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Westminster Hall

Volume 487: debated on Wednesday 4 February 2009

Westminster Hall

Wednesday 4 February 2009

[Mr. Eric Illsley in the Chair]

Community Land Trusts

Motion made, and Question proposed, That the sitting be now adjourned.—(Barbara Keeley.)

As the House will be aware, there is a growing interest in my constituency and up and down the country in the potential contribution of community land trusts to increasing the supply of affordable housing. The Government have encouraged the development of policy on CLTs in the past two years by funding, through the Housing Corporation, which is now the Homes and Communities Agency, the national pilot study of 14 CLT projects.

My hon. Friend the Minister has made his interest in the potential of CLTs clear by issuing a consultation paper. The deadline for responses was the end of December, and I hope that when he replies to the debate, he can announce when the Government’s response to submissions will be published.

In my constituency and elsewhere, interest in CLTs has been stimulated by the growing demand for access to a decent, affordable home. CLTs are means by which communities can come together and work to find ways of securing land and other property as community-owned assets to help sustain them. Meeting affordable housing need within a community is a common driving motivation for establishing a CLT.

Although housing is central, it is not the sole motivation or interest: sustainability embraces social, economic and environmental dimensions. That is shown in the Devonport CLT, which is in my constituency and that of my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck). The trust is as much motivated by the need for premises where new businesses can start up as by the need to increase the supply of affordable housing.

It is good to see so many Co-op MPs in the Chamber today, because the co-operative model underpins the working of CLTs and, indeed, other social enterprises. I represent a former coalfield seat. Three of the larger villages in my constituency have had community enterprises with an economic brief for quite some time. Does my hon. Friend agree that it is crucial to have a professional, paid person at the heart of a CLT, alongside an array of volunteers? I hope that the Government recognise that, and ensure that there is appropriate training and models that CLTs can draw on to be successful when the brief is widened—rightly—to affordable housing, as she described.

My hon. Friend makes a good point that will sit well with the work of the new Homes and Communities Agency, which is looking not only at housing regeneration but at the management of jobs and everything that goes to make a sustainable community.

I want to pay tribute to David Rodgers. He works with the Co-operative party nationally, but he has made his expertise available to me and others in Plymouth over the past few years as we sought to understand what is happening in housing and the innovative models that are available to address the growing challenges we have been facing. My hon. Friend the Member for Stroud (Mr. Drew) has also worked with David Rodgers, who has had a career in co-operative housing since 1972. Since 1979 he has been executive director of CDS Co-operatives, which is now the largest secondary housing co-operative in England—it manages some 3,000 homes. As befits someone steeped in the co-operative movement, David Rodgers—in addition to his experience on the board of governors of the Co-operative college and a track record in the Co-operative Housing Finance Society, of which he was a founding member in 1997—has international strings to his bow. He is the UK’s representative on the housing board of the International Co-operative Alliance, and is recognised as an international expert on community ownership and residence control.

I have been following the evolution of David Rodgers’s advocacy of CLTs for a good few years. The Co-op party pamphlet, “New foundations: unlocking the potential for affordable homes”, which was launched last week, takes the thinking on the subject in an innovative direction. That thinking could help the Government to rise to the challenge of restoring lending and trust to a banking system that is beset with uncertainty, and a lack of trust and confidence, stemming from the “ninja”—no income, no jobs, no assets—mortgages in the American sub-prime market. That has been like a pandemic disease.

I congratulate my hon. Friend on securing this debate—she is an expert on the subject in her own right. Does she accept that it is right to consider the CLT option, which keeps land in collective ownership and supports and sustains business, in the current economic climate? We should encourage the Government and the HCA to give it full support.

I agree with my hon. Friend. The time of the CLT model of housing has come. The ideas that are espoused in the Co-op pamphlet—David Rodgers is its prime mover—deserve serious and urgent attention, and I hope that this debate will play a small part in counteracting the pandemic with a dose of co-operative common sense and values.

I acknowledge the work of the hon. Member for Truro and St. Austell (Matthew Taylor) who last year published a report entitled, “Living Working Countryside”. I believe that he saw a role for CLTs in addressing rural housing needs. Recommendation 21 of the report, which was commissioned by the Prime Minister, states:

“The Government should anticipate increased interest in Community Land Trusts…as a model for affordable housing delivery and draw up guidance on how best to implement this model”.

The Campaign to Protect Rural England, in its submission to the Minister’s consultation, also makes the case for CLTs in rural settings. It says that in seeking to meet the aspirations for a decent home and a sustainable community, it is crucial to engage local communities in developing constructive solutions, and to take into account the capacity of the environment to accommodate development.

One of the best features of CLTs is that they command the confidence of people on both sides of the House and all parties. On the hon. Lady’s last point, CLTs offer the potential for communities to welcome housing, rather than setting up machine gun nests to prevent it.

The right hon. Gentleman makes a good point. I hope to make some remarks on that aspect of the CLT model.

Shelter published an excellent pamphlet last December entitled, “Building Blocks”. It promotes debate on solutions to maintaining the momentum on affordable housing generally, and mentions the potential of the CLT model. It states that the model has the capacity to capture the

“value of public investment, philanthropic gifts, charitable endowments, legacies or development gain…in perpetuity, underpinning the sustainable development of a defined locality or community”.

I am pleased that the Conservatives are developing their interest in CLTs and their potential to contribute to the supply of affordable housing. I understand that the hon. Member for Welwyn Hatfield (Grant Shapps) recently established a community land taskforce—it had its first meeting last week. I look forward to hearing his views in this debate, and when the taskforce concludes its deliberations later this year.

What is a community land trust? Through the wisdom of the Government accepting an amendment tabled in another place by my noble Friend, the Labour and Co-operative peer, Lord Graham of Edmonton, we now have a legal definition of section 79 of the Housing and Regeneration Act 2008. It defines a community land trust as a corporate body

“established for the express purpose of furthering the social, economic and environmental interests of a local community by acquiring and managing land and other assets in order—

(a) to provide a benefit to the local community, and

(b) to ensure that the assets are not sold or developed except in a manner which the trust’s members think benefits the local community”,

and

“established under arrangements which are expressly designed to ensure that—

(a) any profits from its activities will be used to benefit the local community (otherwise than by being paid directly to members),

(b) individuals who live or work in the specified area have the opportunity to become members of the trust (whether or not others can also become members), and

(c) the members of the trust control it.”

Where CLTs are set up in rural areas, it is likely that already elected parish councillors will be responsible for the community. It seems inevitable that in some cases the views, hopes and plans of the parish council will not necessarily be in accord with those of the community land trust. There could be tensions; let us not shy away from that. How does my hon. Friend think those problems can be overcome and those tensions removed from an important area of parish life?

Again, my hon. Friend makes a good point. Community land trusts have been seen as part of the answer to rural housing. Representing an urban constituency as I do, I believe that they are also a part of that, and I am sure that the tensions that he discussed will show themselves as we go forward. However, community land trusts have the capacity to involve their members. I hope that through the learning process of managing, the Homes and Communities Agency, to which I referred earlier, will develop national vocational qualifications that will help the people involved. It is the old co-operative ideal of education. I hope that it will help them to foresee things and relate to their communities appropriately.

My interest in the potential of community land trusts was given fresh impetus by a housing inquiry that I carried out in Plymouth last year and the report that came out of it, “Homes for the Future: 21st-Century Solutions for Plymouth—Putting rungs back on the bottom of the housing ladder”. That inquiry started as a result of my meeting a constituent with a young family who had been asked to move five times in five years by a number of different private landlords. She was not a bad tenant, just the victim of insecure short-term housing. Some of her neighbours had other housing challenges that I wanted to understand, as I realised how much the housing market in my city was changing.

I had two specific aims in the housing inquiry. The first was to ensure that we in Plymouth go as far and as fast as we can to provide housing that meets demand, especially in respect of affordability. The second was to inform continuing development of national policy legislation and regulation. My inquiry resulted in several specific recommendations, all of which are directed at maximising the availability of housing across all tenures in Plymouth. The advent of the Homes and Communities Agency, set up under the Housing and Regeneration Act 2008, has created an environment in which many of those recommendations can be pursued. Many of the provisions in the Local Democracy, Economic Development and Construction Bill announced in the Queen’s Speech will also help to carry forward improvements, particularly in the rented sector.

One of the key findings of my housing inquiry was that there was a significant gap in housing supply and affordability between those housed by the city council, by housing associations or by registered social landlords because of priority housing needs, and those who find their own housing through renting from private landlords or buying on the open housing market. Of course it is important that private landlords are encouraged to provide good-quality, well-managed homes for rent in the private sector, and my inquiry report outlined how that sector might be encouraged and improved further, but for many in housing need, neither the private rented sector nor buying on the open market is an affordable option. My report concluded that we need to put rungs back on the bottom of the housing ladder.

Since last summer, when my report was published, there have been significant falls in the housing market. Even so, the ratio between house prices and average earnings in Plymouth, which was one of the worst in the country, remains high. In 2008, the average house price in the city of Plymouth was eight times average earnings. Notwithstanding the downturn in the housing market, the national housing and planning advice unit predicts that affordability in Plymouth and the south-west will continue to worsen until 2026 unless there is an increase of affordable housing supply to meet the demand arising, as we know, from demographic changes affecting the UK and the rest of the developed world. Supply is out of kilter with demand.

To many, of course, the fall in house prices is welcome, as it brings the possibility of buying or part-buying a home within reach. However, I am advised that house prices in Plymouth would have to drop by more than 50 per cent. before many hard-working households aspiring to home ownership could fulfil their dreams. Heaven forbid that that should happen, as it would bring all sorts of other mayhem in train, but the pressure on social housing and the private rented sector will remain great and must be addressed.

That reality led to two of the report’s key recommendations. There is a pressing need to restore some rungs at the bottom of the housing ladder by creating a supply of permanently affordable housing in the intermediate housing market. A permanently available supply of homes at a price between the cost of social rented housing and open market purchased housing is desperately needed to create a greater range of affordable housing choices for those in need of a decent home.

It is desirable in Plymouth to develop, in addition to current homebuy products, a range of affordable intermediate housing market products that will remain permanently affordable. That will help to create communities that are sustainable in the longer term, as it will enable many households currently excluded from the open market to finance part of the value of their homes and to own a property asset. That will allow them to do that in a way that will remain affordable from one generation of occupants to the next.

Community land trusts could play a large part in responding to those conclusions. They can take land out of the market, capture the uplift in value for a local community and harness that community’s talents through an openly governed and accountable democratic organisation. That contributes to increasing housing supply in a way designed to be permanently affordable and sustainable. CLTs can do so on their own or, as I recommended in my report, in partnership with a local housing company.

A partnership being developed in Plymouth between the local housing company and the local community through a community land trust could help to ensure that the additional homes produced by the local housing company are not sub-market with the potential to become unaffordable and destined to move quickly into the open market, but are genuinely affordable, in compliance with the definition of affordable housing set out in the Government’s supplementary guidance to planning authorities in planning policy statement 3.

Developing new forms of permanently affordable intermediate market housing is not easy. It is never easy to float new ideas, particularly at a time when the global economy is facing major challenges due to the volatility in the financial markets, but it is precisely because we face major challenges that new ways of increasing the supply of affordable housing and maintaining activity in the construction sector of the economy are needed.

Last week, the Co-operative party, of which I am proud to be a member, launched a pamphlet in its “Politics for People” series that made the case for a new form of co-operative intermediate market tenure. The pamphlet is entitled “New Foundations: unlocking the potential for affordable homes”. It proposes the development of mutual home ownership on land owned by community land trusts. As in a unit mutual property trust, members of the mutual own equity shares in the property in which they live. The more they earn, the more rent they pay and the more equity shares they own.

The Co-operative party’s case is based on three central propositions. The first is that the global financial crisis has fundamentally changed the world in which we must work to meet the affordable housing needs of our nation. Gone are the days when mortgage finance from high street lenders was readily available. The loss of £1,800 billion—there would be nine noughts after the 1,800 if the figure were put out in full—in the global financial crisis means that, for the foreseeable future, mortgage finance will be in shorter supply. Commercial lenders will, of necessity, return to the old canons, lending to low-risk borrowers buying on the open market, who can afford a deposit of at least 15 per cent. of the property’s value. I was talking to someone who works in that sector at a Federation of Small Businesses dinner last night and he suggested that buyers could be more commonly asked to provide a deposit of 25 to 27 per cent. of the property’s value.

Secondly, because of the financial crisis, if we are to meet the demand for affordable homes and to maintain activity in the house building sector of the economy, including the associated manufacturing industries and their skills bases, we need to find new sources of finance for affordable housing development. The Co-operative party’s pamphlet explains how co-operative mutual home ownership has the unique potential to be an attractive investment for pension funds. That is because it can be structured to guarantee long-term investors a fixed annual yield on their investment to match their liabilities and it is also designed to remain permanently affordable, from one generation of occupants to the next.

Thirdly, mutual home ownership treats a home not as a speculative investment but as a consumer durable. Like a car or a washing machine, a home has a value that is consumed over its useful life. In the case of a house, I am told that that useful life is about 65 to 70 years. The view expressed in the Co-operative party’s pamphlet is that one of the consequences of the global financial crisis is that the days of speculative house inflation, driven by unwise and badly regulated lending practices along with easily available cheap loans, have passed.

Adopting the Co-operative party’s proposals in “New foundations: Unlocking the potential for affordable homes”, which provide the basis for co-operative mutual home ownership on land owned by community land trusts would be a win for the Government, because it would increase the supply of affordable housing and maintain activity in the construction sector of the economy. It would be a win for pension funds and other long-term investors, because it would offer them a fixed annual yield on their investments, irrespective of inflation and secured on the value of the housing that they invest in. It would also be a win for communities in need of affordable housing, giving them an opportunity to contribute their energies and efforts to secure its provision. Finally, it would be a win for the environment, because environmentally sustainable elements of design and construction can be financed over the full 60-year term of the investment in the mutual homes, rather than needing to generate a short-term return for each individual owner.

There is a growing body of evidence showing the success of co-operatives and of other forms of mutual ownership. It is a common form of ownership in other countries, such as Sweden, Norway, Germany, Austria, Canada and elsewhere around the globe. In addition, research commissioned by the recently established Commission on Co-operative and Mutual Housing, which is independently chaired by Adrian Coles, the director general of the Building Societies Association, has shown how co-operatives and mutual forms of tenure promote social, environmental and sustainable communities, which is just what my hon. Friend the Minister, who is responsible for the Homes and Communities Agency, is looking for.

I urge the Minister to look at the evidence from the Commission on Co-operative and Mutual Housing and to consider the case made by the Co-operative party in its new pamphlet. I ask that he responds positively to the representations made to his consultation paper on community land trusts by the experts working with local communities, to remove the barriers to the development of community land trusts. In particular, there is a need to reform the leasehold enfranchisement provisions in the Leasehold Reform Act 1967, so that homes built on land owned by community land trusts can remain affordable in perpetuity, putting those vital rungs back at the bottom of the housing ladder.

I also ask the Minister to proceed as a matter of urgency with the exemplar community land trust and mutual home ownership pilot projects, to demonstrate their potential. Finding ways of assessing the value for money of permanently affordable housing in the intermediate housing market would be helpful, if it were done on the basis of cost per affordable housing year rather than the crude capital subsidy cost per unit. That would reflect the value to Her Majesty’s Government of having such a stock of permanently affordable housing. I also ask him to ensure that Government policies for community land trusts empower local communities to use them as a means of meeting their needs for affordable housing and other needs.

Finally, I ask the Minister to work with the co-operative movement to put in place arrangements that will encourage long-term institutional investors to invest in mutual home ownership and, in particular, to consider underwriting a national insurance fund to guarantee such long-term investment in affordable homes, which would be controlled and owned by the communities that they serve.

In the time that we are privileged to serve our constituents in this place, many ideas come to our attention and demand our advocacy. Of all the things that have come to my attention in the 12 years that I have been the MP for Plymouth, Sutton that might change my constituents’ lives for the better, community land trusts must be one of the most significant. We desperately need something that will halt the slow-down in house building that was set in train by the credit crunch, which was inspired by the American sub-prime crisis. We need the homes and also the work that is associated with building homes, selling them, moving into them and furnishing them. We need the money that was speculative and created a bubble—a bubble that was bound to burst and has now gone forever—to be replaced, at least in part, by new, different and more trustworthy sources of money that can flow into the housing market, particularly into the affordable housing sector, which will be competing for loans in a more crowded space and from more risk-adverse lenders. Similarly, pension funds and insurance funds are looking for safe and sustainable places to invest their funds, which will guarantee steady yields.

Community land trusts have a unique role to play in putting those two pieces of the jigsaw together, in a way that would begin to build the picture that people are crying out to see. It would be a picture that shows that there are new ways out of this nosedive, led by trustworthy sources, and that shows there is a bit of ethically-based competition to the banks in some of their traditional stamping grounds.

Just as we are looking to innovation to create the jobs of the future, I urge the Minister and the other Ministers in the Department for Communities and Local Government not to be risk-adverse but to be innovative, and to make those two needs match up to address one of the greatest challenges that we face in constituencies the length and breadth of the United Kingdom and, indeed, further afield too.

I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on securing this debate. I agreed with much of what she had to say. I want to add a number of points. The first is that in my constituency, in the village of Buckland Newton, where we have had experience for some years now of trying to develop a community land trust, some features of the scene have emerged. Some of those features have been alluded to in the debate so far, and we all need to attend to them.

The first of those features of community land trusts is the difficulty of ensuring that there is sufficient professional help to take these projects from conception to realisation. The great virtue of the community land trust is that it is a community idea; it springs from the bottom up. However, the great difficulty when things spring from the bottom up is that a cadre of professionals are not necessarily available to help turn the very good ideas into reality. The experience of Buckland Newton clearly shows that we need to work on that.

The second feature that has emerged is the contrast between that small village in my constituency and the towns in my constituency; no doubt that contrast also exists between that village and cities in other constituencies, although I do not have any cities in my constituency. Buckland Newton benefits from having a development boundary and therefore from having the potential for exception sites that lie outside the development boundary, which can be exploited by a community land trust to provide cheap land and to make the housing built on that land intrinsically more affordable. Not very far from that village in my constituency is the town of Lyme Regis. Because Lyme Regis happens to exceed a certain size, it does not have the potential for an exception site and therefore the same economic dynamics do not work there. So, as I say, the second feature that has emerged for me is that we need to attend to the question of how we enable community land trusts from lower land values than are charged to private developers.

A third feature has become evident, to which I referred in my intervention, and on which I think the hon. Lady and I agree. My attention was engaged by a remarkable phenomenon some years back, and since then I have been besieged by people asking me to represent them in their efforts to prevent housing from being built in their areas. I am sure that a poll of all Members who represent rural and suburban constituencies, and perhaps even urban ones, would show that they have had a similar experience, so my situation is not unique.

I suspect that local councillors all over the country have been elected on the presumption that they will help to prevent new housing in their areas. However, those local councillors, as well as we Members of Parliament and successive Ministers and Administrations, have all accepted that there is a huge need for housing in the UK on a trend basis. I accept that there is not a huge demand for housing at the moment, other than social rented housing, for obvious reasons, but we will get through this situation eventually, and then we will be back to the trend of having an excess of demand over supply.

We all recognise the bizarre tension between what we know in the aggregate and what we experience in the microcosm. What was remarkable about Buckland Newton was that, because it sprang from the bottom up, the village came together and the very same people who I am pretty sure would otherwise have been at a large meeting objecting to the houses in prospect, were demanding that they be built. That offers the potential to unlock something that the present and previous Governments have desperately sought to unlock—as, no doubt, will future Governments: the ability actually to build houses, rather than merely have targets but find that no more houses are built. I know that the hon. Member for Truro and St. Austell (Matthew Taylor), who produced the recent report, has focused on that issue.

I really believe that a bottom-up approach can liberate us from the ghastly tension of local feeling versus national need, because people in villages, towns and city neighbourhoods, who feel that a community land trust will be useful to their relatives, children and grandchildren, will have a different feeling about the houses that are then built. They will see the social utility of those homes directly, and will therefore vote for them.

