I am pleased to have secured this debate in the run-up to carers week, which as I am sure everybody knows takes place this year from 11 to 17 June. I am this year’s carers week parliamentary champion. Carers week plays a vital part in raising awareness of the key role of carers in our society and helps to highlight the challenges that they face. I am sure that we shall explore many of those challenges this morning.

Every debate on carers notes that there are about 6 million carers in the UK, which means that every constituency contains thousands of people who are caring for a friend or relative who is sick or disabled. In my Worsley constituency, there are 10,000 unpaid carers, including 2,300 who care for more than 50 hours a week. My constituency contains wards that have much higher than average levels of cancer, stroke and coronary heart disease. In such wards, the heavier level of caring commitment means that one in three carers cares for more than 50 hours a week compared with the national average of one in five.

Research has shown that carers who care at the heavier end of caring commitment suffer impacts to their health as a result. I understand that that is particularly the case for those who care for people with stroke disease or Alzheimer’s. We must require general practitioners and their primary care teams to identify all those carers whose caring commitment puts their own health at risk.

I am extremely interested to hear this discussion about carers’ health. Has a systematic study been done in this country, supported by, for example, the Economic and Social Research Council, on the types of illnesses and problems that carers have? My experience is that depression is a major factor. Does my hon. Friend agree that, given that the Mental Health Bill is just around the corner—we hope—we will seriously have to address that feature politically and give resources to it?

I certainly do agree. As I understand it—the Minister may be able to help us with this later—not much systematic study has been done on the health impacts of caring. I know of just one such study, which I believe was done in the United States. It showed the impacts of caring in respect of stroke disease and Alzheimer’s.

I was just making the point that, in any case, it is necessary for GPs to identify people with heavy caring commitments. That step is basic common sense, because the unpaid care provided by those carers is a vital cornerstone of our health and social care system. I should remind the Minister that I recently reintroduced a ten-minute Bill that would require health bodies to identify carers and then refer them to sources of help and support. Following on from the suggestion of my hon. Friend the Member for Norwich, North (Dr. Gibson), it would also enable those practitioners to keep an eye on the health of the most committed carers.

I hope that the provisions outlined in my Bill can be considered as part of the review. In 1999, this Government launched the first national carers strategy. We all now acknowledge that that was an important step forward for carers and their organisations. At that time, the Government gave GPs a five-point checklist for use with carers, which included the fact that GPs should identify patients who are carers or who have a carer. Eight years on, the slightly disturbing thing is that research shows the inconsistent and patchy nature of the work being done by GPs to identify carers within their practice population. If we accept that we know about only a small proportion of the total number of carers, we will see that this is an important issue. It is important because we, as Members of Parliament, know that if carers are not identified, they will struggle to get the support that they need and should receive.

This example of identifying carers, and the involvement of GPs in that, goes to the heart of a key issue that should be addressed in the review. In 1999, the Government strategy outlined a variety of good practice that was considered essential to deliver much-needed support to carers. Most of us know from our own contact with carers and carers’ groups that if, in reality, local authorities or primary care trusts fail to deliver that support, carers just have to manage, and it is their health and quality of life that then suffers.

I congratulate my hon. Friend on securing the debate. Does she agree that schools and education authorities also have a role to play, particularly in relation to young carers and their needs? I am pleased that my constituency has a young carers support group, but I am aware that many parts of the country do not have such things. Will she include the need to identify and provide support to young carers among the measures that she would like the Government to consider?

Very much so. As is often the case in these debates, I shall come in a moment to the point that has been raised.

Much has been achieved for carers in the past 10 years: legislation has been introduced in private Members’ Bills recognising carers’ rights; more than £1 billion has been invested in short breaks; and there has been a greater awareness of the contribution that carers make to society.

My hon. Friend mentioned the role of private Members’ legislation. The Carers (Equal Opportunities) Act 2004—it is now an Act—which was introduced by my hon. Friend the Member for Aberavon (Dr. Francis), played a huge part in all this. Would it not send the right message to carers if mainstream Government legislation were introduced as part of the next Queen’s Speech to tackle the carers strategy issues that are being raised by so many throughout the country?

I agree with that. I was just going to say that the extra £340 million to help disabled children and their families that was announced on 24 May was a welcome development in the view of most Members of this House. As we shall probably hear this morning, many carers’ groups are coming to their Members of Parliament with concerns about short-term funding and lottery funding. Such issues will not go away until much of the money is mainstream. The issues that carers have, and deal with, are continuous, so the funding cannot be short-term. That is a key issue.

We must accept that we are moving in the right direction and that legislation such as the Carers (Equal Opportunities) Act 2004 means that carers’ wishes to work or study must be taken into account. Importantly, the right to request flexible working was enshrined in the Work and Families Act 2006. Those are important milestones. Most recently, the Pensions Bill contains the first real recognition that caring work is on a par with paid employment and should be recognised as such in terms of credits towards the state pension. Such steps are important.

Like many hon. Members present, I feel that there is still a long way to go before carers are fully supported and fully recognised. It is clear from survey after survey that carers can suffer ill health and financial strain through their caring. I have mentioned the impact that caring can have on the health of carers, although we do not know enough about that. We do know from surveys that carers are more likely to be in low-paid jobs or careers, or not in employment at all.

Carers UK recently found that 72 per cent. of carers are worse off financially as a result of caring and that the longer someone is a carer, the more likely they are to be on a low income. It is time for a review of the income that carers receive.

What happened to the minimum wage in respect of carers?

Again, the Minister may help us with that later. Many carers are now raising an issue with their MPs: what is the equation between their financial situation and the minimum wage? The issue is important.

Of course, the minimum wage issue is a real concern, as is the issue of the carer’s allowance, which is less than £50 a week for a minimum of 35 hours’ care at £1.40 an hour. There seems to be quite a void. However, one source of real angst among many elderly carers is the cessation of carer’s allowance at the point of retirement for so many people. Is that not something that could be tackled, bearing in mind that the value to the economy of carers is approaching £60 billion a year? I should have thought that a sliver of that money would help redress the anomaly.

Yes, indeed. We ought to consider carers’ income as a whole: income that they can gain from work, benefits, tax credits and pensions. I am sure that that is a possible step for the review. The whole issue needs to be considered. We know that carers’ numbers must continue to grow as the population ages, and that people with disabilities and serious illnesses are living longer and are more likely, because of our model of health and social care, to want to live at home.

Carers still feel that they face significant barriers in important areas. Interestingly, a recent Carers UK survey showed that carers’ key priority is still the need to feel recognised and valued for their role by professionals and society generally. Importantly, one in five carers made it their top priority. Maintaining health and well-being is important to one in 10 carers, as is the availability of respite breaks. However, there is still a feeling about the need for recognition, and the income, benefits, tax credits and pension issue is part of the issue.

Recognition is important to carers whenever they access services and deal with professionals. There is a need to understand the role that they fulfil and to treat it with respect. The review seriously must consider the way in which we can change attitudes and develop understanding about carers, particularly among the professionals whom they have to deal with.

On Monday I met a group of carers from south Warwickshire who raised the issue that health and social care professionals do not always work with them to develop the best solution for the carer and cared-for person. One carer mentioned that the person whom she cared for would not use external respite care, but that the social worker would not help her to find alternative home-based respite care. The carer and I felt that she was not being treated as a partner in care as we would expect.

Hon. Members have already referred to the fact that of all the strategies for carers deserving attention in the review, appraising the reason why 175,000 children are young carers is one of the most compelling. For the Princess Royal Trust for Carers, what is needed most is to reduce the numbers of young carers. To do so, adult and children’s services must work together to ensure that parents with a disability or illness receive the proper support that they need. Resources to provide such support are too scarce and services are not set up to work together.

I also talked this week to two young carers who told me about the impact that caring had had on their lives and education. Both young people had missed out at school and they had had little or no time for leisure. One of them told me that for six years, she had rarely left her home apart from to go to school or college.

My Bill would place duties on social services authorities to consider the support services that are needed to sustain the parenting role in families in which a parent has a disability or a serious illness. If the adult relies on the care of their child, that is the point to offer support services. Doing so would ensure that the health, education and well-being of the child or young person were not impaired by caring responsibilities at an inappropriately young age. The two young carers whom I met had definitely missed out on their education and leisure time, but importantly, they told me that other young carers at school were not receiving any support as they would not discuss their home situation with anybody. Young carers can feel, they told me, that they will be misunderstood by staff at school. They would definitely be bullied by other children because their home lives were different.

The hon. Lady makes an excellent point. Is she also aware of the evidence that one reason why child carers do not mention that they are carers—part of the number of hidden carers—is the fear that families may get broken up, which would lead to something that they do not want?

Yes, indeed. There is a panoply of reasons: being bullied and misunderstood, and, possibly, fear of the family being broken up.

My ten-minute Bill would require that schools and local authority children’s services have policies in place to support young carers. It is a difficult and complex issue, but such measures are needed. The importance of the situation was underlined by the tragic suicide of Deanne Asmoah, who could no longer cope with the responsibility of caring for her terminally ill mother.

The carers strategy review must consider the way in which we can improve carers’ health, well-being and life chances. The recent survey by Carers UK discovered that many carers find it difficult to pursue study, leisure activities or just a social life, and it is important that we meet those needs if carers are to feel supported and valued.

A key consideration is that carers groups are calling for new equalities legislation to cover them. Carers have gained their rights mainly through the legislation that three Labour Members have introduced in the past 10 years. Trevor Phillips is keen that the new Commission for Equality and Human Rights starts to study the issue of rights for carers, and that interest is welcome.

A cross-governmental approach is needed on carers issues, because the needs of carers do not fall neatly into one Department. Caring can affect a carer’s health, financial situation, social life and education, and it is essential that the Government appoint a Minister to act as carers’ champion throughout the Government, as the Welsh Assembly Government have already done.

Carers’ organisations feel that the original national carers strategy of 1999 had too short an outlook—only three to four years. Immediate changes, medium-term commitments and long-term vision are needed, and the national carers strategy must be a strategy for the future, looking beyond the next 10 years. As the numbers of carers increase, we must have reliable and comprehensive policies in place to cope with it and to continue to support existing carers.

A key issue in the short term is to ensure that questions about caring are included in the 2011 census. The 2001 census provided crucial evidence about caring, which has been vital for decision makers and policy makers, but there is a risk that those questions will not be included in the next census, which would be a backward step.

I commend the work in my constituency’s local authority area, Salford, to improve support and services for carers. In 1998, before the national strategy was introduced, Salford developed its own strategy, which was produced by carers for carers. The Salford Carers Forum oversees the strategy, which was updated in 2002.

Over the past nine years, my local area has developed a great deal of good practice, which is encouraging. There has been a Princess Royal Trust for Carers centre in Salford for eight years, and it employs 10 members of staff who provide support, advice and information. Encouragingly, there is also a young carers group, which many areas do not have.

Since 1999, we have had an “aspirational project” to give carers of people with autism and Asperger’s in Salford a break, and the Manchester Jewish Federation carers advice service offers services to Salford carers. The Princess Royal Trust for Carers centre has a GP liaison service working with primary care services throughout Salford. The centre finds such work a struggle, because for an organisation of its size, it is difficult to map the whole NHS; however, it does its very best.

The excellent Salford Crossroads organisation last year provided more than 20,000 respite care hours to help more than 200 carers in Salford. All that work is greatly appreciated, and Salford Crossroads was recently awarded “excellent” status by the Commission for Social Care inspection. There are high standards of service in the voluntary sector.

The local authority is developing a carers strategy action plan. It has targets for the next three years, and it will be linked to the outcomes that the White Paper “Our Health, Our Care, Our Say” identified. I am pleased that carers in Salford are directly engaged in identifying priorities. Indeed, last month there was a workshop where carers could meet professionals to identify their needs.

In my local area, the experience of local carers helps to form the basis of our local action plan. That is not true of every part of the country. Local carers have already made some suggestions to improve, in small ways, the support that is available to them. They include developing small libraries at carers centres, services that loan wheelchairs, commodes and other equipment, and even a small gym and computers at local carers centres. I understand that my hon. Friend the Minister will consult carers at a meeting in Manchester on 29 June, and I hope that he picks up on the ideas that are coming forward and gathers many more from carers when he is there.

It is a measure of the challenges that we face locally that more than 22,000 people in Salford identified themselves as carers in the census, but that only a comparatively small number of carers are known to carers support groups. Although many other issues are important to carers, central to the national carers strategy review must be the provision of an effective framework both in GPs’ surgeries to identify carers, and in schools to identify young carers. It would make carers aware of the support that local organisations work so hard to deliver. We have some excellent services and support there, but it needs to be backed by the aspects in the review on which I have touched. Key among those will be the review of carers’ income and looking at the structure of the funding sources for the services on which they rely.

The strategy review is important to carers. To get it right, we need to put carers at the very heart of the consultation, and that is what is happening. I welcome the review and look forward to seeing how carers will help to shape it to meet their needs, now and in the future.

I congratulate the hon. Member for Worsley (Barbara Keeley) on securing this debate at just the right time, with next week being carers week. I am sure that most of us here will be participating locally in that event.

It is hard not to express the most enormous gratitude and respect for all carers. We must all ask ourselves: would we be able to do what they do? As has been said, the contribution that carers make in removing costs from the state is enormous. I was recently visited at my surgery by an east Dorset carers support group for carers of relatives with mental health conditions. The group came because it was troubled about its future funding and whether it would be able to continue. The group had been set up with a lottery grant, but that had ended and was not continued as had been expected. The group was fortunate to receive support to continue from all the local authorities, but its concern was for the future. Anything that the Minister can say about what will happen regarding the carers grant will therefore be helpful.

I shall focus my comments on young carers, which obviously, given my portfolio, is an issue in which I have a great interest. Probably the most moving part of the story is that invisible army of very young people—perhaps even of primary school age—caring for up to 50 hours a week. That is an enormous burden, but we do not really know the scale of the situation because young carers are reluctant to come forward and identify themselves. Research by Barnardo’s has shown that a young carer will typically not receive any support for about four years after taking on a caring role. That shows that we must be more outward looking.

The first national carers strategy was an important step in acknowledging the existence of young carers and the impact of caring upon them. At events and debates in the House, we all acknowledge the problems that young carers face. The Government have put in place frameworks that, in principle, should provide support, and they are funding a number of initiatives directly, such as the Children’s Society project to develop best practice for all sorts of professionals working with young carers. That is all excellent, but I fear that there is a degree of complacency if we say, “Well, we’ve got this framework”. The recent teenage suicide to which the hon. Lady referred highlights that point. It shocked the nation, but it is not a great surprise, if one talks to young carers and understands the pressures on them. It was particularly interesting that the presiding coroner called for

“a proper inquiry into the issue”

of young people coping with such heavy responsibilities. That showed that, despite all the frameworks and all the documents, we need to ensure truly joined-up thinking and practice and consistency in what young carers are offered, which is clearly patchy across the country.

I concur with the hon. Lady that perhaps one of the most frequently raised problems is the difficulty of adult social services and children’s services working together. We all applaud the emphasis on “Every Child Matters”, but one downside has been the separation of those functions. An holistic approach to assessing the needs of the family is needed. There are examples where one service gets precious, saying, “No, the adult doesn’t need this type of support at night—the needs aren’t high enough,” when for the child who is getting up during the night and having their life and schooling disrupted, the need is so much greater. That problem needs to be sorted out.

The children’s commissioner has identified the need for the services to be joined up, commenting that there is a great danger of

“falling through the gap between adult and children’s services.”

In a 2005-06 report, the Commission for Social Care Inspection said:

“Given the separation of adults’ and children’s services, and our assessment that no more than 20 per cent. of councils are taking a wholly strategic approach to carers’ services, it is hard to see how young carers’ issues can be routinely addressed unless there are clear and robust interdepartmental policies and procedures… Care needs to be taken that addressing the needs of disabled parents and young carers does not fall between stools.”

We must use the strategy review to make progress in that major area. Just think of the case that went to heart of our country.

Funding and its continuation are also important. We recently held a big meeting in the House. Lots of young carers came and talked to us, and voted on what the most important issues for them were. The No. 1 issue was ensuring that their local support group survived. I remember one very articulate young lady saying, “The trouble is that my support worker isn’t there at the end of the phone when I need her.” That was not the support worker sloping off; it was that there were not enough hours available for all the support that was needed. We must ensure provision throughout the country for support groups, because it is definitely the No. 1 issue.

We also need to work on the training of professionals. We have made great progress in schools through guidance from the Department for Education and Skills, but there is still no duty to have a lead member of staff responsible for young carers in schools. Even if that is not made a duty, we must give much more guidance and encouragement to local authorities to ensure that it happens anyway. Having a young carers’ champion in the local authority is also an excellent way forward. I also commend the proposal to give training to our health care and social care professionals, so that we can pull everything together and ensure that there is a complete package for young carers and that they do not fall through the net.

It is a pleasure to contribute to this important Adjournment debate under your wise and, dare I say it, progressive chairmanship, Mr. Bercow. I congratulate my hon. Friend the Member for Worsley (Barbara Keeley) on securing the debate and on the tremendous work that she has done on behalf of carers both before entering the House and in the two years since. She is certainly a valued colleague on the all-party carers group.

I should explain at the outset my interest in the matter. I was a carer for 16 years and the promoter of the Carers (Equal Opportunities) Act 2004, as we have heard. I am proud to be vice-president of Carers UK and I also chair the all-party carers group. I share my hon. Friend’s enthusiasm for the work of our Labour Government over the past 10 years under the leadership of my right hon. Friend the Prime Minister. His early enthusiasm for the cause of carers was greatly appreciated. It is should also be recorded and acknowledged that all the progress that we have made has received broad cross-party support. That is manifested in the strength of cross-party support in the all-party group.

We have already heard that much has been achieved, but much more is needed. The debate is opportune because not only is it the week before carers’ week, but the review is being undertaken. The voice of carers is, quite rightly, being heard more loudly and is much better organised than 10 years ago. It is having an increasing impact on much of the legislation that affects carers’ lives, whether it involves flexible working, education, the rights of young children, respite care or, most challenging of all, pensions. That is all as it should be.

My hon. Friend has a remarkable and admirable track record in this area. Does he agree that one of the major drivers of change that we are encountering is the demographics of the caring community? There are 6 million carers and they churn 2 million carers a year, but there is an underlying steady growth of 300 carers a day and 100,000 a year. Over the next 30 years, from 6 million, the number of carers will grow by 3 million to 9 million. That pressure of change is behind all that Carers UK and MPs such as he and my hon. Friend the Member for Worsley (Barbara Keeley) do.

I agree entirely, and I commend the work of Carers UK in identifying that important phenomenon, which is having an impact on all social policy legislation. My purpose today is to ask a simple question: how can the national carers strategy review take account of the impact, or lack of it, of our legislation?

Before my hon. Friend starts to get into the details, I want to compliment him and our hon. Friend the Member for Worsley on their sterling work. I just had a thought: I have been involved in work on eating disorders, and when we changed the name of an organisation it suddenly became very dynamic and reached a new plateau of support. I often wonder about the words that are used. Perhaps the word “carer” is just a little less aggressive than it could be. We might need something much more positive to define the sterling work that people do in that field. “Carers” sounds like they are depending on someone, when it is the other way around. I do not know whether the organisations have thought of a new way to define it.

That would probably require a separate debate. I can imagine my hon. Friend wanting carers to be called “revolutionaries” or something as radical as that.

I was talking about the purpose of the debate and posing a simple question: how can the national carers strategy take account of the impact, or lack of it, of our legislation on the rights of carers and their quality of life? In the course of my constituency work, through working with carers’ groups and as chair of the all-party group on carers, I am constantly being made aware of the—rightly—rising expectations of carers. I recently commissioned a piece of research by the Bevan Foundation, and the result, “Caring and Working? A Welsh Case Study”, is a challenging report by Dr. Victoria Winckler. I should declare an interest as an unpaid trustee of the foundation. I commend the report to the Minister, not only because it is powerfully radical in its recommendations, but because the voices of carers are to be heard loud and clear on every page. Although the report’s recommendations have a Welsh focus, because caring is a devolved matter, they are universally applicable. I want to draw the attention of hon. Members to three of those recommendations, as they could apply to the rest of the United Kingdom. The first is:

“As a first priority, carers need to be recognised in all areas of Welsh Assembly Government policy including economic and employment policy, as well as social care policy”.

