I applied for the debate because a number of developments made it particularly appropriate to discuss the European Union trading scheme for manufacturing industry now. Before dealing with the substance of the debate, I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Brent, North (Barry Gardiner), who I understand is deputising at the last moment for the Minister for Climate Change and the Environment. Having to respond to a debate on emissions trading at such short notice will be a supreme test of his ministerial multi-tasking ability, but I am sure that he is capable of dealing with it.

As secretary of the all-party group on steel and metal, I speak essentially from the steel producers’ perspective. I used the words “manufacturing industry” in the debate title because there are common issues with other manufacturing sectors; other Members with other specific manufacturing interests will thus be able to join in. My constituency has more foundries than steel companies, but although foundries are not covered by the emissions trading scheme, the issues are still relevant. In the black country, a significant number of jobs still depend on the survival and success of the steel industry.

The Stern report highlighted the potentially catastrophic consequences for the climate if carbon emissions continue unabated. The climate change Bill, the energy White Paper and the EU review of the emissions trading scheme post-2012 provide the United Kingdom with the opportunity to develop a clear climate change policy framework in which industry can plan its future carbon-reducing investments. Central to that is the development of technologies that will lead to reductions in carbon emissions, which will enable manufacturing industry to meet the demands of consumers in developing economies without leading to the consequences outlined in the Stern report. The challenge for the Government is to provide the correct regulatory framework to promote that change.

The UK produces only 2 per cent. of total world emissions, and the greatest challenge is in leading the rest of the world in developing low-carbon economies. The EU emissions trading scheme—the ETS—is a worthy first attempt at providing an international industry and environment regulatory structure designed to reduce carbon emissions. The first phase runs from 2005 to 2007, so it is appropriate now to examine the deficiencies of that phase and to look for improvements in the next phase, which is to run until 2012. During the second phase, we will have the opportunity to research and develop new provisions, not only to reduce emissions in Europe but to provide an example and a model that could be developed for non-EU countries. Not only would that make a significantly greater impact on climate change, but it would offer European industry the opportunity to develop technologies that can be adopted by other countries.

In order to demonstrate the flaws in the first phase of the scheme, it is important to understand its structure and methodology. Companies are allocated a certain number of carbon allowances, based partly on their historical record of carbon emissions and partly on their projected use of carbon in the years to 2012. Any carbon consumption over and above those allowances will mean that companies have to buy carbon credits from other companies that have underused their allocations.

The first flaw in that approach is that companies with a history of less energy-efficient means of steel production receive more credits. The second is that companies seeking to expand production beyond their original projections, to meet rising world demand, will have to buy extra credits to do so, thereby incurring costs in addition to those associated with new investment. In effect, that is an extra financial penalty for companies that want to invest in newer and potentially cleaner processes.

I congratulate my hon. Friend on securing this important debate and on the way in which he has led the all-party group on steel and metal, together with my hon. Friend the Member for Llanelli (Nia Griffith) and my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith), who is the successor to a distinguished former chairman of the all-party group. Will my hon. Friend the Member for West Bromwich, West (Mr. Bailey) address the debate not only to colleagues in Westminster but to steel communities across the UK? Two important issues have arisen from discussions in my constituency and nationally with Corus and trade unions. The first is the need to continue to recognise that the steel industry is strategically important for the United Kingdom. The second is the inconsistent way—

Order. I ask the hon. Gentleman to resume his seat. He is making a speech rather than a brief intervention. I am sure that his hon. Friend has heard what he has to say.

I understand the thrust of my hon. Friend’s remarks. Although the steel industry may not employ the numbers that it used to, it is still of strategic importance as part of our manufacturing architecture. The European regulations are crucial to its survival, and the steel industry is crucial to the survival of a large section of our manufacturing industry. Many more people than those directly employed in it depend on the steel industry for their jobs.

The hon. Gentleman is right to bring this subject before the House, and I congratulate him. Does he feel that increasing manufacturing costs through the ETS and in other ways might displace production to third world industry, which is less clean and which might damage the atmosphere even more? Is not the real solution what he suggested earlier—technologies to remove carbon from production, such as carbon capture and storage, that apply as much to steel manufacturing as to power generation?

The hon. Gentleman makes a valuable point, and I intend to cover it later in my speech. There are threats and opportunities: if the matter is handled wrongly it will be a problem; if it is handled correctly it will be an opportunity.

The third flaw in the scheme is that is that companies with a history of inefficient technology and higher carbon emissions can compensate for their inability to develop by selling their unused allowances. As a result of decoupling the carbon allowances system from energy efficiency and relating it purely to levels of production, the scheme has developed a number of perverse incentives that hamper investment and production in the UK while contributing little to the reduction of carbon emissions.

That problem was compounded in phase 1 by the national allocation plans of various EU countries. The Commission decided to adopt a decentralised, co-ordinated model that allowed some countries to allocate over-generous allowances to their own companies. The processes for arriving at the level of allowances were not always robust, and they led to weak caps in a number of countries. Only Ireland, the UK, Spain, Austria and Italy set tough targets; other countries over-allocated. Indeed, such was the level of underuse of allowances in some countries that the excess of carbon credits on the open markets actually caused the price to crash. While that may have provided some short-term compensation for overusers of carbon in countries such as the UK, that approach is counter-productive to the ultimate goal of reducing emissions. It is now expected that at the end of phase 1 the majority of countries will have used less than their level of allowances, which seems to negate the purpose of the scheme. It is hardly surprising that the first phase is not expected to yield any net reduction in emissions at all.

I will summarise the shortcomings of the scheme as it operates at the moment. First, it requires Governments to second guess how much steel companies will be producing many years in advance. Secondly, it rewards failing companies and penalises growing companies. Thirdly, there are wide variations across Europe.

Improvements are planned for the second phase, although only time will tell whether they are realised. There is evidence that the current round of national allocation plans is more transparent. It is significant that, so far, nine of the first 10 plans submitted to the European Commission have been rejected because they are not consistent with the Kyoto commitments. The Commission is insisting on plans that will deliver a reduction in carbon emissions of 7 per cent. below those of phase 1. It is essential that the Commission remain robust in its approach, otherwise it will undermine the effectiveness of the scheme as a whole.

Such changes are to be welcomed and, if implemented robustly, there is no doubt that they will achieve a reduction of carbon emissions in Europe. However, phase 2 does not address the fundamental flaw in the scheme: the failure to relate carbon credits to energy efficiency. If Europe is to develop to provide an exportable model to reduce carbon emissions worldwide, that flaw must be eliminated in phase 3, which is to start in 2012. The time to consider that is now.

The hon. Gentleman talks about reductions in CO₂ production; perhaps he should also talk about exports of CO₂ production. He mentioned exporting the model of the European scheme, but we are already exporting our emissions to places such as Donetsk in the Ukraine, and to India and China. We should try to move forward internationally rather than regard the European Union as a little fortress, standing on its own.

The hon. Gentleman makes a valuable point, which I shall mention when I sum up.

The steel industry advocates an alternative model that would achieve the objectives relating to carbon emissions without putting UK and European steel manufacturers at a competitive disadvantage to other international manufacturers. The concept, in essence, is that a series of baseline CO₂ emission factors would be calculated as an average for the whole of the EU steel industry; those would be varied according to the type of product produced and the type of process used. At the end of the accounting period, each company would have its actual emissions assessed against those baseline figures multiplied by the volume of steel produced. If a company’s performance was worse than the baseline it would need to buy allowances to compensate; if its performance was better it would receive equivalent allowances for sale. That system would reverse the existing perverse incentives.

I emphasise that those are not a set of self-interested proposals advanced by the steel industry. Such an approach was advocated in a paper by the Centre for European Studies in 2005, and was also highlighted in the Institute of Public Policy Research report on the future of the scheme. The report states that,

“a major step forward would be for the European Commission to develop common allowance allocation methods that use benchmarks based on production capacity and best available technology”

I emphasise the last few words. The report goes on to state that,

“This would be a substantial undertaking, requiring extensive data-processing and difficult negotiations. Nevertheless once industry benchmarks had been agreed it might be relatively easy to tighten them”.

Ultimately that must be the right approach. In a world economy where the demand for steel is likely to increase for the foreseeable future, there is little point in curbing steel production and carbon emissions in Europe. Companies in other countries that are not part of any emissions trading scheme can expand their production to fill that gap with processes that are either equally or more carbon intensive.

On the auctioning of carbon credits, in phase 1 member states only had the discretion to auction up to 5 per cent. of allowances, and few did so. In phase 2 that will increase to 10 per cent. There is a body of opinion that says that there should be no free carbon allowances for companies and that they should buy their credits in auction on the open market, as they do any other raw material. There can be no doubt that the auctioning of carbon allowances is the most effective method of allocating carbon resources. However, on the international market, some companies that have to buy carbon credits to expand production will be at a severe competitive disadvantage with other companies outside the scheme that do not have to buy carbon credits. It is estimated that such a policy, even with the currently low carbon prices, would add around £150 million a year to UK steel industry costs and £300 million a year to the UK chemical industries costs. Once again, the consequences could be the export of production to less energy-efficient companies in countries not in such a scheme. We would suffer the double hit of a loss of jobs and production here and potentially higher carbon emissions internationally.

I agree with the hon. Gentleman’s analysis. He is highlighting a real problem, but can he explain why benchmarking based on production capacity as opposed to historical emissions, as in the present scheme, would avoid carbon leakage? Surely, even the scheme he advocates would impose costs on some companies, which might avoid those costs by moving to other international locations.

I was not advocating benchmarking based solely on production capacity; cleaner technologies are also important. In effect, if there were a system that incentivised cleaner technologies within the framework of international negotiations, it would be easier to export that model and we would not be at such a relative competitive disadvantage. That is the broad approach that could be adopted.

A further problem is that if there were a single carbon auction market for all manufacturing sectors, certain industries would suffer another disadvantage. Some industries such as steel cannot easily pass on costs to their consumers, whereas others, such as electricity generation, can do so. Industries passing on costs could bid up the price of carbon and cause problems to other users who cannot do so. Those users would suffer a double hit of having to pay both the higher carbon prices driven up by users such as the electricity industry, and the higher electricity prices resulting from the auction.

The subject is complex, with different industries having different priorities, but I believe that a number of principles should underpin the Government’s input to the debate. First, existing provisions should be tightened up to ensure a level playing field throughout Europe. Secondly, future allowances should be based on production and technology, not just output. Thirdly, the EU must press for comparable emissions trading schemes in other industrial blocs in the rest of the world. There are embryonic schemes in various parts of the world, and impetus needs to be given to their development in international negotiations. Fourthly, full auctioning of carbon credits should not take place until there is a critical mass worldwide of companies involved in such schemes. Lastly, carbon auction markets should be sectoral to avoid certain manufacturing sectors being better placed to outbid others. If we take that approach, we can promote energy efficiency in industry in the UK and abroad, and reach our Kyoto targets in Europe. It will also provide a model for other, developing nations in other developing schemes to enable them to play a part in the process.

I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on securing a debate on this very important topic. It will be no easy task for the Minister who has responsibility for it to negotiate the 2013 phase of the EU emissions trading scheme, and I should be very grateful if the Minister present today would work alongside ministerial colleagues. I am sure that by the end of this debate he will be an expert on many of the issues, and we hope that he will take forward the message from the debate in the tricky negotiations that lie ahead with the large number of EU states that have very different priorities.

As chair of the all-party group on steel and metal, and representing Llanelli, a constituency with a long and proud tradition of steel and metal industries—famously symbolised by its saucepans but perhaps not quite so well known as the home of the first ever brewery in Europe to put beer in cans—I shall concentrate on the metal industries, but I urge the Minister to take into consideration other energy-intensive industries, which face similar issues.

I have long been committed to environmental issues, and industry has made considerable progress over the years both in cleaning itself up and in increasing efficiency. We have come a long way from the days of filthy smog, but now we have to face the much greater challenge of not just cleaning up but trying to reduce emissions.

The EU ETS is the largest multinational greenhouse emissions trading scheme in the world and shows the EU’s determination to tackle climate change and global warming, but it is global warming that we are talking about. It is no good having a scheme that reduces EU emissions by driving industry out of the EU, because emissions, wherever they are produced, will contribute to global warming.

Will the hon. Lady acknowledge that the ETS proposed by Europe does not reduce emissions until at least 2025 and that that is simply complacent?

We have to recognise that we are at least talking about these issues. Whatever people’s views of the EU, at least a number of member states are coming together to discuss the issues and saying, “This is more than something that just one country can solve.” Obviously, the more we can push that out to include a larger number of nations, through initiatives such as the Kyoto agreement and some of the things happening in individual states in the US to influence their Government to come on board, the better. It is very important that we do all that, but we have to start somewhere. We are well aware of the imperfections of the current scheme, which is why we are having this debate and why we want to ensure that, for 2013, we are going in the right direction. It is no good thinking that we can just clear away the dirt from here and have something produced elsewhere, because emissions do not work in that way. Wherever they come from, they affect the whole world.

We need an effective ETS that protects the environment but is pragmatic and does not become just a commercial liability for the UK and the EU. We have a lot to learn. We need to work out how the ETS works and what effect it creates. There have been widely differing interpretations of the scheme from one EU member state to another. Put simply, some Governments have been much more lenient in allocating allowances than others. The UK has been particularly strict. Governments have also used different criteria to set allowances. That is leading to a situation in which companies are tempted to shop around and switch production according to which Government’s criteria will afford them the best advantage. It is frightening enough for us to face the fact of companies switching production across the globe where labour prices are cheaper than anything we could ever replicate in the EU, but when companies are tempted to move production to countries such as the Netherlands, with its comparable costs and high environmental standards, simply because the Dutch Government interpret the ETS differently from the UK Government, clearly we need to re-examine the ETS.

Before I move on to the detail of the ETS, it is important that we stress the need to support research initiatives aimed at developing less polluting technologies. The European steel industry is already working towards that end: 48 European companies and organisations, led by a core group of steel producers including Corus, have entered a major research project with the aim of achieving a significant reduction in CO₂ emissions to the atmosphere. The project is called ULCOS—ultra-low CO₂ steel making. It is a €44 million, part EU-funded, multi-partner research and development initiative to investigate new steel production processes that would significantly reduce CO₂ and other greenhouse gas emissions compared with current production methods. The consortium is further composed of suppliers to the steel industry, research institutes, small and medium-sized businesses, and universities. A 50 per cent. reduction in atmospheric CO₂ emissions has been set as the target. We need to commend the members of the consortium on the initiative and support them even more.

The financial support from the EU via framework 6 and the research fund for coal and steel programmes is a laudable first step, but we need to go further. The British steel industry in particular has expressed concerns that as the EU ETS is currently devised—a regional cap and trade system with an underlying allocation process that shifts with each successive phase—there is no real incentive to invest in new, less polluting technologies. In fact, the system as it stands in its initial 2005 to 2007 phase encourages output reduction instead of investment in operational efficiency. In that framework, there is every likelihood that if a new technology such as carbon capture and storage were to be fully developed and subsequently deployed, the future allocation would be reduced, thus negating the value of the investment in generating CO₂ credits that can be sold to cover the significant research costs, and leading to a lack of incentive to improve. Instead, we should be trying to increase production at the most energy-efficient plants and ensuring that companies have incentives to invest in the best technology and thus drive down emissions in the long term.

The hon. Lady is a very articulate champion for the sector, but she does frequently use the phrase “long term” and she talks about technological development, which is also a long-term issue. If we accept the science that we have a relatively short window—a maximum of 10 years—in which to make a substantial difference in reducing CO₂ emissions, does she see these solutions as part of the bearing down on CO₂ that we need to do within the next decade?

Indeed. We have to accept that there are short-term and long-term goals. We have to use everything that we can because the situation is so grave, but we must be realistic about what we can do in terms of research and development. We are talking about 2013. That is only six years away and we must be realistic about the time that it takes to develop new technologies. We certainly need to look at other sectors, which I shall come to in a moment, in respect of emission reductions.

From 2013 onwards, we need to move to a more sector-based regional baseline and credit system, with allowances for better-than-standard performance. That could provide a much more positive incentive for the commercial implementation of several forms of technology, including carbon capture and storage. Current carbon allocations depend on forecasting how much steel will be produced, but it is often difficult to predict that exactly so many years in advance. We therefore need a scheme that encourages efficiency, regardless of the volume baseline.

The benefits of such a solution are many; efficiency and manufacturing performance in the EU steel sector would become the basis of allocation and that allocation would be adjusted for actual output. The benefits would include the removal of the reliance on imperfect forecasts of output, the development of more efficient installations and the removal of distortions to competition in the EU. Ideally, of course, the more we involve countries outside the EU and develop worldwide systems for reducing emissions, the better.

We now need a scheme that judges each industry sector on the basis of best practice in that sector, rather than an all-encompassing trading scheme for all sectors that fails to take into account the different circumstances in different industries. To be more specific, all-inclusive trading schemes run the risk of failing to reduce overall emissions and causing considerable disparities between those industries that can pass on costs to consumers and those that cannot.

I congratulate my hon. Friend the Minister for Climate Change and the Environment on his willingness to challenge the aviation industry to face up to climate change. Domestic flights, whether internal to the UK or the EU, are a good example of an industry that could pass on the cost of its carbon allowances to the consumer, because all competitor operators in the EU would be subject to the same scheme. That contrasts sharply with the situation of the steel and manufacturing industries, which face stiff price competition from countries outside the EU, where companies are not subject to the EU scheme. As a result, EU-based companies collapse in the face of competition or move their factories to countries with much more lenient conditions. Either way, that has a devastating effect on our manufacturing industry, in which we have built up skills over many years. That could lead to large job losses and an overdependence on imported steel.

Nor does such a situation do any good in terms of global warming, because the companies involved will continue to produce emissions; indeed, the reverse could be true, as companies take advantage of less stringent conditions outside the EU and produce more emissions than they would have done in the EU. They might also use older and more polluting equipment, and there might be the thorny issue of less generous conditions for workers and less rigorous health and safety expectations. Indeed, more emissions might be produced, because more products would have to be transported around the world.

We therefore need to look carefully at the effects of lumping everyone together in one ETS, under which the price of emissions credits could, for example, rise sharply, as the aviation sector buys in more credits from other sectors. Although it makes sense to expand the number of activities that come under the ETS, we need careful mathematical modelling to determine the possible effects of mixing different sectors together. There is a real danger that we will end up not reducing overall emissions or encouraging industry to develop best practice.

We also need to look at the knock-on effects of having the ETS in one sector on other sectors. For example, electricity does not have a single price in the EU, and there are several reasons for that, some of which are more transparent than others. Again, the ETS gave Governments leeway to apply its provisions in different ways to the electricity generating industry, and that has different knock-on effects on industry in different countries. Electricity generators are not subject to international competition in the same way as manufacturing industry, so they can pass on the full costs of the ETS to the consumer, with considerable effects on high-energy users.

There is also a real risk that high credit prices will lead to substantial political pressure from consumers, the public, national Governments and Brussels to reduce the environmental stringency of the ETS. That would be a catastrophic development, which would take us back several years, to a much more inactive and complacent past. Let me point out, however, that my colleagues in the European Parliament have already expressed their opposition to plans to include aviation in the ETS. Last July, they voted in favour of creating a separate closed or semi-open trading scheme for aviation, in which airlines would buy credits from the ETS on a carefully limited basis.

We need to be careful about the dangers to the environment and UK commercial competitiveness of inflexibly applying the scheme to sensitive industry sectors. We need to be clear about that with our European partners and particularly the European Commission. In some of this country’s industry sectors—steel is undoubtedly one—the inflexible imposition of additional costs can prove lethal. The UK steel industry and steel workers have done everything in the realm of feasibility to drive down costs, and any unreciprocated increase in the cost of production could leave them exposed to fierce competition from low-cost countries in the developing world.

My hon. Friend is making a telling case. Has she posed those questions to Ministers from the Department for Environment, Food and Rural Affairs across to the Department of Trade and Industry? If so, has their response been consistent? Implicit in that question is the further question of whether she would agree that we need to take a step backwards and establish a Department of Energy to address these important issues.

