I welcome you to the Chair, Mr. Deputy Speaker, for what I hope will be an interesting and informative debate on this important subject.

North Wales, particularly north-east Wales, is a manufacturing area. In my constituency, 28 per cent. of the work force is employed in manufacturing industry, around twice the national average. That has been so for many years, but conceals the enormous change that has taken place in manufacturing industry in Wrexham during that period. The traditional coal and steel industries have been replaced by a different sort of industry, based less on the exploitation of existing resources and more on the development of skills serving consumer markets in the United Kingdom and beyond. We are entering a period of huge change in manufacturing, one that is different in kind but similar in scale to that in the 1980s and, to a lesser extent, the 1990s. It is very important that we prepare ourselves for that challenge now.

One of Wrexham's premier companies in the past 20 years has been Hoya (Lens) UK Ltd. Its story of inward investment from Japan and servicing of UK and European markets is typical of the recovery of manufacturing in Wrexham in the past 20 years. However, last week, despite recording a profit of £1.75 million in the past year, it announced the closure of one of its two Wrexham factories and the loss of 240 jobs. It is instructive to look at that example and to learn for the future of manufacturing in Wales.

Hoya, which I have visited on many occasions, supplies spectacle lenses to opticians in the UK and Europe. It does so in small, individual packs specific to particular customers. It is a source of astonishment to me that the company judges that such a job can be done more economically in Thailand than in Wrexham, but I must accept that that is so. Having visited the company, I am well aware of the high level of investment, the high-tech equipment and the excellent staff relations that have existed in the company for many years. There is nothing more that the Wrexham work force could have done to make the company more efficient and competitive.

That is an example of the globalised economy at its most ruthless. Competitiveness is all and low labour costs, often aided by poorer working conditions abroad, pose great threats. What can we as politicians do about that? When Wrexham's traditional industries shut down in the past, both Labour and Conservative Governments have intervened. I recall a discussion with a former managing director of Hoya who praised the work of the right hon. Member for Richmond, Yorks (Mr. Hague) who, when he was Secretary of State for Wales, did a great deal to bring a second factory to Wrexham for the Hoya company.

At that time, Wrexham benefited from assisted area status and grant aid helped in bringing those businesses to Wrexham. From 1983 to today, unemployment has fallen from 20 per cent. to less than 3 per cent. Industry has also benefited from the stable macro-economic framework in Britain since 1997; one of low interest rates and low inflation. The effect of those things is often underestimated by business and taken far too much for granted.

Following a very early start to what will be a packed morning, I have just attended the all-party group on small business at which Mr. Dennis Turner, the chief economist of HSBC, gave an entertaining and informative discussion about the macro-economic situation. He greatly praised the Chancellor, and his predecessor, for setting the boundaries for that stable economic framework.

Wrexham is a victim of its own success. It no longer has assisted area status because of the strides it has taken to reduce unemployment and its success in bringing companies to the town. It pains me to say this, but a certain complacency has entered Government thinking on manufacturing. The positives, which I fully accept are in place, are not enough. We must do more.

In Wrexham, the plain fact of the matter is that multinational companies are leaving. In the past six months, Owens Corning, a US company, left to go to central Europe, resulting in the loss of 230 jobs. There have been job losses at the multinational companies of Tetrapak and Intellicoat. Now, Hoya has closed part of its operation. Manufacturing industry is choosing to go elsewhere.

I am listening to the hon. Gentleman with great interest. Is he aware that there is a similar problem in Montgomeryshire? In Llanidloes, KTH, which was a successful die-cast manufacturer, has been forced to close on account of the problems of its parent company, which is also choosing to relocate to other parts of central Europe. Does the hon. Gentleman agree that infrastructure development can help, but that it must have the support of Government?

I entirely agree with the hon. Gentleman and I intend to discuss infrastructure development.

What do we need to do to support manufacturing industry in north Wales and ensure that the present difficulties are overcome? The short answer is that the Government must do everything they can. First, we must maintain the stable economy that we have today. Low interest rates, low inflation and, above all, stability are the key things. We must not take them for granted. No business can plan for the future unless that stability, which is so hard-won, is maintained.

Secondly, we must encourage investment to increase competitiveness. As someone who ran his own small business, I remember that investing was the most difficult decision to make. The easiest cut to make is in investment, because machines do not talk back; it is much easier to get rid of a machine than to dismiss an employee, but it is a temptation that must be resisted. The best way for any company to compete in today's economy is to invest in plant and machinery and in the work force. The Government should be extremely active in offering financial incentives to invest, particularly in research and development.

Thirdly, we must make our region one that has such a high level of knowledge and skills that it would make no sense for multinational companies to forgo access to that skills base in favour of a low-tech alternative. There are examples in the area of such good practice. The optics model at St. Asaph and Bangor university shows us the way forward and we must build on it.

Fourthly, we must build a first-class infrastructure, as the hon. Member for Montgomeryshire (Lembit Öpik) said. In the past year, the Welsh Assembly Government have built half a transport link to the Wrexham industrial estate, which is, I think, the biggest industrial estate in north-east Wales and where Hoya and Owens Corning are located. However, the Welsh Assembly Government have set back completion of the project for a further five years. What kind of message does that send out to multinational companies in an intensely competitive world? The answer is that they feel that they would get better support elsewhere.

I also appeal to the Welsh Assembly Government to change their attitude to the A5-A483 road development, which is due in England but not in Wales. That crucial link to the midlands and south Wales must be improved for the benefit of the north Wales economy. The failure on the roads has been exacerbated by the UK Government's failure to establish decent rail links to Wrexham and north-east Wales. Our area is currently in desperate need of a transport policy.

We still await broadband links for smaller businesses on the Wrexham industrial estate That fundamental defect must be sorted out between the Department of Trade and Industry and the Welsh Assembly Government as a matter of urgency. Again, other areas both within the UK and beyond are competing with us and taking jobs away because we cannot offer a vital business service in the modern world.

Finally, I shall come out—if that is the right phrase—on the climate change levy. Having visited companies throughout my two years in Parliament, I know that the climate change levy is having a substantial effect on the competitiveness of UK manufacturing. I speak as a member of the Environmental Audit Committee and I hope that my environmental credentials are strong. I am in favour of an environmental tax to reduce harmful carbon emissions, but it makes no sense to limit such a tax to the United Kingdom. The upshot is that certain companies—there is one in my constituency—are considering crossing the channel, where they will not have to pay a tax and can pollute our world and our country.

Virtually every manufacturing company that I visit in Wrexham has raised the issue. They are not old-fashioned, dark satanic mills-type companies; they are highly competitive, modern, high-tech companies that consider that they have done all they can to reduce their energy bills. The current structure of the tax is not conducive to their business because it makes them less competitive. The levy has been in place for more than two years, and I should like my hon. Friend the Minister to discuss with the Treasury the institution of an immediate review of its effects. The exemption system currently operates by exempting the most polluting industries from the tax. Smaller businesses, which in the past did not take the steps that they should have done to secure exemptions, are subject to prejudice. The matter is urgent and must be examined immediately.

Does the hon. Gentleman agree that companies that invest heavily in machinery and plant are actually adversely affected by the climate change levy because they cannot turn it into a fiscally neutral tax? Other companies that perhaps employ more people and have invested less can get the money back on national insurance.

One of the unintended consequences of the operation of the levy is that it benefits service industries over and above manufacturing industries. That is one of the least satisfactory aspects of the tax, particularly when one takes into account the difficulties that manufacturing industry has had over the past few years.

Last week's Hoya decision was completely unsatisfactory. The work force, which was extremely loyal, was badly treated by the company. There was no consultation before the announcement that the jobs would go. The jobs are highly skilled and are filled by people who have worked for the same company for many years. I spoke to a constituent last Friday who had worked for the company for 10 years and had no idea whatsoever that there was any prospect of her job going.

Within the past year, the company has received the Queen's award for export—I was pleased to attend the ceremony six months ago—and the work force is deeply disappointed by the steps that the company has taken. It is about time that companies voluntarily informed their work forces of such situations and consulted properly before taking such decisions. Companies should also have the courtesy to discuss matters with agencies such as the Welsh Development Agency, which has been so supportive of them for many years through finance and advice. They need to give us the opportunity to deal with the difficulties that they may have.

If that opportunity is presented to us at the appropriate time, it is possible that things may need to be done. If we are presented with a fait accompli, nothing can be done to assist those companies. If employers will not consult voluntarily, we must impose obligations upon them to treat their work force with respect.

Will my hon. Friend also consider the terms under which grants are made to companies investing in the UK? I understand that equipment paid for by grants from the WDA is now winging its way to Thailand for Hoya to use in competition with British industry. That is an absolute disgrace, and cannot be right. [HON. MEMBERS: "Hear, hear."] I also think—this will be less agreeable to Opposition Members—that we need to revisit our attitude to Europe and the euro. The lack of clarity on the euro issue over recent months, and perhaps years, has not helped industry locally. It is ironic that one of the most successful manufacturing projects in Wales, and probably the UK, is one where we have worked most closely with our European partners.

In the constituency of my hon. Friend the Member for Alyn and Deeside (Mark Tami), Airbus employs about 400 workers, and is a hugely successful commercial venture, based on the closest co-operation between Government and an industry in the UK, and with other European Governments and businesses. As a result, we are wiping the floor with our competitors. We must tell our constituents that Europe can be a hugely successful project. It is not a matter of bent or straight bananas; it is about jobs. Whether people and their families have a decent standard of living depends on industries being able to compete. We exist in a world of intense competition. The ability to compete depends on the Government having a clear sense of direction so that industries know where they stand and can make firm, long-term investment decisions.

We must ask ourselves whether those industries want Britain to be at the heart of Europe or on the outside. We all know the honest answer to that question. I hope that, now, there will be a clearer commitment to using closer European economic links as a bulwark against the destructive forces of globalisation.

Wrexham suffered a huge setback during the past 10 days with the announcement of the Hoya job losses, but it has in the past shown great resilience and an ability to recover. It did so when its coal industry and steel industry closed down in the 1980s. At that time, it was difficult to see that the way forward was an era of inward investment and assembly jobs imported from abroad. That policy was successfully followed for several years, but the era of inward investment, particularly in a world where the economy is not strong, is coming to a close.

In north Wales, we need to begin to build, on the Airbus model, a modern, high-tech, visionary economy for manufacturing, which builds its own research base, develops skills locally and makes north Wales a place with which no other part of the world can compete. That is the only way in which north Wales will have a long-term future in manufacturing in a globalised economy. It is a huge challenge for the area, analogous to the one faced in the 1980s. I have confidence that local industry, working more closely with universities, colleges and the resilient work force in the area, can develop the type of economy and industry that will lead to north Wales becoming again the manufacturing powerhouse that it has been in different eras in the past.

I begin by congratulating the hon. Member for Wrexham (Ian Lucas) on securing this highly significant debate. As we know, manufacturing in Wales is extremely important in comparison with manufacturing in the UK in general and the south-east of England in particular. Manufacturing provides 30 per cent. of the gross domestic product in Wales, and has a fundamental role as a generator in the Welsh economy.

I do not say this in a partisan way, but I am rather disappointed that so few representatives of the north Wales group of Labour MPs are here. That is unfortunate. Members on both sides will recognise and welcome the recent fall in unemployment, and I give credit for that where it is due. In my constituency and neighbouring ones—such as Conwy and Ynys Môn–there is a stubborn rump of long-term unemployment, but there has been a welcome fall, to which I shall refer later.

We appear to have a tale of two manufacturing economies in north Wales. Manufacturing in the east is doing rather well; on the whole, I accept the points that the hon. Member for Wrexham made about Hoya. The A380 super jumbo jet has had its wings built in the constituency of the hon. Member for Alyn and Deeside (Mark Tami), at the biggest manufacturing facility to open in Britain during the past 10 years. That will bring 1,700 new jobs, 1,200 of them at Broughton where a £350 million plant is being opened. That is all well and good, and I welcome it tremendously. However, I am less happy that there is so little trickle-down to my constituency in north-west Wales. People travel the length of north Wales to take up jobs in facilities such as Broughton, but the trickle-down is generally fairly small.

Historically, north-west Wales has done less well than the north-east, and the reasons are well known; the historical reliance on primary extraction, the decline in the slate industry, the high levels of service industry employment and the high levels of economic inactivity, especially among older workers. Hon. Members who attended the recent Welsh Grand Committee were dismayed at the figures revealed there, which showed that the lowering of economic inactivity in the areas outside objective 1 areas is four times higher than inside objective 1. Clearly, objective 1 is not working in that regard.

In the north-west, we have higher levels of self-employment and a very fragile local economy, with low availability of venture capital. Reports in the past year have shown that 2 per cent. of new venture capital is invested in Wales. I have no idea how much of that makes its way to my constituency, but I think that it is probably a very small amount.

I referred earlier to the fall in unemployment, but is that figure masked by out-migration? We know that out-migration, a natural process, happens. People from my constituency move, perhaps to Cardiff, London and other metropolitan centres. My gut feeling is that out-migration from my area is greater than that from other areas. Is that taken into account when measuring unemployment, and in economic planning?

Before I go further, I shall refer to objective 1 plans and the current wisdom, which says that, at the accession of the new states to the European Union, there will be a lowering of the average gross domestic product. That will make it very difficult, if not impossible, for Wales to qualify for objective 1 in the next round. My hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price) has informed me that—on current forecasts of GDP in the Wales objective 1 area— when the new accession countries come in, our level will be only 78 per cent. of the European average. Despite all the investment and efforts that have been made, we will only be marginally above the level at which we would qualify for objective 1, even with all the supposedly poorer countries coming into the European Union. There are probably areas in the accession states that are much better off than north-west Wales and, perhaps, north Wales as a whole. They are certainly much more prosperous than the objective 1 area in Wales.

In limited terms, objective 1 has been a success. For example, Gwynedd county council's scheme to encourage employment in small businesses has been a runaway success and is oversubscribed many times. It is important that we understand why that scheme has been a success. The crucial factors are a minimum of red tape—there is a very simple one-page application form—a minimum of fuss, quick decisions and a maximum fit to the needs of the local economy, which has a high level of self-employment. Clearly, the scheme fits with the requirements of businesses.

On Friday, I met Professor Jones-Evans at the University of Wales in Bangor. He told me about the new £10 million business education centre, which is targeted specifically at the needs of developing local business capacity and working with the North East Wales Institute of Higher Education in Wrexham. I hope that there will be greater co-operation between those two institutions in the future, perhaps in establishing a north Wales university.

