I welcome the opportunity to debate the important subject of regional air services. I thank the many right hon. and hon. Members here for attending today. I also thank the many Members who attended the debate that I organised in July in Portcullis House to consider the subject, especially my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who spoke at it.

I shall touch on several issues. I shall define what I mean by regional air services and consider current issues and problems and the report of the former Select Committee on the Environment, Transport and Regional Affairs. I intend to analyse the role of government, not only here but in the United States and France, and the prospects for government intervention. I should like to summarise briefly the points that I made almost a year ago to the day in this Chamber on a similar Adjournment debate, and analyse the south-east and east of England regional air service study—SERAS— which is crucially important to the debate.

What do I mean by regional air services? They could be defined as routes from London in its broadest sense—from Gatwick, Heathrow, Luton, London City and Stansted to domestic UK airports such as my constituency of Inverness, Aberdeen, Newquay, Belfast, Plymouth, Dundee, Glasgow, Edinburgh and, let us not forget, the Channel Islands, for which regional air services play an important role. Of course, the two primary hubs in London are Gatwick and Heathrow. Journeys tend to be of two types: point to point or interlined, by which I mean domestic flights that continue to international destinations. Heathrow is undoubtedly top of the interlining league, Gatwick is mid-table, and Stansted and City, to continue the football analogy, are unfortunately very much in the relegation zone.

What current trends and problems are evident in United Kingdom regional services? Mr. Laurie Price, from Aviation and Travel Consultancy Ltd., analysed daily flights from Heathrow to regional airports between 1986 and 2001. In 1986, 19 regional UK airports had direct flights to Heathrow, with an average of 106 flights daily. However, in the summer of last year only eight regional airports had direct flights to Heathrow, and the daily average of flights had fallen to 88. In 1986, 15 airports had direct flights to Gatwick, and by 2001 that figure had fallen to 11. To be fair, Gatwick's daily flight average is now slightly higher, in part because of the transfer of domestic flights from Heathrow, including my own route.

Which airports have lost out? Heathrow services were slashed from Inverness and from Plymouth—where the constituency of my hon. Friend the Minister lies—in 1997, from Dundee and Carlisle in 1987, from Liverpool and East Midlands in 1992, from Birmingham in 1993, and from Norwich in 1990. Why do such cuts occur? Services in the UK are a free market and in simplistic terms the profit per mile per passenger is better for intermediate and long-haul flights than for domestic UK routes. In effect, commercially viable daytime slots at Heathrow and Gatwick are full.

I have asked some questions on the subject. Last summer there was 20 per cent. excess demand for slots at Gatwick. On a typical summer's day in August 2001, demand exceeded capacity by as much as 22 per cent. every minute between 6 am and 8 pm. That, of course, is fully reflected at Heathrow as well.

Aviation was badly affected by the tragic events of 11 September. Airline costs rose and initially growth and traffic were reduced. The traffic in question, however, has fully returned. As the Minister well knows, his Department has predicted a 4.25 per cent. growth rate in passenger numbers every year. In London, there is no new capacity to take that growth. The last substantial runway built in the UK was in Manchester more than a decade ago. In the competition for slots, therefore, regional air services will always lose out to their older and bigger brothers: international and transatlantic flights.

In 1998, the then Select Committee on the Environment, Transport and Regional Affairs undertook a comprehensive inquiry into regional air services. The Committee made several recommendations to the Government, which I fully endorse. It argued for different categories of slots—domestic, intermediate and long haul—so that swapping of slots could be controlled, as in the United States. It also suggested that, in the allocation of slots at domestic airports, priority be given to airlines bidding to operate domestic regional services. That would be similar to the US essential air services programme. The Committee recommended an end to airlines' own companies allocating slots at airports, as they do at Heathrow and Gatwick. It also argued for the development of public service obligations—PSOs—at Heathrow for a specified minimum level of air services.

The current European slot allocation rules—governed by European regulation EC 95/93—have been due for revision for some time, although I understand that we will not have a complete spring clean until 2003. In my view, they must be adapted to allow greater protection for vulnerable regional air routes, otherwise there will always be a trade-off between domestic routes and more lucrative international destinations.

What role can the Government play? What examples of best practice have there been throughout the world? In simple terms, under the EU regulations member states can reserve slots in two ways: first, on a route to an airport serving a peripheral or development region, if that route is considered vital for the economic development of that region; secondly, on routes on which the Government have imposed PSOs to make sure that a service is maintained that would otherwise not be.

There are demanding regulations for the first option: the slots concerned must have been used on that route when the regulations came into force in 1993; only one carrier must operate that route; and, it must not be possible for the route to be covered substantially by any other mode of transport. The reservation ceases once a second carrier covers the service with the same frequency.

Only in France has the first option been used, at Paris, Orly airport. It is now using the second option of imposing PSOs and I believe that some 30 per cent. of services at that airport now have PSOs. At present, there are no English PSOs. In Scotland there is a long track record of them, particularly in the island services, such as the Western Isles. They are all exclusively subsidy PSOs, however. I am certainly not calling for subsidy PSOs today, which are not needed on routes that are commercially viable.

In the United States, the essential air services programme has operated since deregulation in 1978. That was the price that Congress demanded for passing legislation. Congress now spends $50 million per year on that important programme, which serves 75 cities in the US. Most are in remote areas, such as Alaska. At very congested airports though, the United States Department of Transportation can demand that EAS status be given to certain routes. The Government have a strong power of intervention, in a country that is arguably the most unregulated in the industrial world. We should examine that closely—if it fits, why not copy it?

On that point, I know the Welsh air service opportunities best. America also seems to have accepted the idea of having a large number of hubs, with the regional airports acting as spokes. What does the hon. Gentleman think of the idea that we cannot sustain the increasing pressure for international flights through London, so we should use places such as Cardiff, Birmingham and Manchester to ease that pressure? Should we have spokes going into those hubs?

The hon. Gentleman makes an important point. It is important that we develop alternative hubs and I note that Manchester is doing so. That does not put an end to the argument that many of our tourists and business people want to get to London and that therefore we need the capacity in London. However, developing alternative hubs and super-hubs, as they have in the rest of Europe, is vitally important.

What are the prospects of a Government intervention in this case? The bulk of witnesses before the Select Committee inquiry to which I referred argued that there was a case for public sector intervention to protect key vulnerable regional air services. In my constituency, the Highland council, the enterprise agency, the Scottish Council for Development and Industry, the local chamber of commerce and more than 90 per cent. of local businesses argued that we should have a public service obligation on the Inverness to Gatwick route. The Minister may wish to comment on a letter that proposed a draft PSO, which his Department received from Sarah Boyack, a former Minister for Transport and the Environment in the Scottish Parliament.

In paragraph 93 of the evidence to the Select Committee, the Minister's Department stated that the United Kingdom would have a chance to suggest amendments during the revision of the European slot allocation regulations. It stated:

"Particularly if the Commission does seek the ability to restrict the ability to ring-fence slots, one possibility might be to propose balancing that by giving greater priority to regional services in the…allocation of available slots."

British Midland criticised the new entrant rule in slot allocation and used the example of Heathrow, which has had 53 new entrants since 1991. There have been too many low-frequency long-haul services, which have frustrated prospects for domestic air services. Effectively, they have been squeezed out by low-frequency long-haul services.

It is often said—and it may be a cliché—that politics is the art of the possible. However, it is also the art of the practical, within a range of competing priorities.

:On the art of the possible, does the hon. Gentleman agree that the case has been convincingly made for a PSO between Inverness and London Gatwick? What possible explanation can he suggest for the Government delay in acceding to such a reasonable request from the Scottish Executive?

I thank the hon. Gentleman for the intervention. My track record on this matter is well known, because I argued for the PSO for many years before the hon. Gentleman became a Member of Parliament. It is important that, if we meet the criteria, we get that PSO. However, before that decision is made, we need to persuade Europe to open up the regulations, so that it is much easier for routes such as Inverness-Gatwick to qualify. There are legal arguments, too, but as I am not a lawyer I shall not take them up. I am sure that the Minister will want to comment on them in his reply.

A simple solution to the problem is to build more runway capacity at Gatwick and Heathrow. However, this may not be a suggestion that wins me much favour with my right hon. and hon. Friends who represent London seats. Judging by the experience of Manchester airport and Heathrow terminal 5, one must allow 10 years for the lead-in time for planning, because of the large number of likely objections. However, technical solutions may be found. For example, the Cranford agreement that covers Heathrow and governs the speed and direction of take-off and landing times could be varied to create more slots for regional air services.

There may also be creative solutions. Laurie Price, the aviation consultant to whom I referred earlier, argues that 70 per cent. of aircraft using Heathrow and Gatwick use a 1,800 m runway. RAF Northolt has such a runway and could be adapted as an overflow airport for Heathrow. Redhill aerodrome, which is not too far from Gatwick, could perhaps be adapted for the same purpose.

What future is there for regional air services? I welcome the Government commitment to the new White Paper and I commend the effort that is going into the consultation process. However, I and many other hon. Members from peripheral regions want immediate solutions. We need the bread of new runways at Gatwick and Heathrow today—or at least in the next five years—rather than the jam of possible new runways and protection in 10 to 15 years.

I also welcome the commitment and key objectives set out on page 277 of the Scottish regional consultation document, which refers to allowing

"a days business to be transacted in a wide range of UK and European cities from all parts of Scotland".

The achievement of such objectives will in large part depend on maintaining links with London Heathrow and London Gatwick, the UK's leading network hub airports. On the Government's admission, however, in the SERAS consultation mentioned earlier, both Heathrow and Gatwick are full today. The viability of additional slots at those airports is limited, particularly at peak times. In such circumstances, there is no prospect of improving schedules or frequencies to peripheral regions. According to the SERAS consultation, the earliest time that additional landing capacity is envisaged is 2011. Realistically, the date is more likely to be 2015 if bold initiatives like the new runway at Sipson at Heathrow are to be developed.

Against that historical background, it is difficult to accept assertions that a proportion of any new capacity would be kept for regional air services. It cannot be in the best commercial interests of commercial airlines to do so. Some would argue that that would be failing in their duty to shareholders. In 10 to 15 years, capacity will be an even more difficult problem and new capacity will just be taken up through expansion of short-haul and long-haul services. The regions will still be left in limbo. The only practical way forward is to include immediate capacity solutions in the White Paper.

I commend the Government for recognising the importance and contribution of the air transport industry. Its contribution to the economy is £10.2 billion. It accounts for 1.4 per cent. of gross domestic product and, directly, 200,000 transport jobs. Heathrow and Gatwick are leading international network airports, with more services to more places than competing continental airports. As my right hon. Friend the Secretary of State for Transport said,

"doing nothing is not an option."—[Official Report, 23 July 2002; Vol. 389, c. 847.]

We now have a comprehensive process of researching, identifying and consulting on airport and runway options. I welcome the Government's commitment to a new aviation White Paper by spring 2003—the first for almost 20 years. However, there are some negative points to be made.

Seventy per cent. of demand is in the south-east. That will always take precedence over the needs of the regions. As I mentioned, Heathrow and Gatwick airports are full. Stansted will be full by 2005. There will be no new runway in the south-east until 2011 and 17 regional routes have lost London services since 1986. No new runways for 10 years will mean that airlines will gradually trade slots used for regional services for use by higher revenue long-haul services. For example, British Airways dropped Belfast-Heathrow after 54 years last year. There is no prospect of additional regional or domestic routes or of reinstatement of lost services such as the route that Norwich lost in 1990.

Increased reliance on low-cost, point-to-point services from regions to secondary airports will leave many regions off the international development radar. The no-frills carriers provide excellent low-cost links to some peripheral regions, to the benefit of passengers and regions, but those areas must have full service network links to London hubs, with worldwide interline access to services, as a key to economic development. That means maintaining access to Heathrow or Gatwick via the services of a full service network carrier such as British Airways, British Midland or British European.

I spoke to representatives of the largest employer in my constituency a few weeks ago. It is called Inverness Medical and is owned by Johnson and Johnson. The American who runs the company, which has 1,400 employees, made it clear that he would not be in Inverness if there were not direct links to London Heathrow and Gatwick. I am sure that many hon. Members could echo that experience with reference to their constituencies.

As Amanda Francis, the UK representative of the States of Guernsey, told me yesterday,

"Guernsey believes that in the short to medium term slots into Heathrow and Gatwick should be ring fenced for regional access for air services to…all parts of the United Kingdom and the Crown dependences of Guernsey, Jersey and the Isle of Man."

The SERAS proposals include a new runway at Sipson, Stansted or Cliffe. Gatwick, which is of course London's second largest network airport, has been left out, for unsupported reasons based on the 2019 agreement, a planning agreement with the local authority that there can be no new runway before 2019. None of the options is deliverable in less than 10 years, possibly longer. Only the Heathrow option takes account of where market demand is greatest, and Gatwick has largely been ignored as a major regional UK focus by the SERAS study.

What is the solution? The Government must now accept the crucial importance of specific regional air links to specified London airports and work with the EU to secure designation and protection of the slots for those links, just as has happened in France and in the Republic of Ireland, where the Irish Government have secured a PSO designated link between Londonderry and Dublin. The Government must afford the same protection to air links from peripheral regions to London. Concurrently, we need to develop Northolt at Heathrow and Redhill at Gatwick to provide specific capacity for regional and short-haul services for those airports with runways up to 2000 m long.

In paragraph 14.17 of the SERAS document, the Government called for maximum use to be made of Heathrow, Gatwick, Stansted and Luton airports. However, without more runways, many of their proposals will remain undeliverable. We must develop Northolt now and Redhill within four years. That could increase the capacity of the London system, where demand is greatest, by 60 million passengers. Developing Northolt and Redhill may require concurrent ring-fencing of slots through PSO or similar designation.

Some people may ask why capacity must be provided at Heathrow and Gatwick. What about other airports? I answered that question in a reply to an earlier intervention. Heathrow and Gatwick offer a range of destinations and connections to the worldwide network of air services that is unrivalled by any other UK airport and, arguably, by any airport in Europe. We must encourage airlines that want to run domestic links to bid for more local services. We need to divide slots into domestic, intermediate and long haul, to stop the trade-off between Belfast and Bonn, Aberdeen and Athens and Plymouth and Paris. We need to create a regional policy for aviation, which recognises the legitimate need of regional airports to have access to at least one of the two key hubs in London, Heathrow and Gatwick.

We need to protect peripheral routes by ring-fencing slots and routes. We need published route development plans for Gatwick and Heathrow, which take account of the need for regional travel and national priorities for airports. We need more London hub capacity and more 1,800 m runways. Then, we can truly say that we have a UK-wide regional policy, which develops the regions and builds social inclusion.

rose—

Order. Not all right hon. and hon. Members indicated beforehand that they wished to speak, so I have only just formed an impression of how many would like to contribute to the debate. As it is customary for the Front-Bench spokesmen to commence their speeches at 10.30 am, I hope that hon. Members will exercise some self-restraint so that the maximum number of voices can be heard.

I am grateful for the opportunity to contribute briefly to the debate and to support my neighbouring colleague, the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart). I congratulate him on securing this morning's debate and on his parliamentary and political persistence over many years on the issue. I shall focus in my remarks on our collective concern, the Inverness-London link, and issues that arise from that.

The hon. Gentleman will remember that, after the 1997 election, we both contributed to a debate in the House, which I initiated, with the then Under-Secretary of State for Transport who was responsible for these issues. With some amusement, I noticed some oral exchanges in Hansard between the hon. Gentleman and the Minister earlier this year. At column 134 of Hansard for 23 April 2002, the Minister noted that his hon. Friend had cheekily introduced the subject of Plymouth. I say "cheekily" because, during party campaigning before the 1997 election in that neck of the woods, I remember seeing prominent regional newspaper coverage of the then Labour Opposition transport spokesman pledging a Labour Government to a public service obligation for the Plymouth-London link. The Government have form in opposition; I can provide the Minister with chapter and verse as I have a voluminous file on the matter. All that we seek is the consistency to which the Government have long since pledged themselves. It will have full support from all quarters of the House.

The current highlands campaign is broad based. It represents the whole business community and traverses the Highland council, Highlands and Islands Enterprise, the Scottish Council for Development and Industry and Inverness and district chamber of commerce. They have set themselves five key policy objectives in making the case for the public service obligation order for the continuing guaranteed link between Dalcross Inverness airport and London. The first is secured guaranteed regional air services, to which the hon. Gentleman devoted the bulk of his speech, and the second the need to secure the public service order. The third is to establish a minimum level of guaranteed air service from London to the regions. I underscore what the hon. Gentleman said. This is not just a selfish argument about one link; it is part of a UK-wide recognition of the importance for regional economies of regional links into and out of the metropolis.

Fourthly, there is the thorny issue of capacity in the south-east, to which the hon. Gentleman fairly alluded. Again, that is part of a much bigger consideration. Finally and importantly, there is the ability of the regional interests involved effectively to own their air slots, which would give them a greater degree of locus where decision making is involved.

I hope that the Minister can update us further vis-à-vis the European Union and the lengthy ongoing discussions—discussions are always lengthy where the EU is concerned. We have made the case so many times that I do not need to rehearse the excellent points made by the hon. Gentleman, which I completely endorse. However, I would like to stress that the Scottish Executive fully support it. Lewis Macdonald, one of the transport and planning Ministers involved, wrote to me some time ago and stated:

"The current Slots Regulation is being revised and I shall ensure that the UK's negotiating position on the revised Slots Regulation adequately reflects Scottish concerns. My officials are keeping in touch with colleagues at the Department for Transport, Local Government and the Regions on this issue."

I hope that that support can be reciprocated by Whitehall. Equally, the previous Secretary of State for Transport wrote to me on the same issue. He said:

"I understand your concern that direct air links between Inverness and London should be maintained and genuinely appreciate the economic importance of this route for the Highlands and Islands."

He went on to say—this was just over a year ago—that

"The DTLR has now received a request for the imposition of a PSO on the Inverness to London Gatwick route from the Scottish Executive and this is being considered along with a range of policy options including those mentioned in your letter."

We have more recent, speculative press reports about the possible downgrading of what is publicly acknowledged by the commercial interests concerned to be a profitable route. That can be damaging. Some of us remember commuting between the Highlands and London almost 20 years ago using the old Dan-Air service. In the 1980s, a huge battle had to be fought to secure Dan-Air's access to Heathrow. Then commercial matters took a turn for the worse due to European routes, and Dan-Air went bust. British Airways moved in again, having given up the franchise before Dan-Air took it on in the 1970s, and made a commercial success of it. Then came the battle to retain the Heathrow link, which was lost, and we moved to Gatwick, where we are at present, but there is now further speculation about Gatwick.

Businesses, community and public representatives and many other interested groups from across the political spectrum are saying, "Use it or lose it", and they have put that message over successfully. However, it is undermined by continuing speculation and uncertainty. The sooner public and commercial opinion can be reassured, the better. I hope that the Minister will take this opportunity to go at least several steps in that direction.

rose—

Order. The House will have heard the remarks of Mr. Deputy Speaker. I believe that five Back-Bench Members wish to speak during the next half-hour. I ask them to confine their remarks to that time scale, so that I can call them all. First, I call the hon. Member for Don Valley (Caroline Flint).

Thank you, Mr. Taylor. I congratulate you on acquiring your position. I am not sure whether this is the first time that you have overseen debates in Westminster Hall, but it is certainly the first debate that I have attended when you have been in the Chair.

