To ask the Chancellor of the Exchequer what measures he is taking to curb smuggling in tobacco and alcoholic drink. [308]

Customs and Excise has almost 300 staff employed directly to prevent the cross-border smuggling of excise goods. They include a further 25 posts recently allocated to Dover. This front-line effort is backed up by specialist intelligence investigation teams whose efforts are being intensified. In addition, new computerised systems are being set up to enhance the co-ordination and analysis of intelligence about excise smuggling. Smugglers run the risk of losing the imported goods and the vehicles used to transport them. They also risk a prison sentence of up to seven years.

I thank the Minister for that reply. However, that news is inadequate, given that £770 million is lost to the Exchequer every year through smuggled drink and tobacco and a further £300 million is lost through cross-channel booze expeditions. Those expeditions are having a huge effect on my constituency, where five pubs have closed in the past 12 months. Yesterday, the Chancellor said that he was

"in favour of some approximation of taxes that bear on sales, such as excise duty".—[Official Report, 30 October 1996; Vol. 284, c. 674.]

When will there be some approximation of levels of duty across the European Union to damp down on smuggling?

On the latter part of the hon. Gentleman's question, he will have to ask Chancellors in other EU countries. We have no control over their excise levels.

Having said that, I do not seek to minimise the problem. The hon. Gentleman has put his finger on an important difficulty, although, to put it in context, the loss represents some 5 per cent. of the £19 billion collected in excise duty. The fundamental problem is that collecting all the missing revenue would involve huge numbers of uniformed officers stopping every vehicle and person. That would result in massive queues at ports and airports, matched only by the queues of people complaining at every hon. Member's constituency surgery. Therefore, we are concentrating our intelligence resources on the large, organised smuggling gangs where the real criminal activity is taking place.

Has my hon. Friend seen the report by Customs and Excise confirming that the figures relating to smuggling published by the tobacco and brewing industry were approximately accurate? Will he confirm that any hope of curbing smuggling can be effective only if the costs of beer and tobacco are approximately equal on either side of the channel? Does he agree that the solution lies with the French putting a sensible level of tax on tobacco to encourage their population to give up smoking?

I have little influence on my opposite number in France. However, I understand that the French recently decided to increase tax on tobacco by 9 per cent. later this year.

To ask the Chancellor of the Exchequer what plans he has to promote private finance projects in the regions. [309]

To ask the Chancellor of the Exchequer what are his current priorities for the PFI. [323]

I have already taken the private finance initiative roadshows to Birmingham. Wigan, Leeds, Southampton and Belfast and plan to visit the north-east, the south-west and East Anglia in the near future.

My priorities are to build on the £7 billion of PFI projects already agreed, so that public and private sectors continue delivering high-quality services at improved value for money.

My hon. Friend will be aware of the enthusiasm for the introduction of private sector funding to provide for infrastructure projects. Is he also aware that there is considerable anxiety about the apparently slow speed with which many projects are getting under way? Can he reassure the House that design, build, finance and operate will actually deliver the goods?

I am grateful to my hon. Friend for articulating the concerns that have been expressed on deal flow in the private finance initiative. The best way to sum up how we have responded positively to that criticism is to tell him that the CBI said recently that our new guidance would improve risk allocation and, most important, cut bidding costs and help to speed up the flow of deals. At a recent conference in London on the private finance initiative, my right hon. and learned Friend announced a number of new documents, including those on standard contract clauses, better costs, project appraisal and other guidance, which we are giving those involved in the projects to help to speed up the deal flow and reduce bidding costs.

Can my hon. Friend confirm that the private finance initiative will be fully extended to local government, while at the same time ensuring that the proprieties of public finance are properly observed?

I am grateful for my hon. Friend's question, since my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration has been speaking today at the city and financial conference in London, where he has been outlining some of the important steps that will open up private finance for local authorities—indeed, £250 billion-worth of support in private finance—such as introducing the ability to run DBFO-type projects.

My hon. Friend asked an intriguing question on propriety. It is very interesting to consider that Lord Clinton-Davis recently said:

"Labour would look at updating the public sector borrowing requirement regulations"

for the PFI. If Labour is going to fiddle the PFI figures, perhaps it will fiddle them for everything else.

Is the Minister aware that his recent visit to Belfast was very much appreciated? Will he and his colleagues consider what further steps can be taken to make the enterprise initiative scheme more effective for, and attractive to, small investors?

I thank the right hon. Gentleman for his very kind comments about my visit to Belfast. The conference that I attended was extremely good: many people came from all sectors of industry in Northern Ireland, and there was great support for what the PFI can do. I have been lobbied on the enterprise initiative scheme and a number of other matters connected with venture capital as part of the Budget representations that I have personally received.

Will the Minister take a special roadshow to some of this country's universities? As he will know, the last Budget was a disaster for university finances, and universities are struggling. They are very willing to try the PH, but cannot make it work for them. Will the Minister pay special attention to the universities' problems and to how they can use the PH with some success?

The hon. Gentleman touches on an important point. I attended a major seminar in London towards the back end of last year. It dealt with how we explain the PFI to all those participating in further and higher education. It is interesting to note that my right hon. Friend the Secretary of State for Education and Employment recently opened one of the pathfinder projects for universities and the PFI at Greenwich concerning new student accommodation. There is very considerable interest in that area, and we are certainly working with the Department for Education and Employment to make further progress.

Is not encouragement of the extremely useful PFI made so much more difficult by the Labour party's discouragement of the initiative, especially in the national health service? That is surely rather odd, since at least five hospital projects have been brought about through the PFI.

My hon. Friend is right. Such an attitude is typical of Labour Members. The Opposition Front-Bench spokesmen for health recently tried to mix it on the PFI by suggesting that, in some way, the initiative represented privatisation of the health service—it never has been that, and it never will be. It is about providing better facilities for patients who receive NHS care.

My hon. Friend is right to point to what we have achieved. Already, 40 projects of between £1 million and £10 million have signed up with the PR and we are working hard on the five major pathfinder projects for significant hospital development.

The Chancellor said that £2 billion had been cut out of public expenditure estimates to allow room for PFI projects. Aside from the nonsense of trying to reclassify the channel tunnel link as a PFI scheme, which it never was, will the Minister explain exactly how much has been committed to the PFI this year and how much it is estimated will be committed by the end of the year? Does the Minister accept that there could be a reduction in that £2 billion and that, therefore, the PR has caused a reduction in public services, because the scheme is substitutional, not additional?

The hon. Gentleman attempts to take our eye off the ball. Table 6.5 in the Red Book suggests that—in addition to our target of £2 billion-worth of private finance deals—the Government have £20 billion-worth of publicly sponsored capital. Some £7 billion-worth of deals have been agreed, and we are working hard to take those on to their next stages.

When does my hon. Friend expect to come to the south-west to talk about the PFI? Before he does so, will he undertake to look at the details of the Dawlish hospital scheme to find out why it has taken so long to finalise the details?

I cannot give my hon. Friend a precise date for my visit, but I hope very much that it will be before the end of the year. I am aware that the hospital project to which my hon. Friend refers is high on the agenda of other hon. Friends. We are working hard to unblock some of the problems—in Kent, as well as in the west country—to make certain that these important hospital deals can take place. A great deal of work has been done, particularly with the Department of Health and the private finance panel executive, to turn those projects into reality.

To ask the Chancellor of the Exchequer what is his latest estimate of the net national debt. [310]

The provisional estimate of net public sector debt at end-March 1996 is £323 billion—some 45 per cent. of gross domestic product.

Can the Minister explain how, in spite of having receipts from North sea oil and privatisation, in the five years since the Prime Minister came to office—when the national debt was £155 billion—the Government have managed to double it?

There is something rather preposterous about the Labour party complaining about the national debt. The average public sector borrowing requirement under the Conservative Government has been 2.; per cent. of GDP. Under the previous Labour Government, it was 6; per cent—even with the help of the International Monetary Fund. It is reasonable to say that, had Labour stayed in power, the Government would have continued to borrow at the same level. That would have produced a national debt of about £650 billion, or 90 per cent. of GDP. That is not an unlikely figure, as a number of countries in Europe that have had the disbenefit of social democratic governments have such debts.

Will the Chief Secretary confirm that Britain is one of only three countries beneath the reference level for the stock of debt necessary to enter the single currency? Will he further confirm that the 12 countries that have already borrowed too much and are outside the terms of the treaty will not be eligible to join, and that Britain will try to prevent them?

My right hon. Friend is perfectly right, and Britain is in a strong position on the stock of debt. In addition, all the other major European countries have had large increases in total debt, and most of them have been run for at least part of the time by socialist governments. We have not, and that is a major achievement. The final decision on who is eligible for EMU among those countries that want to join will be for the Heads of Government in due course, but some countries will have some explaining to do.

Does the Minister acknowledge that, in some areas, it is the Government who have some explaining to do—in particular, on the current PSBR forecast and our inflation targets, both of which put us outside the qualification criteria? Will the Government ensure that they maintain their commitment to bringing down the PSBR forecast to meet the criteria? Will both he and his right hon. and learned Friend the Chancellor resist the rumours that the Government will announce at the start of the general election campaign that they will not proceed to enter monetary union, and consequently will not be disciplined by the need to meet the Maastricht criteria?

My right hon. and learned Friend and I—and all our colleagues—are reducing the public debt for the good of the British economy, and we will continue to do that.

When those member states of the EU that wish to join a single currency come to submit their statistics to show whether they have satisfied the economic criteria of the Maastricht treaty, will those countries with unfunded public sector pension obligations have to attribute that unfunded commitment as part of their national debt? If not, how will it be treated?

That is not one of the criteria set out in the Maastricht treaty. Britain has a strong position in the short, medium and long term compared to some other countries that do not have properly funded pensions. Those countries will find that they must either cut pension entitlements—as some are currently trying to do, causing trouble in the streets—or increase taxes. I am happy to say that there is no question of our paying any part of that cost.

On the question of putting up taxes, the Chief Secretary will be aware that the Chancellor's former adviser has suggested that value added tax ought to be increased to reduce national debt and borrowing. Is it still the Chancellor's view that in principle the scope of VAT ought to be extended?

I know that this is the Labour soundbite for this week. The hon. Gentleman read it out in a rather dreary way. We had it yesterday and my right hon. and learned Friend the Chancellor answered it. I advise the hon. Gentleman to read Hansard.

To ask the Chancellor of the Exchequer what economic factors he expects to improve industrial output over the next 12 months. [311]

Industry will benefit from the most favourable combination of economic circumstances for decades—living standards are rising, business and consumer confidence are high, United Kingdom firms are highly profitable and are competitive in overseas markets, investment is rising, inflation is low and the public finances are under firm control.

Does my right hon. and learned Friend agree that Britain's strike record last year was the best since records began and that statutory recognition of trade unions, as proposed by the Labour party—a power that unions have never been given in the past—would pose a new danger to Britain's industrial output, particularly in Basildon and Southend, West?