The last point I want to make about the Buckland Newton experience is one that the hon. Member for North-West Leicestershire (David Taylor) made in an intervention on the hon. Lady about the connection between community land trusts and parish councils in villages, or the new urban parish councils in urban settings. It is absolutely vital that there should not be the tension that he described, but a coalescence of the two sides. Unless the democratically elected representatives of a location are in tune with the efforts of the CLT, we will not unlock the potential of this movement. This approach should bring people together, not force them apart.

Those of us who represent rural constituencies will have come across cases in which the village hall committee is locked in mortal combat with the parish council, which is unproductive. It is when the two come together that the village hall is renewed. The same is bound to be true of CLTs. We have to bring them into some kind of symbiosis with locally elected representatives. My hon. Friend the Member for Welwyn Hatfield (Grant Shapps), who speaks for the Conservative party on this issue, has had discussions with me and others about this issue for some time, and I suspect that it will be one of the main subjects that his admirable taskforce will cover. We need to find a way of putting those things together, and I am sure that this can also become a matter of political consensus.

I should also like to approach this issue from the national point of view, rather than in relation to my Buckland Newton experience. It is absolutely clear that as a result of the amendment that was accepted in what became the Housing and Regeneration Act 2008—as a small dose of partisanship, I must say that my hon. Friend and the Conservative party in the House of Commons probably had quite a lot to do with that, although the hon. Lady very skilfully put it in a different way—the Homes and Communities Agency is starting to take on board the idea of community land trusts. I welcome that enormously.

It is also clear that this issue is to some degree counter-cultural, by which I do not mean that Ministers are anything other than enthusiastic about it. I suspect that down there, through the spreading bureaucracies over which Ministers preside from an Olympian height, there is still quite a lot of doubt and hesitation about this newfangled idea. They are sort of used to registered social landlords, and it is inevitably the case under any Administration that large bureaucracies will like to deal with large bureaucracies because they are used to large things. These small, bottom-up enterprises pose certain difficulties for bureaucracy, and it will require a certain amount of political will—in the sense not of party politics but of elected politicians—to get the bureaucracy as a whole to recognise that CLTs are not a marginal, interesting and rather terrifying development, but part of the wave of the future.

My last point is that we are not just being nice when we talk about community land trusts, which are of the essence and are not a point of dispute between the three major parties. CLTs will not survive, prosper and multiply, or become an enormous feature on the scene, if they are like the nationalisation and privatisation of steelworks, coming and going with Administrations as they favour or disfavour them; the approach has to be persistent across time. We have a wonderful opportunity to put together something that will last, although it will no doubt vary over time, and that can be sustained because it has combined political will on both sides of the House.

However, a danger of which we all need to be aware lurks in that magnificent consensus. The two worst pieces of legislation for which a previous Conservative Administration were responsible are the Child Support Act 1991 and the Dangerous Dogs Act 1991, which were passed without opposition, and there is an uncanny connection here. If everyone is enthusiastic about the idea, as we all are, no one adopts the position of sceptic, and there is then a danger that we will move in directions that have not been sufficiently inquired into. I hope that while we exhibit all the enthusiasm that we need to exhibit, we will also retain our sense of proportion and accept that there will be all sorts of difficulties on the way. We need to maintain our critical faculties and ensure that we develop this idea in a way that is robust and that allows for the possibility of objections and changes rather than simply assuming that it will be plain sailing because we all agree on the essence of the idea.

It is perfectly possible to combine consensus and appropriate, constructive scepticism, but it requires an effort of will. That is one reason why I welcome so strongly the taskforce that my hon. Friend has set up, and the pilots in which the Government are engaging. Pilots, taskforces and inquiries—and, indeed, the reports of the hon. Lady and the hon. Member for Truro and St. Austell—are very useful devices. We need to open this subject up and get people to comment on it. This must not become a private event inside the House of Commons that gets steamrollered through because we all agree on it. We need to do things in a way that is open, debated and discussed. There will then be a real prospect that in 20 years’ time we shall regard this as the moment when we began a process that transformed the housing landscape of Britain.

It is a delight to take part in this debate. I am aware that the hon. Member for Truro and St. Austell (Matthew Taylor) wants to speak, so I shall keep my remarks as brief as possible, particularly as he was very helpful to me when he listened to my plaintive pleas on behalf of community land trusts in rural Britain.

Let me pay my respects to my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy), a fellow “Co-operator” who is a doughty campaigner in this area. It is important to give credit for the work that she does locally and nationally. We could argue about who tried to get CLTs into law, but they are now in the law, and we welcome the fact that that definition of them now exists. I pay due regard to the hon. Member for Welwyn Hatfield (Grant Shapps), who has visited Cashes Green, which, without making any understatement, I intend to speak largely about. My hon. Friend the Minister has also been, and remains, very helpful. He keeps a weather eye on that site, which I shall not describe as bedevilled, although there are some problems with it. I hope that my comments will help to take the debate forward. I do not demur from what my hon. Friend the Member for Plymouth, Sutton has said about the wider context of CLTs, and I pay particular respect to David Rodgers, who has been so helpful to me in trying to get the Cashes Green community land trust under way.

Why do I spend so much time on the Cashes Green site? Not only is it in my constituency, but it is an important model that we have to deliver because of all the ramifications that there will be if we do not. I am pleased that the hon. Gentleman has visited the site and has spoken to Gloucestershire Land for People. I pay due regard to those who have driven GLP forward: the two Martins—Martin Large and Martin Alder—Max Comfort and Jan Bayley. However, others have also played a part.

Why is it so important that we are able to deliver the Cashes Green community land trust? As the Minister knows better than me, there are 14 community land trusts, including at least one in his constituency. He therefore has a practical handle on what is going on. I believe that Cashes Green is still the largest initiative being introduced, and I have seen it from its infancy. When the then Minister for Housing, my right hon. Friend the Member for Streatham (Keith Hill), was looking for sites to move from the NHS to English Partnerships, which was the ownership body, I persuaded him to include Cashes Green—I, among others, claim ownership of that idea.

Cashes Green was a classic site. It was disused and difficult to develop and it therefore seemed sensible to consider its being used in this new form. From the outset, I stress that Cashes Green is in the more urban part of my constituency, so it is not a truly village concept. However, if the initiative can work in Cashes Green, it can work in many of the villages across the country, as the right hon. Member for West Dorset (Mr. Letwin) rightly alluded to.

I shall quickly go through some of the issues that the Cashes Green initiative has unearthed, and hopefully the Minister will consider them—even if he does not do so today. There are ongoing problems that have to be resolved. As I said, it was pleasing that Cashes Green was considered to become one of the community land trust pilots. In 2006, we completed the project feasibility study on behalf of GLP and submitted it to English Partnerships, which is, of course, now part of the Homes and Communities Agency. After initial support for Cashes Green being a pilot CLT on the mutual home ownership model—to which my hon. Friend the Member for Plymouth, Sutton has alluded—sadly, in mid-2007 English Partnerships advised GLP that it could not proceed with the project as planned because it did not offer value for money. The way in which that has been measured is debatable and, as land prices have crashed, has become even more so.

The problem has been that although there are those of us who see the scheme as an excellent form of intermediate housing market provision, English Partnerships compared it with other forms of low-cost home ownership, principally New Build HomeBuy. It measured value for money according to the full site value. That was about £3 million, as opposed to what English Partnerships paid to the NHS, which was £1 million. Site values have of course fallen and that might be helpful, but the value for money calculation currently being used is very simplistic, if not crude.

In comparison with the open market value of the site, which would deliver 30 per cent. of the units as affordable under a section 106 planning agreement, the GLP proposals would produce an additional 27 affordable homes. English Partnerships calculated the cost for the additional affordable homes provided by dividing the site value—some £3 million—by the 27 units. Surprisingly, it came up with the figure of £111,111 as being the cost of this form of model. Both David Rodgers and I feel that that is highly simplistic and has been a pall over this site. It has made it difficult to deliver the mutual home ownership model for our community land trust.

We believe that a real cost assessment has not been made and that the real cost should be nearer to £60,000, which was in the original proposal. No one was pretending that this site was going to be given for free; that would be illogical and would not help future community land trusts. We know that there has to be a land subsidy, because that is the way in which we bring community land trusts forward, and that is what we are asking of the private sector. We are asking private landowners to accept that these sites would not necessarily come forward otherwise. They should therefore bring them forward on the basis that they would take something of a hit on the site value that they are helping to deliver. That is the nature of our criticism and so far we have not been able to resolve the matter.

In my speech, I referred to the concept, which has come out of a recent conversation with some people in housing finance and David Rodgers, of looking at a cost per affordable housing year. Does my hon. Friend think that that might help to resolve the dilemma that he is describing?

That is helpful because, of course, the proposal from David Rodgers in his pamphlet will go some way toward looking at how we can bridge the gap between public and other forms of finance.

I return to the key point. We are looking at a false comparison: one that has derived a value for money calculation that we think is unfair. In addition, CLTs have been compared with other forms of affordable housing, principally the grant-giving process regarding housing associations. To do so is at best illusory.

My report was obviously about rural areas, where exception sites can, in principle, allow the bringing forward of land at low value because that is the only use it might have. In the urban setting, particularly where there is a form of public sector land, I wonder whether there might not be a reverse exception process whereby the exception is that the land is only available for certain kinds of uses and therefore does not carry an open-market use. That is not available in planning at the moment, but it might be a useful reversal of the rural situation.

I am sure that the hon. Gentleman will talk more about that when I shut up shortly, when he will have a chance to build on his argument. His point is exactly right. I will not use the word “subsidise”, but this is a lower-cost form of land access. That is the way in which we are able to kick the process off.

The case I am really making is that mutual home ownership has many benefits, the best of which is that the ownership of the land is locked in perpetuity. That is what makes it distinct both from other models that the Government are continuing to pilot and from a housing association, through which the grant is invested initially and there may be subsequent problems. This is an exciting opportunity, but it has been somewhat curtailed because of the way in which the calculations have been done.

As the Minister knows, we have argued this case for about 18 months. I hope that we can resolve the situation because, rather than the whole site being made available, we are now talking about between a third and half of the site. I understand why GLP is looking at a twin-track approach. It is talking to the HCA about the proposal that it is putting forward, which is being worked on by the consultancy firm ikon. I would like the whole site to be made available so that we can look at larger developments, which are different from the other pilots that are mostly smaller developments in rural areas. However, I am not sure whether I can talk about the Minister’s area. I hope that we will look again at what is being proposed by the original mutual home ownership model; we are talking about a 77-unit development in totality being derived, according to the mutual home ownership form of community land trust.

At the start of the month, I went to a presentation of the ‘Enquiry by Design’ proposal, which, although disappointing, had some merit. I am not saying that work has not been done, but at that presentation, which was done by the agents GVA Grimleys, there was no mention of community land trusts. Certainly, the constituents who went along, many of whom are older and have views on what they would like to see come out of the site—including community provision—were somewhat confused about why they were presented with just a housing development. That is sad and is not the way to do it. I am not criticising Grimleys or HCA, but we need proper consultation and to badge this for what it is: a different form of housing provision. It was wrong not to do that, and I had to mount a defence regarding whether we could deliver the site for the things that we wanted to do.

I make a plea to the Minister to look in detail at what the mutual home ownership model provides in terms of community land trusts. Ikon has come up with six different models for Cashes Green and Plymouth, and it would be useful to put them in the public domain, so that we can argue about them, look at their strengths and weaknesses and know where we are going. The debate is largely consensual and one on which Members from all parties can move forward, but we must look at how we can deliver the programme quickly. That is my big concern, because if Cashes Green is indicative, we are stuck in the detail and not delivering what we want: low-cost, affordable housing through locking the housing in perpetuity into mutual ownership and allowing people to climb the staircase by obtaining some equity value, if and when their incomes increase.

I welcome the comments of everyone who has spoken, and I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on initiating the debate. I am glad to have a few minutes to address the issues.

My principal concern is about rural communities. If the papers are to be believed, there will be a formal response to my report relatively soon. If so, the debate is well timed on two grounds: first, it may influence the response; and secondly, it may nudge the response so that it is made sooner rather than later. As the right hon. Member for West Dorset (Mr. Letwin) said, there is a time to move from finding that we all agree on the issue to taking some action, and the present economic circumstances have, to a degree, taken the matter off the boil in the press, because some believe that falling house prices mean “problem solved”. The truth, however, is that it is problem worsened—in three key respects.

First, if people think that the issue is no longer important, action is less likely to take place and will be diverted, because the Government have to address big issues that, to some extent, displace the issue before us. Secondly, need is rising. There are more people on lower incomes, and more people losing their jobs and unable to afford housing on the open market. One might think that that would be addressed by falling house prices, but because the issue is about a credit crunch and the availability of mortgages, the demands for deposits make buying even more unaffordable for people at the margins. Although they might have struggled to pay a monthly mortgage before, the rates available to them have not fallen in line with the Bank of England rate; broadly, they have stuck at 5 per cent., and people who have small deposits are being asked to pay 6, 7 per cent., and in one recent constituency case 9 per cent., on a self-build exception site. The costs of getting into the market are higher than ever before.

Thirdly, the really big issue is that the private sector is no longer developing. I was at a meeting last week of a large number of developers, lawyers and those who are involved in the industry, and they were discussing who still had cranes up, because they were pulling out of any scheme that was not heading to completion—where they were not so committed that they could not get out. The great majority of affordable homes are delivered as a quota on the back of private sector schemes, but that is not happening now. In every possible respect, the situation is worse now than when I reported, even though the detail may have become more complex and a little different.

I shall focus on the 16,000 communities with fewer than 3,000 people in this country. In such communities, there are two groups of people. There are the relatively wealthy, who may be incomers or local but can afford the homes and have benefited from the price rises, certainly as an investment. The majority of people say that they would like to move to a little village in the countryside, so the demand on such communities from people looking to buy is absolutely enormous. However, the other group of people in those communities—the people who work in them, the farm labourers, the tradespeople, the people in the shop or the pub and those who provide support as care workers for the elderly rich who have retired there—are being priced out. At best, such people end up having to commute from the poorer part of town to the rural areas, which makes no sense from a sustainability viewpoint; at worst, many of the facilities close—the shop and the pub no longer run.

We are just at the beginning of the cycle, because 20 or 30 years ago those people could still afford a home, or find a rented place or council house. However, the council houses were sold, the rented places have been turned into holiday lets or retirement cottages and the new generation is being priced out.

The hon. Gentleman is much more of an expert on the rural situation; I tend to look at the issue in an urban setting. But did he find, or is he concerned about, what I found in my housing inquiry: that more than 40 per cent. of working households in the age group that would aspire to buy their own houses, at about 30 to 35 years old, are unable to get a mortgage? Although house prices will have brought that percentage down, that is the figure behind the demand and supply situation, and it is completely out of kilter.

I agree, and I do not want to take anything away from the urban problems, because they exist, too. We worry about an ageing population and how it will be supported if there are not enough people in work to provide facilities, but we are experimenting that situation in our rural villages right now, because it is already happening there, not because there are no young people, but because they are being priced out of the communities. What do we about it? Nobody in this place believes that we should tear up the planning rules and build all over the countryside, despite the fact that when the issue is debated in the press, that is often how it is described. We all agree that that is not the appropriate way forward. I do not have time to go through all the reasons, but to most people they are self-evident. We need to provide a route for people who work in such communities but cannot afford a home there. Interestingly, they are often working people who, even if there is council housing, will not get any because they are not high enough up the need scale. They can afford the bricks and mortar but not the excessive land values.

The solution is partly in place: the exception site process, which provides affordable homes in perpetuity to people with local need and connections in such communities. There is a fundamental problem, however. First, some local authorities do not apply the policy. It does not apply universally, and its application is discretionary for the local authority. Even in those local authorities that have such a policy, however, it may be applied only in certain villages that meet criteria of “sustainability”. The smaller communities are allowed to die or wither and lose their services on the grounds that there is no bus stop; that they do not have a boundary, because we allow the policy only where there is a defined boundary; or that there is no suitable site, because the planners can be restrictive. The wording states that it should adjoin the existing community, but some interpret that as “right bang up against the nearest 20 properties,” which may be the very place where there is most resistance. Another, more flexible site may not be miles away from the village; indeed, it may have a connection to it, which is the way that properties used to be developed. Not every property used to be bang up against the next, and those sites may be available and attract support, but planners say no.

I raise the issue because it is the nub of what not only CLTs, but registered social landlords and even, in some cases, the private sector seek to do. I feel passionately that there is a role for the private sector, provided the development has a section 106 planning agreement, is affordable in perpetuity or has a local connection. There are various routes, but we need to turn exception site policy from something that is exceptional to something that we do in communities where there is housing need but where we would not allow open-market housing, which would almost certainly be sold to people moving into the community anyway.

So what do we need to do? We need to say to all the authorities that they need to have this policy in place if there is not an alternative supply of housing. Houses will not be allowed to go on to the open market, and the process must be allowed to take place, subject to key criteria. There must be community support—not absolute support, as there will always be some opposition, but if the community itself says that it wants a development to take place, the role of the local authority should not be that of a gatekeeper, refusing it on technicalities, but that of an enabler, supporting it.

The right hon. Member for West Dorset was right to say that there needs to be support because communities themselves do not always have expertise. They need help with the process, which begins with identification of need in the community. Agreement around need opens the door to finding a site, talking to Farmer Joe and Lord Whatsit to find somebody who is willing to make a site available. We know that sites become available if people understand that the houses will genuinely be affordable in perpetuity for the local community. “For the local community” is a key criterion, as is “affordable in perpetuity,” not least because no one will part with land at low cost if they think they could part with it at a higher value for an open-market development. They also do not want someone else to make a profit from it. No landowner will make land available if they think that a few years down the road the houses will be sold off as the council houses were and someone else will make the money. Therefore, “affordable in perpetuity” is important.

Another criterion, of course, is evidence of housing need. There is no point in doing this if there are not people with a local connection in genuine need who will be part of the mix of the community. The development must be of appropriate scale and style and be well designed, but as I said, it need not be on the one piece of green open space at the centre of the village on which all the opposition is focused. There needs to be flexibility about the site.

The key thing with the CLT model is that it brilliantly pulls all those criteria together. It gives the community surety on all those points because they appropriately hold the value of the site. That is why the model has support not just from Shelter, the Country Land and Business Association and the National Housing Federation but from organisations such as the Campaign to Protect Rural England. A point that I always make to those who say that we are talking about ploughing up the countryside is that the last organisation in the country to support ploughing up and concreting over the countryside is the CPRE, but it is behind this kind of proposal.

It is time to move from words to action, and I hope that is exactly what the Government are about to do.

This interesting debate has been different from the kind of debate that the hon. Member for Welwyn Hatfield (Grant Shapps), the Minister and I usually engage in on Wednesday mornings, which is when we regularly debate housing. I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on securing this debate. I want to acknowledge from the outset her report and the report of my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), which are helpful additions to the debate.

Liberal Democrats have been championing community land trusts for a long time—long before others became so keen on them—and I am absolutely delighted that there is now cross-party support for them. I was relieved when the Government agreed to cross-party representations to have them added to the Housing and Regeneration Act 2008, and I acknowledge the contribution of the hon. Lady in ensuring that that happened.

The hon. Lady clearly laid out the issue around need. She spoke about the case in her constituency that provoked her to begin work on her report. Both she and my hon. Friend the Member for Truro and St. Austell spoke about house prices. The fact is that falling house prices have not actually increased affordability for many of my constituents and many people around the country, because the issue is affordability of credit. The hon. Lady made the point very well that we would require a substantial drop in house prices in many areas for affordability to become a reality.

The real danger is that if we do not keep pace with house building during this period when credit is drying up, we may experience hyperinflation later. Need does not go away just because mortgages dry up. People still want to be able to buy or rent houses, and the fact that they are finding it difficult to access credit does not mean that need disappears. The danger is that when lending comes back on stream, we will get back into another housing bubble and then, of course, another bust later.