The crucial point about the business centre is that it targets its education services at the local business community and sells those services to students from abroad in a very innovative way. It reminds me to some extent of the situation in Galway in the west of Ireland, which also supposedly has a marginal economy and where another main language is spoken. Galway is doing rather well. I understand that the reason it is doing rather well is that there has been a great deal of investment in road, rail and air links. It is unfortunate that the hon. Member for Ynys Mon (Albert Owen) is not here, because I am sure that he would have intervened on me and pointed out the real need for an air link for north-west Wales, possibly from Valley. Of course, we have an airport in Caernarfon that is modest in size, but road, rail and air links are important, as they have been in Galway.

Investment in the higher education sector has also been very important to Galway. It has a very good university and a large media sector. The circumstances in the Caernarfon and Bangor area are similar.Galway also relies on endogenous growth, to use the Chancellor's favourite term, whic is growth from the inside. People from outside have invested, but the reliance on endogenous growth has been a key factor. We heard from the hon. Member for Wrexham the sad tale of Hoya's investment.

I shall now concentrate on manufacturing and ask the Minister to elaborate on some of the issues arising from a reply of the Secretary of State for Wales on 1 May. If the Minister finds it difficult to reply this morning, I should be grateful for a written response. I wish to ask first about research and development tax credits, which are a central plank of the Government's policy. How many manufacturing firms in north Wales are taking advantage of those tax credits? If the figures are not clear at present, will she say how many firms are expected to take advantage of the research and development tax credits and what the Government are doing to minimise the red tape associated with them?

Last night, we had a very lively debate on the working families tax credit. Unfortunately, the prospects for that tax credit are rather similar to those for the research and development tax credit. There is certainly great potential benefit, but the tax credit is complicated. It is unclear how to apply for it and who should apply, and there is a great deal of red tape. There are, in effect, disincentives. I hope that the Minister will refer to the tax credits in her reply.

I should also like to ask the Minister about regional centres for manufacturing excellence, which also form a central plank of the Government's policy. I understand that, so far, they have been located in the south-east, the east midlands, the south-west, the north-east, the west midlands, the north-west, Yorkshire and Humberside; at least, that is the list that I have been given. I should be grateful if the Minister said whether any regional centres for manufacturing excellence are to be established in Wales, particularly in north and north-west Wales.

Furthermore, the Department of Trade and Industry reports that the Government's response to the review under Sir Gareth Roberts, which is aimed at ensuring a strong supply of skilled scientists and engineers, is to say that the minimum PhD stipend needs to be increased to £12,000 in 2005 and £13,000 in 2006. There will be an additional investment of £100 million by 2005–06 under that strategy, and the Government will also invest in research careers by increasing funds for PhD training, career development of post-doc researchers and, over a five-year period, establishing 1,000 new academic fellowships. Those will be crucial to the development of manufacturing industry. Again, I do not know whether the Minister has any figures for Wales, but I should be interested to know how many of those post-does are to go to Wales and how much of that money is being invested there.

Is my hon. Friend aware of the current practice in Ireland? In Ireland, lists are prepared of PhD students who qualify from Irish universities and where they reside worldwide. Large manufacturing and high-tech concerns are then approached, and asked, "Look, we have a number of PhDs available, so come and set up shop in Ireland." That has been successful. Does my hon. Friend think that we could emulate it in Wales?

My hon. Friend makes a very good point. We have as many resources spread across the world as any country of our size; in fact, being a Welsh nationalist, I would contend that we perhaps have rather more. We have the people, but we need the networks, the ability and the will to make use of those networks.

In a reply, the Secretary of State for Trade and Industry said that:

"The role of the Minister of State for Employment Relations, Industry and the Regions has been strengthened—effectively creating a Minister with responsibility for manufacturing."—[Official Report, 23 July 2003; Vol. 389, c. 948W.]

Perhaps the Minister could say what meetings and relations that Minister has with the Wales Office, and what is to be produced. How does the Minister see that developing?

To focus on a less happy development in north Wales, and north-west Wales in particular, the hon. Member for Wrexham referred to the difficulties at Hoya. Such difficulties have to some extent been replicated in the disputes at Friction Dynamex in my constituency, which is not a high-tech company; in some ways it is associated with the metal-bashing industries of the 1960s and the motor industry. To quote the recent reply from the Secretary of State for Wales:

"While some traditional manufacturers are moving to Asia and the Far East, many new jobs are being created in Wales in hi-tech sectors."—[Official Report, 1 May 2003; Vol. 404. c. 478W.]

Although the hon. Member for Wrexham referred to high-tech jobs, there is, in addition, a great danger in Friction Dynamex that some of the more traditional jobs will disappear.

I shall end with the story of the strike and lockout at Friction Dynamex, the most significant events to take place in manufacturing in my constituency for many years. I do not need to go into the history of the strike, save to say that it arose because an outside investor, using a good measure of state aid, bought a plant that was in difficulty. He then sought to squeeze what value he could out of both the physical and the human capital in a classic asset-stripping operation. He eventually provoked a strike over the terms and conditions that he imposed—longer hours, lower wages and so on—and, after eight weeks, he locked the workers out. They have now been out for two and a half years.

People who pass on the road between Caernarfon and Bangor will see them picketing, 24 hours a day, six days a week; thankfully, they rest on a Sunday. They have won their case in the industrial tribunal and have received great sympathy and much material help, not only from their local community but from others in Wales, elsewhere in the UK and throughout the world. They have done all that they can to settle the dispute. However, they are still out and there is no prospect of a settlement until November at least when the employers' appeal against the tribunal decision is heard. By then, it will be two and a half years after they were locked out after a strike that was provoked by what can only be described as a very bad employer.

I was on the Committee that considered the Employment Act 2002. I listened day after day to Ministers talking about the quick, informal settlement of disputes without recourse to tribunals or to the courts; that was the Government saying that they did not want to go down the formal route. The Friction Dynamex dispute has shown that quick settlement is a rather pious hope. It has demonstrated the calibre of the workers that Mr. Smith tried to sack—people of principle, dignity and determination—and the fact that the Government's talk of quick settlements is unrealistic. That is crucial to manufacturing industry in general, to manufacturing industry in North Wales and to the strikers at Friction Dynamex.

The hopes are pious because of the fundamentally skewed situation in industrial relations, caused by the eight-week rule, which is as significant as the Taff Vale decision many years ago. The terms of discussion between workers and employers have been skewed and workers have been very much weakened. I am not optimistic about the reply, but may I ask the Minister what plans the Government have to change the eight-week rule to ensure that the Friction Dynamex situation never happens again and that a relationship of respect and of equal power, status and worth is established between workers and employers? Lastly, I commend my early day motion 1506 to that effect to all hon. Members.

I thank my hon. Friend the Member for Wrexham (Ian Lucas) for securing the debate. As a number of colleagues have mentioned, last Friday the Prime Minister opened the new Airbus facility in Broughton, where the wings for the new A380 will be built. It will be the world's largest airliner and is receiving a large number of orders. It will certainly not be a jumbo jet, as the hon. Member for Caernarfon (Hywel Williams) has said; that is a Boeing aircraft. The design of the 747 is over 30 years old, whereas Airbus is producing the aircraft that the world's airlines want today.

The facility that the Prime Minister opened received over £1 million a day of investment at the height of its construction. It currently employs just over 5,000 people, and another 1,200 are being recruited. Another important point is that there will be 274 apprentices on site, with a further 80 starting in September. When Broughton gears up to reflect those numbers, it will be the largest manufacturing plant in Britain. Airbus is a world leader in wing technology, and we can be very proud of such a great success story. It is an example of value-added manufacturing, but the key point is that we have the intellectual property that made it all possible. My hon. Friend the Member for Wrexham talked about jobs being exported, and there is always a danger that companies will up sticks and move the work or, in some cases, the plant if one does not have the necessary intellectual property.

There is also the Filton site in Bristol. Indeed, more than 84,000 jobs in this country are directly and indirectly reliant on Airbus. In the main, they are skilled, well-paid jobs; the sort of jobs that we all want to come to Wales and the rest of Britain. However, I do not want people to think that Flintshire is just about Airbus, because we have several other important manufacturers. Corus still employs more than 500 people at Shotton, although that is obviously down from a high of almost 14,000. We also lost jobs with the end of the ZT line.

Equally, however, there was some good news at Shotton, which is rare in today's steel industry. A new company called Building Solutions has been set up to manufacture purpose-built, lower-cost housing that can be quickly put up. It is also looking to secure orders for service personnel quarters, where there are opportunities because the state of such quarters is extremely poor. There is also a need, particularly in some inner cities, for social housing that can be built quickly to house public sector workers and the nurses whom the Government are clearly recruiting. Obviously, there was not the same need under the previous Government, who did not recruit such numbers.

There are other large manufacturers beside Corus, although people may not have heard of them. There is ConvaTec, which manufactures medical products and employs more than 800 people in Flintshire. There are many others, including the Toyota engine plant, Shotton Paper, Raytheon and Faurecia, which makes products for the car industry such as seats and bumpers. In fact, there are more than 100 manufacturers at the Deeside industrial park, and, together, they employ more people than Airbus. That is a key point, because it is important that all our eggs are not in one basket. That was perhaps a problem in the past.

As a whole, Flintshire accounts for 25 per cent. of north Wales GDP. My hon. Friend the Member for Wrexham said that 28 per cent. of people in Wrexham relied on manufacturing for their employment, but the figure in Flintshire is 43 per cent. Indeed, 20,500—or more than 10 per cent.—of the 200,000 people employed in manufacturing in Wales live in Flintshire. The challenge is to keep those jobs and to build on our success, and we must learn the lessons of the past.

I mentioned the Corus plant, which still holds the record for the highest number of job losses on a single day at a single plant. In some ways, I do not want to lose that record, because I do not want anyone else to suffer such terrible losses. Unemployment was forced up to 27 per cent; one can still see the effects now, even though unemployment is at a low level thanks to the Government's policies, which are very welcome. The high street in Shotton, for example, is still suffering from what happened in the early 1980s. The area was also very dependent on the textiles industry, but that has gone altogether.

Also, in manufacturing, job losses or plant closures may happen that one cannot see coming. Corning was a classic example of that; 600 good-quality jobs were lost in the optical fibre industry. The plant was investing and gearing up, and doing all the right things, but world demand for optical fibres virtually collapsed overnight. Because of the drop in demand, there was enough optical fibre on the shelves to meet world needs for the next six years. It was unforeseen, but 600 jobs were lost. We must always be aware of the possibility, which is why it is so important to renew and build on areas where we can hope to grow.

Another danger is caused by the failure to innovate and to look to the future. Many manufacturers that are doing quite well will just carry on doing well, but the danger is always that unless they invest for the future a time will come when they will be outstripped by their competitors or find that their products are no longer required.

We need to invest in industry, but as my hon. Friend the Member for Wrexham said, we need also to invest in people. In that respect, we—Britain as a whole, but especially Wales—always let ourselves down. Airbus has 274 apprentices at the moment, with another 80 coming on stream. The company can be proud of the fact that it recognises the importance of training. It costs between£25,000 and £37,000 each to train the apprentices, and the company retains more than 90 per cent. of them. The company recognises that it is investing in its apprentices, and it has to guarantee them a job so that they stay with the company.

The problem is that that commitment is not being repeated in other industries. I think that Airbus is the largest employer of apprentices in Britain; it certainly has more apprentices than the rest of Wales put together. That probably says more about the rest of Wales than it does about Airbus, because companies and employers would rather poach staff than go train their own workers. In my old life, when I worked for a trade union, people would say to me, "Why should we train staff when others are doing it? We need pay them only slightly more and we will get those workers." If everyone did that, we would have a major problem; when we see big growth in the economy or in a manufacturing sector, that is what happens.

The hon. Gentleman has hit on an important issue. Should not the Government actively intervene to create real, modern and proper apprenticeships? The hon. Gentleman is right about poaching. Economics being what it is, companies prefer to take on qualified people rather than train new staff. Does the hon. Gentleman agree that it is now time to intervene forcefully in that area?

Yes, I do. Indeed, I would support a training levy. That may have gone out of fashion, but I have become convinced over the years that employers who stay out of training are being unfair to those who do train. Those who train put a lot of work and money into it, while others just sit by. I believe that employers of a certain size should he obliged to train a number of people. We would then have a level playing field; it would be the same for everyone.

At the moment, many employers save themselves large sums of money by not training people. That is a dreadful message, because if no one trains, the time will come when we do not have enough trained employees. As the economy grows, the demand for trained people will grow, but if we do not train it will leave us with a gaping problem.

There will always be a churn effect—I do not like that phrase—in manufacturing. Clearly, if one is being churned, it is not much fun. We have to accept that factories will close for one reason or another. They may have failed to meet the new challenges, or technology may have moved on.

I congratulate my hon. Friend on securing the debate—[Interruption.] I congratulate my other hon. Friend, the hon. Member for Wrexham, on securing the debate. I apologise for being late; I was at a Wales Office ministerial team meeting. Does my hon. Friend agree that it is not just a question of training, but of transport? When training 16-year-olds and 17-year-olds, one must take into account the fact that they cannot drive. We need to look at train, bus and coach transportation, and shared car journeys, to the big factories such as Airbus in north Wales.

Yes, I agree. That is an extremely important point. I welcome the improvements that have been made to the A55, and it is a matter of working in partnership with the local authorities and the WDA to put a package together. We are fortunate in north-east Wales because of our transport links. Certain industries will always be attracted there.

Does my hon. Friend agree that public transport links in Flintshire are substantially better than those in Wrexham? That may account for the discrepancy between the figures of 43 per cent. and 28 per cent. of the work force employed in manufacturing, a discrepancy that I hope to overtake in due course.

I thought that my hon. Friend would make that point; perhaps I should not have strayed into that area. He makes a fair point. Geography has been kind to my constituency, but we have to build on that. People who work at Airbus live as far away as Anglesey, and England as well, although not as many of those who work at Airbus come from England as some hon. Members often claim. Even so, many people in Alyn and Deeside work at Ellesmere Port for Vauxhall, and in the Chester business park. That is a fact of life; there is not a wall between Wales and the north-west. If there were, we would be the loser. We rely on the north-west, and the north-west relies on us. It is an important relationship upon which we need to build.

Equally, where we have successes such as Airbus, we have to attract supplier companies around it. That makes sense for Airbus and those supplier companies. The WDA and Flintshire county council are trying to encourage people to do that, and it makes good business sense to do so.

We are well positioned in north Wales to retain and grow our manufacturing base, but we have to look to the next generation. Even at Airbus—where we can say that there should be work for 20 or 30 years, which we cannot say of many manufactures—we have to look to the next generation of wings, which will be carbon-based. We can be sure that the Germans and others will be looking for that work. We have to look to the future to ensure that we keep our lead, and the work stays with us. It is key that we work in partnership with the Government and the Assembly to secure that, so that we can ensure a bright future for manufacturing in north-east Wales.