I never fail to point out to our European partners that not only do we not have the social chapter but, because we have adopted more flexible labour market practices at a local level, we have the best industrial relations record we have had this century and a very much better record than anywhere on the continent. I agree with my hon. Friend that it is extraordinary that new Labour has put forward proposals on trade union recognition and the dismissal of strikers which go far beyond anything that old Labour tried to do in the 1970s, and that that poses a great threat in Basildon and elsewhere.

Is the Chancellor aware that there is widespread disappointment in industry at his decision to increase interest rates? The result has been the greatest degree of uncompetitiveness in the pound sterling with, as a consequence, declining exports and problems for the balance of payments. That is a pure consequence of what happened yesterday.

The decision taken yesterday received a much better reception from most people than it has done from the right hon. Gentleman. Most people in British industry know that the key thing now is to keep in place for the next few years the combination of circumstances that I have just described and not to throw it away by allowing inflationary pressures to build up and threaten our progress.

The right hon. Gentleman should be in a better position than most of us to point out the lessons of the past. When he was a Treasury Minister, we were used to double-figure interest rates and double-figure inflation. We lost control and threw away any advantages that British industry might have had. That was the result of mismanagement under a former Labour Government, which the Conservative Government do not intend to repeat.

Although I share to an extent the view of the right hon. Member for Ashton-underLyne (Mr. Sheldon) that a rise in interest rates is not helpful, I appreciate why my right hon. and learned Friend has done that and I hope that he is proved right. Does my right hon. and learned Friend accept that one way in which he could ensure that industrial output improved would be to avoid any further cut in infrastructure expenditure, which is so important to industrial efficiency, and that he and his Department should encourage investment in industry further by considering an improvement in capital allowances?

Of course I accept that an increase in interest rates is in itself never welcome news for those in manufacturing industry, with whom my hon. Friend is so concerned. However, people in manufacturing industry all realise that monetary policy has to be adjusted to protect against inflation. They have seen from what happened the last time I increased interest rates that, if one acts in good time on a modest scale, inflationary pressures are snuffed out and interest rates move within a narrow band while inflation generally stays low. That is the best assurance for the future.

I take on board my hon. Friend's representations about the importance of infrastructure investment. That is right. We should sustain the necessary level of investment in infrastructure for our long-term good, and my hon. Friend the Financial Secretary's replies on the private finance initiative show that there are new and better ways of delivering better-quality infrastructure products at better value for money for the country.

Given all the claims that the Chancellor has just made about industrial output and the rosy picture that he painted of the British economy, will he explain why national income per head is higher in Germany and France in a downturn than in Britain today? Will he also explain why, far from being the enterprise centre of Europe, Britain is ninth out of 15 in the European prosperity league? After 17 years of failure, will not the British people rightly conclude that enough is enough?

I welcome the hon. Gentleman to his position on the Opposition Front Bench. He, too, is making his debut—like my hon. Friend the Exchequer Secretary. My hon. Friend, unlike the hon. Gentleman, has chosen the right moment in our economic performance to join the Front Bench. I commiserate with the hon. Gentleman—it was bad luck to become a Treasury spokesman for an Opposition party when the economy is doing so well. I hope that a fresh face will produce fresh league tables—that may come later.

Of course, Germany and France are currently showing higher incomes per head than we are—they have done so for years and years. But we are now outperforming them; we have faster growth than they have and our unemployment is falling from a level that was already below theirs. We are catching up and we shall overtake them. We shall double living standards in this country in25 years, unless the hon. Gentleman and his right hon. and hon. Friends have the chance of getting into office and ruining the economy in the next few months.

Does my right hon. and learned Friend agree that, with continuing low inflation, three-year wage deals should become the norm in industry and should also be extended where the Government are the employer?

I find that proposition attractive, but each individual case must be addressed on its merits and all cases must be subject to the usual discussions that take place over wage settlements. My hon. Friend highlights one aspect of becoming used to being a low inflation country. People are still getting used to the apparently low levels of their pay settlements. People receive a 3 per cent. pay settlement, which makes them better off, but some still hanker after a 10 per cent. settlement, which actually made them poorer when we were a high-inflation country. The annual wage round, annual bidding and the expectation of an annual pay change go back to the days when we first encountered hyper-inflation and Governments had pay policies—that was when the ritual got under way.

To ask the Chancellor of the Exchequer what additional revenue he forecasts will be raised in the next two financial years as a result of the recent customs ruling on input VAT reclaims by NHS hospitals. [312]

None.

Is the Minister aware that 200 NHS hospitals expect to be cheated of £140 million out of those VAT changes? Have the Government got themselves to the point where they need to sent VAT inspectors into nursing homes to levy VAT on incontinence pads? Are not those Tory tax rises too far?

I understand that the hon. Gentleman's concern about the NHS is genuine, but he has got it wrong. There is no change in hospitals' or hospital trusts' ability to reclaim VAT for contracted-out services, which is what the question was about. NHS trusts are treated in exactly the same way as NHS hospitals and other Government Departments. They pay their VAT in the year in which the expenses are incurred. Customs and Excise has given them a little leeway at the end of each year to ensure that they can get their payments in on time. There is no change, and the hon. Gentleman is running a rather unpleasant scare story.

Will my hon. Friend confirm that the only time during the past 20 years that the national health service has not received a real increase in resources was under the last Labour Government?

My hon. Friend is absolutely right—not only that, but nurses' pay was cut under the last Labour Government. Under this Government, spending on the NHS has increased by 70 per cent. in real terms—a record that no Labour Government have ever matched or could match.

May I again ask the Minister to look at the representations that he will have received from NHS organisations confirming that, as a result of this Government's change of policy, £140 million of patient care money will be removed from the NHS? Is that not another example of the Government's addiction to 'VAT which makes them blind to consequences, the existence of which they continually deny?

I had thought that Labour Front Benchers had cleansed themselves of any connection with any lobbying organisations. The fact is that the so-called NHS VAT forum, which has been running this scare story, is run by one organization—an organisation of VAT and tax avoidance lawyers called VAT Liaison Consultancy Ltd. [Interruption] I suggest that, instead of shouting at me across the Chamber, the hon. Lady should go back and do her homework. If the Labour party is going to allow every VAT loophole to be charged through when—if ever—it is in government, it will find that it has no money at all to put into the health service.

What additional revenue does my hon. Friend forecast will have to be raised in the next two financial years to make good the deficiency in VAT caused by the European Court of Justice ruling against Customs and Excise on the sale of discounted goods in this country?

The revenue lost in that case was £70 million.

To ask the Chancellor of the Exchequer how much revenue he estimates will accrue from the landfill tax in (a) the current year and (b) the first full year. [313]

The revenue that will accrue from the landfill tax has been estimated at £110 million in the current year and £450 million in the first full year.

Given that the aim of the tax is to change people's behaviour rather than to raise money for the Government, what steps are the Government taking to encourage people to recycle items such as tin cans, newspapers and bottles so that the burden does not fall on local authorities and local council tax payers?

As the hon. Gentleman will know, the Department of the Environment is very active in that area, but I urge him to put his effort behind recycling. No doubt he, like me, collects newspapers, tin cans and bottles at home. I urge him to take them down to local bottle and paper banks and so do his bit for conservation and recycling and to let local authorities do theirs.

Although it would stick in my craw to admit that any tax is a good tax, does my hon. Friend agree that the landfill tax is a good environmental measure? Will she confirm that it will not pose an overall net cost to businesses, because it is balanced by a reduction in the national insurance contributions of employers? In addition, I wish my hon. Friend many happy returns of the day.

I thank my hon. Friend for his kind wishes. I have, unfortunately, reached the age at which I would rather go backwards than forwards.

The substance of my hon. Friend's question related to landfill tax and I can assure him that the tax is a key part of the Government's strategy of reducing reliance on landfill and promoting more sustainable alternatives. My hon. Friend is also right to say that the tax will result in a national insurance contribution reduction for businesses, thereby helping industry to create jobs in this country, an endeavour in which we have been successful and will continue to be successful in future.

To ask the Chancellor of the Exchequer how much revenue has been raised by changes to the range of goods on which VAT is charged since 1992. [316]

The net revenue effect of various changes to VAT coverage since 1992 is estimated to be £870 million in the current year.

Is it not true that, before the last election, the Prime Minister announced that he had no intention of increasing, and no need to increase, the scope of VAT? Yet we have just heard that more than £800 million is to be collected this year from such extensions. Do the Government intend to make a similar pledge ahead of the next election, or are they going to extend VAT to children's clothes, food, books and newspapers?

The hon. Lady knows that the money raised from VAT on fuel, which was the largest component of that rise, funded the increase in NHS spending last year. Perhaps the shadow Chancellor will now tell the country where he will find the £450 million from his proposed cut in fuel duty. Which spending programmes will he slash? Will he cut spending on the NHS, will he raise other taxes, or will he do what every other Labour Government in history have done—massively increase borrowing?

Can my hon. Friend tell the House the original Treasury estimate for VAT on domestic fuel and how that compared with what has been raised? Surely electricity and gas prices have fallen sharply in the past three years, so that, even with VAT, people are paying less for electricity and gas at home.

My hon. Friend is right, and I should gently remind Opposition Members that for years they have had only one energy policy—to burn more and more expensive and relatively dirty coal. They fought tooth and nail our policy of allowing power stations to burn cheaper and cleaner gas, which has resulted in a fall in energy prices even when one takes into account the rise in VAT, and they are shameless enough to pretend that they care about the pollution of the environment and the cost to poorer people.

Can the Minister confirm that the Chancellor said:

"If we could start again, we would have VAT on everything and I do not think the case for exempting newspapers is all that strong. The real reason we zero-rate newspapers is that politicians are frightened about putting VAT on newspapers."

Is the Chancellor frightened, or will he have the courage of his convictions? Will we see the 23rd Tory tax rise? Enough is enough. Britain needs a new start and a new Labour Government.

That was the parliamentary equivalent of a cheap shot. I will confirm that, as long as the hon. Gentleman or the Shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), will confirm that no Labour Government will under any circumstances increase VAT. I will also confirm it, if the hon. Gentleman will confirm that the Labour Front-Bench spokesman, the hon. Member for Edinburgh, Central (Mr. Darling) described last year's Scottish nationalist proposal to reduce VAT on fuel to 5 per cent. as

"another cynical ploy from an increasingly opportunist and desperate party.—[Official Report, 23 January 1995; Vol. 253, c. 49.]

That sums it up pretty adequately.

Does my hon. Friend agree that the hon. Members for Bristol, South (Ms Primarolo) and for North Warwickshire (Mr. O'Brien) simply got their statistics in a twist when talking about VAT rises? We are talking not about rises, but about the elimination of fraud and, for the second time this afternoon, we have heard the Labour party being the friend of the tax avoider. Is it not right that the Labour party is simply trying to play politics and does not care about economics at all?

