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Westminster Hall

Volume 458: debated on Tuesday 20 March 2007

Westminster Hall

Tuesday 20 March 2007

[Hywel Williams in the Chair]

Armed Forces (Recruitment and Retention)

Motion made, and Question proposed, That the sitting be now adjourned.—[Huw Irranca-Davies.]

I am grateful for this opportunity to raise the issue of recruitment and retention in the armed forces, and it is a pleasure to do so under your chairmanship, Mr. Williams. This debate is particularly timely, as today marks the fourth anniversary of the invasion of Iraq, an event that provides the context and backdrop to almost every issue relating to our armed forces that is currently discussed in the House. It is absolutely central to the topic that we are discussing this morning. Iraq is at the heart of the problems of overstretch, and it causes and exacerbates recruitment and retention problems.

Furthermore, this is the first opportunity that the House has had to debate the issues raised in the National Audit Office report, “Recruitment and Retention in the Armed Forces”, which was published in November. It highlighted some of the enormous challenges and made several specific recommendations for the Ministry of Defence to take on board in order to improve recruitment and retention.

Earlier this month, the Armed Forces Pay Review Body published its 36th report, which made recommendations on pay, allowances, accommodation and other charges. In strengthening and examining the evidence base for its report, the pay review body made some specific observations about the recruitment and retention problems that exist in the armed forces. It reinforced much of what was said in the NAO report, especially in respect of the impact that operational commitments, and the tempo of those commitments, are having on our servicemen and women, and the imbalance between commitments and current manning levels.

The debate is timely, and I hope that the Minister will welcome it as a good opportunity to outline his thinking on the issues raised in the reports to which I have referred, and to update hon. Members on his efforts to address recruitment and retention challenges in the armed forces.

In a tight labour market such as that in the United Kingdom, there are recruitment and retention challenges across the full range of employment sectors, and some of those challenges are particularly severe for certain categories of work. I shall not digress into areas that may be covered in the debate in the main Chamber tomorrow afternoon, but it is worth acknowledging what is driving the tight labour market. Demographic change means that a decreasing cohort of young people enters the labour market each year, which, when combined with the general strength of the economy, means more intensive competition to attract workers. There must be few hon. Members who do not regularly receive comments from local employers about how difficult it has become for them to find appropriately skilled and motivated staff to fill vacancies.

Skill shortages, recruitment difficulties and the challenge of hanging on to good workers are raised at any gathering of employers in the country, but what we are discussing when it comes to recruitment and retention challenges in the armed forces is not only one subset of a broad trend. The issue is fundamentally different, because the work carried out by the men and women who serve in our armed forces is unique and not directly comparable with anything in civilian life, and because the consequences of recruitment and retention difficulties, which result in added pressures on the service person in post and, ultimately, affect our ability as a nation to meet strategic military objectives, could be very serious indeed.

As I have said, the operation in Iraq forms a backdrop to many of the current challenges facing our armed forces, and that is certainly true when it comes to recruitment and retention. However, I do not for one moment go along with the crude line that I have heard expressed by some hon. Members that Iraq has somehow been a catastrophe for military recruitment and retention efforts. Yesterday, an officer described to me the challenge presented by the so-called mum factor—parents not wanting their sons and daughters to be killed or injured in Basra—which I do not dispute, but it is also true that the war in Iraq, our role in the invasion four years ago and the ongoing security operation have time and again thrown the spotlight on to some of the very best aspects of our armed forces, which can create heightened levels of interest among potential recruits. However, that also cuts the other way, in that our heavy commitment in Iraq has created new and additional pressures on our serving troops, which, in combination with other factors, have served to reinforce some negative retention trends.

The fact is that since 1997 the British armed forces have been operating at a much higher tempo than that envisaged by military planners. They have been deployed in the Balkans, Africa, the middle east and Asia, and they have supported other United Nations missions around the world. Most significant, of course, have been the operations in Iraq and Afghanistan. Since 2001, the armed forces have consistently operated at or above the most demanding combination of operations envisaged by the defence planning assumptions.

The NAO report observed that:

“Increased operational tempo has led to heavier workloads and more separation from families than expected, particularly in many pinch point trades.”

I think of the men and women of the 14th Signal Regiment, who I met recently at Cawdor barracks in my constituency. They are heavily in demand for their technical and linguistic expertise, and their regiment is currently engaged in three theatres—Afghanistan, Iraq and Kosovo. Some of the soldiers were getting ready for their third deployment to Iraq, and, although they approach the mission with the utmost professionalism and dedication, it would be entirely understandable if their motivation levels and enthusiasm were perhaps not as high as they were when they were preparing for their first deployment, and if thoughts of the long period of separation and the pressures on their young families now feature more strongly in their minds than thoughts of the novelty and excitement of a new mission.

The problem of targets for manning requirements not being met, requirements which themselves are not accurate for the scale of operations demanded of our armed forces, is at the heart of the problem of overstretch, which feeds powerfully into the mix of factors currently affecting recruitment and retention. The manning requirements published by the MOD do not reflect the level of operations that the Army and rest of the armed forces are undertaking. Put simply, manning requirements fail to reflect the true demands being placed on the Army.

The NAO report stated:

“The manning requirements have not been adjusted to reflect the current levels of deployment of the Armed Forces which have since 2001 exceeded the assumptions made about enduring concurrent operations”.

When one considers that even the understated manning requirements are not being met, one can begin to appreciate the seriousness of the personnel challenges facing the armed forces.

The NAO report refers to a shortfall of some 5,000 personnel, but states that

“the figures mask wider shortages of trained personnel within a range of specific trade groups across all three Services.”

I am very interested in the report to which the hon. Gentleman has referred, which points out that there is a shortage of approximately 5,000 troops. Is he aware that if the recruitment policy of the Army, Navy and Air Force were colour blind—that is, if they were recruiting a similar proportion of the ethnic minority population as exists in the community at large—they would recruit an additional 10,000 personnel? Indeed, if we were recruiting ethnic minorities at the same levels as the United States army, navy and air force, we would have almost 20,000 additional recruits and no problem with recruitment or retention.

I am grateful to the hon. Gentleman for making that intervention. I was not aware of the point that he has raised, although I shall make a few remarks about recruitment among ethnic minorities later.

Manning shortfalls in the pinch-point trades examined by the NAO were as high as 70 per cent. for intensive therapy nurses and 68 per cent. for accident and emergency nurses. The report recommends that the MOD review overall manning requirements within individual operational pinch-point trade groups to determine whether they are set appropriately. I would welcome the Minister’s comments on that specific point and on the extent to which he thinks that the stated manning requirements are realistic.

Although broad recruitment figures across the three services may not demonstrate an overall crisis, and some successful measures have been taken to improve recruitment to pinch-point trades, I maintain that the challenge to the Army of recruiting new soldiers has become severe. Over the past few years, Army recruitment has dropped significantly, and in 2006 more troops quit than signed up. Recruitment was slightly up last year, but I understand that it was still the second-worst year for recruitment in the last decade. Whereas in the past the Army might have expected to recruit nearly 17,000 people a year, the number has now dropped to well under 13,000, and it was as low as 11,700 in 2004-05.

The decline in recruitment has occurred despite a 34 per cent. increase in the Army recruitment budget. Given that the Army is currently thousands under strength, it is vital that recruitment efforts are sustained and increased. I invite the Minister to explain what will happen to the Ministry of Defence recruitment budget and recruitment activity and to comment on the observation in the NAO report that recruitment has been deliberately reduced by the MOD, at least in part, to make short-term financial savings that may not represent value for money in the longer term.

Will the Minister expand on his recent comments to the press about the disbanding of school recruitment visits by the MOD? In my constituency, many teachers believe such visits are useful and welcome. The only complaints that I have heard are from some members of Plaid Cymru, who do not consider such activities to be appropriate in Wales.

My hon. Friend is making a powerful argument for the need to increase recruitment. One of the problems is the recent change in dynamics regarding the type of soldier leaving the Army and the other two armed forces. Traditionally, a private solider who had been in the Army for three or four years would be more likely to leave, but now it is the more senior ranks—corporals, 12-year sergeants and 15-year staff sergeants, who simply cannot be replaced by a new recruit coming in at the bottom. The retention of senior soldiers is key to managing the recruitment process.

That is an extremely valuable point, and my hon. Friend speaks with considerable experience of the subject. Replacing school visits with a beefed-up online recruitment effort for young people will not seriously improve recruitment rates in the target group. I support as much interaction as possible between service personnel and schools. Last year, I spent half a day at a local secondary school, where a team from the MOD that specialises in citizenship education looked at a disaster scenario with a year group and involved teams of young people in designing hypothetical responses to an international disaster. The group operated extremely effectively in the school and, although it was not there specifically for recruitment purposes, it was, no doubt, an excellent advert for a career in the armed forces.

One area of recruitment where the Government have taken steps to improve performance, but where much more needs to be done, is the recruitment of soldiers of Muslim faith. Last November, I attended the memorial service held in St. Davids cathedral in my constituency for Corporal Peter Thorpe and Lance Corporal Jabron Hashmi, who were killed earlier in the year in an attack by Taliban fighters in Helmand, Afghanistan. Both men had been serving with the 3rd Para battle group, but were either part of or attached to the 14th Signal Regiment, to which I referred earlier. It was a privilege to meet members of their families and the Army imam who participated in the memorial service. One of Lance Corporal Hashmi’s officers told me that they desperately need more men and women like him in the regiment, because of the value and commitment that he brought and the skill set that he possessed— specifically his expertise in Arabic. Having grown up in Pakistan, Lance Corporal Hashmi had a knowledge of the culture, religion and language of the region, which made him an extremely important and valued member of the team.

A written answer to my hon. Friend the Member for Forest of Dean (Mr. Harper) revealed that the number of Muslims recruited to the forces is statistically insignificant and, for each month last year, barely reached double digits. I would be interested to hear what further steps the Minister thinks that his Department can and should take to improve recruitment among such an increasingly important demographic group.

On the problems and challenges of retention, if one of the challenges is improving the inflow of new recruits, the other side of the equation involves hanging on to good, experienced personnel who have benefited from expensive and extensive training and who occupy vital roles. Some degree of churn is welcome in any organisation, as it enables younger guys to come through, have a chance and make steady progress in their careers as well as fostering the spread of new skills and experiences within the organisation—we are perhaps learning some of that in the Conservative party. In certain sections of the armed forces, however, the rates of exit are too high and represent a net loss to the services. The Royal Marines other ranks exit rate is more than 7 per cent.; the average exit rate for Army general practitioners is 10 per cent.; and the figure for Army nurses is more than 8 per cent. Those figures are above the guidelines set by the Department and surely represent a challenge to ongoing efforts to hang on to valued and good personnel.

At the heart of the retention issue is the importance of making service personnel feel valued in their roles. For each individual and service family, a different mix of factors will make them feel valued in the career and lives that they have chosen. For many, the issue of accommodation is extremely important, and thanks to the comments of some senior officers it has recently received a lot of attention in the press. Clearly, accommodation issues present a major challenge that needs to be addressed. In its recent report, the Armed Forces Pay Review Body stated:

“where personnel have access to new and upgraded accommodation they are generally positive”.

However, it also noted that

“personnel moving from such accommodation to that of a lower standard…can contribute to retention problems.”

The Armed Forces Pay Review Body reiterated its disappointment with the cuts made by the Department to accommodation budgets over successive years. Urgent action is required regarding the issue of accommodation. It is not enough for the Minister simply to refer to the amounts of money being pumped into service accommodation; he needs to demonstrate that he and his team genuinely understand the grievances expressed and are committed to seeing the problems addressed.

On accommodation, when I visited Cawdor barracks to meet the 14th Signal Regiment, personnel generally expressed satisfaction with the quality of their accommodation, but the issue of broadband access was raised again and again. Despite those men and women being experts in electronic warfare, they do not have broadband access—access to the internet—in their barracks, which would really improve their quality of life. I have previously corresponded with the Department about that issue and did not receive an entirely satisfactory response. I ask the Minister to look at that issue again and find some way of connecting up Cawdor barracks to broadband internet access, because it would make a significant improvement to the quality of life of many excellent soldiers.

I have received numerous e-mails and letters from the spouses of some of the soldiers in my constituency about the quality of health care services locally. They have informed me that they enjoy the quality of life on offer in Pembrokeshire for service families, but are totally exasperated by the fact that they cannot access a dentist. As many hon. Members are aware, Pembrokeshire is a rural, peripheral area of the country where NHS dentistry has been all but decimated over recent years. Some service families moved from areas where there was good NHS dental provision only to find that the service barely exists in Pembrokeshire, which affects their outlook on the military lifestyle.

For some servicemen and women, what counts is access to training and the opportunity to acquire and develop new skills and improve their education, which will help them to get ahead in their military careers or when they return to civilian life. What are we seeing currently in that area? Well, more than 60 training exercises were cancelled last year out of a planned total of 548 separate exercises, which means that one in nine training exercises were suspended as a result of general issues associated with overstretch in the armed forces. Those cancelled exercises and courses represent lost opportunities for service personnel to develop vital skills and, for some, it will shape their perception of life in the armed forces, again, in a negative way.

Our armed forces have a superb track record in getting on with the job no matter what circumstances they face; they do not moan, whinge, or down their tools—there is no British Leyland tendency in the armed forces. More than anything, they want to be valued and properly resourced to do the job that they are asked to do. Recruiting and retaining high quality personnel in our armed forces is a serious and growing problem, and a significantly under-strength Army is being asked to operate over and above the level for which it was designed. That situation can only be maintained for so long before real pressures emerge that will cause lasting damage to the institution, and we are getting dangerously close to that point. I look forward to hearing the Minister explain how such problems can be effectively addressed.

I want to make four points. My hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) has made an excellent speech and I do not wish to repeat anything that he has said. However, as a starting point, I must state that it is true that the Ministry of Defence is having to recruit in a tight labour market. I joined the Territorial Army back in 1970—35-plus years ago. At that time, the armed forces were “benefiting” from structural unemployment around the country. Heavy industry was changing, coal mines in south Wales were closing, manufacturing industry in the west midlands was being lost, and men saw opportunities and better long-term careers in the armed forces. Today, even with the pay increase, a new recruit—a private, a gunner or a sapper—will earn not much more than £11,000 a year, or just short of £12,000. That is not a lot of money. The Minister looks at me quizzically, but I visited a Pioneer regiment in my patch the other day and was told that recruits earn about £11,000.

Out there in the labour market, one can earn more than that. In my constituency, where there is practically zero unemployment, one wonders what attracts people to the armed forces. Everyone must recognise that the MOD will be competing in an increasingly tight labour market.

Following on from that, many of those whom one would recruit as private soldiers at 18 will have left school at 16. It seems to me that there are two years that go gash there. One hears commanding officers having to explain that many of those recruited need to work to improve their educational standards, and our armed forces are obviously becoming increasingly technical, so why do we not recruit at 17? I appreciate that recruits cannot fight at that age, but we used to have a good junior leader scheme from which half of those recruited became lance-corporals and corporals.

Why does the MOD not recruit younger people, and use that first year on education and training, and getting guys up to standard, so that when they reach their 18th birthday they already have a head start? Otherwise the danger for the MOD is that those who might want to join the armed forces will have left school at 16, taken up other employment and become involved in other jobs and will be lost to the armed forces. That is particularly so if they have taken up employment that pays them as much as, if not more than, they are likely to earn in the Army.

I know of a good place where the Army could set up a new education school, and I hope that the Minister will agree. I know that the MOD is thinking about having super-garrisons. Bicester in my constituency—as the name suggests, it was a Roman garrison—became a garrison for the British Army at the time of the first world war. It had a huge footprint because it was built to resist Zeppelin attacks. It was thought that if the Zeppelins managed to hit one part of the depot they would not hit the others. It covers a huge area.

It has some enormous hangers and storage sheds, which must be among the wonders of the world. In one of them—it is an incredible sight, and I am sure that the Minister will have seen it—is the Bowman conversion for the new radio system. The set-up includes classrooms, and it is like going into a university. When the Bowman training at Bicester is over, I hope that the Army will find another good purpose for it. I believe that it would be an ideal place for a super-garrison, where apprentices and young soldiers, both men and women, could be trained. It would ensure that they found their trades at the earliest possible opportunity.

The point is that we should be recruiting earlier. We should use the time to enhance people’s education and training in trades and skills, particularly if, as my hon. Friend the Member for Preseli Pembrokeshire says, they have less time for training or to acquire skills because they are being deployed so frequently.

My next point is about housing. My hon. Friend made the point that families will be pretty disillusioned if the quality of housing is not good. Ambrosden in my constituency is a large village just outside Bicester that once had within its borders almost a village of MOD housing. A road that goes through Ambrosden once had MOD housing on both sides. Some time ago, the Ministry sold off the housing on one side of the road to Annersley Housing, which then sold it on to the private sector. In other words, it is now owner-occupied; people have done up their houses, refurbished them and remodelled them. On the other side of the road, the housing is traditional; I do not say this in a pejorative sense, but it is bog-standard MOD married quarters, in which little has been invested. It is pretty depressing.

I speak for the Army because I do not have so much experience of the Navy or the Air Force. It needs to recognise that if it wishes to retain soldiers it must also retain their wives and families. And the wives and families will stay only if married quarters are of a good standard; they do not want to think that they are being prejudiced by having to live in sub-standard accommodation.

There is a further issue. I have seen the problem in my constituency, but I do not pretend to have the answer. Twenty or 30 years ago, a staff sergeant or warrant officer leaving the Army with a gratuity could probably put a deposit on a home. It is now difficult for people leaving the armed forces to get on to the housing ladder. I do not know the answer, but it behoves us to ensure that the quality of housing while in the armed forces is good and that when people leave the services they have access to social housing should it be needed. I hope that the Minister can give us an undertaking that whichever defence estate is involved, it is giving active consideration to upgrading married accommodation.

The third point that I wish to raise was not mentioned by my hon. Friend the Member for Preseli Pembrokeshire. It is something that I genuinely do not understand. Anyone who has had any involvement or connection with the Army or the armed forces knows that the regimental system works to look after those in the regiment. It has always done so because most regiments rightly see themselves as a family so I genuinely do not understand why barely a week goes by without a surfeit of articles in the press about soldiers being neglected.

Last week’s edition of The Week magazine included the headline “Wounded soldiers: a shameful neglect”. The Mail on Sunday of 18 March carried an article headlined “Soldiers wait years for MOD payouts”. Sub-headlines in that article included “Government admits 7,000 wounded soldiers have not received their war pensions—many more are not even told of their entitlement”; “I may never have kids, but I’ve had no money”; and “I thought I’d die. Now I can’t afford hot water”. The Sunday Times of the same date had the headline “MoD ‘deserts’ teen soldiers scarred by Iraq”. It is a litany of neglect. It must have a corrosive effect.

As my hon. Friend said, parents are loth to support their children if they express a wish to join the armed forces. I genuinely do not understand why that is. If there is a system in place or if unit welfare officers are available, I do not understand how people can get lost in the system. One of the lessons that we should have learned from the first Gulf war is that it cannot be beyond the wit of man and officialdom to ensure that every wounded, injured or discharged soldier leaving our armed forces has some dedicated support, even if it comes through the Soldiers, Sailors, Airmen and Families Association or other organisations, to ensure that people are not left alone. What is coming through many of these stories is that people being discharged from the Army feel that they have been left on their own. I cannot believe that our uniformed institutions should get so much bad press. It must have a corrosive effect on recruitment. That is apart from the fact that each story is a matter of concern in itself—I am sure that the hon. Members who represent the individual soldiers affected will seek to raise those concerns in Adjournment debates if they feel it appropriate. The situation reflects badly on the Army and on its duty of care.

My final point is on access to military personnel. The armed forces are in a changing world, and each and every member of them is an elector. Serving soldiers are our electors. Yet, curiously, it is easier for me to get through to a closed convent than to serving personnel. If I want to go and see serving soldiers—my electors—in their garrison, including in Bicester garrison, I have to write to the Minister of State to ask permission.

I do not wish to tease anyone, but that situation might well go back to the days when half the Labour party were rabid members of CND, and Lord Heseltine was concerned that if they were allowed into barracks and garrisons they would cause mayhem by demonstrating and chaining themselves up. However, time has moved on. We should ensure that all soldiers are on the electoral roll where they live. I understand that the position has now been changed so that, if they register, their registration counts for three years rather than one. Nevertheless, there is a difference between Members of Parliament visiting installations—regiments per se—to talk about operational issues, deployment and so forth, and Members of Parliament visiting soldiers’ quarters and married quarters, and having contact with soldiers as electors. The latter type of visit gives us confidence that we as MPs have first-hand information about what is causing concern in the military and about what is good.