Initially, the issue was a little cloudy, and we were not sure whether we should have been dealing with DEFRA or the DTI. The important thing, however, is that we are on a learning curve and that Ministers in both sectors need to be well aware of the issues involved. We are all working together in the EU to get the best out of the scheme, although any new scheme will inevitably throw up effects that we had not dreamed of. However, I take the point that energy is such an important issue that we need to give it all possible governmental support, particularly as we work out what to do in the future.

On the issues that we currently face, only 30 per cent. of the world’s steel producing countries have signed up to the obligations in the Kyoto agreement, while 70 per cent. remain outside it. Of those, 50 per cent. are countries such as China, India, Brazil and Korea, which are not covered by Kyoto, and 20 per cent. are countries such as the US, which have not ratified Kyoto.

The hon. Lady may not be aware of this, but India, and China are covered by Kyoto, and that is probably true of the other nations, too, although I am not certain about that. They are signatories, although they were not set targets in the first phase.

That is the point; they were given different conditions because they are developing countries. That is different from the case of the US, which refused to ratify Kyoto. Those countries are not covered by the same stringent conditions as we are, but they were involved in the negotiations.

Most frighteningly, 90 per cent. of all new capacity is being developed in countries that are not covered by Kyoto. As a G8 country and an influential EU member, the UK must continue to take the lead that it took on Kyoto and use its influence to develop worldwide schemes.

To sum up, I urge the Minister to work with UK and EU colleagues to develop schemes that take an efficient but pragmatic approach to EU emissions trading. Such schemes should involve the development of cleaner technologies, with a recognition that their development needs active support, not only at the research stage but in terms of creating a favourable business context that will render such technologies an attractive option.

In the interests of clarity, may I ask a question? When the hon. Lady says “active support”, does she mean subsidy?

That is something that we will have to look into. What we are really talking about is incentivisation. The scheme should provide an incentive to produce a certain number of tonnes of steel in a more efficient and more environmentally friendly way, rather than simply reward a reduction in production. We are looking for the best possible practice in the sector.

We should develop a suitable context, which rewards better-than-standard performances and in which people are committed to sustaining such performances. We should also undertake a careful analysis of the problems involved in mixing a range of different activities into the same scheme, when the capacity of the sectors involved to pass on costs is very different. I should appreciate it if the Minister would carefully consider a credit-based system that would help to pre-empt inflation of prices and emissions, and would not run the risk of collapsing under the burden of its own poor planning. We need to develop a flexible credit system that will take into account the need for reciprocity; we also need to realise that the problem is a global one, and that any scheme that fails to address it as such could increase greenhouse gases worldwide. I ask the Minister to take those points on board. I hope that in the difficult negotiation with our EU partners and the worldwide community he will consider carefully how to ensure that each industry will do its best, and that the outcome will not be part of a global muddle with other systems and industries which cannot be comparable.

I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on securing this important debate, and my hon. Friend the Member for Llanelli (Nia Griffith) on her contribution. I shall speak—briefly, I hope—on the steel producers’ perspective on the matter. I am aware that, as my hon. Friend the Member for West Bromwich, West made clear, the debate is relevant to other industries too, but because I represent the great steel city of Sheffield I must focus on the steel industry. The industry is, indeed, still relevant not just to Sheffield but to the whole of South Yorkshire. Rotherham is of course one of the other great producers of steel, even now. I want to echo much of what my hon. Friend said about the emissions trading scheme. Its objectives are worthy, but it has shortcomings, and I hope that the Minister will respond fully and positively to the way forward that he outlined.

My interest in the steel industry arises, of course, from the location of Corus Engineering Steels in my constituency. Corus Engineering Steels is a division of Corus UK. It has two main plants—one in Rotherham, at Aldwarke, and one at Stocksbridge. Stocksbridge is in my constituency and employs between 650 and 700 people. In total, more than 2,000 people work for Corus Engineering Steels in South Yorkshire, so it is incredibly important to the future of the steel industry there. It is critical to my constituents that companies such as CES should be given a level playing field for the emissions trading scheme. An important point that has not yet been made in the debate is that they provide significant high-value, highly skilled employment. The Chancellor has repeatedly made the point that if we are to compete in a global economy we shall have to continue to develop and secure the future of companies such as CES in this country. Not only will we have to develop our young people, so that they may have the skills to continue in those industries; we shall have to allow those industries to keep ahead of the field and to continue their work in securing their top place in the international production of steel and materials for manufacturing.

The products of CES in particular are used for manufacturing precision components by the aerospace, automotive, energy-related and specialist mechanical engineering industries. Remelted steels are used for aerospace and high performance engineering, and quality approvals for their products have been given by British Aerospace, Bosch, Caterpillar, Rolls-Royce and Siemens, to mention only a few. Hon. Members will understand from what I have said that my main concern is that high value and important companies of the kind I am concerned with should be given a future. The importance of that future and of continuing to develop the relevant technologies is recognised by the industry and companies such as CES, whose apprentices undergo a rigorous programme to NVQ level 3. Its employees generally are encouraged to undertake academic study continually, to HNC and degree level. If we are to meet the Chancellor’s objectives of ensuring that this country has a highly skilled work force who are capable of competing in the global economy in the next 20 years, we must do our utmost to ensure that such companies can compete. That is why we want the Government to do their bit to ensure that approaches such as the emissions trading scheme offer a level playing field.

On the environmental front, some hon. Members may be surprised to learn that the specialised steel production industry uses scrap metal for its basic raw material, and is thus a good example of recycling. When we think of recycling we often think of paper and paper-based products, but one of the first, and best, examples of good recycling in this country was in the specialised steels industry. That should be recognised in the context of the emissions trading scheme; the starting point of the industry is the use of materials that would otherwise be difficult to dispose of. I should like the Minister to deal with that point.

The specialised steels industry is committed to improving its energy use and to developing new technologies wherever it can, in both the short and the long term. The question has been raised this morning whether new technologies can be developed quickly enough to deal with the challenges presented by global warming, but we should not forget that very small refinements to the manufacturing process which improve energy efficiency are also important in reducing carbon emissions. The emissions trading scheme should be flexible enough to recognise that.

Many of my constituents and their families rely, even now, on the steel industry for their livelihoods. They value the well paid, highly skilled jobs offered by companies such as CES. It is imperative that the methodology of the emissions trading scheme is reviewed, to create the fair trading conditions that are so critical to the British steel industry—an industry, by the way, that became once again a net exporter of steel in 2005. I do not think that the value of that should be underestimated. For me, coming from a family in which there have been generations of steel workers, but which now has none, that achievement is tremendous. I am proud that that position has been gained after all the problems of the 1980s and 1990s, and I do not want us to lose it. I want us to consolidate it, on the basis of a responsible attitude to emissions trading and the reduction of carbon emissions in the manufacturing process.

As I said earlier, I echo the view of my hon. Friend the Member for West Bromwich, West about the way forward. The shortcomings of the current methodology are that it requires the Government to second-guess how much steel companies will produce for many years ahead and, more than anything, that it rewards failing companies and penalises growing companies such as Corus UK and Corus Engineering Steels. There are wide variations across Europe, never mind internationally, and that is unacceptable. We need a sectoral agreement, as has been outlined by my hon. Friends the Members for West Bromwich, West and for Llanelli, which will de-link allocation from the volumes produced and relate it instead to energy efficiency—on both a small and a large scale. That agreement should be flexible enough to enable improvements in energy efficiency to be recognised, and should be common to all EU member states. Of course we need to remember the EU’s responsibility to exert international pressure for a similar approach.

I hope that the Minister will respond positively and remember the importance of the steel industry, and manufacturing generally, to this country’s future position in a global economy.

I advise hon. Members that I intend to call the first Front-Bench speaker at 10.30.

I start by congratulating my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on his eloquent testimony in defence of the steel industry. It is a great credit to him that he articulated the case for the steel industry so well. I worked in research and development in that industry for 15 years, when I tried to solve some of the problems that we are discussing. I praise my hon. Friend for securing this debate.

I agree with my hon. Friends about the importance of the steel industry, which we in this country have worked hard to make a success. We have gone through tough times, such as some of the times when I worked in the industry, and now the good times have emerged. I ask my hon. Friend the Minister not to jeopardise all the success and the jobs of people who work in the industry. As someone who represents the Teesside steel industry, where many of my constituents work, I ask him to bear it in mind that several thousand jobs are at stake. He is familiar with the area because he has visited my constituency. However, I want to focus not on the steel industry but on the chemical industry, which is certainly an issue on Teesside. Emissions trading is important for our area and the chemical industry plays an important part in that.

The energy requirement of the UK chemical industry is responsible for only about 4 per cent. of total UK carbon dioxide emissions. Through its trade association, the Chemical Industries Association, the chemical industry has been measuring and improving energy efficiency for many years. In 1997, the CIA was the first trade association to enter into a voluntary agreement with the Government, and it has negotiated a climate change agreement with them. The chemical sector has a target of a revised energy efficiency improvement of 19 per cent. by 2010 from the levels in the base year of 1998, which will bring the total energy efficiency improvement between 1990 and 2010 to 34 per cent. That target is achievable given that the chemical sector has improved its energy efficiency by 19.5 per cent. since 1998. As an engineer, I know the importance of emissions. Given their effect on plant efficiency and product cost, we have to have a technology-led programme for the reduction of emissions because it makes good business sense.

I want to raise two issues with the Minister about the chemical industry in my area. The first is a plea from a chemical company called Terra Nitrogen UK regarding something called joint implementation, which comes under the emissions trading arrangements of the Kyoto protocol. Joint implementation enables companies to undertake projects to reduce greenhouse gas emissions and allows Governments to use the credits against their Kyoto targets or for the company to use them itself within the EU emissions trading scheme. Terra wants our Government to support a domestic joint implementation project, but I am told that they are against that idea. Other EU countries such as Germany and France support such schemes—indeed, France is already developing a regulatory framework for such a scheme—and I ask the Minister to consider the pleas of companies in my area and take this matter up seriously.

The second issue that I want to discuss concerns Centrica, which is committed to participating in the UK’s first complete clean-coal power generation project at a cost of £7.15 million. With its technology development company, Progressive Energy, it has agreed to set up a new energy undertaking called Coastal Energy Ltd, which will seek full consent for the right to construct a new clean-coal power station in Teesside. The project would be the first to combine integrated gasification combined cycle with carbon capture and storage capabilities. That would mean the development of a clean-coal power station to supply electricity for British Gas customers, together with a pipeline and storage project to capture CO₂ emissions for under-sea sequestration in the North sea.

Emissions trading is crucial to the financial viability of the project because it will provide a basis for the selling price of captured CO₂. Long-term economic certainty over the payback period of the £1 billion investment project is important. Crucially, the project’s CO₂ pipeline is likely to be oversized so that it can carry captured CO₂ from other large emitters in Tees valley. It is certain that the construction of the power plant, the commissioning of its equipment and the development of the associated offshore pipelines would bring many construction jobs at a difficult time for such jobs in Teesside. Of course, it would also enhance our manufacturing bases in Teesside and the north-east. I hope that the Minister will look at the consents for the scheme which will be coming his way and consider the concerns of the chemical industry in my area that I have mentioned.

I would like to reinforce what my hon. Friends have said about the steel industry and its future. I could have gone on for hours about the importance of the steel industry—

The hon. Gentleman is making an interesting, short speech. Does he believe that the success of the Centrica clean-coal plant depends on each sector being segregated within the ETS, or on cross-sectoral emissions trading?

I do not have a fixed view either way. It does not matter which route we follow. Only when we look at the overall problem down the line will we learn whether it has worked. All I will say to the Minister is that he must make the right judgment, as the wrong one could cost us dearly—certainly in industries that we have worked hard to make successful, of which the steel industry is a living example. It was the most profitable industry in the world, but hundreds of thousands of jobs were lost in the 1980s. It is now going through a transition period—I am thinking particularly of Corus. In the spirit of what my hon. Friend the Member for West Bromwich, West and others have said, it is crucial that we consider the importance of steel, especially for our regions, and the fact that the industry has gone through difficult times. I ask the Minister not to jeopardise the success and achievements of Corus and other steel companies when he takes a decision on this matter.

I previously advised Members that I wished to call the first of the Front-Bench spokesmen at 10.30 am, but the hon. Member for Bishop Auckland (Helen Goodman) wishes to speak. If she is very brief, I will call her.

I am most grateful, Mrs. Humble, that you have called me to speak at this late moment and I am sorry that I was not here at the beginning of the debate to hear what everyone else had to say. I shall make a few brief points.

It would clearly be a nonsense to set up a tight regime here that would mean closing down UK and European manufacturing that is relatively efficient in terms of emissions and then importing goods—particularly heavy metals and heavy manufacturing goods—from countries where they are produced inefficiently. I have two suggestions as to how we could deal with that problem.

First, we need proper pricing of shipping and aviation fuel, as that would change the economics of local production—the alternative is the production of goods in faraway places—and would apply equally to people in this country and in Beijing. Secondly, the emissions trading scheme could examine sectoral agreements, so that we do not put financial services into competition with steel production or heavy manufacturing, as any economy needs some of those things. It is necessary to cut the cake horizontally as opposed to vertically, as it were.

I congratulate the hon. Member for West Bromwich, West (Mr. Bailey) on securing this crucial debate. He rightly described the European emissions trading scheme as a good first attempt. It has flaws, which we are exploring, but it has put Europe at the leading edge of greenhouse gas action and has focused corporate attention on climate change and CO₂ reductions among companies responsible for 46 per cent. of Europe’s CO₂ emissions. It incentivises clean technology and a reduction in energy use, but, given the bigger picture, it should do so.

Some pejorative references to fortress Europe were made by the hon. Member for Scarborough and Whitby (Mr. Goodwill), who is no longer in his place, but another advantage of the European emissions trading scheme is its international linkages. It enables companies in places such as the United States of America, and states and projects in the developing world to participate in the wider scheme. It is unfair to say that the ETS reinforces fortress Europe. In effect, it is the first building block of a global scheme, and all the better for that.

The analysis made by the hon. Member for West Bromwich, West was typically astute and his solution sounds logical, as do those made by other hon. Members, when applied to the steel industry alone. In effect, he suggests benchmarks based not on historic emissions but on production capacity, best practice and other analysis. Such a scheme would be complex and could penalise growing companies, and it would be open to the same problems of application between different countries that apply to the current emissions trading scheme.

There is a more fundamental problem with a sectoral approach. Let us consider its application not to steel but to wind energy. Would we say that the least efficient wind energy companies would also be penalised for emissions over their baseline and that that industry would be treated in the same way as much more carbon-intensive or energy-inefficient industries? That example begins to expose the flaw in a segmented, sectoral approach. One of the beauties of the ETS is that it allows flows between sectors. In its simplest and most efficient form, it should steer carbon reductions to the parts of the economy where they can be most cost-effectively and efficiently made in economic terms. The sectoral bureaucracy advocated by some hon. Members would fatally undermine that system.

Valid concerns have been raised, and the scheme must be introduced properly. The Carbon Trust has said:

“Overall our findings do not support the view that the EU ETS threatens the competitiveness of industry in Europe for most sectors, providing that EU Member States take a broadly consistent approach.”

Consistency is important, and the hon. Member for West Bromwich, West pointed out some of the inconsistencies between countries. Any hon. Member wishing to study the WWF’s country-by-country analysis of how national allocation plans have worked is in for an entertaining but depressing read.

Sir Nicholas Stern, using typical economist’s language, said:

“To reap the benefits of emissions trading, deep and liquid markets and well designed rules are important.”

That is right. The importance is not just in terms of economic competitiveness and fairness, because bad rules allow carbon leakage to economies with worse emissions. China is often criticised for its rising manufacturing emissions, but whose goods are being manufactured there? Many of the goods are destined not for Chinese consumers but for western markets.

The Carbon Trust examined the competitiveness threat of the EU ETS and identified two crucial factors—price and allocation, and exposure to competition in various sectors. On price and allocation, it, too, conceded that phase 1 was a bit of a sorry tale. WWF’s analysis shows instances of cheating and of wishful thinking, such as Finland’s counting of emission reductions from nuclear power stations before they have even been built. However, everyone concedes that that was the testing phase in the ETS and that it was never supposed to work perfectly the first time. We were to work out how the thing would happen in practice during that phase.

There is a risk that phase 2, in concentrating on levelling the playing field and ironing out some of the inconsistencies, might encourage countries that performed better in the first round, such as the UK, to take their foot off the accelerator. Friends of the Earth has criticised the Government’s business-as-usual approach in the national allocation plans for phase 2. The Government have reasonably responded that in real terms, when the number of installations is taken into account, a reduction is involved, and I understand that.

There are other indicators that the Government are not pursuing this process quite as aggressively as they could be. Why is the full possible auction allocation of 10 per cent. not being taken up? Why are they planning for only 7 per cent., when Sir Nicholas Stern and many others have shown that encouraging a real market in carbon allowances by the use of auctions contributes to fighting climate change? I would be grateful for the Minister’s answer on that.

The other issue is exposure to competition. The Carbon Trust concedes that some sectors, such as steel and aluminium, are more exposed to competitive forces than others, and that therefore the reassurance that most sectors are not affected might not be true in all scenarios for industries such as steel. That raises a key question: how do we maintain the competitiveness of European industries against carbon cost-free imports and avoid cutting off our carbon-efficient industrial nose to spite the face of the planet?

The Carbon Trust was reassuring about most sectors, but it concedes that steel and aluminium are vulnerable. So, as the hon. Member for West Bromwich, West mentioned, what are we to do about sectors of which the ability to pass on costs to the consumer is limited? As the scheme progresses, the situation will worsen; as carbon allowances become tighter, those companies will face even more competitive pressure. This raises a wider geopolitical issue for the post-Kyoto international agreements: how do we treat countries such as the United States and Australia, which are refusing to play ball? Such countries are not making their own contribution and are making the situation worse in their own right. In addition, they are undermining the efforts of more responsible bodies such as the European Union to find a solution.

How would the hon. Gentleman treat such countries?

I was just about to say that there are three responses. As various hon. Members who represent steel-producing areas have suggested, the first is that significant support, including investment in research and development, could be provided for industrial processes such as carbon capture, which can enable emissions reductions to take place while maintaining steel production. We could also examine more incentives for the large-scale use of renewable heat and power, such as geothermal energy, at industrial sites.

Does the hon. Gentleman mean state-sponsored research and state-subsidy incentives? Is that a spending commitment or is he just recommending that the private sector do those things?

If the hon. Gentleman is to get his chance to speak, I shall have to move on to the other two responses, which are the substantial ones. The first relates to international agreements. There is not time to reinvent the wheel. We do not have the time for a radical redesign of international agreements and trading systems. The next generation of international agreements must be based on Kyoto and on schemes such as the European emissions trading scheme.

Secondly, we must consider plan B for those who do not participate. There has been much talk of the US, China, Brazil and India, but only one of those countries has not ratified Kyoto and only one is responsible for 30 per cent. of historic carbon dioxide emissions. Peter Mandelson recently rejected a French proposal for a tax on imports from non-Kyoto countries, and anything that Peter Mandelson rejects must have something going for it. The proposal for a carbon border tax is mentioned in the Stern report, which concedes that there will be stronger and stronger pressure for that. It could offend purist free traders because there is obviously a risk of protectionism, but we need some form of carbon sanctions against the United States and other countries to provide a powerful boost in those countries for the Chicago climate exchange and the regional greenhouse gas initiative in states such as California which would be able to avoid those penalties and sanctions. It would show that the UK and Europe are taking real leadership in the sector and tackling difficult questions. Real sanctions and border taxes would have to be compatible with World Trade Organisation rules, and would that not be a good test of that organisation’s green credentials? We must show real leadership and I hope that the Minister will encourage us to believe that we are doing so.

