During my speech, I shall refer in a political context to my right hon. Friend the Chancellor of the Exchequer. At the outset, I want to express my deepest sympathy to him and his wife Sarah on the tragic loss of their baby. I am sure that all Members will want to express their condolences.

I thank Mr. Speaker for again granting me an adjournment debate on the important matter of London Underground. I initiated a debate on the subject on 17 October, and I shall try not to repeat what I said then despite the fact that several of my concerns remain. I have also corresponded with the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Plymouth, Devon Port (Mr. Jamieson), and I thank him for his informative and helpful letter to me of 22 November, to which I shall refer in due course.

The public-private partnership proposal continues to develop, and I should like the Minister to explain the latest situation and tell us of London Underground's investment plans. My hon. Friend the Under-Secretary rightly said on 17 October that

"London Underground is a vital national asset"—[Official Report, Westminster Hall, 17 October 2001; Vol. 372, c. 278WH.]

It is also essential for those Londoners who use it regularly and who rely upon it. Sadly, it has been starved of sufficient investment for more than two decades, and it shows.

The Government have promised big money—£13 billion over the next 15 years—and that commitment is most welcome. However, it must be regarded as a one-off chance significantly to upgrade the tube. It is unlikely that such an investment will be repeated for several decades if it is done wrongly now. It must be got right. The investment could help to create a first-rate transport system in London; but it might not have the impact necessary to prevent the present deterioration continuing. That deterioration has a high cost for passengers, business and employment, and for London's environment as the roads become more over-burdened, and for the nation's economy.

Several aspects of the Government's currently preferred method of investment remain of concern. The first is safety. In his letter to me, the Under-Secretary wrote:

"The Government has always made clear that safety is the first priority for the Underground, and that modernisation plans will only proceed when the independent Health and Safety Executive has accepted the necessary safety arrangements. Clearly that is something that must be got right."

My hon. Friend added that a decision on the current safety case was expected before Christmas, with a decision on the revised safety case, which reflects the role of the private sector infrastructure companies, being expected this financial year—that is by the beginning of April. Will the Minister give us more information about that? The question of safety is important, because the public are not yet convinced.

A report in The Independent on 7 December referred to the disclosure that safety chiefs are not expected to clear the project for its scheduled start date next year. It stated:

"The Health & Safety Executive is 'highly unlikely' to accept the revised safety proposals for the PPP in time for the 1 April deadline set by Ministers".

The main reason for the delay is London Underground's failure to compile its final so-called safety case, which covers the full handover of the system to commercial firms. The article went on to say that

"the HSE is understood to have indicated that its own assessment of London Underground's safety case would not be governed by the 1 April date."

The paper also said

"The independent safety watchdog accepted this week the latest version of safety plans for the shadow PPP structure set up for the Tube."

However, I have not seen such a report from the HSE or, indeed, the railways inspectorate, in the public domain. Will the Minister explain what those bodies have declared and arrange for their full reports to be published and placed in the public domain?

In his November letter, the Under-Secretary responded to my concerns about the Parsons Brinckerhoff report on safety management, which was prepared for the Transport Commissioner for London, Bob Kiley. The Minister said that the infrastructure companies could not

"simply change standards at will"

and that they

"must comply with the requirements of their safety case and other controls."

However, in a letter to me on 19 November, Bob Kiley stated that Parsons Brinckerhoff's

"findings made clear that the current standards are inadequate and inappropriate to serve as an effective management control mechanism in the context of privately owned infracos. With the Standards being incomplete, LU itself has acknowledged (and continues to acknowledge) that bringing them up to date could take approximately three years. This timeframe would obviously go well beyond the closing dates anticipated for the PPP contracts".

He emphasises the point, saying:

"There is no disguising the fact that the current state of the Standards do not form the safety net that PPP advocates claim them to be and whether one likes the PPP or not, they should be fixed before the contracts are finalised".

Ministers should take that serious point into account and should perhaps, even at this late stage, arrange for an urgent standards rewrite; otherwise, a potentially serious safety loophole could emerge.

In its written testimony to the Select Committee on Transport, Local Government and the Regions, Parsons Brinckerhoff recommended, first, that the standards update process be accelerated and completed in about 18 months; secondly, that a top-level suite of standards be provided that was appropriate to London Underground Ltd's need to control standards of workmanship and associated safety under PPP contracts; thirdly, that the issue of non-compliance be reviewed to ensure that the concessions process was not open to abuse; fourthly, that a single authority for all standards be set up and led by LUL, but include infracos and third parties, to maintain consistency of standards across the system; and fifthly, that PPP contracts contain owner-variation and directive rights to permit LUL to change standards when warranted by the public interest. Do the Government propose to respond to those recommendations?

I come to the question of what levels of investment should be implemented and by whom. At the Labour party conference, the Chancellor categorically said:

"we plan to invest an extra £13 billion of public funds".

That was in the context of public spending on public services. The Department for Transport, Local Government and the Regions has diluted that commitment. The Under-Secretary told me that 20 per cent. of that £13 billion would

"be provided by the private sector, with the remainder coming from London Underground fares and Government grant".

Is he saying that the Chancellor was incorrect at the Labour party conference? What does the reference to £13 billion of public funds mean? Does it mean that 20 per cent. will come from the private sector?

On fares, the Minister told me in a parliamentary answer that the value-for-money evaluation that London Underground is carrying out on PPP bids assumes that fares will do no more than keep pace with inflation, whether tube improvements are financed under PPPs or by direct government borrowing.

A value-for-money exercise is not the same as actuality. Will the Minister write to me indicating his Department's estimate of the maximum contribution of fares income to the investment programme without fares having to rise beyond inflation? The arrangements for paying the infracos from the public purse need to be clarified. Will London Underground or Transport for London have a role? Will either of them be an agent for handing over the capital to the infracos? Will they be able to hold back payments if they are dissatisfied with performance, or have any capital of their own that they can use independently for the tube?

It is known that the private sector often makes careful "accounting for profit" judgments before releasing investment money. What arrangements are proposed to avoid the investment hiccups and delays that that might cause?

I understand that, by now, the PPP contracts should have been completed and the final bids submitted, and that all these things should now be on the Minister's desk for assessment and decision. Is that so? If that is the case, can the Minister give us his first impressions of the bids and contracts? Will he explain what process the Government are adopting to ascertain whether they represent value for money or constitute an unacceptable risk? Will such an assessment consider the implications for the public sector of being committed to a specific contractor for 30 years, and what could happen at the reviews at the seven-and-a-half-year intervals? What information about the bids and contracts does the Minister think can be released into the public domain before the contracts are signed? How will the London Mayor get a look in on the process?

The Minister will know that Bob Kiley has complained about the complexity of the contracts, which involve 135 documents, many more than 2,800 pages, thousands of cross-references, close to 2 million words, and a web of hundreds of complex formulas. The performance regime, by which the Government set such great store, is not even in a single volume. It can be accessed only by extensive cross-referencing of lengthy and complex schedules, models, tables and codes. It seems to be a bureaucratic nightmare and a lawyer's dream. Worse still, it looks unworkable. Mr. Kiley has observed that the performance regime is riddled with loopholes and rife with opportunities for the infracos to play the system. They can delay being held accountable for any incident, go into protracted disputes over contracts and be paid bonuses despite service failures, as well as being tested using performance criteria that they have the ability to influence to their advantage. In some instances, those situations are worse than the current criteria. Will the Minister consider those points in his assessment of the contracts?

At Transport Questions in November 2001, the hon. Member for Brentwood and Ongar (Mr. Pickles), the Opposition spokesman, talked of £90 million of bonuses being paid to contractors regardless of whether there are any tube improvements. My right hon. Friend the Secretary of State for Transport, Local Government and the Regions told him to await the final outcome of the negotiations. If the contracts are now at the Department, a response on whether they include such gratuitous payments would be of interest.

In his letter, the Under-Secretary of State stated

"The Government's position is not simply that the private sector takes the risk but that the approach is to achieve the optimum sharing of risk".

He added:

"The risk allocation is made quite clear in the contracts."

In that case, will the Minister please explain it? Risks arising from a discriminatory change of law, terrorism or the rising water table remain with London Underground. I remind the Minister that it was a major structural problem—the Austrian tunnel collapse—that contributed to the Jubilee line extension cost overrun, and that that led to the Government's policy of paying the private sector to take on risk. Who would be responsible for a similar unforeseen major structural problem? If London Underground and the public sector would be responsible, the raison dêtre for the policy would collapse. I hope that the Minister will set out clearly and specifically who takes what risk.

Management is a crucial issue. In the debate in October, the Under-Secretary said:

"The underground needs a new way to manage investment".— [Official Report, Westminster Hall, 17 October 2001; Vol. 372, c. 280WH.]

He concluded his letter to me by stating

"LU will transfer to the control of TfL once the competitions for the modernisation of the Underground have been completed. The detailed management arrangements would then be a matter for TfL, accountable to the Mayor and GLA".

Will the Minister provide his estimated time scale for the handover? Will the infracos remain autonomous or be integrated in the overall management? If the latter, how is that envisaged? When will London Underground come under the control of Transport for London? Once the contracts were signed, what reason would there be to delay the transfer? Is there concern that because the Secretary of State sacked Bob Kiley from the London Underground board at the behest of its directors, he would sack them if he took over? Delay of a takeover would divide and damage the management of the tube. How do the Government propose to deal with the conundrum to which they have contributed? Have they discussed with the Mayor the subject of appointees running the service on behalf of the public sector?

The most important issue is that described by Bob Kiley as "management obfuscation". Is there to be an integrated system of democratic control, or a fractured one where no one has overall control and in which different, perhaps competing, policies are set by different groups of institutional managers? If the Government insist on the current form of PPP, with contracts and infracos beyond the reach or influence of the Mayor, they should address how the system can be coherently and accountably run, rather than saying that the matter is for a Mayor whom they have made powerless.

The concern is about the form of PPP, not the principle of PPP. In The Observer on 23 December, the Mayor pleaded with the Government to reinstate the rebuilding of Wembley Park station into London Underground's long-term business plan and the PPP contract, from which it was dropped. It is needed to accommodate the plans for a new national football stadium at Wembley, which he supports. A system that incorporates private sector involvement is reasonable, but it must be under full public sector control so that priorities are clearly set and achieved, there is no management division or obfuscation, and the money is properly invested and not wasted. The Government still have to provide evidence of strategic command of the problem, and to give answers to the many unresolved questions. Time is running out. In our second term in office, we must ensure that the Government deliver a first-class underground system for London.

The hon. Gentleman has made several astute technical points. His point about fares was especially pertinent, and would carry some weight with all users of the underground. Is he aware that the current level of fares exceeds projections of income from London Underground fares? The take-up of fares is declining, as are the sums that London Underground collects. Is it not critical that the Minister makes what will happen to fares clear when the PPP takes off, if it ever does so?

The Minister told me that the evaluation of PPP compared to direct Government borrowing was made on the basis that fares would not rise above inflation. Can the Minister confirm, as far as possible, that fares will not rise above inflation over the period of this investment? Our fares are among the highest for capital cities in Europe. Although the great demand for the tube persists, fares are too high.

The hon. Gentleman has considerable expertise in these matters. Having considered fare revenue, does he agree that little or no leeway is given by fare revenues for significant improvements to be made to the tube network? The income would not be sufficient even if a decision were taken to increase the level of fares above inflation.

That is a reasonable point. Fares are already very high. There is no objection to the existing income being used for the ordinary operation of the system and investment purposes, when that is possible, but Londoners would look askance at the notion that fares might rise further.

It is important that in their second term of office the Government deliver a first-class underground system for London. We must ensure that Londoners get what they want, and it is in the national interest that we have a first-class London underground.

May I associate myself with the words of condolence to the Chancellor so movingly expressed by the hon. Member for Leyton and Wanstead (Harry Cohen)? I thank him, too, for his diligence in representing the interests of his constituents and Londoners in general on the question of the future of the London underground.

It is noticeable that the hon. Gentleman is yet again isolated, being the only Labour Member present apart from the Minister and the Minister's Parliamentary Private Secretary. It would seem that the Labour party has abandoned hope for the London underground and is, rightly, ashamed of the Government's performance. The Labour party's 1997 manifesto unequivocally supported the idea of a public-private partnership, modernising the London underground system and improving the service for Londoners. The manifesto commitments have still not been honoured and in the intervening years the service has steadily deteriorated in terms of fare increases, reliability and overall service to the public.

The situation is wholly shameful, and cannot be justified in any way. The Secretary of State should have returned from India to attend the debate, because he is ultimately responsible. Of course, it is nice to see the Minister of State here; he must regard his time at the Ministry of Defence as a happy experience when compared with the woeful responsibilities that he now has to face, not least over the London underground. Clearly, however, the buck stops with the Secretary of State.

Londoners expect manifesto commitments to be honoured and expect to have a system of public transport that lives up to the standards of other systems in the world. I have just returned from Chile; the underground system in Santiago is infinitely better than London's. It is clean and reliable and the standard fare costs about a fifth of that for central London. The perpetual increases in fares above inflation are hitting living standards in the capital but are also symptomatic of a failure to deliver the integrated transport strategy that would provide a cost-effective improvement in transport for Londoners. It was the Government's strategic promise to put in place an integrated strategy under the overall political command of the Mayor. To date, neither the Mayor nor the Government have been able to deliver, and London is very much the worse for it. Business is suffering—that is the constant refrain of business organisations in London, including the London chamber of commerce. The tourist trade is also suffering. It is intolerable that visitors to our capital should have to endure the current standards of unreliability and squalor on the tube. In addition, the environmental damage to the capital is profound.

The Government's approach should have been to improve the public transport system first and then set in place road-user charges. Instead, the Mayor proposes that, from next year, Londoners will suffer the additional misery of road charges, which can only make a very unsatisfactory situation on the tube worse, as people who have previously used their cars take to the tube in ever greater numbers to exacerbate the problem of overcrowding. We have the worst of every possible world.

Today's Metro newspaper says

"Tube commuters have been hit with inflation-busting fare rises of up to 11 per cent. The revised charges, which were introduced at the weekend, included an increase in the cost of a single fare outside Zone 1 from 90p to £1 and a 7 per cent. rise for single journeys in central London, from £1.50 to £1.60."

A cost of £.1.60 to get from one tube station to another just down the line in central London is intolerable. From the outset of the mayoralty, there should have been a much more imaginative fare structure. The Mayor should have introduced early-bird and night-owl fares to encourage passengers to use the tube system outside peak hours. Such fares have not been introduced. There is a new all-day travelcard, which can be used before 9.30 am, but it costs £1.20 more than its off-peak rival.

In short, the Government's approach has been be devilled by their blinkered adhesion to the public-private partnership. The evidence is clear that the public-private partnership approach is wrong. There must be a clear political and managerial chain of command, and that can be brought about only by maintaining the London underground in the public sector or by privatising it in its entirety. Either of those courses of action would be clear and logical and would lead to the single management control that is essential if the safety standards to which the hon. Member for Leyton and Wanstead referred are to be maintained, if confidence in the system is to be enhanced and if the advantages of modernization—a more cost-effective and reliable system—are to be produced.

When will Transport for London take over London Underground? We asked that question during debates on the Greater London Authority Bill. We received no answers then and we seem to be further away from receiving any answers now. It is fair to ask why the expert brought in as Transport Commissioner for London—Mr. Kiley—has been treated so atrociously by Ministers. Mr. Kiley has spent the greater part of his career bringing into effect significant transport improvements in New York and has greatly enhanced the reliability of the underground system there. Yet all his criticisms and advice have been set aside by the Government in their petty spite and malice, which they continue to display towards the Mayor just because he happened to be directly elected by the people of London in a process that, unlike that used to select Labour's candidate for the mayoral election, was transparent and clear.

In short, the London underground is daily showing Londoners, and those who have the misfortune to visit our capital and use the system, all that is worst in new Labour. The Government are demonstrating an unwillingness to take political responsibility, an inability to fulfil manifesto promises and a tendency to put their own political interests first by trying to blame the Mayor because he has moved away politically from the Labour party. Last, but not least, the matter demonstrates the Government's inability to prove themselves trustworthy.

When manifestos are brought before the public at election time, the public have an entitlement to expect them to be carried through into action. When a Parliament elapses in which a key manifesto commitment is not met, and when we find ourselves almost a quarter of the way through the succeeding Parliament without any change on that commitment, its honouring being as remote as ever, Londoners have no alternative but to seek redress at the ballot box. It is my hope that they will do so, at least at the borough elections in May. They must do it in the mayoral elections thereafter.

In the meantime, the Government have an obligation to explain to the House, as I trust the Minister will shortly do, what on earth they are going to do to restore public confidence in their proposals. That confidence has evaporated. The Government seem to be more in thrall to the unions—if the dispute between the RMT union and South West Trains is anything to go by—and their own dogmatic ideas than to sensible policies such as those put forward by the Transport Commissioner for London, Mr. Kiley. Londoners deserve better.

I am sure that the hon. Gentleman is aware that the unions in London do not support Government policy on the PPP. We think that they are wrong about that and I will explain why in my main response. On South West Trains, the dispute is a matter for the company and the RMT union. The hon. Gentleman will have seen the comments made by the Prime Minister's official spokesman yesterday, which indicate that the Government are not in thrall to the unions. He should get out of the old rhetoric and deal in contemporary arguments.

I am grateful to the Minister for his intervention, because the arguments are all over the press and the boss of South West Trains has spelt them out in a full-page advertisement. We were led to believe that new Labour's relationship with the unions was one of amity and mutual trust—that the bad old days of the unions holding the public to ransom would be gone for good. That is clearly not the case, as the rail dispute shows.

In my constituency, as in many parts of London, it is impossible for people to commute to London by rail if there is a dispute on the tube. There are no rail stations at hand. In other parts of London, such as the south-west, the tube services are inadequate. It is crucial that there be a good relationship between London Underground and railways management and the trade unions and between the Government and the unions. That does not seem to be the case. We had thought that the bad old days had gone for good under new Labour, but they have returned with a vengeance and I am sure that the public will seek redress at the ballot box at the earliest opportunity.

I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on securing another debate on this important issue. I fill in my slips on a week-by-week basis and never seem to have any luck. I will have to get some advice on lottery numbers from the hon. Gentleman.

