On Friday, just around the corner from my office in Dudley, I visited an archaeological dig led by Pete Boland, Dudley's archaeologist. The dig is uncovering features of the local glass industry dating from the 1700s. It closed around the mid-19th century. I saw the remains of a glass cone and its furnace, which are now being unearthed, cleaned and studied with the help of Birmingham university archaeologists.

So Dudley has had a long association with manufacturing. Abraham Darby, father of the industrial revolution, was born on the Wren's Nest in 1678. A forerunner of the coking process had been developed earlier by the son of the local Baron of Dudley. By the mid-19th century, glass, iron and other manufacturing dominated the life of Dudley, as manufacturing did other parts of the black country. Stuart Crystal—a major glass company in the area—was the manufacturer of the crystal glass used on the Titanic.

Although manufacturing is alive and well in Dudley and the black country more generally—and I will return to that later—its character and size have changed. The large iron and steelworks have closed, although there are still castings and the fabrication of metal products. Royal Brierley Crystal has a limited presence in my constituency. There was a steep decline in those employed in manufacturing in the 1980s from 43.3 per cent. of the work force in 1981 to 31.9 per cent. in 1991. The relative number employed in the manufacturing sector seems now to have stabilised at about a quarter of those working in Dudley.

Also on Friday, I spoke about this debate to four people in Dudley whom I know especially well: Bob Duncan, Barry Guest, Rod Adams and Melvyn Mottram. All have worked in manufacturing and all have experienced its vicissitudes, the redundancies, the closing of factories. It is fair to say that they all acknowledge the realities of a globalised economy—the competition from cheap-labour economies such as China and the restructuring of British industry that that involves. They are conscious of the present downturn in the world economy, but they are adamant about the continued importance of manufacturing to this country. They raise serious issues, with implications for Government policy—the loss of skills, the availability of training opportunities, the access of smaller businesses to finance, the balance between large and small companies and the burdens on business such as the present costs of liability insurance. I would welcome the Minister's assurances on some of those points.

As to the continued importance of manufacturing to this country, those four men are absolutely right. Manufacturing contributes importantly to our earnings from abroad with more than three fifths of our exports. Any further fall in manufacturing's share of the economy would, as the Engineering Employers Federation has put it, create the danger of a large structural trade deficit, which would leave us dependent on our earnings from investments abroad and on attracting capital inflows. Moreover, manufacturing is a key to closing the productivity gap with other European countries such as Germany and with the United States, as it achieves faster growth in productivity than the rest of the economy.

Manufacturing is also an important source of innovation in the economy; it is responsible for around 80 per cent. of research and development. Finally, there is the contribution of manufacturing to particular regions of the country. In the west midlands, more than 500,000 people are employed in manufacturing—more than in any other English region. In the 1980s, manufacturing took a hammering in the west midlands, with devastating consequences for individuals and their prospects. Any downturn in manufacturing has a disproportionate impact on the region, and on Dudley, which is part of it.

In the past year or so, the Government have made explicit their belief that a strong manufacturing sector is vital to our future prosperity. That explicit commitment to manufacturing in "The Government's Manufacturing Strategy" published in May 2002 was important in correcting a perception that in their first term the Government did not take manufacturing as seriously as they should have done. My right hon. Friend the Secretary of State and my hon. Friend the Minister for Employment Relations, Industry and the Regions have done much to assert that manufacturing matters. The seven pillars that they identified in the strategy highlight key goals and policies and will prove useful in measuring progress. I commend them for their work so far.

In the past six years, the Government have provided macro-economic stability, with low inflation and low interest rates, and there have been specific fiscal measures such as the lowering of corporate tax rates, especially for small firms. The issue that manufacturers consistently raise with me, however, is the value of the Cap pound. Yesterday, Gemini Ernst and Young helpfully provided me with the results of the business outlook survey carried out in December 2002 on 750 manufacturing companies. It found that 38 per cent. of UK manufacturers increased the proportion of their total output produced overseas during 2002 in a bid to cut labour costs and—this is the point relevant to macro-economic policy—to obtain a more favourable exchange rate.

I cannot see an easy way round the exchange rate issue. Manufacturers are certainly not overwhelmingly of the view that entry to the euro will solve the problem. In the Financial Times yesterday, a MORI poll of 164 chairmen and chief executives from the country's top 500 companies showed that 50 per cent. do not support the principle of entry, against 42 per cent. who do. That reflects a movement against entry, which is also evident in the recent British Chambers of Commerce survey.

An attempt to manipulate the exchange rate, by the Bank of England lowering interest rates for example, would stoke inflationary pressures. That might be good for property owners in the south-east, but not for west midlands manufacturers. Deflating the economy through fiscal measures, in another attempt to manipulate the exchange rate, would have unacceptable social consequences as well as reducing the demand on which manufacturers partly depend, unless they export their total output.

I return to some of the concerns raised by my four Dudley informants: first, the loss of skills. By that they mean not simply personal skills but our collective knowledge as a nation. Firms in Dudley and the black country were often pioneers and innovators. I know that my hon. Friend the Minister is concerned with encouraging more innovation and getting British companies to invest more heavily in R and D. Compared with other major industrial countries, we have invested proportionately less, although the Treasury's reports on productivity in the UK chart encouraging improvement since 1998. The R and D tax credit and the fiscal measures to encourage science should reinforce that trend. Although the UK has a strong science base, however, the conventional wisdom is that we fail to translate that into commercial success. The most recent confirmation of that was the report last June, to my noble Friend Lord Sainsbury, by the UK nanoscience and technology advisory group.

There is much to hope for with the launch of the Department of Trade and Industry Manufacturing Advisory Service and its mission to encourage manufacturers to innovate with new technology and practices. I am especially pleased that the regional centre for manufacturing excellence in West Bromwich adjacent to my constituency is up and running and already providing advice and assistance to companies in Dudley. I congratulate the Minister on that initiative, with which he had a close involvement. Perhaps he can inform us of the experience of MAS to date and the comparisons with other national advisers to industry such as MICE, which seeks to deliver improvements in the metal sector through the application of lean manufacturing practice and supply-chain efficiency.

The picture is disappointing for individual skills in Dudley and the black country. In January 2001, the Basic Skills Agency reported that 46,660 adults in the borough aged 16 and over had poor literacy, and that 48,920 had poor numeracy. That places Dudley slightly above the national average for poor literacy and numeracy. Information technology skills are also under-represented in the Dudley work force.

The low skills base is reflected in the vacancies that are unfilled at professional, technical and senior levels. However, I am especially pleased at the progress that David Wray and his team at the Black Country learning and skills council have made. The black country has had one of the worst staying-on rates in the country for young people over 16, but there are the first real signs of change. Reports published in December suggest that Dudley has seen the largest increase in 16 to 18-year-olds staying on in sixth-form colleges, which takes us from well below the national average to just above it. Tackling adult literacy and numeracy skills has taken a turn for the better after a local publicity campaign overcame the shortage of tutors.

I am especially pleased with the excellent work being done by Dudley college, which has 1,000 staff and 40,000 students, including 500 from abroad, and has earned the Basic Skills Agency post-16 kitemark and three beacon awards for excellence. The college provides most of the training for MG Rover apprentices. An adult learning inspection recently awarded MG Rover six grade 1s for its training for apprentices. The inspectors' report states that work-based learning in engineering, technology, and manufacturer business administration and management are excellent. The college is in the process of establishing a Black Country centre of vocational excellence for engineering and manufacture to provide for advanced technology skills in support of regional manufacturers. I invite my hon. Friend to visit the centre once it is established.

Skills are also necessary at the top level of manufacturing. The Engineering Employers Federation report of late 2001 identified important management failures, such as not adopting techniques such as lean manufacturing, despite evidence that 30 per cent. of companies that do so reap significant productivity gains. Last October, a McKinsey report examined 100 manufacturers and concluded that the crisis in the sector was due above all to poor management. It suggested that the key to the relatively strong performance of foreign-owned companies in the United Kingdom was management, not employee performance or Government regulation.

There are good UK managers in manufacturing, who are concerned about innovation and investment and not simply about reducing costs. They focus on design and marketing as much as on making things. On 26 March, the Black Country chamber of commerce will launch its manufacturing support campaign in the Palace of Westminster. My hon. Friend is sure to be invited. The policy and representation director of the chamber of commerce, Ian Brough, told me about some of its major themes. I am pleased that helping management to identify niche segments, promoting high value-added products and fully exploiting design and innovation will be at the forefront.

That approach resonates with that advanced by my right hon. Friend the Secretary of State. Last year, she launched a study led by the United States management expert Professor Michael Porter to review and collate existing studies of UK management practices and to analyse their effect on productivity. I hope that his report, which I understand is due to be published soon, will help to guide those in British management to make the best of their resources in people, processes and equipment. They need constantly to ensure that they are providing the right products for the world outside. British managers should try to keep up to date with developments and provide the right environment for harnessing innovation in their organisations. I look forward to seeing Professor Porter's report, and hope that there will be useful lessons for the black country.

The McKinsey study downplayed the role of regulation in manufacturing difficulties, yet a constant refrain from business is that it is overly burdened by regulation. Only last Friday, the Black Country chamber of commerce was quoted in The BirminghamPost as calling on the Government to help to boost business confidence by slashing red tape. Indeed, at regular meetings with the chamber of commerce, the subject of red tape is raised, but when members of the chamber are challenged to produce examples, they are strangely silent. I would need several hours to unpick the notion of over-regulation. I do not deny that in some cases, a lighter touch might be justified, but let me make three brief points.

First, the notion of regulatory burden often ignores the interests of other stakeholders in manufacturing—notably employees and their interests in, say, a healthy and safe working environment. Secondly, the notion is not always borne out by the response of management to specific aspects of regulation. For example, I was especially taken last year with the SGS Consultancy national survey of small and medium-sized enterprises. Nearly three quarters of respondents said that the minimum wage had had no effect, while almost two thirds said that equal opportunities legislation had had no effect and 19 per cent. said that it had had positive effects.

That leads to my third point: the acknowledged benefits of regulation. One example that I shall mention in passing is the Black Country forging and foundry project, the aim of which is to reduce noise in the industry. That will benefit employees and residents of the area.

The Government have a prime role in providing institutional support to industry and not just in regulating it. I mentioned the Manufacturing Advisory Service. The Small Business Service is also up and running, providing support to small manufacturers and other businesses. In its 2002 report, the Trades Union Congress warmly welcomed the refocusing of the Government's industrial and economic policies towards regional level, as do I.

Last week, my hon. Friend the Minister met the new chairman of the West Midlands regional development agency, Advantage West Midlands, to discuss its priority of supporting industry. Perhaps he can give a brief report on those talks. It is early days for AWM, although I have struck a couple of unexpected bottlenecks in relation to projects in Dudley, which I may need to bring to my hon. Friend's attention later this month. That said, AWM's agenda for action—modernisation, diversification and excellence—is certainly the right one.

In 200 years, industrial archaeologists will, I imagine, still be excavating in Dudley. If industry invests in R and D and pursues technical design and innovation, and if the Government's manufacturing strategy delivers skills and expertise to factories and workshops, the archaeologists' reports will be of the historical success of manufacturing and its adaption to the challenges in the first part of the 21st century.

I was particularly interested in what my hon. and learned Friend the Member for Dudley, North (Ross Cranston) had to say about manufacturing. I think that we are really talking about the situation in the west midlands and nationally. Some hon. Members will know that the west midlands has been one of the economic powerhouses of the country in manufacturing innovation. However, it is fair to say that in western countries manufacturing has been in decline for some years, and the decline in the United Kingdom seems to have been sharper. Let us consider the economy of the west midlands, for example. A quarter of the industries are manufacturing industries, so a quarter of the jobs are in the manufacturing industries.

One issue that my hon. and learned Friend touched on and which we have campaigned about is research and development. Anyone who knows anything about manufacturing knows that a considerable percentage of outside labour costs goes into R and D. A company such as Rolls-Royce, for example, would invest heavily in projects and new engines, but would not get a return on that for 10 to 15 years. That is one of the problems that such companies have experienced over the years. Over the past five or six years, Rolls-Royce—as—as I am sure hon. Members know—has gradually been shedding labour. That process started before 11 September; I remember attending a series of meetings with the company. It might be argued that, in that loss of labour, there is an element of outsourcing to other countries. The trade unions will raise that as an issue, if anyone ever has discussions with them, but such outsourcing does not occur only in companies such as Rolls-Royce. Outsourcing is widespread, and it might be said that it is costing jobs in this country.

A further aspect of declining manufacturing in the west midlands is one that we sometimes tend to forget: the small supplier. The small supplier can be badly hit when there are cuts. Such suppliers are often small companies which, in brighter times, we would say were the backbone of innovation in British industry. We should be aware that some of the events and actions that emerge from central Government or result from world events can often hit the small company.

I am sure that some hon. Members will remember the Rover situation a few years ago. Anyone who visited the area at that time would have been struck by the fact that many people——even those who worked at the corner shop—knew someone or had a relative who worked at Rover. It is probable that thousands of small suppliers would have been badly hurt if Rover had been allowed to go to the wall. The Government and the Trade and Industry Committee put tremendous effort into trying to save Rover, and, fingers crossed, MG Rover seems to be thriving these days.

Coventry, in a similar way to the black country, has a tremendous industrial history, from the manufacture of bicycles to motor cars. Coventry was one of the first places to be devastated by the recession of the early 1980s. I remember the thousands of redundancies there during that period. However, through diversification over a number of years, the city has been able to reinvent itself economically.

Although we should not be alarmed by current trends, we should nevertheless be cautious. Recently, there has been the Marconi situation and its ramifications not only in Coventry but nationally and internationally. Although Marconi has restructured, it is still going through a process of job losses. Over the next couple of weeks, the local MPs will meet the employees of Marconi to see how far the company has progressed in its restructuring and, more important, how many jobs can be saved or will be lost.

We should not talk ourselves down; we should remain optimistic. However, the textile industry gives cause for concern, as I am sure the Minister will be aware. We might debate the reasons why the textile industry is in decline in this country. Traditionally, the industry has been the preserve of the east and west midlands as much as of any other part of the country, and its decline has been having a sharp effect on the east midlands. I am sure that colleagues from the east midlands could elaborate on that a great deal better than I can.

We should, however, welcome the new manufacturing strategy; I am sure that those who work in industry will also welcome it. A manufacturing strategy can offer a five to 10-year programme for training and investment to meet the needs of the economy and, more important, to promote exports. The strategy is probably the first attempt for about 30 years to try to take manufacturing seriously. We must also encourage investment—my hon. and learned Friend mentioned red tape—and do nothing that hinders it, because investment is very important to manufacturing industry.

It is also important to get our transport structures right. We all know of difficulties with the railways, which play a vital part in transporting our manufacturing goods abroad. That is why, a few years ago, the west midlands took an interest in the Hams Hall project. My hon. Friend the Minister will know exactly what I am talking about. Without that project, goods coming from and going to Europe would not have stopped in the midlands. The next stop would have been Newcastle and then Glasgow. The midlands would have been bypassed, accelerating its decline. That shows how vital it is to have a proper transport structure for transporting our goods.

The regional development agency has been up and running over the past two or three years; it played a major role in reviving Rover. The RDA is still in its infancy, but the resources made available to it to help industry are insufficient and should be increased. I hope that the Minister will reflect on that. More generally, we need to help industry by providing a major retraining programme. Several retraining programmes are in force in Coventry, but I wonder how strong programmes like them are nationally and in the east midlands more widely.

I welcome this morning's debate and I thank my hon. and learned Friend for introducing it. Despite what people think, the west midlands still takes manufacturing seriously and we are always guarded about its future. The area has a tremendous history of innovation, enterprise and inventions such as the motor car.

The bulk of employment today is in small rather than major companies, many of which outsource. Today, about 4 million people work in the manufacturing sector. It is worrying, but I try to remain optimistic without being over-confident. We should certainly be vigilant about manufacturing in this country and try to learn from our competitors abroad.

One important body not often mentioned is the World Trade Organisation. People do not realise the significant role that it plays in manufacturing. Some agreements are made—or foisted on us—that make it difficult for us to subsidise our industries, whereas the French and certainly the Americans can, particularly to do with research and development for defence. The costs of such R and D are covered through defence programmes—always a burning economic issue. The public in this country often do not realise that the WTO fixes everything from the price of sugar to that of an aircraft engine. We do not debate the WTO often enough, though it is half the problem of third-world exploitation. We should focus more on the effect of the world economy on people's daily lives.

I shall conclude on that note and congratulate my hon. and learned Friend once again on securing this debate.

I am pleased to participate in this debate at such an opportune time and I congratulate my hon. and learned Friend the Member for Dudley, North (Ross Cranston) on securing and introducing it. He gave a precise run across the terrain, though manufacturing is so diverse that much more could and should be said—and I hope to make a few additional points.

When people hear of Stroud, they often misunderstand the nature of the area that I represent. To many people, it means the Cotswolds and the Severn vale—a beautiful environment with a large service industry. In fact, something approaching 40 per cent. of employment in the Stroud valley is still in manufacturing. Therefore, when manufacturing catches a cold, at the very best we sneeze but sometimes we get the flu. We saw the decline of the early 1980s, which my hon. and learned Friend well described. Manufacturing has been in the doldrums for some years, but there is another side to consider.

I had the opportunity yesterday to visit one of the new companies that have come into my constituency. It is a company of which many hon. Members will have heard, and it has held a conference today at the Queen Elizabeth II conference centre. It is Unite, the leading manufacturer of what are technically called modular built units, which we are now providing for students and key workers. It was good to see under the leadership of John Tonkiss the way in which the company has embedded itself into the local economy. It is providing jobs and would seem to be destined for success.

I want to make three points to put manufacturing in a sensible context. One is entirely positive, although the other two are less so. I start by paying tribute to my hon. Friend the Minister. We have had dealings on a particular case, which I will not mention for reasons that he and I both know about, and he has always been interested and responsive when I have been to see him. I hope that that relationship can continue, as the nature of manufacturing means that the Department of Trade and Industry has to act quickly on particular cases.

The positive point, which relates to those congratulations, is about the work of regional development agencies, which my hon. and learned Friend mentioned. We are fortunate in the south-west, as the South West of England Regional Development Agency has been keen to make its mark and has benefited from its chairman, board members and full- time staff. I am particularly grateful for its intervention in Dursley, where a major diesel manufacturer, Lister-Petter, was in considerable difficulties. I pay tribute to the RDA's strategic direction and willingness to get its hands dirty in the nitty-gritty issues of keeping companies going and sites available for manufacturing.