This has been a surprising, interesting and robust debate, and I have learned something from it. I congratulate the hon. Member for West Bromwich, West (Mr. Bailey) on securing it and on his worthwhile and articulate speech. He put his finger on the central issue at the start when he asked how the UK, which accounts for only 2 per cent. of global emissions, can play a much larger role in leading the rest of the world towards a low-carbon future by pioneering the technology and low-carbon solutions which, on the one hand, avert the worst catastrophic effects of climate change and, on the other, secure economic efficiency and growth? How will the UK square that circle?

I believe that the EU’s emissions trading scheme probably represents our best hope for doing that, but the bottom line is that phase 1 has been an absolute shambles and barely successful. The impact on the carbon price of the nonsense of the national allocation plans in phase 1 shows that it has not worked properly or efficiently, but we must not allow the failure of the early stages to blind us to the potential of the ETS to move forward. It remains our best hope of a free-market, flexible solution that can grow into something not just EU-wide but worldwide, and which offers companies and economies in a free-market context the opportunity to do something about carbon emissions. That will require the EU to put its house in order in double-quick time and our Government to do more to show real leadership in Europe in ensuring that our European partners do not repeat the ridiculous performance with national allocation plans that we saw previously.

The EU in this case is absolutely right to send back with a clipped ear those national allocation plans that merely seem to replicate what happened in phase 1, which overestimated the requirement for their industries. I compliment the Government on coming in at the low end of our own national allocation plan estimates, but unless we all play ball and do that throughout Europe, it will simply not work. We must make it work.

My party often rightly criticises the European Union for invading too far into national domains of competence, but the environment is one of those issues that needs a truly pan-European solution. The environment is an issue on which the European Union can play a worthwhile, added-value, pan-European role, and we must ensure that it does that. If Europe cannot get the environment right, what can it get right? That goes to the heart of what the European Union is for. It is crucial that in going forward the European Union gets it right and that our Government are at the forefront of debate and support the Commission in ensuring that other countries play their part in getting the EU ETS right.

That is not to say that there are no shortcomings with the system. The hon. Member for Llanelli (Nia Griffith) articulately outlined some of the concerns that people have about not allowing our own emissions trading scheme to drive efficient low-carbon business to other parts of the world. However, at the end of the day we must not shirk difficult decisions. There is no pain-free solution to the transformation to a low-carbon economy. There are many opportunities, but there are no pain-free solutions.

The hon. Gentleman talks about painful decisions and he was very critical just now about the actual practice of the ETS and the national allocation plans. Does he believe that Britain’s allocation for NAP2 is too high or too low?

I believe that, by and large, the Government did a pretty good job, and I said so in my compliment to the Minister. We now need to play a leadership role in backing the Commission and ensuring that the other countries in Europe that have been listed during the debate go back and do what the UK has done. We argued forcefully during the decision process that the Government should come in at the lower end of the scale and, to their credit, that is what they have done. It is right that the Opposition not only criticise the Government but say when they do the right thing, and that is where the Government’s record is to their credit.

I am very interested in the issues that have been flagged up during the debate about long-term development of technological solutions to the problems of climate change. This country has a huge opportunity. We have some of the greatest minds and research establishments, terrific pioneering research and development in industry, great entrepreneurial businesses and business leaders, and extraordinary capital markets in the City of London which show great innovation in funding. However, by and large, we cannot simply wait for long-term technological solutions before we take action. They must go hand in hand. We stand on the threshold of what is widely called a tipping point. The next 10 years will be crucial and we cannot simply delay our solutions to the problems of climate change for 10 or 20 years until we can rely on those solutions. We must get stuck in now and start making real cuts in CO₂ in the next five years. That will require the next phase of the EU ETS to start biting.

Nevertheless, I was particularly interested to hear about the developments in the constituency of the hon. Member for Middlesbrough, South and East Cleveland (Dr. Kumar), and the Centrica clean coal power station. I would be interested in learning more about that because, in the long term, it offers real opportunities and that is where Britain can show real leadership to the world. If we can develop a pioneering technological solution involving clean coal and carbon capture and storage, that would offer real solutions for places such as China, which is building many coal-powered stations. We must support the technology and there is a requirement for a public policy framework that allows such building.

The most important thing that the Government can do in public policy is not just to dole out more subsidy, as the Liberal Democrat spokesman suggested, but to promote a framework for a long-term sustainable—

Will the hon. Gentleman give way?

I cannot give way now.

We must promote a long-term, sustainable and high carbon price. I believe that that is what the hon. Member for Middlesbrough, South and East Cleveland was getting at when he talked about the need for long-term economic certainty.

I shall bring my comments to a conclusion by saying that the Government have done well domestically, but they must do a lot more within the EU to sort out the EU ETS. However, in the long term the scheme holds real potential to grow beyond the EU into an international framework. That represents our best hope for doing something urgently in response to climate change.

I am delighted to respond under your chairmanship, Mrs. Humble, to this important debate. First, I apologise on behalf of my hon. Friend the Minister for Climate Change and the Environment, who cannot be with us this morning because he is attending a Cabinet Sub-Committee meeting about the Climate Change Bill and what it should contain. I hope that for all Members present, it is a reasonable excuse.

I am always proud of my colleagues, but not for a long time have I been quite so proud of a group of them as I have been during this morning’s debate. I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on the way in which he introduced the debate, on the extraordinary way in which he has championed his constituency and its interests, and on the responsible way in which he has done so by setting the issue within the context of climate change as a whole. My hon. Friends the Members for Llanelli (Nia Griffith), for Aberavon (Dr. Francis), for Sheffield, Hillsborough (Ms Smith), for Middlesbrough, South and East Cleveland (Dr. Kumar) and for Bishop Auckland (Helen Goodman) all replicated that when they spoke. It has been a good debate, and the speeches from Opposition Members contributed to the way in which the debate was conducted.

I shall make some general remarks about emissions trading, and then I want to focus on the questions that have been raised. I shall try not to take interventions in the hope that I will get through my remarks and answer all those questions.

Last year there were many positive developments in the EU emissions trading scheme. Phase 1 was always a learning-by-doing phase, recognising that emissions trading had not been tried before on that scale, and that it was likely that there would be lessons to learn. We have heard this morning that that was very much the case. The first significant and positive lesson of phase 1 is that it is possible to take multilateral action to tackle climate change. The EU ETS has been developed and implemented against a tight timetable. Although not all member states were able to meet the challenging timetable, the scheme was operational throughout the majority of the EU by early 2005, demonstrating that it is possible to take swift and decisive action to implement measures to combat climate change.

The first year’s results have reinforced that positive message. They show that the mechanism is viable and that the scheme is functioning as expected. Throughout Europe, operators monitored and reported their verified emissions and surrendered allowances for 2005. Compliance in the UK has been excellent; almost all operators surrendered sufficient allowances within the deadline. The first year of the scheme has shown that there is a solid base on which to build for the future—but by golly we have to build.

Last year was also important for the development of phase 2, in which a key aim was to create as level a playing field as possible for businesses throughout Europe. A key UK priority for phase 2 was to work towards more consistent coverage of emissions sources throughout the EU’s 25 countries in order to reduce the potential for competitive distortions. The UK, in conjunction with industry and other member states, developed consistent definitions of the expansion activities to help ensure consistent coverage of the new activities. The Commission has shown that it is using those definitions when assessing member states’ phase 2 national allocation plans.

In addition to those lessons, the operation of the scheme to date has highlighted many other issues about which member states and the Commission should be aware. Some, such as the handling of market sensitive information, can be and are being carried out now; others such as the scheme’s impact on smaller emitters, however, must be addressed through legislative changes. The Commission’s review of the EU ETS directive is considering them.

Smaller emitters make up the majority of installations covered by the scheme, but they account for only a small proportion of emissions. In 2005 about 60 per cent. of installations in the UK emitted less than 5 per cent. of the UK’s total emissions covered by the EU ETS. That raises questions about whether the associated regulatory burden is appropriate for those installations. The UK has scaled administrative charges and established tiered monitoring and reporting requirements to reduce the regulatory burden on the installations, and we have suggested means to exclude some of the smallest emitters from phase 2. The Commission’s review must consider whether the scheme should capture smaller emitters.

Another lesson learned was the need for a scarcity of emissions allowances. Our debate has touched on the issue, which is vital to the scheme if it is to deliver real emissions reductions and help to deliver the EU’s Kyoto commitments. The first year’s results showed that throughout Europe, emissions were lower than had been anticipated when member states set their emissions cap and allocated their allowances. However, it is evident from emissions results in 2005 that more allowances were available than were required for compliance with the scheme, deflating the value of allowances and, consequently, diminishing the financial incentive to reduce emissions over buying allowances.

Although it is too early to draw firm conclusions with just one year’s data, the results highlight the fact that for future phases it is crucial to set consistently realistic but tough caps throughout the EU. Since scarcity drives the carbon price, it should incentivise industry to deliver real emissions reductions. The Commission has recognised that, and in an announcement in November last year on 10 member states’ plans for phase 2 of the scheme, it asked for further work from a number of them. It is looking for significant further reductions in emissions.

The Commission set out clearly the framework under which it has taken decisions, which the UK welcomes. It has set a standard for the plans that have yet to be submitted and assessed, and it has made clear the importance of using the emissions trading scheme to achieve Kyoto targets and to make good use of the potential for emissions reductions.

Pressures for emissions reductions will increase over the next decade and beyond. It is vital for EU competitiveness that we meet those pressures through mechanisms that do not generate unnecessary regulatory burdens, that allow businesses to make their own choices on priorities, and that minimise the costs of reducing emissions. Trading does that, and it is important to ensure that trading continues to work. In addition, the UK will benefit from being at the forefront of the growing global market for carbon technologies.

During the development of phase 2, several sectors and companies raised the issue of competitiveness. The steel sector is one sector in which international competition is intense. We have consulted extensively with industry throughout the development of our policy, and we take seriously its concerns, which have been so articulately presented in the debate. To date, the signs are that the EU ETS has a promising future.

I shall now try to respond to the questions posed during the debate. My hon. Friend the Member for West Bromwich, West asked one key question, which my hon. Friend the Member for Llanelli also articulated. It was about global warming being global and needing a global solution, and about the danger of exporting emissions rather than reducing them. It is part of the reason why almost full business-as-usual allocations were given to industry. We recognise the concerns: they are about finding the correct balance and about the need to take sufficient but not excessive action. We are working closely with the Commission and third countries such as the USA and Australia to develop that global carbon market, and the Commission is considering the issue in its review.

Within our debate hon. Members asked questions about the need for sector-specific targets. I agree that different sectors face different competition issues, and phases 1 and 2 recognise that through the almost full allocation to all sectors other than the large electricity producers’ sector. The ETS review is also considering the issue.

The UK must play its part in the global effort to tackle climate change, and I was grateful for the consensual spirit adopted by Opposition Members, who noted how, in the circumstances, the Government have responded appropriately through our national allocation plan. The UK has worked to harmonise where possible, and to create as level a playing field as possible for industry. We will continue to do so, targeting and balancing the impact on business with our environmental concerns.

My hon. Friend the Member for Middlesbrough, South and East Cleveland also asked me a question. On carbon capture and storage, we take seriously the issues that he raised with Transco and Centrica in his constituency. I am sure that my colleague the Minister for Climate Change and the Environment will take considerable note of the project as it develops, and that he will work with the Commission to ensure that carbon capture and storage is recognised in phase 2 of the ETS and beyond. We hope that it will provide the necessary clarity for business when pursuing the schemes that my hon. Friend the Member for Middlesbrough, South and East Cleveland outlined.

My hon. Friend also asked about joint implementation projects receiving domestic support. In the time available, I cannot go into that, but I shall ensure that my ministerial colleague is in touch with him.

In the Prime Minister’s 10th, and presumably last, new year’s message, which ran to some 1,000 words, he managed to devote just one sentence to Iraq and Afghanistan combined. I believe that the thousands of our servicemen and women serving in those two countries, who are putting their lives at risk daily, would have thought that a very inadequate degree of attention to give to those countries. I am glad that we have the opportunity this morning, in the House’s first sitting week of this year, to deal in greater depth with the all-important issue of policy towards Afghanistan.

With three other members of the Select Committee on Foreign Affairs, I made a visit to Afghanistan approximately six weeks ago, at the end of November. In the course of our visit, we were reminded constantly that security will not be the only means by which we solve the problems of Afghanistan. That is entirely correct and it is as correct in Afghanistan as it most certainly was for us in Northern Ireland. In saying that it is correct, I suggest that the converse is equally the case. Unless we get satisfactorily on top of the security situation in Afghanistan, we will not be able to achieve long-term stability for that country, make satisfactory progress on good governance and human rights there or help it to develop as a modern state, and we will certainly not be able to help it realise the considerable potential that it has for economic progress and development. The security dimension is crucial, and unless we win on security, we are at serious risk of losing in Afghanistan.

The essence of the security problem for us was shown very well in the “Dispatches” programme on Channel 4 last night. Although I noted that the Government sought to dismiss the programme as being based on out-of-date film, I thought that it brought home extremely vividly, and with absolute accuracy, the essence of the security problem, which is that NATO forces are too thinly spread in the areas of Afghanistan where combat intensity is highest. That presents our forces with real operational problems. It makes them constantly vulnerable to the possibility of finding themselves significantly outnumbered. It makes them dependent on calling in air strikes, which carry with them the attendant risk of civilian casualties and the destruction of civilians’ homes, with all the political damage that that does to our long-term objectives of winning hearts and minds in Afghanistan. The fact that we are so thinly stretched in the southern part of the country tends to make many Afghan civilians there significantly more alarmed and open to coercion by the Taliban than are reassured by our very limited presence.

There are a number of points concerning security on which I am critical of the British Government, but I do not criticise them for the lack of boots on the ground as far as we are concerned. There is no question but that the UK is doing more than its fair share in dealing with the military resurgence of the Taliban, as are the Canadians and the Americans. What is lamentable is that too many of our NATO allies, which have significant forces in Afghanistan in some cases, have surrounded their deployment with national caveats, and they make it difficult, if not impossible, for the NATO commander to deploy them in the areas where they are most seriously needed. I hope that the Minister will confirm that it is imperative that national caveats in Afghanistan be swept away lock, stock and barrel. All NATO forces in Afghanistan should come under the same rules of engagement and the NATO commander of the international security assistance force should be left wholly free to deploy all available NATO forces in that country in the locations where they are most needed.

I believe that the number of troops NATO has in Afghanistan at the moment is about 30,000, not all of whom are combatants. The Soviet Union had 120,000, killed 1 million Afghanis and lost 15,000 casualties. How many troops does the right hon. Gentleman think NATO needs to have to secure a military victory?

I say to the hon. Gentleman that our approach is fundamentally different from that taken during the Soviet occupation. There is no way that we are going to employ the sort of tactics employed by the Soviets because they successfully and unequivocally alienated the hearts and minds of the Afghan people. We have a totally different approach, and I do not believe that we need forces of anything like that number to be able to win politically in Afghanistan or to contain the Taliban.

I wish to touch on three aspects of security policy. The first is the key policy issue for the British Government: what is the right balance of forces between the deployments in Iraq and Afghanistan? There is little doubt that the present Government’s reduction in size of the British Army and the insufficiency of operational aircraft, particularly helicopters, is producing profound overstretch in Iraq and Afghanistan. The crucial issue is determining the optimal balance of British forces between the two countries. I take the view that we are probably now overcommitted numerically in Iraq in relation to what we can achieve on the ground. Equally, I take the view that we are under-committed in relation to the gains that are to be had in Afghanistan. Perhaps the Minister will say whether the Government are considering making a significant redeployment of British forces in the coming year from Iraq to Afghanistan.

The second issue I wish to touch on, which is crucial for us down in the south, in Helmand province, is that of security co-operation between Afghanistan and Pakistan. In Northern Ireland, the long, open border was a considerable security problem for us for many years. However, that border was child’s play in security terms compared with the situation that we have along the border between Afghanistan and Pakistan. Alongside the length and topography of that border, much of it mountainous, is the fact that an enormous number of people cross there: we were told that approximately 200,000 people cross over that border each day, and at one crossing point alone, 30,000 people cross per day. Sadly, those factors make the border an ideal cover area for Taliban fighters to intermingle with the civilian population and move both fighters and supplies between one country and the other. That makes security co-operation between the two of the utmost importance, and we know that General Richards has been devoting a lot of attention to that issue. Some progress has been made. I think that the military trilateral commission is a very important step forward, and while we were there we learned of further developments in military co-operation. Again, however, it would be helpful if the Minister could confirm that that is a central security policy of the British Government and will remain so as long as our forces are in the south.

I want to raise a third security issue: the fundamental duty of any British Government is to ensure that our forces are adequately equipped for the task that they are being asked to undertake. Patently, that has not been the case and still is not the case in Afghanistan, and certainly is not in Iraq. We all know that casualties have been incurred, and lives lost, as a result of insufficient body armour. We know of deep concerns among our servicemen and women about the adequacy of their armoured vehicles. We also know—it was borne out graphically in the film on television last night—about the serious inadequacy in the amount of helicopter support available in Afghanistan. We all heard the Prime Minister on television stating that our forces in Afghanistan could have any equipment that they wanted. That has turned out to be one of his rhetorical statements and so far there seems to have been a singular lack of delivery on that very important need.

The Opposition feel ashamed about the lack of equipment and vehicles in Afghanistan and Iraq, which my right hon. Friend has pointed out. Will he tell us whether the Vector Pinzgauers, which were to be deployed by the end of 2006, have been deployed?

I cannot give my hon. Friend an answer to that, but I am sure that the Minister will have heard her question and will give the answer that she is seeking.

On that point, I can confirm that those vehicles have not been deployed to the region. In fact, the speed of the procurement reflects the lack of coherent thinking in replacing the unsuitable Land Rovers with the sudden purchase of the Vector Pinzgauers and the Cougar vehicles, to which my right hon. Friend has referred.

I am grateful to my hon. Friend.

I shall turn to some key Foreign Office policy issues other than security. I shall not touch on development because this is a debate to which the Foreign Office will reply, so I want to focus on issues concerning specifically that Department. On improving governance in Afghanistan, I say at the outset that given where Afghanistan was when we invaded, following years of war with the Soviets and then the appalling Taliban tyranny, I believe that the presidential, parliamentary and provincial elections, which were relatively free from violence and intimidation, were a considerable achievement. They achieved an encouraging turnout from the Afghan people—men and women.

Having said that, there is no doubt that there are grounds for many concerns about the state of governance in Afghanistan. Clearly, a huge amount of additional progress is required. The Afghanistan compact, signed in London almost exactly one year ago, is still largely an aspiration. The legal system is in its infancy, to put it mildly and politely. We heard during our visit that significant numbers of those who administer justice and of those in the police force are illiterate. There is very serious and all-pervasive corruption—I do not think that is an exaggeration—in the Afghan Government. That represents a big and long-term challenge.

I believe that we have to work at that over a long period. It cannot be dealt with solely by the British Government and I am not suggesting for one moment that it should. However, I say to the House that the British Government are highly regarded, as is the strength of our governmental and parliamentary institutions. Notwithstanding the pressures on the Foreign Office budget, I hope that the Minister will reassure us that it is looking carefully at the various pots of money that it has to promote and support good governance around the world and will make Afghanistan a very high priority. Unless we make progress on governance, we will not achieve long-term stability and success in the country.

That brings me to another specific issue: poppy cultivation. I do not know by what process the British Government agreed to take the lead on counter-narcotics after the invasion of Afghanistan. I do not know whether it was an act of heroic self-sacrifice on behalf of the Government, or plain naivety. Whichever it was, it has proved to be a seriously poisoned chalice. Poppy production was up 60 per cent. last year and is proving to be a depressingly useful source of funding for the Taliban and a means by which they can pull in what appears to be an almost unlimited supply of new recruits on the promise of $10 a day.

