What discussions he has had with ministerial colleagues in the Ministry of Defence about Royal Air Force St. Athan. [44146]

I have regular discussions with my ministerial colleagues at the Ministry of Defence. I very much welcome the recent announcement by the Minister for the Armed Forces that the Welsh Guards are to be relocated to RAF St. Athan, in my hon. Friend's constituency, from May 2003. I am also pleased that the Ministry of Defence and the Welsh Development Agency will be working together on proposals to develop the site facilities, including the possibility of establishing an aerospace park at St. Athan.

I warmly thank my right hon. Friend for that reply. The development at RAF St. Athan, and especially the creation of a world-beating aerospace park, is indeed wonderful news. Will my right hon. Friend join me in welcoming the news this week that there will be no need, in that multi-million pound development, to extend the runway at RAF St. Athan, which I know is a great concern for the local community?

I am grateful to my hon. Friend for his comments. He will of course welcome the fact that the Welsh Guards are to come to RAF St. Athan, because it means that some 600 personnel will come to his constituency, which will obviously be a big boost to the local economy. In addition, the working relationship between the Government and the National Assembly, through the Welsh Development Agency, means that the development will be of enormous significance to the Vale of Glamorgan and surrounding areas. I pay tribute in particular to my hon. Friend for all the work that he has put into the project.

We, too, welcome the fact that the Welsh Guards will be based at RAF St. Athan, and that they will be based in Wales for the first time in the 83 years of their existence. However, does the Secretary of State agree with Welshman and Welsh Guardsman Simon Weston, who recently said that it would be pure folly for the Government not to mark the 20th anniversary of our great victory in the Falkland Islands? What does the right hon. Gentleman intend to do to make certain that the part played by the Welsh Guards in that victory is suitably marked?

I take the hon. Gentleman's point, and I am glad that he welcomes the Welsh Guards' return to Wales after nearly a century. I shall certainly take up his point with my colleagues in the Ministry of Defence and, of course, with the Assembly.

I welcome my right hon. Friend's efforts to preserve defence industry jobs at St. Athan. Is he aware that in the league table for defence spending in the UK, the north-east is top, with spending of over £700 per person, and Wales is bottom, with less than £120 per person? What efforts will he make to close that gap?

I have visited my hon. Friend's constituency on a number of occasions. The aerospace developments in north-east Wales are particularly significant for his constituents and others, but I am sure that he and others will welcome today's news in the Western Mail that 267 regional selective assistance projects have been approved in Wales, which is a record number; that manufacturing production figures are up for the first time since the summer; and that business confidence in Wales is better than it has been for many years.

What plans he has to change the Barnett formula to ensure equality of spending per head on health between Wales and England. [44147]

What recent discussions he has had with the First Secretary on the operation of the Barnett formula: and if he will make a statement. [44148]

I meet the First Minister regularly to discuss a range of issues. The Government keep the operation of the Barnett formula under review, but have no plans to change it.

I am grateful to the Secretary of State for his answer but I wish that he had said a little more about health spending. He is probably not aware that the new Hereford hospital will have 120 fewer acute beds than the current one and that 10 per cent. of the hospital's patients come from Wales. The primary care trust needs a 4.1 per cent. increase in health spending, which is £6.5 million. Will the right hon. Gentleman make representations to Health Ministers and the Treasury to ensure that Hereford hospital has 120 more acute beds, which will benefit not only my constituents but the people of Wales?

I suspect that not many hon. Members would see the significance of Hereford hospital, but the hon. Gentleman is of course right that many patients come from mid-Wales to Hereford—and Shrewsbury—for treatment. He made his points well and I will make sure that the Minister for Health and Social Services in Wales is aware of them. However, the Assembly has given the health service in Wales £3.5 billion in 2002 and 2003, and a further £49 million for 2003–04. That is an enormous sum to be spent on the health service. I only wish that the Conservative party had some ideas about where it would get the money that it wants to improve the health service.

The perverse nature of the Government grant distribution system within the United Kingdom must not be allowed to continue. The Secretary of State knows that even though Wales's population of 2.9 million is identical in aggregate to that of the east midlands counties of Leicestershire, Derbyshire and Nottinghamshire pre-1997, and the two regions have similar economic and social profiles, the level of public expenditure in Wales is significantly higher. Is not a full-scale economic and social assessment long overdue to form the basis for regional distribution, and should not the Barnett formula be thrown on the same bonfire as its English standard spending assessment cousin?