More than that, I pay tribute to the way in which the RDA brought on board not only the company, its work force and the trade unions but the local community in a groundbreaking attempt to consult widely on how we wanted the site to be redeveloped. The agency went to enormous lengths to lead that change and examine how to return industry to that site, which was mixed with housing in order to factor in some income and make the development as important as possible given the wider background of difficulty in manufacturing. Notwithstanding some of the Conservative party's comments about RDAs, I hope that it will reconsider its opposition to them. They are important, strategic and detailed organisations that can make an enormous difference.

The first of my two less positive points concerns the interpretation of state aid rules on manufacturing. I spoke about the subject in a recent debate in this Chamber, and I make no apology for returning to do so again. One of the worst aspects of the European Union is that it restricts the way in which companies can build relationships with the Government. We are prevented from intervening when it is appropriate by the simple fact that a competitor or European rival could complain that any intervention falls foul of the so-called state aid rules. I am sure that the state aid rules are written down, but they are subject to wide interpretation. The difficulty is that the system is negative in that it prevents one from intervening in the way in which one otherwise might, so one cannot test the waters because of the likelihood of being fined and hauled over the coals by the European Commission.

It is often alleged that other countries are far more liberal in their interpretation of state aid rules. I hope that my hon. Friend the Minister will be robust in defending industries and companies, because manufacturing is the lifeblood of this country. Our attitude in that field can be contrasted with our willingness, on all occasions, to intervene in agriculture. As someone who represents farmers and spends much time talking to them and seeking to change the common agricultural policy, I suggest that we move some of the money from agriculture to industry, which would have benefits all round.

I am talking not about favouritism or bolstering companies that are clearly past their sell-by dates, but about investing in high-tech and in research and development to rebuild our industries from within. Some money could go in that direction rather than being spent entirely on agriculture. I say that as someone who, as I am sure hon. Members know, always advocates fairness to farmers and the food chain. Sometimes, however, subsidy levels in the food chain have been counter-productive.

I am afraid that my third point is very critical of one of the seven strands, which I am sure my hon. Friend the Minister knows about and which my hon. and learned Friend the Member for Dudley, North has already touched on: the role of the banking system. I am not here to criticise individual banks or to cast aspersions on everything that banks do, but when this Government were elected in 1997, I genuinely believed that the banking system was beginning to look more to the longer term. That was my experience in the Lister-Petter case. The banks involved were signed up to trying to stay on board over a period of time, including taking ownership of companies if that were required. It is a difference between us and the Germans that banks in Germany have always had shares in companies, to the extent that they have almost taken ownership of some. I see that as part of a genuine partnership between Government, companies and the banking system.

It is with some sadness that I have to say that my experience locally and nationally suggests that, although some banks seemed convinced in 1997 that a new relationship was required, that relationship does not yet really exist in practice. I hope that my hon. Friend the Minister will comment on how we are trying, by talking to those in the banking system in this country and—as one now has to—globally, to find ways of creating a brand new environment in which banks understand that they cannot invest in manufacturing for the short term. That must be for the long haul, but if it is done properly and partnerships are developed appropriately, rewards will be reaped. If we are looking at only short-term returns, manufacturing is, quite simply, doomed. We cannot do that. I hope that the Government have some good messages about how, at the individual and the wider environmental level, they are going to get to grips with ensuring that banks play their part, along with companies, the Government, employees, trade unions and local communities.

I have a quick rejoinder to my hon. and learned Friend, who rightly highlighted, as did my hon. Friend the Member for Coventry, South (Mr. Cunningham), the roles of training and bringing skills into industry. We have to be sorry that we have lost so many skills as a result of the closure of so many important companies. We must ensure that we attract younger people, particularly as the generation of people who currently work in engineering begins to die out.

I strongly agree with my hon. and learned Friend that there is a need for work-based training. Through the work of the regional agency and business link in Gloucestershire, we have tried to encourage those on industrial estates to make available a training room with up-to-date equipment so that people can train during as well as outside work time, and so that they do not have to make the effort to attend college courses—notwithstanding the fact that many such courses are very good.

We all know that time is precious. Many trainees work for small and medium-sized enterprises and, because of the constraints of the company's operation, they cannot be allowed to disappear for parts of the day. Therefore, I would like training rooms on every industrial estate throughout the country where, with the support of employers and initiative from trade unions, more people can be given encouragement to upskill or build the skills that are sadly lacking. Such measures will give people the hope that they are working in the right area and ensure that we begin to join the circle so that manufacturing in this country can again be strong and receive the support that it deserves.

I congratulate my hon. and learned Friend the Member for Dudley, North (Ross Cranston) on securing the debate and on the way in which he introduced the topic. I apologise to my hon. Friend the Minister and the Opposition spokesman, the hon. Member for North-West Norfolk (Mr. Bellingham), because I may not be able to stay to hear the winding-up speeches.

Unlike my hon. and learned Friend the Member for Dudley, North and my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for Stroud (Mr. Drew), I do not come to the debate with any important parochial manufacturing interests to help to inspire my contribution. My constituency is not famous for its manufacturing industry, but I seek to lock into the Minister's brain the name Thales Acoustics. The company is not in my constituency but just outside it, in the constituency of the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Harrow, East (Mr. McNulty). It is an example of a successful, modern and effective acoustics engineering and manufacturing business. When the Minister is in discussions about contracts with colleagues in the Ministry of Defence, particularly the Minister for Defence Procurement, Lord Bach, I ask him gently to press the case of Thales Acoustics.

My interest in taking part in the debate is to make a case for a potential area of manufacturing for British industry. Renewable and sustainable energy technologies offer considerable new opportunities for British manufacturers, particularly as we try to accelerate the process of reducing greenhouse gas emissions.

Britain is well known for its windy climate and, therefore, for the potential of wind energy. Many in the fledgling wind industry await with interest the energy White Paper that is to be published soon by the DTI. At present, there is just one major manufacturer in the UK of wind turbines—the Vestas plant in Scotland. For other renewable technologies, there was only a manufacturer of solar panels, Intersolar in Bridgend, south Wales, which I understand has recently gone into insolvency.

Many in the House will be well aware of the problems faced by those who seek to develop combined heat and power systems, given the impact of the new electricity trading arrangements and, more important, the rise in gas prices, which has effectively killed off many of the plans for CHP manufacturers to expand in the UK. That is why CHP manufacturers are looking to the White Paper to begin the process of restoring confidence and providing new opportunities in the manufacturing of those technologies.

It is fair to say that the DTI has not always been a friend to Britain's fledgling renewable energy industry. Until 1997, under the previous Conservative Government, it was notorious for being a friend of the nuclear industry and of the coal industry—when Baroness Thatcher was not trying to destroy it to accelerate the take-up of gas. The Department was certainly not a generous funder and supporter of the development of renewable energy. Since the Labour party came to power, however, there has been a shift in the Department's attitude to renewable energy, which was no doubt helped by our 10 per cent. target, based on 1990 levels, for the take-up of renewables by 2010, and by our manifesto target to reduce carbon dioxide emissions by 20 per cent.

I urge the Minister to take away from the debate the need to champion the case for more investment in capital grants for offshore wind power and solar panels to allow us to create the domestic market from which to win new export orders. I say that not only because of the needs of British manufacturing but because CO₂ emissions are rising in the UK. Accelerating the development of renewable industries in this country offers a win in terms of both British manufacturing and bringing down CO₂ emissions.

If the Minister shares my enthusiasm for the development of renewable energies, I hope that he will seek to discuss with the Office of the Deputy Prime Minister the problems with planning applications, which thwart and delay the take-up of renewables in the UK and therefore limit the expansion of the manufacturing side of the industry. Some two thirds of planning applications for wind farms end in rejection or substantial delay. I know that the Office of the Deputy Prime Minister is looking at that issue and is sympathetic to it, but I hope that my hon. Friend's considerable talents will be put to good use in making the case for the speedy reform of PPG22.

Although the National Assembly for Wales is an excellent institution, which is led extremely effectively by the Labour party in Wales, I hope that my hon. Friend is willing to persuade his officials to encourage a more positive attitude to wind farm applications from the civil servants who serve it. For some reason, Wales has suffered from a planning blight in which renewables applications have been turned down.

My hon. Friend may also be aware that the take-up of renewables in the UK, and thus the opportunity to develop the manufacturing potential of renewable technologies, has been in part frustrated by the objections of the Ministry of Defence to a number of wind farm sites. I do not condemn it for its objections—wind farms interfere with radar—but a solution needs to be found if we are to see an expansion in the take-up of manufacturing opportunities in renewables. Any further effort that can be put into resolving and speeding up the MOD's handling of its objections to wind farm applications will be important.

The need for sensible regulation of the manufacturing industry is a point that has been well made by my hon. and learned Friend the Member for Dudley, North. If we are to see the take-up of manufacturing opportunities for renewables, the Office of Gas and Electricity Markets is an important source of regulation. With that in mind, the selection of a new chair and chief executive of Ofgem, which is beginning, is a particularly important process for the DTI. I ask my hon. Friend to remind other Ministers in the Department of the need to ensure that the person who is appointed is not the usual dry economist with no understanding of the needs of renewable technologies, but someone with a genuine sympathy for the manufacturing opportunities that renewables offer in the UK.

As I would expect, my hon. Friend is making an excellent speech in support of renewables. Does he agree that the two key points, for the promotion of renewables and the companies themselves, are the need to try to build the entrepreneurial spirit and the need to ensure that there is engineering expertise? That is why the background that he talked about is necessary; we need people to have both skills.

My hon. Friend is right, and I want to consider some of the institutional mechanisms that can support the take-up of renewables and therefore the manufacturing potential of renewable energy technologies.

On the planning argument, I ask the Minister to offer to meet Opposition Front Benchers to encourage their party to adopt a more sympathetic attitude to renewable technologies. Conservative Members have often opposed wind farm applications in the House. I hope that the Minister will encourage them to dissociate themselves from that notorious flat-earther Bernard Ingham, who has led many a campaign to prevent wind farm applications from being accepted. I hope that the Minister will encourage the Liberal Democrats to be consistent in their attitude to renewable technologies. They say that they are always keen to support them, but whenever there is an application in a Liberal Democrat constituency, they are always willing to oppose it.

I hope also that the Minister will consider the institutional mechanisms. As I said in response to my hon. Friend the Member for Stroud, I have long believed that we need a sustainable energy agency in the Government to help to make a case against enthusiasts and lobbyists for nuclear power and the coal and gas industries—not that I am against those things. Given the fledgling nature of the renewable and sustainable energy industry in the UK, we need such an agency to bring together the expertise in the Government and to provide one clear point of access for those who seek to make their case and to develop renewable energy options. There is a sense that regional development agencies are beginning to recognise the manufacturing potential of renewable technologies. I hope that when the Minister meets the heads of the regional development agencies, he will encourage them to look with a bit more enthusiasm at the potential in that area.

Order. We have 37 minutes left. For reasons of equity and courtesy, it is desirable that Front-Bench spokesmen each consume no more than one third of that time.

I shall honour your request, Mr. O'Hara.

I congratulate the hon. and learned Member for Dudley, North (Ross Cranston). The challenge in such debates is to say something new. This is the fifth or sixth debate that I have attended on manufacturing industry. However, the hon. and learned Gentleman is doing us a service. This is an important subject for the reasons that he explained. It is not just important at a parochial level for many constituencies; the manufacturing sector is still large in aggregate terms. We are talking about almost 20 per cent. of the national economy. It accounts for over half of trade and is important for productivity growth. Even though the themes and arguments are the same, it is important that we keep making them.

The key point is the pronounced long-term trend—it has been going on for half a century—of manufacturing industry slowly declining as a share of the national economy, regardless of which Government have been in power. Since 1979, the share has declined from 27 per cent. to 17 per cent. One can draw a line along a ruler to reflect that; there has been no marked deviation. That has been happening in the rest of the industrial world, but it has probably gone further and faster here than in other countries.

The most recent trend, however, is a little worrying. In the past five years, manufacturing industry has hardly grown at all. On average it has grown by 0.4 per cent. a year. The service sector has grown 10 times faster—by about 4 per cent. a year. The British economy is doing reasonably well, and growing at a rate of 2.5 per cent. It is stable, out-performing the rest of the western world and sustains a fair degree of buoyancy. However, it is almost entirely driven by the service sector. The manufacturing sector has been stagnating, and it is right to ask why.

Before dealing with that question, I want to make the point that it is unhelpful to draw a clear distinction between manufacturing and services and say that there is no connection between them. The contribution to the debate of the hon. Member for Harrow, West (Mr. Thomas) was useful in that regard; there is a connection. In my constituency, we have only one factory, which employs 75 people. There are others employed by "services", but that is misleading.

Over the past generation, many manufacturing companies which used to conduct design and marketing in-house or have their own IT consultancy branch have begun outsourcing such work. It is carried out by firms called service companies, but which are fully integrated with manufacturing. I often joke that Twickenham is one of the largest shipbuilding centres in Britain. Boats are not actually built there, but specialist IT companies in my constituency carry out all the design work for the Tyneside shipbuilding industry. There is a link between the service and the manufacturing economy, which we are in danger of overlooking.

Why has manufacturing apparently had uniquely difficult problems? They are not unique to manufacturing. The same sort of crisis has affected agriculture and traded services. As MPs in London know, a very sharp contraction is taking place in financial services, partly because of the problems of the stock exchange, but partly for the same reasons that manufacturing and agriculture have been affected. They are traded parts of the economy that are exposed to international competition. If there is a recession in the world economy, as there has been during the past year, it will hit those traded sectors more than others.

One factor makes the British manufacturing problem much worse than that of other countries, and it was mentioned by the hon. and learned Gentleman: the problems of the exchange rate. People often do not realise how damaging that has been. Manufacturers often produce a list of grievances about their difficulties, and the exchange rate is one of them. British manufacturing, agriculture and traded services have taken an enormous hit in recent years.

According to the Organisation for Economic Co-operation and Development, British manufacturing has lost about 30 per cent. of its competitiveness. In the jargon, the real, effective exchange rate, which is a measure of how one loses competitiveness because of exchange rate movements, stands at 30 per cent. The International Monetary Fund suggests that it is even 40 per cent. That is a staggering amount to lose. It is amazing that so many manufacturing industries keep going, make money and compete despite the enormous hit that they have taken.

That issue is central to the difficulties of manufacturing, particularly in recent years. As the hon. and learned Gentleman said—it is not a partisan point—it is difficult to deal with that. I do not pretend that there is a magic cure for the problem. We believe that if the Government declared their intention to lock in sterling to the currencies of Europe at a much lower and competitive rate, they would help the process to happen because the market would respond. I do not pretend that that is easy; we are not discussing a magic cure. The exchange rate is crucial to a definition of the problem.

What else can be done? The Government have produced a manufacturing strategy and many of its elements are sensible, so we can agree with them. It tends to emphasise macro-economic stability, training, infrastructure, attracting foreign investment and creating the right market framework—all of which are right and sensible and from which I doubt any of us would dissent. It is also important, not so much for what they say but for what they do not say, that the Government have not gone down the road of massive intervention and trying to rescue companies that are in difficulty or trying to bail out failing enterprises. That is right and an important development, although the Government do not advertise that. I have no quarrel with the basic framework of the manufacturing strategy, but I want to make two specific points.

First, the Government still have some manufacturing intervention. We still have the innovation budget, which amounts to around £1.4 billion. Some parts of that are well received and the small-industry element is popular with business, but how far are the Government evaluating the effectiveness of their own programmes? From time to time we hear reports that the Secretary of State has commissioned studies into how effective the programmes of the Department of Trade and Industry are in helping business and particularly industry. I am a bit sceptical about where some of the money goes and the results. Is there a point at which the Government will produce a self-critical evaluation of their own efforts in the DTI to help business? Which programmes are succeeding and which are not? How much of the money allocated reaches the front line and how effective is it? It would be useful in a non-partisan way to examine what the money is buying and how successful it is.

My second specific point concerns complaints about regulatory burdens and business taxes. Although such burdens and taxes are minor in their impact compared with the exchange rate, they have an effect. One of the particular problems for manufacturing industry is that if a new tax, national insurance surcharge or whatever is introduced, it cannot pass it on to customers—unlike the service sector which can pass it on to consumers. So, the problem is doubly difficult.

The one area in which the Government should think again about policy is the climate change levy, which has aroused enormous ire because it bears disproportionately on manufacturing industry. I fully understand the environmental reasons for it, but the same objectives could have been achieved in other ways—through a carbon tax, applied upstream to filter through the whole economy without bearing disproportionately on manufacturing. The Government have heard that many times from manufacturers and I hope that they will rethink the matter while retaining their environmental objectives.

In conclusion, where do we go from here? I want to be optimistic, but dark clouds are appearing over the world economy. The United States economy is poised on a knife-edge and things could go badly wrong, particularly if the prospective war goes badly wrong. Japan is in a serious state of deflation and the German economy is in serious difficulty. All that will have an impact on our manufacturing industry and the outlook is not particularly good. I fear that in a year the hon. and learned Member for Dudley, North might return with another debate on the same subject and we shall, unfortunately, be saying many of the same things.

I congratulate the hon. and learned Member for Dudley, North (Ross Cranston) on securing this debate because the matter is crucial to the constituencies of many hon. Members.

I should declare an interest: I am a non-executive director of a plastics manufacturing company. There is a strong manufacturing base in my constituency, especially in food processing and engineering, and several other manufacturers are based there.

Although the economy has done well in the past few years, the manufacturing base has been in decline compared with the service sector. I agree with the hon. Member for Twickenham (Dr. Cable) that we cannot be insulated from the global economy. There are some worrying trends. The service sector, which has been the driver behind the fall in unemployment, will come under pressure if consumer confidence starts to falter. That confidence has to a large extent been built on rising house prices, low interest rates and the ease with which consumers have been able to remortgage houses and spend the money on improvements to their homes and other things. I do not expect a hard landing, but if the economy gradually slows down, the weakness in manufacturing compared with the rest of the economy will be even more important, and it is vital that the Government do their best to arrest that decline.

The hon. and learned Member for Dudley, North talked about the structural trade deficit, about which the Engineering Employers Federation expressed concern when I met its representatives recently. They said that the recent trade figures were pretty deplorable—the worst for 300 years, I believe. That is very worrying, as there has also been a big increase in the number of days lost to strikes and a fall in the European productivity league and the inward investment figures, which have been extremely good for the last 15 years.

There is obviously a limit to what the DTI and the Treasury teams can do to insulate this country from the global economy, but they have taken various initiatives, which the Opposition support. The Government cannot control the increasing trend of sourcing manufactured products in low-cost economies in the far east and elsewhere, and they cannot do anything about the companies who are looking in that direction, but there are positive steps that they can take.