During our visit we discussed poppy cultivation and counter-narcotics for hours with a number of experts and, of course, the counter-narcotics Minister. I was satisfied that there is no simple or quick solution. No alternative cash crop can provide an income for Afghan farmers even remotely close to what can be obtained through poppy cultivation. There can be no commitment to buying in poppies for destruction at their current value because undoubtedly that would spur on further cultivation. Neither can the problem be dealt with by buying in poppies for legitimate medical use and the manufacture of morphine because that market has been taken up already by licit production in Turkey, India and Australia. Furthermore, drastic eradication by aerial spraying is ruled out by virtue of being politically unacceptable to the Afghan Government—with some justification.

We are left, therefore, with what appears to be only one option: a slow process, which will probably take many years, of combining moral and religious persuasion, and, hopefully, a more effective system of deterrence through the criminal justice system. It will probably require a more intensive form of eradication as well, particularly through the use of ground-based spraying. It would be helpful if the Minister could tell us whether the British Government are now willing to back such spraying as a means of dealing with eradication more effectively.

Does the right hon. Gentleman not think that if poppy cultivation in Afghanistan were reduced, production would inevitably increase in Myanmar, north Pakistan, Kazakhstan and a string of other countries, which could lead to the Colombiarisation of a large part of central Asia?

I certainly recognise the force of what the hon. Gentleman says, in that the market is international. However, we must consider the issue in the context of Afghanistan and its relation to the UK. The overwhelming proportion of the heroin sold on the streets of our towns and cities comes from Afghanistan. Poppy production in Afghanistan is also directly contrary to our security objectives there, as it produces a lot of money for the Taliban and finances their recruitment. Against those two criteria, we must be persistent and determined in trying to effect the gradual but ultimately total eradication of poppy cultivation in Afghanistan.

My last non-security point concerns human rights, which is also of profound importance. I should like to raise one small issue initially, which concerns the memorandum of understanding, which was entered into shortly before we arrived in Afghanistan, between the Afghan Government and the British Government on the treatment of detainees—that is, persons who are detained by British forces in Afghanistan and then transferred to the Afghan authorities. There is a clear written obligation in the memorandum on the British armed forces out there to notify both the International Committee of the Red Cross and the Afghanistan Independent Human Rights Commission when they make those transfers. However, the Afghanistan Independent Human Rights Commission made a strong complaint to us during our meeting about the lack of timeliness of such notifications. I hope that the Minister will give that matter his attention. It is important that we fulfil our obligations under that memorandum of understanding.

The central human rights issue in Afghanistan applies to approximately one half of the population. That half is of course the female population. Our presence in Afghanistan will determine whether the huge progress that has been made since the days of the Taliban tyranny on giving women greater human rights, and career and employment opportunities—we were glad to meet a number of women parliamentarians—and, perhaps most critically, on providing education for girls, will be carried forward or whether it will be totally obliterated, which would be the result of allowing the Taliban to take back control.

One cannot stress too strongly either how much is at stake or the sheer ruthlessness of the Taliban in their determination to deprive women and girls of those fundamental human rights. The Taliban are people who still burn down schools in the south simply because they take girls. They have murdered teachers in schools simply because those schools give access to girls. Therefore, when we talk about human rights in Afghanistan, we are talking about the fundamental rights of one half of the population there.

I am in no doubt that we should be in Afghanistan. The security case is overwhelming. It is unthinkable to allow the Taliban to retake control of that country and to return it to before 9/11. There is also a fundamental human rights case for being there. I conclude by saying that we are right to have removed the Taliban and we are right to be there, but we must do more, by deploying more resources to ensure that we win on security grounds, and we must be prepared to be there for the long haul.

rose—

Order. I intend to call Front-Bench spokespersons from about 12 o’clock, so if hon. Members who have indicated that they would like to speak can be reasonably brief, we can, I hope, get everybody in.

We are all grateful to the right hon. Member for Tonbridge and Malling (Sir John Stanley)—I can call him my friend, because I have known him for a long time—for the wealth of his experience on the Foreign Affairs Committee and for all that he has learned on his visit to Afghanistan. He gave a sobering report. What came through some of his suggestions was the pessimism that must be the proper reaction to the situation there, particularly after our incursion in Helmand province.

To return to the beginning of our involvement, it is important that we have a Minister here who played a crucial part in the early days of the invasion and its aftermath. My right hon. Friend the Prime Minister said in October 2001:

“We act because the al-Qaeda network and the Taliban regime are funded in large parts on the drugs trade. Ninety per cent. of all heroin sold on the streets of Britain originates from Afghanistan. Stopping that trade is directly in our interests.”

The hope that was shared by the Government and the Opposition, almost unanimously throughout the House, was that there could be a twin battle against the threat of terrorism and, rightly, against the Taliban and their mediaeval cruelty, to which the right hon. Member for Tonbridge and Malling referred, while also destroying the refuge that al-Qaeda had enjoyed in that country. They were seen to be worthwhile objectives and were supported almost unanimously throughout the House. We would have a twin campaign—a double war and a double victory.

We see now, however, that we have not secured a double victory but, if anything, a double catastrophe. We have been reminded of the drugs situation. Not only has Britain taken the lead, but the spending will increase to more than £200 million—we have spent more than £100 million already, £21 million of which has disappeared without trace and greatly antagonised the Taliban farmers. It was meant to be paid to them in compensation, but it disappeared in what for the past two centuries has been the endemically corrupt system of government in Afghanistan—there is a long history of that. Freedom of information investigations have turned up some of the documents that were needed for the Taliban farmers whose crops were destroyed in 2003 to receive the compensation due to them. They have not received that compensation and they rightly feel cheated. In fact, the efforts that we made in destroying those crops gave a further inducement to those farmers to plant more crops. We find ourselves in the ridiculous situation where our actions there have not reduced the crops—production fell by 2 per cent. in the year before last, but it is now up by 60 per cent., to the highest it has ever been.

The idea was to stop the heroin on the streets of Britain, but if we go a few hundreds yards from this place, we can buy heroin more cheaply in real terms than at any time. That is utter, abject failure. As I said in my intervention on the right hon. Gentleman, even if we had successfully destroyed the entire crop, the supply of the heroin would not be affected—it might be affected temporarily, but that would only increase the price and thereby the crime on our streets. The reaction would be an immediate increase in cultivation in Laos, Myanmar and elsewhere in that string of countries, exactly as has happened in Colombia. We should have learned the lesson: America spent billions of dollars trying to destroy the crops in Colombia. It had some success in that it reduced Colombian production, but production greatly increased in Peru and Bolivia in keeping with the “squeezed balloon” principle.

A splendid report by Lord Birt and the strategy unit, published under freedom of information legislation, clearly makes the point: we cannot destroy the drugs problem on the supply side. We can do it only in other ways. The situation is one of abject, utter failure. The lives of British troops are being sacrificed to an impossible cause. As always, I praise the heroism and professionalism of our soldiers in Afghanistan; I have met some from my constituency. Given the combat that they face, they are doing a splendid job in circumstances as difficult as anything faced by soldiers for many years.

I turn to what has been happening recently. A short while ago in the House, I raised a question with the Secretary of State for Defence about the endemic corruption of the Karzai Government—not so much of Karzai himself. I am sure that he is a good and idealistic man, but he is running the country in the only way possible: by doing dirty deals, through bribery and by using an army of provincial governors and police chiefs. I asked the Secretary of State:

“With Karzai increasingly appointing warlords, ex-Taliban leaders, criminals and drug dealers as police chiefs and provincial governors, is not the likelihood that oppression by these provincial governors and police chiefs will greatly increase the danger to our soldiers?”

We are associated with that rotten Government. There was an election, so they are a democratic Government, but as a western democracy we would not recognise them as a fair Government. The Secretary of State gave me an interesting answer. In a bit of a cheap shot, about which I later wrote to him, he decided that I was attacking one man. I was not; I was attacking the generality. He referred to the only star, the only provincial governor about whom we could talk with pride. The Secretary of State said:

“My hon. Friend should be careful in what he says…The description he has given of the governance of Helmand is far from the truth.”

I did not mention Helmand in the question, but that is what he said. He continued:

“Governor Engineer Mohammad Daud is a very brave, committed and non-corrupt individual, which is why we want to support him so much. He is a force for good in Helmand province.”—[Official Report, 10 October 2006; Vol. 450, c. 189.]

The Secretary of State was absolutely right and entirely fair, but last month Mohammad Daud was sacked. He is no longer the provincial governor of Helmand province; clearly, in that province there is no place, certainly in the Karzai Government, for someone with idealism who is non-corrupt. Mr. Daud could not survive there. Not only was Mr. Daud non-corrupt, but he achieved what has probably been the most promising success in Afghanistan by negotiating the deal that has brought temporary peace in Musa Qala. There is an interesting set-up there, which I think gives hope for the future.

Yes, we agree that there have been great gains in Afghanistan as far as women and education are concerned. However, it would be a mistake to believe that women are educated on the finer points of Plato’s “Republic” or the writings of Voltaire. They are educated in sharia law. There is no way of altering that; it is part of the culture of Afghanistan. The Taliban attacks on the schools and their murder of teachers and others involved is wickedness on a terrible scale. Of course we have to fight to try to stop that happening. However, do we have an attainable aim? Can we really do it? I believe that we can defend the gains that we have made around Kabul. For all the control that he has, Karzai is really the mayor of Kabul. The rest of Afghanistan is farmed out to warlords and provincial governors who still run the bulk of the country.

Since our February Westminster Hall debate on Afghanistan, we have been arguing about our going into Helmand province and trying to extend there. That was mission impossible; we cannot take control in that area. We can defend the gains around Kabul and use Karzai’s influence on the warlords, but that is the maximum that we can gain. That is not just my opinion. In our February debate, I gave a very pessimistic assessment of the situation and suggested that we were heading towards a British or NATO Vietnam.

Having heard suggestions that we should escalate the number of troops in the country, I am extremely worried that such a situation will come about, in which we are fighting not a traditional war between nations but an insurgency. We know the result of that from Chinese, US and French involvement in Vietnam and the humiliation of various other western nations with great sophisticated armies. I do not want to make too close a comparison with the Russians on this issue, but what is happening now was exactly forecast to me by a member of the Duma when we invaded in 2001.

At the moment, the hope of getting out with some dignity is the Musa Qala deal. I wrote to and asked the Secretary of State for Defence about that. I suggested to him that we had withdrawn British troops from Musa Qala, and that that had seemed a sensible thing to do. He said that we had not withdrawn the troops, but redeployed them. There is a subtle difference, perhaps; I do not know.

The Taliban are still in Musa Qala; they are inactive but present. We are not there, and a deal was done by the people who run the place so that they could recruit their own army, which I understand we are helping to finance. All that has resulted in a period of calm, without hostility. There is hope, although there is some nervousness in the Government about whether the situation will break down. Questions have been raised about the loyalty of the army, given that many of its members are certainly former members of the Taliban. However, in the context of looking for an optimistic solution, the Musa Qala deal has been good. We should certainly try to extend it to Sangin province.

After February, when we went in, we had lost seven troops in Afghanistan, most as a result of accidents. Since then, I believe that we have lost another 35, mostly in combat. That is a sad and bitter price for their families to pay.

There is an answer. I was disappointed to hear what the right hon. Member for Tonbridge and Malling said about the serious suggestion of using poppies for medicinal purposes as morphine. He said that the market was flooded, but it is not flooded as far as the developing world is concerned. The chance of a person in the developing world with a terminal illness or in terrible pain getting morphine is very small—only 6 per cent. Following the suggestion might well reduce the price of morphine.

In the western world, we know that if we face terminal pain we will almost certainly be supplied with morphine, that greatest of painkillers. However, there is certainly a market in the world that needs to be supplied. Médecins sans Frontières says that it has great difficulty in getting supplies and providing people with the boon of morphine and codeine. Yes, there is a great legal market supplied by Turkey, India and Tasmania, but it is not saturated. The suggestion in respect of poppies is practical. There are ways of growing them so that they go down the medical route rather than that of drugs of abuse. We should take up the proposals made by the Senlis council. There is support from Afghan farmers, who are either bribed from one side or attacked from the other.

The new governor of Helmand province, Mr. Wafa—a bit of an unknown quantity—has a plan to spray the poppies with herbicide. We can only pause to recall past experience of spraying crops. I do not know whether Mr. Wafa intends to spray them from the air, but the Karzai Government oppose the plan. However, we know that in most such cases, the decisions are taken by the United States as it exercises its influence over Karzai. Another catastrophe could take place; the people will certainly be further antagonised.

We can congratulate our troops, who recently achieved a significant military victory. Their reconstruction work has been virtually frozen for some months now. They were virtually confined to their barracks because of the ferocity of opposition from the Taliban and some of the civilian populations. Adding crop spraying to the list of what are perceived to be our crimes as the farangi in that area will further add to the difficulty of ever winning hearts and minds there.

You rightly asked us to be reasonably brief so that everyone can speak, Mrs. Humble, so I shall wind up now. There is no quick fix, but neither is there a slow fix. We must recognise that our mission in Helmand province is unattainable.

There is another danger. As a member of the Western European Union Defence Committee, I speak to people from more than 40 European countries. I know the views of fellow members of NATO such as France, Germany and Italy. Their views are different from those of this country, Canada and the Netherlands. I do not believe that there is any situation in which they would go into Kandahar or Helmand province. They regard that as a step too far and something that would be a suicidal mission for their soldiers.

Canada, Britain and the Netherlands have lost a great many troops. One questions whether they died in vain. It would be an act of criminal folly for us to send more troops on a mission for which there is no possible victory. Our best course of action would be to consolidate the gains that we have made around Kabul and to use our influence with the Karzai Government for benign ends. We should not continue with what we are doing in Helmand but seek a dignified retreat from the province. We will not call it a retreat, of course—we will dress it up as a deal—but we must get out of there. We can work with warlords who could use their influence to bring peace, but we will not achieve some kind of Scandinavian democracy in the area, as many here claim is possible. It is unattainable.

I thank my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) for his interesting contribution.

What strikes me about the situations in Afghanistan and Iraq, particularly Afghanistan, is the Government’s lack of candour. A long briefing that the military gave the Defence Committee during its visit last year to Kandahar was very interesting. At the end of it, I bumped into a friend. He dragged me outside and around the back, and said, “I can’t believe it. You sat there for three hours but the military have not told you that all five of our platoon houses in northern Helmand are today in heavy contact. All those guys giving you the briefing are apoplectic because yesterday the Americans dropped a 500 lb bomb or two on children in a compound in Helmand province without the slightest reference to the British.” That culture—that lack of candour—reflects a degree of panic on the part of the Government.

It suits the Government very well that we all stand up in the House of Commons and bang on about the lack of helicopters, body armour and vehicles. Those are important issues, of course, but they obscure a much bigger picture. On 12 September 2001, we had the sympathy of the vast majority of people in the Muslim world, the middle east and the Maghreb. Today, that picture is very different. The effect of our policies and those of a US Administration that completely dropped the notion of pragmatism in foreign affairs from the lexicon has been to push tens of millions of people in the middle east—and, regrettably, a few in our own country—into the hands of al-Qaeda and the like. Previously, those people had thoroughly objected to such groups, but now they are against us. For the benefit and safety of the people of this country and our allies, this Government, during the time that remains to them, must urgently address what on earth they are going to do about the situation. The effect of their policies has been the reverse of what they wanted to achieve.

The hon. Gentleman has just suggested that the Government are able to determine the content of a military briefing given to Members of Parliament in southern Afghanistan. Is he seriously suggesting that the Government would instruct the military on how to brief Members of Parliament?

No, I am not suggesting that.

That is what the hon. Gentleman said.

I did not say that. I said that the culture was the problem. I shall give another example. The Defence Committee was at the airport, waiting to leave Kabul. Along comes the senior Foreign Office official, who is a good guy. He has done great stuff in southern Afghanistan. Has he come to say goodbye to us? No, he has come, rather like a public relations man, to say, “Ladies and gentlemen, there are three key points that you must take back.” The Government created that culture, and I have many friends in the military from the time when I served in it who would agree with me.

I shall be brief, but I wish to make a couple of points. First, I pay tribute to the right hon. Member for Tonbridge and Malling (Sir John Stanley) for his introduction to the debate, which was well informed and measured in tone. That is the line that we must take when discussing Afghanistan.

We had a visit from a group of parliamentarians in December, and some of us took part in a video conference with Members of the Afghan Parliament, who pointed out a few things that are relevant to this debate. They asked that we not let our discussion of Afghan issues be completely overwhelmed by what is happening in Helmand province. They obviously understood that there are enormous difficulties in Helmand but asked that we bear it in mind that that situation is not necessarily typical of what is happening across Afghanistan.

The Afghan parliamentarians were also keen that we, as a group of British parliamentarians, press our Government to secure more international support for what we are trying to achieve militarily in Afghanistan and to urge NATO to provide additional support.

Afghan parliamentarians are aware of corruption in their Parliament. Those with whom we had the video conference are challenging it themselves. That is an enormous advance, and as parliamentarians we should do what we can to support them in that challenge. We had discussions with the British Council, which works with parliamentarians on language skills, and on understanding what is meant by governance and what they need to do to govern effectively. Again, that is something that we should recognise and applaud, and we should do what we can to support it.

The Afghan parliamentarians stressed that we should get on with economic development and reconstruction. They said that although supporting additional security is obviously necessary, it should not take our attention away from the other side of the coin, which is ensuring that economic development and reconstruction continue. At the end of the day, that is the only way to secure hearts and minds. People must be able to see on the ground that things are getting better.

I hope that all Members have received a copy of the report that was sent out by the BBC World Service in the past week. It carried out a nation-wide survey of opinion in Afghanistan. Seven in 10 people are still happy with the presence of US, Canadian and UK troops, and some 74 per cent. said that, overall, their living conditions are better today than they were under the Taliban. Obviously, they still have enormous concerns about security and corruption, but the Afghan parliamentarians want us to challenge negativity and pessimism such as that in the contribution of my hon. Friend the Member for Newport, West (Paul Flynn). They were astonished at the pessimism that is expressed in this country, not only in Parliament but by non-governmental organisations, and they are doing what they can to challenge it. That is not to say that they are not aware of the enormous difficulties, and I would not want to play them down. In essence, a country is being built from scratch, in terms not only of basic services but of principles of government, security services and the legal system. That is an enormous challenge. We should see it as a challenge and do what we can to support the Government. We should be not unnecessarily pessimistic but realistic, and we should get on with the job.

It is an honour to participate in the debate and I congratulate my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) on securing it.

It is sad that we are not able to conduct such debates more frequently in the House, considering that Britain is at war in Afghanistan. We have 4,000 soldiers there, who are working very hard. I must acknowledge some of the comments made by my right hon. Friend. I have been to Afghanistan three times now and each time I come back with far more information than I ever glean from the Government. It is important that all hon. Members who have been to Afghanistan can come back and contribute to such debates. Sometimes we do not get the full information about the consequences and challenges, so it helps us if we visit such places as frequently as we can.

I pay tribute to the work of 3 Commando Brigade and to that of their predecessors, 16 Air Assault Brigade, in doing a difficult job. However, they do not have the technical support or the back up that they need. It is not possible to patrol an area the size of Wales with eight Apache helicopters and four Lynxes. I am afraid that that is a reflection on the commitment that the Government now show towards our military, which is seen in the many comments made by a series of generals, both retired and serving, on the state of our armed forces. For example, let us take the comments of General Rose on the state of our Army, those of General Dannatt—a serving officer—about the consequences of our struggling in Iraq and those of General Jackson in the Dimbleby lecture. They need to be taken seriously by the Government if we are to ensure that we are successful in Afghanistan.

If we are to be successful, we must ensure that we provide the right equipment. The Vector Pinzgauers have been mentioned, and I have been calling for some time for Warrior vehicles to be sent. The Canadians and, indeed, the Americans are now taking full-blown battle tanks, but instead, as hon. Members might remember, in July we had to rush through the sudden and hasty purchase of Vectors and Cougars, which are tougher vehicles, much better than the Land Rovers that have resulted in some 21 soldiers being killed because they are not tough enough.

