With permission, Mr. Speaker. The whole House will want to join me in expressing condolences to the family and friends of the two soldiers who recently lost their lives serving in Afghanistan: Lieutenant Paul Mervis of 2nd Battalion the Rifles; and Private Robert McLaren of 3rd Battalion the Royal Regiment of Scotland—the Black Watch. Their lives, their service and their contribution will not be forgotten. Their sacrifice reminds us of the dangers our serving armed forces confront every day and of why we must continue to give them all our support.

Our troops first went into Iraq in March 2003 and now they are coming home. In total, 120,000 men and women have served in Iraq during the last six years, so it is fitting that I should now come to the House to talk of their achievements through difficult times; to chart the new relationship we are building with Iraq; and to set out our plans for an inquiry into the conflict.

As always, we can be supremely proud of the way our armed forces carried out their mission—proud of their valour in the heat of combat, which is recognised in many citations for awards and decorations; and proud of their vigilance and resolution amid the most difficult imaginable conditions and the ever-present risk of attack by an unseen enemy. Today we continue to mourn and to remember the 179 men and women who gave their lives in Iraq in the service of our country.

In my statement to the House last December, I set out the remaining tasks in southern Iraq for our mission: first, to entrench improvements in security by putting Iraqis in charge of their own defence and policing; secondly, to support Iraq’s emerging democracy, particularly through the provincial elections; and, thirdly, to promote the reconstruction of the country, economic growth and basic services like power and water in order to give the Iraqi people what matters most for their livelihoods in years to come—that is, a full stake in their economic future. I can report that those three objectives are being achieved, and that, thanks to our efforts and those of our allies over six difficult years, a young democracy has replaced a vicious 30-year dictatorship.

In recent months, we have completed the training of the 9,000 troops in 14 division of the Iraqi army, who are now fully in charge of the security of Basra. It was 14 division who, with our and the Americans’ help, took on the militia in the crucial Operation Charge of the Knights in spring last year. Since then, violence and crime in the Basra region have continued to fall, while levels of violence across Iraq as a whole are at their lowest since 2003. Provincial elections were held peacefully on 31 January with 7 million Iraqis turning out to vote for 440 different political groupings. The Iraqis ran the elections themselves with only three violent incidents across the entire country, and preparations are now under way for national elections on 31 January 2010.

Since 2003, the UK has spent more than £500 million in Iraq—for humanitarian assistance, infrastructure and promoting economic growth. Support to the health sector has included 189 projects in Basra, including the refurbishment of Basra general hospital and the building of the Basra children’s hospital. As a whole, the international community has rehabilitated more than 5,000 schools, as well as constructing entirely new schools and new classrooms in existing schools. Despite high unemployment and the scale of the global recession, economic growth in Iraq this year is predicted to be nearly 7 per cent.

Significant challenges remain, including that of finding a fair and sustainable solution to the sharing of Iraq’s oil reserves, but Iraq’s future is now in its own hands, in the hands of its people and its politicians. We must pay tribute to the endurance of the Iraqi people; we will pledge to them our continuing support. However, it will be support very different from the kind that we have provided for the last six years. As the House knows, our military mission ended with the last combat patrol in Basra on 30 April. As of today, there are fewer than 500 British troops in Iraq, with more returning home each week.

On the day of that last combat patrol in April, I welcomed Prime Minister Maliki and most of his Cabinet to London. We signed together a declaration of friendship, partnership and co-operation defining the new relationship between our two countries for the future. At the request of the Iraqi Government, a small number of British Navy personnel—no more than 100—will remain in Iraq for long-term training of the Iraqi Army. Royal Navy ships will continue to protect the oil platforms on which Iraq's exports depend, and we will continue to offer training to the Iraqi army as part of a wider NATO mission. We will also offer training opportunities at Sandhurst and elsewhere in the United Kingdom for Iraqi officers of high potential. At the core of our new relationship, however, will be the diplomatic, trading and cultural links that we are building with the Iraqi people, supporting British and other foreign investors who want to play a role in the reconstruction of southern Iraq.

I have discussed with Prime Minister Maliki a plan for British companies to supply expertise to the Iraqi Oil Ministry. Earlier this year, the Mesopotamia Petroleum Company signed a joint venture worth $400 million. Shell is working with the Southern Oil Company to bring to market some of the 700 million cu ft of gas that is currently lost each day by flaring. British companies are now competing for further contracts, and Rolls-Royce and Parsons are currently discussing with the Iraqi Ministry of Electricity proposals for a new power generation infrastructure worth an initial $200 million.

British funding will support lending to 1,000 businesses in southern Iraq, and a youth employment programme that should give training and work permanently to young Basrawis could be rolled out across the whole of Iraq as a result of its success. We are supporting the Iraqi Transport Ministry in the resumption of civilian flights; the Department for International Development and the British Council are working on a major education programme; and Iraq has already identified its first 250 students, an early initiative in Britain’s contribution to Iraq’s plans for 10,000 overseas scholarships for Iraqi students.

Issues in the region still confront us. Iran is an independent nation that deserves our respect, and the Iranian people are a proud people who deserve democracy. That is why the regime must address the serious questions that have been asked about the conduct of the elections. The way in which the regime responds to legitimate protests will have implications for Iran’s relationships with the rest of the world in future.

The House will note the speech made by Prime Minister Netanyahu, in which for the first time he endorsed a two-state solution. His speech was an important step forward, but there remains a long road ahead of us. I will speak to him again later today to impress on him the importance of freezing settlements.

With the last British combat troops about to return home from Iraq, now is the right time to ensure that we have a proper process in place to enable us to learn the lessons of the complex and often controversial events of the last six years. I am today announcing the establishment of an independent Privy Counsellor committee of inquiry which will consider the period from summer 2001, before military operations began in March 2003, and our subsequent involvement in Iraq right up to the end of July this year. The inquiry is essential because it will ensure that, by learning lessons, we strengthen the health of our democracy, our diplomacy and our military.

The inquiry will, I stress, be fully independent of Government. Its scope is unprecedented. It covers an eight-year period, including the run-up to the conflict and the full period of conflict and reconstruction. The committee of inquiry will have access to the fullest range of information, including secret information. In other words, its investigation can range across all papers, all documents and all material. It can ask for any British document to be brought before it, and for any British citizen to appear. No British document and no British witness will be beyond the scope of the inquiry. I have asked the members of the committee to ensure that the final report will be able to disclose all but the most sensitive information—that is, all information except that which is essential to our national security.

The inquiry will receive the full co-operation of the Government. It will have access to all Government papers, and the ability to call any witnesses. The objective is to learn the lessons from the events surrounding the conflict. It is on that basis that I have accepted the Cabinet Secretary’s advice that the Franks inquiry is the best precedent. Like the Franks inquiry, this inquiry will take account of national security considerations—for example, what might damage or reduce our military capability in the future—and evidence will be heard in private. I believe that that will also ensure that evidence given by serving and former ministers, military officers and officials is as full and candid as possible. The committee will publish its findings in as full a form as possible. These findings will then be debated in the House of Commons and the House of Lords. It is in these debates, as well as from the report itself, that we can draw fully upon the lessons learned in Iraq. So while the format is the same as that of the Franks inquiry, we have gone much further in the scope of the inquiry. No inquiry has looked at such a long period, and no inquiry has the powers to look in so much breadth, for while Franks looked only at the run-up to the Falklands conflict, the Iraq inquiry will look at the run-up to conflict, the conflict itself and the reconstruction, so that we can learn lessons in each and every area. The inquiry will take into account evidence submitted to previous inquiries, and I am asking members of the committee to explain the scope, width and breadth of its work to Opposition leaders and the Chairs of the relevant parliamentary Committees.

In order that the committee is as objective and non-partisan as possible, the membership of the committee will consist entirely of non-partisan public figures acknowledged to be experts and leaders in their fields. There will be no representatives of political parties from either side of this House. I can announce that the committee of inquiry will be chaired by Sir John Chilcot and it will include Baroness Usha Prashar, Sir Roderick Lyne, Sir Lawrence Freedman and Sir Martin Gilbert. All are, or will become, Privy Counsellors.

The committee will start work as soon as possible after the end of July. Given the complexity of the issues it will address, I am advised that it will take a year. As I have made clear, the primary objective of the committee will be to identify lessons learned. The committee will not set out to apportion blame or consider issues of civil or criminal liability.

Finally, I am sure the whole House will join me in paying tribute to the courage and dedication of every one of our armed forces, and also our civilian personnel, who have served our country with such distinction in Iraq over six years, and who will continue to do so in Afghanistan and on peacekeeping missions around the world.

At its peak, a force of 46,000 served tours of duty in support of operations in Iraq. In total, 120,000 men and women served over the period of the entire conflict: 179 Britons died and 222 were seriously or very seriously injured, and we remember them all today.

I said in my statement in December that the memorial wall in Basra would be brought home. I can now confirm that it will form part of a new memorial wall to be built at the national arboretum in Staffordshire, and just as it is right that we should pay tribute to the memory of those who have fallen, and to the wounded, so it is right to give thanks for the safe return of their comrades, to show our gratitude to all those who have served, and for us as a nation to celebrate the enduring achievements of all our armed forces. So I can also tell the House that in the autumn of this year a service of thanksgiving and commemoration will be held in Westminster abbey.

We salute our forces today. Through their work, the work of their American and coalition comrades and of the Iraqi security forces, and supported by the courage and vision of those within Iraq led by Prime Minister Maliki, Iraq is emerging from the shadow of 30 years of brutal dictatorship and then conflict. Today, Prime Minister Maliki and his Government can work together for a peaceful and prosperous future. That they can now do so is the ultimate tribute to all who served in Iraq: to their skills, commitment and sheer professionalism; to their great and enduring courage in conflict; and to their immeasurable contribution to reconstruction and to peace.

I commend this statement to the House.

I join the Prime Minister in paying tribute to Lieutenant Paul Mervis and Private Robert McLaren, who have been killed in Afghanistan in the last few days.

In the course of the Iraq conflict, 179 British servicemen and women lost their lives. They came from all three services: the Army, the Navy and the Air Force, and their number also included one Ministry of Defence civilian. Of course, the Iraq conflict caused great division in our politics, our Parliament and our country, but we can all unite over the professionalism and bravery of our armed forces, the service they gave to our country, and the debt we owe to all those who lost their lives.