My hon. Friend is right. When it comes to fraud, of all Labour's phoney figures, those on borrowing, debt and tax are the most fraudulent. Our worst year for public borrowing was better than Labour's best year. If we had continued to borrow at the level that we inherited from the last Labour Government, national debt would have doubled—[HON. MEMBERS: "It has."] No, it has not. Hon. Members should get their facts right. National debt is significantly lower than it was in 1979, and if they have other figures, they should produce them. That is why people are saying, "There are lies, damned lies, and Labour sound bites."

To ask the Chancellor of the Exchequer what has been the percentage change in the value of the pound (a) against the deutschmark, (b) against the dollar and (c) against the basket of international currencies since September 1992. [318]

Between 1 September 1992 and 24 October 1996, sterling has fallen by 13 per cent. against the deutschmark, 20 per cent. against the dollar and 12 per cent. on an ERI—that is a basket of currencies—basis.

Does the Chancellor recognise that, as has been shown again by Labour's 28-point lead in the latest opinion poll, the people of this country realise that the recovery has nothing to do with the Government's policies, but is due to the devaluation that followed black Wednesday?

That peculiar theory is obviously held in more quarters than I had appreciated. The idea that all one has to do to achieve economic success is to devalue one's currency has been disproved over and over again by successive Labour Governments. Of course, in the short term that devaluation gave us a competitive advantage, but it might well have given rise to higher inflation and led to the sort of disasters that we had when Labour was in power. My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) acted quickly. He put in place a firm inflation target and a framework for monetary policy, which I have since strengthened to concentrate on delivering that target. We went in for tight fiscal policies to keep the public finances under control and we kept the competitive advantage that came from the devaluation by taking the right economic measures here. We were opposed all the way by the Opposition, who would have turned the devaluation into the sort of fiasco that we saw over and over again when Labour was last in power.

Is not the Government's performance in dealing with the devaluation unique? This is the first time that devaluation has been followed by sustained low inflation. Is not the success of the Government's monetary policy borne out by the fact that, in recent months, the pound has been rising?

I agree with my hon. Friend. This is the first time that we have kept the competitive advantages of a devaluation. We took the tough measures that were necessary to do so, despite Labour's opposition. Now the pound is strengthening strongly. It is still not back—but at an acceptable level—because it is just getting back to where it was 18 months to two years ago. That is because of confidence in the international markets about the long-term stability and prosperity of the United Kingdom economy.

Although the Prime Minister told us in 1992 that the pound would replace the deutschmark as the strongest European currency, will the Chancellor confirm that, in an astonishing revelation this afternoon, he had to admit that we are now behind France and Germany in national income, that we have been behind France and Germany for years under his Government, and that our best hope is to catch up with France and Germany not now or next year, but many years from now? What is left of the Government's claim that Britain is the enterprise centre of Europe? Will the Chancellor confirm that we are in the bottom half of the European league, and that that is the result of 17 years of Conservative government?

The right hon. Gentleman aspires to be a Chancellor of the Exchequer who attends meetings of the G7 Finance Ministers. He has been shadowing the job for three years, yet he has just discovered that the Germans and the French have bigger economies than ours. That has been the case for many years under successive Governments. The failure of the United Kingdom compared with other countries, under Labour Governments in particular, led to our being overtaken in the post-war world. In the 1980s and 1990s we have had faster growth than France or Germany. We are fast catching up with them. The right hon. Gentleman is so out of touch with the real world that he does not realise that his policies would take us back to the comparative decline from which, under a Conservative Government, we have at last escaped.

To ask the Chancellor of the Exchequer if he will make a statement on the International Monetary Fund's recent report on the United Kingdom economy. [322]

The IMF recently described the UK's economic performance as "enviable" and said that "the strong overall performance is a product of sound economic policies."

Does my right hon. Friend agree that that extremely complimentary report contrasts starkly with the performance of the last Labour Government, which was so bad that the International Monetary Fund had to come in and run our economy? Does he further agree that Labour's plans to introduce the provisions of the social chapter on a minimum income are likely to destroy jobs and damage our economy?

The contrast between the situation in, I believe, 1976 when Lord Healey, the then Chancellor, could not attend the IMF meeting because of the financial crisis in Britain, followed by the arrival of the IMF to run the British economy, and the fact that the IMF this year congratulated my right hon. and learned Friend, could hardly be more marked. That contrast provides a summary of the difference between Labour and Conservative economic government.

If it is all so rosy in the garden, will the Chief Secretary explain why there is such an overwhelming wish in the country to get rid of the Government, and why The Times today publishes an opinion poll showing a 28 per cent. Labour lead? Does that not demonstrate that what the British people want, first and foremost, is a general election now?

I remember hearing remarks like that from the hon. Gentleman many times over the past 17 years. I shall hear them from the Opposition benches over the coming years too.

In fairness to the Opposition, when my right hon. Friend and the Chancellor study the IMF report, will they ask themselves whether, over the entire period when the IMF has reported on this country, the shadow Chancellor has ever agreed with us, or got it right, on any single major decision affecting taxation, interest rates or anything else?

One certainly wants to be fair in these matters, and the answer is that my hon. Friend is perfectly right. In the past, the Opposition have always got interest rate judgments wrong. They now have a policy which precision-bombs all the strengths of our economy—the social chapter, the minimum wage and so on. They want to destroy all the labour market liberalisation which is giving us more and better jobs than our European competitors.

To ask the Prime Minister if he will list his official engagements for Thursday 31 October. [338]

This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall he having further meetings later today.

Will my right hon. Friend confirm that it is the Government's intention first to cut and then to abolish both inheritance tax and capital gains tax—moves that would be extremely popular with all who work hard to provide for themselves and their children`? Does my right hon. Friend agree that it is strange that the electorate hears a great deal about taxes that the Opposition would cut and precisely nothing about taxes that they would raise?

My hon. Friend is entirely right. We hear very little about the windfall tax. Instead, we hear about promised reductions in value added tax—reductions that were called "cynical" by a shadow Treasury spokesman last year. But we hear little about what the rate of the windfall tax would be, on whom it would be levied, or what it would mean for the people who use gas, electricity and the other utilities.

As for our tax plans, I can confirm that our first priority, when it is affordable, is to move towards a 20p basic rate of tax; and then to deal with the other taxes that my hon. Friend mentions.

I think that what most people remember about cynicism and tax is that the Government promised not to raise VAT before the election and raised it straight afterwards.

On Tuesday, the Prime Minister said that he could not be precise about lifting the beef ban now because there were continuing discussions in Luxembourg. That meeting ended last night. Is it correct that, although a compensation package for all European farmers was agreed, there was no agreed progress on lifting the ban? If so, given that the Prime Minister's timetable for lifting that ban expires tomorrow, what is his new timetable?

No, the right hon. Gentleman has misunderstood something—but I shall happily explain it in greater detail to him. The discussions yesterday in the Agriculture Committee were not the discussions to which I specifically referred. The discussions are going on with officials and with the Commission in order to deal with the science—that was not a matter for general discussion in the agriculture debate yesterday.

What was agreed was more resources for farmers. The determination of precisely where the extra £50 million will go is to be discussed in this country and decided later.

Actually, the right hon. Gentleman said on Tuesday that the discussions on lifting the ban were continuing now. My understanding is that lifting the beef ban was not even put on the agenda by the British Government at Luxembourg—an extraordinary state of affairs.

The Prime Minister gave us the November timetable; it has now expired. Is it his position that the Florence agreement is still valid, or is his position that that agreement should be changed? In the latter case, what change is he seeking; and in either case, given that he gave us a timetable before, precisely what is his new timetable now? I think we should be told.

The right hon. Gentleman needs to do a little more research before he asks ill-advised questions on this subject. The discussions on the scientific evidence are continuing with the Commission. Those discussions were not especially appropriate for the Agriculture Committee. Many of them are technical discussions and they are continuing. As I said to the House very clearly earlier this week, scientific issues that arose after the Florence agreement remain to be determined

As I told the House on Tuesday, of course the Florence agreement is still in being. Much of that agreement has already been met, and, as I set out to the House on Tuesday, a determination on the rest of it depends substantially on the points still under discussion. I shall explain again gently to the right hon. Gentleman that those points arose after the Florence agreement in the light of changed science that is still being discussed. I hope that that is now clear enough for the right hon. Gentleman.

I do not think that it will be clear to the farming industry, to Europe or to anyone else. What is clear is that the Prime Minister said that the beef ban would be lifted by November. The right hon. Gentleman shakes his head. We all remember when he stood at the Dispatch Box and said that the ban would be lifted by November. Is it the position now that it will not be lifted by November, and that he cannot tell when it will be lifted? I think that is true. He simply cannot tell us what the position will be.

Is not that weak and ineffectual leadership—precisely what means that his Government can no longer advance Britain's interests abroad, nor look after them properly at home? That is why people in this country say, "Enough is enough". [Interruption.] Yes, they say that. If we are to get leadership, direction and purpose back in Britain, let the British people decide, and let this weak and vacillating Government go.

That really was one of the most trivial series of comments—utterly trivial. This is a matter of great interest to British agriculture. Scientific changes are important to that industry, but the right hon. Gentleman does not understand them, does not enter into any research on them, deliberately distorts what little he does know, ignores the reality of what is happening to the British beef industry, and moves—as he does on his third question every Tuesday and Thursday—into a carefully pre-packaged, pre-prepared piece of irrelevant, juvenile sloganising. [Interruption.] I hear applause for the hon. Member for Hartlepool (Mr. Mandelson), who is undoubtedly the author of much of this sloganising. The right hon. Gentleman should give up this matinee performance, and start dealing with the realities of the beef crisis and other matters that we deal with daily.

Is my right hon. Friend aware that the county of Yorkshire has an economy that is bigger and better than those of many small nations? Is he also aware that 140 companies from Yorkshire are quoted on the London stock exchange, which is more than many other regions in this country? Will he send congratulations to all those in the county who have worked extremely hard to achieve the present state?

I am certainly happy to congratulate the successful innovators who have produced a successful economy in Yorkshire, and undoubtedly many of them have been successful. That is also true in other parts of the country. At the moment, we have the most innovative and the most competitive economy in western Europe.

The national debt has been going for 300 years. Will the Prime Minister confirm that he has doubled it in the past six?

Can the right hon. Gentleman name a single expenditure cut that he has supported?

Will my right hon. Friend confirm that the Union that he wishes to protect is the Union of the United Kingdom, and that his Government will have no truck with proposals that put the Union at risk, and would not give people living in England the same opportunities as the people living in Scotland?

I confirm the importance of the Union not only to Scotland but to England and the rest of the United Kingdom. I have never advanced the argument that devolution, or the separation that the Scottish National party wants, would be bad for Scotland alone, although I believe that it would be bad for Scotland—because I believe that it would be bad for the rest of the United Kingdom too.

To ask the Prime Minister if he will list his official engagements for Thursday 31 October. [339]

I refer the hon. Gentleman to the reply I gave some moments ago.

