With permission, Mr. Speaker, I should like to make a statement about the local government White Paper that we are publishing today.

The White Paper sets out a new vision for local government at the beginning of the 21st century. It seeks to establish a partnership between central and local government, reflecting the critical importance of local authorities, both as a tier of democratic government and as a body with the responsibility to deliver high-quality public services to local people.

Democratically elected councils should be part of the fabric of our communities. The services that they provide have a vital part to play in sustaining and enhancing social and economic prospects and the environmental quality of our towns, cities and countryside. They can have a profound effect on the opportunities and quality of life of the people who live and work there. They are responsible for educating children, providing care for the vulnerable, making places safer and cleaner to live in and providing reliable local transport.

People therefore expect a great deal from their council, and those expectations are rising. To meet them, councils have constantly to seek new and more effective ways to deliver customer-focused services and to lead their communities. The proposals in the White Paper will provide a framework in which all can do so, through the application of the Government's four principles of public service reform.

The first principle is to establish a national framework for the delivery of high-quality services and effective community leadership. For example, people everywhere want high-quality education for their children. Secondly, within that framework, we intend to free up local councils to meet their communities' particular needs, recognising that those will be different in a London borough and, say, in a shire district council area. The third principle is to ensure that councillors and council staff have the skills and money to do their jobs well. Finally, we intend to provide more choice for people in the services that they want to use.

I want to tackle the trend towards excessive central prescription and interference, which dominated central-local relations in the 1980s and 1990s. The White Paper reverses that approach: it marks a pronounced step away from centralisation. It is about increased freedoms, better incentives and a significant reduction in the number of controls, consent requirements, plans and over-elaborate guidance, which have all too often characterised the top-down approach to local government that we saw in recent years.

The White Paper is truly about local government, and it is a fundamental shift away from local administration. It is based on a belief that we do not need to control everything and on a recognition that local authorities are often in the best position to respond to local needs and aspirations.

I hope that this approach will encourage local political and civic leadership. Today's reports into this summer's disturbances in Oldham, Burnley and Bradford show how important it is to have a leadership with a democratic mandate who are prepared to take the often sensitive and always difficult decisions necessary to ensure social cohesion. The White Paper has at its heart community leadership and the democratic renewal of local government.

We want to reduce the bureaucratic burden for all councils and give them the freedom to innovate and focus on driving up standards. We therefore intend to cut the number of plans and strategies that councils are required to produce, to scale back the number of area-based initiatives and to give greater scope to rationalise partnerships. We shall remove many of the present requirements to obtain Government consent before acting. More than 50 will be abolished, and another 30 are under review. We shall also provide councils with wider powers to provide services to others.

With these new freedoms come responsibilities. For the first time, we will produce a clear performance profile for each and every council. The Audit Commission will compile a scorecard and will identify each council as either high performing, striving, coasting or poorly performing. It is our intention that further freedoms over and above those for all councils will be given to high-performing authorities. We will also intervene decisively where councils are failing their local people. Where councils are not collecting their council tax or providing high-quality public services, for example, that will not be acceptable, and we will take the appropriate action.

The Government agree with the Local Government Association that there should be joint ownership of the service priorities for local government. It is therefore our intention that, through negotiation and dialogue, we will agree with local authorities a single list of priorities for local government.

The White Paper also sets out our specific proposals for the reform of local government finance. Last week, I announced to the House that next year will be the final year in which the grant to local authorities will be based on the present standard spending assessment formula. We will be bringing forward our detailed proposals for a new system of grant distribution next year, but I can inform the House that I have decided to abolish the standard spending assessment mechanism and replace it with a system that is easier to understand and better reflects the real cost of services and the needs of the local area.

We also intend to give local authorities greater flexibility to undertake capital investment. We shall scrap the system of credit approvals; instead, authorities will be free to borrow for capital investment without consent, provided they can afford to service the debt. Where a council sees a need, for example, for a new library or leisure centre, it will no longer need central Government permission to go ahead with such a project.

As a consequence of that approach, we shall abolish the "receipts taken into account" mechanism, which has acted as a disincentive for local authorities to dispose of surplus assets. I know that there has been concern about the growth of ring-fenced funding and the way it limits local discretion. We shall therefore restrict ring-fenced funding to areas that are genuine high priorities for the Government, and where we cannot achieve our policy objectives by specifying outcome targets.

The setting of council tax itself is very much a local decision, but we also recognise that the risk of high council tax increases affects local taxpayers. We have already ended pre-announced universal capping. Our long-term goal is to dispense with the reserve capping powers altogether, but we intend to proceed with caution. However, we feel that we should take the first step towards ending capping, so I can announce today that the power to cap will not be used in respect of high-performing authorities. A large number of authorities and hon. Members have raised with me the difficulties created for councils by the council tax benefit subsidy limitation scheme. The principles underlying the scheme are sensible, but in practice its application has proved complex. Some have proposed that we should simplify the scheme or find ways of reducing its impact. Having considered all the options, I have decided to abolish it altogether.

The proposals in the White Paper form part of the Government's agenda for modernisation and reform. For many, they will be challenging; they are meant to be. We proposed the changes not for their own sake, but because local people will benefit from the requirement that all services should be delivered to an acceptable standard; from the fact that the changes that we all want to see—better schools and social care, improved local environments, better transport and other vital local services—will get the priority that they deserve; and from effective community leadership by councils that are in touch with local people and working to meet their aspirations.

The proposals will put the "local" back into local government, allowing local councillors to make a difference to their communities. That is vital if we are to re-engage people and, as a result, achieve an increased turn-out at local elections. The White Paper outlines a new and lasting basis for effective local government. I want central and local government to work together in a constructive partnership to deliver the high-quality public services that local people have the right to expect. In a practical and tangible way, the White Paper shows how we can achieve that and I commend it to the House.

I should like to thank the Secretary State for giving me prior sight of the statement. I was interested to hear on the Radio 4 "Today" programme this morning an item saying that the Prime Minister had agreed that policy should always be announced first to Parliament—which was immediately followed by an item announcing the contents of this White Paper.

Strong, independent and effective local government is essential for our democracy and for people's quality of life. We want councils to be better able to understand and meet local needs, deliver high-quality services, and respond to and stand up for local interests. Local government has traditionally been an engine of change in this country; many policy innovations have come up from local government. Today, Conservative councils throughout the country are responding to local needs, providing the public services that people want and finding new ways to deliver effective local services. To the extent that the White Paper heralds a change in the attitude of central Government and a genuine move to freedom for local councils to respond to the needs of their communities, we welcome it. However, to the extent that it merely pays lip service to the ideas of freedom and deregulation, we challenge it.

I must tell the Secretary of State that Members of Parliament now know not to take at face value what he tells the House. Following the fiddled figures of the local government settlement last week and our experience with Railtrack, Members know that with this Secretary of State more than any other, they simply cannot believe what he says. The devil is in the detail, and so it will be with the local government White Paper— [Interruption.]

Order. The language that the hon. Lady is using is sailing a bit close to the wind. Perhaps she should remember that we use temperate language in the House.

I apologise for any intemperate language that I used, Mr. Speaker, and I trust that the rest of my language will be suitably temperate.

We have been promised by the Secretary of State that the White Paper [Laughter.] I cannot think what hon. Members are laughing at.

Later in the statement, the Secretary of State goes on to say:

The Secretary of State says that the White Paper

We have heard such language before. In the education White Paper published earlier this year, the Government promised that where schools were successful,

If the right hon. Gentleman is serious about freedom for councils, he will want to ensure that his Cabinet colleagues are serious about it too. Will he therefore give the House an undertaking today that the Government will remove those centralising measures from the Education Bill? Will he commit his Cabinet colleagues in all other Departments affecting local government not to introduce any more net regulation for local government?

What confidence can the House have that the rest of the Government are signed up to a freedom agenda for local councils, if we see them doing something very different? From the way the Secretary of State's Cabinet colleagues have been keeping away from him in recent weeks, we can have no confidence that his agenda will be driven through.

The Secretary of State says that the Government

Then we come to the clear performance profile for each council—the scorecard—and more mechanistic targets and league tables that will be set by the Government. Most voters, when they vote in local government elections, assume that they are making decisions about the performance of their local council. They do not expect their council to be told what to do by central Government.

That is what is sad about the statement from the Secretary of State. If he is really interested in local democracy and in increasing voter turnout at local government elections, he will want to restore to local government true democracy and true autonomy for all councils, so that when people vote they know that their vote will make a real difference and that they are not merely electing people to be agents of central Government.

We are told that there should be

Then came an amazing statement. The Secretary of State announced with a flourish that he had decided to abolish the standard spending assessment mechanism. [Interruption.] Labour Members seem to think that that is some great new announcement, but I must tell them that their Government announced in 1997 that they were going to reform the standard spending assessment. Obviously, they were not listening to the right hon. Gentleman last week, as he made the announcement then as well. Again, all that we have this week is a promise of details in future. When will those details be published and what opportunity will hon. Members have to question him about them?

One of the main ways in which the Government control local authorities is through ring-fenced funding. They claim that they are going to reduce the amount of such funding. What is the Secretary of State's target for the amount of budget that will be ring-fenced in future? It has increased under this Government from just over 4 per cent. in 1997 to 15 per cent. next year. If the right hon. Gentleman is so interested in reducing the proportion of budget that is ring fenced, why did he not make the announcement last week in respect of the local government settlement, and why did he increase the proportion of ring fencing in that settlement?