May I correctly identify the hon. Member for Wrexham (Ian Lucas) as the hon. Member who obtained the debate, and congratulate him on introducing it? I understand the problems that he is facing in his constituency with Hoya and its decision to pull out and relocate its activity to Thailand.

All hon. Members, in some way or another, will have experienced redundancies caused by important employers in their constituency. Our sympathy goes out to those people who have lost jobs and invested much of their lives in obtaining skills to work in the industry concerned. I am sure that the hon. Member for Wrexham is doing as much as he can with the available agencies to ensure that those people have job opportunities, and perhaps the opportunity to retrain for other jobs in the area.

The hon. Member for Alyn and Deeside (Mark Tami) mentioned the churn in manufacturing industry. I believe, as does he, that that is an unfortunate metaphor, but everyone is conscious that some industries develop, evolve and become more successful, while others, because the product on which they are based is not in demand in the economy, find themselves on a downward, rather than an upward, track.

The real concern is that manufacturing in the whole UK is on a downward, not an upward, track. Jobs have been lost in manufacturing over the years, and that seems to be continuing at the moment. Before the hon. Member for Ribble Valley (Mr. Evans) gets too excited and says that I am stealing his lines, I lay the blame for some of that on the events of the 1980s, when a Conservative Administration gave the impression that Britain could exist without a manufacturing industry; they suggested that service industries were the future for Britain, while the dirty type of industry based on manufacturing was not a key to our future success.

Perhaps the hon. Gentleman is familiar with the statement made by Lord Healey at that time. He said that from listening to the Conservative Government, one might think that we could all get by by selling hamburgers to each other.

I was not aware of that particular quotation. One actually has to manufacture hamburgers, although I am not sure that that is a key issue. I am certainly aware of the strange concept then that everyone could make a living by repairing each other's cars.

The hon. Gentleman made a point about dirty manufacturing, which is still an issue today, especially for younger people. They have an image that, in manufacturing, there is smoke everywhere and oil all over the place. In fact, the vast majority of manufacturing, especially high-tech manufacturing, takes place in a clean working environment. Manufacturing has an image problem, particularly when it comes to attracting younger people to work in the industry.

I was coming to that point; when a generation of young people was put off, there was no future in manufacturing. It was not a job that the more capable and active people would aspire to enter. It has been very difficult to turn that round in a generation. People who wanted to be involved in the workplace and on the factory floor were one thing; almost more important were those who might become leaders in industry. The fact that they were given the impression that manufacturing would not be a key economic driver in this country led many people with skills and energy to enter industries other than manufacturing. I may return to that point later.

During the late 1980s and early 1990s, it seemed that foreign investors had more confidence in the manufacturing capability of this country than indigenous business leaders had. That led to considerable foreign investment. Although we welcomed that at the time, in retrospect we might look back and see that many of the activities introduced were based on assembling products rather than designing and carrying out the research that is so necessary to remain at the forefront of a competitive economy. I guess that those investors decided to come to this country because it was a base in the European Union that had low labour unit rates, so they could manufacture more competitively in this country than elsewhere in the EU. However, as the EU expands and globalisation takes over, those people are seeing opportunities to bear down on their costs again. The experiences of the hon. Member for Wrexham over the past couple of months bear that out.

The need for research and development is all the more keen when we remember that a third of all the products on shop shelves at the moment will be replaced in three years' time. Consumer fashion is a fast-moving animal and new products must be designed to respond to consumer choices. If manufacturing units have not got the necessary research and development capabilities, such things are often lost to this country.

Whether there is an economic environment conducive to manufacturing depends on the Westminster Government, and on the Assembly. If we are to have a welcoming attitude to manufacturing in Wales, it is essential that Westminster and the Assembly work well together. We have gone through a time of Government reorganisation, but I ask the Minister to ensure that she and her Department maintain a close connection with the Wales Office. Only when connections are working well will Wales, and particularly north Wales, succeed in manufacturing.

The CBI consulted its members on how politicians were regarded by industry; I am afraid that we did not come out of that very well. Leaders in industry think that politicians do not understand how commerce and competition work. The CBI suggested a number of ways in which to improve relationships with the National Assembly, including political parties signing up to a minimum of six structured visits to businesses a year by each of their Assembly Members. I am sure that that would not be a bad idea for Members of Parliament as well, particularly for those who have not been involved in industry and commerce. The CBI goes on to say that Assembly Ministers should re-introduce twice-yearly meetings between the main business organisations and the Assembly Cabinet.

Businesses find the continual consultation, as part of the political process, difficult. Not only have they got to spend a considerable amount of their resources acting as unpaid tax collectors for central Government—in terms of VAT, PAYE and, for people who are self-employed and involved in small businesses, self-assessment—but they are now required to be part of the political process by taking part in consultations all the time.

A number of the academics who take an interest in such matters are concerned that the entrepreneur is being squeezed out of the process because rather than committing all his time and energy to—and being driven by—the business that he is trying to create and maintain, he is being drawn into extensive consultation that does not deliver an awful lot for his company.

Professor Dylan Jones-Evans, who is professor of entrepreneurship at the university of Wales, Bangor, stated:

"A lot of the policies in the public sector are being strangled by the fact that you have to talk to everybody under the sun to ensure you don't offend anyone. That's not the way to run an economy. There are all these consultations going on—the Assembly consults on something every week—but you have to ask, who are they consulting? Usually it's the interest groups, who are geared up to answering. Businesses don't usually have the time to respond. It's the same crew that turns up to meetings."

We must address that problem and give young people—who will create the businesses of the future—the freedom and the opportunity to work at their businesses rather than dragging them into huge consultation exercises.

The hon. Member for Wrexham mentioned the euro and the European Union. Without getting into that huge debate, a number of economic areas in Wales would benefit greatly from a change in the exchange rate from which we have suffered for a number of years, because the rate has not reflected the relative competitiveness of a number of our industries. It is not only tourism and agriculture; manufacturing has suffered from the exchange rate.

It is key to the success of manufacturing of Wales in general and north Wales in particular that the Minister assures us that there are still strong links between central Government and the Assembly and that the Secretary of State of Wales, who is part-time, will play a key part in ensuring that that relationship continues.

I congratulate the hon. Member for Wrexham (Ian Lucas) on securing this important debate. As he said, manufacturing is proportionally more important in north Wales than it is in the rest of the United Kingdom.

The hon. Member for Alyn and Deeside (Mark Tami) mentioned the importance of the north-west to north Wales and how jobs are cross-fertilised between the two areas. People are mobile and can live in England and work in north Wales, or vice versa. Today, I learned that BAE Systems is announcing 132 job losses in Samlesbury in my constituency and a further 32 job losses in Wharton. Everybody recognises that it is not only the loss of manufacturing jobs that is important, but the ripple effect on other jobs that are dependent on them. It is estimated that three jobs in the service sector and the supply chain are lost for every job lost in manufacturing. Those job losses will hit people throughout the north-west region.

The debate has been interesting. Hon. Members have discussed the need for co-operation between the Welsh Assembly Government and central Government. We all agree on the strategic importance of manufacturing. The issue is not party political and we must decide whether we want a manufacturing base in this country; I certainly do. At the end of last week's Welsh questions, I asked the part-time Secretary of State for Wales if he would set up a taskforce to examine manufacturing in Wales. We should assemble representatives from Westminster, the Welsh Assembly, the CBI, the Institute of Directors, Welsh manufacturers and the WDA to sit round a table and come up with the answers to manufacturing's current problems.

Did the previous Conservative Government establish such a taskforce when there were massive job losses in north Wales in the 1980s, when there were 15,000 job losses at Shotton and 3,000 job losses in the pits?

This is not funny in a humorous way, but if we compare manufacturing's current position with its position then, many more people were employed in manufacturing in the 1980s, which is desirable. We have mentioned the work of my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) when he was Secretary of State for Wales to obtain inward investment. We can thank Wyn Roberts for the enormous work that he put in on the dualling of the A55. We all joked at the time that it was to enable Wyn to get home to his constituency more quickly, but the work played an important role in assisting job creation around that area. We should recognise that.

Peter Walker, when he was Secretary of State for Wales, introduced a number of initiatives with local authorities. We should recognise their importance and get them to work together. Now is the time to put aside our differences and to recognise that manufacturing is important and that there are problems in manufacturing in Wales. We should have a taskforce so that we can all work together.

Hon. Members have mentioned a number of companies in their constituencies in north Wales where there have been severe job losses. Hoya is the most recent, with 200 jobs being exported from Wales. I have a list of household names in manufacturing where there have been job losses ranging from only 10 or 20 up to 480. The hon. Member for Alyn and Deeside mentioned several hundred jobs that were lost and referred to the churn factor; I also hate that word. Global figures show that there has been a net reduction in manufacturing jobs. There will be a churn in the service and financial sectors, as there will be always be people changing jobs. We must look at the bigger picture.

Conservative Members of Parliament do not often quote Bill Morris of the TGWU, but he said:

"Every sector is affected yet our politicians say 'crisis in manufacturing, what crisis?'"

Members of Parliament should be pressing the Department of Trade and Industry to take the state of our manufacturing industry seriously and not stand by. We must look to the DTI to come up with initiatives. An early-day motion was suggested and I have tabled such a motion, recognising the importance of manufacturing. I hope that I have phrased it in such a way that all hon. Members of all parties will feel able to support it. It states that

"this House recognises the problems faced by the manufacturing industry in Wales; and urges the Government to do more to help the manufacturing sector in Wales which has lost thousands of jobs over recent years."

I hope that all hon. Members agree with that and will feel able to sign it.

The hon. Gentleman seems keen to quote trade union leaders; I recall that he quoted my own union's general secretary on manufacturing at Welsh questions. Could he tell us whether he has signed up for the whole trade union agenda?

The hon. Gentleman should not hold his breath, but it is important that trade union members recognise that there are real and severe problems. At the last general election we were told that manufacturing throughout the United Kingdom was suffering job losses. Some of us foolishly thought that when the Labour party became the Government, it would do something about that. Instead, the Government have exacerbated the problem. That is what is so staggering. In 2000, there were 205,000 manufacturing jobs in Wales. In 2001, the figure had fallen to 191,000; at the end of 2002, it was down to 179,000. The change in manufacturing output is nothing to shout about. In October 2001, there was a reduction of 3.2 per cent. from the year before. In March 2002, it was 8.3 per cent. lower than the year before and in March 2003, the figure was down 3 per cent. There is nothing to shout about there.

To quote the other side of the industrial coin, the CBI points to a number of significant problems that should be addressed. The hon. Member for Wrexham explained what we he thought we should be doing. I shall refer to Amicus again because Derek Simpson, joint general secretary of Amicus, was right when he said that if we do nothing, all manufacturing jobs in this country could be lost within five parliamentary terms. We must sit up and work out what we must do.

Will the hon. Gentleman give way?

I shall not give way to the hon. Gentleman because I have only four minutes left.

I am delighted that the hon. Member for Wrexham referred to the climate change levy and I agree that we should have a review. After two years, let us see where the climate change levy is hurting. Let us see if it is resulting in job losses and whether there is something that we can do about it. Let us see what the competition is doing. It is not just Europe but the rest of the world with which we have to trade. What are other countries doing? I am not saying that we should lower our standards to those of the poorest countries, but let us at least ensure that we are not suffering from unfair competition

Does the hon. Gentleman, like me, favour a harmonised environmental tax across the European Union?

It is important that we see what impact the rest of Europe is having on us. It would be stupid if something in Britain gave an unfair advantage to the rest of Europe. [Horn. MEMBERS: "Answer the question."' We have to trade with the rest of the world as well. We cannot assume that fortress Europe can survive on its own, ignoring the rest of the world. We must consider all the rules, regulations and directives that impact on Britain, and we have to get that right, too.

We know from the CBI that the amount of extra rules, directives and red tape with which businesses have to deal is absolutely enormous. Last year, 4,642 new regulations were introduced in the United Kingdom; one every 26 minutes of the working day, and an increase of 50 per cent. on 1997. The British Chambers of Commerce estimates that the cost to business of regulation has climbed by£20 billion since then. I thought that the Government believed in deregulation.

Let us be sensible and have regulations if they are necessary, but not the insanity with which businesses have to deal. There are all sorts of regulations; packaging and waste directives, the landfill tax, the national insurance contribution increases that came through in April, business rates, the climate change levy, increases in fuel taxes—from which many businesses have suffered—and the cost to firms of administering parts of the benefits system through their payroll.

Let us consider how British manufacturing is affected and what we can do strategically to support those industries. Let us not see them as an embarrassment or something that belongs to yesteryear. Let us not be keen on increasing jobs in the service sector only, but give some support to our manufacturers, which are vitally important.

Objective 1 was mentioned earlier, and the way in which that has been administered has been hugely bureaucratic as well. The hon. Member for Caernarfon (Hywel Williams) is absolutely right that we may have received our last tranche of objective 1 money because of the new entrants to the European Union. Let us at least spend it well and ensure that it supports our industries.

I am delighted with what is happening with Airbus in Broughton but, as the hon. Member for Alyn and Deeside said, other smaller manufacturers also need support. They are vitally important.

Finally, the hon. Member for Brecon and Radnorshire (Mr. Williams) said that the Conservatives at some stage had decided that they were not interested in manufacturing. We are interested in manufacturing and wish it to flourish. I would support anything that the Government did to support manufacturing industry throughout the whole of the United Kingdom, particularly in those areas that are so reliant on a strong manufacturing sector.

I join other hon. Members in congratulating my hon. Friend the Member for Wrexham (Ian Lucas) on securing this debate on a very serious issue. All hon. Members have highlighted the significance of manufacturing for their own constituencies. Perhaps I could begin by agreeing with the hon. Member for Ribble Valley (Mr. Evans) that manufacturing is vitally important for Wales and the UK as a whole. I assure him that it is very important to this Government.

Manufacturing makes up a sixth of the economy overall. It employs more than 3.5 million people and many more in associated services; it accounts for two thirds of our exports and 80 per cent. of our research and development; it is a crucial driver of innovation and technology uptake in the wider econ omy; it is absolutely central to our future as a high-teciimology, high-value successful economy.

In the relatively limited time available, I wish to talk about what the Government are doing in partnership, if necessary, with the Assembly and with other Ministers in order to ensure that manufacturing thrives.

I am very well aware that manufacturing is going through a tough time at present. The three largest economies in the world—the United States, Japan and Germany—are suffering from recession and very slow global growth. Furthermore, competition is increasing from lower-cost producers in other countries. The reduction of tariffs and other barriers to trade, with easier global transport and communications, although important, are expediting that change. They combine to bring huge pressure on our manufacturers. Increasingly, we see labour-intensive production shifting from advanced industrial economies to lower-cost economies.