The second recommendation is:

“The final refocused carers’ strategy needs to be much more visionary and robust. It should give much greater emphasis to employment for carers”.

Finally, the report recommends:

“Better training should be available for social workers to undertake carers assessments so that they do not reproduce gender (and other) stereotypes and to help them to offer services to meet carers’ needs.”

I believe that the new national carers strategy should have an impact on all Departments. It is not a matter merely for the Department of Health. The Carers (Equal Opportunities) Act was about providing work opportunities, and the recommendations of the Bevan Foundation refer to that important aspect of that Act. The Act also paid attention to education and training opportunities. Recently I have been impressed by the work of the National Extension college with carers, and I shall elaborate on that point in a moment.

Another aspect of my Act dealt with the right of carers to have access to leisure opportunities. My neighbouring authority, the city and county of Swansea—in the true spirit of cross-party recognition of the work of other parties, I acknowledge that it is led by Liberal Democrats—has an innovative collaborative project that is funded by the Big Lottery Fund to encourage carers to engage in more physical activity. Called “Mentro Allan”, which means “Getting Out”, the projects involves more than 100 carers in a variety of outdoor activities and, crucially, provides respite care. Such initiatives need to be more universally available.

When the national carers strategy was launched in 1999, the landscape was very different. Carers had few rights and were expected to care with little recognition or reward. One of the key changes in the past 10 years has been the acceptance, enshrined in Government-supported legislation in the form of the Carers (Equal Opportunities) Act, that carers have a right to a life beyond their caring responsibilities—what one carer in my constituency called the right to an ordinary life. That perhaps is a much better way to describe the challenge before us than to argue about equal rights. The evidence so far is that that Act has begun to bring about a culture change, albeit rather slowly, particularly in the way in which carers are viewed by social services. It has also improved information to carers and a new raft of initiatives has been developed to give carers opportunities to learn, train and work. However, those initiatives are fragmented and, by definition, locally focused.

The developments that have arisen from the Act have been backed up strongly by the Government’s legislation, particularly the Work and Families Act 2006, which gave carers the right to request flexible working from their employer. We have a long way to go to change workplace culture so that carers’ responsibilities and needs are as well understood as those of parents. The Work and Families Act is a good place to start and I hope that employers will embrace the opportunities that it brings and adopt a constructive approach. I salute the work of the trade unions, particularly through the Warwick agreement, in bringing about the legislation, especially the Union of Shop, Distributive and Allied Workers, which has championed the cause of working carers.

I feel that those two pieces of legislation have been critical in raising awareness of carers’ issues among crucial groups such as social services, employers and other service providers. Work done by the action for carers and employment project, led by Carers UK, has helped to embed the legislation, and it also provided much of the evidence on which the legislation was based. That evidence indicates that legislation does indeed change culture and practice. It has often been argued that good practice guidance is all that is necessary, but the experience of Carers UK is that legislation is needed to provide a strong framework for such guidance, because guidance on its own is a blunt tool.

My hon. Friend is giving a thorough explanation of the employment issues and of the needs of carers in the context of employment. It is worth making the point that work needs to be done in organisations such as Jobcentre Plus in developing flexible employment. Does he agree with me that the need is not only for good practice, but that the Government must take a lead in working with employers to set up structures such as flexible jobs? We have discovered in recent months that that concept is difficult for jobcentres to get their heads around, and that designating a job as a flexible job is perhaps not something that has been done customarily, despite the fact that it would help carers.

I entirely agree with my hon. Friend. The Government needs to take a lead in legislating to bring about such changes.

We must ensure also that the vision enshrined in my Act is delivered on the ground. Carers UK has found that the most common reason that carers give for being unable to work is the level and complexity of care that they provide. If services are not in place to support them both in providing that care and in working or studying, real choice for carers will be an impossible dream.

It must be acknowledged that, over the past few years, the Government have made significant progress by putting more than £1 billion of money into respite care. However, we know that that does not stretch far enough; there is still a shortage of good quality respite services. I particularly welcome the Treasury and Department for Education and Skills report, “Aiming high for disabled children: better support for families”, which was published last month. That begins to show a way forward, particularly for the most severely disabled children, and I pay tribute to the hon. Members who supported it.

Carers’ organisations feel very strongly that the carers grant—an important stream of funding that provides carers with breaks—must remain a discrete grant rather than be rolled into the revenue support grant. Carers UK hears strong concerns from its wide membership that the funding for carers’ breaks will be reduced if the grant loses its clear identity. That is a critical part of the discussion, as it will affect the delivery of break services in the future.

The fact that the responsibilities of one Department—the Department of Health—have an impact on the ability of other Departments, particularly the Department of Trade and Industry and the Department for Work and Pensions, to fulfil their own objectives reminds me that we must keep up the campaign for a carers’ champion, and I am pleased that that cause has been mentioned several times already. Such a champion would be at the heart of Government and would ensure that all Departments recognise carers’ needs.

The success of the similar campaign in Wales with which I was associated, and the appointment of the Deputy Health Minister in the previous Welsh Assembly Government—Assembly Member John Griffiths—as carers’ champion were great steps forward. That has made a huge difference to the coherence of policy making in the area. Having someone whose responsibility it is to, as they say, “carer-proof” legislation would have prevented some of the contradictory pieces of legislation that we currently have. The Welsh Assembly Government is also updating its carers strategy.

I am particularly pleased that my Labour-led local authority, Neath Port Talbot county borough council, was among the first to appoint a carers’ champion, before there was such a champion for the whole of Wales. Councillor Paul Thomas has done excellent work in that field for the past year or so. I should therefore like specifically to ask the Minister whether the UK review will link with the Welsh Assembly Government review to ensure that the strategies learn from one another and that they share good practice and good policy development policy across the country.

As a corollary to his reply to that question, the Minister might like to address cross-border issues. As a Member whose constituency has a Welsh border, I see notable differences between approaches to carers, depending on whether one lives on one side of the River Dee, in my constituency, or 200 ft across the river in Holt in Wales. It would be useful to highlight those differences as part of the process of moving forward.

Indeed. As Chairman of the Welsh Affairs Committee I am very conscious of cross-border issues. There are differences not only between Wales and England but between county boroughs, and I agree that account should be taken of those matters in the two respective reviews, so as to minimise contradictions.

Looking to the future, I hope that we can build on the Acts that I have mentioned and consider ways of ending the remaining discrimination faced by carers. It is still legal to discriminate against someone who is a carer, whereas, as we know, it is illegal to do so on the basis of someone's race or disability. A crucial part of the review of the national carers strategy is to evaluate equality legislation and examine how carers can be brought into the existing framework. A human rights approach is very important. As we have already heard, when Trevor Phillips, the chairman of the new Commission for Equality and Human Rights, recently addressed the all-party carers group, he assured us that he would give proper priority to carers’ rights from the earliest stages of his work.

There is a need also to renew the focus on carers’ access to work, education and training opportunities, as the Bevan Foundation report recommends. It is predicted that 2 million extra workers will be needed in the next 20 years to keep the UK economy buoyant, and that there will not be enough young people to meet that demand. It is also predicted that 3 million more people will become carers during that time. It is therefore self-evident that we must address how carers can gain access to learning and work opportunities—for the sake of both equal opportunity rights and the economy.

Many carers want to return to work. Eighty-five per cent. of the carers taking distance-learning courses on the lottery-funded project run by the National Extension college are of working age—younger than 60—and the majority take courses because they are thinking ahead to a time when they can return to work after their caring responsibilities have ended. For some carers, particularly older ones, education also has social value that should not be underestimated. It gives relief from the isolation created by the caring role, allows for personal development and leisure activity, and for obvious reasons, reduces social exclusion.

Current barriers to education and training are the cost of courses, the lack of alternative care services during the time of study, the inflexibility of the courses on offer and a lack of understanding of carers’ needs by colleges. A big issue is that a carer cannot study for more than 21 hours a week and receive carer’s allowance. At a time when more and more courses can be delivered online, that seems ludicrous. The review of the national carers strategy should include a full review of how the benefits system works, because there are too many rules like that.

May I end on a personal note? My hon. Friend the Minister has been enthusiastic in his support of carers, and he gave me unofficial support in the preparation of the Carers (Equal Opportunities) Act 2004. I hope that he will be the newly appointed carers’ champion and that he will drive forward the carers’ cause across all Government Departments.

rose—

Order. I would like to wish the hon. Member for Aberavon (Dr. Francis) a happy birthday. Before calling the next and last of the Back-Bench speakers, I would like to make it clear that I shall call the Front-Bench speakers no later than 10.30. I call Mr. David Lepper.

I have already congratulated my hon. Friend the Member for Worsley (Barbara Keeley) on securing this debate. I add my congratulations to those that have already been expressed to my hon. Friend the Member for Aberavon (Dr. Francis) on his sterling work on the legislation that he has taken through Parliament, and on his work on behalf of the all-party group on carers.

I declare a personal interest, in that I am a trustee of a Brighton and Hove-based charity called ARDIS, which was set up some 12 years ago specifically to support people with dementia and their carers. It is the needs of those husbands, wives, fathers, sons, daughters and friends caring for those with Alzheimer’s and other forms of dementia that I would like briefly to speak about in this debate.

The carers who care for people with dementia are often very elderly themselves and in need of support in their own right, let alone in their role as carers. I am thinking, for instance, of some research done in my constituency that revealed a carer aged over 100 caring for his slightly younger wife.

All too often, the support that is available across the country to elderly carers is patchy and piecemeal. In my area, as well as the charity of which I am a trustee, we have a carers’ centre and an active branch of the Alzheimer’s Society. I pay tribute to Neil McArthur, who, for 18 years, was the driving force behind that branch and its extensive work to support dementia sufferers and their carers. Sadly, he died suddenly some two weeks ago. I had the sad duty of attending his funeral yesterday. He inspired many of us locally to try to ensure that support is available for those often elderly people who care for relatives with dementia.

ARDIS can provide a dedicated support worker who is based in our carers’ centre and gives advice and support to carers of people with Alzheimer’s and other forms of dementia, but the support that the charity can give to that post is, unfortunately, time-limited. It is important that older carers should have confidence that, when ARDIS’s financial support unfortunately must come to an end, the Government will have taken account of their particular needs.

As I have said, there are centres of excellence in different parts of the country. We have heard from hon. Members about what exists in their areas and I suspect that those of us who are here today are here partly because much good work is being done in the constituencies that we represent or the areas of which those constituencies are a part. Will the Minister ensure that the Government’s review not only takes into account the needs of young carers, which I mentioned earlier and which others have mentioned, and the needs of those caring for people with dementia, but considers carefully the good practice in many parts of the country and ensures that that can continue with their support? There is no doubt that there has been a sea change since the Labour Government’s introduction of the carers’ strategy a few years ago, but it is important to ensure that the good practice that already exists in local areas can continue, and that the best of that good practice is replicated across the country so that we can begin to move away from what I regret is still often piecemeal provision of support for people who perform the vital role of caring.

I congratulate the hon. Member for Worsley (Barbara Keeley) on securing this debate. It has been noticeable this morning that every hon. Member who has spoken has had a real and long-standing commitment to the issue, so perhaps this is not a time for political point-scoring, which would be inappropriate, given the commitment expressed today.

I very much welcome the carers review. I could make the point that it is slightly disappointing that most of the steps forward have been the result of private Member’s legislation, but that would be a little churlish, as private Member’s legislation does not get anywhere without Government support. We must acknowledge that, but I would like the Government to introduce mainstream legislation to tackle some of the problems and issues, and to bring a greater focus to the problem.

Support for carers is a developing problem. At present, there are approximately 6 million carers. It is estimated that, by 2037, the figure will probably increase to some 9 million. Although that seems a long time away, there will be large increases year on year.

The hon. Lady mentioned the income of carers, which is important. Carers do not take on a caring role for the money—money is not always at the forefront of their thinking when they do it. They take on the responsibility because they want to, because of affection and ties—there are many reasons—but it seems wrong that some people are so severely financially disadvantaged when they take on the caring role. A survey by Carers UK showed that 72 per cent. of carers are worse off than when they started caring, 54 per cent. give up work to fulfil the caring role, 33 per cent. are now in debt, and, more worryingly, nearly one third of carers are cutting back on basics such as food and heating simply to try to make ends meet. I sincerely hope that the review will recognise those problems and consider the available income streams.

Hon. Members have pointed out that the system is in a bit of a mess. People have difficulty finding their way around it even to claim benefits to which they are entitled. Some of the age-related anomalies in particular are considered unfair and galling by many carers who feel that they have contributed to society all their life but are not being given help when they most need it.

The support needed is not always financial. It is crucial to develop a respite strategy in the review of future provision. The £25 million announced by the Government for that purpose was welcome, but deals only with the tip of the iceberg. Many times when carers come to see me in my surgery, they raise the problem of respite care. They say, “I could cope, I am happy to cope, but from time to time I just want some time when I can be me.” Whether the respite is a few regular hours a week or, if the caring responsibilities are weighty, a regular week every so often, they need to be able to recharge their batteries so that they can go back to their caring responsibilities refreshed.

In some parts of the country, there are schemes where respite care works quite well: a regular respite place is available in the same home, the carers get to know the staff in the home and it becomes a home from home. We should examine the economics of providing respite care because we would reap long-term benefits. If people continue as carers for longer, it will save us money in the long run.

Although it has received little political attention, research by the Equal Opportunities Commission carried out before the last election highlighted that, particularly for women, the problem of caring responsibilities was almost as important as child care responsibilities. I will be fair and acknowledge that the Government have done a lot for working women and have helped with child care responsibilities. However, in the age of the extended family, families do not all live in one area any more. The pattern is that they are dispersed, so caring responsibilities and the help available to carers is of increasing importance. Therefore, as we approach the next election, I think that the issue will have a higher profile.

My hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) highlighted the problem of young carers and I know that she has a long-standing commitment to the issue. When one meets young carers, it is clear that they receive limited support. My hon. Friend mentioned the case of the teenage girl who said that her support worker was not there when she needed her to be. The simple truth is that young carers need someone to turn to because often schools do not understand the problem. I disagree with my hon. Friend slightly because she said that a lead member is needed in schools; I have concluded that that is not enough. Ticking the box and employing a lead teacher does not solve the basic problem that most teachers have no comprehension of the existence of young carers and the impact of caring on a young person’ s life. When talking to young carers about their problems, they often say things such as, “I am starting to bunk off school because when I have to care for mum, I can’t do my homework properly and I may be late for school. I get in trouble when I go to school and my teacher doesn’t seem to understand.” There is a great need for an increased overall awareness and understanding of young carers and it is vital that their specific needs are taken into account during the review. I hope that the Minister will highlight how the voices of young carers will be included in the review, so that it is not simply well-meaning adults talking about what young carers want.

Another problem is the general level of engagement with services, which is partly caused by people’s lack of awareness and partly by a wariness of the interface with social services. There is a Government will for greater assessment, but that clearly is not filtering through at local level. That is a problem because, although there may be strategies and frameworks in place, if there is no incentive for local authorities or local health authorities to implement them, they are frankly not worth the paper on which they are written.

Carer responsibilities have to become a must-do issue for councils and health professionals. We should perhaps consider introducing quality outcome framework points for GPs, so that they are more proactive in identifying carers. Carer responsibilities perhaps need to be a more important part of social service assessments, so that they fail or lose a star if they do not do consider it. We really need to take this issue seriously.

More should also be done to highlight what a carer is. Thousands of people become carers every year, but research shows that 65 per cent. of them do not recognise themselves as such in the first year of caring. More worryingly, 32 per cent. of people take five years to recognise that they are carers. That also means that a third of carers believe that they have missed out on benefits and pension entitlements and well over half that group think that they have missed out for three years. We are failing those people because, if someone is caring, they do not have time so get to grips with the benefits system.

Much greater awareness of the issue is needed and a higher proportion of carers need to receive assessments. To help with that, the Government need to deliver on their pledge to fund a national advice and information service to help carers. Where do carers go at the moment for help? I shall finish by praising some of the wonderful local carers’ support groups. Individual groups have been mentioned, but local groups exist all around the country and provide considerable help and support for people who are caring for someone. The benefit of those groups must not be underestimated and when I recently visited one, I was recommended a book called “The Selfish Pigs Guide to Caring”. I do not know whether hon. Members have read it, but it highlights brilliantly that carers are not Mother Teresa. The difficulty is that a carer will want to help their loved one, who may have been their partner for years, but they may feel resentful about doing so. It would be nice if people did not have to turn to such books and if help was more readily available. If we can work together to achieve that, we will have come a long way.

I congratulate the hon. Member for Worsley (Barbara Keeley) on securing this important debate, which has provided a fitting preparation for all of us for carers week, which is next week. I shall be participating in many events both in my constituency and elsewhere in the country. Since becoming an MP, the hon. Lady has been a champion for carers and has brought insight to the issue from her previous work for the Princess Royal Trust for Carers. I pay tribute to the hon. Member for Aberavon (Dr. Francis) for his authoritative and moving speech and wish him many happy returns of the day.

I put on record my wholehearted support for the 6 million carers in this country; they do amazing work in often difficult circumstances. In that context, on a personal level, I am proud to be married to a hospice nurse and to be the son of a nurse who ran a small respite and end-of-life care home for a decade in the 1980s, when I witnessed admirable first-class care at first hand. Individual unpaid carers give care of no less quality and importance.

The national carers strategy was welcomed by all parties and was launched in 1999 with three main strands: information, support and care. Under information, the Government promised a new charter on what people could expect from long-term care services. That would involve setting new standards, improving the consistency of charging for services, good health information, an NHS Direct helpline for carer information and Government information on the internet. On support, the Government wanted carers to be involved in planning and providing services and for local caring organisations to be consulted. They also thought that comment cards, advice surgeries and carers weeks would all be good ways to involve carers. The national carers strategy said that there would be a carer’s right to have their own health needs met, which was mentioned earlier, and new powers for local authorities to provide services to carers, as well as those being cared for. It also said that the first focus of the new powers should be on helping carers take a break and that there should be a new special grant to help them do so. On top of the £750 million for prevention and rehabilitation, £140 million would be provided over the next three years to help carers take a break and used in a targeted way. Financial support for working carers would be kept under review.

On 22 February this year, the Minister and the Chancellor announced a review of the national carers strategy, which fulfilled a promise made in the White Paper, “Our Health, Our Care, Our Say”. Typically, no timetable has been announced and I hope that the Minister will rectify that omission this morning. Conservatives welcome the review— although we hope that it is not an attempt to kick the issue into the long grass. I do not believe that it is, but such views would be overcome by the Minister announcing a timetable today.

In the Conservative statement of aims and values, “Built to Last”, my right hon. Friend the Leader of the Opposition outlined our party’s commitment to carers’ rights and restated our commitment to respite care for carers, and we welcome warmly the Government following our lead on that. In addition, our “Built to Last” document established that the

“test of a strong and just society is how it looks after the least advantaged – but this duty is not reserved for the state alone. It is a shared responsibility”.

As part of that, our party is committed also to an increase in general well-being and sustainability to enable

“people to strike a better balance between work and life through flexible working”—

a point made powerfully earlier on by the hon. Member for Worsley—

“with government setting an example by making the British public sector a world leader in flexible working.”

That was precisely the point on Jobcentre Plus raised in an intervention.

“Our Health, Our Care, Our Say” gave the following commitment:

“The updated strategy will reflect developments in carers’ rights, direct payment regulations, carers’ assessment and carers’ grants. We will work with stakeholders to consult, develop and issue a revised cross government strategy that promotes the health and well-being of carers, including the particular needs of younger carers, and includes the use of universal services.”

Any serious review of the national carers strategy must contain a qualitative assessment of the impact of the 1999 carers strategy, in addition to establishing ways to support carers. It must also make more concrete commitments than were present in the original carers strategy, with a timetable for delivery associated with each one. I urge the Minister to confirm what that review will contain and, in particular, how it will take forward support for carers and when it will be published.

