The House will be aware that I made a statement on Thursday indicating that I had summoned an urgent meeting of the Members Estimate Committee for today. In the debate on the fourth report of the Committee on Standards and Privileges that afternoon, several Members expressed deep concerns about Members’ allowances. Similar anxiety about the audit system has been relayed to me privately, and we must also take fully into account the public interest in transparency. At this afternoon’s meeting of the Members Estimate Committee, we will be discussing urgently how to proceed on these matters. The subject of Members’ allowances is something that the House itself must determine, but it is clear that the Committee must find an effective and acceptable solution as quickly as is practicable. It has always been my practice to inform Members first, so I shall be writing to every Member of the House following today’s Committee meeting, announcing how the matter will be taken forward.

With permission, Mr. Speaker, I should like to make a statement. As the House will be aware, there appeared in The Sunday Times yesterday allegations that conversations between my hon. Friend the Member for Tooting (Mr. Khan) and a constituent of his, Mr. Babar Ahmad, detained in prison on an extradition warrant, had been subject to covert recording when my hon. Friend visited Mr. Ahmad on two occasions in 2005 and 2006 at Her Majesty’s prison Woodhill.

I was made aware of the burden of these allegations on Saturday afternoon. My right hon. Friend the Home Secretary and I discussed the matter and we agreed that an immediate inquiry should be established. In a statement to The Sunday Times issued on my behalf early on Saturday evening I announced this, and expressed my concerns about the allegations, if true.

It may assist the House if I now give some detail of the differing ways in which the statutory authorisation regimes for intercept, and for intrusive surveillance, operate. But just before I do so, let me underline the fact, drawn from my experience as a Minister directly involved in these matters over many years, that no authorisations are granted unless by law they are necessary for the detection or prevention of crime or the protection of national security or for related matters, and are proportionate, and unless the information concerned cannot be obtained by other means. Any authorisation for the interception of telephone calls and other public telecommunications requires a warrant personally signed by the relevant Secretary of State—usually the Home Secretary in respect of the police, Security Service and other domestic law enforcement agencies, and the Foreign Secretary in respect of the Secret Intelligence Service and GCHQ. Such a Secretary of State warrant is also required for surveillance operations—including eavesdropping—where sought by the three intelligence agencies. The telecommunications regime is overseen by the interception of communications commissioner—normally a retired member of the senior judiciary, currently Sir Paul Kennedy. This is laid down in the Regulation of Investigatory Powers Act 2000—known as RIPA. Surveillance under this regime is overseen by the intelligence services commissioner under the Intelligence Services Act 1994.

Under the 2000 Act, the regime in respect of intrusive surveillance operations by the police and other domestic law enforcement agencies is different. Under these provisions, which originated with the Police Act 1997, passed in the closing months of the previous Administration, with our support, there is a hierarchy of approvals depending on the nature of the surveillance concerned. In the case of eavesdropping operations, authorisation by a chief officer of police or officer of equivalent rank in the Metropolitan Police Service is required. This regime is supervised by the chief surveillance commissioner—currently Sir Christopher Rose, formerly a senior judge of the Court of Appeal. Ministers play no part in these authorisations.

Where any operation involves the use of premises of HM Prison Service, neither the Prison Service nor the Minister concerned is asked for any additional authorisation for the particular operation. What the Prison Service is asked for, on the basis of a brief summary, is permission to conduct the operation, and that judgment by the Prison Service is based on whether any order or control issues arise, not on the merits of the authorisation itself.

The story in The Sunday Times related to claims in respect of an alleged operation sought by and authorised by the police. It follows that this matter falls within the regime supervised by the chief surveillance commissioner. I can now announce to the House that, with the agreement of my right hon. Friend the Home Secretary, the chief surveillance commissioner, Sir Christopher Rose, has agreed to conduct an inquiry with the following terms of reference:

“To investigate the circumstances relating to the visits to Babar Ahmad at HMP Woodhill by Sadiq Khan MP in May 2005 and June 2006, to establish whether the visits were subject to any form of surveillance and if so by whose authority and with whose knowledge, and to report his findings to the Prime Minister, the Home Secretary and”

to me as

“the Justice Secretary.”

The inquiry will of its nature be fact-finding. Sir Christopher has told me that his aim is to conduct the inquiry as quickly as possible, but consistent with the thoroughness required. He says that he will do his best to complete his task within two weeks. A further statement will be made to the House once we have received and have been able to consider his findings.

It may assist the House if I mention two other matters. The first is the Wilson doctrine. This, as the House knows, was originally promulgated by the then Prime Minister, the late Harold Wilson, in 1966, when he said that he had given instructions that there was to be no tapping of the telephones of Members of Parliament, and that if there were a development that required a change of policy he would, at such a moment as was compatible with the security of the country, make a statement about it. The terms of that statement have been endorsed by successive Prime Ministers, including by Tony Blair in a written ministerial statement to the House on 30 March 2006. In a written answer on 12 September 2007, my right hon. Friend the Prime Minister said:

“The Wilson Doctrine applies to all forms of interception that are subject to authorisation by Secretary of State warrant.”—[Official Report, 12 September 2007; Vol. 464, c. 2103W.]

Secondly, the question has been raised about interception of, or surveillance of, conversations with any person—whether a suspect, a convicted criminal or otherwise—by their legal adviser. Those are all subject to explicit safeguards which generally prohibit such interception or surveillance.

Mr. Speaker, I commend my statement to the House.

I thank the Justice Secretary for advance sight of the statement. Indeed, I thank him for coming to the House rapidly to make the statement. Today he has told us what should happen—not what did happen. He has confirmed that the Wilson doctrine remains in force and that there have been no changes in process or practice, given the duty under the doctrine to notify the House of any such changes. I think he also confirmed that the alleged action—if it happened—was in breach of the spirit of the doctrine. By now he should be able to answer the question: who authorised this? Was it a Minister? Was it a policeman? If a policeman, at what rank was it authorised? Is there any truth in the rumours that appear to have been briefed to Nick Robinson of the BBC at lunchtime today?

More generally, in what ways did the authorities fail to follow proper procedure? Were the breaches of the applicable protocol accidental, or a deliberate and pre-meditated short-circuiting of the system? In particular, was it known in advance that a Member of Parliament would be bugged, and if so, was an explicit decision made not to switch off the recording equipment? Was higher authorisation sought before making that decision?

Clearly, there will be lessons to learn from this case, but can the Justice Secretary tell the House what the current arrangements are for ensuring compliance with the rules for authorising such recording of communications with MPs? What failures in the monitoring and review procedure allowed recordings of a Member of the House—made, we understand, in 2005 and 2006—to go unchecked for, in some cases, two and a half years? Those are all things that the Justice Secretary should be able to tell the House today. Others will take longer.