No, I do not agree that the Barnett formula should he scrapped—far from it. My hon. Friend is aware that the Barnett formula was established 20-odd years ago and that it has served us well under both Labour and Conservative Governments. As far as I know, the Conservatives have no plans to change the Barnett formula, nor did they when they were in office for all those years, and it was of course a Labour Government who introduced the formula. It prevents constant haggling about finance every year, and it deals only with changes in spending levels. My hon. Friend is also aware that one of the reasons—the chief reason—why Barnett was established was that deprivation in Scotland and especially in Wales was acute and needed to be tackled. The Barnett formula has done that very well.

The right hon. Gentleman is wrong. There is currently great deprivation in Wales—look at the fact that a good part of the country is covered by objective 1. Let me respectfully remind the right hon. Gentleman that Lord Barnett said that the Barnett formula was not a formula, and that it was meant to be temporary. It is time that we revisited it and introduced a proper needs-based formula, which is what is really needed in Wales and other parts of the UK.

There is very little evidence to suggest that Wales would be better off as a consequence of such a change. Some time ago in the Assembly, the Minister for Finance, Local Government and Communities was asked precisely the same question. She replied:

"On the Barnett formula itself, if I were convinced that reopening the Barnett issue would be of benefit to Wales, I would do that. However, I am not yet convinced of that."

I concur with my right hon. Friend the Secretary of State. May I suggest that, in fact, the complexity of changing from Barnett to some other formula would result in much wailing and gnashing of teeth throughout the United Kingdom, as we in Wales found when changes were made to the local government formula and all the new arrangements were regarded as worse than the originals?

The House should take note of my hon. Friend's words. As a former Welsh Office Minister before devolution, he is conscious of the fact that Wales benefited from the formula then. As it does now. I remind the House that because the formula ensures that changes per head are set at the same level in Wales as in England, the idea that the formula disadvantages England is simply wrong.

None the less, I am sure that the Secretary of State agrees that Wales could do with more money if it were available, and that the best way to achieve that is to elect a Liberal Democrat Government, who would raise direct taxation and put the money into public services. Until that great day, is the right hon. Gentleman at least willing to consider holding a cross-party debate on whether it is possible to produce a more level playing field for Wales, perhaps by reviewing the Barnett formula, accepting that if he can prove the points that he has already made, there is no need for change?

I suspect that I will have long retired from politics before we reach that great day of a Liberal Democrat Government. While we are waiting, I point out to the hon. Gentleman that some days ago his party discussed its shadow Budget. The hon. Member for Truro and St. Austell (Matthew Taylor)—I assume that this is agreed by Peter Black, who is the hon. Gentleman's Assembly spokesman on finance—is happy to commit a future Lib-Dem Government to using the Barnett formula. I assume, then, that the hon. Gentleman would agree that the formula gives Wales more money.

Does my right hon. Friend agree that resources for health care should be allocated on the basis of need, and not, as the hon. Member for Leominster (Mr. Wiggin) suggests, on the basis of a crude head count?

My right hon. Friend is precisely right. He is aware, too, that it is for the Assembly to decide how much money is spent on the NHS in Wales, irrespective of what the Barnett formula gives Wales.

Is it not a fact that through the Barnett formula more money per patient is spent on the NHS in Wales than in England? Is it not also a fact that the NHS in Wales is in a worse state than it is in England? There are far too many people waiting far too long for treatment in Wales because there is an enormous shortage of consultants and nurses. John Osborne, the ear, nose and throat specialist at Ysbty Glan Clwyd, said:

"It is a more stressful job today, and people are retiring early. Money for new developments is virtually nil. That means the service stands still or goes backwards."

The hon. Gentleman is entirely wrong in saying that the Barnett formula determines the amount of money spent per person on the health service in Wales. It does not do that.

More money is spent in Wales.

Indeed, more money is spent on the NHS in Wales, but that is not because of the Barnett formula. The formula and the changes to it give Wales extra money. It is for the Assembly to decide how it distributes that money. It has given extra money to the health service in Wales precisely because of the points to which I alluded.

The Secretary of State agrees that more money is being spent per patient in Wales than in England, yet there are many shortages. The British Medical Association in Wales estimates that it needs a 30 to 50 per cent. increase in the number of consultants to improve hospital services. Vacancy rates in cancer are 24 per cent. In mental health, the rate is 17 per cent. and in radiology it is 13 per cent. We have eight consultant neurologists, but the British Association of Neurologists says that we need 28.