Another point that the hon. Lady made very well was about the need for intermediate housing, which is often overlooked when we debate these issues. We talk a great deal about the need for social housing and home ownership, but the particular thing that CLTs offer is intermediate housing for people who fall between two nets: they cannot afford to buy but have too much income, are too wealthy or are not deemed to be in priority need and so are unable to access social housing.

The Co-operative party pamphlet, “New foundations—Unlocking the potential for affordable homes” is particularly helpful in laying out how CLTs may deliver an innovative model during economic downturn. It is a helpful addition to the debate, and I hope the Minister recognises that and will respond to it in his summation. Housing associations’ ability to deliver housing has been based on a model of cross-subsidy through private sales, which of course is now failing, whereas this innovative model of mutual home ownership offers an opportunity to deliver housing in a different way.

The hon. Lady spoke about mutual home ownership being an attractive investment for life and pension fund investors. It would be far less risky than investing funds in shares, asset-based securities, derivatives or hedge funds on global markets. It is an attractive model for investors but also an attractive model for people who are looking for some form of home ownership because there is far less risk that they will fall into negative equity. If mutual home owners do fall on hard times, they could sell some of their equity shares to others or freeze their equity and convert to a rental tenancy, which would not be possible in other situations.

The hon. Lady highlights an important feature of the model. In addition, there is the Co-operative’s track record of low debt: people do not build up debt and are able to pay their mortgage or rent.

I agree with the hon. Lady and thank her for making that point.

The right hon. Member for West Dorset (Mr. Letwin), who is no longer in his place, made an interesting point about the potential for CLTs to get around the nimbyism that we often see when we encourage communities to build more houses. There is always tension between the Government’s targets for house building and people’s fears about loss of lifestyle and change to the nature of the local community. The point of CLTs is that they get around that problem because they come from the ground up. People have a stake in the development—they feel that they or their children may benefit from it. That makes CLTs particularly attractive for rural areas, which is the point that my hon. Friend the Member for Truro and St. Austell made here and elsewhere, although not in his report. However, the importance of CLTs extends beyond rural areas. The model is gaining a great deal of interest in London as well. The sense that people have that there is some possibility of accessing the development overcomes crucial fears. The right hon. Member for West Dorset also discussed the need for professional help and the importance of the relationship with parish councils and housing associations.

I shall conclude with a few questions for the Minister, which pick up on some of the points made by the hon. Member for Stroud (Mr. Drew). Of course there will be areas where separating the price of land from property will not, on its own, bring homes into an affordable range. What guidance has the Minister given to the Homes and Communities Agency on subsidies that it may make available for this kind of development? What has his response been to representations from CLTs that the Leasehold Reform Act 1967 should be amended to ensure that affordability is locked in?

A number of hon. Members mentioned value for money. I am interested in the idea of valuing a site based on the cost per year of affordable housing. The point about the current system for valuing a development being simplistic was well made. I wonder how the Government will ensure that we also take account of social value and social benefit to a community.

Having made those points, I remind the Minister that this matter has cross-party support, if he had not already gathered that from the debate. I hope that he will not just make it possible for community land trusts to exist, which is what the amendment to the Housing and Regeneration Bill did, but will positively enable CLTs, because this important, innovative idea may offer a solution at a time when many of the other models that we have for housing development are failing.

I will try to be brief. First, I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) not only on securing the debate, but on her excellent paper, “Homes for the Future”, which sets out many of the principles behind today’s debate and the future of housing. I also thank the Minister for his phone call to me, during which he said that, having voted twice against our new clause on community land trusts, he had decided, under some persistent and welcome pressure from hon. Members in this Chamber and others beyond, to accept in the House of Lords an amendment that looked remarkably similar and which, for the first time, defined community land trusts in law.

There is a huge amount of agreement and perhaps even co-operation on CLTs, as is fitting for such an idea. The hon. Lady has already mentioned the community land trust taskforce, which met for the first time last week. I set up that taskforce to produce a report that will, I hope, provide the recommendations that need to be put in place to encourage CLTs into action—to make them happen, as it were. Many of the eminent names that have already been mentioned this morning—such as David Rodgers and Martin Large—sit on that panel, so we know that we are getting expertise from the best sources. The taskforce is chaired by Dr. Karl Dayson of the university of Salford, who has spent a large amount of time, academically, studying this subject.

Some of the problems that CLTs face are questions of culture and misunderstanding. I enjoyed my visit to the CLT project in the constituency of the hon. Member for Stroud (Mr. Drew). I was struck by the story of a community coming together and doing all the background work, including studying and consulting the local community and working up the plan that the hon. Gentleman mentioned in great detail, only to meet English Partnerships, which insists on redoing all the work at a cost of £160,000, as I recall. That is nonsense and is contrary to the principles that we are all trying to establish for CLTs. I have taken that specific example up with the chief executive of the Homes and Communities Agency, Sir Bob Kerslake, who promises to investigate.

Last week I sat on a panel with Sir Bob Kerslake at the Guardian “Future of Housing” conference and one of the questions that came in was about what could be done to speed up CLTs. His response was, “Look, I’d just like to see any of these actually go ahead.” There are many trials now—I have been round the country and have seen many or most of them—but they all suffer from problems of understanding or misunderstanding. People do not quite understand what they are about.

We are now in a position to do something with cross-party support and I hope that the Minister, in his last year or so, can get this scheme moving. There is a really pressing need, which has been brilliantly outlined by many, including the hon. Member for Truro and St. Austell (Matthew Taylor) in his report and the hon. Lady in hers, and in the Co-operative report of last week.

I was struck at the first meeting of our community land taskforce last week, here in Westminster, when, in response to the question, “This is a great new idea, but how are we going to get it going?” one panel member said, “I saw this idea in Estates Gazette 20 years ago and ever since then I have spent my life trying to get the thing going.” The time has come. Minister, we look to you to provide the guidance.

I welcome you to the Chair, Mr. Illsley. I congratulate my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing this debate. As has been said throughout the debate, my hon. Friend is a huge champion of the whole idea of housing and her report is excellent. I like the concept of housing for the benefit of the whole community and she has been a strong champion of community land trusts for some time now. She has rightly and successfully held the Government to account on the matter of community land trusts, particularly on the definition of them. Let me spoil the consensual cross-party thing that we have had throughout this debate by saying that it is thanks to her efforts and those of my hon. Friend the Member for Stroud (Mr. Drew) that we were able to accept an amendment to the Housing and Regeneration Bill on the definition of CLTs.

This has been a professional, high-calibre debate, reflecting the importance of the concept of CLTs. My hon. Friend the Member for Plymouth, Sutton mentioned that there is a growing interest in the potential for CLTs. I agree. She beat me to it in saying that the time has come for CLTs—I had already written that phrase down—but, again, I believe passionately in them and agree strongly with her about that.

Let me declare an interest at this point. My hon. Friend the Member for Stroud has already mentioned it, but hon. Members will be aware of the 14 CLT pilot areas—seven in urban areas and seven in rural areas—which the university of Salford is helping to run. Hartlepool, my constituency, is the location for one of the seven urban area pilots. Progress has been slow so far, but I take a strong interest in the concept of CLTs, particularly because I have a constituency as well as a ministerial interest.

We in the Government feel strongly about putting power back in the hands of communities. That theme is repeated across the range of public services, with a stronger voice and more direct involvement for people throughout the health and education sectors and local democracy, so services improve and quality is raised. There is no reason why we cannot do the same thing in respect of housing and planning. At the same time, we know that the lack of affordable housing is a major concern for people throughout the country. One of the strong themes of the report by my hon. Friend the Member for Plymouth, Sutton is the need for affordable housing. The hon. Member for Truro and St. Austell (Matthew Taylor) has also produced a strong report that we will respond to shortly.

Yesterday in the Department, we had a presentation on the affordability of housing. We saw a map of the country showing the pressures on affordability, and the least affordable places to live were represented in red. As hon. Members would expect, London was bright red. However, I was struck by the fact, which will be of interest to the hon. Member for Truro and St. Austell and to my hon. Friends the Members for Plymouth, Sutton and for Stroud, that the south-west was burning red. In both the urban and the rural areas of the south-west, there is a real affordability issue. We should ensure that we build more houses to a model that helps to provide them in perpetuity. How to provide affordable housing for today’s generation and the next generation is a long-term concern for all hon. Members.

The Government are keen to back the aspirations of people who want the chance to own a home of their own. The hon. Member for Truro and St. Austell is strong on that in his report and in his comments in this debate. Future household growth projections, the fact that we have an ageing population and the current short-term difficulties with regard to the global economy underline the need for us to go further and faster to help more people to realise their aspiration for affordable housing. That was a strong theme in the debate.

We are doing our bit. The Government are investing £8 billion in affordable housing—for both social rent and low-cost home ownership—through the new Homes and Communities Agency throughout the next comprehensive spending review period. That represents a £3 billion increase compared with the previous three years. We have never seen in this country the investment in housing that we will see in the next three years.

That is simply not true. We have responded quickly and decisively to the current economic difficulties. We have brought forward future years’ spending—about £550 million—for the HCA precisely to allow housing associations and RSLs to bring forward spend, not only to help to ensure that we have affordable housing for our people, but to ensure that we can stimulate economic activity and help the construction industry at what everyone acknowledges is an extraordinarily difficult time.

I do not want to lead the debate off the subject, but I want to get to the facts. I met Sir Bob Kerslake just before Christmas and he made it clear that although money has been allocated, only about £600 million of the budget has been spent to date.

To be fair, this is something that we look at closely with Sir Bob and the HCA and, in the two months that the HCA has been up and running, to be able to spend £600 million is not a bad state of affairs. We consider this issue very closely. It is extraordinarily important. We need to ensure that we have the homes that this country needs. I have already mentioned the affordability issues. The hon. Member for Truro and St. Austell was right when he mentioned the evaporation of lending capability, which is putting acute affordability pressures on young families. We need to ensure that we build the homes that people need and that we stimulate the construction industry to help to do that.

The market is struggling, leading to sharp falls in house prices, and developers are finding it harder to sell new homes. That is why we have brought forward money to allow the HCA to go to RSLs and councils to buy unbought stock from private developers. In central Government, our focus is on proactively responding and intervening to address those difficulties, helping to restore stability by rebuilding confidence and reassuring consumers that there is practical support where that is needed. The Government have a key role to play and we have stepped up to the plate to help to achieve what I have set out.

Unsurprisingly, I shall return to the value-for-money calculations. I would be happy for this to take place outside the orbit of this discussion, but it would be useful for the Government to examine value for money, to help the HCA, and then to come back and discuss it with those of us who are trying to move things forward, because that is the crux of the problem that some of us are facing at the moment.

My hon. Friend mentioned value for money during his excellent speech. It is an important point. I will spend some time talking about the role of the HCA, because that is important, but I want to respond to that intervention in two ways. First, I recognise the point about value for money. Community land trusts can provide additional albeit somewhat intangible benefits, whether that relates to community cohesion, building capacity in the community or strengthening the sense of ownership. During the passage of the Bill that became the Housing and Regeneration Act 2008, the hon. Member for Welwyn Hatfield (Grant Shapps) and I debated at length how land can be sold for less than market value for a wider social good. That is an important point. My hon. Friend the Member for Plymouth, Sutton mentioned the consultation exercise on CLTs that I launched in October. That closed on 31 December. A key issue that we were considering in the consultation was how to get the concept of value for money into this process—how we can assess value for money when considering community-led development. Again, that is an important point.

Secondly, given the economic difficulties that we face, the evaporation of mortgages and the business model for RSLs being inappropriate in the current market with regard to private money helping to fund socially rented stock, we have to be as flexible as possible. That is the key point and I think that it is what Sir Bob Kerslake would champion. The HCA has to be as flexible as possible in responding to the current difficulties.

I have mentioned the role that central Government have to play, but I return time and again—this point was reiterated throughout the debate—to the power of the community itself. In my experience and, I know, in the experience of hon. Members on both sides of the House, there are few problems that communities cannot solve for themselves. If their talent and ingenuity are unlocked, they can work wonders. Change goes deeper when people have ownership and can take control of things themselves, rather than having them imposed on them. I strongly oppose the idea of public services being provided at people, rather than for people and with people. That is a disgrace. Working together and shaping public services according to specific local needs is the way we need to go.

It is in the context of community empowerment with regard to housing—including long-term concerns about affordable housing, about the evaporation of mortgages and about how our children and grandchildren will get on to the property ladder—that CLTs can play a key role. That is why I and a number of other hon. Members have said that their time has come. CLTs are about engaging, galvanising and mobilising the community. They are about bringing communities together to improve the quality of their local environment, the services that they receive and the facilities available to them.

The Government’s firm aim is to see CLTs that are well managed and have the capacity to take on development. I am mindful of points raised in the debate about support and training for communities. The point has been made that a bottom-up approach is not sufficient; people need professional help in this regard. We recognise that and, in response, have commissioned research to review the availability of and access to technical expertise and information for community organisations to enable them successfully to manage their own assets. Community transfer of assets, community ownership and how those things are achieved on the ground practically and technically are important points.

I am sure that the Minister is right on that, but I think that he will also accept that, if the planning officers see themselves as gamekeepers whose job is to say no to much of this development, to apply very strict criteria or to say that a community is already unsustainable, and they will not allow anything to happen there, what ought to be quite quick and simple loses its certainty and gets bogged down in ridiculous planning arguments. That is the experience of community groups. Even when communities start in favour, they too often run into a brick wall. We need to move from these schemes being seen as exceptional to their being seen as what people do in the community.

The hon. Gentleman makes a fair point. I would certainly be against the “Computer says no” philosophy and in favour of the idea that people should be helping to enable and facilitate. Central Government have a role to play in that in providing resources, but local agencies also have a role. A strength of the HCA is the can-do attitude stemming from Sir Bob Kerslake downwards. That is about saying, “How can we help you in your local community? How can we ensure that you have the tools to do the job and realise your ambition on the ground?”

Will the Minister be sure to let us know when we can expect to hear the response to the CLT consultation?

I will get that on the record now because I know it concerns my hon. Friend. As I said, we launched the consultation in October and it ended on 31 December. We received 63 responses—very in-depth, professional, high-quality responses, including one from my hon. Friend. I am currently reviewing and assessing those and I hope to be able to respond fairly shortly.

I am not able to give a firm date. I am sorry to disappoint hon. Members on that. I am keen to do the work as quickly, but as thoroughly as I can, taking the whole House with me to ensure that we have cross-party support.

It is a disappointment that the right hon. Member for West Dorset (Mr. Letwin) did not have the courtesy to stay for the winding-up speeches, because he made a very perceptive and intelligent point about development often being seen as negative when it should be seen as positive, as something that helps a community to realise its ambitions and aspirations. I do not want that nimby attitude to exist in planning and development. I want development to be seen as a positive thing that helps to engage people. Community land trusts can be a vehicle to achieve that and, with cross-party support, we can move from talking to delivery and action.

Global Population Growth

It is a pleasure to see you in the Chair, Mr. Illsley, and I know that as usual you will be firm but fair in chairing the proceedings. It is also a pleasure to see the Under-Secretary of State for International Development, my hon. Friend the Member for Bury, South (Mr. Lewis), in his place to respond to the debate. I have followed his career with great pride and joy and am pleased that he has been so successful. I wish him well in his new job in Government, which is an exciting but difficult one.

The local council in Stafford is today unveiling its proposals for a consultation on its next local development framework. The Conservative-controlled Stafford borough council will be explaining why it has agreed to a Labour Government plan for a growth point at Stafford, because it has agreed to take 20 per cent. more new housing over the next 20 years than it would have had to take under a normal calculation. I am sure that there will be great controversy locally about why we must have all that house building in Stafford in the next 20 years. When people such as myself explain that it is because of the growing population and the need for housing, people ask me where that growing population comes from and why we have to have it.

There are many explanations of our need for more housing, but much of that need relates to demographic change and not necessarily to immigration change. Those questions illustrate on a small scale in one place in this country the population growth going on around the world, which should concern people but does not get the airing and debate that it should receive.

After I secured the debate, I suddenly started to see the topic attracting comment and attention in the media. Last week, George Monbiot wrote in The Guardian about population growth being a serious concern, and argued that we should blame not the poor for having children, but the rich for hogging more than their fair share of the world’s resources. This week Sir Jonathon Porritt was reported in the Telegraph headlines for saying that there should be a two-child limit in future on the size of families. He referred to irresponsible parents who have more than two children and green campaigners who betray their membership by not debating that important issue. I would very much like to dissociate myself from his comments, particularly as I am one of four boys born to my very successful mother and father, who are both sadly dead. My approach is different, and I would like to explain it this morning.

It is important that we focus on the part that population growth will play as a more general issue in sustainable development. The population of this country has now passed 60 million and is forecast to reach 77 million by the middle of the century. The world’s population has passed 6 billion and is forecast to reach 9 billion over the same time scale. That would mean an increase in the world’s population of 6 million every month, which is a staggering statistic.

I am drawn to the debate on population because of my initial concerns for the environment and the urgency of our task to combat climate change. The Climate Change Act 2008 was a world first in setting a binding target for cutting carbon emissions by at least 80 per cent. by 2050. I took part in the debates as we crafted that Act. We of course have to mitigate by reducing our emissions of greenhouse gases and adapt by preparing for rising sea levels, warmer summers, wetter winters and more unpredictable weather events, but as I asked on Second Reading, where is the discussion about the effect on all our plans of the level of population we will be working with?

My approach is very different from that of Sir Jonathon Porritt. I do not think that society should interfere in the free choices people make about having children, and I want the world community to discuss all aspects of sustainable development, including population size. In this debate, I want to focus on two points that arise as a result of a growing population. First, given that there will be a larger population in the future, how can we manage the world’s resources to meet their needs? Secondly, can we agree that, on balance, the world will be a safer place if we can stabilise the population at a lower level than currently forecast, and if so, what can we do to achieve that stability?

I will look first at the resources for a larger world population. Currently, over 1 billion people—about one sixth of the population—live on an income lower than $1 a day. The balance between those living rural or urban lives shifted last year: for the first time, more of us are urban dwellers. As the population grows and land use continues to shift towards urban living, we will need smarter ways of providing water for drinking, washing and irrigation and of farming to produce enough food for everyone. As we know from our plans in the UK for cutting carbon emissions, we will have to replace much of our carbon-based energy with renewable sources.

I shall now discuss the implications for water. One in three people in the world already face water shortages, and there are significant areas of water stress now. The Pentagon produced a risk assessment a while ago that identified competition for limited water supplies as potentially a major cause of future conflicts, and we can anticipate migration away from areas of water shortage. Also, we can see that rising sea levels will create too much water in some areas, which will cause flooding, wash away people’s homes and again trigger migration. The forecast rise in global population means that, by 2030, we can expect demand for water to be 30 per cent. higher than today. In some developing countries, as much as 70 per cent. of fresh water is currently used for agriculture, so we simply have to focus agricultural research and development on global public goods such as developments to support sustainable water and land use, and that brings me to food.

We saw last year that prices rise when food is scarce, often beyond the reach of local people, and we witnessed serious riots around the world due to food shortages and unaffordable prices. It was certainly a wake-up call for the international community and our own Government and food producers that food security is even more basic than energy security. The forecast rise in the global population means that demand for food is expected to rise by 50 per cent. by 2030, so we need the agricultural research and development I have mentioned to stimulate agricultural production in all parts of the world. It is a big ask: more food from less land. There will be less land because of the urbanisation I have described. At home and abroad, it is essential that our Government promote long-term investment in research, science and technology to support farmers everywhere.

I chair the all-party group on science and technology in agriculture, which incidentally is not some entry group for pushing genetic modification. It looks at the research, some of which has already demonstrated what works somewhere in the world. Some science is about efficient land management, plant breeding and the right tools for the job. Some technology is actually quite low-tech and uncontroversial. In some developing countries, for example, there is potential to treble or quadruple existing crop yields by straightforward steps such as investment in infrastructure, quality seeds, education and measures to reduce wastage and post-harvest losses.

In the UK, climate change will pose questions about which crops will be most suitable for our conditions and whether a changing climate will bring new pest and disease challenges for our crops and livestock. However, we cannot shut our eyes to evidence of additional new ways to help feed the world’s growing population. I expect biotechnology will offer some solutions—for example, crops with enhanced tolerance to drought, heat and stress. The important point is to allow the scientific research to take place so that we can then consider the evidence and decide which farming methods to adopt or reject.