As my hon. Friend the Member for Preseli Pembrokeshire said, what soldiers tell us is often good. When I went to Afghanistan last year with the armed forces parliamentary scheme—along with a detachment of Labour MPs whom the Chief Whip had clearly wished to lose for the purposes of a key vote—we took time out to ask soldiers what they thought of their kit. Every one of them said, “We like our kit. We no longer have to buy any other kit.” Coming from Bicester, where the Defence Clothing and Textiles Agency is located, I was genuinely glad to hear that. Soldiers are candid—they are up front in saying what is good and bad. At the beginning of the 21st century we should have new protocols for Members to have access to and contact with those of their electors who are members of the armed forces.

Allow me to summarise my four points. First, we should be recruiting earlier and training younger. Bicester should be a super-garrison because it would be an ideal location for an army education centre—not least when Bowman training goes. My second point was about housing. Thirdly, I just do not understand why so many soldiers who leave the armed forces, or who are wounded or injured, feel neglected. Finally, MPs should have much better access to soldiers who are their electors.

I welcome the opportunity to take part in the debate, albeit briefly. I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing it—the subject is important and I agree almost entirely with the content of his speech, which was a good one. I agree also with much of what was said by the hon. Member for Banbury (Tony Baldry).

The final point made by the hon. Member for Banbury was about access to service personnel and establishments. It is the constitutional right of every US Congressman to visit any military establishment and speak to any military personnel, not just in the United States but anywhere in the world where US forces are serving. I am not necessarily suggesting that we adopt that practice in its entirety, but that right is an important one, because it allows legislators to gain access and to know exactly what the issues are in the three services.

I should like to speak briefly on an important subject that I believe crucially affects recruitment and retention—the recruitment and retention of ethnic minorities in the United Kingdom’s armed forces, which is a matter of concern. I approach that issue from the perspective of the pressure caused by the scale of the current operational tempo, and the fact that the armed forces are stretched as opposed to overstretched.

One has to be a little bit careful with the figures, but it is utterly unacceptable that there is an ethnic minority population of roughly 10 per cent., or just less than that, in today’s United Kingdom, yet the current figure for the recruitment of ethnic minority military personnel in the three services is 4.9 per cent. Sadly, there are also indications that such recruitment is in decline.

Since 1997, the Government have taken a number of welcome initiatives to address the problem. Between 1997 and 2001, there was early success in increasing recruitment among ethnic minorities, but those welcome efforts have clearly not succeeded in the longer term. There is a problem in the UK armed forces that involves barriers to recruiting from ethnic minorities.

The situation of our closest ally, the United States of America, is completely different. Again, we need to be careful with the statistics, because there are varying versions. However, even on the most conservative estimate, it can be argued that the ethnic minority population of the US, excluding Hispanics, is between 10 and 12 per cent. At the same time, that population’s recruitment into the armed forces in the US averages between 15 and 18 per cent. So not only does the US achieve the objective of being colour blind, and of recruiting at least the same proportion of people from ethnic minorities as in the community, it recruits half as many again. We should be doing the same for the simple reason that ethnic minorities in the United Kingdom, as in north America, tend for a host of cultural and historical reasons to live in areas where recruitment to the forces occurs at a much higher level. We should be attracting more people from ethnic minorities into the armed forces, but we are not.

For socio-economic reasons, ethnic minorities invariably find themselves in less favoured positions in society, and I know from personal experience that the military offers people a wonderful opportunity—often a second chance—to pursue a career and make a life for themselves. It is wrong that our military clearly does not offer that opportunity to ethnic minorities.

The hon. Member for Preseli Pembrokeshire was right to refer to the situation of the Muslim community. There is a particular problem relating to the Muslim community, because the levels of recruitment of members of that community to the three services are almost statistically insignificant. In the United States of America, however, members of the Muslim population are recruited to the armed forces at a level that reflects the size of that population within the country at large.

The same applies to Afro-Caribbean recruits. We struggle desperately in this country to be able to recruit enough Afro-Caribbean service personnel. In the United States of America, however, members of the Afro-Caribbean community are recruited very successfully. Moreover, the chair of the joint chiefs of staff in the United States of America, General Colin Powell, was of Afro-Caribbean origin. I state here today quite openly and categorically that that would be impossible in today’s forces in this country, because of the bars to recruitment. We must do something about that. Ten years after the Government’s gallant but, I have to say, failed attempt to address the problem, we can no longer afford to ignore it, given the pressure that our armed forces are under.

Our total military personnel establishment is just over 200,000, of whom fewer than 10,000 come from ethnic minorities. If we recruited at a level that reflected the proportion of people from ethnic minorities who live in the community, we would have at least another 10,000 personnel to draw on. If we recruited at the same level as the United States of America, we would have another 10,000.

The hon. Gentleman is making a powerful argument. In his analysis of the issue, which he has obviously taken a great deal of trouble over, what are the barriers in the British armed forces that the Government have failed to remove? Why does he think that we have not been as successful as the United States of America?

I thank the hon. Gentleman for raising that point, because it is the very one on which I shall finish. I do not think; I know what the barrier is. As an ex-serving airman myself, it saddens me to say this, but there is no doubt in my mind that the single largest barrier to recruitment within our armed forces is institutional racism. It has to be, because there is no other explanation. We are talking about a uniformed disciplined service, structured by authority. We should be able to break down any barriers that exist in the service. Why have the Americans achieved that and why have we failed? Quite simply, the Americans, back in the 1960s, took positive action. They said, “It is unacceptable that we do not give the ethnic minority communities access to our armed forces.” I am not saying that individuals in our armed forces are racists. I have no knowledge of that. I am saying that the armed forces are by definition, de facto, institutionally racist and it is about time that Parliament did something about that.

I hope that, over the next few minutes, I do not betray the fact that I had no intention of speaking when I came into this Chamber. Having listened to the debate, and as one of, I think, just two Members of Parliament who still wear a uniform, I think that it would be remiss of me not to make a contribution.

I congratulate my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) on securing the debate, which has been excellent. I shall make three brief points, if I may. First, I shall touch on operational welfare. Secondly, I shall touch on an area that has not been mentioned at all, which is recruitment and retention in the Territorial Army. Thirdly, I shall add to the debate on the recruitment of people from ethnic minorities.

As hon. Members realise, I had the honour to spend last summer in Afghanistan, fighting alongside our soldiers, and it was a fascinating experience, but I took home with me, among other things, the genuine concerns held by our soldiers and servicemen about the extent of their welfare package. To be fair to the Government, the welfare package for people on operations has improved in recent years. I had served twice before on operations—in Kosovo in 1999 and in Bosnia in 2002—and there is no doubt that over the years the welfare package has improved. I remember having to queue for 40 minutes in Kosovo to get on to the single Ptarmigan telephone in Pristina to ring home for my 10 minutes once a month. That was a thoroughly depressing experience.

There are still great areas in which we can make improvements, and telephones are one. It was quite depressing to find in Kabul that although we are now issued with a 20-minute phonecard, soldiers could buy what is called a banana card from the German PX or post exchange, which would allow them to make limitless phone calls home for a very low price—£2 or £3. Soldiers used that system rather than the issued card. It says a lot that when soldiers looked at the Ptarmigan card, they said, “Well, this is a waste of time. I’m going to use a banana card.” There were also complaints that those in the platoon houses were having to pay up to five times more to buy the extra units for the mobile satellite phones than they were for the landline, so ironically the closer people were to the front line, the more expensive it was for them to phone home. That was fundamentally wrong.

I have touched before in the House on my experiences of the air bridge and I do not intend to go over that ground again, but it is right to say that one of the things that we owe to our troops is to ensure that they receive their full rest and relaxation entitlement. I am sure that the Ministry of Defence would argue that R and R is not an entitlement but a privilege, but I would argue the opposite. If we send our troops on operations for six months, the very least that they can expect is their 15 days off. More importantly, when they get their 15 days off and they are due to come home, they should not have to lose three days of their time off because, for one reason or another, the air bridge is failing. That means, apart from anything else, that it is simply impossible for people to plan time off with their families when they come back from an operational tour. If they have no guarantee of getting back home on a certain day, they simply cannot book a holiday. That was a major bone of contention and I am pleased that the Government seem to be tackling it; I give them credit for that.

I want to touch on Territorial Army recruitment and retention. I have great concerns about the direction in which we are heading. I had the honour to command a Royal Engineers TA squadron just up the road in Holloway. I think that, by the time I left, of the 119 men and women on that establishment, 104 had been mobilised on to an operational tour at some point or another. That is a tremendous rate. We have clearly reached the point at which the Territorial Army is no longer being used as a reserve; it is being taken for granted. It has been taken for granted that the establishment of the Territorial Army will be there the whole time to support our regular forces. Indeed, I think that between 10 and 15 per cent. of our armed forces on operations at the moment are serving in the Territorial Army.

The point has not been grasped that that is simply not sustainable. Members of the Territorial Army join and are delighted to be mobilised to go on operational service. There is no doubt about that. People volunteer time and again, as indeed I have. I was amazed this morning to receive a text message from a very good friend of mine who at 44 is very excited about the fact that he is going off on an operational tour to Afghanistan for what will be the fourth time.

The problem, which the Government have not really grasped, is that members of the Territorial Army are not prepared to sacrifice their primary career for their secondary career. Under the Reserve Forces Act 1996, the jobs of members of the Territorial Army are protected, so that when they come back their employer is obliged to give them their job back. However, the employer is not obliged to promote them. Let us say that someone has had six months away. There is no guarantee that within the next four years, he will not go away again. The employer will look at their two employees and think, “Well, this chap has been loyal. This chap has been away for six months. What he learned over that six months has been very valuable, but I have no guarantee that he will not be sent away again for another six months.” So who will the employer promote? Whom will he tell, “I can rely on you”? Whom will he tell, “I value your time in the TA, but your being away is difficult because this is a small company”? Again and again, members of the TA who have been given their jobs back on their return realise that that they may well lose them if they stay in the TA and run the risk of repeated mobilisations. They are simply not prepared to do that.

Years ago, when members of my generation joined the TA, we knew that we would all mobilise as a unit following an Order in Council. To echo my hon. Friend’s point, however, it became clear to me when I was an honorary colonel of a Royal Logistic Corps unit that people were happy to do one six-month tour, but that a second such tour was almost too much for their employers or their families. Once people have done a six-month tour, therefore, their effectiveness in the unit will be very limited if the same demands continue to be made on them.

Absolutely. My hon. Friend sums up the point far better than I did. Indeed, the situation is worse than that because people are not allowed to train with their TA unit during post-operational tour leave—they are literally not allowed to go in. I should be fascinated to see the figures for the number of soldiers who have resigned from the TA after they have come back from their first or second operational tour.

The point that I am attempting to make is that the Government have still not got the message that the TA is there to be used and wants to be used. We should remember that the TA is rather like a shotgun: we can fire one barrel and then the next, but it will take an awfully long time to reload.

Let me touch now on the debate about ethnic minorities. As I mentioned, I commanded a TA squadron in Holloway and I think that it was the most multiracial in the British Army—soldiers who were not from the ethnic minorities were in the minority. We had a tremendous record of recruiting ethnic minorities, simply because we had that gravity in the unit. Members of the ethnic minorities who came to recruitment evenings found that there were already significant numbers of ethnic minorities in the unit, so they felt comfortable with it.

When I was a regular soldier, I was the ethnic minority in many ways, because I served in a brigade of Gurkhas, which was a fascinating experience. We shall need to look carefully at how we organise our units, however, if we are to make the most of such situations. I am not suggesting for one second that we should have ethnic minority units—far from it—but there are advantages in having such numbers, because they give entirely the right impression that the British Army is not—to be controversial—a white man’s army. That is certainly not what it is, and the TA units in London that are recruited from their local area are good examples of how the recruitment system can work.

When I served in Afghanistan, I had the honour of sharing a room with Corporal Charlery, who was recruited from Antigua. He is part of a growing cohort of foreign and Commonwealth soldiers in the armed forces, but there is great unease among its members, who feel let down by the Ministry of Defence. When Corporal Charlery was recruited in Antigua, he was told that he would be allowed to apply for a British passport within five years of service. That was absolutely not the main reason why he joined the British Army—like so many others, he wanted to serve the Commonwealth—but it was a factor. When he went on operational service, however, he discovered that his time on operational service would not count towards residency in the UK, and nor would his time in Germany. That was a major demotivating factor—he felt very strongly about that. To the Government’s credit, the issue was looked at towards the end of 2006, but I should be grateful if the Minister could confirm that it has now been fully addressed and that time on operational service counts towards residency when Commonwealth soldiers serving in our armed forces apply for a British passport.

Before I call the hon. Member for Colchester (Bob Russell), let me remind the Front-Bench spokesmen that they should each take up to a third of the remaining time so that we can have a full reply from the Minister.

I note your comments, Mr. Williams. I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing the debate. I also congratulate those hon. Members who have taken part on the way in which it has been conducted. I look forward to the Minister’s response.

Retention and recruitment are two sides of the same coin and include issues such as the conditions and care of personnel, the standard and quality of equipment, the provisions available in conflict zones, levels of training and preparedness and the needs of soldiers’ families.

To follow up the point about ethnic minorities, it is interesting to note that 10 per cent. of the British Army is not British, with one in 10 soldiers belonging to one of 57 other nationalities. That must be because there has been a decline in the number of young British men and women who wish to join Her Majesty’s armed forces, although I welcome the increase in the percentage of young ladies who join the Army, in particular.

Fiji leads the way on this issue, providing 2,000 of the 6,700 soldiers who come from the Commonwealth countries. In one sense, we should rejoice that so many people from other countries wish to join our armed forces, but what percentage does the Minister think that the British Army can go to given that the figure is already 10 per cent.? What is being done to encourage young men and women from this country to join Her Majesty’s armed forces?

As I said, Fiji leads the way with about 2,000 soldiers, but the A to Z roll-call of countries with citizens in the British Army goes from Australia, with 75, to Zimbabwe, with 565. There are also 660 soldiers from Ghana, 975 from Jamaica and 720 from South Africa. Even tiny countries such as St. Lucia and St. Vincent have provided 225 and 280 recruits respectively. Two weeks ago, I visited Bassingbourn as a member of the armed forces parliamentary scheme and had lunch with three young men—one from India, one from Ghana and one from Nigeria—and the members of their cohort were predominantly Ghanaians.

What incentives are there for joining the armed forces? Although the higher ranks seem to be doing quite well, there appear to be limited incentives otherwise, and the basic rate of pay for privates and recruits is not in line with that for other professions. I do not usually quote Williams Rees-Mogg, but he recently reported in The Times that the average Army recruit is paid £10,000 less than a Metropolitan police recruit.

It could be said that the conflicts in Iraq and Afghanistan have proved more challenging and often more hostile than anticipated. It is also fair to say that the impact of the Iraq war and our intervention in Afghanistan is taking its toll on the retention and recruitment of troops. It is therefore important that our troops feel valued and supported in their missions; after all, they are the backbone of our fighting forces. The Government therefore need to prioritise their welfare, fair treatment and conditions of service. Regiments and individual soldiers are being asked to do too much too often without proper regard to their welfare needs.

If we send our troops overseas, they will obviously need to be well prepared and protected. At home, however, the situation may be little better, with nearly half of armed forces accommodation considered substandard and the quality of medical care at times questionable, as recent reports have indicated. Those are just prominent examples, but there are others.

We also need to focus on the needs of armed forces families and the issues facing them to ensure that they get a good deal and are looked after while their loved ones are away, and I shall return to that in a minute. There is also a link to issues such as education for armed forces children.

Another issue is tax. It is ludicrous that men who are deployed to Iraq and Afghanistan have to pay council tax back home.

Married quarters often leave a lot to be desired. There is also the issue of the time that families do not spend together because of increasing deployments. Overstretch means that troops are spending longer away, and anybody who says that overstretch is a myth is not living in the real world.

I pay tribute to all those who provide Her Majesty’s armed forces with welfare and medical services. However, they are in short supply, and we have already heard about dentists. I had an Adjournment debate on education for armed forces children a few years ago, and I invite the Minister and his officials to look at what was said and at what the then Minister promised in response to see whether it has been delivered.

Welfare is important for the well-being of families back home, particularly when troops are serving overseas, but also when they are on training schedules elsewhere. We pay tribute not only to the Soldiers, Sailors, Airmen and Families Association, but to others including the Royal British Legion.

On schools, I have the great privilege of representing one of the super-garrison towns, and we have several garrison schools. However, the turbulence factor is not taken into account in the funding of those schools. Indeed, it has got worse in recent years because the hot-school-meals service that those schools used to receive has been withdrawn by Essex county council. It is fair to say that in many parts of the country things have improved dramatically for single men, not least in Merville barracks in Colchester, where the accommodation is superb. However, that is not the case everywhere, and certainly not the case with family housing.

As an aside, the number of MOD police has been cut by 40 per cent. in my garrison, and I believe that there have been cuts in other parts of the country as well. That is related to welfare and the feel-good factor. If there was a 40 per cent. cut in the police service in a neighbourhood, it would be noticed. That is exactly what has happened.

I said that I would concentrate on the housing side of the matter. I appreciate what the hon. Member for Banbury (Tony Baldry) said about housing, but let us go back to 1996, when the previous Government sold the entire MOD housing stock—57,428 houses—for £1.66 billion. Interestingly, they have ended up in the ownership of Annington Homes, which has made quite a financial killing. I shall come to that in a minute.

I have tabled parliamentary questions about the decent homes standard and, in reply, I was told that the MOD has even higher standards—the standard for condition, bands 1 to 4. That is the good news. However, then we discover that all is not well. Indeed, I raised that matter previously and received a letter from the chief executive of Annington Homes in which he informed me that the MOD

“directly benefits from our sales due to a profit share arrangement which formed part of the original transaction to buy the MoD homes in 1996. To date the Treasury has received over £145 million from Annington.”

My question to the Minister is: why has that £145 million not been ploughed back into increasing the housing stock? A very illuminating passage in that letter informed me:

“You are perfectly entitled to call for the standard of accommodation for all Service personnel to be improved, a sentiment shared by many, but you know that Annington is not involved in how and when the MoD do this. The MoD chose to retain its responsibility for the management and maintenance of the properties it leases from us and, naturally, makes its own decisions about its priorities.”

Annington is saying that the ball is very firmly in the MOD’s court. I ask the Minister to dwell on that.

I shall quote from an article in the current edition of Private Eye—a magazine that we all read fondly—under the headline: “All MoD cons”. That is one of the best headlines that I have seen in relation to this story—the words “MoD” and “cons” slip nicely off the tongue. It reads:

“Meanwhile the company that bought the housing in 1996, Annington, continues to do very nicely. When the forces no longer want to rent houses from Annington the company sells them, with the MoD recouping a share of any profit on the property it paid for in the first place. But the taxpayer only gets 22 percent of the gains, and since 1996 has recouped just £140 million.”

Now, there is a bit of a variation there, but the general picture is the same and virtually confirms what Annington said. It continues:

That means that in the same period Annington, controlled by Japanese investment bank Nomura, has bagged £500m”.

Let us bear in mind that the 57,428 houses were sold for £1.66 billion. One does not have to be a mathematician to work out that Annington has made a fantastic financial killing already.

The article continues by stating that that £500 million

“would have come in very handy in the defence budget, not least for the dirty work of maintaining and upgrading the housing that remains the public sector’s responsibility). And there’s plenty more bunce to come: the MoD’s share of future gains, expected to be large, soon drops to 10 per cent. and disappears completely in 2011.”

I invite the Minister, his colleagues and the Government in general, to look again at what went on and what can be done to retrieve the biggest rip-off, I believe, of all the privatisations under the previous Government.

Much more needs to be said, but I appreciate that the clock is moving on. I hope that the Minister will take very seriously the housing issue because it is very important to retention, along with welfare, education and MOD policing. I hope that he will also look at what is not working in recruitment because quite clearly it is not right that 10 per cent. of people serving in the British Army are not British. However much we welcome members of the Commonwealth serving in the British Army and, to a certain extent, Air Force and Navy, the simple fact is that something is not right if we cannot encourage a sufficient number of our own young men and women to join Her Majesty’s armed forces.

Thank you very much, Mr. Williams, for calling me to speak. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) on securing this debate and for the excellent opportunity it has given us. We have heard contributions from my hon. Friends the Members for Banbury (Tony Baldry) and for North-East Milton Keynes (Mr. Lancaster) and from the hon. Member for Vale of Glamorgan (John Smith) which touched on a number of important issues.

The root problem, which a number of hon. Members have identified, with the difficulties in recruitment and retention and the general overstretch of the armed forces comes down to a central question. In 1998, the Government did a good piece of work on the strategic defence review, out of which came the defence planning assumptions, which underlie the size and shape of the armed forces. Those assumptions were that we could undertake a certain level of operational activity, but, as the NAO has noted, we have exceeded that level in each of the past five years.