I agree with what the Minister said about the importance of manufacturing. Why has the number of people in her Department dealing with engineering and materials gone down from 25 to nine, and why only one person now deals with the trade associations?

A very important part of the Department deals with manufacturing, not least myself. I shall now continue to pursue my ministerial responsibilities.

My hon. Friend the Member for Wrexham highlighted the issue of Hoya lenses, and other hon. Members referred to particular difficulties, which I recognise. My hon. Friend spoke about the need for information and consultation. I refer him to the important announcement made yesterday by my right hon. Friend the Secretary of State about new plans for improved information and consultation provisions in the workplace. They are the result of considerable work and consultation between the TUC and the CBI, and they will promote the sort of high-quality sharing of information and consultation that is good for employees and for high-quality employers. I hope that my hon. Friend is reassured.

We should not run away with the idea that manufacturing is collapsing as a percentage of our GDP while holding up in other countries. It is an international challenge. To put things into context, manufacturing is 18 per cent. of GDP in the UK; as we heard, it is higher in Wales. It is 14 per cent. of GDP in the USA, and 19 per cent. in France. In Germany, the figure is higher, at 23 per cent., but not much. However, we have important successes.

My hon. Friend the Member for Alyn and Deeside (Mark Tami) and others rightly referred to Airbus. As my hon. Friend pointed out, the Prime Minister and the First Minister of the National Assembly for Wales were there last Friday. The wings produced by Airbus are transported from Wales to final assembly lines in Toulouse.

Will my hon. Friend give way?

Preferably not, if my hon. Friend does not press me.

I was able, on my first day in this job, to attend the Paris air show, where three major new deals for the A380 programme were struck. My hon. Friend is right that Airbus is now outstripping its major competitor, Boeing, something we can all celebrate. However, we cannot hide from the realities of the pressures that manufacturers face, nor the pressures of global restructuring.

We cannot compete on the basis of low-cost, low-value added; nor should we wish to. Our response must he to have the best companies, the best products and the best workers. That is why, shortly after taking over as Secretary of State, my right hon. Friend brought the main stakeholders together for a manufacturing summit. Trade unions, trade associations, the regional development agencies and manufacturers were able to share views on the key challenges and to focus on practical steps for dealing with them.

At the summit, it became clear that there are longstanding weaknesses in UK manufacturing—in skills, investment and innovation—many of which have been raised this morning. We must address those problems together, and there was clear agreement throughout industry on the way forward.

Our manufacturing strategy, which was published in May last year, was based on that consensus. I know that those themes are picked up in "A Winning Wales", the economic development strategy of the Welsh Assembly. Our themes were welcomed by industry and trade unions alike. Everyone agreed that the way to ensure global success was not to cut wages and compete on cost, but to invest for the future so that we could compete on quality. That is what our strategy sets out to do. However, I recognise the need to demonstrate progress and to show that we are putting those words into action.

We have made considerable progress against all seven pillars set out in the strategy, and those areas picked out in Wales. My hon. Friend the Member for Wrexham rightly highlighted the need for macro-economic stability. Due to the strong macro-economic policy framework that the Government have put into place, the UK has weathered the recent global economic slowdown better than many of its major competitors; with our low inflation, low interest rates, sound public finances and low unemployment, we are in a better position to gain from any global upturn.

My hon. Friend also mentioned the important issue of investment. Across the UK and in relation to Welsh-specific schemes, we support investment through regional selective assistance, the small firms loan guarantee scheme and regional venture capital funds. Through the Budget, we have introduced a range of measures to encourage investment. Corporation tax rates have been cut to their lowest ever; reforms to capital gains tax have substantially reduced the effective rate of tax, creating the right incentives for investment in business assets; and we have made permanent enhanced capital allowances for small and medium sized enterprises.

Several hon. Members rightly emphasised our need to compete on the basis of innovation and development. We are investing strongly in science because of its importance as a driver of new products and new processes in manufacturing. The UK science budget is increasing at 7 per cent. per annum in real terms arid, as a result of the 2002 spending review, it will increase at 10 per cent. per annum in real terms over the next three years.

We are undertaking a major review of business innovation. The Wales for Innovation strategy is also making clear the importance of innovation for improving business performance. Several hon. Members have mentioned the importance of research and development, and the research and development tax credit. We have further extended the tax credit to all companies, which will overwhelmingly benefit manufacturers. As a result, the UK is among the best in the G7 in terms of tax support for research and development as a percentage of GDP.

At the time of the Budget, 58 small and medium-sized enterprises in Wales were benefiting from the 150 per cent. tax deduction for qualifying research and development expenditure. The new improvements—in particular the reduction in the minimum expenditure threshold from£25,000 to £10,000—will also increase accessibility, especially for small companies.

We are already seeing the results in terms of support for science investment, with the number of spin-off businesses from UK universities up by 22 per cent. and the number of patents filed by higher education institutions up by 26 per cent. I hope to follow up the specific questions asked by the hon. Member for Caernarfon (Hywel Williams), but in general there is an important benefit from the investment in science and the relationship that can be built between business and those innovating in our academic institutions.

Many hon. Members have mentioned the important matter of skills. I agree that we need to invest in modern apprenticeships and, as they are doing in Wales, in a scheme covering all age groups—particularly the economically inactive—that will result in a modern skills diploma for adults, encouraging the over-25s to upskill to NVQ3 level and above. In Wales, as in the UK as a whole, competing on the basis of skills is crucial.

My hon. Friend the Member for Wrexham also mentioned infrastructure, in particular broadband. Under the heading Broadband Wales",—115 million is being spent on a broadband programme for Wales, launched by the Assembly last July and designed to improve broadband access across Wales. That is an area in which the Department of Trade and Industry plays an important role, along with the devolved Administrations. Yes, there is a regional centre for manufacturing excellence in Wales. The manufacturing advisory service—another important area of our manufacturing strategy—is also highly successful in Wales, with about 500 visits to companies made by highly qualified engineers with real experience of manufacturing.

Those are all practical steps that show the significance that the Government places on manufacturing. We have also set up a policy forum for senior policy makers, including Welsh Assembly officials, to help us to champion the needs of manufacturing with Whitehall colleagues and throughout Government. I assure hon. Members that we shall continue to take forward the work that we are doing in relation to manufacturing in partnership with colleagues in Wales, and in recognising the significance of the industry throughout the whole of the UK.

I want to speak about an issue of grave concern in my constituency and others throughout the land. Next July, the Government intend to hand over to the private sector responsibility for the management and storage of millions of files held by the Department for Work and Pensions, which contain personal and confidential data on millions of citizens. At the moment those files are kept in secure locations until they need to be worked on by local offices, when they are sent away.

Some 56 file stores are dotted around the country employing about 900 staff, who mostly earn around£12,000 a year. The file stores vary in size; the largest, in Willand, Devon, employs 140 people. The sensitive records include information on attendance allowance, disability living allowance, mobility allowance and so on.

I believe that sensitive records on citizens should be held by the state. That is a very unfashionable view in some quarters, but I would prefer my files to be the responsibility of a civil servant rather than some casual worker employed on the minimum wage by a private sector company. Other things being equal, I would prefer my records to be held by a Government Department than by, say, Virgin records. However, there is to be no in-house bid, in spite of the experience of the civil servants who run the system and make it work.

The matter is of concern in Pendle, where there is a large file store in a converted mill. The Nelson file store is the main repository for attendance allowance and DLA files. There must be about 9 million files there; it is huge, and I have never seen so many files in my life. There is an astonishing number, with shelf after shelf extending as far as the eye can see. All the files are kept in a warm, air-conditioned environment. It is quiet, like a library, with the staff going about their work in a purposeful way. The file store has more than 48 miles of shelving. The main storage area covers the same area as the pitch at Wembley stadium, which gives an idea of how big the operation is.

There are 124,000 requisitions for files every month, meaning that the turnaround is nearly 6,000 files a day, and 120 staff make the process work. Like the rest of the public sector, they have to work to targets. We insist on that. Staff turn around 90 per cent. of non-priority requests within 24 hours. They turn around 100 per cent. of such requests within 48 hours. They turn round 100 per cent. of priority fax requests within one hour of receipt, since people's money depends on the file being sent to a local office.

I have a copy of a fax that went from the disability benefits centre in Surrey to the file store in Nelson. Under the heading "Great service!" it states:

"Well done file store team! You found my file in six minutes! Great service! Are you on roller skates?"

That is what they think in Surrey about the file store in my constituency.

The hon. Member for Pendle (Mr. Prentice) will know that there is also one of those stores in my constituency, at Primrose mill in Clitheroe. I have visited it and seen its amazing array of boxes. I have talked to people there, and I have seen how quickly they are able to retrieve any information and their professionalism and commitment. I am at a loss to think how it can possibly be improved. With security and terrorism to the fore, is it not better to have the information dispersed rather than kept in very large, central stores, which could provide a threat of terrorism in the future?

The hon. Member for Ribble Valley (Mr. Evans) makes a good point. The file stores are in secure locations staffed by dedicated people who want to remain civil servants. They do not want to work for any old private sector company; they are proud of being civil servants.

Why is that being changed? We can all recite by heart the new Labour mantra, "We do what works", but there is a flip side to that coin: the mantra should be, "If it ain't broke, don't fix it". If the structure needs to be tweaked or reconfigured, I have no problem with that. People with expertise and professionalism in the Department can handle that, but they are not going to be asked to turn their attention to the matter.

Like the chair of the Labour Party, my right hon. Friend the Minister without Portfolio, I believe that we cannot modernise Government without taking public service employees with us. I have read his speech on 8 March on Labour and the unions and the new deal. He said:

"We will modernise better, if we do it in partnership with the unions drawing upon the skills, experience and commitment of public sector workers and giving them shared responsibilities for promoting quality and innovation."

Yet there will be no shared responsibility, because the whole shooting match will be transferred lock, stock and barrel, with the staff, to the private sector.

A project group was set up last June, which met the Public and Commercial Services union, the one that organises in file stores. The union was told that the preferred option was to outsource to the private sector in 2004. The Minister told me in a letter yesterday, after I had raised the issue in business questions on Thursday, that

"consideration was given to inviting a bid from the existing in-house operation but it was decided this would not be a viable option given that the fragmentation of the current service does not provide a basis for development into the new service the Department requires."

With respect to my good Friend the Minister, I find it astonishing that it is possible to go out to tender for a private sector provider without checking that against the costs and service standards of retaining the operation in house.

We are told that the predicted financial savings of going private are considerable. Last year, the cost of running document retention and retrieval at the file stores was in the order of £30 million. I am told that savings of between £10 million and £20 million are forecast, and that one of the latest estimates—the Minister will be able to elaborate on this—of the cost of a private provider is £5 million. I am also told that the private sector bidders include Hays, Hayden and TNT.

Is my hon. Friend aware that the Department for Work and Pensions has a file store at Heywood? It takes care of working families tax credit, invalid care allowance and the majority of filing for veterans, and is also part of the departmental review. Up to now, the service has been deemed to be good value for money and of high quality, factors that privatisation experiments throughout the UK have failed to deliver.

My hon. Friend the Member for Pendle (Mr. Prentice) mentioned the private company Hays, which is based in Heywood. It currently works from lorry containers that have neither heat nor light. That raises concerns about security, the damage that could be done to the documents and the private sector's ability to reach the required high standards. I also understand that the private service is more expensive. Does my hon. Friend agree that the Department must examine retaining the service in the public sector or giving civil servants an opportunity to prepare and submit an in-house bid?

Indeed, that is my view, as I hope I have made clear. My hon. Friend the Member for Heywood and Middleton (Mr. Dobbin) mentioned lorry containers where files are stored without heat and light, circumstances in which paper files can decay and rot. I have heard horror stories about the operation at Heywood, with which I need not detain hon. Members. The Minister will want to give weight to my hon. Friend's informed criticism about the private sector operation run by Hays.

There will, of course, be consequences when the work transfers to the private sector. I have already mentioned that the transferred staff will no longer be civil servants. That matters in a constituency such as mine where civil service jobs are seen as being secure. The people employed in the file store take pride in their jobs and in delivering a public service. When people are transferred to the private sector, their terms and conditions will be protected under the Transfer of Undertakings (Protection of Employment) Regulations 1981, but what will happen further down the line? The Minister cannot possibly guarantee to safeguard terms and conditions five or 10 years from now.

In the Minister's letter, he also said that staff will be redeployed where possible within the Department

"provided we have vacancies and they can be released without affecting the future operation of services."

Redeployment may be an option in some areas but not in Nelson, where there are few civil service jobs. Ominously, he went on to say:

"It is not possible to guarantee that despite these efforts, some may not be transferred against their wishes nor that their new employer may need fewer staff to undertake the work in the future."

That is the nub of the matter. The number of jobs could reduce; indeed, the number of file stores could reduce. I have seen the minutes of a meeting held on 18 June at which it was suggested that there could conceivably—not probably, but conceivably—be as few as one file store for the country, which touches on the point raised by the hon. Member for Ribble Valley. There could be one gigantic file store holding the records of everyone in the country. In any event, the minutes state that

"there would definitely be a greatly reduced number of sites."

The staffing cost of running the current operation is about £11 million, which covers 900 staff on an average salary of £12,000. If a private sector provider could do the work for £5 million, which has been suggested, the job losses could be in excess of 60 per cent. of the work force, or 550 to 600 jobs. People are clearly fearful when they hear those estimates. People are also upset that the decision to go private was taken by the permanent secretary with the "agreement of Ministers" rather than by the Secretary of State for Work and Pensions. People are mystified that such an important decision can be taken by a senior civil servant rather than by a Minister who is accountable to the House of Commons. I do not know whether the decision to transfer the estate of the former Employment Service—for example, job centres—to Land Securities Trillium without an open competition among private sector bidders was also taken by senior civil servants on the grounds that it was merely an extension of an existing contract, given that Trillium handled the old Department of Social Security estate.

There is also concern that what is happening runs directly counter to previous ministerial assurances. I have seen another letter—I do not mean to sound like Inspector Clouseau—from the Department, which is dated 23 June. It states that the

"previous commitments provided by the Benefits Agency were given in good faith and took account of the business environment of the time".

However, sadly, the Benefits Agency

"no longer exists and new services are now being delivered by new businesses as part of a much larger Department."

Well, that is all right, then. If central Government can be reconfigured, the assurances given to employees may be set aside and will count for nothing.