I congratulate my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this debate—I think that I was here a year ago for a similar debate. I have the utmost sympathy for and understanding of the need for communities to have access to quality air services—not only for social reasons but, as my hon. Friend ably outlined, for economic reasons. However, I come to the debate from a rather different angle.

I hope that a regional airport will be developed in my constituency at Finningley, the former Royal Air Force base. It is a huge brownfield site, although it is now in the hands of a Government Department. Today is a good opportunity to flag up why a regional air service in Yorkshire is important and, in a roundabout way, to consider whether airports outside London would be sustainable and whether they could offer the sort of long-haul flights that I believe Finningley is capable of providing. If so, it would mean that three out of four people who now have to leave Yorkshire and Humberside to fly with the service of their choice could choose to stay there. That might make a small contribution to alleviating the impact on Heathrow and the south-east. It could also allow us to consider more imaginative and creative proposals, as well as additional runway capacity, to ease the situation and allow more slots to other United Kingdom airports.

I take the opportunity today to place on record—a number of Members have heard this many times before, but it is worth flagging it up again—that in July 2000 I presented a petition to Parliament with 21,000 signatures in favour of the former RAF base at Finningley becoming a commercial regional airport and against the holding of a public inquiry. That was an historic first for a Member of Parliament. Today, we have a petition from 150,000 people from Doncaster and the immediate surrounding areas who would be affected by the development of an airport at Finningley who would support such a proposal. Against that stand 505 individual representations against the development.

As I said before, three out of four people from Doncaster, Sheffield, south Yorkshire and Yorkshire and Humberside currently leave the region to fly with the service that they need, whether for social, economic or business reasons. The truth is that existing airports at Humberside and Leeds have not proved themselves capable of developing the air services that Yorkshire people want—so why Finningley? The former RAF base is entirely a brownfield site, and hundreds of millions of pounds of public money has already been invested in it. It has a 1.7 mile runway and. without a hole being dug, it is capable of taking practically all major aircraft used by charter and scheduled airlines. They could fly direct to the west coast of America, or to the far east, without refuelling.

Despite the weekend's gales, which affected people throughout the country, and despite its position on the eastern side of the United Kingdom, Finningley has favourable weather conditions, which is important to commercial airlines looking for sites for new services. This is also about the north-south divide, about giving communities the opportunity not only to regenerate and rebuild their economies, but to rebuild their social structure, and giving people the opportunity to go to work and have access to the variety of jobs and skills that airports can help to bring to a community.

I think that my hon. Friend the Member for Inverness, East, Nairn and Lochaber said that if the major employer in his constituency did not have access to major routes around the world, that would have a huge impact on that employer's decision to stay in the area. For those of us who represent deprived parts of the United Kingdom, there is also the question of attracting investment. The issue is huge. Doncaster—considered not on its own, but in the family of south Yorkshire—is a coalfields area, so people are looking for opportunities to develop a new future through infrastructure.

This is also about consumer choice and people having the opportunity to decide that they want to live in an area that has access to services. That point is as valid for my hon. Friend as it is for me in Doncaster in south Yorkshire. The issue is about flying from local airports and the environmental impact of people having to make long journeys, often by car, because local airports do not provide the services that they need. So, consumer choice is involved, as well as environmental impacts. We have to consider the consultation on airport development in its widest sense. Different parts of the jigsaw affect all four corners of the United Kingdom. In my hon. Friend's case, there is the issue of direct access to areas around the world for business and social reasons.

It is also important not to look a gift horse in the mouth. When I hear many of my colleagues say, "Yes, we need more airport capacity, but I don't want it in my backyard," I say, "Please, don't look at Finningley in that regard." Here is an opportunity. We have the brownfield site and there is local support. Local opinion is not divided: there is support from Yorkshire Forward, the regional development agency, and the business community. Some £100 million of taxpayers' money has been put towards the site. All that we need to do is build a terminal building and we can fly. Let us do that.

I commend the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing the debate. He is clearly passionate about improving air links and, although we may have our disagreements, I say that most warmly.

Other hon. Members are much better placed to talk about the needs of their areas, so I will concentrate my comments on the need for improved air links to the north of Scotland. Responsibility for air links is now shared between the Scottish Executive and the United Kingdom Government. The Scottish Executive make decisions about land use, planning, surface access and the management of publicly-owned airports, but sadly we are still dependent on the good will of London Ministers for licensing safety, security and environmental policy, international agreements, economic regulation and slot policy.

This is the third debate on air services in which I have taken part since my election last year. Unfortunately, there has been little positive progress on what is an important matter for the north of Scotland. The issue is crucial to the region's economy. This week, the annual regional trend survey showed that the lowest level of pay in Scotland is not in urban, central-belt Scotland, but in the constituency that I represent, Moray.

Many of my constituents who live in fishing communities are worrying about their future this week—there have been warnings of thousands of potential job losses. So, air links are not just about jetting off on holiday, they are an economic lifeline. The current underdeveloped links to the north of Scotland are an impediment to social and economic progress. When one compares Scotland's economic position with that of our better-connected neighbours in northern Europe, it is hardly surprising that our country is in an economic recession.

I commend Scotland's shadow Minister for Tourism, Transport and Telecommunications, Kenny MacAskill, and the Member of the Scottish Parliament for Inverness, East, Nairn and Lochaber, Fergus Ewing, for their innovative work on a route development fund, an idea that is supported by the Scottish Council for Development and Industry. That is a concrete example of how the debate in Scotland has been led by the Scottish National party and it stands in stark contrast with the farce that we witnessed earlier this year—so far unmentioned—when Ryanair's efforts to secure regular links with the north of Scotland were all but rebuffed by the intransigence of the Scottish Executive and their publicly owned agency, Highlands and Islands Airports Ltd. Despite the imperative for rapid action, the Government and the Scottish Executive spend more time reviewing than delivering. Aviation is worth £0.6 billion to the Scottish economy and 15,000 jobs, with perhaps the same amount again indirectly employed.

Future levels of traffic are set to increase. Will the Minister explain why Highlands and Islands Airports Ltd. is forecasting that 1.8 million passengers a year will use Inverness airport by 2030? The Department for Transport estimates that the figure will be only 800,000. Why does the Department estimate 1 million fewer passengers than HIAL? I am assuming that the Department and the Scottish Executive work as closely as they say.

It must be a decimal point mistake.

The leader of the Liberal Democrats says it is a decimal point mistake. Perhaps it is. The Minister will have the opportunity to comment on that later.

People in Moray and the rest of north Scotland are asking themselves what a local Labour Member, a Labour and Liberal Democrat Scottish Executive and the Labour Government all have in common, when none of them has delivered a PSO guaranteeing the Inverness to Gatwick link. We have heard the Secretary of State for Transport say in the House in February, March, April, and May that he would make an announcement on his decision on the PSO "soon". I do not know how soon "soon" is. Perhaps the Minister will be able to comment on that. Unfortunately, the new Labour Government have been ducking and diving on the issue for more than a year, constantly saying that a decision on the PSO for the Inverness to Gatwick service will be made "soon".

In July, the Secretary of State for Transport and the Scottish Executive published a consultation paper on air services, "The Future Development of Air Transport in the United Kingdom and Scotland: A National Consultation". There is no mention in the document of a PSO being considered for the Inverness to Gatwick link. Despite letters from Scottish Executive Ministers saying that it is an important issue, and despite the hon. Member for Inverness, East, Nairn and Lochaber confirming that it is an important priority, there seems to be no progress whatever. The SNP has repeatedly demanded that the Government should announce a PSO for the Inverness to Gatwick service, and the Minister has an opportunity to do so today.

Inverness has already lost the link to London Heathrow and it is inexcusable that the Government should let north Scotland down by not delivering a PSO for the service that we have left. At present, Inverness has among the highest landing charges in the whole of Europe, which undermines the entire economy of north Scotland, particularly tourism. Scotland's economy, tourism industry and its people have long been seriously disadvantaged compared to nations such as Ireland, which has far better, cheaper and more direct air services. Scotland must become a premier league nation for aviation services, not continue to endure second-rate options.

I congratulate my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this important debate and for laying out in such a clear and cogent way the arguments and challenges that lie before us on behalf of all of us from constituencies with peripheral airports.

As my hon. Friend the Minister knows, Plymouth faces similar challenges. We should really refer to Plymouth and Newquay because our two airports go hand in hand, and rely on each other. Newquay is central to Cornwall's objective 1 status. My remarks on the importance of Plymouth airport to our economy and Plymouth are even more the case as far as the future regeneration of the Cornish economy is concerned.

Plymouth airport has a wider catchment area of 1.2 million people, and a working population of 558,000. A recent survey of 40 companies in Plymouth, which was part of a wider study of Devon and Cornwall, found that 32 companies, employing 20,000 people, had overseas parentage. Another 33 companies, which export to 49 countries, employ 7,000 people, so that is 27,000 in the catchment area of Plymouth airport. There is about five times that number if we take into account Devon and Cornwall, so people will understand that Plymouth is greatly appreciated as a city airport. It takes 113,000 passengers from Plymouth each year, and there has been a growth of 3.2 per cent. per annum., which I understand is about half the national growth between 1991 and 2000.

Two issues concern the business community, however. There is uncertainty about the slots, to which other hon. Members referred, and the loss of the Heathrow slots, which my hon. Friend the Member for Inverness, East, Nairn and Lochaber outlined was part of a national trend in loss of links to Heathrow. Apart from the general convenience and the fact that they keep Plymouth on the map, those air routes are vital to maintaining and developing inward investment.

American and Japanese businesses in particular, such as Toshiba, Kawasaki, Wrigley's and Gleason Corporation, are now joined by a number of new and small but growing science businesses built around Derriford hospital and the science park. It is becoming a medi-science park. New developments are also being built on our area's rich legacy of marine science and technology. All those businesses are the sort that need quick and easy access to worldwide destinations.

Typical comments in the recent survey of businesses carried out for Sutton Harbour Holdings plc, which operates the airport, include:

"Economic progress for the city of Plymouth will be severely hampered without access to a city rated airport"

and

"difficult connections cause great problems with trying to be taken seriously as a major player site within our organisation".

That was from one of the bigger companies. Another comment was that

"reinstating the Plymouth-Heathrow route would help our business enormously".

In other words, some certainty that businesses can have access to international destinations that are important to them is vital.

Let us consider the people who do not fly because of the loss of the Heathrow service from Plymouth, but who travel by road and rail. The Civil Aviation Authority 2000 estimates show that about three times the number who currently fly from Plymouth airport—more than 300,000—travelled to Heathrow by road and rail. As my hon. Friend the Member for Don Valley (Caroline Flint) said, that travel has environmental implications.

Let us also consider the sort of destinations that people were looking for by travelling to Heathrow: 17,000 flew to Brussels, 32,000 to Frankfurt, 17,000 to Dubai, 10,000 to John F. Kennedy airport New York and 9,000 to Bahrain. Other destinations that are not available from Gatwick, but that are important to the local business community in Plymouth include Boston, Hong Kong and Tokyo.

My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) received well over 120 submissions, including some from Plymouth, for the 1998 report on regional air services by the Select Committee that she chairs. That report, as my hon. Friend the Member for Inverness, East, Nairn and Lochaber mentioned, advocated feeder reliever airports, such as Northolt for Heathrow and Redhill for Gatwick, as fast-track solutions while greater capacity was developed. There is certainly great interest from our end of the country—as was mentioned by those at the northern end—in developing that proposal as it could address the problem in the medium term.

Alongside the desire for better access to destinations of importance to them, businesses are desperate for some security of knowing that the present services can continue. In fact, I am talking not just about businesses, but about those who have responsibility for the economic infrastructure. A 1997 Plymouth city council study, carried out by KPMG, suggested that 3,000 jobs depended directly or indirectly on the availability of our city airport. I am aware that other lower values have been put on that—the thin routes study attached a lower figure—but as paragraphs 5, 6 and 6.4.4 of the current consultation report, "The Future Development of Air Transport in the United Kingdom: South West" notes:

"increasing the availability of routes and frequency of services from airports in the region may encourage more firms to invest in the South West. Conversely if they are not frequent or available, firms may withhold investment in the region or even relocate to a region with better connections … Crucially it is the 'perception' that businesses have of the importance of air services which is significant, even if there may be alternative, less direct ways of undertaking the travel to meet customers and suppliers."

I greatly appreciate the courtesy that my hon. Friend the Minister extended in receiving representations from local MPs led by Glyn Ford, MEP, Sutton Harbour Holdings and the chairman of our regional development agency in July this year. I hope that the Minister will be able to confirm his commitment to helping us all find a way through the complexities of what can be done in a way that puts our city, our community and the other regions on a more secure footing, whether through slot protection or overcoming the barriers through configuration of access to airports, including certain airports in London that, as I said, connect us to those parts of the world that matter. I look forward to his observations, which, we can be sure, will be made with the benefit of his experience as a constituency MP with a long track record of understanding and championing the interests of the important subject of this debate.

We are all grateful to the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) for instigating the debate. Undoubtedly, airports are an important topic for many Members. This is also a crucial time in the development of airport policy.

As hon. Members know, Biggin Hill in my constituency is famous as the front-line fighter station in the battle of Britain. With regard to today's news, it is mentioned in the south-east and east of England regional air services study as a bottom-tier airport. The top-tier airports in the London area are Heathrow and Gatwick, and the second-tier airports are the City of London, Southampton and Norwich. The bottom-tier airports are Biggin Hill, Cambridge, Farnborough, Lydd, Manston, Shoreham and Southend, about which the SERAS reports says:

"It is clear from our analysis that, taken as a group, the overall contribution of these airports to meeting demand in the South East would be very small, and even smaller if more runway capacity were provided at the main airports."

Of course, the last part of that statement is likely.

On Biggin Hill, the document says that

"poor surface access links and noise impacts on nearby residential properties".

and provide, "very serious constraints." They do indeed. I would add that the airborne approach to Biggin Hill is over densely populated residential suburbs in which more than 200,000 people live. Their quality of life would obviously be adversely affected. Access by air is overly complicated by proximity to flight paths in and out of Heathrow. The beacon over which the incoming and outgoing Heathrow and Gatwick planes circle and are often stacked, is above Biggin Hill. There are therefore three levels of aeroplanes—those from Heathrow, Gatwick, and Biggin Hill on the bottom level—over my constituency. Access by road is extremely poor, and there are no close rail links. Bromley's new general hospital has been built under the flight path only two miles away from the airport runway, and the major part of the airport lies in the London area green belt. For all those reasons, as the Minister may imagine, most of my constituents are strongly opposed to any significant development of Biggin Hill airport.

I would like the Minister to reply to my final point. There is, as he will be aware, a lease between Bromley council and the Biggin Hill airport company. This stipulates the numbers and types of aircraft that can use the airport to comply with specific noise levels. That lease is not mentioned in the SERAS document, whereas other leases, such as those relating to Farnborough airport, are. The Farnborough report says that because of the lease there will be no further development at Farnborough airport. The lease restricts business at Biggin Hill airport to training, business aviation and private flying and the company does this very successfully. Could the Minister make a formal reference to the lease in the White Paper and correct the passenger forecasts accordingly?

May I join the line of right hon. and hon. Members congratulating the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing the debate? I also endorse his comments about the need for a public service obligation on the Inverness-Gatwick route and commend him for a long and hard-fought parliamentary campaign. I am pleased to see that it continues in as much that I recall that in July he was told by the Under-Secretary of State for Scotland that we should not worry too much because she has spoken to British Airways and it said that it had no intention of going off the route. I found her faith in British Airways particularly touching but it is a faith that I suspect my constituents might find it difficult to share, given their recent experience. If we are to continue to have a Scotland Office, which exists to promote Scotland's interests in the UK Government, there is an awful lot more that it could do.

I add my words of welcome to the Minister's joint consultation with the Scottish Executive on "The Future Development of Air Transport in the United Kingdom: Scotland". It is a worthy tome. The hon. Member for Inverness, East, Nairn and Lochaber said that at present the regulation of the air services market is left at the mercy of market forces. That is true. It seems to me, listening to the contributions from various parts of the country today, that it produces a most unsatisfactory situation. On the one hand, people in south-east England quite justifiably express concern at the impact on their environment of more airports, more runways and more traffic, while at the other end of the country in my constituency, we are desperate for more runways and a better infrastructure. In this age of joined-up government, there should be scope for a light-touch regulation of air traffic and for using it as a tool for economic development and regeneration in some of the most vulnerable and peripheral communities.

Like other hon. Members, I have been to other PSO debates. The most recent was on 8 May. The Minister may recall that on that occasion he said:

"I understand the issue raised by the hon. Gentleman about high fares, but costs are inevitably higher per passenger on low-volume routes than on highly packed traffic routes."

That is a statement of the obvious. He continued:

"However, for the Government to impose a PSO on a commercially viable service would mean overriding the long-standing policy of non-intervention other than when the market fails."—[Official Report, Westminster Hall, 8 May 2002; Vol. 385, c. 134WH.]

If the market can only provide a return fare to Shetland in excess of £250, in my definition that is a market that has failed. When he responds to the ongoing consultation, will he give some serious consideration to the definition of some of the terms, in particular what is considered to be a commercially viable route? Will that simply be left to the accounting practices of British Airways or will there be coherent Government guidance on the point?

Subsidy has already been mentioned. The routes are already subsidised through the public purse in many indirect ways. My fare to Westminster, which is about £580 return from Orkney or Shetland, is paid every week and every time I board a plane to or from Orkney someone from the council is there. There are many ways in which subsidies are given at present. What is needed is an open and transparent system, the first part of which would be a public service obligation order.

I congratulate the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing the debate, which is one of a number that he has secured on the subject. The debate's importance is underlined by the presence of many hon. Members, including my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy). It is a topical debate, as the 30 November deadline for responses to the consultation is approaching. The subject has often been debated in this place. In the past three years, the Select Committee has produced a couple of reports on the matter and the Government have responded.

Massive expansion is planned in the provision of airports and runways and reasonable air services should not be neglected in the Government's dash for airport expansion. It would be sad if the Government insisted on pushing ahead with predict and provide, making as many airports and runways available as possible, but with only international travellers being allowed to take advantage of increased slots at key airports, while those living near those airports and runways and below the flight paths, suffer the environmental consequences and those living in the peripheral regions derive no economic benefits.

In an ideal world, a network of fast rail links would do away with the need for many regional air services. Indeed, the Environment, Transport and Regional Affairs Committee said in its eighth report:

"Rail services may be able to provide a substitute for air services for places under three hours away from central London or from Heathrow by rail".

Unfortunately, we do not inhabit such an ideal world, and even if we did, regional air services would still be a necessity for the remotest part of the United Kingdom.

The Select Committee report of 27 July 1998 made several important points. For example:

"It should be the objective of Government policy actively to maximise the contribution regional hubs make to meeting the demand for scheduled European and intercontinental services."

I hope that the Minister will be able to explain what mechanism will be used to ensure that whatever decisions are taken in response to the consultation that is being conducted, the outcome will maximise the contribution regional hubs make to meeting the demand for those services. If a wider range of European and intercontinental services were available from the regional hubs, it would reduce the demand for regional air services flying into Heathrow.

The report also called on the Government to advocate changes to the European slot regulation, a matter to which the hon. Member for Inverness, East, Nairn and Lochaber referred, and to give priority to airlines bidding to operate domestic regional services rather than to new entrants in the allocation of new slots at congested airports. The Government's response stated:

"The UK has already made proposals to the Commission that priority in the allocation of slots not claimed under historic precedence should be given to airlines that wish to use the slots for services to regional airports".

I hope that the Minister will be able to tell us what progress has been made on that matter.