The hon. and learned Gentleman played down the damage done by red tape, bureaucracy and other burdens on business, which organisations in industry and business have told me is what worries them most. Taken individually, many of those burdens are not show-stoppers or deal-breakers, but the accumulated burden is starting to have an impact. The Government inherited an extremely vibrant supply-side economy with a very flexible labour market, which was the envy of the rest of Europe. In a number of years, we have moved much closer to the American model and away from European rigidity and inflexibility. However, rather than supporting what was going on because more companies wanted to invest in Britain as the No. 1 location in Europe, and bringing its regulations and burdens down to the British level, Brussels wanted our regulations to be increased in line with those in other European nations.

One regulation—the agency workers directive—will be of pivotal importance in its potential to damage the economy, and it sums up the attitude of Brussels. To be fair to the Minister, he is doing his best to oppose the directive and I congratulate him on his efforts in that respect. I invite him to give us an update and to say when the matter will next be discussed by the Council of Ministers. He has not been helped by his MEPs, who voted for the directive. I do not blame him, as he was not a Minister when the Government decided that they would re-adopt the social chapter without any provision for flexibility or opt-outs from directives that were clearly going to damage the United Kingdom economy. The Government's hands are therefore tied to some extent.

The hon. and learned Member for Dudley, North mentioned the Engineering Employers Federation, which is very concerned about the agency workers directive, as are the Federation of Small Businesses, the Institute of Directors, the CBI and many other organisations, including trade unions. When we talk of agency workers, people who are not conversant with that part of the market often think of gang labour in East Anglia—people who work on the land for very low wages and are exploited by ruthless agencies. That may be typical of a small part of the agency workers market, but the most important part of the sector is the often highly paid, highly motivated people who are comfortable with the flexibility and way of life. They may go from one job to another depending on the contracts that they can secure.

I have talked to several companies, including British Aerospace and IBM. Both those companies have a significant number of highly paid technicians whom various agencies have supplied. IBM made it clear to me that agency workers are an important part of its business, as they increase flexibility. Moreover, the agency workers do not want permanent contracts and the firm does not want to put them on to permanent contracts; nor are the trade unions agitating for them to do so. No one seems to be pushing in that direction except the Commission. It is extraordinary that several of our European counterparts do not understand how the UK labour market is different from their own. There are very few agencies in countries such as Denmark, Holland and Belgium, as they have few agency workers.

The directive will hit this country disproportionately. It will not suit anyone: not the agencies, employers or the employees. Confidential details about wages and other terms and conditions of employment will have to be made available to the agencies and agency workers, which will undermine confidence and the good working relationship between certain agency workers and the companies for which they have been working. There is no doubt that the directive will lead to a significant loss of jobs.

The directive will especially affect the interim management market, which is positively the top end of agency work. The interim management market is extremely vibrant. There are many retired chief executive officers, managing directors, people who may have lost their job as a finance director in their forties or fifties and others who may have retired early because they sold their business, who want to go on working and to put something back into business.

Those people can go to specialist agencies that can find them interim management positions, and take a temporary job in a "turnaround situation", or in a company where the key finance director or divisional manager is ill and the agency is providing a suitable replacement. The interim manager will then work for three, four, five or six months on a high salary. He does not want a permanent contract and the firm does not want to give him one. The directive could completely undermine this important sector, and it would be a disaster for British industry. I wish the Minister well in his attempts at least to water down that damaging directive, although we are not optimistic. It will be a grim day for British business if he fails.

To conclude, we support several of the Government's initiatives to help industry. I simply flag up some of the ones mentioned by the hon. and learned Member for Dudley, North. They secure all-party support. We also take a pretty favourable view of the Government's handling of the macro side of the economy. We know that their hands are often tied when it comes to regulating and controlling business, but we implore them to look at those areas where they are in the driving seat and where our domestic legislation gives them a significant say in what happens. We also urge them to fight as hard as they can for British business in Europe. We could be moving into far more turbulent times. There are parts of the global economy from which we will not be insulated and we must do our level best to help manufacturing and jobs in this country.

The Minister, of course, may use all the available time.

Thank you, Mr. O'Hara. I should like to say at the outset that I am genuinely pleased that my hon. and learned Friend the Member for Dudley, North (Ross Cranston) has raised this issue. As the hon. Member for Twickenham (Dr. Cable) said, we have been over the ground several times, but this is a serious time for manufacturers, and it is right that we debate it as fully as we can. This has been a very constructive debate, and it has lacked the Punch and Judy atmosphere that these debates sometimes have. If we are going to help British manufacturers we must concentrate on resolving the problems, rather than indulging in synthetic indignation, which we are all too good at manufacturing here.

My hon. and learned Friend's four Dudley informers put their finger on the main issues. The Government feel that we inadvertently gave the wrong message during our first term. We care about manufacturing, but we gave the impression to manufacturers themselves that we regarded it as the industry of the 20th century, not the 21st. We have tried hard to address that problem over the last 12 to 18 months. Of course manufacturing is important. It represents 60 per cent. of our exports, a fifth of our GDP, 4 million jobs directly and millions more indirectly. Let us not get this out of context: manufacturing is 16 per cent. of GDP in the USA and 18 per cent. in France. In Germany it is 22 per cent., which is higher, although not much. We should not run away with the feeling that manufacturing in this country is collapsing as a percentage of our GDP while it is holding up in other industrial countries.

Manufacturing matters. When I talk to manufacturers, I am amazed at how much they value Ministers and Members of Parliament repeating that phrase. We have probably said it to the point of exhaustion. That message has got across. So what are we going to do about it? Just over a year ago in Birmingham we met all the major manufacturers, the trade associations, the regional development agencies and the trade unions. We tried to thrash out a practical strategy, not a pouch of fairy dust, for manufacturing. It was the first such strategy in this country for 30 years.

To a large degree, this is boring stuff. It will not make front-page news. It is hard slog rather than quick fix. Nevertheless, we have identified the issues on which we need to concentrate and where the Government have a role. This is not a command economy, and we are not returning to the days of bailing out lame ducks, as they used to be called in the early '70s. There are areas where the Government obviously have a role.

My hon. and learned Friend was quite right to point out major issues of skills and best practice. He mentioned the problems in management. Sometimes manufacturers and business people feel insulted, thinking that we are being derogatory; we are not. We are saying not that this country does not produce good people, but that we have not paid enough attention to managerial skills in the past. We assumed that when people became managers they would acquire the appropriate skills on the job, so the correct training was not provided.

That is an important part of Professor Porter's review, which examined competitiveness with particular focus on managerial skills. The Council for Excellence in Management and Leadership said that 36 per cent. of managers are not fully proficient. The number of managers with NVQ-equivalent qualifications in managerial skills is tiny. We have not focused on the issue seriously enough and I am glad that my hon. and learned Friend highlighted it.

Regulation is another important issue. I am extraordinarily pleased that the hon. Member for North-West Norfolk (Mr. Bellingham) did not bang on about it. He banged on about the agency workers directive, and I will deal with that in a second. On regulation, the OECD said in its most recent report that we are in many ways a beacon. We set up the Better Regulation Task Force and other initiatives because we were concerned about the issue. As the hon. Member for Buckingham (Mr. Bercow), who is becoming a hero on our Benches, recently pointed out, the idea that all the problems of government relate to regulation is extraordinary. We should reflect carefully on where regulation is needed, weed out bad regulation and provide more sunset clauses so that it does not stay on the statute book any longer than necessary. The contribution of my hon. and learned Friend the Member for Dudley, North was extremely thoughtful.

In my remaining time, I shall attempt to respond to the contributions before reading the script. My hon. Friend the Member for Coventry, South (Mr. Cunningham) has long taken an interest in these matters and often plays a constructive role, sometimes behind the scenes, in assisting manufacturing industry in his constituency. He spoke about the importance of research and development, one of the seven strands of our manufacturing strategy, which is recognised by all major manufacturers and has been helped by the research and development tax credit.

My hon. Friend also referred to outsourcing, which needs to be tackled. With tariff barriers coming down and communications becoming much easier, the flow of companies into central Europe and other parts of the world is bound to happen. The move into central Europe is partly due to the efficient geographical location of countries such as Slovakia and the Czech Republic and partly to the low-wage, high-skill nature of the economies there. We cannot deal with those problems by pulling up the drawbridge and becoming a fortress UK economy.

My hon. Friend also mentioned textiles. No Government sat down with the textile industry and the trade unions to discuss problems in the sector until 1998, when my right hon. Friend the Member for Leicester, West (Ms Hewitt), now the Secretary of State, set up the textiles industry forum. Similarly, in the whole history of this maritime nation, the Government had never sat down with the shipbuilding industry and its work force to discuss problems until the recent establishment of the shipbuilding and ship repair forum. Problems will not necessarily diminish as a result, but the opportunity to debate how best to deal with them is useful.

My hon. Friend the Member for Coventry, South also mentioned the World Trade Organisation, which is an important issue, and Longbridge. It is right to note that we move on from problems and do not look back at them. My right hon. Friend the Member for Tyneside, North (Mr. Byers) was Secretary of State when we were urged to feed Longbridge to the asset strippers, and he held out until a company prepared to keep it as a going concern—Phoenix—moved in, saving thousands of jobs. Thanks to him, many people are still working, successfully producing cars at Longbridge.

My hon. Friend the Member for Stroud (Mr. Drew) is right about the bucolic image of the Stroud valley. I was trying to think of a manufacturing version of "Cider with Rosie", but could not do so in the time available. I was pleased to hear what he said about the South West of England Regional Development Agency. Its recently retired chairman, Sir Michael Lickiss, was personally attacked in an Adjournment debate, which I thought was disgraceful, by two Members who turned out to know little about what the development agency was doing. My hon. Friend is right: the agency had to tackle the problems, including those in tourism, caused by foot and mouth disease, and the Eden project is a monument to the agency's interest and energy in the south-west. My hon. Friend also asked the hon. Member for North-West Norfolk to end his party's opposition to RDAs, and I will come to that in a second.

My hon. Friend made two less positive points. One was about state aid rules. Everywhere I go, I hear that the UK plays by the rules—it seems that people do not say "cricket" any more—whereas other countries bend the rules. I was in Denmark recently when its Government held the EU presidency, and the Danish are convinced that Denmark plays by the rules and every other country in the EU does not. Apart from the fact that it is a saloon bar discussion, we always ask manufacturers to give us one example of state aid rules being breached elsewhere so that we can pursue it, which we have done. This example has nothing to do with manufacturing, but Deutsche Post was found to have breached state aid rules recently and was fined heavily.

My hon. Friend also mentioned the banking system, and that issue is under review. We have set up regional venture capital funds to help, but I know that my hon. Friend's point was about banks' attitudes to failing companies. That goes a bit wider than manufacturing, but we are keen to work with other Departments to influence the situation.

My hon. Friend the Member for Harrow, West (Mr. Thomas) cannot be here. I think that he has an exaggerated sense of my abilities. He asked me to speed up the Ministry of Defence, to ask the Liberal Democrats to be consistent, to encourage the Conservatives to have greater sympathy for renewables and not to appoint dry academics to positions in the regulator. That is all a bit beyond me, but I will try my best.

The hon. Member for Twickenham made several important points, in particular about the synergy between manufacturing and services. They are interlinked, and that point needs to be made more often. For every manufacturing job, between one and four jobs are created in the service sector, depending on which analysis we use. The synergy argument is not raised enough.

The hon. Gentleman also asked about business support, which the DTI is evaluating. That is a difficult process, and I have nothing but admiration for my right hon. Friend the Secretary of State for many reasons, but especially because she is asking stakeholders what they think about the DTI. I know that the hon. Gentleman wants to abolish the DTI, as I explained to my staff. I said, "If there's a Liberal Democrat Government, you're out of a job", and they were pleased to get that assurance of job security.

Nevertheless, we were brave in asking stakeholders what was wrong with the DTI. Again and again, they said that we have many good people doing lots of valuable work, but our business support system is too complex and much of the support that we offer is outdated. It may have been relevant in the mid-1970s, but not any more. We are examining that and looking to streamline the system into four or five portfolios, so that people understand where to go depending on which type of business support they want. We hope to announce at least the first tranche of change in the spring, although I realise that spring is loosely determined in political circles as any time between February and December.

The hon. Gentleman also mentioned the climate change levy, which is an important development for manufacturers. Announcements about that in the pre-Budget report will help, but the companies that are excluded from the integrated pollution prevention and control directive and cannot gain access to the 80 per cent. discount have a point. The Engineering Employers Federation produced a good document on that recently.

I am pleased that the hon. Member for North-West Norfolk spoke about the limit to what the DTI and the Treasury can do, although he placed too much emphasis on the agency workers directive. We are pleased and proud to have signed the social chapter. It was the right thing to do, and we should do nothing other than crow about workers in this country having basic, civilised standards. That is an important development. The point about not having opt-out from the directive is that we engage in debate. The directive is a problem: there should be a directive, but it should provide for a longer derogation period.

Finally, I urge the hon. Gentleman to talk to his party about its opposition to RDAs and its commitments to abolish the Small Business Service and to wipe out £300 million of business support. That would not help manufacturers.

I was extremely pleased to secure this debate and had sought it for quite some time. The subject is vibration white finger. That term is commonly recognised, but the correct term is hand-arm vibration syndrome, or HAVS.

I shall concentrate on what I consider to be the out-of-date nature of the prescribed list, PD A11; the prevalence of HAVS in occupations outside the prescribed list; new developments in assessment procedures; the differences in practices between the Department of Trade and Industry and the Department for Work and Pensions; aggregated disability; and, if I have time, health and safety practices.

The list of those in certain occupations and the use of certain related tools that creates entitlement to industrial injuries disablement benefit for HAVS was prescribed in 1985 and is very limited. It came about on the recommendation of the Industrial Injuries Advisory Council. The IIAC is an independent body that was set up to advise the DWP on matters relating to the industrial injuries scheme. It comprises representatives of the Confederation of British Industry and the TUC, and experts in occupational medicine and epidemiology. According to its website, the major part of its work is considering whether the list of prescribed diseases for which benefits should be given should be amended.

My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller), in early-day motion 160 in 1993–94, expressed concern that the prescribed list did not embrace certain victims of the disease who had

"indisputably contracted it as a result of their work".

He went on to

"urge the extension of the list to include all occupations which cause vibration white finger to correct this anomaly".

In 1995, the IIAC produced a report on HAVS for Parliament that recommended changes.

In a letter to the then Secretary of State for Social Security—the right hon. Member for Hitchin and Harpenden (Mr. Lilley)—Professor Harrington, the then chair of the IIAC, made a number of pertinent points and recommendations, which I shall outline. Although the prescription covered vascular effects—blanching and numbness—it should also cover the well recognised neurological effects. At the 1986 Stockholm workshop held under the auspices of the International Commission on Occupational Health, conclusive evidence was presented that exposure to vibration causes neurological disturbances as well as blanching of the fingers. Science and medical knowledge of the condition had improved and should be reflected in the way in which the condition was covered in legislation.

The syndrome should be linked to a list of tools, or rigid material held against those tools, rather than to occupational exposures. That would recognise the fact that the use of a tool may not be confined to a particular industry. Current working practices make it more likely that a worker will be exposed to a range of tools than was previously the case, so identifying tools instead of occupations was a more realistic approach to prescription for this condition.

The IIAC recognised, however, that the administrative costs of the industrial injuries scheme could be increased, and a 14 per cent. disability threshold for payment of benefit might produce few additional payments. It also recognised that a small assessment of HAVS could be aggregated with another award to satisfy the 14 per cent. rule or to increase a current benefit payment for another industrial injury. The council pointed out, however, that recognition of the condition in the prescribed list and for the individual had important preventive implications for industry and employees.

On 31 January 1996, the Conservative Government rejected those recommendations in a written answer. They were

"not persuaded that the additional benefits to individuals would be sufficient to warrant the high administrative costs".

They were also concerned about

"the costs associated with developing a usable, repeatable and acceptable test for diagnosing the condition and assessing a person's disability."—[Official Report, 31 January 1996; Vol. 270, c. 823W.]

Nevertheless, the Government were confident that the council would continue to monitor scientific advances and literature on the condition and developments in diagnostic and assessment techniques, and would give careful consideration to further advice from the council. It has been seven years since the council's report was published, and six years since the Government's response. I would like to know whether there have been any advances.

I wrote to the DWP last year on behalf of a constituent who had spent his working life in the upholstery industry and suffers from HAVS as well as bilateral carpal tunnel syndrome, as evidenced by his consultant plastic and hand surgeon. I received the same response from the then Minister that I received in 1996. However, I think that further evidence, developments and contradictions have emerged since then, and I would like to draw them to the Minister's attention.

There is evidence that the prevalence of HAVS is significant in a greater number of occupations and tools than in the prescribed list. The Health and Safety Executive website presents detailed statistics on that. Additional areas affected include construction, manufacturing, agriculture and fishing, and people using industrial sewing machines, grinders and floor polishers.

A Medical Research Council survey commissioned by the HSE, and carried out in 1997–98, gave a national prevalence estimate of 301,000 sufferers from vibration white finger, of which 268,000 were male and 33,400 female. That survey indicated that many occupations outside the prescribed list were affected. Moreover, working practices have changed, particularly because of the development of the flexible job market. Many employees are therefore exposed to a variety of tools as they move from one job to another in related industries.

I became interested in the limitations of the prescribed list when I was contacted by a local union representative, who had been supporting another constituent of mine at a tribunal. There was no question but that the man concerned suffered from HAVS, caused by the vapour-blasting machine that he had used since 1976. Copies of the tribunal documents, which I studied carefully, detailed engineers' reports, and the medical reports clearly showed that that was the case. However, the appeal had to be withdrawn because the machine was not a hand-held rotary tool, as required under PD A11. That constituent became part of a study carried out by Dr. Ian Lawson into nine sufferers from HAVS who had used high-pressure hoses alone or with other tools. His study was published in Occupational Medicine in September 2001. He concluded:

"In all cases this group presented with the disease when their use of high-pressure hoses became a significant or exclusive part of their job. These hoses fall outside PD A11."

The constituent whom I mentioned earlier who has HAVS has worked in the upholstery trade for 38 years, using a variety of compression tools: sanding tools, frame, staple and matting guns, and what he calls "the big gun" for putting in seat springs. When he first started work, the tools were bigger and heavier than they are today, although in one of his letters to me he writes, quite poignantly, that

"with today's tools you still get the thumping in your hands from the power."