I conclude with several questions that I hope the Minister will address. Why do not the Government consider an in-house bid? What guarantees are there that most of the file stores will not close? How will quality of service be maintained when the stores are transferred to the private sector? For example, it is vitally important that files can be quickly retrieved and sent to offices around the country. What will happen if the private sector contractor fails, and what remedies do the Government have? What guarantees are there that the files will be as secure and as confidential as they are now? That point was made by my hon. Friend the Member for Heywood and Middleton. Finally, why was this very important decision taken by a senior civil servant and not by my hon. Friend the Minister or the Secretary of State?

I congratulate my hon. Friend the Member for Pendle (Mr. Prentice) on securing the debate. He introduced it by saying that the issue is important—although he may have used more extravagant adjectives—and I agree with that. I am grateful for this opportunity to record the reasons for the decision to seek a private sector solution to the future file storage needs of the Department for Work and Pensions, and to provide some of the reassurance that he seeks, particularly for employees who work in the service in the Department, about their value to us and their future prospects. I recognise my hon. Friend's long-standing interest in the matter and pay tribute to the way in which he has pursued it. He asked several questions to which I shall seek to reply.

Services provided by the DWP touch the lives, from birth to death, of every citizen. That is why there are so many paper files and why the records storage need is vast. New technology gives us opportunities to hold records in much more efficient ways in future, but the Department inherited 50 million paper-based files from the organisations that came together to form it and, therefore, a need to store and, if necessary, retrieve those files as efficiently and effectively as possible.

My hon. Friend referred to correspondence about changes in the way in which we deliver our services. Such changes are important. For example, because of the creation of much more customer-focused workplace environments in Jobcentre Plus offices and pensions centres, we need increasingly to hold customer records away from our operational offices to create additional space to allow us to provide services in modern and effective ways. The services that we provide to our customer base are changing as, for example, we look for opportunities to provide all those of working age with employment options.

There are some misunderstandings—I do not suggest that my hon. Friends the Members for Pendle and for Heywood and Middleton (Jim Dcbbin) and the hon. Member for Ribble Valley (Mr. Evans) misunderstand—about the current file storage and retrieval services, which are provided by a mixture of in-house and commercially managed operations. Around 30 per cent. of the provision of services to the Department is provided from commercially managed operations. They are already privatised, and they were inherited in that form.

I heard the informed criticisms of my hon. Friend the Member for Heywood and Middleton about the company in his constituency. My understanding is that the lorry containers to which he referred are a temporary and short-term solution as the process of building capacity continues. My information is that that private provision of storage and retrieval has not turned out to be more expensive, although I do not have detailed information. If my hon. Friend wishes, I am sure that I can find it for him. I am not aware of any horror stories, although I must say that I have been in the Department for only three weeks. If my hon. Friend knows of any, he should let me or my Department know so that we can investigate them.

Throughout the country, there are 50 stores, ranging from some with only a few staff to others, such as that in the constituency of my hon. Friend the Member for Pendle, where well over 100 people are employed. Those stores have grown up in response to local or regional needs, with a variety of operating practices and widely different levels of efficiency. This is n at an issue of public versus private. Some sites that we operate are very efficient, and I am happy to pay tribute to the dedication and effectiveness of our staff. By the same token, the private sector has shown that it is fully capable of managing those services and that, in particular, it can ensure that the confidentiality of sensitive records of individual customers is fully respected. My hon. Friends and hon. Members will be aware of that.

A significant amount of the core work of the DWP is provided by people operating in the private sector. It could not be otherwise because of the number of doctors who would need to be employed to carry out the medical examinations necessary to inform decisions and decision makers. Even when we are successful in moving people into the labour market, the process and necessary support is provided by the private, community or voluntary sectors, which provide services to address specific barriers to employment. My Department, in its present shape and previous manifestations, has a long history of working closely with people outwith the public sector to deliver services and to support our customer base. There is no evidence to suggest that, except in isolated cases, any of that information has leaked out or been treated other than confidentially. The Department has significant experience in dealing with people beyond the public sector, enforcing confidentiality agreements and having contractors respect those agreements. Otherwise, stories of confidentiality being breached would be legion, and they are not.

I do not accept that the only way in which services can be provided to the DWP's customer base must be through the public sector if the need to protecting people's confidentiality is important. Nor do I accept that is necessary to have a proliferation of small sites providing storage and retrieval services in order to protect against the possibility of some terrorist attack in the future. It seems perfectly possible to concentrate that work in fewer sites than we do at present and still build in protection for files from the possibility of destruction in any fashion, including the rather serious risk of a terrorist attack suggested by the hon. Member for Ribble Valley.

However, the needs of the DWP are not simply those of the aggregation of the organisations that came together in 2002. It is not just a question of taking 50 distinct providers and aggregating them. We have new objectives, new priorities and new ways of meeting them. The services that supported previous operations are not always well placed to do the same in the future. That is true of our file storage and retrieval service, as it is of much of the support that we hope to provide for our customer base. Our current arrangements are simply not capable of meeting future needs.

We have looked at alternative ways of delivering such services, and it is clear that there is a willing market available to compete to do it, and that a single operating system—not necessarily a single operating site—which uses modern systems of records management could do so more efficiently and effectively, and at greatly reduced cost. In comparison with existing costs, we estimate that we should save a significant amount of taxpayers' money over, say, the life of a 10-year contract. To cite one aspect for my hon. Friend the Member of Pendle, I can say that the savings in estates costs alone are estimated at £4 million a year. There will be other savings, but some are more difficult to calculate. For example, someone may provide storage and retrieval services on a DWP site as well as on others. We would not necessarily intend to redeploy that person out of that site, even if the stored files left.

It must be right to look at the best way of acquiring services that meet our needs, and that will provide us with value for money gains. The scope for DWP teams currently delivering the service being able to mount a bid has been fully considered. My hon. Friend was right to refer to my letter of yesterday, which I sent to inform his contribution to the debate. We expect future service to be delivered very differently, from a greatly reduced number of sites and supported by a single, proven, modern information-handling system. Creating an in-house bidding capability is simply not practical in these circumstances. However, as a matter of overall policy, the Department is committed to looking for in-house solutions and to examining the scope for in-house bids as part of any future review of support services case by case before considering bids solely from the private sector.

rose—

I will allow my hon. Friend to intervene, but it may mean that not all of his questions will be answered. They can, of course, be answered by other means.

I just wanted the Minister to expand on his point about rejecting the possibility of any in-house bids. What did the Department do to explore the option of an in-house bid? It is not enough to say that it is not practical.

The Department had significant experience of existing services and their capabilities. I will be happy to expand on that in correspondence. The Department concluded that in relation to the expectation of the modern service, it would not be possible to reconfigure in such a way as to allow existing services to compete to provide that service.

It is important to record that the Department recognises the valuable service provided by the staff who run the file stores. Where possible, we shall find them other positions, and I am determined that we must do that; those are not simply words. We already have experience of closing two file stores and moving the records to a central site, and we found alternative posts for the staff. That will be more difficult at some sites, and I do not underestimate the problems in sites such as Nelson, in my hon. Friend's constituency.

Order. Time is up.

I am pleased to have secured the debate to which I welcome the Minister and hon. Members. The choice of subject recognises that we are supposed to be in the middle of a public debate, and I am sorry to say that it has taken a Back Bencher to secure a debate on the matter in Parliament. It would have been nice if the Government had secured the debate because the subject involves their public interface.

I shall make clear my position on GM technology: at first, I recoiled in horror at the idea of it, but now I am less concerned about the technology and more concerned about its application. The principle of humans interfering with food genes was established many millennia ago in Iraq, around Nasiriya, which is in the news today. Improving plants through selection allowed people to test tiny variants in plants on the human population over many generations, which allowed them to understand the limits of human digestion and which variants are bad for us.

GM allows us to bypass that involved process, which is potentially dangerous. GM technology is a hierarchy that must be considered with precautionary principles in mind. At the bottorn, demanding the least concern, are non-food crops such as biomass crops, which are improved from within their own species gene pool. Food crops, which have been improved in a similar way, are next. I am more concerned by non-food crops, such as pharmaceutical crops, and food crops modified with genes from outside their species, like the famous Sainsbury's fish-flavour tomato paste in Private Eye. GM technology within animals and our own species, which is not impossible to conceive with modern technology, is of greatest concern.

I want to examine those technologies from the point of view of consumer choice, the environment and health. First, however, I want to ask what has happened to the great debate. In Wales, it has not amounted to a row of beans—GM or otherwise. There has been a handful of public meetings, most of which were organised by anti-GM groups. The Welsh Assembly Government have organised nothing; for example, the matter is not mentioned on the National Assembly's website. The consultation information and questionnaire are available only in English, so some half a million Welsh speakers have been disfranchised from the great debate at the start, which is a disgraceful way to approach public consultation. In addition, the debate is taking place without the full evidence being available. The Government's studies—a scientific assessment and the field studies—will not be published until the autumn.

Let us start with the effect of GM technology on health. As a Member of Parliament, I will not support a novel technology if I do not think that its effect on human health has been properly evaluated. I owe that duty of care to my constituents. It is therefore up to the proponents of GM technology to demonstrate that it has no ill effects on human health, animal health and the environment. GM technology is being given a soft landing as a novel food technology by the regulatory bodies and by the Food Standards Agency in particular.

I prefer to eat local food, followed by organic food and finally bog standard food—I hope that it is not bog standard, but hon. Members will catch my drift. Others have a different set of priorities: some will eat the cheapest food first and perhaps have some treats to bolster their diet. I wonder which avenue FSA members follow. Why is everyone so keen to subject the UK population to a giant experiment in digesting novel GM foods? The research has been insufficient to evaluate the short or long-term effects of GM foods on human health.

Genetically modified crops are usually created by adding genes from bacteria, viruses and other plants to make them immune to chemical weedkillers or to enable them to produce toxins to kill insects that feed on them. The genetic modification may make the plant toxic when eaten. Even if that toxin is present in small doses, it can build up to cause harm, especially to vulnerable individuals. Allergies, which are generally on the increase among the population, may also develop.

There has been virtually no monitoring in the United States, where the main human testing is taking place, of the number of GM ingredients in food or of the impact on the general population. All that we know is the general trend of allergies and health effects emerging in the population; we do not know where they have come from. There is no doubt that food allergies are increasing as we eat more varied diets with new ingredients. It will soon be possible to test whether GM genes come from peanuts, which are known to cause severe allergies in some people. Dr. Michael Antoniou of Guy's hospital said:

"The reason why we can't be specific about the health consequences of GM food is that we don't know enough…Each genetic engineering event holds its own dangers. You could have acute toxicity or something that sneaks up over many years. Any of these things are possible."

Another danger is antibiotic resistance. Genes are often used for antibiotic resistance as selectable markers, which allow plants to select cells that have taken up foreign genes. They have no further use, but the genes continue to be expressed in plant tissues. Most genetically engineered plant foods therefore carry fully functioning antibiotic-resistance genes. There are two possible consequences: first, eating those foods could reduce the effectiveness of antibiotics taken as medicine; secondly, the resistance genes could be transferred to human or animal pathogens, making them impervious to antibiotics. It is unlikely that very strong resistance will occur, but any possibility of that requires careful scrutiny, especially as we know that so many diseases today, such as the SARS virus, come from animals.

That is why the overall health risks were assessed by the Royal Society last year. It said that GM products needed rigorous investigation before marketing to vulnerable sectors of the population, including the elderly, babies, those with chronic disease and pregnant women, due to the

"unpredicted harmful changes in the nutritional state of foods".

I thank my hon. Friend for giving way. I call him my hon. Friend in this instance because we share the same concerns. Does he agree that a major concern is the lack of peer evaluation in GM issues, which has come about because of a fear of commercial confidentiality? In every other avenue of science, peer review is considered essential for the evaluation of new products.

The hon. Lady—my hon. Friend——has put her finger on a particular problem there. Many of the so-called tests have been undertaken by the companies themselves, so the foods have not been subject to the rigorous examination that we would expect before we could say to our constituents, "These are safe foods to eat; eat as much of them as you want". I cannot say that, and I share the hon. Lady's concern.

As far as I am aware, the only study commissioned by the FSA looked at bacteria from GM food which is shown to be transferred through the human intestinal lining. If in, say, 1983 we had had results from an animal feeding test of cows' brains being changed as a result of the animals ingesting sheep's brains, I wonder whether we would have been wise to press on with feeding animal proteins to ruminants. We need to learn a lesson from BSE. The United Nations has certainly done that, because its food standards body said only last week that the failure to carry out adequate checks could lead to toxic reactions, allergies and an increased resistance to antibiotics. As far as I am concerned, the food safety case has not been made.

I turn to agriculture and the environment. Wales, through the National Assembly, has declared itself a GM-free zone. That is a declaration of intent, rather than a reality, but it exists as a political will expressed through a democratic body. I am sure that the future of Welsh agriculture does not lie in the production of mint-flavoured lamb chops or antibiotically enhanced milk. Following common agricultural policy reform, farmers will have the opportunity to sell to local markets, to add value directly to their products and to engage in sustainable agriculture, including the growth of organic crops, which is particularly relevant and important to agriculture in Wales. GM technology does not sit easily with that vision. I claim a constituency interest in the matter because Ceredigion is part of a west Wales cluster of organic farming with world-famous producers such as Rachel's Dairy and the organic centre for Wales at Aberystwyth university.

Let us look at the latest GM gee-whizz idea to grab the headlines: ready-decaffeinated coffee. I drink decaffeinated coffee, having discovered what caffeine does to the body, but should I be drinking GM-decaffeinated coffee? It sounds good not to have to remove the caffeine with a chemical or water-based process, but the coffee plant contains caffeine for a reason: to defend the coffee beans against fungi. Plants that are unable to produce caffeine might be susceptible to fungi, which can produce toxins. Fungal toxins, such as aflatoxin, are potent human toxins that can remain active through food preparation processes. I have no doubt that there will be a GM solution to that, perhaps by introducing GM markers to provide resistance to the fungi, but is that really how we want to produce our food?

I turn now to virus-tolerant crops. For reasons not yet well understood, plants producing viral components on their own are resistant to subsequent infection by those viruses, and there is a risk of creating new and worse hybrid viruses through recombination and transcapsidation. For that reason, the European Parliament has handed a lifeline to organic and conventional crop producers in the United Kingdom on the issue of cross-contamination. It voted last week on an amendment tabled by the Plaid Cymru-Green group in the European Parliament to amend directive 2001/18 on the deliberate release of genetically modified organisms into the environment and insert new article 26a, which states:

"Member States may take appropriate measures to avoid the unintended presence of GMOs in other products."

I should like to know how the Government intend to implement that new article when it has been approved, as I presume it will be, and whether the Welsh Assembly can draw up its own regulations on implementation. I understand that although the directive gives member states the right to take appropriate measures, the regulations will be drafted by the Department for Environment, Food and Rural Affairs for England, and by the Welsh Assembly and the Scottish Parliament. There must be a GMO land registry, as the Chartered Institute of Surveyors suggested, which is open to the public, showing where GMOs are being planted, the nature of the planting and so on. The public must have access to such information.