Why does the hon. Gentleman not understand that more money is spent on the health service in Wales because of the neglect of the health service for nearly two decades? That is the reason behind it. The hon. Gentleman should understand also that over the past 12 months, waiting for cardiac surgery fell by 38.6 per cent. Waiting for orthopaedic surgery fell by 10.6 per cent. and the number of patients waiting for cataract surgery fell by 25 per cent.—all during the winter months. In addition, the hon. Gentleman is wrong about personnel. We now have 400 more doctors, and 500 extra nurses are being trained in Wales this year. By 2004, there will be 4,300 more nurses, more midwives and more health visitors. That is far more than there ever were under the Conservative Government.

The Secretary of State will be aware that, in Blaenau Gwent, we have some of the worst health problems in the United Kingdom. I am sure that he will also accept that if we are to tackle bad health, we must tackle poverty. With that in mind, will he have a quiet word with the First Secretary about the money that he is wasting on a millennium arts centre and on the new Noddy-like transport system whose sole object seems to be to get Assembly Members from the Assembly to the council chambers without getting wet? Will he suggest that those schemes be dropped and the money reinvested in tackling health and poverty in areas such as Blaenau Gwent?

I shall certainly have a quiet word with the First Minister, although how quiet it will be on such issues is anybody's guess. With regard to my hon. Friend's constituency, as a valley Member of Parliament myself, I am aware of the health spending inequalities over the years between different parts of Wales. That is why the Assembly has rightly listened to the findings set out in Professor Townsend's report, which I hope will end that inequality.

What discussions he has had with the First Secretary of the National Assembly for Wales and ministerial colleagues on regional airports in Wales; and if he will make a statement. [44149]

My right hon. Friend the Secretary of State and I have regular discussions with Assembly and UK Government Ministers on a wide range of transport issues, including regional airports in Wales. Aviation is a matter that is reserved to the UK Government, but Assembly officials have had close contact with colleagues in the Department for Transport, Local Government and the Regions about regional air services, regional air services co-ordination studies and the regional consultation documents that are to be published later this year.

I thank my hon. Friend for that reply. He is aware of the importance of a fully integrated transport system and the economic benefits that it can bring periphery areas, including mine in north-west Wales. Will he therefore use what influence the Wales Office can exert to ensure that all four corners of Wales are served, so we can have a united and inclusive Wales? May I suggest that commercialisation of RAF Valley in my constituency can help in that matter?

I should congratulate my hon. Friend on his efforts on behalf of RAF Valley and RAF Mona in his Anglesey constituency. I can tell him that the Wales air services consultation document, which is one of six regional consultation documents that are currently being finalised by the DTLR, considers specifically the possible roles that regional airports might play in terms of passenger air traffic. That consideration will cover all sites in Wales, including RAF Valley and RAF Mona on Anglesey, as well as the airfields at Caernarfon and Welshpool.

Does not the Minister accept that an airport can only ever be as good as the infrastructure that supports it? It is not getting on and off the plane that matters to passengers, but the time that it takes to get to the airport. Does the hon. Gentleman share my concern about the National Assembly's road-building strategy which, by ignoring that fact, appears to condemn all airports in Wales to third-world status? Will he again have a word with his colleagues in the National Assembly to try to bring about a change of heart? What is needed are improved road links—and they should be built.

I am not so sure that we have third-world conditions in Wales. Perhaps if the right hon. Gentleman were to visit, he might find that out for himself. The regional air service study that has been commissioned by the DTLR will cover Wales, Scotland, Northern Ireland, the south-west midlands and the north of England, and will consider how each region might best be served by a combination of available airports and aerodromes. It will identify the strategic enhancements that are required to improve service access to existing and potential regional airports and appraise the economic, environmental and social cost-benefits of a range of airport developments. All those matters will be considered in the study.

What discussions he has had with the First Secretary about the progress of the objective 1 programme in west Wales and the valleys. [44150]

I meet the First Secretary regularly to discuss a range of issues, including progress with the objective 1 programme. On 21 March, more than 500 objective 1 projects had been approved, worth a total of more than £300 million in European grants. More than £68 million of objective 1 grant has already been paid out by the Assembly.