The Government will need to establish whether this is an isolated case or whether other Members of Parliament have been bugged in the past. Everyone in the House understands and accepts the privileged nature of communications between a Member of Parliament and a constituent. Everyone, including the Prime Minister and the Justice Secretary, accepts the almost absolute nature of that privilege. I say “almost” absolute because the question arises: what would happen if a Member of Parliament became implicated in some way in actions or communications relating to a terrorist plot? The Wilson doctrine is silent on that.

The inquiry that the Justice Secretary proposes might consider that issue, and after it has concluded, the Prime Minister should consult the Leader of the Opposition and other Opposition parties and return to the House on the matter. Given the security interests involved, the discretion required and the importance of sustaining public and parliamentary confidence in the system in place, I welcome the proposed independent review, but I believe that as far as possible the full report should come to the House, not just to Ministers.

The case has exposed two very serious risks. The first is that it is possible for the Executive to ride roughshod over the relationship between a Member of Parliament and his constituents—a relationship that is the very basis of parliamentary democracy. Secondly, the necessary authorisations for secret anti-terrorist activity may be being ignored. Wilson himself recognised that there is a “delicate balance”—his words—between the needs of security and democracy. It is the duty of Government to find and maintain that balance—and it is the job of the Justice Secretary in the next two weeks to re-establish that balance.

I thank the right hon. Gentleman for the manner in which he has responded to my statement, particularly his welcome for the independent inquiry by an extremely distinguished and experienced former senior member of the Court of Appeal.

The right hon. Gentleman asks me a series of questions. I made it clear in my statement that the allegations relate to claims in respect of an alleged operation sought and authorised by the police, and I set out the nature of authorisations in respect of such intrusive operations, which come under that part of the 2000 Act. I also said that we do not know whether the allegations are true, but we do, however, know the nature of the allegations and what is alleged. In so far as there was an authorisation of anything in this area, no Minister plays any part in such authorisations. I repeat that for the avoidance of doubt.

As for the right hon. Gentleman’s other specific questions, I hope that he will accept that although they are entirely legitimate questions, for certain, they are now properly questions for Sir Christopher Rose. He will conduct his inquiry thoroughly but swiftly. He has allowed me to say that he hopes to complete it within two weeks. That is a very acceptable time scale for the House. Of course we understand the public and parliamentary interest in this matter.

The right hon. Gentleman also refers to the Wilson doctrine. I spelt out the nature of that doctrine—and as for any implications for the Wilson doctrine, I think it best if we wait until we have the result of the inquiry by Sir Christopher Rose.

I join the shadow Home Secretary in thanking the Lord Chancellor for coming to the House to make the statement, and for launching the inquiry, which was his decision, with the Home Secretary, and was not done at the request of my hon. Friend the Member for Tooting (Mr. Khan). Will the Lord Chancellor say to Sir Christopher that if he wishes to make any recommendation concerning the Wilson doctrine it can be considered in the future, but that it is absolutely vital that he stick to the timetable of two weeks?

I thank my right hon. Friend for what he has said. On the time scale, I have already said that Sir Christopher will carry out the inquiry as quickly as possible, consistent with the thoroughness required. He hopes to be able to complete it within two weeks—I believe that he almost certainly will—but I hope that the House will accept that if there is a balance between speed and thoroughness, thoroughness must be the priority.

I am grateful to the Lord Chancellor for his statement. I welcome the inquiry that he has launched, and I hope that, unless the systems are entirely dysfunctional, the audit trail will be clear and unambiguous. Is it not the case that these events have added piquancy because they took place in one of Her Majesty’s prisons, and because Mr. Babar Ahmad was held on an extradition request from the United States, under the US-UK extradition treaty, for alleged actions that may or may not have happened on British territory?

The Lord Chancellor has implied that the Wilson doctrine is to be upheld by the Government, and there are good reasons for doing that, but does he agree that there may be a need for a restatement of the doctrine, given the ambiguities in the current arrangements, in differing levels of warrantry for various intercepts, and the fact that the doctrine can be set aside, and that fact will not be announced if the Prime Minister feels that it is in the national interest not to announce it? Is there now a case—I think that this was proposed as long ago as 2003 by my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), the Chairman of the Justice Committee—for authorisation for all intercepts on Members of this House to be taken at a high level by an independent judicial authority, such as the Lord Chief Justice?

What specific actions have been taken since March 2006, when Sir Ian Blair admitted recording conversations with the then Attorney-General, Lord Goldsmith? Does the fact that protocols are apparently not understood by senior police officers not undermine the safeguards offered and enacted on the ever-expanding surveillance activity in this country, and underline the need for vigilance, which the House should exercise, in response to any further extension of intrusive surveillance powers?

On the issue of an audit trail, Sir Christopher Rose will obviously wish to examine that matter, and I do not want to anticipate his findings. The hon. Gentleman referred to the Wilson doctrine. I understand the point that he was making, but I repeat for the benefit of the House that if there are any implications for the Wilson doctrine, it is best that we wait until we have the result of the Rose inquiry.

The hon. Gentleman also referred to a recording—I think that this is a matter of fact—made by the Commissioner of Police of the Metropolis of one phone call with my right hon. and noble Friend Lord Goldsmith, who was Attorney-General at the time. That was an entirely separate matter, which as far as I know did not come under any of the regimes that we are discussing, because it was a recording made by one party to a telephone call of the other party’s conversation. The commissioner has already explained what happened in that case.

Woodhill prison is in my constituency, and many people who work there are my constituents. They do a job of great complexity, as the prison has a wide range of prisoners, including some who are high security risks. Will the Lord Chancellor assure me that the inquiry will be handled in such a way as to minimise any destabilisation of the work done by prison officers and staff during that period?

Yes is the answer to that question, and in answering it I pay tribute to the prison officers and other staff of all grades at Her Majesty’s Prison, Woodhill, as well as those throughout the Prison Service, who are dedicated and professional and do an extremely difficult job very well indeed.

The Justice Secretary said that the allegations first came to light on Saturday. This is Monday. Surely it is possible between Saturday and Monday to ascertain whether someone has been bugged, and what authorisation was given for the bugging. That is the general “bugging” question. Surely it is also possible to determine whether the bugging, if it did occur, took place in the presence of a Member of Parliament. I am concerned that we are drowning in inquiries on almost every subject under the sun, and I am concerned about the time that they take. Yet we are to have more inquiries, when here, technically, the question of what happened that Saturday is something that the right hon. Gentleman can answer.

I can answer about my own state of knowledge on Saturday afternoon, which I have already explained. I do not think that it is quite fair to suggest that my right hon. Friend the Home Secretary and I have not acted with speed. As soon as we understood the nature of the allegations, which was late Saturday afternoon, my right hon. Friend and I discussed the matter and agreed that an independent inquiry should be established. That was announced in a statement that evening to The Sunday Times. I suggest that we could not have acted with greater speed, and that the appropriate way to behave if one is setting up an inquiry is to ensure that it has proper terms of reference and that there is an individual who has accepted the invitation to run it, and then to make a statement to the House. It would have been impossible to make this statement any earlier than I have.