Finally, on consumer choice, the European Parliament has voted on a strict labelling regime for all GM foods and derivatives with over 0.9 per cent. GM content. That used to be 1 per cent. but the rule has been tightened. The Government must explain how they will protect consumer interest in the World Trade Organisation negotiations. Some countries may seek to downgrade that interest and to introduce an alternative agreement, but we must protect it. I defend the right of members of the FSA to stuff themselves full of GM food, as well as the right of the rest of us to choose a different path. Perhaps that is why the British Retail Consortium, which represents 90 per cent. of high street shops, said on 8 June that it did not see a market for GM foods at present.

The GM industry tends to concentrate production in monopolistic companies. Corporations are given patents on the genes that they use and the crops and seeds they develop. Royalties may then be charged for the use of their technology. Companies and Governments of the developed world are now pushing developing countries to accept patents on genes and seeds, sometimes for gene and seed banks that they have developed through traditional methods of agriculture. That will benefit the companies that produce GM crops, but many small farmers cannot pay the royalties or purchase the herbicide or pesticide that must be used with the GM crop.

A Canadian farmer, Percy Schmeiser, has been held responsible for Monsanto canola which grew on his land although he did not plant it. Monsanto produces over 90 per cent. of GM crops worldwide, and Syngenta, Bayer Cropscience, Dow and DuPont produce the rest. Leaving worldwide production to five multinational corporations, and saying that that is the way to feed the starving world, is like leaving Dracula in charge of the blood transfusion service and expecting him to give a drop to everyone. All the companies are putting pressure on the United Kingdom, as well as on developing countries, to buy their products, thereby forcing more traditional farmers out of the market.

Conversely, the GM industry wants no legal liability for any genetic pollution or potential health or environmental effects of the crops. It is not willing to be held accountable, despite its claims of GM safety and success. The only clear winner is the GM industry, which wants to play the game by its own rules. There is absolutely no evidence that farmers, consumers or the environment in the UK or Europe will particularly benefit from GM crops.

The decision of the European Government, or rather the European Parliament—there is no Government yet, but perhaps at some time we will have a debate on that—is a step towards better regulation, but the introduction of GM foods in UK agriculture has not been thought through. If and when organic and non-GM foods are contaminated, who will be held responsible for the economic and environmental consequences? More importantly, who will pay for the damage? Welsh farmers cannot compete now with large corporate farms. How will GM foods help the Welsh agricultural economy and environment, which sustains not only biodiversity but cultural diversity?

Finally, the cruellest canard is that GM crops will feed a starving world. Already enough food is grown throughout the world to feed everyone on the planet to sufficiency. Feeding the world is a matter of political will and better distribution, things which genetic modification cannot achieve. The push for GM foods serves only to hide the root causes of poverty, hunger and disease. Even if a case could be made for immediate relief in developing countries, there would be the potential for catastrophic long-term effects. The genetic contamination seen in the loss of crop diversity in the developed world may be more of a problem for developing countries. Many crops have wild relatives and can cross-pollinate. In tropical countries, where many staple foods such as rice, maize and potatoes have evolved, there is greater potential for genetic contamination. Already, imported GM maize has contaminated native maize varieties in Mexico.

My central point is that agricultural biotechnology may have a role to play, but it is not a substitute for sustainable agriculture, which solves problems by understanding and adjusting elements of the system to achieve its goals rather than by developing new products that must be purchased. Agricultural biotechnology, by contrast, is basically an input industry, developing relatively expensive products and always depending on the novel. In sustainable agriculture, new products are less important than new knowledge and new ways of manipulating agricultural ecosystems.

I wish to end with some direct questions for the Minister. How will the precautionary principle be applied to GM foods? I ask him seriously to consider extending the great debate to at least October, in light of the poor publicity, the lack of public meetings and the call by eight major organisations, including the Consumers Association, to extend the period. I ask him also to ensure that the Government's studies are published before any conclusions are made about the public's opinion of GM crops. I say that even though I suspect that the public consultation is running heavily against GM crops. It is better that any public consultation is done on the basis of all the evidence and not on preconceived ideas.

I would like the Minister to give a copper-bottomed guarantee that labelling or strict co-existence regulations will make it possible for those who do not wish to ingest GM foods to avoid having them stuffed down their throats. Will he explain how the European Parliament's co-existence proposals will be brought into force in the UK and how organic farming in particular will be able to protect its position as a non-GM system of food production?

It is said that the Government have already made up their mind on the commercial planting of GM crops—at least, according to the Evening Standard.

I wonder why.

Perhaps we will hear a little more about that. As a constituency MP, such questions are of interest to me. If they cannot be fully answered now, it will mean that it is too soon and too risky to countenance such a move.

It would be advisable for me to remind hon. Members that it is customary in these 90-minute debates to commence the first of the three winding-up 30 minutes before termination. That leaves us with 41 minutes in which to accommodate the five right hon. and hon. Members who are trying to catch my eye, only two of whom have given me prior indication of their intention to do so. I appeal to everyone to make their comments as brief as possible and to bear in mind the time constraints when accepting or making interventions.

By my calculation, that means that I have eight minutes. I will do my best.

I congratulate the hon. Member for Ceredigion (Mr. Thomas) on an excellent speech that raised the relevant questions. I endorse and confirm its content. I hope that my hon. Friend the Minister allows me to pursue some points that I raised on Friday, to which I received a rather limited response. My first question concerned what the Government's response to the farm-scale evaluation trials will be. They will receive a report on the conclusions of the research in September. I argued, as we all know, that a decision has to be taken on the commercialisation of GM crops in accordance with the terms of EU directive 2001/18, but that that does not mean a yes or no determination. That is a key point.

A further option is for the Government to invoke the precautionary principle, which is allowed under item 8 of the preamble, which states:

"The precautionary principle…must be taken into account when implementing"

the directive. That is also covered under article 23 of the directive, which is the safeguard clause, and under article 5 of the phytosanitary agreement. My hon. Friend the Minister's response was that

"if the evaluations are inconclusive or demonstrate that there are potential problems that require further investigation, that will be undertaken."

He did not follow through the logic of his position. As the hon. Member for Ceredigion said, there are huge uncertainties about GMOs because the long-term research on clinical and biochemical impacts has simply not been carried out. The random position and the lack of control of the gene's functions could change any character of a plant, and that might not be evident immediately. In the US, there are already many examples of undesired effects being identified only after approval has been given.

Those are more than adequate reasons why, in the case of each and every GMO, approval should be deferred until the long-term epidemiological, clinical and biochemical research has been fully carried out— exactly as is already the case in relation to the introduction of new drugs. My first question is, will my hon. Friend the Minister confirm that that option is open to the Government and that they are seriously considering it?

At the moment, the Government seek to avoid that option by regularly citing the mantra—I signed many letters in these terms—that

"there is no evidence of any greater risk from a GM product than from its non-GM counterpart."

However, the truth is that no one has undertaken the systematic tests to find out whether that is true. It is simply assumed. The biotech companies look at the various nutrients, allergens and toxins and if, in their view, the GM plant has similar levels to the non-GM variety, it is assumed to be safe in all respects. That is the so-called principle of substantial equivalence—an infamous concept, if ever there was one—which is at the heart of the whole problem. The Minister did not mention that in his reply last week. Will he do so today?

My second question is, will the Minister confirm that that process has no scientific validity whatever, that it is open to fraudulent manipulation and that it does not meet the criterion of giving certainty to people, which is what they want, on whether a GM product is safe to eat? People want to know not whether a GM food or ingredient is similar to something else, but whether it is inherently safe to eat—without any side effects—and whether all the tests necessary to check that beyond any reasonable doubt have been carried out.

There is also the question of biotech companies' own credibility in these matters. In the case of GM forage maize called Chandon LL, the company claimed that there was no nutritional difference. I would point out that when the company data were subjected to peer review, it was found that there were significant variations in fat, protein and fibre content.

My third question is, will the Minister confirm that the Government will not sanction any GMO until full-scale, long-term research on health and biochemical effects has been carried out on the GMO in its own right, not on the basis of its alleged similarity to something else? The only reason for introducing the deceptive and misleading concept of substantial equivalence was saving the biotech companies the lengthy and expensive research necessary to establish what the truth is directly, or conceivably because they feared what such tests might reveal.

I asked the Minister last Friday about the organic sector, which he, I and the Government are committed not only to preserving, but to expanding. How will that sector be protected against cross-contamination from GM, which could drive most, if not all, organic farmers out of business? His reply on that point was tempting but rather unconvincing:

"We must consider the most appropriate separation distances on the basis of good, scientific advice."

That is fine, but he added:

"I do not want the organic sector or its viability to be threatened."

That is absolutely excellent, but the logic is clear. The separation distances must be set so that cross-contamination is so small that it is below detectability. If they were set at such a level, the organic sector would be protected. If they were set above it, the organic sector would be threatened, and slowly destroyed, which is exactly what has happened to the organic oilseed rape industry in Canada.

We know that the detectability of GM is about 0.1 per cent. We also know from research by the National Pollen Research Unit at Worcester what the separation distances are for different crops that will yield cross-contamination no higher than 0.1 per cent. My fourth question is, if GM crops were to be commercialised in the UK, will the Minister guarantee that separation distances will be set statutorily at a level that ensures that any cross-contamination does not reach detectability? If he does not take that view, how will he deliver his commitment that the organic sector will not be threatened?

I raised the crucial question of liability, and the Minister replied a little airily:

"We must examine that more carefully."—[Official Report, 4 July 2003; Vol. 408, c. 728–30.]

Quite so, but mere examination is not nearly enough. My fifth question is, will the Minister guarantee that the Government will not approve the commercialisation of any GM crops until a legally enforceable liability provision is in place that ensures that any organic or conventional farmer whose crops are subject to contamination from nearby GM cultivation is eligible for full compensation so that his livelihood is not disrupted or destroyed in any other way?

Although I was going to raise other points on health, I shall take one more minute to raise my final point, to which I did not receive an adequate reply. If the Government believe in consumer choice, and I believe that they do, how will they deliver for that large number of people—perhaps the majority of the population—who want to eat exclusively GM-free food? That crucial question was also raised by the hon. Member for Ceredigion. Why should people be forced to eat GM food if they do not want to?

The Minister referred to the recently agreed EU threshold of 0.9 per cent. for labelling GM food. With great respect, that misses the point. If a tin or package on a supermarket shelf has no GM label, does that mean that it is GM-free or that it might have nearly 1 per cent. GM content? That does not provide for consumer choice. It provides the opposite: it means that we will all soon be eating food that contains small amounts of GM, but without being given that information. In my view, that will be unacceptable to the British people.

My last question is, will the Government enforce labelling rules in the UK that provide for genuine freedom of choice by placing the labelling level at the threshold for detectability, which is far below 0.9 per cent. and probably as low as 0.1 per cent? If the GM debate is for real and not mere window dressing, we need answers to those questions. I look forward to receiving them today.

I start by drawing attention to my entry in the Register of Members' Interests.

This debate is not about the pros and cons of GM, so I shall not go down that road. First, I believe that there is no such thing as risk-free food. That is seriously important, because if the debate is to mean anything it must be about risk assessment. There are risks in every sort of food; whether food is fatty or non-fatty, or a host of other things, we take a risk with every spoonful that we consume. It is also true that there is no such thing as GM-free food. It is a bizarre deception that people should think that food can be labelled GM-free even if it has up to 1 per cent. of GM produce in it. Patently and obviously, such food would not be GM free.

Looking at it semantically, one could say that all food has been genetically modified; it is a question of who does it, how it occurs, how fast it is done and how long it has taken to evaluate. I visited the Broom's Barn establishment 18 months ago to find out about GM sugar beet. I learned an enormous amount in my day away from Parliament, and I began to understand what is at stake. The images of Frankenstein food quickly slipped away as I came to understand the enormous potential of GM foods and the good that could come from them—for the environment, for the nutrition of people around the world, and for other uses including pharmaceutical ones.

In our debate, we first need to know the facts. That is where the Government have been slow, and I am critical of them for that. Trying to get information from the Government is like trying to get water from a stone. The right hon. Member for Oldham, West and Royton (Mr. Meacher) is absolutely right to press the Government hard on the basic facts of the matter. Only when we have more facts can we make an appropriate risk assessment.

I have asked a series of parliamentary questions in order to elucidate some interesting information, and I have perused the daily outflow of answers on GM from DEFRA. It is clear that the Department is working extremely hard, and I commend the Minister and his officials for that. I was also interested in the answer of the former Secretary of State for International Development to a question from the hon. Member for Portsmouth, South (Mr. Hancock). She said:

"Developing countries must have the opportunity to make their own informed decisions on whether or not to adopt modern biotechnologies based on an assessment of the risks and benefits from their safe development and use. Developed countries have a responsibility to help developing countries build the capacity to make these choices."—[Official Report, 24 March 2003; Vol. 402, c. 67W.]

If we block people's choices by saying that certain foods cannot be imported, even if they are safe, because the EU has a 1 per cent. threshold, we shall be doing them no favours.

I turn next to an answer from Lord Warner, an Under-Secretary of State for Health in the other place. He said:

"All genetically modified foods approved for sale in the UK have undergone a rigorous pre-market safety assessment by independent scientific advisers…There is no evidence that the consumption of genetically modified food has caused an increase in allegenicity. The available evidence does not indicate that GM DNA transfer to gut bacteria has adverse consequences for metabolism, organ development, and the immune and endocrine systems. DNA is consumed as part of our normal diet."—[Official Report, House of Lords, 4 July 2003; Vol. 650, c. WA153-4.]

Indeed it is—just as, every day, we all consume genes. That is important.

I tabled a question about what evidence there was on the safety of GM food consumption, and asked for a statement. The Under-Secretary of State for Health, the hon. Member for Welwyn Hatfield (Miss Johnson), replied:

"The available scientific evidence does not support the view that the consumption of the genetically modified foods approved to date would lead to any harmful effects. The safety is assured using procedures developed by the World Health Organisation."—[Official Report, 30 June 2003; Vol. 408, c. 117W.]

I asked, pursuant to that question, whether she would list the scientific evidence on which her answer was based and whether she would describe the procedures developed by the WHO. Answer came there none—so far. It is extremely important that those sorts of answers are produced.

The same Minister, in an answer to a question from the hon. Member for St. Ives (Andrew George), said:

"Details of the research programme"—

the Food Standards Agency's programme—

"are published in the FSA's research and surveys programmes annual report and are available on the FS A web site".—[Official Report, 3 July 2003; Vol. 408, c. 483W.]