The Secretary of State has announced four bands or performance levels for local government. He has gone from being the blue-eyed boy striving to do his master's bidding, through being a coasting Minister, to being a poor performer. He had the opportunity today to take radical measures to restore local government and local democracy and to bring forward a programme of decentralisation and deregulation to all councils. Frankly, he has flunked it. He has run scared from that challenge and local democracy will be the poorer for it.

Of course, the Conservatives have one fundamental problem with local government: they do not have any time for it at all. That is not only my view. There are Opposition Members who served in local government while a Conservative Government were in power. Indeed, the hon. Lady did so, as did I and some of my Labour colleagues. We know full well that the Conservative Governments of the 1980s and 1990s destroyed local government because they had no time for it. Local councils that were prepared to stand up for jobs and services were denigrated by Conservative Governments. They were attacked by the Conservatives and funding was cut, and when the local electorate continued to return Labour councils, what did the Tories do? They abolished them. That was their response to local democracy.

The White Paper represents a fundamental shift in the way in which central Government relates to local government. The hon. Lady said that the centralising tendencies are still there. She prayed in aid the fact that there is to be a single list of priorities and suggested that it was somehow being imposed from the centre. When she has time to read the White Paper, she will see that that list of priorities will be agreed between Government and the LGA. This proposal, which she criticises as centralising and as not taking into account the views of local government, was suggested by the LGA itself, including Conservative members as well as Labour ones, and Liberal Democrat members as well as independent ones. We can see where the divisions are. The hon. Lady does not speak for Conservatives in local government, because the proposal was theirs and we were prepared to sign up to it—but there we go.

The hon. Lady spoke about the bureaucratic burden on local councils. Plans are to be cut by more than a third and we will abolish 50 consents—changes that will make a real difference. We are reviewing the best value regime because we believe that it has become bureaucratic and can be improved. I remind the House that we created best value so that we could abolish compulsory competitive tendering, which was another Conservative party creation. It had nothing to do with quality of service; the cheapest provider and privatisation drove the policy. We removed it and put best value in its place because we believe that the quality of the services count.

The hon. Lady disapproves of the fact that we will have four categories of council. She would prefer it if local electorates could not compare their council with neighbouring councils. It is time for effective quality assurance. It is important to have a balanced scorecard and to examine a range of performance indicators for local councils. However, the Audit Commission, not politicians, will have that responsibility.

The hon. Lady asked about funding for schools. The White Paper makes it clear that schools are in a special position and that we need to safeguard their funding. There is no Government policy to abolish county councils or to impose regional government on parts of the country. That is for local people to decide.

The hon. Lady did not even provide a hint about Conservative party thinking on local government. That is no surprise, because she knows that her policy does not celebrate local government but denigrates it. Conservative Members have no time for local government. Consequently, thousands of Conservative councillors throughout the country have lost their seats.

The White Paper marks a fundamental shift in direction. It celebrates local councils. When Opposition Members have had a chance to digest the proposals, they will realise that they mean a new beginning—a renaissance—for local government. I hope that when they have the opportunity of discussing it with their local government friends, they will be able to support it.

I congratulate my right hon. Friend on his statement and on starting on the long road back from local administration to proper local government. What is the timetable for the proposals? Will there be a bonfire of regulations in the next few weeks and a pause until legislation can be introduced? How soon does my right hon. Friend believe that we can revert to the position whereby local government has the same sort of powers that he enjoyed when he was first elected to a local authority on Tyneside?

My hon. Friend makes an important point in not perceiving the White Paper as the one and only act to change the relationship between central Government and local government. It is the beginning of celebrating all that is good in local government, and much is good. However, we also need to ensure that we are prepared to intervene to help people who live in areas that have poorly performing councils.

We can introduce some of the White Paper proposals immediately. They include the reduction in the numbers of plans and consents. We do not need to delay the abolition of the council tax benefit subsidy limitation, which can be introduced from April next year. Other changes require primary legislation, and we shall make them as soon as parliamentary time is available.

My hon. Friend made another important point. When I took up my post in June this year, I realised that the constraints on the powers and responsibilities of local councils are dramatic now compared with 1980, when I was first elected as a local councillor. Local councils do not have the opportunity to respond to the needs and demands of local people. I hope that the White Paper will contribute significantly towards changing that. As my hon. Friend said, we are at the start of the process, not the end.

Taken at face value, the White Paper represents a sea change in the Government's attitude towards local government. That is welcome, if long overdue. I also welcome the clear commitment to change the obscure, out-of-date and unfair funding system for local government. I especially welcome the announcement on the abolition of the council tax benefit subsidy limitation, which was a backdoor capping scheme.

However, given that this is a Government White Paper, will the Secretary of State assure the House that all Ministers support it? In particular, does the Secretary of State for Education and Skills back it? On 4 December, she announced very clearly that she was tightening the strings on local education authorities. She said that the Government were putting even more pressure on local authorities to delegate more money to schools. In addition, the right hon. Lady recently introduced a new Education Bill that will strip more powers away from LEAs.

I welcome the commitment to reduce the number of ring-fenced grants, but the Secretary of State proposes to do so in part by introducing targeted grants, which the White Paper states may have eligibility conditions attached. Is not that simply another form of ring fencing?

I also welcome the long-overdue proposals to reform the capital funding regime. However, many people will be disappointed that the White Paper contains only one sentence about the abolition of the standard spending assessment. That states:

More generally, does not the right hon. Gentleman accept that, unless local councils themselves are able to raise more of the money spent locally, the Government will still control local government purse strings? Has the time not come for local government to be able to put its own money where its mouth is?

The Secretary of State was right to speak in his statement about giving further powers to local councils, but I fail to understand why he continues to say that they must earn their additional freedoms. Should not local councils' autonomy be theirs as of right, and not something that they must earn?

Why does not the White Paper mention proportional representation in local government elections? The Secretary of State would be disappointed if I did not ask that question.

Finally, we all know that crude targets have led to the distortion of clinical priorities in the NHS, and that the Department for Education and Skills has acknowledged serious deficiencies in school league tables. Why, then, does the Secretary of State feel that the time is now right to introduce crude league tables for local government?

The White Paper contains some welcome measures. However, actions speak louder than words, and we look forward to the actions.

I thank the hon. Gentleman for his support for certain parts of the White Paper. I can assure him that it is a Government White Paper, and that it is supported by all Ministers, including my right hon. Friend the Secretary of State for Education and Skills. When he has had time to look at both the White Paper and the Education Bill, the hon. Gentleman will see that there is no contradiction between them.

The hon. Gentleman asked about ring fencing. The House will know that the Government have just begun our spending review for 2002, the outcome of which will be announced later next year. In that context, the question of ring-fenced grants to local authorities will be one of the matters for consideration. Our objective, during the process of the review, is to have an outcome that will reduce the amount of ring-fenced grants going to local authorities. It would be a mistake to try to move more quickly, as that would have a detrimental impact on services that are provided at present.

The proposals regarding targeted grants and eligibility are not the same as ring fencing. I shall give an example of what would amount to a targeted grant. Recently, my Department and the Department of Health have provided an extra £100 million to support local government initiatives on bed blocking. That money has been targeted on certain authorities facing particular pressures in the sense that those authorities become eligible for those grants.

I welcome what the hon. Member for Bath said with regard to capital. We want to move as quickly as we can, but the changes are so fundamental that they will require primary legislation, and will have to wait until a suitable slot is available.

It is not true that I announced last week that we would abolish the standard spending assessment. What I said was that we would change the formula, although I did not give an indication of the sort of changes that we would introduce. Today, I am able to say that the new formula will not be based on a standard spending assessment. Relatively early in the new year—I cannot give a precise time yet—I would like to find ways of sharing with hon. Members the various options that we are considering in relation to that new formula.

There is an issue about the balance of funding between central and local government, to which the Government are giving close consideration. All authorities will benefit from the deregulation and the cutting back of bureaucracy proposed in the White Paper, but we felt it appropriate that there should be greater freedoms and flexibility for high-performing authorities. I do not think that people will see the four categories that we are proposing as crude league tables. This is a scorecard for individual authorities, and I think that most people will see it that way.

The hon. Gentleman asked why there was no mention in the White Paper of proportional representation for local government elections. It is not in there because it is a daft idea.

It was pretty good, that last remark. We, on this Bench, have spent the last few minutes assessing the Secretary of State's performance indicators, and they have come out reasonably high for the last month. I think we have been in a Byers market. He gets pretty high marks for taking Railtrack back into public ownership. The same applies to his abandoning the public-private partnership on the London underground—I think that is what he said last week. He was also pretty good to take power from the quangos and hand it back to democratically elected local authorities. Very good! We will measure him on that later, and if he comes up with more money for Derbyshire and Bolsover than Westminster, his rating will be 10 out of 10.

In everything we do, we will be fair in ensuring that finances are allocated on a needs-based approach, which may well benefit Bolsover and Derbyshire. Decisions will be taken over the next few days in relation to the single capital pot that my right hon. Friend the Minister for Local Government will announce later this week, and also in relation to the local transport plans, which will be published, I think, on Thursday or Friday. Many authorities will benefit from those proposals.