I thank my right hon. Friend for his response. Would he care to give examples of specific projects in south Wales—perhaps in my constituency—which are receiving funding? Is he aware that Mr. Philip Owen, who is in charge of these European Commission programmes in the United Kingdom, sees the Welsh programme as a model of good practice?

I understand that my hon. Friend visited Brussels with other hon. Members some weeks ago, where that point was made to him. I have in front of me a large list of objective 1 approved projects in the Caerphilly constituency, which shows that the objective 1 programme is doing precisely what we wanted it to do when it was approved.

During the last round of objective 1 negotiations with the Chancellor, the then First Minister of the National Assembly for Wales had to resign to ensure that Wales got its fair share of the allocation. Is the Secretary of State for Wales prepared to put his political life on the line to ensure that Wales gets its fair share this time round?

The hon. Gentleman is aware that the Chancellor of the Exchequer is sitting not far from me, and that it is not appropriate for any Minister to comment on the spending review at this stage. I would simply say to the hon. Gentleman that I see no reason at all for the present First Minister to resign.

Will my right hon. Friend raise with the First Minister the use of objective 1 funds to improve road links and the road-building programme? Is he aware that there is a view that objective 1 money cannot be used for roads? Given that west Wales is close to the periphery of Europe, and that roads can increase gross domestic product, is it not rather senseless to deny the use of objective 1 money for the building of roads?

My right hon. Friend has a point when he says that infrastructure projects, including roads, will help the economy in his part of Wales and in others. I am informed that roads can be part of an objective 1 programme, so long as the local partnership agrees. He is also aware that the whole purpose of objective 1 is to restructure the Welsh economy, and the infrastructure is obviously an important part of that.

The areas of Wales that were not fortunate enough to get objective 1 designation are very concerned about how objective 2 is being implemented. Will the Secretary of State receive representations on behalf of the people in objective 2 areas, and consider the redesignation of those areas to objective 1, given the effect that foot and mouth disease has had on them?

The hon. Gentleman is aware that two thirds of Wales is covered by the objective 1 funding, but I shall be more than happy to receive representations from his constituency regarding the operation of objective 1, bearing in mind the fact that that would have to be done with a representative from the Assembly, which is responsible for the implementation of the programme.

What recent discussions he has had with ministerial colleagues and the First Secretary about Cardiff's bid to be European capital of culture 2008. [44151]

I have regular meetings with ministerial colleagues and the First Minister to discuss a range of issues, including Cardiff's capital of culture bid.

If, by any chance, in the near future, my hon. Friend sees the Prime Minister—[interruption.] Oh, here he comes! Will he draw to his attention the excellent bid that was submitted last week by Cardiff to be the European city of culture in 2008? Will he also note the total support across Wales, with one or two small exceptions, for that bid?

My right hon. Friend the Prime Minister has just entered the Chamber, and I have no doubt that he is aware of the issue that my hon. Friend raises. Cardiff is a vibrant and exciting city in which to live and work, and I am constantly impressed by its vitality. It is a commercial, cultural and learning centre, and a major centre for the arts. I can do nothing better than to echo the comments made by my right hon. Friend the Secretary of State for Wales at the Welsh Grand Committee last November—in answer, I think, to a question from my hon. Friend the Member for Cardiff, West (Kevin Brennan)—when he said that he was backing Cardiff's bid to become the European capital of culture. I hope that all Welsh Members will do that, as it would benefit Cardiff and Wales.

If he will make a statement on Government support for renewable energy in Wales. [44152]

The Government's approach to renewable energy is to set the framework but leave the market to decide on the type and location of projects to be pursued. The renewables obligation, which came into effect in England and Wales on 1 April 2002, will provide an assured market for renewables until 2027.

I thank the Minister for his reply. May I remind him that an objective 1 project at Aberporth in my constituency has a renewable biomass energy-creating project at its centre? That project has been endangered by the withdrawal of Ministry of Defence funding for its apprentices in the past two weeks. What action is the Minister taking in the Wales Office to ensure that that shortfall of funding will be plugged so that the project can go ahead? Will he come and visit the project to see for himself how we can renewably regenerate that area of west Wales?

I am aware of the biomass project to which the hon. Gentleman refers. I am also aware that this morning he met the Secretary of State regarding the decision to discontinue apprenticeships at Aberporth. I commend the hon. Gentleman for his hard work lobbying on that issue, and I understand his disappointment. My right hon. Friend and the First Minister met QinetiQ earlier this week, and they are now exploring with other agencies ways to obtain continued funding for the apprentice school. I will happily visit the proposed site of the Aberporth technical park. If we pull together on this issue, we will gain great benefit for the whole of Wales.