I start with some of the things we agree about in the statement. Yes, we agree about the need for a strong relationship between democratic Iraq and Britain. We absolutely agree about the need for a two-state solution between Israel and Palestine and welcome what Prime Minister Netanyahu has said. Yes, we need answers about the conduct of those Iranian elections. But I want to focus my questions on the inquiry announced by the Prime Minister.

We welcome an inquiry—indeed, we have been calling for it for many months—but I have to say that I am far from convinced that the Prime Minister has got it right. The whole point of having an inquiry is that it has to be able to make clear recommendations, to go wherever the evidence leads, to establish the full truth and to ensure that the right lessons are learned, and it has to do so in a way that builds public confidence. Is there not a danger that what the Prime Minister has announced today will not achieve those objectives? The membership looks quite limited, the terms of reference seem restrictive, the inquiry is not specifically tasked with making recommendations and none of it will be held in public. So will the Prime Minister answer questions about the following four areas: the timing; the membership; the coverage and content; and the openness?

First, on the timing, this inquiry should have started earlier. How can anyone argue that an inquiry starting six months ago, for example, would somehow have undermined British troops? Indeed, the argument that we cannot have any inquiry while troops are still in Iraq has been blown away today by the Prime Minister’s saying that some troops will be staying there even as the inquiry gets under way. As for how long the inquiry takes, the Franks inquiry reported in just six months, yet this inquiry is due to take—surprise, surprise—until July or August 2010. Will delaying the start of the inquiry and prolonging the publication until after the next election not lead everyone to conclude that this inquiry has been fixed to make sure that the Government avoid having to face up to any inconvenient conclusions? At the very least, will the Prime Minister look at the possibility of having an interim report early next year?

Secondly, on the people conducting the inquiry, what is required for an inquiry such as this is a mixture of diplomatic, military and political experience. We welcome the diplomatic experience, but there must be a question mark over the military experience—there are no former chiefs of staff or people with that sort of expertise. In addition, is it not necessary to include, as the Franks inquiry did, senior politicians from all sides of the political divide to look at the political judgments? The inquiry needs to be, and needs to be seen to be, truly independent and not an establishment stitch-up, so will the Prime Minister look at widening the membership in the way that we have suggested?

The third area is the coverage and the content of the inquiry. It is welcome that the inquiry will cover the whole period in the run-up to the war, as well as the conduct of the war, but is it not wrong to try to confine the inquiry to an arbitrary period of time? Should it not be free to pursue any points that it judges to be relevant? On the specific issue of the terms of reference, is it not extraordinary that the Prime Minister said that it should try to avoid apportioning blame? Should not the inquiry have the ability to apportion blame? If mistakes were made, we need to know who made them and why they were made. The Prime Minister was very clear that the inquiry would have access to all British documents and all British witnesses. Does that mean that the inquiry may not have access to documents from the USA, the coalition provisional authority or the Iraqi Government, even if they are kept in the British archive? That is an important specific question and one to which we need an answer. Will the inquiry be free to invite foreign witnesses to give evidence—written and oral?

On the scope of the inquiry, will the Prime Minister confirm that it will cover relations with the United States; the use of intelligence information; the function of the machinery of government; post-conflict planning; and how the Department for International Development, the Foreign and Commonwealth Office and the armed forces work together?

I turn now to the issue of openness and transparency. Given that this inquiry is of interest not only to us politicians but to the public and the families of servicemen and women who gave their lives, should there not be some proper public sessions? Is that not what many will want and many will expect, and is it not part of the building of public confidence that is absolutely necessary?

Finally, are not the limitations of this inquiry reflected in the way the House of Commons is being treated by the Government over this issue? Before the Franks inquiry—we are told that this is a Franks-style inquiry—there was a proper debate on the terms of reference of the inquiry on a substantive motion in the House of Commons. This time—[Interruption.] The Prime Minister laughs, but this time there is just a statement and no debate, even though last Wednesday he promised us a new era of parliamentary accountability and democratic renewal. What happened to that? It has not lasted even a week.

A proper inquiry must include a range of members, including senior politicians. It needs to have the freedom to range widely and to speak frankly, and its terms of reference must be debated properly in a democracy such as ours. So when the Prime Minister responds, will he put those failings right?

I thank the right hon. Gentleman for his comments about our soldiers who have died in Afghanistan and the contribution they have made. I am glad that he also agrees with what I have said about Iran and the behaviour of the Iranian regime, including the need for it to stop any violence against people who are protesting against the election result peacefully. I also agree with him about the support that we want to give to our troops and the need to take into account at all times, especially as we consider this inquiry, the wishes, views and sensitivities of the families of the people who have died or been injured in the fighting in Iraq.

Almost all the points that the right hon. Gentleman raised are dealt with by the remit and scope—the breadth and depth—of the inquiry. The shadow Foreign Secretary and he spent a great deal of time calling for a Franks-style inquiry, and that is exactly what we have—[Interruption.] There are repeated references in Hansard to the shadow Foreign Secretary and the Leader of the Opposition saying that what they wanted was a Franks-style inquiry, which is what we have got.

The right hon. Gentleman says that the remit of the inquiry is restricted, but I cannot think of an inquiry with a more comprehensive, wider or broader remit than the one that I have just announced. Far from being restricted, it will cover eight years, from 2001 to 2009. Far from being restricted, it will have access to any documents that are available, and that will include foreign documents that are available in British archives. As far as we are concerned, it may interview any witnesses, including British witnesses and witnesses it wants to invite, if necessary, from abroad. I do not think there is any fundamental disagreement between us on the nature of the inquiry, its scope and its comprehensiveness.

I remind the right hon. Gentleman about the timing. The Franks inquiry looked only at the run-up to the Falklands war. Incidentally, it was announced in a written answer to the House of Commons, not in an oral statement. This inquiry will deal with the run-up to the conflict, the conflict itself and all issues of reconstruction after the conflict. With such a broad remit, I cannot think of any set of events that can be excluded that are of importance to Iraq and the future of our relationship with Iraq. It is hardly surprising that if we are dealing with that eight-year period—the run-up to the war, the conflict itself and the aftermath—the inquiry will take time to interview witnesses and take evidence. Its report will be detailed.

I have said that the report should be as comprehensive as possible, given the issues of national security that are involved. In other words, all but the most sensitive of information should be reported to the House of Commons. The lessons that will be learned from the Iraq events will be learned not just from the investigation, but from the debates that will take place in this House when we receive the full report from the inquiry.

As for the membership, I think that there is a difference between now and the Franks inquiry. For eight years, we have had politicians commenting on Iraq one way or another in this House and elsewhere. We would do better in these circumstances to draw on the professional and expert advice of people who have not been involved in commenting on this issue over the last few years. That is why we have what I believe can be regarded as a committee of people who can be regarded as both knowledgeable and expert in their field. I defy the Opposition to criticise the individuals who are named in this inquiry as people who are not capable of carrying out an important piece of work. They are suited for that task, and they will do a good job. I hope that people will recognise that they are respected in their own fields and have a great deal to offer in this inquiry.

The events in Iraq are controversial. They have led to heated debate in this House and across the country, but it is possible for us to work together to learn the lessons of this inquiry. I hope that it will not become the subject of partisan in-fighting. It will be carried out by a respectable group of people who have great reputations throughout our country and I hope that it will receive the support of as many hon. Members as possible.

I should like to add my expressions of sympathy and condolence to the family and friends of Lieutenant Paul Mervis and Private Robert McLaren, who tragically lost their lives in Afghanistan in this last week. Of course I join the Prime Minister in paying tribute to our brave servicemen and women, who have served our country so courageously in Iraq over the past six years. In particular, I pay tribute to the 179 who have lost their lives. They and their families are in our thoughts today.

I passionately believe that we were wrong to invade Iraq, but I am second to none in my admiration for the bravery and dedication of our servicemen and women. Everyone knows that the invasion of Iraq was the biggest foreign policy mistake that this country has made in generations—the single most controversial decision taken by Government since Suez—so I am staggered that the Prime Minister is seeking to compound that error, which was fatal for so many of Britain’s sons and daughters, by covering up the path that led to it.

The Liberal Democrats have called for an inquiry into the build-up and conduct of the Iraq war for many years. I suppose we can be grateful that, finally, the Prime Minister has acceded to that demand. However, as is so often the case, he has taken a step in the right direction but missed the fundamental point. A secret inquiry, conducted by a clutch of grandees hand-picked by the Prime Minister, is not what Britain needs. Does the Prime Minister not understand that the purpose of an inquiry is not just to produce a set of conclusions but to allow the people of Britain to come to terms with a mistake made in their name?

I met the families of soldiers who lost their lives in Iraq and just an hour ago they asked me to speak in their name and to tell the Prime Minister that nothing short of a fully public inquiry, held in the open, will satisfy them. Will he at least listen to what those grieving families need?

The Prime Minister says that the inquiry has to be held in private to protect national security, but it looks to me suspiciously as though he wants to protect his reputation and that of his predecessor instead. Why else would he want the inquiry to report after the general election, when we could have at least interim reports before then? It is perfectly possible to have a limited number of sensitive sessions in camera while retaining the fundamental principle that the vast bulk of the inquiry—not just a few public sessions, as recommended by the Conservative leader—should be open to all.

I am grateful that the Prime Minister has listened to my representations and has extended the inquiry to cover the full origins of the war and given it full access to the documents and files that it will need. However, I am disappointed that he made such a feeble attempt to secure consensus on the panel that will conduct the inquiry. The experience of successfully established inquiries, such as the one now being held in the Netherlands, shows that consensus can be secured only if the Government conduct painstaking consultation over a prolonged period of time. Why did the Prime Minister not even attempt that sort of constructive discussion with other parties?

The Government must not be allowed to close the book on this war as they opened it—in secrecy. Last week, the Prime Minister stood at the Dispatch Box and spoke eloquently about the need for more public accountability and transparency. This was his first test. He has failed. He has chosen secrecy instead. For six years, we have watched our brave servicemen and women putting their lives on the line for a war that we did not support and could not understand. To rebuild public trust, the inquiry must be held in public. Will the Prime Minister, even now, reconsider? Will he make this inquiry a healing process for the nation, or will he turn his back on the legitimate demands of the British people once again?

