What recent assessment he has made of the performance of manufacturing industry in Northumberland. [120503]

The performance of manufacturing industry in Northumberland is constantly assessed by a number of organisations. The key organisation is the Northumberland strategic partnership which has as its partners local authorities, the North East chamber of commerce, Northumberland health authority, Northumberland training and enterprise council, Northumbria police and Business Link Northumberland. The Government office for the north-east and the regional development agency, ONE NorthEast, are in regular contact with the partnership about business matters in the county.

I take this opportunity to raise the issue of manufacturing and textiles in Northumberland, especially Cramlington Textiles which was in danger of being sold to an asset stripper. Luckily, we have found a buyer, K Shaws, which is a big textiles company, and work will continue. Unfortunately, there will be about 100 redundancies, leaving 83 men and women working at the factory. Will my hon. Friend investigate ways in which money can be put into training for the people who will lose their job, or who have already lost their job?

I pay tribute to my hon. Friend for the fight that he has put up. He has always been a strong advocate of increasing employment and investment in Northumberland, and his constituents must value highly his efforts to ensure continuity of employment and production at Cramlington Textiles and Ellington colliery. Through the new regional development agency, ONE NorthEast, much-needed sites for the manufacturing and service sectors, such as those at Wansbeck and at West Hartford near Cramlington, have been developed. They have already attracted important new investment and will be properly resourced in terms of training.

Two hundred and six thousand jobs have been lost in manufacturing since the current Government came to power. How many of the losses occurred in Northumberland?

I do not believe that Northumberland has been any more acutely affected than any other part of the country. I hope that the hon. Gentleman will not try to make cheap political points from difficult trading conditions. I am sure he welcomes the work that the Government have done to ensure that proper skills are in place in Northumberland so that new investment can come in place of old industries.

If he will make a statement on the future of motor vehicle manufacturing in the United Kingdom. [120505]

The year 1999 saw the highest number of cars produced since 1972. Although we recognise that there will be changes in the sector, we are confident that it will remain as a major employer in the UK.

If Ford announces the ending, after 70 years, of car assembly at Dagenham, a devastating blow will be dealt to the economy of east London and to many of my constituents who work there, and there will be serious knock-on consequences throughout the region. Will my right hon. Friend hold urgent discussions with the company, trade unions, local authorities and the Thames gateway partnership, to see what can be done either to continue some form of car assembly at the plant, or, if that is not possible, to ensure that there is massive investment and training to regenerate the economies of east London?

I assure my hon. Friend that discussions have already taken place with the company, trade unions and those involved in local regeneration projects, such as the Thames gateway partnership. If, as expected, Ford announces tomorrow the ending of car production at Dagenham, we hope to delay implementation of that for as long as possible so that people can be taken through the process of change and be equipped to deal with their altered circumstances.

In the light of tomorrow's expected announcement by Ford, we shall announce a plan for the regeneration of Dagenham and the local area. The plan will be based on training to provide skills to those who do not currently have them and to improve the level of existing skills, supporting the setting up of small businesses, modernising manufacturing in the locality, introducing new manufacturing and attracting inward investment. Our objective is to provide new jobs for the future to replace those that might well be lost as a result of the announcement that Ford will make tomorrow.

The Gaydon research centre in south Warwickshire is not in my constituency, but some of my constituents go there. It is rumoured that Ford is likely to acquire the centre. Is Ford likely to sustain the current activities that take place there?

It is not yet clear whether Ford will say anything specifically about the acquisition of Gaydon from BMW in its announcement tomorrow. We know that as a result of the acquisition of Land Rover in Solihull, in the hon. Gentleman's constituency, Ford is carefully considering the acquisition of Gaydon because much of the work that goes on there is linked directly to Land Rover. Ford is going through due diligence with BMW in relation to the acquisition of Land Rover and the negotiations are not yet completed, and will not be until June or July, but I can reassure the hon. Gentleman that we are still talking to Ford, and indeed BMW, about those outstanding matters.

The interest that Ford continues to take in the United Kingdom economy and in automotive production—be it vans, Jaguar or Land Rover—shows that it is still committed to Britain. There is gross overcapacity across the motor industry because we are producing far more cars than we can sell. Will my right hon. Friend ask the manufacturers to adopt a more realistic approach and not lurch into crises, given that people have known for years that too many cars are being produced and that there are not enough people to buy them? That is the problem that we have in the car industry, and it is the fault not of the workers but of the marketing people who look at the world through rose-coloured glasses.

My hon. Friend makes a most important point. The review of its European operations that Ford is now conducting has been motivated not by the strength of sterling or by the employment laws in the United Kingdom but by the fact that there is overproduction in the European market, running to about 20 or 25 per cent. Tomorrow's announcement will be a mixture of good and bad news, but it will be clear from it that Ford will remain committed to the United Kingdom and that we will still have Ford as a major employer in this country.

Under this Government, the UK has slipped from fourth to eighth in the world competitiveness league. There is more that the Secretary of State could do to help our manufacturing industry, and the motor industry in particular. When will he start reducing the extra £30 billion of taxes that the Government have imposed on business? When will the Government start cutting the extra £10 billion of regulatory costs that business now has to bear? Is not it about time that he rolled up his sleeves and started to do a bit of cutting back himself?

I regret the fact that the hon. Lady has clearly not seen the latest manufacturing output figures which were published this morning. If she had, she would have seen that between February and March manufacturing output grew by 0.4 per cent. Indeed, in the first quarter of this year, it rose by 1.6 per cent. compared with the first quarter of last year. Manufacturing in the United Kingdom is not in crisis, as the hon. Lady would like to claim. It is strong, where there has been investment, and productivity has improved. That is the reality of the situation. It is about time that the hon. Lady put facts before prejudice.

May I first relate the concern of Toyota in my constituency at the continuing high value of sterling and its effect on its competitiveness? What representations has my right hon. Friend made to the Monetary Policy Committee and the Chancellor on the subject? May I also draw his attention to the continued opportunity for inward investment in this country through the retention of the Rolls-Royce car brand, which is currently owned by BMW?

I hope that, in the not-too-distant future, BMW will be able to say something about its intentions regarding the Rolls-Royce brand. I know that it is giving detailed consideration to the issue. My hon. Friend raises an important point about the value of sterling, particularly in relation to the single European currency. The current euro-sterling exchange rate cannot be justified by any view of the long-term economic fundamentals, and I would hope that, when people consider the position and look at those long-term fundamentals, they will realise that.

What recent representations he has received on the reorganisation of the Post Office. [120506]

I have received a number and variety of representations over time about the Government's proposals to transfer the Post Office to plc status under the provisions of the Postal Services Bill. Internal reorganisations of the Post Office are a matter for Post Office management.

Will the Government listen to Post Office customers, postmistresses and postmasters all over the United Kingdom, and particularly in Southend, West, who are disgusted by the Government's proposals to disorganise the Post Office? Does the Minister realise that as a result of his Government's damaging policies, as many as 500 sub-post offices will close? Will he explain to the House how he expects those hard-pressed small businesses to generate enough income to replace the third of their income that they will lose by 2003 as a result of his Government's policies?