If he will list his official engagements for Wednesday 10 April.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further such meetings later today.

This is a momentous day for my family and me, because this morning my wife and I, in common with thousands of parents up and down the country, took our children to school for the very first time. [HON. MEMBERS: "Aw!"] Thank you—any contributions to their lunch boxes would be gratefully received. Will the Prime Minister assure me that he and the Chancellor will regard next week's Budget as a defining opportunity not just to sustain but to increase Government investment in public services, which will define the quality of life that our children will enjoy, and to create a national consensus about the society that we want to live in, about the limits as well as the extent of the Government's power to create such a society, and about the rights and responsibilities of each citizen in helping to achieve that?

I was not entirely sure what momentous decision my hon. Friend was about to announce. The key for the Government is to proceed on the basis of a strong economy that delivers the investment in our public services that we need. Already, record investment in education has produced the best school results this country has ever seen. We see from today's report by the chief executive of the national health service that most indicators in the NHS are moving in the right, positive direction, although there is a lot more to do. The only way we will be able to keep that investment coming through our public services is to make the right choices in the Budget to sustain that investment over the long term, so that the people of this country get the opportunities they need, and that depends on public services for all.

In the future, if left unchecked, Iraq will be able to deploy its weapons of mass destruction against targets in western Europe, including the United Kingdom. As the last head of the United Nations inspectors makes clear, development of those weapons continues unchecked. Given that, will the Prime Minister confirm reports that he told President Bush over the weekend that if military action is needed against Saddam Hussein, the British Government will support and, if necessary, contribute to it?

The time for military action has not yet arisen. However, there is no doubt at all that the development of weapons of mass destruction by Saddam Hussein poses a severe threat not just to the region, but to the wider world. I draw the House's attention to the fact that, in my first statement to the House a few days after 11 September, I made it clear that the issue of weapons of mass destruction had to be, and should be, dealt with. How we deal with it will be a matter for deliberation and consultation in the normal way. After 11 September, we proceeded in a calm and sensible way, and we shall do so again, but we must confront the issue of weapons of mass destruction.

Not only is Iraq developing weapons of mass destruction, but it has also become apparent that it is a major sponsor of terrorism in the middle east, bankrolling many of the families of suicide bombers and providing terrorists with bomb-making equipment. In the United States, the Prime Minister spoke about a "regime change" in Iraq. Given his reported comments, will he confirm that getting rid of Saddam Hussein may now be an objective of the Government?

As I said in Texas, there is no doubt at all that the region would be a better place without Saddam Hussein. It is worth pointing out that the Iraqi people themselves would rejoice most at Saddam Hussein leaving office. We should never forget that that regime has a particular record: the Iran-Iraq war in which 1 million people lost their lives; the annexation of Kuwait, which precipitated the Gulf war; and perhaps the most appalling act of all, the use of chemical weapons on the Kurdish people. There is no doubt whatever that the world would be a better place without Saddam. However, the method of achieving that is, as I said, open to consultation and deliberation. When the judgments are made, I have no doubt at all that this House—indeed, the whole country—will want to debate the issue thoroughly.

Does the Prime Minister believe that countering the growing threat from Saddam Hussein is about protecting lives in Britain and the lives of British forces abroad, and not just about supporting our allies? In the USA, the Prime Minister described those who refuse to accept the need to act as "utterly naive". Does he believe that they misunderstand the nature of the threat, or that they will simply refuse to accept any evidence that they are given?

I do not think that I should comment on other people's motives in relation to this matter, however kind it is of the right hon. Gentleman to offer me that opportunity—I am sure he wants to be helpful. The key issue is that this is not something that has suddenly arisen, and it is important that the House understand that. Before 11 September, a whole series of negotiations took place about potential new United Nations Security Council resolutions to put in place a better sanctions regime, and about how we try to ensure that weapons inspectors get back inside Iraq. The reason why the UN Security Council resolutions that were originally proposed and passed demand that weapons inspections take place in Iraq is precisely that the threat of weapons of mass destruction is real and present.

May I tell the Prime Minister how pleased I am that our right hon. Friend the Minister for the Environment will attend the most important United Nations environment conference on rain forests next week? However, it is equally important that we have a commitment to the environment at home. Will the Prime Minister look closely at assurances given to me that timber used in the refurbishment of the Cabinet Office, at 22 Whitehall, is sustainable? If, as Greenpeace suggests, it is not, will he look again at his Government's contract?