Another interesting point in the Government press release that was issued at the time of the Government's response to the Environment, Transport and Regional Affairs Committee's report on regional air services was a programme of surface access studies by DETR, as it then was, and Opraf—Office of Passenger Rail Franchising—considering the potential for developing long-distance rail links to London and the south-east and improving connections between the London airports. This may be an opportunity for the Minister to update us on the progress of those studies.

The most recent Select Committee report on the air transport industry was published on 4 July. I do not believe that we have yet had the Government's response to it. The Government, in their evidence, said that the current availability of slots was sufficient to preclude the need to intervene to ensure the protection of regional air services. As other hon. Members have pointed out, British Airways withdrew the important Heathrow to Belfast route immediately after that. Will the Minister comment on whether any other services have been withdrawn? Will he also comment on the public service obligations, the number of services withdrawn, and whether he expects that number to increase or decrease within the next five years?

The future of regional and other air services depends on safety and the reliability of National Air Traffic Services. Hon. Members will be aware of the concerns expressed about those systems and, in particular, about the character sizes of the displays on the screens that are used. I take this opportunity to ask the Health and Safety Executive to review its assessments of the screens' fitness for purpose, because its report was based on information supplied by NATS that was incorrect with regard to the screen character sizes. I hope that NATS will set out its timetable for addressing the HSE's concerns. NATS must guarantee that all the HSE's requests for action are fulfilled.

It would be ironic if the future of regional air services were put at risk at the same time as the Government are producing their plans for airport expansion for the next 30 years. I hope that the Minister will use the debate to set out how, in the absence of a fast rail alternative, he will ensure the survival of regional air services.

May I say, Mr. Taylor, that it is a great pleasure to serve under your chairmanship for the first time. I hope that it will be one of many such occasions. I join in congratulating the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this very timely debate.

I remind right hon. and hon. Members of my interest in the airline industry. My husband works for Delta Airlines. I personally have an interest in the form of personal equity plans with British Airways and the British Airports Authority. For 10 years, I was the Member of the European Parliament for North-East Essex and South Suffolk, and at one stage I had both Stansted and Southend airports in my constituency.

When the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), the leader of the Liberal Democrats, left the Chamber, I thought that he might have received a timely telephone call from the BBC to rejoin the programme "Have I Got News For You?", which is his, and my, favourite programme. I gather that its presenter is undergoing personal difficulties. I am delighted, therefore, to see the right hon. Gentleman resume his seat here with us.

The number of direct flights from regional airports to London, and particularly to Heathrow, has been reduced. The Select Committee investigated that. The airlines are redeploying their resources to more lucrative international routes.

It would help if we could agree, at the outset, a definition of a regional airport. There is no statutory or legislative definition. The original definition was in the 1978 White Paper on airports policy, in which category B airports were described as

"regional airports which provide a network of short-haul scheduled international services, offering a significant range of charter services and domestic services including links with gateway airports."

Outside the south-east of England, Manchester was designated as a category A international gateway airport. Newcastle and Leeds-Bradford, however—the latter subject to the extension of its runway—were classified as category B regional airports. Local airports were described as including Teesside, but I do not know whether that particular definition has been revised. In a White Paper of June 1985, the Conservative Government used the term more loosely than in the original, suggesting that regional airports were merely those not in or near London.

In its inquiry into regional air services of 1997, the Transport Sub-Committee of the Environment, Transport and Regional Affairs Committee described regional airports as including UK airports other than the five London airports, including airports on Guernsey, Jersey and the Isle of Man. In the past 10 or 15 years, or even longer, considerable looseness has clearly applied to descriptions of regional airports.

Perhaps the most vexed question that the Minister must address—several right hon. and hon. Members have already commented on it this morning—is the allocation of slots. Will they be treated like milk quotas and recognised as an economic commodity? In fact, only a scheduling committee allocates them and no price attaches to the allocation in the first instance. Will the Minister confirm that the Government are still pressing for slot auctions? On the Government's first attempt, I understand that slot auctions had little support among other member states. If they are to succeed and become the way forward, what support is there among other member states now?

When the deadline was initially set on a system for allocating slots in December 1992, I welcomed the allocation of priority to new entrants. It is regrettable that the deadline for review of January 1996 has slipped. Can the Minister predict—perhaps we could have a sweepstake—when that review will take place?

I support the hon. Member for Inverness, East, Nairn and Lochaber in asking what criteria must be met before the Government will intervene to create a public service obligation. What specific resources will the Government allocate to the creation of a PSO and from which part of the budget would such an allocation be taken? I am unclear about that and it would help all of us if we knew.

The hon. Gentleman selected regional air services—from regional airports to Heathrow and Gatwick and other lesser London airports—as a priority. My alternative view is to boost services from regional airports to the UK and other European cities. The Library helped me by preparing a selection of such routes. I understand that the hon. Gentleman and Members with neighbouring constituencies have only ever enjoyed one international route from Inverness—to Amsterdam—and only for a short time. Otherwise, its routes have been only to London airports. I come from Scotland, so I understand the importance of opening up the economy through London routes.

Let us consider Glasgow airport as another example. What is available is impressive, but there are few scheduled international routes. Otherwise, it has a healthy smattering of charter routes. In that regard, Manchester has led the way. In the 1980s, it was regarded mainly as a charter airport. Twenty years later, it is now regarded as a leading international airport. The hon. Gentleman could be mistaken in persisting entirely with all routes accessed to London, though I understand the prize placed on a London route for that particular corner of Scotland.

As the Member representing Vale of York and North Yorkshire, I would prefer direct routes from Leeds-Bradford, Manchester, Teesside or Newcastle—here and on other issues I part company with the hon. Member for Don Valley (Caroline Flint) —to bypass London whenever possible. Alternatively, I would welcome international routes to other regional airports. Manchester, which would be closer for me than Finningley, now has two flights a day to US airports. I leave the Government with that thought.

As the hon. Member for Inverness, East, Nairn and Lochaber so eloquently argued this morning, Heathrow and Gatwick have unrivalled international access. However, with investment—most of it private rather than public—and improved public transport links to airports such as Manchester, direct routes from Scottish and northern English airports to European and transatlantic airports would emerge.

In conclusion, I ask the Minister whether, if limited funds are available, it would not be better to use them to develop new routes from existing airports than to create an entirely new airport.

It is a pleasure to serve under your chairmanship for the first time, Mr. Taylor. I echo a number of hon. Members in congratulating my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on having secured the debate. He set out the arguments with his usual clarity, charm and forcefulness. Tomorrow, it will be a year since we had a similar debate. He and my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) clearly outlined the importance to their local economies of securing the future of flights in and out of those areas. I note that Plymouth was mentioned a number of times. I do not know why it is important to so many hon. Members, especially those from north of the border, but perhaps that will be revealed.

My hon. Friend the Member for Inverness, East, Nairn and Lochaber made some important points. I shall deal with those after I outline our general thinking on regional air services. We are making progress, partly thanks to the light shed on the issue by the many debates that we have had about it in the House. I read with interest the notes from a regional air services seminar held by my hon. Friend, which some of my officials attended.

Since the last discussion on the matter, the Government have issued the consultation documents on the future development of air transport in the United Kingdom, in which hon. Members will have seen the high profile given to regional services—they are a key issue—and a number of policy options suggested for their protection. My officials are now exploring those and I should like to set them out as a basis for debate.

The first is to discuss with airlines ways in which they can involve the Government at an early stage when they are considering withdrawing from a regional route. That has been of particular concern to my hon. Friend in his area. That could mean developing an informal agreement with airlines whereby they have to give certain notice if they are considering discontinuing a regional service. Such a notice period would allow the Government and regional bodies to consider options and possibly to apply for the imposition of a public service obligation on a specific route.

I think that I gleaned from the words of the hon. Member for Vale of York (Miss McIntosh) that the Conservative party is in favour of the public service obligation. She is now shaking her head. Certainly the Conservatives did not favour it when they were in government. In fact, when I lobbied Ministers, it was specifically ruled out. The hon. Lady may want to give some clarification.

I recall putting a number of questions in response to points raised by right hon. Members and hon. Members this morning. I asked whether the Government would make good the pledge that they made when they were in opposition. Will they push for a PSO, and what resources will they make available?

That was not an answer to the question whether the Conservative party is now in favour of PSOs. I am sure that those in the regions affected will have noted the hon. Lady's comments.

Secondly, we are examining ways in which regional bodies or stakeholders could provide additional financing for an airline if it should consider pulling out of a route. The hon. Lady raised that important matter, too. Thirdly, we are examining whether the United Kingdom could propose amendments to the relevant European regulations that would provide member states with a more appropriate means of protecting regional air services. United Kingdom officials have already proposed alternative wording to the Commission's proposal to amend the slot allocation regulation 95/93 so as to preserve the option to ring-fence slots and loosen the existing criteria.

My hon. Friend rightly said that Heathrow is full to overflowing and that Gatwick is under enormous pressure. At one stage he said something like, "We need new runways at Heathrow and Gatwick today." In a debate last week, a rather different view was expressed by hon. Members representing constituencies around Heathrow, Gatwick and Stansted. That difference in views highlights one of the difficulties. If we are to allow the expansion of air travel for leisure and business purposes, we must tackle the important question of where those flights should depart from.

The hon. Member for Carshalton and Wallington (Tom Brake), who spoke for the Liberal Democrats, made some interesting points. He seemed to suggest that rail services should take over some routes. Perhaps it is his party's policy to accept that there is an extra demand for flying and that it should be met—we might ask his leader about that. If the answer is that the demand should be met, we must deal with how it should be met.

I fully understand the anxiety of those who live in the south-east, especially around Heathrow, Gatwick and Stansted. People living in all regions of the country should consider the development document for the south-east because it is key to what is happening in the country. but they should also consider the documents and consultation for their own area. They should consider what facilities there are in their areas to create sub-hubs that could provide services. Scotland is a good example of the difficulties of that situation. There is the question whether both the Glasgow and Edinburgh airports can survive as sub-hubs, but it is up to Scotland to decide what will serve the Scottish economy best.

There has been much discussion about PSOs. We differ from the Conservative party in that, when it was in government, it entirely ruled out PSOs, whereas we have said that we shall use them when the circumstances are appropriate. However, additional information can be helpful, and my view on the matter has changed somewhat. The right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) alluded to views that we held previously. I still hold the views that I held before, but one must consider what might happen in the event of a PSO.

A PSO would not be route specific or designed for a particular airport. It would be specific to London, which means that it could apply to any London airport—possibly, including Luton. That may not be an option wanted in Inverness, or in Plymouth or Newquay. The PSO is intended to create exemption from state-aid regulations and it is not designed for profitable routes; it is designed for loss-making routes on which operators have threatened to pull out.

I am not aware of any threat at present to the routes that have been mentioned today. One limitation is that if a PSO were imposed, we would need to find an airline to fly the route and it would need to obtain slots at the appropriate airport, so that the route could be flown. That presents considerable difficulties. Merely imposing a PSO does not secure particular slots into particular airports at particular times. It is not especially helpful to an area if an airline is given a slot at 4 am instead of 8 am. That does not guarantee the survival of the service, although it may guarantee a commitment, which does not currently exist, to securing the service through the use of public funds.

The Minister mentions some cautionary notes about the implications of imposing a PSO but, at the same time, he prefaces his remarks by saying that he still holds to the views on a PSO that he held in opposition. There seems to be a contradiction there—or is he obeying orders?

Not at all. I am saying that where a route is threatened because an airline is about to pull out, where there is no alternative public transport into an area and where it is vital for inward investment and economic development, we would consider imposing a PSO. We carefully considered the Scottish Executive's request regarding Inverness and we are still discussing the matter with them. The fact that it has taken so long shows the merit of our discussions. The hon. Member for Moray (Angus Robertson) would have been right to criticise us if we had made the decision rapidly without proper consideration, but we are still in correspondence with the Scottish Executive on the matter.

The Minister will appreciate that many people in the north of Scotland have waited a long time to hear the Government's decision on a PSO application. Instead of saying "soon", will the Minister tell us when we can expect an announcement on a PSO for the Inverness-Gatwick route?

I can only repeat what I have said before. I hope that there will be a decision in good time, but discussions are still taking place. I have set out the limitations to the PSO and the hon. Gentleman may want to consider whether that obligation would provide what he wants for the Inverness-Gatwick service. My discussions with people in the south-west have caused them to reflect further on their requests regarding a PSO, once they have realised that it will not provide all that they want. It is easy for the hon. Member for Moray, who is in opposition and has no prospect of being in government, to make bald statements about what should happen, but I have to consider the issue in a hard, realistic way and ask whether a PSO would genuinely benefit the people in a certain area. Unlike the hon. Gentleman's decisions, any decisions that we make will have an effect on an area.

Will the Minister give way?

No. I want to cover some more points. My hon. Friend the Member for Don Valley (Caroline Flint) mentioned Finningley. The consultation documents on the north of England and other regions set out options and requested responses and possible solutions. I congratulate my hon. Friend on the petition, which, I hope, will form a valuable part of the consultation.

The hon. Member for Moray mentioned the difference between the highlands and islands prediction and our prediction. I think that the two were formed from different bases, using different information. If the hon. Gentleman wants me to write to him on that, I shall be happy to do so as an explanation is needed.

I do not want to go into detail on Biggin Hill, so I would like to jot a line to the hon. Member for Orpington (Mr. Horam) about it.

I thought that the hon. Member for Carshalton and Wallington was proposing that we build a railway line from Skye to London. Frankly, he did not say anything to illuminate our debate on regional air services or any other subject.

I shall certainly write to hon. Members about the many questions that I have not covered.

I am pleased to open the debate on overstretch in the armed forces, and particularly pleased that I am not doing so on the first day of a firemen's strike, or to be more accurate the first day of industrial action by the Fire Brigades Union. It seems strange that the Deputy Prime Minister and Mr. Gilchrist have apparently reached some understanding or agreement in advance of the Bain report, and we want to see what it is. For the main part, however, we must be thankful that our armed forces have not had to deploy this morning.

I met my chief fire officer in Devon, Paul Young, and his senior colleagues on Friday. Although we are in a better position than some areas—Devon has 55 fire stations, of which 46 are retained—he was extremely concerned that the whole county had an allocation of only 12 Green Goddesses. Devon is the third-largest non-metropolitan county, and covers approximately 2,500 sq miles. That includes the 600 sq miles of Dartmoor national park, 200 miles of coastline, 30 miles of motorway and several main arterial routes, such as the A380 to Torbay and the A38 expressway to Plymouth and Cornwall. No doubt during their summer holidays hon. Members have grown to know and love such routes.

Devon has a resident population of 1,082,000, which rises considerably with the influx of tourists and holidaymakers. The Devon fire and rescue service needs to be equipped to deal not only with all categories of risk, from the "A" risk of Devonport dockyard, to the large areas of sparsely populated land categorised as "remote rural". The 12 Green Goddesses, manned predominantly by the Royal Marines and Royal Navy, and trained by the Defence Fire Service, would be located in Plymouth, Torbay, Exeter, Exmouth, Barnstaple and Ilfracombe. Those who know Devon well will realise how thinly spread that cover would be.

The Minister will be aware that up to 13,000 service men and women have been trained to respond to 999 calls, drive Green Goddesses and use specialist equipment. The 827 Green Goddess crews, 331 special breathing apparatus rescue teams and 59 equipment support teams, in addition to 6,500 personnel from all three services who will be engaged in administrative, security and command and control duties, mean that 20,000 service men and women are involved in some way.

In a poll conducted by YouGov and published in The Sunday Times last weekend, 47 per cent. of those questioned said that they had "not very much confidence" in the Army being able to provide effective emergency cover. When asked whether the Army should

"be instructed to cross Fire Brigades Union picket lines to gain access to modern fire-fighting equipment",

74 per cent. responded that they should.

That is no criticism of our armed forces. Of course they would carry out their duties professionally if called on to do so. However, it reflects a general concern that yet again we are asking too much of them. Are we certain that their equipment is good enough to do the job? I doubt it. Even when I joined the Army in 1979, Green Goddesses appeared antediluvian, and one half-expected to see Corporal Jones behind the wheel. That was more than 20 years ago. They have no radios, lighting gear, foam-making kit or seat belts. Yet again we are asking our armed forces to do a job and use equipment that no professional, unionised organisation would agree to.

Can my hon. Friend think why, in the long time that has passed since Green Goddesses were used during the last firemen's strike, the armed forces have not been allowed to train on other, more modern equipment, as it has gone out of service? Presumably that equipment has been scrapped while the Green Goddesses have been left for the Army to use in such an emergency.

My hon. Friend makes a good point. I can only imagine that the Green Goddesses are being saved as a job lot for sale to the motor museum at Beaulieu. I go further than my hon. Friend in believing that the armed forces should have access to the most up-to-date equipment, whomever it belongs to and wherever it is located.

Perhaps all that I have been discussing is hypothetical—let us hope that that remains so. Still, perhaps the Minister could tell us whether he believes that, in the event of a strike, the armed services should have proper access to all the most up-to-date and safest equipment.

What pressure is being put on the services by what is happening at present? The Minister of State for Defence has already said that nearly 1,000 personnel who recently returned from the Balkans have had some or all of their post-operational leave delayed, although he went on to say that they, and any additional relevant troops, would have their leave as soon as possible. However, the knock-on effects of the threatened action do not stop there. In a reply to a question from my hon. Friend the Member for North Essex (Mr. Jenkin) the shadow Secretary of State for Defence, the Minister admitted that the use of RAF personnel would reduce flying time and delay repairs to aircraft. No Navy ships had been recalled from sea operations, but activities had been changed to allow for training on board.

It is no wonder that there is concern at the highest level in the armed forces that overstretch is the main problem. It is also understandable that there is worry at the prospect of British forces being committed to a war against Iraq at the same time that there is industrial action at home.

I want to talk about recruitment, training and retention. The Government's strategic defence review contains plenty of acknowledgement that overstretch is a problem. Paragraph 76 states:

"We need to solve the problems of undermanning and additional overstretch which comes from over-commitment."

Lord Gilbert, the then Minister of State with responsibility for defence procurement, said on 24 February 1999:

"It is the policy of Her Majesty's Government not to take on more commitments than we can handle."—[Official Report, House of Lords, 24 February 1999; Vol. 597, c.1229.]

However, yet again the rhetoric does not match the reality: there are 1,000 fewer service men and women this year than last year and 6,000 fewer people in the armed forces than in 1997; the Army as a whole increased its strength from its 2001 total and has 1,300 more personnel than it did in1997, but its trained strength is 1,300 below what it was in 1997. The figure has remained roughly static since 1998, despite Labour's pledge to enlarge the Army by 3,300 men. The Territorial Army is 2,000 men short of its post-strategic defence review strength of 41,200.

More service men left the forces than joined them last year. Ten per cent. of the Army's rank and file left the service last year. So this morning let us deal with fact rather than aspiration. What are the Government doing, or planning to do? In 2000–01, the armed forces met 90 per cent. of their recruitment target, compared with 96 per cent. in the preceding year. The combined effect of not meeting those targets and of having more people leaving than joining is self-evident. However, while lack of manpower is one thing, lack of proper training is another. In the past 24 months, 84 exercises have been cancelled, often because those involved were already committed to other operations. Five were cancelled because of lack of funding and 36 were cancelled because of operational commitments. The Defence Secretary actually wanted to cancel Britain's biggest post-cold war exercise—Saif Sareea 2—to save £93 million. but was overruled by the Prime Minister, on the advice of military chiefs. One can only hope that the stories that he then attempted to get Sultan Qaboos of Oman to pick up the bill are erroneous.