Every Member has the greatest respect for every family that is grieving as a result of what has happened in Iraq. Nothing that anybody says today takes away from our concern about the needs of those families and our respect for them. I want to answer the right hon. Gentleman’s specific points about the inquiry, however.

The inquiry is to learn the lessons of what has happened. The inquiry will cover the run-up to the war, the conflict itself and reconstruction after the conflict. I can think of no remit that could be broader than that—to cover the events leading up to the conflict, and the reconstruction after it. The inquiry will cover eight years of our history, and will be a very detailed piece of work that has to be done.

The inquiry will be able to call any witness, and for any evidence. The report will be published and debated in this House. That is exactly how the Franks inquiry went about its work. To be fair to the right hon. Gentleman, he disagrees with using Franks as a model, although the main Opposition party has always wanted that. However, we must take into account national security considerations, and what is known about the capability of our armed forces and security services, and the missions they are undertaking at the moment. We also have to take into account what serving officers will want to say to the inquiry. I think that the right hon. Gentleman will come to recognise that all those things involve a degree of confidentiality that would not suit a public inquiry, where all witnesses give evidence in public. The lesson of public inquiries is that they take many, many years, because everybody who comes before one wants to be represented by a lawyer. We know that from other public inquiries that are taking place at the moment, one of which has already taken eight years and is no nearer to completion now than it was a year ago.

I also ask the right hon. Gentleman to bear it in mind that the matter will come back to the House. It is up to the inquiry to decide how long it will take to do its work. I think that the best way for it to report to the House is with a comprehensive piece of work, rather than through piecemeal reports. In the end, the members of the inquiry team will decide how long it will take them to do the work, but I think the right hon. Gentleman will agree that it will take some time to cover eight years of history in the most detailed way. All witnesses and all evidence can come before the inquiry. I hope that he will agree, on reflection, that those who have been selected and asked to take part in the inquiry are people of high reputation who can do a very good job of work for this country.

As one who supported the Iraq war, I did so on human rights grounds. I saw no secret material and had no private briefing, but I had a 30-year involvement with the Iraqi opposition. I personally would want assurances from the inquiry as to why, prior to the war, this country failed to indict leading members of the Iraqi regime when we had the legal evidence to enable us to do so.

I am grateful for the work that my right hon. Friend has done in Iraq, especially with the Kurdish population. She is regarded very highly by all those whom I meet when I go to Iraq, in particular for the way she has protected the interests of the Kurdish population in that country, who were facing very difficult times under Saddam Hussein. She is party to binding that group together with the rest of the country to make for a stronger future.

Obviously, the inquiry will look at the events from 2001 onwards. However, if it feels that it is necessary to look behind that and before that, it will of course do so.

As someone who supported the war, I unashamedly continue to believe that history will record that what was done at that time will turn out to be a cause for good, and that a stable and democratic Iraq will be a force for good in the region. On that basis, I hope that the Prime Minister will consider some slight adjustments to this welcome inquiry. The first is that it could have a slightly wider membership and include some ex-military members. To give it a little more cutting edge, it could also include some senior politicians. I recommend that only because I think that a committee without that edge would be a little less credible.

Further, because I believe that there is ultimately nothing to hide, the reality is that some hearings must be held in public. I urge the Prime Minister to think again about that.

First, all the military personnel at a senior level who are either retired or serving officers will be in a position to give evidence to the inquiry. I think it important that they are given the chance to do so, and that they can speak frankly. That means that the sessions will be better held in private than in public. I hope that the right hon. Gentleman will agree that the military voice will be listened to as we try to learn the lessons of the war.

As far as serving politicians are concerned, it is probable that, over this eight-year period, there is no one in this House who has not commented in detail about the Iraqi situation. I think that it is better to look for people outside this House who can take an objective view of the circumstances and who are also seen as politically impartial. I hope that, on reflection, the right hon. Gentleman will understand that the difference between the membership of the Franks inquiry and the membership of this inquiry is because of these reasons.

As far as public sessions are concerned, the Opposition called for a Franks-style inquiry; they knew perfectly well, when they did so, that Franks was held in private. The essence of Franks was that it was held in private. If people on the Opposition Benches want to change their mind, it is their right to do so, but what they say is completely inconsistent with what they have said previously.

I, too, welcome the removal of the brutal, fascist regime of Saddam, and I think that Iraq is a much better country today than it could ever have been while the regime continued. However, it is important that the inquiry also look at the origins of the conflict, which did not start in 2001. We were bombing Iraq in 1998. Saddam was gassing the Kurds in 1988. There is a context and a history. I hope that the inquiry will look at the context and the history, and not just start events at 9/11.

I do agree that there was a whole series of events leading up to what happened when the conflict broke out in 2003. No doubt the inquiry will be free to take some of those events into consideration, but it must focus itself on a period, which is the immediate run-up to the conflict, the conflict itself and the reconstruction afterwards. I have also to remind the House that we have had four separate inquiries already into some of the events surrounding Iraq: we have had the Foreign Affairs Committee inquiry, the Intelligence and Security Committee inquiry, the Butler inquiry and the Hutton inquiry. It is not as if many of the issues have not been addressed; they have been addressed, but it is important to look at the matter in the round. What we want to do—I think that sometimes we forget this—is learn the lessons, so that they can be applied for the future.

We all welcome the demise of the Saddam Hussein regime, but the important question is: could it have been done differently? Could Saddam Hussein have been indicted, and could a lot of Iraqis have not lost their lives? We all agree that we mourn the loss of our soldiers, their injuries and the number of soldiers who are mentally ill, but should we not regret the death of hundreds of thousands of Iraqis and the displacement of millions?

Also, when the Prime Minister rings Prime Minister Netanyahu, could he point out to him that it is not just the expansion of the settlements that is not good enough? The settlements are illegal, and there will be no two-state solution unless the settlements are closed down. That is something that no one is talking about, but we will not get peace without a willingness to move on the settlements.

Lastly, I agree with those who say that the membership of the inquiry is rather feeble. We need senior politicians who understand political decision making, and senior military people who can understand the decisions that were made. The inquiry is welcome, but surely it should be allowed to have hearings in private or in public as it sees fit, rather than having them kept completely secret.

First, I do regret the loss of lives of all those who suffered, and the loss of life among any community and any nation. We regret the loss of Iraqi lives, but we cannot deny that the responsibility for what has happened in Iraq lay at the hands of Saddam Hussein. Both the right hon. Lady and I, who served in the Government, knew exactly what Saddam Hussein was trying to do and how he had broken every single United Nations resolution that he said that he would uphold. As far as Israel is concerned, I agree with her that the settlements must be stopped. I agree that this is the advice that we should give to the new Israeli Government: that in addition to embracing a two-state solution that will give security to Israel, as well as the possibility of a viable state to the Palestinians, an announcement about stopping the growth of settlements, and indeed halting settlements, is important to move the peace process forward.

As far as the inquiry is concerned, I just beg to disagree. I feel that the people who have been selected for the inquiry have very respected positions in the public life of this country. I think that when people look at what they have achieved, they will see that they have a great deal to offer. I just repeat this: are there Members of this House who, in the last eight years, have said absolutely nothing, or not been involved in any vote, on Iraq? It is far better to have a non-partisan and impartial group looking at the issues.

I welcome the inquiry, and may I say to the Prime Minister that I am surprised that the leaders of the two main Opposition parties are insisting that their political placemen be put on the inquiry? Now is the time, when Parliament is not held in high esteem, to have an independent inquiry. Anyone who has heard Sir Roderick Lyne comment on British foreign policy will know that at times, he is no friend to this Government.

Will the Prime Minister extend the inquiry to take evidence from people in Iraq? People suffered under Saddam’s dictatorship and were freed from it, and then had to accept an onslaught from jihadi Islamist extremists, Iranians, al-Qaeda and Syria, which our troops helped to resist. Those groups are responsible for the death of people in Iraq, and we should not let the lie go out that their evil is in any way attributable to the decisions of this Government and the other democratic Governments of the world.

I am grateful to my right hon. Friend, and for the interest that he has taken in these issues over many, many years. Sometimes we in the House should have the humility to accept that there are people outside the House who can contribute, perhaps more than we can, to an objective and impartial review of what has happened in Iraq, both in the run-up to the conflict and in the reconstruction that has taken place there afterwards. When people reflect on the list of names before them, I think they will take the view that this is not only a very responsible group of people, but a group of people who can conduct the review with great efficiency and great care. I agree that the review must have the power to listen to all voices that may have something to say them, but that will be a matter for the review itself.

As a declared sceptic as early as November 1992 of the existence of the weapons of mass destruction, and as a subsequent opponent of the invasion of Iraq, may I put it to the Prime Minister that the disastrous effect of the war has been to make Iran the dominant power in the whole of the middle east? What the British people well understand is that after the capture of Baghdad, the political management of the occupation was extremely incompetent, as is recognised now in both America and Europe. What the British people want is an explanation, well before the general election 11 months from now, of how it came about that Mr. Blair was able to persuade Parliament to vote in favour of the war on facts which he knew would not stand up to proper examination.

I disagree with the hon. Gentleman, but surely the point of an inquiry is to look at all those issues, and that is exactly what will happen. It will look also at whether there were failures in the reconstruction, as well as before that, and it will report on these issues. What happened after the fall of Baghdad will be as much a subject of the report as what happened before. So I hope he will agree that all these issues—that seven-year period—will be looked at by the inquiry, and looked at very fully indeed.

In the history of the conflict, two political matters cry out for explanation more than any other. The first is why the House was never informed of the contents of the Downing street minute that revealed knowledge six months before the conflict that the Bush Administration had decided on the inevitability of war, whatever concessions were made. The second matter that requires explanation is why the Attorney-General’s opinion on the legality of the war was never shown to the Cabinet before the decision to go to war was made. Neither of those matters—neither of them—affects state security. Neither of them requires phalanxes of lawyers. Why cannot they be ventilated and canvassed in public, and without delay?

My hon. and learned Friend has deeply held views on the issues that he has just raised. No doubt he, also, will be able to give vent to those views in the course of the inquiry. Perhaps he may wish to offer evidence to the inquiry.