As far as I can tell, there is no sign that that is going to change in the near future. I know that we only signed up to a three-year Afghanistan operation, but it is clear from talking to NATO planners and from the state of that country that realistically we will be there for a decade or so. It is also clear from recent announcements on the Iraq deployment that although we have been able to reduce troop levels, we are going to retain several thousand troops, again, probably for the medium term. We will continue, therefore, to run our armed forces “very hot” to quote the phrase of the Chief of the General Staff, which will bring with it a continuation of the problems with retention and recruitment.

I have raised that matter because, as we all know, this summer, or possibly, autumn, the Chancellor will announce the comprehensive spending review settlement for the MOD, which will set out the spending plans for the next three years. It would have been sensible for the MOD to review its defence planning assumptions ahead of the comprehensive spending review in order to make the case to the Chancellor for the appropriate budget settlement. It is disappointing that that review will not be concluded until next year. If those defence planning assumptions are that we will be running at the current level and that we will have to recruit and retain more members of the armed forces, it is going to be a bit late if the funds are not in place to do so.

That can be seen clearly from looking at our current manning levels. The Government’s own requirement for the armed forces is 183,950 personnel, and the latest figures are that we have only 178,610. On the Government’s own figures—a requirement based on defence planning assumptions that themselves are too low—and based on the level of commitment, we have a shortage in the armed forces of more than 5,000 personnel.

The situation is getting worse, because the level of exits from the armed forces is exceeding the number of those recruited, which will increase the problems with recruitment, retention and the level of deployments in both the regular forces and the Territorial Army, which we have heard about. Indeed, the Chief of the Defence Staff recently told the Select Committee on Defence that the most important thing for the armed forces was to achieve full manning—to get to the required level set by the MOD. Given the figures and trends and what hon. Members have said, that does not strike me as being at all likely. Will the Minister confirm that the Government intend to get back to that manning requirement level? How does he plan to do that?

As my hon. Friend the Member for Preseli Pembrokeshire has said, the most worrying thing with recruitment is that although there has been some increase—last year was the second-worst year in the past five for recruitment, rather than the worst, so there has been some progress off a very low base—there has been an increase in what the MOD spends on recruitment. Army recruitment costs have increased by 34 per cent. and now run at £89 million. The cost per recruit has also gone up: in 2001-02, we were spending just under £4,500 per recruit, but we are now spending about £7,000 per recruit, because recruitment has not risen in line with the budget.

The MOD has a central defence schools presentation team that does excellent presentations in schools across the country. The Minister himself has said:

“These presentations are extremely well received and do allow us to get our messages over about the importance of defence. Almost all schools ask for a repeat visit the following year which has lead to a yearly increase in presentations. Civilian and military staff are seen as excellent role models and there are consequently significant benefits for future recruiting.”—[Official Report, 7 February 2007; Vol. 456, c. 922W.]

That shows that there are benefits both in recruiting and in communicating to the wider world. It also relates to a point made by the hon. Member for Vale of Glamorgan about presenting the armed forces as an attractive career prospect to ethnic minority populations, thus bringing a double benefit.

Unfortunately, having said all of those fine words, the Minister has also announced that the defence schools presentation team is being wound up. Those presentations will no longer take place, but will, I am afraid, be replaced by an on-the-web solution. However good the penetration of the internet is, particularly with younger people, it is no replacement for having men and women from our armed forces physically going into our schools and doing all those excellent things that the Minister has acknowledged.

I want to pick up the points made by the hon. Member for Vale of Glamorgan about recruiting from our ethnic minority populations. When I pressed him in an intervention, I was genuinely trying to understand what some of the barriers are. I know that the MOD has taken steps in the past few years to try to recruit more widely from ethnic minority populations. My hon. Friend the Member for Preseli Pembrokeshire has mentioned recent efforts to recruit from our Muslim population. It is clear that we have not been as successful in recruiting from those groups as we had hoped, but at the end of the hon. Gentleman’s speech, I was not much wiser. I do not find the phrase “institutionally racist” at all helpful, and I am still completely unclear about what he believes we need to change in our armed forces. He has simply cast a slur on them. I know that he said that individuals in the armed forces are not racist, but simply branding the whole organisation as racist is not very helpful—it is an insult and it does not take us any further forward.

This is a short debate, and perhaps I did not make myself clear. The hon. Member for North-East Milton Keynes (Mr. Lancaster) has suggested some possible solutions. We have to positively discriminate to get rid of this unacceptable anomaly, which we have not done up to now. That is what I propose.

We have a great deal of difficulty with recruiting, but I am still not quite sure what the hon. Gentleman is saying. Is he saying that people are coming forward to join, but are not being recruited, because the evidence does not seem to bear that out? I absolutely agree with the comments of my right hon. Friend the Leader of the Opposition on this. He has said that we must ensure that the armed forces are clear that there is absolutely no place for racism.

I want the armed forces to be seen to recruit from across the whole population. I believe that they do so, but they need to be seen to recruit and promote on merit. That is the direction the Government want to go, and it is certainly what I want, but the problem is moving from that aspiration to specific policies. I am still unclear as to exactly what needs to be changed, but, as the hon. Gentleman has said, we do not have time to go into that in great detail. Will the Minister touch on some of the things that the Government are doing?

Moving briefly to retention, medical treatment has been mentioned. To be fair to the Government, the recent problem at Selly Oak was about not the clinical and surgical treatment that members of our armed forces receive, which is generally acknowledged to be very good, but the environment in which they recover and recuperate, which is a slight difference on which I hope the Minister will elaborate. The Chief of the General Staff has said that his aspiration and expectation for when that hospital is redeveloped in three years’ time is that there will be dedicated military wards on which armed forces personnel can recover.

At Prime Minister’s questions last week, however, the Prime Minister said that it would be wrong to have a military ward with empty beds that could be used by civilian patients. There is a problem here: if we want a dedicated ward on which our armed forces personnel can recover with comrades who can understand what they have been through in combat, we have to accept that that ward cannot be used as an overspill for the busy district general hospital in Birmingham. Given that the comments of the Prime Minister and the Chief of the General Staff are not reconcilable, will the Minister tell us which of them has the position correct, because I am unclear about what the Government are aiming for?

Finally, we need to return to the general issue of commitment, resources and what we ask our armed forces to do. The Government need to review their defence planning assumptions and consider what they require our armed forces to do and how large the forces need to be. They should then set proper recruitment targets and consider the whole package, including issues that we have discussed today such as housing and the operational welfare package—there has been some improvement with that, but there is more to do. If we do not get the big picture right about what we are going to ask our armed forces to do and what size they should be to do it, regardless of how well all the other things are done and policies are implemented, we will have the central problem of running the armed forces too hot and having very little “left in the locker”, as the Chief of the Defence Staff has said. In that case, we will find ourselves up against those problems time and again, and we will be unable to solve them.

In the 1998 strategic defence review, the Government said:

“We must also deal with the underlying problems of undermanning and overstretch…A crucial test will be whether we can solve these problems.”

So far, the Government are failing that crucial test.

I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing this important debate, which has given us a good opportunity to go through several issues of recruitment and retention. Unfortunately, because of the time, I shall not be able to deal with all of the issues that have been raised, but I shall write to hon. Members about specific issues, not least regarding their constituencies or experiences.

I welcome the debate on this complex and challenging business. As hon. Members have said, the problem with recruitment sits against a backdrop of prosperity, high employment and a strong economy. Having to recruit against that backdrop is a challenge. The National Audit Office acknowledged in its report last November that it was wrong to suggest that the armed forces could not secure the right number of people to meet their needs.

I accept that we face challenges. As the NAO commented, we have a

“good understanding of what leads individuals to join the Services and of the increasingly challenging recruiting environment it operates”.

Perceptions are also important, so we need to deal with the myths. I shall try to cover most of the main points in the time available, but I shall first discuss numbers for a moment or two.

The combined effects of recruitment, retention and restructuring gave a trained strength for the armed forces of 178,610 at the start of 2007. That figure is 97.1 per cent. of the full requirement—an increase from 96.6 per cent. in October 2006—and is a sign of steady improvement. The Opposition have acknowledged the improvement, but we want to do more.

We must bear it in mind that all three services are being restructured, to a greater or lesser extent, better to meet today’s strategic threats. The key point is that the services are striving to achieve a manning balance within 2 per cent. of the requirement by 2008. As hon. Members would expect, the Ministry of Defence is working closely in partnership with the services and continues to use a range of financial, professional and social measures to secure sufficient capable and motivated personnel.

I shall set out what we are doing. The Armed Forces Pay Review Body recommended a good pay award for 2007, as has been generally acknowledged. It includes an above-inflation increase of 3.3 per cent. for all service personnel, with the notable exception of the most junior ranks, who will receive more than 9 per cent. I should tell the hon. Member for Banbury (Tony Baldry) that the relevant salary with the increase from 1 April this year will be £15,677, which represents an increase of 9.3 per cent. For many, this represents an increase of £100 a month and is the largest military pay rise in four years. It is well deserved and a recognition of what our armed forces do. It gives a clear signal of the value that we place on the people who serve in them.

The pay award also specifically recognises those who serve their country on dangerous and challenging operations. Last October, we announced a new operational allowance, which is a tax-free bonus of £2,240 for six months’ deployment paid to service personnel serving in specified operational locations. The allowance is accumulated at a daily rate of £12.31 by all regulars, mobilised reserves and those on full-time reserve service for each day that they serve in those locations. It is paid as a lump sum at the end of the tour, giving a welcome and tangible reward for operational service.

On the basis that I have not been paid my operational bonus from six months ago, will the Minister confirm that soldiers have been paid the allowance?

I can give that confirmation, unless the hon. Gentleman knows of someone who has not been paid it.

You have not been paid it. I shall personally look into the case. I went to Iraq and Afghanistan recently, visiting various bases and barracks, and found from my discussions that this had been paid. I cannot understand why the hon. Gentleman’s allowance has not been paid.

I give the hon. Gentleman an assurance that I shall personally look into the matter.

The NAO’s report acknowledged that we needed to focus on encouraging people to stay longer in some particularly important areas. That point was raised by Conservative Members. We are focusing on the infantry, the Royal Marines and air crew, where we are using financial retention incentives to encourage people to stay. The cost will be about £17 million, securing a valuable return of service that will contribute directly to operational effectiveness. Of course, we also use a range of other measures.

Recruiting targets have been discussed this morning, and, in general, recruiting has increased. Although the armed forces offer a wealth of opportunities, not least in terms of training and education, the reality is that our recruiters operate in a very competitive environment, as has also been acknowledged. We need about 20,000 new entrants each year across all three services. Young people have more opportunities than ever before, given the strong economy and the Government’s encouragement to stay in education.

The hon. Member for Banbury mentioned recruiting younger people. We have been highly successful in recruiting 16 and 17-year-olds, and he may be aware of the Army foundation college in Harrogate. Places are available to school leavers aged 16 to 17 years and one month. He alluded to the fact, of which account is not often taken in the complaints that are made and the issues that we hear about, that the armed forces do a lot to improve young people’s education and skills. That leads me on to the specific point that being in the armed forces is a good thing for one’s future because it gives the leadership, skills, communications and teamwork that can be taken on when one leaves the armed forces. That is why so many people who leave the armed forces—they receive an excellent resettlement package when they do so—go on to gain a higher level of employment than those elsewhere and contribute greatly to their community.

The issue of the recruitment of ethnic minorities has rightly been mentioned. Although recruitment goals were not reached in 2005-06, the services continue to commit significant effort and resources to engaging and raising awareness among all of the UK’s minority groups to encourage their members to consider a career in the armed forces. It is important to say that ethnic minorities are beginning to progress through the ranks structure and reach more senior levels. Recently, an ethnic minority officer in the Royal Navy was promoted to rear admiral, becoming the highest ranking ethnic minority officer in the armed forces.

The armed forces regularly review their recruitment strategies and policies, with a view to engaging ethnic minority groups, raising awareness and promoting careers in the services. We have heard about the sums that are being put into recruitment. Recent results have shown an increase in the level of interest in armed forces careers among minority communities. The challenge now is to convert interest into recruitment.

I must tell my hon. Friend the Member for Vale of Glamorgan (John Smith) that I do not accept that the armed forces are institutionally racist. I have talked to the chiefs of staff—the people at the very top. They are very committed to improving the recruitment from ethnic minorities, and much time and effort goes into doing that. I shall not go into the comments made by the hon. Member for Newark (Patrick Mercer). We must ensure that the armed forces are moving on, that there is a clear strategy for recruitment and that there is encouragement of promotion and of the advancement of people’s careers.

By 1 January, we had recruited 96 per cent. of our requirement for the financial year. While recruiting is generally up on the previous year, there is still more to do, particularly for elements of the Army. That is why we have introduced recruiting incentives in shortage areas, such as the infantry and Royal Artillery. So far, the signs have been positive; there has been a 30 per cent. increase in potential recruits to the infantry and a 44 per cent. increase in respect of the Royal Artillery when compared with last year. The Army has launched “one Army recruiting” to bring together regular and reserve soldiers. I pay tribute to the hard work, determination and imagination of recruiters in reaching the young people we need. Young people will benefit from service.

I return to the question of retention. A healthy and thriving organisation has people joining and leaving it at various stages of their lives. The armed forces are essentially young organisations. Some people retire at the end of a full career, while others leave early voluntarily. The services well understand voluntary outflow and plan accordingly. Voluntary outflow from the armed forces has varied little over the past decade, and compares favourably with the outflow from the rest of the public sector and from the private sector. We cannot purely rely on transactional measures to secure retention. We also use a range of social and community measures that are aimed at maintaining the morale not only of our serving people but of their families. For the Royal Navy and the Army, the latest attitude surveys show significant improvement in the self-assessment of morale compared with previous surveys, although the Royal Air Force showing was slightly lower.

We have continuously improved the operational welfare package for those serving on operations. The package directly upholds our obligations to our people by providing extra support for their physical and emotional well-being when they are employed on operations. It was clear from the seven-day visit that I made to Afghanistan and Iraq a few weeks ago that morale was high; it was even higher among those involved in the front-line operations. While some issues to do with the welfare package were raised, the welfare package was broadly welcomed by most people. I spoke to hundreds of members of the armed forces during my visit.

The recent improvements made include an increase in the free weekly telephone calls from 20 to 30 minutes, and better internet access. Other benefits include: the free e-bluey, which is particularly popular; free forces airmail; free packages from families to personnel of up to 2 kg over the Christmas period; and up to 14 days’ rest and recuperation leave during a six-month tour. That, combined with the new operational allowance, means that there has been improvement. We continue to examine how we can improve the package.

The issue of accommodation was rightly raised by the hon. Member for Colchester (Bob Russell) and others. I had the pleasure of visiting Colchester a few months ago, where I met the Paras and saw the new accommodation that has been built. I readily acknowledge that we need to do more in this area. There is a legacy of underfunding, but we must ensure that the right and proper accommodation is in place for our service people. It will take some time to deal with this issue. As I have seen on my recent visits, new accommodation for both families and single personnel is coming on stream all the time. In this financial year, we spent more than £700 million on accommodation and have upgraded many service houses. We plan to spend about £5 billion over the next 10 years, but there are no quick fixes because we need to address a legacy that goes back many years. We must continue our improvement in this area. Opening up the opportunities for home ownership is a part of our strategy.

I have gone on the record many times in recent weeks and months about the health service issue. Our people are getting the best world-class care possible. When people come back wounded from operations they receive first-class care in the Selly Oak facility and in the national health service; I have spoken to many service personnel and their families, and they all praise the care and treatment that they are receiving. There is also an excellent rehabilitation centre at Headley Court. We can always do more. One area in which we need to do more is mental health, and we are examining that as part of a partnership with the NHS and Combat Stress.

London’s Economy

I am pleased to have secured this important and timely debate on London’s contribution to the UK economy. The number of unsolicited but helpful briefings that I have received emphasise the importance of the debate. There is not time to do them all justice, but I am grateful to everyone who wrote to me from a wide variety of organisations that I did not even know existed. That shows how topical the subject is.

In many respects, London is the great success story of the past few years. Its strengths are that it is a diverse, vibrant, open and outward-looking city. Hon. Members may have seen the prominent story in The Times last Tuesday which suggested that London is overtaking New York as a financial centre and is overtaking Paris as a cultural centre. That was not the first straw in the wind to that effect. London’s business and financial services, creative industries, retailing and tourism are all growing. World-class businesses have gathered in London to contribute to our high-growth economy. Forty per cent. of the UK’s export growth in 2000-04 came from London, mainly from the financial sector.

What benefits London also benefits the rest of Britain. Some estimates have placed London’s annual net tax exports to the rest of the country at £8 billion at the bottom of the range and other estimates are as high as £20 billion or more. The capital accounts for 15 per cent. of total UK employment and 18 per cent. of its gross domestic product, with productivity 27 per cent. higher than in the country as a whole. London produces far more in tax than it ever receives in state funding, benefits and services.

Does my hon. Friend recognise that the midlands of England are larger, have a greater population, make a bigger contribution to the economy, and are more significant in academic, cultural and sporting terms, so the special pleading for London that is about to start does not ring true to midlands ears? We must rebalance UK society away from the metro-centricity of which this speech is typical.

I was about to say that I thank my hon. Friend for his contribution, but I do not think I can, because I do not agree with what he said. He has not yet heard my speech and he is prematurely off the mark. The fact remains that the statistics speak for themselves: London is the economic powerhouse that drives this country.

The continuation of London’s success and the scale of its contribution to the rest of the UK cannot be taken for granted. We are reminded every day of the growing economic strength of the emerging economies of China, India, Russia and now Brazil; nor can we assume that historic competitors such as New York will not respond effectively to London’s success.

In an increasingly competitive global environment for investment, London must stay one step ahead of the game. That requires significant and continued investment in those areas in which the city is weakest: transport, housing and skills. It is also essential that resources are available for the capital to respond to emerging problems and their consequences, such as the challenging security environment and the real threat of climate change.

I shall not reprise the comments of the hon. Member for North-West Leicestershire (David Taylor), but I agree with everything that the hon. Member for Hendon (Mr. Dismore) has said so far. However, is there not also an issue—he may want to develop this—that London’s power is becoming almost overwhelming? In many ways, it is something of a city state within the UK, which I suspect is an issue that might be in the minds of his hon. Friends from other parts of the country. Could he explore that, as well as doing the right thing by the bankers of NW4 and the lawyers and accountants of NW7, who make up an important part of his constituency?

I simply say that although parts of my constituency are wealthy, some are very poor, and I shall refer to them shortly. The hon. Gentleman makes an interesting point. I certainly do not advocate a return to the city states of ancient Greece, nor a London nationalist or separatist movement, but London’s problems are unique in many ways and require special solutions that do not necessarily match with national policy across the board.

The starting point must be public transport, because the contribution of its network to London’s economic viability, and therefore the nation’s, is undeniable. London businesses consistently cite transport constraints, such as delays and overcrowding, among their greatest concerns. There are significant cost implications when people are late for work, because loss of productivity and lost business inevitably follow from unreliability. People arrive at work, or at home after the working day, stressed out from their journeys on public transport. In 2005, the cost of transport delays to central London workers and businesses was estimated to be £1.2 billion a year.

Sir Rod Eddington's study, which was published last December, emphasised the importance that transport plays in supporting a strong and growing economy. His report stated:

“There is clear evidence that a comprehensive and high-performing transport system is an important enabler of sustained economic prosperity”

and that

“the strategic economic priorities for long-term transport policy should be growing and congested urban areas and their catchments”.

I congratulate the hon. Gentleman on securing this debate, and, so far, I have enjoyed what he said. However, he touched a raw nerve when he mentioned overcrowding on public transport, and I am sure that he is right to bring that issue up early in his speech. There have been complaints about increasing overcrowding on journeys from Orpington, and the solution is not, as is sometimes said, more and more high-level investment. The Secretary of State for Transport recently promised another 1,000 carriages by 2014. That is an amazing promise, and went down like a lead balloon in Orpington. Short-term, relatively cost-free improvements can be made simply by running more carriages and having a licensing and franchise system that encourages licensees to do that. I would like the Government to pay attention to that short-term arrangement, rather than just to the long-term farragoes.

The hon. Gentleman’s comments are interesting. I do not know the particular problems of travelling from Orpington to central London, but I shall refer generally to the south-east and mainline rail links. He makes some important points, and I shall refer specifically to Thameslink, which serves my constituency, because similar issues arise.

The Eddington report supports my case, because London can certainly be described as growing, congested and definitely urban. Around 1 million people use public transport to get into central London on weekday mornings, and 6 million people use London’s buses on any given day. Last December, the tube carried 4 million people on a single day, which was a record for the network.