I just about managed to catch that question. We are modernising the Post Office and investing £500 million to computerise the network. With regard to closures, the hon. Gentleman may like to know that the record number of closures was in 1992, when 478 post offices closed. One reason may have been the introduction of automated credit transfer by the previous Government in 1990. The challenge for Royal Mail in the hon. Gentleman's area is to deliver a package between Basildon and Southend as quickly as he managed to move shortly before the last election.

We all eagerly await the report of the Cabinet Office performance and innovation unit on the future of the Post Office. The prospect of subsidy has been held out to us by the Secretary of State. May not we have to go down that road if we are to preserve post offices in small towns and villages, of which there are many in Pendle?

We await the conclusions of the PIU report. There has always been an element of subsidy in the post office network—the cross-subsidy between heavily used post offices and those in more remote rural locations, to the tune of £30 million a year. The clause is in the Bill in case we need it. The way forward that everyone supports is for the vast majority of post offices to be commercially viable because of the number of transactions across the post office counter.

Since the Government came to power, eight sub-post offices in my constituency have closed—of the 500 which it is proposed will be closed this year. That greatly exceeds the number in 1992, which the Minister mentioned a moment ago. How can he justify the fact that he is introducing one of the most damaging pieces of legislation on sub-post offices by saying, "You lot did worse than we did"? If sub-post offices such as those in Colerne and Box in my constituency close—they are threatened with closure this year—how will people pick up their pensions in cash, even if the Government put in place some procedure by which they could do so?

The hon. Gentleman is wrong. There will not be 500 closures this year. I do not know where that figure came from. The number of closures for the financial year 1999–2000, the last year for which figures are available, is 383—well below the 478 that I mentioned earlier. In the past 20 years, 25 per cent. of the network has closed. Ten per cent. of the rural network closed between 1990 and 1997. As Opposition Members know full well, given that half a million people a year are moving voluntarily to ACT, there will not be a solution to the problem until we can find a way to ensure that the Post Office has other forms of transaction coming across post office counters to protect their future.

May I thank my hon. Friend for his concern about a post office that was to be closed, which I raised in the Chamber on a previous occasion—the post office on Slough trading estate? Partly because of his concern, a new post office will open there in July so that the service will be restored to the businesses and the people who live in that part of Slough. May I offer my hon. Friend the chance to come and open it?

As I worked as a postman in Slough, and as I worked at that office, it would be a delight for me to open it.

Will the Minister join me in paying tribute to sub-postmasters and their staff throughout Northern Ireland who, during the last 30 years, have courageously continued to provide the people with a service despite intimidation, violence and continual attacks on their persons? Does the Minister understand the concern now felt by those sub-postmasters about their future, in view of the Government's proposal to extend ACT provisions? Will he give special consideration to the position of sub-post offices in rural areas in Northern Ireland which, in spite of the violence of the last 30 years, have continued to provide a much-needed service?

The hon. Gentleman has raised an important point. During the troubles in Northern Ireland, 16 post office workers were killed on duty and clerical staff were declared a legitimate target by one terrorist group in the early 1980s. They were subject to proxy bombings and hostage attacks. We should indeed pay tribute to those who continued to work under the most difficult circumstances.

We will ensure that there is a proper future for the post office network. We are determined to protect post offices, not just in the hon. Gentleman's constituency and in Northern Ireland generally—although obviously it is important for us to do that—but throughout the United Kingdom, and that is what we are working towards.

The most difficult option is to grasp the nettle now. If we had done nothing, the network would have gradually drifted away, as it has for the last 25 years.

Is my hon. Friend aware that many people who rely on post offices are among the weakest and most vulnerable in our communities? Does he share my concern about the Conservatives' continued suggestions that we, the Government, intend to withdraw opportunities for cash payments from post offices, despite all the ministerial statements and all the leaflets that have been produced? Will he again confirm that we have no intention of withdrawing the facility that allows people to receive benefits and pensions in cash if they so desire?

That is a good point. It is important for us not to undermine the network by continually talking it down, because that affects the properties of sub-postmasters and, for instance, their ability to obtain bank loans.

Let me repeat that we have given a pledge that all pensioners and benefit recipients who still want to draw their pensions and benefits in cash across a post office counter—undiluted by bank charges, and weekly if they are paid weekly now—will be able to do so, before and after the change.

If he will make a statement on the future provision of post office services. [120508]

The Government are fully committed to a nationwide network of post offices, and recognise the important role that they play in local communities. We are contributing nearly £500 million to the cost of equipping the network with a modern, automated online IT platform. The system will be installed throughout the network comprising 18,500 post offices, enabling the Post Office to improve existing services and take advantage of new business opportunities. The report from the performance and innovation unit of the Cabinet Office on the longer-term future of the post office network is expected soon.

Does the Minister realise that in some of the parts of my constituency with the greatest amount of social housing, sub-post offices stand to lose up to 70 per cent. in turnover? The same applies to the constituencies of many Members on both sides of the House. Does that not mean that when post offices are closed as a result of the Government's policy, those who need the services most will lose them more often?

Last week the Labour party lost 600 seats in the local elections, and the Prime Minister said that he would start listening. Is it not time that the Government started listening in this instance, and changed their policy in order to save post offices?

I know of the dependency of post offices in urban areas on the payments to which the hon. Gentleman refers. Indeed, I published the answer to a written parliamentary question giving the hon. Gentleman and others the figures.

Let me emphasise again that the Government are not looking to close post offices; we are looking to protect them and to keep them open. I repeat that 25 per cent. of the network has disappeared in 20 years. The Conservatives' solution was to break the Post Office Counters network away from the rest of the Post Office, and to privatise Royal Mail and Parcelforce. We will take no lessons on the Post Office, especially from the Conservative party.

Does my hon. Friend share my anxiety that some sub-post offices, which have quite a lot of customers, are nevertheless egged on by the Conservative party, which continues to tell them that they will close? Does he find it worrying that although the Government make it clear, as my hon. Friend has done again this morning, that people will be able to get their benefits and pensions in cash, some post offices are shooting themselves in the foot by frightening their customers away? The message to all those who have signed the petitions should be, "Use your local post office and you won't lose it."

My hon. Friend makes an important point. I recently visited post offices in his constituency to emphasise it. Since the rally that took place in Westminster in April, when the general secretary of the National Federation of Sub-Postmasters met the Prime Minister, dialogue has continued between me, my right hon. Friend the Secretary of State and others in Government to ensure a shared vision that allows sub-postmasters and sub-postmistresses to stop the propaganda to which my hon. Friend referred and to know that they should not only survive but thrive in the network that we aim to create.

Given that the performance and innovation unit's report seems to be travelling second class, will the Minister put some flesh on the bones of the shared vision? Has he discussed with the Chancellor the scale of and timetable for any subsidy? Has he consulted the Secretary of State for Social Security and thus shown that the Government are cross cutting, not merely cost cutting? Most important, has he a shared vision with postmasters and postmistresses in which they have confidence?

On the PIU report travelling second class, we said that the exercise would be a cross-cutting, thorough and comprehensive examination of the network, and that we would publish the report in the spring. We still intend to do that. That should be contrasted with the previous Government's review, which began in 1992, muddled through until 1994 and began a new phase and, in 1997, ended where it began. Discussions with other Departments take place all the time. We are considering not a Department of Trade and Industry, Department of Social Security or Treasury issue, but one that involves the whole Government. Our discussions and the PIU report are intended to find a Government solution.