Often, people in politics are criticised for not using public transport. With that in mind, I display my moth-eaten annual zone 1 ticket. It is one of the disadvantages of representing my constituency that, unlike Members whose far-flung constituencies permit them large first-class allowances to go to all parts of the country, my constituency is entirely within zone 1 of the underground system.

There is little doubt that, as my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) pointed out in his excellent speech, things have got worse since 1997, and I shall explore that in a moment.

If animals were herded into carriages on the underground as human passengers are, that would be considered a national disgrace. The way in which passengers are herded into carriages, not only at the height of rush hour but often in the middle of the day, is a disgrace. I do not say that to make a narrow point, because the underground has had substantial problems for many years. However, when it works, the tube, considering the confines and difficulties that it faces, works reasonably well. It simply has insufficient capacity to do the job well, particularly in central London.

London is the economic powerhouse of the United Kingdom. It is disgraceful that there has not been sufficient investment. I am sure that the Minister will point out that the picture was not entirely rosy before 1 May 1997, but only in the early 1990s was significant investment made, as we headed into recession. The last Conservative Government were brave not to slash the budgets immediately in the period 1991 to 1993, when it might have been easy to do so.

However, there is no doubt that the London underground requires substantial investment. It needs long-term vision. There are no short-term solutions. I have been concerned for the past five years that no strategy has been put in place. There was great talk in the 1997 Labour manifesto of an integrated transport policy. However, that soundbite was simply repeated endlessly, year on year.

In London we now face—I feel strongly about this, as I represent the centre of the city—the introduction of a congestion charge within the next 13 months. It is clear that there will not be a sufficient increase in capacity on the underground or the buses to absorb the notional increases that will occur in the use of those public services if people are taken out of private cars. The policy will work only if there is a prolonged economic downturn, which will cause demand in the transport system generally to fall. That does not seem a sensible way of developing a congestion charging system that will be seen as the vanguard for similar systems throughout the United Kingdom.

What is the way forward? The hon. Member for Leyton and Wanstead made a valid point about risk being the key issue. If too much risk is transferred back to the public sector, the very raison d'être of a PPP is undermined. Politically, it is not a saleable option. Given the events since 7 October, when Railtrack was put into administration, a PPP system would not be right. Conservative Members want to see the London underground succeed, and we want to play our part in supporting the long-term investment that is the key to a successful transport system.

It is blindingly obvious that if PPP were implemented in its current form and there were a Railtrack mark 2, not only Opposition Members but powerful, high-profile trade unions and a raft of consumer and passenger bodies would argue against it. If PPP were implemented in its current form it would not work, not least because of the risk issue. Given the continuing debacle in relation to Railtrack, City investors would be willing to take a punt only if a large premium were paid in relation to risk, which would not make sense for taxpayers in the medium to long term. We must build a structure for the next three decades, but it would be a disaster if we made that decision with our sight fixed only on what has happened in the past three months.

Like many Conservative Members, I am concerned about the elected London mayor. I did not want to see a London mayor, but the people of London have spoken by electing an individual who has a long-standing commitment to and involvement in London politics. As has been pointed out, he has brought in at great expense Bob Kiley, who has a track record of success in Boston and New York. It is now incumbent on all London politicians in the House of Commons, who have little authority in this matter except in relation to strategy, to exert whatever pressure we can on the Government to ensure that Mr. Livingstone and Mr. Kiley are given the tools to get on with the job. However, I recognise the point raised by both the Treasury and the Minister's Department that the Government must set parameters if we are to hand authority to Transport for London.

The current position is difficult. It would be no use giving the Mayor full authority and enormous amounts of cash because he would have an eye on his re-election in two and a half years' time. There would be short-term, high-profile fare cuts and other gimmicks, which would return us to the mid-1980s position when he was leader of the Greater London council. We must ensure that public money put into the underground system is invested for the long term. As five years have been wasted since mid-1997, things will get worse before they get better whatever investment decisions are made now—whether a PPP is implemented or power is passed to Transport for London, which must be a temptation for the Government. Mr. Kiley has made it clear that for at least the next three to four years the nature of the long-term infrastructure project will ensure longer delays, greater safety concerns and larger areas of the network out of commission.

Many hon. Members are concerned that London has had a raw deal, which is something that has become evident in recent years, but the roots of the problem go back many years. Decision making must be diversified if devolution in London is to mean anything. We must devolve financial powers to regional representatives such as the Mayor of London, the Greater London Authority and local authorities. The Mayor of London is a high-profile figure—admittedly he has limited Powers—and we have devolved government in London. If one compares devolved government in London with that in Scotland, which has its own Parliament, it is clear that Londoners are in a difficult position. Although they have a high-profile figurehead, he has one hand—if not both hands—tied behind his back. The financial wherewithal is lacking with which to make necessary long-term investment decisions.

As my hon. Friend the Member for Ruislip-Northwood pointed out, London is, and must remain, the economic powerhouse of this country. There is a real fear that we will lose some of the international investment that has helped to ensure London's pre-eminence in the past decade and a half, particularly in respect of financial services. Our city is of global importance, but it has a third-world infrastructure, and that cannot be right.

I encourage the Minister to tell his right hon. Friend the Chancellor of the Exchequer and all those in central London who are playing a part in the matter that we must get people round the table and put in place a sensible, long-term solution. Such a solution must also be politically saleable, and for that reason alone I fear that the PPP proposal simply will not wash, because it will be seen as no more than Railtrack mark 2. Every day's delay in committing ourselves to the major investment that the London underground requires is a kick in the teeth for those unsung heroes of the economy, many of whom work in central London and depend on the tube system to travel to and from work.

I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on securing another debate on this subject, and I echo his words of condolence to the Chancellor. The hon. Gentleman is doing an excellent job in single-handedly representing Londoners in the debate on PPP and the tube. I wish that his colleagues would offer such support, although I suspect that he offers his at the expense of a future ministerial career.

I welcome these debates because they allow us to question Ministers. I shall not dwell on the history of the underground—30 years of under-investment by Conservative and Labour Administrations—which is set out in Lord Birt's report. There is no point wasting time discussing a subject that we know well, and given that the purpose of Adjournment debates is to allow hon. Members to put questions to the Minister, I hope that he will use his time to focus on those that have been asked this morning.

The hon. Member for Cities of London and Westminster (Mr. Field) made what I think was a plea for first-class carriages on the London underground. However, he also had some interesting things to say about the need to devolve financial responsibilities, and in that respect I support him entirely. Given that we have set up a Greater London Authority, with a Mayor and elected Assembly Members, it should surely take much greater financial responsibility. That is what devolved government is supposed to be about.

I am one Member who, for his sins, travels almost daily not just on the tube but by train, and I am afraid to say that the transport system is absolutely and totally pathetic. There is no other way to describe it. This morning, the trains were in complete chaos. The train that I intended to catch was supposed to arrive at 8.22, but it was running 12 minutes late. The earlier service—the 7.38—had also yet to materialise, having been delayed who knows where along the line. When I arrived at Victoria, the tube station gates were closed because of overcrowding, so no one could get on to the platforms. That, I am afraid, is the commuter's daily experience.

Belatedly, the Government are waking up to this crisis. In his new year message, the Prime Minister said:

"We are also determined in our plans to modernise the Tube, again a large and sustained increased investment to be taken forward by public-private partnership that would ensure the money is spent properly."

I am concerned that the Prime Minister seems to have prejudged the outcome of the Ernst and Young report into value for money. Is he saying that the Government are committed to the PPP whatever the conclusions in that report? Perhaps the Minister will explain how there can be a full examination of the PPP's value for money when the report was started before contracts had been finalised. We know that a lot of work was still being done on the detail of the contracts in December.

Will the report take account of the changed financial climate for private investment in transport? According to Lord Birt, the decision to put Railtrack into administration has had an impact on the financial attraction of transport for private investment. If the Ernst and Young report has not taken that into account, its validity must be questioned. The Secretary of State promised the Select Committee on Transport, Local Government and the Regions that the report would be delivered between 10 and 14 January. Can the Minister confirm that that is so?

The hon. Member for Leyton and Wanstead spoke at length, rightly, on safety, which is a matter that I took up with the Minister. I wrote to him on 7 August and received a reply dated 28 December, which may suggest how much thought he had to give to my original question. During those five months he had a long time in which to consider the issues. The letters referred to the impact of Lord Cullen's inquiry on the PPP contracts. The inquiry made a number of recommendations on maintenance contracts and changes to them. Have those recommendations been taken into account in relation to the PPP contracts? Lord Cullen's report also made a number of recommendations on accident investigations. Have those issues been taken up and worked into the PPP contracts?

Hon. Members will have read in the newspapers during the past few days that the Jubilee, Northern and Piccadilly lines may be given to Ken Livingstone to run because Tubelines' bid is too expensive. That was reported in The Independent on 4 January and The Times suggested yesterday that all the network could be handed over to Mr. Kiley. Can the Minister confirm whether that is so? It would be the best late Christmas present that Londoners have ever received. If the Government intend to give responsibility for part or all of the tube to Transport for London, will it be bound in the same way as private consortiums to specific targets? Will it be fined if it fails to reach its targets? Will it be allowed to issue bonds to finance the chunk of lines that it may be given? Will it be allowed to use congestion charges to put money into the contracts?

If the Government can already say that Tubelines' contract does not provide value for money even before contracts are signed—that is the message that is leaking into the newspapers—hon. Members may wonder how Londoners can be certain that the other contracts, if they are signed, will represent value for money in practice. The Deputy Prime Minister has promised that huge savings will arise as a result of PPP, and I have tried to get the Government to confirm that. Will the Minister do so today? Will he also confirm whether those savings will be increased or decreased if part or all of the contract to run the system is handed over to Bob Kiley and Transport for London?

A further matter that the Government have been unwilling to discuss is how much cost will have been incurred if PPP does not proceed. We know how much has been spent on consultants, but how much has been spent through the involvement of other Departments and outside bodies such as Transport for London? The figure for consultants is around £100 million. Can that figure be, say, doubled if one takes into account the time that the Government have devoted to PPP? Londoners and hon. Members are entitled to know how much has been spent on the project and how much will have to be written off if the Government pull the plug on it. If Ministers do not know, why not?

I hope that the Minister will take this opportunity to inform hon. Members about the current timetable for PPP. Many deadlines have gone past. I was told in a meeting that the Tubelines contract was due to be signed on 4 January, but that clearly has not happened. When will the contracts be signed? When will the Ernst and Young report be handed over? When will the decision on whether PPP contracts provide value for money be taken?

Does the Minister agree with Lord Birt, who said in his leaked report that a more realistic funding regime for London Underground required an adequate and predictable contribution from the public purse? I have attempted to extract from the Government exactly how much public money they are committing to London Underground over future years, but I am afraid that the figure is not forthcoming. When I approached Ernst and Young, I was told that that information was for the Government's eyes only. Will the Minister reveal the figure?

There has been so much in the newspapers recently that it is hard to know what to believe.

As my hon. Friend said, in a recent quote the Prime Minister appeared to prejudge the matter in favour of PPP, yet when the Secretary of State appeared before the Select Committee he seemed to display a genuine open mind. Is it not important that the Minister should clarify precisely who is determining transport policy—the Prime Minister, the Secretary of State or Lord Birt?

I thank my hon. Friend. I was about to come to that.

Is the Chief Secretary to the Treasury—who, when in opposition, was well known for saying, "Our air is not for sale"—lined up to take over the Secretary of State's job? Are the Government trying to bring in someone who supports PPP, as, coming from the Treasury, the Chief Secretary presumably does? Neither the Secretary of State nor the Deputy Prime Minister is terribly keen on PPP, so are the Government trying to firm up support for it in the Department?

There have been numerous debates on the subject and unfortunately many questions have, all too often, been left unanswered. As the deadline approaches, stonewalling seems to be more, rather than less, pronounced. I hope that the Minister will give some specific responses, rather than tell us how many people travel on the London underground daily. Otherwise, we will leave the debate knowing full well that Labour has let Londoners down, and that will not be forgotten.

I, too, congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on his remarkable luck in securing yet another one and a half hour debate on the London underground system. I associate the Opposition with the hon. Gentleman's kind words about the sad plight of the Chancellor of the Exchequer and his wife.

Against that background, it might seem churlish to disagree straight away with something that the hon. Gentleman said, which was that there had been under-investment in the rail for 30 years. That is not correct. As you recall, Mr. Olner, you and I served on the Select Committee that examined the tube system, and it was clear that there had been under-investment for 50 years. The only time when there was significant investment was during Mr. John Major's Administration.

My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) is right to point out that we are having yet another debate about the London underground system and yet again, with the honourable exception of the hon. Member for Leyton and Wanstead, there are no Labour Members present—the Minister is here because we called him. They have no concern about the tube. Their constituents are crying out for a solution and complaining daily about the inadequacies of the system, yet none of those hon. Members can be bothered to turn up. It is left to the Conservative party and Liberal Democrats to try to make sense of the matter.

My hon. Friend referred to travelling on the Santiago underground. I had the opportunity to travel on it a couple of years ago and can confirm that it is an efficient system. To take another extreme, the Moscow metro is run considerably better than is the London underground system. My hon. Friend the Member for Ruislip-Northwood is right to talk about the petty slights directed against Mr. Kiley, a distinguished public servant, and Mayor Livingston. My hon. Friend the Member for Cities of London and Westminster (Mr. Field), brandishing what he described as his tatty underground pass, is also right repeatedly to talk of the transfer of risk in the public-private partnership and to refer to the large premium that will have to be raised. It may be possible to raise £13 billion, but a considerable amount will be spent on premiums and interest payments. He was right to say that the situation of the London underground is a kick in the teeth for those trying to earn their living in London.

The hon. Member for Carshalton and Wallington (Mr. Brake) said we should not talk too much about how many people travel on the underground. However, it needs to be emphasised that the number of people travelling on it per day is about 3 million. That is the number of those on the rest of the railways combined, so we are talking about a significant part of our country's infrastructure. We know that 80 per cent. of people coming to work in London travel by public transport and that that figure increases to well over 90 per cent. within the City. Those good folk are travelling not because they think that the underground or other public transport is wonderful, but because no other forms of transportation are viable. In effect, they are trapped into using public transport.

I cannot think of a better way to describe the situation than what was set out in the editorial of yesterday's Evening Standard. It refers to the underground and railways, and is headed, "Blame Labour for the railways". The story is easy to spot on the page, as it is next to an article by Professor Anthony King entitled, "Why there are so many duds in Cabinet?". Despite the fact that the Minister is at the centre of the accompanying picture, I am sure that Professor King did not mean to refer to him directly. The editorial refers to the condition in which passengers travel by rail and asks:

"Is this the image New Labour wishes to be remembered for: its ministers reclining in the back of limousines while ordinary men and women travel in cattle trucks?"

That seems a most reasonable way to express the dilemma that faces the tube.

While the unseemly argument between the Government, London Transport and the Mayor continues, delays on the underground have risen sharply during the past year after an upsurge in track and signal failures. The failure rates on some lines have almost doubled. A good example is the District line, on which I frequently travel. It has roughly 600,000 users a day. Compared to the 1999 figures, track defects rose by 116 per cent. Delays of 15 minutes or more increased by 35 per cent., while investment levels have been heavily cut. The average annual investment in the tube since 1997–98 has been less than during John Major's years in office.

Transport for London, which was set up as part of the Government's commitment to devolution, has found that Labour's control freakery stifles its efforts to improve the tube. The Government even went to the High Court to suppress the Deloitte and Touche report that said that the PPP gave poor value for money.

According to the annual report of London Underground, which was published in August, seven clear performance targets were set. It is sad to say that every one was not met, including those on safety and security. Investment is not the only area in which there has been a decrease, and nor is performance. Industrial disputes have increased, and absenteeism is worse than it has been for five years. That is the backdrop against which we are considering the PPP. To be blunt, the PPP is nothing more than a glorified leasing deal that offers little or no help to passengers.

Various Members have referred to speculation in the press about whether the Mayor will be offered the Jubilee line, the Northern line or the entire network, and whether there is value for money. I shall put my neck on the line: I suspect that the stories have no truth. If they do, the Government are acting in bad faith. From other press reports, we know that intense negotiations are taking place between the various bidders, and that the Government are considering different conditions to protect them from the Mayor and Mr. Kiley. I cannot believe that we have arrived at a position in which the Government would be able to act. I suspect that the stories are about the fact that the Government said, before the election, that no one should worry and that the PPP deal would not take place. They said that they would consider ways to involve the relevant people in a much greater way and that the matter would be put off until after the borough elections, when the PPP deal would be put through.

The hon. Member for Carshalton and Wallington raised an important point about Ernst and Young. He talked about the time scale. I think that the time specified was the middle of January, but that is what the dates he gave amount to. He said that the Ernst and Young review would be made available for a period of wide-ranging consultation, after which a final decision on value for money would be taken. If that is so, we had better be given the Ernst and Young report now. If it is to be anything like the contracts, which are 2,000 pages long, it will take a little time to read it and to put something together. Is the report on the Secretary of State's desk, and when does he intend to publish it?

I was slightly confused by the remarks of the hon. Member for Carshalton and Wallington about Lord Birt's position. While the hon. Gentleman was struggling to get to this debate, I heard the Secretary of State say, on the "Today" programme, that Lord Birt was studying not the matters that the hon. Gentleman was considering, but problems of railways and transportation 15 years from now. Perhaps the Minister will tell us why Lord Birt has strayed from his mandate to examine the present contract.

I shall try to leave the Minister time to answer in full the questions that he has been asked. I have counted 27, so the first of mine, which has been asked before, is number 28. When do the Government intend to transfer London Underground to Transport for London? What rate of return do they think would be acceptable for the private infracos? That is relevant to the earlier points about value for money. What steps were advocated by Mr. Kiley to ensure that safety under the PPP has been incorporated in the proposed contracts?

We would like to know what general advice the Government have received from the Health and Safety Executive and the National Audit Office with regard to the PPP. More important, however, in the context of the question of fares raised by the hon. Member for Leyton and Wanstead, is the level of Government support through the PPP. What level of Government grant or revenue support would be invested during the period of the PPP?

It would be useful to know what efforts London Underground is making to improve its performance. It failed its operating targets. Given the fate of the Jubilee line, it would be good to know the average number of trains operating on the Jubilee line between Green Park and Stratford from January 2000 to date. What is the average number of speed restrictions that apply for longer than seven days, for the whole of the underground, for each of the past five years? I should happily accept that information in writing if the Minister does not have it now.