It is blindingly obvious that increased investment and consequently more reliable services with greater capacity would make a real and fundamental difference to the ability of London’s transport network to support the economy as a whole. Bus use in London uniquely has increased by 40 per cent. since 2000. The congestion charge has cut traffic and congestion, and a seventh carriage has been added to every Jubilee line train. Those improvements alone have contributed to a 5 per cent. shift from private car to public transport. That is unprecedented elsewhere in the world in major cities like London.

Much more must be done, however, to provide for the population and job growth that London will experience over the next 20 years. There will be an extra 1.1 million people and 900,000 jobs on top of the 760,000 increase since 1989, which is equivalent to absorbing the population of Leeds already, with Sheffield to follow. Public transport demand will increase from 10 million journeys a day to 12.8 million by 2025.

Transport for London has carried out an extensive analysis of this, and recently published “Transport 2025” on a transport vision for a growing world city. Unless London’s transport system benefits from increased, sustained funding over the coming years, the limitations of the current transport network will subject London’s economic development and its vital contribution to the country's economy to slow and inevitable strangulation.

“T2025” sets out the priorities for London’s transport network. The current position with the vital Crossrail project seems to be positive. The recent meeting in Downing street and the Prime Minister’s unequivocal support is encouraging, but it is essential that the funding package needed to deliver this robust and costed scheme is agreed as quickly as possible to prevent further hold-ups for this long overdue plan. It is vital that the House appreciates both the project’s benefits and its urgency. It is estimated that Crossrail will generate £31 billion in additional GDP, which in turn will yield around £12 billion back to the Exchequer. That investment in London will generate substantial benefits for the rest of the economy.

In the global competition for financial and related services, we must provide location options. Businesses want to locate where they can expand, and they will soon choose not to come here, or to anywhere in the UK, without Crossrail. They will decide instead to go to another global financial centre. In the meantime, central London office rents will continue to rise, and new offices will be refused planning permission because of the absence of any transport links. The costs of delaying Crossrail are estimated at £4 million each day, or £1.5 billion a year. It is vital that all elements of the scheme, including financing, come together, so that construction can get under way as soon as possible—perhaps even as early as 2008.

On the underground network, the public-private partnership must be made to deliver for Londoners. The full public-private programme can and will deliver significant benefits—not only modernised stations, but almost 30 per cent. additional capacity. The Northern line, which serves my constituency, will have a new signalling system and more of its track will be replaced, but it will be a number of years before the project is completed.

Last summer, I visited the maintenance crews working on the night shift, and the conditions in which they have to work—the heat and the dust—and the heavy labour that they undertake are amazing. What they are able to deliver—unseen and underground when the network is closed—is a real benefit to Londoners, and we ought to pay tribute to their work. I was very impressed by what I saw—by their commitment and hard work down there, unseen by anyone else. As problems have been resolved, however, new difficulties have arisen from, for example, the train maintenance contract. The trains were new 10 years ago, but the contract has tied up their maintenance in red tape, and the work is not done as well as it should be.

For Londoners living away from the Tube network, as some of my constituents do, dependent as they are on Thameslink, mainline rail is a vital part of the picture. The Thameslink 2000 scheme is vital to opening up the suburbs, and it must be funded when the comprehensive spending review is announced this summer. In the meantime, improvements can be made to the network, as the hon. Member for Orpington (Mr. Horam) said. One of our problems has been the loan of the special trains that are needed for the Thameslink service to other parts of the network, because if we had them back, its reliability and the service in general would significantly improve. We have had one train back so far, but 12 others should be returned.

There are a high proportion of national rail passengers in London and the south-east, and further spending must reflect their desperate need for extra capacity. Sir Rod Eddington’s report on transport spending priorities strongly supported that view. The T2025 programme should reduce journey times by 10 per cent., and when the wider economic benefits are included, its overall cost-benefit ratio will be 9:1. It is essential that the Government make the necessary commitment to that project and to projects that support it, so that London’s transport system can continue to play its key role in supporting London’s growing economy.

It is no secret that London faces a severe housing shortage throughout all key sectors: social housing, affordable housing and intermediate homes. Owing to the absence of urgent action, the shortage is becoming a crisis, blighting the lives of hundreds of thousands of Londoners who are condemned to live in homes that are temporary, overcrowded, unfit for habitation or, in many cases, all of the above. On top of the damage that such conditions inflict on the quality of life and on the health and the life chances of people living in such accommodation, they are seriously detrimental to the economic competitiveness of London. The shortage of suitable housing decreases the attractiveness of the city to inward investment, and it is pricing many key workers out of London.

The figures are stark: two thirds of UK households in temporary accommodation live in London. The 150,000 London households in overcrowded conditions represent more than half the national total. London has suffered more than any other region in the country from the failure—identified in the Barker review—to provide a new supply of homes to meet a rising population and decreasing household size. It has been exacerbated by the failure to refurbish and renew London’s housing stock, which is older than the average for the rest of Britain. I am constantly criticising Conservative-controlled Barnet council—the local authority for my constituency—about its snail’s pace progress with major regeneration schemes such as Grahame Park, West Hendon and the Spur Road and Stonegrove estates.

In the London plan, the Mayor of London proposes radical action to address the housing shortage. The plan shows that the capital has sufficient land capacity to build more than 30,000 homes each year during the next decade, and if the Mayor’s targets were hit, more than 10,000 would be social rented homes and 4,500 would be intermediate homes, almost doubling the current annual output of social and affordable housing. In making decisions on the allocation of national funding for housing, the Government must recognise the pressing need for investment in London’s housing stock, compared with the rest of the country. Nowhere else is there such a concentration of the problems of shortage of supply, unaffordable homes, overcrowding and unfit accommodation.

Unless London’s severe housing issues are tackled, the Government will be unable to meet their national housing targets. The Mayor has the political will to make progress, but without desperately needed additional resources from national Government, he will be unable to make real progress in tackling effectively the appalling and unfair housing conditions in which many Londoners are forced to exist.

Housing and transport are two key areas in which a Government commitment to support is urgently needed to guarantee the continuation of London’s vital contribution to the UK economy. However, there are other areas in which Government engagement is essential, and tackling poverty, low skill levels and high worklessness in the capital is one of them. London has the lowest working age employment rate in Great Britain at 69.7 per cent., compared with 74.4 per cent. nationwide, and worklessness in London is concentrated in households with children. In 2005, just 68 per cent. of London’s parents with dependent children were in work, compared with 78 per cent. in the rest of the UK. That situation contributes significantly to London having the highest child poverty rate in Great Britain. Some 39 per cent. of children—52 per cent. in inner London—live in poverty, compared with 27 per cent. nationally, and the rate is getting progressively worse compared with the country as a whole.

Some people see the suburbs as prosperous, leafy boroughs, as the hon. Member for Cities of London and Westminster (Mr. Field) said, but in my outer London constituency in 2005, 7,700 children—33 per cent. of all children in the constituency—were living in households dependent on benefits. Between 2000 and 2005, the number of children living in families receiving benefit in Hendon rose by 1,100.

I recognise—I hope that the hon. Gentleman will, too—that in my inner-city constituency, areas of great poverty exist alongside affluent areas. It obviously applies to Hendon, too. However, does he not recognise that in part, the benefit system’s complications, which have become manifoldly worse during the past decade with tax credits and the like, ensure that many parents find it difficult to return to work, because they know that they will lose their benefits? Housing benefit in particular makes such an important contribution to household income in London, and more so perhaps than in other parts of the country.

The hon. Gentleman makes a fair point, and I should not typify all his constituents by comparing them to people who live in Mayfair. Throughout London, the pattern is repeated whereby wealthy people live side by side people in extreme poverty.

The hon. Gentleman’s main point was his concern about the benefit system, but the system is not so much complicated as unable to recognise the London effect. Although the system has been effective at alleviating poverty in the rest of the country, owing to features that are particular to London, such as the high cost of living and, for those in work, the high wage structure, tax credits have not alleviated poverty as they should have. However, he is right to highlight the problem that tax credits have not delivered for London as they have for the rest of the country.

Furthermore, housing benefit can prove a barrier to people finding work because they fear losing their home as a consequence of being unable to pay the rent. However, I am concerned that some proposed reforms to housing benefit may work to the detriment of Londoners rather than to their advantage. The benefit system must be tweaked to reflect problems that are particular to London, and one could make a case for adding London weighting to the old-age pension. I shall not go down that route today, because it is not the main thrust of my argument, but London pensioners incur a higher cost of living compared with the rest of the country.

The policies that increase London’s employment rate support social justice and economic efficiency. Moving into work is the best escape route from poverty, and unemployed people represent an unused resource for London’s economy. Properly designed training programmes can help to tackle worklessness in London and, by improving the skills of people already in work, they can help people to progress in the labour market.

By addressing London’s high levels of worklessness, we could help to reduce poverty in the capital. To that end, the resources, targets and structure of Jobcentre Plus in London should be reviewed to meet London’s special economic requirements—so different from the rest of the country—as part of both the comprehensive spending review settlement and the Mayor’s skills and employment strategy.

We will not see real progress on the Government’s wide range of national policies and targets without effective action in London. Investment in London will help to ensure that the capital continues to provide its net contribution of billions of pounds to central Government, benefiting the UK as a whole, attracting resources and increasing the whole country’s competitiveness and productivity. London is the country’s golden goose. If it is to continue to lay the golden eggs from which the nation benefits, the investment that I have described must continue.

I congratulate the hon. Member for Hendon (Mr. Dismore) on initiating this important debate. As the Member for the Cities of London and Westminster, it is a pleasure to take this opportunity to highlight the importance of London’s contribution to the nation and to make some points that are important to its continued success.

The hon. Gentleman understandably—and quite rightly—did not focus just on London’s economic success, but I hope that he will forgive me if my speech is geared towards the importance of the economy. Not only do I have 70,000 constituents, but almost 1 million people come to work in my constituency every day. He made some important points about certain aspects of poverty and the high rate of unemployment in London, which I hope that the Economic Secretary has taken on board. However, I shall focus on the financial services industry and other industries that are so important to the wealth of London and, therefore, to this country’s continued economic success.

London now has the highest unemployment of any region in the UK. We also have the largest number of migrants to this country, an issue which it is often difficult to debate in parliamentary terms, who understandably come to the vibrant area of central London. One of the reasons why it is perhaps so difficult to get back into work is that we have quite a large black economy—its size is unknown. A lot of people are paid cash in hand, which is a strong disincentive to employ and train up many people in the indigenous population, who therefore remain unemployed. Also, a lot of people who perhaps lack the skills and aptitude to hold down a job live in social housing. They find it difficult to improve their lives for the reasons that the hon. Member for Hendon has set out and find it easier to remain unemployed if they thereby qualify for the scarce social housing to which he also referred.

There are some major problems in London. I endorse what the hon. Gentleman has said about the need for serious thought about a problem that was thought to be specific to the capital, but which, I fear, now extends beyond its borders. I suspect that many hon. Members with seats in the home counties—for instance, Essex, Kent or Hertfordshire—would recognise precisely the same problem of increasing polarisation. In order to live in many bits of London and the south-east, people need to have inherited property, to work in financial services or a related industry or to be so poor that they qualify for social housing. The group in the middle is for ever being squeezed. That polarisation has been an element of life in central London for many decades, but I suspect that it is now every bit as evident in Hendon, St. Albans and Stevenage. That raises major issues—of social cohesion, apart from anything else—that we shall all have to address going forward.

Hon. Members may be aware of a report commissioned by the City of London corporation entitled “London’s Place in the UK Economy, 2006-07”. It highlighted the increased importance of London’s wealth and its potential to generate tax revenue at a time when the overall UK budget balance continues to deteriorate, a point to which I suspect that I shall return not only today, but at some point in the next few days, as we debate the Budget in the main Chamber. London is widely regarded as a world city; indeed, many see it as “the” world city—the big global capital—and rightly so. However, the capital’s current standing across the globe reflects the fact that at its heart is a highly concentrated cluster of international business, whose beneficial effects are felt in many parts of the world.

However, it would be mistaken to forget the important contribution that our capital city makes rather closer to home. To paraphrase the hon. Gentleman, London made a net contribution of £13.1 billion to UK public finances in 2004-05, which is a figure that I believe has increased fairly steadily over recent years. Data published by the City of London corporation suggest that GDP growth in London stood at 3.9 per cent. in 2006 compared with 2.6 per cent. in the UK as a whole. Further data suggest that London as a whole contributes between 17 and 19 per cent. of UK Government revenues, depending on whether residence-based or workplace-based calculations are used, despite London’s population making up only one eighth of the country.

Financial and related business services have played a key role in the acceleration of the capital’s growth, since London is dependent on financial services to a far greater extent than any other region of the UK. The importance of financial services to London is underscored by the fact that more than 40 per cent. of the country’s financial services firms are based in London. Indeed, financial services now account for more than 9 per cent. of the UK’s GDP, compared with just 7 per cent. a decade ago and with as little as 5 per cent. in 1980. It therefore appears that the success of London’s City cluster goes hand in hand with the performance of the economy as a whole.

The UK fiscal position as a whole, relative to London, has deteriorated sharply since the turn of the millennium. In the fiscal year 2004-05, for instance, the capital’s net positive contribution to the UK current account was calculated to lie between £6 billion and £20 billion, so a mid-point estimate implies a net contribution of £13.1 billion, the figure to which I have referred. A strong case can be made that London’s tax export to the rest of the UK has helped to mitigate the impact of the increasing UK deficit, which reached £39.7 billion in 2004-05. Without the benefit of that substantial contribution to the Exchequer, the public borrowing requirement would be considerably greater, with stark consequences for public spending as a whole throughout the UK. Furthermore, London imported £110 billion of goods and services from elsewhere in the country in 2005, amply demonstrating that London’s success provides essential support to the rest of the UK economy. As the hon. Gentleman has said, if London does not succeed, the rest of the UK will suffer.

London occupies a uniquely competitive position in the UK economy. Its high costs are more than offset by other factors, making it an attractive location for internationally traded services. London’s high-value-added economy depends upon providing benefits for its highly skilled work force. London has a strong track record in attracting skilled professional and managerial workers from overseas as well as lower-skilled workers, who have filled potential labour shortages in the retail, catering, transport and other sectors and have consequently helped the UK to maintain a relatively liquid employment market. However, all the caveats that I mentioned earlier must be taken into account. It is a great worry that an increasing number of Londoners are being left behind, notwithstanding the efforts of central Government, London government as a whole and the City of London corporation, which plays an important role in Hackney, Tower Hamlets and Islington, in trying to attract from further afield not only the brightest and the best, but others to make their full contribution to the financial services sector.

In 2005 alone, 32 per cent. of London’s work force possessed degrees or higher education qualifications, compared with just over one quarter in the rest of the UK. That picture reflects the fact that London is competing internationally. London is truly a global capital and does not sees its competitors as—dare I say it, given the earlier intervention—Birmingham, Glasgow or Edinburgh, but as New York and Tokyo and, in the decades to come, if not already, Shanghai, Beijing, New Delhi and Hong Kong. London is one of an elite group of cities. New research commissioned by the City of London corporation has for the first time established an index of competitiveness, which tracks 46 of the world’s financial centres. That index—the global financial centres index—shows London and New York as the two global powerhouses, ranking well ahead of Hong Kong and Singapore. At present London is ranked ahead of New York in all five areas of competitiveness—people, business environment, market access, infrastructure and general competitiveness. However, the report highlights widespread concerns about the UK tax regime relative to its competitors.

It is also important that we take this opportunity to highlight some of the issues of broader infrastructure. We cannot be complacent about the skills infrastructure, and there are issues of physical infrastructure—in particular the transport infrastructure, to which the hon. Member for Hendon has referred. I should like to make a bid for serious consideration of Crossrail and other aspects of the transport infrastructure, without which London’s great dominance, which has been jealously guarded and created strongly in the past two decades, will begin to be undermined. That would be little short of disaster not only for our capital city, but on a broader basis.

Central to London’s ability to retain its competitive edge will be its cultivation of the knowledge economy. The capital is well served by its 43 higher education institutions, but more than ever the best universities compete globally for teaching, students and finance. This debate is not simply about higher education, but we must all face that important issue. Some of our very best universities are suffering as a result of global competition—not least for places, given the numbers of graduates from China and India coming through across the country. There is also a significant brain drain of some of the best academics, who are now going to US universities simply because pay and conditions are so much better. I hope that we shall give great consideration to setting free our best universities. Now a fee structure is in place, I should like there to be a much more flexible structure.

I am listening carefully to the cogent argument that the hon. Gentleman is making on behalf of London. Are not the significantly increased costs in London one of the other considerations in respect of students and lecturers in higher and further education? I think particularly of housing costs. I have been involved with a research student, now reaching 30, who has a doctorate and significant experience behind her. Yet she cannot even get on to the lowest rung of the housing ladder in London. Is that not a common problem across the capital?

It is very common. There are individuals who are happy to give money to their alma mater. As I have mentioned, there are 43 higher education institutions in London as a whole. It is perhaps easier for the better known institutions, such as Imperial college and the London School of Economics—two institutions in my constituency—to find entrepreneurs willing to sponsor junior research fellows in their 20s and 30s, who are some of the brightest and best brains and who will eventually get academic posts. However, the hon. Member for Edmonton (Mr. Love) has made an absolutely fair point, which, I fear, applies not only to academia but to areas such as medicine that are not ancillary to the financial services industry. It is one of the problems that needs to be dealt with, and all on both sides of the House will have great sympathy with the hon. Gentleman’s point.

In recent years, 26 per cent. of foreign students were attracted to London to study, bringing with them a contribution of an estimated £750 million a year to the UK economy. Although that is welcome, challenges remain. A high-productivity, high-cost location is not necessarily ideal for a university—for example, King’s college, the best placed London institution, is almost six times less well-endowed than Oxbridge. If London universities are to continue to provide the same opportunities for home-grown talent as to overseas students eager for a world-class education, we must ensure that they possess the financial muscle to match the most powerful institutions worldwide.

During my conversations with him, Sir Richard Sykes, the rector of Imperial college, has made it clear that he would like to attract more home-grown talent. However, the phenomenal difference between the fees that he receives from indigenous students and those from students overseas make it, to put it in rather brash terms, a bit of a no-brainer. To make ends meet, Sir Richard has to take on far more foreign students than he would ideally like to.

No debate on the contribution of London’s economy should go without mention of the efforts put into the promotion of financial services at home and abroad by the lord mayor of London and the City of London corporation. Their promotional role for the financial services sector is strengthened by the direct representation that City businesses enjoy on the corporation’s main governing body, the common council. As you know, Mr. Williams, and as I am sure the hon. Member for Hendon would also point out, the City is the only place in which businesses participate directly in the electoral process. Understandably, that has been a matter of some controversy. Obviously, I am a democrat—I voted for a fully elected House of Lords. If I did not represent the Cities of London and Westminster, I suspect that I might take a somewhat different view. As it is, I have seen how the system works, and it works well in the City.

As an arch-opponent of the City of London (Ward Elections) Act 2002, which introduced the reforms to broaden the City’s franchise, the hon. Member for Hendon may not wish to hear this, but I believe that those reforms have generally been pretty successful. About 75 per cent. of the eligible business electorate now register to vote. In his role as the City’s international ambassador for financial services, the lord mayor therefore directly represents the business community. It is worth adding that those activities, complemented by the work of the corporation’s offices in Brussels, China and India, are undertaken without any call on the public purse.

Hon. Members will surely agree that London’s continued prosperity depends on its infrastructure. City businesses require sufficient support to sustain growth; in particular, the availability of quality office stock must meet the pressures of demand if raising rents and falling vacancies are not to dent London’s competitiveness. The position of London as a revenue generator needs to be recognised and proper investment made. As I have mentioned, projects such as Crossrail will facilitate essential access to and business in the City and help to relieve the burden on London’s creaking public transport system, making travel into the business centre attractive and efficient. Those concerns must be addressed if London is to deliver an exemplary 2012 Olympic games worthy of the whole nation and, more importantly, if we are to build an infrastructure legacy that will ensure not only a spectacular show for three weeks in the summer of 2012—I am sure that it will be—but great benefits beyond then.

In conclusion, London is an asset to the UK, the European Union and the global economic world. At its heart, the City of London is the engine of the capital’s growth. We must ensure that the benefits of London’s success continue to be felt throughout the whole UK—particularly here in the capital—and we must keenly resist any threat to its prosperity.

I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on securing this debate. He rightly highlighted issues of housing, skills and transport as key to the future of London’s economy. Most of us would agree with most of the comments made by the hon. Member for Cities of London and Westminster (Mr. Field), who gave such a clear exposition of London’s economic position from his unique position as a representative of the heart of London’s economic and financial centre.