Yesterday my right hon. Friend the Member for Dunfermline, East (Mr. Brown) reminded the Chancellor of the Exchequer of a BBC radio interview in which the right hon. and learned Gentleman, recalling the introduction of VAT, said that if we could start again we could have VAT on everything. Does the Prime Minister share the Chancellor's desire to extend VAT to children's clothes, water, public transport and food, or does he share the view of Opposition Members and of the mass of the British people—that enough is enough?

I certainly think that enough is enough of absurd sloganising of that sort. I am delighted that the Opposition have decided to spend so much of the money that they have apparently accumulated on the sort of trashy advertising campaign that they are trying to conduct this afternoon. If the hon. Gentleman wants to know about VAT, I shall tell him what the hon. Member for Edinburgh, Central (Mr. Darling) said about a Scottish nationalist proposal to reduce VAT to 5 per cent. He described it as

"another cynical ploy from an increasingly opportunistic and desperate party".—[Official Report, 23 January 1995; Vol. 253, c. 49.]

Now the Labour party is doing the same.

Will my right hon. Friend confirm that, following yesterday's rise in interest rates, mortgage rates in this country remain at their lowest level for a generation? Can he recall any Government-announced interest rate move, whether upwards or downwards, that was not opposed by the Labour party?

No. One part of the shadow Chancellor's litany is absolutely consistent: if interest rates go down he claims that that shows weakness in the economy, but if they go up he claims the same thing. It is a consistent litany. My right hon. Friend is right about the present level of interest rates. He is also right to say that the British economy is exceedingly strong, and that we shall keep it strong and keep inflation low.

To ask the Prime Minister if he will list his official engagements for Thursday 31 October. [340]

I refer the hon. Gentleman to the reply I gave some moments ago.

Does the Prime Minister accept that, after 22 Tory tax rises since 1992, which have left the typical British family with an extra tax bill of £2,000, the British people are entitled to say that they have had enough both of him and of his party's broken promises on tax?

As the hon. Gentleman is concerned about the level of tax, I look forward to finding out which tax reductions he has supported in recent years. Will he say now that he will not support the windfall tax, the tartan tax, the health tax proposed by his Front-Bench spokesmen, or the teenage tax that will result from child benefit being taken away? Which of those, all of which have been proposed by the occupants of the Opposition Front Bench, will the hon. Gentleman oppose?

Is my right hon. Friend aware that the European Commission has disgracefully suppressed new evidence showing a clear link between rigid labour laws and high unemployment? Is not that a huge embarrassment for the Commission and for Opposition Members who support the job-destroying social chapter and a minimum wage? Does it not show that the Labour party's approach would lead to massively increased unemployment?

I have not seen the report, but like my hon. Friend I have heard that the report exists and that there has been some difficulty in getting it into the public gaze. I shall certainly ask whether the report will be published, so people can have a sensible debate on the policies that underlie it and see whether they are, as we believe, costing jobs; if they are, we shall consider whether we can take action to prevent that from occurring in the future and to reverse those expensive, job-costing policies, which are so much the flavour of the month with Opposition Front-Benchers.

To ask the Prime Minister if he will list his official engagements for Thursday 31 October. [341]

I refer the hon. Member to the answer I gave some moments ago.

Two days ago in the House, I repeated to the Prime Minister our invitation to co-operate in the introduction of legislation to regulate the advertising and sale of certain dangerous knives and weapons that are obvious to Opposition Members and to the British public and that ought to be obvious to the Government. The Prime Minister once again retreated.

—[HON. MEMBERS: "Question."] Madam Speaker: Order. Those who are calling out for a question are often the first to be guilty. I am asking the hon. Gentleman to carry out the regulations and put his question, but he does not need any guidance from Conservative Members.

Certainly, Madam Speaker. The Prime Minister once again retreated behind the need for a definition. We have now produced a definition and—

Order. The hon. Gentleman must now put a question; otherwise, he must resume his seat.

Has the Prime Minister seen the definition, does he agree with it, and will he now sit down with us and discuss it?

Of course we will examine very carefully any constructive proposal. I understand that the hon. Member for Blackburn (Mr. Straw) has written to my right hon. and learned Friend the Home Secretary and that there will be a meeting with the hon. and learned Member for Montgomery (Mr. Carlile) in the near future. I must say, however, that it seems that the Labour Front-Bench team has been forced to accept what my right hon. and learned Friend has said all along: that it is not easy to define knives to be banned, despite the fact that the hon. Member for Blackburn said that it was. I believe that he has had to change his position. Of course we will consider any constructive suggestion from the hon. Member for Blackburn or from the hon. Gentleman.

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill is to provide the future Hong Kong Special Administrative Region's London economic and trade office with a limited range of privileges and immunities.

At present, the Hong Kong Government operate a number of ETOs around the world. They have offices in Brussels, Geneva, Washington, New York, San Francisco, Tokyo, Toronto, Sydney and Singapore. The prime function of the ETOs is to promote trade with Hong Kong and to provide assistance to companies that are considering investing or starting operations in Hong Kong. The ETO in Brussels also maintains close links with the European Commission, and the ETO in Geneva is responsible for handling Hong Kong's relations with the World Trade Organisation.

The Sino-British joint declaration of 1984 provides that the Hong Kong Special Administrative Region will, after 30 June 1997, enjoy a high degree of autonomy, including in the conduct of its trade and commercial affairs. For example, the future Hong Kong Special Administrative Region Government will be responsible for Hong Kong's trade policy. Hong Kong will continue to be a member in its own right of the World Trade Organisation and of the Customs Co-operation Council, as well as other international trade organisations.

The joint declaration provides for Hong Kong on its own to maintain and develop economic and trade relations with all states and regions and for it to establish official and semi-official economic and trade missions in foreign countries. Thus, Hong Kong will be able to maintain and further expand its network of ETOs after 30 June 1997.

The Hong Kong Government office in London is in a slightly different position from Hong Kong's other ETOs, reflecting the fact that Hong Kong is a British dependent territory until 1 July 1997. While the present London office performs a valuable trade and investment function, it also promotes Hong Kong in other ways—for example, by maintaining close contact with hon. Members who have an interest in Hong Kong affairs.

I expect that most hon. Members in the Chamber today will know the Hong Kong Government's Commissioner in London, Sir David Ford, who has done an excellent job, and I am pleased to see that he is continuing to do so. Over the years, many hon. Members have made sponsored visits to Hong Kong organised by the London office.

After 30 June 1997, the London office will become an ETO. It will continue to have contact with hon. Members, and I hope that educational visits will continue, but it will play a less active role in this respect, as the Chinese Government will be responsible for Hong Kong's foreign affairs. The main function of the office will therefore be to promote economic, trade and business links between Hong Kong and the United Kingdom, which is the work normally undertaken by the commercial section of an embassy.

My right hon. Friend will be aware of the large number of visits that have taken place1—I am thinking in particular of the one in which I was involved recently, which was, I think, the last visit to be made to Hong Kong by Commonwealth Members of Parliament before the handover.

Is he aware that members of the delegation came away with an overwhelming and extremely encouraging impression of tremendous optimism among the business community—Chinese and other nationalities working there—for the future; that, in respect of contact with the People's Republic of China authorities represented in Hong Kong, there was a strong determination to let Hong Kong continue to be run economically and in other ways by the local Hong Kong Chinese; and that that double impression created a tremendous overall impression of great optimism for the future?

My hon. Friend is absolutely right, and I am pleased that his experience has confirmed what we have all been working for. I mentioned yesterday during Foreign and Commonwealth Office Question Time that, some five years ago, the Hang Seng index was at about 4,000. Today, with only seven months or so to go before the transition, it is up at 12,000. That is hardly a sign of lack of confidence, either in the present Hong Kong or its future. I am very grateful for what my hon. Friend says.

The Hong Kong Government are, however, concerned that their ETOs should be given suitable status by host Governments, including a limited range of privileges and immunities. The privileges and immunities are of practical benefit to the ETOs, and they also help to reinforce the fact that Hong Kong has, and will continue to have, autonomy in the conduct of its trade relations.

The ETOs in Brussels and Geneva have enjoyed such privileges and immunities for a number of years. The Canadian Government have enacted legislation to grant privileges and immunities to sub-state entities, and provided a range of these to the ETO in Toronto. The Australians have enacted similar legislation for Hong Kong's new ETO in Sydney. The Japanese provide a range of non-statutory privileges and immunities to the ETO in Tokyo, and are considering enacting legislation to provide these on a statutory basis. The Singaporeans are still discussing with the Hong Kong Government what privileges and immunities they will grant to the ETO in Singapore, and the American Government have undertaken to enact legislation so that the three ETOs there can receive privileges and immunities.

The Hong Kong Government look to the British Government, both as the sovereign power until 30 June 1997 and as a co-signatory to the joint declaration, to help support Hong Kong's future autonomy. My right hon. Friend the Prime Minister made it clear when he visited Hong Kong in March this year that Britain's obligations to the people of Hong Kong will not come to an end at midnight on 30 June 1997. It is against that background and the steps that other Governments have taken to give Hong Kong's ETOs a suitable status that my hon. Friend the Minister for Trade, who I am pleased to see present, and fellow signatories have decided, through the Government, to introduce the Bill.

The limited privileges and immunities that we propose are set out in the schedule to the Bill. They are taken mainly from the Vienna convention on consular relations. They are, however, not nearly as extensive as those found in the convention, as the ETO will not be a consular mission.

The Chinese Government have been consulted and have agreed to our proposal to grant limited privileges and immunities, with effect from 1 July 1997, to the London office of the future Special Administrative Region Government.

The proposed package of privileges and immunities has been discussed with the Hong Kong Government to ensure that it will meet the functional needs of the ETO. In considering the Bill, I would urge hon. Members to bear in mind the important message that we shall be giving about the future autonomy of the Hong Kong Special Administrative Region. It is only right that, as the former sovereign power, we do all we can to provide assistance.

I am pleased to move the Second Reading of the Bill. I am conscious that the House will have a full debate on Hong Kong on 14 November, and I look forward very much to that. It is a technical Bill, and I am grateful that the hon. Member for Leeds, Central (Mr. Fatchett) and the hon. and learned Member for Fife, North-East (Mr. Campbell) support it.

The official Opposition support the Bill. The Minister was right to say that, although it is a technical measure, it sends a number of constructive signals to the people of Hong Kong, and is important to United Kingdom-Chinese relations. The Minister was also correct in saying that, given the specific and technical nature of the Bill, we cannot broaden the scope of our debate. In any case, we have no need to do so, as a full day's debate on Hong Kong is scheduled for two weeks' time.

We are delighted that the Government have acted quickly on the matter. We understand the reasons for the Bill. We wholly accept that obligations arise from the joint declaration and the responsibilities defined within it, and we wholeheartedly agree with the Government that Britain's responsibilities to Hong Kong and its people do not end on 1 July 1997.

Although I might sound old-fashioned, I believe that it is crucial to Britain's future standing in the world that we honour our obligations to Hong Kong after July 1997. In many respects, our role may be more important now than it was previously. We owe that responsibility, and whether a Conservative or Labour Government are in office in 12 months' time, we shall endeavour to carry out all the commitments that we consider morally important.