It is important that the Minister acknowledges the need for us to support research and development in the long term, with a joined-up, strategic approach. That means that every Government Department must be involved, not just the Department for International Development. The Department for Environment, Food and Rural Affairs clearly has an interest, and the Department for Innovation, Universities and Skills and the Treasury will have an interest in ensuring that we have a coherent, joined-up approach to that kind of research.

In the UK, we have efforts to achieve that kind of approach. DEFRA has formed its new Food Policy Council and Professor Beddington, the Government’s chief scientific adviser, has set up a foresight initiative to consider long-term food security issues. The Royal Society is conducting its own inquiry into biological approaches to boosting production. Through the all-party group on science and technology in agriculture, I am supporting calls for an integrated food research strategy. Internationally, we have opportunities to set the same approach through EU discussions about reform of the common agricultural policy, the Doha round of trade talks and efforts to boost international research and development so that we increase global food production in socially and environmentally sustainable ways.

I shall turn to the third of those three limbs about meeting people’s future energy needs. Similarly, the case for research and development in new renewable energy technologies is essential. The forecast population growth means that demand for energy is expected to rise by 50 per cent. by 2030. We must not meet that demand by burning more carbon, because of the climate change threat. In any event, the finite sources of carbon-based fuels might not stand the strain, as anyone who follows the peak oil debate will testify. Like the food debate, we face challenges of price rises and security of supply. It is urgent, therefore, that we develop a diverse range of renewable energy technologies capable of deployment in all parts of the world and of meeting the predicted increased energy demand. There are, of course, consequential considerations in all the three areas that have to be addressed. For example, we need effective regulation, but not over-regulation. We need translational research to ensure that the basic science is carried through into practical and beneficial outcomes. It is very important that we do not take our eye off the ball in ensuring that we have enough people with the right skills for such ways of working.

I now turn to the population side of the equation. People who rely on large families to combat the fear of childhood deaths and poverty need to be reassured that health care and wealth can be had. We must all agree that education, family planning and health services should be universal rights. I do not necessarily sign up to the objectives of the Optimum Population Trust, but I find its work helpful in informing the debate. When asked about the population solution, it responds:

“GLOBALLY: reduce birth rates. NATIONALLY: reduce or keep birth rates low and/or balance migration to prevent population increase. All countries need environmentally sustainable population policies to underpin other green policies. PERSONALLY: have fewer children and work a few more years before retiring.”

I throw that policy solution into the mix for consideration without endorsing its particular approach.

I know that the Minister has read the report on the hearings by the all-party group on population, development and reproductive health called, “Return of the Population Growth Factor: its impact upon the Millennium Developments Goals”, which was published in January 2007. The instigator and chair of the inquiry, and publisher of the report, the hon. Member for Croydon, South (Richard Ottaway), is with us today. I look forward to hearing from him in a moment. The report reminds us that in 2000 the United Nations set eight goals for global development, to be achieved by 2015, known as the millennium development goals. Strikingly, the original goals made no reference to population growth and gave no recognition of its impact. The UN has since agreed to add a specific goal calling for universal access to reproductive health care by 2015. Mostly, the countries with the greatest levels of poverty and greatest need to achieve the goals also have high birth rates and rapidly growing populations. The report says:

“Improved access to family planning is one of the most cost-effective ways of reducing infant and maternal mortality. Slower population growth offers a demographic dividend, which opens the door to economic progress and permits a country to invest in education and health”.

I have been following this debate through other means. The International Planned Parenthood Federation argues that any debate about population should be framed around people’s rights. The federation believes that

“women, men and young people everywhere should have control over their own bodies”,

that

“they should be free to choose parenthood or not”,

that they should

“be free to decide how many children they will have and when”

and that they should

“be free to pursue healthy sexual lives without fear of unwanted pregnancies and sexually transmitted infections, including HIV.”

I agree with those conclusions. However, we cannot discuss tackling climate change, environmental degradation, resource efficiency and population levels in isolation. Each issue has a bearing on all the others. Every crisis, whether social, economic or environmental, will be affected by resource consumption patterns, inequities in trade, the distribution of wealth and societal changes. We need policies that place people at the centre of all that we seek to achieve in terms of sustainable development and peaceful coexistence. We must consider much more than just birth rates—we must also consider mortality, spatial distribution, migration and urbanisation.

I endorse the following quote by Robert Engelman, of the environmental group Worldwatch:

“Differences in future population growth can’t by themselves determine whether we stabilise the climate or improve human well-being. But by imagining a global climate framework based on both equity and sustainability, we can see that slowing population growth is crucial to the goal of climate stability. So clear does the relationship become that special vigilance in defence of reproductive rights may be needed in a world of still-growing populations ever more worried about the future of the climate”.

I agree so much with that quote, and asked for this debate, because as people grow more concerned about what the future holds—some things look grim, given those statistics on population growth, energy consumption, food, water and so on—they will start to worry and look for easy solutions. It is important that we place the debate on population growth in the context of sustainable development, so that we can resist the more extremist causes that might come.

Many worrying trends in today’s world are causing stresses and strains already. It is urgent that global efforts are made to ensure a sustainable future for our planet and succeeding generations and to ensure that they have popular understanding and support. With consent will come the public backing on all the social, economic and environmental fronts that we need. That will include an easing in the forecast global population growth and an eventual stabilising of the world’s population. As we debate local development frameworks in the coming weeks, I will have to explain to my constituents that migration is not the only cause of population growth. It is great that in the developed world people are living longer, and I expect that this demographic trend will extend to more and more countries in the future. However, it means that even with voluntary, popular support for more effective family planning, any gains in reducing population growth will be achingly slow.

I set the Minister a number of challenges: to confirm our intention to keep the UK at the forefront of global efforts to reduce greenhouse gases and to tackle climate change; to ensure that, at home and abroad, we contribute fully to finding the appropriate solutions to ensure that a growing world population will have enough water, food and energy to meet our needs, and to ensure that the world community understands and accepts that a stable population will contribute to future development that is fair and sustainable. It is not much, Minister. How can you do it?

We have just heard a tremendous contribution to a very important subject. I congratulate the hon. Member for Stafford (Mr. Kidney) on securing this debate. His remarks were sharp, relevant and very much to the point, and I hope that the Department for International Development will take them seriously. He kindly mentioned the all-party report. He will be interested to know that it is working on an update to the report, which we hope to publish around Easter. The report concluded that the millennium development goals would not be reached with the current levels of population growth in the areas where the goals are most pertinent.

People usually respond to this debate by saying, “Well, economic development is the best contraceptive. It does not need a ministerial push.” In truth—this is a key conclusion in the report—in the 20th century, no country has got itself out of poverty without first addressing population growth. Whether the chicken or the egg comes first, the message from the evidence is clear. I hope that the Minister and his Department, which responded very well to the report—I congratulate it on its response—will focus on the unmet demand for contraception. The hon. Member for Stafford mentioned the need for good family planning services, about which he is absolutely right. In Africa there are hundreds of millions of people who want contraception but cannot get it. Addressing that alone will make a huge difference. With a proper programme we can have sustainable development, which will address the points made by the hon. Gentleman.

I congratulate my hon. Friend the Member for Stafford (Mr. Kidney) on securing this incredibly important debate. I, too, have followed his career with great interest; he is one of the most thoughtful, intelligent and passionate Members of the House. The people of Stafford are incredibly fortunate to have him advocating on their behalf on a range of issues. I am delighted, therefore, to be able to respond to this debate.

As my hon. Friend pointed out, population growth is both a global and a local issue, which must be tackled honestly in every situation. It is all too easy to pander to populism. What we need is a balanced, responsible and grown-up debate. I know that my hon. Friend will lead such a debate in his own community in the period ahead.

Let me congratulate the hon. Member for Croydon, South (Richard Ottaway) on the pioneering work that he has done in this area. I have to say in all honesty that I have not read his report; it would be totally disingenuous of me not to put that on the record. However, I commit to reading the updated report when the hon. Gentleman produces it later this year, and also to offering to meet him and hon. Friends, should that be appropriate.

We all agree that tackling global population growth is inextricably linked to our capacity to achieve many of our commitments in the developing world. We cannot divorce it from issues such as economic growth, alleviating poverty and improving health and education. It is a core that runs through all of those aspirations and objectives for the developing world.

Global population growth has been referred to as one of the unfinished agendas of our time, yet it has become a subject that many agencies hesitate to discuss in case they are accused of removing free choice or forcing individuals to have fewer children. The UK Government do not support programmes that coerce individuals and couples to have fewer children, but we want population growth issues to be actively debated. As my hon. Friend said, every Government must have a coherent policy, particularly those in countries that have rapid population growth.

The key statistics have been mentioned already, but they always bear repeating. The UN estimates that the world’s population will increase to 9.2 billion by 2050. It says that a staggering 99 per cent. of that growth will occur in the developing countries. Why is that a problem? As my hon. Friend said, it is because rapid growth will place a massive strain on Governments to deliver to their people basic services, such as education, health, water and sanitation. Such services are needed to achieve and sustain the progress envisaged by the millennium development goals.

As an example, it is worth considering one country in sub-Saharan Africa and the pressures that it will face in the areas of schools and health. Tanzania has a comparatively low population growth rate of 2.6 per cent., but its population will nearly double—to around 71 million people—between now and 2035. The number of students in Tanzania will more than double to 16 million. The country will need to recruit and train 350,000 teachers, up from just 135,000, and will need more than 50,000 nurses, up from under 3,000. The challenge will be immense.

Not only basic services will feel the strain of rapid population growth. As my hon. Friend said, natural resources such as water, fuel, wood and land for growing food will all come under increasing pressure, and the poor, those most reliant on the natural environment for their basic survival, will feel the greatest impact. Climate change, which is driven by the emissions from countries in the developed world, is also reshaping the environment on which poor people depend. Increased rainfall variability and water scarcity, increased drylands but also increased flooding, and changing patterns of pests and disease will all increase the pressures.

We are committed to helping poor countries in a number of ways. First, to develop in a cleaner, “greener” way, secondly, to prepare for the impacts of climate change, and thirdly, to get a fair deal from any global climate change agreements now and in the future. We are spending £800 million through the Environmental Transformation Fund to help fight climate change and poverty. We are also providing £5 million to improve scientific understanding of climate change in Africa.

DFID has a long history of supporting research into the best use of natural resources. Current DFID initiatives to improve farmers’ access to technologies include supporting the African Agricultural Technology Foundation to enable African farmers to gain access to privately owned and patented agricultural technologies such as striga-resistant maize. Such changes, combined with the effects of rapid population growth, can only increase competition for natural resources and accelerate the pressures brought about by climate change.

The demographers also tell us that rapid population growth can often lead to a “youth bulge”—a high proportion of young people aged between 15 and 29. If developing country economies are unable to offer meaningful training and employment, there will be increasing numbers of socially excluded people, particularly unemployed males, which may lead to increasing conflict, instability, violence and extremism. Therefore, we must tackle the issue for a variety of reasons.

Can we be optimistic that the world is ready to tackle such major issues? It is important to say that the UK Government have always played a leading role in getting the world to face up to such challenges. That has been as a consequence both of Government policy and of a commitment by parliamentarians in all parts of the House.

Four steps have been shown to have an impact on population growth. First, increasing access to sexual and reproductive health services will have a real and lasting impact and will eventually lead to a stabilising of population growth. Secondly, working with couples and individuals to reduce current high levels of fertility, encouraging choice and increasing confidence that children already born will survive into adulthood, through supporting gender equality and women and girls’ empowerment, and improved health, water and sanitation services. Thirdly, addressing the large and growing demand for family planning services—the hon. Gentleman made that point, too. There will be temporary methods for those who want to delay or space pregnancy, and safe permanent methods for those who have decided not to have any more children. The United Nations Population Fund has estimated that 137 million couples worldwide do not have access to family planning, and a further 64 million are forced to use unreliable traditional methods. DFID has recently allocated £100 million over five years to UNFPA to address that specific issue. I know that the hon. Gentleman will be interested to hear that.

We also know the potential power of the new American Administration’s change of position on such issues within the first 48 hours of President Obama’s taking office. That could have a profound impact on our capacity to tackle the problem in a most effective way, based on science and on what we know works. It is incredibly important that the United States provides a leadership role both with regard to its individual role in the developing world and with regard to its capacity to influence multilateral and international institutions. The change in policy is welcome. It was desperately required, and we now look forward to engaging with the new Administration to ensure that it can lead to rapid and meaningful change on the ground in many countries.

Political leadership in all countries is essential. If I am frank, this issue has been kept in the “too difficult” box for too long, with many senior leaders avoiding it entirely. Rapid population growth must be openly discussed and sensitively tackled, with the provision of support for those Governments who are already concerned and ready to take action. I am delighted that DFID has been at the leading edge of action in four areas. We have embedded and integrated policies on reproductive health and rights within all relevant policies and strategies. My hon. Friend said that we must have a joined-up approach; he is absolutely right. We have a long history of making substantial investments in countries to help them improve their sexual and reproductive health and rights programmes. We have had country programmes in Ethiopia, Mozambique and Zimbabwe. We have provided £250 million for India’s nationwide reproductive and child health programme, made a £8.5 million annual grant to the international planned parenthood programme and provided £100 million for UNFPA’s global programme for reproductive health commodities security.

The UK has been a strong and sometimes lonely voice for reproductive health and rights. We have sought to give political leadership on the issue at key international forums over many decades. We welcome the fact that the international climate—please excuse the pun—is changing in every respect in relation to such issues, but we still have a long way to go. If we reflect on the fact that the MDG that is the most off target and that should cause us the most concern is maternal mortality, that should demonstrate the absolute importance of the issue. Maternal mortality leads to the death of many women who have so much to offer their countries, and leaves many children without parents.

Sitting suspended.

NHS Appointments

I am pleased to have the opportunity to bring this important issue to the House and look forward to the Minister’s response. It has affected the medical histories of many of my constituents.

The system has been a problem for me and my constituents ever since it started. In turn, I have been in touch with the local foundation trust, the primary care trust and NHS Direct, and I have asked parliamentary questions—in fact, because my December question was too long, Mr. Speaker kindly offered an Adjournment debate. I shall try to do the issue some justice.

After I was told last week of the time of the debate, entirely serendipitously, the British Medical Association produced a report entitled, “Choose and Book: learning lessons from local experience”. I am not so arrogant as to think that my probing put the BMA up to it, but the report is interesting, and I hope the Minister addresses it when he responds to the debate. It talks about learning lessons from local experience, and I want the Minister to learn from my constituents’ local experience.

I will start with a disclaimer: MPs hear of the worst cases. Nobody writes to me and says, “I had a brilliant experience of choose and book” or indeed of public transport or any other public service. The scheme provides a comparatively easy route to medical care and treatment, but there is a significant minority for whom it is a major problem. I want to bring the cases of a number of my constituents to the Minister’s attention, and to draw one or two national lessons from them.

My worst case illustrates many of the features of choose and book that drive patients to distraction. Mr. I was first sent to choose and book on 19 July 2007, and first contacted me on 9 August 2007. Nine and a half months later, after much correspondence in many directions, he wrote to me again on 12 May 2008 and said:

“Me, I’m giving up but if you wish to carry on the saga be my guest!!!”

I suppose that the debate is me being Mr. I’s guest. I spoke to him yesterday, and I can report that he received his treatment last month. For him, the saga that started with a doctor’s diagnosis in July 2007 has now been completed with treatment in January 2009.

As I said, Mr. I is my worst case. What happened? On 19 July 2007, his general practitioner referred him to choose and book, gave him the telephone number, the address of the website and the password, and told him what to do. When he phoned the number, he was told that he should phone again because of a high volume of calls. He repeated that experience many times. He was referred to the website, but it did not respond to him. He did what many patients do, much to the irritation of their doctors: in frustration, he went back to his GP, because he thought that he might have got the number or password wrong. Having established that they were correct—he had a letter of confirmation from the system in due course—he tried again. Once again he was told that he should try the website because of a high volume of calls.

He eventually got on to the website, but it told him that no bookings were available for the period he had chosen, and that he should try again and seek another date. He did not want to make it hard for choose and book, so he did not try to make an appointment for the week after; instead, he tried to make an appointment for three months after his first choice. Anyone who knows choose and book knows what that means. The system would not give him an appointment because the date he selected was beyond the 18-week period in which it will accept an appointment.

Mr. I is articulate and persistent. After that trouble, he went to his GP for a third time. His GP said, “I’ll tell you what. Why don’t you phone up NHS HealthSpace?” That sounded like something to do, so Mr. I did it. What did it tell him? It told him that no appointments were available.

On 1 August, he got the first of his letters from the Appointments Line criticising him for failing to book a choose and book appointment—that was when he first wrote to me. He told me that he wanted to tell Appointments Line that he had been trying to book, but he could not do so because the standard letter from Appointments Line has no address on it—he showed me a copy of the letter to prove it. The only way in which a patient can contact the Appointments Line was by phoning the number that tells them that they cannot get through. It is absolutely ridiculous.

Patients might not be able to write to the Appointments Line, but MPs can. I now know that it is run by NHS Direct. The chief executive of NHS Direct, Mr. Matt Tee—that is not an abbreviation—sent me a letter. He invited me to comment on the application of NHS Direct for trust status. I told him in no uncertain terms that until he sorted out Appointments Line, it would not be sensible to give it such status. The letter he wrote back to me is interesting in many ways, but I like this bit:

“The Appointments Line takes over 280,000 calls a month and at present receives 0.56 complaints for every 10,000 calls.”

I thought that that was an interesting way of expressing things, but I marvel at how half a complaint managed to sneak through. How would the Appointments Line know that people wanted to complain if they cannot write or phone? There is no address to write to. People have to know that it is run by NHS Direct before they can get anywhere.

I also marvelled at another part of the letter that delightfully passes the buck for the problem:

“I agree that services should be user friendly and less bureaucratic and will do all I can both to ensure that this is the case for the services I control (such as The Appointments Line) and to encourage others to do so with the services that I do not control (such as the national Choose and Book system).”

I thought that that was a pretty neat sidestep from my constituent’s concerns. Who runs the national choose and book system? Mr. Tee said:

“We are working closely with colleagues both in the Department of Health and (specifically) in Connecting for Health, to promote improvements to the systems and software associated with Choose and Book”.

So it is not his problem; in his view, it seems to be the problem of the Department of Health, NHS Connecting for Health and the software manufacturers. Evidently, choose and book has nothing to do with the Appointments Line and everything to do with everybody else.

I would not want the Minister to think that, because I started with a case from 2007, he can respond by saying, “Yes, there were some initial teething difficulties, but everything is fine nowadays.” It is no better now. Calls still go unanswered, appointments are still unavailable and infuriating reminder letters are still sent. Unanswered calls are a problem for my constituents.

Last November, my hon. Friend the Member for North Norfolk (Norman Lamb) asked a parliamentary question and received a briefing in the Minister’s reply saying that last October, 338,000 callers tried to access the Appointments Line. According to the figures in the reply, 27,000 were not answered. One must read the small print carefully to find out that 17,000 callers found the line engaged and 10,000 found it playing Vivaldi. One in 16 calls made to the Appointments Line is unsuccessful. That is from the Minister’s own figures for last October, which show 27,000 calls not answered last October. That works out at 324,000 missed calls a year. A third of a million calls, according to his own figures, fail to get through to the Appointments Line.

The astonishing thing is that the Appointments Line met all its key performance indicators. I do not know whether any other call centre in the country, commercial or public, would meet all its key performance indicators if it left out a third of a million callers a year. If so, I hope that the Minister will brief us on which one it is. I suggest to him that the key performance indicators for the Appointments Line are not sufficiently rigorous. He is not getting his money’s worth.