Does my right hon. Friend agree that there are circumstances in which the authorities can legitimately bug a detainee, and that such surveillance need not be suspended when the detainee meets a Member of Parliament? However, I put it to him that the Wilson doctrine, which has served this country well and which protects Members of Parliament from eavesdropping by the state, should not be eroded.

On my right hon. Friend’s second point, there was wide approbation across the House when the then Prime Minister, Tony Blair, explained in a written ministerial statement in March 2006 that, notwithstanding proposals emanating from the interception of communications commissioner, he had come to the view, widely shared by all Members, that the Wilson doctrine should continue. As for the regime, the Regulation of Investigatory Powers Act 2000 lays down detailed regulations governing the use of those powers and the level at which they can be authorised, as well as proper oversight by commissioners who are always former senior members of the judiciary.

It would seem as if something has happened that should not have happened, so there is a risk that other things that should not have happened might have happened. Can the terms of the inquiry be enlarged so that Sir Christopher Rose has an opportunity to identify whether, at Woodhill or anywhere else, conversations between prisoners on remand and their legal advisers have been recorded? If they have, not only is the integrity of the criminal justice system at risk, but individual convictions will be prejudiced and will probably have to be set aside. Sir Christopher would do well to examine, too, the question of whether private conversations with legal advisers have been recorded, whether at Woodhill or at other prisons.

The inquiry is specifically into the allegations that have been made in respect of our hon. Friend the Member for Tooting. I repeat to the right hon. and learned Gentleman and to the House that on the subject of legal professional privilege—in other words, conversations between any individual, whatever their circumstances, and their legal adviser—specific rules are laid down in codes of practice and in non-statutory form, which, as I said, generally prohibit not only the interception or surveillance of such conversations but any accidental recording that takes place thereafter. To my certain knowledge, as a former Home Secretary and Foreign Secretary, those rules are rigorously enforced, and there is a careful audit of all interceptions and the use of those powers by the relevant commissioners.

Is it not the case that Swinton Thomas wanted the Wilson doctrine to be abandoned, because he knew that it had been broken and flouted over many years? Is not the problem that the Wilson doctrine has no statutory basis whatever, so it should be put on such a basis? The Home Secretary in a statement admitted to, or referred to, Parliament’s failure to have oversight of the security and intelligence services. When will the Government provide for Parliament to have oversight of those services, as is the case in all other leading parliamentary democracies? At present, the scrutineers are hand-picked by the Prime Minister. Unacceptable.

I know that that is my hon. Friend’s consistent view. We have introduced for consultation the question whether the basis of the Intelligence and Security Committee should be changed, but I remind him that in any event, the basis of the ISC’s authority is not a quixotic decision by the Prime Minister or by any of his predecessors, but a thorough decision made by the House and the other place in statute in the Intelligence Services Act 1994.

Hon. Members in all parts of the house sometimes deal with constituency cases that are highly sensitive. The Secretary of State will be aware, because he has met me on a number of occasions, that I represent two men who have been in Guantanamo Bay. Is he confident that the case that we are discussing is an isolated incident? Can he give any assurance to my constituents that their conversations with me remain confidential, and that they have not at any stage been overheard by the security services?

It is always a logical impossibility to prove a negative, but this is the first time that I can recall such an allegation being made. I repeat that the regime in respect of all those authorisations is an extremely careful and thorough one, laid down in law by the House and the other place in the very thorough 2000 Act. If any individual has any suspicion that there has been an unauthorised interception of their communications or surveillance of their activities, there are clear routes for making a complaint, including a complaint to the tribunal itself.

If my right hon. Friend was unaware of the issue and the Prime Minister had no knowledge of it, may I ask my right hon. Friend to assure the House that he will extend the inquiry’s terms of reference to include how a prominent member of the Opposition Front-Bench team could claim that he had written a letter to the Prime Minister in December giving forewarning of the issue? Will that be part of the inquiry?

I shall certainly draw my hon. Friend’s remarks to the attention of Sir Christopher Rose. I simply repeat what has already been said: the right hon. Member for Haltemprice and Howden (David Davis) has said and put on the record that he sent a particular letter, although the text of that letter makes no reference to the names of any individuals. The right hon. Gentleman has confirmed that.

It is also a matter of record that Downing street has checked all its files and records on the receipt of letters, and although there have been a number of communications from the right hon. Gentleman, this was certainly not one. I say on my behalf and that of my right hon. Friend the Home Secretary that we also knew nothing whatever of the letter until we were informed about it through the media by the right hon. Gentleman.

Can the Lord Chancellor confirm that Members of the Scottish Parliament and all the other devolved institutions are not covered by the Wilson doctrine? If that is the case, does he not believe that MSPs should be given the same protection as MPs when it comes to having their conversations bugged?

What the hon. Gentleman says is correct, and it is spelt out by Sir Swinton Thomas’s report for 2005-06, in which he raises the question of whether the Wilson doctrine should be abandoned. Decisions about interception warrants in respect of police operations in Scotland are a matter not for any UK Secretary of State, but for the Scottish Executive.

The Lord Chancellor’s statement appears to suggest that there is one regime for telephone tapping, another regime for bugging by policemen and another for bugging by members of the security services. When the inquiry is concluded, will he consider one protocol that covers all those circumstances in relation to Members of Parliament so that at the very least to bug or tap the telephone of an MP will require ministerial approval? In that way, our constituents—many of whom come to us as frightened, vulnerable or fearful individuals—could have some security that they were speaking to us in complete confidence.

As I pointed out in my statement, there are indeed three separate regimes; that is the position as the House and the other place accepted it for reasons that I could go into but will not detain the House on. As far as the implications for the Wilson doctrine are concerned, I think it best if we wait until the results of Sir Christopher Rose’s inquiry.

Does the Secretary of State consider that the Wilson doctrine applies to Members of Parliament who have not taken the Oath?

The Wilson doctrine applies as stated.

I congratulate the Secretary of State on introducing this inquiry. Will he also do us—especially those of us in the focus group on this Bench—a favour? Will he extend the inquiry to beyond a fortnight? It will certainly need it if it looks into the allegations of MPs and trade union leaders being bugged in the strike of 1984 and 1985. That was when the Thatcher regime was in power. Despite all the protestations from many of us present in the House today, that regime would not have an inquiry—and we did not send one letter; we sent many scores of them.

This is a matter of history, because it is the first time that my hon. Friend has ever admitted to being a member of a focus group, although I have heard him on many occasions express opinions about them and say that he would never touch one with a bargepole.

I note what my hon. Friend has to say. I think that it is correct that the Interception of Communications Act 1984, the original statutory provision that laid down a proper statutory procedure for telephone intercept—not for other matters at that stage—probably did not come into force until quite late in that year. It was only introduced following an adverse decision in a case—the Malone case—in the European Court of Human Rights. Before that—it was a matter of considerable concern to many people, including me—the regime for telephone tapping was a non-statutory one operated in what we would now regard as unusual circumstances.