May I say to the Prime Minister that I profoundly regret the nature of the inquiry that he has announced? It is a disappointing response to what is, by common consent, regarded as a catastrophic foreign policy decision. On the form of inquiry that he proposes, can he tell us whether it will have the power not to ask for witnesses, but to compel witnesses to attend and to put them on oath so that their evidence may be verified against that background? Let me ask him, finally, how he thinks the kind of inquiry that he proposes will satisfy the millions of Britons who marched against the war, when the inquiry will meet in private even when the national interest will not require it?

I sometimes think the Liberal party forgets, first, that the inquiry is independent of Government. Secondly, its remit covers eight years—the build-up to war and the reconstruction afterwards. With reference to witnesses, I cannot think of the inquiry being satisfied if people whom they want to interview refuse to be interviewed, and I expect that everybody who is asked to give evidence will give evidence. I believe that is exactly what will happen. For the Liberal party or anybody in the House to jump to the conclusion that the inquiry is in some way not independent is completely wrong. It is an independent inquiry, independent of Government, able to take all papers and able to interview any witnesses. I know that the Liberal party wanted it to be held in public, but I think they know also what happens when there are public inquiries. That means lawyers, lawyers and lawyers, whereas people can feel free to give evidence and give it frankly about what we want to hear—that is, the lessons that we can learn from the war.

The Prime Minister did not answer the key question, which is, will evidence be given under oath? In this matter, there is a history of obfuscation and deliberate deceit by some agencies and individuals—proven deceit, now. Nothing short of people giving evidence under oath will be sufficient to give the inquiry veracity and integrity, so I ask the Prime Minister now, will he assure us that evidence will be under oath? If not, why not?

The terms under which evidence will be given is a matter on which we will comment and report later, but I am absolutely sure that everybody who gives evidence will have to tell the truth to the committee. They are under an obligation to do so by the committee’s terms of reference.

The delay in the announcement by the Prime Minister and the details of the scope of the inquiry have plainly been designed so that it reports the other side of a general election. Given that—[Interruption.] I wonder whether I might have the Prime Minister’s attention for a moment; I am trying to ask him a question. Given that Parliament and the people were misled about the causes of and reasons for the war, will the Prime Minister answer the point made by the Leader of the Opposition about the need for an interim report, so that we can learn some lessons about this Government before they have their date with the British electorate?

The Franks inquiry was done without an interim report. The Opposition ask for a Franks-style inquiry, and the Franks-style inquiry that we are having will look at the run-up to the conflict, the conflict itself, the reconstruction and the issues about reconstruction afterwards. I think that that is a pretty comprehensive remit—that will take time but must be done in the best possible way. The right hon. Gentleman will accept that if the committee needs the time to do that, it should have the time to do that. It will be a full report from which we want to learn lessons for the future. That is the issue: what lessons we can learn for our military, for our diplomacy, for our security and, of course, for our country’s reputation abroad for the future. That is the essence of what we are doing.

This inquiry is part of a process of holding the Executive to account, but this House has mechanisms for holding the Executive to account: they are called Select Committees. Any member of the Select Committee on Foreign Affairs will have first-hand experience of the limitations of a Select Committee’s ability to hold the Executive to account. I, as a Member of Parliament, find it extremely difficult to accept that we are giving privileges to people outside this House, under the guise of independence, when we could have an inquiry that gave Members and Select Committees access to the kind of documents that we are giving to those people, when we could have hearings in public and in private, and when we could come to a view.

I understand that my hon. Friend feels strongly about this matter, but she must know that there has been a foreign affairs inquiry by a Select Committee of this House and an intelligence and security inquiry by a Committee of this House. There has also been the Butler inquiry and the Hutton inquiry, and we now have an inquiry to look at all the events of the past eight years: the run-up to the war, the conflict itself and reconstruction after the conflict. I cannot think of a wider remit than that, and I do believe that, given that the House has looked at the issue many times, it is right that the Privy Council inquiry get on with the job. It will be able to interview witnesses—either Members or other people—take evidence from anybody it wishes and receive all papers from the Government, and nothing will be kept secret from it. That is the model of the Franks inquiry, and that is what we are following.

May I add my condolences regarding the loss of Lieutenant Mervis and Private McLaren in Afghanistan? The Iraqi conflict has led to the loss of 179 UK service personnel, 4,600 coalition personnel and about 150,000 Iraqi civilians. Their loved ones want to know the cause of the war and why their loved ones fell. If every evidence session is held in private, that may not be possible, so will the Prime Minister think again about holding a secret inquiry? It is the wrong thing to do.

I disagree with the hon. Gentleman. The inquiry has to take into account the interests of our national security and to look at the issues that reflect on the capability and deployment of our troops, and it may not be best for that to be made public. It also has to get people to talk frankly about what they believe are the lessons to be learned from the inquiry. If the inquiry were surrounded by lawyers and everybody else in a public arena, that would be more difficult, as the hon. Gentleman would have to acknowledge.

I believe that the inquiry will be thorough and independent, and I believe that the results of the inquiry will be reported to this House. For weeks and months, people have been calling for a Franks-style inquiry; it is quite extraordinary that now that they have a Franks-style inquiry, they are trying to oppose it on cynical grounds.

Franks was 25 years ago, and the whole climate of opinion has changed since that secret inquiry. I want the Prime Minister to understand that. I had hoped for a new politics of openness after last week. I am not prepared to accept a secret inquiry into Iraq, and I want the Prime Minister to think again.

May I ask the Prime Minister this? After everything that he has been saying, why on earth did he not consult the official Opposition, the Liberal Democrats and the other political parties on the inquiry’s terms of reference, its membership and how long it would take? Why did he take it upon himself again to tell the House what was in its best interests?

The Cabinet Secretary did discuss with the official Opposition and the Liberal party issues relating to this inquiry, so my hon. Friend is wrong on his final point. As far as the wisdom of how we do this inquiry is concerned, let us remember that there are issues of national security, issues related to our military, serving officers who may wish to give evidence and people who are working in other arenas at the moment. I do not think that any person who looked at this in detail would say that all these people should give their evidence to the inquiry in public; I think that that person would respect the fact that a degree of confidentiality is necessary. They would also understand, on reflection, that if people are going to be frank with the inquiry about the lessons to be learned, those people will want to be able to give their evidence in private. Just look at the alternative. The alternative would mean a long inquiry, lasting years, in which everybody would be represented by a lawyer rather than by themselves. That is not the way to learn the best lessons from this conflict.

I call Patrick Mercer.

Thank you, Mr. Speaker; I am most grateful. The events of the Iranian elections at the weekend will demonstrate just how unstable the region is likely to become. Will the Prime Minister assure the House that plans and resources exist for a British military re-engagement should the Iraqi Government ask for it, and that things will not just be left up to the Americans?

The hon. Gentleman, who takes a great interest in these matters, will know that we have signed a new agreement with the Iraqi Government about what support we can give them in training, what naval support we can give them and what help we can give them in the short term, medium term and long term. Obviously, there is a very significant reduction in troops; there will be very few British soldiers on the soil of Iraq, but there will be very close co-operation between our two countries. The arrangements that we have with the Iraqi Government will be similar to the bilateral relationships that are very strong in other parts of the region.

I fully understand that it would be inappropriate for my right hon. Friend the Prime Minister to go into detail; I would not wish him to do anything that would compromise the safety of the hostages. Can he give me assurances that, in spite of our withdrawal, our Ministers will still be fully involved in making every effort to secure the release of the five hostages—the computer expert and the four bodyguards?

I understand the concerns that my hon. Friend has expressed. She has been very vigilant in asking about the welfare of the five hostages. That is something that I have talked about to Prime Minister Maliki on a number of different occasions. I have pressed him to take an interest in the matter directly, and he has done so. We are determined to secure the safe release of the hostages. Some progress has been made, but a great deal is still to be done. The issue is permanently on our desk as something that has to be dealt with. For the safety of those five people, we are doing everything in our power to ensure that they can come home.

May I remind the Prime Minister that he has yet to answer the question about evidence on oath?

In listening to the Prime Minister’s presentation of Operation Charge of the Knights, one could be forgiven for believing that we had something to do with its preparation and planning, when the truth of the matter is that it took place in a British area of responsibility without notice to us, and it was the most graphic demonstration of the fact that our troops had been invited to take a role way in advance of the political influence of their leaders, and way in advance of the resources that the nation was willing or able to devote to supporting them in the role they were asked to undertake. Sadly, the number of fatalities in Afghanistan looks as though it is about to overtake the number of fatalities in Iraq. There are important lessons here regarding what is happening in Afghanistan. Will the committee have the opportunity to report emerging conclusions on such issues in advance of its final report?

I know that the hon. Gentleman is an expert on many of these matters and talks a great deal about them. However, he should take care not to talk down the contribution of our military forces. In the episode in Basra where he says that the British military were not consulted and involved, I do not think he is telling the full truth about what happened in that exercise. We need to have all the facts put out there, and of course that is what the inquiry will do.

I very much welcome my right hon. Friend’s announcement of an inquiry. However, will he revisit the advice that he has been given by the Cabinet Secretary—I can understand why that advice was given—in two respects in particular? First, the central purpose of the inquiry is surely not just to learn the lessons, although that clearly is an objective, but to establish the truth of what happened. Secondly, the Public Administration Committee, which I chair, has been taking an interest in the form that any inquiry into Iraq should take. Last week, we held a private seminar of very distinguished people, and we are about to issue a report. I have to say that those people felt that the Franks inquiry was appropriate 25 years ago, but a private Privy Counsellor inquiry would not be thought appropriate now. The worst thing of all, surely, would be to replicate all the arguments we have had about Iraq with similar arguments about the form that an inquiry would take. As I say, I welcome my right hon. Friend’s statement, but could he regard it as the beginning of a short process of consultation, so that he can carry the whole House with him?