Clinically, there is general agreement that HAVS may have at least two separate components, the vascular and the neurological. The internationally agreed Stockholm classification, which includes neurological effects, is now the most widely used method of grading the disease. It is known that vibration can also cause damage to nerves, and that 20 to 25 per cent. of those who have HAVS experience only those neurological effects—altered sensation in the fingers such as tingling and numbness. Compensation to workers thus affected is now available in many countries, but not in the United Kingdom through industrial injuries disablement benefit.

I will now discuss the mismatch between the DTI and the DWP in their approach to the disease. There is a clash of medical opinion supported by two different legal decisions. The DTI miners health compensation scheme has a judicial underpinning. Compensation is based on agreements between claimants and acting solicitors and extensive tests. In the DWP scheme, which is set out in legislation, the claimant has to show a link between the disease and occupation, loss of faculty and 14 per cent. disability. There is a reliance on medical reports and discussion.

The miners compensation scheme is functioning well. Sensory testing, which was flagged up as a reason for not accepting the 1995 report, is already carried out to determine entitlement to compensation under that scheme. The DWP awards IIDB for HAVS only if a person's occupational background fits within the prescribed list and they have episodic blanching and/or circulatory or vascular effects. There is no test under the DWP for the neurological component because the factor is not recognised. Miners getting compensation cannot get IIDB for all those reasons.

In any event, the DTI uses a different vascular test from that used by the DWP, which causes duplication. To complicate matters further, the social security commissioners report recommendation states that in assessing disablement the Benefits Agency must take account of neurological as well as vascular damage.

Less than 14 per cent. of claims are given an assessment of disablement. The recommendation on aggregation in the 1995 report by the Medical Research Council still stands: it would make a difference to sufferers if compensation were aggregated with other industrial disease assessments or with existing industrial benefits. My constituent has carpal tunnel syndrome and has just had two operations. He received sick pay only when he was having his operations, and has to return to work on the same "thumping" machines, as he puts it.

I shall briefly touch on health and safety, which is the other side of the issue. In the study to which I have already referred, Dr. Lawson concludes that the ultimate goal for tool manufacturers, hygienists and engineers should be to reduce workplace vibration levels to meet national and international standards and guidelines, including HSE guidelines and EU directives. The HSE 1994 advisory booklet "Hand-Arm Vibration" recommends preventive measures where workers' exposure regularly exceeds the recommended level. To date, the proposals have not been adopted by regulation, which means that when inspectors investigate work sites with potential vibration problems they may only recommend specific corrective action.

The Medical Research Council's research working group is looking again at HAVS, and I gather that a further meeting is scheduled for next month. That work has been urged on by my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), who is so active in this field. The working group is looking at using information on a sufferer's work history to back up diagnosis. We hope that it will recommend that the DWP adopt the DTI scheme tests as a low-cost way to deal with those who come into the miners compensation scheme, although that would not address those who are outside the scheme. In any event, it is looking at a functional test of neurological damage for which the DTI already has a test.

Will the Minister undertake to look again at the issue? In particular, will he look at the evidence of the wide number of tools and occupations in which HAVS is significant? Will he consider the issue of aggregated disability in the light of international practice, the mismatch between DWP and DTI practices and the health and safety issues? Above all, will he look carefully and sympathetically at the council's recommendations?

It is a pleasure to serve under your chairmanship again, Mr. O'Hara. I congratulate my hon. Friend the Member for Erewash (Liz Blackman) on securing the debate and on raising this important issue on behalf of her constituent. It is a wider constituency matter, too, and I acknowledge that Government Back Benchers have been interested in it for some while.

As my hon. Friend will be aware, our approach towards work and disability is focused on preventing injuries through health and safety action—she acknowledged the importance of prevention—and enabling people with health problems and disabilities to return to work through the help offered by Jobcentre Plus. However, the industrial injuries scheme, which dates back to the foundation of the post-war welfare state in 1948, is a vital part of the support that we offer to people who have become disabled as a result of an accident at work or an industrial disease. That is a non-means-tested, tax-free, non-contributory benefit, payable even if the person continues in or returns to work. It is effectively a no-fault insurance scheme. In 2001–02, that benefit cost £775 million and there were 377,000 recipients.

Not everyone with vibration white finger, to use one description of the condition, has a prescribed disease for which industrial injuries disablement benefit is payable. Only the most severe forms of the condition are compensated through the industrial injuries scheme. In those cases, the condition is so advanced that it causes disablement in the sufferer, by comparison with someone else of the same age and sex. Hence the prescription of prescribed diseases A11 equates to a more advanced state of the disease.

As my hon. Friend rightly points out, PD A11 has been prescribed as an industrial disease in relation to specific occupations since 1985. As she acknowledged, the disease was reviewed by the Industrial Injuries Advisory Council in 1994. It recommended that the list of prescribed occupational exposures should be replaced with a list of tools and rigid materials held against such tools. It also recommended changes in the way in which the disease is diagnosed and assessed for benefit purposes. Careful consideration was, of course, given to those recommendations, but the then Conservative Government were not persuaded that the additional benefit to individuals would be sufficient to warrant the high administrative costs of implementing the recommendations.

My hon. Friend asked why some people with the disease pass assessments carried out by the DTI but are not awarded benefit. That is because, in compensation claims, the degree of disablement does not have to be as severe as that required under the strict qualifying criteria laid down in the industrial injuries scheme. It is not possible, therefore, to compare the two schemes directly.

My hon. Friend noted the apparent disparity between the tests used by the DWP to determine entitlement to industrial injuries disablement benefit and those used by the DTI to diagnose and assess the disablement caused by vibration white finger. The fact is that there is no simple, reliable and universally accepted test for vibration white finger. Diagnostic procedures must be viewed in the context of the high volume of applications to the industrial injuries scheme. Claims need to be resolved speedily and consistently.

I thank my hon. Friend for giving way and I congratulate my hon. Friend the Member for Erewash (Liz Blackman) on securing this important debate.

As I am sure the Minister is aware, my constituency has received the highest level of compensation for vibration white finger through the DTI in the country, because of its number of former miners. The difference between the approach of the two Departments causes difficulties. Miners go through two detailed and excruciating DTI medicals to qualify for compensation for VWF. When they go to see a doctor from the DWP, the assessment is usually very quick. Few questions are asked and the person's hands are looked at very briefly. The miners have difficulty understanding why some of them get benefit and others do not. Some of the decisions seem to me to be wrong. Will the Minister comment on that?

I certainly acknowledge that having two schemes appears perplexing at first sight, not least to those who are directly affected and to hon. Members. However, the two schemes are not the same; otherwise, they would be one. One is about compensation; the other is about possible entitlement to a regular weekly benefit, regardless of whether one is in work. The nature of the schemes is different. I acknowledge my hon. Friend's role in raising the issue. As he said, it is important to his constituents, and I recognise his interest in and conviction about the matter.

Having said that, because concerned Members of all parties continue to raise the matter, my right hon. Friend the Minister for Work felt that it would be appropriate to ask the Industrial Injuries Advisory Council to review it. It is the council's role to monitor developments in medical knowledge and improved diagnostic procedures, and to provide sound evidence-based recommendations to the Government. Medical knowledge has moved on and new industrial trends have appeared since the council last made recommendations. The council also advises on whether the extent of occupational cover needs revising in the light of changes to working practices.

The Government approached the council in March 2002 and asked it to carry out a review of prescribed disease A11. I understand that the council will meet on Thursday to discuss progress. Once we have seen its report, which we expect to be finalised this year, we shall consider what changes to the scheme would be appropriate.

My hon. Friend the Member for Erewash raised the issue of employment activity, in which we are particularly interested. She may be aware that my Department is now the sponsoring Department for the Health and Safety Executive, which has published extensive guidance on hand-arm vibration syndrome. It has also mounted two campaigns on the hazards of vibration, most recently targeting the manufacturers of vibrating tools. My hon. Friend may be aware also of the vibration directive, which will further reinforce the HSE's action and set legal requirements for action at certain levels of exposure. That will come into force in 2005.

We continue to monitor and advise employers on good practice. We believe that we have the good will and support of industry—those who make the tools and those who use them.

My hon. Friend also touched on aggregated disability. Although the majority of assessments for vibration white finger are under the threshold of 14 per cent., as she said, benefits can be awarded if the disabled person has an assessment or assessments for other accidents or diseases and the aggregate amounts to 14 per cent. or more. I hope that that is some comfort to her.

I appreciate that it is difficult at first sight to understand the logic of two schemes, and I understand the difficulty that hon. Members have in communicating it to their constituents.

Before the Minister sits down—

I am not about to sit down. Let me finish, as I am enjoying the debate.

The schemes apparently assess the same disease. However, as I said earlier, they have somewhat different purposes. I hope that that helps to explain the logic of having two schemes.

Does the DWP accept in principle that the disease causes neurological effects? At present, the scheme does not. Will the Minister look favourably on reviewing the situation if and when the council decides on the functional tests of neurological damages, which it is now considering?

One problem is that the DTI and the DWP define the disease differently. The DWP must accept that there are neurological implications, as has been recognised internationally.

Order. This is becoming a very long intervention.

I beg your pardon, Mr. O'Hara. I believe that the Minister gets my point.

I am advised that neurological effects are taken into account because of case law. However, if I feel that it would be useful to write to my hon. Friend on this or other points that she raised, I will do so.

Although the council will monitor the debate, I give the assurance that I shall send it a copy of the Hansard record so that it can take fully into account the issues raised by my hon. Friends the Members for Erewash and for Barnsley, East and Mexborough (Jeff Ennis).

I conclude by thanking my hon. Friend the Member for Erewash for raising an issue of great importance to her constituents and to others, and by assuring her that the council's report, which is expected later this year, will be taken very seriously by the Government.

First, I must thank my hon. Friend the Member for North Cornwall (Mr. Tyler), who originally secured this 90-minute slot for a debate, but had to give it up because it clashed with other business in the House that required his presence. There is some justice in his misfortune, for such a clash would not have occurred under the previous sitting arrangements, which he campaigned to change. Next I must thank whoever it was in the Speaker's Office who drew my name to fill the vacated space. That was appreciated not only by me but by the all-party acquired brain injuries group, which I have the honour of chairing.

The group takes the view that more needs to be done to improve brain injury rehabilitation services not only in the interests of the individuals who have suffered brain injuries through accidents at home, at work or at play, in road crashes or owing to medical causes, but in the interests of those who care for them, be they NHS workers, other health providers, the voluntary and charitable sector or families.

I should like to offer my personal appreciation as well as that of the all-party group to each and every person and organisation who individually and collectively seeks to improve matters for brain injury victims. In particular, I mention Headway, the leading UK charity dedicated to providing help, support and services to people affected by brain injury. It also gives much-needed support to families and carers. There are more than 100 Headway groups around the UK. My thanks also go to the United Kingdom Acquired Brain Injury Forum for its valuable contribution, to Rehab UK whose aim is to enhance the social and economic independence of people with disabilities, and to the Brain Injury Rehabilitation Trust, which is a division of the Disabilities Trust.

The seriousness of today's debate stems from the stark fact that every year around 1 million people attend accident and emergency departments with some form of traumatic brain injury. It is estimated that for every 100,000 of the population as many as 15 will receive a serious head injury, up to 20 a moderate head injury and up to 300 a mild head injury. It is estimated that about 120,000 people in the UK live with the long-term effects of a severe traumatic brain injury.

I should declare my personal interest in the general subject of brain injuries. This coming July marks the 25th anniversary of the death of my first daughter. She died as a result of head injuries that she sustained when she fell from wall bars during a gym lesson at school. She was seven years old. Regrettably, despite the efforts of her teacher, who had recently qualified as a first aider, the ambulance personnel and medical teams at Essex County hospital and Oldchurch hospital, Romford, she did not survive. I dread to think what her condition would have been if she had lived. It was my daughter Joanne's tragedy that caused my wife and me to do what we could to help survivors.

We know that medical science has made advances over the past 25 years. More people appear to be surviving as a result of better and earlier diagnosis and the improved treatment that follows. However, that has not been matched by advances in rehabilitation—something that the Health Committee set out in its excellent report on the subject in March 2001. It is most regrettable that progress on the Select Committee recommendations has not materialised. I hope that today's debate will contribute towards ensuring that the improvements, which are both necessary and obtainable, can be provided.

I recognise that better rehabilitation services for those with brain injuries will cost money, but greater investment from the outset will cost the public purse less in the long run, which I assume appeals to the Treasury. In addition, of course, it will greatly improve the quality of life of those who have suffered brain injury and their families, who so often have their own lives torn apart by what has happened to their loved one. Perhaps the Minister will give an assurance this afternoon that all the Health Committee's recommendations will be put into action. Those with brain injuries and all who are associated with them would welcome such a declaration.

Headway has told me that the Select Committee's report entitled "Head Injury: Rehabilitation" is a seminal document. Its recommendations define an ideal brain injury service. However, Mr. Graham Nickson, Headway's policy and campaigns manager, told me:

"Whilst there were elements in the Government response (Command Paper 5226) which Headway welcomed, overall we were very disappointed at what we felt was a complacent approach.

Given that it is nearly two years since the publication of the report, Headway feels that it would be an opportune moment to ask what progress has been made in meeting the standards recommended by the Health Select Committee."

Let us hope that there will be real progress. I know that other hon. Members hope to participate in the debate. No doubt they will discuss some of the Committee's recommendations.

I am grateful to Professor Lindsay McLellan, Professor of Rehabilitation Medicine at Southampton university and chairman of the UK Acquired Brain Injury Forum, for his professional thoughts. He tells me that unless the management structures of the national health service are reformed at the same time as the national service framework is developed, any new resources for meeting NSF standards may be spent in areas other than rehabilitation. The Government already face that issue in respect of the money that they have provided for cancer care services. Professor McLellan suggests that a senior manager in each NHS trust be given responsibility for brain injury rehabilitation services, thus ensuring that the budget is spent correctly and progress is made.

I am sure that the Minister will readily confirm that the NSF will lay down what her Department believes that health and social care services in England need to do for those who have brain injuries. Unfortunately, when it comes to rehabilitation, it is clear that insufficient is being done to honour the spirit and letter of the NSF.

There are no pharmacological treatments for brain injury, which is the poor relation in medical research, even though each year, as I have already pointed out, some 1 million people in this country will seek treatment for a head injury. Road crashes are the biggest cause of injury. I am sure that everyone will welcome the moves that are being made across the board to reduce the number of road accidents so that there is less pressure on health services. However, this debate is about people who already have head injuries.

The Health Committee reported:

"Head injury is the foremost cause of death and disability in young people. In an age of increased motorisation and violence, head injury is a healthcare problem which is not going to go away. There is a growing population of head-injured people in this country, as improved medical techniques have led to many head-injured people now surviving their accident and living into old age, with a normal life expectancy."

The majority of brain injuries—40 to 50 per cent. of all cases—are sustained by young men aged between the ages of 15 and 29 who are involved in road crashes. Accidents at work and in the home account for 20 to 30 per cent., sports-related injuries 10 to 15 per cent., and violent assaults about 10 per cent. of brain injuries. Men are two to three times more likely to sustain a head injury than women.

Despite the widespread prevalence of brain injury, services to help and support the victims are woefully inadequate. The brain, with its 1 million million nerve cells, can be injured by illness, a physical blow to the head or internal neurological malfunction. Brain injuries can affect young and old, rich and poor, men and women and people from all cultures and ethnic backgrounds.

Greater importance must be attached to rehabilitation. Intensive rehabilitation must immediately follow acute care, which could last several weeks or many months. That should be followed by long-term rehabilitation. Given the importance of rehabilitation following brain injury, have the Government given serious consideration to the Health Committee's recommendation xix, which called for each NHS trust to identify a named manager with responsibility for rehabilitation services?

I would also draw the Minister's attention to recommendation xxi, which states:

"We recommend that the Department of Health should help charitable organisations, where they are providing core services, to develop these services further."

I very much regret that the inadequate funding for rehabilitation is likely to get worse if the example of my local branch of Headway is typical. Many Headway groups are struggling financially just to survive, although they are providing a vital service for those with brain injuries and saving the state a fortune. Such groups need more resources, not fewer.

Colchester Headway has been led to believe that the Colchester primary care trust will not be renewing its annual grant. A shortfall of £15,000 in the current financial year has not been paid. It gets even worse for the financial year due to start in April. The ongoing grant, which would be about £56,000, is in doubt.

Colchester Headway says:

"Should Colchester PCT decide to withdraw its support from Headway the repercussions will be immediate and very distressing for the people with brain injury and the families from the Colchester area who currently attend the day centre and receive our general support. The knock-on effect of this withdrawal, at a time when the world believes money is pouring into the Health Service, would not only be difficult for the public to understand, but would probably affect the viability of our organisation."

Will the Minister explain why money for rehabilitation for those with head injuries is being reduced? Perhaps my example is purely localised, and more financial support is being provided elsewhere. Either way, intervention by her in this funding crisis would be appreciated. Will the Minister point out to her Treasury colleagues the overall saving that will accrue to the public purse if proper resources are put into rehabilitation? Continuing the theme of joined-up government, I suggest that she involves the Department for Work and Pensions, from which I detect mixed messages.

I congratulate the hon. Gentleman on securing the debate. I hear what he is saying about Headway, which works so well in my locality. However, vocational rehabilitation can also be important to people who are making even greater recoveries from their injuries nowadays.

I thank the hon. Gentleman for that welcome comment, which I fully endorse.

Is the Minister aware of the views of Lord Morris of Manchester, the much-respected former Minister who did so much to help those with disabilities? In November, he attacked cuts in services to disabled people with acquired brain injuries, which are forcing the closure of centres specifically designed to help them. What is her response to that?

Rehab UK estimates that, for an average investment of £15,000, their 48-hour-a-week vocational rehabilitation programme saves the benefits system £300,000 over the lifetime of a person. The Brain Injury Rehabilitation Trust estimates that lifetime savings are in the range of £400,000 to £1 million per person, depending on the severity of the injury and the person's life expectancy. Those are huge savings for relatively little outlay.

The financial benefits are one thing. Of even greater importance is the improvement to quality of life for those with brain injuries and those who care for them.

I congratulate the hon. Member for Colchester (Bob Russell) on securing the debate. I do so with some degree of jealousy, as I have been applying for a debate on this subject whenever my diary has permitted me since October 2001. I did not have an Adjournment debate in the House for the whole of last year. I wanted to initiate a debate not because I have been personally touched by a tragedy such as the one so movingly described by the hon. Gentleman—I am sure that he has our condolences—but because, as is often the case for Members of Parliament, people had come to my surgery in great distress about people who had received severe head injuries that were virtually, but not completely, terminal. They are people with very high dependency.