I want to highlight not only what London contributes to the UK but, as the hon. Gentleman intimated, the fact that it has a much wider role internationally. In London, productivity is 20 per cent. higher than in the UK as a whole. In inner London, which includes my constituency, productivity is 38 per cent. greater than in the UK as a whole. London provides 15 per cent. of the UK’s work force with jobs and nearly 20 per cent. of UK output.

We need to consider London in the international context; it really is a world city in every sense. As the Member for Hackney, South and Shoreditch, in which the Olympics will partly be based, it is important that I should mention investment in the Olympics, a significant contributor to the future and regeneration of part of east London, which we hope will create hundreds of thousands of jobs and housing places—in fact, we know that it will; the finances were pinned down last week. There will be investment in housing, jobs and skills for my constituents and many others in London and the UK. Although it is true that my constituents have benefited particularly from the Olympics, given that every £1 that they spend will be matched by £3 of taxpayers’ money and general investment in the area, business up and down the country will also receive a huge boost, as other sites are chosen to become training centres for the Olympics and other businesses up and down the UK get ready to bid for the many contracts that come out of the Olympics.

When we bid for the 2012 Olympics, it was clear that during previous Olympic bids there had been a debate about whether Manchester or Birmingham should also be allowed to bid. The International Olympic Committee made it clear that only a bid from London would be considered. That is a living example of the pull of London and reflects its position among other world cities. I do not decry the cities represented by other hon. Members, present or not. Other cities clearly have a role to play, too, but nothing can replace the pull of London. Sadly, my hon. Friend the Member for North-West Leicestershire (David Taylor) left before he heard me say that; perhaps I have saved myself some grief.

Much is rightly made of London’s financial clout and its role as a financial centre. The hon. Member for Cities of London and Westminster said everything that needed to be said on that. However, London’s creative businesses have not been mentioned so far, and they are a huge area of success and growth in our city and the country. My constituency is a hub of creative talent for individuals and businesses. We believe, although it is difficult to prove, that we have more artists in Hackney than in any other European local authority area. Some of the artists I deal with, both as a trustee of SPACE and otherwise, have suggested that there should be a tax break for artists. The mayor of Hackney, knowing the number of artists in Hackney, was not keen to reduce the local council tax and I am sure that the Government would not want to follow that route. However, there are other ways in which we can support creative businesses, which all add to London’s value-added status, as mentioned by the hon. Member for Cities of London and Westminster.

I refer the Economic Secretary to a report by the Mayor of London’s economic think tank, which was called “Creative London”. It highlighted a wedge from Shoreditch, in my constituency, out towards west London and Oxfordshire that shows all the things that make a creative city. I refer hon. Members to the work of the US academic Richard Florida and to his book “The Rise of the Creative Class”, which highlights the ingredients that are needed to make a fully creative economy. London has those ingredients. It has diversity—in my constituency, more than 300 languages are spoken. It has tolerance built on that diversity across the city. My hon. Friend the Member for Hendon can speak about that in his constituency, where he plays such an important role in community relations. London has 43 centres of academic excellence, which are also a major contributory factor. Good transport links, through airports and other means, help to make London that hub. Whatever other cities want to achieve, they will not take a long time to catch up with London’s regional status. However, London needs to remain internationally competitive if it is to remain a cash cow for the UK economy.

London is growing. By 2016, an additional 500,000 will live in London and it will be home to 8.1 million people. We are living through that growth. When we have difficulty getting on a tube or a crowded bus, that shows the strain on our infrastructure that the growth that we are trying to house in the London boundaries creates. If we want to see London retain its status as an international city, competing with New York, Frankfurt and other centres, we need the investment in housing and transport to continue.

I want to touch particularly on transport and talk a little about housing. Transport for London has proved to be one of the best elements of governance of London by Londoners. Investment in buses has seen London as the only city in the UK where bus use has increased at the same time as car use has decreased. It is important for the Economic Secretary to recognise that TFL has an AA rating and is a prudent financial manager. It is a body that has proved by its track record that it can invest and can raise finances to invest, as well as spend public money wisely. TFL’s 2025 plan—I shall not go into it in detail, as my hon. Friend the Member for Hendon has done so—has projected the impact of population growth in London. Under its current investment plan, which runs to 2010, we will see London going only so far. Thereafter, we must have a seamless transition to the next wave of investment, both from the Treasury and from private markets, as TFL has proven capable of obtaining such funding, or we will go backwards.

When I go to get on the tube in the morning, I often have to let three trains go past. That is because we are living through growth. That cannot continue if we want to see London compete.

The hon. Lady has just pointed out the wondrous record of Transport for London. Its iconic policy, the congestion charge, has been anything but a financial success. Indeed, the biggest criticism has been that it has raised some £900 million in the five years and one month since it was set up, but that most of that has gone on capital and administrative costs. It has not in any way been a great success, but rather a great disappointment in respect of the amount of money that might otherwise have been secured for other transport projects.

I do not want to digress too far on the congestion charge. We always knew that the congestion charge was an attempt to address many issues. Congestion was one; pollution and climate change were another. It was not intended to be a quick fix. It is a longer-term plan in respect of the money that it might raise and whether it will break even than something that will make or break in a short time. However, that is perhaps for another debate.

In order for London to maintain its competitiveness, we need continued investment in transport. Crossrail is particularly key. It would cut through 10 boroughs just outside my constituency, but it is nevertheless important to my constituents. We need to see full and proper extensions to the docklands light railway, which has, we would all agree, been one of London’s great successes. We need to do so not only because we need the transport improvements but because we need to see a proper tackling of climate change and CO2 emissions. We ought to be thinking ahead of the game. How seriously are other cities around the world taking climate change? London is beginning to gear up to tackle that issue, and it will become more of an issue as businesses locate here and consider their carbon footprint and the ethical nature of their business with a modern, savvy consumer.

Such issues are important for the rest of the country, too. A high percentage of rail journeys begin and end in London, and so all improvements benefit other citizens of the UK. We must not be seen to be saying all this as little Londoners. Clearly, my constituents will benefit from any further investment, but it will benefit individuals from the rest of the UK in their regular contact with London, too.

Another issue that has not been raised is the high population turnover in London. In parts of my constituency, it is up to 40 per cent. a year, with a general average of around 30 to 35 per cent. depending on how it is measured. We see that in other parts of London, too. We need to keep people in London. Census data clearly shows a flight approximately at the point when families need an extra bedroom and/or when their children reach the age of 11. Our schools are improving significantly to tackle that. Without making a point against the hon. Member for Cities of London and Westminster, I recall that in 2005 Hackney’s school results outstripped those of Westminster. We still have some way to go.

In that case, one might ask why the hon. Lady’s parliamentary neighbour, the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), chooses to send her son to one of the constituency schools in my area—into the private sector, no less.

I never get between a mother and her son, and I would never comment on colleagues’ family matters.

In Hackney, we have seen an improvement in GCSE results. Six new city academies have either been built or are under way. We still have some way to go, as we do across London, but thanks to the investment of the Government in London and elsewhere we are starting to make a difference.

Housing is key. Two thirds of the UK’s households in temporary accommodation are in London. More than 150,000 London households are overcrowded, including 8,000 in the borough of Hackney. I see Hackney as the Ellis island of London, and possibly of the UK. People arrive from all corners of the globe and the UK and we need to keep those people in Hackney and in London if we are to see our city stabilise.

One of the most startling features of recent years has been the increasing decline in the number of new lettings available in the social sector. Does my hon. Friend agree that the only way to respond to that is significantly to increase the supply of new affordable accommodation in London?

My constituents would be keen to see that, particularly in respect of family-sized housing. I cite the example of Thomas Fairchild primary school in Hoxton, in the heart of my constituency, which is surrounded largely by dense council estates. I went to visit in July 2005, just after the general election. Of the year 6 group that was leaving the school, less than 20 per cent. had been there since reception. The people living around that school were not middle-class people with houses that they could sell to buy elsewhere. They were finding other ways to leave. Many were aspirant, keen to buy and to move to areas such as the constituency of my hon. Friend the Member for Edmonton (Mr. Love) where they could afford a home, but could not afford to buy a home in my constituency. We must ensure that we take every step we can to keep people in London, whether they are indigenous or immigrants, whether or not they work for big City firms.

I shall not repeat what my hon. Friend the Member for Hendon said about skills, but I endorse every word that he said. There are huge issues in Hackney, South and Shoreditch, but, given the time, I shall not go into all of them. Twenty-two per cent. of the residents of Hackney as a whole are aged under 16, and one third are under 24. The youth and energy of those people are key potential contributors to London’s future growth and stability, if we can keep them in London. I hope that my hon. Friend the Minister has heard what we have said today and will consider London kindly in the spending review.

I thank the hon. Member for Hendon (Mr. Dismore) for his excellent introduction of this debate. I was pleased that he mentioned that London has some of the poorest areas of the country as well as some of the most affluent. My hon. Friend the Member for Cities of London and Westminster (Mr. Field) made the point that some areas of London have the highest unemployment, as well as obvious wealth.

I vouch for what the hon. Member for Hackney, South and Shoreditch (Meg Hillier) said about London’s creative talent. I had the pleasure last Thursday of being present at the launch at the Hackney Empire of the English Touring Opera’s season, which certainly justified her claim of there being a high proportion of creative talent in Hackney. The English Touring Opera, which will go around the country, also makes the point that London is not a metro-centric body. It is a generous capital—it exports its talent to other parts of the country. The hon. Member for North-West Leicestershire (David Taylor), who, sadly, has departed—perhaps in good time, from his point of view—might bear that in mind.

The issue that I want to return to—very briefly, Mr. Williams, in view of your remarks—is transport and the point that the hon. Member for Hendon made about overcrowding. It is extremely distressing to stand out in the open, particularly in this weather, on a platform in, say, Orpington or any other station in south London, to find that the eight-coach train that one is expecting does not have eight coaches but six or even four, or that it is cancelled altogether and two lots of people have to get on one train. That causes problems.

The problem is the same in reverse when people are going home in the evening. We have heard about road rage, when people lose their temper on the road because of congestion. I have seen rail rage—or platform rage—at Charing Cross, when trains are cancelled and people are not told what is happening. Understandably, they are absolutely furious, and sometimes they take it out on each other and on the poor platform staff.

That does not mean that trains are not often punctual and very satisfactory, but problems occur far too often. If from time to time Members speak, as I obviously do, to people who work in the House of Commons, they will find that the constant complaint—the biggest complaint of all—is overcrowding and the conditions that people have to put up with to get to and from work. That is a dreadful state of affairs in a city as affluent as London is at present.

As we know, the situation led to an excellent campaign in the Evening Standard called “A seat for every commuter”. Unfortunately, as is usual with the Government, they responded not to the people but to the media. We had a response from the Secretary of State for Transport, who, as I said in my intervention on the hon. Member for Hendon, came out with a statement about 1,000 more carriages by 2014. My good friend Mr. Brian Cooke, who is the chairman of London TravelWatch and also a constituent—and therefore knows about commuting at first-hand—calculated that 1,000 extra carriages, apart from being seven years away, will provide only 80,000 extra places. I hesitate to say “seats”, because we know that these days “places” does not mean seats. One does not often get a seat on a commuter train. As he pointed out, given the expansion of London at the present rate, another 325,000 people will have come into London by then, so the plans of the Secretary of State for Transport are for overcrowding to get markedly worse. The promise is not for a golden future but a rather bleak and distant one. It cannot be taken at all seriously, and it is certainly no comfort to my constituents.

My plea to the Minister and his colleagues in the Department for Transport is for some short-term, quick-acting measures to alleviate the situation in the near future. The hon. Member for Hendon mentioned the fact that there is now a seventh coach on some underground trains. That improvement was effected fairly quickly. It is perfectly possible to change the licensing and franchising arrangements so that operators are incentivised to bring in more coaches when necessary. The arrangements can be changed. They were changed only a year ago, so it is not an excuse to say that they were inherited and cannot be changed, or anything like that. Furthermore, if there is a problem with platform lengths, it is also possible to do something about that fairly quickly.

I am not a fan of Transport for London, but its experts on the matter, which I clearly am not, have told me that short-term measures could be taken within a year or two to alleviate the situation that commuters in south London face. I am telling the Government that unless something is done fairly quickly, I and no doubt many of my colleagues will continue to nag them about this disturbing, everyday problem of life in London.

I, too, shall try to be brief, Mr. Williams. I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on securing this debate and giving his usual comprehensive account of the issue. Having tried previously to speak after him on a Friday, I am glad that he has left me at least four or five minutes to do so today.

I am also glad that there appears to be—we have yet to hear from the Liberal Democrats—a broad measure of support for my hon. Friend’s comments. I hope that the Minister in his response will echo the proposition that he made. We must put the uncharacteristically churlish comments of my hon. Friend the Member for North-West Leicestershire (David Taylor) down to second-city, or second-region, envy.

It could now be third-region envy. My hon. Friend the Member for North-West Leicestershire is not here to bait, so I shall confine myself to saying that if Birmingham and the midlands wish to be Barcelona to our Madrid, they will have to improve the food and the football somewhat. I would add that the other difference, of course, is that Catalonia actually pays for Castile, whereas in this case London pays for the rest of the United Kingdom.

I do not want to anticipate my hon. Friend the Minister’s response to the debate, but I am sure that he was aware, before my hon. Friend the Member for Hendon spoke, of London’s contribution to the UK economy. His response may be in part, at least to Labour Members, that our party is still a redistributive party. I do not know whether that is true, but certainly the London Labour party continues to believe that to some measure, perhaps because we are more aware of the great inequalities of wealth that exist in the capital.

In the brief time that is available to me, I shall not repeat points that other hon. Members have made but say that the consequence of what is happening at present is that redistribution is not working. The example of child poverty that was given earlier is perhaps the clearest instance of that. Fifty-two per cent. of children in inner London—39 per cent. in London as a whole—live in poverty, compared with 27 per cent. in the UK as a whole. That one stark statistic shows that the money that is generated by the capital is certainly not being redistributed within it. Beyond that, it is not economically efficient to run a capital city or any region on that basis.

The problems cross the whole of the Government’s social and economic policy, but I wish briefly to mention three issues. The first, which has already been dealt with extensively, is transport. From a parochial perspective, it is necessary to deal with the scenario set out in the Transport for London 2025 document of a possible increase in demand at peak time of 30 per cent. That could happen in terms of bus, overground and tube services and, of course, Crossrail, all of which affect my constituency. I have the pleasure of travelling every day on the District line and the set-up at Earls Court station, with Bakelite telephones and flashing Christmas tree lights, is more like a fighter command than a modern railway network. It is sometimes a wonder to me how the tube functions at all. Investment over the next 10 or 20 years is not just an optional extra, but essential if London is to continue to function on a daily basis.

I do not have time to say everything that I wish to say about policing, but it is a truism to say that London has additional pressures not only because of anti-terrorism measures and major events, but because of the general cost of policing, salaries and other costs, which are not reflected in the figures. We often have to fall back on the Mayor’s precept yet the Opposition hypocritically demand additional policing, while at the same time condemning every increase in precept made by the Mayor. To a large extent, that is because of a lack of fair funding from central Government to the capital.

My hon. Friend the Member for Hackney, South and Shoreditch (Meg Hillier) dealt with the issue of housing quite clearly and therefore I will briefly conclude by referring to that. Housing is the single issue that London Members would like the comprehensive spending review to address by providing an increase in funding for the supply of affordable homes—as my hon. Friend the Member for Edmonton (Mr. Love) said. The figures are eloquent in themselves: London has two thirds of households in temporary accommodation and half of the total national figure for overcrowding.

We are at a tipping point in London and if we wish it to continue to be a city in which rich and poor can live together side by side, as they have done over the centuries, it needs investment, particularly in housing and in the needs of the population in constituencies such a mine. That is the plea that we make to the Minister today.

You have missed a good debate, Mr. Hancock, led by the hon. Member for Hendon (Mr. Dismore), who has set out a case that almost all hon. Members have echoed. He made two central points. First, that London makes a wider contribution to the national economy and secondly, that the basic elements of its success are its openness to trade, investment and migrant labour, and the ability to develop clusters in relation to financial services and culture.

I happen to disagree with the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) about the rather pungent but brief contribution of the hon. Member for North-West Leicestershire (David Taylor) on metro-centricity. Although brief, it was an important contribution, which reminded us of what everyone else may be thinking. I was reminded of that last week when I travelled outside London the day after the statement was made about the Olympics. The provincial newspapers were dripping with venom about the amount of money that must now allegedly be contributed to London. We need to be aware of that dimension to the debate.

I agree with the broad thrust of the arguments, but we need to be a little more self-critical about what is said on London’s behalf. I read the Oxford economic forecasting study on London’s fiscal contribution and it does not actually say what several hon. Members said it did about a net contribution of £13 billion. It says something rather different: that there are a wide range of estimates from £5.8 to £20 billion. The figure would be at the lower end of that if we looked at London residents as opposed to people who work in London and live somewhere else. All sorts of heroic assumptions are made in the report about how to allocate public expenditure and, clearly, there is a net contribution, but let us not dwell on that issue too much. When I lived in Scotland for some years, I was lectured on how Scotland supported the rest of Britain through north sea oil. I do not think that we should become drawn into the same kind of syndrome.

The second qualification to the argument is that we need constantly to remember is that there are vast disparities within London. It is not simply a matter of London versus the rest of the UK, as emphasised by the hon. Member for Hackney, South and Shoreditch (Meg Hillier) and other hon. Members. There are two kinds of disparities. The first is the co-existence of extreme poverty and affluence in and between boroughs. Indeed, in parts of east London, there is the extraordinary phenomenon of high levels of unemployment existing a mile or so from the most successful financial centre in the world. As someone who has lived in developing countries for a number of years, that situation strongly reminds me of the enclave economies of such countries where mines and commercial agriculture sit alongside impoverished areas. London has many of those characteristics.

I would love to take an intervention, but we are already behind schedule.

Secondly, differences within London exist in the enormous variations in funding support for different parts of London. There are parts of London that because of their deprivation quite rightly attract reasonable levels of grant, but as someone who represents a suburban area, parts of London at the other end of the tail of funding distribution also have a combination of private affluence and public squalor because of the lack of support for local government. When we talk about London versus Britain, such qualifications must be borne in mind.

Following on from points made by hon. Members, there is a danger of the institutions of London becoming excessively dependent on what I would call mega-projects. First, on public transport, I entirely agree with the hon. Member for Hendon and others who have spoken about the importance of Crossrail, which is extremely desirable for London. None the less, there is a real danger that a fixation with one massive project is overshadowing the large numbers of incremental projects that can be done quickly on the suburban network and on the London transport underground system, as the hon. Member for Orpington (Mr. Horam) rightly stressed. Such projects are relatively low cost and, in many cases, have no costs attached as they simply provide an extension to a franchise and give greater security to investors. I hope that Crossrail can co-exist among all that improvement, but there is a danger that the fixation of people in London government with one big prestige project that may happen in many years to come will crowd out the more mundane, but equally important improvements.

A second example is in relation to London airports, which is an issue of major concern in my part of London. Many of my constituents are airport workers and many residents are concerned about the environmental side effects. I am always being told that continued and large-scale expansion of London airports is essential to the London economy. Frankly, I doubt that. Slots for aircraft are allocated inefficiently and aircraft are often highly underutilised. Large numbers of people who pass through London are transit passengers and are not from other parts of the UK, but other parts of the world. It is obvious to me that such demand is as it is presented. There are massive environmental side effects such as noise, pollution and ground pollution. Most of the boroughs—Conservative, Labour and Liberal Democrat—in the relevant parts of London are actively campaigning against expansion. We need to bear that in mind when arguing for the constant expansion of infrastructure and facilities.

Thirdly, the hon. Members for Cities of London and Westminster (Mr. Field) and for Hackney, South and Shoreditch referred to the Olympics in positive terms. I do not disagree with that broad tone, but we have reached the point when the debate is becoming rather sour. One group of people are asking why we bothered with the games in the first place and another group are denouncing the others as professional cynics. That is not helpful. There are two propositions of which we need to be aware. The games could be a great boost to London or could be a disaster. It is not altogether clear that they will turn out positively and we need to focus in a practical sense on the difficulties. For example, it appeared this week that the London borough of Newham has produced a major report questioning many of the gains of regeneration, of which that area is supposed to be the main beneficiary. We need to consider what the problems are and why the design does not fit what was expected.

The other issue is that we made a bid for the Olympics on the basis of costs that were wholly unrealistic and that have been revealed to be much higher. Since the Economic Secretary is here, I will say that, at some point, the Treasury will have to explain why it signed off and gave a financial guarantee on the basis of such wholly unrealistic costs. We now have the real practical problem—not just general pros and cons—that London taxpayers do not want to pay more council tax. People have a strong and entirely understandable resentment against paying more through the lottery. Another good example was the chairman of the National Opera saying yesterday that it will result in cuts in the arts and therefore in culture, which is central to London. Taxpayers in other parts of Britain are saying that it is not right for them either. So who is going to pay? It is a real bottleneck.