The new deal for carers was outlined in the health White Paper, “Our Health, Our Care, Our Say”. Tellingly, that document reports that the

“your health, your care, your say listening exercise revealed considerable public support for carers. Better support for carers came third in the 'people's options' at the national Citizens' Summit”.

It is worth noting that the 2005 Labour manifesto made two references only to carers’ issues, which were both, of course, extensions of other main policy areas—pensions, which was mentioned earlier, and the ongoing consultation on a putative right for carers to request flexible working arrangements from their employers.

The Conservative manifesto at the last election pledged to

“boost the vital role played by informal carers by expanding the provision of respite care so more carers can continue to support loved-ones at home and are able to remain in their own home”.

The challenge is highlighted even more starkly by the lack of any effective commitment to respite care in the original national carers strategy, despite its importance being highlighted throughout the document.

The new deal for carers was announced at the same time as the review of the national strategy. Surprisingly, that is not, as its branding would suggest, a welfare-to-work scheme in the same format as the jobcentres’ new deals—perhaps the Minister will explain that choice of phrase. Instead, it is a package of support for carers with three strands: first, £25 million to be spent on providing short-term home-based respite care for carers in crisis or emergency situations in every council; secondly, £3 million towards the establishment of a national helpline for carers; and thirdly, £5 million to support the development of an expert carers programme.

We welcome the Government’s commitment to emergency respite care; we would, given that we proposed it. However, as important as that is, it should be in addition to planned respite care, which has suffered up and down the country––a fact to which, no doubt, hon. and right hon. Members can testify. The reason is a tightening of local authority budgets as an inevitable knock-on effect of NHS deficits. To put the £25 million into context, last week, the Health Service Journal reported that London councils alone are to meet Lord Hunt to discuss extra pressures on social care amounting to £22 million in 2007-08 owing to NHS cost-shunting. It has been reported also that £740 million of caring benefits go unclaimed per year—perhaps my most controversial point is that, as usual, the Chancellor gives with one hand, but takes away with the other.

The £3 million for the national helpline is, somewhat cryptically, “towards” rather than “for” the establishment of a national helpline. I fear that that raises the possibility of another delivery that does not quite materialise, although I hope that that will not be the case. That money finally fulfils the commitment of the national carers strategy to

“an NHS Direct helpline for carer information”.

I hope that the Minister will take the opportunity to explain why it has taken eight years to set that commitment in motion, why he has moved away from NHS Direct as the delivery partner, and when it will be available for carers. I hope that the Minster will detail in his wind-up how, and when, this helpline will fulfil the commitments in the White Paper to provide carers with

“up-to-date information to assist them in their caring role”,

as well as

“reliable, detailed information to help them make decisions about their personal support, opportunities for them and the needs of the person for whom they care”,

and

“information in the widest sense – from legal entitlements, to contact numbers for ‘help’ groups and training, to advice on benefits.”

As with the helpline, all that has been announced is funding towards the development of an expert carers programme, rather than a programme itself. As it is explicitly compared to the expert patients programme, what is the Minister’s opinion on the recent critique of the expert patients programme that was in favour of the whole system informing self-management engagement approach—known as the WISE approach, which is much easier to say.

The final commitment made in the White Paper was to

“encourage councils and PCTs to nominate leads for carers' services”.

The Government have not mentioned that since, and I hope that the Minister will tell us how he intends to move it forward. Speaking to carers, as I do very frequently, I know that one of the key issues that needs to be addressed is the disjunction between the health and social care sectors, which, sadly, the White Paper failed to address. NHS deficits and PCT reorganisations have conspired to exacerbate that situation. We hope that the Government will make proposals soon to address that gap.

One of the groups included in the review will be child carers. Good. The 2001 census identified an estimated 175,000 children and young people in the UK as child carers, although Barnardo’s thinks that the number might be higher, hidden within a culture of secrecy stemming from fears, such as that of social services splitting up the family—a point that I raised in an intervention. Of that 175,000, 18,000 children, aged between five and 15, provided 20 hours of care or more a week—nearly three hours a day—and nearly 9,000 provided at least 50 hours, which amounts to more than seven hours a day.

I hope that, in addressing child carers, the Minister will look to the two key areas from which child carers feel excluded—health and education. Regarding the former, if the children are mature enough to care for a parent, the state should reflect that maturity. Many child carers are not taken into the confidence of doctors dealing with the disabilities of their parents or other charges. I trust that the Minister will address that. Equally, there needs to be an understanding of the issue in schools; it seems very obvious that to have a member of staff in each school or college fully aware of the needs of child carers, and able to champion them, would be a good idea. Again, that has been suggested today. Of the two alternatives presented by the Liberal Democrats, I believe that we should pursue the champion idea.

I urge the review to deal with the outstanding educational issues.

I hope that the review will not make the mistake of riding roughshod over what child carers want. The temptation may be to impose statist solutions; instead, we should have a range of solutions that give both the child carer, and the person in their care, choice over the best package to fit their circumstances and their life.

I am aware of the time pressures in the debate and I want to hear what the Minister has to say. I hope that he will be prepared to consider the possibility of introducing an adjustment to the remit that Parliament gives the National Institute for Health and Clinical Excellence so that the carer’s interests can also be taken into account in judging the cost-effectiveness and clinical effectiveness of drugs. That would help a lot with some of the issues that we have been facing on Alzheimer’s drugs.

Conservatives recognise the enormous debt of gratitude that the country owes its carers and the responsibility of those in government towards them. With that in mind, we reconfirm our support for the review of the national carers strategy. I hope that it offers a critique of the delivery of the strategy alongside the challenges for the future. I call on the Government to take note of all that has been presented in the debate today and to provide answers to the questions raised.

It is always a privilege to serve under your chairmanship, Mr. Bercow, which is progressive. I do not know whether that comment will do you any good with your colleagues, but I certainly agree with my hon. Friend the Member for Aberavon (Dr. Francis) in that regard.

I congratulate my hon. Friend the Member for Worsley (Barbara Keeley) on securing this very important and timely Adjournment debate, and I pay tribute to the work that she did in her professional life before entering this place. Since becoming a parliamentarian, she has continued to raise the profile and the status of carers, so that their needs are being considered on an ongoing basis by legislators in this place.

It is of course important that we begin by recognising and respecting the value of the contribution that carers make to our society. We also recognise the wide range of people who fulfil caring roles, whether they be the parent of a disabled child, the husband or wife of a partner—perhaps with Alzheimer’s or dementia, as is increasingly the case—or the son or daughter of an ageing parent.

I pay tribute to the tremendous charities and voluntary organisations in this field. At national level, there are Carers UK, the Princess Royal Trust for Carers, Crossroads and Partners in Policymaking. Those organisations and many others do a tremendous job in ensuring that parliamentarians are kept up to date with the views and real-life experiences of carers. They provide a very strong voice.

The Government’s record on carers is one that we can be proud of, but not complacent or smug about. The 1999 carers strategy has made a significant difference. Alongside that are the annual grants to every local authority, which mean that by next year we will have spent an additional £1 billion on carers. The emergency respite care fund that we have announced as part of the new deal for carers is in addition to the year-on-year money already going into the system to provide respite and other forms of support for carers.

Other measures include the Carers and Disabled Children Act 2000 and the Carers (Equal Opportunities) Act 2004, which my hon. Friend the Member for Aberavon—I wish him a happy birthday—was so instrumental in driving forward, based on his personal experiences of caring. It is always a great privilege to listen to his contributions to such debates. Of course, the future status and role of Ministers in the Government is a matter for the Prime Minister, whoever that might be over the next few weeks. I shall not get into a debate about who will do what jobs—that is a matter for other people—but the point about a champion across Government was well made.

Other measures include the right to request flexible working and enhanced pension credits. A couple of weeks ago, we saw the outcome of the Treasury and Department for Education and Skills review of the needs of disabled children and their families. A long overdue package of respite care was announced, which has been widely welcomed up and down the country as demonstrating the Government’s commitment to addressing the needs of disabled children and their families.

Of course, we need to do a lot more, which is why my right hon. Friend the Chancellor of the Exchequer and I recently announced the new deal for carers, which will consist of a national carers helpline, an emergency respite care fund and an expert carers programme. Equally important is the development of a new national carers strategy, which will be cross-government and, significantly, informed by bottom-up consultation in every part of the country through hundreds of consultation events, at which we will listen to carers and hear from them about what they believe are the fundamental issues that need to be addressed as part of a national carers strategy. The review will be cross-government, but it will not simply involve groups of Ministers and civil servants sitting in rooms in Westminster and Whitehall, making decisions divorced from the real-life experiences and aspirations of carers.

My hon. Friend the Member for Worsley made a number of points, including on the impact on the health of carers of taking on caring responsibilities. I agree that there is a need for further work in that area. QOF—quality and outcomes framework—points are already awarded to GPs to some extent for their identification of carers, but I personally believe that we need to go much further as we negotiate contracts with GPs, because carers’ main access, with a system of any kind, is often through their GP. That is often the most trusted relationship, so it is very important that GPs take greater responsibility in the future in terms of that gatekeeping role, but that must be in the context of contractual negotiations.

My hon. Friend was right to refer to the impact of caring on carers’ income. Unquestionably, we need to consider holistically the ability to work, benefit entitlements, tax issues and the progress that has been made on credits in relation to the Pensions Bill. We need to consider the consequences for people’s income of fulfilling caring responsibilities.

I agree with my hon. Friend about the relationship with professionals. It is very important that professionals regard carers as partners in the provision of care, but that frequently does not happen. There is a training issue, a cultural issue and, frankly, a management and leadership issue. My hon. Friend also referred to the census. We need to ensure that any decisions about the census are consistent with the commitments that we make as part of the carers strategy.

I can assure my hon. Friend the Member for Aberavon, who as I said has a tremendous track record in this field, that there will be synergy between the work going on in Wales and the review of the national carers strategy. Indeed, the Welsh Assembly will be represented on the oversight group. That synergy will be extremely important.

My hon. Friend made the point strongly, as he did in the legislation that he introduced, about employment, education and training, and leisure. That underpins the need for the cross-Government review to examine all matters of public policy that enable carers to have a life, and not only through the provision of support for their caring responsibilities. We also need to recognise that they are individuals who want to have a life outside those responsibilities. The question is how we can create a system that is far more focused and customised according to the needs of, and realities for, individual carers.

The hon. Member for Mid-Dorset and North Poole (Annette Brooke) and my hon. Friend the Member for Aberavon asked about the future of the carers grant. Comprehensive spending review negotiations are ongoing with the Treasury. It would be premature to make any commitment, but I believe that reflected as a consequence of this CSR will be the Government’s continued commitment to funding that is distinct and specifically available to carers.

The hon. Member for Mid-Dorset and North Poole, like other hon. Members, rightly referred to the needs of young carers. We are only just beginning to face the realities of that issue in society. Young carers do a tremendous job, but we know that it has a massive impact on their education and on their relationships with peers, and indeed on every aspect of their life. It can be incredibly emotionally draining—a fact that some very sad cases have brought to light in recent times.

We must consider the responsibilities that we have across the system. I am thinking of education, health and youth provision and how we identify and appropriately support young carers. The hon. Member for Mid-Dorset and North Poole was right to talk about the need for much greater synergy between services specifically for children and families and services for adults. It is irrelevant to the young carer and the person whom they are caring for where the service fits; they want a joined-up service.

My hon. Friend the Member for Brighton, Pavilion (David Lepper) raised the extremely important issue of the demographic realities in society, to which my hon. Friend the Member for North-West Leicestershire (David Taylor) also referred. People are living longer and longer, but in doing so have more and more difficult and challenging conditions, such as dementia and Alzheimer’s. In those circumstances, there is a growing challenge for society and carers. I suspect that we need specialist responses for people caring in those circumstances. We certainly need centres of excellence. There are a couple of those in my constituency: the Pinfold Lane day centre and Heathlands nursing home, where people with Alzheimer’s and their carers get the service that they would expect.

The hon. Member for Romsey (Sandra Gidley) raised a number of important issues in what was, I grant, a very apolitical and appropriate contribution; most of these issues unite people in the country and on both sides of the House. She rightly talked about the centrality of listening to the voice of all carers, but particularly young carers, as we develop the new national strategy. We have to listen to the voice of carers on their daily realities, priorities and concerns.

The hon. Member for Eddisbury (Mr. O’Brien) asked a number of questions. On the time scale, we intend to publish the new national policy for carers in January 2008. We hope to have the telephone helpline and the expert carers programme up and running by the summer of 2008. We will make the funding specifically for emergency respite care available to local authorities in October 2007. The hon. Gentleman was right: of course, as part of developing a new strategy, we must consider the impact of the existing strategy and the new legislation that has been introduced over the past few years.

The needs of carers have never had a higher status than they have now. That is entirely right. For too long, carers’ distinct needs were not recognised in health care, social care or, indeed, public policy generally. The distinct and specific needs of carers now have a much greater priority, but we must remember, as my hon. Friend the Member for Aberavon said, that these issues are about almost every element of public policy. Therefore at both national level and local level we need a genuinely joined-up approach. We need to recognise that the state has major responsibilities in this field, but equally we can achieve what we need to achieve only by working and engaging with the voluntary sector and community-based organisations and by listening to the voice of carers as we develop the response.

I am pleased to have secured the debate and to be able to speak about the Government’s policy on museums. I am also pleased to serve under your enlightened chairmanship, Mr. Bercow.

The Government’s policy on museums and their broader support for the cultural sector over the past 10 years have been a resounding success, particularly for the youngest in our society: more grants have been given, museums have modernised and attendance has accelerated. Our great national museums have reaped the rewards of the Government’s brave decision to introduce free admission, which has seen literally millions more Britons experience the wealth of shared experience, knowledge and heritage that those museums possess.

I know from work in my constituency that our regional museums have also undergone a transformation thanks to the renaissance in the regions programme and funding from the Heritage Lottery Fund. Without the Government’s financial support and cultural vision, such programmes would never have been put together. However, the real successes could never have been achieved without the tireless work and steadfast commitment of the Museums, Libraries and Archives Council.

It is testimony to the leaps and bounds that have been made over the past decade that there is almost universal agreement about the pivotal role played by culture throughout society. As the Prime Minister has stated, culture plays a creative, economic and even diplomatic role in making Britain what it is today. Indeed, he went on to say that a return to boom-and-bust funding of the cultural sector would risk turning back the clock on the tremendous achievements that have been made so far, and I could not agree more. It is vital that we do not sit back and watch the paint dry, and I hope that a deal can be secured after the next spending round to ensure that that does not happen.

As hon. Members are well aware, I am extremely proud to represent Gateshead and Washington and, in doing so, the wider north-east. It gives me particular pleasure to say that the north-east continues to provide a strong example of how increased museum funding can be best used to make a real difference in the community. Renaissance North East is part of the wider renaissance in the regions programme that is transforming our museums and which has proved to be one the most beneficial projects ever run by the Department for Culture, Media and Sport.

The statistics speak for themselves. Educational visits to north-east museums have almost doubled, increasing from 80,000 to 140,000 in just three years. Overall, visits are up by a fifth, and the number of children engaged by museums has risen by a phenomenal 6,500 per cent., with much of that increase made up of children from the poorest parts of our society. Polling data show that visitors to north-east museums are more satisfied with their experience than visitors anywhere else in the country. In addition, Tyne and Wear Museums has brought £70 million into the regional economy and created more than 5,000 new jobs as a result of the millions of new visitors to the region.

However, numbers alone cannot tell the story. Children are increasingly likely to return with their parents and, indeed, to return as parents, promoting a cultural cascade throughout the generations. History teachers have described Renaissance-funded museums as manna from heaven. The work of Renaissance North East and the Museums, Libraries and Archives Council has been crucial in using heritage to connect people to knowledge, information and inspiration. A renaissance could be defined as something with a clear beginning and an end, and I hope that we can discover a permanent revolutionary renaissance in all our regions by securing full funding for the future.

I was pleased to hear of a seminar that took place last week, which drew together specialists from across the cultural sector to look at the role that culture can play in fostering community cohesion and neighbourhood renewal. It is welcome that other Departments realise that there is a lot to learn from the various outreach activities for which museums can be responsible. I hope that the recognition of the role of culture in communities on the part of the Department for Communities and Local Government will lead to a recognition that culture can also play a role in promoting Government cohesion.

It is clear from talking to children in my constituency that they have found museum visits exciting, engaging and educational. It would therefore be good to see the Department for Education and Skills promoting closer links between the nation’s schools and museums.

So far, I have talked about the successes of regional and national museums and I would strongly argue that we should encourage a greater spirit of co-operation between them. By encouraging the sharing and rotating of stock, we can ensure that some of our greatest treasures are not hoarded away in London, but available across the regions, where they can be enjoyed in context by people who would not otherwise have the chance to appreciate them. I was encouraged to receive news yesterday that the British Library has set up an independent expert panel to review the condition of the Lindisfarne gospels, which other Members and I have campaigned to have returned to the north-east on loan.

There can be no argument that the pedigree is there in the north-east. It was fantastic that Tyne and Wear Museums scooped the national museum and heritage award for excellence. That would not have been possible without the support of the Heritage Lottery Fund, and there are undoubtedly concerns about the impact of the Olympics on the funds that are available. I have been working hard to ensure that Gateshead international stadium in my constituency can secure a training camp, which would see some of the undeniable benefits of the Olympics delivered to the north-east. All the predictions are of a tight spending round, but I implore anyone with a role in the decision making to look at the relatively small cost of continuing to fund the renaissance programme and to weigh up what it means for millions of lives across the country. Our museums should not lose out to sports—this is not a zero-sum game.

The majority of my speech has focused on the successes of the cultural sector under this Government. Before closing, however, I want to highlight one way in which we can do more to support our museums. Collections are the lifeblood of any museum, and we must do all we can to encourage people to contribute however they can. It is not the job of a Labour Government, or of any Government for that matter, to offer the richest in society tax breaks for no apparent reason. As things stand, tax relief is available to people who choose to donate pieces to museums as a part of their estate—but not while they are alive. In some cases, the social benefits of such donations outweigh the cost of granting tax relief to donors. If we want to encourage a society in which there is a social obligation on everyone to support each other in whatever way they can, we must ensure that philanthropy is encouraged—not at a cost to the public purse, but as a benefit to British people.

The facts show that the Government have done a good job in opening up the cultural sector, but the real heroes of this renaissance have been those who work day in, day out in museums and on other cultural projects. We owe them a commitment of continued support, which we can deliver by providing funding, working together across the Government and listening to curators, creators and innovators everywhere.

I congratulate my hon. Friend the Member for Gateshead, East and Washington, West (Mrs. Hodgson) on securing the debate. I am extremely pleased to be here as a substitute for the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Tottenham (Mr. Lammy), who usually deals with the arts. It is probably quite a shock to a lot of people to see what Richard Caborn, the Minister for Sport, is debating today, but I am pleased to be here, because much of what has been said this morning has a strong resonance with what we are doing in sport and with the whole renaissance agenda.

Regional museums are a vital part of the country’s cultural make-up and play an important role in so many things that we value, as my hon. Friend the Member for Gateshead, East and Washington, West indicated. They also help people to learn, and my hon. Friend homed in on that. They build strong communities, improve people’s health, contribute to the visitor economy and provide a focus for the regeneration of our towns and cities.

I pay tribute also to the role of the north-east—my hon. Friend’s region—in developing the museum hub that includes the Beamish museum, the Bowes museum, Tyne and Wear museums and the museum of Hartlepool. I have three grandchildren, aged one, four and five. My wife and I took the four and five-year-olds to the Beamish museum earlier this year. It was a beautiful day and it was fantastic for both me and the youngsters to go into the old Co-op shop and look at the things in there. I must admit that when the youngster turned round and asked, “Do you remember them, Grandad?”, I said, “Unfortunately I do,” and he said, “That’s how old you are.”