Time is limited, so I shall drop many of the comments that I would have liked to make. On my last visit, I saw that huge progress has been made, particularly in the north. Schools are opening up, radio stations are developing and we are getting the bases of the communities that we so wanted. In the south, the picture is very different. The serious levels of corruption are now being exposed by the relative peace. Some speakers today mentioned that they have met Members of Parliament from Afghanistan, but those whom I have met have never been to their constituencies because that is too dangerous. We have to ask how much of a democracy that is.

We are not taking advantage of the fragile peace because of a fundamental lack of co-ordination in reconstruction activities. Who is in charge? Is it Tom Koenigs of the UN, or the head of the EU in Afghanistan, or our representative from the Department for International Development? I witnessed those organisations competing against each other rather than working together. We need one overall co-ordinator with the authority to knock heads together and work with ISAF commanders. That is absent from Afghanistan and a ton of money is being wasted as a result. Those are the issues that we on this side of Europe can get right.

I want to see the EU take a more pivotal role. One way in which the EU could do well would be in spending the tons of money that are pouring in better. There are rivers that run underground in Afghanistan that are not tapped into. Those are larger projects than the quick impact projects that the local provincial reconstruction teams can tap into. Such projects need massive co-ordination, big engineering and a huge amount of work beyond the ability of any DFID operation in Helmand province or of the German foreign ministry in the north. That is where the co-ordination must take place.

My final point is about poppy growth. We have a shortage of diamorphine in this country, and another country—the third poorest in the world—is producing poppies that could make diamorphine. It does not take a rocket scientist to work out that there has to be a little co-ordination. I heed the points that have been made. Yes, it is difficult to wean people off growing poppies but let us have some five-year pilot programmes that allow us to purchase the poppies directly from the farmers. We can turn them into something that the world has a shortage of and at the same time introduce other programmes whereby farmers grow other crops. It takes a while to grow peach trees, so in such a five-year programme we can slowly wean farmers off their reliance on poppies. If we were to do that we would provide financial support direct to the farmer, raise taxes for the Government, cut off the clandestine links that have been established with Pakistan, and remove the link to terrorism, too.

Time is short, Mrs. Humble, and it seems so sad as I know that everybody else wants to say so much. In conclusion, we are at a tipping point. We have been in Afghanistan for five years and not a huge amount has happened in that time. We need to do so much more. The window of opportunity is closing, and we need a workable solution to the challenge of poppy growth. The Prime Minister has said that we can have any equipment that we want there, so let us meet the challenge and encourage our allies to do so, too.

rose—

Order. I have three people wishing to speak and five minutes left for them to do so, so I urge everybody to be extremely brief.

I shall be extremely brief. I congratulate the right hon. Member for Tonbridge and Malling (Sir John Stanley) on gaining this debate and I congratulate all hon. Members on the extraordinary analysis that has been made by members of all parties in the Chamber this morning. There has perhaps been more analysis of Afghanistan than of almost any other hot spot anywhere in the globe in the current political conflict. It has all been enlightening in many respects.

To those who say that the military or the Government are spinning, let me remind them that the first casualty of war is always truth. It is extremely difficult to get to the bottom of what is going on. I immediately disagree, however, with my hon. Friend the Member for Newport, West (Paul Flynn): now is not the time to plan a withdrawal from Afghanistan. I say that in the light of a recent visit I undertook with the right hon. Member for Tonbridge and Malling—

I did not say withdrawal from Afghanistan, but from Helmand province.

I shall move on, because that is now on the record and that is fair enough.

Let me quote from the International Crisis Group’s report, which gets to the heart of the matter. The group, having heard the analysis and carried out significant amounts of work in Afghanistan, states:

“The intervention in Afghanistan has been done on the cheap. Compared even to many recent post-conflict situations”—

it gives the examples of Bosnia and Kosovo—

“it was given proportionately many fewer peacekeepers and less resources—and Afghanistan has never been a post-conflict situation.”

The report also states:

“The desire for a quick, cheap war followed by a quick, cheap peace is what has brought Afghanistan to the present, increasingly dangerous situation.”

I commend the report to all who want to make any difference in Afghanistan.

I was also interested by a quote from the deputy Secretary-General of the UN, who said that unless we go to Afghanistan, Afghanistan will come to us—and, by golly, in a big way. In the west midlands and in other conurbations, the market for drugs is growing at an exponential rate. The way to tackle that is not to go for some of the poorest farmers on the face of the earth, who exist on just over a dollar a day to keep their families, but to prevent the demand here, in Europe and in America from increasing and to reduce it through education.

In Afghanistan, I saw our two old friends: poverty and his bedfellow inequality. Until we tackle those two problems in Afghanistan, as we must elsewhere, the rise and rise of fundamentalism will continue to confound us and even our best efforts will be laid waste. I agree with my hon. Friend the Member for Newport, West that there are no quick answers, but the long answer is education, the elimination of poverty and the reconstruction of devastated nations.

I congratulate the right hon. Member for Tonbridge and Malling (Sir John Stanley) on a characteristically thorough and impressive introduction to our debate.

The backdrop, of course, is the attacks by al-Qaeda on the United States on 11 September 2001 and the subsequent response by the US and others, including the United Kingdom. The Liberal Democrats supported the intervention by British armed forces in Afghanistan in the wake of 9/11, partly because the country was evidently a base for al-Qaeda and could form a platform for exporting militancy around the world. It was difficult to have much sympathy for the Taliban regime.

Considerable progress has been made, and I am sure others would echo the sentiment that the tales coming out of Afghanistan are not all bleak. For a start the Taliban Government have been removed; the Taliban has residual influence but it no longer controls the country as it did. Anyone who is of a liberal disposition will see huge merit in the fact that the Taliban is no longer running the country.

Many basic measures of attainment are pointing in the right direction. There is greater access to health care and an increasing number of children are being educated. We have seen progress, and I would not wish anyone to leave here with the impression that my party does not regard that as worthy of support, just as we remain supportive of the troops and the British presence in Afghanistan. However, there is much to reflect upon given the difference between the objectives and ambitions that the country had when we first sent troops there and the position today.

From the beginning, it is fair to say that there has been confusion about the purpose of the mission in Afghanistan. We were told that troops were intended to enhance stability and to spread the authority of the Afghan Government, but what was billed as a stability mission has rapidly become a full-blown counter-insurgency operation. One can see that in the disparity between the present position and the statements made by the right hon. Member for Airdrie and Shotts (John Reid) when he was Secretary of State for Defence. He allowed the British to believe that there may be no need for British forces to engage in substantial fighting in southern Afghanistan. That is evidently not the case, and the news on our television screens and radios and in our newspapers nearly every day makes that clear.

We are trying to fight in two countries in the middle east—Afghanistan and Iraq. It is worth repeating that if the armed forces are overstretched it is due in large part to the fact that the Labour and Conservatives parties voted for us to go to war simultaneously in both countries. Many people in the Liberal Democrat party and beyond regard the invasion of Iraq as a distraction from the work being done in Afghanistan.

We supposedly invaded Iraq because of the link between Saddam Hussein and the appalling events of 11 September 2001—a link that has never been established; or because, according to the Prime Minister’s account, weapons of mass destruction posed an imminent threat to the security of the United Kingdom. Some said that that threat could be realised in 45 minutes. That, too, proved not to be the case. I leave those arguments to one side—they have been rehearsed again and again, and I wish to consider only the effect on Afghanistan.

I keep hearing about overstretch, a lack of equipment for British forces and the difficulties of retention and recruitment in the armed forces because of problems with morale and the time that soldiers and others have to spend away from home. Our presence in Iraq was the result of a conscious decision by the vast majority of Labour and Conservative Members in the House that we would commit our forces to the war in Iraq, despite the absence of al-Qaeda links in Iraq and the evident links in Afghanistan. That war has been a distraction from some of the work being undertaken in Afghanistan.

Drugs were mentioned earlier. If that is a measure of our success, it is lamentable. The Prime Minister gave the country the impression that the British presence in Afghanistan would reduce the amount of drugs coming to the UK and being used here illegally. I refer to a written answer to the Conservative spokesman, the hon. Member for Cotswold (Mr. Clifton-Brown)—I give credit where it is due—from the Foreign Office. It confirmed that in Afghanistan in 2005 4,100 metric tonnes of opium poppies were cultivated; that by 2006 the figure was up to 6,100 tonnes—an increase of about 50 per cent. year on year—and that Helmand province saw an increase of 162 per cent. in the amount of opium poppy cultivation in 2006. If that was the Prime Minister’s objective, as we were led to believe, our efforts have not been conspicuously successful.

I wish to give others more time to speak, particularly the Minister, so I finish by saying that, although our presence in Afghanistan is necessary to continue to ensure that it does not act as a base for exporting violent militancy, extremism and terrorism around the world, good things are being done there. However, there is confusion about our objectives. I hope that the Minister will be able to deal with these three questions.

First, what is our goal? In summary, is our aim to make the country sufficiently stable that people do not daily go in fear of their lives and that the aid agencies can go about their business reasonably unmolested, or are we instead trying to achieve the far more ambitious goal of exporting western-style liberal democracy to Afghanistan? If it is the second, laudable though it may be, the Government will have a big struggle on their hands.

The only time in my memory that power has changed hands between political parties was at the 1997 general election. That shows how infrequently it happens in Britain—or how young I am, or a combination of the two. I remember being struck by how painless the process was. One party and one Prime Minister were in charge of one of the most powerful countries in the world—a member of the United Nations Security Council, a member of NATO, a nuclear power and all that goes with that—but after the people had voted, they exited office and a newer regime, a newer Administration, came in with a new Prime Minister. We take such things for granted, assuming that they can be exported to other countries, and that others can pick them up and take things from there, but the process that took place in the UK in 1997 and which happens in other mature and established democracies takes a long time to establish. The Government are showing an element of naiveté if they think that they can export our liberal democratic systems and values as a package to other countries. Indeed, we have heard a lot about the corruption in Afghanistan that undermines those intentions.

The second question is what is the Government’s envisaged timetable in Afghanistan? They may not have one, but I would be interested to know whether the Minister thinks that we will be there months, years or decades. At the moment, it is unclear. He may say, as the Prime Minister does about Iraq, that we will be there for as long as the job takes, but that is an extremely vague basis on which to plan defence expenditure and British foreign policy.

The third question summarises all that I have said. What would the Government regard as constituting success in Afghanistan? Whether we take it from when the Prime Minister leaves office in a few months, or whether we take a longer view and consider what might have happened in 10 years’ time, what would the Minister regard as a successful outcome to our venture in Afghanistan? It would be extremely interesting to know, as it would be a basis on which to measure the Government’s policy and the achievements that had been made in the meantime.

I wish you all the compliments of the new year, Mr. Pope. I thank the Minister for being here; and I congratulate my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) on securing this debate. My right hon. Friend did exactly the right thing, given that we have some 6,000 troops in Afghanistan, that we are in a deep military conflict and that we have committed ourselves to about £400 million of aid for Afghanistan.

This should not be a debate in private Members’ time; it should be a properly constituted Government debate. We should have a debate on this subject at least once a quarter and the Government should tell us what progress they are making towards the timelines and ambitions contained in the London compact signed just over a year ago. I urge anybody who has not read that document to do so. It is not an onerous document to read, but it is very interesting and contains some important information. However, in my view, the compact is vastly over-optimistic and I will come on to the aims of that document in a moment.

I congratulate my right hon. Friend on what he has said. In particular, I agree that, as in many other parts of the world, a solution will not be reached by military means alone. There has to be a stable security situation in Afghanistan to achieve the other goals we are aiming for. Surely, one of those goals is the establishment of a stable and secure central Government in Kabul with an independent judiciary and a stable economy delivering improved public services for all the people of Afghanistan.

So, where do we go from here? My right hon. Friend did well to emphasise the problem of overstretching our military. We are beginning to see that in every aspect of military life, from cutting back capital resources in our Navy to the condition of the living quarters of our armed troops, which was highlighted over the Christmas break. Many different areas of the military are overstretched. The Government must decide exactly what they want from our armed forces and what assets they will provide them with. It is morally unacceptable to send our troops into danger without properly equipping them.

We, the official Opposition, believe that it is absolutely essential that we bring stability to Afghanistan and therefore, in a sense, all like-minded western democracies are in this fight together. Much mention has been made of those countries which have deployed forces to Afghanistan. Congratulations and thanks should be given to the countries that have taken the brunt on the front line—America, Canada, ourselves and the Netherlands. However, it must be said that other allies could do more, particularly considering the size of their armed forces and the number of troops deployed. I will not name names, but several of our key European allies do not commit as many troops as they should while others commit troops yet impose huge numbers of caveats. Those troops should be available to commanders on the ground in whatever capacity they wish to deploy them.

Having said that we are in this fight together, what is happening on the ground in Afghanistan and what needs to happen in the future? It is not all doom and gloom as some hon. Members have said that it is. The number of women being educated in the north of Afghanistan is certainly increasing; on the other hand, Human Rights Watch says that the overall number of women being educated in Afghanistan is not enough and that the situation has not changed as much as women in Afghanistan would want or the liberators would desire.

I have a story that will particularly appeal to the hon. Member for City of Durham (Dr. Blackman-Woods), if not to other hon. Members, because it sums up what is taking place in the Parliament and democratic processes of Afghanistan today. I do not know whether my right hon. Friend the Member for Tonbridge and Malling met the lady my story is about when he visited the country. She is a parliamentarian in Afghanistan and her name is Malalai Joya. She is just 28 years old and is the youngest and most famous of all the women in the Afghan Parliament. Her very presence in the Parliament is a powerful symbol of change. She rose to fame in 2003 when she made a speech attacking the warlords who still hold the balance of power in Afghanistan. On that occasion, one of the men she was attacking, Abdul Rasul Sayyaf, rose and told her that her speech was a crime. He announced in the Afghan Parliament that

“Jihad is the business of this nation”.

He then asked for her microphone to be disconnected. The then Speaker of the House, Sibghatullah Mojaddedi—a former mujaheddin leader—called her an infidel and said that if she did not apologise, she could not attend the next session of Parliament. I could not imagine you, Mr. Pope, doing anything similar. However, that incident shows what is taking place in the life of Afghanistan and is an example of what we must reckon with.

The general situation in Afghanistan has been mentioned and I would like to go back to the compact that was signed over a year ago. I draw the attention of hon. Members in particular to the annex at the back. On those countries who could supply armed forces, I ask hon. Members to look at annex IV, which lists the countries that could but do not supply troops. I urge the Minister to look at that list and consider whether he could urge some of our key allies to provide more troops. As the Secretary-General of NATO has said, we need another 2,500 troops.

I draw the Minister’s attention to one or two of the timelines in the compact. First, and perhaps most important, on the international security forces, annex I of the compact states:

“Through end-2010, with the support of and in close coordination with the Afghan Government, the NATO-led International Security Assistance Force (ISAF), Operation Enduring Freedom (OEF) and their respective Provincial Reconstruction Teams (PRTs) will promote security and stability”.

We are a long way off achieving that. On the Afghan army, the compact goes on to state:

“By end-2010: A nationally respected, professional, ethnically balanced Afghan National Army will be fully established”.

On the Afghan national and border police, the compact states that by the end of 2010 a fully constituted, professional, functional and ethnically based Afghan national police will be established with up to 62,000 men. Those aims are vastly optimistic, but extremely important. That is why I repeat to the Minister that the Government need constantly to come to Parliament and update hon. Members on progress towards those goals. Some of our troops have been in Afghanistan since 2001 and the vast bulk have been there since the middle of 2006, with further troops committed towards the end of 2006. I do not believe that those aims are any closer to realisation than they were when we committed troops. Indeed, some of the aims in relation to counter-narcotics are further away from being achieved than when the compact was written.

Another point of view is that the Governments of Germany, France and Italy are to be commended because they have not put their troops at risk of death for an impossible cause. If the hon. Gentleman is urging the other NATO countries to send more troops into Kandahar and Helmand, will he tell us the number of troops he thinks NATO should have to achieve a military victory?

The hon. Gentleman has put it on the record in his own way, but, as I have already said, the Secretary-General of NATO has estimated that we need another 2,500 troops to improve the security situation in Afghanistan. He has named those countries that he thinks could provide more troops, and his intervention brings me on to his pet subject—counter-narcotics.

The hon. Member for Taunton (Mr. Browne) quoted the parliamentary answer that I was given, but I would like to bring hon. Members’ attention to the aim stated in the compact on counter-narcotics. It says in reference to the Afghan Government that,

“By end-2010, the Government will strengthen its law enforcement capacity at both central and provincial levels, resulting in substantial annual increase in the amount of drugs seized or destroyed and processing facilities dismantled”.

I am told that one of the main problems with drugs is that we are not going after the dealers or the manufacturing facilities. I do not know why, but there is a suspicion that the dealers are being kept so that we can gain more intelligence. That is unacceptable; if we know who they are, we should go after them. We should follow the American model in Colombia. I commend the Minister for looking at some of the Colombian figures because they have had great success in reducing the amount of coca-growing areas in Colombia.

Will the hon. Gentleman give way? There was a 20 per cent. increase last year.

The hon. Gentleman scoffs, but it is a fact and I am not going to give way to him. The Colombians have had a significant success. I do not agree with him that by concentrating efforts in one country the problem will merely go to another country. That is not an excuse for not concentrating efforts in a particular country. The Americans have helped the Colombians reduce coca production in Colombia and I hope that we will produce significant reductions in poppy growing in Afghanistan. That is absolutely necessary because the price of heroin on our streets has halved during the past two years—down from about £75 a gram to about £35 a gram. If that is the real reason why some of the public do not believe that we should be in Afghanistan, I believe it is cast-iron proof that we should be there.

There are other things that we should and could be doing in Afghanistan. We should be helping to establish a proper judiciary; the French are in charge of that aspect and it seems that relatively little progress has been made. It is estimated that we need to train 62,000 police. The Germans are making relatively little progress in training the police and rooting out corruption in the police force. As with the armed forces, the police need to be given proper equipment.

I do commend the Government for one thing. They have done a good job of helping to reconstruct the Treasury, and it is now bringing in more revenue. The Afghanistan Government are now spending a little more on schools and health and beginning to build infrastructure in the north. The trouble is that Afghanistan is a country of many different parts, and while one part may be making progress, the situation in others—certainly in the south—is getting worse. We do not even hear about some of the provinces, and nobody seems to know, for example, what is going on in Nimroz, the province next to Helmand.

I urge the Government to remember that we are in this fight together and that all western democracies and like-minded nations must co-ordinate their efforts to resolve the problem, by providing human assets and training so that we can build infrastructure or providing military assets so that we can make a real effort to crack down on the Taliban insurgency. Finally, I urge the Government to make every possible effort to lobby the Pakistani Government to seal the porous border with Afghanistan.

I shall bring the debate to a close with some observations on the current position in Afghanistan, but I begin by congratulating the right hon. Member for Tonbridge and Malling (Sir John Stanley) on securing the debate and on taking the time and trouble to visit Afghanistan with other members of the Foreign Affairs Committee.

Given the nature of the debate, it is important to remind those who have contributed to it that when the Taliban regime fell in November 2001—a very short time ago—it left behind a fractured, impoverished, broken state. In the five years since then, the only constant for the people of Afghanistan has been change. However, with the help and support of the international community, they have effectively rebuilt their nation almost from scratch, and their accomplishments have been significant.

In 2004, Afghanistan held free, fair and democratic elections to select a President. The following year, the people elected a Parliament, and a new National Assembly was inaugurated. The key state institutions are all now in place. Afghan entrepreneurial skills, helped by inflows of reconstruction and development aid, have generated annual economic growth rates of between 9 and 14 per cent. Some 4.5 million refugees have returned to their homes. Women, who were excluded from participation in public life under the Taliban, now make up a quarter of the MPs in the National Assembly. Five million children, 37 per cent. of them girls, are now at school. The health system is functioning, with a 60 per cent. increase in the number of clinics since 2001 and a widespread vaccination programme.