I hope that, when the House has had the opportunity to look at the White Paper, it will see that what we are trying to do is to get a settled position with regard to central-local government relations. Local government does not want constant chopping and changing, and it is important to establish a system that all political parties feel is, on balance, right. I happen to believe that the White Paper achieves that. It proposes a shift in direction, and recognises that many issues are best dealt with not in Westminster or Whitehall but locally, by people who are elected locally and who know the demands and priorities of local people. I hope that that is reflected in the White Paper.

Will the Secretary of State expand on the issue of performance profiles that he mentioned in his statement? He said that he would classify councils into the categories of

"high performing, striving, coasting and poor performing".

He then said that he would "intervene decisively". What precisely did he mean by that? How will he intervene? Will he intervene both on coasting councils and on poor-performing councils? Will that involve putting them into administration?

When the hon. Gentleman has the chance, he will see that, of the four categories, coasting councils are those that are

An intervention could take a variety of forms. It could involve a new provider coming in, or it could involve taking a council into administration, then taking it out again, perhaps with a different form of leadership. That is certainly one of the options in the White Paper.

As for coasting authorities, there will be opportunities to try and help them improve their performance—less through intervention than by working with them by means of local agreements. It is a question not of standing aside, but of working co-operatively through local government itself to support authorities with particular difficulties.

I warmly welcome my right hon. Friend's commitment to changing the capital control rules. The present rules are nonsense: they are completely out of step with arrangements in the rest of the European Union. Some of us with backgrounds in local government have been fighting for this for many years.

My right hon. Friend did not mention one issue that I regard as a real problem for local government. Until we change the current system whereby 75 per cent. of its funds come from central Government and only 25 per cent. from voters, have we any chance of achieving true local accountability and reinvigorating local democracy—and local government itself? Does my right hon. Friend envisage a solution in the longer term, involving returning more responsibility for raising money to local authorities?

My hon. Friend makes an important point about capital controls, which do not fit in with any prudential regime of local authority spending. The present arrangement, in which credit approvals in minute detail are given by central Government is unacceptable: it restricts the innovation that we, certainly, would like to see.

As my hon. Friend says, 75 per cent. of funds currently come from central Government while 25 per cent. is raised locally. It is worth reminding the House how we ended up with that balance. In a rather shoddy, sordid quick fix to escape the difficulties caused by the poll tax, the Conservative Government shifted money into increasing VAT.

The Government are considering the issue seriously. A review of the balance of funding is currently under way to establish whether changes should be made, and what sort of changes would be appropriate. It would be premature to forecast the outcome, but the fact that we have set up a group to look at the matter carefully is an indication of the Government's concern about the balance between central and local contributions.

If, as the Secretary of State just asserted, his White Paper marks a step away from centralisation and is truly about local government, can he assure us that no services currently provided by county councils will be transferred to more remote regional assemblies?

That is not an issue for the White Paper. As the right hon. Gentleman probably knows, a White Paper on the question of regional government will be produced in the new year. No doubt it will consider, among other issues, functions and responsibilities that might apply at regional level. Without giving away too much of its content, let me reassure the right hon. Gentleman by reiterating that there will be no imposition of elected regional government on regions. It will be for local people to vote for it if they want to: this will be a local decision.

Most important, the effectiveness of regional government is not about taking powers from local authorities—county, district or unitary. It must be about Secretaries of State and others in Westminster and Whitehall giving up their powers. It is about devolving down, not taking up powers from any kind of local authority.

Does my right hon. Friend agree that all that was missing from the comments of the hon. Member for Maidenhead (Mrs. May) was a candid recognition that the need to restore local government is due entirely to the damage done to it by her party during its too many years in office?

I welcome my right hon. Friend's statement, and his commitment to re-empower local authorities. I look forward to further debate on the detail in due course. Does my right hon. Friend accept that there are many examples of good local government throughout the country, not least on Tyneside? The Gateshead and Newcastle authorities have jointly launched a Newcastle-Gateshead initiative, which will work for the revitalisation of the area to the benefit—and with the support—of local people. Following the completion of his duties here, will my right hon. Friend join me downstairs in Terrace Dining Room B, where the two authorities are launching their joint bid to become European capital of culture in 2008?

I receive a number of attractive invitations from my hon. Friend, of which that is one, but I cannot say too much about the European capital of culture, as I will be involved in deciding who might be successful. My hon. Friend makes an important point. We have spoken about local councils' limited freedoms, but Members should consider what has been achieved not only on Tyneside, particularly in Gateshead, but by Gateshead and Newcastle working closely together.

The massive improvements along the river have been achieved because we have a good example of local authorities supporting innovation, being adventurous and being ambitious for their communities. What has been achieved on the banks of the Tyne, particularly, if I may say so, in recent times on the south bank and in Gateshead, has made a real difference, and the authorities are to be congratulated on what they have been able to do.

Through the White Paper, I want greater freedoms to be given to good local councils such as Newcastle, Gateshead and many others up and down the country, so that the improvements taking place on Tyneside can be reflected in many other parts of the country.

The Secretary of State is aware that Wealden district council runs the most effective waste recycling scheme in the country, which involves up to 48 per cent. of waste collected in the district. [Interruption.] Labour Members should be aware that the Secretary of State has a personal interest in recycling rubbish, given the way his career is going.

Is the Secretary of State aware that that scheme is on hold because of the settlement announced last week? Figures from his Department show that council tax in Wealden will have to rise by 8 per cent. simply to stand still. He says that the burden of a high council tax increase falls on the councils, but is he not aware that his Department's decisions force them to choose between delivering good services and imposing whacking great council tax increases?

I do not accept that position, but we are in a consultation period, which will last six weeks or so, and if Wealden council has particular concerns—I know that those exist among some district councils—they can be considered. We shall do precisely that, because the consultation is genuine. This period always throws up difficulties—it was the same under the Conservative Government—but we shall use it genuinely to reflect on the consequences of individual decisions by authorities. There is the possibility of change in the final outcome.

I congratulate my right hon. Friend on his statement, particularly his long-term commitment to abolish capping. Parish and town councils are not subject to the cap, so I wonder what place they have in his White Paper. On Monday, I was at Swanage town council, which costs the local council tax payer £50 a year, although it has a budget of more than £500,000. It is clearly an important part of local government, yet my right hon. Friend's Department has no jurisdiction over town and parish councils. How do they fit into the statement?

When my hon. Friend has the opportunity to study the White Paper, he will see that the role of parish and town councils is genuinely valued, probably for the first time in a Government document. We shall provide about £30,000 for each parish and town council to support democracy and any proposals that they might have to develop best value in their area. That is a good initiative. The document identifies how real improvements and benefits for each tier of authority will flow from the proposals, and no tier, whether it be the county or the parish or town council, has been left out of the proposals.

What assistance can the Secretary of State offer this year to local authorities such as the London borough of Havering, which receive a perversely low settlement under the current system? What help can he offer the council tax payers who suffered the third highest increase in the country last year—12.5 per cent.—and who face a possible increase this year of more than 20 per cent? Why is he not receiving any delegations this year?

As for Havering, on any judgment the settlement announced last week is obviously generous. The local council in Havering will have to explain why it is even considering a council tax increase at the suggested level. Given the funding that is being made available and, indeed, the additional funds that may be made available as a result of the abolition of the council tax benefit subsidy limitation scheme—which will benefit a number of local councils—the council needs to consider the level of council tax increase that it should be setting. There is no good reason for that proposed increase, as we have made clear.

On receiving representations, we are adopting the same policies as successive Governments—Conservative as well as Labour.

I warmly welcome my right hon. Friend's statement and the White Paper. My right hon. Friend is aware that, back in 1990 with the introduction of the poll tax, my local authority was one of those that were capped—mainly owing to the standard spending assessments. Can he confirm that a new formula will be in place for next year to do away with the SSAs, which have been the blight of local government since 1990? Can he also give some indication of what will be in the new formula to take into account the needs of local authorities?

My hon. Friend has been a powerful advocate for change in the SSA regime. From his experience in his local authority, he knows of the regime's detrimental effect. The mechanism was not designed to reflect the needs of local communities or the degree of service being provided; it had nothing whatever to do with those objectives.

I can confirm that the SSA regime will be abolished—this will be the final year in which it will be used. A new formula will be in place to take effect from April 2003. It will be my intention that the new grant mechanism will reflect service needs and also the level of provision in local authority areas. I hope that, as a result of pressure from authorities such as that of my hon. Friend, there will be real benefits from the changes that might be introduced.

However, I have to give a few words of caution. My worry is that everybody seems to believe that their local authority will be a winner as a result of the formula changes. That will not be the case. The nature of any change of system means that some people will gain while some do not. We shall have to wait to see what the position is for individual authorities, but I am sure that we shall be able to target funds to areas that need them most.

I doubt that the Secretary of State has yet had an opportunity to read yesterday's Leicester Mercury . If he had done so, he would have read in the political commentary, under the headline "An idea that's best forgotten":

"There may be lots of brilliant reasons for regional government but the public has not heard of any. Perhaps, like that old fondue set from the 1970s, the Government should put regional assemblies back in the cupboard."

Will the Secretary of State clarify the answer that he gave my right hon. Friend the Member for North-West Hampshire (Sir G. Young)? What is the Government's policy on regional assemblies, which were so proudly trumpeted four years ago in a White Paper issued in 1997?