Let me add the praise and thanks of the Opposition to the Hong Kong office that is currently based on London. This may be almost our last chance to thank Sir David Ford and his colleagues for their work on behalf of Hong Kong and for the service that they have provided, not only to hon. Members, but to others in the United Kingdom who are interested in either trading with Hong Kong or looking to that country as a potential source of inward investment into the United Kingdom. The role of the Hong Kong Office will change substantially after 1 July next year. That is one reason why we need the Bill, and it should become law.

The Minister rightly pointed out that Australia and Canada have already taken measures to ensure that the privileges and immunities set out in the Bill will be in place in those countries. It would look wrong indeed if Britain had not carried out those responsibilities when other countries had already done so.

There is no disagreement on this technical measure—far from it. We support the Government, we wish the Bill full speed, and look forward to it becoming law.

Let me end with two slightly broader points that are relevant to the role and functions of the new economic and trade office. As the Minister said, It is worth reminding ourselves that, a few years ago, there was a great sense of pessimism about the future of Hong Kong. That pessimism was totally unjustified, and today, optimism in the island continues to grow at some pace. All hon. Members would like the United Kingdom to repeat the economic performance of Hong Kong. That is probably a matter of consensus across the British political divide.

It is worth while reminding ourselves of some of Hong Kong's success. A great deal of potential has already been realised, and there is a great deal more. Hong Kong is the eighth largest trading community in the world, the eighth largest stock market, and the fifth largest centre for foreign exchange dealing. Probably the most remarkable figure, and the legacy that China will inherit, is that, at the end of the current financial year, Hong Kong's fiscal reserves will be equivalent to 150 billion Hong Kong dollars. That is a very healthy nest egg for Britain to leave for Hong Kong and the future.

It is also worth while reminding ourselves that, in Hong Kong, China will have a new economic force representing 20 per cent. of China's new gross domestic product. Hong Kong is already a substantial economic success; it is already a substantial world trading partner. The facilities in the Bill are important for maintaining that economic and trade function. The lesson from such figures and the broader issues that we shall debate in two weeks' time are clear enough. It is in China's interest to allow, maintain and encourage the development of Hong Kong's economic success. We have an interest in that; China has an even greater interest.

Much of Hong Kong's economic and trading success has been based on the values that are central to its political system and way of life. It is important for the future that all recognise that there is an intimate link between political activity and economic success, especially in the context of Hong Kong. We shall be raising those broader issues in two weeks' time, but they are important in the context of this Bill, because, in agreement with the Chinese on these narrow issues, we are ensuring that Hong Kong will have the right to trade and encourage its trade, and be seen as a separate entity in a whole range of activities.

The Bill is specific, but still part of the changeover of control in Hong Kong. It is certain that, although the changeover will take place, all hon. Members have great faith in the people of Hong Kong continuing to make their island a great success. We have seen what they have done in the past, and I believe that they will continue to achieve such success in future. Britain's task in future, as it is in this Bill, is to ensure that we do all that we can to maintain such success and the Hong Kong way of life. I support the Minister in introducing this legislation.

I, too, can be brief. The Minister may be relieved to hear that I have not brought a megaphone with me, in the light of our exchange yesterday during Foreign Office questions and his characteristically generous telephone call to my office this morning.

As has already been pointed out, the Bill is entirely sensible. It will enable the United Kingdom to do as much for Hong Kong as Canada and Australia have already done, and should clearly pass through the House with neither let nor hindrance. I am particularly encouraged by the fact that the Bill is being introduced with the agreement of the Government of the People's Republic of China. Such agreement may well be the basis on which we can effectively argue for a closer coming together of opinion on some more fundamental issues, several of which I have no doubt will be touched on in the debate on 14 November.

I add my good wishes and congratulations to those already expressed to Sir David Ford, who has been a most assiduous representative of Hong Kong in this country. He has taken every opportunity in the least officious way to promote the case of Hong Kong and ensure that right hon. and hon. Members have been well aware of the issues at any particular time. He has been especially effective in ensuring that a ready stream of individuals from Hong Kong, especially members of LegCo, have visited the United Kingdom to talk face to face with hon. Members. The debate on 14 November should not be foreshadowed by this debate, because we are concerned today with essentially a technical measure.

The Minister will have readily anticipated that there will be concern in the House during the debate on 14 November about civil rights, particularly freedom of expression in the print and broadcast media. Recent observations from a fairly high level in the Chinese Government have raised a number of questions in the minds of the people of Hong Kong. These are important issues. To put it bluntly, it would be a poor legacy if we left free trade, but not free speech. The House should be concerned with those matters when we consider the broader issues. The Bill should pass through the House as soon as is convenient, and I am happy to give it my support and that of my right hon. and hon. Friends.

I take the surprising liberty of coming to the Dispatch Box—having not expected to do so—because my right hon. Friend the Minister of State, Foreign and Commonwealth Office, has kindly given me the opportunity to wrap up this short debate. I do so with great pleasure, because I have taken a close interest in trade relations between Hong Kong and the UK.

I am grateful to the hon. Member for Leeds, Central (Mr. Fatchett) and the hon. and learned Member for Fife, North-East (Mr. Campbell) for their remarks, and I particularly note what the hon. and learned Gentleman said about free speech as well as free trade. I am sure that their courteous and responsible remarks today will have been greeted by a much wider audience, as they have added to the aura of political stability and bipartisan national unity that we express in this House on behalf of our country towards Hong Kong.

This non-political Bill is a practical measure with limited expenditure implications. The people of Hong Kong will be heartened by the reservoir of good will in this House towards Hong Kong, and I hope that they will see the Bill as evidence of the Government's determination to do what we can to ensure that Hong Kong continues to enjoy full autonomy in the conduct of its economic and commercial affairs. I am sure that many hon. Members will continue to have dealings with Hong Kong in the London office long after 1997 in trade and commercial matters, and that the office will continue to perform its functions as effectively as it does now.

I very much appreciate the personal commendations that have been rendered on this occasion, and I am sure that the office will continue to play its role fully and effectively. The office will promote trade and investment between the UK and Hong Kong, which will help to secure the future of Hong Kong as a special administrative region, not just politically but commercially. For reasons of prosperity and good commerce at a time of transition—as well as for constitutional reasons—I very much welcome all the expressions of support that have been made today.

I have great pleasure in supporting my right hon. Friend the Minister of State, whose personal work in this area has been outstanding. He has taken his visits to Hong Kong seriously, and I take great pleasure in adding my commendation to the Bill.

I wish to question the Minister of State on one aspect of the Bill. Will any of the rights to be granted to the Hong Kong office on 1 July 1997 be in any way weaker than those granted to the offices of the provinces of Canada or the constituent parts of the Commonwealth of Australia? I hope that that is not the case, but if it is, I should like to know where and why the privileges will be different from those currently offered to all the other offices that will be in a similar situation after 1 July. This is a pure point of information, and I wonder whether the Minister has the answer to hand.

With the leave of the House, Madam Deputy Speaker, I shall reply to the question of the hon. Member for Wrexham (Dr. Marek), who takes an assiduous interest in Hong Kong.

The Hong Kong Government office in London already receives partial exemption from rates and exemption from income tax for its staff. These are provided on an extra-statutory basis. The additional privileges and immunities in the Bill are for the running of the office, and include exemption from duties and taxes for the staff on the importation of certain effects and a motor vehicle, and on official vehicles for the office. The number of staff at the Hong Kong Government office will fall slightly.

The revenue forgone—this is not quite what the hon. Gentleman asked, but it may help the House if I say it—as a result of granting a limited range of privileges and immunities to the office and its staff should be well below £1 million. That is quoted in the explanatory memorandum.

As for the differences between the Hong Kong office and any other office, I should explain that Hong Kong's position is unique. It is incumbent on Her Majesty's Government, as a co-signatory to the Sino-British joint declaration, to help Hong Kong to maintain its autonomy and international standing in trade matters. It would seem bizarre, as the hon. Member for Leeds, Central (Mr. Fatchett) said, if the United Kingdom did not help Hong Kong on this issue when other countries such as Australia, Canada and Singapore have planned or have granted a similar range of privileges and immunities to Hong Kong.

As for the differences with other countries, I think that it is true that the privileges that we are granting here are extra to the privileges and immunities granted to other offices. I shall certainly list them for the hon. Member for Wrexham. I shall send him a letter and publish the list of privileges and immunities granted to others, although it is true to say that most other similar offices have fewer privileges and immunities than are listed in the Bill. I do not have the detailed list with me, but I shall willingly answer the hon. Gentleman's question. It would be helpful to the House if I put the list in the Libraries of both Houses.

Question put and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mrs. Lait.]

Further proceedings stood postponed, pursuant to the Resolution of the House [25 October].

I wish to raise a matter of considerable importance and interest in my constituency and I am grateful for the opportunity for this Adjournment debate to do so. My hon. Friend the Minister for Railways and Roads visited my constituency and saw some of the problems that I wish to mention, so he is aware of the difficulties facing my constituents because the Manchester airport eastern link road—the MAELR—has not been completed.

The central section of the road, from the new A34 bypass—running north-south through my constituency—runs from the A34(M) in the west to Woodford road in Bramhall. My hon. Friend visited Woodford road in Bramhall to see the junction that has been located where none was originally envisaged. That junction has created terrific traffic problems in the villages of Woodford and Bramhall.

While the central section is welcome in itself, it can be properly welcomed only when the whole road has been completed: the central section alone has perhaps created more problems than it has solved. The central section was built with the aid of some private finance, which meant that it was finished well ahead of the other two sections in the west and east.

At the time of the public inquiry into the central section of MAELR, it was estimated that there would be an extra 15,000 to 20,000 daily car movements owing to the two out-of-town shopping developments. Those two developments contributed financially to the building of the central section. There is no doubt that those stores are a great success, but their commercial success has produced massive traffic problems. I shall give evidence to show that the increase in traffic has gone way beyond that anticipated at the time of the public inquiry.

My constituents and I are also annoyed that the constituency has had to wait 30 years for the road. The line has been laid down in some form or other for that long, but there is still not a complete bypass around the area that I am privileged to represent. There is merely a third of a bypass, which benefits the shopping cities, but does little to alleviate the constituency's traffic congestion. Indeed, the congestion will be worse until the Government build the rest of the MAELR.

The eastern section of the MAELR runs from Woodford road in Bramhall, through to the A523 Poynton road and will hopefully eventually link up to the proposed A6(M) Hazel Grove bypass. Congestion in Bramhall village, Woodford road and Chester road in Woodford and in Poynton—in the constituency of my hon. Friend the Member for Macclesfield (Mr. Winterton)—has become intolerable. I shall give evidence of the scale of public concern within those areas and I am sure that my hon. Friend will too.