The crucial fact, however, is that much of Afghanistan is at peace. The Taliban have sustained significant losses in the face of determined action by the international security assistance force. In that respect, NATO and British troops have made a significant contribution. In much of the country, ordinary people can go about their daily lives without being at serious risk from terrorism or crossfire. In short, Afghanistan’s rate of recovery since the fall of the Taliban has outstripped that in most post-conflict countries. I recognise, as right hon. and hon. Members have highlighted in this brief debate, that challenges remain, and I shall outline a few of them, but it is important to concentrate on what has been achieved rather than on what must still be done.

Let me emphasise that we cannot win in Afghanistan through military action alone. There is a need to extend the rule of law and the writ of the democratically elected Afghan authorities across those parts of the country where there are still challenges. The Afghan Government want and need to take responsibility for the security of their country and their people as soon as they can. However, until a new Afghan national army and a reformed Afghan national police force have been trained, equipped and fully deployed, international forces will need to remain in Afghanistan. In that respect, work remains to be done, but there has been significant progress. Nearly 30,000 Afghan soldiers and more than 40,000 police officers have been recruited, trained and given the tools to do the job. The Afghan national army has been reformed to make it more professional, accountable and ethnically balanced. More than 62,000 fighters have also been disarmed under the disarmament, demobilisation and rehabilitation programme, and a successor programme to disarm illegal armed groups is in hand.

The right hon. Gentleman talked about training the police force and the army, but when does he imagine that that will be completed, given that we heard earlier—that the countries undertaking that training appear to be dragging their feet? He describes the most fantastic progress, and there may be progress in the north, but there is certainly no progress in the south, so perhaps he should concentrate more on the difficult situation there, rather than on the rest of the country.

If I may say so, one thing that almost all hon. Members who have contributed to the debate have overlooked is the plan that was outlined quite soon after British and international forces went into Afghanistan. The operations in the south are the continuation of a plan that has evolved over a number of years. The plan was always that effort would be concentrated in and around Kabul and then in the north, before moving progressively to the east and then the south, and progress has been absolutely consistent with that plan. We always anticipated that resistance, particularly among the criminal and terrorist elements in the south, would be one of the most difficult problems, so it is not surprising that we are facing attacks there; that was always anticipated and planned for. If I may say so, the hon. Lady needs to emphasise the tremendous success that has been achieved in other parts of Afghanistan as the plan has evolved.

Is the Minister going to use all his time to read his civil service brief or will he make any attempt to answer the points raised in the debate? That is the convention of the House.

I am sorry that I gave way to my hon. Friend.

Given what the Minister knows now, and bearing in mind that we have only 30,000 troops in Afghanistan but sent 230,000 troops to Iraq after the invasion of Afghanistan, does he agree that we would have achieved an awful lot more in the past five years if we had sent those 230,000 troops to Afghanistan?

I made it clear that what has evolved in Afghanistan was planned for and is the continuation of proposals that were set out right at the start. I should also emphasise that there cannot be a military solution alone to the problems of Afghanistan. If hon. Members had had the time, they might have looked more carefully at what has taken place in the north and, indeed, the east, where a sophisticated combination of military effort and the development of the civilian administration has resolved problems. That is particularly significant in the east, where many people said that the problems could not be dealt with. However, the warlords and others who had been in power there, who were not prepared to accept the authority of Kabul, have now done so, and a similar pattern has developed in the west. We have been able to combine the sophisticated use of military force with the skills and ability of administrators from this country and a number of other international contributors to ensure peace and stability and to create administrations in many parts of Afghanistan that are answerable and responsible to the democratically elected President and the parliamentary authorities. That is a huge achievement in a short time, and I only wish that right hon. and hon. Members had given the Afghan people more credit for what they have achieved and, indeed, for what they want to go on achieving with the support of the international community.

None the less, I recognise that there are problems, and I have mentioned some already. Corruption remains a major challenge and good governance needs to be extended. The UK hosted a conference on Afghanistan in London in January last year, which was chaired jointly by Afghanistan and the UN. The Afghanistan compact, which was adopted during the conference, dealt directly with corruption and saw tackling it as a priority for the country’s continued development. Corruption will not be eliminated overnight, but measures are being put in place to help the Afghan Government tackle it in a more effective and sustainable way. Those measures include creating a panel to advise President Karzai on senior appointments below ministerial rank that fall outside the existing civil service appointments board. The panel assesses candidates’ competence and personal integrity and seeks to exclude those with links to illegal armed groups, drug trafficking, corruption or human rights abuses. The President has also established an anti-corruption commission, which is chaired by the chief justice, and which has tasked the Afghan attorney-general with leading the fight against corruption among senior public officials. A number of officials have already been suspended. Together with terrorism, the continued involvement—

Order. We must now start the next debate.

I am delighted to introduce this debate. This is the third time I have troubled the House on the subject, but I have not done so for some time, and a debate on the future of rural land estates is long overdue. I welcome the Minister and thank him for coming today. I know that he has difficulties with events that clash, so I congratulate him on being able to attend to answer for the Government. I am also indebted to George Dunn, the chief executive of the Tenant Farmers Association, Dennis Brewer of the south-west National Farmers Union, and Martin Large of Gloucestershire Land for People, who have helped me to construct some of my argument; the fault is entirely mine if I get it wrong. I hope that we shall receive some illumination on where the Government are going, and what they expect of local authorities.

I have some background in the area covered by the debate, because I chaired Gloucestershire’s rural estates advisory group when I was a county councillor, between 1993 and 1997. Smallholdings are, to me, an important part of the fabric of the countryside. I shall not say much about history, but I remind hon. Members of how developments arose from the first world war idea of a land fit for heroes. The two key principles remain important in my view: the gateway that allows people with no other means of getting access to farmland to gain it through county council smallholdings; and the ladder principle, which allows people to develop their skills and capabilities, by moving on to larger holdings. If anything, that has been helped by the tenancy reforms, farm business tenancies, and so on.

I am grateful to my neighbour for giving way. He may be interested to know that I discussed the issue with the local NFU on Friday, and was told that the problem with the county farms is that, although the ideal that the hon. Gentleman set out is exactly right, there is no ladder by which people from the smaller farms can progress to bigger ones, because so few bigger ones ever come up for let.

I think that that is a problem, and I want to allude to it and to some ways in which we can take the matter forward. However, I agree that in essence that is a difficulty for the estates.

Do my hon. Friend’s proposals include giving the tenant farmers in the circumstances described, and tenant farmers generally, the right to buy?

Not as far as I am concerned, because I am in favour of keeping the holdings in state control, so to speak. However, there are ways in which, through community land trusts, we might consider giving farmers opportunities to bridge the gap between the public and private sector.

My starting point, and my main concern, is that there has been a reduction in the overall size of the farm estate nationally, and more particularly that there has been a piecemeal decline in size. That is particularly apposite at this time, as my close neighbour the hon. Member for Cotswold (Mr. Clifton-Brown) knows, because there has been a further debate in Gloucestershire county council about the future of the estate, and some alarm was raised by both tenants and their representative bodies—both the TFA and the NFU.

Correspondence has come to my notice that has gone to the county council and to my noble Friend Lord Rooker, trying to ascertain where we are going, with respect to the future of the county farm estate. It is not for me to ascribe blame. As I have said, I have some responsibility with regard to a previous time when we decided to keep and develop the estate, and I consider anything that will detract from that unacceptable. However, in these days of pressures on local authorities and central Government there is always a likelihood that the issues will come up again. I want to lay some of the ghosts and encourage authorities to keep their holdings, because of the principles that I still hold dear.

There are other reasons for what I am saying. The estate is not inconsequential. It brings £375,000 a year to Gloucestershire in rents, but when such things are considered purely as pounds, shillings and pence, to use old terminology, it is difficult to argue that there are pure economic reasons to retain the smallholdings. I nevertheless want to examine some other arguments, because there are deeper and wider arguments for doing so. New approaches are being introduced. I am not talking about just keeping a set of estates that will decline over time. I should like to consider the idea of community land trusts, which provide the opportunity to bring affordable housing into the areas in question; more particularly, different forms of ownership are suggested for consideration. My mind is not closed to those ideas and I want to talk later about the idea of mutualising the farm estate, which might provide protection. In the end each local authority will make decisions on merit, but perhaps collectivising and considering ways to get greater asset value from the land might provide us with greater certainty about where we are heading.

In Stroud we are thinking about new forms of agriculture; we have Stroud Community Agriculture, which is a group of people who are not on a county farm estate, but who have formed a smallholding and are farming it organically; their intention is that it should grow. The importance of the land can be seen in different ways. I shall not get into arguments about the idea that the land is ours, but I certainly think that it is of crucial importance in what it can bring—not just food, but the uses that people want from it.

I see the estates as being under attack; there has been debate in Gloucestershire and it continues in North Yorkshire. Indeed there has been almost a process of sale in Somerset. I see a threat of piecemeal as well as wholesale sales. That does not mean that I have ever been against selling some land to accumulate capital value, which can be invested in other services in the county council. However, I argue that that can be done strategically rather than as a whole or by selling farms as they come up. We need to be much more thoughtful about it.

Opportunities are also provided by the new environmental world we live in, by carbon sequestration and by the European rural development programme. I hope that we shall consider ways of investing collectively, through county farm estates, to encourage farmers to look for new ways to farm. With that in mind, Fresh Start is an important development, but we need to fund it.

To return to the concerns of the hon. Member for Cotswold, I would argue that we must not look at estates in isolation. We must consider links with the National Trust, the Duchy of Cornwall, the Church Commissioners and, indeed, large landowners such as the Bathurst estate in his area. They are always looking for good tenants and the county farm estate is often somewhere for people to develop their skills. We should not see them in isolation.

Other problems come to mind. The NFU talked to me about the conflict in local government, when estates have been sold off by county councils. Issues have now arisen in the planning process in that those who acquired the estates seek planning permission for purposes far from what was originally intended. That is inevitable, because people are trying to use land for creative reasons. An interesting paper in the Library, by Christopher Barclay, considers farm diversification, countryside and planning and the new planning policy guidance note 7. It is a good move, but there are inherent dangers in relation to who is to apply for planning permission and what they want to do.

That aspect of the matter links to the problem of the ever present drive to get rid of the estates. There is pressure on tenants and increased regulation, such as nitrate vulnerable zones and animal welfare measures. All those pressures come together, particularly in Gloucestershire, where there has always been a tradition of a large number of dairy holdings; it is those that are decreasing. It is important that removing dairying is not the end of the farm estate; that should not be a reason. There are reasons for the changes happening in dairying.

I congratulate the Government—the Tenancy Reform Industry Group has come up with some valuable proposals, and that discussion must continue. To be churlish, there are issues well beyond the Minister’s pay grade but which he could take forward as questions to the Treasury.

Where are we with some of the fiscal proposals? This issue covers five different tax areas: inheritance tax, because of the ownership of the estates and the way in which tenancy reform is dependent on landowners—of course the situation is slightly different if it involves a county farm estate, but I am talking also about tenancy farming—income tax, capital gains tax, corporation tax and VAT. The issue goes across the whole fiscal range. That has been covered by TRIG, but very little progress has yet been made. I have tabled parliamentary questions on the matter, not to this Minister but to the Treasury, and so far I have received a fairly bland set of replies—I put it no more strongly than that.

The Minister gave an answer yesterday on the end of the adjudication scheme. I am disappointed about that, as are the NFU and the TFA. My hon. Friend said in his answer, quite rightly, that no one has yet used it, but that does not mean that some mechanism will not need to be considered in future. It is good that there is now a code of practice, but that, by necessity, will not be as strong as the adjudication process. It would be useful if the Minister talked to his noble Friend Lord Rooker about the letter, as yet unanswered, from the TFA, so that we can have an explanation as to why the Government have removed the scheme and what they see as being put in its place.

Let me move on to the issue of the retirement scheme. We argued in favour of that in the 2001 election manifesto. It disappeared in 2005 but, again, tenants would, to a person, always argue that they would want that matter to be considered. With the ageing of the farming population, we need, alongside Fresh Start, a way to encourage people to retire from the land. The average age of people on county farm estates is increasing considerably. I suspect that we have more 60-year-olds than 30-year-olds, which is not a good way for an industry to run.

My main argument today is that the time is long overdue for the Government to launch a review of county council smallholdings. We have had no legislation on the matter for a considerable time. We have not even had a statement from the Government since 2003-04. Lord Rooker, in a previous ministerial post, made very good remarks about how he saw the strategic importance of these landholdings, but that is not the same as a proper review and guidance—I put it no more strongly than that—to local authorities on the importance of keeping these estates, rather than seeing wholesale or even piecemeal sales. There is a need, therefore, to examine how the Government plan to take the matter forward. The challenge to the Minister, and my fear, is that we are seeing a different and more threatening approach to the future of the estates. Death by a thousand cuts is still death, and even though there seems to be some lessening of the pressure for wholesale sales, piecemeal sales are certainly growing.

I shall conclude shortly to give the Minister plenty of opportunity to respond. I am looking for leadership on this issue now. I talked earlier about mutualising the whole estate. So far, George Dunn, the chief executive of the TFA, and I have done some stargazing, but we want real definitive investigation of the potential of unlocking some of the asset value by allowing counties and other local authorities to draw down some of the value from the land and invest it in the estate. Everyone talks about the acre-for-acre policy as though it exists, but in effect it is somewhat mythical. However, where there is investment in county farm estates—certainly Gloucestershire has invested over recent times; I cannot deny that—we can see the value coming back in terms of the holdings themselves, which of course adds to the land value in due course.

We need a forward-looking approach. If we did not have county farm estates, someone would be calling for us to invent the concept. The need for local food chains, the need to feed local schoolchildren, the need for strategic opportunities to get people out into the countryside and the need for people to have a stake in the land through public ownership of it provide great opportunities. It is a no-brainer to be talking about getting rid of the estates at this time by whatever measures are in place. More particularly, we should value them, invest in them and certainly be willing to talk about the way forward.

I hope that the Government will think seriously about the issues that have been raised. That is the key impression that I want to leave with the Minister. We must have a review. We must think about where the estates fit in the overall picture of farming. We must celebrate tenant farming in this country, which is unique in Europe. It provides a valuable way in which people can come on to the land and a different form of farming that allows change, as opposed to some of the stultifying ways in which Europe seems to do these things—that will be my only dig at Europe in this debate.

We need leadership on this issue from local authorities and from central Government. Then, agricultural practice, which is undergoing huge changes at the moment, can be supported and the changes can be seen through. I see county farm estates and tenant farmers as the jewel in the crown of our control and maintenance of our land.

I am very pleased to respond to this important debate under your chairmanship, Mr. Pope. My hon. Friend the Member for Stroud (Mr. Drew) has a matchless history when it comes to bringing these matters to the attention of the House. I think that the first debate that he initiated on the issue was in November 1997, and he entered the House that year. He introduced a further debate in 1999. Indeed, the issue has been a constant theme that he has brought to the attention of the House. I noticed that George Dunn got an honourable mention today, as he did in 1999. I only hope that John Warfield and Ken Oliver, who were mentioned on previous occasions, are still hale and hearty and have been informing my hon. Friend on this issue as well.

Tenant farmers have a very important role to play in securing a sustainable future for the farming industry in this country. The Government are committed to ensuring a vibrant and prosperous tenanted sector. Only recently, my noble Friend Lord Rooker, speaking at the 25th anniversary conference of the Tenant Farmers Association, emphasised the importance of the tenanted sector. Tenancies give many farmers the flexibility that they need to adopt new farming practices. They also provide a much- needed way into farming, particularly for young people who do not have a farming background. I take on board my hon. Friend’s remarks about the increasing age profile of tenant farmers on county farm estates. That seems to be at odds with part of the purpose that we have talked about, and we need to consider the issue.

Statutory smallholdings, or county farms as they tend to be called, have traditionally played a key role in helping new entrants to get a foot on the farming ladder. That role is recognised in the literature published to promote Sir Don Curry’s fresh start initiative, which is aimed at getting new people into the industry, as well as helping older farmers to retire. The traditional image of county farms means that they are often thought of solely as agricultural holdings. As a result, some local authorities may be reluctant to allow tenant farmers to develop new business ideas. However, there are many examples of county farm tenants who have taken advantage of diversification opportunities in order to adapt to changes in consumer demands.

For example, on the Monmouthshire county farm estate, one farm is a training school for horse riding. Specialist plant nurseries have been set up, while other farms have diversified into bed and breakfast. In Dorsetshire, several county farms are fully organic and the estate has strong links with the local farmers markets. Those are all things that my hon. Friend has mentioned. Also in Dorsetshire, a farmer on the county farm estate has set up his own farm shop. In Cornwall, the county farms estate, together with Penwith Farm business centre and Penwith district council, has developed a website to enable consumers to purchase produce direct from the farmer’s gate. Again, much of the produce is organic. There are many other examples of good practice throughout the country.

County farms also have an important role to play in promoting increased public access to the countryside. They provide an educational resource that enables the public and particularly children to learn more about farming practices. The origins of county farms are, as my hon. Friend said, in the Small Holdings Act of 1892, which established statutory smallholdings to relieve the depressed conditions of agricultural labourers. Later, the Agriculture Act 1947 introduced provisions to allow agricultural workers to farm in their own right, placing a duty on smallholding authorities to provide smallholdings. The legislative provisions that govern county farms today are set out in the Agriculture Act 1970, which requires smallholding authorities to make it their “general aim” to provide opportunities for people to farm by letting holdings to them, but there is no longer an obligation on authorities to provide smallholdings. Similarly, there are no provisions in the Act to prevent local authorities from disposing of county farm estates. That is a theme that my hon. Friend has brought before the House very forcefully over the years—the fear that those estates will be sold off piecemeal.

Faced with growing financial pressures and the need to consider the interests of all their taxpayers, many local authorities have sought to realise assets that are bound up in county farms. My Department will continue to support the county farm system, particularly—I stress this—in its role in providing opportunities for new entrants. We have encouraged local authorities to think carefully before disposing of farms. My noble friend Lord Whitty wrote to all smallholding authorities in January 2004, reminding them precisely of their obligations under the 1970 Act to make it their aim to enable people to farm in their own right. In doing so, he honoured a commitment that the Government gave in their response to the recommendations of the Tenancy Reform Industry Group.

The Government believe that county farms provide a valuable first step on the farming ladder, and they therefore urge smallholding authorities to consider all their options before deciding to sell their farms. However, the Government have no statutory powers to influence the management of county farms or to prevent their disposal. Those decisions are entirely for individual local authorities.

I know that the recent decision of Gloucestershire county council to review tenancies when they fall due is disappointing to those representing tenant farmer interests. It is fair to say that Gloucestershire has run a model estate in the past and that other smallholding authorities have often looked to it to provide a lead. I hope that Gloucestershire will continue to honour its existing tenancy agreements and that as tenancies come to an end the authority will take a balanced view on the retention of each farm in question.

My hon. Friend suggested that there should be a major investigation into the role and value of county farm estates, but we have no plans to use the provisions of the 1970 Act to initiate a review of smallholdings. That idea was considered in the light of the TRIG report, but after receiving advice that such a review could not prevent the further disposals of county farms we agreed that it would serve no purpose and would, moreover, be a burden on local authorities.

My hon. Friend also suggested that there should be liaison between local authorities and other major institutional landlords. That might be possible, but the initiative would need to come from local authorities and the institutions themselves. Similar exercises have been tried in the past, such as the rural starters register, but few landlords expressed interest.

I have agreed with almost everything that the Minister said until his last point. If county farms are to work properly, there needs to be a ladder so that young people can come on to them and then move on to bigger farms. For that to happen, the Government must provide the right fiscal climate so that landlords and institutions are prepared to let bigger farms. The whole purpose of the county farm will be lost if tenants stay there for many decades until they become older and retire.

I know what the hon. Gentleman has said on this, and I am sure that the Treasury will also have noted the spending commitment that he is prepared to undertake in this area. As he has recognised, that would demand a financial commitment that his party is, perhaps, prepared to put a figure on—I will happily give way to him if he has a figure for how much it will cost—but that is not something that we have seen fit to undertake at this point.