The website address is given, but the website simply does not work. People cannot get the information—that is worse than useless, because it makes the Government appear to have something to hide. I do not believe that the Government have anything to hide. I wish them well; it is extremely important that they win the debate. I want genetic modification to be used in the production of food; it would have a huge impact and could be of benefit around the world. However, it is right, of course, to ensure that the scientists are completely open.

I end with a plea that the Government do something radical: start to be an open Government. It does not matter whether we are talking about nuclear energy, about the response to terrorism or about GM foods—it is about time that our Government came clean with the public. The culture of the United States of America is wholly different in that respect. Some in this country, particularly civil servants, argue that our Government are dangerously open; they are not.

The approach of the Americans——I have discussed it with them recently, with respect to terrorism, on a visit to the United States—is that the more information that can justifiably be made public, the more people will realise that someone is on to them before they start. A similar argument applies in this country. We need to be far more open and to present the scientific evidence in a way that the layman can understand—then we will have a proper debate on GM.

First, Mr. Cook, may I congratulate—

Order. This has happened a couple of times, and I would be remiss if I did not remind hon. Members that, when establishing proceedings in this Chamber, the House decided that the occupant of this Chair should be addressed as Mr. Deputy Speaker.

I am so sorry, Mr. Deputy Speaker. On the first occasion that I spoke in this Chamber it was different; I had not appreciated the change.

I congratulate the hon. Member for Ceredigion (Mr. Thomas) on securing the debate and, in particular, on the way that he has presented his case. I do not want to go over the same ground, but everything that he said on the developing world, on choice and on liabilities I would have wished to say myself.

I believe that there is a consensus in this country on the issues that we need to address in UK food and farming, such as food safety, food supply, food costs and environmental pollution. Genetic modification needs to be judged against that background. So, first, does genetic modification enhance food safety for animals or humans? The answer is no; there is a risk and it is unquantified. Do we need GM crops to guarantee UK food supplies? No, we are generally a country of surpluses.

Should food costs be paramount in the debate? The answer is no. Experience tells us—and has told us all too recently—that a cheap food policy compromises food safety and nutrition and drives farmers out of business. Will GM foods be cheaper in the long run anyway? There is no guarantee of that. Finally, the issues relating to environmental damage are well understood: we do indeed need to reduce pesticide and chemical fertiliser use, but we do not need GM crops to achieve that.

Can we, as a nation, tackle the major challenges in food and farming today? The answer, surely, is yes. I believe that we are doing so. Indeed, the Minister and his predecessor, my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher), have done much to drive the process forward. Why, then, is GM now imperative? Why are we as a nation on the verge of making an irreversible decision that could have totally unpredictable effects on our countryside and on animal and human health?

The answer is simple: one company, Monsanto, rushed from the laboratory to the field to plant GM crops, and it irresponsibly sought to mix the products of those crops with non-GM foods. It did so with the lightest of regulation and without waiting for public consent. Today, it is still responsible for 90 per cent. of commercially grown GM crops. Although millions of Americans have eaten the products of those crops, that is testimony not to the popularity of those products but to the fact that they had no choice.

This debate should focus on one question: does this country need GM crops? My answer is a resounding no, and I must tell the hon. Member for Salisbury (Mr. Key) that the Monsantos of this world have done nothing to convince me otherwise. Of course, public knowledge and understanding would be increased if the Government's scientific review, the strategy unit's economic report and the results of the farm-scale trials and evaluations were made available. None of those documents has been published, and it will not be possible to take them into account in the public debate, which ends next week. The time allotted to that debate, and the nature of the process, have been inadequate to the task. I commend the attempt to deal with the issue, but it is ludicrous to keep the three strands—the public debate, the science review and the economics—separate.

All of that raises the suspicion that the public debate will be sidelined. I hope that the Minister will tell us whether public hostility to GM will be the determining factor for the Government if it remains as strong as it is or whether the decision to commercialise GM crops will be taken regardless of public opinion. Does the Minister believe that the Government have any scope to respond to public opinion and to keep the UK GM-free? Is not commercialisation inevitable, given US pressure and the potential role of the World Trade Organisation? What is his assessment of the arithmetic in the European Union? Does a majority of states still oppose the commercialisation of GM crops?

I cannot think of a more important issue. It is more important than any changes that we might make in the administration of our health or education services. The decision to commercialise GM crops could bring irreversible change to our plants, animals and environment, but the topic is virtually undebated in the House. Indeed, I would put money on the fact that only a few MPs actually know that the great national GM debate is under way at all. Why is that? Sadly, many MPs are wary of issues when they feel that they might not fully understand the science or that expressing their gut instincts could result in them being labelled ignorant or anti-science. However, expressing one's gut instincts is neither irrational nor primitive when one is considering the quality of the food that we ingest and the environment that we inhabit.

Genetic modification is not a simple extension of centuries-worth of tried and tested old plant-breeding technologies; it is fundamentally different. It crosses species and creates organisms that would not arise in nature. The crops under trial—maize, oil seed rape, sugar and fodder beet—have all been modified for tolerance to the herbicide glufosinate ammonium. None of the constructs between the bacteria and the crops would occur in nature and all pose potential threats to the environment. As my right hon. Friend the Member for Oldham, West and Royton has said, none of the resulting food products has been subjected to long-term human or animal testing.

What is the utility of GM crops? They are simply tolerant to the weed killer to be used during the growing season; all that they do is allow the farmer to put the herbicide on the crop without destroying it—so the farmer has a seed that is tied to a herbicide and the company has a farmer that is tied to the company.

The debate has hardly begun. I have accessed all the material on the public debate site and I estimate that it takes about three hours to read and digest it. I commend the effort, but people cannot easily engage in the debate, express themselves and form a view for or against. I understand, having read the transcripts, that people have been tremendously frustrated at the meetings because they cannot question experts and receive answers. The Government have not even organised a public meeting in London; there are many deficiencies in the public debate.

I remind the Minister that the country has been working systematically towards a sustainable agriculture policy. The commercialisation of GM crops in the UK would fatally undermine the consensus on sustainable agriculture. I urge the Government to continue to accept the precautionary principle. There will be enough speakers with views that indicate that the precautionary principle can and should be applied, despite anything that comes up in the documents and reviews that are under way. Sufficient evidence exists for us to say "case not proven; not yet, and maybe not ever," but we have to have the choice.

I end by asking the Minister to extend the period of the public debate. It has had far too little publicity and the House has not been engaged, and it is critical, in a democracy, that it is.

There are 12 minutes remaining and two hon. Members to go.

I draw the attention of hon. Members to my entries in the Register of Members' Interests in relation to agriculture, although they might not be relevant to this topic. I have a background in plant breeding, so I am interested in the issue. I would have liked to debate a number of the points that have been made. However, I shall restrict myself to a few of my interests.

I congratulate the hon. Member for Ceredigion (Mr. Thomas) on having secured the debate. I was interested in his hierarchy of concern about the ways in which GM has been applied to different crops, and I should like to have another look at it. I, too, am more concerned about GMOs as applied to animals and human beings than to plants. It is strange that the public seem to be more concerned about the application to crops than about other applications that could be critical to the future of the human species.

It has been said that the public are expecting a simple answer to emerge from the debate—GM technology will either be accepted in a blanket way or deemed unacceptable. The important point, which is being made well, is that each genetically modified organism should be examined to determine the implications for safety and human health. Each genetically modified organism should also be examined to discover what effect it has on the environment.

The hon. Gentleman spoke of the Welsh Assembly's aspiration to make Wales a GM-free country. Whether the Assembly has the competence to achieve that, I do not know. The evidence from field trials on contamination could well suggest that GM technology is acceptable in some environments and ecosystems, but not in others. Indeed, some ecosystems may be so sensitive or perhaps so important for biodiversity and other things that it would be very harmful for there to be any GM intrusion, whereas the fact that big arable areas may contain few native plant species or plant species of any importance could make them appropriate areas in which to commercialise GM production.

The hon. Member for Lewisham, Deptford (Joan Ruddock) mentioned the four crops that are being produced in connection with GM technology in this country: rape, maize, sugar beet and fodder beet. The hon. Member for Ceredigion talked about the large expansion of organic farming, but that is not based on arable production, so contamination into that type of organic farming would be limited and perhaps not even an issue at all.

Just as there will be no universal answer to the question of whether GM is a safe or unsafe technology, so there will be different answers to the question of where GM crops can be grown. When it comes to taking a decision and making an announcement, will or can the Minister come out with a solution that respects the sensitivity and importance of certain ecosystems?

Like the hon. Member for Ceredigion (Mr. Thomas), to whom I pay tribute for securing this debate and the powerful speech he made in opening it, I am a member of the Environmental Audit Committee. That Committee spent hardly any time discussing the subject at issue this year or last year. That is not because we have been lax or are not interested; as many people have pointed out, the subject is one of the most crucial issues in the environmental sphere in recent years. The reason is that when we raised the issue earlier in the year it did not even occur to us to begin a serious discussion and investigation into the subject before the results of the first UK farm-scale trials were made public and we had proper, detailed evidence on which to base a sensible judgment. I am therefore absolutely amazed that the Government should have leapt in and sought to have the debate in a few weeks, before any farm-scale evidence becomes available and long before any of the long-term scientific implications are made known.

The potential impacts of GM crops are huge: on the environment, on public health, on local sustainability and even on our culture, particularly that of the small farmer. There is also the impact on consumer choice—real choice that will eventually not be a gift of a handful of the world's largest multinational corporations. More and more people across the political divide are becoming convinced that those who farm the countryside are its guardians and not, in Mrs. Thatcher's famous phrase, its freeholders. It is therefore ironic that those individuals, who manage the landscape on our behalf, working with the natural order, not against it, should be confronted by crucial, irreversible changes of such enormity, yet not have access to full and proper research or the more broadly based scientific understanding that any sensible person would like to see before taking such a huge step. I cannot understand why the Government are so complicit in denying them that wider debate.

One argument that is most commonly used by those in favour of GMOs is that they are necessary if we are to feed the world. The Prince of Wales has been outspoken in trying to pump prime the debate, and I praise him for the work that he has done speaking across party political boundaries to try to interest the public in it. In 2001, in a speech to Essex university's centre for environment and society—an event sponsored by the Department for International Development—he said,

"No-one in their right mind would resist a technology which could solve the world's food shortages if that was the only way forward. But where people are starving, lack of food is rarely the underlying cause. It is more likely to be lack of money to buy food, distribution problems or geo-political issues. But there is very clearly a need to create sustainable livelihoods for everyone, particularly those in developing countries. This is why I would like to argue for a more balanced approach, looking at all the options, particularly where research is concerned."

The department of land economy at Cambridge university recently argued:

"There is a strong case for research and development funds to he made available for organic agriculture."

It explains that that would help organic farming to reach the productivity levels of conventional farming, which has benefited from extensive Government-funded research in the past 60 years. The department also pointed out the

"existing imbalance in the technological development of the two farming systems"—

which is—

"likely to put organic agriculture at a distinct disadvantage."

It concludes,

"a long term research strategy for organic agriculture would aim at rectifying that imbalance and help to improve the efficiency of organic production, thereby making it more attractive and more profitable."

At the moment, the emphasis seems to be on supporting research into genetically modified crops, which, regardless of any possible environmental threat, certainly pose an acute threat to organic farmers and to all those consumers who wish to exercise a right of choice over what they eat. I am particularly concerned about the impact on organic agriculture in the UK. Public consumption of organic produce is rising at 15 per cent. a year, yet we are able only to produce a fraction of the total demand for such produce. It is a huge growth area for British agriculture, but it could be snuffed out in its infancy by the rapid introduction of GMOs.

Scientific studies demonstrate that cross-contamination of GM and non-GM crops is inevitable. Separation distances of a few tens of metres are completely inadequate when we know that pollen is naturally designed to carry over much greater distances. Furthermore, pollen is not the only problem. Gene flow can take place through cross-contamination of seed supplies and through plant material attaching itself to machinery, people and animals moving between farms. Unlike other forms of pollution, which diminish over time through a process of natural degradation, genetic pollution has a natural propensity to reproduce itself. The idea that genetic-free agriculture should compromise with the new technology is crackers. GM agriculture is the intruder and although genes flow both ways, the damage is done only one way, as conventional and organic farmers lose their GM-free status.

Exactly the same arguments apply to GM food. GM-free food production was there first and it is up to the GM industry to keep its products out of the pre-existing food chains. As the Soil Association has argued,

"We must have consumer choice to eat non-GM food. Ultimately we should be consumer focused in what we deliver."

I do not understand why the Government are seeking to pre-empt a properly informed debate, whatever conclusions may emerge from it. I do not understand why they are in such a rush to reach conclusions before the research has been done. I do not understand why they have such a short-term agenda with a technology with such long-term implications.

There are conflicts of interest at the heart of the Administration. It must be a matter of profound concern that Lord Sainsbury, in many ways a great and admirable Minister for Science and Innovation, although also a donor of millions of pounds to the Labour party, sits at the very heart of the debate. Surely the time has come for him to remove himself from this position of conflict and for the Government to adopt a sensible, un-alarmist but nevertheless clearly precautionary principle over planting and licensing, before the views of the British public and the clear scientific evidence become a retrospective irrelevance

I congratulate the hon. Member for Ceredigion (Mr. Thomas) on securing this debate and making such a powerful, comprehensive argument for the need for more time to consider further information and evidence. That is a theme that has come through this debate. We need that to inform what is clearly going to be a truncated public debate, in which that crucial evidence is simply unavailable.

One of the first points that the hon. Gentleman made was that we must learn lessons from past mistakes. In my view, the two most recent and expensive—to the public purse, at least—food chain catastrophes to hit the UK teach us two simple lessons that we are showing signs of rapidly forgetting. The first, from BSE, was that we adulterate any part of the food chain without the backing of sound, cautious science at our peril. The second, from foot and mouth disease, is that unnecessary and excessive transportation of food helps to promote, and undermines efforts to control, disease. Whether we will take heed of those lessons in respect of other challenges is yet to be seen, but they should at least give us pause for thought before we launch headlong into a brave new world, or push back the frontiers of science with indecent haste and without the backing of sound science.

The right hon. Member for Oldham, West and Royton (Mr. Meacher), who clearly knows a great deal about the subject and about the internal workings of government in relation to it, made a rather revealing comment towards the end of his contribution, when he expressed concern that the public debate should not be seen merely as window dressing. The hon. Member for Salisbury (Mr. Key) argued eloquently why we need more evidence and why the parliamentary questions that other hon. Members and I have tabled have not been fully answered. Clearly, an information gap is obscuring any possibility of an informed public debate.