What Government targets were set for London Underground in 2000–01? How widely were those published, and were they met? Where is the money to pay for the current London Underground "Your Tube" advertising campaign coming from? When did London Underground last conduct an audit of its assets? When are we going to see the merger between London Underground and Transport for London?

If we had suspicions last year about a lack of direction on the part of London Underground, the troubles over the Christmas period and the new year confirmed them. The problems of the underground are many and varied. Our capital city is sinking under its core transport difficulties; and the Government seem transfixed, like a rabbit caught in a car's headlights, and unable to make a decision.

First, I congratulate my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) on securing a further debate on London Underground. Secondly, like all other hon. Members, I echo his condolences to my right hon. Friend the Chancellor of the Exchequer at this sad time.

It is self-evident that the future of transport in London, and of London Underground in particular, is of great interest to the people of London and to the many people who visit the capital or work in it. That is especially so because, as the hon. Member for Cities of London and Westminster (Mr. Field) said, London has a significant role as a world city. It is also a topic of considerable interest to hon. Members, which is demonstrated by the number of times that it is debated.

Today's debate threw up some interesting points. For example, Opposition Members expressed the wish to dissociate themselves from Railtrack and said that they did not want Railtrack mark 2—an appropriate comment on a system set up by a Conservative Government. They also dissociated themselves from public-private partnerships, but that underestimates the success of the PPP on the Northern line, where reliability and other improvements should be noted. Opposition Members have found previously undiscovered merits in the Mayor of London, which were not noticed in his previous incarnations. I am sure that he will appreciate the irony, if not the conversion.

The Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), apologises for not being able to add today to the considerable number of adjournment debates to which he has replied. In response to the previous adjournment debate initiated by my hon. Friend the Member for Leyton and Wanstead in October last year, my hon. Friend noted that far from being required to offer his commiseration, he was pleased to have an opportunity to explain the Government's plans.

My hon. Friend the Under-Secretary reminded hon. Members that the Government have invested almost £1 billion more in the tube than was planned by the last Tory Government. He explained that a new approach was needed to improve the tube's infrastructure, and to avoid the cost and time overruns of the Jubilee line extension. Hon. Members should remember that when examining the need for a new approach. My hon. Friend made it clear that our approach was not driven by dogma, but was the result of a careful examination of all the options for modernising the tube.

London Underground has been working to ensure a better service for today's passengers, but we must recognise the pressures under which it operates. It now carries 1 billion passengers a year. That is the most ever, and it represents an increase of more than 25 per cent. over the past four years. The hon. Member for Cities of London and Westminster alluded to that when he said that we could relieve the tube of some of that pressure if we had an economic downturn. Indeed, much of that pressure, particularly at rush hour, is associated with a considerable increase in economic activity. One has only to look at London's skyline, and the number of cranes, to see that. As the Mayor of London consistently points out, London has seen a sizeable increase in its population over the last decade, which is a reversal of previous trends. And, as the hon. Member for Brentwood and Ongar (Mr. Pickles) said, as many travel on the underground as on the whole of remainder of the rail network.

We recognise that the quality of service declined noticeably last winter. However, London Underground has actively been tackling the key issues that affect service quality and reliability. Measures taken by London Underground—for example, on the availability of train operators—have resulted in some improvements, but more needs to be done. The Government are keen that those achievements should be built on and that further initiatives to improve performance and customer service should be introduced.

I mentioned the considerable improvements on the Northern line. When I last checked, the figure for reliability was 98.5 per cent. under the PPP. Furthermore, peak-time train cancellations this year are the lowest on the network and, at just 1.1 per cent., the rate is half that for last year. I do not want to be complacent, but we should offer the management of London Underground some congratulation on that, although we look to it to do better.

Across the network, the problems that emerged with escalators last year have been vigorously tackled. Unplanned station closures have been reduced, and extra station staff have been brought in to help customers. There have also been considerable improvements in targeting by the British Transport police, which will make for a safer underground. Further improvements are under way, and hon. Members will have seen publicity for the modernisation of ticketing and revenue-collection systems on the underground and, incidentally, on London Transport buses, under the Prestige PFI project. Measures will include the introduction of new automatic ticketing machines to reduce queuing.

The hon. Member for Cities of London and Westminster referred to integrated transport. There has been a considerable improvement in the bus service in London, a substantial increase in the use of buses and considerable investment. We should also bear in mind the light rail systems, and I pay tribute to the previous Administration for starting the Croydon tram link system, which is extremely successful. There have been several improvements in integrated transport, and we are considering how it can be developed further. Many other initiatives are in hand, and the overriding aim is improving service to customers.

We are all aware that many of the current problems with the underground are the result of three to five decades of under-investment, although there is some argument among Opposition Members about that period. However, we all recognise that decades of under-investment have led to a deterioration in the quality of the infrastructure. Equally, we all recognise that London Underground needs a massive investment programme to bring it up to scratch and a new way to manage the work.

When did the Minister last travel on the underground during peak hours? Did he enjoy the journey?

I cannot remember when I last travelled during peak hours, although I travelled off-peak about three or four weeks ago. I used to travel on the underground and on Southern region services; indeed, I used to go to school on Southern region services. We have heard about the halcyon days of uncrowded transport in London, but there have always been difficulties with travel in London at peak hours. If anything in the system goes wrong, the problem quickly snowballs. We have identified that issue, and the hon. Member for Carshalton and Wallington (Tom Brake) referred to the need to close the gates at Victoria for a short period when there are pressures there.

I think that we all agree on the need for additional investment, and we are considering the most efficient and effective way of managing it. As I said, the Jubilee line demonstrates that London Underground can be well focused on running trains, which is its core competence. However, it has demonstrated serious deficiencies when it comes to enhancing the infrastructure and, in particular, managing all the infrastructure contracts. That is precisely why we considered the possible mechanisms to harness the skills and abilities of the private sector and introduce private capital into the London underground system.

Contrary to allegations made by Opposition Members and by some in the media, the various consortia have managed to secure the necessary finance for their proposals. That is the best way to enhance the infrastructure of London Underground. We want to ensure that the improvement works are completed on time and to budget. We want to ensure also that essential maintenance work is not overlooked and that the resources required to provide the public service are not diverted to pay for more massive cost overruns, such as those that were incurred in connection with the Jubilee line extension.

That is why London Underground has developed modernisation plans whereby three companies will be dedicated to fixing and improving the infrastructure. Those companies will work for the public sector.

The Minister has been speaking for 10 minutes. He has only five minutes in which to complete his speech, yet he has not answered any of the questions raised by hon. Members.

I thought that I was dealing with many of the questions that have been posed, not least why we believe that there is a need for increased infrastructure for the tube. There are several transport priorities throughout the country relating to rail and other modes of transport. Even in London, there is considerable pressure from the Mayor for additional investment in buses and pressure from elsewhere for investment in light rail. However, we believe that substantial investment in infrastructure, including investment for maintenance of the current tube infrastructure, is required. Having decided that such investment was necessary, we adopted the mechanisms to which I have referred to ensure that we achieve the most cost-effective and timely method of delivery. Those points relate to important questions raised by hon. Members, who have questioned the basis of the PPP, as well as the timing.

On the question of timing, will the Minister say whether the Government will honour their manifesto pledge of 1997 to transfer London Underground to Transport for London? Will they do so before or after the fifth anniversary of their election in 1997, especially as that anniversary more or less coincides with the May elections?

Yes, I am looking forward to commercial close on the project before the end of the financial year, although I had hoped that it would happen slightly sooner. The Department is putting in a great deal of work, and is putting pressure on all concerned to sort out the details, which it is important to get right. Equally, we want to secure close on the arrangements, following consultation and publication of the Ernst and Young report on value for money. That information will be put in the public domain before a final decision is taken. Then, under the Greater London Authority Act 1999, the intention is to transfer the running of London Underground to the Mayor and Transport for London. Like the hon. Member for Ruislip-Northwood, we hope that that will happen as soon as possible.

I shall move back to my main theme of London Underground and the development of modernisation plans whereby three companies will be dedicated to fixing and improving the infrastructure. These companies will work for the public sector. The operation and management of the system will be in the hands of London Underground. The public sector will monitor that work and payment will be linked to results. The companies will be required to deliver the improvements demanded by the public sector. Many commentators overlook the fact that several private sector companies already work for London Underground. We believe that this scheme will ensure a more efficient method of managing those contracts, ensure a better connection between the installation and maintenance of services, and, therefore, ensure the ultimate delivery of a successful scheme. At present, there is a considerable gap between the companies that put in the service and the final output.

The reality is that about 80 per cent. of the investment work already undertaken—

Order. We must move to the next business.

I am sure that I speak for all right hon. and hon. Members today when I pass, via the Minister and others, our thoughts and support to the Chancellor and his wife following their tragic news. As well as offering our private support to them at this difficult time, we hope that they will not suffer public or media intrusion.

I am delighted to have secured this debate on island and rural transport. It is an opportunity to raise several issues, and I have informed the Minister's office about the line of questions that I shall pursue. The first matter is island transport, which is a particular issue in my constituency. No doubt others will wish to express their concerns about islands in their constituencies. With regard to the Isles of Scilly, I am not asking for special or favourable treatment; I ask merely for parity with other areas, particularly Scottish offshore islands, with which the Isles of Scilly can most closely and appropriately be compared.

The Isles of Scilly are five inhabited islands out of 200 islands and rocks—the nearest, St. Mary's, being 30 miles off Land's End and 42 nautical miles from Penzance in my constituency. The population of the Scillies is 2,000. The islands enjoy ferry transport from Penzance provided by the Isles of Scilly Steamship company, which also offers a freight service. Helicopters and fixed-wing aircraft fly there from a number of airports.

I shall deal first with sea transport. The Isles of Scilly Steamship company provides a ferry, Scillonian III, which carries 600 passengers. It was purpose-built in 1977, with some support from the then Labour Government, who supplied a £1 million loan towards its purchase and construction. It can take limited freight and, for seven months of the year, operates one return trip per day for six days a week. From early November until late March there is no passenger ferry service to and from the islands. The ferry is laid up during that time partly because of low demand, and also because it must, of necessity, have a flat bottom, and the prevailing inclement south-westerly winds in the winter months make for an unpleasant journey for people travelling in a flat-bottomed ferry. The freight service, on the Gry Maritha, takes freight to and from the islands three times a week. That loads and unloads by crane; unlike many Scottish ports, it has no roll on/roll off service.

With regard to air transport, British International has two Sikorski helicopters that provide services for between 26 and 30 passengers, depending on the amount of freight being carried, and costing about £96 for a period return. Two services out and back are run during the winter months when the ferry does not operate, which are clearly lifeline services to the islands. I am told that the company cross-subsidises what would otherwise be a loss-making service during these winter months with its other operations.

A fixed-wing aircraft is operated by Skybus for several destinations, including Land's End, Newquay, Exeter, Bristol and Plymouth. There is an eight-seater service from Land's End and a 16-seater service from other areas. All those services together provide 250,000 passenger journeys per year for people travelling from and to these small islands. The helicopter service provides 47 per cent. of those journeys and the ferry provides 35 per cent.

Hon. Members may wonder why I am describing the situation in such detail, but it is important that they understand the services that are provided to the Isles of Scilly, as I shall go on to compare them with those provided in Scotland. I do not begrudge my Scottish friends and colleagues those services, but the comparison should be made.

In Scotland, the Government have been empowered through the Highlands and Islands (Shipping Services) Act 1960 to provide a deficit grant subsidy for transport links to offshore islands. That is now the responsibility of the Scottish Executive. The subsidies have been given to Caledonian MacBrayne, which has been wholly owned by the Secretary of State for Scotland since the 1970s. The company has to fulfil demand for specific services, including 23 lifeline routes, with a public subsidy of £21.4 million. A subsidy of £11 million is given to the Orkney and Shetland group, which is currently operated by P&O. The subsidies are EU-approved as state aid, subject to the services' being put to tender. The Treasury has always calculated funding for those services as part of the Scottish funding bloc. Air services are also supported with subsidies, which have been given to Highlands and Islands Airport Ltd. since the 1980s.

I have already given the Minister some comparisons in terms of cost subsidy per nautical mile and air mile between the services provided to the Isles of Scilly and those for Scotland. For example, the 42-mile ferry service from Penzance to St. Mary's costs the passenger 86p per nautical mile, whereas the 30-mile ferry service to Islay costs the passenger 23p per mile. The helicopter service for passengers in my constituency is £1.45 per air mile, compared with the cost of the Glasgow-Campbeltown service, which is 98p. Similarly, freight costs to the Isles of Scilly are more expensive, as well as being restricted.

I am aware that the subsidies for Scotland are put through the public service obligation test, which asks whether the market would operate the service on its own, without a subsidy. However, the Isles of Scilly face major dilemmas and opportunities, and decisions must be taken soon about whether the services that they currently enjoy can be sustained and extended. I would argue for extension, especially during the winter months.

As far as the PSO test is concerned, there is no question but that the island economy would almost totally collapse without existing services. However, the Isles of Scilly Steamship company cannot afford a new boat and cannot invest in ro-ro facilities. Last year, the company lost more than £100,000 merely on inter-island services, for which the Council of the Isles of Scilly provided a subsidy of £19,000. The company told me this week that it makes marginal profits in a good year and loses heavily in poor years. As a consequence, it does not have the capability to replace its ageing assets without support. Objective 1 money needs to be matched by support from the United Kingdom Government to replace the Scillonian III, and the loss- making inter-island freight operation needs revenue support and grant aid for future vessel replacement if it is to continue at all.

What assessment has the Minister made of the comparison between the costs and quality of services provided to the Isles of Scilly and those in Scotland, which I am sure are richly deserved? What discussions has she had with the Treasury or the Scottish Executive on parity of public support for such services? What advice would she give me, and therefore the island communities, on meeting future needs? I do not expect the Minister to have come to the Chamber with a cheque book as well as a speech, so I do not expect her to answer my questions in financial terms. However, I hope that she at least agrees to follow up the questions that I raise with further meetings, so as to help, advise and support the fragile island community on the Isles of Scilly as it deals with the issues.

I also want to raise issues about rail, but I understand that several hon. Members want to speak, so I shall try to be brief. I am especially interested in the mainline service between Paddington and Penzance. My constituency experiences the same problem as any community at the end of a main line. If there is a problem anywhere along such a line, the people at the end of it always get the worst deal.

Is my hon. Friend aware that Railtrack threatens to make the whole of Cornwall an island during the Easter weekend, as it proposes to close the Brunel bridge over the River Tamar? Does he agree that that shows ludicrous contempt for the Cornish holiday industry, and more generally displays a lack of awareness of the importance of encouraging rail transport for holiday purposes to rural areas throughout the country? Will he join me in making representations—I have made some already—to the Secretary of State and Railtrack to reverse the decision?

I am grateful to my hon. Friend for raising the issue. Not only have he, other colleagues and I raised the issue, but The Western Morning News has galvanised support locally to raise concern about the closure on that weekend, which was announced only recently. I had intended to raise the matter with the Minister. There will be other closures on the line in the coming months.

The closure is due to welcome investment in services, which has been long overdue. It is good that money is to be spent on the bridge. Brunel's generation recognised that it needed genuine investment and regular maintenance, but generations of recent Governments have not, hence the delay. The investment is welcome, and disruption is inevitable, but why choose to close the bridge on the most symbolic weekend of the year for the future of the summer tourist season? Many in Cornwall worry when England finds itself shut off. We worry about how it will manage without us, but we hope that it will cope for the few days that the bridge is to be closed. However, I agree with my hon. Friend the Member for North Cornwall (Mr. Tyler) that another time should be chosen.

On the broader strategic issues affecting Penzance commuters and passengers, I know that the Minister has experience of the rail journey to Newlyn, as she accompanied me on a Select Committee visit there to examine the fishing industry. On that day, the service ran on time—I do not know about the journey back—but that is not always the experience of those who travel to the far end of my constituency. In 1906 the scheduled journey time between Penzance and Paddington was six hours 35 minutes. It now takes approximately five hours, which is an improvement, but the journey from Exeter to Penzance takes as long—about three hours—as it did in 1906.

In 1997, Railtrack produced a trans-European networks study, funded by European TENs money, entitled "A Vision for a World Class Rail Transportation Network for the South West". It states:

"Railtrack is investing in 'core enabling' works to facilitate performance improvements and remove bottlenecks in the Great Western Main Line…over the next five years."

Railtrack claimed that it could cut journey times by up to 30 minutes, but five years on, as a result of disruptions and delays, some 30 minutes has been added, on average. In the past two years, services have gone from bad to worse. In the case of Cornwall, a vision for world class has turned into the nightmare of a third-world service.

As I sent her the relevant quote, the Minister will be aware that on 24 October, Sir Alastair Morton—former chairman of the Strategic Rail Authority, and a Government appointee who presumably spoke for the Government—told a business gathering in Plymouth that the

"South West Rail network falls way behind other parts of the country in the Government's schedule for change. You are not near the top of the pecking order when seen from the centre. The region does not meet any of the Government's measurable criteria for priority funding."

Is that still the position? What must Cornwall and Devon do to improve their chances of securing vital investment and support? Lack of investment in rail infrastructure in Cornwall is a cause for concern. It is having a visible effect on levels of service, on customer confidence and patronage, and on Cornwall's credibility as a location for new and continuing business investment. Passengers are unhappy with the caretaker franchises that the SRA promotes through two-year extensions.

Disruption has been caused by many factors, including Virgin's withdrawal of services in Cornwall while driver retraining is undertaken. The introduction of 1960s rolling stock has added discomfort to a generally unpunctual service. What comfort can the Minister give to rail passengers at the end of the line in my constituency, and to passengers throughout the region? What will be done to get our services up the pecking order, to increase investment, and to improve the punctuality and comfort of those services?

In view of time, I shall not detain the Chamber much longer, but I want to raise one or two other matters. I should point out to the Minister that, although there are problems, the prospect of objective 1 funding for a further five years presents a major opportunity. I realise that, with our support, the Government have taken Railtrack into administration, but a great deal of uncertainty has none the less been created. Urgent decisions are required to bring forward projects that make the necessary infrastructure investments and improvements and take advantage of objective 1 funding, which is available for a limited time only.