To give hon. Members the flavour of what I am talking about, I will mention the case of a young girl who was badly injured in a car accident. She was unable to speak, and her mother was in real distress. The young girl was placed in a home that had the duty to look after her. The subject of the debate that I wanted to secure was the role of family and friends in the care of those with severe head injuries. I hope that the Minister agrees that it is vital that family and friends are given a much clearer role in the care of such people.

In the case in question, the mother alleged that the home was not treating her daughter in the way that had been intended. Specifically, her mother said that the state was giving the home resources for physiotherapy that were not being applied to her daughter's physiotherapeutic needs. One tremendously important aspect of the debate is that the patients have no voice. They literally cannot talk or sign, and if they are in distress, the only voice that they have is that of those who are either good friends or family—the voices of those who love and cherish them.

The mother asked to see the physiotherapy that was being given, not least because she was more sensitive to her daughter's distress than someone who was new to her daughter's needs and forms of communication. She was denied that access and told effectively that she would be in the way; that the treatment was medical and would be carried out in a way that would not require her presence. The mother put a tissue in the wheelchair behind her daughter's back and one under her arm. Her daughter came back from an hour's "physiotherapy", and the two tissues were still there. That, of course, is an allegation and there may be a problem with a particular home. Indeed, extensive inquiries are being conducted into the home.

However, it is important that we do not focus on one home and say that it failed this young girl and did not respect her mother or family and friends. I submitted an extensive dossier to the Department of Health in October 2001 on that and related cases. In all of them the role of family and friends was marginalised, and patients were denied a voice. For example, if a family visiting a patient in room A went into room B to find out how another patient was doing and ask how their family were coping with the stress and pain of someone they loved being in such a sad state, they were told that they were a source of infection and were not allowed in room B. Fraternising between relatives was discouraged.

I understand that it is extremely difficult for the carers of people in a dreadful state to cope with the distress of the family. Some people do not have families to represent them; the only person who visits them may be someone who serendipitously calls into their room on their way to visit a relative or friend. However, unless there is a regime that integrates into their care those who have love and concern for them, patients' quality of life is even further reduced and family and friends are denied the capacity to endure the pain of the patient's suffering constructively.

This issue arose in the House yesterday and the Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), spoke eloquently on the matter. People have made representations to her about the over-medicalisation of thinking about people's needs. We must allow those with brain injuries to be given an effective voice, and allow those who take on that role to contribute to their care. It should be absolutely clear that to marginalise that voice and prevent people from receiving visits is a major infringement of human rights.

When it comes to the crunch, looking after those with severe brain injuries is not like "Footballers' Wives"—I have to confess that I have followed that programme rather avidly. The football manager in that programme who was in intensive care had someone looking after him all the time. In reality, one does not expect such levels of care to be available. People who have severe brain injuries have problems, such as the fact that they are incontinent of faeces, which makes caring for them extremely difficult. It does not come over on television, but patients can suffer grave indignity in a situation that may generate infection unless there are people around who can act as their eyes and ears and attend properly to them, which is something that family and friends often do. They must be able to say that they believe that someone is in distress, and there must be someone to pay attention to that instead of telling them, "It's not your business. You shouldn't have been there anyway. We're the professionals and we know best."

We must find a way of factoring in a role for family and friends, and extend it so that the family can care for their relative at home if they have visited them in a nursing home for some time and believe that they could be better looked after, loved and more constantly attended to there. It is right that we do everything that we can to extend to those people the Government's current policies on looking after people at home.

Brain injury victims are not just patients. Most of the families have some form of communication with them, and a sense of whether or not they are comfortable, and whether they are at peace or in distress. The expertise of family and friends and their potential for caring are the most important considerations of the debate. It might mean that someone dies when they might otherwise have lived. I do not know, but I would prefer to die having been loved than to live a long time in a state of distress.

Like the hon. Member for Hemel Hempstead (Mr. McWalter), I have long taken an interest in the subject of brain injury. I am a founder member of the all-party group on brain injury; the hon. Member for Colchester (Bob Russell), who secured the debate, is now chairman of that group, on which I congratulate him. I am also co-chairman of the all-party group on disability. Most significantly, I might be alone among those contributing to today's debate in having had the misfortune to suffer a serious head injury, from which, fortunately, I made a good recovery. I will go into the reasons for that later. My interest in the subject is therefore profound and of long standing.

I intend to highlight three of the key issues that we should address in the short time available to us today, and I hope that the Government will take them up. Before I do so, it might be worth emphasising some of the background information without, I hope, replicating what has already been said. I can do no better than to quote from the Health Committee's 2001 report, to which hon. Members have referred. The report states:

"Head injury is the foremost cause of death and disability in young people. In an age of increased motorisation and violence, head injury is a healthcare problem which is not going to go away. There is a growing population of head-injured people in this country, as improved medical techniques have led to many head-injured people now surviving their accident and living into old age, with a normal life expectancy."

That observation raises several points, the first of which is that head injury is a significant and growing problem, especially among some sections of the population such as young men, who are more at risk from head injury than any other group.

The second point is that the problem is under-recognised. Head injury is not the most glamorous of issues. Headway does a fine and important job, but it is not a charity that springs to the minds of those who are not interested in the subject when they list the charities that they know best. That may be because the wider population does not find some of the images associated with head injury comfortable. It is not a glamorous or sexy subject for many people until they come up against it because they, a member of their family, or someone they know happens to suffer head injury, and they are forced to deal with the realities associated with it.

The third point made by the Health Committee is that the problem is becoming more serious because of the impact on the need for ongoing rehabilitative provision of people living longer. In the past, a significant proportion of people suffering major head injuries might not have survived the initial trauma, but that is no longer the case and effective treatment at the traumatic stage often confers a normal life expectancy.

It is important to set out the terms of the debate and to clarify for those less familiar with the subject how brain injuries are classified. Brain injuries are usually divided into three categories—mild, moderate or severe—and the ongoing effects of the injury are often a result of the speed at which treatment is provided. If people receive the good-quality medical treatment that they need quickly, leaving them unconscious for a shorter time, they are likely to make a better recovery. If the loss of consciousness and responsiveness continues much longer, it is more likely to result in long-term effects.

What are the effects of head injury? They are many and varied—and can be invisible. Many of the impacts cannot be recognised at first sight. They include short-term memory loss, concentration and sensory problems such as loss of taste and smell, lack of motivation, inappropriate behaviour, dramatic mood swings, changes in personality, emotional instability, problems with comprehension, loss of organisational and planning skills as well as physical problems such as lack of balance and co-ordination. Many of those symptoms would not necessarily be apparent on meeting a head-injured person. They are not always apparent even to carers or colleagues at work—certainly not employers—if head-injured patients return to their old jobs.

Suffering from several conditions but showing no obvious physical sign of injury poses massive difficulties to the person concerned. The invisibility of their disabilities often prevents them from gaining the consideration or treatment that they warrant and deserve.

rose—

I am happy to give way to the hon. Gentleman, but I cannot hope to match his comprehensive knowledge of popular culture, so I hope that he will not challenge me on that.

Does the hon. Gentleman agree that the people who know the injured best are the family, and that giving the family's representations more credence might go some way towards dealing with the problem?

Yes, the hon. Gentleman is absolutely right and I intend to amplify that point. The family often has to pick up the pieces, and it is vital to ensure that family members are well informed and able to anticipate what they will have to deal with. I am grateful to the hon. Gentleman for his informed and heartfelt contribution to the debate.

Let me summarise three main points. First, the Government must recognise head injury or brain injury—the subject of today's debate, which amounts to the more traumatic effects of head injury resulting from a blow or knock to the head—as a distinct condition. We have already mentioned car accidents and other injuries, and I suffered head injuries as a result of a motor vehicle accident, but, if you will allow me an aside, Mr. Benton, I well remember meeting in hospital a postman who had suffered a similar injury, but with much worse effects, from slipping on the ice and banging his head on the pavement. The risks of head injury are many and varied and the extent of the resulting damage does not necessarily reflect the drama of the incident that caused the injury. I hope that the chap involved in that accident made a good recovery, but the journey for him and his family was long and difficult.

Recognition of brain injury as a distinct condition means applying the appropriate services. In that respect, it is important to highlight an earlier point: the sooner someone is treated appropriately, the better is their chance of recovery. There is a useful comment on precisely that subject in the Health Committee's report, which states:

"We recommend that Health Improvement Plans and Community Care Plans have a section for planning services which will include the rehabilitative services needed by those with complex neurological conditions such as head injury. We recommend that the Government makes explicit the level at which responsibility for planning different levels of rehabilitation for head injury should be located…We recommend that the Government spells out clearly what steps it will take to improve the situation in the provision of rehabilitation services for head-injured people, and that it instigates plans for action which will come into place long before 2005."

The report is about making initial treatment speedy and appropriate, while ensuring that it is matched by the rehabilitative treatment that needs to follow—a point that the Select Committee was anxious to emphasise. Recognition of brain injury as a distinct condition is a prerequisite for ensuring that we get all our ducks in a row for both initial treatment and rehabilitation.

My second point concerns the co-ordination of services between different agencies. Addressing brain injury is often a multi-agency task. We have already heard about health services, but many other organisations such as the Department for Work and Pensions, social services, local authorities, the charitable sector, the private sector and a range of other central and local government departments have a role, particularly in the rehabilitative aspects of the problems.

Frankly, the level of communication at the moment ranges from poor to very poor. It is not good enough to say that we are getting there and making the right moves. We need to put in place some dramatic measures on exchanging information and communication between agencies, and we need to be able to give head-injured people and their families a guarantee that there will not be duplication or contradiction in the information with which they are provided and the type of treatment that they receive. Up and down the country, the picture is patchy, as I am sure the Minister knows, and those involved with head injuries will confirm that view.

My third point brings me back to the intervention by the hon. Member for Hemel Hempstead. We need to work in a more thorough way on the provision of information, and the understanding and comprehension of the problems associated with head injury. That applies first to the people affected and their carers, which is the hon. Gentleman's point. Those dealing with someone who is head injured face extraordinary challenges, not least possible changes in personality—the head-injured person may become like someone one does not know.

The wife of a head-injured man told me that her husband's memory of their life together had virtually been extinguished, although he could remember his childhood, his family and various other things. In cognitive terms, he could have passed many of the tests that might reasonably have been set for him, but his memory of their life together was almost a blank. Imagine the impact that such memory loss has on any relationship, be it between husband and wife, mother and child, or siblings. Head injury is extraordinarily dramatic for not only the person concerned, but their loved ones. If we are going to give people the support they need to help them to play their part in the recovery of the head injured, we need to let them know the issues with which they may have to deal and to cope. Greater information for carers who are immediately affected is fundamental.

The second challenge is to make information available to the wider public. At the beginning of my contribution, I said that head injury is a forgotten—one might even call it hidden—disability. We have to be much more ambitious in our plans for making the wider public aware of the problem. I know that many of those responsibilities will fall to charities and pressure groups involved in the sector. They do a very good job, and I pay tribute to Headway, which the hon. Member for Colchester mentioned. The organisation does so much good work, not only through Headway Houses in its direct caring role, but through its advocacy role of making people aware of its concerns and advancing its cause. Having said that, Headway needs help. It must work in partnership with Government if head injuries are to become the subject of general knowledge, understanding and concern.

I shall not take much more time, because other hon. Members want to contribute and I know that the Minister wants to reply paying full attention to all the points raised and, no doubt, making many new announcements of what the Government are going to do to address these pressing issues. The hon. Member for Colchester—I almost called him my hon. Friend, but I would never want to apply that description to any Liberal Democrat—mentioned the Government's response to the Health Committee report. His description was very polite, but I will be less so. I think that the Government's response so far ranges from inadequate to pitiful.

I say that not for my own or for party-political purposes, but because it is what most people involved with head injuries say. Most people involved in the sector are unhappy with the speed and quality of the Government response. There is room for improvement and I live in hope—although not expectation—that things will improve. It would be less than generous not to expect the Minister, who is diligent and responsible and takes such matters seriously, to listen to today's comments. I hope that she will respond immediately and then in a more considered way, so that we can make progress in this vital field.

Order. Before I call the next speaker, can I remind hon. Members that this debate lasts for only an hour and a half? On such an important subject, I want to ensure that the Opposition spokesman and the Minister have adequate time to reply. I do not want to impose time limits, but I remind hon. Members to keep their remarks as brief as possible. It is important that everybody has the opportunity to speak.

I shall be brief, because I want to ensure that other colleagues have a chance to contribute. I should like to address three issues on which I hope the Minister can give some answers. I come to the debate with an interest in neurology, which I have developed in this House during the past five or six years, and as the vice-chair of the all-party group on disability. I have also been prompted by constituents who suffer from brain injuries.

My first point is on data and the adequacy of the epidemiological research conducted in this country to enable the Department of Health and national health service organisations properly to understand the scale and scope of the challenge. According to the Health Committee's report, the most up-to-date data are more than 10 years old. The Minister who gave evidence to the Committee accepted that there were real difficulties with the figures, with data collection and with the diagnosis of head injuries.

The second recommendation of the Health Committee's report urged the Government to address that serious deficiency in their ability properly to put in place services that match need. Without accurate figures, how can the NHS plan services that meet the real needs of people who have suffered traumatic brain injury and subsequent disability? Back in June 2001, the BMA was prompted to suggest a system of health and injury surveillance in this country and internationally. It said that

"the systematic collection, analysis, interpretation and timely dissemination of health care data"

would play a vital part in

"the planning, implementation and evaluation of public health programmes."

I hope that the Minister can tell us whether such a surveillance system is in Ministers' minds and whether it will become a practical, working reality any time soon.

The second, and related, issue concerns the national service framework, which was announced by the Secretary of State in February 2001. The NSF is meant to address long-term medical conditions. During the Health Committee's deliberations, the then Minister for Public Health, the hon. Member for Pontefract and Castleford (Yvette Cooper), said that the NSF may be used

"to assess the data currently collected, and to look at what improvements might be made or what research might be needed."

I hope that the Minister can tell us that the early work that is being undertaken in relation to the NSF includes ensuring that the basic evidence base on which services are to be built has been properly established and is robust. There is some question about whether that is currently the case.

Subsequent to the NSF, there was the scoping study in November 2001. I acknowledge that that study, which was published on the internet, identified a need for epidemiological research and a disability needs analysis. That was more than a year ago. Will the Minister tell us whether the work has been commissioned and is in the pipeline?

The NSF is a welcome initiative, but many are concerned about it because, in a way, the current system has successes, saving seven in 10 of those who suffer brain injuries. However, it leaves them in limbo, because it does not adequately provide for their long-term care, support and rehabilitation. We save people's lives, but we do not allow them to go on and live those lives. The NSF faces the challenge of enabling people to live their lives after such a traumatic experience.

In 1996, the social services inspectorate carried out an interesting piece of work that considered the work being done in the national health service. It found that one of the major gaps in service provision was long-term rehabilitation. That remains true. Will the Minister tell us how far the Government have got in implementing the recommendations of the Health Committee and the social services inspectorate on improving services?

The last of my three points relates to specialist commissioning, which is an important part of the overall picture of the provisions of services for people with brain injuries. There are relatively few severely brain-injured people in each primary care trust area, so proper provision of rehabilitation requires co-ordination across several primary care trusts. That raises questions about the arrangements for specialist commissioning. Before Christmas, I tabled several written questions on that subject. I have had one or two answers to those questions, but several still await a reply.

I asked the Secretary of State:

"what the process and timetable is for completion of the review into commissioning specialised services;"—

which include neuroscience and neurosurgery—and

"how the views of patients will be taken into account, and when he will announce the outcome."

I was told:

"A summary of the responses will be placed in the Library in December and guidance will be issued in the new year."—[Official Report, 25 November 2002; Vol. 395, c. 144W.]

I checked with Library staff today and they confirmed that the responses to the consultation have not yet been put in the Library. Will the Minister tell us what the process is, what the timetable is, and when we will get clear announcements about how we intend to safeguard services that will need to be commissioned by a number of PCTs in the near future? Several patient organisations are concerned that there is a degree of uncertainty about the commissioning of those services.

I end by congratulating my hon. Friend the Member for Colchester (Bob Russell) on securing this important debate, which is not just about medical care, but about building in the rights, roles and concerns of carers and ensuring that we reflect the needs of patients, who should be treated first and foremost as people.

I shall be as brief as possible. I hope that hon. Members will excuse me if I am not as fluent as I can be, but I shall be chucking out parts of my speech as I go because I realise how important it is that hon. Members want to contribute to the debate.

I congratulate the hon. Member for Colchester (Bob Russell) on securing the debate and I declare an interest in that I am a member of the Select Committee on Health. I was a member of the same Committee in the last Parliament. The Committee produced a report on head injuries that contained 28 well scrutinised and practical recommendations, which would have moved brain injury care and rehabilitation into the 21st century and ensured that the type of NHS services that brain injury sufferers and their families have a right to expect were provided. Sadly, judging by the Department of Health's response to that report and by conversations that I have had with Peter McCabe, who is the chief executive of Headway, the Brain Injury Association, as well as my constituent and friend, it appears that the DOH does not yet give brain injury the focus that it deserves.

The brain is the most precious part of the human body. It consists of highly specialised tissue and is far more complex than the 21st century's supercomputers. Due to that awe-inspiring complexity, even the slightest damage can have extreme consequences. The brain can be damaged in a variety of ways, and depending on the areas damaged and the severity of the damage, it can prove to be anything from relatively harmless to fatal.

As has been said, each year about 1 million people attend hospital as a result of head injury. Having been concussed after a motorbike accident as a teenager and cared for at St. George's hospital in Tooting, I have been one of those people, although I do not wish to overplay my injuries. Many other hon. Members have talked about injuries that members of their family or they themselves have suffered. Some people might say that I have needed my head examining ever since the accident, but I got off lightly. My life could have been different, and I might not have been standing here today. Happily, I am. Sadly, many are not so lucky and are left to pick up whatever pieces they can while coping with severe, ongoing problems.

On average, every year in constituencies such as mine, between 15 and 20 people suffer a severe head injury, 23 to 30 suffer a moderate head injury, and between 375 and 450 sustain a mild injury. Most people recover and return to their normal state or something close to it, but a number of individuals and families have to live with the consequences for a long time.

Brain damage can have various causes, be they genetic, a blow to the head, a blood shortage, a blood clot or cancerous tumours. However, the most common reason, which applies in 58 per cent. of cases, is a road traffic accident, as in my case. Other categories include accidents at home and at work, sporting and recreational injuries, and assaults, which include gun crime and domestic violence. There is also the deplorable violence against children, as in shaken baby syndrome.