Because of what happened earlier today, I am more acquainted with the fixtures and fittings of the Cabinet Office than I was previously. My understanding is that the timber that is being used is indeed certified as sustainable, so Greenpeace's campaign is misconceived. However, the matter will doubtless be looked into by those responsible.

It is reported today that 3,000 post office branches in urban areas are scheduled to close. Does the Prime Minister support that?

No, it is not correct that 3,000 offices are scheduled to close. What is correct, however, is that there needs to be a major programme of change within the Post Office, which we are prepared to support with several hundred million pounds. The reason for that is perfectly simple: the current situation is not sustainable, unless we were to spend very large sums of public money in doing so. If that is the Liberal Democrats' position, perhaps they should say so.

The House will notice that the Prime Minister cannot side-step the facts. Since he took office, 1,500 post office branches in rural areas have already closed. Double that number are to close in urban areas, yet Labour's last election manifesto described those facilities as "an invaluable resource". By definition, how can they be an invaluable resource if 4,500 of them are to shut?

The reason why the change in the Post Office has to come about is precisely that it is not possible, unless we are to spend very large sums of money, to say that no post office will ever close. In fact, under the restructuring proposals, 95 per cent. of people will still live within a mile of a post office in urban areas, and as a result of the restructuring package, we will of course give the best protection possible to rural post offices. [Interruption.] I know that the Liberal Democrats always like to propose a problem but never a solution, but the fact is that, in the end, the only solution is to restructure. Even that will cost somewhere in the region of £270 million. If we were to go further by guaranteeing that no post office would ever close, no matter what its circumstances, the bill would run to hundreds of millions of pounds more. I am afraid that we simply cannot do that.

Given the Prime Minister's reported comment that those who take a different view from his on events in the middle east are utterly naive, may I ask him whether it is naive to be dismayed at the succour that has been given to Sharon by the mixed messages that have come from the American and British Administrations? Is it naive to be aware of the bellicosity of elements in the American Administration, based on ideology; or is it naive to believe in the centrality of the United Nations in resolving the problems of the middle east?

I have not described anyone who takes a different view from mine on Iraq as utterly naive. I said that it would be utterly naive to say that weapons of mass destruction were not an issue, and I am sure that my hon. Friend would not say that either. The issue is how we deal with that—I said what I said on Iraq a moment or two ago—but in relation to the middle east, it is not correct to say that there have been mixed messages. We are absolutely clear that we condemn entirely those things that are happening in the middle east at the moment, which is why Israel should withdraw from the occupied territories and do so now, as the American President has said; but we also—I hope that my hon. Friend would do so too—condemn without reservation the terrorist attacks on Israeli citizens: both must be condemned.

In answer to my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) a moment ago, the Prime Minister very properly said that there should be a period of consultation and debate before contemplating any military action against Iraq; but does he agree that, lying behind that debate, there would have to be the very fundamental principle that if a rogue state threatens the peace and security of this nation, it would be a gross dereliction of duty if we did not take military action against it?

Of course we must make sure that we are protected against any such state. I hope that this Government's record on issues such as Kosovo and Afghanistan and, indeed, in relation to Iraq shows that we are prepared to take that action. But I hope that the hon. Gentleman will appreciate, as I am sure that the whole House will, that action of this nature is very serious, that it should not be undertaken lightly and that it should be undertaken in consultation and deliberation with key allies.

Returning to the subject of Iraq, does not the Prime Minister agree that, dangerous and difficult though the situation in Iraq is, it cannot be tackled in isolation; and that, on the position in Palestine and Israel, we must tackle both issues without being seen to be exercising double standards, not only because that is fair and just, but because in the war against terrorism it would be counterproductive to be seen to be exercising those double standards?

Of course I agree with my hon. Friend; it is important that we act without double standards and that we act on both issues. That is precisely why we passed UN Security Council resolution 1402 in respect of the situation in the middle east at the present time, which made it absolutely clear that we support both Israel's right to security and a viable Palestinian state, and that Israel should withdraw from the occupied territories. Of course it is also important that we deal with the issues of weapons of mass destruction.