What comfort, support and advice can the Minister give me so that I can tell the project operators and managers in Cornwall how to achieve the essential project progress that is required? Investment is needed in the branch line to the new university in Falmouth, for redoubling the track throughout most of Cornwall, and in signalling. Journey times must be improved. It takes two hours just to get from Penzance to Plymouth, let alone to get out of Cornwall and on to the track to London.

I do not want my speech to be simply a list of whinges. I congratulate the Government on what they have achieved through the rural bus services grant, which is significantly improving bus services in Cornwall, and I welcome many of the aspirations in their 10-year plan. It is important for rural communities in my constituency and throughout Cornwall that the fuel duty rebate should be extended to more informal community transport services such as voluntary car services and community bus services. The Government said that they would free up opportunities for community transport services to step in where bus services are not available. What progress is being made in achieving the targets in the 10-year plan?

I welcome this opportunity to raise matters of great importance to my constituents. We must ensure not only that there is parity between Scottish islands and the Isles of Scilly, but that rail services to the far west of Cornwall are at least brought up to national standards—even though those are not acceptable—before they go beyond them to achieve the levels of service that people in rural areas richly deserve.

I am grateful to be called to speak in this important debate and associate myself with the comments made by the hon. Member for St. Ives (Andrew George). I remind him that the last time that we were both in this Chamber we were talking about the south-west, defending initial moves towards regional government, although we approached the subject from slightly different areas and perspectives. I cannot comment on the second part of the title of the debate because we have not yet found an island in Stroud, but we are a rural area and I can comment on that basis.

I shall mention a few local issues in the hope that my hon. Friend the Minister will take them up on my behalf, but I also want to consider the wider terrain in terms of what needs to be done about transport in rural areas. Although I have some criticisms of the Government's approach to the issue, they clearly recognise its importance and have addressed some of the underlying factors.

Five aspects are worthy of mention. First, rural transport grants have helped the bus industry. They have made a difference in my area, where we have a bus service that works on an interactive basis, which means that people may telephone for a bus. We must do more in that regard because there is pleasing evidence that that scheme allows people in the most rural parts of my constituency to have access to a bus for the first time. We must convert more people to wanting to use the bus and we must run the system more effectively because communications can make the difference. Not everyone in rural areas has a telephone, and if a bus does not arrive we must have a way in which we can tell people at what time it is likely to arrive. Sometimes buses do not arrive at all, although it is not a common occurrence.

The second aspect is the increase in rail investment, which is still insufficient. My constituency is linked to that of the hon. Member for Cotswold (Mr. Clifton-Brown) by a railway line on which I am pleased to say that the rail operating companies are trying to run more trains. However, they have made promises that I am not sure that they can keep because we are now looking forward to more trains by next Easter, which means a delay. The existing services, which are well used, have improved when they run on time and when there are no problems further down the line—there have been such problems on several occasions.

The third area concerns transport in rural areas, which often depends on volunteers. Investment in voluntary bus services, and especially in voluntary minibus services, has increased, and it has made a difference. However, a great deal more needs to be done to build on that progress.

Fourthly, some parish councils have taken the £15,000 challenge. I am proud to say that I am still a town councillor, but I wish that more parish and town councils would take up that challenge because they are slow to come forward. If they did more work in that area they would make a difference to their communities, which would be preferable to the current diminution in that layer of local government. Parish councillors would be appreciated by their communities if they sorted out transport.

Fifthly, initiatives such as jumpstart, which also applies to the Cotswold constituency, have been implemented. We have identified that transport makes a difference because it allows people to attend work and training, which can make a difference to their lifestyle. The jumpstart initiative involves the provision by the Employment Service of free mopeds and training to help people to learn to drive. I believe that we must get people off the road, but there are situations in which, if one does not have a car, one does not work.

Transport has created various running sores in my constituency, such as the long-term problem with unacceptable traffic noise in Upton St. Leonards near the MS. Like my predecessor, I felt that I was banging my head against a brick wall on that issue, but the Government have listened. I should like to claim responsibility for that achievement, but it was not down to me; it was down to community effort. If one puts a good case to the Government they tend to listen; they deserve to be congratulated on that.

We must address the main factors. Transport is important to people who live in rural areas because it relates to their ability to work, to access shops and to send their children to the school of their choice. If transport is not available it bears down on people's ability to choose, which relates to their quality of life. We must recognise that we differ from urban Britain in the scale and nature of our problems.

We need greater resources, but we must deal with those resources in a sensitive way that is determined by individual demand. I stress the word "individual" because we are collecting together groups of individuals to make such services viable, and it is that process that allows services to run. That point relates to anti-poverty strategies, and I am pleased that the Government have highlighted their recognition that we must deal with the transport issue if we are to get to grips with the reasons why some people in rural areas have no quality of life and live in poverty. That will give greater opportunity to people, which has been borne out by the many reports, countryside agencies and organisations that examine poverty in rural and urban Britain.

I wish that it were just a question of introducing more buses and trains and better roads, but it is not. We must consider ways to improve quality. If we want people to use public transport, it must be reliable. The age of vehicles matters, as do bus shelters, particularly those in the more urbanised parts of rural areas, because no one wants to stand for a quarter of an hour waiting for a bus in the pouring rain if they do not have to. I do not suggest bus shelters for every village bus stop, but sensible use of small amounts of investment will make a significant difference to people's willingness to use public transport.

I fervently believe that we do not need more roads. We have had arguments on the subject recently, as the hon. Member for Cotswold knows; incidentally, I support the idea of the missing link just outside his neck of the woods. We need to improve by ensuring that the road network is completed. In the main, people in rural areas want not more roads but improvement of the quality of existing roads by proper surfacing—they want horrible potholes filled in before someone is knocked off their bike or worse. More money is coming through, but we have such a legacy of disrepair that more must be done.

I am grateful to my neighbour for giving way. Does the hon. Gentleman agree that we need more flexible rural bus services? People tend to run bus services because they have always been run, but routes, services and, above all, the size of bus used must be reviewed. If it is uneconomic to run a full-sized bus, a smaller community bus should be used.

I totally agree with my neighbour. I thought I knew a bit about rural Britain, but only after I was elected as MP did I understand why, in the most isolated of places, one sees bus stops at which buses never stop. It is because we have the wonderful system whereby, when a bus goes past such a bus stop, the company can claim subsidy or some form of support. That system dates from the dark ages and no one has changed it or can explain it. It is time that we considered sensible approaches and had flexible responses.

Would the hon. Gentleman like to expand on that point? In the past, bus subsidies have applied to a particular route although, as the hon. Gentleman suggested, they should apply to an area so that the system responds to the needs of that area over time and does not serve to perpetuate one route with a rigid scheduled timetable.

I entirely agree with that. The hon. Gentleman may also want to comment on the system of the traffic commissioners. It is not good enough that money is available to save rural buses if those buses cannot be saved; a new route can be created, but money cannot be put into an existing route because of the current subsidy regime and regulations. That needs consideration because it might lead to ludicrous situations in which a route is lost and, later, an improved variation of it introduced. That is not sensible.

I am satisfied that the 10-year transport plan is right, but we need to consider the action that follows. I will pose some difficult questions not just to the public sector but to the private sector. I am not satisfied that the private sector has played fair or is aware of its responsibility to rail and road, especially with regard to buses that use the roads.

We must accept that we shall not go backwards. It would be nice to re-regulate some of the bus services in rural areas because that made a significant difference to the number of buses and routes that were used during the past 10 years or so. We do not necessarily want what happened to Railtrack to happen to the rest of the industry, but we need rationalisation so that we may talk to fewer people. As MPs, we become frustrated with the number of different companies that we must deal with, which make promises but do not always deliver on them.

There is a problem and it is shared between the public and private sectors. If the private sector cannot do the job, we must look for alternatives—the public sector or even greater use of the voluntary sector. The shame is that the voluntary sector is often looking for such work, but must not do it on the cheap, must not be ripped off and must do it as part of a proper strategy. We could have a fast minibus link between the hospitals in our county—I am looking at the hon. Member for Cotswold—to ensure that people without transport can get to the towns and hospitals where their nearest and dearest are. That may be idealistic, but we should be looking for such ideas and I am sure that the voluntary sector would be pleased to participate in such provision.

I am grateful to my neighbour for giving way again. I do not know whether he is aware of the community bus service that was founded by the late Trevor Baxter near Stow-on-the-Wold. It was one of the first community bus services in the country and does exactly what the hon. Gentleman described. It is staffed by volunteer drivers and links local hospitals and doctors' surgeries. If enough notice is given, the route can often be varied to accommodate people who want to go to the doctor, post office, hospital and so on. A little public pump priming would help the volunteers to buy the buses, which they could then run. That would be an excellent community service.

I am aware of the late Mr. Baxter, who did excellent work. It can be done, but the problem is often that the initiative runs out of steam because the voluntary sector is taken for granted and resources are not forthcoming in the long term. I shall move on quickly because other hon. Members want to speak and it would be wrong for me to take more time than is due to me.

I shall give an example from my constituency of the need for proper planning. The Minister's predecessor, my hon. Friend the Member for Hampstead and Highgate (Glenda Jackson), met us three years ago and agreed to allow Gloucestershire county council to borrow money for a rail-bus interchange at Stroud. I could bore the Chamber for the next half hour on why that did not happen and I point the finger at public authorities and the private sector, including Railtrack, for their inability to reach agreement not on the service but on land swaps and arrangements for building facilities. The Government must be cuter when considering how to push things along more quickly and sometimes use direct intervention. It is our money that is being forwarded for such projects, but they take too long and there are too many frustrations. I am sure that the Minister will take note and look into the matter urgently to ensure that different authorities do what they are asked to do.

Safety is sometimes underestimated. In urban Britain the number of casualties has declined, pleasingly, because of the action taken by the Government and their predecessor, but sadly the number of accidents in rural Britain has increased. Unfortunately, speed reflects people's frustration when they are held up, and they drive more quickly on rural roads.

We must also consider greater coherence in traffic calming, which was the subject of a debate in Westminster Hall some months ago. I am referring not just to road humps but to the way in which people who do not use a car get about. I am a keen cyclist and it used to be a pleasure to ride my bike around the rural parts of my constituency. That is still usually so, but if someone drives up behind at 60 mph in a narrow lane it makes one think carefully about cycling there. The Government should address that problem with an education programme, if nothing else, to persuade people to drive more considerately in rural areas.

I turn to some specific issues; I make no apology for doing so because I said that I would. One thing that the Government can do to make a significant difference to people living in rural areas is to ensure that the train system is improved in such a way that people want to use it, and—by providing more trains—that they can use it. We are talking about a £50 million investment that would dramatically improve the way in which people travel from Gloucestershire to London, for instance from the constituency of the hon. Member for Cotswold, where there is currently only a single line between Kemble and Swindon. It will not just be an improvement for ordinary passengers, but will make a significant difference for business. I have spoken about that subject before and make no apology for raising it again.

There is also a strategy in the south-west known as SWARMMS—the south-west area multi-modal study. I shall not dwell on the acronym. It is very important, but it tends to leave out the county of Gloucestershire. My hon. Friend the Minister might like to consider that. In a number of cases we are not looking for great expenditure in the county, but are asking for things like the doubling of the track between Kemble and Swindon. That issue should be addressed.

In conclusion, much has been done. The issue is micro-management, not big expenditure. We need to get on with doing things at ground level and to ensure that we continue to do things on a scale that is sensitive, takes account of what rural people want and attends to their demands. Our actions should follow that strategy.

I begin by joining other hon. Members in expressing my condolences to the Chancellor and Mrs. Brown on the tragic loss of their baby daughter.

I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing this important debate. In rural and island areas, transport is vital; it impinges on all services.

I should like to refer to the efforts to re-establish the ferry service between Campbeltown and Ballycastle in Northern Ireland. It is important both to the economy of the remote Kintyre peninsula and to the Moyle area of Northern Ireland. The efforts to get the service up and running are in danger of floundering in a bureaucratic muddle. When I wrote to the Prime Minister, his written answer was that the ferry service was the responsibility of the Department for Transport, Local Government and the Regions, because it runs between two different countries in the United Kingdom. However, letters to the Secretary of State in that Department are transferred to the Scotland Office, on the grounds that that office acts as the Department's agent. The Scotland Office, of course, says that it does not have a budget for such a service; that is because the budget rests with the Department for Transport, Local Government and the Regions.

The Scottish and Northern Ireland Executives have indicated that they are willing to pay to meet the cost of the service. What is required is for this Parliament to make an order to transfer to the Scottish and Northern Ireland Executives the power to pay the subsidy. That, apparently, will take time. It is important for the tender documents to be issued now, so that the service can start in the summer. Many of the people who will use the service will be tourists, and there is no point in starting a service in the autumn. It is vital for it to be up and running by 1 July at the latest.

I suggest to the Minister that tender documents be issued urgently by the Department for Transport, Local Government and the Regions, because that Department does have a budget. In parallel, an order can be passed that transfers to the Scottish and Northern Ireland Executives the power to pay the subsidy, so that the order has been passed by the time that the tender documents are returned, enabling those Executives to accept the best tender and enabling the service to be in place by the summer. It is vital, and I hope that that course of action will be taken.

Islanders suffer tremendously high fuel costs compared with those paid by people living in the rest of the country. On Mull and Islay, in my constituency, the cost of fuel is 20p a litre higher than it is on the mainland. My constituents deserve parity with the rest of the country, not least because the taxation that is being paid to the Treasury, particularly on the island of Islay, far exceeds any money that comes back in the form of services. The people there are paying more in VAT on petrol because of the higher cost. Also, a tremendous contribution is made to the Treasury because of the number of distilleries and the large tax on whisky.

I want to make two suggestions. First, variable rates of duty should be charged on petrol on islands. That would require a derogation from a European Union directive, but I would encourage the Government to apply for such a derogation and levy different rates of fuel duty on islands to bring the price down to that on the mainland.

I am sure that the hon. Gentleman understands that I agree with that proposal. However, does he accept that it might also be fair to apply it to certain remote rural areas that are far from the motorway and the principal road network, on which most of the money is spent?

I agree with the hon. Gentleman that, although the price difference between the islands and the mainland is more than 20p a litre, there is also a difference of a good few pence a litre between normal mainland prices and those in remote areas. Although my suggestion would be of more importance to the islands, it should also be applied to parts of the mainland.

Another reason for the high cost of petrol is the small turnover. My second suggestion is that the Government give transport agencies the power to buy petrol in bulk, thus obtaining a lower unit cost, and to sell it on at that cost to island and rural filling stations.

I am grateful for the opportunity to contribute to the debate, and I congratulate the hon. Member for St. Ives (Andrew George) on securing it. I was interested that he introduced his remarks by mentioning constituencies with islands in them. My constituency is an island, as the Minister well knows, so I feel particularly well qualified to speak.

I begin by admitting to some ignorance. I am glad that the hon. Member for Argyll and Bute (Mr. Reid) spoke about the position that has been reached on the Campbeltown to Ballycastle service. I read, back in 1999, that his predecessor was making the case for the subsidy to that service to continue. The lifeline ferry services are of particular importance to island residents. Tourism services are very important, but lifeline services are even more so.

My second obligation is to put on the record the information that has been given to me by those who operate the ferry services to the Isle of Wight. They complained to me, perhaps rightly, that I had presented the island as having ferry services among the most expensive in the country. The operators have kindly supplied me with some figures. The cost per kilometre of Wightlink—hon. Members will forgive me if the figures do not compare with those presented by the hon. Member for St. Ives—is £1.55 for the car ferry service, and 54p for the passenger service. Red Funnel costs £1.05 per kilometre. The Cowes chain ferry, which is operated by Isle of Wight council, costs £9.29 per kilometre. The Red Funnel high-speed service costs 29p per kilometre and the Hovertravel hovercraft service 57p per kilometre.

I have put those figures on the record partly to show how successful the private sector has sometimes been, without any subsidy from the Government, in providing cross-Solent services. I emphasise that those are the lowest fares available, some of which require a person to buy a book of 24 tickets, which must be used in six or 12 months. Not everyone can afford that. The other day I had to bring a car across—fortunately, from my point of view, at public expense—and it cost £50 for a return trip involving travelling on one day and coming back on another. That illustrates the concern felt by many of my constituents that we should not simply compare the lowest costs, because few people—perhaps only one fifth of the island's population—make frequent and regular journeys to the mainland. However, they must occasionally make urgent journeys, and they feel that the cost of those is unfair.

The island is taking the initiative in three areas as a result of an invitation given by the Minister's predecessor to my predecessor to consider the cost of travel for the purposes of health, education and seeking jobs.

I was fumbling through my notes to find the comparable costs for the Isles of Scilly. During the height of the season, the return ferry journey between Penzance and St. Mary's for a foot passenger—one cannot take one's car—is £78. It would be useful, perhaps after the debate, for the hon. Gentleman and I to compare the costs of ferry services to the mainland in our constituencies.

I will gladly share with the hon. Gentleman the figures that Wightlink gave me. Its list includes Caledonian MacBrayne and the Scottish islands routes, the Irish sea crossings and the services to the Isle of Man but, for reasons best known to Wightlink, it does not mention the Isles of Scilly.

It appears from the hon. Gentleman's earlier comments that the Isles of Scilly benefit from at least a fairly regular air service, unlike the Isle of Wight. To some extent, that reflects the fact that we already have relatively swift communications with London. For the benefit of anyone who wants to visit the island for a holiday or for other purposes, I should emphasise that it takes me only two hours to get from my front door in Cowes to Waterloo station on the scheduled service, all things being equal. For the most part, the service has operated reasonably well, given the obstacles that the Government and others have put in its way recently. However, we would benefit enormously from assistance with air services because people from parts of the United Kingdom outside London and the south-east also want to come to the island.

I revert to the issues of most concern, the first of which is health. As in the Isles of Scilly and other remote rural areas and islands, our hospital cannot provide every necessary service. I compliment the bodies that support people who have treatment on the mainland, including the Wessex Cancer Trust and Heartcare, which assist people who travel to Southampton or the King Edward VII hospital at Midhurst for the services that they need. June Ring, in particular, has worked tirelessly for the trust over many years to assist people who visit the Southampton hospitals for treatment. She has accompanied many of them and has arranged taxis and minibuses at the other end. The King Edward VII hospital does the same for those with coronary care needs.

Residents are concerned that coronary services may be transferred to Brighton, which is a long way away, without the advantages of transport being in place. I put on record my thanks to David Crawley for his work for the Isle of Wight primary care trust to ensure that proper transport links are in place when the service is transferred. People do not always need accompanied transport, but they do need simple transport. We are taking the initiative on that, but we may need the Government to make a little contribution towards the cost.