The more severe the injury, the worse the damage to the brain and the longer it takes to recover, which is why rehabilitation services are vital. Even a minor head injury can leave someone with dizziness, memory problems, poor concentration, tiredness or depression. The vast majority of people recover in a few weeks or months, as I did, but it is important to give people time to recover and not to expect them to cope instantly with demanding situations or to accuse them of malingering.

Thousands of brain injury victims face the difficulty of getting back to work or finding new work. In 1998, it was estimated that 60 per cent. of people with brain injuries had failed to find work after discharge from hospital. It is estimated that nine out of 10 people with brain injuries suffer psychological difficulties. Three quarters have some intellectual impairment, and 44 per cent. have lasting pain and headaches. The cost to the taxpayer is estimated to be £266 million a year, and in cases of severe and lasting difficulty, the cost will mount to many times that in coming years. Emotional and behavioural problems are the most difficult for individuals and their families to cope with.

The Government announced in early 2001 that they would develop a national service framework for long-term medical conditions with a neurological focus, including brain and spinal injury. They later announced, in June 2002, that brain injury would have its own chapter. The NSF is due to be published in 2004 for implementation in 2005. I welcome the Government's intention to set up national standards for long-term conditions such as brain injury. As a Member of Parliament, I am acutely aware of the length of time that it takes to produce NSFs. The recent one on diabetes is a prime example, causing frustration to interest groups and disappointment when it was eventually published.

I am sure that the hope of the groups and individuals who are concerned about brain injury is that, with the NSF in place, there should be an improvement in the quality of services for people surviving a brain injury and in the support offered to their carers. If that is not the case, I hope that the Commission for Health Improvement will enforce the standards set out in the NSF. The net result would be that sufferers and their supporters knew more about the models that the local health and social care providers should follow and the standards that they should achieve. They would have a new reassurance.

I am concerned that the planning process to establish any health or social care services must be based on robust data to ensure that decisions regarding the shape of the service, the likely level of demand, staff training needs, capital investment and all other relevant factors are based on reality, not impression. The epidemiological data that describe the number of people who have sustained a traumatic brain injury, often quoted by the Department of Health, are based on research work carried out in 1991 by McMillan and Greenwood.

Last October, with Peter McCabe of Headway, I met the Minister of State, Department of Health, my hon. Friend the Member for Redditch (Jacqui Smith), to discuss the Government's response to the Health Committee inquiry into rehabilitation services following a head injury. I draw the Minister's attention to the Select Committee's second recommendation:

"We recommend that the DoH finds ways of improving the methods of data collection on incidence, prevalence and severity of head injury and subsequent disability, as a matter of urgency."

If the Government are still using that data, will the Minister indicate whether they will look favourably on bids for funding for such research?

When considering research proposals, it is necessary to learn the lessons of the Warwick study, which was commissioned by the Department of Health to examine the effectiveness of rehabilitation and used as a basis of good practice to the NHS. When the Department of Health gave evidence to the Health Committee, it accepted that there were problems with the Warwick study and undertook that if another were created, it would be designed differently. That is welcome, as the Warwick study was used as evidence that rehabilitation does not work, and I hope that the Minister agrees that any future research needs to collect data in a systematic way that is consistent and reliable and allows comparison.

I understand that if we are brief and confine our remarks to three minutes, all Members will be able to take part in the debate, so I will rattle through my speech.

I want first to congratulate the hon. Member for Colchester (Bob Russell) on securing the debate. He is a first-class officer of our all-party group on brain injury, and today's debate emphasises that. I want also to pay tribute to the Headway group in Bristol and Mrs. Rita Rees in particular for their pioneering work, which began many years ago and continues still.

I want to draw attention in a slightly different way to an aspect of today's subject: the clear requirement for more research, which has already been partially covered in the remarks of the hon. Member for Sutton and Cheam (Mr. Burstow). The excellent Health Committee report of 2001, which has been much mentioned in the debate. drew attention to that in two of its recommendations. That is not self-praise, as although I am now a member of the Committee, I was not on it when it produced the report, unlike my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh).

The Committee's recommendation ii asked the Department of Health as a matter of urgency to find new ways of improving methods of data collection on the incidence, prevalence and severity of head injury. The Committee wanted that information to be more readily available, mostly in the context of better treatment planning, and that, I think, is what the hon. Member for Sutton and Cheam was emphasising. However, the epidemiology of traumatic head injury is important too, and there is an underlying need for better information to be more readily available.

It has already been pointed out that much of the information that is currently used is up to 10 years old and based on research done for the Department in 1991. I know that in their response to the Health Committee report the Government have accepted that there are problems with the data, but I am not aware that much has been done to improve the situation, as a few Members have pointed out.

In the context of epidemiology, it is important that brain injury can be easily and robustly identified, particularly following traumatic situations such as car accidents when brain injury may go unnoticed and undiagnosed because of other multiple physical injuries. That can result in patients being placed inappropriately, for example, on orthopaedic wards where staff may have little training in the management of brain injury. I look forward to the Minister telling us whether her Department is, somewhat belatedly, about to put the matter right by commissioning more research in that area.

The Health Committee's other proposal to which I want to draw attention is its recommendation xi, which states:

"We recommend that the DoH allocates more of the R&D budget to research into traumatic brain injury rehabilitation".

It was correct then and it remains correct.

I want to make two related points. First, as an ex-medical scientist, I know how difficult it is to interest not only most scientists but research funders, never mind media people, in areas where there will not be major breakthroughs. Everyone likes to be associated with research that is looking for the magic bullet, an anti-cancer drug, a new anti-viral agent or a wonder drug to stop tissue rejection. It is much harder to fund research into the small advances that make life better for people with degenerative diseases and improve the rehabilitation process following trauma.

Secondly, on the importance of steady, small improvements in treatments, I want to urge the National Institute for Clinical Excellence and those who influence its programme of projects to ensure that it carries out more assessments of whole treatments. I am an unashamed admirer of NICE and possibly its best supporter in the House, but I sometimes feel that it is pressurised into spending too much time on new technologies and wonder drugs when it should be looking at more mundane treatments that could bring benefits to many somewhat neglected patients.

I am grateful for having had the chance to contribute to this important debate and look forward to hearing the Minister commit the Government to an adequate level of research in this area, both epidemiological and pathological.

May I use my three minutes to pay tribute to the work of the Royal hospital for neuro-disability in my constituency which, among other things, has set up the first brain injury rehabilitation unit for those in a vegetative state, the first unit for cognitive retraining of brain-injured people with cognitive impairment and the first unit for those with a combination of physical and behavioural disorders? During the past months it has placed great emphasis on research and education in the setting up of the new institute of complex neural disability led by Dr. Keith Andrews. He is my mentor and gave evidence to the Health Committee. That institute will enable many brain-injured people, and their families, professionals and carers, to gain access to up-to-date information.

I want to draw the Chamber's attention to the excellent documentary "Coma: Locked In", on BBC2 on 17 December, which followed the treatment of Joanne Douglas from Ayrshire who came down to the Royal hospital for rehabilitation. Joanne's mother, Jeanette Douglas, said after the programme:

"Joanne is much better now. I'd really like the programme to give hope to people who find themselves in that situation. It's important to know that there are other people with similar experiences and to know that there is somewhere to go for help. I want other people to know the Royal Hospital for Neuro-disability is there."

During my last minute, I want to make five quick points about the Royal hospital and my knowledge of its work. First, the hospital is not part of the NHS but is a national charity. Any extension of its work, including the units that I described and the institute, must be financed by donations. I was pleased that the Minister of State, Department of Health, my hon. Friend the Member for Redditch (Jacqui Smith), found time to visit the hospital in September. That was the first visit by a Minister during the 100-odd years the hospital has been open. It is good news that the hospital is now on the NHS radar screen. Many of the specialist hospitals and institutions in that area are independent charities, and we must work out a way forward that enables the co-funding to take place. At the moment, with increased salaries—rightly—being paid to doctors and nurses, many of those hospitals are being squeezed.

Secondly, to pick up on a point made by the hon. Member for Sutton and Cheam (Mr. Burstow), we need to ensure better diagnosis. I draw the Minister's attention to the work being done at the Royal hospital on SMART, which stands for sensory modality assessment and rehabilitation techniques. That has been worked out over a 10-year period using the occupational therapy staff, and has led to patients' potential for recovery and interaction with their environment being greatly enhanced.

Thirdly, other Members have said that the Royal College of Surgeons report clearly shows that funds invested in neurosurgery save on long-term costs. I pay tribute to the investment that is going into the relocation of the Atkinson-Morley hospital, which will be co-located with St. George's hospital in Tooting. I would like to see more neuro-surgical centres.

Fourthly, it is very important, as Dr. Keith Andrews has said, that there should be champions in PCTs and area PCTs. Dr. Andrews is the chair of the neuro-rehabilitation sub-group of the specialist commissioning group that provides a specialist resource to all London PCTs. That group leads the way, and was suggested by the Select Committee report. There should be champions on a regional level, not simply within each PCT, because many of the most serious brain injuries are uncommon.

Fifthly, brain awareness week begins on 11 March. As many hon. Members have said, we welcome the national service framework, but there are many actions that can be taken now that would make a significant difference. I hope that the Minister will take those up, and not wait for the national service framework to be fleshed out in detail.

I shall make three quick points. I congratulate the hon. Members for Colchester (Bob Russell) and for North Cornwall (Mr. Tyler), who is currently speaking elsewhere, on securing the debate.

I have been asked to speak by Headway Dorset, which does a fantastic job in my constituency in caring for people with acquired brain injury. I am told that it is unique in receiving NHS funding for rehabilitation. That is working well, and I commend that to the Minister as a practice that could be extended elsewhere.

There is particular interest in the subject in my constituency because of the furore over our search-and-rescue helicopter moving from Portland to Lea-on-Solent, increasing its response time by 30 minutes. The move would increase the problems that may arise from cliff-top accidents and cerebral bends. Someone with cerebral bends was picked up by the helicopter this year, and the case was only dealt with when the helicopter reached the decompression unit at Poole. There is no doubt that in that case, as in many others, an extra 30 minutes would have increased the cost to the NHS considerably.

Finally, has the Department looked at some of the work done in the United States on care pathways for acquired brain injury? People there are examining not only the care pathway, but the whole pathway from incident to rehabilitation. That work is focusing on the fact that if one can decrease the time to treatment, one reduces the effects of the injury and the amount of rehabilitation that is required.

In some cases, paramedics, who in this country have to go straight to accident and emergency, are trained to monitor patients. They have a direct link to neurosurgeons and can make an assessment there and then as to whether it is better to go straight to the neurosurgeon rather than to accident and emergency. In some cases in this country, one may find that a leg is fixed while brain trauma is allowed to continue, making the whole injury much more severe. I would be grateful if the Minister could examine that work and see whether it could be extended to this country. I welcome the recommendations of the Select Committee and look forward to the Minister's response.

I have just one point. When my right hon. Friend the Secretary of State for Work and Pensions announced the pathways to work programme in November last year, I asked him whether the new specialist advisers who would be helping people on incapacity benefit into work would have specialist knowledge and training in the important area of head and brain injuries. He assured me that that would be the case.

If that is to be the case—we certainly hope so—very close working will be required between the Department of Health and the Department for Work and Pensions, as well as between the DWP and the Scottish Executive, who have responsibility for health matters in Scotland. I do not expect the Minister to reply now, but will she ensure that, on the pilot schemes, the DWP works as closely with Malcolm Chisholm and the Scottish Ministers as it does with her?

Finally, in my constituency, 39 per cent. of adults of working age, or two in five, are economically inactive. That means that they are neither in work nor looking for work. I urge the Minister to do all that she can to ensure that one of the six pilot schemes is located in Inverclyde.

In common with others, I shall attempt to gabble my way through my speech. I congratulate my hon. Friend the Member for Colchester (Bob Russell) on securing the debate. We offer him our sympathy on the loss of his daughter and our admiration for his determination to initiate the debate.

As many hon. Members have said, head injury is the foremost cause of death and disability in young people. It affects young men disproportionately. My indirect experience was to be present at a road traffic accident in which a young student from the school at which I taught was injured, and had to have rehabilitation afterwards, and at a swimming pool accident, in which someone dived into the shallow end. Obviously, that caused massive trauma for the individual and the family. Many people have made the point that family and carers need a great deal of assistance. I ask the Minister to ensure that they are able to obtain at an early stage the information that they so clearly need.

As I was doing research for the debate, it occurred to me that there are massive links between head injury and other long-term conditions. I understand that a debate tomorrow will consider long-term conditions in the round. There is a great deal of linkage between the effects that all long-term conditions have on carers and families, and the way in which the health service, social care and other agencies work together.

The numbers of people affected have been mentioned, and it has been said that working with figures that are based on projections that are 10 years out of date is not really good enough. Clearly, the Select Committee's recommendations need to be put into practice. However, I make an additional point. The hon. Member for South Holland and The Deepings (Mr. Hayes) said that head injury is not a sexy condition, unlike others such as cancer and heart attack. It is worth bearing it in mind that breast cancer affects about 39,000 people a year, whereas head injury affects 176,000 people a year—four and a half times as many—yet we seem to pay rather less attention to it.

Road traffic accidents account for nearly half of head injuries; accidents at work and at home make up 20 to 30 per cent. of cases; sports-related injuries account for 10 to 15 per cent. and violent assaults 10 per cent. I do not believe that anyone so far has mentioned the part that prevention can play. Clearly, it would be an improvement if we were to prevent the accidents from happening in the first place.

Ninety per cent. of people with head injuries suffer psychological impairment, 75 per cent. suffer intellectual impairment and 44 per cent. suffer pain and headaches. This huge problem has effectively been forgotten by most people, including me. We need better data collection. I add my voice to those of the many people who have called for the Select Committee's second recommendation to be implemented.

People who are trying to get back to work or to meet their needs through the disability living allowance should be dealt with by people who are aware of their condition. Disability living allowance staff need training to recognise the problem. As I said in the debate on autism last week, Connexions staff also need to recognise the condition when they are dealing with young people.

Acute rehabilitation services and most community rehabilitation services are run by the NHS. Specialist services for cognitive and behavioural problems tend to be in the private sector, and are too expensive for many people to access. My hon. Friend the Member for Colchester paid tribute to the charities that are working in the area, but charitable groups are struggling.

I have received information from Headway, the Disabilities Trust and Rehab UK. They all make the point that the reorganisation into PCTs and the new health care arrangements mean that the PCTs find other things on which to spend their money, partly because there are too many claims on that money. If we are not careful, that money will not end up where we think it should. Given the numbers that we discussed earlier, it is important that people receive proper rehabilitation.

In the extensive briefing that I received from Headway, for which I am grateful, the point is made that a life worth saving must be a life worth living. I do not know whether Headway is the first to express the point in that way, but it is important. Rehabilitation frees up acute beds, gives people a greater chance of returning to work and reduces the cost of long-term care. As my hon. Friend said, Rehab UK estimates that if a person has access to the 48-week course costing £8,000 to £10,000, there will be a saving of £300,000 per person in disability benefits. We are spending money at the wrong end of the service.

According to Headway, despite the numbers of people concerned, services are woefully inadequate. The growing population of head-injured people presents society with problems that did not exist when medical treatment was not so advanced. Leonard Cheshire estimates that, after acute care in hospital, 70 per cent. of residential placements are inappropriate. As other hon. Members have said, head-injured people need specialist tertiary diagnosis. They need neuro-psychiatric diagnosis and should not be counted as mentally ill although, sadly, some of them become mentally ill as a result of their inability to access the services that they need.

The national service framework has been mentioned. That has been promised for a long time, and the scoping event held on 12 November 2001 was extensive. We expect to see the NSF published in 2004 for implementation in 2005.

I see, Mr. Benton, that I am overrunning my time. I shall conclude by saying that many valuable points have been made in the debate.

This debate may prove to have been something of a landmark in demonstrating an enhanced parliamentary focus on an area of great public importance which has not previously received adequate attention. The hon. Member for Colchester (Bob Russell) deserves our thanks for introducing the subject, as do many other contributors who have drawn on their personal experience and commitment in the area. There is an understanding that things are not as good as they should be, and an overwhelming determination to make things work better.

I shall focus on two main themes. The first of those, on what may be termed the professional level, is that the Department needs a greater understanding of what we are facing. Many important figures were given earlier in the debate, and I will add one of my own: every year, half a million children under 16 present at accident and emergency with head injuries, and that is in addition to those suffering from various potentially threatening diseases in the same medical area. It is a huge and growing problem. It is not just a matter of counting heads, but of the Department's ability to identify a condition. As was noted earlier, conditions are sometimes latent or eccentric and may reappear later, with damaging consequences for individuals and their families.

The Department should also reflect carefully on the cost-effectiveness of various treatments. Traditionally, it relied on the Warwick study, but some advisers outside the Department questioned the viability of the calculations and asked whether rehabilitation is worth while. The British Society for Rehabilitation Medicine, for example, took a different view.

American experience should also be taken into account in two main respects. First, strong evidence from American studies shows that early and intense intervention is highly cost-effective and will speed the process of healing and rehabilitation. Secondly, the Americans proved remarkably successful at getting people who have suffered traumatic brain injury back into work. It is not always possible to make people economically active, but it happens much more frequently in America than in this country. Rehab UK published statistics showing that many sufferers in this country are unable to find useful work after rehabilitation.

There is a dynamic pattern to recovery. When people have a serious accident, they may need immediate acute care to save their life. Subsequently, they need further medical care, but the position is dynamic, as new needs—social, economic and educational—develop. We must sort out the different pathways. Recommendation xvi was the most important of all those specified in the excellent Health Committee report.

The present problem is that the path towards a final outcome is strewn with barriers at every turn, and there seems to be a gaping chasm in NHS support for medical care. There is no formal responsibility or duty for vocational rehabilitation and all the follow-through provision from social and employment services. Only rarely do we see good practice; for example, in Aylesbury, where a community rehabilitation team can take people back and forth to the world outside. More typically, the pattern is of unplanned transmission, readmission or emergency therapy after a crisis incident, wasted effort and missed opportunity.

I twice visited an NHS rehabilitation centre at Northwick Park hospital and saw patients having contractures remedied, which is the medical equivalent of rework. I also noticed rehabilitation beds lying empty because the funding had been siphoned off elsewhere in the hospital, which suggests that all is not well.