Looking at tenant farmer issues more generally, we recently amended the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995 to establish a more flexible framework for agricultural lettings. I thank the Tenancy Reform Industry Group for its work in securing an industry consensus. The changes remove some of the barriers that would have prevented tenant farmers and their landlords from adapting to the needs of a sustainable agricultural industry in the 21st century.

My hon. Friend raised several other issues that are relevant to tenant farmers to which I would like to respond. As he acknowledged, TRIG’s fiscal recommendations are primarily matters for the Chancellor. The recommendation on business asset taper relief was implemented by the Chancellor in the 2003 Budget. The other recommendations are still under consideration and TRIG should pursue them directly with the Treasury.

I assure my hon. Friend that the decision to withdraw the funding for the adjudication scheme to support the code of good practice for agri-environment schemes and diversification projects within agricultural tenancies was not taken lightly. It was part of an urgent wider review of expenditure within DEFRA that resulted from the current financial pressures on the Department, of which he is well aware. There has not been a single application for the scheme since its launch in December 2005. Given the financial constraints on the Department and in light of the lack of take-up, it did not seem a sensible use of funds to continue to allocate money to the scheme for a further three years. That decision does not affect the validity of the code of good practice, which remains an important document for landlords and tenants when considering proposals for diversification.

With regard to an early retirement scheme for tenant farmers, I know that fellow Ministers have considered this issue carefully in the past few years. The Government have decided against introducing such a scheme because it would not provide value for money compared with the large costs that are likely to be involved and because it would offer little public benefit. That view is shared by the policy commission on the future of farming and food. Further, funding a retirement scheme could mean having to close down or shrink other grant schemes that provide valuable public benefits, such as the agri-environment schemes. That would be a poor shift of resources.

On the single payment scheme, common agricultural policy payments have always been capitalised into land values and rents to some extent, and that process would have continued whatever model of the SPS had been adopted in England. Some argue that the effect would have been less if a different model had been chosen but, as my right hon. Friend who is now the Foreign Secretary made clear at the time, we needed to avoid a situation in which subsidies were allocated solely on the basis of past activities undertaken in the context of production-linked support policies. It would be difficult to justify an ongoing link between support payments and business decisions taken 10 or more years earlier. We now operate in a very different policy context.

Does the Minister agree that one way in which real opportunities can be created is by collectivising decisions so that we get local food chains? Tenants are ideally suited to work co-operatively to supply local schools. Surely we should be looking to do that with the single farm payment.

Without linking it to the single farm payment, I acknowledge what my hon. Friend said about the importance of local food chains and the capacity of the sector to work co-operatively to put them in place. That is an important part of the whole strategy of sustainable food and farming that we want to be developed.

The system of occupancy conditions known as agricultural ties is a policy rather than a law for which the conditions are set by local planning authorities, which have appropriate powers to enforce them. I understand that the Department for Communities and Local Government has no plans to review that policy.

The suggestion that landlords should receive capital gains tax relief is a matter for the Treasury. The provision of affordable housing both for rent and for purchase is vital for a prosperous and vibrant countryside because it helps to support diverse communities that are socially and economically vibrant and inclusive. We established the Affordable Rural Housing Commission, which reported to Government in April of last year, and some 4,000 homes have been built in villages across England in the past couple of years—500 more than planned. We still have plans for more homes to be built in the next two years as we work towards ensuring that there are affordable homes in all rural areas in the future. DEFRA and the DCLG have worked together closely to ensure that the new planning policy statement on housing appropriately reflects the needs of rural communities. It retains the exception sites policy, but goes further in promoting a positive and proactive approach to planning that is informed by evidence of local need.

My hon. Friend talked about the Community Land Trust. I thought his idea interesting, but it would be for local authorities to look to funding for that.

Order. We must move to the next debate.

It is a pleasure to be able to discuss rural policing in Gloucestershire. I am glad to be flanked by two Conservative colleagues from the county, my hon. Friends the Members for Cotswold (Mr. Clifton-Brown) and for Tewkesbury (Mr. Robertson), although I should not forget the hon. Member for Stroud (Mr. Drew), who has remained in his place from the previous Adjournment debate.

I shall focus on two points. First, I should remind everyone that both the rural and the urban parts of our county need their fair share of policing resources. Secondly, I should draw attention to the financial squeeze that is likely to come from Government funding pressures over the next couple of years. I want to know whether the Minister can help and whether we can start that dialogue and process now.

My starting point is my constituents’ feeling that there is an imbalance between the policing in the urban and the rural parts of the county. The Forest and Gloucester basic command unit has the most officers in the county—336—but the bulk of them are based in Gloucester rather than in the Forest. One thing that irks my constituents and local officers is that those officers are extracted from the Forest of Dean to deal with public order policing in the city of Gloucester, particularly on Friday and Saturday evenings. I have been out on patrol with the police, and I have seen how stretched they are when dealing with incidents at those times. They then have a difficult balance in respect of prioritising calls from members of the public.

It is reasonable to expect the deployment of police to be focused, to some extent, on the areas that have the highest levels of crime. Forest’s population is three quarters that of Gloucester, but its crime level is only a quarter of Gloucester’s. I do not expect the level of policing to reflect only the level of population, as to do so would be unreasonable, but to have it entirely determined by the crime level is also not reasonable. People in rural parts of the county and the Forest of Dean pay their fair share of local tax, through the council tax police precept, and of national taxation. They should expect a reasonable level of coverage by the police in terms of response times, beat patrolling and all the things that they should be able to take for granted, as their neighbours who live in Gloucester and Cheltenham are able to do.

We need to examine how this area is managed. Recent parliamentary questions, albeit not ones broken down on a county or constituency basis, have shown that rural crime is rising. Rural parts of the country are not peaceful idylls. Instances of violence against the person rose from slightly fewer than 70,000 crimes in 1998 to slightly fewer than 160,000 in 2005. The rise was more than 100 per cent., which is large even when one takes into account changes in recording methods.

Surveys in my constituency, and I am sure that the same applies in other areas, show that crime, law and order and policing are a key concern—second only to the national health service. People expect those issues to be addressed, and about 60 per cent. of constituents who responded to surveys considered that having more police officers out on the beat patrolling our towns and villages was the best way of addressing them. Such an approach not only deals with crime when it occurs but acts as a deterrent.

I tabled some questions to Ministers on this issue. A recent parliamentary answer by the Minister for Policing, Security and Community Safety showed that the number of police on the street in Gloucestershire had declined from 593 in 2003 to 456 in 2006. I immediately had an irate chief constable on the phone to me pointing out that those numbers were inaccurate, that the Home Office had changed the basis on which they were calculated and that I was not making a like-for-like comparison between the two years. I hope that the relevant Minister will correct the record and issue accurate figures.

Despite that, only about a third of police officers are out on the streets, as the Home Secretary puts it. The situation makes me wonder what the rest are up to. The increasing bureaucratic requirements are tying up the police and not giving them the chance to do the job that my constituents and the public more generally expect them to do.

I recommend to the Under-Secretary of State for the Home Department, the hon. Member for Gedling (Mr. Coaker) the book by police constable David Copperfield—it is a pseudonym—“Wasting Police Time”. The writer is a serving police officer who spends a great deal of his time

“filing, stapling, and writing forms, reports, statements, e-mails and exhibits.”

He deals with a sea of paperwork, and spends far too little time doing the part of the job that he loves, the bit where he gets to chase criminals and arrest them, which was the reason why he joined the police force and is also what the majority of our constituents want the police to be doing.

Does my hon. Friend agree that one of the key things that the public expect, particularly in rural areas, is high visibility policing? One of the good innovations in that respect was the introduction of police community support officers. Does he agree that it is reprehensible of the Government to resile from their manifesto commitment, which I believe was to put 26,000 PCSOs on the street? Their doing so will mean that Gloucestershire will get 51 fewer PCSOs than it originally thought it would.

My hon. Friend takes me a little further into my speech. I was just coming on to the issue of police officers on the beat, but I want to finish the previous point. It would be helpful if more freedom and flexibility were given to chief constables, and whatever local policing arrangements are in place, to deal with their areas. There should be much less control and direction from central Government.

My hon. Friend mentioned PCSOs. They have worked in safer community teams, and that has been popular and effective. The high visibility patrols in my constituency and others have had an effect on antisocial behaviour. Officers have told me that one of the huge benefits that PCSOs bring by being out on the street and visible, and by building relationships with local shopkeepers, retailers, business people and others, is that they get a significant amount of intelligence, which they are then able to pass back to their colleagues. Such information can be significant in dealing with serious criminal behaviour and it allows people to deal with things before they happen, rather than afterwards, which is what we want. That is valuable.

As my hon. Friend said, it is disappointing that the Government have gone back on their manifesto commitment to provide 24,000 PCSOs nationally and will not give that funding to constabularies. The record shows that that was a personal pledge made by the Chancellor of the Exchequer in 2004. This is another example of Gordon Brown failing to fund the promises that he makes—perhaps that is something that we can look forward to in the future.

Last year, the Government agreed to provide funding for the PCSO target over two years, but in November they decided to keep the total at 16,000, thus abandoning a key plank of the neighbourhood policing strategy. The funding for next year’s PCSOs has been reduced, and therefore the provision for the PCSOs that Gloucestershire was expecting will not arrive. The situation may be even worse than my hon. Friend suggested, because I think that the chief constable had been expecting 74 extra PCSOs. The county will not now get those PCSOs. Out of the money that the Government did make available on PCSOs, they have provided just £160,000 extra for neighbourhood policing, which will cover the annual cost of just seven PCSOs. That was hardly what we or the constabulary were expecting.

In May 2005, the Conservatives won control of Gloucestershire county council for the first time in two decades, with a manifesto commitment to provide 63 new police officers from county council resources, which is roughly one for each electoral division, specifically for community policing. The agreement has been made with the chief constable, who still has operational control, as is right and proper. Those officers will be available broadly for community policing.

Those police officers, who are delivering on a Conservative local manifesto promise, are starting to be recruited and trained—12 have been recruited and trained in 2006-07, with a further 17 to come next year and the following two years, so that the total of 63 will have been delivered by the time of the next local elections. I was surprised to see the extraordinary comments of the deputy leader of the county council Labour group. He welcomed the additional officers three times, but then got himself confused by saying that he was not sure that he was happy with them and wondered whether perhaps the police authority ought to fund them. He seemed to be saying either that he wanted the police precept to go up again or that he wanted the police officers to be removed, having welcomed them. That did not seem to be a very good start and he was either out of touch or confused, or both.

I am sure that the Minister will mention the rise in police numbers nationally since 1997, which, to be fair, have risen from 128,000 to 140,000. It is worth pointing out that general Government funding has not kept up with the rise in costs. In real terms, the Government grant funds only 120,000 of those police officers, and even with the crime fighting fund, the numbers would have remained roughly stable. The big rise—this is certainly true in Gloucestershire—has been almost entirely funded by local people through the police part of their council tax. Before the Minister praises the Government, I hope that he will at least acknowledge that the increase in the number of police officers is significantly due to the decisions of local police authorities and not the Government. Indeed, in Gloucestershire, the local police authority, at some cost to its reputation, increased the precept by 51 per cent. a few years ago. That was not at all popular, but it is the only reason why we have a significantly increased number of officers in Gloucestershire. If it had not done that, we would have seen a decrease in the number of police officers, not an increase.

My final point is about police funding. In 2007-08, the year coming, the general grant for Gloucestershire from the Home Office will increase to £56.5 million, which is a rise of 3.6 per cent. However, the other specific grants that Gloucestershire receives will decrease overall by 7 per cent. as most of them are either frozen, decreased or eliminated. Total central funding from the Government to Gloucestershire on a like-for-like basis for 2007-08 is only about 1.5 per cent. over the year before. Police authority precept rises are capped at 5 per cent. and the actual increase in police costs, largely due to pay and other cost pressures, is well above the increase in funding. In 2007-08, the constabulary faces a deficit of almost £6 million just to maintain services, let alone to develop or improve them. To cover that, the reserves are likely to have to be used.

In 2008-09, which is the year about which the constabulary is most concerned, it seems that the situation will deteriorate. Indications from the Home Office suggest that funding is likely to be frozen at around 2.7 per cent., and much of that is likely to go towards prisons and the immigration service. The police are likely to have real problems because costs will continue to rise.

All in all, the financial outlook for the next couple of years is bleak. As well as responding to my points about the deployment of police officers, I should be grateful if the Minister could say something to put my constituents’ and even the chief constable’s minds at rest.

rose—

If the hon. Member for Tewkesbury (Mr. Robertson) wants to make a point, I shall allow him to intervene.

I welcome you to the Chair, Mr. Pope. I am pleased to be here this afternoon. I congratulate the hon. Member for Forest of Dean (Mr. Harper) on securing this important debate and the way in which he presented his case. I am also pleased to see his hon. Friends the Members the Cotswold (Mr. Clifton-Brown) and for Tewkesbury, as well as my hon. Friend the Member for Stroud (Mr. Drew). I know that for all of them, whatever our differences, this is an important and serious debate. I welcome the constructive and thoughtful way in which the hon. Member for Forest of Dean made his points, even if there are differences between us. If I fail to answer any of his points, it will not be a deliberate omission. He is at liberty to intervene and I shall respond appropriately.

The point to make at the beginning is that although I shall respond to some of the issues about police funding, the deployment of officers in the local area is of course an operational matter for the chief constable in liaison with the police authority. I guess that part of the reason for raising the matter is to raise those issues and I am sure that he has been in correspondence and had discussions with the chief constable.

I know something about Gloucestershire because I visited Cheltenham and Tewkesbury basic command unit a few months ago and went to Whaddon police station on 19 September. I had the opportunity to see at first hand the neighbourhood policing there and was impressed by the commitment of the local police officers. I have met the chief constable of Gloucestershire and was impressed. I am also impressed by the work that the police do in Gloucester and Gloucestershire and I would like publicly to commend them. I know that the hon. Gentlemen and my hon. Friend join me in that commendation.

The hon. Member for Forest of Dean will have heard some of the funding figures, but I need to put them on the record. There has been a huge increase in resources for the police service in England and Wales over a sustained period. On a like-for-like basis, Government grant and central spending on services for the police will have increased from £6.2 billion in 1997-98 to £11 billion in 2007-08, which is an increase of nearly £4.8 billion or a cash increase of 77 per cent. or, in real terms, more than 39 per cent. between 1997-98 and 2007-08. Gloucestershire and other police authorities and police services throughout the country will have received their fair share of those resources.

Provisional allocations for 2007-08 were announced as long ago as December 2005 to provide greater certainty and allow authorities such as Gloucestershire to improve medium-term planning. Police forces and police authorities have welcomed that. That is why we will move to a three-year settlement from 2008-09—the hon. Gentleman mentioned that—to try to provide some certainty for planning, although there will always be a debate about the level of those resources.

All police authorities, including Gloucestershire, are set to receive an increase in general formula grant, which makes up the great bulk of central Government support to the police of 3.6 per cent. That increase is both higher than the 3.1 per cent. increase in general grant this year and well above inflation, which was forecast to be 2.7 per cent. The hon. Gentleman will know that the consultation period on the provisional funding settlement for 2007-08 closed on 5 January. We are now considering the representations that we have received in response to the formal funding announcement that we made on 28 November and the House will debate the Government’s proposed settlement at the end of the month.

Gloucestershire, like every other police force, has benefited from the good funding settlements of the past few years. Total Government funding for Gloucestershire will have increased from £51.7 million in 1997-98 to £70 million next year, which is an increase of more than £18 million or a cash increase of more than 35 per cent. However, it is only fair to acknowledge the hon. Gentleman’s point that police authorities throughout the country, including Gloucestershire, have made local decisions about the level of precept that they should charge, and district councils such as my own, which do not have a police authority function, have also purchased police community support officers. My authority has purchased six.

I take the hon. Gentleman’s point about Gloucestershire’s decision, which many authorities throughout the country have made. He wanted me to refer to that.

I acknowledged the increase in funding from year to year, but it is worth remembering that for local government, as well as the police, many of the costs facing constabularies are largely pay costs that are determined centrally. Pension costs are determined centrally and many of the framework and target regimes are given to police authorities and constabularies from the centre. So it is fair and reasonable to look not just at the increase in funding, but at the other side of the income and expenditure account and the costs that are imposed on those constabularies. My point was that the rise in forces’ incomes is not keeping pace with centrally imposed costs. That is where the problem lies.

There is always a debate about costs and income. My point is that there has been a significant rise in income for Gloucestershire police from central Government. The hon. Gentleman asked me to recognise that local authorities, including Gloucestershire, make a valuable contribution to that. I was trying to respond to that point.

Gloucestershire will receive £56.5 million in general grants in 2007-08, an increase of 3.6 per cent. or £2 million over this year. That is in line with the broadly flat increase of 3.6 per cent. for all police authorities throughout England and Wales. It is worth noting that Gloucestershire would have received £600,000 less if we had applied the police funding formula strictly. Gloucestershire has been supported by the funding formula for many years, and it benefits from that method. I receive complaints from police forces throughout the country which lose money because we establish a funding floor so that others, including Gloucestershire, do not lose out according to the funding formula.

On top of the general grant that Gloucestershire will receive, there will be more than £13 million in specific grants and capital provision. That will include £1.8 million in special formula grant, a consolidation of former grants, which will include £770,000 from the rural policing fund. Police authorities have complete flexibility to spend formula grants as they choose. We have recently announced that from this year, the control of officer numbers that accompanied the largest specific grant, the crime fighting fund, is being lifted, as the hon. Gentleman noted. It is a major facet of funding flexibility, for which the police service has long campaigned, and if we are being honest, the policy is a real difficulty.

We have responded to the Association of Chief Police Officers and the Association of Police Authorities, which have asked us to stop ring-fencing money and give them the additional money so that police services can use it in their local areas as they see fit. That is what we have done. The changes that we have made, which brought about the reduction in police community support officer numbers to which the hon. Gentleman and the hon. Member for Cotswold referred, were due to the flexibilities that the police service and the APA asked us to introduce. The APA press release following the change said that it was a welcome step in the right direction and “a positive step forwards”.

There is a tension, however. The hon. Member for Forest of Dean, the hon. Member for Cotswold and my hon. Friend the Member for Stroud know that there is always a conflict between the national direction in which funds should be spent and local flexibility and decision making. We responded to the demand from local police services and authorities for flexibility, and we gave it to them. As a result, they are able to choose how they wish to spend the money.

There is a consequence. I am sure that in other debates people would say, “Central Government should get off the back of local services, let local people determine how best to deliver services in their area and let them make the choices which best fit that.” That is what we have done with those funds and resources.

I thank my hon. Friend for giving way, because I acknowledge that the hon. Member for Forest of Dean (Mr. Harper) introduced the debate. However, I have some misgivings about the loss of the ring-fenced funding in rural areas, because it served a function by drawing attention to the need to police rural areas differently. I understand what my hon. Friend says and why the police wanted to remove the ring-fencing, but it has some adverse consequences.

I take that point as I have tried to take others. This is an important debate, and the point of debates in Westminster Hall is to air differences of view. There is a tension between national, central direction and local flexibility. However, we have responded to ACPO and to the APA. Nationally, they said to us, “We want flexibility.” My hon. Friend referred to the rural fund. It was changed before this year and all rolled together partly in response to local police forces saying to us, “Please give us the money so that we can make the decisions about how best to use police resources in our area.” On rural policing generally, the allocation of resources throughout the force area is a matter for local decision making. I am sure that my hon. Friend will have talked to the chief constable and to other members of the police authority about the balance between urban and rural policing.

I accept the Minister’s point that it is helpful if police authorities are given the funds with as little ring-fencing as possible, but they must have the funds. One problem with the PCSO announcement was that although the Government did not tell constabularies to have a certain number of PCSOs, they did not give them all the money either. There was less money available nationally, the bulk of it went to London, and the one-off amount that the Gloucestershire constabulary received for neighbourhood policing was £167,000, which does not pay for much at all.