Secondly, there are education services. We are fortunate to have a further education college on the island, but it clearly cannot provide every service, and many people must travel to the mainland. Thirdly, there are people who are seeking work. On the island, we have commissioned a survey into reducing the cost of cross-Solent travel for those particularly needy groups. I hope—in fact, I am sure—that in due course we shall make proposals for the Government to assist us, through the Isle of Wight partnership and the Isle of Wight council, in reducing those costs.

It is easy to criticise the Government and the relevant companies, and then to present a wish list to which even the Minister, with her customary generosity, would be unable to respond instantly. However, I want to mention how pleased I am about the level of subsidy and support provided by the ferry companies for island people—particularly the ice hockey team, the Isle of Wight Raiders, which has been subsidised until recently by Wightlink. I appreciate the support given to sports people, bands wanting to play on the mainland and a range of other people.

The ferry companies are part of the community. They are not simply leaching it. However, there are problems with the oligopoly. We have only two major ferry companies. Of course, Hovertravel also provides the hovercraft service from Southsea to Ryde. Will the Minister examine, in particular, the open port regulations? During the previous Parliament, I wrote to her predecessor, the hon. Member for Hampstead and Highgate (Glenda Jackson), asking her to do so.

The regulations rightly require those who operate an open port to make space available to anyone, but do not ensure that the same space is always made available to operators wanting to provide regular services. At the time in question, Red Funnel was owned by Associated British Ports, which also owned the entire waterfront in Southampton. It had an interest in maintaining the Red Funnel monopoly on the route to Cowes, and one way of doing that was to deny other companies a regular landing slot on the waterfront at Southampton. I hope that the Minister will attend to the matter.

I emphasise the need for flexibility in other respects. The hon. Member for Argyll and Bute referred to fuel costs. Until recently there were three suppliers of fuel on the island but, thanks to various takeovers, we now have a monopoly supplier. The effect has been to push up the cost of agricultural fuels—that is the example that I have been given—and perhaps other fuels, in comparison with the mainland.

We also need flexibility with respect to taking animals to slaughter. We do not have a slaughterhouse on the island. We consider that that is largely the result of legislation derived from Europe, which was gold-plated by the former Ministry of Agriculture, Fisheries and Food. With the National Farmers Union and other agencies, we are looking towards the creation of a slaughterhouse on the island, perhaps associated with an outlet for island produce. It would be helpful if the Government would suggest some support for more slaughterhouses, particularly in rural areas, because there are animal welfare benefits in providing them.

Finally, I shall say a word or two about assisted area status.

A word would be better.

I apologise for taking too much time.

We need assisted area status. Perhaps that is the simplest way to put it. The Isle of Wight is one of the poorest areas in the south-east—certainly among the 10 poorest constituencies. It has high unemployment and the lowest gross domestic product in the south-east—less than 75 per cent. of the national average—yet we are unfairly associated with wealthier areas such as Hampshire for the purpose of assisted area status. We need to be considered independently of the mainland so that we can qualify, if not for objective 1, at least for objective 2 status. If the Minister can promise nothing else, I hope that she can promise that.

I am grateful for the opportunity to contribute to the debate. In the interests of brevity, I merely associate myself with many of the remarks that have been made, particularly those made by my hon. Friend the Member for St. Ives (Andrew George). I congratulate him on securing the debate, because the chance to discuss island issues in the House is rare.

I associate myself also with the remarks by my hon. Friend the Member for Argyll and Bute (Mr. Reid) on the cost of petrol and diesel in island and rural communities, and I agree with much that was said by the hon. Member for Isle of Wight (Mr. Turner), particularly about the need for rural slaughterhouses. We in Shetland are familiar with that problem. The hon. Gentleman and I are two of only three Members who have entirely island constituencies, so we have a particular contribution to make to a debate such as this—although I envy the hon. Gentleman for having a constituency with only one island.

Naturally, much of the debate on island transport has centred on ferry services. In the brief time available to me, I ask the Minister to turn her attention to air services to island communities. They are particularly important to my constituents. Journeys from Orkney involve a two-hour ferry trip to the mainland followed by at least a four-hour journey by road to reach any sizeable town, and it is a 14-hour ferry journey from Shetland to Aberdeen.

Air travel is immensely important to people requiring hospital treatment in Aberdeen, and to those who need to travel for educational or job-seeking purposes. When I checked this morning, I was told that the standard full fare from Sumburgh in Shetland to Aberdeen was £294, and that the cost from Kirkwall in Orkney to Aberdeen was £277. That is a significant burden on local people who have one-day hospital appointments and those who need to travel with them, on those who serve on the local health board, and on local businesses. Apex fares are available, but extra conditions always require to be fulfilled, including staying away on the Saturday, which is not suitable for many island businesses.

Our particular problem is that the air services to the northern isles operate on a marginal profit. I suspect that any route could be operated profitably if one was prepared to tolerate a low standard of service and high fares. It is therefore important to establish what sort of benchmark service should be provided. To that extent, I should be interested to hear the Minister's views on the application of public service obligation orders to services such as those to Orkney and Shetland.

A few days ago, a travel agent in my constituency told me something about the Saab planes that are used on the northern isles routes. They are often smaller than needed and are clearly unsuitable in many ways, but they are being used because of the marginal nature of the routes. Those planes do not have the necessary capacity; technical difficulties and breakdowns often result. Another plane that would be much more suitable for the northern isles routes would be the Dash 7, but that is not open to us because of the small margins available to those operating on those routes. I suggest to the Minister that the imposition of public service obligation orders would allow improvements in the quality of the service.

We all accept that subsidy should be given to transport in the rest of the country, in the form of roads and railways. Why should those island communities who have to rely on ferries and air services be treated any differently? When one lives on an island, Mr. Amess, transport becomes something of an obsession. I could bore those in the Chamber for the rest of the day with this subject, but I see that I have had my five minutes.

I assure my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) that one need not live on an island to become obsessed with transport. It can become an obsession even for a Member who represents Carshalton and Wallington, which is in suburbia.

I shall confine my remarks to a few points, as the Liberal Democrats have made a heavyweight contribution to the debate. I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing the debate and raising his concerns in a constructive way. The general tone of the debate has been constructive and I now feel much better informed about services to the Isles of Scilly. My hon. Friend spoke eloquently about the problems with those services and I shall listen carefully to the Minister's response to see whether she can assist him and his constituents.

I echo my hon. Friend's concerns about Railtrack's plans to shut England off from Cornwall over the peak Easter holiday period and I hope that the Minister will give a commitment to talk to Railtrack, which is in administration, about those plans to see whether those important works could be undertaken sooner or rescheduled for a time that would be more convenient to the tourist trade. I also hope that the Minister will have time to respond specifically to the point raised by my hon. Friend the Member for Argyll and Bute (Mr. Reid) regarding an urgent request for tender documents to be issued to enable the ferry service to which he referred to proceed.

There is no doubt that rural areas—where up to one in five people do not have access to a car—suffer disproportionately from poor access to transport. It is clear that the way to solve the problem is through bus and community transport services, as there are no rail services at all in many rural areas.

Although the number of passengers using buses has declined, we should not accept that that decline is inevitable. In London, where bus regulation was retained, the number of bus users has increased by 8 per cent., whereas outside London, where bus services were deregulated, the number of bus users decreased by 9 per cent.

I am sure that the hon. Gentleman is right about rural areas, but does he accept that the same does not apply to some urban areas outside London?

I accept the hon. Gentleman's point. I am simply saying that we should not assume that bus use will decline, because there are measures that can halt such a decline. For example, bus regulation or reform of quality partnerships and quality contracts could allow for changes in fares and frequency of services and ensure the greater flexibility that some hon. Members have requested. In that way, bus services could change according to demand, rather than relying on a top-heavy or contractual process that puts the brakes on new bus services. It should be possible for new services to be provided almost immediately in a way that cannot be achieved with other services, such as rail and light rail.

On rural transport regeneration, we support the fact that the Government have provided additional funds for bus services, but we would like them to go further. We put forward proposals in our costed manifesto for a total of £200 million to be spent each year on a rural transport regeneration fund. We estimate that that would allow about 2,000 new or improved bus services to be provided each year. In considering the introduction of such services, one may also take into account the savings to the national health service that would result from a consequent reduction in road accidents. The average cost of an accident is £140,000; if one reduces road accidents, additional savings can be made elsewhere.

The Government could introduce other measures. They could extend fuel duty rebate to community transport, as other hon. Members have suggested. They could cut car tax to make people pay little or nothing on the least polluting cars. The price of public transport is a problem, and something must be done to assist bus customers, even when such services are available. I suggest free off-peak travel on local buses and reductions for students.

I can see that the Minister wants me to draw my remarks to a conclusion. Before I do, I want to ask what progress has been made on increasing access to bus services, a measure used as an indicator in the Transport 2010 plan. Of the 500 or so rural transport projects due within three years of the plan's launch, how many have been delivered? Are the Government on track to deliver all 500?

I extend the compliments of the season to you, Mr. Amess, and to all hon. Members present, including the Minister. I also express my party's commiserations to the Chancellor of the Exchequer and his wife on their sad news today. We wish them well in future.

I shall keep my remarks brief, because I want the Minister to have a chance to reply fully. I congratulate the hon. Member for St. Ives (Andrew George) on obtaining the debate, which has thrown up much interesting information, not least from some of the remote parts of the United Kingdom, which are often forgotten. He has done the House a service by raising the matter, which especially interests me because his constituency and mine belong to the south-west region. It is a huge region, extending from the Isles of Scilly to the constituency of my neighbour in the north, my hon. Friend the Member for Tewkesbury (Mr. Robertson). If ever there was an example to show why regional government does not work, this is it. In many respects the requirements of our areas are as different as chalk and cheese.

The hon. Member for St. Ives did not draw hon. Members' attention to a matter to which I shall refer. In a letter dated 21 December 2001, Louisa Britten, the deputy policy adviser for the south-west region, stated:

"Following the announcement, on Wednesday 5th December 2001, a meeting of all local authorities in the South West was held to discuss the implications of the provisional announcement."

The implications were that the settlement for the southwest region, as announced that day in the House, was pretty poor. Further meetings are being arranged with the relevant Ministers in the Department for Transport, Local Government and the Regions to discuss the settlement. If we do not have a reasonable settlement, the transport services in my constituency and that of the hon. Member for St. Ives will suffer, compared with those in the rest of the country. The issue is not only more money but equity of distribution in the formula. That is why we look forward to the Government's redistributing the formula. We want that to be done as soon as possible; we do not want to wait two or three years.

The hon. Member for St. Ives raised some interesting points, which I have time only to skate over. As he is aware, there has been significant investment in road networks in his region during the past two decades. The motorway network extends from Exeter, with two trunk roads—the A30 via the Okehampton bypass and the A38 via Plymouth—into Cornwall. My area has had no similar investment in road infrastructure, and urgently needs it. The A417 and A419, which is now a national network road—a vital short-cut road—that extends from the M4 to the M5, needs a so-called missing link. One can travel from the island of Sicily in Italy to Glasgow on dual carriageway, with a little missing link in the middle of my constituency. My constituency suffers serious accidents and fatalities because of that missing link. The DTLR has put in place a study under the Babtie Group. I urge the Department to act quickly on its findings.

In the short time left to me, I want to mention trains, as have many hon. Members. Train infrastructure is important in all rural areas. I have a huge rural constituency which extends to 1,000 square miles and contains 110 villages and 10 market towns. Trains are a vital form of transport there, as they are for the constituency of my hon. Friend the Member for Isle of Wight (Mr. Turner), who made an excellent speech. Will the Minister consider those rural services, which could be improved for relatively small sums?

My neighbour, the hon. Member for Stroud (Mr. Drew), referred to the upgrade of the single-track line from Swindon to Kemble and Cheltenham. That would be a huge infrastructure boost for his constituency and mine. Another rail infrastructure improvement would be the upgrading of the Hereford line via Moreton-in-Marsh. The hon. Gentleman did not refer to the possibility of reopening some rural stations, but I have been involved in a campaign to reopen the Chipping Campden station on that line, for example.

The industrial action that is affecting South West Trains will mean that falls in service will continue to be experienced by those in the south-west, who have already experienced falls since 2000 from 84.3 per cent. to 73.6 per cent. That is bound to get worse as a result of the industrial action. We want proper, forward-looking decisions to be taken on investment in our railways. As a result of Railtrack's being put into administration, such forward planning does not exist. I have asked many detailed questions about the Virgin Cross Country franchise route, which might help the south-west, but have not received any satisfactory replies. Will the Minister address that issue, as it is an important national infrastructure project?

I am fully in favour of beefing up bus services in rural areas, which was another issue referred to by the hon. Member for Stroud. We received a briefing from the Disability Rights Commission on the matter. Bus and rail services should be fully accessible to disabled people. It is curious that the Government have a 10-year target for increasing bus services by only 10 per cent., whereas the target for increasing rail travel over the same period is 50 per cent. Will the Minister address that problem?

I must leave the Minister time to reply, as she has been asked a range of questions about ferries, rail and roads in our more remote areas, which are wonderful places to travel and have some excellent facilities. I can tell the hon. Member for Orkney and Shetland (Mr. Carmichael) that I enjoyed a very acceptable dram of Highland Park whisky over the recess. I encourage all hon. Members to boost tourism in rural areas by paying such visits, as that is one way in which we can help those areas.

I am grateful to the hon. Member for St. Ives (Andrew George) for securing the debate and to all hon. Members who have taken part. The debate has been helpful, positive and constructive. If I do not answer all the questions, it will be only because of time constraints, but I will deal with as many as I can.

First, I join with all other hon. Members in expressing my sincere condolences to the Browns for the loss of their daughter, which was a dreadful tragedy for them.

I shall consider what we are doing to improve rural transport while addressing specific local issues, including strategic issues for Cornwall and the south-west connected with that area's location, which has done much to cause transport problems. I shall also refer to ferry services.

The Government are determined to improve transport as much in rural areas such as Cornwall as in big cities. We want rural communities to be thriving and prosperous, and we recognise the importance of transport's role in that. We want, too, to boost tourism, as the hon. Member for Cotswold (Mr. Clifton-Brown) said. Our vision of how transport can contribute to a rejuvenated rural England was set out more than a year ago in the White Paper entitled "Our countryside: the future". It emphasised the need for locally provided services in rural areas to reduce long-distance travelling and, in particular, for better quality public transport provision that is flexible enough to be truly responsive to the needs of rural communities. My hon. Friend the Member for Stroud (Mr. Drew) and the hon. Member for Cotswold emphasised the importance of bus services in achieving that.

Much has been done over the past year to implement the White Paper's vision for rural transport. More than £40 million will be spent during this financial year alone on the rural bus subsidy grant to provide extra local bus services to rural communities, and we are providing more flexibility within that grant scheme so that 20 per cent. can go to existing services. Nowhere can our drive to improve rural public transport across England be better seen than in Cornwall. Last year the county was acknowledged by my Department as a centre of excellence for rural transport.

My hon. Friend the Member for Stroud mentioned the need for more demand-responsive services, especially in relation to buses. I want to highlight the role of the rural bus challenge in stimulating innovation in the provision and promotion of rural public transport, including new services of that type. In last year's challenge competition we gave £21 million of funding for 51 innovative rural bus projects, from novel bus infrastructure improvements to flexible, demand-responsive minibus and taxibus schemes. We shall announce the results of the latest challenge competition shortly. That will be another big boost for the more innovative types of rural bus service.

Earlier in the current financial year, the Government established through the Countryside Agency two important rural transport programmes—an enhanced rural transport partnership scheme and the new parish transport fund—to enable rural communities to develop transport solutions to meet local needs. Over the next three years those two programmes will together spend £47 million on a range of projects. The hon. Member for Carshalton and Wallington (Tom Brake) asked whether the Government were on target in respect of the 500 new schemes that were proposed in the policy statement, and the answer is yes.

My hon. Friend the Member for Stroud referred to community transport. We recognise that that sector plays a vital role in catering for needs that cannot be met by scheduled commercial public transport services. Above all, it provides flexible solutions that are tailored to meet the needs of local people. We made it clear in the rural White Paper that we wanted an expansion of the community transport sector, and we will shortly publish a consultation paper on the changes that might be made to reduce barriers to its expansion. We are also committed to extending the bus fuel duty rebate scheme to a wide range of community transport services, and we shall introduce regulations shortly. I hope that that reassures hon. Members who are interested in such services.

I congratulate the hon. Member for Isle of Wight (Mr. Turner) on his remarkable diligence in always pressing the concerns of his constituency. He has raised the profile of the Isle of Wight as never before. He is an island in himself. I shall deal with his points about ferry services later. On port regulations, I shall give him a considered written response. I shall look at the statistics on disadvantage in his area. I am aware, partly due to his pressing of the matter, that there are problems in his constituency arising from the number of prisons, but I was not aware of the other factors, and I shall send him the details that we have.

The hon. Members for Orkney and Shetland (Mr. Carmichael) and for Argyll and Bute (Mr. Reid) raised some important points about ferry services and illustrated extremely well the disadvantages that people in rural and island communities can face. I shall take the matter up with the Scottish Executive, who are responsible for the bulk of such issues. On public service obligations, I shall give the hon. Member for Orkney and Shetland a considered written response.

I want to deal with some of the south-west issues, but as I have only a few minutes left, I must go through them at a canter. I shall send a written response to the helpful note that the hon. Member for St. Ives sent to my office.

I appreciate the Minister's response to the issues that she has raised, but there were three specific questions that I outlined both beforehand and in the debate: the Easter bridge closure, the ferries and improvements to rail services in east Cornwall.

The hon. Gentleman raised issues concerning regional transport links. Each English region is required to develop a regional transport strategy that sets out key regional transport priorities. These will be informed by multi-modal studies, which will provide integrated solutions to major transport problems around the country. As I am sure the hon.Gentleman is aware, the south-west area is subject to a multi-modal study and the report is due in April. It will recommend improvements to reduce journey times to Cornwall and to increase the reliability of such journeys. I am sure that it will address the strategic regional issues that underlie his remarks this morning.

Many hon. Members have raised issues relating to railways, and I should point out that a statement from the Strategic Rail Authority is due next week in which it will set out its investment plans. Sir Alastair Morton is no longer the chairman of the SRA, and we shall be examining the way in which that investment plan addresses the issues raised this morning.