I have read the letter that my hon. Friend has written to me, and I appreciate what he has said about his views and those of other people on this. However, his point is answered by the fact that the range of this inquiry goes through eight years—from 2001 to 2009. What he wanted to be sure of was that all the issues relating to Iraq would be discussed. We could have had an inquiry like Franks only into the run-up to the war; we could have had an inquiry about the conflict itself; we could have had an inquiry about reconstruction. Those are all big issues, and we have an inquiry that covers them all. The range of the inquiry is as big as it could be, as a result of the decision that we have made. Some of the points that my hon. Friend’s Committee, or he, wanted to make to me concerned being sure that the range of the inquiry was sufficiently wide so that all these issues can be dealt with, and that is the case.

In the Prime Minister’s answer to my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg), he suggested that having this inquiry in secret would mean that he, or we, would get the answers that we required. Does he not understand that it is the British people who require these answers, and that what they require is the truth of what led up to this war? Will he ensure that, if possible, any of the taped conversations between the then Prime Minister, Tony Blair, and the then President of the United States are made available to the inquiry? Will he also ensure that all the recorded telephone calls between the then Prime Minister and President Bush over that period are made available? Can I ask him again not to think about what he wants to hear from the inquiry but to consider what the British people want to hear? What they do not want to hear is that the inquiry is being held in secret. Everyone can accept that part of the inquiry would, for security reasons, necessarily have to address that fact, but most of it—

Order.

The hon. Gentleman asks that the inquiry deal with issues surrounding the run-up to the conflict. That is exactly what the inquiry is going to do—it is going to start in 2001. He wants to be sure that it will look at the issues surrounding the decision that was made to go into conflict. That is what the inquiry will do—it will look at all those issues. The disagreement between him and us is about whether we have a Franks-style inquiry, which both the main parties have asked for, or a fully public inquiry. I have given him the reasons why a fully public inquiry does not seem to me to be appropriate when we are dealing with issues of national security and issues affecting the military.

May I say to my right hon. Friend that the most important decision that any MP makes when coming here is one such as the decision that we took to send our troops into Iraq? I have felt that way ever since I came here, and I have never once asked a question that would embarrass our troops or the Government during that period. I have always waited, in the knowledge that there would be a public inquiry at the end. I am therefore extremely disappointed that we are talking about an inquiry that will be limited in its remit.

At the end of the day, I have always said to my constituents that we need an inquiry for two reasons. One is that we must learn the lessons of the mistakes that were made. The second is that the truth must come out, and the general public need to know the truth. It is important for people to understand that when they give advice to Prime Ministers, there will be a day of reckoning. A public inquiry is the only way forward to deal with that.

I am grateful to my hon. Friend. He has always stood by the armed forces of this country when they have been in conflict, and I appreciate that he holds strong views about the issue. I just say to him that while the inquiry will be done in private, the report will be fully published for people to debate in this House. People will be able to see for themselves what conclusions are drawn by the inquiry. At the same time, as I said to the House earlier, I have asked the inquiry to publish all the information other than the most sensitive military and security information. The House will therefore have a chance to debate a fully comprehensive report that covers eight years and covers all issues in the run-up to, and aftermath of, the conflict.

On a point of order, Mr. Speaker. On the Order Paper last Thursday, it was announced that the Third Delegated Legislation Committee would discuss three statutory instruments implementing the identity card scheme. In yesterday’s Sunday Times we read that those debates had been postponed until next month because the Home Secretary had launched an urgent review of identity cards, paving the way for

“a possible U-turn on one of Labour’s flagship policies.”

Have you been given any indication that Ministers are preparing to come to the House to make a statement about the scrapping of the ID card scheme? If they are, it would be extremely welcome on these Benches.

I have had no indication, because it is not a matter for me. It is a matter for Ministers as to when they come to the House.

I inform the House that I have selected the amendment in the name of the Prime Minister.

I beg to move,

That this House recognises the serious impact that the economic downturn is having across the country; notes the specific impact of the recession on rural communities, with recent job losses affecting key rural industries; further notes with concern that levels of economic inactivity are higher in rural areas and believes that increased redundancies will fall particularly hard on small rural communities; further notes that rural communities, already suffering from the closure of key services and the Government’s failure to provide affordable rural housing, are finding it harder to cope with rising unemployment, with those out of work lacking adequate support; is concerned that the recession is exacerbated by the burden of regulation, increased payroll costs and problems accessing credit for small businesses; believes that too little say has been given to people in rural areas with decisions taken centrally; and calls on the Government to show more respect to rural communities and return power to local people.

We have called this debate because we want to draw attention to the impact that the recession is having on rural communities. In many ways, those communities are already fragile, and when faced with economic difficulties they can be left even more exposed. We also want to ensure that the economic potential of rural areas is harnessed, so that they can emerge stronger from the recession and help contribute to the UK’s recovery by driving sustainable growth.

I am disappointed that the Secretary of State for Environment, Food and Rural Affairs is not here in person to put the Government’s case, particularly as only last week the Prime Minister said that he wanted to make the Executive more accountable to Parliament and the people. So much for the latest relaunch. Perhaps we should not be surprised. The word is getting around in the countryside that the Secretary of State is not really interested in the rural aspect of his brief, and today he has proved the point. In his place we have the junior Minister, the Minister of State, Department for Environment, Food and Rural Affairs. I mean no personal disrespect, and I genuinely congratulate him on his appointment, but he is the fifth Minister of State in five years. What signal does that send to rural communities about the priority that this Government give to farming, rural people and the countryside?

My hon. Friend makes an important point about the signal that the Government are conveying to the nation. What signal does it send when we look at the Labour Benches and see only one Back Bencher present in the important debate?

Quality, not quantity.

Perhaps we should ask the House authorities to check whether the Annunciators are working in the offices of Labour Members—perhaps they are not aware that the debate is taking place.

I agree with my hon. Friend. Despite the high quality of the one Labour Back Bencher who is present, the fact that Labour Members simply have not bothered to turn up for the debate says something about their concern for rural issues. Despite their frequent claims that several Labour Members represent rural seats, when it comes to a debate, they do not think the subject sufficiently important for them to be here.

I bring apologies from the Secretary of State. We take exception to the accusation that he is not committed to the countryside—he is. As the hon. Gentleman knows, we have scheduled a debate on Thursday to discuss those matters.

Perhaps the Minister would like to intervene again and tell me whether the Secretary of State will lead that debate. We would welcome that. It will be the first agricultural debate in Government time under the Labour Government.

I was reporting not my view, but the widespread view in the countryside about the Government’s interest in rural people. I am afraid that the Secretary of State’s absence will serve only to reinforce it, and the Minister should take that message back to him.

Is not part of the problem the Government’s perception in the past 12 years of rural areas and the countryside as a theme park rather than a living, breathing economic organism? That is why, when things get hard, they have not a single answer to give.

I agree with my right hon. and learned Friend. It is important to remember that rural areas are not a theme park. We cannot allow rural communities to be dormitories, where people only live, then go to work somewhere else. We must have sustainable, vibrant communities and remember the importance of farming and agriculture in those communities to manage the land. Farmers need to be allowed to get on with their businesses.

Will the hon. Gentleman give way?

I will happily give way to the quality Labour Member.

I am grateful to the hon. Gentleman for being so generous. I agree with him about the importance of farming and farming communities. I am a little disappointed that neither the motion nor the amendment says anything about food security, which is vital for our country as well as rural communities, for example, to ensure employment and housing so that agricultural workers can live and work in those communities. Will the hon. Gentleman say something about food security for our country?

I agree with the hon. Gentleman about the importance of food security. He knows that we had an Opposition day debate on it last year. My right hon. Friend the Member for Witney (Mr. Cameron) spoke at the National Farmers Union conference last year, when he led the debate about the subject and I talked about it to the NFU conference this year. Conservative Members have been drawing attention to food security—indeed, my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will consider it in the debate on farming and agricultural matters on Thursday.

The economic downturn affects every community, but the impact on rural areas can all too easily be overlooked. There is a myth that rural Britain is wholly affluent, but 1.6 million people in rural areas live in poverty. One in five households in the most rural areas live in fuel poverty—double the proportion of fuel-poor households in urban areas. Around one in six people who suffer from deprivation are found in rural areas.

It would also be a mistake to believe that a slightly more rosy scenario for some sectors in farming after real difficulties in recent years means that we do not need to worry about the countryside compared with the rest of the economy. Farming may have had a slightly easier time recently, with increased incomes and strengthened exports, but there are continuing difficulties and underlying fragility. Hon. Members of all parties will know about the recent collapse of Dairy Farmers of Britain, which highlights the serious problems that our dairy industry faces.

Does my hon. Friend agree that, when an employer or business goes bust in an urban area, the Government fight tooth and nail to try to show that they are doing something, but when Dairy Farmers of Britain went into administration, threatening the livelihoods of some of my dairy farmers in Lancaster and Wyre, the silence from the Department was deafening?

My hon. Friend makes a strong point. There is enormous concern in the agricultural community about the collapse of the co-operative and the impact on producers, who may be unable to sell their milk to alternative sources. We look forward to hearing what the Government say about that on Thursday. It is particularly important that the banks should have regard to the continuing viability of many of the businesses affected while they make short-term arrangements to change their purchasers and that they should regard those businesses with sympathy. My hon. Friend raises an important issue about the distinction between how the Government responded to the banking collapse and the collapse in the car industry and how their stance does not seem to be as high profile when it comes to an important sector of the agricultural industry, and one that puts food on our tables.

The hon. Gentleman has just referred to the impact of the collapse of the car market on urban areas, but does he accept that it can also have an effect on the supply chain in more rural areas? One of the businesses in my constituency manufactures high-quality tools. Its business is being severely affected by the downturn in the car market, but it does not qualify for any support. Do the Government not need to ensure that the supply chain receives the same support from which larger employers in more urban areas seem to benefit?

The hon. Lady makes an interesting point, which is a reflection of what I want to say about the potential of rural areas to foster such businesses. She mentioned a small manufacturing business. With the right policies and support, rural areas offer huge untapped potential for such businesses. We must have regard to the fact that the countryside is home to many small manufacturing businesses, as well as farming and the more conventional rural businesses that we all tend to think of.