The second big problem is that appointments are not available when people do get through. There are two causes for that. Well, there may be more than two causes—the BMA report suggests quite a range of them—but I will focus on just two. The first, and perhaps the one that the Minister could most easily do something about, is the 18-week waiting period, which creates a black hole beyond 18 weeks when appointments are not taken. If appointments cannot be booked more than 18 weeks ahead, when a particular clinic or consultant is fully booked, they are taken off the list of appointments available. They do not even appear. Of course, at the call centre, they cannot say, “Well, that’s because they’re booked up for the first 18 weeks”; what they say is, “They’re not on the system.” They disappear into a black hole.

Does my hon. Friend agree that if a particular hospital or clinic disappears from the list because the waiting time is more than 18 weeks, that restricts choice rather than enhancing it?

My hon. Friend makes a good point. My constituency is adjacent to the local district general hospital, Stepping Hill hospital, which is run by the Stockport NHS Foundation Trust. I would say that more than 90 per cent. of my constituents—probably more than 95 per cent.—would expect that if they were referred from primary care to secondary care, they would be referred to Stepping Hill hospital, as it is an option more or less on their doorstep. It is in Stockport, as the name suggests. A referral to Preston, Bolton or somewhere similar is very much a second choice unless there is a specific reason to see a particular specialist. The expectation is that appointments would be booked at the local district general hospital.

My hon. Friend is articulating the frustration of many constituents who come up against the system. Does he agree that one of the fundamental problems, particularly in certain sections of society, is that people do not understand why the Government are so keen to force that system upon us? An elderly couple recently came to visit me, bringing with them all the literature sent out as a matter of course. It included an expensively produced colour booklet, letters and an information pack. There was a lot of detail for them to go through. They said, “Mark, all we did was ask for a referral from the GP to go to Stepping Hill. Why are we being offered an appointment in Bolton?”—or Wigan, or wherever it was. Those places are part of the Greater Manchester conurbation, but they are too far away for many of our constituents to travel to.

I agree absolutely with my hon. Friend. The 18-week event horizon—that is what they call it when a black hole occurs and radiation cannot get in or out—means, perhaps not surprisingly, that the local district general hospitals’ clinicians and consultants tend, on the whole, to be fully booked first. Then they disappear. It does not make a lot of sense for people to be referred to distant places.

The Minister needs to have a look at the 5 per cent. tolerance rule. Everybody in the health service has to meet the 18-week rule, but one of the things that I learned from reading the BMA report is that the Government allow a 5 per cent. tolerance rule, as I understand it, in case somebody does not turn up. There needs to be flexibility for choose and book to book appointments well beyond the 18-week event horizon at the patient’s request. That does not seem difficult.

The hon. Gentleman is making an interesting case, drawing upon experiences with constituents that I suspect all of us, as constituency Members of Parliament, have had. Is Tee correct in highlighting the fact that the problems of not being able to book an appointment through the choose and book system after 18 weeks are a good example of the centrally driven target culture distorting clinical priorities?

That is true, of course. It is also interesting to see the decisions taken about which medical procedures should be included in the 18-week limit and which should not. We could have another interesting debate about that. As somebody who recently acquired a pair of hearing aids, I happen to know that hearing is not included in the 18 weeks.

However, I do not want to go there; I return to the point made by my hon. Friend the Member for Cheadle (Mark Hunter). People who go to their GP and are referred for a medical procedure will not necessarily be rocket scientists. What they get with choose and book is a complicated way of getting in touch that involves passwords and so on. I have a letter, which I will not quote, saying, “I’m going to go and have my hip replaced. They’ve given me a password. Surely nobody else wants my hip?” There is a lack of comprehension about what the system is designed to do and why it is being done in that way.

Apart from the 18-week event horizon, there is a second factor that leads to a shortage of appointments on the system: some appointments are never put on the central database in the first place. At least one of the reasons for that is the failure of choose and book to engage the medical profession fully and the profession’s lack of confidence in it.

I would like to take the example of Stockport. When my hon. Friend the Member for Romsey (Sandra Gidley) asked a parliamentary question in November, she established that only 60 per cent. of bookings for secondary care in Stockport are made through the choose and book system; 40 per cent. are made on pre-existing manual systems of one sort or another. Because hospitals, clinics, GPs and consultants are so fed up with choose and book, they are using the old “steam” system in many parts of the country. The same parliamentary question established that take-up ranged widely in different primary care trust areas; 60 per cent. was somewhere near the norm. As a result, appointment times never get on to the system and are held back for the manual appointments to be made. The BMA has some interesting comments on that situation. Perhaps the Minister would like to come back on that point when he responds.

Therefore, not only can someone not book after the 18-week period, but many appointment times are never there to be booked in the first place. Why is that? Why do GPs not think that choose and book is the best thing since sliced bread? One of the reasons is illustrated by the case of Mr. I, who had his consultation with the GP but had to go back twice to try to establish how he could make his appointment through the system. I do not know how many people in Westminster Hall have had a referral through the choose and book system. My GP, who had no particular knowledge of my interest in the system or concern about it, did not even ask me to book through it. What he said to me was, “They’ll be sending you a letter, but in the meantime I’ll get you booked in anyway”. That was an example of a GP bypassing choose and book, because he did not want me to come back moaning that I could never get through on the phone to make the booking.

Of course, there are also the infuriating reminder letters; it is not necessarily the case that just one is sent. I actually received an apology from my PCT. If I quote from the letter that I received in September 2008 from the chief executive of my PCT, everyone will get the drift, because it is a contemporary example of the problem:

“As you will be aware, the Choose & Book is an automated system and part of the process is for reminder letters to be sent out to any patient where a referral had been made, but the appointment not yet booked. In the case…I understand that she”—

that is, my constituent—

“received at least three letters, and that on each occasion she then telephoned in an attempt to book the appointment, but was then told that there were no available slots to book her into. I can appreciate the frustration this would cause and I would ask that you pass on my most sincere apologies, on behalf of the Trust.”

The question that I suppose the Minister might be asking himself is, “Well, has he just got a couple of nutters writing in green ink, or is this something which is widespread?” I can say that it is widespread. There is the case of Mrs. M, who said:

“I was somewhat dismayed when my recent appointment came through under a different consultant and involved a very basic procedure. I realised that I was being treated as an entirely new patient, despite the very clear letter of referral that my G.P. had sent. I queried matters with the ‘choose and book’ administration and was told that my usual consultant would not be able to see me within the target time, so I would have to start all over again with a new consultant, even if it were inappropriate to do so.”

There is also the case of Mrs. H, who required a consultation with a neurosurgeon but was told that no appointment could be made within the next three months as all the appointments were taken. However, as no appointments could be made beyond the next three months, no progress could be made with the appointment at that stage.

I have a letter from Mr. B, who said:

“If patients have to chase their follow-up appointments, it suggests that either too much money has been wasted on inadequate computers or someone isn’t doing their job properly - or both? There seems to be an over-emphasis on computer technology at the expense of employing personnel needed to deliver a front line service.”

I thought of offering Mr. B a job in this debate.

Then there is the case of Mr. P, who has spinal problems that require regular injections. He needs to see a neurosurgeon too. A specific consultant was recommended but the new choose and book system would not allow direct referral.

Sometimes we get lucky and I have had a follow-up letter from Mr. P, which says:

“I would like to thank you for the enquiries you made on my behalf, it’s amazing what an MP’s letter can do!!”

Given that there are about 338,000 failed inquiries a year, I do not think that MPs can plug all the gaps in this particular system.

I want to round off with a quote from a patient who is a constituent of my hon. Friend the Member for Somerton and Frome (Mr. Heath), who contacted me when she saw that I was having this debate. She is Miss G and she wrote to me to say:

“My experience is that this is a totally pointless exercise. I recently had to book two hospital appointments in Somerset. For both of them, I received letters with a list of the hospitals where I could book my consultation and promised I could do this through the Choose and Book line but when I phoned, in both instances I was given the telephone numbers for phoning the hospitals direct to make a booking. Why did they not put those telephone numbers in the letter, saving me time and the NHS money in employing someone to give out the phone numbers?”

I have described choose and book as the NHS’s version of air traffic control. If all the landing slots are full, then the aircraft are just kept circling and kept waiting until there is clearance. That is exactly what is happening with patients, time after time after time.

Everybody knows that there is a serious problem with choose and book, but nobody wants to take responsibility. The Appointments Line says that it is not responsible, the Minister said very clearly in answer to my question in December that he was not responsible, and the PCT says that it is not responsible either.

I want the Minister to answer a few straight questions. What will he do to tackle the 330,000 or so missed calls each year to the Appointments Line? What will he do about the 18-week waiting period “black hole”? What will he do about the fact that only 60 per cent. of appointments in Stockport are made through choose and book? Whether he goes forwards or backwards, can he at least ensure that all the appointments are on the computer screen? What will he do about the duplication and expense involved? There is the expense of appointments line itself; the duplication of a manual system and of a choose and book system; the wastage of multiple automated letters, complete with postage, even when the fault is on the side of the Appointments Line itself; and of course the retention of parallel paperwork systems, when all the information is supposed to be on the computer.

There is a lot of frustration and annoyance among patients. They face a system that is designed for robots, not people. It denies local choice and blocks opportunities. I do not want my constituents’ concerns to be brushed over with a load of sloppy departmental whitewash. I want some clear, hard answers.

We have now got well past the “teething problems” excuse. We have got past the “waiting for it to get better” stage. We are right up to the “putting it right” stage, and I want to hear from the Minister today exactly how he proposes to put the choose and book system right.

It is a pleasure to contribute to the debate under your chairmanship, Mrs. Dean. I thank my constituency neighbour, my hon. Friend the Member for Hazel Grove (Andrew Stunell), for securing a debate on what all hon. Members will agree is a very important subject, certainly if our postbags are anything to judge by.

This is not the first time that I have spoken in such a debate or the first time that I have raised this issue. It is a matter of record that in Health questions last November I asked the Minister if he might agree that there is a need to review the choose and book system in the light of the many complaints that we have been receiving and the significant difficulties that it has caused, the likes of which have been so well chronicled today by my hon. Friend. The Minister replied that choose and book is

“one of the great success stories of the national programme for IT.”—[Official Report, 4 November 2008; Vol. 482, c. 102.]

I hope that my colleagues, whatever party they are in, will agree that the Minister’s response to that question showed a failure to understand the real frustration that so many of our constituents feel.

My constituents have contacted me to complain about the system and about what they perceive to be complacency in dealing with the problems that it is helping to create rather than to resolve. If the Minister would term the system a great success—that term is lifted directly from his answer to my question—I sincerely hope, for all our sakes, that we never find out what he would consider to be a failure. It is evident that the choose and book system is an unnecessary, expensive and inefficient IT and administrative system that serves only to divert money away from much-needed improvements to local health services. When one asks local people what they would prefer that money to be spent on—I am sure that many hon. Members on both sides of the House have done that—they say that they want their local surgery or hospital to be improved. They do not want money to be spent on another ridiculous and badly performing Government IT system.

My constituents want to be offered appointments at their local hospital. My hon. Friend and I share a local hospital at Stepping Hill in Stockport. People want to be offered appointments in a local hospital that is within easy travelling distance from their homes, with the best consultant to deal with their problem. They want to get their appointments quickly and to be treated well when they attend. The choose and book system is making that harder, because people are unable to get through to make appointments, as we have heard in so much detail from my hon. Friend. In some cases, when people do get through, they are told that no appointments are available at their local hospital, sometimes because those places are being booked up by people from outside the area. That is a form of madness.

With the best will in the world, and given the regard that I hold the Minister in, I think that he is being put in the position of having to defend the indefensible. I hope that he is able to respond positively to this debate. All we are asking for at this stage is a review of the system’s operational efficiency. Surely, anyone would accept, on the weight of the evidence, that there are good reasons for asking for such a review, and surely the Minister does not want to defend good money going after bad into a system that is patently failing patients.

It is not only politicians who criticise the system. The British Medical Association and local doctors do not think that it works. Indeed, many have gone on record as saying that it is getting in the way of choice. GPs want to refer patients to the specialists whom they feel are best suited to deal with their patients’ specific problems, but in many areas they cannot do that because the system allows them to make appointments only with departments, not with particular specialists.

This is not a party political issue. All of us in this place, regardless of party affiliation, want to have the best possible health service for our constituents, whom we have the privilege of representing in Parliament. Will the Minister rethink the system, which is failing the very people whom it was set up to serve? It is undoubtedly an expensive system, and the bureaucracy attached to it, with pamphlets and reminder letters being sent out, is relentless and expensive. The system confuses many people and has already proved inefficient and ineffective. Perhaps it is time for a review, so that we can consider using the money that we spend on choose and book, which has patently failed to operate properly, on improving local services instead. I am sure that we would all agree to that. I hope that the Minister will take that message firmly on board today.

Let me start by congratulating my hon. Friend the Member for Hazel Grove (Andrew Stunell) on securing this important debate. I congratulate also my hon. Friend the Member for Cheadle (Mark Hunter) on his contribution, which was also important to the debate.

Choose and book is part of the national programme for IT. It seems to me, and to most people who have looked into this issue, that the Government are in complete denial regarding the scale of the problems with that programme. The Minister is a reasonable man, and I suggest that he should take this opportunity to accept the problems that the programme has experienced. He is not responsible for instituting the system, as he has inherited this nightmare, and everyone would welcome his acceptance of the massive challenges that the national programme faces.

My hon. Friend the Member for Hazel Grove has described the experiences of his individual constituents. I am sure that the Minister will agree that the situation in the first case that my hon. Friend described, that of Mr. I, is intolerable. We cannot accept a situation in which someone who experiences anxiety about hospital referrals has to go through such an experience. It should be incumbent on us all to realise that that is not acceptable and to find ways of changing things for the better.

The national programme was centrally flawed from the start. I went to a fascinating seminar at which someone who has been heavily involved in the national programme spoke candidly about its whole design. He said that there had been no systems review at the start, which means that there had been no process by which the different people who were building and buying the system reached agreement with those who would be using it about what they were trying to achieve. He explained that although such a review is of fundamental importance to any IT project, it had been missed from that project because of the political imperative to drive it forward. He also said that we do not have sufficient skills in the UK to deliver the programme as it was originally designed.

Many other people have made the absolutely valid point that it is stupid and wrong centrally to impose a system on a highly diverse health system without getting buy-in from the clinicians who are to use it. A small number of providers are involved: at first there were four, and now there are only two because the other two have deserted the project. Smaller IT providers, which have historically provided all the innovation, have been excluded from the project, and we now have the highly vulnerable situation in which the whole system depends on just two providers because the other two have left. We are told in a report in The Times this week that one of those that has left—Fujitsu—is pursuing a claim for some £600 million against the Government. I would be grateful if the Minister responded to that report and confirmed whether it is true.

The national programme for IT is years behind schedule. We were told by the National Audit Office that completion was expected around 2014, but that now appears to be in doubt; it looks as if the time scale will be even longer. We also know that the whole programme is billions of pounds over budget. In a response to a parliamentary question that I recently tabled, it has been revealed that the number of severe faults in NHS computer systems has almost doubled in the past three years. That potentially puts patients and their care at risk. We have to take that matter very seriously.

There are two particular problem areas in the national programme for IT. The first is the national care records system, which is the national database of all of our patient records. In this day and age, I do not know who on earth would trust the Government to look after sensitive patient records—I certainly do not. In its report this week, the Public Accounts Committee has highlighted its serious concerns about the scale of the crisis that the national care records system now faces.

This debate is on the other matter that has caused real concern: choose and book. I want to start the analysis of where we are going wrong with choose and book by establishing some principles. First, I fully accept that the concept of electronic booking and someone being able to sit with their GP or someone else in the practice and make a booking—for example, for the Stepping Hill hospital in Stockport—is an attractive proposition. For the patient to know that an appointment has been booked when they leave the GP practice is a good concept and we should not lose sight of that.

The second principle, which I absolutely support, is the concept of enabling patients to choose the clinician whom they want to see. Critically, that should be done on the advice of a person’s GP, because they will often be guiding us in the decisions that we make. As my hon. Friend pointed out, in the vast majority of cases the individual patient will want to choose their local hospital. However, there might sometimes be a good reason why someone does not want to choose their local hospital—for example, it could be that an elderly person wants to stay with a son or daughter somewhere else in the country, or that someone’s local hospital has a poor record on hospital-acquired infections. There could be all sorts of reasons why an individual might choose to go elsewhere, and people should have the right to do so.

Does my hon. Friend agree that the choice that people want to exercise is to balance convenience against the timing of the appointment? If it is a question of going to Stepping Hill in two months’ time or somewhere further away in one month’s time, they should have that choice. There should not be a black hole preventing them from exercising that choice.

I agree with that point, which I was going to come on to. Critically, when we talk about choice, we must be clear about what we mean and have a clear idea about what is a good thing for patients to have a say on. It is not just a matter of patients being able to choose hospital buildings; it is about patients having a central involvement with the clinician to whom they are referred. As my hon. Friend pointed out, the system is not good at enabling someone to choose a particular specialist or consultant. I understand that the system is theoretically capable of doing that, but in most cases the way in which it is used does not provide that choice—people are simply presented with a list of hospital buildings. People should also, of course, have a central say in the treatment options that might be available.

As my hon. Friend pointed out, there are a whole load of unacceptable practical problems with the system that individual patients, their GPs and, indeed, the people at the other end of the link—the clinicians in the hospital—are experiencing. It is worth pointing out that this problem is not peculiar to Stockport and Cheadle; I have had to take up concerns about it in Norfolk. When I raised the issue with the local hospital and primary care trust, their response was, “Yes, we agree. We’re having problems with the choose and book regional office down in Milton Keynes.” They accepted that there were problems with the operation of the system in the east of England.

We have had complaints that the system is slow. GPs get totally frustrated at the fact that it takes a long time to open up attachments and so on, so the temptation is not to use it. The system is unreliable and we are told that it crashes when people try to open attachments. The telephone system is a complete nightmare and a third of a million calls were unanswered in a year, which is completely unacceptable. When one hears the experience of Mr I, one is left with the sense that, far from personalising care—a concept that we all ought to be able to sign up to—the system is making it far more impersonal. People try their best to book an appointment but keep getting rebuffed. They then receive a letter complaining that they have not booked an appointment, and when they try to respond, they find there is no address to which to respond. This is driving people crazy, and it ought not to be necessary for Members of Parliament to intervene. Whenever people go to their MP to sort out problems, one always has the sense that there are a whole load of other people out there who may not have the wherewithal to go to their MP. Such people are left unable to get their hospital appointment booked up. That is completely unacceptable.

Another problem with choose and book relates to the central issue of choice. The great paradox of this system is that it actually constrains choice. The Government’s great claim is that the system is the central feature of offering choice to patients, but if someone happens to want to see a consultant because their GP has recommended that consultant to them, and the waiting list for that consultant is longer than 18 weeks, that choice is removed—even if it is for a speciality where a wait of 18 weeks is not damaging to someone’s health. For example, someone might want an appointment for orthopaedics and be prepared to wait a little longer, albeit in pain, because they want to go to a particular consultant. However, as my hon. Friend has pointed out, if that wait is longer than 18 weeks the choice disappears. This is centrally constrained choice. The truth is that the system has more to do with managing the 18-week target than with offering real, genuine choice for patients. If the system was about the latter, I should have the right to wait longer than 18 weeks if I wish to see a particular consultant.

I completely support the principle of informed choice guided and supported by someone’s GP, but because so many GPs are frustrated with dealing with a slow system, they refer bookings to the practice administrator. The recent British Medical Association report makes the point that the system is working reasonably well when an administrator is doing the booking. However, that administrator will not always make the right judgment. The clinicians at the hospital end of the divide often find that the wrong booking has been made—for example, for a general clinic rather than a specialist clinic. The patient then has to be referred somewhere else. I have had reports of patients being confronted by two appointments that clash. They are then left to make a judgment themselves about which appointment to take and which to cancel, and they may well make the wrong decision.