The one lesson that has to be learned is that a tougher approach must be taken on the question of funding and on the venues that are chosen, including the media centre. It may seem a trivial example, but I heard the other day of a proposal—it is part of a package—to create a shooting range at Woolwich at a cost of £18 million that will be demolished three weeks later for a further £8 million, yet we have perfectly good international ranges within a few miles of London. Such extravagance is envisaged on a large scale. Someone—the Treasury is certainly involved—has to get a grip on it; otherwise there will be a complete draining away of confidence. That will do great harm to London and to sport.

With those qualifications, I thank the hon. Member for Hendon for saying what many think. I speak not so much a national spokesman but as a London MP. I am proud of the city. It has achieved much, and we want it to continue to succeed.

I congratulate the hon. Member for Hendon (Mr. Dismore) on securing the debate and on the way in which he opened it. I am the first Member representing a non-London seat to speak, so I may not seem so metro-centric as others.

I want to touch on some of the themes raised by hon. Members in this brief but important debate. The hon. Member for Hendon set the scene well when speaking about London’s transport problems. Its transport infrastructure is a constraint on the growth and development of London as a major employer and as a place to live. My hon. Friend the Member for Orpington (Mr. Horam) commented on some of the stresses on suburban rail services caused by the growth in passenger traffic into London. It has a ripple effect not only into and out of London, but even as far south, Mr. Hancock, as your constituency and mine. Long distance commuters from Portsmouth and Fareham travelling into London face increasingly cramped conditions because of transport developments and increasing demand in outer London as well as in the centre.

The hon. Member for Hendon was also right to mention London’s housing problems. Anyone who lives in London, even those like me who live here only part-time, is acutely conscious of the pressures caused by house prices and the affordability, availability and quality of housing stock. He also spoke about unemployment, which I shall return to later.

The hon. Gentleman highlighted a point which was also raised by my hon. Friend the Member for Cities of London and Westminster (Mr. Field). He spoke about the tremendous paradox that London has a high level of unemployment—higher than any other part of the United Kingdom—but also a high level of inward migration. Society faces the risk of polarisation with extreme wealth and extreme poverty living cheek by jowl. The hon. Member for Hackney, South and Shoreditch (Meg Hillier) has referred to the issues around social cohesion that flow from that.

My hon. Friend the Member for Cities of London and Westminster has rightly paid tribute to the work of the lord mayor of London and the City of London corporation in promoting London’s financial services sector. They promote not only the financial services sector in London, but the sector outside London, and they act as ambassadors for the sector on a global basis. It is important to recognise that London, as a global city, needs to build strong links with other parts of the world. We need to attract business into the UK as well as people into the UK. In debates about London, it is important to look outwards and to recognise that other cities and capitals are trying to attract the same business. We need to consider London’s competitiveness as a city and international financial centre and how it shapes up and compares with other centres in the world. I shall return to that subject in a moment.

First, however, I want to say a little more about unemployment in London. At 7.9 per cent. in the mid-point of last year, it exceeded the national average. It seems a contradiction that although London’s economy is growing faster than the UK economy, London is seeing such high levels of unemployment. Certainly we are seeing inward migration, as we heard from my hon. Friend the Member for Cities of London and Westminster, and anyone who has spent time at any of the international banks based in the City or in Canary Wharf will have seen the rich and diverse pattern of employment.

We need to consider the causes of London’s unemployment. One factor highlighted by the report commissioned last year by the City of London corporation was the skill levels of people in London. It found that the proportion of graduates living and working in London is much higher than in the UK as a whole. It was also evident from the report that the proportion of Londoners with few or no qualifications also exceeded the national average. I suspect that that low level of skills underpins the high level of unemployment in the capital. If we are to tackle the mismatch between wealth and poverty in London, we need to consider the skills of the population as a whole.

The report also highlighted the fact that the number of adults receiving training in London was below the national average. We clearly need to focus on improving the skills set of people who work in London, but we must also raise the aspirations and attainments of young people there. I have visited the City of London academy in Southwark, and I am sure that its programme will play just as important a role as city technology colleges, the forerunner of academies, in raising levels of attainment in parts of London.

Will the hon. Gentleman accept that one problem is the continual shedding of manufacturing and construction jobs in Greater London, and that the people who lose jobs in one industry desperately need to be retrained for the new jobs that are coming to the capital?

It is a pattern that we see throughout the country, and it is not limited to London. We have seen a decline in the manufacturing sector, and if people are to find employment, they need to be retrained. That focus is particularly needed in London given the relatively high level of unemployment.

I return to the competitive position of London vis-à-vis other world capitals. It has been a long debate and most, if not all, speakers have touched on transport infrastructure. I am sure that, like me, the Minister has heard the lobbying of employers in the City of London and Canary Wharf—and of hon. Members today—about the importance of Crossrail to London’s transport infrastructure. However, my hon. Friend the Member for Orpington and the hon. Member for Twickenham (Dr. Cable) were right to point out the importance of relatively small projects that could help unlock transport capacity.

The other factor that we face in maintaining London’s competitiveness and its contribution to the UK economy is the competitive threat posed by other financial centres across the world. For example, in the run-up to the Budget a number of business organisations commented on the lack of competitiveness of the UK tax system. When businesses are wondering where to locate their international operations, they will consider the competitiveness of the tax system. We have among the longest tax codes of any developed country, second only to India. In 1997, we had the third lowest rate of corporation tax in the European Union, and we now have the seventh highest. Such factors have an impact upon people’s perception of London as a place to locate.

Another issue, which is close to my heart and that of the Economic Secretary, is the competitiveness of the regulatory system of the financial services sector in London, and how it compares with other sectors worldwide. We need to be continually vigilant, because there are territories and locations that offer advantages and attractions to financial services businesses, if those businesses locate outside London. To the extent that that happens, or to the extent that such businesses locate themselves outside the UK, there is a detrimental impact on the UK economy as a whole. We might not be able to redress all such differences, but unless we are vigilant as to the tax and regulatory risks posed by other jurisdictions that seek to attract financial services business, London’s premier role as a motor for the UK economy will be under threat. We should be conscious of the threats to London’s status as a leading economic powerhouse not only in the interests of Londoners but in the interests of people across the UK.

I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on securing the debate and I appreciate the wide range of points that have been made. A common theme has run through most speeches, perhaps with the exception of that by the hon. Member for Twickenham (Dr. Cable), from whom qualifications seemed to come across more strongly than support for the importance of the London economy—though I may just have misheard him.

As has been said, London is vital to the UK economy as well as to the lives of people who live and work in it. It is right and proper that the Members of Parliament for London continue to make the case for it, but it is also right that the rest of the country appreciates its vital role both in job creation and investment and in its contribution to public finances, which I acknowledge.

It will be impossible in the limited time available to respond fully to all the points that have been made. I shall start with the comments made by my hon. Friend the Member for North-West Leicestershire (David Taylor), who gave some important context. We are indeed concerned with the national interest and with the jobs and prosperity of people across the country. In my view, the stability of the economy during the past 10 years has been an important contributor to the turning round of the employment situation throughout the United Kingdom. The narrowing of regional income differentials between London and the rest of the economy during the past year, as shown in the latest figures, is a strength for the economy and for society. The northern regions are catching up. However, an important part of the reason for that is London’s strength as a motor for growth and job creation, which benefits the rest of the country.

As a constituency MP in Yorkshire and as a former member of the steering group, “The Northern Way”, I acknowledge and support 100 per cent. the role of the London economy in the prosperity of the UK as a whole. As the Economic Secretary, I fully understand the important role of London and of the City in delivering jobs, investment and tax revenues. Like many MPs from different parts of the country, I have lived in London for more than 15 years, and I see myself in part as a Londoner. I fully appreciate the diversity and dynamism that is London today. My children go to a primary school that has fewer than 200 children but at which more than 28 languages are spoken—a small fact that testifies to London’s huge variety.

We have a capital that delivers £180 billion of economic activity—more than the economies of Sweden and Russia. Median weekly earnings are £540 a head—a fifth higher than for the UK in general—and the higher level of earnings is reflected in the job creation of the past decade, with 300,000 more Londoners in work, the biggest proportional rise in employment for any UK region. It is seen also in the growth of the City and in higher education in London. At the same time, as my hon. Friend the Member for Hendon pointed out, there is substantial disadvantage in London. It has the highest worklessness rate of any region.

The borough of Westminster has the ward with the lowest proportion of people on workless benefits but also four of the wards with the highest proportion of people on workless benefits, in one of which a staggering 83 per cent. of children are in families on benefit. That is a mile or two from the west end. Whatever we are getting right, which is a lot, we are clearly not managing to get right all our employment strategies for families on benefit and in poverty in inner London. That needs urgent review, and I hope that the Economic Secretary will reflect on it.

Given the shortage of time, I shall reflect on that point in detail after the debate. The point that I was going to make was related to the degree of worklessness, the fact that more children live in poverty in London than elsewhere in the country, the fact that there is more overcrowding, and the coexistence of those conditions alongside prosperity. That is a source of concern to any of us who care about cohesion and inequality. It is also partly an explanation for why London benefits disproportionately from public spending compared with other parts of the country. There is greater need, which results in greater delivery of public spending resources.

My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) mentioned employment policy. There is no doubt that our employment policy and our skills policy, which is now strategically directed by the Mayor, need to be more finely tuned so as to tackle the issues that she raised. I hear the concerns of the hon. Member for Cities of London and Westminster (Mr. Field) about employment, but he should reflect on whether the abolition of the new deal employment policy is really the right way. His rhetoric was probably genuine. However, if he wants a serious discussion on solutions, he should recognise that an active employment policy enables us to meet the concerns of my hon. Friend the Member for Regent's Park and Kensington, North.

The point that was made about housing is well taken. Building more social housing must be a priority for the spending review, as must tackling homelessness and lack of affordability, which have been mentioned by a number of hon. Members including my hon. Friend the Member for Edmonton (Mr. Love). It is also important to continue to invest in transport, as the Government have been doing over the past decade. Let me say to the hon. Member for Orpington (Mr. Horam) that transport is not an area in which a quick fix is easy. Extending platforms and building new trains or lines takes a substantial time. Part of the reason why his constituents face overcrowding issues is that it will take time to turn round the substantial under-investment deficit with respect to the railways, the buses and the tube that existed for a number of decades. We have been trying, and we continue to try, to rectify that.

I recognise the points made on Crossrail by my hon. Friend the Member for Hendon. As the Minister with responsibility for the City of London, I have heard the arguments many times and I understand and appreciate them. The Government are committed to taking the Crossrail Bill forward and to doing everything we can to try to meet the challenge before us. My hon. Friend and others will understand that the project is a major one that will cost many billions of pounds. Finding a way to finance it that is affordable and sustainable is a challenge and would be so for anyone in government, including for us. Nevertheless, we take that challenge seriously and we understand the long-term consequences for London if the issues raised by Crossrail are not addressed.

My hon. Friend the Member for Hackney, South and Shoreditch (Meg Hillier) urged recognition of the important role played by Transport for London in meeting transport investment needs, and of the fact that TFL is now AA-rated. That is exactly why we are enabling TFL to borrow to such an extent to finance its transport plans. She is right to laud the Mayor for his leadership on transport, including public transport, and on the congestion charge. I was surprised that the hon. Member for Cities of London and Westminster criticised the congestion charge, given the achievements that I believe that the Mayor has delivered over the past few years.

As a former resident of Hackney, I agree with my hon. Friend about the dynamism and vibrancy of south Hackney and Shoreditch, which are well known. I am sure that they contribute to the productivity and performance of the London economy, both directly and indirectly.

I shall end by agreeing entirely with those hon. Members who stressed the importance of being vigilant in continuing to support the City of London’s competitiveness. The fact that in a recent survey from the City of London, London was ranked above New York as the financial centre of the world is not only a source of great pride for London and the UK, but a reason for us to be vigilant—

Academic Freedom

I am pleased to have the opportunity to raise this important issue, which I have already raised briefly in oral Education questions with the Minister whom I am pleased to see will respond to this debate. It is my contention that there are more and more attacks on and, in addition, threats to academic freedom in our universities, including the freedom to research topics of one’s choice, the freedom to lecture and give academic treatises on subjects of one’s choosing within one’s academic field, and the freedom of expression in and of itself on university campuses.

We have seen recently the incident at Leeds university, in which an academic’s speech was cancelled by the university. We have seen the personalised attacks on a professor at Oxford university, in my constituency, on the basis of his political views, and the calls for his tenure to be somehow affected by them. We read in The Times Higher Education Supplement that some tax-funded institutions of higher education that one would think were subject to the rules about academic freedom qualified their provisions on academic freedom by reference to religious ethos. Then there is the question, which I raised with the Minister in oral Education questions, of no-platform policies on university campuses.

What I want from the debate is an acknowledgement by the Minister that he recognises the importance of academic freedom and freedom of expression and that he supports the existing legislation, which was introduced by a previous Government and which I believe was steered through the House in part by previous political opponents of mine, but which has stood the test of time. I want the Minister to say that the Government’s clear position is to respect freedom of expression and academic freedom, and I want him to say whether he will take action to make it absolutely clear that Parliament, the Government and the institutions that govern the way in which universities receive taxpayers’ money—that is why we have a particular interest in this issue—are interested and keen to ensure that there is no restriction on freedom of expression within the law in universities.

I do not argue that freedom of expression should be absolute. Clearly, we have, except in this place, libel laws. We have rules about matters that are sub judice. We have rules about incitement to violence and incitement to criminal offences. I support those rules. We also have rules about incitement to racial hatred even if those involved do not themselves incite criminal offences. So clearly there are limits, but beyond those limits, which I think should be limited and clear, we need to ensure that we protect freedom of expression, especially in the area of religious discourse. In fact, I would argue that it is incumbent on us to challenge religious views, whether that be in academia, in politics or in general speech.

It is also vital that we recognise the importance of academic freedom in the sense of freedom to research and publish without constraint from the funder of the research. I shall not go down that road, but I wanted to acknowledge those issues, and I am grateful to the University and College Union, a trade union, and to Universities UK, which represents vice-chancellors, for the briefings that they have given me for the debate.

The issues that I want to raise in detail include the campaign against David Coleman of Oxford university in my constituency. That has stemmed from a petition to the university of Oxford, although the university told me that it had not actually received any petitions. The petition is from Oxford Student Action for Refugees—STAR—which is a national organisation with which I have worked closely. It notes:

“David Coleman has been Professor of Demography at the University of Oxford since October 2002.”

It claims that he is also

“a consultant and spokesperson for Migration Watch.”

It says that he

“is a member of the Eugenics Society, now called the Galton Institute”,

and that he

“is acquiring a public image in the ongoing…debate about immigration, and…is using his status as a university professor to legitimise the views and reports produced by Migration Watch.”

The petitioners believe that Migration Watch

“masquerades as an independent non-partisan organisation, but in fact has a strong anti-immigration bias.”

The petition continues:

“Through his many media appearances Professor Coleman is bringing the university into disrepute by associating it with the views of Migration Watch...We the undersigned call on the University to: Ask Professor Coleman to refrain from using his academic title when appearing on behalf of Migration Watch in the media”,

and to

“Consider the suitability of Coleman’s continued tenure as a Professor of the University, in light of his well-known opinions and affiliations relating to immigration and eugenics.”

That would be laughable were it not so outrageous in what it is seeking to do. The organisation has the right to free speech to make those ridiculous claims, but it ill befits members of Oxford university to attack other members of Oxford university and, indeed, their tenure, income and position simply because they disagree with them.

I have spent 20 years in politics as a subscriber to “Searchlight” and campaigning against anti-immigration views and I yield to very few people in the strength with which I have taken issue with some of the claims made by Migration Watch. However, to argue that someone who is a professor cannot describe themselves as a professor when giving their views is preposterous. David Coleman had never claimed, as far as I can tell, to represent the university but in fact spoke on behalf of Migration Watch, and none of his personal views has any direct impact on his ability to do his job in respect of research or teaching. If students object to being taught by him, that is their lookout. It is unacceptable to seek to hound a man, through a boycott or through the sort of criticism and petitioning that I have described, out of academic life.

I am very disappointed at what has happened. My view is that such a petition and such an approach are counter-productive, because they create a victim—David Coleman is a victim in this respect—out of someone who, when it comes to the arguments on immigration, should be debated with or ignored, not given credibility and victim status. However aberrant David Coleman’s views—they are debatable—as long as they are legal and delivered lawfully, he has, in my view, every right to express them without fear of retribution from his employer. As long as he does not claim to speak on behalf of the university, he is at liberty to set out his academic background.

The price of all of us enjoying academic freedom and free expression is that we provide those freedoms to people with whom we disagree. The campaign against Professor Coleman is illiberal and counter-productive. The reference to “eugenics” in the petition, based on the history of the Galton institute, is plain silly. We cannot stop debate about genetics and population just because someone says, “Ooh, boo hiss, eugenics.” It is an ill-founded campaign and I hope that it has no further impact.

Something that clearly has had an impact is what happened at Leeds recently. A talk by Matthias Kuentzel at Leeds university was cancelled by the university at short notice. The university claims that that was not done on the basis of complaints from, perhaps, Muslim students or other members of the university or the wider Leeds population about Matthias Kuentzel’s talk, which was initially titled “Hitler’s Legacy: Islamic Anti-Semitism in the Middle East”, but was changed to “The Nazi Legacy: the export of anti-Semitism to the Middle East”. The university claims that it did not cancel the meeting due to complaints. Again, that would be censorship. It is peculiar, though, that I am told through the Community Security Trust that the academics called to a meeting with the university were told that there were complaints and that was why they had been called to the meeting, but the university later claimed that the talk was cancelled for administrative reasons because of a lack of notice, even though posters had been up.

We have a choice. One scenario is that there were complaints that the talk was offensive, in which case it is not for the university to censor the speech as long as it is lawful. Indeed, some of the most important dialogues relating to religion, particularly extremist religion, are bound to be offensive. People on both sides of the matter who are propagating their strongly felt beliefs are easily offended, it seems to me. That does not mean that we should be restricted in what we say.

The alternative is that there were threats to people’s safety. If there were, it is the job of the university authorities and the police in a free society to provide safety and to police events, rather than censor them. If they do censor events, there is a good chance, whenever anyone makes a threat, that meetings will be cancelled on safety grounds or because the risk assessment is not up to date. That just feeds the idea that events and speeches will be cancelled if threats are made, and a stand must be taken on that. I thought that we had a police force to protect our liberties, not to make concessions on the spurious basis of administrative grounds. It is extremely unfortunate that they have done so, because more complaints and threats may well be made, which would add to the problem.

A further example of the increasing trend towards attacking academic freedom was highlighted last week in The Times Higher Educational Supplement. The paper has been running a series of articles exploring threats to academic freedom, and I commend it on doing so. The article mentions Canterbury Christ Church university’s article of governance, which refers to academics’ “freedom to question”—that wording is taken from section 202 of the Education Reform Act 1988 which states that academics

“have freedom within the law to question and test received wisdom, and to put forward…unpopular or controversial opinions”

without fear of sanction. According to the newspaper, the university’s article of governance says:

“academics’ freedom to question received wisdom is subject to a qualification: that they do not undermine the institution’s ethos as a Church of England college or its code of conduct.”

Apparently, the university of Chester

“also asks its academic staff not to undermine the institution’s ethos and social values based on that ethos.”

One either has academic freedom and the ability to question received wisdom in one’s academic work or one does not—it is not a question of saying, “Yes, there is academic freedom, mainly.” The bodies that I mentioned receive funding organised by the Minister through the Higher Education Funding Council, and I should be interested to hear whether he thinks that such restrictions on academic freedom are acceptable.

I turn now to no-platform policies. It is worrying that such policies have been allowed to proliferate through student unions and the National Union of Students and that, until I recently raised the issue with the Minister, the Government had made no comment as to the fact that they are unlawful. It is interesting that the report by the all-party group on anti-Semitism, which contained several otherwise very good recommendations and comments and which a large number of hon. Members published in November 2006, stated without criticism:

“Individual student unions are responsible for passing No Platform policies. A student from University College London…submitted that the university has not done this and it has resulted in an inability to deal with extremist elements on campus.”

I put it to the Minister that extremist elements on campus who break the law need to be dealt with by the police, not by self-appointed kangaroo courts and no-platform policies that determine, by means of prior restraint, what is unlawful.

The report goes on to say that the student referred to in the report commented in 2005 that

“spokespeople for Hizb ut-Tahrir were invited to the campus to give presentations. Although UCL has an equal opportunities policy, without a No Platform policy the University was unable to prevent them from speaking.”