The trip brought home to me how important such visitor centres and museums are. Sometimes we use the word museum in the wrong context. We are talking more about learning centres, which deal with knowledge and our history, and are a living and interactive experience for young people. Seeing the faces of my two grandchildren as we got on the tram to go round Beamish was a fantastic experience, which I know many other people have shared.

In my city of Sheffield, which I am proud to represent in Parliament, we have also been putting major investment into our museums. The Weston Park museum now takes visitors from the ice age all the way through history, and uses old Sheffield, through its various decades, to bring them up to modern times. It is amazing that on the first day of opening this year there were 5,000 visitors. In the first 15 days, 55,000 people went through the museum, and within three months the first year’s visitor target had been reached. There has been a reaction of amazement in the region at the transformation of a museum that I remember visiting as a kid, when everything was behind glass panels and we looked at swords, steel and jewellery. It is not like that now. It is all interactive. Education centres for youngsters add a lot of value.

As my hon. Friend said, Tyne and Wear museums well deserved their recent success in the Museums and Heritage awards for excellence. I shall give a brief snapshot of the achievements of the north-east museums because, although my hon. Friend has already spoken about them, they are worth repeating. In 2005-06, 115,000 schoolchildren visited museums in the north-east regional hub—an increase of 41 per cent. since 2002-03. In 2005-06, 2.1 million visits were made to north-east hub museums. An additional £16.5 million has been directly invested in museums in the north-east between 2002 and 2008, thanks to the renaissance in the regions programme.

Central Government will have invested £150 million in the renaissance programme by 2008. That money is critical to the modernisation of museum collections, the broadening of access to new audiences and the provision of a comprehensive service to schools, which was central to my hon. Friend’s remarks. Renaissance is vital and helps to tackle regeneration, deprivation, community cohesion and the creative economy. It also raises expectations and has changed the museum landscape. No one doubts the educational role of many of our museums. It encourages learning outside the classroom and encourages museums to be centres of excellence and knowledge.

Museums promote learning, most notably through support for the national curriculum. Schools across the country increasingly look to museums for help in enriching and supporting the national curriculum. Lifelong learning is also incredibly important. Early- years education, further and higher education and adult, family and lifelong learning have all been boosted by renaissance. Museums provide physical and intellectual access to collections, helping to illuminate history, the natural world, and the great artistic and scientific achievements of our great nation.

Museums can also reach across social and economic barriers and help to sustain and regenerate communities. Renaissance has helped to foster a culture of collaboration, including joint working with local youth offending teams, mental health services and regeneration bodies. Once, no one would have envisaged museums playing a role in those areas of life. We have a fantastic diversity of museums, which are cultural institutions second to none. Several of our national museums are now recognised as world leaders in their field. Renaissance also benefits those outside the network of the hubs through financing the work of museum development officers and the creation of subject specialist networks that strengthen the capacity of the museums sector.

The Department for Culture, Media and Sport wants this country’s heritage to be maintained and enhanced in the best way possible. I therefore fully subscribe to the belief that increased philanthropy can play an important part in helping our museums and galleries to refresh their collections—a point that my hon. Friend made very clearly. As you know, Mr. Bercow, tax policy is a matter for the Treasury, but we continue to work together to examine ways in which to support philanthropy in the arts. There are already a number of successful tax concessions such as acceptance in lieu, conditional exemption and the douceur on private treaty sales. There is also a variety of tax concessions available to encourage private and corporate giving including, of course, the recent changes to gift aid announced in the last Budget. However—this is a serious point, which I am sure my hon. Friend will take on board—it seems that those concessions are not well understood by the private sector and are not widely taken up. People may think that such tax concessions can be had only when they have passed on to another world, but in this living world there are tax concessions and we need to ensure that they are made known more widely.

I am keen for organisations to make the best use of existing tax breaks and the DCMS is working with Arts and Business to encourage wider take-up of existing reliefs. That is true of both the arts and sports: what we have been doing for community amateur sports clubs has not had the take-up that we wanted. We need to improve communication in the relevant area of the arts and in sport. There are great benefits to be had, and I am sure that contributions would be forthcoming if more people knew about them. Funding has also been given to the Maecenas initiative of Arts and Business, which provides training for fundraisers on raising money from individuals, research and issue identification. Of course, acceptance in lieu continues to enhance our national collections, and in 2006 38 objects were accepted. Those were valued at more than £25 million, which represents more than £13 million in tax.

The wider picture for museums is impressive. Grant in aid funding has risen by 29 per cent. in real terms since 1997. Free admission has brought about an 87 per cent. increase in visits to formerly charging museums since 2001, representing an extra 29 million visits, or nearly half the population of the United Kingdom visiting museums.

My hon. Friend alluded to the Olympic and Paralympic games and their effect on cultural programmes and funding, and I want briefly to tackle some of the myths that have arisen. The total lottery contribution to the games will be £2.175 billion. The Government make no apology for that. The Olympic and Paralympic Games are exactly the type of national event that the lottery was designed to support and Governments have been clear from the start that the lottery would support the overall funding package. However, £2.175 billion represents just 19 per cent. of the lottery’s income from the time that we won the bid to the time of the games. The overall lottery contribution will make up just 11 per cent. of the total cost of the games.

To weigh that against what will happen in the next period for arts, heritage and culture, the cultural Olympiad will start next year, and it will be a huge success. Obviously projects are still in the planning stages, but they include an international exhibitions programme—a planned collaboration between museums and galleries around the UK; a world cultural festival; and a world festival of youth culture. In addition a UK-wide festival is planned to build up to and run alongside the games. The aim is that projects involved in the festival should be drawn from grass-roots community projects and should engage local communities and increase participation. We have an opportunity. Beijing will hand over the torch next year, and it will come here in 2012. That gives us five years; we are now in the planning stages.

Order. I am sure that the Minister’s words are in reference to, and will be tied up with, Government policy on museums. I know that he will not want to dilate at any length on matters outwith the topic.

Absolutely not, Mr. Bercow. That is the furthest thing from my mind. Our great museums are but part of our cultural heritage and part of what we will project to the world as we move towards 2012, using the platform of the Olympic games. More than anybody in the House, you understand that the Olympics originated as a cultural event as well as a sporting one, Mr. Bercow. That was the case in the time of the great Greeks and the ancient games, and I am sure that their museums played a significant role in the thinking of the Olympians of that day. We have inherited the great history of the Olympic movement, which provides a great platform for the renaissance of the museums in this country. It shows the diversity of our nation that we are able to use the platform of 2012 and the origins of the Olympics, and put our museums at the centre of that platform. We can be proud of that.

I shall now conclude, having been reminded by you that I might have been straying slightly from the funding of museums, Mr. Bercow. The Prime Minister spoke recently about the renaissance of British culture, in which the renaissance of museums plays a major role. Nowhere is that more apparent that in our great regional museums. I saw at first hand a sample of their wonderful collections when they were brought to a northern exhibition at the House of Commons a few weeks ago; I had the privilege of visiting it, and many people were able to view some of the great treasures of the north. As I have said, in my own constituency there is the wonderful Weston Park museum, which is now a jewel in the crown of Sheffield. We are very proud of it indeed.

The way in which we have been able to reach out to the wider public, including young people, has been an incredibly important part of the renaissance. I am pleased about the investment that we are putting into learning. My hon. Friend the Member for Gateshead, East and Washington, West referred to links between schools and museums. We have created 167 new learning posts to develop new learning opportunities in the hub museums, and 69 access posts to take collections out of the museums and into the schools themselves. There is clear interaction there, which is important. Last year, 7,000 museum staff from across the museum spectrum benefited from some form of renaissance-funded training. Those steps have built up not only the museums’ real estate, but their human capital.

By 2008, there will be 188 new renaissance curator’s posts to underpin the increased access and educational activities, and 58 placements for ethnic minority training. My hon. Friend raised the issue of continued funding of the renaissance; as she knows, we are awaiting the outcome of the next comprehensive spending review. We hope that sustained funding for the programme will be made available. The renaissance of the nation’s museums is extremely positive, and we can be proud of it. I have no doubt that it will be play a significant role in the launch of the 2012 Olympics, on to which I might have strayed a little.

Some of the issues addressed by the hon. Member for Gateshead, East and Washington, West and by the Minister will no doubt be raised in this afternoon’s first debate, which is on the impact on arts and heritage of the diversion of lottery funding to the 2012 London Olympic games.

The news that the UK would host the 2012 Olympics was welcomed enthusiastically across the country almost without exception. However, that Olympic dream is beginning to be at best tarnished, and at worst shattered, by the bungled initial costing of the games, the delays in getting the building programme under way, the throwing away of £400,000 on the supposed design of the controversial logo and, above all, by the Olympic smash-and-grab raid on lottery funds.

Nearly two thirds of the latest costing of £3.3 billion is to come from the lottery, which must have a devastating effect on arts, heritage and sports funding across the whole country. How can there be a cultural Olympiad from 2008 to 2012 when such huge sums of money are being diverted from grass-roots activity, especially given that arts groups and, to a greater extent, heritage groups have already had to turn to lottery funding to make up for shortfalls in mainstream funding? Mainstream funding bodies such as the arts councils, English Heritage and the Museums, Libraries and Archives Council have been asked by the Department for Culture, Media and Sport to cost the effect of potential cuts of 5 to 7 per cent. in the next comprehensive spending review round.

Some countries put significant sums of money into the cultural Olympiad when they hold the Olympics. In the UK, however, it seems as though vast sums are being taken out instead, with an absolute minimum of £1.1 billion being taken directly from good causes funding. Another £750 million will come from the special Olympic lottery, whose sales will probably have an impact on general lottery sales and therefore on arts and heritage funding. Given all that, it seems inevitable that arts, heritage and cultural activities across the country will be undermined.

In place of all the money that is being lost, just £40 million is being offered by the Legacy Trust UK, which was announced by the Secretary of State, of which only £6 million is new Government money. That is counter-productive madness. Taking £340 million of lottery money from grass-roots sport can only undermine nationwide enthusiasm for the sporting aspect of the Olympics. The huge diversion of lottery funding to the Olympics will undermine the cultural value of arts and heritage, but the Chancellor and the Treasury seem unable to understand that. It will also undermine the economic value of the tourist legacy that the Government promise will come in the wake of the Olympics.

Let me give the background to the cuts. At the time of the original Olympic bid, the agreed funding package was £1.5 billion from the lottery, £250 million from the London Development Agency and £625 million from the Greater London authority via London council tax. In short, two thirds of Olympic funding was to come from the lottery. It was agreed that £340 million of the lottery funding would come from sport, £750 million from the new Olympic game, if it could raise that money as an extra, without affecting usual lottery sales, and £410 million from existing good causes.

In November 2006, the Secretary of State admitted that costs had already risen by nearly £1 billion— £900 million. Despite the fears that were voiced by the Select Committee on Culture, Media and Sport, the National Audit Office and many arts and heritage organisations about the likely impact on lottery good causes, she announced a further diversion of £675 million from lottery good causes. That brings the total lottery contribution to the cost of the Olympics to £2.2 billion, which equates to a loss of 20 per cent. of the money that would have been available for good causes between 2005 and 2012-13. Of the additional diversion, £425 million will come from the Big Lottery Fund and £250 million will come from other good causes. However, the impact on lottery good causes is likely to be even greater as ticket sales are likely to be diverted from the general lottery to the Olympic lottery, thus further reducing the money that is available for good causes.

What will be the specific impact of all that on arts funding? There will be funding cuts of £112.5 million for the Arts Council of England, £21.8 million for the UK Film Council, £4.5 million for the Arts Council of Northern Ireland, £12.5 million for the Scottish Arts Council, £1.8 million for Scottish Screen and £8.1 million for the Arts Council of Wales. In total, there will be cuts of £161.2 million in the arts sector.

As a result of the cuts, the Arts Council in England is already cutting its grants for the arts fund, which finances thousands of small projects, by 30 per cent. from £83 million to £54 million. It has also set stricter caps on the amount of money that is awarded to projects. The grants for the arts fund is the only source of funding for many small arts projects that are not designated as regularly funded organisations. Many companies will be threatened by those cuts, and many projects simply will not go ahead. The grants for the arts scheme is used to invest in one-off, time-limited productions such as theatre tours. The loss of such productions will threaten the viability of many regional theatres, which rely on such programmes to attract custom and fill their seats. It may therefore threaten their ability to survive economically, as well as deny regional audiences access to top-quality productions.

Cutting funding for those sorts of smaller-scale projects will have a knock-on impact on the whole sector. The grants for the arts scheme is the breeding ground for the artists of the future. The main threat is to small-scale and new projects, including the 53,000 voluntary arts groups in England whose only source of Arts Council funding is the grants for the arts scheme.

The impact of the cuts will be even greater in other UK nations, because whereas 60 per cent. of the Arts Council of England budget goes to the voluntary and community sector, the proportion is higher in Wales, Scotland and Northern Ireland. The effect in those nations may be to cause stagnation and lack of innovation, because new companies and projects will no longer be able to get off the ground. Local community-based participatory groups will be heavily hit, which will affect the Government’s participation targets and will undermine the development of future talent.

It is the vibrancy of the arts in the UK that makes it so attractive to overseas visitors. That vibrancy was an essential strength that helped London’s bid to be the host city of the Olympics to win, but it depends on small community arts activities and projects, which can only be undermined by the short-sighted cuts.

The Heritage Lottery Fund will also take a cut of £161.2 million, because there was a 50:50 split with the Arts Council. The fund is the only heritage body that operates throughout the UK. It funds heritage projects of all sorts, including museums, libraries, archives, natural heritage sites, historic buildings, townscapes and parks—the list goes on. It is the main source of public funding for heritage in the UK, and the heritage sector relies increasingly on its funding because other sources have reduced in recent years. Gift aid, for example, will generate less income in coming years as the standard rate of income tax is reduced by 2 per cent.

English Heritage is suffering a real-terms reduction in grant in aid of £20.6 million between 2000 and 2008. The Heritage Lottery Fund has had to fill the gaps that have been left by the cuts, but it will no longer be able to do so when the diversion of funds to the Olympics takes effect. The fund gives 55 per cent. of its grants to the third, or voluntary, sector. It has given grants to Strutt’s North Mill at Belper, in Derbyshire, which I visited a few weeks ago. The mill is an historic landmark from the industrial revolution of the 18th century, and would not have been saved and be open to the public without the work of a small, voluntary group that survived entirely on heritage lottery funding when it was getting off the ground. There are similar stories all over the country. Large-scale cuts will inevitably hit the voluntary and community sector despite the Secretary of State’s assurances that they will make no difference. If making cuts of at least £1.1 billion will make no difference, then money must surely be being misspent at the moment, but I see no evidence of that.

In the heritage sector alone, some 400,000 people volunteer every year, creating a social network that contributes to all communities and to community activities and identity. The diversion of £90 million of funding from the Heritage Lottery Fund is equivalent to wiping out four years’ worth of spending on smaller community and voluntary sector grants, as well as the entire stream that is aimed at younger people—6,000 projects in all. Or it is equivalent to wiping out the planned spend on churches and historic town centres from Gateshead to Great Yarmouth—1,400 schemes—for four years. Or it is equivalent to wiping out five years’ worth of funding for renovating our historic parks, such as Queen’s park in Chesterfield, which has benefited enormously from that funding in recent years. It would be a shame if many historic parks around the country were denied access to that funding.

Despite the Heritage Lottery Fund’s assurance that it will continue to support in full the range of projects as they are currently funded, it seems that in the circumstances of such cuts it will be impossible to fund large projects such as the Big Pit in Blaenafon, Kelvingrove museum in Glasgow and the transformation of the British Museum. The cuts will inevitably worsen the already poor ability of British museums to acquire new material. Some 96 per cent. of our museums already say that poor core funding is a barrier to collecting, and 60 per cent. of museums were unable to allocate any income at all to collecting in 2005.

What is the value of the arts and heritage? They are a central part of community life, not an optional extra. They define and bind communities and they provide an understanding of the world and of what makes us human. The arts make a crucial contribution to innovation, education, diversity and social inclusion. A healthy society is one in which everyone can share in the arts, and it is the responsibility of the Government—indeed, it is an oft-proclaimed Government target—to ensure that that happens and that participation covers all levels of society and people from all backgrounds. Sustained investment in the arts means that they can now effectively contribute to wider agendas such as health, education, social inclusion and community cohesion.

The creative industries are acknowledged to be a key part of British competitive economic performance, accounting for 7 per cent. of the economy and growing at 5 per cent. per annum—twice as fast as the rest of the economy. Heritage is critical to the tourist industry, consistently featuring among the top reasons why people from overseas choose to visit this country. In one survey, 72 per cent. of visitors from Russia, China and the United States cited British historic sights—castles and houses—as the leading reason that brought them to this country.

For every £1 spent on entrance fees to heritage attractions, £25 is spent in the vicinity on retailing, catering, transport and accommodation. Heritage attractions are important employers and they generate significant income for many communities, especially those in rural areas. Britain’s privately owned historic houses, castles, parks and gardens alone contributed £1.6 billion to £2 billion and 10,000 jobs to the rural economy in 2005 and attracted 15 million visitors. In my county of Derbyshire, tourism is the largest single employer—not agriculture in the Peak district, and not the defunct mining and engineering industries in east Derbyshire where Chesterfield lies, but tourism throughout the whole county.

Heritage is also important in developing strong local communities and identity, and we have recently heard much talk from the Government about fostering ideas of Britishness, community and identity. Heritage is not elitist; it is extremely popular. Some 70 per cent. of adults visited an historic location last year alone, and more than 1 million people supported the “History Matters—Pass It On” campaign.

In the build-up to the Olympics, arts and heritage are vital to achieving the objectives that the Government say they have set themselves. The cuts will affect the ability of arts and heritage to deliver and to act as a showcase for Britain during that period. If our arts and heritage are not at their best, the potential benefits from additional tourism before and after the games will be lost. The Government estimate that the tourism legacy will be £1.4 billion to £2 billion for a decade after 2012, but that will not be achieved if arts and heritage cannot showcase and market themselves to the rest of the world using the Olympics as their vehicle.

The four-year cultural Olympiad in the run-up to the games should be that showcase. It should showcase both London as one of, if not the, greatest cultural capitals in the world, and the rest of the UK’s world-class arts and heritage. The cultural Olympiad is a key to the whole project and it was central to the UK’s winning bid, but instead of funding the Olympiad at this critical time, funding is being drastically cut throughout the country, reducing the ability of the arts and heritage sector to deliver the cultural Olympiad successfully.

Most of the money available for cultural events connected with the Olympics has already been assigned to the opening and closing ceremonies, the torch relay and the medal ceremonies. It appears that the rest of the cultural Olympiad is to be paid for by participating organisations out of existing budgets, but existing budgets are being cut. The international exhibitions programme, which is designed to be a collaboration between many major and smaller museums and galleries throughout the UK, has not been assigned any money from the Olympics budget.

There is no clear plan for the cultural Olympiad, and regional co-ordinators are only now being appointed. However, there is little point in recruiting people who will not have any budget and whose role could have been covered by the existing infrastructure. Other cultural Olympiads have received significant financial support from their Governments. Australia’s Government put 70 million Australian dollars into the cultural Olympiad that preceded the Sydney games, but in England, some parts of the cultural Olympiad, including the Shakespeare festival, the world festival of youth culture, and an international music programme, which were part of the original bid and therefore must be delivered, are to be delivered despite not having any budget allocated to them.

We need a clear plan to be made public as soon as possible so that arts and heritage organisations can plan the participation that they can manage to deliver under such conditions. Among all the arts and heritage organisations that I meet, I find a growing cynicism about the cultural Olympiad and the Olympics that threatens to undermine the delivery of a successful nationwide festival of culture, as the small-scale and voluntary groups that are key to its delivery lose enthusiasm in the face of the loss of funding.

More money, not less, is needed in the heritage sector. It has not had the benefit of the increased grant in aid that DCMS arm’s length agencies in other sectors have had. From the 2000-01 baseline, English Heritage has received an increase of just 3 per cent., compared with 53.4 per cent. for the Arts Council and 98.6 per cent. for Sport England. Clearly, DCMS has already prioritised sports over arts and heritage, and it plans to take even more money from arts and heritage to put towards sport. That has left the heritage sector with a legacy of funding needs that grow yearly.