What assistance he proposes for small and medium-sized enterprises in Kent Thameside. [120509]

The Business Link network provides a range of advice and assistance to small and medium-sized enterprises in Kent Thameside, including guidance on IT, exporting and sources of finance.

I thank my hon. Friend for that answer. I know that she and her colleagues worked hard to win assisted area status for Kent Thameside and other parts of north Kent and that she shares my disappointment at the European Commission's rejection of those proposals. Will she consider other ways in which we can help small and medium-sized enterprises in my constituency—and in Kent Thameside generally—to unlock the potential for prosperity and employment that we know exists there?

I do indeed share my hon. Friend's disappointment and that of small businesses in his constituency that we were not able to include Medway and Gravesham in the assisted areas map. However, I can confirm that all the areas that were previously proposed for tier 2 status will be designated as tier 3 areas. Small businesses in Medway and Gravesham will therefore be able to apply for enterprise grant schemes. That will undoubtedly help many businesses to thrive in future.

Now that Medway and north Kent have lost their assisted area designation, will the Minister explain to small businesses in Kent a letter that Commissioner Mario Monti sent to the Conservative leader of Kent county council? It states:

the UK failed to notify its proposal for the new regional aid map in time. In fact, we had asked Member States as early as February 1998 to submit their new maps by March 1999. The UK did not notify until July 1999 and its proposal raised important questions as regards its compatibility with the state aid rules on national regional aid.

We have been round this course before. The Secretary of State does not know what he is doing on regional aid. Is not it time that he rolled up his sleeves and learned the discipline of delivery on time?

I think that the hon. Lady is in danger of getting her record stuck. We submitted our proposals for the assisted areas map in line with the timetable that was agreed with the Commission. Of course we were disappointed that we were unable to include all the areas that we would have liked because of the need to reduce population coverage and to satisfy the Commission on the point about which it came back to us—whether or not Gravesham and Medway constituted a self-contained area.

What criteria he uses in deciding which sectors receive selective industrial assistance. [120510]

All sectors are eligible to apply for assistance, subject to European Union restrictions. Aid to firms operating in certain sectors, such as coal, steel, shipbuilding and motor vehicles, is governed by other European codes.

So that business can be reassured that assistance is provided on a genuinely objective, nondiscriminatory basis free of political interference, will the right hon. Gentleman explain the logic that has led the Government to find help, as he says, for the coal, steel, car, ship and other industries, but not for the chemical, textiles, paper-making and other sectors that have faced the same competitive pressures and difficulties in the job market? Can he give examples from his period as Secretary of State of when he has declined industrial assistance for applicants from particular sectors?

We look at three broad matters when considering assistance. First, we need to support investment—either inward investment to attract a mobile project that could go anywhere in the world or projects such as the airbus initiative, where investment is made in the form of launch aid, which is repaid to the Government. Secondly, we need to ensure that competition is not unfair. For example, we must ensure that our shipbuilding industry is not at a disadvantage, given that the industry in other parts of Europe receives Government support.

Thirdly, we need to assist industry through the process of change. That was one reason why we provided £100 million to the coal industry, where the process of change occurred because of the lifting of the stricter gas consents policy. There is therefore a rational approach to those matters that does not discriminate against particular sectors. We are considering how we might be able to support the textiles industry in a way that falls within those three principles.

Will my right hon. Friend note the observation in the consultation document from the national textiles and clothing strategy group, which the Department is considering, that take-up of regional selective assistance by textiles and clothing companies is remarkably low? Will he undertake to ensure that the officials who administer regional selective assistance and the enterprise grants take a positive attitude to investment in our eighth largest manufacturing industry and, specifically, that they encourage textiles and clothing companies to make applications for assistance and help so that take-up is increased?

My hon. Friend raises an important point. We are looking at the responses that we have received through the consultation process on the textiles strategy and we shall announce our conclusions in a few weeks' time. I will ensure that my hon. Friend's comments are taken on board as we arrive at our conclusions. She also raises an important point about employment in manufacturing. While recognising that there have been difficulties in recent times for certain sectors of manufacturing, it is important to set them in the historical context.

Since we took office, between May 1997 and February of this year 160,000 jobs have been lost in manufacturing. I regret that 160,000 jobs have been lost in manufacturing in almost three years, but it is worth comparing that with the average fall in employment for each year under the Conservative Government from 1979 to 1997: for each of those 18 years, 140,000 manufacturing jobs were lost. That is the Tory record on manufacturing—one of neglect. This Government's record is one of continued modernising investment.

Can the Secretary of State confirm that there is deep unease in the ranks of senior civil servants in his Department over the shambles of his industrial policy and that, as a result, he has taken the unprecedented step of moving a number of senior policy advisers to other parts of the Department? In particular, can he confirm that Michael Atkinson has been removed as the director of the coal unit and sent to the resources and business competitiveness group, and that Alan Wright has been removed as director of the coal health claims unit and sent to the finance department? If that is correct, can he tell the House the reasons for those moves?

I gave the hon. Gentleman a parliamentary reply a few days ago that put all that on the record, so he should just read the official record and find out. These issues are decided by the permanent secretary; I have had no involvement in them. It is wholly appropriate that that should be the case.

If any of those civil servants were around when the Tories shut the 31 pits in the early '90s, then good riddance to them. I hope that my right hon. Friend played a part in moving them.

The reason why it is necessary to refer to selective assistance is that I, as a firm believer in intervention in the labour market, believe that, if it is correct to pay out large subsidies to farming interests, it cannot be wrong to assist where it is necessary in the industrial market generally, so it would not worry me at all. In fact, I would be pleased to know that, from now until the next general election, my right hon. Friend and others will make statements here to say that they are intervening before breakfast, dinner and tea to ensure that British workers keep their jobs. One thing is absolutely certain: unemployment has fallen for a good number of years. We want to ensure that it does not start rising before that next election is called.

The issue of intervention is important. I disagree with my hon. Friend on these matters, and he knows it because we have debated them at length. My view, and that of the Government, is that there should be a presumption against intervention. We need to look at the three areas where we are prepared to intervene very much as exceptions. The reason is that history shows that, in the long run, intervention and state subsidies do not build strong, profitable companies. It is only by having strong, profitable companies that we will have long-term employment.

If he will make a statement on employment relations in respect of employers who repeatedly reappoint temporary staff on a seasonal basis. [120511]

We would always encourage employers to treat their staff fairly, whatever the basis on which they are engaged. Many employment rights apply to temporary and seasonal staff.

Is the Minister aware that, in west Cornwall, which is characterised by the lowest wages in the country and high unemployment, many low-paid workers such as classroom assistants have a pattern of employment, lay-off and re-employment that makes them ineligible for benefit during the long weeks and months during which they are unpaid? Does he accept that there is a need for joined-up government attention and action to ensure that the best interests of those low-paid workers are protected?

I am aware of some of the problems. It is important to retain the flexibility that seasonal and temporary staff bring, but the improvements that we have introduced include making provision last summer to ensure that temporary and seasonal staff are not allowed to sign away their rights on unfair dismissal. The minimum wage had an effect on such staff. Later in the year, the fixed-term working directive will be debated, which again will look at that particular matter in great detail.