On the reports about the closure of the bridge over the Easter weekend, Railtrack has consulted the train operating companies, as it is required to do. It has made arrangements to ensure that the closures will not affect the Friday and Monday of the bank holiday weekend, which are the peak travelling times. The train operating companies were satisfied that these closures were the best solution to the difficult choice that occurs when one must make improvements to infrastructure that require possession of the railways. I shall write to the train operating companies involved to establish whether there was consultation and whether mechanisms exist for consulting passengers and other stakeholders such as tourist agencies about the timing of such closures. It is in everybody's interests to work together to ensure that the commuter services keep operating to make the most of that peak tourist period. It is a question of all stakeholders working together to find the best possible solutions.

Finally, I want to turn—I recognise that this will be brief—to island transport. Ferry services in the United Kingdom are expected to operate on a commercial basis unless there is a compelling reason why they cannot do so. As a general rule, my Department does not directly subsidise ferry services in England, but English local authorities have the power to subsidise local ferry services if they wish, and several do. I understand the point about the replacement of the passenger vessel to the Isles of Scilly. The Council of the Isles of Scilly is hoping to seek a European objective 1 grant for a replacement passenger vessel. It would be premature to discuss its proposal in detail, but I am sure that the Cornwall objective one partnership will look sympathetically at any grant application.

There will, however, be issues to address involving eligibility and value for money. I know that officials in the Government office for the south-west are looking forward to seeing shortly the report on the consultancy study commissioned by the Council of the Isles of Scilly, which we hope will make clearer the extent to which there is a case for supporting a replacement vessel. I say to the hon. Member for St. Ives that it is important that we receive that consultancy report at an early date so that we can assess it properly.

In conclusion, I hope that I have addressed the main concerns that were expressed by Members of all political persuasions, and shown that we understand the difficulties in rural areas. We have put in place the planning, some of the money, and innovative small schemes—micro-management, as it was described—that can indeed make a difference to the quality of life of people in rural areas.

I raise the sad case of Barry Donnan, who joined the Royal Highland Fusiliers in 1987 as a 16-year-old. As a young soldier, he was sent to Lockerbie in 1988 to pick up pieces of bodies that had fallen from the sky. After that he was sent to the Belize jungle, where he was accused of murdering an Army cook—a foreigner—who in fact died of a heart attack. The case was dealt with not by the Army, but in a civil court. After an eight-week trial, he was eventually found not guilty. On his return home in 1991, he was sent immediately to the Gulf. One of the many events he witnessed there was the burial of hundreds of Iraqi soldiers in a mass grave. Such events traumatised him, but he argues that inoculations and tablets supplied to the troops also contributed to his suffering post-traumatic stress disorder, among other disorders.

As a former trade union official, I had to represent social workers in the aftermath of Lockerbie. Six months after the disaster, not a single social worker was still in employment. All of them had to be pensioned off because of the stress that they experienced. Nor does a single policeman or fireman who served during the events of Lockerbie remain in service. As a 16 or 17-year-old boy, Barry Donnan was sent into the very middle of that disaster, but the Army gave no counselling. Nor did the Army offer the necessary support during his time in Belize and in the Gulf. As he says in his book, "Fighting Back" a copy—of which I have given to the Minister—he just lost it. After a break, he went absent without leave for some six months. On being captured, he was court-martialled and sentenced to 112 days in Colchester. No counselling was offered, and no attempt was made to look at the mental state of this youngster.

On his release from Colchester, he was immediately sent into the trauma of Northern Ireland. By his own admission, he had no clue where he was or what he was doing. Before being allowed on to the streets of Northern Ireland, every trooper normally completes an intelligence threat analysis course, but Barry did not have that certificate. I find that rather surprising, and it illustrates the events that surrounded the fusilier at that time.

Barry first came to my surgery on 14 March 1997. On 24 March, I wrote to the then Minister for an immediate review of his case. I have made subsequent representations to the present Minister and to his predecessor, but to no avail. Aspects of the case greatly concern me. When Barry applied for legal aid, his solicitors were informed that because the War Pensions Agency had given information to suggest that he was time-barred he would get no form of support from the Legal Aid Board. I have established that that was misinformation, but young Barry's situation still gives cause for concern.

In 1999, after three years of dealing with other matters, he came to tell me that his disability living allowance had been withdrawn. After a protracted fight with the then Minister with responsibility for social security, I established that that should not have happened and ensured that the disability living allowance was put back in place; however, it was at a lower rate. Barry's most recent argument is that he believes that his war pension is under threat. He says so on the basis that while he was in the ex-services mental welfare place in Hollybush, Ayrshire, he discovered that statements were being sent to the War Pensions Agency about how he was doing. He is of the opinion that that was threatening his war pension and is concerned that reports are being sent from the Ex-Services Mental Welfare Society to the War Pensions Agency. I have been told by the commodore in charge that that is normal because the armed forces are paying for his time in the Hollybush centre.

I am looking for two possible solutions. There is no doubt that the Ministry of Defence must change the way in which troops are dealt with and fully recognise that although their physical state is looked after well by the Army, their mental state is equally important to them. During developments in the deployment of armed forces around the world—the latest of which has been in Afghanistan, and before that they were in Kosovo—there does not seem to be the commitment that there should be to the mind of the individual and the traumas seen. One could argue that the lad was immature from the outset, but there is no difference between someone who joins the armed forces and someone who becomes a policeman or joins a local authority as a social worker. The experience of Lockerbie was so traumatic for the police and social workers that not one of them was still in that employment six months after the event. It surprises and appals me that the armed forces do not treat that mental element as they should; they must do so, and settle the case of Barry Donnan. I appeal to the Minister on that point.

Arguments that have been presented in correspondence suggest that another option is open to young Barry. He could join a group of some 30 ex-service men who are in some form of joint application to the Ministry of Defence and through that to the courts for a settlement. However, in his letter dated 27 August 2001, Barry states:

"The group action issue is nonsense, the time scale is too long, only 30 ex-servicemen are being heard in the first instance, of which I don't belong, then, what ever the judge says is binding. So, maybe I won't ever get a fair hearing. My solicitors have made and struck many deals with the MOD lawyers, I am sure they will know the outcome before it even gets to the High Court. Perhaps, that is why the MOD are so keen to railroad me down that line."

He now has no confidence in the system, which is what led me to apply for this Adjournment debate. I want the Minister and the civil service to wake up to the mental health issue in the armed forces and, particularly in Barry's case, to make some form of compensation. I look forward to the Minister's response.

I am grateful to my hon. Friend the Member for Cunninghame, South (Mr. Donohoe) for initiating this debate about his constituent, Mr. Donnan, and the important issues surrounding his claim for compensation against the Ministry. My hon. Friend will understand that because Mr. Donnan's case is due to be heard as part of a wider post-traumatic stress disorder group action in the High Court in early March, it would be inappropriate for me to discuss the details or to re-examine Mr. Donnan's case ahead of the judgment. The group action, of which Mr. Donnan's claim is a part, is significant litigation. The trial is likely to last up to five months with written judgment to be handed down in the autumn. I understand that Mr. Donnan will give evidence at the trial.

While recognising the emotive and sensitive nature of the issues raised by group actions, it is important that they are set within a factual context. I have corresponded with my hon. Friend about the case on several occasions, as have my predecessors. The way in which he approaches the debate is constructive and far removed from the lurid headlines favoured by some when dealing with similar cases.

I have read Mr. Donnan's book, "Fighting Back: One Man's Struggle for Justice against the British Army". He has endured a series of terrible personal tragedies that have contributed to his present suffering and I have considerable sympathy for his current plight. Stress-related medical disorders are recognised by the armed forces as potentially serious and disabling conditions. Post-traumatic stress disorder—PTSD—was not recognised internationally as a medical condition until the 1980s, but methods of treatment have subsequently developed in the medical world and the armed forces. The measures now in place to combat PTSD in the armed forces have evolved and been enhanced over a number of years to reflect our improving knowledge of the condition, its effects and the best methods of remediation. Each service runs active programmes aimed at prevention and treatment. Measures include pre-deployment and post-deployment briefing and, when practicable, availability of counselling in theatre.

The strategic defence review recommended that psychiatric services be enhanced and a review of the defence community psychiatry service has been completed. That resulted in proposals to enhance existing defence community psychiatric centres and the formation of two new centres: one in Scotland and one in England. Additionally, the armed forces are exploring ways of detecting PTSD at an early stage and of managing the condition according to the best clinical practice. That involves training service line managers so that they are better able to detect symptoms of stress-related conditions in their units and to act positively with individuals to resolve problems before seeking outside professional assistance from the defence community psychiatry service. A pilot programme was set up by the Royal Marines and has provided positive results.

Turning to litigation, the Ministry has received about 1,500 claims for post-traumatic stress disorder from former members of the armed forces, mainly relating to service during the Falkland and Gulf conflicts, and in Bosnia and Northern Ireland. Many of the claims contain similar allegations, so the Lord Chief Justice set up a group action in 2000. The allegations, in general terms, are that the Ministry was negligent in that it failed properly to recognise, diagnose and treat those said to be suffering from PTSD. The action consists of two groups. In group one the Ministry's alleged failure occurred before 15 May 1987 and in group two the earliest alleged failure took place after 15 May 1987. The reason for the two groups, as I am sure my hon. Friend is aware, is that prior to 15 May 1987 service personnel were prevented from pursuing claims against the Ministry of Defence under section 10 of the Crown Proceedings Act 1947. That section was repealed on 15 May 1987 and it was logical to separate the claims into those arising from incidents occurring before and those occurring after the repeal. Mr. Donnan's case forms part of the second group.

Compensation claims received by the Ministry of Defence are considered on the basis of whether the Ministry has a legal liability to pay compensation. Where there is a proven legal liability, compensation is paid. The amount of compensation is determined by common law principles which, broadly speaking, take account, as appropriate, of the individual's pain and suffering, the degree of injury, past and future financial losses, the level of care required and so on. The level of compensation can vary according to the individual's circumstances.

That Mr. Donnan suffers from PTSD is not questioned. I acknowledge that he receives a 100 per cent. war disablement pension and a service pension under the armed forces pension scheme. The nature of Mr. Donnan's disability is, therefore, not the issue to be determined by the court. It is important to emphasise that this litigation is not about the validity of PTSD as a psychiatric disorder—the Ministry accepts its validity—or about soldiers unjustifiably suing in respect of the natural and probable risks incidental to their calling. The claimants' case is that PTSD can be detected and prevented, and that proper systems would or should have achieved those objectives in the vast majority of cases.

The parties have agreed that the judge be invited to adjudicate on a range of generic issues that form the basis of the allegations. Those issues include: screening to exclude those vulnerable to PTSD from combat in the first place; briefing to prepare soldiers psychologically for combat; detection to enable the early identification by properly educated commanders and medical officers of those who are either at high risk of a PTSD or who suffer from one; debriefing to allow for the deployment of psychological intervention post trauma to ventilate or defuse its adverse effects, to educate the individual about those effects and enable him to seek help if necessary and to enable the employer to detect early or incipient morbidity; cumulative exposure, or the deployment of troops beyond their expected breaking point; our duty at discharge and the failure to carry out a thorough medical examination at discharge from the armed forces, and, therefore, to detect and treat psychiatric morbidity at that stage; the failure to deploy effective treatment modalities; Crown immunity and the question of whether section 10 of the Crown Proceedings Act 1947, which is relevant to breaches of duty that arose before May 1987, is appropriate in the light of the human rights that are now enshrined in British law; and causation, or the extent—if any—to which alleged breaches of duty caused or materially contributed to the claimants' psychiatric condition. The claimants' case highlights alleged failures in the Army, although their solicitors recently confirmed that the Royal Navy and the RAF were equally targets of criticism.

The Ministry acknowledges that some members of the armed forces may be subjected to traumatic experiences during their careers and may suffer stress as a result, but that does not necessarily mean that it has been negligent. However, it has a duty to ensure that service personnel receive proper treatment. If we fail in that respect, and the individual suffers loss or damage as a result, he or she may be entitled to compensation.

If I may, I shall leave PTSD to one side, and turn to matters that arise from Mr Donnan's service in the Gulf. The Government accept that some Gulf veterans have become ill and that many believe that their ill health is unusual and is related to their Gulf experience. There is now scientific evidence that Gulf veterans report more illnesses than other comparable groups, but there is no medical or scientific consensus about the causes of those illnesses. We remain open minded about the causes, and important research is under way.

What are the time scales for that exercise? When will we have the final reports?

It might be helpful if I point out to my hon. Friend, since the matter is one of my responsibilities, that some 12 research studies are still proceeding. Most of them will report during the coming year. Some of them are very detailed, others much more general. The various problems should be resolved within the next 12 months or so. However, we are afraid that we will again find that there is nothing specific involved after having expended a great deal of time, effort and money—resources have not been stinted in our attempts to identify the cause of the conditions that are complained of. We may be left with an inconclusive result and have to recognise that we will never get to the bottom of the matter. However, I assure my hon. Friend that any suggested causes will be actively followed up and that we will do our very best to find the cause, if there is one to be found.

As my hon. Friend is aware, we encourage all Gulf veterans who are concerned about their health to attend the Gulf veterans' medical assessment programme. That programme was set up in 1993 to provide as full a diagnosis as possible to veterans who were concerned about their health. Following consultation with the medical assessment programme, the examining physician writes to the doctor who referred the patient to provide diagnostic information and recommend any appropriate treatment. It is then that doctor's responsibility to take forward and monitor the treatment as he or she would for any other patient. Veterans who have left the armed forces will normally have a GP as their doctor and any recommended treatment will therefore be carried out within the NHS. Veterans can be referred to the medical assessment programme more than once.

Last year we re-issued our Gulf veterans' illnesses information pack. Copies of the pack have been sent to all GPs in the United Kingdom, service medical officers, prison medical centres and other interested parties. I understand that two appointments were made for Mr. Donnan at the medical assessment programme on 18 October 1999 and 16 November 1999, but that for reasons that are unknown to me he declined to attend both of them, or was unable to do so. He was referred by his GP because he was suffering from depression. The medical assessment programme provided advice in writing to the GP and offered to help in any way they could. I would take this opportunity to urge Mr. Donnan to make use of this facility, because it might still be of some benefit to him. The people have a great deal of experience in handling those who have had similar experiences to him.

Gulf veterans' illness issues remain a high priority for the Government, as evidenced by the Gulf veterans' medical assessment programme, the continuing support for research and the publication of new information whenever it becomes available. The Government have demonstrated their commitment to addressing Gulf veterans' concerns openly, honestly, and seriously and I assure my hon. Friend that we will continue to do so.

The Ministry's Gulf veterans' illnesses unit is drawing together a document for publication later this year which will identify the key health lessons arising from the aftermath of Operation Granby and the subsequent investigation of Gulf health issues. It will set out developments that have contributed to improved performance since 1991. Planned publication of this paper further underlines our commitment to address the concerns of veterans' groups who have expressed the worry that the shortcomings in the Gulf may be repeated in future. We are determined that that will not happen and that the lessons must be applied to future deployments.

As my hon. Friend knows, early in 2001 I was appointed Minister with responsibility for veterans' affairs. I have spent most of the intervening months improving my contacts with all the veterans' organisations in the UK, so far as I am able, and setting up a proper structure for the handling of veterans' matters. As a physician, qualified in psychiatry and public health, I can assure him that medical matters such as Mr. Donnan's case are high on my list of priorities. I shall be taking a personal interest in the development of the community psychiatry programme and in the development of means to identify some of the factors that I have outlined; that may prove part of the case that the judge will review in the action later in the year.

The Ministry of Defence could use other approaches to the matter, besides going to court. It seems to want to hide from its obligations. While the Minister's remarks have been encouraging in a general way, they will do nothing to help Barry Donnan. On past experience of dealing with the Ministry of Defence, most cases are settled before they reach court. I wonder whether the Ministry would want to move from a reactive approach—of driving matters towards the courts—to a proactive approach of solving problems.

I have to say three things in reply to my hon. Friend. First, Mr. Donnan has chosen to have his case included in the group action. I am therefore constrained in what I can say, because of the legal proceedings. Secondly, treatments are available for Mr. Donnan's condition. The Gulf veterans' medical assessment programme might be able to direct him towards further help. It is not true that we are doing nothing for Mr. Donnan. As I have suggested, we have provided a reasonable pension. I am conscious of the adjectives used to describe pensions, but the general procedures have been followed.

We operate a generous scheme in the armed forces of both attributable and non-attributable benefits, through the War Pensions Agency, which is now, of course, part of my rapidly increasing area of responsibility. Mr. Donnan can rest assured that his pension is not subject to the reports on him supplied by the facility that has been treating him. Rather, the procedure was used by the association to justify his continued treatment and costs at the facility. Obviously it is necessary to show whether he would derive further benefit from treatment.

I cannot comment in detail on the case, but, to summarise, I have great sympathy for Mr. Donnan's predicament. I do not like our soldiers to suffer as he has done. Unfortunately, when the Ministry is accused of negligence and I consider that unjustified, it is necessary to take a robust stance. In the present instance, that is my general view, which is why the actions are proceeding. Generally, I assure the hon. Gentleman that I am conscious that people can be mentally as well as physically damaged by their service to the Crown, and I shall ensure that the services that we provide to them in turn are as good as they can be to deal with any future problems that they experience.

I am grateful to have been able to secure this debate, and am pleased to see the Under-Secretary of State for Health, the hon. Member for Pontefract and Castleford (Yvette Cooper), here to answer the debate. I have always regarded her as one of the more able Ministers in her Department and it is a pleasure to be here with her. She may know that I shall see her colleague, the Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), for a private meeting about this matter next week. I hope that the debate will be a useful preliminary discussion of some of the issues and that we shall perhaps be able to go into more detail next week.

I am sure that the Minister is well aware of the context, but it might help if I set that out. Cirencester is the largest town in my highly rural constituency, but the hospital is not typical. It is not as small as a typical rural community hospital nor as large as a normal district general hospital; it is in between. There are not many models for a hospital of that size in this country. That is why we begin to encounter the problems that we have. It is a delightful hospital, very well run by a matron who knows the name and medical condition of every single patient. It is spotlessly clean and people are treated with the highest possible care.