There is a lot of annoyance in the villages of Woodford and Bramhall at the increased traffic congestion, with heavy goods vehicles and cars coming on to the end of the MAELR, not only to reach the new shopping cities, but to reach the M63 by way of the MAELR and the A34(M). Of course, no junction was ever intended at the point of entry to the MAELR in Woodford road at Bramhall, so the annoyance to residents who have to suffer the traffic has to he witnessed to be believed—their feelings are entirely justified.

When my hon. Friend the Minister visited Woodford road and saw the junction to which I referred, he met representatives of Bramhall and Woodford community councils. They expressed residents' views, but—being community council representatives—they were perhaps more polite than residents would have been if my hon. Friend and I had walked along Woodford road and knocked on their doors.

The western section of the MAELR will require building from the A34(M) through to the M56—what could be called the airport link. Traffic that would have bypassed Heald Green had the original scheme gone through in its entirety now comes off the central section of the MAELR and, if travelling west, comes on to the old A34 and goes straight on to Finney lane, which is the east-west route to the airport, through the village of Heald Green.

Again, the central section has brought no relief to my constituents, but merely more traffic—traffic that is of no benefit to the area I represent. The central section has increased traffic congestion significantly. Stockport metropolitan borough council monitored traffic and found that there had been a 30 per cent. increase in daily traffic along Finney lane, which is the only available western route at the western end of the central section for traffic going to the airport. Knowing how important Manchester airport is, my hon. Friend the Minister will realise the scale of that traffic.

Many developments have been proposed for the area: some are in the pipeline—approved but not yet built—and others are at some stage of the planning process. Their impact should not be underestimated and lend significant weight to the case for an early completion of both the western and the eastern sections of the Manchester airport eastern link road.

At Cheadle Royal hospital, which is adjacent to the old A34 and the shopping city at Cheadle Royal in what was Bruntford park, extra housing and commercial properties are at various stages of planning or build. They can only increase the traffic pressure on the old A34 and, indeed. the central section and surrounding roads.

At Hanforth Dean, in the constituency of my hon. Friend the Member for Tatton (Mr. Hamilton), there is a large shopping development—one of the those that contributed toward meeting the cost of the central section of the MAELR. Construction on that development will continue—some with planning permission, some without—to enlarge the leisure and retail complex that is already there and generating the extra 15,000 to 20,000 car movements a day.

A little further north up the A34 we have a proposal for a multiplex cinema which, if built, will be the biggest in the country. I hasten to add that, although they are not my hon. Friend the Minister's concern, I opposed all those developments—for reasons that are obvious, given the traffic congestion that we already suffer—and some of them will be subject to public inquiries.

There is also a proposal for a plastics factory to be built next to the multiplex cinema-all that on the Sharston-Gatley boundary, which is also the boundary between the city of Manchester and the borough of Stockport, and not far from the M63 and the new A34 bypass. That would increase local traffic flowing on to local roads in my area, turning one of the most pleasant parts of the country—as I am sure my hon. Friend the Member for Macclesfield would agree—and a lovely residential constituency into sheer hell for many of my constituents. That is not good enough.

I ask my hon. Friend the Minister to take into account the possibility that Manchester will get a second runway. The matter is before the Secretaries of State for Transport and for the Environment, who will make the final decision. The increased traffic would be intolerable if the proposal went ahead, in addition to all the developments that I have mentioned and the extra traffic that has been generated, over and above that expected by the public inquiry. It would be inexcusable if approval were given for a second runway without the MAELR being completed all the way through from the M56 to the A6(M).

There has just been a public inquiry into a proposal for opencast mining at Poynton, which would affect my constituency and that of my hon. Friend the Member for Macclesfield. God forbid that that development should go ahead, but if it does, extra traffic pressures—very heavy traffic—will result.

The completed MAELR scheme from the M56 to the A6(M) was designed to cope with traffic levels anticipated in conjunction with a single runway al Manchester. A second runway would demand not only the completion of MAELR, but substantial upgrading to cope with yet more traffic.

The Commonwealth games are to be held in Manchester in 2002. Part of the grand south Manchester bypass system is, however, nothing more than a joke and a grand driveway to Sainsbury's car park at Cheadle Royal. That is the best way to describe it and the only function that it fulfils—apart from creating massive problems for my constituents.

The need to complete the road is recognised by other hon. Members. I welcome the fact that my hon. Friend the Member for Macclesfield wishes to contribute to the debate. Other hon. Members have given their permission for me to cite their support for my argument. The hon. Member for Stockport (Ms Coffey) writes:

"This long-standing scheme which will bring benefits to airport users and all the residents of Stockport has my total backing."

My hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) states:

"I believe that this scheme will bring major benefits to our area and allow the full benefits for the A34 by-pass to be realised. I think it will also ease a lot of congestion on the roads which will be of benefit to local residents. I realise that there is enormous support for this scheme in your constituency"—

that is, Cheadle

"and I would also like to give you my full support."

The right hon. Member for Manchester, Wythenshawe (Mr. Morris) wanted very much to contribute brietly to the debate and, as his constituency neighbour, I should have been glad to allow him to do so, but because of a family bereavement, he cannot be present. He has asked me to read on to the record his support for my case. He states:

"This long-standing scheme will bring major benefits to South Manchester/North Cheshire and allow the full benefits of the A34 by-pass to be realised. In particular, it will improve access to the Airport from the south and east and remove traffic from congested roads through residential areas. This will benefit passengers and staff as well as local residents.

While the full benefits of the MAELR will require the completion of the A6 Stockport by-pass"—

amen to that

"even without this there will be significant local benefits.

I understand the Airport Company fully support the completion of the remaining sections and that its planning has been designed so as to be compatible with MAELR. It"—

that is, the airport

"would be prepared to fully co-operate in any initiatives to progress MAELR."

The right hon. Gentleman asked me to mention also that residents of his constituency have expressed concern about the impact of the second runway construction traffic coming from the Peak district in the absence of MAELR.

I shall show my hon. Friend the Minister my file of constituents' letters on MAELR. I have been inundated with letters, and rightly so—that is my job. I want to pass on not only my constituents' concerns, but their anger at being left with one third of a road that is of no use to anyone and is causing more problems than we had before. We desperately need the road to be completed. If, at the end of the debate I have impressed on my hon. Friend the Minister the importance of the road to the area, I shall be well satisfied.

I shall read the most recent letter that I received. A few letters arrived today, as people in my constituency heard about the debate. A resident of Woodford road writes:

"The traffic situation is quite unbearable on Woodford Road from early in the morning to late at night. In the rush hours the traffic is solid and frequently at a standstill.

The volume and speed of the traffic at other times is such that access onto Woodford Road involves a long wait and a frantic dash on most occasions.

Lots of heavy vehicles use the new bypass as a better access to the M63 than other routes, and will drive from Hazel Grove, Disley etc. at all hours of the day or night to gain access to it."

That is the living reality for people on Woodford road, where no junction was ever intended.

I hope that my hon. Friend the Minister will repeat what he told me when he visited Bramhall and that he will give an assurance that when the eastern section of the MAELR is completed—sooner rather than later, I hope—the junction at Woodford road will be closed and returned to its original planned status as a proper bypass for Bramhall and Woodford.

I have a letter from councillor Kenneth Holt, who represents the Bramhall East ward on Stockport metropolitan borough council. He states:

"The partial completion of MAELR has increased traffic flows in and around Bramhall throughout the day to levels only previously experienced in the rush hour with journeys to and from local industry. The huge volumes of through traffic are making local traffic manoeuvres particularly difficult. and of course significantly increasing the hazards to local schoolchildren and all other pedestrians."

I can vouch for that. Crossing the road in Bramhall village is a nightmare, and it is a brave person who dares to cross Woodford road.

Councillor Peter Burns, an independent councillor representing the Heald Green ratepayers association, also sent me a letter of support. He says:

"I write on behalf of the Heald Green community of some 15,000 residents…For many years the community of Heald Green has been seriously damaged by the amount of East-West traffic along Finney Lane. the main road through the village. This road provides the only decent bridge for East-West traffic over the North-South railway and, therefore, is the route for traffic to and from the East and South-East, bound for the motorway network and Manchester Airport…

Recent traffic counts by my Council"—

that is, Stockport metropolitan council—

"have shown 30 per cent. increase in the daily traffic flow along Finney Lane. This has been achieved not by increasing the already saturated number of vehicles per hour but by extending the number of hours of this saturation.

The only way to relieve the ever-worsening ill health, danger and environmental damage being caused, is by the construction of the western section of the MAELR Route.-

I do not disagree with Councillor Burns.

Woodford community council has sent a brief letter of support for the completion of the road scheme. Its chairman, Bryan Leck, says:

"As Chairman of the Woodford Community Council my members would strongly support your campaign to ensure that the extension from the Woodford Road roundabout in an easterly direction be expedited.

The completion of the central section has caused horrendous problems in the Bramhall and Woodford area which can only be alleviated by the construction of

the eastern section of the road.

The chairman of Bramhall community council wrote:

"The leisure centres on the A34 sharing the Cheadle Royal Hospital site"—

to which I referred earlier—

"opposite the J. Sainsburys-John Lewis shopping complex have been opened recently. They will attract more traffic."

He wrote that he was grateful that the Secretary of State for the Environment had called in some of those applications, and continued:

"Now the enquiry into the application for opencast coalmining on Towers Farm, Poynton, near to the Hazel Grove 5 ways road junction, has just been completed."

He says that the short distances between those local developments emphasise the potential for increased traffic congestion in Bramhall. He then wrote:

"Therefore you can well understand why an Action Committee has been set up to urge the completion of the east and west sections of MAELR as soon as possible.

The residents of Hazel Grove, Poynton, Woodford and Bramhall held a public meeting in Poynton on October 7 1996 to appoint a committee which met a week later."

I have a letter from one of the founders of the MAELR and Poynton bypass campaign—a constituent of mine who lives on Chester road in Woodford—which said:

"I write to express my growing concern about the increasing levels of traffic using unsuitable roads through Woodford, Bramhall and Poynton which have resulted from the partial completion of MAELR… I am particularly concerned that the daily traffic levels are already well in excess of the projected level of 18,000 for the year 2009, a figure which was submitted to the Public Inquiry in 1992. Almost 20,000 vehicles per day were measured by Cheshire County Council along Woodford Road south of the MAELR's 'temporary' termination point in May this year, barely six months after the central section of MAELR was opened.

The resultant increase in traffic is causing considerable congestion and delay for road users as well as excessive noise and pollution for residents, pedestrians and cyclists along the existing roads. More worrying is the large increase in traffic resulting from heavy lorries, over 10 per cent. of the traffic or 2000 vehicles per day is now in this category, and this extends from early morning and late into the evening. The result is considerable additional noise, vibration and pollution. a particular concern when there is a weight of evidence confirming the effect on health of particulates arising from diesel vehicles. Large vehicles on the narrow roads also pose considerable dangers for cyclists and for those using the pavement or attempting to cross the road.