I am afraid that I shall have to repeat the comment that I made earlier: there will be a White Paper in the new year on the whole question of elected regional assemblies. I reaffirm the point that there will be no imposition of regional assemblies on any region that does not want them—it will be left for local people to decide.

We are giving local people the choice as to whether they want an elected regional assembly. That will be welcomed by many people.

We should not be scared to hold the debate about elected regional assemblies. Certainly, there may be people in the east midlands—including those on the Leicester Mercury —who do not support such assemblies. Good, let us hold the debate. In most parts of the world, there is strong regional government and we should think about whether that is right for England. At least let us hold the debate—we should not be scared of that—and let local people decide. That is how it should be done. There will be a White Paper in the new year, and people can then make up their own minds.

I congratulate my hon. Friend on his extraordinary announcement this afternoon. However, it is difficult to engage our constituents in debate about local democracy when they are trying to unpick the funding formula—never a debating point on the doorstep. When my right hon. Friend replaces the SSAs and is looking for areas of genuine need, will he ensure that his assessment is open, transparent and fair, and that it measures poverty according to genuine poverty indicators—unlike some of the nonsense that we experienced during the 18 Tory years? Will he also ensure that it is fluid enough for genuine local democracy to reflect the needs of rural areas where there are isolated pockets of poverty, so that we can really address those needs? Perhaps then people will have some confidence in the outcomes of local government.

We all know the way in which the SSA formula was manipulated by Conservative Members when they were in government to reward some of their favourite councils—[HON. MEMBERS: "No."] We all know that that is what happened; the figures are there for everyone to see. Conservative Members know that that is the case. My hon. Friend is absolutely right that we have to ensure that the replacement for the SSA regime is fair, open, just and transparent. We shall do precisely that. Most important, the replacement will need to reflect the demands that are made on a local authority service. If there are high levels of poverty and unemployment, or sparsity issues in rural areas, those matters will have to be taken into account when we consider the new formula that will take effect from April 2003.

I assure the House that we shall consult widely on the replacement formula. Above everything else, we shall ensure that people can understand it, and that they know that the system is not fixed in any way, but responds to the needs of a local authority area and reflects the service level being provided.

As one of those on the Conservative Benches who spent some time in local government before being elected to this place, I ask the Secretary of State to accept that many Opposition Members appreciate the valuable democratic role played by local government whether it is at the parish, town, district or county level. Local government, to be successful, needs to be local. Does the right hon. Gentleman accept that, to meet the criteria that he has rightly set out in his statement today, funding will—as the hon. Member for Colne Valley (Kali Mountford) said—have to be fair? Although the Government did not expect It, my own Macclesfield borough council has been disadvantaged because of the formula change. Will the right hon. Gentleman therefore be prepared to meet me and the chief executive of my council to discuss the problem? Funding is clearly critical to local government's success in meeting the Government standards that he has rightly announced today.

The hon. Gentleman is absolutely right that a fair funding regime is the crux of the matter. As I said earlier in relation to Wealden, the settlement raises a particular issue in relation to district councils. We are aware of that issue, and I should be more than happy to receive the information on Macclesfield.

At a meeting?

I think that the issue goes wider than just Macclesfield, but—

Indeed, it affects a number of other councils.

The point that I am trying to make, if I may do so without being interrupted, is that there is a specific issue to do with Macclesfield. I should of course be more than willing to receive that detailed information. However, there is also a wider issue to do with borough councils which we have to address and we are considering it. I hope that we shall be able to give the hon. Member for Macclesfield (Mr. Winterton) some reassurance about our intentions on that matter.

Having spent my adult life in local government, I ask the Secretary of State to forgive me for not waving my Order Paper when he finished his statement. Does he acknowledge that, behind the smokescreen of past bonfires of controls, previous Governments were frantically fabricating further controls on local authorities? Is he confident that this is indeed a bright new dawn for local government? Will he consider the position in shire districts—particularly as that position is spelled out in my own early-day motion 351—whose funding regimes, as announced last week, have actually experienced a move backwards? Is he confident that the new scheme will, as the hon. Member for Macclesfield (Mr. Winterton) questioned, provide more generously? I share the hon. Gentleman's concerns.

My hon. Friend makes an important point about the need to be eternally vigilant on controls. We have to do that. Today's announcement will make possible a big improvement by reducing the number of plans by more than a third, reducing the number of consents by more than 50 and reviewing another 30 of the consents. However, there will always be further pressure to add new plans and new regulations. As I said, we have to be vigilant to ensure that we do not give in to those particular pressures.

As I acknowledged, we are aware from the consultation process that an issue has arisen from the settlement. We are considering how we can overcome the difficulties that have been caused to a number of shire districts. I am confident that, as a result of consultation and current discussions, we shall be able to make proposals that will ensure that councils do not go backwards, but benefit from the improvements.

Some have gone backwards.

Let us be clear that we are now in consultation. The announcement last week was not the final one but part of the consultation process, and many people are expressing their views. If consultation exposes difficulties, we can reflect on them and have a different outcome if we feel it appropriate to do so. In this case, we are likely to be able to respond positively to the concerns expressed.

Does the right hon. Gentleman appreciate that there will be a warm welcome for the removal of capital controls, but some disappointment that he cannot be more explicit about what he intends to do to replace the standard spending assessment? In that respect, can he give a commitment that the iniquitous area cost adjustment is as dead as the standard spending assessment?

Secondly, will he reduce the gross disparities in funding between areas? For example, the funding per pupil in our schools cannot be based on any sensible assessment at the moment.

Finally, can the right hon. Gentleman confirm that the new system, whatever it may be, will reflect the real expenditure within local authorities, and take into account the fact that some, like my own in Somerset, have spent massively above the education and social services SSA year after year because of their belief that those services are important and need adequate funding?

It would be foolish to rule out particular aspects of the formula. It is too soon to say whether there will be something like the area cost adjustment. There is a genuine issue about levels of pupil funding. My right hon. Friend the Secretary of State for Education and Skills is looking carefully at how we can improve the position. There has been a dramatic increase in the amount of funding per pupil that we have put in over recent years, and I have no doubt that she will want to continue that.

In terms of the new formula, it is important to consider the level of service provided by the local authority. I do not like the sort of system that we have at present, under which the standard spending assessment bears no relation to the level of spend on particular services in an individual authority such as Somerset. If we are allocating money, we should do so on the basis of the level of service provided by an individual local authority. I am confident that that will be part of the make-up of the new grant regime.

Does my right hon. Friend agree that it is crucial that the locally raised portion of local government finance is seen to be fair and adequate? Will he look again at whether the business rate should be determined locally rather than nationally? Does he agree that, in the absence of regular revaluations, the council tax will be seen as increasingly unfair and that, because of the multiplier, many people see it as unfair in any case? There are not enough bands to ensure that people in very low-value properties feel that they are paying a fair whack through the council tax. Will my right hon. Friend consider that issue as well?

We have no proposals to change the existing business rate arrangements. The White Paper outlines the proposition of business improvement districts, which the House has been informed of before, and goes into some detail about how we want to carry forward that initiative.

We have announced that there will be a revaluation, and the aim is to introduce it with effect from 2007. There is a genuine issue about low-value properties and the extent to which the system is seen as unfair. We indicate in the White Paper that there may be opportunities to look in detail at ways of dealing with that. As my hon. Friend knows, there are a number of properties of lower value in the north-west of England. People believe that it is unfair that there is no distinction between the levels in band A, and we may wish to consider that. I accept my hon. Friend's points; we need to ensure that people regard the council tax as fair, and I know that there are reservations about that.

May I tell the Secretary of State that today's announcement of the reform of local government financing will be welcome in Worcestershire, so long as he takes into account the statements about fairness, about which we have heard so much this afternoon? He will be aware that last week's local government settlement did not go down well in Worcestershire because, once again, the gap between the funding for children in Worcestershire's schools and the English local authority average increased even further. At the moment, about £250 less is spent on the schooling of children in Worcestershire than the average for all English local authorities, and that gap grew again by £17 in the secondary school sector. The right hon. Gentleman will also be aware that the head teachers forum is proposing to take the Government to the European court on the issue of fairness, so can I take a message back to the forum to the effect that, far from growing wider, the gap will at the very least start to diminish under his new arrangements?

The local government settlement announced last week shows that Worcestershire received an increase well above the rate of inflation. Many people would regard that as a reasonable settlement in the circumstances, but, obviously, the head teachers there will need to take whatever steps they feel are appropriate. I hope that, beyond 2003, the new funding formula will be fair, just and transparent and that the head teachers and parents of Worcestershire will be able to see that such a scheme is put in place. I have to tell the hon. Lady that one of the reasons why they have been discriminated against over the years is that the Conservative funding formula in place since 1990 has led to an appalling settlement for Worcestershire. I am pleased that Worcestershire has had an increase well above the rate of inflation this year.

I congratulate my right hon. Friend and the whole team on this afternoon's statement, which represents a fundamental shift in the relationship between local and central Government, dismantling the command system that the Conservative party built up, year on year, during its time in office. It does not simply represent a bonfire of regulations; it represents a bonfire of the vanities—the vanity which says that Westminster knows best and that Whitehall can devise one system that fits all. Will my right hon. Friend confirm that the White Paper builds on the Local Government Act 2000, under which local authorities are allowed to serve their communities better? I particularly welcome the abolition of the council tax benefit subsidy limitation scheme, which hits poorer communities such as mine disproportionately. Will my right hon. Friend confirm that that scheme will be abolished in 2002–03?