Retention must be the key. It must make sense to concentrate on those who are already trained, rather than to start from scratch. The problem is the competitive job market. Evidence of that is the fact that we are losing highly qualified pilots from the RAF to commercial airlines. The Government's response must be to look after service men and women much better. The pressures on service families caused by overstretch are leading to many people leaving the services altogether.

A comparison with the situation six years ago underlines the challenge that the forces now face. In 1995, the Army had 33,178 personnel deployed abroad. In 2001. the figure stood only slightly lower at 30,800, despite the repatriation of units from Germany and an Army that was reduced in size.

The hon. Gentleman mentioned the possibility of conflict with Iraq. If that happens, how does he suppose that we could stay as a peacekeeping force—as we would presumably have to—given the problems of overstretch elsewhere that the British Army faces day in, day out, and on which I totally concur with him?

Indeed, that is a worry shared by some very senior generals, admirals and air marshals. The question does not solely concern Iraq—it is a question of other commitments that might increase over the coming months, in Northern Ireland and nearer too.

I draw the hon. Gentleman back to his point about pilots and how to retain them in the RAF. That is not a new issue—it has been around for some time. Can he explain how he would retain those pilots? For pilots, the issue is not only about money. They want an all-round package. I have yet to hear anyone come up with a satisfactory alternative to the private sector, which offers nearly 50 per cent. more than they now receive.

Indeed. I entirely concur with the hon. Gentleman's point. There must be a balance between pilots entering into a contract with the RAF and the service that they render. It is up to the RAF and the Ministry of Defence to work out ways of making the overall package, as the hon. Gentleman described it, as competitive as a commercial package. That might not be achieved in financial terms, but in overall career development terms. Those are questions for the Minister.

I understand that the Army had an agreed level for tour intervals of 24 months, but the Defence Select Committee was told in 2000 that because of current commitments, there were no sections of the Army in fact getting 24-month intervals. Some were badly affected by operational deployments during peak commitments in Kosovo in 1999; for example, the Royal Engineers' and the Royal Signallers' tour intervals were only seven months and six months respectively. That puts huge pressure on service families, as does the condition in which they are forced to live.

Following the sale of married quarters by the Ministry of Defence to Annington Homes in 1996, the last Conservative Government made a commitment to service families that their quarters would be upgraded to grade one condition by the autumn of 2003. Some £470 million, out of the £1.6 billion proceeds of the sale, were allocated for that purpose. Yet pressure on the defence budget has forced the Ministry of Defence to delay the upgrade programme by two years, until 2005. In the meantime, the Army Families Federation has reported that some soldiers have been driven to leave the services by intolerable living conditions, including leaking roofs, damp walls and faulty heating.

I do not wish to paint an entirely bleak picture. Whatever our country's shortcomings, it is still blessed with the most professional and dedicated fighting force in the world. However, we should not take our service men and women for granted. Not for them the luxury of a work to rule; they will always do what they are called upon to do. It was the Secretary of State himself who promised in June 1997 that the problem of overstretch would be seriously addressed. As the situation in Northern Ireland becomes more uncertain following the suspension of Stormont, as the international situation becomes more dangerous, and as the threat of the firemen's strike still hangs over us, I ask Ministers to acknowledge that they have failed to do so and to let us know, as a matter of priority, what action they intend to take.

I congratulate my hon. Friend the Member for East Devon (Mr. Swire) on raising this important subject and on the powerful way in which he addressed it. I want to concentrate my remarks on our ground forces.

The figures that my hon. Friend presented speak for themselves. The trained manpower of the Regular Army has shrunk since the Government took office. We have fewer trained soldiers today than at any time since the 19th century. The manpower of the Territorial Army has fallen by more than a quarter. We have fewer volunteer reserves today than at any time since the 16th century—and perhaps even before then. Today, we have the largest proportion of soldiers medically unfit for military service since modern medical record-taking began.

It is worth stepping back from this sorry sight for a moment to remind ourselves what service in uniform is about. Although I am concerned today principally with the Army, joining any of our armed forces is not a job: it is a calling. As the possibility of war in Iraq gets closer, it is worth remembering that we ask things of our service men and women that we do not ask of people in other walks of life. On those occasions when they are called upon to use their skills, we ask them to put their lives on the line. What we ask of them in peacetime and in conflicts of low intensity, put strains on their family life that, to say the least, are unusual in a civilian context.

It is worth remembering that the most important thing in the armed forces is not the equipment, nor even their level of professional training. Scipio said it all in his famous address to the Roman militia from his field hospital, after being wounded at the battle of Canae. Before the gates of Rome, when Hannibal's army, the best army by far, was fresh from its victories at Lake Trasmene and Canae, Scipio inspired the men, most of whom had never seen action, with the following message:

"Of all the factors which make for victory, the spirit of the warrior is the greatest."

Nurturing that spirit must be a two-way process. With that in mind, I find a letter from the British Legion particularly horrifying. The Minister will recently have received a letter from me on the subject, although I do not ask him to comment on that case. A letter that I sent to the British Legion elicited this comment:

"I am afraid that the Legion's experience is that across the board, the medical support available to the armed forces is definitely not what is was and we are regularly consulted by members of all three Services who are being discharged with existing medical conditions that are treatable but whom the MOD medical services discharge and refer on to the NHS for treatment. This situation is particularly worrying for those who are discharged knowing that they require further surgery but are placed on a waiting list by the NHS and they are also worried that even if they find employment, it is a very understanding employer indeed who will permit them time off for surgery and perhaps months of rehabilitation … it is not unusual for people to be discharged within weeks of surgery, when the MOD must know that the individual faces a period unable to work and perhaps, unable to support their family."

The letter continues:

"discharge with a medical condition is a real problem for trainees … Often injuries occur only days into their initial training but because they are untrained … the MOD has no 'realisable' investment in them, they are discharged … Many of them would have resigned and sacrificed jobs or college places only weeks earlier in order to enlist but they quickly find themselves at home with no job, an injury of varying severity and few prospects."

That reflects to a large extent the overstretch in our medical services.

A wider measure of the way in which overstretch is a creeping cancer in our forces was elicited by a question from Lord Vivian. His question related only to the Army, but I am sure that the picture would be the same in the other two services. Since 1997, the divorce rate among military personnel has risen from 2.16 per cent. to 3.12 per cent. That is significant increase.

The truth is that we face a desperate overstretch, and my local unit, the Royal Irish Regiment, is a case in point. During the past three years. it has had three major deployments outside mainland Britain: to Kosovo, Northern Ireland and Sierra Leone. In this country, the national focus for professional training, and the focus that we should all expect for members of 5th Airborne Brigade, is the possibility—some say probability—of a major operation in Iraq. In fact, 400 of its number are away, training as firemen. That is creating a hole in their training, even if no Green Goddesses are actually called out. At the same time, the unit is being called on to provide substantial training teams for other units going to Northern Ireland. The questions posed by my hon. Friend the Member for East Devon about the impact on professional training seem very apt in that context.

I am slightly confused as to where the hon. Gentleman's argument is taking us. I thought that it was part of the role of regiments to help other units in the Army to familiarise themselves with what to expect in Northern Ireland. That is not new; it has been going on since 1970.

Indeed. I support that role. It is an important one for the Army. Obviously, there must be training teams for one unit when another unit is training. My point is that if a regiment has come back from three different deployments, all of a low intensity, and it desperately needs to prepare for high-intensity war—a subject on which there would inevitably be a degree of rustiness—to have most of its soldiers away on firefighting training, and others away training another unit for another low-intensity operation, would not leave much scope for exercising for its main role. I am afraid that is an inevitable effect of overstretch.

I cannot help contrasting our situation with that of America. We are talking the same tough language as the Americans. The Prime Minister, with the support of the Conservative party, is shoulder to shoulder with President Bush. The President and the United States Congress have voted an extra $40 billion for defence. I thought that our shadow Secretary of State, my hon. Friend the Member for North Essex (Mr. Jenkin), was right to say that we should fund the essential commitments of the armed forces.

It is worth remembering the other side of the equation. I do not accept that all the matters that the armed forces are involved in at the moment are actually necessary. When he was shadow Secretary of State, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) pointed to the fact that the equivalent of a whole battalion's worth of expensive civilians are involved mostly in budgeting or monitoring the various forms of legislation that have resulted from the European convention on human rights. We have already made a commitment to review that in the case of the military.

Bullying is featuring prominently in the media. It is a particularly important issue at a time of overstretch, when we are considering recruitment and retention. There is not time for me to do justice to the subject, but I will make one observation: the best way to deal with bullying in a military unit, or, indeed, in a school, is by strong leadership. Strong leadership involves officers and senior non-commissioned officers getting to know the soldiers who are under them, rather than spending long hours burning the midnight oil filling in forms.

To return to the school analogy, it is no wonder the headmaster of Downside has just resigned. He pointed out that the school in his area that is most notorious for bullying is also the one that has the best reputation for getting all its forms filled in and having the most detailed anti-bullying policy. The truth is that we need less paperwork in the armed forces and fewer people involved in that paperwork. That is a whole activity area where resources could be saved.

I refer the hon. Gentleman to the many occasions on which the Defence Committee criticised us for not keeping enough records of what armed forces personnel were up to. That is quite the reverse of what he is stating.

The Defence Committee, of which I was a member for four years, commented repeatedly—at one point it was almost an annual comment—on the extent to which the MOD was spending large sums of money tracing very small financial transactions. One example was the cost of tracing the movement of military shirts. It was shown that it cost four or five times as much as the price of the shirts to discover what had happened to them. There has to be an 80:20 rule. As a person who has a background in management consultancy and corporate finance, I think that we are spending too much money on monitoring minutiae and as a result we are losing sight of the big picture.

There are others waiting to speak, so I shall return to the main thread of my argument. I want to make two final points. Our armed forces are manifestly too small for the tasks that they are set. It is essential that some of the deficiencies to which I have pointed in the Regular Army—the under-recruiting, the lack of medical fitness—are put right, but we are going to need a larger reserve to expand, whether or not people like it.

There is something bizarre about the MOD thinking that this reserve should be used only in logistic areas. If the worst comes to the worst, personnel for logistic areas can always be found from civilian life and can be trained very quickly. It is weird to claim that it is appropriate to use special forces from the Territorial Army in formed units, although we never discuss their detailed deployments; that it is appropriate to use Royal Marine reservists, commando infantry, in up to company strength, as they have been used; and that it is appropriate for 131 Commando Squadron, Royal Engineers to send formed troops around the world; while claiming that it is inappropriate to use ordinary infantry, engineers and yeomanry, the three areas that were most heavily cut in the Government's defence review, in formed units.

When we took the shameful decision to withdraw fighter cover from London, nobody asked how it was that every single air defence unit responsible for continental air defence in America comes from the Air Guard, who are volunteer reservists. Nobody even considered an option for that.

I stepped down from the last Conservative Government because I was unhappy about defence cuts. I was one of a small group of people who protested for two or three years, with limited effect, against what was going on. I was concerned that we did not sufficiently appreciate the dangers of the world as it was five or six years ago, and had failed to realise that the forces that we were providing were inadequate to meet them. Since then, no one would deny that the terrorist threat has grown enormously. The challenges that we require our armed forces to face have greatly increased, and yet the forces are still shrinking.

I congratulate my hon. Friend the Member for East Devon on securing this vital debate. As the Government take us towards the brink on Iraq, and as the next terrorist strike may be on this building, I urge them to think and to ask themselves whether they have got the balance right

I congratulate the hon. Member for East Devon (Mr. Swire) on securing the debate. I will comment first on his speech, and then on the speech of the hon. Member for Canterbury (Mr. Brazier).

On troops and firefighting, I understand that the Green Goddesses, and the training that the troops receive, are designed for what, in the parlance, is called "defensive firefighting". That means that they get to the location, douse it with water, get people out of the building if they possibly can, and then try to minimise the damage. In essence, they can stand outside, but do not go inside the building.

Trained firefighters with proper equipment, on the other hand, go inside the building and try to minimise damage. That is a much more sophisticated business, which is why they require all sorts of additional equipment, including air equipment. That is not to say that soldiers could not be trained to serve that function, but there would be several implications if they were. Should the need come to pass—I hope it will not—the troops' primary role will be to fight fires defensively. We should stress the importance of human life and accept the fact that more property may be damaged leading to more insurance costs in due course.

The hon. Member for New Forest, East (Dr. Lewis) suggests training troops to use complex equipment. I do not deny that they could be trained—we certainly have troops of sufficient quality—but they would need to be trained for far longer. To have the same number of troops firefighting would mean that more troops would need to be in training for longer. That would contribute to overstretch, which is the subject of the debate. The hon. Gentleman should reflect on that when he suggests having longer training time so that troops can use more complicated vehicles and equipment, while at the same time he laments the existing overstretch.

The hon. Gentleman is making a gallant attempt to shield the Government from the fact that if a firemen's strike occurs, the troops will have to go forth with inadequate equipment. Surely, a balance can be struck between not overburdening the armed forces with such a role. and at the same time updating, at least steadily, the equipment that is held in reserve for them when they have to discharge that function of support for the civil power, which surely is a normal function for armed forces in this country?

The hon. Gentleman makes an interesting point. I do not know the technical answer, although the Minister may be able to tell us at the end of the debate. I suspect that it has something to do with how regularly equipment is updated. The training programme is designed around training troops in an emergency to use Green Goddesses and standard equipment. However, fire engines are regularly updated every couple of years, so it would be much more complicated to organise a training programme that fitted any circumstance.

Speaking as someone who had the dubious honour of being involved in the 1977 fire strike, I can tell hon. Members that the Green Goddesses are wholly inadequate. They have no proper pumping equipment or radios for communicating with each other. I respect the point being made by the hon. Member for Falkirk, West (Mr. Joyce), but he is stretching it.

Of course I recognise the hon. Gentleman's experience, but the outcome of the 1977 strike, and the effect of the troops using Green Goddesses, was a minimal increase in loss of human life and a significant increase in damage to buildings. Insurance claims doubled. That reflects the function of the Government's present position, which is to prioritise human life and to accept that there will be an increase in insurance claims. The outcome of the troops' efforts was entirely sound and consistent with Government policy then and now.

Can we get it clear that the problem is not firefighting, but the rescue element? Firefighters provide a fire and rescue service. With the best will in the world, troops using Green Goddesses will not able to cope with that. It is a much more complicated issue than simply telling the troops to go in and fight fires. It is not just about fires, but about how people are rescued in all sorts of other ways.

I recognise my hon. Friend's point, but should like to move on. The hon. Member for East Devon referred to targets. I counsel him against using figures that are couched as targets. Targets are simply what the Army projects as feasible, given its recruitment constraints. A target is different from a requirement. If the Army says that it hit 96 per cent. of its target two years ago, and only 90 per cent. of its target this year, that does not mean that it recruited fewer people. It does not mean anything in terms of its requirements. The reference to targets is not just a semantic device, but it means something different in the way that the hon. Gentleman uses it.

The hon. Gentleman also referred to housing. I recall that when the sale of Ministry of Defence housing to Annington went through, a substantial chunk—about £100 million of the £1.1 billion sale price—was hypothetically reserved for the upgrading of military accommodation or for additional expenditure at a rate of about £13 million or £14 million a year. The then Opposition Defence team challenged the Secretary of State on whether he would guarantee that the level of expenditure already committed to upgrades and to maintenance would be maintained. They wanted to be sure that the Conservative Government would not simply reduce the maintenance budget to add in that extra chunk. Time and again the then Secretary of State refused to give a commitment to increasing expenditure a nd upgrading housing. That is a matter of record. I am sure that we could find the appropriate references in Hansard.

It is no secret that I led the rebellion opposing the sale of married quarters, so I have no vested interest in defending the Conservative Government's record in that area. The only positive thing to come out of that whole sorry episode was that there was a clear-cut, ring-fenced commitment to allocate the extra money for housing which my hon. Friend outlined.

The hon. Gentleman is quite right. The clear-cut ring-fencing took place. The Government said, "Here is a receipt for £1.1 billion. We will commit a chunk of that to spend on housing." However, they refused to commit the current level of expenditure on maintenance. In other words, they could scoop money out of the maintenance budget and add it to the money committed to housing, but no extra money would be spent on housing. The Secretary of State was repeatedly challenged on that fundamental point. The hon. Gentleman will remember that.

I would not like the hon. Gentleman to fall into the trap that has been set for him by suggesting that that ring-fencing took place. It manifestly did not. If one looks closely at what the Conservative Government were saying at that time, it is clear that they said nothing about protecting that money. It certainly did not happen.

I thank the hon. Gentleman for that. I defer to his greater expertise and memory of that.

Just in case I forget to mention this when I reply to the debate, may I point out that although £100 million is a large sum, it is nowhere near enough to do up all our accommodation to the standard that we would like?

Of course, and I thank my hon. Friend for that.

My final point is that recruitment and retention has as much to do with economic policy as it has with defence policy. It is in the wider domain of employment and economics and the other opportunities that people have. It is an old sore but it is a fact, nonetheless, that during periods of high employment when there are other opportunities it is much harder to get people to join the armed services. It is not, as the hon. Member for Portsmouth, South (Mr. Hancock) said, simply a function of pay; all sorts of other things go into a person's decision whether to join the armed services. The more opportunities there are, the harder it is to get numbers into all three services.

Hon. Members may call for radical increases in recruiting—notwithstanding what I have just said, recruitment is affected by the lever of pay to a certain degree— but that would require a substantial increase in defence expenditure. The services have had their current problem for at least 10 years, although there were previous problems, but it can be solved from a financial point of view only if we are prepared to spend an enormous amount of money on pay and conditions, for example. However, just as the Opposition never say which commitments they would reduce because the armed services are overstretched, they never commit themselves to an enormous increase in defence expenditure. I would welcome a statement from any Opposition Member that there would be a gigantic increase under a Conservative Government.

Thank you, Mr. Taylor. I am full of admiration for my hon. Friend the Member for East Devon (Mr. Swire) for introducing the debate.

I want to respond to one or two points made by the hon. and gallant Member for Falkirk, West (Mr. Joyce). Everything he said makes a great deal of sense until one looks at the patchy way of recruiting and at certain regiments in the British Army that are constantly over-recruited. They use wholly different methods from those laid down by the usual Army guidelines and manage, even in the areas of sparse population and full employment from which they recruit, to be over strength to the tune of about a company. Those achievements are remarkable and I will not bang on about them any more than usual as the poor Minister has heard quite enough of me on that matter. However, it drives a coach and horses through the hon. Gentleman's point and I shall return to it in a moment.

It might be useful to illustrate exactly what overstretch means at unit level. The word is bandied around an awful amount and I wonder whether people really understand what it means. It is not so much the line infantry or the Royal Artillery or the Royal Armoured Corps, but units like the Royal Electrical and Mechanical Engineers, the Royal Engineers and even the Royal Corps of Signals whose soldiers are not protected by a regimental cap badge or a battalion but whose expertise is paramount. Those soldiers are constantly being called upon for operations in Northern Ireland and Bosnia, for example; you name it, they are there.