The Minister will be aware that seaside communities such as Scarborough and Whitby have a seasonal employment problem, inasmuch as people are taken on for the season. What discussions have taken place with the Department for Culture, Media and Sport—particularly with the Minister for Tourism, Film and Broadcasting—regarding the tourism and hospitality industry, where there is a problem in terms of the seasonality of employment? What information packages will be made available for small employers, which are the bedrock of many of these economies?

My hon. Friend raises an important point. We looked at this matter when we introduced the minimum wage—and we included such staff—and again when we introduced the working time directive. For the first time, all those workers now have the right to rest breaks and paid holidays. We will discuss with the Department for Culture, Media and Sport—which has an important role—the introduction of the fixed-term working directive to ensure that we give maximum protection without destroying the flexibility which my hon. Friend will appreciate is necessary in those areas.

I am glad that the Minister will look carefully at the directive. In the last Parliament, when the Select Committee on Education and Employment looked at temporary working, it found that the French—who had tried to legislate against temporary working—had 25 per cent. of their employees on temporary contracts, whereas, within the United Kingdom, where there is no legislation against temporary contracts, the figure was only 6 or 7 per cent. I hope that the Minister will look carefully at that before he signs up to job-destroying directives coming out of Europe, which are causing so many problems in France and Germany.

We have no intention of stopping people working on fixed contracts. Many people choose to do so, and have done for many years. However, neither do we have any intention of introducing bad employment practice ghettos for people who are on such contracts. I do not agree that we have introduced job-destroying measures. Unemployment is at its lowest level for 20 years, long-term unemployment has reduced by 50 per cent. and youth unemployment has reduced by 70 per cent. The hon. Gentleman's dogma has been destroyed by the reality of this Government promoting social justice while ensuring that the number of jobs is increased.

What plans he has to extend further the rights of consumers. [120512]

In our White Paper "Modern Markets: Confident Consumers", published last year, we set out how we intend to improve consumer law to help people get a fair deal. We are consulting on these changes to the law, which will provide tougher sanctions against rogue traders, tougher controls against the misdescription of services and better advice to consumers.

Has my hon. Friend's Department any plans to attempt to liberalise trade with the European trademark directive, which has resulted in a ridiculous situation where British retailers cannot market branded clothes at a competitive price because of bureaucratic European rules? The British consumer has been ripped off for too long, especially on designer clothes.

The Government are working with other sympathetic EU Governments, especially Sweden, to examine—and, where appropriate, promote—the benefits to consumers of relaxing the current European Union rules governing trademarks, parallel imports and other restrictions on the free movement and sale of goods. There should be no acceptance by consumers or retailers that people in Britain should be paying the same number of pounds for goods and services as they would be paying in dollars in the United States.

Does the Minister agree that, while addressing people's rights as consumers, we must allay their concerns about health and the environment? In view of the concerns expressed about the health implications of mobile telephony, why are the Government not making a statement today about the report addressing those concerns that is published today? When will they come to Parliament and give us time to discuss the issue?

That is a matter for my right hon. Friend the Secretary of State for Health.

What measures he is considering to encourage responsible risk-taking in business start-ups. [120513]

The Small Business Service will encourage people who are starting or growing a business to seek support from Business Links. There is good research evidence to show that those who do receive support and advice can significantly reduce the risks that they take and are more likely to stay in business.

What measures are the Government taking to ensure that those who have incurred bankruptcy because of reckless or fraudulent practice are treated differently from those who have simply made honest mistakes?

My hon. Friend raises a very important issue. We are reforming bankruptcy law to distinguish between the vast majority who are honest and responsible risk takers, and the minority who have engaged in fraudulent practice. Our measures will ensure that those responsible risk takers will be discharged earlier from bankruptcy and, indeed, when appropriate, given help to set up again in business. At the same time, however, we shall protect creditors and impose tougher penalties on the reckless and dishonest minority.

Today, when the Secretary of State and the Prime Minister encourage young entrepreneurs to go into business, will they also advise them about the business risks? Will they, for example, warn them not to go into information technology and become specialists so that they do not get clobbered by IR35? Will they warn them not to forget to build into their cashflow forecasts the costs of administering the Government's ill-thought-through schemes, such as the working families tax credit, which will cost business £340 million in administrative costs alone?

Will the Prime Minister and the Secretary of State also, however, encourage those young entrepreneurs to develop thick skins—so that, when they eventually become world-class businesses and discover that yesterday's entrepreneurs have become today's fat cats, they will understand that there is nothing personal in it, just new Labour looking for a soundbite?

Well, that was a very snappy question. I am sorry that the hon. Lady did not feel able to welcome this morning's launch by the Prime Minister and business organisations of Enterprise Insight, which will indeed encourage more people of all ages to take the plunge into setting up a business. As for business burdens, perhaps I can remind her of her own words when, as a Minister in the previous Government, she said that she would be the first to say that they did not do very well on regulation. [Interruption.] We are reducing the administrative costs to business. Indeed, the new chief executive of the Small Business Service sits on the regulatory reform panel, which will help to ensure that we improve the regulatory environment for small and large businesses.

When it comes to risk taking, is there not a distinction between caution and inaction? Many firms that are at the cutting edge of developments in sectors such as the biosciences are finding it extremely difficult to obtain necessary capital from banks and other financial institutions. Does that not undermine the work of the small firms loan guarantee scheme?

My hon. Friend makes a very important point. The issue that is most often raised with us by small businesses is the need to obtain proper finance, and finance on the terms that they require. That is why we have created the enterprise fund, which will ensure not only continuation of the very successful small firms loan guarantee scheme, but the creation of regional venture capital funds to help close the equity gap in funding for small and growing businesses.

What assessment he has made of the effect of climate change levy upon the competitive position of aluminium converters. [120514]

The effect of the climate change levy on companies engaged in aluminium conversion—rolling and extrusion—will depend on whether they benefit from the various levy exemptions, whether they take advantage of the proposed new scheme of capital allowances for energy-efficient investments, and the extent to which they may qualify for a discount from the levy.

We all know that the Government have difficulty with simple arithmetic, but does the Minister understand that if the Lawson Mardon Star Company—an aluminium converter and roller in my constituency, which employs 600 people—is obliged to pay somewhere in the region of £600,000 or £700,000 per annum, while expecting to receive only £10,000 in employers national insurance rebate, the cost to that company will be of the order of £1,000 per employee? Does she realise that that poll tax on workers in manufacturing industry, coming on top of all the other cost burdens imposed by the Government in the past three years, will be the straw that breaks the proverbial camel's back—or is she content to see British workers' jobs exported to countries where environmental protection is nothing more than a sick joke?

I welcome that speech—I thought that I was going to get a question. The hon. Gentleman is clearly not prepared to take into account the environmental obligations on every country and every company. The climate change levy is a key element in tackling climate change. A draft national programme was published on 9 March. The Aluminium Federation has been involved in discussions with the Government about the levy. We have just come to the end of a three-year programme on competitiveness in the aluminium industry that was partly funded by the DTI. We have continued to work with the industry, particularly on issues of sustainable development. For companies throughout the world, climate change issues will not go away. That is why my right hon. Friend the Chancellor has revised his plans for the climate change levy, putting in place capital allowances to assist industry to become much more energy-efficient. Unlike the Conservatives, we are not prepared to bury our heads in the sand on climate change issues.