There is considerable support for the completion of this scheme, from residents and businesses throughout Bramhall, Woodford and Poynton, but growing anger that the scheme could have been allowed to proceed in part only with a totally unsatisfactory 'temporary' termination on Woodford Road—in spite of the weight of objections presented at the public inquiry."

Stepping aside from my constituent's letter for a moment, I can tell the Minister that at the time of the public inquiry I was one of those who warned of the dangers that would result if construction of the central section went ahead. I hate to say, "I told you so," because I wish that I had been proved wrong. I am afraid that the residents' warnings about the dangers of building only the central section have proved to be correct.

My constituent continued:

"The decision to proceed with MAELR on a partial basis has, in the short period since its completion in November 1995, proved to be totally unsatisfactory, causing severe congestion and all the attendant noise …I would therefore wish the scheme to he progressed to completion without further delay to enable the people of Woodford, Bramhall and Poynton to he relieved of the distress caused by the wholly unacceptable and growing levels of traffic on our roads which have resulted."

The last letter of support is from Manchester Airport, and I am pleased to have received it. It says that the MAELR

"Will bring major benefits to South Manchester and North Cheshire and allow the full benefits of the recently completed A34 by-pass to be realised. It will also improve access to the Airport…remove through traffic from congested roads through residential areas. Obviously, the full benefits of the completed MAELR scheme will also require the completion of the A6…by-pass".

That bypass is not the subject of the debate, but it is on the minds of my constituents and many others in the area. The letter continues:

"The Airport Company fully support the completion of the remaining sections and we have joined forces with the Local Authorities to try and progress the road. Thus we would be more than happy to fully co-operate in any initiatives which come forward to progress MAELR particularly once the uncertainty about our own future growth prospects have been resolved."

Will the Minister please talk to the people who have commercial or potential commercial interests in the area, and let us get the road completed at the earliest possible opportunity?

I want to show the Minister a petition signed by more than 6,000 people, all of whom are my constituents. The names were collected over the summer months, during the recess. More forms are still to be collected from other petition points. I hope that when we reach the target figure of 10,000—which I expect to happen shortly—he will accede to my request and ask the Secretary of State to receive this petition, because it is addressed to him. It expresses the concern of 6,000 of my constituents in Cheadle. As I said, my hon. Friend can expect more names before we are done.

The road is vital to the well-being of my constituency. Support for the scheme is overwhelming. I look round the country and see demonstrations against bypasses here, there and everywhere. The Department has had great difficulty getting those roads built, whereas in Cheadle we have wanted this road for 30 years. No one is against it, yet we cannot have it. I wish that hon. Members who have problems with bypasses in their constituencies would write to the Minister and say, "Let Mr. Day in Cheadle have the money for the bypass up there." We would take the money with both hands and say, "Get on and build the MAELR."

We need an early starting date. We lost the original starting date. We were told at the public inquiry that there would be a four-year gap between the building of the central section and the building of the western and eastern sections. I am now told by the Highways Agency that we could be looking at 2006. That is not acceptable, and am sure that my hon. Friend the Member for Macclesfield agrees. My constituents are furious, and I do not blame them—I share their anger. Something must be done to fulfil the promises made at the public inquiry.

Surely the Minister is now in no doubt about the overwhelming importance of the scheme to my constituency and the area beyond. We have waited 30 years, so please let us have our road. My constituents have waited far too long. They now have problems because only the central section is being built, whereas the whole scheme should have been built.

The people of Heald Green, Bramhall and Woodford—I leave it to my hon. Friend the Member for Macclesfield to mention places in his constituency—are looking to the Minister to provide the relief that they have waited 30 years for. We desperately need that relief, because the traffic congestion is appalling. My constituents have a right to expect the Government to act; I expect nothing else, and neither do they.

I am grateful to my hon. Friend the Member for Cheadle (Mr. Day) for allowing me to speak in his Adjournment debate. As he implied, the road projects about which he spoke so well and so accurately impact upon my constituency as much as on his. I endorse to the letter, to the word and to the dot, everything that he said to the Minister, through the Minister to the Secretary of State for Transport and through the Secretary of State to the Chancellor of the Exchequer.

Earlier today, I asked the Chancellor a supplementary question highlighting the importance of infrastructure expenditure and investment to the prosperous and progressive economy, and he agreed that such investment was vital to the on-going progress of the United Kingdom economy.

I am here to represent the interests of the people of Poynton, of the village of Newton and of the large village of Prestbury. All those areas are suffering immensely because of the A34(M) Handforth-Wilmslow bypass and the Department of Transport's failure to proceed with the construction of the MAELR east and west.

I have bombarded the Secretary of State and the Minister with letters. I recently had a letter from the county engineer of Cheshire county council, Mr. Peter Cocker. He says:

"I refer to your letters of 1 I, 14, 15, 16 and 18 October 1996".

With those letters to Mr. Cocker, I enclosed numerous letters from constituents, mainly—not exclusively—from people who live on or near the Chester road in Poynton.

Their environment has been dramatically disadvantaged, undermined and damaged since the opening of the centre section of what I would call the MAELR contract project road-that is, the Handforth-Wilmslow bypass, the A34(M).

Mr. Cocker's letter continues:

"Most of your constituents have highlighted the need for the Poynton By-Pass" —

my hon. Friend the Minister will be aware that that is part of the MAELR contract—

"and I can only reiterate the County Council's support for this scheme. The by-pass, and the western MAELR Link, represents the only real means of resolving"

the local problems to which I had referred. Mr. Cocker then makes an important point; he says:

"These schemes are part of the Department of Transport's Trunk Road programme."

We are not pushing something that is not part of the Department's programme.

The letter continues:

"The Department of Transport supported the Wilmslow/Handforth/MAELR schemes through their Public Inquiry process, indicating"—

this is a critical point—

"a programme for an early completion of the MAELR/Poynton By-Pass scheme in evidence at the inquiry."

Was that fraudulent? Was that dishonest? Did the Department mean what it said? If so, it must proceed with the scheme. Perhaps the inspector found as he did because the road would be part of a wider trunk road building programme.

The county engineer goes on to say:

"The element of the MAELR scheme which was considered at the Inquiry (and now completed) forms a part of the protected Trunk Road link between the A6(M) scheme and the M56 spur at Manchester Airport. The failure to carry forward these schemes on a timetable which was specifically put before the Inspector at the public inquiry by the DOT is giving rise to the current problems in this area."

My hon. Friend the Member for Cheadle referred several times to that matter, and I fully support what he said. Perhaps Mr. Cocker put it even more succinctly.

The Department of Transport owes this road to my hon. Friend and me, as well as to my hon. Friends the Members for Hazel Grove (Sir T. Arnold) and for Altrincham and Sale (Sir F. Montgomery) and to the right hon. Member for Manchester, Wythenshawe (Mr. Morris), to minimise the unacceptable congestion in our areas which is damaging the environment and adversely affecting the quality of life of those people whom we represent.

My hon. Friend the Member for Cheadle mentioned the public inquiry, which I believe has almost finished, into the application by coal contractors for opencast coal mining at Towers farm in Poynton in my constituency. Uniquely, for the first time in 25 years, I appeared personally to object and to oppose the application. I was delighted that my hon. Friend also found time right at the end of the recess to appear and give evidence.

My evidence related to a range of reasons why the appeal should not succeed and my hon. Friend, representing the best interests of all his constituents, highlighted the existing road problems, which could only be exacerbated. I hope that I am not out of order, Mr. Deputy Speaker, if I express the fervent hope, based on facts and on democratic representation, that when the report comes before my right hon. Friend the Secretary of State for the Environment, he will see that there is overwhelming opposition to the opencast application. I hope that the inspector's conclusions will be the same, that the Secretary of State will support them, and that the appeal will be dismissed.

My hon. Friend the Minister knows the beautiful village of Prestbury. Peter Hayes, a well-known local business man, was elected to the council in May this year. His time has been dominated since then by the representations of hundreds of local people on the matter of the road chaos caused in Prestbury by the opening of the Handforth-Wilmslow bypass and by the huge increase in the volume of traffic flowing through the village, with all the environmental and road safety implications that go with it.

Prestbury parish council feels so strongly that it has set up a special highways road sub-committee, to which it has co-opted people who do not even sit on the parish council—I refer in particular to a Mrs. Lillian Burns, who is becoming an expert on roads and who is doing a great deal of work in close co-operation with Councillor Peter Hayes. Sadly, a past mayor who was the second councillor for Prestbury and Adlington, died recently. The new councillor is Mr. John Braithwaite, another local business man; a great deal of his time is spent dealing with fair and reasonable representations from people who are appalled by what is going on. Because the road schemes have been postponed, people's life style, quality of life and environment have been badly disadvantaged.

I know that my hon. Friend does his best as Minister for Railways and Roads, and I ask him to listen to the concerns of both Conservative and Opposition Members. I do not think that I am being selfish: the areas of my constituency to which I have referred—Prestbury, Mottram St. Andrew, Newton, Adlington and Poynton—contribute massively to the income of the county council, by way of domestic rates, and to that of the Government by way of the business rate and taxation.

My hon. Friend the Member for Cheadle referred to some very desirable residential areas of his constituency. Do we want to destroy the environment of those areas? Do we want to deny those who live there—who make a great contribution to the economy through their work and through the taxes, the domestic rates and the business rates that they pay—some return on all that money? The Department of Transport recognises the importance of the roads.

I pay tribute to my hon. Friend the Minister. He has been to my constituency and has gone round with me to see the sites of some of the road projects that are required. We hear of the huge sums of public money wasted on security for the construction of the Newbury bypass and of the strong opposition to the Salisbury bypass. The people of the area of Cheshire that I represent would love to have roads built. They want to put civil engineers back to work and they want to help the environment. The roads are well designed and some are fairly advanced in the contract procedures. The designs are finalised. The public inquiries may be still to be held in some cases, but a great deal of work and money has been invested. How much money have the Government had to fork out on security for the Newbury bypass? I suspect that a large part—

Order. The hon. Gentleman could table a question about that if he was so minded. This has nothing to do with the Manchester link bypass, which is the subject on which he has been given permission to make a contribution.

I am grateful to you, Mr, Deputy Speaker. However, the money spent on security at Newbury could have been spent on the Poynton bypass, for which my hon. Friend the Member for Cheadle and I are making a plea to our hon. Friend the Minister. We want an assurance that the A523 Macclesfield-Poynton road improvement scheme, which ties up with the Poynton bypass and is part of the MAELR east and west, will remain a priority in the Government's trunk road construction programme. We are not asking him to say that the project will go ahead within two years, although I would love him to say that. If he did, he could come to my constituency and drink champagne from dawn until dusk at my expense.

The roads are vital. All the elected councils want them: Cheshire county council; Macclesfield borough council; Poynton parish council; Adlington parish council; Mottram parish council; and Prestbury parish council. The Members of Parliament representing the areas concerned also want the roads. My hon. Friend the Member for Cheadle spoke with great eloquence for his constituency and its councils. I hope that I have added to his argument.