The White Paper builds on the steps that were taken in the previous Parliament, during which we considered the constitution of local authorities. In the current White Paper, we consider the level of service and the relationship between local and central Government, and we shall try to put it on a totally new footing which respects the important role that local government can play. I knew that my proposals on the abolition of the council tax benefit subsidy limitation scheme would be welcomed in Wigan, because I attended a meeting there about six weeks ago at which I was told in the clearest possible terms that one of the positive things that we could do in the White Paper was to propose the abolition of the scheme. My hon. Friend strongly supported that proposal. I am delighted that we have been able to deliver on the Wigan recommendations. Yes, I can confirm that that proposal will be introduced with effect from April 2002.

The Secretary of State mentioned that there were particular problems and issues relating to shire district councils, and he was certainly correct in that respect. He also prayed the Local Government Association in aid in support of his proposals. Will he therefore explain to the House why the LGA is in serious dispute with his Department about the way in which it expressed the funding increases for shire district councils in his related statement only last week?

The position is very clear. I was specifically referring to the joint partnership approach whereby the priorities for local government are identified jointly between central and local government. There is no big dispute about the presentation of the figures in the settlement announced last week. An issue has arisen through the consultation process and, as I have mentioned before, the situation is clear. We are considering the issue in the light of representations that have been made and I hope to be able to respond positively. That is what happens during consultation. There would have been a real issue if we had just announced the final settlement last week, but we did not do that. We said, "Here are the figures, and now we will consult." An issue has arisen in relation to the districts and it is one to which I hope to be able to respond positively.

I welcome the Secretary of State's statement, especially the reforms that he is introducing to capital funding. Will he confirm that under the changes he has announced local authorities such as the London borough of Merton will be better placed to examine the contribution they can make to the financing of major community projects, such as the search in my constituency for a new home for Wimbledon football club or the need to rebuild the civic hall? That hall had to be sold off when the Tories were in office; Merton had a Tory council and the hon. Member for Maidenhead (Mrs. May), who leads for the Opposition on this issue, was a Tory councillor in Wimbledon Park ward.

Most of us know that the approach that the Conservatives took to local councils, as in many other areas, was to sell everything off. I was not aware that the hon. Member for Maidenhead (Mrs. May) was a member of Merton council at the time when it sold off its assets, but that is the nature of Conservatives in local as well as central government. Many of our crucial utilities were similarly sold off. Local councils will now have the scope to support community projects. The new capital freedoms that we intend to give will allow Merton to develop a site, perhaps in partnership with Wimbledon football club, or to make provision for a civic hall. Those flexibilities and freedoms will be available as a result of the changes that we have introduced, which did not exist under the Conservatives in government.

rose—

Order. We must move on.

On a point of order, Mr. Speaker. My point of order concerns motion 9 on the Order Paper, which was placed there only this morning. Is it in accordance with the rules of the House for the Government to place on the Order Paper a proposal that we should give them the authority, without debate or discussion, to participate in the drafting of a European arrest warrant that would entitle any other member state to arrest in the UK a citizen of our nation whom it believes to have voiced an opinion contrary to its laws? That is an important and significant undermining of our rights and freedoms, in that it would deprive our Government and courts of the right to object to extradition even if they believed it to be unfair and unreasonable.

Do you consider it is right to place on the Order Paper a proposal of that sort in a way that makes no provision for debate? If by chance it is in order, can you give me an assurance that, if the order is objected to at 10 o'clock tonight, its approval will be delayed until the House has the opportunity to vote on it tomorrow under the deferred voting procedure? I am sorry to take up the time of the House, but it is a very important point.

On a point of order, Mr. Speaker.

Order. I want to answer the hon. Member for Rochford and Southend, East (Sir T. Taylor), and my answer may assist the right hon. Gentleman. I am grateful to the hon. Gentleman for giving me notice of his point of order. I am satisfied that everything that has been done conforms with the rules relating to the consideration of such documents. I understand that the document was debated in European Standing Committee B yesterday and reported to the House in the usual manner. I can confirm that, if the motion is objected to after 10 o'clock tonight, it could give rise to a deferred Division tomorrow afternoon.

Further to that point of order, Mr. Speaker. In your ruling, you referred to a document that was debated yesterday in European Standing Committee B, which I attended. Unfortunately, that document is not the final text that will be agreed at the European Council meeting to take place shortly. Therefore, the House has not scrutinised the final form of the instrument in question. I believe that that is in breach of Standing Orders and the resolution of the House of 1998 that insists that nothing of a European legislative nature shall be agreed or passed without full scrutiny taking place first. Because we did not have the up-to-date document, such scrutiny did not take place.

The right hon. Gentleman raises a new issue. I shall consider it and get back to him and, if necessary, to the House.

Further to that point of order, Mr. Speaker.

Is it on the same matter?

Yes, I serve on the Committee.

May I point out that not only was the document that we were discussing out of date—it related to a Council meeting that took place on 31 October—but a French document exists that relates to an interim discussion that took place at the Justice and Home Affairs Council. French is a working language of the Community and, had a translation of that document been produced, it would have been entirely germane to our proceedings. It was not produced, so our proceedings essentially considered a document that was out of date. Will you bear that point in mind?

I will bear that point in mind. I give the same assurance that I gave earlier. I will look into the matter and come back to the hon. Gentleman and the right hon. Member for Wells (Mr. Heathcoat-Amory) and, if necessary, to the House.

On a point of order, Mr. Speaker. I seek to raise a point of which I have given you prior notice. It relates to the guidance that you helpfully gave the House recently on parliamentary answers. You indicated that Ministers should be as open and as helpful as possible in response to Members' queries.

As an example, I draw your attention to an answer that I received from the Leader of the House yesterday when I asked him if he could list the orders made through the Privy Council under the royal prerogative in each year from 1997 to date. He said that the information could be provided only at disproportionate cost, but an answer to an identical question tabled on 3 March 1993 at column 203 listed all the orders in full detail.

I tabled another question to the Department for Transport, Local Government and the Regions about flights carrying radioactive material, and that was met with the answer:

Sadly, it seems that Ministers are not paying attention to your guidance and are being less helpful. I will, of course, draw the matter to the attention of the Public Administration Committee, but would be grateful if you would issue further advice to Ministers to inform them that they should listen to what you have said and ensure that questions are properly answered.

The hon. Gentleman has answered his question himself. He can go to the Public Administration Committee if he so wishes. He referred to individual questions and replies, but I cannot give a ruling on them. He can pursue the matter and, if he studies my rulings, he will see that I have provided more than one piece of advice on the subject.

On a point of order, Mr. Speaker. There is a great deal of confusion about the possibility of further troop deployments to Afghanistan. This morning's Washington Post reported:

"Britain has agreed to lead an international peacekeeping force in Afghanistan for up to six months".

That fact seems to have been confirmed by the Prime Minister who said this afternoon:

"We have indicated in principle a willingness to play a leading role in any UN-mandated force to provide stability in Afghanistan."

Have you, Mr. Speaker, received any indication that the Government are likely to make a statement on that matter in fulfilment of the Prime Minister's assurances that the House would be informed first about changes and developments in Government policy.

I have not received such an indication, but the hon. Gentleman is right to say that news of this nature should come to the House first and I hope that it will.

Further to that point of order, Mr. Speaker. You probably heard about this matter on the "Today" programme this morning. A BBC report says:

Is it not extraordinary that the Prime Minister is now saying that the Government will carry out that policy, thus implying that that was not previously the case? Even though Ministers frequently said that this place received information first, it did not. Could you, Mr. Speaker, meet the Prime Minister or someone from the Cabinet Office to determine when the policy will be instigated.

If the hon. Gentleman is saying that the Prime Minister failed previously and has now made a statement to say that he has changed his mind, then a sinner has repented. We should all rejoice in that.

On a point of order, Mr. Speaker. You will recall that during Health questions, my hon. Friend the Member for Gosport (Mr. Viggers) asked about the recruitment of HIV-positive people as nurses in the NHS. It was clear from the response of the Minister of State, Department of Health, the hon. Member for Redditch (Jacqui Smith), that she had no idea, which is understandable, that my hon. Friend had received a written answer confirming that that was happening. However, she went on to criticise my hon. Friend for raising what is a serious issue. She suggested that he was stigmatising people with AIDS and that it was unhelpful to raise the issue in the House. If hon. Members are not supposed to raise questions of such a serious nature in the House of Commons with Health Ministers, where are they supposed to raise them.

The hon. Member for Gosport (Mr. Viggers) was able to raise the matter with the Minister. I allowed him to do so. That will always be the case for hon. Members. The Minister's response is not, however, a matter for me.

I beg to move,

My experience was of the Carlton club where I had been part of a campaign to remedy that injustice. On two separate occasions, the club narrowly missed the opportunity to move itself into the modern world. In the summer of 1999, I raised the issue again at the club's annual meeting. I was greeted with derision. After the meeting, otherwise intelligent men told me that I should have been asked to resign on the spot for having the audacity to ask the committee to reconsider its decision. I gave the club six months to re-address the issue, otherwise I could no long remain a member.