The Heritage Lottery Fund has observed and documented that £3 billion is needed to finish regenerating our historic parks, £10 million to provide digital access to archives and £700 million for repairs to canals and waterways. The canal in Chesterfield is a case in point: 30 years ago when I moved to Chesterfield, the canal was a stagnant ditch; today, as a result of the work of a terrific band of volunteers, it has become a viable canal, helping to regenerate at the centre of Chesterfield an old industrial site in which new shops and offices will be built around a brand new canal marina—something that was unthinkable 20 or 30 years ago. The combination of voluntary work by the Chesterfield Canal Trust and judicious funding from lottery and local government sources has made it possible. Are all those projects to go by the board in the next few years?

Additionally, £185 million a year is needed for repairs to England’s listed places of worship, and cathedrals alone need £95 million over the next five years just for maintenance. The repairs needed to buildings on the buildings at risk register would cost £400 million, and there is the danger of a long-term loss of conservation and maintenance expertise as the funding goes and heritage posts dry up. In addition, the heritage sector needs more money to carry out the recommendations of the Government’s heritage protection review. It has been widely welcomed, as long as the money exists to make it happen, but money—mainstream and lottery funding—is under threat and drying up.

Even such a tiny scheme in funding terms as the portable antiquities scheme, which costs just £1.6 million a year, could be at risk as a result of comprehensive spending review cuts, as and when we hear of them in the autumn. If those cuts happen, the scheme will not be able to turn to a diminished lottery budget to make up the gap. For such a small cost, the scheme plays a fantastic and invaluable role in preserving, recording and mapping local archaeological heritage throughout the UK, as witnessed at Chesterfield museum when I met the finds officers for my region a few weeks ago. However, even that small amount of funding could be under threat.

There is a good case for saying that the arts world needs more funding, not less. The arts have fared better than heritage in terms of grant in aid over the past 10 years, but we do not want to return to the boom and bust cycle. The cuts of the 1980s and 1990s led to a drop in the quality and quantity of output; attendances fell and theatres closed. In the past 10 years, the funding that existed before the cuts in the 1980s and 90s has effectively been restored. Is that to be threatened by the forthcoming CSR and by lottery cuts? That would be a grave mistake, given the success of the Government’s policy in that area over the past 10 years.

The comprehensive spending review covering 2005-08 froze the Arts Council grant, resulting in a real-terms cut of £34 million, which the council absorbed through restructuring and cuts. However, it seems unlikely to be able to do so again in a further round of cuts over the next three years. Without at least an inflationary settlement in the CSR, there is a real danger that theatre grants will be cut, and the impact will be serious. Why undo the good work of recent years? The subsided arts sector is a training house for the performers and technical staff who go on to work in commercial arts companies. Public funding drives up the standards of theatre and the arts by enabling risk taking and investment in new material. “Jerry Springer: The Opera” and “The History Boys” both started in subsidised theatre before moving on to the commercial world. That is what makes the UK’s arts so attractive that 1.5 million people attended orchestral performances in 2005 and 12.4 million people viewed west end shows in 2006 alone. Many tourists come to London and the rest of the UK for the arts and heritage. On its own, theatre makes a major contribution to the UK economy of £2.6 billion a year.

In conclusion, I should like to put a number of questions to the Minister. It is time that the Government finally acknowledged the positive role of the arts and heritage in the success of our Olympic bid and for the nation as a whole. The arts and heritage sector strongly supports the Olympics and welcomes the opportunity that it will bring to showcase the UK. However, the sector cannot afford the twin cuts, through the CSR—if that is what emerges—and through the diversion of lottery funding. As Nicholas Hynter, the director of the National Theatre, has said:

“There is a spectacular lack of logic in using money earmarked for the arts to plug the holes in Olympics bills. The money raided from the lottery will largely affect small, innovative, experimental organisations and individuals who are the lifeblood of creativity in the UK. Pulling the carpet out from under them and nobbling their money is undermining the future of our major arts institutions.”

The lottery funding is not

“the icing on the cake”,

as one DCMS spokesperson recently suggested. It is an essential element of arts and heritage funding, providing the financial base for the grants by Arts Council England and the Heritage Lottery Fund to a vast and diverse range of small organisations and community projects, which should form the backbone of the cultural Olympiad.

I have seven points to which I look forward to hearing the Minister’s response. First, the Government must now guarantee that this is the last time the lottery will be raided to pay for the Olympics. No one other than Ministers doubts that the original inadequate bid, which has already been increased by nearly £1 billion, will increase again over the next few years. However, that must not be met at the expense of further lottery funding being slashed, so, secondly, any additional cost increases or shortfalls in Olympic lottery sales should be paid for by other means. The arts and heritage cannot sustain further cuts.

Thirdly, the Government should allocate money for the cultural Olympiad from the Olympics budget, perhaps from the contingency fund. That would enable arts and heritage organisations to take part in the festival and to do more than simply rebrand existing, underfunded activities. The arts and heritage sector would receive a direct benefit from the Olympics that would overcome the perception that it was being punished by having money taken away for sport, with no compensation.

Fourthly, arts and heritage should get a higher funding settlement in the comprehensive spending review, to compensate for the loss of lottery money. In particular, funding for English Heritage should be raised to a level at which it can deliver its core objectives as well as the new heritage protection reforms, which the Government have suggested passing over to it. Fifthly, the Government should give a tighter guarantee that the lottery—especially lottery funding of the arts and heritage—will have first call on the profits from the sale of Olympic properties after 2012.

Sixthly, the original principle of additionality in lottery spending should be strictly reinstated, to prevent further raids on good causes to fund what should be mainstream Government spending. Finally, Parliament as a whole, not a small Committee, should debate the resolution on the lottery funds diversion. I look forward—probably in vain—to the Minister’s reassurance that the Government have realised the folly of their Olympic smash-and-grab raid on lottery funds.

I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing this important debate, which is part of a wider debate that has resonated throughout the country. The Government’s decision was a difficult one to make. If I have been critical of it, I am sure that that did not come as a surprise to the Minister, although to be honest I think that it was just bad politics. It is bad politics, approaching an election in 2009 or 2010, for each constituency to be stripped of £1 million. The decision just does not make sense and it is an own goal.

There is some hubris, however. I want to clear my throat and make one or two quick comments. Dick Pound, who was on the International Olympic Committee for more than 20 years, said that the bids that came in contained the most creative pieces of accountancy that he had ever seen. The principle of bids is to win them, not to come second or third. We won the bid, and we should be proud of that. We probably did take rather too long to get the bid into a proper position once we won it, and we are all aware of the time that that took. However, previous Olympic games—in Athens, Sydney, Atlanta or Montreal, for example—all did the same. They all underbid and they all spent too much. But were the games a magnificent success in those countries? They were. Some of us poured scorn on Greece; it has a population of 4 million people, but for them to put on the biggest sports occasion in the world and pull it off has given them the most amazing confidence in their society.

I wrote to both the Leader of the Opposition and the leader of the Liberal Democrats to suggest that we needed a Select Committee on the Olympics, of both the House of Lords and the House of Commons. Interestingly, the Leader of the Opposition turned that proposal down, but I am pleased to say that the leader of the Liberal Democrats thought that it was a good idea. With the changes that are approaching on our side, perhaps the idea will not be lost.

I could not agree with some of the conclusions that the hon. Member for Chesterfield came to. What are the alternatives, if the expenses for the Olympics have been increased? There are seven: either we pay higher general tax or London ratepayers pay a higher London tax, or we use a combination of the two, or there are also some other alternatives, which I shall come to. Higher general taxes are not good politics, either, but if that is what the Liberal Democrats propose, I look forward to their spokesman, the hon. Member for Bath (Mr. Foster), saying so at the end of this debate. In going into a mayoral election in London, if the Liberal Democrats are saying that they want to increase taxation on London, I am sure that they will be elected on that platform. However, in reality that is nonsense, and we cannot have a combination of the two alternatives, either.

The two things that I have been banging on about for the past three years as worth considering are, first, the sale of the analogue spectrum, which Ofcom will undertake in the next two years and which will come into place in 2012. The Budget in March estimated that that would bring in £5 billion, although I think that that is a serious underestimate. So, first, there is a pot of money from the analogue spectrum, which is currently allocated to the Treasury.

I do not think that we disagree about that. Money from the sale of the analogue spectrum goes to the Treasury. Therefore, if money comes from the Treasury to pay for the real costs of the Olympics, instead of being raided yet again from the arts and heritage, the route is the same.

I ask the hon. Gentleman to bear with me. The analogue sale is the first pot of money, mentioned in the Budget only a few months ago, although I cannot remember whether the Opposition or the Liberal Democrat arts spokesman have written to the Treasury on the matter. More importantly, last month the Treasury published a report entitled “Unclaimed assets distribution mechanism: a consultation” and finally, there is the lottery. So, there are six alternatives—I said that there were seven, but there we are.

Let us consider the analogue spectrum. Our bid for the games was an all-party bid, and when we won it there was an all-party celebration. However, there has been some bitterness since, which I do not think is acceptable. We are either in this together or we are not. I therefore make this challenge to hon. Members in the Chamber: why do we not come together to make a representation to the Treasury on the analogue spectrum? Why do we not counsel our parties, make that representation and see whether we can secure some of the extra funding needed from the Treasury?

Let me quote from the report on unclaimed assets, which all hon. Members have received and which I am sure they have all read. Towards the end of page 7, under the heading “Principles for redistribution”, the report refers to

“distribution to be managed efficiently, with as little resource as possible being spent on administration and running costs; and…distribution in England to focus on a diverse range of communities across the country.”

There we go—that is our chance of bidding for the money. At the bottom of that page, the question asked is:

“Are the principles underpinning the distribution of the available surplus assets the right ones?”

For the benefit of those of us who have lost pensions or who have constituents who have lost their occupational pension schemes, I should point out that I have led the debate about unclaimed assets for four years. I happen to think that the amount of unclaimed assets is spectacularly under-represented. The Treasury, under Sir Ronald Cohen, thinks that only £350 million is unclaimed. I think he is wrong. The Irish claimed that there was £100 million, but when they introduced primary legislation they found that there was £2 billion. I think that we will find between £5 billion and £8 billion, but that is a separate issue.

I am concerned about how one applies for the money that is available, as published by the Treasury. People have until 9 August to apply. I ask the leaders of the Opposition parties and their spokespersons whether they have applied. What have they sent in? If hon. Members think that I am completely mad, they should consider some of the questions for consultation contained in the report. On page 35, it asks:

“Is the proposal to use the Big Lottery Fund as the primary UK-wide distribution vehicle for the available surplus assets the right one”?

I think it is. The document goes on to ask:

“What are the different approaches that the Big Lottery Fund could take to the distribution of the available assets”?

Why do we not ask? Finally, the report asks:

“Do you agree with the proposals for how legislation will work in relation to the distribution of these assets?”

I do not. I do not want it all to follow the ideas in that report. It is up to us to make the case.

Does the hon. Gentleman recognise that the independent Commission on Unclaimed Assets recommended that the funds should be used to set up a social investment bank to promote social entrepreneurship and social enterprise? The Treasury report seems to have abandoned that worthwhile exercise, which is another blow to the voluntary sector in addition to the raid that is the subject of today’s debate.

I was not aware that that had been said; I think that the whole social banking side has been toned down. The issue is that there is a pot of money, and it is up to us collectively to argue the cause for it. I will say again, as I did about the analogue spectrum: do we want to put an all-party group together—I would happily lead it or be a part of it—to argue to the Treasury by the closing date in August about how we would like the money to be redistributed, so that we make up for the wretched smash and grab, as the hon. Member for Chesterfield put it, on the lottery, which we all find incredibly embarrassing?

There is work to be done, and in the spirit in which all parties support the bid and the winning of the games, I hope that my suggestions will be taken seriously. The analogue spectrum and the unclaimed assets are available.

I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing the debate and on his meticulous contribution.

I want to make three brief points, which are based on my disappointment at the performance of the office of the third sector. It is just a year ago that the office was set up to be a champion for voluntary organisations in government, after a period of many years in which they lacked a strong voice in that field. The office was set up with a new Minister as the advocate in government. The history of the Olympics episode is a testament to the disappointment that many of us feel about the intentions of the office not being delivered in practice.

In particular, on 15 March, when the Government announced their second raid on the lottery good causes to prop up the Olympics, the Parliamentary Secretary, Cabinet Office, the hon. Member for Doncaster, North (Edward Miliband), who is the Minister responsible for the third sector, assured the voluntary sector that

“today’s funding settlement protects both existing programmes and future resources”

for the voluntary sector. That is a disgraceful statement as it ignores completely the effect on arts and heritage organisations of the raid. It is almost as if the office of the third sector disregards charities and voluntary organisations that happen to be involved in arts, heritage and sport as part of its responsibility, when they should be central to it.

The truth is that such organisations will lose £100 million because of the raid that took place. That figure came to light only in response to a parliamentary question that I tabled to ask what proportion of funding from each distributor went to voluntary organisations. The calculation of £100 million as the cost of the second raid is based on the most recent figures supplied by DCMS for Arts Council England, the Heritage Lottery Fund and Sport England. It does not include any estimate of the loss of funding from the other lottery distributors. My calculation was confirmed in a press release on 23 April from the National Council for Voluntary Organisations, which also put the cost at more than £100 million.

That might not be the end of it. Just today, the sector’s magazine, Third Sector, carries an article that claims to bring news that the voluntary sector is under a new threat of another raid from the Big Lottery Fund, despite assurances specifically to the contrary from the Minister responsible for the third sector. According to Third Sector:

“The board of the Big Lottery Fund has decided in principle to cut £120m from its programmes, including some that fund voluntary sector projects, in a bid to recoup losses from the recent raid to fund the London 2012 Olympic Games.

Sources have told Third Sector that two programmes in line for cuts are the Young People’s Fund 2 and the Research Programme, both of which are targeted at third sector organisations.”

If true, that would be a great betrayal of the trust that the sector has in its Minister, who has promised that existing programmes under the Big Lottery Fund would be protected. I would be grateful if the Minister present could reassure the House that the rumour is unsubstantiated and that those organisations can sleep easy without that further worry.

That same Minister who is responsible for the third sector said in a recent interview with The Spectator that

“charities and social entrepreneurs are going to require funding from government to really make a big impact.”

The way to do that is not to match that ambition with the record, which so far has been to withdraw money from charities.

What a great pleasure it is for me to debate under your chairmanship for the first time, Mr. Bercow. I pay tribute to my hon. Friend the Member for Chesterfield (Paul Holmes) for securing an extremely important debate on an important issue. I congratulate the hon. Member for Sittingbourne and Sheppey (Derek Wyatt), too, on his great honesty in being fairly critical of what the Government have done, describing it as “bad politics” to withdraw the equivalent of £1 million in lottery funding from each constituency throughout the land. He admitted that the decisions that the Government have made about using lottery money to bolster the Olympic funds are something that we all find terribly embarrassing. I suspect that any Government Member would find it terribly embarrassing, in view of the wide-scale concerns that are being expressed by many people.

We are talking about the Olympics, and we all acknowledge that the Olympics are not merely about sporting activity. They are about artistic endeavour, culture and heritage. If we look back to the first Olympic games, many millenniums ago, we see that they brought together not only the best athletes from around the world, but the best poets and artists. Medals were awarded for artistic endeavour as much as for sporting prowess. It is important that we continue that approach with the modern Olympic games by promoting not only sporting activities for able-bodied and Paralympic athletes but a cultural Olympiad. The connection between arts, culture, heritage and sporting endeavour in the Olympics is well established.

Like everyone else, I was delighted when we won the great privilege and honour of hosting the 2012 Olympic and Paralympic games in London in 2012. I had the great fortune to be out in Singapore when the announcement was made, and it is a credit to all the people who put together the bid and lobbied for it that we achieved that. I want in particular to pay tribute to the Prime Minister. He has never been fully recognised for the work that he did in the last couple of weeks before the final decision was made.

I note that the Prime Minister, in all his lobbying, continually made the point that winning the Olympics was not about winning an event that would last for a few weeks, mainly in London. It was about the lasting benefits that it would bring for the whole United Kingdom—not only London, but every part of the UK. What he expressed very strongly was the crucial importance of the games’ legacy in terms not only of sporting endeavour, but of artistic and cultural endeavour. It is therefore a supreme irony that the Government have chosen to fill the hole in the Olympic budget by taking money from the grassroots bodies that ensure that we have vibrant sporting activity and vibrant artistic and cultural endeavour in this country.

As to sporting endeavour, we have seen cuts of £525 million to the various lottery bodies that fund grassroots sport, which means that we will have real difficulties giving young people the opportunity to be involved in the games’ legacy and ensuring that more people are active and become interested and involved in sports, whether by volunteering, supporting athletes or becoming athletes themselves.

Similarly, as my hon. Friend said in his excellent contribution, there will be a significant cut in funding for arts, cultural and heritage activities. He referred to the cuts to the Arts Council of England, the Film Council, the Arts Council of Northern Ireland, the Scottish Arts Council, Scottish Screen and the Arts Council of Wales. He said that, taken together, those cuts add up to more than £160 million. He referred to a further cut of more than £160 million, which is being made to the Heritage Lottery Fund, making the total more than £320 million. As a result, £525 million has been taken from grassroots sport, while the figure in arts and culture, according to my hon. Friend, is more than £320 million.

In his excellent contribution, my hon. Friend also referred to one other aspect of the cuts, although only in passing, and I want to draw his and hon. Members’ attention to it. He talked about the possible loss of revenue as a result of what is known in the trade as cannibalisation. Not all the money that people use to buy an Olympic lottery game ticket will be extra money, and some would have been put into one of the other lottery games. That means that those other games and therefore the lottery distributors will lose out.

Hon. Members do not have to take my word for that, because the problem is clearly documented in the Government’s own figures, which show that 59 per cent. of the £750 million to be raised from the new Olympic lottery games will come from cannibalised sales from other lottery games and that that will mean £140 million extra in cuts. My hon. Friend says that the cuts to art, culture and heritage amount to about £320 million, but we must add to that the Government’s estimate of a further £140 million, which brings the total much nearer to £470 million.

That will have a huge impact in all the areas that we are talking about, and it is hardly surprising that so many organisations are deeply concerned. Indeed, they are equally concerned, as my hon. Friend said, about the outcome of the comprehensive spending review, given the mood music coming out of the Treasury and the Government. It is no wonder that Dame Liz Forgan, the chairman of the Heritage Lottery Fund, recently said:

“Heritage funding was already due to drop because of the Olympics and this further cut will impact on our ability to invest in the nation’s heritage at exactly the time it is being showcased to the world”.

Peter Hewitt, the chief executive of the Arts Council of England, also expressed his concern, saying:

“There is currently a view in Whitehall and Westminster that the arts sector can absorb the impact of the Olympics raid on lottery funding without visible impact. This is not true.”

It is worth noting that, on hearing the recent announcement, even the former Culture Secretary, now Lord Smith of Finsbury, said:

“The Government made a serious error of judgment when they took their decision on this funding.”

How right he was, and he certainly should know what he is talking about.

Perhaps the Minister will give a cheery, positive response to my hon. Friend and the hon. Member for Tunbridge Wells (Greg Clark), who made an important contribution about the third sector and the disappointing response that we have had so far from the Minister responsible for it. It is slightly worrying, however, that when fears have been raised with the Secretary of State, they appear to have fallen on deaf ears. She referred to the additional contribution that the Arts Council will now have to make as “relatively small” and as

“just 5 per cent. of its total income”,

as if the cuts were small beer and would have no impact on anyone. As my hon. Friend and the hon. Member for Tunbridge Wells said, however, the impact will be felt largely by small organisations and small events right around the country. As my hon. Friend put it, they are the lifeblood of the arts, culture and heritage, but they will lose out. That is not small beer, and I hope that the Minister will acknowledge that.