Professor Wendy Currie, head of information systems and management at the Warwick business school—it is part of Warwick university—has studied the national programme, including choose and book. She says that the software for choose and book started life as a billing system in the United States. It was then developed into an electronic booking system—a simple system for booking appointments from the GP’s surgery. It was nothing to do with choice or with presenting the GP and the patient with a list of four different hospitals; it was just a system for booking appointments—very sensible, as I said at the start of my remarks. The previous Secretary of State then morphed the UK system, Professor Currie says, into the central plank of the Government’s “choice” strategy. She also says that we need to get the function and technical specification right at the start. However, the software was designed for one purpose but it is being used for a different one, and all the evidence suggests that it is not sufficiently robust to cope with the demands that it faces; and this is when, nationally, only 50 per cent. of appointments are booked using the system.

Does my hon. Friend acknowledge that when the chief executive of NHS Direct reports software problems, and when the software is on version 4.6 after only three years, there is clear evidence that the IT system is not robust enough for the job that it has been asked to do?

Absolutely. There is clear and mounting evidence of the software’s inadequacy to live up to expectations. Returning to the point that I made to the Minister earlier, I hope he will concede that, for those of us who believe both in empowering patients to make decisions about which clinician to be referred to, which hospital to go to, the treatment options and so on, and in booking appointments electronically, the system does not provide patients with real choice. It causes immense frustration for clinicians who are already under enormous time pressure.

Professor Currie argues for de-scoping the contract and returning it to what it was originally intended to be: a straightforward electronic booking system. There is enormous merit in that. We may eventually get there, but it would be an enormous help if the Government conceded the scale of the problems—the monumental mess that we face. We need, first, Government recognition of the problems for clinicians and, critically, for patients, many of whom are vulnerable; secondly, as my hon. Friend the Member for Cheadle said, we need a thorough review, which the Government must act on; thirdly, we need to learn the lesson that grandiose, centrally imposed systems that are ill-thought through and do not get buy-in from clinicians are doomed to failure.

It is a pleasure to serve under your guidance, Mrs. Dean—for the first time, I think. I congratulate the hon. Member for Hazel Grove (Andrew Stunell) on securing the debate and on the excellent way in which he highlighted, in considerable detail, the concerns of many of his constituents. I suspect that he highlighted only the worst cases, and that if he had had more time he could have brought many more cases to our attention. I have had similar issues in my constituency in Lincolnshire, so they are clearly not limited to a particular part of the country. Indeed, I know that the hon. Member for North Norfolk (Norman Lamb) has had similar problems in Norfolk, across the Wash from my constituency.

The hon. Member for Hazel Grove was right to highlight the significant problems. He emphasised the telephone aspect of choose and book, but from GPs whom I have met in my constituency and in my Front-Bench role, travelling around the country, I can assure him that the problem is pertinent to GPs who try to book appointments online, too. However, he should be aware—I am sure the Minister will mention this in his closing remarks—that there is a vast range of opinion about choose and book, and some GPs find it an asset to patient care, so there is no uniform animosity towards the system. Having said that, I realise that there are significant problems.

The hon. Gentleman highlighted the 18-week problem, which I shall return to later, and the peculiarity of the complaints procedure, which seems completely unacceptable. It is not surprising that the body responsible for collating the number of complaints has very few to report, because there is no mechanism for people to express their disappointment and to complain about the procedure. He also gave some staggering and astonishing figures on unanswered calls, and the Minister must address that point urgently.

I got the feeling that the hon. Gentleman and the hon. Member for Cheadle (Mark Hunter) were suggesting trying to remove patient choice, but in an intervention on the hon. Member for North Norfolk, the hon. Member for Hazel Grove seemed to contradict what he had said earlier. Indeed, I noted that the hon. Member for North Norfolk, who is the Liberal Democrat Front-Bench spokesman, did not reiterate the idea of potentially removing patient choice. It is a key part of any patient-centric national health service.

I thank the hon. Gentleman for giving way, because that is an important point. He is right to appreciate that we were not seeking to remove choice in any way. I referred to it by saying that people should not have choice forced upon them, as the Government seek to. If one’s area is well served by the local hospital, as ours is, most people will want a referral to that hospital, not to one on the other side of the conurbation.

I am grateful for the hon. Gentleman’s clarification of his earlier point. Ultimately, the decision should be the patient’s to make, with advice from the general practitioner, but under the current system that is not the case.

May I reinforce the point that my hon. Friend the Member for Cheadle (Mark Hunter) made about the choice being the patient’s? If the patient wants to go to the local hospital and its appointment system is booked for the next 18 weeks, he or she is not offered that choice by the system. That is the flaw when it comes to choice. The fundamental choice for most patients is to be able to go somewhere near, and if choose and book cuts out that choice it is a failure.

I agree. The 18-week target covers roughly only one third of activity in the acute sector of the health service anyway, but from the evidence that the hon. Gentleman and his hon. Friends have put before the House today, and from other evidence throughout the country, there is absolutely no doubt that the 18-week target not only constrains and limits choice but distorts clinical priorities. That must be fundamentally wrong.

The hon. Member for Cheadle made an interesting point by highlighting the Minister’s response to his question at Health questions in November. However, I suspect that the Minister was right: compared with what else is going on in the NHS IT system, choose and book is a relatively successful scheme, and at least it works in part. In the context of the complete shambles and mess that is the over-budget, behind-schedule totality of the NHS system, choose and book is probably a small ray of hope. However, the hon. Member for Cheadle was also right to highlight patients’ inability to choose a consultant. It is one of the main concerns in my constituency in Lincolnshire, particularly for elderly people and people who have historically been referred to a specific consultant—where a consultant-GP relationship has existed. The operation of the choose and book system does not seem to be able to cope with that.

The contribution from the hon. Member for North Norfolk was, as always, considered and calm, and he is absolutely right that the Minister before us is not responsible for initiating this mess; he has inherited big and significant problems. Accepting and acknowledging that a significant problem must be addressed would be a start, however. It would enable the Minister to put in place a review, which we, as the Conservative party, have done, to consider the very issues that have been highlighted today—not just choose and book, but the entire remit of the NHS IT structure. Although I do not wish to make any statements about the direction of our review, I must say that we are very uncomfortable, as is the hon. Member for North Norfolk, about centrally imposing an IT system without the consultation or agreement of those who have to implement it. There must be a different answer, and there have been fundamental flaws in the system right from the start.

Having said all that, we recognise that technology is a vital part of the NHS, and in some parts there has been praise for choose and book. It has enabled doctors to provide patients with an appointment on the spot, when the patient is in the surgery, and in some cases it has allowed for greater control over appointments and enabled clinicians to track referrals and share confidential information, which is an important part of the system. There is a whole range of issues, some of which have already been raised. Instead of going into the detail of those, I shall raise some additional ones that I think need to be considered.

Choose and book does not offer choice. Of those who used it in August 2008, 66 per cent. reported not being given a choice of appointment date, 66 per cent. reported not being given a choice of appointment time and 86 per cent. reported being given a choice of fewer than four hospitals, which is supposedly the utopian position. Thirty-two per cent. reported not being given any choice of hospital at all. Part of that may be that people are determined to use their local hospital, but they should be given a choice of alternatives, not a forced appointment that may or may not be convenient for them. There is growing evidence to suggest that appointments made through choose and book are increasing the number who do not attend. University hospital, Lewisham has recently done some research and found that 18 per cent. more people did not attend appointments if the appointment was made through choose and book, as opposed to 12 per cent. for traditional GP referrals. That is a growing problem.

Another problem is that the system does not seem to be able to cope adequately with complex referrals. This needs to be looked at to ensure a simple process, not added administrative layers. Other Members referred to technical problems with the system. It crashes, then takes a long time to reboot. By the time the GP can access it, the patient is no longer sitting in front of them so they have no choice but to use the telephone system, in which case they get into the problems that were highlighted by the hon. Member for Hazel Grove.

We spoke earlier about GPs not being able to refer to a specific consultant, which is of great concern and certainly needs to be addressed. It is clear that insufficient appropriate appointments are accessible to the choose and book system. Trusts do not currently put all the available appointments on the system. They hold many back for paper referrals and some for tertiary referrals, and some trusts do not make any appointments available after the 18-week limit that was discussed earlier. There is also inaccurate information. GPs are unable to find the clinic they want to refer a patient to—it might not be on the system, or it is not where the doctor expects it to be. Such problems should reduce over time, but they have been going on for a significant time without getting much better. I am sure the Minister is aware of the dummy appointments problem: in order to meet waiting time targets, trusts tell people that they must accept dummy appointments and then not turn up. That is completely unacceptable.

Another challenge is exactly how the system has helped consultants. The explosion of administration and bureaucracy seems to have had very little positive impact on their working practices. There is absolutely no doubt that patients are being sent to the wrong clinics and consultants. Consultants then have to re-refer patients who should never have been referred to them to specialists in sub-groups. That may be a function of the system or of non-clinical input to the computer system.

The British Medical Association criticised choose and book in a recent report, but it is not the only organisation that has been critical. The Royal College of Surgeons said that choose and book is “detrimental to patient care”. That is a significant statement from such an august body. Not all GPs have signed up to choose and book. I was shown a press release from a newspaper in Norfolk in which the hon. Members for North Norfolk and for Norwich, North (Dr. Gibson) were extremely critical of the impact of choose and book on their constituents in Norfolk. Indeed, some GP practices are not using it at all, as they see it as such a problem in terms of patient care.

The concerns go much wider than choose and book. There are significant problems with NHS IT systems. A Public Accounts Committee report published on 27 January was heavily critical of the Department’s IT programme and referred to unacceptable confidentiality agreements. The Committee was “unconvinced” by the programme’s centralised contracts, and said that they had not provided the taxpayer with value for money. There is a significant way to go to put the situation right.

I reiterate the point made by the hon. Member for North Norfolk about the abandoned Fujitsu contract for the southern area, which poses serious risks. The programme’s new deadline of 2015 is unlikely to be met—the original programme was supposed to be completed by 2010. It would be helpful if the Minister could give us some indication of the compensation— is it £600 million or some other figure?—that Fujitsu wants. If he cannot give specific numbers, it would certainly be a help if he could tell the House the stage that the process has reached.

The Minister will be aware, as other hon. Members may be, of the concern that the Public Accounts Committee raised about the number of suppliers providing IT going down to two—BT and Computer Sciences Corporation—and the impact that that may have on the future of IT contracts.

I shall conclude with some questions for the Minister. If he does not have time to reply to them today, perhaps he could do so in writing subsequently and place a copy of his letter in the Library. It would be interesting to know how much the Department has spent to date on implementing choose and book. When does the Minister expect to reach his March 2007 target of 90 per cent. delivery of referrals through choose and book? I believe that the current figure is just below 50 per cent. Clearly, the Government are significantly off the timeline that they originally envisaged.

Could the Minister tell us what evidence he has that patient outcomes are better from using choose and book, and what analysis his Department is doing to try to prove that such systems enhance patient care and outcomes? What steps is he taking to ensure that patient choice is not constrained by trusts attempting to meet 18-week targets? Could he give his estimate of the number of GPs and GP practices that are not using the system at all? What will he do about that?

Finally, will the Minister publish impact assessments for choose and book, particularly in respect of the elderly, who often find the system difficult to navigate? Some do not have access to the internet, and run into the problems with the telephone system that were so well articulated by the hon. Member for Hazel Grove.

I congratulate the hon. Member for Hazel Grove (Andrew Stunell) on securing this debate.

I believe hon. Members on both sides of the House appreciate that modern health care is a complex service. There are in the NHS more than 170 acute care hospitals and some 150 independent providers. Each one offers a wide and increasingly specialised set of clinical services. On any given day, every one of England’s 36,000 GPs will refer, on average, one patient to a hospital for some form of elective treatment. It is clearly not possible for a GP to know of every consultant in every specialism in every hospital in the country. I believe that there is consensus in Westminster Hall today that the old paper-based system would be completely unable to cope with the complexity and speed of modern health care, or to fulfil the right of the patient to choose, which I believe most of us accept.

The paper-based system was far more cumbersome and much more expensive. For decades, the NHS creaked and groaned under the weight of millions of letters booking, confirming and rearranging appointments. Letters were lost, misdirected or misfiled. If a GP referred a patient to a hospital consultant—one of their choice, not the patient’s—the patient would leave the practice and enter a state of limbo. They would not have a clue when their appointment would be. They would find out just before it was due, when the hospital would send a letter. The appointment, which would be at a time convenient to the hospital, was made without any consideration of the patient’s needs. In summary, the old system assumed that the patient was the passive recipient of care, not an engaged participant.

Just last week, the British social attitudes survey reported that 95 per cent. of people say that they want some degree of choice over which hospital they attend and the kind of treatment that they receive. Of course, from 1 April this year a patient’s choice of elective care will become a legal right through the NHS constitution. Since choose and book was initiated, more than 10 million people have been referred through it. As of November last year, more than half of all out-patient referrals used choose and book and the latest figures that we have, those for January, show that that figure is up, at 57 per cent. In January, more than 600,000 patients used the system, with more than 30,000 referrals made in a single day last week. Usage has doubled over the last year. Last week, 90 per cent. of GP practices used choose and book.

I acknowledge that sometimes the system has been slow and that occasionally there have been problems with system availability, but virtually all the problems that hon. Members have raised today are problems not with the national choose and book system, but with how individual primary care trusts, hospitals and GPs have implemented it or engaged with it.

I have been advised by the PCT in the hon. Gentleman’s constituency that he raised three specific cases with it relating to choose and book between February and December 2007. I think that the case of Mr. I—the hon. Gentleman will correct me if I am wrong—was the second of those cases, which the PCT tells me it heard about from him in November 2007. Clearly, the case as outlined by the hon. Gentleman is unacceptable. It is difficult to know where the fault lies without hearing more details about individual cases, although it seems, from what he says, to lay mainly with the telephone booking service.

I am informed by the PCT that it tried to contact the patient that the hon. Gentleman mentioned to investigate his case, but did not receive any response, and that it further tried to contact the patient but was unsuccessful. However, in the last letter that the patient sent to the PCT, he stated that he did not wish to pursue the case further. Obviously, if there is still a problem relating to Mr. I’s case—or with any of the other individual cases that the hon. Gentleman raises—I should be happy to look into it.

The hon. Gentleman mentioned the case of another patient, whom he did not identify, saying that they were referred to hospital during 2008 but told that it was unable to take referrals because it needed to meet its 18-week target. We picked that matter up last year, when it was raised by another hon. Member whose patients use Stockport hospital and, with the intervention of the chief executive of the strategic health authority, the foundation trust in Stockport was told in no uncertain terms that that was not acceptable behaviour. The hospital responded by reopening its referrals and those referrals remain open now.

I am encouraged to hear that, but we hear time and again of hospitals where the wait would be longer than 18 weeks automatically disappearing off the list of choices. Is the Minister saying that that will no longer be the case and that, even if the wait would be 20 or 25 weeks, the patient will have the right to choose that option?

I will come on to that in a bit more detail in a moment. The basic principle is that patient choice is paramount. However, providers and individual surgeons should not be able to use that excuse not to meet the 18-week target.

As I have already mentioned, some GPs do not use choose and book because they might have heard bad things about it a year ago and they have not tried since. GPs need to take the time to get to grips with that system and really understand how it can benefit their patients, which will mean working with their PCT to address problems that might frustrate them. Similarly, many PCTs have set up their IT systems to make the most of choose and book and others have not and, as hon. Members have acknowledged, there is wide variation in performance among PCTs. Some PCTs do not train their staff, including their GPs, in how to make the best use of the system, some do not agree with their local providers how services should be displayed and some do not use the clear provisions in their contracts with providers to enable referrals to flow freely through choose and book. We are pressing PCTs to work closely with their GPs, and providers to resolve these issues.

Stockport PCT is performing above average. Although the hon. Member for Hazel Grove has come to me with a number of individual cases, the latest performance of his PCT is at about 64 per cent. However, the one in Staffordshire, which the hon. Member for Cheadle (Mark Hunter) mentioned, which straddles areas is not performing quite as well. Of course, Norfolk is one of the poorest performers in the country.

I appreciate the Minister giving way. I did acknowledge that Stockport was about average, with the 60 per cent. figure being mentioned in the recent figures that he published in a parliamentary answer. I notice that Devon is at 73 per cent., Norfolk at 33 per cent. and Lincolnshire, for what it’s worth, at 42 per cent. There is a wide variety of figures, as he says, but there is still the need to get to grips with a system that denies patients the choice of appointments that they need.

For the Minister’s benefit, can I just confirm that Cheadle comes under the PCT for Stockport, Greater Manchester, not the one in Staffordshire?

I want to clarify one of the Minister’s responses that he made a moment or two ago. He seemed to suggest—I want to be careful not to put words into his mouth—that the responsibility for the problems might lie with the PCT, rather than with the system itself. In the cases mentioned by hon. Members, it is of course systematic failure that is endemic in the structure that has been built up. Will he clarify that response and say just how much of the responsibility for this lies with the individual PCTs, since, as he has already said, Stockport PCT is generally a high-performing one.

It is above average: the latest figure is 64 per cent. for Stockport and the latest average figure is 57 per cent. Forgive me. I tried to inquire with officials exactly which PCT area Cheadle constituency straddled and I was told it straddled another one as well; it would simplify matters if it were just Stockport. However, Stockport is an above-average performer. The range of performance, from 95 per cent. by one of the best PCTs to down in double figures, still, for some of the worst, shows that where the PCTs grip the scheme, implement it properly and engage with their GPs and providers, the system can work.

The simple answer to the hon. Gentleman’s question is that it is the responsibility of PCTs. I am being urged on by hon. Members, who usually urge Ministers not to interfere so much from the centre in local issues and local implementation. I am happy to take away individual concerns raised by hon. Members, but I am afraid that it is not—I do not think that they are suggesting it—a Minister’s job to micro-manage the implementation of every single PCT’s choose and book system. It is the PCT’s responsibility to do it on behalf of their patients.

The Minister is generous in giving way again. I personally sought clarification because, frankly, I suspect that when, as hon. Members, we go back and have our regular meetings with our local PCTs, as most of us do, we will find that the PCT will be astounded by the Minister’s replying that the responsibility for these problems lies largely with them and is not down to systematic failure, as we believe.

I talked to the chief executive of the hon. Gentleman’s PCT yesterday and he assured me that he was happy with the system and that it was not a systematic problem, as the hon. Gentleman is implying. It is a problem in some cases of GPs not engaging with it and in other cases of the PCT’s system not working properly. It is also sometimes due to providers not putting information up and not using the system as it should be used, which I am coming on to.

As I was saying, some PCTs do not use the clear provisions in their contracts with providers to ensure that referrals flow freely through the system. PCTs need to work with their GPs and providers to resolve that issue. Some hospitals pay too little attention to how their services are displayed on choose and book and they ignore the instances of patients not being able to book appointments for their services. Strategic health authorities—the regional bodies—are working closely with PCTs and providers to tackle that.

The most important ingredient in all this is local leadership. How choose and book is used in Barnsley and in Leeds is a good example. Those two health communities are separated only by the M1 motorway. The system is no less available in Leeds than in Barnsley. In Barnsley, choose and book utilisation has been in excess of 95 per cent. for several months, but across the motorway in Leeds, utilisation is yet to rise above a percentage rate in the mid-20s. Why? The critical factor is the leadership in Barnsley, where the acute trust has really engaged and got behind choose and book.

I am sure that hon. Members who have spoken in this debate would like me to look into the individual cases that they have mentioned and I will certainly do that, but if they are having problems, as a first port of call they should go to their PCTs. If they have a problem with their PCTs, they may, by all means, come back to me.

The hon. Member for North Norfolk (Norman Lamb), in his comments on the speech made by the hon. Member for Hazel Grove, said that some of his constituents had complained—perhaps he was making a national point here—that they could not see particular consultants because they cannot choose to wait to be referred to a consultant owing to the 18-week target. Such practice is totally unacceptable. If a patient wishes to wait longer to see a specific consultant, they are perfectly entitled to do so. The point that I was making after the hon. Gentleman’s earlier intervention was that we must not allow individual consultants or trusts to claim that they are so popular that there is no way in which they can meet the 18-week-maximum target. Hospitals are obliged to accept all referrals to the services listed on choose and book that are clinically appropriate. They cannot turn referrals away even if they are struggling to meet waiting time targets. It is important that we stick to the principle that patients choose the hospital, not the other way round.