As a constituency Member of Parliament, I know that 52 per cent. of my electorate are women. As a Conservative Member of Parliament, whose party has been led by a woman and was home to the first woman MP to sit in the House, I find such discrimination intolerable.

Although others before and since have resigned from the Carlton, on this issue the club would not budge, so in November 1999 I resigned. In December that year, I drew No. 11 in the private Members' ballot. If I could not change the rules of the Carlton club, at least I could try to change the law. I was not in a high enough position to secure a decent Second Reading, but I was close enough to give my Bill an airing, if only for 32 seconds. It was, of course, blocked through the good offices of the Government Whip, but not before the full magnitude of the issue had been revealed.

It was not only the gentlemen's clubs of St. James's that practised this outdated form of discrimination. They were small fry; there were bigger offenders among the working men's clubs of the north, mostly Labour clubs, but some Conservative clubs too. However, their prejudice was generally born out of ignorance. The real villains of the piece were the golf clubs. Here a strict commercial logic prevailed, but one that was based in a bygone age and on a pattern of life that had last existed in the 1950s.

Here the ladies were obliged to play golf on weekdays, before the man of the house was home from the office. The gentlemen could not be expected to give way to the ladies on Saturdays and Sundays: the attitude was, "Goddam it man, any self-respecting gel should be at home cooking lunch or looking after the children on a Saturday morning." Those clubs honestly believed that while men had work to do during the week, women were at leisure or shopping. It was as if no working woman, with a career or business interests, would be the sort of woman they wanted in their club, on their greens or in their bar. Oh, how the world has changed! It appears that when the Sex Discrimination Act was passed in 1975, those arguments could still be justified. A quarter of a century later, they are totally unacceptable.

I am grateful for the support that I received when I last rehearsed these arguments in support of my first Sex Discrimination (Amendment) Bill, and for my wife's sterling work in drafting and in corralling support. I am grateful to the Fawcett Society for its support, and most particularly, to colleagues in all parties and in both Houses for their encouragement. A number of my colleagues have followed me and resigned from the Carlton club, but this issue goes so much further than a parochial spat. It is no longer acceptable that an institution can offer its membership and facilities to men and women and then say that one sex can be admitted only on inferior terms. We would be outraged if they did so on the grounds of race, religion or disability.

I have no argument with single-sex clubs. I see little attraction in them, but they seem to do no one any harm. I acknowledge the physical difference between men and women, and therefore have no problem with sporting events confined to either sex. The purpose of this Bill is to right the omissions of an earlier Act, introduced in another era. It is no longer right nor just for a woman to be offered inferior membership and facilities by any club, merely on the grounds of her gender. It is plainly wrong, offensive and outdated, and I ask the House to permit the Bill to be read a Second time.

Question put and agreed to.

Bill ordered to be brought in by Mr. Robert Walter, Mr. Anthony Steen, Joan Ruddock, Mr. John Burnett, Mr. David Curry and Mr. Derek Wyatt.

Sex Discrimination (Amendment)

Mr. Robert Walter accordingly presented a Bill to amend the Sex Discrimination Act 1975; to make provision with respect to discrimination concerning the provision of goods, facilities, services and access to governance by private member clubs; and to continue to permit wholly single-sex clubs and sporting events: And the same was read the First time; and ordered to be read a Second time on Friday 15 March, and to be printed [Bill 66].

I thank the House for the opportunity to debate so soon after its presentation to the House the first report produced by the Select Committee on Culture, Media and Sport in this Parliament. I thank all my hon. Friends on the Select Committee, meaning Members on both sides of the House who are Committee members, for their work on the report and the fact that it was unanimous, as has been the case with almost all our reports. I should like to take the opportunity to pay tribute to a former Select Committee member, David Faber, the former Member for Westbury, whom we miss on the Committee and who contributed remarkable knowledge and expertise, particularly to our consideration of the subject that we are debating this afternoon.

The report, "Unpicking the Lock: the World Athletics Championships in the UK", is the fourth in a series of reports published by the Select Committee in the past three years. Our first report was published in May 1999; the second in March 2000; the third in March 2001; and the most recent, which we are looking at this afternoon, was published last month. As we said at the start of the report, it threads its way through a "sorry and convoluted" saga and assigns responsibility for what it calls a "mess". I wish to make it clear that both the main parties in the House of Commons have responsibility for that. Under the previous Government, the English Sports Council which, for a reason that escapes me, now calls itself Sport England, launched a competition and assigned £120,000 in lottery money, with which we deal in detail in our report.

The process and the mistakes began under the previous Government and, to the Committee's regret, continued under the present Government. We assign responsibility for the mistakes to a number of participants in the saga, including the Department for Culture, Media and Sport which, in the Committee's view, involved itself beyond its locus and vires in decisions, first, on the national stadium, then in attempted decisions on an athletics stadium that the Government were never going to finance and for the building of which they had no responsibility. The Department then involved itself in a compensation deal—the repayment of £20 million of the £120 million advanced under the lottery funding agreement—which was in no way the Government's business, then championed a new stadium at Picketts Lock, without saying where the funding would come from or how the infrastructure would be provided.

Our report assigns responsibility to Sport England, which handed out £120 million to the Football Association for a stadium which, purportedly, was to be built at Wembley. However, planning permission for that stadium had not even been sought. Today, I have received a 40-page document from a well known member of the dramatis personae in these events, Mr. Ken Bates. He has provided me with a document entitled "Wembley National Stadium: A Project Overview 1998-July 2001", which was compiled by Mr. Bob Stubbs, the former chief executive of Wembley National Stadium Ltd.

I shall not quote from the document at length, as I do not believe that it would be fair to do so. Mr. Bates makes a robust case, but it is conceivable, on past experience, that that case might be challenged by others. However, the document is important, and what is clear from it and, I believe, cannot be challenged is what Mr. Bates or Mr. Stubbs states at the beginning, under the heading "Project Genesis":

On page 11 of the document, Mr. Bates or Mr. Stubbs states:

It is indisputable that after the money had been assigned to Wembley stadium, Sport England watched supinely as the then Secretary of State came to a deal with the Football Association for the repayment of £20 million of the lottery money—a deal which violated the lottery funding agreement. The details of the lottery funding agreement are examined in our report and in the new document provided by Mr. Bates. Sport England made no public protest of any kind and no objection to the deal, which invaded its own responsibilities. It watched the FA flout the deal and the lottery funding agreement, and did nothing whatever about it.

Although the report that we have published is, in general, supportive of the actions of the current Secretary of State, it must be said that with regard to the refunding of the £20 million, Mr. Patrick Carter is apparently involved in negotiations, although he has no legal vires to be involved in the matter, either.

The Football Association took the £120 million. It made no positive move to build the stadium, which had become its responsibility. It did not tell the Secretary of State that building the stadium or cancelling the stadium was its responsibility in consequence of the lottery funding agreement, and was not within the remit of the Secretary of State. However, what the FA has done and shows every sign of continuing to do is to hold on to the £120 million lottery grant, as if it were stuck to it like flypaper.

Buzzing around the mess like flies was a host of bodies, hardly any of which had any money, power or responsibility, but all of which demanded to be listened to and, heaven help us, were listened to. That added to the complications and contributed to what I do not like to call, but what can only be called, the fiasco that we are examining this afternoon. In addition to the Department for Culture, Media and Sport, Sport England, the FA and its offshoot, Wembley National Stadium Ltd., we know that the British Olympic Association, UK Athletics, Ellerbe Becket architects, UK Sport, the Lee Valley regional park authority, the council of the London borough of Enfield, the Government Office for London, the Greater London Authority, Transport for London, London 2005 and the Wembley taskforce were involved in this series of bizarre events. Uncle Tom Cobbleigh may have been absent, but Fred Karno was definitely on parade.

The process of building the stadium—or, as it turns out, the process of not building it—if it can be dignified with the epithet "process", was aimed at providing either one stadium that would house football and athletics, or two stadiums, one for football and the other for athletics. The objective for one or both was to stage the world cup and the world athletics championships of 2005, and potentially the Olympic games if a bid was made. However, we have ended up with no stadium, rather than one or perhaps two, no world cup and no world athletics championships in this country. To date, according to criteria advanced by the British Olympic Association, from which I received a visit only a few days ago, there is no basis for making an Olympic bid. Meanwhile, the city of Paris has a stadium that staged the 1998 world cup final and was the venue for the 1999 rugby union world cup. It will also be the venue for the 2003 world athletics championships and is suitable for staging the Olympic games.

With regard to our not hosting the world athletics championships, I should mention a statement published today in the Financial Times . It was made by Lamine Diack, president of the International Association of Athletics Federations. The accuracy of the statement may be challenged, but whether it is accurate or not, it displays the view of that association on the miasma with which it was faced in considering the allocation of the games. Mr. Diack said that it was faced with the prospect of hosting the world championships

Does the right hon. Gentleman agree that the situation is even worse than that? Wembley stadium was rejected because the sightlines were thought inappropriate for Olympic athletics events. Is he aware, however, that the very same platform that was to be provided for Wembley stadium is now being purchased in the United States, and that the International Olympic Committee has said that the sightlines are ideal and that there will be no bar on holding any Olympic event in the American stadiums?