Notwithstanding the brevity of the Lord Chancellor’s answer to my hon. Friend the Member for Croydon, South (Richard Ottaway), will he expand a little on what the Wilson doctrine actually requires? It clearly requires that an MP should not be targeted for bugging or for telephone tapping. However, is it the case that if the security services are legitimately bugging or tapping the telephone of someone who is a legitimate target for them, the moment that person is found to be talking to a Member of Parliament, the bugging or telephone tapping has to cease, or is it allowed to continue because the MP himself or herself was not being targeted?

I am sorry to have to repeat what I said in my statement, but the terms of the Wilson doctrine are as laid down by the then Prime Minister, the late Harold Wilson, who said that he had given instructions that there was to be no tapping of the telephones of Members of Parliament and that if there were a development that required a change of policy, he would, at such a moment as was compatible with the security of the country, make a statement about it. That doctrine has been endorsed and repeated by successive Prime Ministers.

Can my right hon. Friend reassure me and my constituents that there are no phones in this place or in our offices that are bugged and monitored by British security services?

Under the 2000 Act, as under its predecessors, it is not possible to give answers as to whether a warrant is currently in force. However—let me repeat what I have said before people’s imaginations run away with them—the only circumstance in which a warrant for interception can be authorised personally by a Secretary of State is for reasons of national security or for the prevention or detection of crime or related matters, and only, too, where that is shown to be both necessary and proportionate and information cannot be gained by any other means. I also say to my hon. Friend that in my experience over nine years of having to sign warrants as Foreign Secretary and as Home Secretary, enormous care was taken by the requesting agencies and by the Departments concerned, and not only by me as Secretary of State but by my colleagues, to ensure that all aspects of the spirit as well as the letter of the law were observed before a warrant was signed.

I know that the Secretary of State does not want to talk about the consequences of this case for the Wilson doctrine, but could he at least put on record his support for the reasons behind the doctrine, which include the apprehension that surveillance on Members of Parliament could be used for political purposes, either for the purposes of the Ministers concerned or—this was Harold Wilson’s own fear—for the political purposes of the security services and the police?

I am happy to do that, and I made my position very clear in my statement on Saturday. I could not have been clearer. I also say to the hon. Gentleman, touching on the point raised by my hon. Friend the Member for Bolsover (Mr. Skinner), that the situation that arose in the mid-1960s and continued for quite a period afterwards is very different from today’s situation, and that of at least the past two decades.

I should also point out an error, for which I apologise. The Interception of Communications Act was passed in 1985, which makes my point more strongly. As we now know, in those days, there was quite widespread surveillance of individuals, to do with national security and the cold war, and related matters involving the trade unions. It would be impossible to say these days that such individuals would come within the narrow terms of the Regulation of Investigatory Powers Act 2000. Things have changed.

I thank my right hon. Friend for his prompt action and his statement. In reply to an earlier question, he confirmed that in certain circumstances, and subject to a code of conduct, communications between a prisoner and his or her lawyer could be eavesdropped on. Would he expand in a little more detail on why the rules should be different for Members of Parliament?

I said that they could not be eavesdropped on, with great respect. There are different rules for different categories of sensitive information. Some are to be found in the codes of conduct, which are laid down under subordinate powers of the 2000 Act, and others are to be found in statements to this House, including the Wilson doctrine.

Will the first question that Sir Christopher Rose asks be: “Was Mr. Babar Ahmad bugged, and if he was, who kept the records?” If it was the Home Office, why is the Home Secretary not doing this statement?

I am afraid that I cannot anticipate the first question that Sir Christopher Rose asks, and neither can anyone but he. As far as the matter of which Secretary of State should be making the statement is concerned, I am making it because the allegations relate to surveillance in one of Her Majesty’s prisons, for which I am responsible.

In view of public sensitivities and their disconnection from this Parliament, is it not time for the Home Secretary to ensure that an independent Law Officer, not a politician, makes the decision on intercepting the communications of MPs? Would it not be a good idea always to put national security and the fighting of major crime before our own sensitivities?

The hon. Gentleman’s latter point was made by Sir Swinton Thomas. He made a case for removing the Wilson doctrine, but it was not accepted. As far as the different regimes are concerned, they have all been considered quite recently. On the latest occasion, between 1999 and 2000, they were considered in the Regulation of Investigatory Powers Act. The House accepted, without a great deal of argument, that there should be different regimes in respect of intercept, surveillance by intelligence and security agencies and surveillance by the police. Of course, in the future, it is open to any Government and to this House to review the way in which those regimes operate.

Will the Secretary of State give an undertaking to the House that part of the review will consider independent, third-party intelligence agencies from outside this country, and the relationship, if any, that they had with the original request for the intercepts?

I cannot give that explicit undertaking because the hon. Gentleman appears to suggest that he has knowledge which I do not have. I repeat that Sir Christopher’s inquiry, within the terms of reference, will be as thorough as all of us who know him would expect and believe.

The Lord Chancellor has answered our questions carefully and fully, but will he tell me whether he is aware of any MP’s conversations being intercepted during the past 10 years?

I apologise to the hon. Gentleman; I cannot answer that question because it would literally be a criminal offence to do so under the 2000 Act, which was passed by the Commons and the other place without argument. I cannot give any details of whether an individual is subject to interception.

If Members of Parliament are discovered by our security services to be under surveillance conducted by overseas intelligence services, is it the case that those Members are alerted—and if not, should it be?

That is a matter for further consideration. I take note of what the hon. Gentleman said.

On a point of order, Mr. Speaker. Have you received a request from the Leader of the Opposition to clarify his remarks during Prime Minister’s questions last week, when he alleged that the previous Conservative Government had kept an individual—Mr. al-Qaradawi—out of the country, when in fact we know that he had been let in about half a dozen times? Have you received such a request, and if so, would you—

Order. That is not a matter for the Chair.

On a point of order, Mr. Speaker. You will be aware that on Thursday last week, during business questions, the right hon. Member for North-West Hampshire (Sir George Young), following a Liaison Committee meeting, mentioned the change that was proposed at extraordinarily short notice to the way in which this House scrutinises European legislation. You will also be aware that we are frequently criticised for the superficiality of the role that we play in scrutinising European legislation. I am therefore somewhat surprised to discover on the Order Paper for today not only that a timetable has been attached to that business, but that, despite the mollifying words of the Leader of the House on Thursday, it would appear that we are going ahead with no consultation with either the Liaison Committee or the Committee concerned.

Is the hon. Lady referring to motion 4 on the Order Paper?

I am, Sir.

The fact of the matter is that the hon. Lady can oppose the motion. If it is taken after 10 o’clock, it will be nod or nothing, but before 10 o’clock the hon. Lady could speak to it.

On a point of order, Mr. Speaker. Immediately after a statement, it is very useful for hon. Members to be given a copy of what the Minister has said. Unfortunately, the copy that I received today had the last part of the statement missing. Can that be looked into?

It will be looked into.