Although a vital industry, farming accounts for only a small part of the rural economy. As the House will have an opportunity to debate agricultural issues on Thursday, I want to focus today on the wider rural economy and the effect of the recession on it. Although rural areas have lower rates of unemployment overall, in the year to April, the average annual increase in jobseeker’s allowance claimants across rural districts was 131 per cent. Some of the steepest rises in the unemployment rate have been in sparsely populated and peripheral rural districts. The number of people chasing every unfilled vacancy in many peripheral rural districts is far higher than the average across Britain, and in the worst cases—Restormel in Cornwall and Staffordshire Moorlands, for instance—it is actually higher than in major urban unemployment blackspots.

My hon. Friend just said that farming forms a relatively small part of the rural economy, but with respect to the part of my constituency that lies in Staffordshire Moorlands, as well as the rest of the rural area of my constituency, does he acknowledge that some of us would disagree? Dairy farmers in Staffordshire are having an extremely difficult time, which is very much to do with how the legislation and regulations from the European Community and elsewhere operate against them.

I urge my hon. Friend not to misunderstand what I said about farming. I said that farming was a vital industry. It is factually correct that it accounts for only a relatively small part of the economy; nevertheless, it is a primary industry and a significant employer. It also manages the land, and it is vital that we should have a viable, successful and competitive farming industry. The Conservative party has been robust in making that case, and that applies as much to Staffordshire, as an important farming county, as it does to other parts of the country.

The hon. Gentleman spoke about the rise in unemployment in rural areas. He will be aware that many small rural towns have already lost staffed jobcentre offices. Does he see the loss of such offices in those communities as creating a problem in offering jobs to people in rural areas when the upturn comes?

The hon. Gentleman must have extraordinary prescience, because I was about to come to that very point. Support for jobless people in remote areas is crucial, yet nearly one fifth of rural jobcentres were closed in the past two years, when the number nationally has been increasing. I wonder whether the Minister would like to say something about that or about its impact on people in the countryside who have lost their jobs and are now seeking work.

Citizens Advice reports that the increase in debt cases among people living in rural areas in the second half of last year was more than twice the increase in urban areas, with a 20 per cent. rise in cases among people in sparsely populated rural villages. In the final quarter of last year, insolvencies and bankruptcies were higher in regions with predominantly rural populations. The Country Land and Business Association’s latest rural economy index survey has found that confidence is improving, but half of the respondents still lacked confidence in the outlook for the rural economy.

In the Secretary of State’s response to the Rural Advocate’s report on the economic potential of the rural economy, he said that there was

“no such thing as a separate ‘rural economy’”.

Of course I understand his point, and there are links between the urban and rural economies, but the danger of such remarks is that they suggest that Ministers do not appreciate the realities of rural life. The simple fact is that, in a rural area, people’s work and services are often further away from where they live. Government measures such as increasing fuel duty and the tax on 4x4 vehicles can therefore hit rural workers, particularly the low-paid, disproportionately hard. The Commission for Rural Communities has noted that fewer than half the residents in villages and hamlets live within 13 minutes of a bus stop with a service at least once an hour, compared with 95 per cent. of urban residents.

For rural small businesses and people working from home, access to the internet is crucial. We are told that the vast majority of the population can get some form of broadband, with 97.9 per cent. of households currently getting a speed of at least 1 megabyte a second. That sounds good, but the truth is that half a million households cannot obtain those speeds, and more than half of those get no acceptable level of internet connection at all, as I know from my rural constituency and I am sure many of my hon. Friends will know from theirs.

Only last week, at the South of England show, one of my constituents in the south downs area—which is less than 50 miles from London—told me that he had been paying £11,000 a year for a 2 megabyte connection to his converted farm buildings. Such costs for a poor connection, which would be cheaply available in an urban area, are undermining farm diversification and the potential for rural development. For businesses in the future, broadband speed will really matter, so the Government’s commitment to making 2 megabyte broadband available to “virtually everyone” is welcome. However, we will await Lord Carter’s final report later this week to find out what “virtually everyone” really means. There is a risk that the digital divide between cities and rural areas will grow wider still, when super-fast fibre-optic broadband is rolled out to cities and large towns, but not to rural areas.

I am grateful to the hon. Gentleman for giving way, and I apologise to all Opposition Members who have been waiting with bated breath for my contribution to the debate; I have been making my way here from a rural constituency. The hon. Gentleman is making some very good points, but before he goes too much further, will he proffer a definition of “rural community” and “rural people”? I genuinely think that we could work together on trying to understand that, for the benefit of everyone. Does he also agree that, in addition to a rural-urban divide, there is also a divide between rural areas in the north and the south of England?

The Commission for Rural Communities mentions two definitions of rural communities. The standard one, the DEFRA definition, relates to communities of fewer than 10,000 people. In my constituency, for example, all the villages and small towns have fewer than 10,000 people, so it amounts to a genuinely rural constituency. There is another definition, which relates to the rural nature of local authorities. The hon. Gentleman mentioned discrepancies between the north and the south, but it is possible to find rural deprivation in the rural south as well—certainly in the south-west. The discrepancies between the rural deprived and the more affluent are more important than a north-south geographical divide, in my view.

Such disparities are not only about fairness. If rural businesses are disadvantaged, we waste huge potential. Rural areas are home to a quarter of all England’s businesses, employing 5.5 million people and with a total turnover of £300 billion. There are higher rates of self-employment and new business start-ups in rural areas, and more businesses per capita than in urban areas.

My hon. Friend is making an excellent speech, and I am sorry to interrupt him. He mentioned small businesses and farm diversification. Does he agree that such businesses are often critically dependent on banking finance and credit, which, at the moment, are becoming more and more difficult for them to obtain? That should be an absolute priority for the Government. There are many things over which they have no control, and many things that are going to cost money, but using their influence over, and shareholding in, the major banks would help to solve that problem.

I am always happy to give way to my hon. Friend, and I strongly agree with him. Access to credit is vital for the small businesses that are the lifeblood of rural areas. I will deal directly with that point shortly.

Will my hon. Friend join me in paying tribute to an important part of rural business—the tourism industry? It is our fifth biggest industry and it does well in this country in spite of, not because of, Government. Tourism has been pushed out to the RDAs, which do not provide the level of support that our businesses need. One example is the £35 million put through by DEFRA, which has not reached the farms that want to diversify into tourism during these difficult times; instead, it has gone to the regional development agencies and got sucked into the bureaucratic system, never to be seen on the front line of tourism.

I agree with my hon. Friend about the importance of tourism as a major rural industry. It is particularly susceptible to regulation, so we should have regard to the regulatory burden on, for example, farm businesses that want to diversify into tourism. I shall come to the role of the RDAs, and particularly the question of whether that role is right for rural businesses.

May I take my hon. Friend back to what he said a few moments ago? Does he not accept that it is of the greatest importance that rural areas have access to high-speed broadband? We must not see a two-tier system in this country, with communities that are already geographically isolated now becoming digitally isolated.

I agree with my right hon. Friend. As I said, there is a danger of a growing digital divide—we already have a digital divide—and the challenge for the Government is how higher-speed broadband can be financed. We hope to hear more about that from the Government this week, including whether there is any potential to lever in substantial private finance to ensure wider access to high-speed broadband. Another crucial issue for the long-term potential of economic growth in rural areas in the digital age is having a decent broadband link, which many rural areas are simply lacking at the moment. This should be regarded as an infrastructure challenge, which must be discussed further, but no one should underestimate the huge sums of money that would be involved.

The untapped potential of rural businesses could be key to driving the recovery of the UK economy and helping to create sustainable growth for the long term. Stuart Burgess, the Rural Advocate and chairman of the Commission for Rural Communities, said that

“our rural communities have much unfulfilled potential…The challenge is to extend growth and productivity across more firms, employees and communities in rural England.”

In the short term, however, we need to help rural businesses weather the downturn. As the Government have admitted,

“rural economies are heavily dependent on small and medium-sized businesses and this is one of the sectors thought to be most under threat”

from the downturn. We have thus proposed a range of positive measures to get the economy moving again that will also help businesses in rural areas.

We have called for a reduction in corporation tax rates on small companies from 22p to 20p by reducing complex reliefs and allowances. The majority of rural enterprises employ fewer than 10 people and many employ fewer than five. In order to help with payroll costs, so that rural businesses can keep staff on and employ new staff that are looking for work, we have argued for cuts of 1p for at least six months in national insurance contributions for businesses with fewer than five employees. We would give smaller businesses greater access to the £125 billion Government procurement budget by cutting red tape, advertising online all contracts worth more than £10,000 and simplifying the pre-qualification process.

We would help thousands of small rural firms by making business rate relief automatic for eligible small businesses in England, and we would reduce the burden of regulation to give businesses more freedom and greater flexibility. The problems of steep increases in the costs of loans and overdrafts for otherwise successful businesses during seasonally quiet periods is a particular challenge for tourism and other businesses prevalent in rural areas.

Of the 25 local authorities with the highest unmet demand for affordable credit, four are classified as rural and eight have significant rural populations. Our proposed £50 billion national loan guarantee scheme to get credit flowing again would also help, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) argued. As the Commission for Rural Communities has argued, businesses need more flexibility for paying VAT, so we would allow small and medium-sized enterprises to defer their VAT bills for up to six months, potentially meaning the difference between survival and failure. Those are all practical measures to help the rural economy in the current downturn.

Does my hon. Friend agree that another practical measure that the Government could take is to ensure that food is properly labelled, so that consumers can determine what is British and what is not, and, in particular, what is produced to our extremely high standards of animal welfare and what is not? That is a simple measure that the Government could take immediately to help the rural economy.

I strongly agree with my hon. Friend. As he will know, we have been running an “honest food” campaign with the support of the farming industry and the animal welfare organisations, arguing for compulsory country-of-origin labelling so that people know where their meat and meat products come from and we do not unfairly disadvantage our own producers. Our simple proposition is that food labelled “British” should come from animals born and bred in Britain. The campaign has widespread public support. We continue to look to the Government to act on our proposals in the European Commission and, if necessary, to introduce a scheme of their own. I hope that the Minister will recognise the importance of that issue to the farming industry.

I am extremely grateful to the hon. Gentleman for giving way. He is being very generous with his time in allowing as many Members as possible to intervene. Does he agree that in many parts of this country, particularly rural areas, the recession is not a new phenomenon? Many parts of rural England have been in recession for 40 years. Might not the answer to what is often predominantly market failure be fewer market solutions and more state interventions?