The so-called "enablers" is a ghastly modern Army term to which I could never subscribe, but none the less the enablers are under huge pressure. It is those people, often doing the least glamorous and well-rewarded jobs, who suffer, not because they are bad soldiers or because they are unwilling, but because generally technicians have stayed in the Army longer than combat soldiers and have probably married and had more children than their equivalents in the Royal Armoured Corps or the infantry. They are under appalling pressure at home; their wives, rightly, resent not seeing their husbands and their children resent not seeing their dads, who are never available for the school run in the morning or to take them out to the cinema. My hon. Friend the Member for Canterbury (Mr. Brazier) mentioned divorce, a matter to which I shall return. Divorce in the British Army is running at an all-time high. It is an evil that erodes combat effectiveness, morale and not just retention, but recruitment. If a unit returns its men to a small town such as Newark at the weekend or during leave periods, the word soon gets round that the Army. Navy or Air Force may be attractive on the surface, but conditions of service are highly unattractive. Therefore recruitment can be affected just as much as retention.

I ask the Minister to address a specific point: many families lose deposits that they have paid for holidays as a result of operational commitments coming up at short notice. I do not know the answer to that, but I shall illustrate the point. A company of the Royal Regiment of Fusiliers went to Belize for six weeks' jungle training but, because of other commitments, was brought back after 10 days. It was brought back by scheduled flight, not trooping flight. The expense to the Government and the nation of that redeployment was considerable, but what was the personal impact on the soldiers? How many of their families lost holidays? What compensation was paid? I know from personal experience that that is a grave source of discontent.

I think that my hon. Friend was away last week when I wrote to the Minister of State for the Armed Forces about the Welsh Guards. After six months' absence from their families in Bosnia, they were told a week before they were due to return to the United Kingdom that all post-operational leave had been cancelled. I am told that up to 40 families lost deposits for their holidays, and the Ministry of Defence will not reimburse them. That sort of behaviour is seriously testing the loyalty of our armed forces, on which we rely.

I am grateful for that intervention.

Recruiting Group, which is part of the Army Training and Recruiting Agency, must be congratulated on its recent level of recruitment success. That has been a distinct change and is a wonderful achievement. Perhaps the recent change of leadership on the recruiting side has had an effect. In any case, the Minister will know what I am going to ask next: why are there no bed spaces for those extra recruits in the training establishments? Why, with the so-called bow wave, are we unable to cope with these young men and women who wish to serve their nation?

I have made the point before, albeit only about infantry recruits. We now have the problem right across the services that failure is being snatched from the jaws of success. That strikes me as the most cack-handed piece of planning. I hope that the Minister will forgive my using that phrase, but we are eroding the will of those young men and women to serve their nation.

The treatment of regular Army reservists must also be considered. Again, these men and women are without the protection of a regular unit or even a Territorial unit. I beg the Minister to consider those regular Army reservists who are constantly called back for operational duty, yet who receive no promotion. I beg him to consider the Golden Jubilee medal for these men and women who serve the nation so well. These soldiers are plugging the gaps in the regular Army and are doing a damn fine job. I ask the Minister to consider rewarding them properly and treating them in a wholly equable fashion. They help to relieve overstretch. They are not part of the mainstream organisation, but their treatment must be examined in more detail.

I also draw the Minister's attention to the Fijian soldiers serving in the Army. More than a company of the first regiment of the Royal Scots now comes from Fiji. I shall let the Minister explain the logic of that. How comfortable these gentlemen are in tartan trews and with "white feet", I do not know, but there we are. I ask the Minister to consider the fact that when they return from Bosnia to Dreghorn barracks, they have huge difficulty in travelling on the passports that they have. Their only way of getting out of the British Isles in order to enjoy their well-earned leave is to go through the difficult process of applying for visas. That applies whether they are abroad on operations or back in this country. Could not some waiver, or perhaps a temporary passport, be found? I do not have a carefully thought through solution, but I would like to draw the Minister's attention to that matter.

Could we also reflect on expanding the utility of the Gurkhas? We have already lost one Gurkha company, we shall lose another next year and another the year after that. I understand the tripartite agreement between ourselves, India and Nepal, but it could be made more flexible. I would be grateful to hear the Minister's views.

I expect no answer—it will become clear why not—on my final point. This week our special forces are to receive recognition from Her Majesty the Queen for their enormous gallantry in Afghanistan. I want to put on record my undying admiration for these men, one of whom is to be rewarded by Her Majesty for despatching the Queen's enemies with a knife. That is wonderful. I regret the circumstances in which it occurred, but such gallantry should be recognised.

These gentlemen, however, face the same level of overstretch as the rest of the Army. For obvious reasons, that does not appear in official reports and documents. If we visited Bulmers in Hereford—the people who make the cider—we would find that 80 per cent. of the work force were female. Of those 80 per cent., a huge number are Special Air Services divorcees. The price that these men pay for their gallantry and dedication is reflected in their home lives. It is an old sore and an old adage, but unless things are right at home, the soldier is unlikely to fight effectively.

I am grateful for the Minister's attention and I ask him to pay close and detailed attention to the points that I have raised.

May I also congratulate the hon. Member for East Devon (Mr. Swire) on securing this important debate? I congratulate Members who have participated in it this morning, though many of the points raised by Conservative Members require a proper response. I was amazed to hear the hon. Member for Canterbury (Mr. Brazier) excuse bullying by claiming that it was the result of the amount of paperwork forced on senior NCOs and others. That might be an excuse for him, but—

I certainly did not excuse bullying, which is always inexcusable. Many soldiers at different levels have told me that whereas in the old days, senior NCOs and some officers had time to spend with soldiers training under them so that they could discover what was going on off duty, they are now increasingly so caught up in paperwork that that vital steam valve no longer operates, increasing the scope for bullying.

That may be the hon. Gentleman's point of view. However, speaking as a member of the Defence Committee and someone who has met members of our armed forces throughout the world, whether on deployment or on station, that view has never been put to me. Nor has it been put to members of the Defence Committee in the four and a half years of my service on it. Bullying in the armed forces takes place for other reasons. I was pleased to hear a brigadier on this morning's "Today" programme make it clear how seriously the armed forces were dealing with bullying. One hopes that that is true, but it clearly remains a significant problem for some young recruits, and females in the forces often suffer from sexual abuse in one form or another.

The hon. Member for East Devon referred to the fire service. We should all be grateful that we are not today in the first stages of that dispute. One hopes for a solution that will not require the use of the armed forces. My hon. Friend the Member for Stroud (Mr. Drew) made an important distinction between firefighting and the fire and rescue service. Anyone who has spent time with the fire service knows all too well how much training and conditioning goes into the process of encouraging people to enter a building at great danger to themselves to rescue others. That calls for real skill and an effective means of training has developed over the years. I was amazed to hear the Leader of the Opposition suggest at Prime Minister's questions last week that such training could be accomplished in just a few days. It is ludicrous to believe that people can be trained to tackle a blaze and rescue others from inside a building in just a few weeks. That beggars belief. Training people to hold a hose and fight a fire from outside a burning building is not the same as producing dedicated rescuers capable of saving others in intensely dangerous circumstances.

The use of firefighting equipment is another issue. Training someone to use the most up-to-date fire equipment—I have taken advice from the fire service in Hampshire, which I was once, as leader of the county council, proud to lead—takes a long time. Training soldiers properly to use the latest equipment would take a minimum of six to eight weeks. That would be required to make someone capable of taking the vehicle from the station to a fire and to set about the task of fighting it—emphatically not to rescue people.

I thank the hon. Gentleman for giving way, but I fear that his memory is at fault and that he is gilding the lily on what my right hon. Friend the Leader of the Opposition said. I recall that he had been advised by the Retained Firefighters Union that troops already familiar with the Green Goddesses could train up in a fairly limited time to use more modern equipment. I was not aware that my right hon. Friend said anything about them desperately plunging into buildings, as suggested by the hon. Gentleman.

I listened carefully and gained the impression that that was effectively what the Leader of the Opposition said.

I am grateful to my fellow Hampshire Member for giving way. I also discussed the matter with the Hampshire fire rescue people, who told me that troops could be trained up to a competent level within a couple of weeks. That entirely mirrors the advice given by retained firefighters to my right hon. Friend the Leader of the Opposition. We are clearly talking not about the standards of a professional firefighter, but the ability competently to man modern equipment, which would otherwise lie idle.

The other issue is how to accomplish the training. It would mean taking out hundreds of fire appliances currently in use—my right hon. Friend the Prime Minister made the same point—which would not be easy to achieve.

I was also surprised to hear Members speak so critically of the Green Goddesses. The last fire dispute took place 25 years ago in 1977. One wonders what happened in the 17 years of the 20 between 1977 and 1997 when the Conservatives were in control? I do not recall any enthusiastic rush on their part to re-vamp or replace the Green Goddesses, or to train service personnel to a higher competence.

The idea that we are sending people out to deal with fires on ramshackle vehicles that do not work is quite wrong. The Green Goddess is old and can be unreliable, but it remains an effective instrument for doing what it is supposed to do—acting as a civil defence last line of equipment.

I accept the Minister's point. None of us should knock efforts to train our troops properly to serve the communities where they are based, but one hopes that we shall not need to use them.

I want to respond to the Minister's riposte about paperwork. The Ministry of Defence owes it to our armed forces to ensure that, in particular, proper medical records are kept. It faces many criticisms in that respect. There have been suggestions that there is inadequate medical evidence to support claims of Gulf war syndrome; there is no proof as to what soldiers and others were given at the time. If proper records had been kept during the Gulf war, many service men and their families would be in a better position to fight their corner. We can only regret that that was not done and I hope that the lesson has been learned.

The armed forces suffer a vicious circle. Failure to address the problems of recruitment and retention results in unsustainable levels of service for those who remain and a consequential drop in morale, as those of us who represent constituencies with a service interest know only too well. The circle must be broken, but I am unclear as to how. No solutions are readily available to the MOD—it has attempted to find them, but has not been successful, and none of us has found any quick fixes for retention.

On 1 July, the Royal Navy was under strength by 1,420, the RAF by 770 and the Army by 5,440. We have two options. We can either up the ante and produce a package of pay and conditions that will attract, recruit and retain or we must seriously consider reducing the deployment capability of our nation. In 1997 we had 47,000 troops deployed overseas; today we have 44,500—a small reduction—but there is a significantly smaller pool from which to draw. There are some 23,000 reserves compared with a wanted strength of close to 40,000—we are nearly 50 per cent. short. We should ask why that is the case. I do not believe that there are soft answers; these are serious issues and, as the hon. Member for Falkirk, West (Mr. Joyce) said, we are competing in a changed world with a new economic climate. In many instances, the competitive opportunities for many of the men and women whom we would like to recruit to the armed forces far outweigh what we can offer. I do not know how it is possible to retain 32-year-old pilots—they can earn 50 per cent. more and achieve a substantially higher pension by leaving the RAF while they still have 20 years' flying for a private airline in front of them. What sort of package must we come up with to make staying in the Royal Air Force until his mid-forties an attractive proposition for a pilot?

rose—

Order. Before I call the next speaker, I should point out that I want to call the official Opposition spokesman at 12.4 pm.

I am grateful, Mr. Taylor, for your allowing me to intervene. Everything that the hon. Gentleman has said is correct, yet there are regiments and units that are constantly over strength and have no difficulty in recruiting and retaining. How does he explain that?

The hon. Gentleman did not explain it to us. I was going to listen with great interest to the comments that he promised, but did not deliver. I was eager to hear what he had to say and I regret that he did not come back to that point. Perhaps on another occasion he will do us that honour.

The conditions are crucial. The issues of housing, lost holiday deposits and temporary passports for foreign nationals serving in our armed forces have to be taken into account. If we are going to ask people to serve us, we must make it clear that Parliament is committed to serving them. Now, many feel badly let down.

The short answer to the hon. Member for Portsmouth, South (Mr. Hancock) is the return of the Conservative Government. That is how we shall resolve the shortage of pilots in the Royal Air Force.

I join others in congratulating my hon. Friend the Member for East Devon (Mr. Swire)—indeed, he is my hon. and gallant Friend—for making such a remarkably good and wide-ranging speech. Although lack of retention has been a problem in the armed forces, the House and the country have sometimes been the beneficiaries. For instance, my hon. and gallant Friends the hon. Members for East Devon and for Newark (Patrick Mercer) added enormously to the authority and the wisdom of this place when they gave up their careers in the services to join us.

My hon. and gallant Friend the Member for Faversham and Mid-Kent (Hugh Robertson) and the hon. and gallant Member for Falkirk, West (Mr. Joyce) are here; nor do I forget my hon. Friend the Member for Canterbury (Mr. Brazier), who served with distinction in the Parachute Regiment, and the hon. and gallant Member for Torridge and West Devon (Mr. Burnett), a former Royal Marine. They illustrate the wisdom that Parliament does have Members with real experience.

The debate is important. It is a good example of the fact that we can have constructive and informed debates on defence in the House. Indeed, we shall be having another on Thursday; then, should the Minister be deficient in his answers today, we shall be able to take up matters again. I say that because many issues have been covered today, and I am not sure that he will have time to respond to them all.

The strategic defence review of 1998 defined overstretch as

"trying to do too much with too little manpower … additional pressures from persistent overstretch contribute to higher exit rates from the Armed Forces."

That was how the Government defined overstretch. It is quite reasonable, four years on, to see how they conducted their stewardship of our armed forces in light of the undertakings that they gave then.

It is clear that overstretch is creating enormous problems. The time needed to train for operations, for the operations themselves and for recovering from those operations is taken from time that would otherwise be used in training for assigned tasks. Paradoxically, most operations, especially peacekeeping operations, degrade capability. Patrolling the streets of Northern Ireland does not prepare soldiers for anti-tank warfare or infantry fighting, and monotonously patrolling the no-fly zones in Iraq does not prepare our pilots for air-to-air combat.

The disruption of training and the increased disruption of family life caused by overstretch has a severe effect on the quality of life our armed forces; and my hon. and gallant Friend the Member for Newark made absolutely clear what effect that can have on family unhappiness and divorce rates.

In that respect, I hope that the Minister will respond to my letter to the Defence Secretary about the Welsh Guards. The Welsh Guards at Aldershot are deeply disappointed that post-operational leave has been cancelled and that they had to return to accommodation that they find disgusting. They were then told that the MOD would not pay their deposits for holidays that were cancelled as a result of leave being stopped. The prime cause of the retention crisis is that men with families have simply had enough; and it feeds back into further problems with overstretch.

I shall speak about each of the services, and I shall start with the Army. Lord Robertson, then Secretary of State for Defence, said in the strategic defence review:

"All three services have been overstretched because of the demanding pattern of our operations, and I am determined to put that right."

That was four years ago. Have the Government put it right? As my hon. Friend the Member for East Devon explained so graphically, the Army's trained strength is 1,300 men lower than it was in 1997, and it has remained roughly static since 1998, despite the Government's pledge to increase the size of the Army by 3,300 men. We have seen a modest increase lately; but even by September 2002, when there was some improvement, the deficit was 5,300 compared with April 1998. Now we are told that the Army is not forecast to reach its full manning level until 2008 and, as the Adjutant-General told the Select Committee, that target has surreptitiously moved from 108,500 to 107,900, yet demands have increased since 1998 and are still increasing.

If we consider the Royal Navy, under the strategic defence review, the number of destroyers and frigates was reduced from 35 to 32, and the number of minehunters was reduced from 25 to 22. Flexible deployment was supposed to fill the resulting gaps. As the Defence Committee commented at the time:

"We remain unconvinced by the proposed new flexible deployment of the frigate and destroyer fleet and are not persuaded that this new flexibility has been devised for operational rather than cost-cutting reasons."

The operational impact of those cuts in the number of destroyers and frigates is clear. In 1999–2000, the time spent by the Atlantic Patrol Task (North), often known as the West Indies Guard Ship, on station in the Caribbean, was cut from 365 to 244 days, so it is a case of all clear on the days when the task force will not be active but steer clear when it is. With a reduced patrol in the Caribbean, are the Government still committed to protecting British interests from drug trafficking? Now we are told that we can make do with 31 frigates, rather than 32, through the more efficient use of assets.

It was smuggled out that HMS Sheffield was to be sold prematurely, and we know the problem regarding HMS Nottingham—Notts on the rocks. HMS St. Albans encountered a ferry in last Sunday's storms. Those ships will be taken out of action. A memo from Commodore Laurence suggested that the announcement of the premature disposal of HMS Sheffield would be made by way of an inspired parliamentary question. His memo continued:

"A decision to dispose of the ship is likely to initiate further questioning over the ability of the fleet to meet its current and future commitments."

He can say that again. It is a shame that the Government did not have the guts to announce their decision in the House, rather than relying on the matter to be leaked through a memo from Commodore Laurence.

Again, we read in The Daily Telegraph on 8 October that the Royal Navy is to lose up to six of its 32 destroyers and four minehunters in order to pay for the two new aircraft carriers and the new joint strike fighter. Ministers have denied it, but their track record is not good. We welcome the Government's plans for six new type-45 destroyers. That is good news, but we need numbers. With all the sophisticated kit in the world, we will not be able to deploy ships that we do not have. That sounds simplistic, but it is true. If the Government continue to decide that we can make more efficient use of fewer ships, we will eventually be making effective use of only 10 ships, but we will not be able to deploy them where we need them.

I shall not rehearse the arguments about Sea Harriers.

My hon. Friend has contrasted peacetime overstretch with the ability to deploy numbers in war. That is why Jackie Fisher, arguably the greatest sealord of all time, adopted the policy of maintaining a substantial reserve of naval vessels, which could be brought rapidly back into use during war.

My hon. Friend makes an extremely good point. We have a very limited naval reserve. I shall not go into the issue of Royal Air Force reserves, but the hon. Member for Portsmouth, South (Mr. Hancock) has mentioned how decimated our Territorial Army reserves are. On the F35, the joint strike fighter, it was admitted in a written answer last November that the Fleet Air Arm was at only two-thirds strength, with only 44 Sea Harrier pilots compared with the required 64. Has the position improved? How do the Government propose to man the joint strike fighter in 2012, assuming that it comes into use at that time, when it cannot maintain the strength of the Fleet Air Arm? Of course, we know the position with the RAF. The 5 Squadron has been cut, which is especially ironic as it was the stand-by squadron to prepare for an intercept if it became necessary to intercept aircraft coming into London.

On all three services, there is a problem with cuts in capability. Hon. Members do not have to take only my word for that. As recently as May 2002, in another place, distinguished former serving officers who have recently retired have been unstinting in their criticism of the Government's stewardship of our armed forces. The noble and gallant Field Marshall Lord Inge said,

"The fundamental problem is that our Armed Forces are too small for the many operational tasks placed upon them."

The noble and gallant Lord Guthrie, who recently retired as Chief of Defence Staff, said,

"Recruiting targets are not being met; ships and regiments are not properly manned; training is being reduced; and equipment is ageing and often not available. So far as defence is concerned, there has been, in effect, disinvestment. All this, I remind noble Lords, has been happening at a time when to many of us it appears that the threats to our security are becoming ever greaten"— [Official Report, House of Lords, 15 May 2002; c. 311–19.]

Ministers cannot lightly dismiss the words of a gentleman who was, until recently, the Chief of our armed forces. I hope that the Minister will respond when he replies to the debate.

Other additional burdens include the war against terrorism and the enhanced homeland security requirements, to which General Sir Michael Rose recently referred in an excellent article in the Daily Mail. There is increased tension in Northern Ireland; four battalions are patrolling the streets of Belfast, when a few years ago there were none. Troop numbers have risen there from some 11,000 to 13,000. There is the possibility of further conflict in the middle east. There is also the firemen's strike, whose impact on the armed forces has been described by my hon. Friends.

The Government have provided no allowance for the unexpected. There is no slack in our armed forces to meet emergencies. It takes time to train experienced and competent service personnel and, if all these new conditions are imposed on them, they will, as one service man put it to me, "leg it."