Does the Minister accept that the perfectly reasonable question asked by my hon. Friend the Member for Ludlow (Mr. Gill) expresses the concerns felt not just by the aluminium industry but by the whole of industry on the climate change tax? Is she aware that industry feels that the DTI has abandoned its sponsorship role, particularly on sustainability? I have one direct question for her. As the various agreements that have been reached require permission from the European Union, because they will be regarded as state aid, will she give a guarantee that the levy will not be introduced until the Commission has granted permission? If not, it will cause hundreds and thousands of job losses.

Again, the Conservatives have underlined their complete opposition to taking any action to ensure that this country has a sustainable economic future. The hon. Gentleman should take into account that, throughout the Organisation for Economic Co-operation and Development countries, there is a need to tackle climate change issues. British industry has an opportunity to gain a competitive advantage on that. The Government have consulted widely on climate change issues. My right hon. Friend the Chancellor has been involved in discussions with industry, and the DTI has acted as a sponsor for the aluminium industry and the entire industrial sector. My right hon. Friend will reveal the outcome of his consultation in due course.

If he will make a statement on his Department's discussions with industry on producer responsibility. [120515]

The Department has regular discussions with industry sectors engaged in producer responsibility initiatives. In March, my hon. Friend the Minister for Small Business and E-Commerce attended a forum on producer responsibility, organised by the associate parliamentary sustainable waste group, at which she was able to listen to the views of industry representatives on a number of aspects of producer responsibility.

Is my hon. Friend encouraging industry to develop schemes in advance of the implementation of European Union directives on producer responsibility? Does he consider that electronics and electrical goods industries, particularly the car manufacturing and retail industry, will be able to respond positively and early to directives that may be in the pipeline?

I am well aware of the part that my hon. Friend has played in formulating a deposit system for white goods. He will know that EU directives on producer responsibility for electrical and electronic equipment and for vehicles are under development. We have been discussing the directives with the industries concerned. A number of manufacturers have already introduced voluntary schemes. For example, the mobile phone industry operates a take-back and recycling scheme through retailers and network operators, and a voluntary scheme for end-of-life vehicles has been in place since 1997. Those schemes demonstrate the commitment of companies to producer responsibility and will provide valuable experience for United Kingdom business when implementing the directives.

Does the hon. Gentleman agree with me that one producer responsibility that industry already admirably fulfils is to warn the Government of the serious danger of the massively damaging burden of regulation from which small companies, in particular, suffer? Does he agree that industry is right to urge a further cut in red tape, the introduction of sunset clauses, exemptions for small firms from the most damaging regulations and longer consultation and lead-in times for the introduction of new regulations? In short, does the hon. Gentleman agree that industry is behaving extremely responsibly in urging the abandonment of the Labour party manifesto and its replacement by the policies of the commonsense Conservative small business manifesto?

No, but I am thinking of putting in a claim for industrial deafness.

What steps are being taken by his Department to assist British companies to participate in the regeneration of Kosovo. [120516]

At the initiative of my right hon. Friend the Secretary of State, British Trade International established the Government/private sector taskforce last June to promote and co-ordinate the United Kingdom's response to the reconstruction opportunities in Kosovo. Arising out of that, a consortium of British companies, with financial support from the Government, was awarded the concession to manage Kosovo's power sector over the winter period. The United Kingdom was also awarded the contract for the first phase of upgrading Pristina airport. A website has been established to assist the British community and a BTI official has also been seconded to Kosovo.

I thank the Minister for that reply. Will she join me in congratulating Racal, in my constituency, for winning the contract to install the new avionics system at Pristina airport and to make safe civilian flights into Kosovo? Does she agree that the outstanding role that Britain has played in the humanitarian relief effort in the reconstruction of Kosovo has placed the reputation of British companies in the region in very good stead? Will she further encourage British companies to support the work of the British Government and British nongovernmental organisations in the region in providing humanitarian relief, thereby taking advantage of new trade and investment opportunities in the Balkans?

My hon. Friend makes a good point. I am happy to join him in congratulating Racal in his constituency. My right hon. Friend the Minister for Trade will be visiting Kosovo in the next few weeks. A key factor will be to ensure that, as we move from the emergency reconstruction of Kosovo into longer-term strategic recovery programmes, British industry will be able to contract for much of the employment. The British industrial sector is held in high regard in Kosovo because sound commercial business sense has been linked with a strong humanitarian agenda.

What initiatives his Department is taking in conjunction with other Departments to reduce burdens on business. [120517]

The Government have set up a new panel, chaired by the Minister for the Cabinet Office, to hold Ministers to account for their regulatory performance. David Irwin, the chief executive of the new Small Business Service, is a member of that panel, and the Small Business Service will be scrutinising all proposed regulations to assess their impact on small businesses and to ensure that all officials and Ministers concerned with regulation think small first.

I thank my hon. Friend for that answer and welcome the measures that she is taking with other Departments to reduce red tape for small businesses. Is she aware that, between 1994 and 1996, the Conservative Government introduced 10,000 extra regulations, and that according to the recent OECD economic outlook, the UK has fewer regulations than other OECD countries? Does my hon. Friend agree that the Government, as well as supporting enterprise, are also delivering fairness at work for thousands of employees, including the national minimum wage, paid holidays and family-friendly policies?

My hon. Friend is absolutely right. The OECD confirmed in its latest benchmarking study that economic product market regulation in the United Kingdom is lower than in any other industrial country, including the United States of America. I entirely agree that it is essential to distinguish between administrative costs and red tape, and providing decent standards at work for employees. Conservative Members, as they have confirmed again today, opposed the introduction of the minimum wage, decent basic holidays for employees and the working families tax credit. They have also opposed measures to help parents balance work and family.

Has the Minister not read the report of her own taskforce, chaired by Lord Haskins, which concluded that entrepreneurs have been distracted from running or enlarging their businesses by the cumulative burden of taxation, employment, public protection and environmental legislation? Does she agree or disagree?

We have asked the better regulation taskforce to help us continue to improve the situation and to continue reducing the burden of red tape upon business. I welcome the taskforce' s report. We are studying its recommendations seriously and shall respond within 60 days.

I have selected the amendment in the name of the Leader of the Opposition.

I beg to move,

That this House takes note of European Union Document No. 6629/00, a Commission proposal on the prices for agricultural products (2000–01); supports the Government's intention to negotiate an outcome which takes account of the interest of UK producers, consumers and tax-payers alike; and also takes note and approves of the action which the Government has taken in partnership with the industry to launch the new Action Plan for Farming to ensure that British agriculture is more sustainable, dynamic and diverse, and more consumer and market-orientated.

We last debated agriculture on a Government motion in October. A great deal has happened in six months. Ambitious rural development plans have been devised, the Food Standards Agency has been established and considerable extra public aid has been given to farmers. Three important reviews of agricultural red tape have been completed and the Government have established a new direction for agriculture, supported by a 62-point action plan, which was launched during the Prime Minister's summit in March. The annual debate on common agricultural policy price-fixing arrangements is a good opportunity for the House to discuss the current position in agriculture and prospects for the future.

This is the third year of depressed farm incomes. Times are hard for many whose livelihoods depend on agriculture. The causes are well known and have been much discussed. They include the legacy of BSE, the weakness of the euro relative to sterling, and low world commodity prices through over-supply. In 1998–99, there was record pig production in several member states. That led directly to the over-supply of our market. When that was combined with the economic crisis in Russia and the far east, where demand for pigmeat fell, the inevitable result was low market prices.