The report made no mention of whether that was appropriate. However, such provisions are not lawful. If the Government, having looked into the matter, have decided that Hizb ut-Tahrir is not outside the law, it is not for individual universities to ban its speeches.

Paragraph 199 of the report goes on to say:

“Although they are banned from most campuses under the NUS No Platform policy, Hizb ut-Tahrir have reappeared under a number of aliases.”

The group is not banned from universities under the NUS no-platform policy—an unlawful attempt may have been made to seek to ban it under that policy. I am disappointed that the report’s authors did not make that clear.

The Minister will be aware that section 43 of the Education (No. 2) Act 1986 states that higher education institutions must take reasonable steps

“to ensure that freedom of speech within the law is secured for members, students…employees”

and visiting speakers. That duty includes taking reasonable steps to ensure that the use of the institution’s premises is not denied to an individual or group on the grounds of the views or beliefs of the individual or group or the policy or objectives of the group. That requirement should also apply to the Government, who should tell student unions that it is inappropriate to have no-platform policies because they would be unlawful if they were successful. Universities should also make that clear.

If we do not make the position clear now, there will be increasing extremism on both sides of the argument. In that respect, I have had supportive representations from both the Council for Arab-British Understanding and Jewish organisations about the need to secure freedom of speech on the one hand and to avoid a boycott of Jewish academics on the other. That boycott was also discussed by the parliamentary report on anti-Semitism, but this time it argued against censorship and boycotts, which was inconsistent. With increasing extremism on both sides, however, we are in danger of stifling debate, and it is far better that we have lawful debate than a restriction on freedom of speech. I urge the Minister to send a signal today that he will do something to secure academic freedom, which I hope he and the Government also believe in.

I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on raising these important and timely issues, which I know from discussions on the Floor of the House he takes extremely seriously.

Let me start by making it abundantly clear that the Government believe in the concept of academic freedom. We certainly support previous legislation on academic freedom on campus, and we respect freedom of speech and academic freedom within the law. As I am sure that the hon. Gentleman is aware, higher education institutions are autonomous, and university autonomy is one of the key features that has made UK higher education such a success. The autonomy of our institutions is one of our greatest strengths, and I welcome diversity in the sector, be it in the student and staff population or the range of provision on offer. I would not seek directly to intervene in the individual governance arrangements, ethos or mission statements of higher education institutions, which are rightly responsible for determining their own academic and administrative affairs.

I am therefore limited in what I can say in detail about the specific cases that the hon. Gentleman has raised. He has mentioned the case of Professor Coleman at Oxford, which can be said to highlight the fact that academic freedom is a matter of constant debate and concern in the higher education world. However, I am sure that he understands that it would be inappropriate for me to discuss individual cases relating to specific higher education employees, particularly when I am not familiar with all the background and circumstances.

From reading and informing myself about these cases, however, I am aware that Professor Coleman’s university, as his employer, has acted in accordance with its own policies and procedures on academic freedom and staff behaviour, and that it has backed the academic in question. From the evidence that I have seen, that is in accordance with the institution’s governance arrangements. In those circumstances, its actions were absolutely right.

On the Leeds case, the decision was taken in accordance with the institution’s governance arrangements. Without being privy to the individual factors concerned, it is difficult to say more, but if the hon. Gentleman raises specific concerns with the vice-chancellor, I am sure that there will be a response.

I also note the hon. Gentleman’s reference to the governance documents of two institutions.

In general, does the Minister recognise my point that if threats to public order arise from an otherwise lawful academic treatise, it is the job of the authorities and the police to allow an event to go ahead safely, rather than to take the easy way out and call for the event to be cancelled? Otherwise, we will have more cancellations, rather than more protected free speech.

That is an important point. I shall not comment on what happened at Leeds, because I am not aware of the detail, but, in general, if someone is advocating a lawful view, the university authorities have a responsibility to do whatever is possible to facilitate the discussion or meeting. There is one important caveat: university authorities must be responsible for the safety and security of people within their environments. That might be one countervailing factor, but as a general principle, I agree with the broad thrust of the hon. Gentleman’s remarks.

The hon. Gentleman has referred to the governance arrangements of two institutions, Canterbury Christ Church university and the university of Chester, where it has been asserted that academic freedom is qualified with the expectation that staff and students respect the ethos of those institutions and adopt a code of conduct based on that ethos. I am aware of his concerns about those institutions’ articles of governance. Those documents must, rightly, be read and applied within the context of the overarching legal framework. I hope to make it clear in the short time available to me that academic freedom is clearly enshrined in law and that that overarching legal framework upholds freedom of speech.

I am sure that we all agree that higher education, by its very nature, is concerned with free debate, challenging established principles and pushing the boundaries of conventional thought. Higher education institutions have always been places where people come together from different backgrounds to explore ideas and exchange experiences. I think that the freedom to engage in robust but civilised argument and the willingness of people to have their ideas challenged and changed are at the heart of the educational experience.

I believe that it is vital to both our economy and society that higher education continues to be at the forefront of intellectual inquiry and discovery. It helps us to progress as a forward-thinking and outward-looking nation and as individuals. Academic freedom is a fundamental principle of our higher education system. It goes wider than freedom of speech, because it includes freedom to pursue research and to publish—actions that play a significant part in academic endeavour.

Academic staff must have freedom within the law to question and test received wisdom, to put forward new ideas and to voice controversial and sometimes unpopular opinions without placing themselves in jeopardy. That protection is articulated in higher education institutions’ instruments of governance, post-92 staff contracts and key pieces of legislation. The definition of academic freedom setting out this principle is included—rightly, in my view—in the model instruments of governance for both pre-92 and post-92 higher education institutions, and it was initially set out in the Education Reform Act 1988 in relation to pre-92 institutions. It is the Government’s expectation that all institutions should include a provision protecting academic freedom in their governance documents.

Section 43 of the Education (No. 2) Act 1986 requires governing bodies of higher education institutions to

“take such steps as are reasonably practicable”

to ensure that freedom of speech within the law is secured for members, students and employees of the institution and for visiting speakers. The duty requires institutions to have a code of practice setting out the procedures to be followed in connection with the organisation of meetings and other activities that take place on their premises, and to take steps to ensure that the code is complied with. Higher education institutions are protected from Government interference in academic matters under the Further and Higher Education Act 1992.

It is therefore clear that a definite framework for supporting academic freedom exists within our universities. I am a firm believer in the principle of academic freedom. However, it is important to say, as the hon. Gentleman has acknowledged, that that is not an absolute. Indeed, section 43 of the 1986 Act states that academic freedom within the law is what is important. The freedom to speak openly must be balanced with the rights of others and the need to take responsibility for one’s words and, indeed, their consequences, such as actions to which they might lead.

That does not override the bar on incitement to racial hatred or unlawful discrimination on the basis of race, religious belief, or sexual orientation. Governments have, of course, made it clear in domestic legislation that it is unacceptable to discriminate against people on those grounds. Article 10 of the European convention on human rights also makes it clear that freedom of expression may be qualified by the need for the protection of the rights of others. The higher education sector’s own guidance on intolerance and hate crimes is helping institutions to deal with those issues.

I shall briefly say a few words about the relevant guidance that my Department issued some months ago for tackling violent extremism in the name of Islam. Freedom of expression is a cornerstone of our democracy. A valued aspect of the right to freedom of expression in the UK is that individuals have the right to criticise, disagree with and campaign against the Government on any issue of foreign or domestic policy. It can be entirely legitimate to hold a view that is radical or extreme on the political spectrum. However, it becomes unacceptable when individuals develop extremist views that lead them to espouse, advocate or even undertake or facilitate violent acts that deliberately undermine good campus and community relations, using their extremist viewpoint as a justification for their actions. Our guidance targeted that dividing line.

The hon. Gentleman also raised some important points about so-called no-platform policies, which have been pursued from time to time by student unions. It is true that a blanket no-platform policy is not consistent with the principles in the 1986 Act, which support freedom of speech on campus within the law, and it is right and important that we uphold those principles. Nevertheless, reasons relating to security or supporting equality might mean that a university, on a case-by-case basis, could act to ensure that a platform is not offered to certain groups or individuals through the use of its premises of resources. We have to be clear, however, that those judgments must be made in the context of the overall legal framework and the circumstances of the event and that they must be taken on a case-by-case basis. For example, we could not condone a university hosting a proscribed organisation.

The key point, however—I hope that this will reassure the hon. Gentleman—is that it is for the university authority, through the office of the vice-chancellor and the governance arrangements, to make that decision, not student unions. Universities should consider the nature of speeches or groups and the risk of an offence being committed under the Terrorism Act 2000 or other legal provisions, and make decisions on such matters.

The Minister has referred to equality, but I am not sure what he means. Is he saying that a university could ban in advance someone from coming to speak for fear that they might say something that does not respect equality, even though it is not unlawful and does not risk breaching the law with regard to terrorism? Is he saying that universities have the right—in individual cases where they are confident—to ban in advance lawful speech, because it is offensive in some way?

No; that is emphatically not what I am saying. I am saying that there is a clear legal framework within which a university must operate to ensure that speakers do not advocate breaches of the law. They must make judgments—rightly so—about the security of a speech or event taking account of local circumstances. However, as a general principle, if someone is advocating a view that is legal and that they have the right to advocate, in my view the university authority should do everything that it possibly can to secure the ability of that view to be put forward. It is difficult to strike a balance between freedom of expression and protecting people against hatred or incitement to violence. Many of the pressing debates on higher education involve those arguments about freedom of speech and the freedom to offend.

The hon. Gentleman has referred to academic boycotts. The Government have consistently made their view clear: we are against the principle of academic boycotts and have stated directly, for example, that we are firmly against any academic boycotts of Israel or Israeli academics. The complex issues surrounding Israel and the Palestinians must be subject to open discussion and debate, and it does not benefit anyone to target academics.

We need a reasonable approach to academic freedom within the context of a civilised pluralist society. A balance must to be struck between an individual’s right to freedom of expression, the rights of others and the protection of our civil society. However, I agree that we need to be constantly vigilant in ensuring that academic freedom is protected. A free exchange of ideas is the bedrock of academic engagement and has consistently proved beneficial to moving our society forwards. Those are important issues, and I rightly congratulate the hon. Gentleman on securing the debate. It is important that we continue to uphold the importance of freedom of speech and academic freedom within the context of the overall legal framework.

HMRC Offices (Chesterfield)

I am pleased to have secured the debate, which is my first in Westminster Hall, and am especially pleased that the Paymaster General is taking part. Given that tomorrow is a big day with the Budget, I am extremely grateful to her for being here.

The closure of the Chesterfield offices is part of a much wider national consultation to rationalise the use of offices and people following the merger of the Inland Revenue and Customs and Excise. My concerns about that process fall into two broad categories, the first of which is the consultation process and particularly the way in which it has been managed. Secondly, I am concerned about the proposed closure of the Chesterfield offices and how that will affect many of my constituents.

My hon. Friend the Member for Bolsover (Mr. Skinner) and I recently met two representatives from the workforce change team at the national offices of Revenue and Customs. It was made very clear to us that the consultation was about achieving efficiency savings by reducing the number of both offices and staff. It was also pointed out to us that neither of our constituencies have Revenue and Customs offices. That may be true, but many of the people who work in the Chesterfield offices live in Bolsover, North-East Derbyshire and Amber Valley. All the Members of Parliament who represent constituents who work for Revenue and Customs should have an equal say in the consultation, and their concerns should carry the same weight as those of hon. Members who have HMRC offices in their constituencies. However, I want to put it on record that the workforce change team and the national office have been extremely helpful since that meeting. Any information that we asked for, we have received, and I am grateful to the workforce change team for that.

The starting point of the rationalisation was to draw a circle of 25 km around each of the urban centres, which are based mainly in the big cities. The proposal is to close all the smaller offices within those circles and to move most of their staff to the urban centres. In our case, that means closing the two Chesterfield offices at Dents Chambers and Markham House and moving the staff who work there to Sheffield. As all that has been mainly a paper exercise, issues such as transport links, the complexion of the local labour market and the individual circumstances of the people who work in those offices have not been adequately taken into account.

In theory, and as the crow flies, Sheffield and Chesterfield are not a million miles apart, but to get from one to the other, one has to cross the county boundary between Derbyshire and South Yorkshire. That has huge implications, especially in relation to transport links. We have had a detailed look at what impact the move would have on people who live in North-East Derbyshire, Bolsover and Amber Valley, all of which are very rural parts of the country. The way in which bus, train and tram services connect will make it extremely difficult for people to use public transport to travel to Sheffield. The journey time from rural villages into Chesterfield added to the journey time into Sheffield would make it almost impossible for people to work there, even with flexi-hours. The additional journey time would often make the working day extremely long for people who currently work in Chesterfield.

All that is before one takes into account the large number of women and part-time workers who work at the Chesterfield offices. Government policy is, quite rightly, to place great emphasis on enabling mothers to return to work, but the proposals would have exactly the opposite effect in Chesterfield. They would force mothers who are in the labour market out of work. I know from first-hand experience, as does my right hon. Friend the Paymaster General, how difficult it is to arrange one’s working life around children’s nursery and school commitments. They have to be dropped off and picked up at very defined times, and we all know that schools do not work on a flexitime regime. Many of the parents who work in the Chesterfield offices, and those who have caring responsibilities, simply could not adjust their working day and already tight timetables. They would have to give up work, and not only would their skills and experiences be lost, but more people would drop out of the labour market.

Is my hon. Friend concerned that we will end up having no Revenue and Customs offices at all in Derbyshire under the proposals? Is she also concerned for her constituents who work in the Alfreton office? Of the staff at the Alfreton office, 47 per cent. work part-time, 86 per cent. are women and 84 per cent. have caring responsibilities. The consultation document stated that no jobs would be lost as a direct result of the proposal, because it is assumed that staff can relocate. Will my hon. Friend urge the Paymaster General to reconsider the proposals for offices that have a particularly high proportion of women, part-time workers and staff with caring responsibilities, who will lose their jobs regardless of their experience and how long they have worked there?

I thank my hon. Friend for that intervention. Those are the key elements of our concerns. In rural constituencies such as ours, mothers who work part-time and those with caring responsibilities are particularly concerned. The same applies to areas such as Amber Valley and Alfreton, where the difficulty of redeploying women, parents and people with caring responsibilities is an additional problem. I hope that all that will be taken fully into account when decisions are made about which offices to close and which to keep open.

I have focused heavily on the move from Chesterfield to Sheffield because that is where the people who work at the Chesterfield office will be moved. Of course, many of my constituents work in the Alfreton offices and would be expected to move to Nottingham, which would be a massive additional journey for them.

I want to discuss the local labour market in Chesterfield. In spite of recent, high-profile company closures and serious job losses there, it is still a thriving manufacturing and service-based town, but civil service jobs are not so easy to come by there. As my hon. Friend the Member for Amber Valley (Judy Mallaber) pointed out, it will be very difficult to find alternative employment for people who will effectively be forced out of their jobs. We hope to see an explosion in the number of jobs in and around Chesterfield in the next 10 years with the expansion of the Markham Vale employment growth zone, which is commonly known as Skinner’s junction because it falls mainly in the Bolsover area. There will be a huge amount of new businesses and we expect there to be between 5,000 and 6,000 new jobs in the next decade. All those businesses will have Revenue and Customs requirements, so it makes no sense to me that at a time of growing local need, we are talking about closing offices and reducing the number of people who work in them.

Tax office workers and VAT-men and women may not be the most popular workers in the world, but we must not forget that they also work on tax credits, which are the single best way to boost the incomes of families in work. Tax credits are a key, flagship policy of the Labour Government, but I know from my constituency casework that there are still problems with their administration. Those problems often come down to the huge number of people applying for tax credits. Reducing the number of people who administer tax credits cannot be helpful or the best way to improve that key service.

I come to the consultation process itself. This is a very uncertain time for people who work in all Revenue and Customs offices up and down the country. Everyone appreciates that changes will take place, but the way in which the consultation has been conducted has not helped the process. The Paymaster General knows that I held a dedicated surgery on this issue, because such a high number of my constituents were coming to my surgery about the proposed closures. That surgery was extremely well attended despite being held late on a Friday evening when the snow outside was knee-deep.

One of the main areas of concern at the surgery was the consultation process itself. The way in which it worked was that proposals on the Sheffield urban centre had been published, plans to close both of the Chesterfield offices and move things to Sheffield had been outlined, and anyone wanting to take part in the consultation was able to e-mail a dedicated mailbox. There was no way of knowing whether an e-mail had arrived and, if it had, what account was being taken of it. In addition, people were not able to ask questions.

The consultation process could have been used to help to reassure people, to work with them on alternative arrangements and to keep them informed. However, it only made people more anxious about their livelihoods. As a result, I pulled together a lot of hard-copy material and personally delivered it to the consultation’s head office. Yesterday, I received an acknowledgement of receipt.

I am here to propose a compromise. Although I would love both Chesterfield offices—Dents Chambers and Markham House—to stay open, it would be great if Markham House at least were to stay open and if staff were redeployed to that office; Jobcentre Plus is based there, in the centre of Chesterfield, so it is easy to access.

I urge the Paymaster General and the chairman of HMRC to consider the points that I have made when they come to make their final decision and to ensure that at least one of the offices remains open in Chesterfield. The Paymaster General will have the awful task of making the final decision on which offices will remain open and which ones will close. I hope that I have made a strong enough case to ensure that at least one of the Chesterfield offices will remain open.

I congratulate my hon. Friend the Member for North-East Derbyshire (Natascha Engel) on securing her first Adjournment debate in Westminster Hall. I know that my hon. Friend the Member for Amber Valley (Judy Mallaber), who has made an intervention, also follows these issues closely.

Regrettably, a lot of myths exist about what goes on in tax offices in Chesterfield and elsewhere, and I should like to deal with those. One big myth is that the work of everyone in them is relevant to the local area and/or that they have local contacts and are a resource, which is rarely the case. I am pleased to have the opportunity to explain exactly what the Government are undertaking.

I have a sense of déjà vu: as a Minister, I am being criticised for having decided to consult fully, but had I not consulted and simply taken decisions, I would also have been criticised, which demonstrates the difficulty of what needs to be done in this case.

The first point that I should like to emphasise is that the senior management team in Her Majesty’s Revenue and Customs have not announced a decision to close the Chesterfield offices—there has been no such announcement. What has been announced is a proposal to rationalise work and office space in the Sheffield urban centre, of which Chesterfield is a part. Consultation on that proposal has been completed in the past few days. I am grateful to those who have contributed to the process, including my hon. Friend the Member for North-East Derbyshire, who has made submissions.

Neither the Government nor the management of HMRC approached the issue on the basis of arbitrarily drawing a 25 km radius around an urban centre and then saying that all the small offices within it are up for closure. The point about 25 km is that it is, and has always been, in the contracts of all civil servants working for the department in respect of what is considered to be a reasonable distance to travel to work.

I should emphasise a point that needs repeating: a decision has not been made on the future of HMRC’s Chesterfield offices or on the future of any of its other offices in the east midlands, Yorkshire or Humberside. I will see all the recommendations before they are announced. All the information that has been provided, alongside the remarks made by my hon. Friend today, will be considered before any announcements are made. The consultation process will be published, which will include who said what and why, and the department’s view.

I understand the concerns of local people working in the Chesterfield office and elsewhere and the concerns of wider stakeholders, particularly in relation to the following: the extra travel time involved; the availability of transport links from people’s homes; the environmental consequence of more journeys by road; and the impact on the local community if the jobs are relocated. As my hon. Friend has rightly identified, all those circumstances need to be taken into account, and I can tell her that they will be along with the care responsibilities and the likely impact on the local labour market.

For those reasons, and others, I asked the senior management team at HMRC to undertake the process of consultation in each office and to assess the impact of proposals on customers, staff, local communities and diversity. Throughout the process, the senior management at HMRC are committed to being open with staff, to explaining the options available to individuals and to exploring how their expectations can be matched with the need to make HMRC’s operations more efficient.

I should make it clear that this is not an easy decision. Such decisions can be taken only once all the facts are known. We are talking about not only the management view on the most efficient way of running the business, but what the local communities, the staff and the local stakeholders are saying. We must also consider why this needs to be done. Members of Parliament cannot implore the Government to ensure that departments are using resources efficiently in order to eliminate unnecessary expenditure so that it can be transferred to health, education or other front-line services, but then say, “Do it somewhere else.”

The fact is that the department has more accommodation than it needs. The position varies across the regions, but, generally, it has 40 per cent. more office accommodation than the staff need, which represents a substantial drain. Through the consultation, I am honestly trying to get the department to say, “This is the number of staff that will work in an urban centre. This is the number of staff that the department will employ in 2008. We can distribute those staff according to business needs in a particular way.” I shall come on to discuss how the department runs itself. What we want to do in each area is to consult people, taking on board precisely the points that my hon. Friend rightly makes about assessing which concerns are legitimate in deciding where staff are located.