The armed forces have always managed to make do, but if their concerns about over-commitment are not heeded, their ability to respond to ministerial demands could suddenly snap. In that case, we could not meet the requirements of Ministers to fulfil our commitments at home and abroad. We must not take the armed forces, or their professionalism, for granted.

I finish by quoting from the SDR, from which I quoted at the beginning of my speech, when I mentioned overstretch. The SDR promised

"to improve recruitment and retention so that our units are properly manned … That era of decline is behind us."

Order. I am sorry to interrupt the hon. Gentleman, but I want to give the Minister some time to reply.

May I just finish my point, Mr. Benton?

The debate has proved that the era of decline is not behind us.

I dislike the use of the term overstretch, as it is trite and clichéd. It should be replaced with another word but, in the absence of a substitute, I think that we should use the terms stretch, which is obviously part of the task of the armed forces, and excessive stretch. As the hon. Member for Newark (Patrick Mercer) said, excessive stretch affects individuals rather than units. We must remember that we are talking about individual men and women when we discuss overstretch, not some abstract concept affecting the armed forces as a whole.

However, we should be clear on the matter. The armed forces and our service chiefs have not declined any operational commitments because of excessive stretch. As the House knows, when we deploy forces we do so with the full support of our senior military advisers. Their advice is based on the collective expertise and best information on the availability and readiness of our forces. There is inevitably some risk in any deployment, but we manage and minimise that risk. After all, operational deployment is the raison d'être of our armed forces, although we would not think so to listen to some of the speeches made by Opposition Members.

Perhaps the most vivid illustration that I can give is a simple comparison. At the height of the Kosovo operations in June 1999, 44 per cent. of Army personnel were committed to operations. The worldwide commitment is now about 27 per cent. of personnel, with about 18 per cent. deployed at the moment.

Despite heavy commitments, naval harmony guidelines under which ships spend 40 per cent. of their time in base port are generally being maintained. In the RAF, only about 2 per cent. of trained personnel exceed the planned limit for separated service.

It is true that our armed forces have been very busy. We ask our personnel to undertake demanding tasks, often in difficult circumstances such as in Afghanistan. We must ensure that that there are no doubts in the minds of families and potential recruits about what people let themselves in for when they choose a career in the armed forces. Our forces are for use, not for sitting around in barracks indulging in an endless cycle of training with no other ultimate purpose. Anyone who joins the British armed forces or the reserves must recognise that they will be expected to serve on operational deployment.

That is part of the attraction of the armed forces, and perhaps why recruitment has gone up dramatically over the past three months, especially to the Army. That has led to the problem that was properly outlined by the hon. Member for Newark, namely that recruitment is now greater than our capacity to bring new recruits into training. However, we are considering extending opportunities for people to be given some general training, to whet their appetites for the full training cycle. My right hon. Friend the Minister of State for Defence and I were offered that new strategy last year when asked how we would cope with a sudden surge in numbers. It has proved difficult to cope, as we generally expect numbers to remain fairly static or to increase gradually. The sudden surge in the past three months has posed problems, but we are addressing them.

We are not complacent about the importance of managing the demands that we place on our armed forces. To help determine them, we now seek to record separated service. I am afraid to say that that involves more paperwork. The most efficient running and coverage of what men and women do, which is what counts, requires a much higher standard and detail of record keeping than was common in the past. We need only point to medical and service records from the Gulf war to show how inadequate they were at the time, and hopefully how much better they are now.

More work is required for us to be able to trace the performance and service commitment of every individual in the armed forces. It is no small undertaking. As the hon. Member for Newark rightly pointed out, individuals in units can suffer from excessive stretch and excessive overseas deployment while the rest of the unit shows no signs of it. It is important to show what happens to each man and woman in our service. That is what we are bringing in, and all hon. Members would welcome it.

The provision of systems to capture such information for a widely dispersed and highly mobile population is difficult, and competes for resources with other technical priorities. It is a key objective of our forces personnel strategy, and in the end will give us a much a clearer picture of the demands that we place on individual men and women.

We have substantially invested in that capability, and its coverage will be extended to all parts of all three services as soon as is practicable. Since 1997, the RAF has provided that facility for personnel for periods of separation of three days or longer. The Navy started recording on a daily basis for the majority of its personnel in September last year. The Army is at present conducting trials in some units, and will bring in a universal system as soon as is feasible.

Turbulence for individual soldiers and families is important, and our general approach is to try to reduce it as much as possible. We aim to commit personnel to operations for no longer than is absolutely necessary to achieve the military aim. They are withdrawn from operations at the earliest opportunity, as in Macedonia last year. Everyone pooh-poohed the idea that 30 days would be sufficient. In fact, the operation was conducted with clinical efficiency. We went in for 30 days; we came out after 30 days of weapons collection. The fact that a fragile peace has been established in Macedonia is due in no small measure to the actions that we took.

Similarly, we said that we would go into Afghanistan for a certain period, and we stuck to that. The Turks took over and are doing a good job.

I accept that most of the points mentioned by the hon. Gentleman should help, but the bald fact is that in the Labour Government's time in office, divorce in the Army has risen by almost half. The haemorrhage of experienced personnel has worsened. Overall, the hon. Gentleman must accept that the Government are losing the battle.

The figures show that divorce rates in the armed forces are similar to those for the comparable group in the general population. They change over time. I shall not waste too much of my speech trying to explain details of vital statistics to the Opposition.

Average unit tour intervals in the Army have improved. They are currently assessed at an average of 23 months, which is just below the strategic defence review target of 24 months. To be fair about that figure, there are differences between units. Not all of them have attained the 24 months figure. There are particular problems with certain light role infantry battalions, engineers and signallers.

I should stress in passing the value of our reserve forces. At present 850 of our reserves are serving in units on active service, and a further 2,240 are on full-time reserve service. That huge commitment by our reserves, quite independent of any other callouts, is an indication of how effective our strategy has been in placing them close to the front line, as far as possible, and using them where they are most needed to plug gaps in service. I hope, over time, to recruit more people to both the regulars and the reserves in specialist areas such as signals and engineering, to alleviate the overstretching of those personnel and bring them back to the norm for the armed forces. I pay tribute to the excellent work done in the past couple of years by the Reserve Forces and Cadets Association and the National Employers Liaison Committee, now known, I think, as Sabre, for their superb work in bringing employers on side, to help to ensure that our reserves are treated fairly and properly by their employers.

I am grateful for the Minister's tribute to the cadet forces. I have heard that it is proposed that he should withdraw from his association with the air cadets. I hope that he can deny that and confirm that he will remain on the council.

No, I do not deny that. I think that all cadet forces should be treated equitably by Ministers, and a Minister does not serve on the council of the Army cadets or the sea cadets. All three cadet forces should be treated in the same way. I can perform more effectively as a Minister responsible for cadets if I do not serve on their governing body, but their governing body reports to me as is proper, in line with the other two cadet forces.

I realise that I have a half-hour speech to make and about three minutes in which to deliver it, so I must try at a breathless rate to cover as many points as possible. On the matter of the use of fire brigade equipment, we have 331 breathing apparatus rescue teams and 59 rescue equipment support teams available. In passing, I should mention that we use a great many sailors in firefighting roles. All sailors are trained, to an extent, as firefighters, because fire is the great fear on board any ship. Because of factors such as the tunnel effect of corridors, they are trained to use breathing apparatus and can provide invaluable support in firefighting activities. The services will not become a fire service; they cannot do that. However, with the equipment available to us, old though it is, I am confident that the thousands of personnel whom we have deployed on firefighting operations will cope well with their allocated tasks.

I am concerned about the matter that was raised concerning the Welsh Guards and lost holiday deposits. I understand that the issue is being intently considered. Frankly, I should think that if people are losing deposits because of unforeseen operational commitments, I would expect them to be reimbursed. I will not make any promises on that, however, until I know for certain what is happening.

We have a robust strategy for defending London from the effects of aerial attack, though I do not want to say any more than that now.

We have introduced retention packages for pilots. I would have thought that the Opposition knew about that. It is a bit early to determine whether the packages will be a success, though we have not made any secret of them.

With regard to the letter from the British Legion, I look forward to—

Order. We must move on to the next debate.

Let me say at the outset that I am disappointed at having to draw the plight of the Swan theatre in Worcester to the attention of the House. Earlier this month, news broke that Worcester district council, through its leader, Councillor Steven Inman, intends to cut the annual grant that it gives to the theatre from £137,000 a year to £54,000. That, combined with its impact on match funding from West Midlands Arts, means that the theatre will be forced to close early in the new year, and I want to draw attention to that act of cultural vandalism today.

Worcester Swan theatre is a 350-seat theatre. It attracts visitors from the city, across the county and further afield. It is a registered charity and a company limited by guarantee. It is governed by a voluntary board of governors and run by a small group of staff aided by volunteers. Of its income in 2001–02, 55 per cent. was earned, 21 per cent. was grant aid from West Midlands Arts, 17 per cent. was from the city council, 3 per cent. was from the county council and fundraising revenue made up the remainder.

The theatre has three strands of work. The first is production, with home-produced plays made in Worcester, with the creative process led by the in-house artistic team.

It is right that the hon. Gentleman should draw attention to the productions of the Swan theatre, of which my wife is a director. It is particularly tragic that the theatre faces closure now, when, artistically speaking, its productions are some of the finest that it has ever produced.

From time to time the hon. Gentleman and I disagree, but, on the issue in question, the city council has done us a great service in that we are united in our support for the Swan theatre, and I put on record my testimony to the hard work and dedication that the hon. Gentleman puts into theatre work in Worcester and in the all-party group on theatre.

Last year, Lance Woodman's "Red Skies Over the Severn" was critically acclaimed, and, as a result, Mr. Woodman was awarded a prestigious Pearson play-writing bursary. The Guardian gave the play glowing praise, describing it as

"a play that speaks so directly and urgently to its audience".

The second strand of work is presenting. with increasing quantities of national touring work going to the Swan. In 1998–99, there were 19 performances of six different productions. In 2001–02, there were 75 performances of 17 different productions. An example of that was "Victorian Values", which was watched last year by nearly 1,800 local children aged seven to 11.

The third strand is participation, which is made up of education and community work, as well as amateur theatre. Last Christmas, the theatre produced a musical adaptation of "A Christmas Carol", which linked the core professional actors and musicians with a community company of local, non-professional actors and children from across the city. There is a picture of the performance in the annual report. I cannot see any physical resemblance between Councillor Inman and Scrooge, but I know that many friends and allies of the Swan may disagree with that view.

In 1998, West Midlands Arts announced its intention to remove completely its funding as of April 1999 because it was underfunded and needed to make savings. The Swan was chosen as the sacrificial lamb because historically the local authority had funded the theatre poorly. West Midlands Arts took the view that if a local council did not value a theatre there was no reason to put money into it. The city council responded by agreeing an extra £83,000 a year on top of the existing £54,000 grant. The theatre produced a three-year plan for 1999 to 2001 called "Creative Connections" and West Midlands Arts agreed three years' worth of funding.

Recently, the city council set up a working party to examine arts provision in the city. It comprised three city councillors, representing the three main political parties, who produced a unanimous report that was presented to the executive board of the city council in December 2001. The working party recommended that the grant continue to be paid at the full level in return for monitoring certain performance indicators at the Swan. Earlier this year, the budget was set and continued the grant funding level on that recommendation.

In 2001, Worcester Swan theatre was shocked to discover that it was not included in the distribution of additional funding resulting from the national review of English regional producing theatres. It was one of only four in the country not to be recommended for additional funding, and that was a major blow to the Swan. Perhaps the Minister would like to comment on the reason behind that decision, and to confirm whether it is true that, as Worcester Swan theatre was told, the primary reason for its exclusion was a lack of drive from local authorities.

Shortly after the Swan published its 2002–03 business plan, it was evident that financial viability was threatened. West Midlands Arts, through the lottery programme, funded a report by Andrew McKinnon on the theatre, its operation and finances. Broadly speaking, the report says that the theatre manages its resources well, that it is vibrant and that the chief problem is underfunding.

To continue its present policy and programmes, Worcester Swan theatre would need another £77,000 a year. West Midlands Arts and the Arts Council responded positively, suggesting that they could make an extra £50,000 a year available. Last night, I received a phone call from County Councillor Adrian Hardman, the portfolio holder for resources, who informed me of the council's intention to increase the grant by the extra £27,000 needed to match fund the West Midlands Arts' grant.

Worcester Swan, recognising that in the long term the theatre needs other resources as it is beginning to show its age and its location is not ideal, started discussions with the city council about shaping the theatre's future and what contribution could be made. In the light of those discussions the city council announced its intentions to withdraw the £83,000 of funding. It appears that Worcester city council has financial problems. Naturally enough, it blames them on the Government, but in reality I suspect it made the classic mistake of anticipating savings and spending them before they were realised. Only on finding that those savings had not materialised did it realise that a problem existed.

Newspaper reports state that the feared deficit for this year is close to £400,000, and the projected deficit for next year is £1.1 million. It is in an attempt to resolve next year's financial problem that the city council has threatened the funding of Worcester Swan theatre. Since that news broke, the public outcry has been enormous. I attended a meeting of more than 300 friends and allies of the Swan on 14 October. The meeting heard from the chairman, Gerald Harris, that due to the actions of Worcester city council, the theatre would close in the new year. It will close unless the city council have a change of heart.

I want local councillors to view spending on the arts not as bailing out the Swan theatre, but as helping to serve the cultural needs of the local community.

I am grateful to the hon. Gentleman for securing this important debate. Does he understand that the wider community is not just Worcester city, but the county of Worcestershire? I am getting a great deal of pressure from my constituents, who are urging me to do all that I can to reverse the closure. The play of which he spoke, "Red Skies Over the Severn", was a powerful work about the impact of foot and mouth disease on Worcestershire, which made a powerful appeal to the farming community in my constituency. We are talking not just about Worcester city, but about the county.

I could not agree more with the hon. Gentleman. I have a letter from the Bishop of Worcester, the Right Reverend Dr. Peter Selby, who makes exactly the same point as the hon. Gentleman. Dr. Selby writes that the theatre

"serves a much wider area, and to that extent plays quite a part in bringing people into the city."

He then makes a telling point:

"A city without a theatre seems to me…something of a contradiction".

The theatre provides entertainment and culture for the city. Worcester is a vibrant city with an increasingly flourishing nightlife. Indeed, the city council has paid for a tourist website to show exactly what Worcester has to offer. The council includes the Swan theatre as a major attraction, yet its actions threaten the Swan's very existence.

I also call into question the secrecy surrounding the decision to cut funding to Worcester Swan theatre. The city council has an appointed representative who sits as an observer on the board of Worcester Swan, but he was not informed of the discussions on future funding and he found out about the decision by reading about it in the local newspaper.

The leader of the city council has responded to criticism from local people by attacking Worcester Swan theatre and how it is organised. Councillor Inman was quoted as saying that the Swan could survive if it lost

"the costly shackles of its professionals."

He said that he wants the theatre to be run by volunteers, amateur groups and friends, but I am afraid that that ignores the theatre's important community and educational role. That point was made strongly by Ben Humphrey of the Next Generation youth theatre at the meeting on 14 October. He asked what the 75 young people involved were meant to do in the evenings once their youth theatre group had closed down.

Worcester Swan cannot rely solely on being a receiving theatre. It would be in direct competition with the newly-refurbished Malvern theatre and the loss of in-house production and community work would set back the development of the Swan by 30 years. I accept that there is some confusion among those who provide grant aid as to what Worcester Swan theatre should do. The McKinnon report recognises that and calls for

"a shared view of a sustainable and fundable identity"

for Worcester Swan theatre.

I am pleased to note that the city council has called a special sitting of the community services committee, which will include representatives from the theatre board and the Arts Council, for 4 November. I hope that by then the city council will have realised the enormity of its mistake and changed its policy towards a grant for the Swan.

Perhaps the Minister can help Worcester. Can he give examples of other parts of the country in which there is a genuine partnership with those who provide grant aid for theatres? If so, can he point me in their direction so that all the local players in this game can get together soon to secure the future of Worcester Swan theatre?

Will the Minister consider the funding for the Swan from West Midlands Arts? It pledged an extra £50,000 to meet the findings and new direction arising from the McKinnon report, but that was on the basis of matched funding from local authorities. As of last night, that matched funding was made available. However, I understand that other theatres have had more generous grants of up to £250,000 a year, without the string attached of matched local authority funding.

The very existence of the Swan is being questioned at a time when there is huge potential for it to succeed in a new setting. The McKinnon report concludes that

"a new arts and cultural centre with up-to-date facilities for audiences, artists and the wider community in Worcester is now a pressing necessity."

There are some exciting developments planned in the city centre, particularly the regeneration of the old Castle street hospital, where such a base could find a new and permanent home. But the Swan needs to survive through next year if that is to become a reality and I should welcome advice from the Minister on how to secure the short-term future of the Swan and its long-term existence.

The conclusion of the McKinnon report was written before the city council broke the news of its plan to cut funding to the Swan. The final paragraph states:

"I suggest that Worcester City Council has a principal and primary role to play in this process. As both a barometer and the arbiter of opinion in Worcester I believe it has both the right and the duty to be instrumental in making the decision about the future of the theatre and performing arts in the city. This it can best do by taking a decisive and unequivocal position on the future of Worcester Swan Theatre within its plan for the provision of the arts in Worcester as a whole."

I doubt whether, when that was written, Andrew McKinnon had cuts in funding in mind, but those cuts are decisive and unequivocal and Worcester Swan theatre will have no future if they go ahead. I appeal to the city council to think again.

I am not a city or county councillor; I have no say in the spending decisions of local councils. My role is merely to draw the attention of those with that power to my fear that Worcester will become a cultural desert. In doing so I have been accused of causing mischief, but if, in being mischievous, I cause people in power to think again, I will have done my job. It is in Worcester's interest to have a successful theatre and I look forward to hearing from the Minister about how he can help to make that happen.

I thank my hon. Friend the Member for Worcester (Mr. Foster) for securing the debate, which has given us the opportunity to discuss an issue that is clearly important to Worcester, and about which the Minister for the Arts also feels strongly. As my hon. Friend rightly said, it is important that Worcester has a thriving theatre at its heart and I regret the funding decision that the city council has made.

However, I am sure that my hon. Friend appreciates that Ministers have no direct influence on the funding of individual art forms or organisations, since funding for the arts is carried out at arm's length from the Government through the Arts Council of England. My hon. Friend and the hon. Member for Mid-Worcestershire (Mr. Luff) will agree that the worst possible thing would be for politicians to start arbitrating on who gets money and who does not with regard to the production of anything creative.

Will the Minister give way?

No, I should like to make progress.

I make it clear at the outset that the difficulties faced by the Swan theatre in Worcester are not due to a lack of commitment on the part of the Arts Council, but are the result of decisions taken by Worcester city council. Those decisions are a matter of great regret to my Department, but ultimately they are local decisions.

That said, I am aware that the Arts Council and West Midlands Arts have a recent history of close and extensive work with the Swan theatre and its other funders, Worcester city and Worcester county councils, to enable financial and artistic development at the Swan and to ensure an exit strategy from its current building.

The need for a new building was first identified in 1998 following a lottery capital fund feasibility study for capital refurbishment or rebuild of the Swan theatre. That independent study concluded that the cost of refurbishment would not represent good value for money and that rebuilds on the theatre's current site would not be prudent as it lies within the flood plain of the River Severn.