The market for sheepskins has also recently collapsed as a result of the economic crisis in Russia and the far east. Skins used to add to the value of lamb. However, sheepskins, which were worth between £7 and £8 two years ago, are now worth only 50p.

I am doing everything that I can to help farm businesses to adapt to new market demands and the evolution of agricultural and trade policy. Only by looking to the market will farming become prosperous, forward looking and sustainable.

I shall set the Commission's price-fixing proposals in context by outlining the key points of last year's Agenda 2000 reforms. The outcome was a success for the United Kingdom, and the final deal represents an important step in moving the common agricultural policy in the right direction. The reforms will help agriculture to meet the challenges of further liberalisation of world trade. They provide for a significant shift from price support to more transparent direct payments and, for the first time, an integrated European Union rural development policy has been created.

Agenda 2000 was a success for the United Kingdom and for Europe. European agricultural policy has started to move in a new direction. Member states have agreed to increase the market orientation of their agricultural economies. That is absolutely necessary for a viable European agri-food sector.

The right hon. Gentleman clearly speaks with great sincerity, but is not the bitter truth that he, as the British Agriculture Minister, does not set the policy for British agriculture? That is done by the EU. Until this sovereign Parliament can reassert the proposition that British law should prevail when British law and interests conflict with those of Europe, there will be no long-term future for British agriculture—nor, indeed, for the British nation.

I do not agree with the conclusions that the hon. Gentleman draws, although he is correct to say that the CAP—and the Council of Ministers, which sets that policy—is an over-arching policy instrument. Much of what I can and cannot do is shaped by the CAP. That is why the debate about reform is so important to those who, like me, believe that our future lies in Europe. The hon. Gentleman's perspective is very different; he looks to leaving the EU as a way forward. That is a fundamental difference between us, but if we start from my premise, it logically follows that we need a CAP that can work for European agriculture. That is why I am so keen on reform.

rose—

rose—

I give way to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman).

Will applicant nations be able to sign up to the EU-wide rural development policy if their applications are successful? As my right hon. Friend knows, I have long argued that an unreformed CAP will harm the interests of countries such as Poland and other applicant nations.

The agricultural aspect is crucial to our ambitions for enlargement. Like my hon. Friend, I believe that a reshaped CAP has an enormous role to play in facilitating the enlargement of the EU. As he knows, discussions between the Commission and the applicant countries continue on that and other issues even as we speak.

I know that the right hon. Gentleman would not want to misrepresent my views. Will he accept that in no sense is it my position that we should simply withdraw from the EU? I want us to acknowledge the fact that if we cannot achieve a fundamental renegotiation of the terms of our engagement, we could still leave. We must recognise that we will be able to establish terms for our participation in Europe only if we make the point that Parliament must retain that ultimate ability. That is a very different point.

I am grateful to the hon. Gentleman for setting out his position so clearly. My objective is to remain in the EU to ensure that we are right at the heart of every negotiation of significance to this country—and, moreover, to add to the value of the EU rather than to stand slightly to one side and criticise it. That is a fundamental difference of approach.

Having welcomed the creation of the second pillar of the CAP, it is also fair to observe that the pressures of EU enlargement and the next World Trade Organisation round will strengthen our case for further reform. As I have often told the House, I attach enormous importance to the second pillar—the rural development regulation—as an appropriate instrument to reform the CAP.

With all the changes that are taking place, will there be any light at the end of the tunnel for the dairy sector in this country? As the Minister will know, I have many dairy farmers in my constituency. They are simply no longer making any money. Farmgate prices for milk have been tremendously depressed. What hope can he give dairy farmers that, in the short term, they will be able to turn a profit again?

Only yesterday, I met a group of dairy farmers and their Member of Parliament, my hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger), to discuss precisely those issues. The hon. Gentleman is right to say that the price that farmers are receiving for their milk—it is often below the cost of production—is the key precipitator of the crisis in the sector.

The hon. Gentleman will know that, following the Prime Minister's summit on 30 March, every instrument that Government could use to help dairy farmers was proposed, including the lifting of the dairy hygiene charges, the drawdown of all agri-monetary compensation and the lifting of the weight limit on the over-30 months scheme. In addition—this gets to the heart of the hon. Gentleman's perfectly proper question—there is the issue of relations within the supply chain. I use my office as far as it is proper for me to do so to persuade others further down the supply chain that they have a vested interest in the security of the chain and in the profitability of the producer suppliers of the product—the more so as we are dealing with a fresh product, and substantial investment is necessary at each stage in the chain.

rose—

I will take some questions on that issue and then move on.

On the dairy sector, my right hon. Friend mentioned the lifting of the cap on the over-30 months scheme. What is the latest position on that in negotiations with Brussels, and when will it be implemented?

As my hon. Friend knows, it is a European Union instrument, although it is the UK taxpayer who will pay the extra costs of the proposed change. We are in discussions with the Commission, and I hope to be able to make an announcement soon.

Does my right hon. Friend agree that at least part of the problem is the intervention milk price equivalent. That is a floor price; it is not the price that the industry should be setting for the exchange of milk. If the whole industry realised that, including the supermarkets, it would make a significant difference to the price paid to individual farmers.

I understand what my hon. Friend is saying. As he knows, I have considerable sympathy with that view—but these are, after all, private sector arrangements, so there is a limit to what it is proper for me to do. I am doing everything that I can to help the dairy sector, and dairy farmers in particular.

The Minister referred to the food chain. Has he noted remarks in the agricultural press by representatives of some stages within the food chain that the supermarkets are intent on buying at the lowest possible price from primary producers, regardless of any farm assurance schemes, whether they be for milk or other products? That is a major problem that he has to overcome.

In an industry such as the dairy industry, which is sophisticated and investment-intensive right the way through the supply chain, from producers to retailers, such a policy would be short term and foolish. Conditions for dairying in this country are ideal; I do not mean just climatic and agricultural conditions. The pattern of consumption in this country is different from that in the rest of the European Union. To allow the industry to be diminished for short-term considerations that will not endure would be very short-sighted.

That is a point that I make to all my Department's partners. With the Food Standards Agency being set up as a separate agency, the industry focus in my Department is thrown into sharp relief, so I make the point to every partner that we have, all through the chain. I get a good reception for what I am saying, but I think that it would be dangerous for me to do more than that.

I turn to the price-fixing proposals. The Agenda 2000 agreement set prices for a number of commodities on a multi-annual basis. For that reason, the Commission has made proposals this year for only modest changes in prices relating to cereals, silkworms, pigmeat and sheepmeat, rice and sugar.

To remove the need for annual fixing, the Commission proposes to transfer the legislative basis on which the changes are made to the basic Council regulation. The UK Government acknowledge the common sense of all that and give the Commission our support. However, I am disappointed that there is no provision for a cut in sugar prices. Support for sugar is increasingly out of line with what is available for other arable crops. The case for a price cut is strong.

On rural development, as well as the important move away from price support, Agenda 2000 introduced the rural development regulation which provides for the first time an integrated EU rural development policy. That is the way forward for the EU.

The regulation gives us a significant opportunity to move away from traditional commodity support in favour of schemes that boost the broader rural economy, encourage farming practices that benefit the environment and help to modernise and restructure the farming industry.