What the Minister is saying is encouraging, but we are told that, time and again, hospitals where the wait is longer than 18 weeks are being “greyed out”—that is the phrase. The option disappears from the list available on choose and book. That is what is happening. If the Minister says that it is unacceptable, what steps will he take to address it?

I shall come on to that in a second, but yes, it is unacceptable. I want to take up a point made by the hon. Member for Hazel Grove about the 5 per cent. tolerance level for the 18-week waiting target. He was not right to say that that includes people who do not turn up. The 5 per cent. tolerance is for people who choose, for whatever reason, to delay their treatment, or for cases in which there is a clinical reason to delay the treatment. They may need to get their blood pressure down, for example. It would not be right to penalise a provider in respect of the 18-week performance target just because people did not turn up. I wanted to disabuse the hon. Gentleman of that impression.

Sometimes the hospital that a patient wants will have no appointment slots available on choose and book at the time they want to book. That should not mean that they have to go elsewhere. If a patient cannot book an appointment, their details should be sent to the hospital of their choice, so that that choice is honoured. There are many places where that problem has been resolved and appointments on the choose and book system are almost always available. Where that is not happening, it is important that we hear about it and that strategic health authorities hear about it and work closely with the primary care trusts and the trusts to resolve the problem everywhere.

The hon. Gentleman asked three specific questions. First, he asked about missed calls. The information that I have is that the performance of the national Appointments Line is carefully monitored and is generally considered good. Where it falls below accepted standards, it incurs financial penalties. Since April 2007, 95 per cent. of calls have been answered within 30 seconds, and the key performance indicator relating to the busy tone has been met 86 per cent. of the time. I think that the hon. Gentleman was referring to patients who chose not to complete their call. That would be registered as a call that was not connected. It is perfectly possible—indeed, it is quite likely—that they called back and their calls were answered. However, we regularly review the performance of the Appointments Line against the call standards and I would be happy to write to him in more detail about that if he would like me to do so.

Secondly, the hon. Gentleman referred to the 18-week black hole, which I have just dealt with. Patients should be able to choose to wait longer than 18 weeks if they want to do so, but we must not let hospitals off the hook about bringing down waiting times, which all patients appreciate. Thirdly, the hon. Gentleman wanted me to ensure that all appointments are on the screen. We are targeting the trusts that have a high rate of unavailable slots appearing on the screen. Many hospitals have tackled the problem effectively. We want to ensure that they all do.

I want to come back to the Appointments Line question—it seems to be an orphan. The figures that I cited were drawn directly from a parliamentary reply that the Minister gave my hon. Friend the Member for North Norfolk (Norman Lamb) in January. That showed clearly that a large number of people could not get through, a large number of people were “Vivaldi-ed” and simply gave up after 30 seconds or more of the call. I advise the Minister to read the small print of his answer. That gives us a total of 330,000 calls in a year that are not being responded to. Whether people give up because they cannot stand the music any more or because the line is engaged, they still give up.

Yes, but the hon. Gentleman is ignoring the fact that those people may have rung back on another occasion and got their appointments. If it will be helpful, I will write to him to give him the clarification that he seeks.

To begin with, choose and book provided a choice of only four or five providers. As I am sure hon. Members will be aware, however, last April, after a major upgrade, we gave patients the ability to choose at referral whichever service would meet their needs. The new system also made it easier for GPs and their patients to navigate through the options available. It is interesting to note that following a peak between April and July last year, the Department has been receiving significantly fewer letters from the public making complaints about choose and book.

A decade ago, people could wait up to two years for a hospital appointment, but thanks to the investment and reform and the introduction of systems such as choose and book, that is no longer the case. Now, the average wait from GP referral to treatment is just eight weeks and no one need wait more than 18 weeks unless they choose to do so. In June this year, further enhancements will be made to the choose and book system that will help hospitals to give their services standardised and accurate names. That will give GPs an experience much more like using Google and information that is far more accurate, enabling them to help their patients in the best way possible.

Hon. Members referred to the recent BMA report. Although that report makes constructive suggestions on how the system can be improved, it clearly shows that the system can work when local engagement, particularly with clinicians, is effective. Its conclusion—section 4—states that the problems encountered were

“not due to the functionality of the system but due to broader issues such as…processes in place and capacity issues...The clinicians interviewed felt that Choose and Book could potentially bring benefits and that a paper chase of referrals letters between GPs and around the hospital is not best practice.”

The hon. Member for Boston and Skegness (Mark Simmonds) referred to the recent Lewisham report, which was published, I think, today. Although we are still looking into that, because it landed on my desk only yesterday, we were rather surprised by the findings at Lewisham that seemed to suggest that choose and book increased the rate of did-not-attends. All the other evidence suggests that choose and book significantly reduces did-not-attends. It is logical that if a patient is actively involved in decisions about their care, their attendance is likely to improve.

We understand that further research is being undertaken in Lewisham on those findings to find an explanation for them. Three previous pieces of research—at Ashford and St. Peter’s Hospitals NHS Trust, at Kettering general hospital and at Doncaster and Bassetlaw hospitals—found a reduction in do-not-attend rates of 32, 33 and 60 per cent. respectively, so there seems to be a conflict with the findings in Lewisham. I point out that Lewisham is an even poorer performer than Norfolk on choose and book. It may be that there is a more general problem, in that Lewisham has not embraced the system, rather than a particular problem with the system itself.

I have spoken about the importance of choice—a concept that most of us believe in and support. The issue that we are debating today is about GPs, primary care trusts and NHS and independent sector hospitals making a choice—making a choice to work with, understand and use choose and book properly, or to ignore it and wonder why it does not work. For their patients’ sake, and with the help of hon. Members, I hope that they choose the former.

Thalassaemia Patients

It is a pleasure to have secured the debate and to speak under your chairmanship, Mrs. Dean. I understand that this is the first time that a debate has taken place in the House on the important issue of the care of thalassaemia patients. Thalassaemia is the name of a group of serious genetic blood disorders that inhibit the normal production of haemoglobin—the part of red blood cells that supplies oxygen to the body.

In one sense, my interest in this issue is local, as the UK Thalassaemia Society is based in my constituency, in Southgate, but my interest goes wider than that, given that there are about 1,000 patients with thalassaemia in the UK requiring regular transfusion treatment for their condition and that more than 200,000 people in the UK carry the beta thalassaemia gene. The overwhelming majority of thalassaemia patients come from ethnic minority communities, particular those of Mediterranean and south Asian origin, and many of them already suffer significant health disadvantages. There are several patients in my constituency.

Thalassaemia remains a little-known condition, which is why I particularly welcome the opportunity to raise the issue in the House today. There are wide variations in treatment and care across primary care and hospital trusts, particularly in areas with low numbers of patients. I have secured the debate in order to highlight the variations in care and the health inequalities to which they contribute and to ask the Minister to consider what can be done to improve the lives of those with thalassaemia in the UK.

People with severe forms of thalassaemia, of which there are about 1,000, do not produce enough healthy, mature red blood cells, and if left untreated, the patient would be expected to die in the first 10 years of life. Thankfully, all pregnant women are now screened for the carrier state through the national screening programme. That is welcome because it makes the identification of patients and earlier medical intervention possible. Happily, the past few decades have seen welcome medical advances that mean that patients with thalassaemia can live long and productive lives if they receive the treatment and care they require.

Medical treatment takes the form of blood transfusions, which the patient typically receives every three to four weeks. One of the problems that thalassaemia patients face is a lack of flexibility from the NHS on receiving those life-saving blood transfusions. Patient choice is lauded loudly by the Government in their vision of the NHS, but the reality for patients with thalassaemia is that they have little or no choice of where or when they receive blood transfusions. That unnecessarily affects their education and employment prospects as they are forced to take frequent and often unpredictable leaves of absence from work or school to receive treatment.

Another issue in the treatment of thalassaemia patients, in which we see a wide postcode lottery of provision, is iron chelation therapy. As blood contains large amounts of iron that cannot be excreted from the body naturally, treatment is required to remove the excess iron that builds up as a result of regular blood transfusions. The process of removing excess iron is called iron chelation, and without it, iron deposits would eventually compromise the vital organs and lead to death, usually from cardiac complications.

The standard chelation therapy is for desferoxamine—Desferal—to be given as a subcutaneous infusion via a needle placed, often painfully, under the skin, usually on the abdomen. The treatment lasts for approximately 12 hours and is administered five to seven times a week. As is obvious from that description, the treatment can cause significant distress and impacts on aspects of daily life such as sleeping and the ability to socialise. I have spoken to several patients with thalassaemia within my constituency about the practical impact of that infusion. The drug is also a strong irritant and often causes pain and swelling at the injection sites. The parents of small children with thalassaemia have to administer those injections to their children, which as one can understand is very distressing to both parent and child. Although the treatment is life-saving, because of its painful and time-consuming nature, the rate of non-adherence to treatment is high. In fact, non-adherence to the treatment is the main cause of death among thalassaemic patients in the UK today.

Fortunately, there is hope of improvement in the administering of the treatment. Recent years have seen the introduction of oral chelating drugs that can transform a patient’s quality of life—the difference between taking the drug as a drink or tablets and having a needle under the skin for 12 hours out of every 24 need hardly be emphasised. The UK Thalassaemia Society wants those oral iron chelating drugs, when clinically indicated, to be available to all patients. Sadly, that is not the case due to the wider discrepancy of provision across the NHS. Therefore, many children and adults with thalassaemia must undergo hours of needless suffering every day.

The process of applying for oral iron chelating drugs in England is often through exceptional case procedures within individual primary care trusts. Those procedures are often time consuming and lead to unnecessary suffering for patients, many of whom are small children. The stress and trauma to parents and carers is immense, and the process requires additional time from doctors who often have other taxing requirements to make those detailed funding applications.

I appreciate that the Minister will say that she cannot direct that application process and that it is for individual PCTs to deal with them, but I hope that she will join me in encouraging PCTs in areas where the prevalence of thalassaemia is high, as in my own PCT in Enfield, to consider putting in place a standardised policy with regard to the provision of oral iron chelators to prevent such delays in funding and, crucially, to avoid the distress and frustration for patients and clinicians.

I have talked about treatment and would like to move on to the matter of curing thalassaemia, which I hope the Minster will agree should be a long-term aim of the health system. The most common method for curing thalassaemia is by bone marrow transplants. The success rate of that method varies considerably, depending on various factors. The alternative to bone marrow transplants is umbilical cord blood transfusion. The Minister will remember that the last time I secured a health-related debate I spoke about the merits of umbilical cord blood. I have insufficient time today to describe the details of umbilical cord blood and the hopes for it as a future treatment. Nevertheless, it is important to make the point that cord blood is a rich source of stem cells, which could be tapped into without the complications that accompany bone marrow transplants.

To date, the number of cord blood transfusions for thalassaemia has been sadly limited, but one small study placed the success rate at 79 per cent. Does the Minister agree that cord blood holds out the prospect of promising future treatments for not only thalassaemia, but other blood-related disorders? Will she ensure that the necessary cord blood banking is available to reach the ethnic communities who need it most? I look forward to her colleague, the Minister of State, Department of Health, the right hon. Member for Bristol, South (Dawn Primarolo), meeting with the all-party group on umbilical cord blood and adult stem cells, which was recently launched to discuss the outcome of the cord blood review.

So much for the future, but with regard to the care for thalassaemia patients now, access to psychological support and community and social care is also needed. There is a real need, and indeed call, for the Department of Health to work with local government, social services and education services to provide thalassaemia patients with a care package that addresses those holistically—I know that that term is often bandied about, but in this case it is truly needed—and deals with the social, psychological and educational needs of the patient alongside their medical treatment.

The issues that I have raised reflect a wider problem, as thalassaemia is in many respects a forgotten condition, and that is perhaps shown by the fact that this is the first time we have had a debate on thalassaemia. It is now forgotten within the health service, but hopefully not in the House. Although there are several committed specialists, to whom I pay tribute, dedicated to the treatment of thalassaemia and similar conditions that should be given a proper mention, such as sickle cell disease, there is a general lack of training and funding for posts in the haemoglobinopathies for both doctors and nurse specialists. Most haematologists deal mainly with white cell haematology, such as leukaemia and other malignancies, and red cell medicine is very much the poor relation when it comes to the research grants and training available.

Also reflecting the low profile of thalassaemia in the medical world is the fact that many GPs are not properly aware of the condition. More needs to be done to educate GPs on the causes and symptoms of thalassaemia to ensure that patients are passed on to appropriate specialists as soon as possible.

Perhaps one of the reasons why the condition has not received as much attention as other rare diseases is, sadly, the population it affects. As I have mentioned, thalassaemia overwhelmingly affects people of south Asian and Mediterranean origin.

Those communities often face social and economic disadvantages, and in the past many have struggled to find a voice within the health service. English is not the first language of many parents of children born with thalassaemia, which makes access difficult. Often families have to navigate the complications in the health and education systems. The lack of access to appropriate treatment and care for thalassaemia patients can contribute to the health and social inequalities that many patients and communities already face. This ethnic profile makes the spread of thalassaemia patients across the country uneven, which means that primary care trusts in certain areas, such as London, Birmingham and Manchester, face a disproportionate number of thalassaemia patients. That creates a number of problems with the burden on resources among PCTs with a high prevalence of thalassaemia. For low-prevalence PCTs, the cost is lessened, but patient access to specialist services is often patchy. They are required to travel long distances to access services.

To overcome problems of disparity in care in other conditions, particularly where patient numbers are relatively low and patients require a package of specialist care, the NHS has responded by developing managed clinical networks with the aim of improving cross-boundary working between health professionals and organisations in order to achieve the desired equitable provision of high-quality, clinically effective services. The UK Thalassaemia Society has produced guidelines on the standards of care for the treatment of thalassaemia patients, with the assistance of leading clinicians. Central to achieving those standards and improving outcomes is the establishment of clinical networks. Clinicians hope that if those clinical networks are established, the service for patients will improve. I understand that for the past two years the Government have been developing clinical networks for thalassaemia and sickle cell, but sadly there is no evidence that they are functioning and delivering the desired service. I would appreciate it, therefore, if the Minister outlined a time scale for the implementation of her Government’s plans for clinical networks.

Variations in treatment and care between PCTs and hospital trusts come particularly to the fore in the provision of certain drugs. This is a familiar theme that no doubt has been the subject of other Adjournment debates secured by other hon. Members. The case of thalassaemia is different and particularly pertinent because it affects the whole package of specialised services, the provision of which varies widely between different PCTs. There is not just a disparity in drug treatment; the whole service is often lacking. Patient numbers are low, but unlike many other conditions the ethnic profile of the people affected means that prevalence is not evenly spread through the population, and often patients must contend with the other inequalities that I have mentioned already.

Furthermore, mechanisms such as clinical networks and specialised commissioning, which exist in the NHS to deal with other conditions, as I have pointed out, requiring similar levels of specialised services for smaller numbers of patients, are undeveloped for thalassaemia and other haemoglobinopathies. Will the Minister explain why thalassaemia remains a poor relation to other genetic conditions, such as cystic fibrosis, in terms of funding for specialist drugs, the provision of services and general recognition? Will she explain when the Government will implement the clinical networks for thalassaemia to improve care and reduce variation in provision? What will the Government do to ensure that oral iron chelation treatment is made available to all patients?

The Minister will be aware of the forthcoming prescription charges review for patients with long-term conditions being undertaken by Professor Ian Gilmore, the president of the Royal College of Physicians. Thalassaemia patients commonly have as many as eight prescriptions per month. Patients with other chronic conditions, such as diabetes, are exempt from paying prescription charges. However, thalassaemia patients bear the financial burden of repeat prescriptions. Given the manifold challenges faced by thalassaemia patients, which I have only just touched on, does the Minister agree that it is unfair and inequitable that they have to pay these charges when patients with other chronic conditions are exempt?

I look forward to hearing the Minister’s response, either today or in correspondence, if further details arise. I pay tribute to the UK Thalassaemia Society not only for its assistance in the debate, but for the work that it does to assist patients who often fall beneath the radar of proper clinical provision and support across the realms of health, education and social services. I hope that I receive her support today.

It is a pleasure to serve under your chairmanship, Mrs. Dean. I thank the hon. Member for Enfield, Southgate (Mr. Burrowes) for raising this important debate. He takes a strong interest in the treatment and care of patients with haemoglobin disorders, such as thalassaemia major and sickle cell disease. As he will know, the prevalence of adult thalassaemia in his constituency is among the highest in the country. I also know that he has strong links with the UK Thalassaemia Society, which has its base in his constituency and provides such a positive voice for its members. It is doing sterling work in helping to drive up standards of care.

I welcome the opportunity to raise awareness of these long-term, chronic, debilitating conditions, the impact of which can be devastating not only for those affected but for their families and carers. An estimated 850 patients with thalassaemia major and about 12,500 to 15,000 patients with sickle cell disease live in England today. I would like to talk about the progress we have made in developing policy in this area and to attempt to address the questions raised and comments made. Should I fail to do so because of the time constraint, I would welcome the opportunity to meet the hon. Gentleman outside the Chamber at an appropriate time.

Our work builds on the success of the national programme for antenatal and newborn screening for sickle cell and thalassaemia, directed by Dr Allison Streetly. This programme is the first worldwide linked screening initiative. It is identifying some 350 affected babies a year and is estimated to save the lives of some 15 infants a year through early intervention. The progress has been achieved in partnership with key stakeholders, such as the UK Thalassaemia Society, the Sickle Cell Society, the UK Forum on Haemoglobin Disorders and other committed clinicians in the field. The Archbishop of York chairs the steering group, and it is a privilege to have such a champion supporting this area. I feel that his chairmanship will move us all faster in a very positive direction.

Key to the development of high-quality services for haemoglobin disorders is the formal designation of clinical networks for specialist care across the country. The hon. Gentleman asked what progress had been made; I can let him know very soon after the debate. The concept behind this is that every patient should have access to optimal specialist management and care, co-ordinated with routine care and provided conveniently close to home. We are working with specialised commissioning groups across the country to support the development of such networks, which will ensure that complications requiring specialist care are managed in the right place with the appropriate resources.

For example, strokes in children with sickle cell disease are common, and early diagnosis and immediate exchange blood transfusion can make the difference between a return to near normal and a long-term serious disability. Such early intervention is critical. Other clinical problems require highly specialist care, such as the management of potentially dangerous chest crises. The assessment and management of iron overload in those with thalassaemia is a rapidly changing area that, again, requires specialist interpretation and treatment guidance.

Our aim is to allow equitable access to comprehensive care across the country that is of a consistently high standard, and that addresses the concerns of patients and their families. This is a relevant time to mention the recently launched NHS constitution, which sets out our intention to ensure transparency and much greater consistency across all NHS commissioners in the way in which decisions are made about treatment and drug therapy. Such development underlines our commitment to addressing public concerns about the inequalities and unfairness in access to drugs.

As a first step to ensuring consistency of care in specialist provision and specialist commissioning engagement, we have succeeded in getting a national agreement—it has support from the Royal College of Pathology and the Royal College of Paediatrics and Child Health—on a specialist service definition for haemoglobin disorders, which covers thalassaemia major and sickle cell. That will help to ensure a consistent approach to service development across England, to encourage service planning and to underline the role of a specialised commissioner.

Currently, eight informal clinical networks are operating outside London and six within London, covering adjacent counties. Network meetings have identified some gaps in local services and those will be addressed via discussions with the local specialised commissioners. We have provided funding for the training of 13 additional staff—three doctors, six nurses and four clinical scientists. Once trained, the personnel will act as a focus for further educational development within the clinical networks. We are also working with the royal colleges to increase and enhance training in haemoglobin disorders. The hon. Gentleman specifically raised the issue of GP training and education in that role.

With the support of the UK Thalassaemia Society, the Sickle Cell Society, health professionals and other stakeholders, the National Haemoglobinopathy Registry was launched last October. It was supported by a report of the National Confidential Enquiry into Patient Outcome and Death on sickle cell and thalassaemia. The registry will allow us to collect details on patients with thalassaemia and sickle cell, and provide valuable information on patient numbers, complication rates and outcomes, which is a key factor underpinning the quality care agenda. We acknowledge that there is still a way to go in the development of service provision.