I am only too aware of what the hon. Gentleman says. The world-class expert on sightlines is Mr. David Faber, who enlightened the Culture, Media and Sport Committee a great deal during our discussions.

The Select Committee has the right to hold firm views on these matters. There is no point in being modest about the fact that we have been right on the main issues from the beginning. On the purported athletics stadium at Picketts Lock, the Committee gave detailed reasons against the project on the basis of six challenges, all of which were vindicated by Patrick Carter's report and have been accepted by the current Secretary of State. If we had been heeded, between our two reports, 15 months would not have been wasted on consideration of a venue to which only one person doggedly adheres today. All the reasons that we advanced have since been accepted as valid and accurate. As I said, they have been fully accepted by my right hon. Friend the Secretary of State.

On Wembley stadium, as the hon. Member for Lichfield (Michael Fabricant) indicated, we recommended a convertible stadium capable of housing both football and athletics. That recommendation in our report was rejected instantly by the then Secretary of State, but is now recognised as an appropriate solution by all knowledgeable authorities.

Given that hosting athletics at Wembley has been rejected not once, but twice, by Wembley National Stadium Ltd., and if we agree with reports published in The Observer and other newspapers at the weekend stating that if the stadium now goes ahead, it is unlikely to include athletics, why do the Committee and its Chairman believe that athletics will occur there in future?

To say that I had confidence about anything that is related to this issue would be to exaggerate my strength of character. None the less, it must be accepted that many of the organisations that are now involved in the matter believe that a convertible Wembley is the solution. What must be said—my hon. Friend is certainly right on this point—is that there is no possibility whatever of it being available for the 2005 world athletics championships. Nobody would argue with that. As I said, the Committee recommended a convertible Wembley stadium and the proposal was rejected instantly by the then Secretary of State. It is now accepted by knowledgeable authorities. If we had been heeded and the project had proceeded, London would now be all set to host the 2005 world athletics championships, which have instead been lost to this country.

It would be easy but futile for the Committee simply to play the game of saying, "I told you so." All of us, in the Committee, the House and sporting organisations, must draw what lessons we can from this debacle. Lesson one is for the FA. It is to say, "Don't be greedy, but be efficient. If you want a stadium, raise the money and get planning permission. Don't hold out the begging bowl for public money; get on and build it. If politicians try to interfere, tell them to keep their prying noses out and their meddling hands off." If that sounds phantasmagoric, I advise hon. Members to look at today's newspapers and consider what happened yesterday with regard to the new Arsenal stadium. Arsenal decided that it wanted to build the stadium and found ways of raising money. It did not ask for a penny of public or lottery money. It got planning permission yesterday and will now go ahead with a project that will not only result in a shining new stadium, but be a factor in urban regeneration in the area. That is a model of what can be done and what the FA could have done if it had been so minded.

The second lesson is for Sport England. I say to that body, "The lottery money that you dispense is not your pocket money to spend on impulse purchases. It is a public trust, which you have violated by being, in the words of our report, 'slack and negligent', and by what we describe in restrained language as a 'cavalier and egregious use of public funds'." Last week, in the Select Committee's current inquiry into swimming, Sport England stated that it had devoted £220 million of lottery funding to swimming throughout England in the five years from 1997 to September 2001. Swimming faces a funding crisis. Sport England provided it with an average of £45 million a year, compared with £120 million for a Wembley stadium, which is still on the drawing board according to the most optimistic assessment. I stress that point to my hon. Friend the Member for Edmonton (Mr. Love).

Sport England should have acted long ago to prise the money from the rich Football Association's greedy fingers. If the FA makes a new decision to build a Wembley stadium, it should have to undergo the whole process of bidding for lottery money again because the project would not be the same as that for which it received the money.

Lesson three is for the Government. I am pleased that my right hon. Friend the Secretary of State for Culture, Media and Sport is present. However, I tell her that if she wants to build a national stadium, she should draw up the plans, determine its uses, decide on the site, obtain the money and get on with it. If she does not intend to do all that, I tell her with the utmost courtesy to keep out and shut up; it is none of her business. Governments of both parties have poor records as building contractors, from the British Library, which took 30 years to build, to the subject of today's debate. I should be happy if my hon. Friends on the Front Bench got on with work on the national health service, education and law and order and left building to contractors and project managers.

In the Select Committee's view, my right hon. Friend has made the right hands-off decisions so far. She has disentangled herself from the tar baby that constitutes the project. I hope that it is not true, but I read in the press that she may get involved in a new process and even launch a competition. She knows the regard in which I hold her, and I tell her that she would be crazy to do that. Having got out of one mess, it would be a serious error to get into another.

Lesson four is for my right hon. Friend the Prime Minister. This country has come to grief over a series of events. They include the millennium dome, for which both parties bear responsibility; the world cup bid; and the world athletics championships bid. There has never been a co-ordinated policy under Governments of either party, and there is no such policy on the Olympics. The only exception is the Commonwealth games because my right hon. Friend the Prime Minister acted on the recommendation of the Select Committee report in May 1999 to appoint a Minister to co-ordinate and progress them. Consequently, a structure exists that can make the Commonwealth games a success.

The May 1999 report recommended the same approach, including appointing a Minister of events for Wembley. However, we were ignored. We made the recommendation again in the report that we published in March 2000 on Wembley national stadium. Again, we were ignored, and the shambles that we are considering today ensued.

The new report also recommends that the Prime Minister appoint an events Minister. I hope that, in view of the series of sagas, he will listen and act. Otherwise, it would be sensible to abandon pretensions to staging complex events in this country. If we do not have the structure, we should not make the effort.

My right hon. Friend and Chairman of the Select Committee has been a little coy in his remarks so far. I recall that the Select Committee and the report was somewhat more critical of the former Secretary of State for Culture, Media and Sport over the decision to pull the rug from under a Wembley stadium that would have included athletics. If that fundamental decision had not been made, we would not be worried about £120 million and the refund, or the lack of venue for the world athletics championships. Perhaps my right hon. Friend will tell hon. Members a little more of what we said about that.

My hon. Friend is well aware of the report's contents because she participated in drafting it and the personal references that it makes. Perhaps if she catches your eye, Mr. Deputy Speaker, she can amplify her comments and quote from the report more fully. However, I am conscious that our time is limited and I do not want to take up too much of that of other hon. Members, who I am sure have useful and interesting comments to make.

Last week, representatives of international swimming, such as Anita Lonsborough, Sharon Davies and Duncan Goodhew, attended the Select Committee meeting. We have also met many other athletes during our inquiries. This country has the talent and our sports people have the commitment to make it an illustrious world centre. If the episode that the report considers means that a salutary lesson has been learned, it may not have been in vain.

5.26 pm

I welcome the opportunity to debate such important matters this afternoon and to consider the Select Committee's excellent report, which was described in characteristic style by the Chairman.

The background to the debate is the failure of the Department for Culture, Media and Sport to provide a long-term strategy for sport in this country. The Government's withdrawal of Picketts Lock as the venue for the world athletics championships should not have come as a surprise to anyone who has studied the Department's performance in recent years. It merely represents another missed opportunity for British sport.

The first aspect to note about the handling of the bid for the world athletics championships is the damage that it has done, not only to the Government and their Ministers, past and present, but to this country's sporting future. The United Kingdom's failure to recognise sport and make it an integral part of the country's culture, health and social fabric is laying waste all sorts of opportunities to promote sport and fitness in this country.

Our failure to provide a venue in London, thereby sacrificing the 2005 championships, was not only embarrassing for Ministers but harmful to many others. It has almost certainly jeopardised any bids that this country makes in the foreseeable future. The world athletics championships are the third biggest sporting event in the world. London would have hosted 3,000 athletes and officials, and the event would have been broadcast across the world to an audience of millions. We should make no mistake: London is more than capable of staging such an event, given the right planning and preparation. Manchester is successfully preparing for the Commonwealth games next year. The relatively small Canadian city of Edmonton held the last world athletics championships, and Kuala Lumpur hosted the last Commonwealth games.

London is larger and more populous than both Manchester and Edmonton, and more economically successful than Kuala Lumpur when it held the Commonwealth games. It can arguably harness a bigger and more enthusiastic sporting audience than any of those cities. If London's bid had been coherent and well thought through, I have no doubt that it could have been successful.

However, if we are now an international laughing stock, judged incapable of holding the world athletics championships—the third biggest event—we have surely lost any chance of hosting the Olympics or football's world cup finals. The Department's actions have not only injured the Department itself but flattened any hopes that the British Olympic Association or the Football Association might have had of hosting either tournament.

The withdrawal of Picketts Lock has also been damaging to the country's athletes. A home venue gives athletes a competitive advantage, and the world athletics championships would have brought significant financial benefits to our sports people. However, those unique sponsorship and training opportunities have been denied to them by inept organisation and, if the report is to be believed, by deals struck in smoky kitchens.

The most fundamental problem is that the loss of the championships has robbed the country of the chance to witness something spectacular and inspirational, and robbed us too of a generation of sporting heroes. School playing fields continue to be sold off, and the two-hour mandatory minimum for school physical education is missed in three age groups out of four. Our children lead more sedentary lives than ever before, yet the opportunity has been missed to present sport in its best light—as competitive and healthy and as an inspiration.