We have ambitious plans for implementing the regulation. Over the next seven years, the Government are proposing expenditure of more than £1.6 billion on the England rural development plan—an increase of 60 per cent. over the period. This will enable us to provide increasing support for agri-environment and farm woodland schemes, continued support for hill farming and support for energy crops, and to introduce a number of new schemes to help rural communities. Several of the new schemes will help the process of diversification and help increase competitiveness.

The Minister was careful to refer to England. What is he proposing for Wales?

There is a separate plan for Wales, which is discussed by the Welsh Assembly and the Welsh Agriculture Minister. Responsibility for this matter is devolved, and the competent Minister is in the Welsh Assembly. I assure the hon. Gentleman that there is close co-operation between my Department and the agriculture departments in the devolved territories.

The hon. Gentleman has asked about the division of the moneys. It is complicated, but it was done proportionately. He is concerned mostly with hill farming, and the division of the money has been done in terms of the proportion of hill farms, rather than any other measurement. One might take the view that the settlement disproportionately favours Wales. I do not take that view; the settlement was fair, as the money was for hill farming.

Given that farmers will be expected to pay an increasing proportion of the money spent on rural development plans, will the Minister assure me that they are being involved in the design of the plans?

Comprehensive discussions have taken place with farmers' leaders, and I did my best to consult individual farmers for a whole year as the plan was being devised. I accept that modulation—which I believe to be the best way forward—is controversial in some quarters. However, for every pound that is modulated in England, Scotland, Wales and Northern Ireland, there is an extra pound from the Treasury. No part of the UK can lose out overall, and UK agriculture as a whole gains. Within that, some individual businesses will be beneficiaries and others will be losers. There is a redistributive effect, and I have paid careful attention to that in devising the England scheme—for which I am responsible—to make sure that there is no disproportionate redistribution between the English regions. The allocation within England has taken careful account of that.

Several of the new schemes will help the process of diversification and increase competitiveness. We plan to reintroduce an expanded processing and marketing grants scheme. A new rural enterprise scheme will promote rural development on and off the farm. Government aid will support the development of energy crops. Vocational training for people in farming and forestry will broaden the skills base and support the delivery of the rural development plan's objectives.

On 30 March, the Prime Minister, ministerial colleagues and I met farming and food industry leaders from throughout the UK to agree a strategy for the future of agriculture. The aim was to chart the way forward in the context of the current difficulties in the sector. An enormous amount of work across Government and in the private sector went into preparing for that summit. I am grateful to colleagues in other Departments, to their officials and to those in the devolved Administrations.

The result is an action plan for farming, supported by more than £200 million in new Government expenditure. The action plan contains 62 measures to support the Government's long-term agriculture strategy. We are working hard to achieve the goals set out in the action plan, and we have already made good progress.

We have notified the Commission of a number of new state aids and the agri-monetary aid that we intend to pay to the beef, sheep and dairy sectors. By the end of this year, the Government will have paid more than half a billion pounds in agri-monetary compensation since coming to office.

Will my right hon. Friend give way?

I hope that my hon. Friend is not going to ask for more.

Will my right hon. Friend tell the House how much was delivered in agri-monetary compensation under the Conservative Government?

The facts speak for themselves: more than half a billion pounds under us; not a single penny under the previous Government.

Does not the intervention by the hon. Member for Monmouth (Mr. Edwards) show how little Labour Members understand? Did milk prices ever collapse under a Conservative Government, as they have recently? The Minister has given details of many interesting schemes, but will he tell us how much money the Government's actions will put into the pockets of dairy farmers—for whom milk prices are at their lowest level since the Domesday book was compiled?

Going back to Domesday is probably going a bit far. It is also claiming quite a lot for the previous Government to take credit for the shifting terms of trade. If the hon. Gentleman is making the point—it is a perfectly fair point to make—that when sterling is weak, the terms of trade are advantageous to agriculture as a sector, he is correct. However, I should also point out that when the international markets were selling sterling, interest rates were increasing to 15 per cent. It is fair to point out that at the heart of the current difficulties in the dairy industry are, at least in part, difficulties with the terms of trade—the strength of sterling and the weakness of the euro.

The Government, however, are doing absolutely everything that we can with the instruments directly under our control—including agri-money, dairy hygiene charges and the weight limit on the over-30 months scheme—to give what help we immediately can to hard-pressed dairy farmers. That is a fair response to what I acknowledge is a difficult position. I have also said that I am using my office, as much as it is proper for me to do, to try to facilitate a solution to the difficulties within the supply chain.

The issue of agri-monetary compensation is important, and I am grateful to the Government for doing something about it, however belatedly and partially. What is the long-term solution on agri-monetary compensation? It is clear that the current arrangements will not last indefinitely, and that there will be pressure on other European Union member states, as members of the eurozone, to remove agrimonetary compensation. What is the British solution to that, and how can it be disentangled from the Fontainebleau arrangements, which are getting in the way of providing proper support for the British agriculture industry?

The Fontainebleau arrangements are a complicating factor in all this. As I have said repeatedly to the House, when agri-monetary compensation is discretionary rather than mandatory, I am competing with other demands for public expenditure, effectively from the domestic Treasury, in order to make those payments. Of course there is a debate within Government about priorities.

The future for the current agri-monetary regime is time-limited, as the hon. Member for Somerton and Frome (Mr. Heath) rightly said. The current scheme spans three years, with half the money being allocated for this year. That is the money that we are, in part, drawing down. I believe that next year, one third of the total sum will be allowed, with the final sixth coming in the following year. After that, the scheme comes to a conclusion. It is not a continuing arrangement, so the Government's policy of securing a stable exchange rate and bearing down on interest rates is important.

The Minister gets away with a lot in debates because he is so generous in taking interventions—

I agree with the hon. Gentleman. Thank you very much.

But—there is a but—he has been disingenuous. He has failed dreadfully in his negotiations with the European Union and let down this country's dairy farmers. Why did Italy, Spain, Ireland and Greece get huge increases in milk quota last year, when our dairy farmers got nothing? In his negotiations on beef, why did he get nowhere on calf exports? A good bull calf in France makes £150, but a good bull calf in Shropshire either goes to the hunt kennels for nothing or at best makes £15. He has let down this country's dairy farmers, and he should not hide it with blather about a lot of little schemes. The real money is made from selling milk and calves to customers.

Although it is possible to get Conservative Members to make such charges, it is difficult to find dairy farmers who do so—or at least, they do not do so when I meet them. I am certain that the hon. Gentleman has his own friends who will support him. I agree that the extra dairy quota for Ireland is difficult to justify, but the Irish Government were able to plead an agreement made in the early 1980s—to which the Conservative Government were a party—as the basis for their extra quota. I could not say that what the British Government did in the early 1980s was wrong, even if I thought that it was. All that I could do was negotiate for our country and get an equivalent increase in quota for Northern Ireland, based on the southern Ireland claim. That seemed to be a reasonable response. The idea that we were somehow let down in the negotiations is fallacious.

In any event, the real issue is not extra dairy quota, but the future for dairy quotas. There are only two possible ways forward. One is to lock us into the regime, which would be wrong. The other is to argue for reform, even if we are currently arguing from a minority position. I stand by the proposition that we, together with the Governments of Italy, Sweden and Denmark, put forward for a permanent phasing out of dairy quota over six years. That would give the industry a period in which to depreciate its quota holdings and provide certainty about the longer-term outcome, resulting in a much more market-oriented industry, which is the only real way forward.