We are told not to worry because there will be a £40 million legacy fund, which will fill the black hole that has opened up in the arts, culture and heritage funding system. As my hon. Friend said, however, the vast majority of that money has already been earmarked for two events—the opening and closing ceremonies—so there is not a lot of money there.

That is particularly worrying given that, on 6 March, in his excellent speech on the arts at the Tate, the Prime Minister, whom I began by praising for his success in bringing the Olympics to London, said that the arts were of

“fundamental importance to the country”

and assured us that there would be no return to boom and bust in the arts world. However, he is the Prime Minister of a Government who are making the very cuts that I am talking about. I congratulate the Government on the increased funding that they have provided to date, as my hon. Friend did; the Minister appeared to acknowledge that from a sedentary position. However, they are now moving us away from the boom, and it appears that we will have the bust. That is our real concern.

I will not repeat what my hon. Friend said, but he explained why the arts, culture and heritage are so important to the country. Everybody recognises that they are important for their own sake and that they make a contribution to tourism and to regeneration. Indeed, he referred, for instance, to the work on canals, and there are many other examples. There is, therefore, real concern.

The hon. Member for Sittingbourne and Sheppey rightly said that anybody can stand up and say, “It’s a disgrace that the Government are doing this” and that people should say a little about what the Government should do instead. He asked whether I believed that there should be increased taxation to pay for the games. Given that he asked me a straight question, let me make it absolutely clear to him that the answer is no. He also asked whether I believed that additional money should come from the London council tax payer, and the answer is no. He therefore has a straight answer to those questions.

The hon. Gentleman then asked whether I believed that an all-party group should go to the Treasury to make representations about the sums that might be available, whether from the analogue sale or from unclaimed assets, and the answer is yes, I do. I would be happy to join him, just as I was when he suggested that there should be an all-party, cross-House Select Committee to keep an eye on the Olympic games.

Could I add just one note of caution as regards the all-party consensus on such an approach? There is a danger in pinning the whole answer on an easy option such as unclaimed assets. The hon. Member for Sittingbourne and Sheppey talked about the pensioners who lost £125,000. I have been campaigning for them for six years, since autumn 2001, when their company first went bust in my constituency. This is not a question of an easy option of saying that the analogue spectrum or unclaimed assets are available. The principle is that the Government—the Treasury—should find funding for the Olympics, in this case, without devastating areas such as arts and heritage. The Treasury should find the funding. The detailed mechanics of where it comes from are for the Treasury to sort out. Any cross-party approach should not pin its hopes on one simple solution.

My hon. Friend is right, and has obviously been looking at my notes, because I was going to give the hon. Member for Sittingbourne and Sheppey a few additional suggestions for putting cross-party pressure on the Government to do something about the problem. I should be interested in the Minister’s reaction to the couple of suggestions that I have.

I want to suggest to the Minister that, as money is being removed from lottery distributors or funds, there may be a way in which, without taking money away from the Treasury, we could help them to grow the money that they have available. I suggest two ways in which that could be done. The first would be a change in the tax regime: at the moment the lottery is taxed on its turnover, but I am assured that switching the taxation on to profits—so-called gross profits tax—would allow Camelot to invest more of its revenues in growing the business. That, in turn, going by its evidence to the Select Committee on Culture, Media and Sport, would raise an additional £50 million per annum for lottery good causes. We should be well on the way to making up the loss. That would require a change in the taxation regime, but the figures show that it would happen in such a way that not only would the Treasury not lose money, it would gain a little, which, in turn, it could contribute to paying for the Olympics or meeting the shortfall of the arts, heritage and cultural sectors.

The other approach, which would entail no difficulty or cost to the Treasury, would be to clamp down on the legal grey area of so-called lottery-style games. Those are causing leakage of money—some estimates suggest as much as £45 million per annum—that would otherwise have gone to the national lottery. Those two suggestions would go a long way towards supplying the shortfall that currently exists. I hope that the Minister will respond to those, or will at least be prepared to discuss them with the Treasury.

I have a small third suggestion to add, because the hon. Member for Sittingbourne and Sheppey will obviously be anxious to draw up a long list for his all-party grouping to take to the Treasury. It does not cost a lot, but it is bizarre that alongside the special Olympic lottery game an Olympic lottery game distributor has been set up. Why do we need a body, which costs money, to allocate the money, when we could just give it to the Olympic fund, and reduce the take?

I am at a loss as to why the Government have done something that the hon. Member for Sittingbourne and Sheppey calls bad politics, and which causes those on the Government Benches acute embarrassment, when there are other ways to proceed, and when we know that it will cause deep difficulties in the arts, culture and heritage sectors: they are critical to ensuring the legacy of the games that the Prime Minister has described as crucial.

In a note on this issue, the head of heritage services in my council area, Stephen Bird, said:

“The supreme irony of the loss of Lottery funds to London 2012 is that museums will now have less opportunity than they might have had for contributing to the Cultural Olympiad. This also means that the much-vaunted “legacy” will not be a rich one but an impoverished one.”

That is right. The Government’s decision is fundamentally flawed and they should seriously think again.

It is a great pleasure to be speaking under your chairmanship, Mr. Bercow; it is the first time that I have done so. I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing today’s important debate. I think that he and all hon. Members present would agree that it is sad that more hon. Members are not present to debate a hugely important aspect of what is happening to the arts and heritage sector. I also congratulate the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) on coming to the debate in a spirit of cross-party consensus, and proposing possible solutions, and my hon. Friend the Member for Tunbridge Wells (Greg Clark) on his important contribution on the voluntary sector. Finally, of course, I congratulate the hon. Member for Bath (Mr. Foster) on his ebullient and pacy speech setting out the Liberal Democrat position.

Figures on the cuts to the lottery, and therefore to arts and heritage, have been bandied about, and at one point I thought it might help if a whiteboard were put up in the Chamber, so we could write them down and reach some agreement on their significance. What we know is that £675 million is going from lottery good causes to the Olympics. With specific reference to arts and heritage, we know that the Arts Council of England will lose £112.5 million—a huge and significant sum when one considers the total arts budget—and that the Heritage Lottery Fund, another incredibly important distributor, will lose £161.2 million. We can add to that the fact that the arts in Northern Ireland, Wales and Scotland will lose £25 million and the Film Council will lose £28 million. Pretty soon a huge sum is reached—something like £1 billion in total.

As has been mentioned, it is also necessary to take into account the new Olympic lottery games. The hon. Member for Bath pointed out that those games will cannibalise the existing lottery: the people who play them will not play other lottery games, so their money will not go into the lottery. I can update him, because, as I understand it, the National Audit Office has considered the matter and increased the estimate of the cannibalisation effect from the Government’s figure of 59 per cent. to 77 per cent., which equates to £575 million. That is the kind of money that will no longer be available to good causes, and it should certainly be added to the figure. Probably about £1.5 billion will come out of good causes overall. That is a huge impact.

What depresses most hon. Members is the fact that much of that additional funding has been taken to cover the Government’s embarrassment. The hon. Member for Sittingbourne and Sheppey rightly took the realistic and common-sense view that one makes a bid to win, and that sometimes the figures that one presents, just as with any business plan, do not necessarily exactly equate to the way the figures will turn out. However, one is entitled to ask how on earth the budget for the Olympics can effectively triple in less than two years. That is an appalling indictment of how the Government went about bidding.

There are two very clear reasons for the enormous increase in the Olympic budget. First, no provision was made for VAT in the original Olympic bid. That is a sum of £840 million—a pretty big slug with respect to money coming out of the lottery. There is also the new contingency fund of £2.7 billion, another cost that was not put forward in the original budget. Those two clear mistakes made by those who made the bid for the Olympics, involving huge sums that were not put into the original budget, are mistakes for which our arts and heritage sector must pay.

It is important for the Minister to understand, if he does not already, the enormous anger that is felt in the arts and heritage sector about those raids. I do not think that that is because people feel that they should not necessarily make any contribution. It is the way in which the situation has come about. On 6 March, 500 or 600 people were dragooned to Tate Modern to sit at the feet of our Prime Minister during his legacy tour. Having not made a speech on the arts for nigh on 10 years, he decided to share his views on the arts with the arts world and to claim the credit for what he called the arts renaissance. People sat there listening to his fine words, which referred to a golden age for the arts. Just 10 days later, the Secretary of State for Culture, Media and Sport stood up in the House to tell the arts world that its golden age was over, and that, as far as she was concerned, it existed simply to fund the mistakes made in bidding for the Olympics.

Still the Government carry on blithely as though nothing had happened. The Chancellor of the Exchequer, who a few months ago sent letters to all arts organisations asking them to budget for 7 per cent. cuts in the comprehensive spending review, had the chutzpah to announce at the Brighton festival:

“I do intend to make sure that what happens over the next period is not detrimental to the arts and will not allow the fact that we are having an Olympic Games to come in the way of the arts.”

How does one square that statement with the fact that about £1.5 billion is being taken away from the arts?

Is it any wonder that those who have been working in the arts or have cared about them feel passionately about the subject and able and willing to speak out? It is no wonder that the former Secretary of State for Culture, Media and Sport, Lord Smith of Finsbury, said in the other place that

“I absolutely recognise the deleterious impact that the recent decisions about lottery funding have had, particularly on the arts, heritage and, importantly, on community sport. It is difficult to overestimate the impact that these decisions have had on the cultural sector.”—[Official Report, House of Lords, 17 May 2007; Vol. 692, c. 342.]

Is it any wonder that the former Under-Secretary of State for Culture, Media and Sport, the hon. Member for Stoke-on-Trent, Central (Mark Fisher), tabled an early-day motion that condemns the Government and the redirection of up to £675 million of national lottery funding to meet increased infrastructure costs, and which

“notes that such a diversion will lead to profound funding cuts for the very culture that the Prime Minister hailed as a key reason for the UK's successful Olympic bid; further notes that such cuts in Arts funding threaten to tarnish what the Prime Minister recently called this ‘Golden Age' of British arts”.

Is it any wonder that so distinguished a Labour backbencher as the hon. Member for Sittingbourne and Sheppey should find the time to come to this debate and call the Government’s decision “bad politics” and “incredibly embarrassing”? As the hon. Members for Bath and for Chesterfield pointed out, numerous practitioners of the arts have had their say.

Nicholas Hytner said:

“There is a spectacular lack of logic in using money earmarked for the arts to plug holes in the Olympic bills. The money raided from the lottery will largely affect small, innovative, experimental organisations and individuals who are the lifeblood of creativity in the UK. Pulling the carpet out from under them and nobbling their money is undermining the future of our major arts institutions.”

Liz Forgan, the chairman of the Heritage Lottery Fund, said:

“This is bad news for the nation’s heritage…It will impact on our ability to invest in the nation’s heritage at exactly the time that it is being showcased to the world.”

Peter Hewitt, of the Arts Council of England, said that

“£63m will need to be found over four years from 2009 and will sadly impact on the arts at local level in every corner of England - with very many youth organisations, festivals, dance and theatre tours, exhibitions, concerts and other activities being turned down for funding”.

I could go on, although you will be delighted to know that I will not, Mr. Bercow.

Is my hon. Friend aware that there are 53,000 voluntary arts groups in England, for which the only accessible Arts Council funding comes from the grants for arts lottery fund, and that the diversion of resources to the Olympics will cut by about a third the Arts Council funding for those local community-based groups?

I am aware of that, and I thank my hon. Friend for bringing it to my attention. It echoes the point made by the hon. Member for Sittingbourne and Sheppey about the bad politics of cutting grants to so many of those voluntary organisations. As I said, I could go on: I could quote Tony Hall, the chief executive of the Royal Opera house; I could quote Jude Kelly, the artistic director of the South Bank centre, a great jewel for the nation that will reopen this weekend thanks to a national lottery grant. The Minister knows all that, and he knows the sheer depth of anger about it.

It is not just about money; there is a principle at stake. The national lottery was set up with the clear principle of additionality. The lottery was meant to fund things that the Government would not normally fund. It was meant to create a pot of money on which charities, grass-roots sports organisations, arts organisations and heritage buildings and institutions could draw. It was a magnificent achievement, which was going to secure long-term funding and capital for those organisations. It was precisely set up with a view to keeping the grubby hands of politicians out of the till. Sadly, the Government, who long ago ceased to pay much attention to the additionality principle, have now thrown it out of the window completely with their raids on the lottery.

I apologise for interrupting the flow of the hon. Gentleman’s excellent contribution. I urge him to be a little cautious with his condemnation of the Government on additionality, however. Will he confirm whether the Conservative party included in its manifesto a pledge to raid money from the lottery to pay for its club-to-school sports scheme?

I praise the hon. Gentleman for his huge attention to the detail of the Conservative manifesto, which exceeds mine by a factor of 10.

Our arts and heritage organisations are astonishingly efficient. Since I took on this shadow role, I have seen that they are among the most efficient public sector organisations in the country. Many of them survive on what is almost peanuts: we are talking about sums of £50,000, £100,000, £150,000. When they see that £400,000 has been spent on the universally acclaimed logo for the Olympics, having pared themselves to the bone to provide first-class arts and heritage services for their localities and for the country, one can imagine how they feel.

Another reason why people feel so angry is that the Government’s decision has set the arts and sport against each other. I echo the comments of the hon. Member for Chesterfield and others: sport and the arts should co-exist. The Olympics should be a fantastic opportunity to showcase our arts and heritage to the world, and to invest more in them if we can. Sadly, that opportunity has gone and the arts and heritage now see sport as having robbed them to pay for its activities.

As the Government scrabble about, trying to square circles and pretend that the raid on the lottery is not as bad as it has been, confusion has emerged as a result of the idea that the money will somehow eventually come back. We are told that there is a legacy fund of something like £40 million, of which some £28 million may or may not go back to the arts and heritage. That is described as venture capital. If a venture capitalist got £28 million back from an investment of £300 million, they would be fired pretty quickly.

We are also told that the sale of the land will somehow make its way back to the lottery. We are not told whether the lottery should expect a percentage of or all the profit from that sale; we are not even told the current value of the land. The Minister tells anyone who dares to suggest that he might put an estimate on the value of the land that they should grow up—

Come on.

Or he says, “Come on” from a sedentary position. We only want more details, because it is no good telling the arts and heritage sector that in five, six or 10 years’ time—we do not even know when the land might become available for sale—that somehow there will be a pot of money at the end of the rainbow. Such an approach is ludicrous. The Government raised this as an issue and an opportunity, but they now refuse to discuss it in detail because should anyone possibly ask them a question about what they mean, they regard that as immature.

In last month’s debate in the other place, the Government spokesman hinted that if the contingency fund—the £2.7 billion—is underspent, it will come back to the lottery. Will the Minister elaborate on that, and confirm that that is the position?

As the Prime Minister leaves office in the next two or three weeks, having made what the hon. Member for Bath describes as a magnificent speech on the arts, it is sad that his arts legacy is in utter disarray. The Government like to claim that they have invested more in the arts, without saying that much of the investment was to make up for the shortfall caused by withdrawing charging. They have slashed the heritage budget by millions and millions of pounds, have entirely ignored their own report, prepared by Sir Nicholas Goodison, on ways of bringing more money into the arts—not a single Minister, including the one who is present, has bothered to meet Sir Nicholas Goodison, despite his work—and now we have the lottery raid.

The Government have no coherent policy on the arts. We need long-term investment, positive support from the Government and a re-examination of the Goodison report. We do not need the Liberal Democrat policy, which I understand is not to build an Olympic stadium in order to save £600 million.

I am pleased to be replying to this debate and to see you in the Chair, Mr. Bercow. It is the first time that you have been in the Chair when I have spoken in this Chamber.

This debate is important to the arts and heritage sector in this country, and I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing it. There has been concern and discussion over the past few weeks about the nature of arts funding. It had been going on before because this is a comprehensive spending review period. It is right that we have this debate, and I am pleased that passion has been shown across the Chamber and that a consensus has emerged that arts and heritage are vital to the life of this country. On that basis alone, although I cannot agree with all that has been said, I congratulate the hon. Member for Bath (Mr. Foster), my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt), and the hon. Members for Wantage (Mr. Vaizey) and for Tunbridge Wells (Greg Clark) on their participation.

The debate has been a good opportunity to reflect on the achievements of the arts, culture and heritage over the past few years. Culture and heritage in this country are outstanding and are important to millions of people. They impact hugely on our international reputation and are economically vital. Changes in cities such as Manchester, Newcastle, Glasgow and Liverpool have been led by cultural regeneration.

Concerns have been expressed today, and I shall come to those a little later, but it is worth reminding ourselves briefly of the context. I say that because it took the hon. Member for Chesterfield 19 minutes to put on record the success that has occurred over the past 10 years because of this Labour Government’s investment. It is easy to forget that just 10 years ago, many of our cultural and heritage organisations were struggling to survive; they were caught in a downward spiral of deficits and underfunding. The financial fragility in the arts had a hugely debilitating impact. Some 30 out of the top 50 regional producing theatres were in deficit, many were technically insolvent, and there was no sign that the trend would be reversed. I must say to the hon. Member for Wantage that that was the legacy of a Conservative Government, and I was surprised that he sought to attack the free entry to museums that has been a cornerstone of the revival over the last period.

I am not attacking that; I am attacking this Government’s attempt to elide the compensation that they gave to museums when they were prevented from charging with the phrase “increased investment in the arts”.

Let us be clear that when we came into office, Government investment in the arts stood at just £187 million a year. This Government have provided a 73 per cent. real-terms increase to £412 million this year. The increase has clearly paid off in the sector, because a 72 per cent. increase in the budget for theatre led to an audience increase of 40 per cent. and to a 60 per cent. increase in education work.

The groundbreaking creative partnerships initiative has allowed more than 610,000 young people to be involved in creative projects. Grant in aid funding to museums has risen by 29 per cent. in real terms since 1997. Free admission has brought about an 87 per cent. increase in visits to formerly charging museums since 2001, representing an extra 29 million visits. Membership of English Heritage is at its highest level; visitor numbers are running to 11 million a year. Heritage open days have enjoyed increased success and have attracted more than 1 million people in the past year. The listed places of worship scheme has given more than £56 million to places of worship across the UK since 2001.

I say all of that because it is clear that part of this debate has been about the core funding that has gone to heritage organisations. Such funding is yet to be determined in the comprehensive spending review, and I understand the anxiety of hon. Members and the sector during this period. As I have said, it is my belief that we must build on success, tight though the Treasury has indicated that the CSR will be. All that has happened is unaffected by the decisions on the lottery, which I shall discuss.

I agree with almost everything that the Minister has just said. As I said in my opening comments, the cuts under the previous Conservative Government were appalling. It is excellent that things have been restored during the past few years, which is why no one wants a return to the bust period after the boom period—we do not want to go back to where we were 10 years ago.

Will the Minister deal with a specific point that I have made? We were talking about the increased funding for arts in particular, but the heritage world has not done so well. English Heritage has faced real-terms cuts, and it is much more on a knife edge. Private heritage groups cannot bid for DCMS money and must rely exclusively on lottery funding. If lottery funding is to be even more squeezed because of the Olympic-inspired cuts, such groups will lose out even more in what is already a poorly funded area compared with the arts.

We have had long debates in this Chamber about heritage and we had a Select Committee inquiry on heritage investment. Let us be clear. Five or six years ago, a quinquennial review of English Heritage showed that the organisation needed modernisation. That has been led superbly by Sir Neil Cousins and Simon Thurley. It was not the right time to increase the budget of an organisation that was in need of modernisation, but English Heritage was able to make efficiency savings, which it put back into the heritage sector. The combination of investment in museums and heritage and funding from the Heritage Lottery Fund resulted in more being spent on heritage last year than has ever been spent on the sector in this country’s history. That is a statement of fact.

Yes, the hon. Gentleman is entitled to make his case for further funding for English Heritage, and the Government have made our intention clear in the heritage protection White Paper. It is wrong to suggest that the community has been starved of funds during that period. If that were so, we would simply not have the increase that we are seeing in the number of visitors and open days and in the maintenance of the fabric of our buildings and institutions

Museums, galleries and, to some extent, archives have certainly not done as well as the arts, and would argue that they have not had the funding to meet the above-inflation cost of acquisitions, books and digitisation

We are moving towards the Select Committee inquiry, but before I return to the central point let me say that I encourage the hon. Gentleman to look at the page on acquisitions in the Museums, Libraries and Archives Council report that was published two or three months ago, where he will see how our national museums stack up against those of our colleagues in Europe. He will see that the acquisition budgets have held up particularly well and that they are particularly strong in this country. I am sure that he will acknowledge the increase that allows the National Heritage Memorial Fund to ensure that our museums can make acquisitions during the next period.