There has certainly been significant rural deprivation in many parts of England for some time, and I want to refer to some of the ways in which I think that it can be addressed without state intervention. Indeed, I would argue that the form of state intervention that we have experienced has been largely ineffective.

Will the hon. Gentleman give way?

I shall make some progress, if the hon. Gentleman does not mind.

In the long term, we need to ensure that rural communities are vibrant and viable. That means ensuring that there is access to local services, and providing affordable housing. The present Government’s record on rural services is lamentable. Hundreds of small rural schools have closed over the past decade, despite Labour’s promise to keep them open. As the Minister knows only too well, 1,400 rural communities have lost their post offices since 2000. Two thousand local shops are closing every year, and, according to one estimate, 42 per cent. of small English towns and villages no longer have a shop of any kind.

The beer duty increase in the Budget has further damaged a fragile sector and we are seeing rural pubs closing at the rate of two a day. The average annual wage in the most rural areas is £7,000 lower than it is in the most urban areas, but the average price of a home for first-time buyers is £16,000 more. There is clearly an urgent need for affordable rural housing, but Labour’s top-down housing targets have failed to deliver. We need to reverse the trend of centralisation and end the years of thoughtless Whitehall diktat so that the needs of rural communities are respected. We will allow towns and villages to create local housing trusts to build new housing to benefit their communities. Provided that there is strong local support, those bodies will have the power to develop new homes without the burdens of the regional planning system.

Three years ago, Members on both of the House supported the Bill that became the Sustainable Communities Act 2007, which requires central Government to make clear how much money they spend on local services in each area and gives councils and communities a far greater say in how that money is spent. The Government agreed that reports on public spending under the Act would include quangos, but Ministers are now backtracking on that pledge, which is unacceptable. The public want more influence over decision making, and that means more information.

It is time to go further and return real power and decision making to individuals and communities wherever possible, so that people have a genuine say in the matters that affect them locally. This Government have been obsessed with regional government, and a plethora of quangos are now ruling rural areas and disbursing funds without local accountability. We will allow councils to establish their own local enterprise partnerships to take over the economic development functions and funding of the regional development agencies. If power is devolved and decisions are taken as close as possible to the people they affect, the social value of rural services, as well as their economic value, will be appreciated. Above all, people in rural communities would be reconnected with decision making at a time when politics in Westminster has never been more remote from the people.

This Government have presided over a decade of disrespect for rural communities. They have ignored local concerns and imposed national policies regardless of their impact. It is time for a different approach. Of course rural areas deserve fair treatment, but it is not just a question of fairness. All parts of the country are suffering in the recession, and the rural economy could be a great national resource for the future. It could help to deliver jobs from growth in small businesses and new sustainable forms of working, but making that happen will require a Government who understand rural areas and are willing to listen, and a Government who respect rural communities and are ready to trust and empower them. As I am afraid the Secretary of State has demonstrated by his absence from this debate today, that leadership will not come from this tired and discredited Government.

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“recognises the serious impact that the economic downturn is having across the country and the support the Government is providing to people, communities and businesses to come out stronger and build Britain’s future; notes that the Government has introduced new measures to increase financial aid for rural businesses through the Rural Development Programme for England as a response to the economic downturn; welcomes the Taylor Report’s work on making sure rural communities have affordable housing and sustainable economic opportunities; commends the work of the Homes and Communities Agency to build 10,300 rural affordable homes between 2008 and 2011; applauds the Government’s commitment to connect communities and support local businesses with a minimum guarantee of 2MB broadband for virtually everyone in the country; notes that unemployment levels in rural areas remain below those in urban areas and is committed to helping maintain high levels of employment in rural areas; expresses serious concern about the impact on rural communities of the Opposition’s promised 10 per cent. cut to the budgets of most Government departments that assist people in rural areas; and supports the Government’s commitment to continue to work with the Commission for Rural Communities, Regional Development Agencies and local communities and businesses to help people through these difficult economic times.”

First, I would like to take this opportunity to say how pleased I am to be taking up my new post at the Department for Environment, Food and Rural Affairs—and I am grateful to the hon. Member for Arundel and South Downs (Nick Herbert) for his words of welcome. I pay tribute to my predecessor, my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy). She is held in great affection by the agriculture industry, and I will have a difficult job in following her.

I greatly welcome this opportunity to focus on the challenges faced by people who live and work in rural areas.

Will the Minister give way?

I have not said anything yet, but I am very happy to give way to the hon. Gentleman.

With respect, the Minister has already said something about his predecessor, and I rise to make a simple point. I wrote to DEFRA on 1 April with a detailed request for certain pieces of information that are highly relevant to this debate. I still have not received a reply, and on behalf of my farmers, who have been having a very difficult time, I ask the Minister to make sure that I receive one as soon as possible.

I am only too pleased to apologise to the hon. Gentleman on behalf of the Department, and I will endeavour to look up his correspondence and respond at my earliest opportunity.

The rural White Paper in 2000 set out for the first time a full rural affairs agenda. DEFRA, the first Department with an explicit remit for rural affairs, was created in 2001. Having reviewed the White Paper in early 2004, we followed up with the rural strategy later that year. It was far-reaching, and aimed to build on the economic success of the majority of rural areas, while tackling those that were felt to be at either economic or social disadvantage. That strategy still underpins the Government’s approach to rural affairs; it is one of equity and fairness.

As we now know, one in five people in England live in a settlement of fewer than 10,000 inhabitants—that is about 10 million people in all. Our rural communities are home to about 1 million businesses, providing more than 5.5 million jobs. There are more businesses for every 10,000 people in rural areas than there are in urban areas.

I am grateful to the Minister for making the point about fairness and justice for all. Does he therefore think it is fair that a ghillie or shepherd who checks their sheep in a 4x4 up in the hills has to pay the same amount of punitive vehicle excise duty as someone driving a Range Rover in Chelsea?

I acknowledge the issue raised by the hon. Gentleman. These are choices that individuals make. I recognise the need for 4x4s in rural areas. We try to make sure that tax arrangements are as equitable as possible, but there are inequalities all around the system.

As I have said, there are more businesses for every 10,000 people in rural areas than there are in urban areas. They have a combined turnover of more than £300 billion per year. Of course, rural England is not a single, homogenous entity; it takes many forms. Going by a wide range of social and economic indicators, rural areas are performing well; their performance is usually on a par with, or better than, urban areas, and that may surprise many. The evidence suggests that most of rural England is well connected, with strong links to nearby towns and cities and good access to local markets and job opportunities. That is why our rural areas have been performing well in both social and economic terms.

The Minister mentioned employment prospects and getting advice on employment. Does he share my concern that the Department for Work and Pensions—I know it is not his Department—has closed two jobcentres in west Norfolk? That basically breaks the link involving advisers and those in jobcentres who can give immediate input to people who are trying to find or move jobs. Such people now have to travel a great deal further to get that advice, and if someone does not have a car in a place such as Norfolk, they very often do not have a job, and vice versa.

I understand that the DWP has suspended any further closures, particularly in these difficult economic times, but I recognise that there has been a rationalisation of jobcentres and benefits agencies, the creation of Jobcentre Plus and an attempt to ensure that appropriate and necessary assistance is provided as efficiently as possible.

Economic development in a rural context needs to be based on a 21st-century understanding of businesses in rural areas—one that is not constrained by a nostalgia but that recognises the dynamism, diversity, interconnectedness and value of our rural businesses and communities. In many respects, rural communities are no different from any other; people there want not only well-paid and secure employment and somewhere decent to live, but long and healthy lives and a good education for their children. It is therefore perhaps no surprise that the impacts of the current recession on rural areas are very similar to those in urban areas. More specifically, when the comparison is made with urban areas the emerging picture in rural England is one of lower risk, higher resilience and higher recovery prospects. So it is worth pausing for a minute to examine what is really happening in rural areas.

In April 2009, 2.5 per cent. of the working-age population in rural England were claiming unemployment-related benefits, compared with a figure of 4.6 per cent. in urban areas. The labour force survey for the first quarter of 2009 showed that 18.5 per cent. of the 254,000 people made redundant in the previous three months came from rural areas—the percentage roughly corresponds to the 19.3 per cent. of the population who live in rural areas. The agriculture industry is specifically helped by the stability of demand for its produce, compared with other sectors of the economy. New tractor registrations—not a statistic that I have cited much in my political past, but one that I shall be looking at in future—which are traditionally regarded as a bell-wether of the industry’s confidence, increased by more than 6 per cent. in the first four months of 2009 compared with the same period in 2008.

On that point, is my hon. Friend aware that in detailing the litany of wonderful policies that they have rolled out today the Tory Front-Bench team fail to mention that their policy is to cut capital allowances? That would cut the number of tractor registrations and harm rural areas.

My hon. Friend makes a very interesting point about what was omitted from the speech made by the hon. Member for Arundel and South Downs from the Front Bench. I also noted that some of the Conservative commitments contained heavy qualifications about whether they would be affordable, were the Opposition ever to form a Government.

Our analysis of a range of indicators associated with downturn risks, resilience and potential for recovery—that is still at an early stage—indicates that rural areas are faring well when compared with urban areas. That is not to say that there are not challenges, especially in relation to falling vacancies, earnings, house prices and negative equity, but rural areas score well against recovery indicators: they have good employment opportunities, good enterprise and business prospects, high skills and good quality of life.

I congratulate the Minister on his appointment. Before he finishes his catalogue of what he thinks is going right in rural areas, will he address the issue of poverty, and the fact that it is higher in rural areas than in urban areas? Indeed, according to the Commission for Rural Communities, it is rising faster in rural areas.

I am not ignoring the issue of poverty in rural areas and, of course, I acknowledge that it exists. I look to the CRC for advice and I am only too happy to look at the information and research that it provides to the Department. I am grateful to the hon. Gentleman for his kind remarks of welcome, and I look forward to working with him and the hon. Member for Arundel and South Downs in the months ahead.

The causes of poverty in rural areas may vary from place to place. In the south-west, water poverty is a real issue, but it is not being appropriately addressed. Will the Minister undertake to look into that area to ensure that households do not spend a disproportionate amount of their income just on paying their water bills?