When the quotas were introduced in the early 1980s, they were supposed to be a temporary response to a particular market difficulty. The market difficulty has come back, but the response is not helping. We need to think strategically. There is not much difference between the Government and the Opposition on the strategic question.

rose—

I want to move on and deal with the pig industry scheme, but I shall give way first.

I am grateful to the Minister for giving way. I want to take him back to agri-monetary compensation, about which the hon. Member for Somerton and Frome (Mr. Heath) asked. The Minister talked about further tranches of existing money, but is he saying that the Government would not support any further agri- monetary compensation system to take over when the existing one runs out at the end of 2001?

I have not said that, but the hon. Gentleman must understand that the circumstances will be pretty difficult, with 11 of the 15 member states in a single currency and three others preparing to go into it. He should think about the circumstances in which such a scheme would be negotiated. It is better to pursue our current policies to stabilise exchange rates so that currency variations impact less on agriculture.

We are trying to support the pig industry and secure its long-term viability through the pig industry restructuring scheme. The issue is under discussion with the Commission, as well as with the industry and other interested parties. I know that the House will be interested in this, because right hon. and hon. Members have often raised the plight of the pig sector.

The scheme is worth £26 million in the first of three years. It will have two main parts: an outgoers element is aimed at those who wish to leave pig farming; an ongoers element is for those who wish to remain in the pig industry and restructure their businesses. We hope to introduce the outgoers element of the scheme in July this year. It is my intention—if I can—to backdate the scheme to June 1998 so that we can provide some help for those who have already left the industry.

We have also notified the Commission of our plans to provide funding for farmers to receive specialised business advice. I am pressing the commission for a rapid response to all the notifications that I have referred to so that we can act quickly to introduce the new measures.

Legislation to remove dairy hygiene inspection charges in England, which I referred to yesterday, was put in place yesterday. Parallel action is in hand to remove the dairy hygiene inspection charge in Wales shortly, but that is a matter for the Welsh Assembly. When that has happened, there will no longer be a charge for such inspections anywhere in the United Kingdom.

My Department is working with the Department of the Environment, Transport and the Regions to ensure that planning regulations, and their implementation, are flexible to local needs. It is essential that planning laws are compatible with opportunities for the farm business diversification that is already taking place, and that will be further facilitated under the new rural enterprise scheme. I accord great importance to that, because it would be discordant for me to favour diversification but for the planning rules to thwart it.

I hoped that the right hon. Gentleman would be saying rather more about the pig industry. Can he envisage a time in the foreseeable future when our pig industry will be able to compete on a level playing field with its competitors in Europe, with the same animal welfare and hygiene overheads as our competitors? There seems little likelihood, in the foreseeable future, of our competitors having the same costs imposed on them as we have imposed on our pig industry.

Both the animal welfare imposts on the industry—the stall and tether bans and the meat and bonemeal restrictions—are unique to the United Kingdom. The legislation to put those measures in place was introduced under the previous Government. I make no complaint about that—

I do.

The hon. Gentleman does, and no doubt he did at the time. However, these matters are not as party political and partisan as he might imply. Better news is that the price in the marketplace is crawling back to what the industry regards as a break-even point. That does not get the industry out of all its difficulties, of course, because there will be residual debts from the prolonged recession in the sector. However, it offers some hope, and the measures that the Government are taking now and have taken, particularly on the marketing side, to help the industry through, with the support and encouragement of Members of Parliament from all sides of the House, have undoubtedly helped.

Throughout the cycle, there have been points at which the domestic industry has been able to command a premium in the marketplace over the European Union price. I believe that we should focus our attention on that market-based solution and on what help we can legitimately give within the state aid rules. That is precisely what I am trying to do.

That is not all that I am trying to do, however. The Government will continue to explore other ways in which we can develop the action plan to help the industry in the short term. I can announce today that the Inland Revenue is offering to join with the National Farmers Union to increase awareness of the assistance available to farming families through the working families tax credit. Many farmers, like many other hard-working families, stand to gain from the working families tax credit. It is important that those who are eligible claim their entitlements in full.

Government action has been matched by initiatives from the farming and food industries. The Institute of Grocery Distribution is taking the lead on developing a code of practice for collaborative and constructive working in the food supply chain. That is having a tangible effect on my efforts to get the food chain joined up.

The NFU has developed a new British farm standard, the "tractor mark". The mark has the support of major retailers and they have agreed to use it, to identify clearly to customers produce that meets the high standards of British farm assurance schemes.

Does my right hon. Friend accept that there is wide acknowledgement that the Government are doing everything that they can to promote high-quality British produce? Are we getting the same commitment from the food processing industry and supermarkets? My right hon. Friend seems to have had constructive discussions, but when will we see real action from those important sections of the industry?

My hon. Friend makes his point forcefully and well. The same point was made to me by farmers in his constituency when I met them recently. I try, as much as the boundaries of my office allow, to make these points to processors, retailers and distributors. The Ministry is the sponsoring Department for the entire supply chain, and I want the consequent responsibilities integrated within it, to the benefit of all.

I shall now say something about the red-tape review. Farmers say to me time after time that the burden of regulation is one of the most difficult things with which they have to cope. They go on to bet that others do not have to cope with that burden in the same way. Other Agriculture Ministers all make the same point on behalf of their farmers. It seems that it is right to bear down on regulations that are a burden to farming. The three regulatory reviews launched towards the end of last year made 107 recommendations, of which the Government accepted 98 straight away. I know that it will be of interest throughout the House that one of the most far-reaching recommendations relates to the computerised administration of CAP schemes. The Government have accepted the working group's finding that computerised administration could offer a radically improved service for farmers and significant savings to the taxpayer.

The Government are considering the issues and no final decisions have been made. I shall set out my four key objectives. First, I want to offer improved services to farmers, traders and other stakeholders. Secondly, I want to strengthen my Department's regional policy presence, which will mean building closer links with the Government regional offices. Thirdly, I want to ensure that the implementation of rural development policy has a strong regional focus. Fourthly, I want to make the best use of available technology in administering CAP schemes.

Will my right hon. Friend give way?

Yes. I know that my hon. Friend has a constituency interest.

My right hon. Friend has been extremely understanding and sympathetic. I know that he understands the worry in my area about the problem of farmers and information technology, especially in relation to completing forms—forms on which a farmer's entire income can depend. Can he assure me that we shall try to resolve the difficulty when there is no civil servant to give direct advice to the farmer at the point of use?

Although we have accepted the principle, we have not yet agreed to a specific proposal. The matter is under active consideration. Before embarking on any change, I want to do two rather obvious things. First, I wish to ensure that the proposal has been as robustly tested as possible. Secondly, I want to ensure that we have given every consideration to my Department's regional interface with farmers, to which they attach so much importance and about which I continue to hear complimentary remarks from individual users of the regional service.

May I take the right hon. Gentleman back to the second of his four points—greater co-operation with the Government regional offices? Is that a code that means shutting down the existing MAFF regional offices and merging them into the overall Government system? I can assure the right hon. Gentleman that my constituents find the service that they get from Carlisle extremely useful. The people at Carlisle understand Cumbria and can explain the problems to farmers in that area. If the service is transferred to Manchester, my constituents will not be remotely as happy, and they will be much worse served.