The Minister should note, though without relish, that her colleagues in the Department for Work and Pensions are also at fault. When Rehab UK wrote to me on 22 November, it pointed out that the

"lack of support from statutory agencies is creating severe funding problems which are likely to impact the rehabilitation services we are able to offer".

The letter was headed "Urgent Crisis". The Minister for Work replied ahead of his counterpart in health—some consolation. He acknowledged that helping people with brain injuries made good sense not only for the individuals helped, but for the public finances in the longer term. Somewhat chillingly, however, he insisted that it had to be

"balanced against other priorities for public spending".

Securing rehabilitation is an expensive process, but it often proves much less expensive than doing nothing or continuing with the present muddled pathways to care.

The Health Committee set the tone two years ago and we now have to wait for the national service framework. We must ensure that it is not characterised by a further wait and inaction, but becomes a genuine long-term framework for change in a sector where we are all committed to securing much better provision than we have at present.

In the six minutes that remain I shall try to reply to as many hon. Members as I can. If I do not get to some points I will follow them up in writing. We have seen the Chamber at its best this afternoon. Hon. Members have brought a range of personal and constituency experience to the debate as well as some specialised knowledge from members of the Health Committee. This is a landmark occasion. It is an opportunity to raise the profile of head injury in the Department and with all our partners.

I congratulate the hon. Member for Colchester (Bob Russell) on securing the debate and on the way in which he presented it, including the extremely personal incident in his life. I should like to reassure all hon. Members that the Department has no intention of being complacent about the Health Committee's recommendations. It carried out an excellent inquiry and made a series of recommendations. All that information is being fed into the external reference group of the national service framework. Those recommendations were very important in developing the Department's work.

The hon. Gentleman and others raised the issue of support for voluntary organisations. There is a section 64 grant for Headway, which will increase its funding over the next three years by £97,000. That is evidence of the Government's commitment to try to support voluntary and charitable organisations. My hon. Friend the Member for Putney (Mr. Colman) made the important point that much of the ground-breaking work has been done in the independent and charitable sector. We have to find better ways for the NHS to incorporate that funding, not simply with grants, but with more deep-rooted partnership working.

As for joined-up responses by the Government, I can assure hon. Members that the Treasury is indeed on board. It recognises that prevention work in the longer term saves money to the NHS and to the Government. I would draw hon. Members' attention to the job retention and rehabilitation pilots that are being carried out by the Department of Health and the Department for Work and Pensions, funded by a generous £12 million from the Treasury. A further £4.7 million was agreed in August last year. There will be a series of pilots. I note the plea from my hon. Friend the Member for Greenock and Inverclyde (David Cairns) for one of those pilots to be in his area. There will be one in Glasgow, although I know that that is not in his area. It is important that we work closely with the Scottish Executive in developing those issues as they relate to both our nations.

My hon. Friend the Member for Hemel Hempstead (Mr. McWalter) presented a moving case in his constituency and emphasised the central role of users, carers and their families in developing these services. Users and carers are at the heart of the national service framework groups. They know whether the services are working well, what needs to be done and what should be done in a different way. We feed the views of patients and the carers into everything we do in the NHS. It is a key consideration.

I have met people with serious brain injuries in my constituency. It is often difficult for them and their families to adjust to the changes that have occurred. People's characters can change completely after a head injury. They will have different qualities and different ways of approaching situations. That applies just as importantly to their employment opportunities. I have met people who did one type of job before their head injury yet after it, although they still have many skills, they do a completely different kind of job.

The hon. Member for South Holland and The Deepings (Mr. Hayes) described a moving personal experience. He is right to say that head injuries have been an under-recognised problem. I hope that the debate will go some way towards increasing awareness. We are developing the NSF for long-term conditions as a whole, but with a particular focus on head injuries and neurological problems, precisely because it is recognised that services have been patchy across the country. The NSF and the NICE guideline should help to address that.

Several hon. Members raised the important issue of data. I am fully seized of that. Our data at the moment depend on accident and emergency departments and various consultants making different classifications. These are complex problems and I will certainly undertake to discuss with my colleague the Minister of State whether we can strengthen the evidence base there.

My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), in a passionate and practical speech, raised, on the Health Committee report, the importance of ensuring that we have a proper focus on the matter. The hon. Member for Sutton and Cheam (Mr. Burstow) mentioned data, the national service framework, the scoping study and trying to ensure that specialist commissioning is in place. I can reassure him that specialist commissioning will be extended for another year, so that we can ensure that the consortium of PCTs has time to develop, to maximise their special commissioning qualities. We recognise that that is important not only in this field but in others.

There are several reasons why I wish to raise this debate today. I hope that by the end of it, the Minister will be able to reassure a great number of my constituents and me that they have not been treated unfairly by the Government. Certainly, the view in Derbyshire Dales at the moment is that 5 December, the day on which the Government—[Interruption.]

Order. I am sorry to interrupt the hon. Gentleman, but will members of the public leave the Chamber quietly, please?

As I was saying, 5 December brought a bitter blow to Derbyshire Dales. On that day, the Government announced the grants that they will make to district councils to provide services such as leisure, sheltered housing, environmental services, refuse collection and many others. They announced that Derbyshire Dales district council will receive an increase, on the Government's figures, of only 3 per cent., compared with a 12.5 per cent. increase for every other district and borough council in Derbyshire. I believe that that shows that Derbyshire Dales district has been very unfairly treated. Of course, that increase was not really 3 per cent., because there was a bit of double-counting, not dissimilar to what we have come to expect from the Government.

My constituency covers approximately 90 per cent. of Derbyshire Dales district and 30 per cent. of Amber Valley borough council. The other 10 per cent. of the Derbyshire Dales area is represented by the hon. Member for High Peak (Mr. Levitt). The leader of the council, Lewis Rose, wrote to the hon. Gentleman and me, saying:

"I am sure you will appreciate that these proposals leave us in an impossible position. The amount that the Government thinks we should spend at is higher than we do spend at. The average Band D for non metropolitan Districts is 180 pounds yet we are at 140 pounds. The real increase in our Grant Settlement year to year is not the safety net of 3 per cent. but a mere 1.6 per cent … We do have many problems, which we need to tackle. Our working in partnership with High Peak Borough and our joint LSP"—

local strategic partnership

"arrangements demonstrate we have much in common and similar problems to solve, yet we are now on the back foot and they at least have a more equitable settlement.

On top of all this all Authorities face as you know wage increases of 5.6 per cent. next year with the recent settlement and the extra National Insurance payments. It is not difficult to see that without a fairer settlement this Council will be left behind in Derbyshire through no fault of its own and unable to participate fully and properly in the valuable partnerships such as the one I have already mentioned, which will bring benefit to those parts of the Dales which require all our efforts.

The Council is faced with a large increase in Council Tax (which appears to be the rationale behind the settlement to bring us up to the level of Band D elsewhere) or finding the money from increased fees and charges and balances. These last two options will only partly solve the problem, so unless you and others can bring about a change in the Settlement, we are faced with a large hike in Council Tax due to lack of proper funding in the Settlement. I am not sure why we have been singled out in Derbyshire for this treatment and we appear to fare a lot worse than many of our rural bench mark colleagues".

That is why there is a lack of understanding about why Derbyshire Dales district council has been badly treated under the settlement. During the four years when Derbyshire Dales was controlled by Labour and Liberal coalition, the council tax for band D increased by 46.7 per cent. In the three years so far of Conservative control, the council tax has increased by 14.19 per cent. That shows a council that is determined to do everything possible to keep the burden on its council tax payers to a low minimum. However, it now finds that its work over the years to keep the council tax down is undermined by one fell swoop of the Government.

The cash increase this year for Derbyshire Dales district council is £52,000, which is an increase of 1.6 per cent. rather than the 3 per cent. that the Government claim. Of that £52,000, some £19,000 must be paid to the Peak District national park—there is no discretion for the council. West Derbyshire is a beautiful constituency, and we get many visitors each year. The Peak district, which covers a large part of the Derbyshire dales, is estimated to get 20 million-plus visitors each year. It is an area of outstanding beauty, but that does not mean that it does not have problems. Indeed, that number of tourists sometimes brings problems as well.

I hope that the Minister will say that she is willing to examine the case for Derbyshire Dales district council. Unless the Government reverse their decision, we will be looking at a council tax rise for band D properties of about 23 per cent. That is art unacceptable increase, as the council leader has said. If it comes about, it will be a result not of what the district council has done but of Government policy.

Derbyshire Dales is a large rural council that borders many different constituencies and district councils. Will the Minister tell me why the people in Sudbury in Derbyshire Dales will get an increase of £1.91 while the people down the road in Foston in South Derbyshire district council get an increase of £7.07 per person? Why will the people of Matlock get an increase of £1.91 while the people in Chesterfield get an increase from Government funding of £8.71? Why will the people of Tansley get an increase of £1.91 while the people of Lea in Amber Valley borough council get an increase from the Government of £7.50 and the people in Ashover in North East Derbyshire district council get £6.78?

Will the Minister tell me why people in Bakewell in Derbyshire Dales will get an increase of £1.91 while the people in Buxton in High Peak borough council get an increase of £7.88 per head? Why will people in Ashbourne get an increase of £1.91 while the people down the road in Mayfield in East Staffordshire borough council get an increase of £5.39? Why will people in Longford get an increase of £1.91 while the people in Church Broughton, just down the road, get an increase of £7.07? Why will the people in Earl Sterndale get an increase of £1.91 while the people in King Sterndale, which is literally just down the road but in the High Peak borough council, get an increase of £7.88 per head?

All those figures are the increases that different councils in Derbyshire and neighbouring East Staffordshire will see in Government funding. However, in Derbyshire Dales, the funding increase per head is a mere £1.91. It is a huge difference, even if one looks at the Government's figures.

The actual increases this year are as follows: Amber Valley £696,000; Bolsover £492,000; Chesterfield £635,000; Erewash £648,000; High Peak £565,000; North East Derbyshire £528,000; and South Derbyshire £472,000. However, the increase for Derbyshire Dales is only £52,000, and £19,000 of that has automatically to be paid to the Peak District national park.

There has always been a great mystique about local government funding. The Government assured us that they would make it simpler but they have not done so. I await with interest the Minister's explanation of why the Government have treated the people of Derbyshire Dales so badly. The variations in the figures are dramatic. For example, the figure for every person in Matlock is £1.91; in Chesterfield it is £8.71; in Tansley it is £1.91, but in Lea, which is just a mile away in Amber Valley, it is £7.50; in Bakewell it is £1.91, but in Buxton £7.88. I do not understand it, and neither will the people of Derbyshire Dales. I hope that the Minister can explain it today.

The district council has asked for a meeting with Ministers to discuss the matter and I hope that that meeting can be arranged. If not, perhaps the Minister herself or one of her colleagues will come to Derbyshire Dales to explain why it has fared so badly in this settlement.

I congratulate the hon. Member for West Derbyshire (Mr. McLoughlin) on securing the debate, which gives us the opportunity to discuss the provisional local government settlement for Derbyshire Dales district council in the coming year.

The matter is also of considerable interest to other hon. Members' constituencies and local authorities. We are considering the comments received during consultation on the proposals that were announced in the House on 5 December. The hon. Gentleman mentioned meetings and representations; he will be aware that many local authorities came to see Ministers before the deadline for consultation, which has now ended. I assure him that all the representations that were made to the Office of the Deputy Prime Minister before the end of the consultation will be considered in detail, as he would expect.

Many local authorities, including Derbyshire Dales, have made representations on the settlement. Many hon. Members, too, have made representations to us on behalf of local authorities in their constituencies. My hon. Friend the Member for High Peak (Mr. Levitt) wrote on the issue of funding for Derbyshire Dales and the hon. Member for West Derbyshire was kind enough to refer to that in his remarks.

We will carefully consider all the comments made on the proposals before we take final decisions. We expect to be able to announce the final settlement early in February. I shall certainly make some detailed comments about what it means for Derbyshire Dales, but I think that it will help if I put the overall framework in context, as the hon. Gentleman invited me to do.

Our proposals for the funding of local government revenue expenditure provide for an overall increase in Government grant including grants for specific initiatives of £3.8 billion—an 8 per cent. increase at a time when inflation is below 3 per cent. In the light of the overall grant increase, we have also been able to set floors and ceilings, which will ensure that every authority in England receives an above-inflation grant increase, and Derbyshire Dales will certainly benefit from that guarantee.

Derbyshire Dales district council will no doubt be pleased by that, although I know from what the hon. Gentleman has said that it is not the happiest of local authorities. However, it will we hope be pleased to learn that we intend to keep the system of guaranteeing a certain level of grant for the foreseeable future. We do not believe, though, that it is appropriate to set the level of that guarantee for future years.

That is where one problem arises, and it has taken some digging to establish the position on it. The Minister has referred to a figure of 3 per cent. This morning, I spoke to the chief executive of Derbyshire Dales, who told me that its increase is 1.6 per cent. in actual terms because the cash increase is £52,000. I have mentioned the fact that money has to go straight to the Peak District national park. Why do we continue with the fallacy of giving different figures? It is either a 1.6 per cent. increase on last year's figure, which it is, or it is a 3 per cent. increase, which the Government say that it is. Floors and ceilings offer no comfort when the Government say one thing but the actual figures do something else.

I understand the hon. Gentleman's point, but he has got to look at the current formula, under which all districts receive at least a 3 per cent. increase on a like-for-like basis. He also has to take into account the transfers of responsibility that have taken place. Derbyshire Dales, for example, will receive a far higher grant from the Department for Work and Pensions for council tax and housing benefit administration, which must be included in the calculation.

I know that the details were slipped out in a parliamentary answer on Friday and I happen to have them with me. The truth is that while Derbyshire Dales got an increase in its grant from the DWP, so did every other authority in Derbyshire. We did not get a higher than average increase, so we are still in the same position as every other authority in the county. I have sat on a Government Bench in my time and was warned that the increase in the DWP grant would be thrown in as a diversionary tactic; it does not alter the figures.

Anyone who knows me knows that I would never go in for diversionary tactics. If the hon. Gentleman gives me a little time to make my case, I will deal with the exact position of Derbyshire Dales. We do not believe it appropriate to set the level of the guarantee for future years. That is because factors such as data can vary considerably each year, which makes firm decisions on the levels of the floors and ceilings very difficult.

The provisional settlement is generally good news for shire district councils. The average increase in general for those authorities is 7.6 per cent., and we have also been able to set a ceiling of 12.5 per cent. Our proposals are also good news overall for those authorities such as Derbyshire Dales with education and social services responsibilities. The county council receives a grant increase of 7.9 per cent., which is near the very top of the increases for county councils in England. I certainly hope that that settlement will bring considerable benefits to the hon. Gentleman's constituents.

If the hon. Gentleman is saying that other districts in Derbyshire have done better in the provisional settlement, he should take into account that only the two most deprived Derbyshire districts, Chesterfield and Bolsover, receive a greater formula spending share per head, with the others receiving similar or lower levels than Derbyshire Dales.

I will talk in some detail about Derbyshire Dales and how we calculated the formula there, but before I do so, I will comment briefly on the formula grant review. As the hon. Gentleman knows, we had a series of debates on the Floor of the House that reflected the wide range of views on the formula grant review. I hope that he will agree—I know that he is a fair man—that my colleagues in the Office of the Deputy Prime Minister have tried to consult all hon. Members as comprehensively as possible. It was a challenging task. We announced that we would introduce a grant distribution system for local authorities that would be fairer and more transparent, as the old standard spending assessment system was outdated. There was a widespread belief among local authorities of all political persuasions that change was needed.

In a year, the Department has held meetings of a technical group, complex discussions with local government and detailed meetings with other Departments. I assure the hon. Gentleman that we carefully considered all the responses that we received.

The result is a grant distribution system that is less complex and easier to understand. It also removes outdated and inadequate indicators. As the hon. Gentleman knows, the environmental, protective and cultural services—the EPCS block—is the main driver of resources for shire district councils such as Derbyshire Dales. There was a widespread belief that that was a main area for reform. The new system is based on a basic level of funding, with top-ups for various factors such as deprivation, high labour costs and sparsity.

The hon. Gentleman made specific points about the changes that have affected Derbyshire Dales district council. The authority has not received a greater grant increase for several main reasons. It has done fairly well on the relative need side of the equation, with an increase in formula spending share of 11.3 per cent. on a like-for-like basis. The figure was not higher for several reasons—the main one being a 2.9 per cent. fall in the population as recorded by the 2001 census, to which the leader of the local authority referred in correspondence.

The Government must rely on the best and most robust data available at the time. If the local authority has questions about the census data, I urge it and the hon. Gentleman to take up the matter with representatives of the Office for National Statistics, who I am sure will listen carefully to any representations made to them. I understand that several local authorities are considering doing so, and we will listen to anything that they have to say.

Derbyshire Dales has also been adversely affected by the removal of the overnight visitors indicator, to which the hon. Gentleman referred. I understand his point about visitors. One can make a plausible argument that visitors impose some additional costs on authorities, but spending patterns suggest that they also bring in revenue, especially through car parking. That may not be the case for every authority, but there is no evidence that overnight visitors impose a significant net burden on councils.

Derbyshire Dales has also been affected by the changes that we have made to take account of deprivation and sparsity. Some of those changes have been favourable to the local authority; others have not. We have removed certain housing indicators, and the long-term limiting illness indicator, because those measures were badly out of date and no longer held to be plausibly linked to councils' costs. I repeat that all the measures were extensively discussed and canvassed with local authorities.

As part of the general reduction of top-ups in the environmental, protective and cultural services block, and to enhance the basic amount for all authorities, we made changes to the factors affecting sparsity and deprivation. Most sparse areas, including Derbyshire Dales, have gained from the reduction in deprivation and density top-ups.

Formula spending share is only part of the equation that drives grant. We deduct from the assessed relative need the amount that authorities would receive from council tax if they charged at the same rate.

The national assumed council tax has been referred to by the hon. Gentleman and in correspondence. That is a notional figure used solely to distribute grant; it is not a target or a prediction. We have set it at broadly the same levels that councils charged in 2002–03, with a small increase for inflation. With the new formula, we have emphasised that, rather than pretending that we can say how much councils should spend or what their council tax should be, we are focusing on how we divide up grant—the real money—between them.

The hon. Gentleman asked why Derbyshire Dales had done so poorly on grant compared to the formula spending share. There are probably two main reasons. The first is the move towards greater resource equalisation. He will know that that is not a new concept; it also existed under the former system. Again, there was some concern among local authorities of all political persuasions about the way in which it had operated in the past.