The Prime Minister may recall that a month ago I asked him about delays in cancer treatment. He reassured me that the Government were investing more. Is he aware of the anger and frustration felt by many cancer patients and clinicians because a high percentage of those specifically earmarked funds has been siphoned off, owing to NHS bureaucracy, and to financing low-priority activity such as reducing the debts of hospital trusts? What guarantees can he give that money specifically pledged by the Government to their top health priority is spent for the designated purpose?

We do need to make sure that money allocated to cancer treatment is spent on that. All I would say to the hon. Gentleman—to put what he has just said in a balanced perspective—is that the report that drew attention to the problem also said in specific terms that cancer services in this country were improving. More than 90 per cent. of people who are referred to a consultant are now referred within two weeks; the figure was just over 60 per cent. when we came to office.

I believe that the Prime Minister has been entirely right—[Laughter.] I believe that he has been entirely right to be as active on the international scene as he clearly has been in recent weeks. May I, however, seek a reassurance on behalf of my constituents that, in next week's Budget and in the coming months, the Government will remain committed to their highly successful domestic agenda—a strong economy, investment in public services, and repairing the damage that the Conservative party has done to our communities? [Interruption.]

I thought it was a very good question. My hon. Friend is of course absolutely right. The Conservatives never like being reminded that when they were in office interest rates were at 15 per cent. for a year and at 10 per cent. for four years, there was savage underinvestment in our public services, and unemployment rocketed. Fortunately, under this Government we have the strongest economy that we have had for decades, the lowest inflation, the lowest interest rates and the lowest unemployment. That is why the Conservative party does not like it.

Perhaps the Prime Minister would like to agree with this one. Commander Ward, the decorated squadron commander from the Falklands—a war whose 20th anniversary we now mark—said that the Prime Minister's decision to withdraw Sea Harriers would lead to the

"loss of many lives and ships".

No. We are satisfied that the decisions we have made through the strategic defence review allow us to defend our country properly, and I pay tribute to the superb work done by our armed forces around the world.

The Prime Minister should know that in the strategic defence review it was proposed to phase out both the Sea Harrier and the GR7, but not before 2010, when a replacement aircraft was supposed to be available. He must also know that the aircraft that the Government are now talking about putting on the carriers—the GR7—is slower, has no air-to-air radar, and is not designed for air defence at all.

First, let me point out that the right hon. Gentleman is complaining about the amount that we are spending on defence. All these decisions are, in the end, about the resources available. I think people in the armed forces remember that when his party was in power it slashed defence spending. The first real-terms increase took place under this Government, when we came to office. As regards the right hon. Gentleman's specific point, I do not accept that the efficiency of our armed forces is being undermined by that.

The Prime Minister cannot go back to the pre-1997 Government, given that his own strategic defence review, on which he bases his evidence, makes it absolutely clear that that aircraft would stay in service until a replacement had been found. The Prime Minister's previous Chief of the Defence Staff, General Guthrie, recently said that

"the Defence programme was underfunded before September llth."

I do not accept that our armed forces are at all in the state that the right hon. Gentleman describes. On underfunding, I was making exactly that point a moment or so ago. When his party was in office—[Interruption.] For 10 years, the Conservative party cut defence spending. Under this Government, the armed forces have had the first real-terms increase in defence spending for years. If Conservative Members are demanding that even more money be spent on defence, I hope that they will support the decisions that are announced in the Budget next week.

In the context of Israel, I hope that the President was prepared to listen to my right hon. Friend's experience in Northern Ireland, which shows that the only way to build peace out of conflict is patient politics and persuasion, not bombs and bullying.

The action that the United States has taken—against many countries, obviously—is now the subject of European Union action under the World Trade Organisation. I made it absolutely clear that we fundamentally disagree with the United States' decision, which is not good for anyone, including the US steel industry. The action undertaken by the WTO is important. If the WTO finds against the United States, I hope that it will abide by that ruling. The more free trade there is, and the fewer restrictions on trade, the better.

Can the Prime Minister explain the difference between what we and the Americans are doing in Afghanistan to root out al-Qaeda terrorism and what Israel is doing on the west bank to root out Palestinian terrorism? Why is one right and the other wrong?

In the case of Israel and the Palestinians, a process is under way to resolve a longstanding dispute, so the two situations are not identical. We will secure a lasting solution in the middle east peace process only when we understand that it cannot be simply a military solution. We will need a political solution. Israel will not go away; the Palestinians will not go away. The only solution will be based on recognising Israel's right to exist—that should be recognised by the whole Arab world—and on giving the Palestinians a viable Palestinian state in which to live.