We must also recognise that significant changes have taken place in the way in which taxpayers choose to communicate with the department. Such communication is increasingly done by telephone or by the internet, and e-filing is becoming more and more common. The amount of letter processing and manual processing is inevitably decreasing, so it is right to consider how operations can be run efficiently. Some work is best done in concentrated areas and larger units where the processes can be more streamlined; in other areas, smaller units or a more mobile work force is seen as the best solution. The final outcome must balance staff, the local area, efficiency and the best service for taxpayers, which is what I am trying to do.

HMRC’s efficiency savings are ahead of the projections, and the department has already been reduced by 9,000 posts through a combination of natural wastage and voluntary early retirement. I am trying to balance all the issues that my hon. Friend has rightly raised, but I want to be clear about an extremely important point that she has referred to. I must emphasise that when there is face-to-face contact with taxpayers through inquiry centres, those centres will stay. They are protected, so public inquiry facilities will stay, regardless of other considerations. I shall give an example, which is not the case in Chesterfield, of a recent inquiry centre in a building on which the lease came to an end and from which the landlord required us to leave. The department then found another location in the same town to replace the service like for like. There is absolutely no question of taxpayers losing the access that they now have to contact with the department.

The decisions are difficult, and the work that my hon. Friend has undertaken, and the assiduous way in which she put the case and gave the pros and cons of the debate, is an example to other MPs of how actively she has pursued it. She is offering a solution, but I cannot comment on whether that solution is necessary. I certainly cannot reply to her today, because I am sure that she would expect me properly to reflect on all the points that have been made in all the contributions to the consultation.

I feel a little torn. My hon. Friend has made a powerful case, but it may not need to be made. We shall see, but I want to make it absolutely clear that I have not made a decision.

I was merely trying to highlight some of the concerns about smaller, rural offices. As a representative of a rural constituency, I feel that the issues for people who live in rural areas and work in smaller towns are often overlooked, because those who live in the big cities shout louder.

My hon. Friend has shouted very loudly, and I compliment her on her presentation today. Her point is important.

We want the outcome to be the best possible network for the department’s offices, which does not mean that a decision has already been taken to concentrate all the work in the larger urban areas. For all my hon. Friend’s points, the matter depends on opportunities in the local labour market. I am not saying that this is the case in Chesterfield, but if a rural office is small and the local labour market is not very buoyant, the proportionate effect of the department not having that smaller office is greater. Those are difficult issues, which I am trying to weigh up.

I congratulate my hon. Friend not only on securing this debate so close to the Budget—I am not about to give any highlights—but on the fantastic amount of work that she has done on behalf of her constituents, and the tenacious way in which she continues to pursue the matter. I do not want to discourage her from continuing to pursue it, because it is important, and I hope to reflect on all the points that she has rightly raised.

Aylesbury Vale

I am grateful to Mr. Speaker for giving me this opportunity to discuss the impact of the Government’s growth policies on the Aylesbury vale district, particularly the town of Aylesbury in my constituency and the area immediately around it.

The background to the debate is that the Government’s sustainable communities plan has classed Aylesbury as part of the so-called Milton Keynes and south midlands sub-regional growth area. For Aylesbury vale, that means that the Government require the district council to plan for 21,200 additional homes between now and 2026. The Minister will know that that does not take account of any possible overspill into Aylesbury vale district from the growth planned for Milton Keynes and the Leighton Buzzard-Linslade growth area just across the border in Bedfordshire.

It is fair to say that when the Government’s plan was first announced, it was not greeted with champagne and roses by local councillors in my constituency. However, it is also fair to say that both Buckinghamshire county council and Aylesbury Vale district council decided early on that, as the plan was declared Government policy, they would work with the Government and their agencies to ensure that the policy was delivered in a way that best suited the interests of the local people whom they represented.

I want to concentrate today on some of the detail of the unspoken bargain between local authorities and the Government. The local authorities undertook to work with the Government to deliver their housing targets, but there was an expectation, reinforced by numerous comments and speeches from officials and Ministers, that the Government would ensure that the relevant infrastructure and public services were provided to meet the needs of the forecast large number of additional residents. I want to talk about jobs, infrastructure and public services, but before that I want to touch briefly on two aspects of the planning system’s operation.

First, the Department for Communities and Local Government is carrying out a review of the local delivery vehicle, Aylesbury Vale Advantage. There is a case for slimming down the agency’s board and operations, especially given that Buckinghamshire county council and the district councils have applied to the Government for pathfinder status under the new proposals for the structure of local government. However, it would be remiss of me not to bring to the Minister’s attention my concern about hints from Government bodies that the Government may replace the current vehicle with a Government-appointed agency to take local planning decisions, which has already happened in Milton Keynes, or even give planning decisions affecting Aylesbury to the Government body that operates in Milton Keynes, rather than set up a separate Government agency for Aylesbury.

Secondly, the Minister knows that I have written to her about planning policy statement 3, which has a direct impact on the subject that is under debate. Historically, a large proportion of housing completions in Aylesbury vale have been on windfall sites—largely brownfield former industrial or office sites—that have become available, although it has not been easy to anticipate the timing of their availability. Over the past two years alone, permission for more than 1,000 homes has been granted on five large brownfield sites in Aylesbury, and they are now being built. The problem with the Government’s latest version of PPS3 is that it stops local councils from counting those significant windfall housing gains against their overall housing targets, which the Government set. If the Government persist with that approach, the inevitable consequence will be more building on greenfield sites, because brownfield sites—certainly the large sites—tend to be windfall gains.

The local authorities in my area estimate that 3,000 extra homes could be built on greenfield sites in the vale of Aylesbury if, through PPS3, Government policy is pursued. It is a back-door method of subverting the planning system without the Government taking the unpopular step of raising housing targets by means that everybody can see, and I hope that the Minister will reconsider the matter.

All parties in the House share the common ground that if one plans large-scale housing development, one must plan for employment, otherwise one will create the opposite of a sustainable community. About 17,000 people already commute daily from Aylesbury to their place of work elsewhere, and the road and rail systems around the town cannot cope with much more. I welcome the development of the new Aylesbury Parkway station, which has now been approved, but although it will enable residents of the new Berryfield development to reach the town centre easily, it will not provide any extra capacity on the trains that run to Marylebone station.

The south-east draft plan proposes for Aylesbury one new job for every new home, which is, frankly, the minimum that is acceptable. The Minister is the last person to need a lecture from me that in most couples, both partners work. If two adults live together in one of those new homes, they are likely to need two jobs to deter them from choosing or needing to commute. I hope that we have seen an end to the practice—ongoing a year ago—whereby regional officials pressed the local delivery vehicle and local authorities to open up areas such as the new Aston Clinton business park site, which was designated for commercial development, for extra housing, because it would help in meeting housing targets more quickly. It would have done so at the expense of vital employment land, and the key to sustainability is achieving the right mix of jobs and houses.

When businesses decide whether to locate to Aylesbury or anywhere else in the south-east, one consideration is whether the town has a decent transport infrastructure, which is important for customers, suppliers and people who work for the enterprise. However, Aylesbury’s roads are increasingly clogged, and the A41 Tring road in Aylesbury is in breach of the atmospheric pollution limits set by European law. I see no change to that problem unless action is taken to improve the road network around the town. There are similar problems in the north of the town on the A413 Buckingham road near the Watermead development, and in west Aylesbury on the A418 Oxford road. The Oxford road queues are a deterrent to people coming to Aylesbury to shop or to trade, and they cause real problems both for residents around Roland way and Fowler road, and for the new Fairford Leys development in the constituency of my hon. Friend the Member for Buckingham (John Bercow).

The traffic generated by building in Aylesbury is not the only problem. The Government have determined that there should be major new development in Milton Keynes, Dunstable, Leighton Buzzard and Linslade, and as a consequence, additional traffic will funnel through Aylesbury on its way to the M40 and M4 corridors and to the growing towns of the Thames valley. Chiltern Railways provides a good railway service, but its capacity is limited and the scope for improvement is restricted because the Mayor of London and Transport for London control the track and signalling inside Greater London. Neither the council nor Chiltern Railways has the power to determine that situation, but I hope that the Government will ensure that measures are taken to add to Aylesbury’s transport capacity in line with growth projections.

There is certainly the threat of damaging gridlock for residents of the southerly villages of my constituency, consequent on the development in and around Aylesbury, and, looking to the future, in the north, for reasons of the Milton Keynes expansion, which my hon. Friend rightly describes. Given that the Government have shown no sign of agreeing to finance or to find a way of financing the estimated £713 million cost of the required infrastructure, and that even the Minister, when she talks about the planning gain supplement, has in all conscience to acknowledge that it will be top-sliced and that its proceeds will not go exclusively to our area, are our constituents not amply justified in fearing that sustainable development does not seem likely, and that development that is unsustainable seems substantially more so?

My hon. Friend is spot on. Roger Tym and Partners conducted an independent study that put the cost of new infrastructure and public services in Aylesbury alone at £768 million. Although I welcome the Government’s contributions, such as £6 million to help fund the new Aston Clinton business park, such relatively small contributions must be seen in the context of that much greater bill. Of course we should look for developer contributions, too, but I fear that the Government are expecting too much out of that pot. Is it realistic to assume, as the Government sometimes appear to, that developers will subsidise roads, railways, GP’s surgeries, schools and parks, as well as pay for the cost of social housing into the bargain? I see no evidence that the sums of money needed will be forthcoming from that source, whether under section 106 agreements or the proposed planning gain supplement.

It is not just in transport that we have infrastructure problems. There are difficulties, too, with electricity and water. I should like to make a plea for the Minister’s Department to talk to other parts of the Government about a more joined-up approach. Demand for electricity is projected to start outstripping existing capacity by about 2012. The problem can be solved. However, as the electricity supplier to Aylesbury, EDF Energy, said in a paper presented to the South East England regional assembly in September last year:

“the regulatory framework discourages or precludes the utility from investing speculatively in anticipation of future growth. The inability of utilities to carry out advance provision of services is…a barrier to delivery of planned levels of growth.”

Thames Water has made a similar complaint, saying that the capacity in the existing sewer network in Aylesbury is extremely limited. Indeed, current growth of water consumption and the impact of infill development has already led to some controversial proposals for the upgrading of the sewerage system in the Bedgrove area. However, looking to the future and the Government’s housing plans, Thames Water has said that the expansion of Aylesbury sewage treatment works is critical to accommodating the growth at Aylesbury and that the “costs will be significant”. There is no provision in the current quinquennial round approved by Ofwat for investment in water. If the Government want the new houses built, it is essential to ensure that those new homes and businesses are provided with a proper electricity supply and proper water and sewerage services. I have yet to see any clear evidence that that joined-up thinking is taking place.

Finally, I should like to touch briefly on public services. I shall confine myself to the NHS, largely because we have some evidence on which to assess what is now happening. Just over two years ago, the NHS trusts and primary care trusts in the Milton Keynes and south midlands area commissioned a study from Hedra consultants about the impact of planned growth on the demand for health and social services provision. That report was published in March 2005. Hedra predicted on current trends that Aylesbury vale as a whole would need 489 acute hospital beds by 2031 or 142 additional beds, provided that there were major changes in the configuration of services in order to provide extra community care beds, more day surgery and more domiciliary support for patients discharged to be looked after and supported in their own homes. The same study predicted on the basis of the Government’s housing targets that Aylesbury vale would need 84 more community beds and 56 more community day places, and the capacity to make 100,000 more accident and emergency visits, 3,000 more 999 calls to the ambulance service, 1,100 more first contacts with a district nurse and more than 200,000 more GP consultations by the end of the growth period.

However, the reality is that the NHS in Buckinghamshire is not planning for growth. The Buckinghamshire PCT is in a desperate struggle to contain its deficit. The very community services that the expert study said had to be developed and improved are now being squeezed and cut, largely because they are not subject to a Department of Health target. There is an issue for the Department for Communities and Local Government to take up with the Department of Health, which does not seem to share the Minister’s priorities.

There is a further problem. As new residents move in, NHS capitation payments to the Buckinghamshire PCT will inevitably increase. However, as the Hedra report said, it is essential to ensure that services can be provided in parallel to population growth, rather than lagging behind it. That means early agreement on land, capital and revenue requirements, but at the moment that is simply not happening. If anything, the reverse is true. My local GPs tells me that even when local residents move into an area, under the Department of Health’s so-called normalisation procedure, it can take as long as 18 months before the extra money finds its way to the primary care trust and through to the GP practice. That is a year and a half during which there is additional demand for health care, yet the capitation payment that is supposed to fund it is not made. I hope that the Minister will take that up. Indeed, I have read speculation in the press over the past few days about the Minister being the next Secretary of State for Health, so—who knows?—perhaps the advice that I am giving her will be especially constructive and helpful.

I conclude with this comment. It is in the interests of all my constituents that, if the Government’s policy of growth is to be implemented, it should be implemented in a way that makes present and future residents of Aylesbury confident that they live in a community that is both dynamic and sustainable. To do that, we need greater evidence of Government strategic planning and more co-ordination between different agencies and Departments in Whitehall than I believe is yet happening.

I congratulate the hon. Member for Aylesbury (Mr. Lidington) on securing this debate on the important issue of housing growth in Aylesbury vale. He and the hon. Member for Buckingham (John Bercow) will know that the proposals on the level of housing growth in Aylesbury vale and throughout the south-east of England are currently being examined by the independent panel, which is conducting an examination in public of the proposed south-east regional spatial strategy. The panel is also considering infrastructure, and economic and environmental assessments. The hon. Member for Aylesbury will therefore appreciate that there is a limit to what I can say while that process is continuing. However, I shall attempt to address the points that he has raised in as much detail as I can.

The hon. Gentleman will, of course, know the background to the additional housing needed in the area. More than 200,000 new households are formed each year—in fact, the latest figures suggest that more than 220,000 a year will be formed over the next 20 years. That is a result of the ageing population and, in particular, more people living alone. According to the latest figures, we currently build around 170,000 new homes a year. That is a significant increase from 140,000 new homes a year, but it is nevertheless clear that new demand is increasing faster than new supply. As long as there is that long-term shortfall between household growth and additional homes being built, we shall see long-term pressure on house prices, growing pressures on first-time buyers and social housing waiting lists, and overcrowding for families on low incomes.

For all those reasons, it is only fair that we take decisions now about the long-term need for additional housing across this country. If we do not, we will be deeply unfair on the next generation. Our research shows that if we simply carry on at the current rate of house building, the proportion of two-income, 30-year-old couples able to afford their own homes from their incomes will drop from more than 50 per cent. today to nearer 30 per cent. in 20 years’ time. Faced with those figures, the South East England regional assembly has proposed a reduction in house building in the south-east that is simply unsustainable. We have to increase the numbers of homes that we build for the sake of those future generations, and it would be deeply wrong of us not to. That means that we must have a serious debate about where those homes should be built, the sustainability of new developments, issues of infrastructure and making sure that we build the homes in the best possible way. We are clear that every region, including the south-east, needs additional housing. I hope that the hon. Gentlemen and their party recognise that need.

The infrastructure issues raised by the hon. Member for Aylesbury are important. We take seriously the need for additional infrastructure to underpin the new homes of the future. The growth area assessments done for the wider Milton Keynes and south midlands area and for Aylesbury looked at the need for additional infrastructure and considered issues of transport, of community facilities and of affordable housing, the promotion of urban renaissance, how to attract inward investment, the focus on jobs and employment and delivery issues. I take seriously the hon. Gentleman’s points about the delivery vehicle—as he will know, the review is under way.

We are already putting new investment into the Aylesbury vale area, partly to support the additional homes being built. The local authority saw an increase in resources for social housing as a result of the stock transfer of 8,000 homes to the Vale of Aylesbury housing trust last July. That has generated a capital receipt of £30 million, the majority of which, I understand, is intended for the provision of new social housing, which will be important in the area.

We have already awarded £3.5 million for the infrastructure projects in the first round of the growth area funds. Last year, there was a further investment of £25 million for crucial projects to improve infrastructure around the town and the vale. The committed funds in Aylesbury include £6 million for a major new business park to help deliver more than 100 homes, £4 million to enable the development of Circus Field and £1 million for improving green spaces in the vale. Some £14.3 million is being provided for the Aylesbury transport hub, which is designed to promote the use of public transport. That includes bus priority measures around the ring road, which will improve links for buses and pedestrians between the railway station and the town centre, and the complete refurbishment of the bus station. In addition, £8.1 million will go to Aylesbury Vale Parkway, which is a new railway station adjacent to a proposed housing site of 3,000 homes. That station, with its associated track upgrades, will go along the proposed east-west rail route. However, we are clear that that is only the start of a long process. The investment in growth areas is about pump-priming the delivery of growth and the need to lever in investment from private-sector partners as well as long-term public sector investment.

The hon. Gentleman has raised issues around railways and capacity. He will know that Buckinghamshire county council is the lead authority for the western section of the east-west rail project, which is being promoted by a consortium of 35 local authorities along the entire route. We have committed Government money to looking at the project and at the Aylesbury-Bletchley link.

Clearly, infrastructure work is already under way. Further work is being done as part of the regional planning process, the local work around the options and opportunities for Aylesbury and the wider Government work on the cross-cutting review of infrastructure requirements, which is being conducted as part of the spending review. Furthermore, work is under way around the Aylesbury area in respect of tariff proposals. The Government have also been considering planning gain supplement proposals.

We are clear that we need the additional homes and that additional homes require additional infrastructure. The question then becomes about how we should finance that infrastructure and ensure that additional homes are properly built in a sustainable way. The hon. Gentlemen seem not to want additional funds to be raised from the private sector through development gains and planning gains locally; they simply want lots of Government cheques to be written for their areas. I appreciate that hon. Members often lobby and call for additional resources for their areas, and the hon. Gentlemen are obviously not the only hon. Members to do so. We have said that additional Government resources are required to support additional homes. However, the hon. Member for Aylesbury will also recognise that he has issues to square with his own party, which is calling for reductions in overall public spending.

I make it absolutely clear: I strongly support, as does my hon. Friend the Member for Buckingham (John Bercow), the idea that developers should contribute. However, our experience of observing the difficulties in negotiating section 106 agreements leads us to think that it is unrealistic to expect that all the infrastructure and public service development made necessary by the Government’s proposals will be met from that source. It is not enough for the Government to try to abdicate responsibility as the hon. Lady, at times, seems to suggest.

Perhaps the hon. Gentleman should take that argument up with his own party. As he will know, we have made it clear that additional investment needs to go into areas with additional homes. In fact, we are putting it in through such things as the community infrastructure fund and the growth areas fund. He will also know that his party is rather more hostile to increases in investment than mine—indeed, it has been advocating cuts in public investment. If he is arguing for additional spending from the public sector, he has a few internal issues to resolve and should not accuse us.

We think that we should consider additional investment as part of developing the infrastructure, but it is also right to consider other ways to raise such infrastructure—for example, through planning gain supplement proposals or tariffs such as those put forward by Milton Keynes. I recognise the hon. Gentleman’s point: there can be difficulties in negotiating section 106 agreements and they can cause challenges. I therefore presume that he supports a simplified approach through a planning gain supplement, which might get round some of his concerns about the section 106 system.

I am interested in the hon. Lady’s brief animadversion a few moments ago to the cross-cutting review. She has teased us about public expenditure and has accepted that some is required. Will she be able to extract a commitment from her Government to the financing of the estimated four new secondary schools and seven additional GPs’ surgeries that are thought to be required? If not, does she honestly, seriously believe that they will be financed by the private sector? If so, I am inclined to ask about the pigs that I see flying before her very eyes.

As I have said, those proposals should be put to the hon. Gentleman’s party. If he accepts the need for additional housing growth and believes that that needs to be provided with infrastructure, he has to have honest conversations about how that infrastructure needs to be funded. We believe in public sector investment in infrastructure, but it is right to consider additional ways to lever in extra money from the private sector. Additional resources can be levered in from planning gain, often from smaller sites, which can make a greater contribution. It is often difficult to arrange section 106 agreements around smaller sites. Tariffs are another way.

In many areas, additional investment for education and health also results from population growth. Children need school places wherever they live. Children need places and patients need health care funding, which is why we are investing in additional funding for health care and education across the country. We need to keep doing that to make sure that growth areas get an appropriate share of the additional investment to make sure that they have sustainable public services. That is precisely what the cross-cutting review is about, and it is what our wider approach towards housing growth is about.

The hon. Gentlemen cannot consistently support cuts in public spending and investment, and simultaneously ask for additional resources for their areas to support the homes that we all believe we need. We need the extra housing for the sake of affordability for the next generation. We also need to ensure that the infrastructure is in place, not only for Aylesbury vale, but across the country.

Question put and agreed to.

Adjourned accordingly at Two o’clock.