In the provisional settlement, there was an increase in the EPCS block for districts of more than £1.2 billion. However, that is not real money; the extra is from an increase in the assumed council tax to a more realistic level. As a high tax-base authority—Derbyshire Dales is well above the national average and is the highest tax-base authority in Derbyshire—Derbyshire Dales' contribution to the extra council tax is relatively high.

The Minister says—I think that I have got this right—that the council should move its council tax to "a more realistic level". Is she saying that it should increase it more than every other district in Derbyshire because it has so much less money from the Government than every other district in Derbyshire?

No, that is not what I am saying at all. The level of council tax is not a matter for Ministers or even Members of Parliament; it is a matter for the local authority. I was talking about the move to greater resource equalisation and pointing out that Derbyshire Dales is a high tax-base authority. That is one of the considerations to which the new formula works.

The second reason is that we have a new system of apportioning assumed council tax levels, and hence grant, between the authorities in an area. We have used our judgment to determine the fairest allocation. In comparison with the former system, that has tended to favour shire counties in shire areas rather than the districts, although the effect on taxpayers in an area is marginal.

The changes that we have made are the result of considerable consultation with experts and those with an interest. We consulted widely and at length over the summer on a range of options for the new grant distribution system. We have tried to make the new system understandable. I do not deny that the hon. Gentleman is right to say that any system of local government finance is complex by its very nature, but we have tried to make it as transparent as possible through a system of basic entitlements and top-ups for certain factors. We have guaranteed that every local authority receives an above-inflation grant; that is unprecedented. Derbyshire county council has had a good provisional settlement, with benefits for all residents—

Order.

I am delighted to have the opportunity to raise issues that are very important not only to my constituents, but to people across east Lancashire. That is why I am particularly pleased to see my hon. Friends the Members for Rossendale and Darwen (Janet Anderson) and for Pendle (Mr. Prentice). The issues that affect people in Accrington equally affect people in Nelson, Colne and the villages and towns of Rossendale.

Those areas were the birthplace of the industrial revolution. They built their prosperity on coal, engineering and textiles, which are industries that have been in decline for about 70 years. There was a time when people could leave school. go to work in a mill or factory and confidently expect to work there for their entire lives until they retired. Round the corner from my office in Accrington, there is a factory that, at its peak, employed 8,000 people. The factory closed a long time ago and the site has now been regenerated and changed to provide offices, shops and restaurants. Even today, after many years of decline in the traditional industries, in my constituency and across east Lancashire about twice as many people as the national average work in manufacturing. About one third of people in my constituency work in manufacturing compared with a national average of about 15 per cent.

However, manufacturing is incredibly vulnerable and fragile. Hardly a day goes by without my reading in the local papers of manufacturing jobs disappearing in east Lancashire. There are a variety of reasons for that. Traditional manufacturing is typified by old-fashioned enterprises, often working in unsuitable converted Victorian cotton mills. It is often low tech, low skill and low paid. Essentially we are making a low-tech product at an uncompetitive price compared with, say, eastern Europe. Only a couple of years ago, Leoni Wiring Systems Ltd., a large company in my constituency that made wiring for the automotive industry, shipped out its operations to eastern Europe simply because the labour rate was uncompetitive. That resulted in the loss of 500 jobs.

The question is not whether we should change the economic base in east Lancashire, because it will change anyway, but how we manage the change effectively and ensure that there is an economic future for my constituents and other people in east Lancashire. There are a couple of initiatives that I want the Government to support. First, there is the Centre for Environmental Research and Technology Transfer, which I have been involved with for a while and support. In this context, it makes sense to see east Lancashire as a city, rather than as five separate boroughs with different interests. It is essentially a city with five boroughs, but it does not have a university. I am not making a case for another undergraduate institution in east Lancashire. There are already 10 excellent universities in the north-west and two of them are in Lancashire; we do not necessarily need another situated in the east of the county.

However, we want the kind of university research facility that brings with it high-tech spin offs and well paid, highly skilled jobs. That is what the CERTT initiative would provide and that is precisely the kind of thing that would give us an economic future and would provide a hook for attracting other high-tech industries. It would give an added value to our economic base. When that project seeks support from a Government Department, I hope that it receives it.

Secondly, there is the site at junction 6 of the M65, which is on the boundary between Blackburn with Darwen council and Hyndburn and which is the only one of 25 strategic sites identified by the North West Development Agency that is in east Lancashire. Early purchase of that site would provide some real employment opportunities in the east Lancashire region. It would be the focal point for the gateway employment development zone. We have already secured £7 million from the European regional development fund, and it would be helpful if the Government could give it their support. I have already said that east Lancashire was the birthplace of the industrial revolution. If it is not to be its graveyard, we need a helping hand from the Government. We want an entrepreneurial approach, and we want to work with partners in the public, private and voluntary sectors.

The big issue that I want to address this afternoon, and the largest one concerning regeneration facing my constituents and people across east Lancashire, is housing. In my constituency, the housing situation is nothing short of appalling. As someone who has been a Member of Parliament for 10 years, I am absolutely ashamed of the condition of streets in my constituency. A quarter of all properties are unfit for people to live in, which means that more than 9,000 families live in unfit accommodation. To put that in context, the English average is 7 per cent.

Half the houses in my constituency were built before the first world war. The appalling truth is that the houses in which the Accrington pals—those sacrificed on the Somme—grew up are still occupied today by many of my constituents. Somewhere between 2,500 and 3,000 houses are abandoned. People cannot sell them.

As a diversion, some of the housing prices in east Lancashire are utterly amazing. I know the Minister's constituency because when my daughter was a university student she was an elector in Hornsey and Wood Green, so I have some idea of house prices in that area. In Hyndburn and other towns across east Lancashire it is really common for houses to sell for less than £20,000. Houses go for less than £10,000, £5,000 or are given away.

Houses cannot be sold; people walk away from them because they are unsellable. That leads to other problems. One needs only one abandoned house in a terrace for the entire terrace to end up in a difficult situation in the housing market. The housing market has collapsed; we need to provide a platform in the housing market on which house prices can be built. In some neighbourhoods in Accrington a fifth of all houses are empty. That causes massive problems.

Unscrupulous landlords can buy up properties incredibly cheaply in such areas, and can house young people, or those with drink or drug problems. That creates a huge problem of antisocial behaviour. When one meets the decent people who live in those neighbourhoods, one realises that the sick joke is that the problem is funded by housing benefit. Decent people whose lives are made a misery and who cannot sell their houses are funding through their taxes the perpetrators of antisocial behaviour. We will clearly have to get a grip on that problem.

We have a multiplicity of problems: abandoned and unfit houses, houses that cannot be sold, people trapped in negative equity and antisocial behaviour. Many of my constituents are forced to live in that cycle of dereliction and despair. At the beginning of my speech, I said that it makes sense to consider east Lancashire as a whole—as a city. When one considers it as a single entity of half a million people, rather than a collection of large towns, small towns and villages, it becomes apparent that there are more than 100,000 houses in east Lancashire that are either unfit for habitation or are in disrepair. Five of the nation's 30 worst wards for housing are in east Lancashire. Accrington Central ward is in the top 1 per cent. of all wards in England in Wales.

Where do we go from here? First, let me say to my hon. Friend the Minister that I am delighted that east Lancashire has been designated one of the nine pathfinder areas. The programme offers us a real opportunity, which we shall take as best we can.

I wish to pay tribute to my noble Friend, Lord Falconer of Thoroton. In his time as a Housing Minister, he accepted my invitation to come and look at the housing crisis in east Lancashire. In my experience, he was the first Minister who fully understood the nature of the problems faced by so many of my constituents. I believe that he was the first person to point out that Ministers often attend to problems in inner cities—that is understandable and fair—and that the local authorities of cities such as London and others were getting resources from central Government to replace the housing that replaced the terraces, whereas in east Lancashire we had not even managed to replace the terraces.

There are historical reasons for that. For example, urban district councils were too small in the 1950s and 1960s to tackle the problem. I do not mean any disrespect to local authorities in east Lancashire, but the fact is that the borough councils of Rossendale, Hyndburn, Burnley, Pendle and even Blackburn with Darwen, which is a larger unitary council, are just not big enough to cope with the scale of the problem. Perhaps Ministers will bear that in mind when next there is a local government review, which is much needed for east Lancashire local authorities.

I know that my hon. Friend the Member for Rossendale and Darwen will refer to this later, but I hope that the Minister will confirm this afternoon that parts of Rossendale will be included in the pathfinder project. They were originally left out. I hope that the excellent campaign that was run by my hon. Friend and to which I gave some support has been successful.

I cannot stress enough my final point, which is that we must move quickly and symbolically. We must take action very swiftly indeed. For the people who are trapped in the terrible housing conditions that I have described, the end to the misery cannot come soon enough. People are becoming incredibly disillusioned and alienated from the political process.

I have mentioned before—I make no apology for repeating it—a lady in Accrington who I spoke to during the last general election. I asked her to vote for me, the Labour candidate. She said that she would not vote for anyone because of the slum conditions in which she had to live, through no fault of her own. She felt that she had been let down by a previous Conservative council, a Labour council, a Tory Government, a Labour Government and me. Frankly, if I lived in her house, I would not vote for me either. It is a disgrace.

We must start giving people some hope—there is so much despair. They have been told for much too long that help is on the way, but it has not come. I know that it takes time to make a difference, that it is difficult compulsorily to purchase properties, to go through the legal procedures, to determine prices and so on, but I just wanted to share with the Minister the frustration experienced by many decent people.

A widowed lady came to my advice surgery a couple of weeks ago. She has lived in a house in Accrington since the end of the second world war. She told me that the area used to be a really nice part of town and much sought after. It is now like a war zone.

People look to us to offer a helping hand. They look to me as their Member of Parliament but, more than that, they look to the Government to help them. The pathfinder initiative is very welcome, and I am sure that it will make a huge difference. It is a once-in-a-lifetime opportunity to transform the lives of thousands of my constituents and tens of thousands of people in east Lancashire. I know that we have the support of my hon. Friend the Minister and the Government in making such a transformation a reality.

I congratulate my hon. Friend the Member for Hyndburn (Mr. Pope) on securing this debate on a very important issue for east Lancashire. I thank him for all the support and assistance that he gives me. We each represent parts of Rossendale—I represent a large part of the Rossendale valley, but the Haslingden part falls within my hon. Friend's constituency—and I like to think that we work very well as a team. I am entirely at one with him on the need—should a reorganisation of local government take place—for an east Lancashire authority. As he said, we work together as an entity.

Alongside six other local authorities, Rossendale is a key member of the East Lancashire partnership. That sub-regional partnership recognises the value of joined-up thinking and working in tackling the major regeneration problems and challenges that it faces. That approach acknowledges not only that we in east Lancashire share a legacy of urban problems stemming from the historic evolution of the built form of our towns, as my hon. Friend illustrated, but that many regeneration issues transcend local boundaries and local markets. The approach also chimes with the messages that come consistently from national Government and the regional development agencies about the necessity of addressing the challenges of urban regeneration at strategic level via sub-regional delivery mechanisms. I believe that we in east Lancashire are following that guidance very closely.

My hon. Friend referred to the housing problems in east Lancashire. I shall touch on the problems in Rossendale itself. There are more than 29,000 households in Rossendale. More than half—nearly 54 per cent.—occupy properties within council tax band A. That presents particular problems of which my hon. Friend the Minister is aware. Some 11,950 properties are terraced properties, which represent about half our total stock, and the vast majority of those were built before 1919. Some 2,234 properties are classified as statutorily unfit, and the proportion of those classified as such rises to 15.1 per cent. in the Bacup area of my constituency. If there is one reason why I hope the Minister will consider formally acknowledging Rossendale as a pathfinder authority in the housing renewal project, it is the conditions in the Bacup and Stacksteads part of my constituency. The unfitness rate of pre-1919 houses is 17.7 per cent. Overall, 4,622 properties are classified as unsatisfactory by way of unfitness or being in poor repair.

I underline what my hon. Friend the Member for Hyndburn said about the housing problems we face. Friends often visit us in our constituencies and they are astonished to see how cheap our housing is, and how in some areas of east Lancashire people literally cannot give the houses away. The problem of poor stock condition can be found throughout Lancashire, but it is especially problematic in the local authorities in the east of the county—Blackburn, Burnley, Hyndburn, Pendle and Rossendale—because all contain huge swathes of pre-1919 terraced housing constructed to house workers in the cotton mills.

Some 62 per cent. of wards in Rossendale are in the worst quartile nationally for poor private sector housing. That is an important point, because if there is one thing that marks Rossendale out, it is that we have serious pockets of deprivation surrounded by areas of relative affluence. That means that, all too often in the past, we have missed out on various pots of funding.

I shall be brief because my hon. Friend the Member for Pendle (Mr. Prentice) wants to make a contribution, but I just want to tell the Minister that one reason why I think there has been a reluctance to include Rossendale as a pathfinder authority is the damning Audit Commission report that identified the council as a failing council. As a result, when my Labour colleagues took control of the council in May, they were faced with an uphill task—a very difficult challenge indeed. My colleague the leader of the council has sent a brief note to all members of the council informing them that the referral monitoring group of the Audit Commission met on Tuesday last week and decided not to recall a meeting of commissioners to consider a referral to my right hon. Friend the Deputy Prime Minister, because it believes that the new council is making progress and doing an excellent job of turning things round. On that basis, I hope that the Minister can confirm that Rossendale is to be included as a pathfinder authority.

First, I congratulate my hon. Friend the Member for Hyndburn (Mr. Pope) on securing a debate on this extremely important issue. If I may say so, I thought that he articulated his case very well. He rightly drew a distinction between the different housing problems in this country. In constituencies such as mine the problems are very high house prices and a lack of affordable accommodation; in other areas, the issues are such as he outlined. I also congratulate my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), who has championed the issue. It is good, too, to have my hon. Friend the Member for Pendle (Mr. Prentice) here.

It is right to say that regeneration in Hyndburn and Rossendale is broadly illustrative of the situation across east Lancashire. Many towns are characterised by high proportions of aged terraced housing in poor condition, to which my hon. Friend the Member for Hyndburn referred. The physical effects of the decline in traditional manufacturing industries add to that problem, resulting in some very poor-quality urban environments. I take his point about the effect when one house in a terrace is abandoned.

Although there are many facets to regeneration, I think that housing presents the single biggest issue. More than 60 per cent. of housing stock in east Lancashire was built before 1919, and at 22 per cent. of all dwellings, the overall level of unfitness is more than twice the national average. I want to be absolutely honest about the fact that we know that problem is getting worse. Available mainstream resources are insufficient to meet the identified repair costs. My hon. Friend the Member for Hyndburn was right to say that people want and deserve better. It is vital that we are committed to regenerating communities and to delivering high-quality public services. Housing is an essential element of that.

The East Lancashire partnership strategy, which was launched almost three years ago, is about to be revised and updated alongside the regional economic strategy. It sets out a vision for east Lancashire in 2020 and identifies the significant challenges for the sub-region in tackling a low-skill, low-wage economy with the attendant problems of poor health, poor housing and crime. We need to put housing issues in that overall context. The strategy envisages a new integrated rapid transport scheme along the lines of those in metropolitan passenger transport authority areas, and an expansion of cultural and sporting activity and higher education opportunities, as my hon. Friend mentioned. However, it is clear that the No. 1 priority is to tackle the acute housing problem.

In Hyndburn, neighbourhood renewal fund projects are already achieving success. For example, a scheme to provide advice to the over-75s on claiming benefits has resulted in enhanced benefits. Several things are happening in the region and sub-region that we believe will considerably help the region in the long term.

In the remaining minutes, I shall return to housing, the single biggest issue in east Lancashire. In April 2002, in response to research funded by the Housing Corporation and local authorities, the Government announced a new radical approach to combating low demand: the housing market restructuring fund. That contains various innovations, including the establishment of nine pathfinder projects across the country. My hon. Friends have referred to those projects, which are made up of local stakeholders such as Hyndburn borough council. The pathfinders operate with a sub-regional remit and are charged with developing and delivering an overarching strategy to bring the supply and the demand for housing back into balance. That is not an easy thing to do, and it requires that approach.

Nine months is a short period for action to turn around decades of under-investment in mainly private housing stock, but we are pleased that much has already been achieved in east Lancashire. A board has been established, drawn from local and regional organisations, and the pathfinder has already moved to convert the money into tangible outcomes that residents will recognise as making a difference to the housing market. A programme of interventions worth £900,000 has been agreed and designed to meet residents' concerns about crime, environment, appearance and demolition, and that will include projects in Hyndburn. We recognise that even with further contributions from the Housing Corporation and the regional development agency, that sum is insufficient for the task facing the pathfinder. That is why we look forward to the Deputy Prime Minister's announcement in the next few weeks, after which I hope all pathfinders will have a clear indication of the resources that they will receive in the next three years.

However, I have one announcement that I can make today which I hope will be of great interest to my hon. Friends. I know of the great campaigning work that my hon. Friends the Members for Rossendale and Darwen and for Hyndburn have done on the pathfinder, and I am delighted to tell the Chamber that it has been decided that Rossendale should now be included in the pathfinder project. [HON. MEMBERS: "Hear, hear"] The announcement has been brought about by a tremendous amount of campaigning and lobbying in which my hon. Friends have played an important part. Initially, the pathfinder was designed to incorporate the four local authorities of Hyndburn, Blackburn with Darwen, Burnley, and Pendle. We will issue a press notice to announce the decision at the conclusion of today's debate and write to the local authority and pathfinder today.

That is good news for the people of Rossendale, particularly those in Bacup and Stacksteads, who have suffered from the problems of low-demand housing for some time, as my hon. Friend the Member for Rossendale and Darwen mentioned. There is an opportunity to transform their neighbourhoods for the better. The Government are making that possible: the challenge is to Rossendale borough council and the east Lancashire pathfinder to deliver. I was delighted to hear the good report about the local authority that my hon. Friend delivered, and we will start negotiations immediately with the local authority and the pathfinder about the precise intervention area.

As I said at the outset, we are dealing with serious and long-term problems. Everyone would agree that there are no quick fixes. We are already providing substantial funding for regeneration and neighbourhood renewal, and we are looking for ways of doing more. Additional funding alone is far from sufficient, and it is our firm conviction that local solutions are needed to local problems. In the past, regeneration has failed because it has been a solution imposed either at local authority level, or from Westminster or Whitehall. To regenerate many of our neighbourhoods, we need regeneration to come from local people, and many people are working locally and nationally to come up with sustainable and affordable solutions.

We know that there is a great deal of urgency about getting this right, and we are absolutely committed to doing so. I congratulate my hon. Friend the Member for Hyndburn again on securing the debate and on ensuring that the issue was given the important airing that it needed.