Does my right hon. Friend accept that there is widespread support in the House and the country for the proposition that the Iraqis should comply with United Nations Security Council resolutions and allow unfettered access to arms inspectors? Will he give the assurance that before any military action that may eventually become necessary is contemplated, Saddam Hussein will be given every opportunity to comply with those resolutions?

My hon. Friend's point is right. Saddam Hussein is in defiance of the resolutions with which he should comply. However, he has the opportunity to comply with them now. He is not in doubt about what is necessary. The United Nations resolutions are clear; there are nine and he is in breach of every one. The international community's position is also clear. Whatever people think about the action that will follow, he must comply with the resolutions. To that extent, I entirely agree with my hon. Friend.

May I give the Prime Minister another opportunity to tell the House whether he has done a deal that involves an amnesty for IRA terrorists on the run?

It is not a question of a deal but of recognising, as we did in the Weston Park proposals, that there is an issue about people who in some cases have been charged and in others, convicted, and who have been out of the country for a long time but are not covered by the existing process. We shall find a way to cover them, and we will do that sensibly; we made that clear at Weston Park. It is not a deal but a sensible issue that needs to be resolved.

Contractors are currently on site, preparing to start construction work on the £11.5 million Rothwell-Desborough A6 bypass in my constituency. Will my right hon. Friend join me in congratulating the local authorities and all those local people who campaigned for that vital road for more than 25 years? Will he note the stark contrast between that public investment and the false promises and fantasy road schemes that we had from the Conservative party for so long?

I am happy to congratulate all involved in the Rothwell-Desborough A6 bypass. It is worth pointing out that my hon. Friend's constituency is one of many that will benefit from such schemes. The transport plan includes an increase of 44 per cent. over the previous 10 years in investment in our public transport system, road and rail. That demonstrates the necessity of the investment in public infrastructure that we will continue to make.

The Prime Minister has clearly set out what he expects the Palestinians and Israelis to do. I doubt whether a single hon. Member does not support that. What did he and the President discuss doing if Israel continued to ignore UN resolutions and persisted in its current actions?

There is no alternative to continuing the pressure to ensure that it complies and, in line with that, that the Palestinian Authority takes the necessary action against terrorists. Even with the United States, there can be no resolution without some assistance from the parties that are directly involved. From the perspective of the international community, we will remain fully engaged. Not only the United States but the United Kingdom, the European Union, NATO, Russia—the whole international community—wants to help. However, to do that we need at least some give from the sides that are directly involved in the dispute.

Although I acknowledge the Government's recognition of Liverpool's housing needs by placing it in the new pathfinder housing area, does my right hon. Friend agree that they cannot be tackled without major new investment funds being made available? Will he support the provision of major funds to the new housing market renewal fund, which will tackle dereliction and its associated problems in Liverpool and elsewhere?

We are putting substantial additional sums into neighbourhood renewal programmes in Liverpool and elsewhere. When those schemes are properly co-ordinated, with all the various departments working together, they are very successful. I know that my hon. Friend will agree that we must also tackle some of the social disorder problems in those local communities. For that reason, the announcement by my right hon. Friend the Home Secretary on matters such as abandoned cars and street crime is so important today.

The Prime Minister sets standards in government. Will he tell the House whether there is a daily record of authorised, unattributable briefings or are some deniable? Is it a condition of ministerial office that those in government obey the code for Members? Who monitors the ministerial code and who requires Ministers to uphold it?

If the hon. Gentleman has any complaints to make, he can make them to the normal authorities in the normal way. I am absolutely satisfied that much of what the Conservative party raises is complete nonsense.

On Friday last, when the final shift was worked at the heavy end of the Llanwern steelworks, it was announced that the steel boss who axed 6,000 steelworkers' jobs last year was to be rewarded with a bonus of 130 per cent., bringing his salary up to almost £500,000. Why, in almost every crisis of this kind, do the workers end up losing out and losing their jobs, but the steel bosses and bosses of other industries are allowed to gift themselves fortunes?

I do understand the concerns that my hon. Friend has raised. All I would say is that, as a result of the money that we are putting into those areas, the work that the Employment Service is doing, and the strength of the economy overall—some 26,000 jobs have been created in Wales over the past few years—we at least give people who lose their job the best chance of getting a new one. In respect of the bonus paid to the chairman of the company involved, I am afraid that that is not a matter for me.