My hon. Friend the Member for Cheadle and I have slightly different views on the airport. I am in favour of the second runway because of its economic importance to the north-west. However, that aside, the airport company believes that if the runway plan is to go ahead, the MAELR projects are essential, although the company hopes that a great deal of the stone that will come to the airport for the second runway will be transported by rail, subject to a freight support grant from the Department of Transport.

If a buoyant area of the country is to continue to play its role in the economy of the north-west and of the United Kingdom, I hope that my hon. Friend the Minister will appreciate the sincerity with which our arguments have been advanced and will at least go some way towards giving us the reassurances that we have asked for. Surely the views of the public are important in a democracy. The majority of people in the area are in favour. I hope that that carries weight in the House and with the Government.

First, I congratulate my hon. Friend the Member for Cheadle (Mr. Day) on his success in obtaining parliamentary time to debate an issue on which he has been campaigning tirelessly on behalf of his constituents. I also congratulate my hon. Friend the Member for Macclesfield (Mr. Winterton) on his efforts. Both my hon. Friends have spoken not just on their own behalf, but for many other right hon. and hon. Members. My hon. Friends' constituents are fortunate, or perhaps wise, to have chosen such powerful advocates of their interests.

I know very well that the delay in the provision of MAELR is a matter of considerable concern to local residents, particularly those who live on Woodford road and Chester road, where traffic flows have increased substantially following the construction of the central section of MAELR by Cheshire county council. I am glad to have the opportunity to respond to those concerns. Indeed, my hon. Friend the Member for Cheadle showed the House an impressive bundle of letters. I suspect that it included a substantial number of replies from me, because I find probably two or three such letters in my box every night, which I read and sign on my way home.

On the petition to which my hon. Friend referred, I cannot guarantee now that my right hon. Friend the Secretary of State will be able to meet his constituents to receive it. I am sure, however, that, if there is time available in his diary, he would be prepared to meet them. I can give my hon. Friend the assurance that, if he cannot do so, I shall certainly be willing to meet his constituents again and receive their petition.

It is relevant to consider the background to the scheme, although my hon. Friends the Members for Cheadle and Macclesfield have filled in a great deal of its history. It is a fact that, as long ago as the 1950s, a route for an east-west link between Hazel Grove and Manchester airport has been protected against development by local authorities.

In 1989, the national importance of the scheme was recognised, when it was added to the trunk road programme. The scheme was then entitled the "A6(M) to M56 (Manchester Airport) Link", and was expected to follow broadly the route protected by the three local authorities whose boundaries were crossed—Cheshire county council, Stockport metropolitan borough council and Manchester city council.

The purpose of the scheme was, and is, to provide improved access to a thriving and expanding airport from the south and east, and to provide relief to congested roads across the southern fringes of the Manchester conurbation. It is an important part of the infrastructure that is needed to serve Manchester airport, which is becoming one of the nation's most important airports, and certainly the most important of the regional airports.

I must not allow myself to be drawn into commenting on the merits or demerits of the plans to expand the airport because they are subject to public inquiry and, ultimately, a quasi-judicial decision by my right hon. Friends. It is clear, however, that even given its current development, the airport would benefit significantly from improved infrastructure. That, in turn, would offer an additional economic benefit to an important region of the United Kingdom.

Following the addition of the scheme to the trunk road programme, the route protection was taken over by my Department. The scheme was then split into three sections. The eastern section from Hazel Grove to Woodford is included in the proposals for the A555-A523 Poynton bypass, for which there is a preferred route following a public consultation held six years ago. The western section, which links with the M56 at the airport and extends to the A34 at Handforth, also has a preferred route following public consultation held in the summer of 1993.

As my hon. Friends have already said, the central section has already been built and the immediate effects of its provision are the cause of concern, or at least the increased concern of my hon. Friends and their constituents.

I apologise for going over ground with which I know my hon. Friends are extremely familiar, but it is important to make clear the sequence of events that have led to the current situation. That is particularly important in relation to the central section, which was built by the county council as part of its scheme to provide a north-south bypass of the A34 through Handforth and Wilmslow.

The Handforth section, and the central section of MAELR has now been open for just over 12 months, and I understand that the Wilmslow section is due for completion in December.

As my hon. Friends are aware, the availability of private finance from major store developments enabled Cheshire county council to proceed with its scheme. It may be now viewed as a mixed blessing. On the one hand, one is aware of the advantages of seizing the opportunities of the availability of private finance to provide a road that would otherwise have had to be provided at some time wholly at public expense, but the advancement of the phasing of the construction that it permitted, and my Department's inability to put the other two pieces in place at the same time, have created the problems that my hon. Friends eloquently described.

Yes, it is a mixed blessing, but it becomes a blessing if we get the rest of the road. The ultimate disaster would be for us to be left with only the central section. That would be worse than no road being built at all. The fact that the central section is there makes the rest essential.

I take my hon. Friend's point absolutely.

Regarding the central section, my Department's involvement was to meet the cost of upgrading the carriageway provision of the central section of MAELR only from single lane to dual two lane and to provide grade separation at the junction, in order to meet the future requirements of traffic forecast to use the completed MAELR between the airport and Hazel Grove. We made no direct contribution to the main component of the scheme other than an element of transport supplementary grant, which is a feature of all major local authority roads.

Both my hon. Friends have ensured that I have been made aware of the effects of traffic using the completed section, almost from the day that the road opened. My hon. Friend the Member for Cheadle extended to me a very warm welcome to visit his constituency just before or just after the Conservative party conference last year, and I had the opportunity then to see the problems. My hon. Friend drove me around the area—fairly slowly, because of the amount of traffic—and I had the opportunity to meet many of his constituents and their local representatives.

I saw the validity of the concerns of residents of Woodford and Poynton, and especially of those living on the Chester road and the Woodford road. They are worried about increases in traffic, type of traffic, pedestrian safety and effects of traffic in the form of noise and other nuisance.

There appear to be three main causes of that concern. First, the opening of the central section has led to a redistribution of traffic movements on the local road network. Secondly, the opening of the prestigious and large scale shopping developments at Cheadle and Handforth Dean has led to increases in traffic on many local roads, including key routes in Poynton. Thirdly, there are at present major works by statutory undertakers on the A6 in Stockport and Hazel grove, which are causing severe congestion and resulting in drivers seeking alternative routes. Some of that traffic will add to pressure on local roads in the area, but, fortunately, that third element should be only a temporary problem.

I am well aware that a local campaign has been formed to press for the completion of the airport link road. On a positive note, both the western section of MAELR and the Poynton bypass remain firmly in the main programme following the extremely stringent review that I had to undertake last year, which concluded in the publication of the revised road programme last November. It is obvious why those schemes have remained in the main programme. They have done so for the reasons that my hon. Friends have so eloquently explained. Those roads are of great value in helping to resolve local problems, are significant for the region and would form part of the linkage to the airport, which is important for the north-western region.

However, my hon. Friends appreciate that the Government are determined to maintain public spending at levels that my right hon. and learned Friend the Chancellor believes can be afforded, and the transport budget, with others, has had to be set at a level commensurate with the total sum. In the past two spending rounds, my trunk road budget lost more than £1 billion, making the programme more difficult to manage.

I assure my hon. Friends that I understand their eagerness for progress. The schemes will be implemented as soon as resources can be made available.

I understand the feeling that the possibility of private money should be considered. The Government have very successfully promoted the private finance initiative in the roads programme. In line with that policy, if there is a possibility of private funding contributing toward the earlier completion of these schemes, we shall always be happy to speak—

My hon. Friend the Minister heard what my hon. Friend the Member for Cheadle said. I also took up, in a modest way, the issue of the airport's role, and I know that the airport management would be happy to co-operate with any initiative that could speed up the road's construction. I suggest that the Department of Transport talks to the airport management, because I suspect that that might involve financial assistance on a modest scale, which could be part of the private finance initiative that my hon. Friend mentioned.

I would be happy to pursue any such possibility, but, although I would not necessarily expect offers of private funding to cover the whole scheme—that would be very ambitious—any private sector contribution would need to be fairly significant to have a significant effect on the rate of delivery.

Following my visit to Cheadle, I asked the Highways Agency to investigate the possibility, suggested by the Woodford Community Council, that part of the eastern section of MAELR between Woodford road and Chester road should be constructed before the remainder of the road, to provide relief to those local roads. That suggestion was considered very carefully, but unfortunately we had to conclude that we could not go ahead with temporary measures of that type because there would have been abortive costs. We would have ended up building sections of roadway that would not form part of the ultimate trunk road scheme, and we could not justify using trunk road money for what would have been only a local traffic alleviation in the longer term.

I understand that Cheshire county council is to undertake traffic survey work in that area, with special emphasis on the A5149 Chester road. However, my hon. Friend the Member for Cheadle will be aware that my direct responsibilities are limited to the trunk road network. The Chester road forms part of the local road network, for which the local Highway Authority is responsible, and as such it would be for the county council to determine, in the light of its survey work, what measures it may believe that it is appropriate to pursue. I am not in a position to give it any instructions as to what it should do.

Priorities have had to be set within a realistic and fairly tight framework. I hope that we have done so responsibly, concentrating our efforts on key national routes. It would not have been realistic to try to progress each and every scheme in the main programme at the same time, and we would have consumed resources in preparation work at the expense of having money to start construction.

I assure both my hon. Friends and those other right hon. and hon. Members on whose behalf they spoke today that the needs of their constituents have not been forgotten, and that we shall continue to invest sensibly and carefully to meet the transport needs of this area, as elsewhere. My hon. Friend the Member for Macclesfield spoke of the timetable that was outlined at public inquiry. I do not believe that my officials were behaving fraudulently or dishonestly in what they said in their evidence to the inquiry, but the significance of timing is that that inquiry took place before we had had more than £1 billion removed from our trunk road budget. I was therefore pleased to hear that my hon. Friend the Member for Macclesfield was able to ask my right hon. and learned Friend the Chancellor about the importance of infrastructure maintaining a buoyant economy arid received a satisfactory reply from my right hon. arid learned Friend, which is no less than we would ever expect of him.

I hope that my hon. Friend the Minister will not forget a major point that I asked him to respond to. He may have been coming to it, but I wish to be certain. It concerns Woodford road junction returning to its original design: the junction being closed and done away with, and the road going under Woodford road as originally proposed. That is very important to my constituents.

It would ultimately be a matter for the local highway authority to decide whether it wished to maintain the junction as part of its local network. Once we are in a position to complete our trunk road scheme, it would be odd if an unnecessary part of the network were maintained.

At the public inquiry into the MAELR, my constituents on Woodford road were assured that the junction created there would be temporary. Temporary means that it will be removed. My constituents are not being unreasonable to think that the promise made at a public inquiry should be honoured. They were promised at the public inquiry that, once the road was completed, the junction would disappear; anything else would be to let them down and to have misled them in a way which I am sure my hon. Friend would not wish to be guilty of.

Any undertaking given at a public inquiry by my officials on my behalf will be honoured, and I expect that any undertaking given by Cheshire county council will be similarly honoured.