The study also found, through extensive research of audiences, schools, non-attenders and strategic agencies, a

"high awareness but a low level of excitement about the Worcester Swan."

That sounds odd, but I recognise such feelings in my own constituency. People think that it is important for towns and cities to have such theatres but, for whatever reason—perhaps we can discuss those reasons—they do not feel that it is one of the most urgent of considerations.

Having considered the independent report, the board of West Midlands Arts intimated that it could no longer justify investment in the theatre unless further revenue funding could be raised locally and a plan developed to address the medium-term capital needs.

The Minister says that he has no response on the funding, but it is quite clear that he has taken his brief directly from West Midlands Arts. I agree with almost every word of the hon. Member for Worcester (Mr. Foster), but the Minister must understand that although the golden bullet was fired by the city council, which I regret bitterly, the gun was formed by West Midlands Arts' history of non-co-operation with the Swan theatre, Worcester city council and Worcestershire county council. The rot set in with West Midlands Arts' unconstructive approach to the Swan theatre, which was the beginning of the crisis.

I understand the hon. Gentleman's point, but I shall seek to prove that that is not the case and that there are serious reasons why the theatre is in its current position. I would not include in those reasons any criticism of the level of production in the theatre, because, independently of the brief, I have heard that the theatre is excellent.

In April 1999, extensive discussions took place with Worcester city council and Worcestershire county council. Worcester city council increased its subsidy to the theatre from £54,000 per annum to £137,000, and West Midlands Arts agreed to fund the theatre for a three-year period between 1999 and 2002, and negotiated a funding agreement for that period in consultation with the city and the county. Worcester city council put forward an application to the Arts Council's capital programme when that was relaunched as capital 2 in 2001. The competition for capital funding at that time was intense, and the application was not shortlisted against other priorities since no research or preliminary feasibility work had been carried out by the local authority in support of the idea. That is an important consideration.

West Midlands Arts could not give priority to the Swan theatre's case for new resources to implement the national theatre strategy in 2001 as there had been no resolution of the theatre's capital difficulties. In November 2001, the Swan theatre approached West Midlands Arts to discuss the new financial problems that it faced and its urgent need for assistance in managing its cash flow.

The regional and national offices of the Arts Council worked together to find an additional sum of £50,000 to supplement the theatre's core funding of £179,000 to enable it to continue to operate during the subsequent two years. Funds were also offered to help with small-scale capital work to keep the theatre open. Those additional sums were conditional on a realistic plan being developed by the city council for the construction of a new arts centre in Worcester.

The city council has decided, in the light of its overall prioritisation of funding, to reduce funding to the Swan theatre. Funding of the arts is a mixed economy, involving the Arts Council, earned income, local authorities and private subsidy. The Arts Council does not seek to be, nor should it be, a majority funder. Money needs to be put into local arts resources by locally based bodies.

There is no statutory responsibility on Worcester city council to provide or deliver a theatre service, and the Department for Culture, Media and Sport cannot dictate how local authorities allocate their funds. The grants offered by the city council to cultural facilities in the area, while welcomed by the Department, are at its own discretion. The modernisation ethos for local government outlined in the local government White Paper seeks to reduce and minimise ring-fenced grants in order to give local authorities more discretion over expenditure.

There have been some reports that local government funding for the arts is under threat. I assure my hon. Friend and the hon. Member for Mid-Worcestershire that my Department monitors the situation vigilantly, and will want to be informed of any instances in which that is the case.

West Midlands Arts is working with Worcestershire county council to develop a touring circuit in Worcestershire that will bring professional theatre to community venues in the county, including Worcester city if the council agrees to participate in the initiative. West Midlands Arts is also aware of a new performing arts facility being developed at University College. Although these cannot replace the professional producing theatre, they will ensure access to participatory and community-based activity. West Midlands Arts will also talk to the county council about other theatre developments, particularly the recently refurbished Malvern theatre, which is just 10 miles away from Worcester city.

Government funding for the arts in general has reached record levels. That will address some of the issues that have been raised, although not the specific one raised by my hon. Friend. In March 2001, the Arts Council announced its theatre review, which discussed how the additional £25 million a year allocated to the theatre from 2003–04 would be spent. West Midlands Arts will benefit to the tune of £ 1.85 million, bringing the total spend on theatre in the region to £5.5 million, which by any standards is a considerable sum.

This year, the Arts Council joined together with the 10 regional arts boards to create a single arts funding organisation. We are monitoring its progress to ensure that it delivers improved value for the arts and the public. We will also be kept informed of the Arts Council's progress on developing a strategy to address the £8 million to £10 million savings on administration. We want administrative savings to be ploughed back into the arts, especially at regional level, such as in the west midlands.

The Arts Council recognises the tremendous efforts and considerable achievements of all those involved in trying to help the Swan to make a critical transition. Regrettably, however, and after careful consideration, it seems that it is not possible for the funding partners to find between them the investment that the theatre requires in the short term, or for there to be sufficient movement towards a new arts facility that would provide a viable and sustainable future for theatre in Worcester.

The challenge for us all is to develop an understanding and appreciation of what the arts can do that cannot be done in any other way. Their contribution to broader social and economic objectives has been demonstrated time and again. I hoped that Worcester city council would see that as an extremely important vehicle in the equation, but it must be seen as additional to the arts' unique value to us as a people.

I urge all parties to see this as an opportunity to seek enhanced partnership funding within the local community. The thrust of the national policy for theatre in England has been to enable theatre to respond to, and reflect in its organisations, the inevitably changing role of theatre in contemporary society, and to reward those that have that immediate capacity. I understand that, among other things, the building in Worcester continues to be an enormous constraint on that possibility for the Swan.

The McKinnon report recommended a short-term increase in funding and urgent work to establish the route towards a new arts centre for Worcester. As I pointed out, West Midlands Arts was able to find an additional £50,000 to supplement the theatre's core funding towards re-establishing a financially viable base level of support for the Swan. Funds were also offered to help with small-scale capital work necessary to keep the theatre open. I stress that those additional sums were conditional on the city council developing a realistic plan towards the construction of a new centre in Worcester. It is important to remember that match funding was not a condition of the additional funds.

The assertion of the hon. Member for Mid-Worcestershire that somehow West Midlands Arts has conspired against the theatre is wrong. West Midlands Arts very much wanted this to be a success and put money towards it. However, I am sure that my hon. Friend will agree that there is a great deal of competition for that funding, which will, of course, be directed to local authorities and other funding parties for theatres that have made a better fist of it. We have made it clear that we believe that regional and city theatres throughout the country fulfil roles well beyond simply putting on excellent performances, vital though those performances are. Those are the theatres that will receive most of the support.

It is a great pleasure to serve under your chairmanship, Mr. Benton. I am delighted that the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty), is my near neighbour, especially as much of the work that I have done on this subject has been guided by the Hillingdon and Harrow branch of the Federation of Small Businesses and, in particular, by Mr. Robert Ridley. I shall be interested to hear what the Minister has to say, as both our constituencies share that branch.

One of the issues that I will be discussing is the impact of upward-only rent reviews on various groups of people, including retailers. It is therefore appropriate for me to declare my interest as a director of a family-owned retail business, although we do not have to pay rent because we are hereditary retailers and own the freehold, so the issue does not apply to me. However, being in business gave me, and continues to give me, great opportunities to talk to many small and medium-sized enterprises. Those businesses will always complain legitimately about the problems caused by the burden of the plethora of regulations imposed on them. It is fair to note that successive Governments always promise that they will do something about those regulations—you may have heard those statements yourself, Mr. Benton—but, unfortunately, successive Governments seem to manage to pass more regulations than they remove.

This anomaly, as I will call it, has an adverse impact on many businesses, so it is up to us in Parliament to address it. There is a history of debates on the subject, and I noticed in the course of my research on it that, in years gone by, some of my hon. Friends tried to persuade the Conservative Government of the merits of the argument. In 1993, my hon. Friend the Member for Croydon, South (Richard Ottaway) introduced a ten-minute Bill on the subject, as did my hon. Friend the Member for South-West Hertfordshire (Mr. Page) in 1994. My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) has also been active on the problem, and I am sure that hon. Members from other parties have also asked questions about it. Unfortunately, it seems that, although the issue has been raised, it is like so much in government in that a great deal needs to be done before anything gets changed.

I will discuss later the code of conduct that has been put in place, but I shall first outline some of the problems involved. I am not an expert in commercial or leasehold law, but I have the benefit of some briefing notes on some of these points. The Landlord and Tenant (Covenants) Act 1995 abolished the old rules relating to privity of contract on new leases, but upward-only clauses for rent reviews can still be incorporated into business leases. One of the justifications for upward-only reviews is that no one forces anyone to sign a contract with an upward-only review in it. It is up to the individual to agree it or to decline to sign it.

In reality, small and medium-sized businesses, which are not backed up by great legal teams, feel under a great deal of pressure. They normally sign up to these things when times are good. The problem with upward-only rental agreements is that they take no account of current market conditions. When the rent comes up for review, it cannot stay the same or go down. The rent can only go up, even if market conditions have changed and there have been substantial changes in the surroundings. A good example would be a town centre that was suffering, as sadly many are, because an out-of-town shopping centre had opened. When times are good, problems can he absorbed, but when things are not so good, businesses will inevitably close.

The Government—I back them on this—have been making efforts to ensure that town centres are regenerated. Small businesses are very much part of that regeneration process and so it is important that consideration is given to helping them. It is also unfortunate that where the business rate is fixed, it takes rental values into consideration. That has another knock-on effect. A code of practice has been introduced which the Royal Institution of Chartered Surveyors has been working hard to try to encourage its members to adopt. Sadly, as it is a voluntary code, it has not had much effect.

In the past six months, for example, McDonald's has been negotiating on around 70 new leaseholds. It is trying to maintain its plan of opening 70 to 80 new restaurants a year. Out of the 30 resulting agreements during that period, no landlord has offered terms in line with the lease code. That is a good example of what we are up against. We often hear that prices and values may go down as well as up, yet this seems the only thing that I can think of that will always go up. The Chancellor would not be very popular if he suggested that interest rates could only go up. There is a real problem.

Another affected group is pub landlords, the majority of whom are self-employed tied tenants. They suffer many problems in being tied for the majority of liquor purchases, at the same time as having to cope with upward-only rental contracts. We are all aware of the difficulties faced by many pubs. The time has come seriously to consider banning upward-only rent reviews.

Such reviews operate in a way that does not recognise that in a low-inflation environment and increasingly fluid modern conditions, markets will go up and down. It is not unreasonable to say that most sectors should be privileged or protected against that—businesses are not—at the expense of others. That should apply to manufacturers and other sectors as well as retailers.

I urge the Government that now is the time. I am hopeful and do not want to talk down the economy by saying that we shall soon face tougher economic times, but I recognise that economic cycles occur. Business is well aware of that. My company has been in business for 110 years, during which many cycles have occurred. Somewhere along the line, despite what we hear from politicians of all parties, I am afraid that boom and bust may well return.

It is time to examine the provisions carefully. The voluntary code needs to be stiffened through legislation because it is not working. The Government can do something to help small businesses.

I had intended to stick to the niceties and refer to the hon. Member for Uxbridge (Mr. Randall) as the hon. Gentleman, but, in the interests of near-neighbourliness and non-partisanship, I shall refer to him as my hon. Friend and I congratulate him on securing the debate. I also accept that Randall and Sons has probably seen more cycles in its 110 years than the Tour de France. I shall let him into a little secret: I am not an expert on commercial leasehold law either and do not profess to be so in any capacity.

I agree that upward-only rent review clauses are a matter of real concern. Our business manifesto acknowledged that they are a source of grievance for many and we promised greater flexibility in the commercial property market. My hon. Friend has provided some of the historical background, but it may be worth reflecting on it again in greater detail.

Upward-only clauses first developed in commercial property leases when inflation took off in the 1960s and 1970s. Landlords letting property on the then prevalent 25-year leases did not want to be left behind with static incomes. By the 1980s virtually every commercial lease included them.

As long as the prices that businesses charged customers rose steeply year after year, few tenants complained about ever-increasing rents, but in the early 1990s the property market turned down as general business conditions worsened. Many small businesses—I accept what my hon. Friend said about them—already suffering badly from the impact of recession found themselves paying rents well above those available in the open market. Some even faced demands for substantial increases in rents, with rents being uprated on the basis of market comparisons that were rapidly becoming out of date. Locked into upward-only rent reviews, tenants had no choice but to pay up. For some, that was the final push over the edge into bankruptcy—or at least ceasing to be able to trade. Tenants then began to complain about their plight, bringing about Government interest in the problem.

The simplistic response, to which my hon. Friend alluded, is that upward-only rent review clauses are a matter of private contracts, so tenants do not have to agree to them. If a tenant does not like them, he can ask the landlord for something else, and if he or she will not agree to an alternative, the tenant should find another landlord who will. That is the easy and simplistic response, which I agree is deeply unsatisfactory. For one thing, there are few alternatives, and, furthermore, it is unreasonable to expect small businesses to be experts in the complexities of the commercial property market. My hon. Friend made the point that small businesses do not have armies of lawyers at their beck and call, as huge conglomerates such as Randall's of Uxbridge do.

Start-up businesses understandably want to focus on their business operations rather than the terms on which they will be occupying premises to carry out their business. As my hon. Friend said, as far as such businesses do focus on the lease, it is primarily on the initial rent payable to start trading, rather than the rent payable several years down the line, when things might not be as cordial—in the business sense—as they were when the business started.

Upward-only rent reviews are not in the interests of small businesses. Any small business would be well advised to ask for a short lease, as is happening increasingly often, so that it will not face any form of rent review. Otherwise, it could ask for a break clause timed to coincide with a rent review, which would allow the business to end the lease if the rent review had unpalatable consequences, and would, as my hon. Friend said, allow the business to appreciate the circumstances of the market at that time, rather than when it had signed up to a longer lease.

What should the Government do about upward-only rent review clauses? In 1994, the Government persuaded the property industry to introduce a code of practice on commercial property leases, not least because of the ten-minute Bill pressure—if I can call it that—coming from some of my hon. Friend's colleagues. I shall compare that code with the current one shortly.

The 1994 code contained useful information about leases but suffered from three major drawbacks. First, it did not require anyone to do anything, so it was a "warm words" version of a code of practice. Secondly, it was not an easy read for those unfamiliar with property jargon. I am sure that my hon. Friend has looked at it. It probably requires something between his excellent proficiency in English and his equal proficiency in Serbo-Croat to be understood; it was not in English. Thirdly, it disappeared without trace. Hardly anyone knew anything about it.

When the current Government came into power in 1997, we took over plans to review the code of practice, and commissioned the university of Reading to gauge the impact of the existing code. When it reported in 2000, the Reading commission confirmed that the code had had no impact whatever, but it found that the property market had undergone significant changes, which is an important point. It found that leases were much shorter. Small businesses in particular had benefited from the trend towards shorter leases. More leases had break clauses than was the case in the 1960s and 1970s, and more had other terms that were more favourable to tenants. However, upward-only rent review clauses were still prevalent in longer leases.

At the time, we considered immediately legislating against upward-only clauses but drew back because of the unintended repercussions of legislation, and particularly of intervening in what remains a very complex market. We acknowledge that in some circumstances upward-only clauses can be of mutual benefit to a landlord and tenant—for example, when they support a sale or leaseback deal. Instead, we prevailed upon the property industry to introduce a new voluntary code, and after some initial setbacks the property industry agreed a new code of practice, which was launched in April 2002.

In the press release to go with the launch, my predecessor, my hon. Friend the Member for Northampton, North (Ms Keeble), said:

"We are concerned not only about upward only rent reviews, but also about the length of lease, and allowing tenants to occupy on terms which enable them to adapt their lease arrangements to their changing business needs."

That is the notion of flexibility. Self-regulation is not a soft option; I should be very disappointed if we had to resort to legislation after all. I therefore urge everyone, whether owners, occupiers or advisers, to familiarise themselves with the new code and to observe it in the spirit as well as in the letter.

I am encouraged by the support for the new code and, in particular, the pledge by leading property suppliers to promote it actively. That pledge had, as my hon. Friend said, the support of the Royal Institution of Chartered Surveyors and several other bodies associated with the property industry. I do not need to mention all of them, but they included something called the Department for Transport, Local Government and the Regions—I am not entirely sure what that is—the Law Society, the Small Business Service, the British Property Federation, the British Retail Consortium, the Confederation of British Industry, the Forum of Private Business, the Federation of Small Businesses and the British chambers of commerce.

I am pleased that the new code has the support of all involved in commercial property—funders, owners, occupiers and the professional bodies. In the context of today's debate, I am especially pleased that the code has the support of small business organisations—in particular, the Small Business Bureau, the Federation of Small Businesses and the Forum of Private Business. I would be more than happy to consider the matter further with the Hillingdon and Harrow branch of the FSB, which covers my constituency and that of my hon. Friend. It says on my brief that the code also has the support of the Government, which is handy.

Why do we expect the new code to succeed when the previous one failed? First, unlike its predecessor, the new code sets out recommended action. It urges landlords to consider offering tenants, among other things, a choice in the length of term of their lease, and break clauses where appropriate. It recommends that the basis of rent review should generally be open market rent, so that upward or downward movements in the market can be reflected. It urges landlords, whenever possible, to offer alternatives to upward-only rent reviews, on a risk-adjusted basis. It urges funders, whenever possible, to avoid constraining landlords in the choices that they can offer tenants. Some commercial landlords will say that it is not in their gift to release lessees from upward-only rent reviews and that it is the funders behind them who insist on what happens. People made hay while the sun shone in the happy days for the property market in the 1960s, 1970s and 1980s and, before the introduction of this code, I imagine that they did not think of anything other than upward-only reviews.

Secondly, the code is short and in plain English; it is accessible to people without expertise in property. It is also accompanied by a leaflet warning first-time tenants of the pitfalls of property leasing. The leaflet strongly recommends that they should take professional advice. It is worth repeating my hon. Friend's point that the terms of the lease are secondary to securing the property, getting in and starting to trade. The terms of the lease may the last thing on a small trader's or small business person's mind.

Thirdly, the code is being widely disseminated and is easily accessible on the internet, from where it may be downloaded, and I am pleased to say that the website has scored more than 100,000 hits. The code has had recent publicity in the property press and has a high profile. Unlike its predecessor, it has not been shelved.

By coincidence, or perhaps more than that, my first ministerial speaking engagement was to the property development faculty—I cannot remember its exact title, for which I apologise—of the Royal Institution of Chartered Surveyors, on precisely this subject. It was remiss of me when I scurried over to outside the Speaker's Office to check whether I had an Adjournment debate, as I always do on Wednesday mornings, not to catch that upward-only rental contracts came under my remit. They clearly do. When speaking to RICS, I said that we were loath to go down the legislative route, not least because of the regulatory burdens that my hon. Friend suggested. However, if we need to go down that route, we will.

We are being ever so slightly precipitate. The code was published in April, it has extensive support from a range of key players in the property industry and we need to give it time to bed in.

I am grateful for the Minister's contribution. I hope that this short debate will send out a message, loud and clear, that if people do not stick to the code, the Government will have to legislate.

I share that sentiment and I am enormously grateful to be able to reiterate that message. I am at the penultimate paragraph of my brief, in which it says that the property industry knows that it is under notice to produce changes,. The gestation period of the code was long but, after extensive consultation, some of which was fairly bloody, we got there, and people signed up to it. Therefore, to decide in October that a code that has been in place only since April needs to be torn up and the process started again is ever so slightly precipitate. We are not necessarily looking for the elimination of upward-only rent reviews, but we are keen to promote choice and to ensure that tenants are able to negotiate terms that suit their business needs. That element of flexibility is core to the code of practice.