The hon. Gentleman knows that in 2006-07 we funded 100 per cent. of PCSOs in Gloucestershire for five months. That figure was in the budget for 2006-07. In 2007-08, 100 per cent. of PCSOs will be funded at 75 per cent. of the cost. If we compare the money that Gloucestershire received for that five months in 2006-07 with the money in 2007-08, during which we are funding all PCSOs for the entire year at 75 per cent. of the cost, a figure that every constabulary throughout the country knew, we return to a 3.6 per cent. increase, rather than the 1.5 per cent. increase to which the hon. Gentleman refers.

Neighbourhood policing is being introduced in Gloucestershire, and it is important: it provides the responsive, accountable and visible policing that we all wish to see. On 31 March 2006, Gloucestershire had 1,289 police officers, 156 more than in March 1997. Support staff are often missed out in any discussion of police officers, but they are an important part of the police service. The number of support staff working with those officers in Gloucestershire was 675, an increase of 240 since 1997. It helps with delivery.

Police numbers in the Forest and Gloucester basic command unit, which will be of interest to the hon. Gentleman, increased from 292 in March 2002 to 357 in March 2006. There were also 30 PCSOs by June 2006. It is interesting how the debate about PCSOs has moved on from opposition to their introduction to argument about their numbers. We should all pay tribute to the work that they do, as to be fair the hon. Gentleman has.

Recorded crime fell by 1 per cent. in Gloucestershire in 2005-06 compared with the previous year; there was an impressive 14 per cent. fall in domestic burglary and a 16 per cent. fall in vehicle crime. Within the Forest of Dean crime and disorder reduction partnership, there were also impressive falls in crime. The hon. Gentleman pointed out alleged funding difficulties with which we do not agree, but in the basic command unit in his constituency, overall crime was down by 10 per cent. Domestic burglary was down by 20 per cent. and vehicle crime was down by 26 per cent.

The fall in overall crime in the Forest of Dean is better than those recorded by more urban CDRPs. We should pay tribute to the work not only of the police, as he has, but of the Forest of Dean CDRP. I had a look at its website, and the different initiatives are impressive. While we debate the levels of resources and funding, it is important to point out, as I know the hon. Gentleman will, the successes in reducing crime in many areas, so that people feel safer on the street.

I am grateful to the Minister for giving way, and I congratulate my hon. Friend the Member for Forest of Dean (Mr. Harper) on securing the debate. In rural areas, I understand that the target response time for police is still 20 minutes. If we know that, the criminals know that, and one can do an awful lot of damage to a house or to a person in 20 minutes. I am sceptical about Government targets anyway, but will the Minister consider that time?

I shall, but I should have thought that that time was the maximum response time. Gloucestershire police, along with the police authority, will in most instances respond to a 999 call far more quickly than that.

The time is 1.29 pm, and I am not sure whether we have 10 seconds or 40 seconds left. However, I again congratulate the hon. Member for Forest of Dean on securing the debate. Neighbourhood policing is an important issue.

I have no doubt that 2007 will be a challenging and perhaps critical year for the coal industry in Nottinghamshire, and I am delighted to have secured this debate so early in the new year.

There are just three collieries left in Nottinghamshire: Harworth, Welbeck and Thoresby. All of them are owned by UK Coal and all need substantial investment either now or fairly shortly, but UK Coal says that it does not have the resources to make that investment. Given that, it is not an over-exaggeration to say that all three collieries face closure in the relatively near future.

To explore the situation in a little more detail, Harworth is currently mothballed. There is a small maintenance team, and the pit is stopped off near the pit bottom because of spontaneous combustion. Moreover, £80 million is needed to access the top hard seams, which hold the third biggest coal reserves in the country. It is clear to me that without new investment, Harworth will close in the relatively near future. At Welbeck, the men are working hard: they have done everything asked of them and more. They have met all the targets but there is a face gap—a production gap—in February, and there has been long-term speculation that the pit is earmarked for closure by UK Coal. I know that the company intends to make an announcement later this year.

That leaves us with Thoresby, which also has a face gap coming, but has workable reserves until 2009. However, for a longer production period, £25 million of new investment is needed to secure its future.

My hon. Friend will know that the Mines Rescue Service has a statutory responsibility to respond very quickly to calls for support. Its headquarters is in north Nottinghamshire in Mansfield, and it is having great difficulty at the moment. Does he hope, as I do, that the Minister will refer to the Mines Rescue Service and how its continued role might underpin the future of coal mining in north Nottinghamshire and elsewhere in the country?

The Minister will understand the situation well because I, my hon. Friend and people from the Mines Rescue Service have been to see him, and I know he was impressed by the efforts that they have made to expand their income outside the traditional setting. However, my hon. Friend is right: there is an awful lot more to be done to secure the future of the Mines Rescue Service.

To return to the three pits, I cannot overestimate the seriousness of the situation. Unless there is new investment, there is no future for the Nottinghamshire collieries. The situation is perfectly clear. UK Coal says that it cannot make that investment because it is tied into long-term contracts with electricity generators, such as Drax, EDF Energy and E.ON. Those contracts were signed when the price of world coal was low. World prices have now risen, but that has not been reflected in contract prices. The solution is simple: the contracts must be renegotiated. The generators tell me that they are prepared to talk, and some preliminary discussions have taken place. It is clear to me that we need better prices and long-term contracts so that UK Coal has an asset so that it can discuss investment for the future. I note that Drax, in its prospectus to the stock exchange, said:

“Drax’s current procurement strategy is to purchase domestic coal at below the international market price”.

Drax also says that if UK Coal fails, it may

“find other suppliers to make up the shortfall, who may charge prices for coal supply that are higher than the prices under the UK Coal Contract”.

That shows the significance of the problem: those negotiations will be difficult.

My view is that both parties, producers and generators, ought to get round the table to have structured, meaningful talks and put forward solutions. I do not think that that will be easy, but it is in all of our interests if a solution is found that meets the need to maintain domestic coal in this country. What is more, there needs to be a discussion about how much the generators are prepared to pay for security of supply so that domestic coal is readily available and we are not dependent on the vagaries of the international market. If all else fails, I call on the two parties to find an independent arbitrator, a mediator, to find a solution.

At the end of the day, we want better long-term contracts. Coal mining is capital intensive. There are long planning periods, and unless UK Coal can talk to its financial advisors about new, better, long-term contracts, within two to three years all the Nottinghamshire pits will close. What should the Government do? They have already accepted in their energy review that

“it is right to make best use of UK energy resources, including coal reserves, where it is economically viable and environmentally acceptable to do so.”

Perversely, on the environmental side, things look better than they have for some years. New clean-coal technology is coming on and there is a focus on carbon capture and storage—moves which are strengthened by the Stern report. The pre-Budget report talked about the next steps, but the Minister knows that people are disappointed that the Government have not made money available for a demonstration plant. When new coal plant is being built in India and China at the rate of one a week, there are tremendous opportunities for UK environmental industry companies to develop that new technology.

I would like to say happy new year to everyone in the room.

Does my hon. Friend agree that it is nonsensical that pits such as Harworth and the linked-up pit at Rossington in South Yorkshire are mothballed with millions of tonnes of reserves, while in my constituency contractors are falling over themselves to dig up the land? They propose to spend three years destroying natural and historic environment for half a million tonnes of coal, while tens of millions of tonnes of coal lie there and may well be sterilised.

I share my hon. Friend’s scepticism on open-cast coal and I hope that the Government will not change planning regulations to make it easier for open-casters to develop.

I say to the Minister that I have been impressed with the setting up of the coal forum, which is an important strategic body. I accept that the Government cannot enter into direct negotiations and new contracts. As the Secretary of State told me in October:

“The Government are not going to stand in the shoes of either party to the contract.”

He went on to say that he wanted to encourage people to talk

“because it is in all our interests that we maintain the ability to mine and supply coal in this country.”—[Official Report, 30 October 2006; Vol. 451, c. 70.]

I hope that the Minister will reaffirm that message today and call for open talks. I hope that he will also encourage the coal forum to be ambitious and aspirational. There is no doubt in my mind that there will be a demand in the coal forum to set an aspirational target for domestic coal, which I hope will be in excess of 20 million tonnes a year. I know that there is scepticism about setting targets, but the Minister knows that there is an aspirational target of 20 per cent. for renewables by 2020. If it is good enough for renewables, why can it not be good enough for coal?

I hope that the Minister will ask the coal forum to consider some important issues. I hope that it will review the price assumptions and forecasts made by the generators on domestic and imported coal, and review the trading models of generators and producers to find a solution to the problem of market conditions that prevent investment in deep mines. The coal forum should quickly make recommendations to the Government on the action that can be taken to secure a workable, market-led approach that satisfies UK energy policy needs. There is an urgent need to address those questions and I hope that the coal forum will consider them and put proposals to the Minister before the White Paper, scheduled for late spring, is published.

I say bluntly to the Minister that I am pessimistic about the coal industry in Nottinghamshire. Unless there are ways of securing new contracts, the industry there will be finished. That will be followed closely by the closure of the deep coal industry in this country. It would be most difficult for him—it would be an indignity to him—if he had to rename his coal forum as the “imported coal forum” because that is all that it will have left to discuss. What is he going to say to the hard-working miners in Nottinghamshire who have done everything asked of them and more? They have responded flexibly to the demands of their employer, UK Coal. They are the most efficient miners in Europe and we should be bringing forward proposals to back them, not to sack them.

I congratulate my hon. Friend the Member for Sherwood (Paddy Tipping) on securing the debate and on the breadth of knowledge that he brings to the debate. I endorse and shall not repeat his points, but add some of my own because Harworth and Welbeck collieries are in my constituency.

Men have come to me to say goodbye before emigrating to Australia having been given well-paid jobs by a country that recognises that the coal industry still has a future. It is absurd that men with great skills are moving to a high-paying economy such as Australia’s—the other side of the world—to dig coal, when there is coal beneath the very houses in which they were living in this country and in my constituency.

There seems to be a shortage of Tories and Liberals here—we are used to the latter never turning up, but the Conservative party ought to be represented because it is responsible for the current problem. It gave away the coal industry to Budge and then it was sold on to various other people who got the land assets. As for UK Coal’s share price—apparently they are among the shares to buy. The reason is that when it exits coal it is left with land stock worth a lot of money. That is a national scandal. It has failed to invest in its own and British industry. It has sat on a land bank and no doubt it will be approaching local and national Government in various guises suggesting that it should have help bringing the land into industrial use. I do not think that anyone here would have a problem with land being used effectively for industry, but it must be based on continued deep-coal mining and on keeping open existing collieries and reopening Harworth colliery where there are 30 years of good coal reserves.

I shall raise some further crucial points. I cannot envisage the Minister or future Ministers, or this Prime Minister or future Prime Ministers, wanting a situation like the one in California where the lights go off because there is no power. That is one of the possibilities if we rely on imported coal for our energy needs for the foreseeable future, in which it is recognised that coal will continue to play a key role. There is already a problem with peak capacity. Why shift coal five miles from Harworth to West Burton and Cottam power stations by train? Bringing it in from such large distances is nonsense.

I shall finish on two critical environmental points. First, future technology dictates that, at some stage, oil-based cars will go—the sooner the better—and that hydrogen cars are potentially the solution. That will require coal and mining skills in order to create the hydrogen cells needed to run those cars. That will be the car of the future—be it in five, 10 or 15 years. We will not be in the race for that mass-production vehicle if we exit coal at this stage.

Finally, China and India are burning coal, and Africa, which has the largest reserves off all, will also burn it. So who will provide the clean-coal technology? The emissions from the vast number of outdated and cheap power stations those countries are building will affect the environment worldwide. We could take the lead in that clean-coal technology, but will not if mining does not continue in this country. We need to keep those collieries open for our industrial future and I hope that the Minister has some good news on how he intends to intervene to ensure that that happens.

I congratulate my hon. Friend the Member for Sherwood (Paddy Tipping) on securing the debate today. He is an authoritative and committed supporter of this important industry, as are my other colleagues who have spoken.

The Government believe firmly that access to a range of energy sources is essential to the security of energy supplies and that coal will play a continuing role in meeting this country’s energy needs for many years to come. That is provided, of course, that its environmental impact can be managed satisfactorily. Reference has been made already to emerging technologies such as clean-coal technology, carbon capture and storage. Perhaps I should add that no one needs reminding of the importance of a nation’s energy security to its wider national security.

The Government believe also that UK-produced coal should play a role in meeting our total requirements. Again, reference has been made to our statement on that in the recently published energy review. This country still has substantial coal resources, which represent an important national asset. We need to put those resources to optimum use, provided that they can be worked at acceptable economic and, as I have mentioned, environmental cost.

I believe that the Government have demonstrated their support for the coal industry by making more than £200 million available in coal state aid since 2000. Of that, some £33.8 million has been paid to mines in Nottinghamshire, including £18.9 million to Harworth colliery. Welbeck and Thoresby collieries have also received coal investment aid. Welbeck was awarded some £7.78 million, of which £5.7 million has been drawn down, and Thoresby £4.97 million, of which £1 million remains to be claimed.

Despite this support, UK output has continued to fall. Production in 2005 was 20 million tonnes—down some 18 per cent. on 2004. That was made up of deep mine production of 9.5 million tonnes, including 9 million tonnes from English mines, and surface mine production of 10.4 million tonnes, of which just 1.5 million tonnes was produced in England.

Nottinghamshire's contribution to those totals was almost 3.2 million tonnes of deep-mined coal—up from 2 million in 2004—from three mines: Harworth, which stopped production owing to geological problems in August 2006, and Thoresby and Welbeck, which between them employed almost 1,500 people at the end of 2005. The long-term pattern for coal production, as has been acknowledged in Nottinghamshire, is one of decline. Although since 1996 the county has produced a total of 51.6 million tonnes of deep mined coal, three mines have closed due to stock exhaustion.

The situation is different at Harworth, in that it might have further reserves in an unworked area of the top hard seam. However, UK Coal judged that it would cost more to access those reserves than the coal would earn, which means that it is not economically recoverable at the moment. Nevertheless, UK Coal is taking steps to maintain the possibility of re-entering the mine if circumstances change, rather than closing it.

So what could change? I think that that is the question posed by my hon. Friend the Member for Sherwood. Harworth's main customer, as for most UK coal producers, has been the electricity-generating industry. Coal-fired generation supplies about one third of UK electricity needs across the average year, which can rise to more than 50 per cent., often at very short notice, to meet winter peaks in demand, as it did last winter. Coal is therefore a flexible fuel. The generators know how important their coal-fired plants are in meeting UK electricity needs. Many have already invested to keep their existing plants in operation to at least 2015, and some are planning the next generation of cleaner coal-fired stations.

Generators have shown their commitment to coal in the generating mix, but what about their commitment to UK-produced coal as part of their feedstock? I understand that in contract negotiations the generators attach considerable importance to reliability of supplies, but deep mining is inherently high-risk. Geological problems, or a longer-than-forecast or unplanned break in production can easily put a producer in breach of a contract to supply.

The Minister refers to risks. Not least among those is the risk to life and limb for the men who work the coal. Does he recognise the perilous position of the mines rescue service, based in north Nottinghamshire, and if so, does he endorse a role for the MRS in future, which is equally crucial?

With respect, my hon. Friend repeats a point that he made earlier, to which I of course intend to respond a little later.

To continue my analysis, added to those problems, the recent decline in production from surface mines has reduced UK suppliers’ ability to switch to that source to make good shortfalls resulting from problems at deep mines. As a consequence, producers have found it increasingly difficult to give generators the reliable deliveries that they need. The generators’ response has been to turn to imported coal, even though the costs of shipping it to the UK and transporting it from port to plant can make it more expensive than UK-produced coal could be. The generators see the world market, which draws supplies from a number of countries, as a more reliable source of coal than the UK, with its declining number of deep and surface mines, and steadily falling output.

However, the world market is not risk free. Competition for cargos and shortages of suitable vessels can drive up international prices, just as pressure on rail and port facilities at each end of the supply chain can mean missed deliveries. It should therefore make sense for major UK coal users to work with the producers to find a way forward in which UK output, which is less vulnerable to international market volatility, plays a continuing role in meeting UK demand.

Those are the issues that the coal forum should help to solve. Like my hon. Friend the Member for Sherwood, I believe that such discussions are a major step forward. The coal forum first met on 14 November 2006 and is due to meet again on 23 January. In addition to representatives of the coal producers and coal-fired generators, it includes trade union representatives and officials from relevant Departments. As was suggested at the forum’s first meeting, there has also been a private meeting between the producers and the generators outside the scope of the forum. That discussion will continue. The forum’s objective is to promote dialogue and so help all the interested groups better to understand each other’s perspectives on the problems that they must solve together if we are to have an ongoing coal industry in Britain. The forum has formed sub-groups to look at three issues of interest—planning, infrastructure and cleaner generation—and report back to the main forum with analysis and advice.

But we must face facts: the geological map of Britain may make it look like “an island built on coal”, to use the familiar phrase, but none of that coal has real economic value unless it can be recovered at an acceptable cost. There are two aspects to acceptable cost. The first is the cost to the mine operator of winning the coal—of opening a mine and keeping it open to recover its reserves. As I have already signalled, operators will do that only while they can sell at a price that gives them a commercial return on their investment. The second aspect is the cost to the locality and the nation of working or not working the coal. Like any other mineral, coal can be exploited only where it is found. For that reason, we must strike the right balance among the legitimate interests of the coal producers, the potential environmental impacts of development and the needs of the community, both in the immediate area and at the wider national level.

My hon. Friend the Member for North-West Leicestershire (David Taylor) also raised concerns about the future of the mines rescue service. Colleagues will know that we had one or two discussions about that important service when I was Minister for Energy. The statutory scheme is provided by Mines Rescue Services Ltd, which is a not-for-profit private company based in Mansfield. It has made great strides in generating income from third parties to cross-subsidise the core rescue function. The financial pressures on my Department mean that we are unable to help meet any shortfall that the company might face this year. I wish Mines Rescue Services Ltd every success in generating more income, and I understand that, although it would be unpalatable to the deep mine sector, the funding framework provides for an increase in the tonnage levy to ensure that the statutory scheme costs are met.

Before closing, I reiterate the Government’s belief that there will be a continuing role for coal in meeting our energy needs, particularly as cleaner generating technologies come on stream. We are all encouraged by recent announcements to that effect. UK-produced coal, deep and surface mined, can continue to play a part in meeting national coal demand, provided that there are reliable supplies at competitive prices. I should also like to take this opportunity to commend the work force at Harworth colliery for the drive and determination that they showed in trying to find a way forward for the mine, only to be defeated by adverse conditions in the working seam.

Is the Minister prepared to talk again to Mr. Spindler, the head of UK Coal, about the possibilities of maintaining coal production in the foreseeable future by reopening Harworth colliery?

We discuss wider issues with Mr. Spindler through the coal forum; we also have regular meetings with him, not least at official level, and I am sure that the issue will be discussed in the future.

I should like to thank my hon. Friends for their contributions to the debate. The issue is difficult, and I note my colleagues’ pessimism about the future, but I know that my hon. Friend the Member for Sherwood feels that the establishment of the coal forum is a step in the right direction, as I do. I also feel that the private talks that are now taking place between the generators and the coal companies—talks that various colleagues urged on me when I was Minister for Energy—are a further step in the right direction.

As always, I am grateful for the Minister’s comments. Towards the end of my speech, I discussed a target that was agreed at the coal forum and raised some questions that I should like the forum to address. Will the Minister and his officials refer those remarks to the coal forum?

Of course we shall refer them to the coal forum. As my hon. Friend knows, I am no longer Minister for Energy, although I moonlight in the House of Commons on that subject rather a lot, but I shall also draw the matter to the attention of the two Ministers with the relevant responsibilities. This has been an important debate and it has been a pleasure to serve under your chairmanship, Mr. Pope.

Question put and agreed to.

Adjourned accordingly at two minutes to One o’clock.