The failure to stage an event of such importance is indicative of a greater failure to provide an overarching sports strategy for the country as a whole. On the one hand, Ministers hope that this country will be able to support Olympic and football world cup bids. On the other hand, however, they do not believe it to be Government's responsibility to co-ordinate, back or underwrite them. As recently as last week, an answer from the Minister for Sport indicated that the responsibility for such matters resided with the governing bodies of the individual sports.

The message is therefore divided: we want the events, but it is down to individual cities, regions or sports bodies to take responsibility for organising them. Surely the lesson to be learned from this fiasco is that in the future it must be central Government's responsibility to take matters by the scruff of the neck. They should decide whether serious bids are to be made and, if so, to see them through.

We have been told that the money saved from the abortive bid—it is not really money saved at all, but money lost and time wasted—will be ploughed back into athletics. Yet we are also told that the demands on Sport England must now be met from an ever-decreasing pot of resources. Our ambitions for the future must be matched with greater resources, and they will probably have to come from Government.

A decision must also be made about our priorities. Do we want high-profile world events, or should we concentrate on grass roots development? With Sport England's pot declining from £325 million a couple of years ago to a projected £180 million in 2003, we cannot, at the current rate of progress, attempt to do both.

The Minister for Sport described last week how disappointed he was that the IAAF had rejected the offer to hold the championships in Sheffield, which he said would have provided an outstanding venue for the 2005 championships. However, that invites the following question: if Sheffield was such an ideal location, why did the Department throw its weight behind an expensive but seemingly superfluous facility in London? Either Sheffield was adequate as a venue, or Picketts Lock would have been another expensive white elephant. It would have followed other white elephants such as the millennium dome, which was also the Department's responsibility, so perhaps the Department should consider establishing a zoo.

The flawed bid to hold the championships at Picketts Lock was, we are told, likely to have cost between £90 million and £120 million. That was before Carter reported on problems with transport, location and accommodation.

The hastily prepared bid to hold the championships at Sheffield—where many of the facilities already exist, and where the greatest cost would have been increasing seating capacity to 43,000, compared to 60,000 at Edmonton—would have cost about £25 million. In either case, there is no doubt that such events cannot be solely supported or underwritten by Sport England.

The chairman of Sport England, Trevor Brooking, said last week that he saw no way this country could ever bid for an Olympics or a world cup without the Government being involved directly and financially. I agree that there is no way that the most recent Olympics in Sydney could have passed off so successfully without the backing of Australia's central Government.

The stadium company is now bankrupt.

It is neither fair nor sensible that individual cities or regions—or individual sports governing bodies—should bear the sole and exclusive financial risks of hosting one of the three big multi-venue events. As the hon. Member for Sittingbourne and Sheppey (Mr. Wyatt) noted from a sedentary position, the high cost of the Olympics has affected the profitability of the stadium company, which is now bankrupt. However, no gains could have been made if the Australian Government had not been willing to accept the risk and the liability throughout the duration of the games. They will have to oversee the legacy, which—for now—is a bankrupt stadium.

It is true that some of the benefits that such tournaments bring—improved infrastructure and a wider range of facilities—accrue solely to the city that hosts the event, but there are many other aspects of holding big international events that benefit the profile and economy of the entire country. That is why it is right for central Government to adopt a hands-on approach and take responsibility for such ventures. However, what this Government have done is to make the Football Association a gift of £120 million, instead of investing the money in a national home for athletics.

That sum has gone to the country's richest sport, which reaps huge rewards and profits from television receipts. Moreover, if the report is to be believed, the terms of the deal were altered fundamentally at a private meeting in the house of the former Secretary of State, the right hon. Member for Islington, South and Finsbury (Mr. Smith), at which no appropriate civil servant was present.

I am grateful to the hon. Gentleman for giving way, as he has referred directly and inaccurately to me. A meeting did indeed take place between Mr. Ken Bates and me. A civil servant was present and took a full minute of the meeting. The record rests in the Department.

I am grateful to the right hon. Gentleman for that clarification. I do not know whether he is specifically contradicting the report's account of where the meeting took place, but I am grateful to him for commenting.

There seems to have been no viable, credible or coherent business plan in place to support the Wembley project. At the very least, we can say that Sport England should have made that a precondition for agreeing to any grant. We are not yet privy to the Carter report on Wembley, which needs to be placed in the public domain before we can arrive at absolute conclusions about this saga.

In addition, it is clear that no further money has been invested in athletics, either at its grass roots or its apex; so football has £120 million of lottery players' money gathering interest in its coffers. That money was given on the basis of fulfilling criteria that were initially flawed, later changed and recently removed altogether.

I wish to clarify one point. The £120 million is not sitting in a bank account somewhere. The scandal is that the money has been used to buy the land, which has just been left unused. That is one of the important points made by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), the Chairman of the Culture, Media and Sport Committee.

The hon. Gentleman is right, and that is shameful.

The decision to remove athletics from Wembley was, in my view, disastrous and should never have been agreed. That flawed decision set in train the sequence of events that culminated in the sad, embarrassing but probably quite correct decision to pull the plug on Picketts Lock. While Carter's report remains in the hands of his team and the FA, this House has no idea how the £120 million of good causes cash is being accounted for at the moment.

I do not know whether the hon. Gentleman has had the chance to read the transcript of the evidence given to the Select Committee, but is he aware of what the Secretary of State—who is in her place at present—told the Committee? She said that although she

"would not hold the IAAF to this",

her feeling was that

"the possibility of a non-London option was not one on which the door was firmly closed."

In other words, as late as 23 October, the Government still believed that the international athletics games would go to the Don Valley.

Had the Government had some disastrous reason to go to the IAAF in the months preceding a tournament that was supposed to have been held in London and said that, owing to an explosion or some unforeseen circumstance, they had to offer another city in London's stead, they could reasonably have expected a sympathetic hearing. However, it was over-optimistic in the extreme of them to make such an offer four years in advance of the tournament. One of the other lessons worth reflecting on is that the competition to hold the games was never exactly hot. That should have told the Government something.

As the saga has gone on, however, the goalposts have not only been moved but have been taken away along with the ball and the teams. If the FA is going to keep the £120 million of lottery money, it should also be bound to meet the terms on which the grant was originally based. If, on the other hand, the plans do not include provision for athletics—as seems to be the case—at the very least the £20 million that it seems to have been agreed should be returned must now be returned.

However, I suspect from the lack of clear answers to written parliamentary questions of late, and from looking at the weekend's press, that we can anticipate a Wembley rebuild being completed—if we are to believe what we read—by the summer of 2005, in time to hold either the FA charity shield, which normally takes place in early August, or even an England friendly game shortly before that. In other words, that would be only a month or so after the world athletics championships would have taken place in London.

The lesson that we have to draw from that is that if the Government had not spent three years dithering over what to do, who to get to do it, and how to change it all once it had been agreed, we could have had a stadium fit for athletics, football and rugby ready within the required time frame, as well as a lasting legacy for all those sports.

A moment ago, the hon. Gentleman said that the decision to remove athletics from the Wembley proposal was wrong. Is he suggesting, therefore, that the FA would have found it easier to raise the money through the City for a stadium combining athletics and football?

It is not possible to build a world-class athletics stadium that would be economically viable in its own right, because it simply would not generate sufficient gate receipts. The perfectly sensible proposal implicit in the original plan was that the FA would raise the bulk of the money for the football stadium, and that public money would be in place to graft athletics on to the project, which would be given its viability principally by having a regular football crowd in, as that is the only way to provide a sustainable revenue at the gate.

That was a perfectly viable option. Even now, it is estimated that the £14 million cost of putting in place an athletics platform and the £6 million for a warm-up track would not exceed the £20 million that was set aside to bring athletics into the equation. Now, the country has lost the world athletics championships, so we have the chance to draw breath and sort this out once and for all.

It is ironic that delay upon delay over the past three years has got us into the dreadful situation in which we now find ourselves. We have missed the boat for the 2005 championships, yet everyone suddenly wants to do everything in a great rush, even though there is no longer any time pressure on us.

Will the hon. Gentleman tell us precisely where this £6 million warm-up facility at Wembley was going to be?

The proposition to buy the entire Wembley site would probably, originally, have made such a project feasible, although clearly not as a long-term fixture or fitting. It would, however, have been possible to create such a facility in reasonable proximity to the stadium as a one-off.

The questions that we must now address are whether the terms of the initial grant to the FA have been met, whether they can be met and, if not, whether that money should be given back and, as has been suggested, the issue of support from Sport England should be revisited from scratch. This country needs an economically viable facility for holding world-class athletics meetings that could be part of a future world athletics championships or Olympic bid. Even with full backing from the Department for Culture, Media and Sport and underwriting from central Government, it is proving unlikely that two separate facilities could be built. It will be too late to consider plans for an integrated venue if we go ahead now with the football-only solution. If we do that, we shall miss the opportunity to pursue the possibility of a venue for both sports.

Since Carter has considered other venues as possibilities for siting a football stadium, he would almost certainly be the best placed person to consider the merits of those venues as sites for multi-purpose stadiums. The FA still has at least a £20 million stake in providing a multi-purpose venue—a not insubstantial sum, which would reduce the cost to itself and any other financiers.

Without a coherent plan for the provision of all sports, we will simply be talking about stadiums this time next year, at a time when the Government and their agencies should be getting on and building one.

5.45 pm