Given what has been said, it is important to say that in the past few weeks I have of course spoken to cultural organisations and small arts groups, and I recognise that there is real concern about the impact of the changes to the Olympic budget announced in March. It is true that for a limited period of about four years, some lottery projects that might have gone ahead will have to be postponed or will be unable to go ahead. I do not accept the suggestion that that is a smash-and-grab raid, which sounds more like a Dale Winton programme than reality, or that it has shattered the country’s arts fabric. I believe that we are talking about a huge opportunity for this country. We cannot, on one hand, say that it is hugely important for the nation that the Olympics proceed and, on the other hand, not accept that it is precisely the Olympics that will fund this opportunity.

I remind the Chamber that constituents in east London are similar to mine. They are some of the poorest people in the country and include some of the poorest youth in the country, who need sport and arts infrastructure. That part of the country was severely affected by the huge bombing that it experienced during the second world war and it still needs investment. If that is not a case for Olympic funding, I cannot think of another. That is why, in the detailed negotiations between the Government, the Mayor of London, the Secretary of State for Culture, Media and Sport and the Treasury, we have sought to establish a balanced and fair pot of funding.

Of course, during those discussions one must have priorities, and hon. Members may depart from the consensus that we arrived at on the Olympics. I accept that my hon. Friend the Member for Sittingbourne and Sheppey has led on these issues, particularly funding, for a considerable time, but in the end one must be clear about where the funding comes from. The debate has reflected a basic tenet that I cannot accept. I believe that lottery funding is appropriate for the Olympics precisely because of the problems in that part of London and the games’ huge importance for the aspirations of young people in this country, and so that culture and arts in this country can go forward.

Does the Minister agree with the Secretary of State who said in the Financial Times that the loss of lottery funding for the arts was very small?

As I said in my opening comments, the Secretary of State was referring to the overall spend on the arts, which has increased by 75 per cent. Lottery funding remains available to enable the arts to go forward. Lottery spend on heritage to 2019 is £1.9 billion, so it is disingenuous to suggest that this is a smash-and-grab raid that would leave the sector entirely shattered.

I acknowledge the concern in the sector, but it is right to put on record the cultural life of this country and our legacy from that. The hon. Member for Chesterfield should look at the work that the MLA has done on the Olympics and at the 30 per cent. increase in tourist revenue for Sydney after the games there. The net gain to the sector here after the Olympics will clearly be in tourism, heritage and the arts sector. That is why it is so important that we all make that investment.

I confess that I am now totally and absolutely confused. I accept entirely that the additional cut from the arts, culture and heritage sector will not leave it entirely shattered, but does the Minister accept the simple premise that as a result of Government decisions those sectors will have less money to spend? Can he explain how cutting that money will enable us to have more legacy than if we had not cut it? That is what he seems to be implying.

Can we have some consensus among the Liberal Democrats? One Liberal Democrat Member is saying that the sector will be left shattered, and the other is saying that it will not.

This decision has been made for the next four years in the run-up to the Olympics and we have come together to establish a budget that includes contingencies. After that, it is absolutely clear—indeed, axiomatic—that those who gain from a successful Olympic games are precisely the sectors that we are talking about. That is why we made the decision and why we have come to this arrangement. Of course I accept that less funding will be available from the lottery for arts and heritage organisations, but I welcome the decision to protect funding from the Big Lottery Fund to the many organisations that do arts, creative, sporting and heritage work.

On youth exclusion, is the Minister aware that the Big Lottery Fund has decided in principle to cut the young people’s fund, which helps to promote youth inclusion?

I am aware of the rumours to which the hon. Gentleman refers, but I refer him to the statement—

John Bercow (in the Chair): Order. I am sorry to interrupt the Minister, but it is time for the next debate.

I am extremely grateful for this opportunity to talk about the reform of local government finance, and I thank the Minister for coming along to this debate.

In a sense, we are all localists now. At least, all the mainstream political parties are paying lip service to localism and talking the language of localism. Labour Ministers are tripping over themselves to tell us how they will devolve power to local communities. The Conservative party—my party, which used rate-capping and abolished the Greater London council—is building a new modernist agenda based on localism. The Liberal Democrats have been talking about devolving power from Whitehall to town halls for as long as any of us care to remember.

There is a danger in having an orthodoxy in politics, in that localism could mean all things to all people. Therefore, we need to introduce a litmus test for localism. For me, the litmus test is the extent to which a political party is willing to localise control over finance. In Britain today, central Government collect more than 90 per cent. of public revenue. They have a near monopoly on tax revenue. Among Organisation for Economic Co-operation and Development countries, only in Ireland is a small percentage of local government finance collected locally. In the United States, some 62 per cent. of local spending comes from local sources. In France and Germany, it is some 66 per cent. In Britain, on the other hand, a mere 25 per cent. of what our local councils spend is collected locally.

I shall not give a detailed description of the minutiae of local government revenue streams—that would be tedious and take a long time. Briefly, revenue support grants constitute nearly one third of local authority income. Critically, those grants are awarded on the basis of Whitehall’s calculation of local need. Also set centrally are specific and ring-fenced grants, and the national non-domestic rates, which make up about one fifth of local authority revenue. Only a tiny element—one quarter of local revenue—is left to local discretion. Two thirds of that comes from the council tax, and the remaining third comes from other charges.

There are consequences to fiscal centralism. There is an economic cost, in that it rewards inefficient councils. With central Government’s allocation of grants being made on the basis of their assessment of local authority spending needs against the actual level of service, there is a perverse incentive at work. A local authority that is good at turning tax pounds into high-level public services will not qualify for as large a grant as one that is less efficient.

I believe that the political consequences of fiscal centralism, however, are more serious. There is less local accountability in local government. There is no longer the correlation that there once was between how someone votes and what services they receive locally, what priorities are set locally and the taxes that they have to pay. There is much less local democracy. The scope for a slate of candidates from any party to stand for office proposing a radically different set of tax-and-spend alternatives is diminished, and as a result there is less pluralism. There is a uniformity of provision, process and output, whereas I believe that local government should be a rich mosaic of diversity and should offer different local solutions to different problems.

Most worrying of all, fiscal centralism causes voter resignation. Turnout for the past three local elections in England has hovered between 29 and 39 per cent. It would be a grave mistake to regard that low turnout as a sign of contented voter apathy. Far from being contented or apathetic, voters are resigned. A MORI poll showed that 91 per cent. of the public were dissatisfied with the services provided by their local authority. Sixty per cent. believed that their local authority gave bad value for money, yet a far smaller percentage bothered to vote and do something about it on election day. I believe that voters have perceptively clocked that it does not really matter whom they vote for or how they vote in local elections. The key decisions—how often bins are emptied, the rate of council tax—are made by officials in Whitehall, and funding is provided through bureaucratic formulaic calculations.

How then should we make town halls more self-financing? Rationally, there are two categories of option. We could solve the balance-of-funding problem by massively centralising expenditure, but I would not advocate such a solution as it would destroy any remaining semblance of local democracy. The other alternative, if we are serious about making town halls more self-financing, must logically be to devolve revenue-raising powers from central to local government. To make town halls entirely self-financing, revenue from devolved tax raising powers would have be about £80 billion. I am not suggesting that town halls are made 100 per cent. self-financing, but we could take steps towards that by devolving national revenue streams that are currently used to collect tax centrally to local authorities. I emphasise that that is not about additional taxes. I am not proposing what Lyons suggested in his inquiry and trying to invent new forms of taxation; I am talking about the devolution of existing central revenues to the town hall.

Any reform that devolves tax revenue streams must adhere to four key principles. One is local accountability. Local authorities must be accountable for how they exercise any new revenue-raising responsibilities. There must also be transparency as local taxpayers and voters need to know to whom they are paying tax and for what. There also needs to be cost-effectiveness and fairness.

What are the options? One solution is a local income tax, which has been an option since the Layfield committee proposed it in 1978. The Liberal Democrats have advocated a local income tax for as long as anyone can remember. In Sweden people have municipal services funded through a system of local income tax. It is an option and I do not dismiss it out of hand, but I do have a couple of reservations. If one is to have a local income tax, either it should be a genuine local income tax that is collected, set and administered locally, in which case the cost of collection would make it an inefficient solution, or it would have to be based on Liberal Democrat party policy. That would involve a local income tax that is in fact collected centrally, in which case there would be problems of accountability. I hope that hon. Members will excuse the slightly wonkish language, but such a tax would become, in effect, a locally hypothecated band sitting on top of what remained a national income tax. In what sense would that be perceived as a local tax?

Another alternative—the one that I believe comes closest to solving the problem—is VAT, which raises a revenue stream for Whitehall of about £80 billion. By happy coincidence, that is approximately the amount that Whitehall pays to the town halls through various forms of subsidy and grant. Could we localise VAT revenue? I believe that we could and that we could go further and turn VAT into a local sales tax. VAT is, of course, charged at every stage in the transaction process; a local sales tax would be charged only at the point of retail. Tax jurisdictions at county or metropolitan level could each set their own rate. In short, we could abolish VAT, replace it with a local sales tax, and scrap the council tax-based system of local government finance.

Such a system would be devolved rather than additional taxation and there would be local accountability. People would know what services they were getting and would pay through their taxes for what they voted at the ballot box. It would be cost-efficient. At present, VAT is an extraordinarily expensive and complicated tax to collect and an army of businesses—large and small—are co-opted, often against their will, to be unpaid tax collectors of the state. With a local sales tax, that would simply fall away and the only liabilities would be calculated at the point of retail. It would be a fair system and it would be a tax on consumption.

Figures from the Institute for Fiscal Studies show that, under such a system, the tax bill as a percentage of household expenditure would be pretty equal across each income decile. There would be drawbacks—for example, equity. Different tax jurisdictions would have different tax bases capable of generating different levels of revenue, so there would be some need for a top-up scheme. The scheme would contravene our EU treaty obligations. Currently, EU rules govern our VAT system. We could renegotiate, and as someone who advocates that the United Kingdom should withdraw from the European Union, I do not consider that a barrier to the proposal. If we could axe VAT, restore local democracy to England and the European federalists objected to it, that would be the icing on the cake.

Some people say that different tax jurisdictions with different rates would lead to evasion—as one Tory Minister once put it, there would be the smuggling of butter across the south downs. There is currently massive VAT evasion and I do not believe that this system would be any worse. A good deal of data suggest that tax would be less easy to evade under my proposal. In the longer term, there would be the advantage of tax competition between different tax jurisdictions. I believe that the system would also lead to more efficient local government as the rate would have to be set at a level that generated a high rate of taxation without harming small or big businesses. Local government would try to squeeze efficient value for money out of every tax pound collected.

My hon. Friend has obviously given the issue a great deal of thought. Can he explain how he would bring in a form of equalisation, bearing in mind the differences between sparsity and density?

There would need to be a system of top-up. The Government would need to take revenue centrally from certain tax jurisdictions with tax bases that generated a lot and allocate that money to jurisdictions with smaller tax bases. However, the local authority would be able to do something if its jurisdiction was unattractive to businesses. In the age of the internet, online shopping and increasing mobility, it would be possible for a tax jurisdiction to make itself more attractive to businesses than is currently possible.

In conclusion, the current council tax-based system is losing its legitimacy. If 50 people refuse to pay their council tax, they have a problem; if 50,000 refuse to pay, the state has a problem. I sometimes wonder whether the people in Boston in the 1770s felt about tax as people increasingly feel about council tax today.

During 10 years, we have had a 90 per cent. hike in council tax, but we have not had a 90 per cent. increase in books in our public libraries, in police on our streets or in waste disposal and rubbish collection. The Westminster village and the political establishment need to seriously question the future of local government finance. I hope that I have provided some helpful suggestions as to how that can be done.

I am grateful to have the opportunity to make a brief speech on the important subject of local government finance. I congratulate the hon. Member for Harwich (Mr. Carswell) not only on securing the debate and providing the opportunity to debate the subject, but for two other reasons. First, it is refreshing and interesting to have an opportunity to discuss a big-picture subject that is not necessarily within the confines of party political thinking. Secondly, the hon. Gentleman’s pursuit of the issue of localism is done with huge vigour and energy and it is refreshing and interesting to hear his latest thoughts on the subject.

I agree that there is a greater interest in localism and how services can be devolved to a level closer to the citizen. I would like to see more of that happening and for parties from across the political divide to grasp that agenda. The hon. Gentleman is right that the Liberal Democrats have a long track record in that respect. However, I say these words of caution to my party: localism is not just about devolving power from one tier of government to a more local tier; it is also about empowering individual citizens, giving them choice and putting power in their hands. I would like to see my party and the political classes within Westminster grasp that emerging agenda.

I accept the hon. Gentleman’s point that local government finance is far too centralised and that local councils’ discretion in how they raise and spend revenue is extremely limited. That diminishes the power of local government to make meaningful decisions on behalf of the people they represent, which diminishes the entire political process. If councils have little scope to raise revenue and nearly all their money is ring-fenced in relation to how they are allowed to spend it, the ability of any politician to outline a vision for change in their community is severely compromised. That acts to the detriment of everyone who wants local government to be successful.

I turn to how we should finance local government. Council tax has been particularly problematic for people on fixed and low incomes. The group that most obviously comes into both of those categories is pensioners and, in his report, Sir Michael Lyons recognised that council tax is particularly unfair to pensioners. Local income tax, which has been proposed as an alternative by my party, has the advantage of having a direct correlation between income and the degree to which someone is taxed. In the context of this debate, it would also offer the scope for a corresponding reduction in national tax and a transfer of tax-collecting ability from the Treasury—the centre—to individual councils at a lower tier. That would, I hope, provide an opportunity for a rebirth for local government.

I end my remarks with this observation: we need greater accountability in local government, which is why I oppose the creation of a single unitary authority in Somerset, for example. We need greater flexibility and autonomy in local government. I hope that all those things will contribute towards a rebirth not only of local government, but of our entire civic life.

It is good to see you in the Chair for this debate, Mr. Bercow. Congratulations are due to the hon. Member for Harwich (Mr. Carswell) on putting forward his ideas. The debate gives us an opportunity—in this instance, in a non-partisan way—to debate policy ideas, which is the rightful job of Parliament. We have three proposals before us: a local sales tax, a local income tax and a property-based tax with a personal element.

Hon. Members might recall that, in 1981, the then Government, with Michael Heseltine as the responsible Minister, published a Green Paper containing those three options, but of course it contained a fourth option, which has not reared its head this afternoon—the poll tax. By coincidence—this is not a partisan point—I was just rereading David Butler’s magnificent book on the history of local government finance and the poll tax in particular. The book, which was published in 1994, is called “Failure in British Government: the Politics of the Poll Tax”, and it is very interesting. Lady Thatcher, the then Prime Minister, sent a draft of the Green Paper back to the then Department of the Environment with a handwritten note in the margin that read, “I will not tolerate failure in this policy area.” The rest is history.

A serious proposal has been put forward. I do not want to use my time to criticise the hon. Gentleman’s proposals. The Lyons report was published recently and it, too, has gone round the circuit of local government finance. I have a few observations to make, however, because as Minister for Local Government, I debate such matters in detail, not least with the Local Government Association and its excellent leader, Lord Bruce-Lockhart, who has many interesting things to say about this policy area.

The hon. Gentleman began by saying, wisely, that we are all now in favour of localism. At last year’s LGA conference, Ministers and shadow Ministers were queuing up to compete over their localist credentials. The Leader of the Conservative party has promised an end to all ring-fenced grants—well, I shall believe that when I see it. My right hon. Friend the Secretary of State for Communities and Local Government outlined our proposals on how to move localism forward that were eventually in our White Paper.

The hon. Gentleman said that there was a danger of orthodoxy. I think that that is right in this regard. Yes, the drive for localism is intended to promote greater democracy and to re-engage the public along the lines that he suggested, and, as the Government and policy makers now see it, to improve local services—public services as well as local government services. However, the hon. Member for Taunton (Mr. Browne) made an important point—I was going to say that he spoke for the Liberal Democrats, but, in this debate, he speaks for Taunton and gives his own views rather than his party’s—when he talked about the paradox between devolution and equity. Those are not competing priorities; Governments and political parties of all persuasions must discuss where the balance should lie. Obviously, we believe that our policies in the White Paper square that circle satisfactorily and will allow the local establishment of targets and accountability under the proposed new performance regime. Nevertheless, in finance, that is a paradox that must be resolved.

The 1981 Green Paper, the Layfield committee report in the 1970s and, indeed, debates in the 1950s all came back to this issue: if one has a completely localised tax, one must have a mechanism to promote equity. I certainly I believe that it is desirable to have one and the hon. Member for Harwich said that he thought so, too. The danger of a completely localised sales tax is not the smuggling of butter across the Epsom downs—

The south downs!

No it was the Epsom downs. I believe that it was the predecessor of the hon. Member for Mole Valley (Sir Paul Beresford), Lord Baker, whose quote it was. He represented an area near the Epsom downs, not the south downs.

Order. I do not think that the Minister should dilate on the question of the south downs or the Epsom downs, or on the subject of the smuggling of butter—deeply interesting though his observations thus far have been.

I am very grateful to you, Mr. Bercow. I had forgotten that the Epsom downs were not in the south downs. The point is that if taxes were set locally, differential prices in different local authority areas would result in no sales tax in some areas or local councils setting one and then knocking on the Minister’s door asking for the redistribution of central Government grants to make good on their resulting poverty.

Going back a bit, I would like to give the example of one London borough that for two years, because of the way in which the equalisation worked and because of its efficiency, managed to have zero poll tax.

That is true, and of course one of the consequences was a desire of people to move into that borough, with the consequential effect on house prices. Were such a principle to be applied to retail sales, I think that there would be a significant distortion. However, my point is that, rather like the debate on non-domestic rates—here again I criticise the Liberal Democrats’ policy—if we relocalised business rates, we would provide an incentive to areas with more significant business rates to cut them, because people will say, “Why should we pay rates in the better-off business areas?” I fear that the same would be true of sales tax.

I want to challenge another assumption in the remarks of the hon. Member for Harwich. He said that at the moment we have a perverse incentive. Under the council tax and revenue support grant regime, whatever its faults and the balance-of-funding arguments—we had the balance-of-funding review some three years ago—this Government and previous Governments have allocated funding not on the basis of the performance or needs of the local council, but on an assessment of the needs of the area. However efficient the council is—we can measure that by performance regimes, by satisfaction rates, to which he referred, or through the ballot box—central Government assess the needs of the area. Part of that assessment, as the hon. Member for Taunton indicated, is based on the property portfolio in the area. If there is a sales tax, it is difficult to see how one could have an equitable system that allows the 100 per cent. localisation that he is seeking. So there are two significant problems with that point.

The hon. Member for Harwich was good enough to mention the impact of the European Union. It is worth recalling that we have VAT because the then Prime Minister, Sir Edward Heath, took us into and kept us in the European Union. We moved from a purchase tax to what became known as VAT. It is worth recalling also that the VAT rate increased from 15 per cent. rate to 17.5 per cent. to pay for the poll tax. When I study these policy areas it amuses me greatly to see that described in the Budget at the time as a transitional increase in VAT. The previous Government and the present Government have not returned to 15 per cent., and I think that the public would be right to be wary of any transitional scheme that did not have a time limit.

I am surprised at the proposal that the hon. Gentleman makes, as he represents Harwich, which I would have thought has a lot of trade with the European Union. That policy would involve renegotiating the treaty of Rome.

I do not want to diverge too far from the subject of the debate, but it will be perfectly possible to have market access once we are free from the treaty of Rome. Many other countries have increased the amount of trade that they do with European Union member states, despite not having signed away their sovereignty.