Nothing that I say implies any criticism whatsoever of the staff or administrators at the hospital, which provides 22 medical beds on Stratton ward, 50 assessment and rehabilitation beds on Colm and Windrush wards, 18 surgical beds on Beeches ward, 19 beds for mental health patients on Bourton ward, six endoscopy beds, a comprehensive range of out-patient services, 24-hour accident and emergency cover, an assessment and rehabilitation unit, a radiology unit and a phlebotomy department.

Our problem is that the range of accident and emergency services could be curtailed by the Royal College of Physicians and the Royal College of General Practitioners, which have recommended that the senior house officer posts at Cirencester hospital be withdrawn in the next few months because they do not offer adequate training. Although that recommendation has not been received formally, it is expected imminently. The problem, as I shall demonstrate, is with the ability to maintain full 24-hour accident and emergency cover when the senior house officers are withdrawn, because no surgery can take place unless there is proper medical cover.

While activity at the hospital has fallen by just under 1,000 cases—from 5,204 to 4,312—in the last three years, in the similar hospital at nearby Stroud it has increased by 25 per cent. Indeed activity at the maternity unit in Stroud has increased by 30 per cent. as the result of very diligent activity by the authorities in that area. When Cheltenham district general hospital and the Gloucester infirmary district general hospital are at breaking point, it makes eminent good sense—in fact it is a win-win situation—to increase activity at Cirencester and reduce the stress, strain and overstretch at those two district general hospitals.

Cirencester has a catchment area of some 25,000 to 30,000 people. The task is to persuade all the GPs when referring people to a consultant with the possibility of medical procedures to follow, and everybody who lives in that area when being referred, to consider Cirencester seriously. The theatre in Cirencester hospital is capable of some 2,000 operations, yet it is achieving only 1,000, or 50 per cent. of capacity. The answer is not to curtail and close facilities at Cirencester hospital; it is to use them better. The same applies to the cottage hospitals in my constituency—there are excellent, small cottage hospitals at Fairford, Bourton-on-the-Water and Moreton-in-Marsh. They should not be closed, but used better.

The funding formula does not fully reflect the circumstances of a highly rural area. As my neighbour, the hon. Member for Stroud (Mr. Drew) knows, it costs more per head on the capitation formula to provide services in a rural area precisely because of the distances and the sizes of units involved. I ask the Minister seriously to consider that factor. I also ask her to look at whether the capitation formula adequately reflects the costs of treating elderly patients. My constituency has the third highest number of over-85-year-olds of any in the country. Cirencester has to deliver services that are particularly geared towards elderly people. It is a truism—the Minister will correct me if it is not—that half the cost of providing health care for any individual is incurred in the first year and the last year of his life. Clearly, a hospital like Cirencester can provide a very valuable service in that respect.

The reason for this debate is the threat of curtailment of the accident and emergency department at Cirencester. The local press has run a very high-profile campaign on the matter. Before Christmas, 3,000 people came to a demonstration in Cirencester town centre. Only a few times in its ancient history—Cirencester was the second largest town outside London in Roman Britain—has the town centre been closed to through traffic, but it was on that occasion. That suggests the severe concern of local people on the subject.

Whatever the future holds for Cirencester hospital—I hope that the Minister will assure me that it is rosy and that services are moving forward and increasing rather than decreasing—the annual worrying of my constituents must stop. Every time changes occur, the local press finds out, huge campaigns are whipped up, and elderly people in particular become worried. With the advent of the running of the primary care trust on a more local basis from 1 April, I hope that we can have a proper public relations explanation of what goes on in the local hospital in language that those people can understand, so that they are reassured.

I would like to refer to the sad case of the treatment of a Mrs. Clark at Cheltenham general hospital. On the whole, the east Gloucestershire NHS health trust, which will soon be merged with the Gloucestershire royal NHS trust, has run a superb ship. Cheltenham general hospital gives good treatment to my constituents in the main, but Mrs. Clark's letter to me of 19 July suggests what can go wrong. She says that she is an elderly patient, and was to have fairly invasive surgery. She was asked to walk to the theatre, to which she objected strongly. I agree. No elderly patient should be asked to walk to the theatre. She details inadvertent circumstances that I shall not describe, but states that her purse was not available to her for five days. She was not fed properly for six days, and was not looked after adequately in her bed, stating:

"I had on several occasions requested that I be helped to sit up in bed as my legs have been paralyzed and each time I was told to do it myself as they were busy".

The letter points out what happens in our larger district general hospitals. People do not have time to treat patients with the necessary care and attention. I make no special criticism of Cheltenham general hospital, as all our district general hospitals are under the same stress. However, the case for Cirencester hospital is strengthened by the argument. If we can reduce the number of patients who go to Cheltenham through increased use of Cirencester, it is a win-win situation.

I return to the subject of the loss of junior doctors at Cirencester. As I said, there are two options as to how the cover can be maintained. A rota of general practitioners could provide resident on-site medical cover, or resident on-site medical cover for up to four nights of the week could be provided by staff grades or other medical grades, with non-resident GP on-call cover.

The first option is preferable, as it would enable the range of services currently provided at Cirencester to continue unchanged, with the exception of a small number of emergency cases. It would provide a more experienced level of cover, compared to that which would be provided by the relatively inexperienced senior house officers. I shall come back to the subject of experience. The second option would require a reduction in elective surgical activity, as it would not be possible to have in-patient cases when there was no resident medical cover, as is self-evident. A cessation of emergency admissions would also be required, as in the first option. In addition, it would be necessary to review the clinical protocols governing accident and emergency admissions, and it is likely that a few conditions would be excluded from admission during the night and at weekends. However, attendances during those hours are few. We all understand that accident and emergency services must be governed by protocols. Of course, the more serious and life-threatening cases will go to the district general hospitals, even during the day but especially at night, because those hospitals have intensive care beds and full consultant cover, but my constituents want 24-hour accident and emergency cover to be maintained at Cirencester.

The matter was due to be concluded last night, but unfortunately was not. This is what happened. The project director of the Cotswold and Vale primary care trust, Richard James, said:

"We remain extremely optimistic following yesterday evening's meeting but it is clear that a number of detailed tasks need to be completed in order for this agreed approach to be implemented successfully. Everyone left the meeting feeling positive that we could conclude the detailed work successfully and that the necessary medical cover could be put in place."

That has been the situation for two months. We still have no agreement and we know that cover is likely to be withdrawn on 1 May, if not sooner. Furthermore, I was told this morning that it takes at least a year to train doctors for the residential qualification necessary to provide hospital cover. If it takes a year to train doctors and there is no agreement in place about whether they will provide that cover, it is difficult to see how the gap will be filled. I seek an assurance from the Minister this morning that she will do her best to ensure that SHOs are retained at Cirencester hospital until properly qualified doctors are available to continue that cover so that there is no break in the service, because I fear that if there is a break in the service, it will never be restored.

This is a question of allocations, and I have already alluded to the fact that the Cotswold and Vale primary care trust is perceived to have spent more than it should have done. However, the reason why it has spent more than it should have done is because it is in a rural area and has a higher percentage of elderly patients. That means that the number of patients per GP is higher than the national average. Another relevant factor is that, in the health service, the requirements of elderly people are often overlooked. When elderly people go to see their doctor or consultant or go into hospital for a medical procedure, they are often confused and not as articulate as younger people. They are not as quick at explaining their problems or understanding what their GP or consultant tells them. We sometimes do not give elderly people the respect that they deserve in the health service.

The people of Cirencester love their hospital. They want all services there, especially the accident and emergency cover, to be maintained. They are looking to the Minister for reassurance today, especially about the need for trained doctors to take over from SHOs. I hope that that reassurance will be forthcoming and I look forward to continuing this discussion with the Minister's colleague at next week's meeting.

I congratulate the hon. Member for Cotswold (Mr. Clifton-Brown) on securing a debate on the future of Cirencester hospital, which is held in high regard by his constituents. I welcome the tribute that he paid to the staff at Cirencester hospital. I wish to respond as far as I can to the points that he raised, but I shall also ensure that the Parliamentary Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears), is aware of the issues raised in the debate so that she can follow them up in more detail.

As the hon. Gentleman will know, responsibility for deciding what services are provided at the hospital and how they are delivered rests with the local NHS bodies in Gloucestershire, in particular with the East Gloucestershire NHS trust and the Cotswold and Vale primary care trust. The key decisions about Cirencester hospital must be taken locally and where appropriate with proper public consultation. Ministers become involved only when a matter is referred to them by the local community health council—or, in future, by the scrutiny committees of local authorities. Nevertheless, I am aware of the concerns that the hon. Gentleman has raised. I shall respond, as far as I can, about the local position; and I will place it in the context of the national approach to the provision of acute care.

The provision of acute services, in hospitals large and small, is one of the central pillars of the NHS. We must clearly ensure that those services are the very best possible, and that they provide modern patterns of care fit for the 21st century. When we talk of modernising medical care, it is easy to think of sophisticated, high-tech treatments being provided in large, specialist hospitals. It is certainly true that many complex services and high-risk conditions require a critical mass that can be found only in larger centres. However, that is only part of the story.

In determining care for the new century, it is critical that we place at the centre of our thinking the views of the people and patients that the NHS is here to serve—including the hon. Gentleman's constituents. The public place a high value on locally available acute care, which means providing treatment as close as practicable to where they live, given the constraints of quality and safety. They want hospitals to serve local communities and to be focused on their needs.

We need to strike an appropriate balance between the convenience of having local services and the requirement to concentrate expertise for reasons of safety and quality. We should not fool ourselves into thinking that the best that the NHS can offer can always be provided on our doorstep. However, many needs can and should be met locally—close to home—by delivering care through networks of skilled providers working together and not in isolation. It is a strategy that is based on local solutions in a national framework. It is a strategy that recognises that small units such as Cirencester hospital have a vital role—not only today but in future—in delivering high-quality care.

I turn to the specific issues that the hon. Gentleman raises. Current public concerns about the hospital focus on the probable removal, later this year, of the junior doctors who provide overnight and weekend medical cover. I know that that is perceived to be a threat to the services at the hospital, particularly to the accident and emergency department. I can tell the hon. Gentleman that I have been assured today that the East Gloucestershire NHS trust and the Cotswold and Vale primary care group are fully committed to maintaining the current level of services at the hospital.

I understand that a meeting yesterday between the trusts and local general practitioners may have gone a long way towards meeting local concerns, enabling Cirencester hospital broadly to maintain its current level of services despite changes to the way in which junior doctors work within the trust. I am concerned by the points made by the hon. Gentleman, because they do not entirely fit with the briefing that I received of that meeting. The matter may need to be discussed in further detail with my hon. Friend the Member for Salford, but I will say more about that shortly.

I am advised that the current pressure for change at Cirencester has arisen as a result of medical staffing and clinical governance obligations. At issue are questions about the increasing specialisation of clinical staff, rising standards, minimising clinical risks—and, perhaps most important, changes to the training regimes and hours of work of junior medical staff. Four senior house officers are based at Cirencester; they provide the resident medical staff overnight and at weekends, supported by on-call GPs.

The Royal College of Physicians and the Royal College of General Practitioners have recommended to the Specialist Training Authority, which recognises the senior house officer posts at Cirencester hospital, that the experience offered at Cirencester is not adequate for training purposes. The Specialist Training Authority has not yet made a decision on whether to continue to recognise the posts for training purposes, but it is expected to be received later this month. However, I understand that the post graduate dean for the south and west region is concerned that middle and senior medical cover and support for those junior trainee doctors is not adequate, and that the associated clinical governance risks do not need to be taken.

The outcome, as the hon. Gentleman suggested, is likely to be the withdrawal of senior house officers from Cirencester and their relocation to Cheltenham in February 2002. That will enable their basic training and support from senior doctors to be enhanced, so that they can gain a wider range of clinical experience. I am sure that the hon. Gentleman would agree that it is important that junior doctors should be properly trained, have the necessary experience and be able to provide the high-quality care that is expected by not only his constituents but patients across the country. Under those circumstances, the key issue is to secure alternative medical staffing arrangements overnight and during the weekend period for Cirencester hospital. Daytime cover is adequately provided through a combination of consultant presence, GP clinical assistance and staff grades.

East Gloucestershire NHS trust and the Cotswold and Vale primary care group are in discussions with medical staff to ensure that alternative arrangements are in place to provide medical cover. As the hon. Gentleman says, the preferred option is for the rota of GPs to provide resident on-site medical cover. That option would provide a more experienced level of cover compared to the relatively inexperienced senior house officers. The hon. Gentleman may be interested to know that the reports that I received from the meeting that took place yesterday said that broad agreement on the proposed new arrangements was reached with local GPs by the trust and primary care trust. Although some contractual details remain to be worked through, it is anticipated that the new arrangements will start on 1 May. To ensure continuity prior to the establishment of the new arrangements, the trust has advertised for four locums to provide cover from February. However, in the light of his comments, I shall discuss the matter again with the regional office and the local people who advised us to ensure that the situation is as I understand it. My hon. Friend the Member for Salford will be able to discuss it in more detail with him and provide him with the reassurances that he seeks.

The proposed new arrangements will mean that services at the hospital remain substantially unchanged, with a doctor-led accident and emergency department open 24 hours a day, seven days a week, and the continuation of the in-patient medical and surgical services. As a result, patients attending accident and emergency are likely to see more experienced doctors than they do at present. I am told that there will be a small reduction in emergency admissions as a result of changes to clinical protocols on admittance, but that the reduction would have occurred because of the demands of clinical governance even were junior doctors to remain at the hospital.

The trust is working to maximise nurse-led services and to use telemedicine links effectively to maximise the scope of services. All beds will continue to be provided, and beds released by the changes will be used to provide increased elderly care rehabilitation and intermediate care services. The post-graduate dean for the south and west region is currently considering the creation of GP registrar posts in intermediate care. If that is agreed and posts are allocated locally, it would provide an additional level of medical cover to the hospital.

There is one other aspect of medical cover that I did not mention, but would be grateful if the Minister could address. Some consultants are resistant to maintaining lists in Cirencester hospital, because it is more convenient for them administratively to have people travelling to the district general hospital in Cheltenham. That is unacceptable to my constituents. If there are the required number of people in need of treatment in Cirencester, the consultant should be prepared to travel. It should not be the case that the list at Cirencester hospital is cancelled at the first opportunity.

I shall ensure that that issue is examined by the time the hon. Gentleman meets my hon. Friend. When it is clinically safe and high-quality care can be provided, we want to provide as much care as possible in local areas for the convenience of patients.

The presence of doctors in training is not essential for the provision of strong and vibrant local hospital services. I believe that the local NHS community is committed to ensuring that Cirencester hospital continues to provide a wide range of acute services for the people of the Cotswolds. The Government's view is that smaller units such as Cirencester have a vital role to play as part of the national health service.

The hon. Gentleman referred to the increasing focus on local decision making through the primary care trusts. He is right that the shift of power and resources towards the primary care trusts means that decisions about local hospitals can increasingly be taken with the interests of the local population in mind. We must also move away from the idea of hospitals as stand-alone institutions, each providing a specialist set of services. Instead we should ensure that the comprehensive range of services is provided across a diverse mix of institutions, be that primary care, care in the community, or care in a local hospital such as Cirencester and in the larger district general hospitals. Cancer networks have been developed to improve linkages across hospitals and between acute and primary care. That needs to take place in many other areas. It provides many opportunities for small hospitals across the country, many of which are working hard to develop their role and to embrace new ways of working. The challenge is to deliver the right care, in the right place at the right time. That means making maximum use of those local resources, but also of the primary care centres, to deliver and co-ordinate a local population's care.

As the hon. Gentleman mentioned, the care of older people requires close working between hospitals, primary care and social care. He also expressed concern about the funding formula. As he will be aware, the funding formula is under review and the NHS plan committed us to introduce a new and fairer funding formula for the NHS and to get resources to areas of greatest need. He will also be aware that we have representations from every part of the country, all raising their local concerns and pressures. In my own area, the concern is that there are fewer elderly people than in other parts of the country because life expectancy is considerably lower. Ensuring that those factors are included as part of the funding formula is clearly a complex matter, which is why such a major review is taking place.

The hon. Gentleman also asked me to confirm whether the most expensive care was provided in the last year of someone's life. That is true. The beginning and end of life are the most expensive times in terms of health care provision, and when the NHS understandably invests most in providing support. He also asked about the case of a constituent in Cheltenham hospital. He should refer his constituent to the NHS complaints procedure, as there may well be issues that should be taken up properly by Cheltenham hospital.

The Government are committed to having a mix of levels of care provision, not simply in the Cirencester area, but across the country. That care will be provided at the specialist level but also at the local level. We clearly do not simply want giant hospitals as isolated centres of excellence. We are entering a new era of health care provision where new technologies offer clinicians the opportunity to work together, to share expertise and to give clinical opinions to their peers, not necessarily through face to face contact but perhaps via phone, video conference or telemedicine links. The increasing use of modern technology to improve communications between consultants and medical professionals should provide even greater opportunities for smaller hospitals and local centres of care to provide all kinds of care that they could not provide in the past.

In conclusion, there are huge opportunities for the people of Cirencester and the local NHS to look at new and different ways of providing care. Clearly they have already been doing so by considering ways in which they can respond to the challenges posed by changes in junior doctors' hours and their training needs. I hope that we will be able to resolve the issue of last night's meeting and ensure that a satisfactory decision is taken rapidly to reassure the hon. Gentleman's constituents about the kind of care that will continue at Cirencester, and to ensure a viable and healthy future for that hospital.

I thank the Minister for her sympathetic and comprehensive reply. The debate has been useful and I look forward to continuing the discussion with her colleague next week.

Thank you, Mr. Amess, for presiding over the debate. I thank my hon. Friend the Minister for attending on this first day of the parliamentary Session in the new year. I am deeply sad, as are we all, that the day is overshadowed by the tragic news received by my right hon. Friend the Chancellor. My constituents and I offer him and Sarah our sincere condolences at this painful time.

I have requested the debate because of massive opposition in north Staffordshire and Shropshire to plans by StrataGas plc to crack into virgin coal seams in precious greenbelt and special landscape areas in order to drill for coal-bed methane. StrataGas's planning application for four test wells, to be followed by up to 1,000 production wells—barbed wire, rig and concrete blots on our landscape—has been opposed by Labour-controlled Newcastle-under-Lyme and Staffordshire councils. Local parishes are against the plans and more than 1,000 letters of protest have been written. The planning issues involved will be heard at an appeal at the end of this month.