I beg to move,

That the Police Grant Report (England and Wales) 2008-09 (House of Commons Paper No. 265), which was laid before this House on 24th January, be approved.

The focus of today’s debate will be the police funding settlement for 2008-09. However, I am pleased to tell the House that, in the context of a tight financial settlement, we have secured a good and affordable funding settlement for the police service for each of the next three years, building on considerable investment over a sustained period. The gradual move to three-year police funding settlements has been widely welcomed by the police and by police authorities and will enable them to plan more effectively and to think in the longer term.

Will the Minister give way?

No, I will not. I want to put things into context and I shall then spend a not inconsiderable time giving way, because there are clear local interests. However, I would like to introduce the context first, if I may.

Government grant and central spending on services for the police will have increased by more than 60 per cent.—nearly £4 billion—between 1997-98 and 2010-11. That is a record of which we can be proud. Our investment over the past decade, as well as the significant investment from local taxpayers and the delivery by police forces and authorities of substantial increases in efficiency, has helped to expand local policing, reduce crime and make our communities safer.

Figures published on 24 January show that crime in England and Wales remains stable, according to the British crime survey, and that it has fallen by 9 per cent., according to the police recorded crime statistics. The risk of being a victim of crime, which is 23 per cent., has returned to its lowest level since the survey began in 1981. The police service has responded well to the many and varied demands placed on it. New challenges continue to arise and we must ensure that the service is in the best possible shape to meet them.

The House will know that we see Sir Ronnie Flanagan’s review of policing as an opportunity for wider debate about how best we can consolidate and build on progress and achievements to date, support the police as they meet new challenges and make the most of their collective talents and resources. As part of that process of wider consultation and review, as well as responding to Sir Ronnie’s findings and recommendations, we intend to publish a Green Paper in spring 2008. The purpose is to consult on wider proposals for strengthening the framework that enables and supports the police service and its partners to deliver effectively for the public in the years ahead.

Let me take the Minister back to his comments about proposals being widely welcomed. I attended a meeting the Friday before last at Leicestershire constabulary headquarters. I believe that the Chairman of the Home Affairs Committee visited in the afternoon because there were two meetings. The police authority and the chief constable told us categorically that, far from welcoming the proposals, they were deeply worried about the cuts that they would have to make in, for example, child abuse investigations. There is already a near freeze on police recruitment. The crime situation in Leicester city is not a happy one and the police are worried that they will have to cut services protecting the public because of the grant. Will the Minister comment on that?

I will. The broader context of the settlement has been welcomed. Some people believed that it would not be as generous as it has been. Chief Constable Matt Baggott and others in Leicestershire are doing a very good job. Casting even the remotest aspersions on them about what they may have to cut is unhelpful.

Forces such as Avon and Somerset are worried about the persistence of the damping mechanism, which means that we never catch up with the needs-based assessment. When will it be possible to fund police forces such as Avon and Somerset at the level that is required?

Let me say, as gently as I can, that the hon. Gentleman’s comments are rather churlish, given that the average increase this year was 2.7 per cent., the floor was set at 2.5 per cent. for those that would lose out from the formula, and Avon and Somerset received 3.5 per cent., putting it in the top category of authorities. However, I take the broader point, however churlishly put, that, having established a formula of need, the sooner we reach the new formula, the better. Having been static, with a narrow range between the ceiling and the floor, we were able this year at least to announce a settlement that had no ceiling. Some progress has therefore been made towards the formula and I hope that, in the coming years, it will continue, if not accelerate somewhat.

I hope that my right hon. Friend will not accuse me of churlishness. As the recipient of a 2.5 per cent. increase, my county has been presented with enormous difficulty. We want to invest in policing. Is he determined to stick to the settlement? It will produce enormous stresses and strains in the policing system in Cheshire.

I would never accuse my hon. Friend of being the least bit churlish. I hope that those matters will be explored further when, this Wednesday or Thursday, I meet the chair and chief constable of Cheshire to discuss their specific problems in much more detail. I hope that they will elaborate on their plans. However, the settlement is broadly welcome.

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I balked at allowing hon. Members to intervene straight away because I knew from the last couple of debates on the subject that they naturally wish to consider their own areas. I fully understand that. I got a little way ahead.

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I said at the start that, given the localised nature of the debate, I wished to be as generous as possible to Back Benchers, and I will be. [Interruption.] I was last year, as the hon. Member for Bury St. Edmunds (Mr. Ruffley) reminds me. However, it is also my role to get a bit of the context on the record. I will be generous.

The response of the chief constable of Leicestershire was that he welcomed the settlement, but he rightly emphasised that he needed more to fulfil Leicestershire’s ambitious plans.

I want to ask my right hon. Friend about Kent and the letter that he may have received from Mike Fuller, the chief constable. Has that letter had any impact on decisions that the Home Office may need to make about funding formulae? I refer to migration, which Mike Fuller mentioned.

The straightforward answer to my right hon. Friend is no, in the context of the three-year horizon projected by the settlement. Kent and other forces have raised similar matters—Julie Spence, the chief constable of Cambridgeshire, raised the same issue as Mike Fuller in Kent—that, to be fair, do not necessarily go to the notion of migration and criminality being linked. However, there are genuine concerns about increasing levels of population and about how the Government formula allocations can be quite tardy in picking them up. There are discussions across Government about the matter, not least those with my right hon. and hon. Friends in the Department for Communities and Local Government about growth areas, the sustainable communities plan and all those directions, although they have not directly impacted upon the issue that my right hon. Friend raised.

Precisely on that point, the problem in Cambridgeshire seems to be the delay. Did I understand the Minister to say that there was no prospect of the demographic gap being filled in the next three years? If so, the situation in Cambridgeshire will become intolerable.

No, that would be—if I can bore people—a rather churlish interpretation of what I said. What we are talking about most directly is the immediate settlement for the forthcoming year, 2008-09. We have said in the broadest terms, to help rather than hinder police authorities, that there is also an indicative three-year settlement, and so have announced what they are likely to get over the subsequent two years. If work on demographic change, particularly sharp demographic change, such as that which I mentioned in response to my right hon. Friend the Member for Leicester, East (Keith Vaz), or other such items intervened in that process and if we got broad agreement after consultation on changing things in that direction, clearly that change could be forthcoming over the next couple of years. I am therefore not saying, “This is three years—all shut. Go away, we’re not having a police grant debate over the next two years, because it’s all settled.”

I am grateful to the Minister for giving way because I, too, want to discuss Cambridgeshire. He has rightly referred to Chief Constable Julie Spence’s remarks about the high levels of immigration into the county. That has nothing to do with suggesting that immigrants are all criminals, as the Minister accepts, but refers to the fact that the cost of dealing with a crime involving immigrants is much higher, in terms of police time and cash to pay interpreters. It was recently announced that some 600 arrests of Lithuanians were made in the county last year, almost all of which involved much more time and cost than would have applied had they been native English speakers. When those representing the Cambridgeshire police authority come to speak to the Minister, as I know they will in two days’ time, will he be able to reassure them that the demographics and the problems of immigration will be addressed before the three-year programme is firmly entrenched? Planning for three years is better than planning for one year, but not if it enshrines a permanent inadequacy in funding levels.