The hon. Lady says that water poverty is not being appropriately addressed, and I am sure that she is more familiar with the issue than I am, as she represents the south-west. I will ensure that she gets a copy of the information that the Department receives from the research that it is undertaking.

As I was saying, this is all being kept under regular review by the National Economic Council, with reports from the Commission for Rural Communities—as mentioned by the hon. Member for South-East Cambridgeshire (Mr. Paice)—and the regional development agencies, as other hon. Members have mentioned. In case I am accused of being in denial, I should say that none of this says that rural areas or rural communities are immune from the effects of recession, and no one would claim that—especially me. It is easy to talk about averages, because that is what we can measure and compare, but the simple fact is that for an individual who has lost his or her job, and who fears losing a home as well, the effects are devastating.

Much of the action that the Government have been taking is intended to prevent those job losses in the first place, to put the right conditions in place for recovery, and to help prevent homes from being lost. Nevertheless, the available indicators appear to show that rural areas are holding up well so far, and in most cases have not suffered as much as urban areas. Across the UK, there have been some encouraging signs that confidence is improving, although we remain cautious. There is no reason to be complacent and it is legitimate to ask what we are doing to tackle the recession in rural areas.

I also welcome the Minister to his post. I invite him to seek out an organisation called Farm Stay UK, which helps farms to diversify into tourism. I attended its annual general meeting last year and listened to its frustration that it is not getting the necessary support from the Government. I mentioned to my hon. Friend the Member for Arundel and South Downs (Nick Herbert) that the £35 million is getting lost in the regional development agencies. Perhaps the Minister could look at that to ensure that the money gets to the front line, where it is so needed.

I took note of the hon. Gentleman’s comment about rural businesses looking to diversify, especially farming, and the assistance that has been given to the RDAs. I will look into the matter and, if appropriate, I will write to him. I am not saying that that will be necessary, but I am sure that we will have a discussion in due course on the interesting point that he raises.

The Minister said that he thought that rural areas were holding up well. How does that translate into the 212 per cent. increase in male unemployment in North Dorset in the past 12 months, or does the Minister think that all those people are registering new tractors?

No, I would not for a second question the statistics that the hon. Gentleman cites about his constituency, any more than he would question mine. He has much greater familiarity with the area. I said earlier that the rural community was not homogenous, and that there were differences in many areas. I hope that that qualifies my comments about the rural community doing well. It was a qualified observation, as the hon. Gentleman will be able to read in due course.

The intention, of course, is to avoid any systematic disadvantage based on geography, but in effect the measures taken by Government more generally to stimulate the economy and to get us all out of recession are just as important to rural communities and businesses as elsewhere. Given the many similarities between rural and urban economies, we believe that that is the right approach, rather than establishing a number of separate smaller rural schemes that would only add to the costs of administration.

The Minister is trying to conflate the experience of the recession in urban and rural areas. Does he agree with me, however, that the thing that defines rural areas is the fact that people are poor and have appalling access to services? What precisely have his Government been doing since 1997 to improve transport in rural areas?

We have given a commitment that there will be no further rail closures until 2013 and we have been subsidising rural bus routes to the tune of some £400 million to try to ensure that the rural community can keep going via public transport as well as via other means.

As I said, the Government are delivering support for people and businesses in all communities. We are cutting taxes, with a cut in VAT worth more than £20 a month on average for households for the whole of 2009. A range of tax cuts and increases for tax credits and benefits introduced on 6 April are already putting money in people’s pockets.

For businesses, we are keeping lending flowing by securing billions of pounds of additional finance with legally binding agreements with banks to increase lending for business on commercial terms—£11 billion from Lloyds TSB and £16 billion from RBS. We are freeing up capital by signing £1 billion-worth of guarantees through the working capital scheme and backing bank lending to viable businesses that cannot get commercial loans with the enterprise finance guarantee. More than £400 million-worth of eligible applications from over 3,600 small businesses have been assessed and are being processed or have been granted. More than 2,500 businesses have been offered loans totalling more than £231 million. We are supporting cash flow by agreeing deferred payment of more than £2.5 billion in tax by 145,000-plus businesses since November, as well as enabling companies to spread the increases in business rates over the next three years. A business paying a rates bill on a typical property that will see a £600 rise in its rates liability in 2009-10 will be able to defer £360 of that increase to future years.

We are also providing real help to keep people in work and delivering support, as I have just described, for thousands of businesses. We are investing in the future so that the economy is well placed to benefit from the recovery. For example, we are bringing forward £3 billion-worth of capital projects and providing a £600 million fund to kick-start house building.

The Homes and Communities Agency plans to build 10,300 rural homes in three years, and that is a woefully low figure. I wish it were far higher. I urge my hon. Friend not to accept the nonsense from the Opposition, who will not properly address market failure in terms of affordable rural housing, as was highlighted by my hon. Friend the Member for Copeland (Mr. Reed). They then come forward with this nonsense about letting local people decide, and we on the Government Benches all know what happens then: Conservative councillors in rural areas oppose all new housing. The Opposition Front Benchers in the House say, “Let’s have affordable housing in rural areas.” What do Conservatives do on the ground? They oppose it all. It is nonsense. Let us have much more affordable housing in rural areas.

Again, my hon. Friend makes a telling point and observes the weaknesses of the Opposition’s policies. I acknowledge his suggestion that we should go further with affordable housing. That is a debate that we have been having and the Prime Minister has pushed the policy further forward than it has been for many years. Clearly, it will continue to move in that direction.

In addition, the Government have developed policies that recognise local authorities as “leaders of place”, responsible for identifying and responding to the needs of their communities. That approach is appropriate to all communities, including those in rural areas. Local area agreements are also part of that approach. At local council level—that is, in town and parish councils—new powers are available to those councils that meet certain quality standards. That will enable those local bodies to do more for their communities, and the policy has been widely welcomed by the sector.

The Minister is incredibly generous in giving way. I agree that local councils should spearhead the recovery from recessions. However, does he agree that this is not the time for the Government to push ahead with a review of local government? Does he accept that it would be a great mistake to push through unitary proposals for Norfolk, given the almost universal opposition in the county? Does he agree that district and borough councils have a very important role to play in ensuring that businesses have a chance to survive into the future?

The Government are trying to provide the best local government framework that we can. We have consulted widely, and that consultation process began when I was in the Office of the Deputy Prime Minister. The hon. Gentleman and local councils will have their own views as to whether we have got the policy right.

I was saying that we have taken specific actions to address some of the challenges in rural areas. For example, to tackle the housing challenge in rural areas we have set the Homes and Communities Agency a target to deliver 10,300 affordable homes between 2008 and 2011 in settlements of fewer than 3,000.

As I mentioned a moment ago, and in respect of the distances involved in getting to major centres, we made a commitment that no rural railway lines would be closed before 2013. Moreover, special rural bus grants of more than £400 million form part of the more general bus services operators grants, and there is a presumption against the closure of village schools, especially primary schools. However, such decisions are very much in the hands of local authorities, which will be best placed to consider the implications.

My hon. Friend mentioned delivering 10,300 more affordable rural homes, but that will not be enough. I hope that he will meet me and other Back Benchers to pursue an increase in that number. However, he spoke about market failure in rural areas and the policy initiatives taken to combat it. Does he agree that many rural economies are kept alive by public spending? A cut of 10 per cent. across the board would do more to hurt rural communities than it would to help them.

My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) paid me a compliment and gave me an opportunity to ask questions of the Opposition, but my hon. Friend the Member for Copeland (Mr. Reed) gives me a slap and says that we are not doing enough in terms of affordable housing. I hear what Labour Back Benchers say, and I hear the silence from the Opposition Benches. This issue is not going away, as it will continue to be pressed by many honourable colleagues.

I said that rural communities are very much like any other, but there is one very important aspect that we cannot ignore: the extent to which they are engaged in land-based activities that remain vital for environmental protection and enhancement. DEFRA is putting £3.9 billion into the rural economy between 2007 and 2013 via the rural development programme for England. More than double the size of its predecessor, the RDPE will both help farmers and support other rural businesses. Around £550 million of the total sum will go to support small businesses, including farmers, and improve the quality of life for rural communities.

At a regional level, the RDAs have been delivering packages of measures tailored to the needs of the individual regions. For example, Advantage West Midlands is investing an extra £3 million to help community development finance institutions and other alternative finance providers to meet additional demand from new and existing business and social enterprises. In addition, the East of England Development Agency is running a three-year campaign, offering free business IT support and advice. I am sure that the work done through Business Link East to put together an “open for business” package for rural pubs will receive the wide support of the House.

Earlier, Opposition Members raised the question of Dairy Farmers of Britain, and asked whether the Government were doing enough to support that organisation. The appointment on 3 June of PricewaterhouseCoopers as receivers and managers of Dairy Farmers of Britain, a farmer-owned dairy co-operative with a turnover of approximately £500 million a year, was disappointing to all those interested in the dairy industry, and distressing to employees, the farmer members, dependent businesses and customers.

A written statement, laid before the House on 9 June, set out the position. Since then, more farmer members of Dairy Farmers of Britain have found alternative buyers for their milk, and while we do not yet have firm figures, we estimate that about 90 per cent. of milk by volume of the Dairy Farmers of Britain’s original farm supplies has now found a buyer. In such a short space of time, that is a tremendous achievement by the industry as a whole, and on behalf of the Department for Environment, Food and Rural Affairs I pay tribute to the hard work of the Dairy Farmers of Britain’s employees, its members council, which assisted in the process, the receiver and other dairy processors, all of whom have worked together to ensure that the impact of Dairy Farmers of Britain’s financial collapse are minimised.

The receiver stated on Friday 12 June that on their appointment 400 farmer members, from a total of about 1,800 farmer suppliers, had yet to find alternative buyers. I understand from contacts made over the weekend that the number has fallen further, and DEFRA officials will meet the receiver on 17 June to review progress.

My hon. Friend has dealt with milk; may I congratulate him on honey, too? With colony collapse disorder among honey bees, the Government have rightly increased fivefold their spending on research on honey bees, which are vital pollinators in rural areas. The Government have matched that with funding from, I think, the Wellcome Trust, so the annual research budget in the next five years will go up from £200,000 a year to £2 million a year, and I congratulate the Government on that.