The Department of Trade and Industry, as the arbiter of national energy policy, is one of many interested parties. Coal-bed methane plans are, of course, nothing new. Licences envisaging CBM exploitation have been issued by the DTI since the start of the 1990s. One of my hon. Friend's predecessors, Tim Eggar, the Conservative Energy Minister, was effusive about CBM as long ago as 1992. StrataGas's plans could create a huge conflict between pressing local environmental and national policy issues, which needs to be resolved during this debate.

I would appreciate the Minister's advice on several issues relevant to StrataGas's controversial scheme. What is the DTI's current stance on CBM schemes in general and how does that fit into the current energy review? To what extent, in what time scale and under what conditions is CBM seen by the DTI as "needed"? What stance will the DTI take on StrataGas' plans in Staffordshire and Shropshire, and on what grounds? Will it take into account local environmental issues and public opinion in deciding whether to support the scheme, and will its decision be influenced by this debate? Given the many reservations local people have about the suitability of StrataGas, how does the Department vet licensees on an on-going basis?

Before I address those points, perhaps I could just briefly set the scene. Newcastle-under-Lyme has always been a coal-mining town, until recently when all our pits shut down. It is, however, surrounded by wonderful, unspoilt rolling Staffordshire and Shropshire countryside to the south and west and by the Staffordshire moorlands to the north. If the Minister were to visit, I am sure that he would appreciate that for himself, as did a planning inspector last year who ruled against a gas extraction scheme near Biddulph in the Staffordshire moorlands. I hope that the DTI will consider his findings carefully for their relevance to the StrataGas plans. The Minister would also find much to admire about the great efforts that Newcastle and Staffordshire councils have made to regenerate vast areas of brownfield pit and opencast sites to attract thousands of new jobs.

StrataGas is a spin-off from Midlands Mining, the company that brutally shut down our last colliery, at Silverdale, in 1998. It also made a hash of its other pit, Annersley Bentinck in Derbyshire. More than 800 jobs were lost owing to the failings of directors and shareholders of StrataGas.

It is deeply offensive that people who failed to invest in mining coal underground now seek to get rich quick by cracking into coal seams above the ground, while creating very few jobs. It is equally offensive that, given all the possible drill sites, they are seeking to do so by spoiling precious greenbelt. The Minister may be interested to know that at a public meeting over a year ago, StrataGas managing director, Mr. Andrew Purcell, told local people, in his trademark listening style:

"The Government has given us the right to drill whether you like it or not."

I am sure that the Minister will find it as galling as local people that StrataGas was implying DTI support, long before all the issues even started to be aired.

I should like to digress, but with a purpose. Mr. Purcell also told me:

"We made no money out of Silverdale."

I have been through the accounts. The company made pre-tax profits of £5.9 million from 1996–98—the period of its ownership. It also took out £4 million—more than was needed to invest in opening up new seams—in dividends by stripping the assets of the mine. What we hear from the company's management is not what we get. The mines and StrataGas investors learned that, and it is what local people fear if that small, financially weak company is given the go-ahead with its CBM plans.

In its prospectus, StrataGas admits that there are significant environmental considerations, such as adverse visual impact, water and methane discharge and land restoration. Locally, we have identified many more, including traffic, children's safety at the nearby Edenhurst school, effects on local wildlife, housing blight and general harm to local business and tourism in a quasi-rural area. Therefore, much of the planning inquiry will focus on whether there is a national or local need for the CBM scheme. We would like to hear the Minister's views on that, and the current position on national policy guidance.

I must admit that we are fumbling in the dark. We have not yet seen the performance and innovation unit's energy project report. However, we are aware that the report says that new energy capacity could best be delivered through energy efficiency, combined heat and power systems and renewable energy. I would be grateful if the Minister confirmed that that is the current thinking.

It is important to distinguish between coal-bed methane and coal-mine methane. The latter is tapped off to prevent its escape from mineshafts—rightly so, as it is a greenhouse gas—but coal-bed methane is present naturally in stasis in virgin, uncracked coal seams. The geologists' report and the StrataGas prospectus make it clear that the seams in the north Staffordshire coalfield lie beneath clay—the Etruria formation—which is an effective seal and stops CBM escaping. Therefore, there is no environmental argument for StrataGas tapping CBM in our area in order to stop it escaping as a greenhouse gas.

As for local gas needs, StrataGas, as the former owner of Silverdale, already has a coal-mine methane operation at the mine; indeed, it is its only source of revenue. The gas is supplied to local business. Over the past year, StrataGas performance—surprise, surprise—has not been up to its directors' publicly expressed expectations. Results have suffered because take-up of the company's gas supplies has fallen. That is hardly surprising in a country awash with gas in which there is fierce gas competition. In short, we feel that there is no national need for the CBM scheme, which would override local environmental, planning and public concerns. Furthermore, as the company's performance shows, there is no overriding local need for the gas.

I would also be grateful to the Minister for information about the conditions that attach to the granting of exploration licences and how the DTI monitors adherence to them. The DTI granted licences to Midlands Mining, the parent company of StrataGas, in 1998. They have since been passed on to StrataGas. The company itself made it clear that the conditions laid down by the DTI for the transfer of the licences included raising a minimum of £4 million on its flotation and admission to the City's OFEX market, which happened in December 2000. StrataGas in fact raised £4.9 million but fell well short of its target of £5.6 million. It has since been consistently over-optimistic to its investors about the timetable for the CBM project, which is now a year behind because of huge local opposition.

The company has not revealed its current cash position but, from the most recent accounts and likely cash burn, we estimate that it is likely to be down to its last £2 million. That is about half the amount it originally said was needed to develop all the test wells. Therefore, the Minister will appreciate local fears that the company is too weak financially, not only to carry through its pilot scheme but to satisfy us that it could withstand any accidents caused by the new, largely untried technology and restore sites properly. Given the company's performance to date and lack of assets, there are concerns about its ability to raise further money in order to do so. Therefore, we would be grateful if the Minister would investigate whether StrataGas is still complying with its licence conditions, including any timetables set for initial well drilling.

A year ago, I raised concerns about disclosure in the StrataGas prospectus with the Financial Services Authority, which subsequently contacted StrataGas advisers, Matrix Securities. Yesterday, I wrote again to the FSA asking it to investigate statements made since by the company's chairman, Mr. Francis Gugen, about its performance, which appear to be at odds with its prospectus.

What you see and hear from StrataGas is not what you get. The public in Staffordshire and Shropshire are concerned because there is no overriding need for the CBM scheme and StrataGas is a wholly unsuitable company to pursue it.

I congratulate the hon. Member for Newcastle-under-Lyme (Paul Farrelly), who is my constituency neighbour, on securing the debate. I support him in his opposition to the coal-bed methane proposals. As Member of Parliament for Stone, I have been actively involved in the issue for an extended period, and I am deeply opposed to the proposals. They raise the most serious problems for the environment in my constituency, especially in and around Whitmore, and, as the hon. Gentleman said, they are vitiated by the grave uncertainties of the status of StrataGas.

I should like the Minister to explain how the Secretary of State for the Department for Transport, Local Government and the Regions, having granted the licences in his former capacity as Secretary of State for Trade and Industry, can now call in the application? How can he reconcile his quasi-judicial functions in his present capacity in respect of granting the licences with his previous granting of those licences? It creates a very difficult situation, which is made worse by the fact that the former Minister of State for Energy, the hon. Member for Leeds, West (Mr. Battle), has already stated on the Floor of the House that the Government regard coal methane projects as in the national interest. Those inconsistencies raise serious doubts about the efficacy of the process, even before the inquiry has begun.

The pilot proposals for four wells are clearly intended to extend to 200 and would cause the gravest damage to the communities and the environment in my constituency and that of the hon. Member for Newcastle-under-Lyme.

Does the hon. Gentleman agree that there is widespread fear throughout north Staffordshire about the implications of the incremental planning applications?

I most certainly endorse what the hon. Lady says. The matter is also of concern to my hon. Friend the Member for North Shropshire (Mr. Paterson), because the proposal extends to Woore, which is in his constituency. It affects a wide swathe of our constituencies and it is important that the Minister accepts that our constituents are gravely concerned about the issue and will fight hard to prevent implementation.

I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on securing the debate and on the manner in which he presented his case. Judging from what he said and from the interventions of hon. Members representing constituencies in the same part of the country, I acknowledge that the issue gives rise to strong local feelings and is therefore a suitable subject for debate.

The debate provides an opportunity to discuss some of the issues involved as they relate to energy policy, the possible role of coal-bed methane energy generation and local issues. My hon. Friend is active and successful in seeking the regeneration of industrial sites in the Staffordshire area with a view to ensuring an inflow of investment. His anxieties about the proposal for investment and coal-bed methane drilling in and around his constituency stem from genuine feelings on the matter and reflect the views of many of his constituents.

As my hon. Friend said, a planning appeal is under way. I am sure that he and others present recognise that that significantly constrains what I can say about some aspects of the application. I can, however, describe the regulatory framework that underpins the United Kingdom's petroleum licensing system and the activities that take place under it, and it would be helpful to do so. I hope to show that a robust regulatory framework controls those activities and to set my hon. Friend's mind at rest on some of the points he made.

Companies that want to search and bore for and get petroleum in Great Britain or on the United Kingdom continental shelf need under the Petroleum Act 1998 to hold an appropriate licence, which is issued by the Secretary of State for Trade and Industry. For the purposes of the Act, petroleum includes coal-bed methane and mines vent gas.

The principal licence under which companies may explore for and exploit those coal-mine gases in Great Britain is the petroleum exploration and development licence, which grants the holder exclusive rights over an area specified in the licence. The Secretary of State invites applications for such licences in regular licensing rounds. To allay the concerns that have been expressed, I stress that those licences confer no right of access to land, save with the landowner's permission, and do not remove the need to comply with the requirements of the local planning authority, the Health and Safety Executive and the Environment Agency.

Applications for petroleum exploration and development licences are made by companies, on their own or in partnership, and are assessed against two key criteria: the financial and technical capabilities of the applicants in relation to any proposed work under the licence, and the way in which any exploration or development of petroleum is to be carried forward. Unless companies can pass the financial and technical thresholds, they will not be considered eligible for a licence award. StrataGas, the company that holds the licence for the area that my hon. Friend mentioned, holds a number of those licences, having been thoroughly assessed against the criteria. Currently, we have no grounds on which to revisit the criteria, but I assure my hon. Friend that we shall consider carefully what he said.

The award of a licence is the beginning of the process. Once a licence is granted, any activities carried out under it are subject to a range of measures to safeguard particular interests. Before any exploration or development drilling can take place, the Secretary of State must grant consent. Our objective in considering applications for consent is to ensure that all economic petroleum in Great Britain and on the UK continental shelf is produced in an efficient, responsible and timely manner.

The team of geologists and engineers in the oil and gas directorate of the Department of Trade and Industry will seek to ensure that the proposed project is sufficient to maximise the recovery of the target gas, but is not gold-plated as regards the number of wells drilled or processing plant provided. I am now speaking generally about applications rather than in any way prejudging the one under discussion.

In addition, the licence holder must obtain the relevant consent from the appropriate planning authority. The authority will consider the proposed project's impact on a variety of issues, including the environment, on which it takes advice from the Environment Agency and the relevant statutory nature conservation bodies. If approved, the activity will be subject to normal environmental controls.

The Minister has said that when a licence is granted, account will have been taken of environmental questions, following discussions with the Environment Agency. I return to a point that I made in my short speech. Given that the functions of the Secretary of State for Transport, Local Government and the Regions—the former Trade and Industry Secretary—are indivisible constitutionally, how will it be possible to achieve fairness and justice on such questions? The licensing arrangements made by him in his former post must be dealt with in the making of decisions regarding the environment—by the Secretary of State at the DTLR.

I did not say that licensing was subject to environmental consultation; I said that licensing was then subject to normal planning procedures, and that the planning authority was obliged to consult the Environment Agency and other relevant environmental bodies.

To return to the hon. Gentleman's point about the former Secretary of State at the DTI now being Secretary of State at the Department for Transport, Local Government and the Regions, the office is charged with such responsibilities, not the individual. It is pretty naive to suggest that individuals move around making decisions in their own name and that those decisions are thereby invalidated, and I do not think that the hon. Gentleman would want to advance that as a substantial part of his case.

The final stage that a licence holder has to surmount is that the Health and Safety Executive must be satisfied that licensees have assessed risks to persons and have demonstrated that adequate measures have been taken to ensure the health and safety of people who could be affected by the proposed project.

Taken together, the measures mean that the UK's long-established onshore oil and gas industry is tightly regulated at a number of different levels, all of which aim to ensure that operations are carried out efficiently and safely and with minimum disruption to interested parties and the environment. The licensing process, the planning process, environmental safeguards and the health and safety check must all be gone through before matters can proceed.

The system has a track record of ensuring that hydrocarbon extraction co-exists harmoniously in the countryside without damage to the community. Significant oil production in Nottinghamshire, Sussex, Hampshire and Dorset has been under way for many decades with very little disruption to any of the local stakeholders. It is not widely recognised that one of the largest oilfields in the UK—the Wytch Farm development—has successfully and unobtrusively produced from under Poole bay near Bournemouth for more than 20 years. I am in no way prejudging issues that are subject to planning appeal, but the system has safeguards to deal with any project that is environmentally irresponsible or is not undertaken by a company with a strong financial and technical base.

I turn to the questions asked by my hon. Friend the Member for Newcastle-under-Lyme about our general approach to energy supply and the potential place of coal-bed methane within it. The overall aim of our energy policy is to work to ensure competitive energy markets while achieving safe, secure and sustainable energy supplies. In support of that, our objectives are to maintain the security and diversity of the UK's energy sources and to contribute to meeting the UK's environmental emissions targets. Potentially, coal-bed methane has a part to play in achieving both those objectives.

Local environmental issues for landward projects are taken into account during the planning process, but we need to consider the impact that projects, especially those in the energy sector, are likely to have on the national or international scene. The Government are committed to taking action to tackle climate change—indeed, the UK is one of the few countries to have published a strategy for doing so. Our current energy review is aimed specifically at determining how we can best meet the twin obligations of securing supply from diverse sources and meeting our Kyoto targets.

In that context, the development of coal-bed methane as a fuel, albeit on a small scale, will supplant the use of more carbon dioxide-aggressive resources such as oil and coal. Coal-bed methane is a very pure form of natural gas which burns more efficiently than other hydrocarbon resources with low CO₂ emissions. Moreover, it is essentially a local fuel, so the CO₂ transportation burden is much lower than that of oil or, in most cases, coal.

The Government's policy is to encourage the development of cleaner coal technologies for application in both home and overseas markets. In 1999, a review of energy sources was carried out, and during the consultation phase coal-bed methane was identified as one of the alternative ways of obtaining energy from coal without mining. As I keep emphasising, I am talking in general terms, rather than dealing with a specific application. I shall not accept the invitation to rule out coal-bed methane as an energy source in general, for the reasons that I have stated.

In the context of the UK's overall energy supply, the potential importance of coal-bed methane production has not been tested. My hon. Friend asked about its significance in the energy mix, and the simple fact is that its current significance is small, but that does not prejudge its potential significance. There is only one coal-bed methane field in production in the United Kingdom, which is at Airth in Stirlingshire. Estimates of the national coal-bed methane resource vary widely, and it is too early to put a figure on the level of production that could be expected. The UK's coal seams could, however, provide a considerable amount of methane and it is important to test that resource. It is worth noting that coal-bed methane has been successfully developed in the United States where it provides a small but significant input to that country's energy needs.

In the absence of a clear estimate of the size of the coal-bed methane resource, one can look to another area of coal-gas exploitation that has been demonstrated to work in Great Britain: the capture of the methane that is continually released from abandoned mineshafts. There are already several such projects up and running, including one in north Staffordshire at the Silverdale pit to which my hon. Friend referred, and there are many more proposals to take such activity forward. In some cases, the projects combine gas exploitation with on-site electricity generation or direct feed into the premises of energy users. The success of those commercial projects has demonstrated to both the energy industry and the financial markets that there is potential in small-scale CBM schemes.

My hon. Friend raised the issue of an appeal by StrataGas against the local authority's decision to turn down its application to drill several wells to test coal-bed methane potential in his constituency and the surrounding area. As he acknowledged, a public inquiry will convene later this month before an independent inspector, which means that the appeal is on-going. The inspector will submit a report to my right hon. Friend, the Secretary of State for Transport, Local Government and the Regions, who will decide whether the appeal is to be upheld or rejected. Officials in my Department have made a submission to the inquiry, as have many other interested parties. Although I do not want to impinge on my right hon. Friend's responsibilities—I am talking in general terms rather than specifically considering the application—I shall re-state in summary the key points from that submission, which reflect the general policy points that I have made.

The UK's energy self-sufficiency will decline as, over coming years, we become increasingly dependent on imports of fuel, particularly gas. The Department's oil and gas directorate is anxious to ensure that all economic petroleum in Great Britain and on the UK continental shelf is exploited in an efficient, responsible and timely manner.

Britain's coal reserves offer considerable potential for the development of a viable coal-bed methane industry. However, not all coal seams are identical: they need different techniques to make the gas flow. Although useful, lessons learned from the United States do not provide all the information necessary to underpin technical decisions about exploitation in the UK.

Again, I make my next point as a general statement of fact rather than an opinion on the specific application: the gassy coals of north Staffordshire make it a promising area for the production of mines-related methane. There are seven extant petroleum licences covering acreage in the northern half of Staffordshire, each of which is targeting coal-mine methane, either through the exploitation of vent gas—Silverdale is one of those projects—or through accessing gas trapped in unworked coal seams as is proposed by StrataGas.

I am grateful for my hon. Friend's information and his assurances that my remarks about StrataGas will be carefully considered. I have not seen the DTI's submission to the inquiry, but from his summary I take it that the submission is a statement of general policy and cannot be taken as backing a specific scheme against local concerns, because that is a matter for the planning inquiry. I take it that it would therefore be wrong for any company to imply that it had specific support from the DTI for a specific scheme.

We have 60 seconds of the debate left, and I do not want to waste them by playing with words. If the DTI has offered a licence, that represents support within the licensing context. I am trying to distinguish between the licensing process and the planning process. I have set out, as best I can, the sequence of events that mean that licensing does not imply approval under the planning process—