I admire the—

Order. The Minister is far too dextrous to want to go down that route.

Thank you, Mr. Bercow. I shall deal instead with the point about a local income tax, which was the second of the four options in the 1981 Green Paper. It was recommended as a possibility for part-funding of local government finance by the Layfield inquiry and was not dismissed by the Lyons inquiry. Lyons said that he thought that it would take many years to introduce and there was mention of the danger of a cumbersome bureaucracy.

I do not know whether the hon. Member for Taunton has criticised the tax credits system, but his party certainly has. I would like to see a local income tax system being introduced smoothly and efficiently, but there are some points of principle that one would need to address first. I have asked the hon. Member for Truro and St. Austell (Matthew Taylor), who spoke for the Liberal Democrats on economic policy for many years—I met him when he was at Oxford university and he advocated this policy—whether the local income tax would be based on where a person works or where a person lives. However, I have never had a satisfactory answer. A local income tax based on where one lived rather than on where one worked would cause huge bureaucratic difficulties and, I suggest, would have an impact on the market in many unforeseen ways, and the same would be true if the opposite arrangement applied.

The simplest way of putting it is that such a tax would have all the disadvantages of the poll tax and none of the advantages.

The question of accountability is at the heart of the issue, as the hon. Member for Harwich said. All of us are seeking to improve accountability— that was the fundamental motive behind the community charge or poll tax. The country has not yet fully answered that question. However, we believe that our proposals in the local government White Paper and the Local Government and Public Involvement in Health Bill change the performance regime and the accountability regime and that we will see an improvement in that respect. We believe that localism that gives more power, particularly over financial decisions, which the hon. Gentleman likes to see, will increase turnout and show that there are real policy choices between the political parties. It will force the political parties to clarify their policies at local level as well, which is desirable.

I am extremely grateful to the hon. Gentleman for raising the issue. I am extremely apologetic to my ever- vigilant officials. They drafted me expert advice and speeches, but because of the wide-ranging nature of the debate, I have not been able to go through all that. I am amazed that my hon. Friend the Member for Wigan (Mr. Turner) has not chosen to intervene. I know that he is not here for this debate, but he has strong views on this issue as well.

The hon. Member for Harwich should be congratulated on raising fundamental points, putting forward his ideas and moving forward the debate after Sir Michael Lyons’ inquiry. I regret the notion that comes from some local authorities, which say that they have no power. Council tax is set by local councils. Opposition Members cannot have their cake and eat it. They cannot say when they are in the House that the Government set the council tax, and then put out leaflets in late April or early May every year saying how good Conservative councils are for having low council tax. They cannot have it both ways, but I do believe that we need to give more power over financial decisions to local authorities and I welcome the contribution that the hon. Gentleman has made to the debate.

I am extremely pleased to be under your guidance and tutelage for the next half-hour, Mr. Bercow. This will be a rather techie debate—I am not sure whether you are as pleased as I am about that. Indeed, it is a debate of choice for anoraks, but it is very important. Let me set the scene.

The market forces factor has been around for quite some time, but the patient choice agenda and payment by results have made it an essential ingredient of the national health service’s finance, so it is very important. Patients have their choice, and the hospital that they choose to go to gets the payment from the appropriate primary care trust, but that hospital may have a different cost base from another hospital, and the PCT would not be able to afford it if everyone in their area chose to go to a higher-rated hospital, so it is important that things are levelled out, which explains the need for the market forces factor.

The market forces factor is made up of four elements: base costs, for which the figure is 27.3 per cent., land, which is 0.6 per cent., buildings, which is 4.6 per cent. and staffing, which is 67.6 per cent. Of the three variable elements, the staffing element is far and away the largest at more than 90 per cent., so it is extremely important that we get that right. Hospitals bearing additional costs through no fault of their own should be recompensed. I fully agree with that principle. I see a look of puzzlement going across your face, Mr. Bercow: if I agree with the principle, why on earth am I bothering to have the debate? The problem is not with the principle, but with its application.

As I pointed out, more than 90 per cent. of the variable element of the market forces factor relates to staffing costs. Those staffing costs do not necessarily relate to the NHS staffing costs. The NHS is, for want of a better expression, a closed economy. Because of the “Agenda for Change” system and the consultants’ contract, a nurse or a specialist consultant gets paid the same for the work that he does, be he in Westminster or in Wigan. An apprentice cleaner will receive the same rate of pay no matter where they work in the NHS. Of course, there is the London weighting allowance, but the rate of pay is the same. From Cumbria to Kent and from Durham to Devon, because of “Agenda for Change” and the consultants’ contract, people will be paid the same amount of money.

I asked the Department of Health some time ago what percentage of the labour costs that hospital trusts incurred were outside “Agenda for Change” and the contracts, and it said that it did not keep those figures. I understand that; it is not necessarily a central issue. Nevertheless, I took the matter further by going to my own local trust and asking it what its percentage was. It said that more than 90 per cent. of its costs were within the “Agenda for Change” element; in other words, it was paying the nationally negotiated wage rates. It went further and asked other hospital trusts in the North West strategic health authority area, and they confirmed that that sort of percentage was reasonable, so in relation to the labour costs, about 10 per cent. or less is variable.

As I said, the formula is based not on NHS labour costs, but on the costs of labour in the private sector. The effect is that the formula bears no relation to the real additional costs that a hospital incurs. Let us consider the Greater Manchester area and treatment in Wigan with, say, a base tariff of £1,000. In respect of the Wrightington, Wigan and Leigh NHS Trust, the amount will be £1,059. However, in central Manchester, the amount will be £1,150. In central London, Guy’s hospital will receive £1,322 and St. Mary’s £1,446.

Those differences arise not because of increases in the base cost within the NHS contract, but because we are using the private sector to calculate the figures. We get paid less in the private sector in the Wigan area because of the low-wage economy, whereas Guy’s and other central London hospitals get paid an awful lot more because of the large bonuses in the City. So the amount paid bears no relation to the real costs that are borne by hospitals.

The formula is extremely detailed—indeed, it goes to six decimal places at times—but when we try to resolve what PCTs should get, there is a variance of more than 10 per cent. between the base and what they get. I might get into another argument with my hon. Friend the Minister on that, as he represents the same borough as me. So, when we work with figures of six decimal places, we are into the particle physics of NHS financing—quarks, neutrinos, bosons and fermions.

It is an absolute nonsense that we are applying private sector costs to the NHS—indeed, it is intellectually unsustainable. If that were the only issue, we could argue about it very nicely in the pub and then all go home thinking what a nice debate we had had, but it is not the only issue. The amounts paid have a real impact on what happens to our health services and communities. A perverse incentive of the system is that it feather-beds hospital trusts in central areas, because it gives them no incentive to increase efficiency. They know that the City bonuses and the amount of money that flows into central Manchester will go up more than increases in other areas, and that they will therefore get more money for performing operations than we will in other places.

The system takes money out of deprived areas, and that will have an effect on the amenities that hospitals in those areas can provide. If those hospitals have less money, they will not be able to redecorate their wards and make them more attractive, which will affect people’s choices about which hospital to go to, so there will be a reduction in clients. That lowered throughput will cause a loss of income, which will mean that wards and services, such as the walk-in centre in Leigh, will have to be closed. All that has a real impact on the services that are being provided, so this issue is not entirely techie.

Has the hon. Gentleman looked into whether there is any correlation between the trusts that operate on a deficit and how the market forces factor operates in those areas?

I knew that the hon. Lady was going to intervene on me, but I thought that she was going to ask something else. So, no, I have no idea what the impact of the market forces factor is in that regard, or whether it correlates to a lower or higher rate of deficit.

It is interesting that in 2005-06, the Royal Cornwall hospitals trust received £484,000 and my authority received just under £2.5 million, whereas the three central trusts—University College London Hospitals Trust, Guy’s and St. Thomas’s Hospital Trust and Barts and the London NHS Trust—received almost £20 million. When I looked at the figures more closely, I found that the London weighting for Barts was nearly £2,694,000, but it received a market forces factor increase of nearly £21 million. That illustrates just how far removed the market forces factor is from the real NHS costs that are borne by hospitals.

The Minister is both a colleague and a friend, in more ways than one. He is also a Member of Parliament for Wigan borough, so he will have seen the “Mapping Poverty in Wigan” document that I have here, which I got from the local authority. The document shows a clear correlation between poverty and ill-health throughout, and I am sure that that is the same right across the country. It shows that where there is a low employment blackspot, there is a high disability blackspot; where there is a low skills blackspot, there is a high coronary disease blackspot; and where there are high numbers of children on free school meals, there are high cancer rates. Such correlations are shown throughout the document when one looks at the super output areas. The same will be clear wherever one goes in the country. The overlay is almost exact. If the maps showing those incidences were placed on top of each other, the blackspots of deprivation and low health would match almost exactly.

All that gives the Government excellent targets for reducing health inequalities. That is what I came into politics for—to reduce inequalities throughout the country, particularly in relation to health. However, the market forces factor system reinforces those inequalities, because it takes money away from areas such as mine with low incomes, rather than putting money into them. Because those areas have low incomes, their hospitals receive less money with which to tackle the health issues in the communities. We need to break the link between low income and poor health by providing a funding regime that properly compensates hospitals for the unavoidable additional costs that they incur. As I said at the beginning of my speech, I have no difficulty in supporting that principle—it is the right thing to do—but when hospitals get significantly more than those costs, the impact on authorities such as mine is extremely deleterious.

The system has another impact, because it is based on private sector wages that can vary unexpectedly. In the Wrightington, Wigan and Leigh hospitals area, the market forces factor was reduced by 3.04 per cent. between 2004-05 and 2005-06, and by a further 0.01 per cent. between 2005-06 and 2007-08. In comparison, the market forces factor for the Christie hospital in the centre of Manchester went up by 1.29 and 4.38 per cent. respectively in those periods. Those rises were not because of extra costs incurred, but because private sector wages in central Manchester rose faster than those in Wigan.

The Wrightington, Wigan and Leigh NHS Trust is seeking foundation status. Its last application was turned down because it was estimated that last-minute changes to the market forces factor would cost the trust £18 million over five years. Although it is a four-star authority and has an extremely good record of saving money—£12 million the year before last and £7 million—the trust fears that it will not be given the foundation status that will give it the freedom that it wants because of the reduced income that it will receive through the market forces factor system.

I understand that although the Department of Health is consulting on payment by results, it is not consulting on the market forces factor. As I said earlier, they are both absolutely integral if we are to have a financial system that puts trusts on a level playing field. The Government should therefore consult on the market forces factor.

In summary, I believe that the market forces factor is right in principle, but that the labour cost element should be based on actual unavoidable costs to hospital trusts rather than fictional private sector costs. The current system provides a disincentive to high-wage trusts to reduce inefficiency; reinforces, rather than tackles, the link between economic deprivation and health inequalities; and introduces uncertainty into the medium to long-term financial planning of hospital trusts. I hope that the Minister will have a root-and-branch review to eliminate those inequities within the system.

I congratulate my good friend and neighbour, my hon. Friend the Member for Wigan (Mr. Turner), on securing this important debate. He and I have spent many a Friday afternoon sitting in the Wigan borough health services offices discussing these issues, so I can vouch that he is well-versed in them. He is one of a select group of MPs who take an interest in the allocation of resources within the NHS and local government. Indeed, he not only takes an interest in them, but understands them, which is why he strikes fear into Ministers and civil servants in our Department.

My hon. Friend began by describing himself as an anorak, but I could not possibly comment on that observation, save to say that most people in Leigh would choose far worse descriptions of our neighbours in Wigan than that rather polite one.

I shall address directly my hon. Friend’s questions about the market forces factor, and I am pleased to see the hon. Member for Falmouth and Camborne (Julia Goldsworthy) present, because those issues are alive in her part of the country, too. I hope that in addressing my hon. Friend’s concerns, what I say will be of interest to her, too.

I shall put the matter into context. Earlier today, my right hon. Friend the Secretary of State announced provisional financial out-turn results for the national health service in 2006-07. They showed that the NHS has delivered a net surplus of £510 million, which is a big improvement on the £547 million net deficit that was recorded in the 2005-06 accounts. The success of that effort is down to NHS staff throughout the country, often operating in different circumstances and often on the receiving end of difficult decisions. Nevertheless, the entire NHS will benefit from the actions that have been taken, and we have a position of stability from which the NHS can move forward.

I shall tell my hon. Friend what that means for the Ashton, Leigh and Wigan primary care trust. Like others in Greater Manchester, its resource allocation was top-sliced in the year just ended—by 1.7 per cent. in its case, which amounted to some £6.9 million, or almost £7 million. The PCT made a contribution to the writing off of some historical debt in the north-west, so that and other costs that had to be paid were taken into account, and the PCT was notified that its allocation for 2007-08 will increase by some £5.7 million, returning the top-slicing from 1 April this year. I hope he agrees that that is excellent news.

People are commenting today on the terrible effect of putting the NHS in financial order, but I hope that my hon. Friend agrees that, because such action has been taken, money can be released to Ashton, Leigh and Wigan primary care trust, which covers, as he rightly said, an area with some of the most entrenched health inequalities in the country. I am sure that he, like me, is encouraged by the PCT’s new scheme called “find and treat”, on which we have both been briefed. It is a real, concerted effort to get underneath the under-reported ill health that is still so evident and prevalent in our borough. Interestingly, the scheme’s value is roughly equivalent to the return of the top-slice to our PCT, with some £6 million being spent on it.

That is the real, practical effect of getting the NHS back into financial balance. It enables PCTs in areas where the health need is greatest to get on with the job of spending money to tackle the root causes of ill health in boroughs such as ours. That is why so much effort was put into delivering the financial results.

Several issues relate to the market forces factor and they create the overall financial context that my hon. Friend mentioned. They are the pieces in the jigsaw that will make up the further resource allocations to the national health service later in the year. In the previous allocation round, he lobbied strongly for a faster pace of change policy to ensure that PCTs were brought up to their target allocation as recognised by the national funding formula. In 2003-04, the most under-target PCT was some 22 per cent. under its fair share of available resources, but because of that emphasis on moving PCTs quickly towards their fair share of funding, by the end of 2007-08 no PCT in England will be more than 3.5 per cent. under target.

The Ashton, Leigh and Wigan PCT received resource allocations of £410 million in 2006-07 and £449 million in 2007-08, an increase of £74 million—19.7 per cent.—over the two years, compared with the national average of 19.5 per cent. Progress has been made in our PCT area, and as a result, at the end of this financial year, the trust will be 2.4 per cent. under its weighted capitation target. We are now considering the right pace of change policy to apply to the resource allocation round that comes out of the spending review. My hon. Friend knows that I, too, take a close interest in such matters, and we will consider the right next step in due course. His comments today will be heard during that process.

I am grateful to the Minister for giving way and to the hon. Member for Wigan (Mr. Turner) for his insight into the issue. While the Minister is on resources, the market forces factor is not about the size of the cake, but about the way in which it is then sliced. I understood that the Department had commissioned a report on the market forces factor specifically, and the group of MPs in Cornwall were informed at Christmas that the report was on the desk of the then Minister, Lord Warner. Is the Department considering the report? Will the Department respond to the report and perhaps even publish it so that we can understand the Department’s considerations? Although the spending review is important, the discussion is about the way in which the cake is divided, not about the size of the cake itself.

The hon. Lady makes a well-informed and timely intervention. The issue is linked to the spending review, because that is the cake, and then we cut it. The report to which she just referred has been the work of the Advisory Committee on Resource Allocation, ACRA, which is independent. If I may, I shall answer her question directly when I describe ACRA’s work in the run-up to the next funding allocation.

My hon. Friend the Member for Wigan made a point about taking money out of deprived areas, and obviously the formula has to do two things: allocate money towards need, while respecting the different costs of providing health care in different parts of the country. That said, the priority is to ensure that NHS funding reaches those parts of the country where it is needed most. We believe that we have achieved that objective through a fair funding structure, but it is continually overseen by ACRA, which is an independent committee of experts.

ACRA’s role is to ensure that there is equity in funding, and it is overseeing an overall funding formula review that will examine the make-up of the market forces factor. The review is being undertaken, it will be published before the allocations are made, and it will in some way address colleagues’ questions about the application of the NHS funding formula. However, the hon. Member for Falmouth and Camborne referred to a specific review of the technical aspects of the MFF, which is different from the general funding formula review that ACRA has undertaken.

That takes me directly to the point that my hon. Friend the Member for Wigan made about the Department consulting on payment by results, which is absolutely true. However, an interrogation of and consultation on the market forces factor is being undertaken––it is just that it is being carried out by ACRA. It is not a wide, public consultation, but a review of the make-up of the MFF. The two none the less sit together; they are complementary pieces of work.

Just to give a little background, the market forces factor has a long history. It is an important element of the weighted capitation formula and its purpose is to adjust for unavoidable differences in cost between the different regions of the country. The need for an MMF was identified by the resource allocation working party in 1976, which recognised that the costs of care may vary from place to place, depending on local variations in market forces. The development of the MFF has been overseen by ACRA, and is the result of many years of analysis by academics. Since it was introduced, the MFF has always been based on private sector wages, even where national wage rates limit the flexibility of local organisations to pay higher wages. Higher costs are experienced, which are caused by such factors as higher staff turnover, lower productivity, higher recruitment and higher agency costs.

We believe that the MFF is the best mechanism available to reflect unavoidable differences in the costs of providing services. However, to ensure that the development of the MFF continues, ACRA is reviewing it again, before the next round of resource allocations, and has submitted its findings to Ministers. In answer to the hon. Lady, that review will not be published in advance of the allocation process, but at, or around, the same time. The recommendations that ACRA makes to Ministers on the MFF will therefore inform the allocation policy and it will be clear how they have done so. I repeat that the points that my hon. Friend raised have certainly been heard by me and will be borne in mind by the Department of Health in making those judgments.

The MFF is, of course, linked to payment by results, which we would argue is transforming NHS funding, by paying hospitals according to the number of patients treated and the complexity of treatment, based on a national tariff. The tariff is calculated from information supplied by NHS trusts about the costs of their services. The cost of treating similar groups of patients varies among providers, owing in part to unavoidable differences in the cost of land, buildings and staff. That is an important reason why the national tariff is adjusted using the market forces factor and ensures that our approach to paying providers is consistent with our approach to resource allocation.

For providers, payment by results encourages clinically effective and cost-effective models of care, such as day surgery. That benefits patients by reducing the amount of time that people have to spend in hospital and helps to reduce waiting times. Payment by results also offers commissioners of health care incentives, such as to redirect resources to providing diagnostics or minor surgery in primary care. That enables people to be cared for closer to home and avoids unnecessary waiting for people who would otherwise be referred to hospital.

I raise payment by results because, although my hon. Friend did not mention this a great deal today, I know that he remains deeply concerned about the effect of the tariff, as it applies to our local trust and to Wrightington hospital, the specialist orthopaedic hospital. However, although he might not yet have all the answers that he seeks, I reassure him that there is a recognition in the Department of how the pieces fit together and a process under way that will eventually result in a fairer outcome for all. Before closing, I should also say to him that the effect of the pace of change policy, of bringing the NHS back into financial balance, put our PCT in an extremely strong position as it entered this financial year—a financial year in which the NHS will receive its largest ever increase in funding in one year, of some £8 billion. That is a position of strength that our PCT can build from.

I heard my hon. Friend’s rather provocative comments about the MFF perhaps resulting in the closure of the Leigh walk-in centre. People in Wigan always want to close things in Leigh. I will not rise to the bait on this occasion, but I am pretty confident about the future not only of the Leigh walk-in centre, but of the other excellent services in our borough. Indeed, only a couple of weeks ago, he and I were in a new local improvement finance trust centre, which has an excellent renal dialysis unit, run by Hope hospital. That is a great facility for people who previously had to travel to Salford three times a week. Through the new LIFT centres, some cutting-edge care is being introduced in our borough, into the heart of communities that need the best of modern health care. We are now in a position where we can see further improvements in that quality of care in the coming year.

Question put and agreed to.

Adjourned accordingly at fourteen minutes past Five o’clock.