I take the hon. Gentleman’s point, although I cannot give him a complete assurance in that regard, because he is asking me, two days after I announced the numbers for this year and, potentially, for the subsequent two years, again to inject a note of caution or potential change. However, such discussions are taking place across Government, which I hope will feed into the process over the next three years. The hon. Gentleman makes some fair points about population change, but he will know too that we try to use absolutely the latest population data and trend data.

However, there is a view that says that whether we are talking about inward or outward migration—migration within country or from outside country—large shifts in population over short periods have significant ramifications for policing. In part, we keep up with that. The notion that we do not keep up in total, either in terms of police resource allocation or more generally, is a fair point that we should consider. I do not have the immediate answer to that over the three-year horizon, but I take the point and shall say that in terms to Julia and her colleagues when I see them on Wednesday.

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The hon. Gentleman has moved places, but I give way.

The Minister was trying to avoid me. However, I am grateful to him for giving way, and I know that he will want to give an accurate and generous response, rather than a churlish one, given our Harrow days together. Is he aware of the great concern in Shropshire about the Government’s failure to realise that our rural counties face many challenges? Of course there are urban areas in the county too, but many villages are affected by rising crime, so I wonder whether the Government have been urban-centric in their funding settlement.

No, I do not think that I accept that. I should point out to the House that the hon. Gentleman referred to our Harrow days because we happened to serve on Harrow council together. It had nothing to do with my schooling. I am sure that no one was in any doubt about that, but I just wanted to make it clear.

The hon. Gentleman will know that policing in Shropshire is first and foremost a matter for the West Mercia police force. I know that West Mercia takes its rural policing responsibilities as seriously as it does its policing of urban areas. As fairly recent events have shown, rural areas and smaller towns in areas such as Shropshire are not immune from serious and violent crime. I shall certainly pass his comments on to the chief constable and the police authority. He will also know, however, that there has been an increase of about 56 per cent. in the budget for the area during the past 10 years.

As I tried to say at the beginning of my speech, I am not saying that everything in the garden is rosy, or that, even after 10 years of investment, everyone has more than sufficient money to use as they choose. I am not saying that at all. As Policing Minister, I would always like to be able to afford to give more money from the centre. I am also keenly aware, however, that there has been a significant increase during the past 10 years, not just in the money from the centre but in the money collected locally. I think that people appreciate that and understand it in terms of policing in their areas.

There are existing pressures on the police and, yes, there is a tightening of the resource base, secured both locally and nationally. On top of all that, everything changes. That is all part of the fascination and fun, if you like, of the world of policing. Policing is now palpably different from how it was five years ago, let alone 10 or 20 years ago, and it has to rush to keep up with the changes in the wider society. We need to prepare the police for that, from a sound and level resource base. Members have raised certain key issues with me, however, and I certainly do not deny them.

It would be churlish of me not to recognise the changes that the Government have made to the rural policing grant as a result of the lobbying of the Minister’s Department. Police forces such as Dyfed-Powys are well advanced in areas such as the civilianisation of the custody service, and they have already made savings in that way. They are therefore finding it more and more difficult to make further savings. Will the Minister give some recognition to those forces that have made a great deal of progress and that are now finding it difficult to make further savings?

I accept the hon. Gentleman’s point. Equally, I recognise that the sum of all the changes that many forces have made in their own areas is far greater than what each individual force has done. I shall rephrase that, because it has confused me. While Dyfed-Powys has made significant advances in some areas, it has not done some of the things that other forces have done to accrue savings or efficiencies. We need to see more of the kind of progress that we are making through the Quest programme and the work force modernisation programme, which have in part been very successful in terms of the all-Wales solution to protective services. When those efficiencies and savings are accrued, part of my job is to ensure that they are not all gobbled back up by the centre. I think that all 43 forces would agree that that is the case, above and beyond what is laid out in the settlement in regard to cashable efficiencies and others. I take the hon. Gentleman’s point, however.

We made quite a serious mistake throughout the debate on mergers—which we were halfway through when I took over this role—when we assumed that we were at ground zero and that there had not been any real degree of collaboration or significant cross-force work in the past. There had been, and that should have been recognised. We have now made significant gains in regard to protective services, to the advantage of all the forces and the communities that they serve, since the mergers debate, and since what people are now calling my Valentine’s letter—it was sent on about 14 February 2007—which set out a quite elaborate way of moving forward.

That is a good example of how forces need to make progress in so many different areas as they deal with new challenges, such as the developments in population, while ensuring the efficiency of their core business and also that more areas than in the past go down the civilianised route or share more roles with other public service elements rather than be carried out exclusively by warranted officers. Those are fair points.

Until a few moments ago, the Minister was joined on the Front Bench by the Minister for Local Government, who has responsibility for flood recovery. The Minister will know that, last year, Tim Brain, the chief constable of Gloucestershire, was the very successful gold commander during the severe flooding incident. Even if the police authority puts up our local council tax by the highest amount it can without being capped—4.9 per cent.—it is faced with the prospect of losing 200 officers or 200 staff in the constabulary. That is a real tragedy for my constituents and others elsewhere in Gloucestershire. How does the Minister justify the excellent service of last year being rewarded by such savage cuts in manpower?

In the first instance, that is a matter, as I say, for Tim Brain, but I fully and wholeheartedly endorse what the hon. Gentleman said. I have written to Chief Constable Brain and spoken to him directly about the excellent job he did as gold commander in dealing with the flooding. We were in different places but shared some close to sleepless nights as things developed in one way or another—[Interruption.] I said in different places. He did a fine and superb job in what he would be the first to note, as he looks down his list of responsibilities, is not really a policing responsibility at all. Funding is partly dealt with through what I think is called the Bellwin scheme—the hon. Gentleman rightly pointed to the Minister with responsibility for flooding, who was in his place a few moments ago. As I have said to Gloucestershire and other authorities, if they need to talk to us more directly about funding in that or any other regard, I welcome the prospect of seeing them, as I do all authorities at this time of year. I believe I have seen four or five this week, that I saw four or five last week and that I will have the great pleasure of seeing others next week. I hope that these meetings are not an opportunity for the usual shroud waving or shaking a bucket, but about seriously looking into taking full account of the peculiar circumstances of particular police forces. In that context, I would be pleased to see Gloucestershire or other authorities.

Now I have to hum a little tune while I work through my speech, work out what I have already said and what still needs to be said. It is right that there has been an average increase of 2.7 per cent. and a floor of 2.5 per cent. That is part of Gloucester’s difficulties with formula allocation, which was raised earlier, as it is stuck in that position. As I said last year and will again, in the mid-term rather than the immediate horizon for this settlement and the next two years, there should be scope for debating police funding.