The hon. Gentleman raised the issue of cord blood. The NHS Cord Blood Bank has more than 12,000 units stored, some 40 per cent. of which is from the black and minority ethnic community. There are plans to increase the units to 20,000 by 2013. We have also asked NHS Blood and Transplant and the Anthony Nolan Trust to work together to develop plans on how we can meet the target more quickly.

On the question of bone marrow, it is important to put on the record that there are more than 100,000 bone marrow donors registered in Cyprus. That is 10 per cent. of the island’s population aged between 18 and 45, which makes it the fifth biggest registry in Europe and the 12th biggest in the world. The Cyprus registry is a member of the World Marrow Donor Association and is linked with more than 67 registers worldwide, including the UK. If a unit is needed, it is usually possible to source it from one of the network banks. The UK has access to such a network through the World Marrow Donor Association.

We acknowledge that there is more that we can do on service provision and the holistic approach that the hon. Gentleman outlined so well in his contribution. We have set the policy framework. With our support, the NHS can continue to build on the momentum for improvement. Our aim is to support high-quality, patient-centred clinical services for haemoglobin disorder. Key to that is the development of clinical networks of specialist care, and the concept that every patient should have access to optimal specialist management and care, as well as routine care provided conveniently close to home.

The treatment of thalassaemia is about the whole patient experience, which means annual reviews by specialists, routine—often monthly—blood transfusion and multiple prescriptions, including a requirement for oral iron chelation. We have recently carried out an informal review of services for haemoglobin disorders through which we hope to gain a better understanding of what is happening in clinical practice. That includes how the national clinical standards for care are impacting on services, and how current networks and commissioning arrangements are evolving. So far, reports have been very encouraging, with many examples of good and innovative practice and effective networking being noted. If any variations or issues arise, we will consider facilitating discussions between health professionals and specialist commissioners.

The Government are committed to phasing out prescription charges over the next few years in England for those with long-term conditions. Professor Ian Gilmore, president of the Royal College of Physicians, is undertaking a review to consider how the exemption should be phased in. The views of the public, clinicians and patient representative bodies, such as the UK Thalassaemia Society, have been sought.

A web survey hosted on the Department’s website gives anyone an opportunity to contribute their views until 27 February 2009. In line with Lord Darzi’s report, “High Quality Care for All”, our aim is to improve management of long-term conditions by offering more personalised packages of care closer to home, in order to allow people more choice and active involvement in decision making.

In conclusion, I thank the hon. Gentleman for initiating this debate and for identifying this important issue. I hope that he and other hon. Members will agree that considerable progress has been made in raising the standard of care for haemoglobin disorders throughout the country and ensuring more equitable access to excellent care. I accept that there is room for improvement, and remain committed to supporting the NHS in achieving that improvement for patients. To do that, we will be working in partnership with key voluntary organisations such as the UK Thalassaemia Society and the Sickle Cell Society.

One issue that goes wider than the medical and clinical perspective is the concern that care crosses into other areas, such as psychological and social care support. That is very important, given that the communities suffering from thalassaemia are often disadvantaged. Is there a contact or a programme in which there is cross-departmental consideration of the need to provide particular support? Although such support needs to take place at a local level, it may need some national direction, as well.

I appreciate the hon. Gentleman reminding me that he raised the point about the need for psychological and social support for the very young through to the troubled teenager and the entire family. As a former nurse who had patients with thalassaemia in my care, I know only too well how necessary that approach is. In line with Lord Darzi’s review on quality of care, personalised care is paramount to me, my Department and all Ministers. I look forward to working with all the societies to achieve that.

Financial Markets

It is a pleasure to serve under your chairmanship, Mrs. Dean. In addition to the items declared in the Register of Members’ Interests, I should like to declare that I am a prospective pensioner of the Royal Bank of Scotland and that I have an overdraft with NatWest. Those declarations are necessary in the context of my speech.

I thank Mr. Speaker for allowing us to have this debate, but I also thank Ministers in the Department for Business, Enterprise and Regulatory Reform and the Treasury. They have gone the extra mile to give advice and help when I have approached them with concerns about important individual businesses in my constituency in this difficult time of credit famine. Obviously, our approach in this House is to be courteous to colleagues across the political divide, but I should like to emphasise that, when dealing with my concerns, Ministers have acted not only professionally, but with a great deal of care, and I appreciate it.

It is fair to say that some companies in the Croydon area continue to be hard-pressed when they seek credit in these troubled times. Rightly, the Government recognise that one of the greatest difficulties in the financial sector is the withdrawal of foreign banks from credit provision. That puts a real strain on our economy. Problems often arise from the action that the Government have found necessary to take regarding Icelandic banking institutions. Those banks had significant market penetration, and some significant companies in the UK economy have been affected. When, of necessity, credit is withdrawn, some companies are embarrassed, because they need to find appropriate credit immediately to continue their business.

Thanks are also due to the Government for listening to hon. Members’ views about the role that Northern Rock can play in the economy. It is especially good news that the Government reversed the strategy of winding down the book of Northern Rock. That policy seemed counter-intuitive, bearing in mind that the Government are keen to see the continued provision of credit to the economy as a whole.

My main motivation for leading this debate is to ask why the Government have not, at this stage, seen the bad bank solution as the one to pursue. Ministers have listened with courtesy and have not dismissed my comments in the past six months about the attractiveness of the bad bank solution. I am especially grateful to the Economic Secretary for that courtesy, but I am encouraged by what the Chancellor said yesterday. He said:

“It could be that in some cases it could be easier to do a good/bad bank split.”

When asked about the bad bank solution, Ministers have expressed concern that it is difficult to price the assets that would be transferred to such a bank. However, the best way for the Government first to provide confidence to the financial markets and subsequently to ensure the appropriate provision of credit to the economy, is to get markets going again by valuing those so-called toxic assets.

The Government have said that the problem is that they may have to rely on banks to price the assets, and they ask to what extent senior management figures in the banking industry are able to understand some of their banks’ assets. However, the additional concern—this is not so openly expressed—is that such a valuation of the bad or toxic assets may lead to the complete equity destruction of the UK banking system, especially if we bear in mind that when the bankers say that assets are unpriceable, in reality they are probably saying that the value is quite close to zero.

To some extent, Members of Parliament enjoy the rather false frisson of talking nationalisation. It would probably be more helpful to talk less about that. It comes from a retro or nostalgic desire for the halcyon days when nationalisation was seen to be an effective policy option. Instead, we should talk more in terms of some forced reconstruction of the banking system, such that the economy will regain confidence through the provision of credit.

I would like to pose a question, although I know that asking questions is easier than providing answers. What has really happened with the Royal Bank of Scotland? Coming into the new year, the Government were moving with enthusiasm towards the idea of some kind of nationalisation, but that has not happened in the case of RBS. Is it because the Government are concerned about the ensuing liabilities if the bank were to be entirely absorbed within the state sector, or did they perhaps find that the senior management of RBS are themselves entirely unsure what they have inherited from the previous senior management?

I contend that some of our UK banks are, in reality, insolvent. There are substantial assets that could be taken into any bad banking institution; I note that JPMorgan has estimated their value at £260 billion. Clearly, that is large enough to destroy completely the equity of many of our banks, although it is fair to say—I know that the word “only” might seem ironic, although it is not intended to be—that that is only 22 per cent. of GDP. The earlier the intervention undertaken by Government to set up a bad bank, the easier it will be to contain ever-burgeoning levels of toxic assets.

I know that there was controversy surrounding the issue. Joe Stiglitz enlivened the debate by saying that there was a danger of Governments paying “cash for trash”. However, it is important for us to learn the lessons from the experiences in Japan, where zombie banks were allowed to exist for many years. It was very deleterious to the Japanese economy, and is still having an adverse effect.

I fear that the Government’s attraction to the idea of insuring the bad debts remaining on banks’ balance sheets is merely deferring the recognition that the value of those assets is close to zero. The controversy is shared in the United States, and it is clear from recent debate that the new Treasury Secretary is somewhat sceptical of the attractions of a bad bank solution. Indeed, the amounts are significant. A senior US Senator—I think it was the Chairman of the Senate Banking Committee—estimated potential bad bank exposures at $4 trillion.

Clearly, the role of Government is to manage the de-leveraging process. I mentioned earlier the problem of foreign bank departures. The other problem, of course, is that the complete destruction of the securitisation market has been much more significant than anything else in the withdrawal of credit from the markets. We often hear accusations thrown in the direction of the UK banks in terms of alleged reductions in lending. In reality, as the Government would rightly point out, the amount of lending to businesses by many UK banks has risen. It is the withdrawal of credit from other sectors, such as the securitisation sector and the foreign banking sector within the UK, that has done the greatest damage.

There is a danger in the Government’s further delay in introducing the bad bank policy solution. Early intervention was likely to engender confidence, whereas reacting to further crises is likely to be seen as less decisive. Other options could be pursued, of course. One possibility is to spend much of the additional proposed money on the creation of a post bank for the UK. There are many other difficult issues before the Government in terms of developments in the financial markets.

It is interesting that Wouter Bos was willing to criticise the Government yesterday about the VAT reductions, saying that they were unlikely to have a substantial effect. Those within our own House who criticised the Government for that policy are erroneous in their judgment. It is purely a matter of the size of the VAT reduction. Obviously a 2.5 per cent. reduction is not very much. We should bear in mind that the Government’s fiscal stimulative proposals, which came at the end of last year, amounted to £20 billion. Although they are substantive and show the Government’s determination to take a determined and vigorous approach to the management of the economy, in reality these sums are very small, by comparison, for example, with the prospective losses of trillions of dollars on toxic assets in the US, or indeed in comparison with the £610 billion rescue package that President Obama is currently trying to take through Congress. So, £20 billion is quite small in comparison. It is therefore quite clear to me that, unfortunately, the Conservative party, in suggesting that less should be done rather than more, put itself on the wrong side of the argument. Given the real dangers and extreme nature of the current situation, the Government have to be even bolder in the intervention that they must pursue.

There is a great deal of criticism and attack within the US, particularly by Mr Peterson, the Chairman of the US House Committee on Agriculture, on credit default swaps. I hope that our Government will not be drawn too far down that road. In many ways, the Government’s own criticism, together with that of our European partners, of the credit rating agencies suggests that they should do their very best to encourage the further development of the CDS market. That is because the more immediate pricing that is available through CDS prices is much more likely to be a better reflection than what has proven to be an inefficient and sometimes misleading rating process, where conflicts of interest have been allowed to develop in banking practice in the last 25 years.

One other possibility, of course, is the introduction of credit controls. It is interesting to see that the Conservative party, which has previously been regarded as a free market economy party, is now very keen on that idea. However, it is quite reasonable to ask why the Government felt that asset price inflation was not a responsibility of the Bank of England. If there is time in the second half of this debate, I shall be interested to learn why that responsibility was not given to the Bank of England previously.

Another approach that could be taken is rather radical, in terms of trying to move the debate further forward. There are real dangers that the Government will now be driven into taking a significant exposure to these toxic assets through a bad bank solution, which I think in the end will in any case be inevitable. Perhaps the banks could share that risk with retail investors, if the price can be established at a very low level. The opportunity might be taken to secure savings, if the prices were significantly discounted on the assets, by sharing those directly with individual citizens within the UK.

There is a final issue that I want to raise, before I again pose the key question. Another option with a bad bank solution would be to pursue the approach that was taken in Switzerland, which was the loan solution. Money is loaned for an extended period of 10 years to institutions or banks that are in great difficulties. That might be an improved approach to the bad bank solution, in terms of not having to go immediately for the complete equity destruction of those banks. That might be an alternative way for the Government to progress on these matters.

Clearly, our European partners are very concerned about the way that matters have progressed for them and they are pushing very hard for much more centralised economic management after this crisis is over. That poses a real challenge to the Government in terms of regulation here, and it may well be best for us to turn round to our European partners and say that if, for example, they want to see Europe as a whole issuing its own debt, that is something that they will have to do without us.

I sound one last little caveat. I note that in the US it is now being suggested that for those banks that are being provided with national Government support there should be a cap on employees’ maximum remuneration of $500,000 a year. I would be interested to learn whether our Government think that that would be appropriate here.

I now come to by far the most important question that I want to ask. There is always a danger, in asking too many questions, that the Minister will not be able to respond within the traditional 15 minutes that is available in these Adjournment debates. The one key thing that I want learn from this debate is why the bad bank solution has not yet been preferred by the Government.

It is a pleasure to serve under your chairmanship in this short debate, Mrs. Dean. I start by congratulating the hon. Member for Croydon, Central (Mr. Pelling) on securing this important debate and giving us the opportunity to consider these issues further. I thank him for his typically generous tribute to the officials and Ministers at the Department for Business, Enterprise and Regulatory Reform and the Treasury who have always sought to provide him with answers to his queries on behalf of businesses in his constituency.

When people look back at recent events, many factors will undoubtedly be adduced as having created the global credit crisis that we now face. They will certainly include the employment of increasingly complex assets that were not well understood and were often linked to the mortgage market, and the bonus-driven pursuit of short-term profit in global financial institutions, which was compounded by shortcomings in regulation, most starkly in the US sub-prime mortgage market. Following the collapse of Lehman Brothers, the haemorrhaging of confidence in the financial system froze inter-bank lending, creating huge problems right across industry in the UK, Europe, the United States and more widely.

In past months, many people have been surprised by the sheer scale and speed of what has gone on, and by the impact of the recession on companies that have been unable to access the credit that they need, because of the unprecedented shock to the financial system. We are in the middle of the biggest shock to the financial system of the modern global era. In response, the UK Government have been extremely clear about our objectives right from the start. Our primary responsibilities are to support the stability of and restore confidence in the financial system, to protect depositors’ money and to protect taxpayers’ interests. Banks sit at the heart of our economy and provide lending that is vital to growth and job creation. People and businesses across Britain are feeling the consequences of the global credit crunch, which is why the Government have been doing everything possible to stabilise the financial system and restore confidence to the economy, and we will continue to do that.

As the hon. Gentleman has noted, last October, following the unprecedented turmoil in financial markets in the wake of the collapse of Lehman Brothers, we announced a comprehensive package of support for the financial system to support the stability of the banking system and to protect savers and depositors. That action has been successful in preventing the collapse of other UK banks and in ensuring that no depositors in UK banks have lost money. In our pre-Budget report we went further, as the Chancellor set out a major fiscal stimulus package to boost the economy and to deliver real help to support businesses, home owners and consumers through these difficult times.

The hon. Gentleman said that a stimulus of £20 billion is quite small, and in terms of global capital flows he is absolutely right. However, as he recognises, it is important that the Government take action. He is right to say that the Conservatives have put themselves on the wrong side of the argument when it comes to this matter. I think they will regret that and have to recant in the future.

It should not just be the UK Government who want to use fiscal measures to stimulate the economy; we need to see global action. That is why we have been particularly welcoming of actions taking place in other European Union countries, China, and most recently the United States, with the fiscal stimulus package that has been discussed under President Obama.

On top of the pre-Budget report, last month the Chancellor announced a further package of measures to support the banking system and safeguard the millions of jobs put at risk by the continuing difficulties in the financial system. Those measures are aimed at beginning to replace the lending capacity lost by the withdrawal of foreign banks and other institutions, which the hon. Gentleman discussed. The measures are also aimed at addressing the barriers that are making it difficult for UK banks to expand their lending and restore certainty to the banking sector.

The hon. Gentleman referred specifically to the bad bank and wanted to know why the Government have not implemented that option. He is aware that we have considered a number of different options and will be aware of the asset protection scheme that we announced. Troubled, or toxic, assets need to be dealt with and a major element of the package announced in January was the asset protection scheme, which is designed to protect financial institutions against exposure to exceptional future credit losses on certain portfolios of assets. In conjunction with the steps already taken by the UK authorities, the scheme is designed to restore confidence in the financial markets, promote transparency, support financial stability and improve the availability of credit to creditworthy borrowers in the economy. Under the scheme, as I think the hon. Gentleman appreciates, we are specifying that any assets protected are ring-fenced and managed separately within these banks in a way that maximizes their value. However, that is not inconsistent with a bad bank approach. The Treasury will have the ability to take over management or ownership of the assets in defined circumstances. That would enable the creation of a bad bank in due course if it proves necessary.

The Chancellor has made it clear that the bad bank approach may be appropriate in the future for certain institutions and that the Treasury will continue to examine options for any further Government action that may be necessary. With the guarantees that are provided, we believe that the asset protection scheme will work and will be important in protecting financial institutions against exposure to toxic assets.

As a further step to increase the availability of corporate credit and reduce the illiquidity of underlying instruments, we announced on 19 January that the Bank of England will set up an asset purchase scheme. The Bank will be authorised by the Treasury to purchase high quality private-sector assets, including paper issued under the credit guarantee scheme, corporate bonds, commercial paper, and a limited range of asset-backed securities. The significance of the action that we are taking in this regard should not be underestimated. This is the first time that the Bank of England will, in effect, be lending directly to the private sector. The Treasury will authorise initial purchases of up to £50 billion, and the Chancellor has this week written to the Governor of the Bank setting out how we expect to see the scheme used.

The Bank will be guided in its purchases by an assessment of the transactions that are most likely to restore the flow of finance to corporate borrowers, but also by where a viable private market will exist for the assets when markets begin to return to normal. It is important to appreciate that, during the course of this year, the corporate sector in the UK will need to refinance in the region of £90 billion to £100 billion of loans. That is why a scheme such as the asset purchase facility will be an important mechanism for the future. I note that it has been warmly welcomed by the CBI.

Complementing measures to encourage lending by financial institutions, we announced at the same time that the draw-down window for the credit guarantee scheme has been extended from April until the end of 2009. The final maturity date for the scheme remains April 2014, but again, the extension will support orderly issuance and rolling over of guaranteed paper by banks. In addition to the steps that the Government have taken, the Financial Services Authority has issued helpful guidance to address any potential uncertainty surrounding its expectations of banks’ capital reserves. The hon. Gentleman, who is knowledgeable about these matters, will understand the importance of the FSA’s statement. The FSA has made it clear that there are no new statutory requirements for institutions to hold increased capital and it reiterated its view that capital buffers built in as part of the recent recapitalisation exercise play a role both in absorbing losses and facilitating continued lending.

The FSA’s statement on capital is consistent with the remarks made on 16 January by the Basel Committee on Banking Supervision. This goes some way to highlighting the fact that we are confronted by a global problem, which requires a global solution. We are continuing to collaborate closely with our international partners. The Prime Minister and the Chancellor have held extensive conversations with international partners to ensure a co-ordinated global response to the economic crisis. I was at a meeting today with one of the governors of the Russian central bank and the Russian Finance Minister has been having talks with the Chancellor. Premier Wen met the Prime Minister only last weekend. The UK will continue to take a leading role in discussions.

The G7 autumn discussions in Washington gave an opportunity for both the Prime Minister and the Chancellor to discuss these issues with world leaders. I want to highlight the importance of the next meeting of the G20, which will be held in London in April. It will come at a very difficult time for the world economy and it is right that the Prime Minister and the Chancellor should take that opportunity to discuss with our international partners how we can further co-ordinate international action. We want to drive forward an ambitious work plan, both to tackle the problems in the global economy and to strengthen the stability and resilience of the global financial system for the future.

In conclusion, we will continue with our dual approach to tackling the global downturn and its far-reaching impacts by working internationally to tackle its causes—the global banking crisis and the lack of adequate funding in the global financial economy—and dealing fairly with its consequences here in the UK, providing the right support for people and businesses. The industrial activism approach that we are adopting as a Government, through introducing the working capital scheme, the enterprise financial guarantee and a range of other measures, not least of which is the recent support for the automotive industry in particular, which we announced last Tuesday, are all indications that this Government is looking to provide real help for businesses now to help them get through difficult times and, at the same time, supporting the banking system.

These are difficult challenges and new challenges are emerging every day, but we are determined to do everything necessary to support people and businesses through the downturn and to get our economy growing again just as quickly as possible.

Question put and agreed to.

Sitting adjourned.