It is perfectly proper to say that those who invest in, and secure their income from, property investment, whether funders or landlords, have the right to earn their money in an entirely appropriate and legitimate market. There must, however, be some flexibility in recognition that there may be small blips up and down in the economic cycle, or windfall-like elements, such as the regeneration of a town centre.

Purely as an aside, my hon. Friend will know that by the mid-1970s and early-1980s Uxbridge town centre was a complete and utter basket case and a good example of how not to redevelop a town centre. Happily, in recent visits to Uxbridge, I have seen that it is increasingly an example of how to build a community around a town centre that serves it well. I have not had the pleasure of going into Randall's of Uxbridge, nor have I bought anything there. That pleasure awaits me, but I am sure that I will get there at some stage during its next 110 years of trading.

We have, once again, asked the university of Reading to monitor the property market, this time over a two-year period ending in December 2004. The university has already assessed the benefits and the efficacy, or otherwise, of the 1994 code. It is revisiting that research and will consider how the present code, which has only been in place since April, beds in. The university will produce an interim report at the end of next year that will give us some indication of how much progress has been made. We are not just waiting until 2004. The property industry knows that we will consider legislative options if there are not clear signs of change by the end of 2004; I repeat that for its benefit as well as for my hon. Friend.

I congratulate my hon. Friend on his choice of topic and on the informed and gentlemanly way in which he put his case. I ask only that he bear with me. The industry knows that if the new code does not work we will—I repeat—consider the legislative options. If my hon. Friend was asking me to look further at the McDonald's case and that of pub landlords, those are notions that I will take with me. Once again, I say that toward the end of next year the university of Reading will report in full on the state of play regarding research in the market.

Finally, I am pleased to have had the opportunity to reiterate what I said about the strength of the new code of practice. We are keeping a watchful eye on that. When I said that to RICS at its conference in June—my first ministerial speaking engagement—there was an open ear and a will and desire to move forward. Perhaps it knows that if the code of practice is not successful, the legislative option stands behind it. Nevertheless, I think that there is a good deal of equanimity and support for the notion that, in terms of the commercial property world, things have moved on significantly compared with how they stood when upward-only rent reviews first became the norm. That being the case, it is, perhaps, in the interest of RICS to consider relevant matters seriously in terms of supply and demand, and the regulation and efficacy of the market.

I shall make one last facetious point. I am pleased that my hon. Friend did not abuse or insult me in any way. One occasion that we crossed swords in the Chamber was during the passage of the Greater London Authority Bill when we were discussing some obtuse Liberal Democrat amendment about what would be done if there were an electoral tie with an electorate of 5 million. I was waxing lyrical about whether one would toss a coin or draw lots and my hon. Friend asked me, entirely appropriately given the context, whether I was a tosser or a drawer. To this day, that remains one of the best interventions on me during my short career in the House, and I thank him for that. However, it is hard to respond to an intervention when one is laughing.

I welcome the opportunity to reiterate the points that I have already made about the code of practice. I congratulate my near neighbour once again on his informed delivery and I assure him that the university of Reading and the Office of the Deputy Prime Minister will watch over the implementation of the code of practice. I also say to the property industry that we will be back with legislative options at the end of 2004 if the code does not bed in properly.

As the Minister is aware, I have been concerned for some time now about the performance of, and the standard of service provided by, the National Asylum Support Service. This is the second debate on the matter that I have sought this year. The first was on 12 March, also in Westminster Hall. On that occasion, I was assured by the then Minister that problems with the past performance of NASS had largely been addressed by a series of internal administrative reforms. In particular, I was assured that all cases involving a failure to deliver NASS subsistence support to an asylum seeker—one of the most common complaints against NASS—are now rectified within a maximum of 48 hours of NASS being notified of the problem.

I was told that further improvements in the performance of NASS would flow from an ongoing programme of regionalisation. However, since that time, I have continued to receive reports of problems with NASS, in my constituency of Peterborough and more generally. In Peterborough, the accurate number of asylum seekers remains unknown owing to the various routes and schemes by which individuals arrive, and despite the great efforts being made in Peterborough to assess them. However, health sources estimate that there are at least 2,500 cases, as do the police. The city council believes that the number could be even higher, particularly because of rapid turnover.

The pressure on housing has been increased by a very rapid rise in the number of homeless applicants in the past year, owing to the widening of duties under the homelessness legislation in July 2002. For instance, the numbers needing temporary accommodation have risen six times, putting pressure on all types of accommodation in the city. The duration of stay by asylum seekers dispersed through NASS in Peterborough—this is probably not untypical compared with other areas—is very short. On average, it is four months. That means that the same private and public sector accommodation is used over and over again as fresh populations arrive and depart. The city council has managed nearly 200 units of accommodation from its own stock during the past year, and in that time three quarters of those housed by the city council have been required to move on by NASS. The private landlords operating in Peterborough would report similar levels of turnover.

Obviously, the short-term nature of placement and the shortage of accommodation create a range of social problems. In general, there is also no recognition of the emotional and physical needs of individual asylum seekers placed in the city. No background knowledge of their circumstances is provided by NASS. It is clear that a number suffer from isolation, mental health problems and trauma. That is made more difficult by lack of work and idleness. Mental health services in Peterborough currently have an eight-month waiting list for counselling.

Despite those difficulties, I am glad to say that in the opinion of our housing director, Sheila Grant, the local picture is generally positive. Local people are no longer surprised by the presence of asylum seekers in the city, despite the fact that more than 40 languages are now spoken. There has been some excellent work by the police, the Red Cross and other agencies and some innovative work with schools to educate young people about the traumas of asylum seekers. However, I regret to say that none of the credit for that can be taken by NASS. I am told that the support given by NASS to the local authority in resettling and rehousing asylum seekers has been negligible.

The Home Office has yet to conclude a formal contract with the city council despite the fact that it has taken accommodation asylum seekers since July 2001, and is being paid for it. That means that permanent staff cannot be recruited. Moreover, no training or advice has been offered by NASS to assist staff in dealing with issues of immigration and so on. In July, BBC Radio 4's "File on Four" programme highlighted the poor standard of service provided by NASS to supported asylum seekers and the organisation's unsatisfactory relationship with many of the local authorities with whom it is supposed to work in partnership. Earlier this month, the National Association of Citizens Advice Bureaux published a report entitled "Distant Voices". It follows on from NACAB's February 2002 report on NASS process error, to which I referred in my earlier Adjournment debate. It is based on the direct experience of CABs between 1 March and 31 August 2002. During that time, CABs dealt with as many as 10.000 NASS-related cases. The report is based on more than 400 specific case examples sent to NACAB, three of them by the CAB in my constituency.

The report paints a disturbing picture of a complex, inaccessible system that is frequently unable to meet the most basic needs of those people it was set up to support, and from which it is almost impossible to get a response when things go wrong, as they do. Despite the assurances given to me in this Chamber on 12 March, many vulnerable people, including families with young children, have been left for weeks and even months without the support that they need to buy food and other essential items. The report describes the case of a single woman with five young children, who in June and July was left without subsistence support for more than six weeks, simply because NASS was sending essential documentation to the wrong address.

An example from Peterborough CAB tells how an adviser spent five hours in total trying to get through to NASS to discuss the case of an Iranian single mother who did not speak English and had been dispersed to Peterborough on 13 June. She had received a letter from Sodexho that advised her to collect her first cash voucher from the local post office between 24 and 28 June. Sodexho is a French company. It has the contract from the United Kingdom Government to print and distribute the vouchers, although one gathers that it does not do so very well. That woman had not received a voucher receipt book from Sodexho as she should have done, and she had been told by post office staff that she must have it before she could be issued with cash vouchers.

A CAB adviser spent 30 minutes on the NASS voucher inquiry line before giving up, having received no answer. She then telephoned the NASS emergency payment line, but again could get no answer. She called the voucher inquiry line again, and spoke to an operator who told her to call the NASS general inquiry line. She tried, but gave up after getting no answer for 40 minutes. In desperation she telephoned the Sodexho helpline, but was told simply to call the NASS voucher inquiry line. She did so again but received no answer, so she called the general line, as advised previously by the voucher line. After waiting 25 minutes to get through to an operator, she was told that the matter was for the voucher inquiry line after all. When the adviser questioned the conflicting advice, a duty manager came on the line and after a short delay agreed to send a voucher receipt book to the client. I am exhausted after recounting all that.

"Distant Voices" describes many such cases in depressing detail. It reveals the remoteness and inaccessibility of NASS, which has no local presence, as I highlighted previously. It also reveals the resultant difficulty that asylum seekers and their advisers, such as the CAB, encounter when seeking to contact NASS by telephone to sort out a problem.

The NACAB report notes that the Government's proposed replacement for the NASS support system—a combined system of asylum induction and accommodation centres—is no more than embryonic and will remain so for many years. That is an important point, and I am sure that the Minister will accept it. It means that NASS is set to remain the principal provider of accommodation and welfare support to asylum seekers for many years, possibly until well after she and I have left the House for good. It is therefore essential that the Government fully address the current shortcomings in the performance of NASS, and especially those in its accessibility to supported asylum seekers.

There is some good news. Although NACAB tells me that it has not yet received a response from Ministers to "Distant Voices", it recently met the director of NASS. On that occasion, she and her senior officials frankly acknowledged the degree and nature of the service delivery problems described in the report. Furthermore, they acknowledged that there appeared to be some "disjoint" between what their quality assurance mechanisms told them about the performance of NASS and the reality. That sounds like progress, and I hope that the Government's response to "Distant Voices" will be to consider, in liaison with NACAB, local authorities and others, the action needed to address the issues that it raises. I look forward to hearing what the Minister has to say about that today.

My local authority has again called particular attention to the need for Government agencies to co-ordinate with benefits, immigration, police and other agencies, and to meet local authorities to advise them of their plans for resettlement and actively to listen to their concerns. I should have thought that that was common sense, never mind a courtesy, as has been said on many occasions and over many months. It would also like to be allowed to negotiate local housing contracts with landlords, rather than having to deal with national agencies such as Clearsprings and Adelphi. It has had particular difficulty getting accurate information from Clearsprings on the number of bed spaces in Peterborough, as it claims that its contract prohibits it from releasing the information. However, it suggested that I could write to its head office in Rayleigh, Essex, if I wanted a direct response.

I look forward to hearing what the Minister has to say about the regionalisation programme. I understood that Ministers may have decided to increase the degree to which NASS will be devolved to regional offices. I welcome that, as I am concerned that the regionalisation programme described by Ministers, not least in this place on 12 March, does not go anywhere near far enough. Although NASS clearly needs to improve its management of accommodation contracts, it is in no one's interests, least of all those of taxpayers, that it should be ripped off by cowboy landlords. NASS also needs to devolve its operational activities on the delivery of subsistence support so as to ensure that service delivery problems can be resolved speedily and without the intervention of third parties such as the CAB.

In January this year, many were sad to hear my hon. Friend the Member for Wallasey (Angela Eagle), the previous Minister, say that the regionalisation programme would not include any operational aspects of providing support. I hope that the Minister will tell me today that that is no longer written in stone and that the fresh approach for which I called in March is at long last beginning to take shape. In previous correspondence, she said that she had no plans to visit Peterborough. I hope that, in the light of today's debate, she will reconsider her decision, and I look forward to welcoming her and her officials to Peterborough as soon as possible.

I congratulate my hon. Friend the Member for Peterborough (Mrs. Clark) on securing, within six months, a second opportunity to raise issues of concern to her constituents and her local authority about the operation of the National Asylum Support Service. Neither I nor my predecessor, my hon. Friend the Member for Wallasey (Angela Eagle), have ever made a secret of the fact that, at its inception, NASS was not set up in the best possible way; indeed, it has had difficulties—some would say that they were considerable—during its first two years. We both made it clear, to my hon. Friend and to others, that substantial improvements were needed, and a programme of improvement is now being delivered.

As my hon. Friend said, I was not the Minister responsible at the time of the first debate on 12 March, and I am sorry if she feels that the changes that have taken place since then are not as evident as she would have wished. None the less, those changes are taking place and I am sure that everyone would agree that changes are needed if the system is to work.

My hon. Friend referred to the Government's proposals to bring forward a radical and comprehensive package of measures designed to ensure that the immigration and asylum systems are fair, efficient and timely, and that they operate in a proper and efficient manner. We must ensure the integrity of the asylum system, not least to establish its credibility with the British people. However, we must also ensure that we deal properly with asylum seekers.

The Bill proposes a complete reform of that system, from induction, accommodation and reporting to the integration of refugees—or their removal if their claims are not successful. Accommodation centres are to be the subject of a trial, and, pending the outcome of that trial, the policy of dispersal will continue. We cannot return to the pre-NASS position, with its enormous pressures on London and the south-east, which, as the hon. Lady knows, the dispersal system was developed in response to. We are not complacent about the way in which asylum seekers are dispersed. I have made it clear, as did my predecessor, that we expect NASS officials to work much more closely with local authorities and other organisations in the dispersal areas. I have visited a number of areas and spoken to regional consortia. The feedback from areas such as the north-east and Scotland, which have considerably more asylum seekers than Peterborough, is that the tide is turning. They discern improvements in NASS and—perhaps more importantly—feel that the working relationships between NASS, the local authorities and the partner agencies are improving substantially.

We recognised from the outset that the presence of asylum seekers could lead to additional pressure on local services such as health and education. It was never intended that the pressure would be such that services could not be provided, and I do not believe that that is the case. Colleagues in other parts of government worked with us to guarantee the provision of extra funding—largely through local authorities and other agencies—to ensure that that did not happen.

As Secretary of State for Education, my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) announced that an additional £500 per pupil would made available to schools. Similar additional tranches of money were given to the health service through local development schemes to enable it to provide specified general medical services to meet local needs. I accept that many people coming into the country and claiming asylum have particular needs as a result of their long-term experiences and certainly as a result of their journeys, but it is not the sole responsibility of NASS to deliver the services that they need. Local agencies must take on the responsibility for delivery, albeit that we recognise that—certainly for dispersed asylum seekers—the funding needs to follow.

Since taking up my appointment, I have been concerned that we should accelerate the programme of regionalisation. As my hon. Friend said, as it becomes operational, we should look for ways in which to extend the range of functions that we can devolve to regional level. I am also determined, having spoken to local authorities and consortia, substantially to strengthen the involvement of local authorities at every level.

The internal review into the operation of the dispersal process, as my hon. Friend knows, recommended a regional presence. The process of developing a strong regional infrastructure is well under way and it will be in place by April 2003. That was the time scale that we set. Our intention is to establish a NASS presence as close as possible to dispersal clusters where the need for service delivery is greatest. NASS will regionalise in connection with housing management and investigations, and a separate team will manage outreach contact with asylum seekers in those areas. My intention is that that will enable the organisation to manage the services closer to the point of delivery and strengthen relationships with partners and other stakeholders on the ground. Certainly, outreach staff will visit asylum seekers in their homes shortly after arrival to ensure that they have everything that they need. We will then be able to assist and signpost them in order to negotiate what will, for most of them, be a new environment. They will then be able to get on with daily living and look after themselves and their families as effectively as possible.

A project board has been established to oversee the development and examine which casework functions we can best devolve to regional offices, on which local authorities and key voluntary organisations are represented. Freda Chaloner, the director of NASS, has asked representatives of NACAB whether they also want to be represented on the board, and I am pleased to say that they have accepted. Irrespective of any formal response to the NACAB report and the issues that it highlights, it enables us to obtain a direct input from NACAB and other important stakeholders into the development of the regionalisation project and ensure that we make it as effective as possible in terms of what local authorities and other people on the ground really need.

I expect the regionalisation project to assist the strong working partnership that already exists in many areas, which will be important in dealing with issues such as the provision of accommodation, as my hon. Friend mentioned. NASS should engage more closely with local authorities on property acquisition. Together with officials from the Office of the Deputy Prime Minister, we are trying to ensure that accommodation is not procured in areas that have been identified for regeneration. That is causing a problem in some regions. I also want to examine whether we can involve local authorities much more as prime contractors in the delivery of accommodation, although I cannot say what the outcome will be because it relates to the wider issue of procurement rules and contracting regimes within the Government as a whole.

My hon. Friend also mentioned the operation of NASS, the quality of its decision-making and other aspects of its work. There has been an extensive, radical overhaul of procedures and I am sorry if the changes have not been evident so far because that is an important priority for me, Freda Chaloner and my senior officials. We continue to examine how to develop processes and procedures to improve efficiency, effectiveness and quality. I am not familiar with the individual cases that my hon. Friend cited, but I have no difficulty saying that they are not acceptable. We cannot tolerate people being left in such circumstances.

NASS is working towards achieving an acceptable standard of service with the minimum number of errors and disruption to the people that it is supporting. I hope that, in the not-too-distant future, I will be able to say to my hon. Friend and other colleagues—as I wish to say about the whole of the Immigration and Nationality Directorate—that it is now an excellent organisation that is doing its work in a proper way, and that it is a public service of which we can be proud. Certainly, I do not separate out the directorate or NASS from the wider Government objectives of improving the standard of public services.

My hon. Friend mentioned the number of asylum seekers in Peterborough. I accept that it was not a major point in her contribution, but it has been a theme of my hon. Friend and others in Peterborough that there are significant numbers of asylum seekers in the area—much higher numbers than have ever been the case.

There are at present 520 N ASS-supported asylum seekers in Peterborough. I cannot give my hon. Friend an exact figure for the number of people in Peterborough who have only financial support because we do not have that information, but there are 2,450 such people in the east of England. I apologise, I gave the wrong figure earlier. The figure of 520 NASS-supported asylum seekers was for the east of England. In the region as a whole there are around 3,000 asylum seekers, including those on local authority interim support. There are 410 asylum seekers in NASS accommodation in Peterborough and while I cannot give her an exact figure, most of the remainder who are on financial support are in areas that are much closer to London and the outer London boroughs than Peterborough.

My hon. Friend's claim today of 2,500 asylum seekers in Peterborough, which is 500 more than her claim six months ago, is not one that we recognise. That figure is wrong and it is unhelpful to the issues that need to be addressed in Peterborough that elected representatives and others are voicing what some may feel is an alarmist view about the extent to which Peterborough is accommodating asylum seekers. Community relations issues have arisen in that town, and to some extent the presence of asylum seekers has been an easy target for those who wish to claim that asylum seekers and the operation of NASS are the primary reasons for some of those difficulties. As we know from elsewhere, community tensions arise from much longer-term factors concerned with the segregation of communities, where people live in separated housing, young people go to separated schools and people feel alienated and that they have been denied access to opportunities.

Clearly, asylum seekers and the issues that they raise may be part of people's perceptions of the difficulties, but they cannot be a causative factor in the way that some claim. Such factors relate to much more long-standing and deep-seated problems that need to be addressed. I am grateful that officials in Peterborough council have shown themselves to be keen not only to work directly with NASS on the issues raised by asylum seekers, but to work on the wider agenda of promoting community cohesion and developing an action plan to start the process of addressing some of the more deep-seated factors that currently colour community relations in Peterborough.

My hon. Friend said that I had no plans to visit Peterborough. She wrote to me several times over the summer, and she may recall that I told her that I had no plans to visit Peterborough over the summer, because I had already planned to visit other areas in the country where there had been disturbances, but that when planned my next series of ministerial visits Peterborough would be included as it is an area that I want to visit.