Whatever the outcome—I said the same last year—the wide spread of the local precept cannot be right. From memory, I think it goes from something like £88 a year in Northumbria, which makes a contribution of barely 20 per cent. to the overall police budget—I do not challenge that; it is just the way history has made it—up to more than £255 for the Metropolitan police and others in the south-east. In the case of Surrey, nearly 50 per cent. of the local police budget comes from the local contribution. These are or should be—with substantive local and distinct concerns—broadly universal services. Core policing business, for want of a better phrase, should be roughly the same, whether we are talking about Cambridgeshire, Gloucestershire, Kent or Northumbria. I say that without providing any straightforward answer to the problem of the balance between local and national funding, as I do not have a plan for instant reform of the precept and council tax system in my back pocket. I do say that, collectively, and hopefully on a cross-party basis, we can turn our minds to examining the longer-term financing of policing, which is usually regarded as a universal service.

What the Minister has just said sounds perfectly reasonable and most people would support it, but he said the same a year ago. What has happened since then? Has there been any progress?

There has been some progress in the subterranean channels, but none in any public sense. The core of this three-year settlement—certainly the settlement for the forthcoming year—is rooted in the system that currently prevails. I should be happy to talk to the hon. Gentleman’s Front-Bench colleagues, and to anyone else who is interested in an exercise that may reach a degree of fruition.

It is just possible that the hon. Member for South-East Cambridgeshire (Mr. Paice) was a bit unfair on the Minister. The Minister’s predecessor also said what he said a moment ago.

I welcome what the Minister is saying, and hope that we can all engage in the task that he is describing. Numerous things need to be put right fairly quickly, and we have an opportunity to ensure that that happens.

To be absolutely fair, and at the risk of sounding pedantic, I should tell the hon. Gentleman that my predecessor probably did not say what I said, because he was in his post for 10 days. His predecessor almost certainly did say it, and I suspect that it was said by predecessors going way back into the mists of time. However, the point remains germane. It is right and proper for the distribution of resources to local government to be aligned with the distribution of resources to the police for historic reasons, but it should not be beyond the wit of the House to come up with alternatives on a cross-party basis. Michael Lyons examined the whole issue of council tax for some time and tippy-toed in the direction of the police tax base, but did no more than that. It was not really part of his brief. None the less, I think that, even a year on, this is a debate that we should have.

The Minister used Surrey as an extreme example of local funding replacing national funding. I will attempt to make that point in more detail later if I am lucky enough to catch your eye, Mr. Deputy Speaker, but will the Minister acknowledge that there is a very special problem in Surrey because of the peculiarities of the funding formula?

The hon. Gentleman may be putting words into my mouth. I did not say that local funding was replacing central funding. What I said was that Surrey benefited from the highest local contribution. The central contribution has not diminished at Surrey’s expense; it is just that, during the past 10 years, the local contribution has climbed higher than the central contribution.

I am sure that the Minister would not wish inadvertently to mislead the public or anyone else. The fact is that the real total Home Office grant in Surrey fell in 2005-06. It is now narrowly above the 1997-98 level in cash terms, but there has been a real-terms cut of approximately 25 per cent.

I am not being pedantic when I say that that is simply not the case. The increase in total Government grants of some £39.5 million—50 per cent., or 14 per cent. in real terms—between 1997-98 and 2008-09 is a fact.

On a point of order, Mr. Deputy Speaker. The Minister is in danger of misleading the House. I have the facts, in the form of a parliamentary answer given by the Home Secretary on 1 December 2005.

That is not a point of order for the Chair. Statistics can vary in all sorts of ways. It is a matter for the debate in which we are engaged.

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May I finish what I was saying before the point of order? The increase of £23.6 million— 25 per cent., or 0.4 per cent. in real terms—between 2001 and 2008-09 shows clearly that Surrey has benefited collectively during the past 10 years. I accept that the process may have slowed down, but it does not constitute a significant cut in real terms. However, that takes us away from the point, which I agree with, that the contribution from the local base is significantly higher than for any other force in the country. The proportion in the last round, that for 2007-08, was 46.1 per cent. compared with the Northumbria contribution of 11 per cent.—rather than 18 per cent. which I think I said earlier, in which case I did inadvertently mislead the House in that regard. Notwithstanding what the points of the hon. Member for Reigate (Mr. Blunt) might be—I have not heard them yet, but I suspect that they will be perfectly valid—I was simply trying to get across my point about there being such disparities in terms of what should be, at core, a universal service. There should be some local variation—some scope for local flexibility—but a range of between 11 and 46 per cent. cannot in any logical sense be right.

Such disparities are rooted in a host of reasons such as history, the options various forces made when there was no capping regime, and what the original base budgets were. It will take time to get to a stage where that can be resolved, because it will invariably require either giving more money to one force and taking it off another or allowing some to go in one direction locally and others not. However, I repeat that the time for debate is upon us—if not a year late.

May I draw the Minister’s attention to a particular problem that has arisen in Wiltshire? When I saw the proposed settlement I knew it was going to be tough, but on 26 January an MOD Minister wrote to tell me that the MOD police complement on Salisbury plain would be cut by four fifths and that the slack would be taken up by the Wiltshire constabulary. Yet no additional resources have been provided for that very substantial cut in MOD police cover. Will the Minister take a look at that and see if he can make an adjustment?

I have already looked at that and I am assured by both MODP and some of the local forces involved—although not Wiltshire in this instance—that policing remains covered sufficiently by the civilian force, but I am more than happy to look into that again. The last time I did so in any detail, that was on behalf of the less than churlish hon. Member for Colchester (Bob Russell), who has experienced not dissimilar circumstances in that MODP numbers had fallen a bit in the garrison town he represents, and he wanted to know about the impact on the Essex police force. I do not encourage the hon. Member for Salisbury (Robert Key) to do this, but he might like to speak to the hon. Member for Colchester and also get a few other Members who represent garrison towns together, and if they then wanted to explore such matters further with me, I should be more than happy to consider doing so.

I think—[Interruption.] Even more clarity on Surrey’s funding has floated up to me from below. Apparently, the figures on its funding are distorted by what happened in 2001-02, when Surrey’s general grant fell by 4.1 per cent. because of changes between the Metropolitan police service and Surrey boundaries. I do not, however, think that that goes to the broad point of the hon. Member for Reigate that things have slowed for Surrey in comparison with others over the latter end of that 10-year period—which I agree with, and I am sure he will elaborate on those points when he makes his contribution.

Some of the main points made by Members go to the heart of one of the original questions, which was about the formula. I am happy that we have been able to move, even in this year’s tight circumstances, at least a little way towards the formula, but that implies winners and losers, and that is our difficulty.

Considerable concern has been expressed in the local media about Avon and Somerset losing out because the formula has not been applied for the last few years. Will the Minister confirm that, as a result of moving towards the formula, Avon and Somerset will get an above-average increase in the coming financial year?

Absolutely, and I am very happy to do so. We spoke earlier about Avon and Somerset, and with 3.5 per cent. it is doing considerably better than the floor of 2.5 per cent. or the average of 2.7 per cent. Notwithstanding that, I take on board the point of my hon. Friend and other Members—not least those who represent constituencies in the Bristol area—that still more might be done to move towards that formula more readily than we have done thus far. That would help me, not least in the sense of notional gainers and losers. We must consider what would have happened if we had not moved towards the formula, where in reality forces are not gainers or losers per se, unless they are judged against the absolute instant implementation of the formula. Given the way these things work, that was never going to happen all at once.

I am mindful that having taken a range of interventions, my speech has taken a good deal of time. I know that this debate is very important for hon. Members, who want to get their local points across, so I shall bring my remarks to a conclusion when I find an appropriate place in this telephone book of a speech to do so. However, may I just make two points in conclusion?

Given that we have sought deliberately again to maximise the increase in general grant next year and we have ensured that all police authorities have received a guaranteed minimum increase in grant of 2.5 per cent, and given the delivery of efficiency gains, prudent budgeting and our making full use of available funding flexibilities—I was going to tell the House about those, but they will have to wait for another time—we believe there is no reason for excessive increases in the police precept on council tax. As I have suggested, much good work is being done across the police service. In pursuing the new efficiency and productivity strategies, we must foster that good practice, disseminate it across the whole service and drive forward dynamically. I am always impressed by the drive for improvement and progress in all 43 authorities and forces, and I know that they operate in a dynamic environment that simply does not stand still and allow them to catch up or draw breath.

As I have also said, we have had extensive deliberations with a range of key authorities and police. In fact, anyone who has wanted to come to see me has done so or is planning to do so over the coming weeks. We have listened carefully to stakeholders in determining the detail of this funding settlement, and I think we have got the balance right in distributing the available resources. The settlement will support the police service in meeting the challenges that lie ahead, it will help the police to deliver effectively for the public and it will protect our communities, so I commend the police grant report to the House.

In opening for the Conservatives, may I congratulate the Minister on taking quite a lot of interventions on the settlements for specific police areas for the second year running? I should also flag up his comment at the end of his speech that he would be happy to receive representations from individual Members who have issues about how the formula might be working.

This debate is vital to the public. All of us would accept that the fear of crime in this country is too high; the Home Secretary bravely acknowledged that when she questioned how safe it was to walk alone at night. Violent crime has doubled in the past 10 years: gun crime has increased—last year, a gun crime was committed every hour in England and Wales; gun-related violence has increased fourfold in the past 10 years; and knife crime has doubled in the past two years. That is not to say that crime has increased in every category over the past decade, but violent crime and the other crimes that I have listed have, and that causes the public concern. They want to know what police funding is in place to meet that challenge.

This year’s settlement is part of a three-year spending settlement, coinciding with the comprehensive spending review 2007, which extends the spending horizon until 2011. Apart from additional funding specifically for counter-terrorism, the police settlement reflects the overall spending provision for the Home Office. On that basis, we face no increase in real terms. The 2.7 per cent. grant increase for 2008-09 is to be read with similar increases for the following two years.

It would be futile to deny that the Minister and I would agree on the importance of efficiency and productivity improvements in the police service. Compared with 2007-08, police authorities will be expected to deliver 9.3 per cent. cashable increases in efficiency and productivity by the end of 2010-11. That needs to be flagged up when considering the headline nominal figures for cash increases that are before us today.

The settlement for the Home Office is very tight, and the Government have been forced to be so strict mainly because of a macro-economic problem—the borrowing problem—that the country faces. In March 2006, the Treasury said that it would need to borrow some £30 billion in 2007-08. In March 2007, that estimate was inflated to £35 billion, and last October it increased again to £38 billion. The Institute for Fiscal Studies tells us that the Government will borrow £42 billion this year.

The Government have run out of money. They have spent too much in the good years and were not prudent. The police authorities are now feeling the pinch as a result. The average increase of 2.7 per cent., in the words of the Association of Police Authorities, represents the “tightest police settlement” for many years. To give an example from the north-west, the chairman of the Lancashire police authority, Malcolm Doherty, has said:

“The demands on policing are increasing, and even with efficiency savings and other grants, we are still left with a challenging financial position.”

For other parts of the country, “challenging” is not the word. In December, Surrey police force took the decision to drop one of its divisions, going down from four to three, because of its budget shortfall and budget constraints. Chief Constable Bob Quick, with whom I have had the pleasure of speaking at length, wrote in the Police Review:

“We are being forced into making these difficult decisions because of our crippling funding situation, which has steadily weakened over the last six years in spite of saving £49 million over the past nine years through efficiency measures.”

He added:

“This is unlikely to be the only tough decision we will have to make—we are exploring other measures in order to continue to make budget savings in both the short and long-term.”

That is an example of a successful police force, according to the performance and assessment framework measures. It came top of the league table last autumn. In addition, it has an excellent record of delivering great efficiency savings, which will have delighted the Minister of State. It is a forward-thinking police force, but even the chief constable who has done all the work in delivering high standards and reducing costs says that he is down to the bone. That poses some questions as to how the national formula is operating in the real world.

My hon. Friend has properly given the example of Surrey. Is he aware that the chief constable has written to the Minister? His letter begins:

“I am writing in unprecedented terms to express my professional concerns about the risks to public safety of people in Surrey over the next three to five years, if our funding position is not resolved urgently.”

I am delighted that the chief constable is writing to the Minister and I think that I know enough about the Minister to know that he will listen and take representations seriously. I urge him to focus on the Surrey example because there are other police forces—I shall not name them—which may not deliver as well as they could. If the criticism that there was not enough money were coming from them, one might be somewhat sceptical of their requests for more money, but I cite Surrey because it has done so well with efficiency savings and performance. I shall not labour that point any further, as my hon. Friend and I have both flagged up the Surrey example.

We accept that the distribution of the grant and the implementation of the funding formula are, as the Minister rightly observed, work in progress. The way that settlements will operate this year, with the floor and ceilings, means that 18 forces will receive the minimum increase of 2.5 per cent.—average 2.7 per cent.—but only one will receive the maximum of 4 per cent. That is only one of the 43 forces.

The joint Association of Police Authorities and Association of Chief Police Officers expenditure forecasting group, in a submission to the 2007 CSR, said that there would be a substantial funding gap at that level of grant increase—this year’s amount—and for the two subsequent years. On the group’s most optimistic assumptions, the funding gap by the end of the CSR period—2010-11—would be in the region of £660 million. Using slightly less optimistic assumptions, the group calculates that the gap would be £996 million—just shy of £1 billion. It is worth noting that both sets of calculations by that authoritative group assume that police authorities will increase the police precept on council tax up to the maximum of 5 per cent. a year, although of course some of them might not want to go that far.

The phrase “funding gap” is wonderfully bland. Perhaps my hon. Friend would care to remind the House that police authorities are under a statutory duty to produce a balanced budget. They cannot operate on deficits; they must so adjust the provision of resources as to bring about a balanced budget.