Information from the Department of Trade and Industry in one of the answers that I received most recently, on 26 June, column 922W, identified the amount of money that the Government are spending to promote genetic modifications through biotech companies. A certain amount is going through the Department for Environment, Food and Rural Affairs, but let us compare the £500,000 being spent on the public debate with the DTI grants to the biotech industry of£18 million in 2002–03, and the £81 million spent in support of the Biotechnology and Biological Sciences Research Council's work, and other grants given in support of biotechnology. That is quite apart from the £13 million put into biotechnology companies to promote biotechnology, as I pointed out to the Minister in the last DEFRA questions to which he responded.

On the money going into biotechnology-related industries, which other hon. Members have also mentioned, those industries are not all related to GM technology. Some work sponsored by the biotech council concerns biological control in horticulture, which benefits the organic sector. The hon. Gentleman should not think that all the money goes into GM technology.

I entirely accept that point, but some of the money is going into companies that support and promote genetic modification. In a previous question to the Minister, I mentioned that£13 million is going into biotechnology companies, which are clearly in the business of promoting genetic modification.

My hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) mentioned one aspect of the debate that we might easily have overlooked. The four crops being trialled in the farm-scale trials are primarily used for animal fodder. Animal feed is an element of the debate that is often overlooked. My hon. Friend also described the particular conundrums that arise when the Welsh Assembly or a local authority declares itself GM-free.

The hon. Member for Bexhill and Battle (Gregory Barker) made an impassioned argument in favour of considering not only human health and the environment but local sustainability, consumer choice and the impact that GM technological might have on organic and small farmers. He made those points eloquently and I hope that the Minister listened to them.

The hon. Member for Lewisham, Deptford (Joan Ruddock) asked whether this country needs GM crops. That is a crucial issue on which the farming industry must reflect carefully. The hon. Member for Ceredigion rightly pointed out that in June the British Retail Consortium said that there is no market for GM produce in the UK. If farmers are going to be sucked into producing GM crops, they must know whether there is a market. It would be pointless for them to consider producing GM crops if there is no market.

Several hon. Members referred to liability. The European Commission produced a report last month demonstrating that the introduction of GM technology will impose significant costs on organic growers, which is an issue that the Government must get on top of. The Government have undertaken their own research and have identified potential problems looming for growers. The contracts between tenants and landowners demonstrate that GM technology could further strain that relationship.

Farmers must consider the extent to which biotechnology companies have a stranglehold over the industry. They are clearly not best pleased that supermarkets have got them by the short and curlies. Biotech companies will have farmers by the throat if farmers enter into contracts with them because they clearly have a widespread interest in the food chain having bought up a number of seed companies.

A further concern is that GM technology will set farmer against farmer. Hon. Members have identified the problems for organic growers and those who wish to remain GM free, who will face significant problems where a neighbouring farmer chooses to take up the opportunity to grow GM crops. Those issues have not been properly resolved and it is important that the farming industry can speak with one voice.

Finally, GM technology could be a public relations disaster for the farming industry. Farmers have been wrongly maligned and criticised for being responsible for BSE by urban consumers. To take on genetic modification when it is unwanted in this country, whether that decision is based on sound science or not, would be a public relations disaster, and they need to reflect on that carefully.

The recurrent theme in today's debate, on which I hope that the Minister will reflect, is that people feel that the situation is entirely unsatisfactory. We need more time and more evidence. The evidence is not available at present. The Government's inquiries and research have not yet been published and the public debate should begin when that evidence is in the public domain.

This has been a particularly well informed and interesting debate, with sensible speakers from all parties. I fear that the Minister may be a little isolated when he replies, supported only by my hon. Friend the Member for Salisbury (Mr. Key). All I can say is that I am glad that Salisbury plain comes between his constituency and mine. Such a distance may be enough to prevent any cross-pollination across the plain. I pay tribute to the hon. Member for Ceredigion (Mr. Thomas) for securing the debate and for his sensible and intelligent opening of it. He spoke extremely well.

The debate's quality stands in sharp contrast to the quality of what the Government have described as the public debate that has lasted some six weeks. How ludicrous, patronising and absurd to suggest that the nation could debate something as fundamentally important as GM in six weeks. There will be a date after which one cannot debate the issue any more because the Government are going to make a decision, which will mean the end of the debate. It is nonsensical and dangerously patronising of the Government to have that debate some months before the only serious scientific research on the matter—the field trials— becomes public. We shall continue the debate for as long as matters continue to be unclear and until scientists are clear about them. The notion that somehow we have reached the culmination of the great debate after which it will be quite all right for the Minister to reach a conclusion about all our futures is absurd.

The debate has been badly handled—it seems to have been a Government PR exercise rather than anything sensible. There have been regional debates in Birmingham, Swansea, Taunton, Belfast, Glasgow and Harrogate at a cost of£500,000, which were not particularly useful. Several sensible organisations, such as the Consumers Association, Friends of the Earth, Greenpeace, the National Federation of Women's Institutes, the National Trust, Unison, the Royal Society for the Protection of Birds and Sustain, wrote to the Secretary of State to say that the entire public debate was chaotic. Lots of people would have liked to enter into a debate had it been sensible. Why is an important decision about to be taken when the public debate has been nonsensical?

I particularly want to highlight two issues arising from the debate. The first is the precautionary principle. Rather like the matter of telecommunications masts, while there is any scientific doubt about something, it is only reasonable not to allow it until such time as the scientists or those proposing it can give us a 100 per cent. guarantee, backed up with bonds or funds, that it is 100 per cent. safe to the environment and human health. If Monsanto will not do so, that leads many people to ask questions.

What has happened to the precautionary principle? Do the Government support it or are they letting it lapse? That particularly applies to one aspect that concerns me more than the others: transgenic GM. That means, in other words, taking a gene out of a pig and putting it into wheat, which strikes me, as a bit of a simpleton, as unnatural and unusual. I would like particular Government assurances that that is guaranteed to be 100 per cent. safe, now and for all time.

The second matter has been raised by a number of people, including the right hon. Member for Oldham, West and Royton (Mr. Meacher). I pay tribute to him, as he probably knows more about the subject than the rest of us put together. There is a possibility of damage to the organic industry, which has grown enormously. My hon. Friend the Member for Bexhill and Battle (Gregory Barker) said that it has grown by 15 per cent. a year, but the figure is 30 per cent. a year. There are 680,000 hectares in organic production, which is growing massively. Tesco reckons that sales will be "1 billion by 2005. Of course, 70 per cent. of the organic food that we eat at present is imported.

The important thing about organic production, as several Members said, is that there is a strong likelihood of cross-contamination of one sort or another unless the separation distance is adequate. So far, the Government have stuck to a separation distance of 200 m for GM crop trials, but the Agriculture and Environment Biotechnology Commission, the National Institute of Agricultural Botany and the European Commission all say that that is inadequate. There is evidence that seeds can be spread as far as 1.5 km away. Equally, BBC News Online looked into the matter and found that seeds in the soil can easily be carried by vehicles.

We need to know more about cross-contamination. Will the Minister give a guarantee to the Soil Association and organic farmers that there is no possibility whatever of cross-contamination? That must be the benchmark.

The Minister must also deal with labelling, which has been raised by several Members. It is extremely important that the public know precisely what they are buying in the shops, so labelling must clearly distinguish between products that are GM free and those that contain GMOs. Otherwise, we will interfere with the consumer's right to make that decision.

The Minister may not yet have come to any clear conclusion on that matter, but he must tell us how he will enforce labelling laws. There must be no room at all for cheating. The Food Standards Agency described the labelling of traces of GM material as a cheat's charter, so we want to know precisely what the Government intend to do to prevent it. Fair labelling schemes are extraordinarily important.

Whatever else is concluded by this afternoon's debate or the dreadfully truncated and condescending national debate that the Government have called on the issue, one thing is certain: no one knows the answers to the questions. If they did, there would be no need for a debate. If the answers were known, the scientists would come along and say, "Don't worry, here is the evidence." If it were 100 per cent. clear that there was no risk to the environment or to health, we would not be having a debate. We would all acknowledge that there were some benefits, such as feeding the third world, and that there may be environmental upsides in reducing the pesticides required in certain conditions. However, the fact that we are having a debate at all shows that there is a lack of clarity. Threfore, we very muchy look forward to hearing the Minister"s answers in his winding-up speech and, more importantly, in the month ahead, because the Government will have to be extremely clear on the issue.

I wish to add some questions to the very clear ones posed by the right hon. Memebr for Oldham, West and Royton. What review will be made of the results of the GM field trials? Will the public have an opportunity to express their views and contribute to the debate once the dield trials have ended—not on a six-week basis, but over the long term? What separation distances have the Government decided on to minimise crosscontamination? Who will be liable for the economic loss to organic and traditional farmer if there is crosscontamination? That is a very real worry.

Finally, will the liability laws be retrospective if damage found years after commercial GM planting? The reality is that the answers are unclear and people are very concerned about the issue. Only the Government can reassure us, and I hope they will. I look forward to the Minister trying to do so.

May I first congratulate the hon. Member for Ceredigion(Mr. Thomas) on securing the debate? He made a very reasonablespeech and many fair points. I shall try to address the important issues that he raised, as well as the question asked by the hon. Member for North Wilshire (Mr. Gray). Hopefully, in the 11 minutes that are available, I shall also be able to answer the complex questions asked by my right hon. Friend the Member for Oldham, West and Royton(Mr. Meacher)

It is patronising to suggest that the whole issue has been condensed into six weeks, because this has been a long-running debate. The Government wanted an independent debate with an opportunity for people to question the issues and to hear both sides of the argument. That was challenging and difficult, and the organisers made a very good effort to achieve that. It was never going to be a simple process, but it has stimulated debate. The fact that we are having this debate now is a result of that stimulation. There have been questions to the Prime Minister, Adjournment debates and reams of newspaper articles. The issue has even been featured on the "The Archers", which many people listen to. The suggestion that the profile of GM has not been raised is wrong. The debate has been successful in that respect and in allowing people to ask questions.

I should make it clear that we decided that the debate process should be independent of the Government, and that was right. It is not for the Government to organise it because people would think that there was an ulterior motive or an attempt at manipulation. The same applies in the Welsh Assembly, which wanted to remain at arm's length from the debate, but that is not to say that questions cannot be raised in the Welsh Assembly under the same democratic process as we have in the House.

Health issues have been raised. My right hon. Friend the Member for Oldham, West and Royton, who has raised such matters, knows perhaps better than anyone the procedures for dealing with health issues, how those are applied and how they go through the FSA, the Advisory Committee on Releases to the Environment and the Advisory Committee on Novel Foods and Processes. That approach is open and transparent, and it is reasonable to raise concerns and to ask about studies and how they are carried out. I shall come to that in a moment.

I want to make it clear that we must avoid the mistakes of the past. I remember the BSE issue, and I assure the Chamber that I have no intention of feeding GM burgers to my children on the basis that they are absolutely safe and that there is no problem. It is not for the Government to do that. The process must be independent, which is why we have the independent FSA and a range of independent bodies to examine the issues and report publicly to Government so that people are aware of them.

Does the Minister agree that although it is fundamentally unnatural to feed bits of cow back to cows in meat and bonemeal, it is equally unnatural to take bits of pig and stick them into wheat?

That is an extreme example and there is no approval at present for that product. There are ethical issues concerning biotechnology and animals which were raised by the Farm Animal Welfare Council. We treat the matter very seriously, and although it is a separate issue, it is part of our evaluation.

The FSA is considering whether there should be a long-term health study on the effects of GM. It is looking into the feasibility and potential benefits of such a study, and it will make its conclusions known very soon. It is treating the issue very seriously.

Some hon. Members referred to choice. The Government accept absolutely that farmers, consumers, processors and retailers should be able to choose whether to take advantage of GM products. That should not be forced on them. We need clear labelling so that that choice is available. I also accept the point about the WTO and world trade. It is essential that we are not bullied by any country into taking products without giving people a choice of whether to buy and use them.

We also recognise that it is important to take into account the needs of the organic sector and of conventional farming. The issue of separation distances has been raised. Obviously, those need to be considered, particularly in the context of the farm-scale evaluation studies. One reason for conducting those studies is so that we can consider things such as pollen spread. I will say a little more about that later.

We warmly welcomed directive 2001/18. In fact, we are about the only country in Europe that has started to implement it—we began to do so even before the European Parliament changed it. We need to consider the scientific advice, particularly on the co-existence rules, which relate to separation distances.

Although the public debate is coming to an end—some Members have suggested an extension, but there has already been one—I accept that the FSE results and the scientific review are an important element. People must have the chance to look at them and comment on them. We have agreed with the Advisory Committee on Releases to the Environment that, when the FSE results are made available, ACRE will hold an open meeting so that stakeholders can submit their concerns or views.

The meeting will be held in public, so that those attending can see the process and watch the decision being made. That will be helpful in ensuring that people have the opportunity to comment on the results of the FSEs and their implications. The fact that the formal part of the debate happens to finish in July does not mean that there will be no opportunities for further public participation and involvement, which I am keen to see.

I take the point about genetic modification and developing countries. Claims should be considered on their merits, or otherwise. I take the point made by the hon. Member for Salisbury (Mr. Key), who said that, in the end, it is a matter for individual countries to decide whether such technology brings benefits, and that must be part of the evaluation. Such decisions should not be foisted on countries, but should be considered in light of their potential benefits as part of good scientific evaluation.

I also accept that environmental liability is an issue. We have asked for advice from the Agriculture and Environment Biotechnology Commission about how to shape liability and about what regulations we may need. I also agree that sustainable agriculture goes much wider than genetic modification, which is just one issue. My hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) made that point.

There were a number of detailed questions. I was asked how the precautionary principle would be applied. The whole approach has been based on that principle. My right hon. Friend the Member for Oldham, West and Royton made another detailed point about whether we can refuse applications simply on the precautionary principle. That depends on the evidence and on people's doubts and concerns.

There is also article 23. I am sure that my right hon. Friend did not want to give the impression that I refused to answer his questions in the earlier debate. As he knows, he was on his feet asking me questions when I ran out of time to answer them. I gave him an undertaking that I would reply in detail to every question that he asked. I have already put that process in train and it will be completed—he will get those replies. Some of the questions were technical and others asked for absolutes; some of the answers might not be absolutes. I will have some difficulty in answering the other questions in the 50 seconds available. My right hon. Friend may wish to discuss the information that I will provide, and I am happy to do that with him, as with any Member.

This is an ongoing debate. I shall not do justice to the pertinent questions that have been put, but there will be further opportunities to ask them both inside and outside the House. There are legitimate questions to be asked. I take the point of the hon. Member for Salisbury. If hon. Members are concerned about not having received adequate answers, they should raise the matter with me or with other members of the Government, and we shall ensure that answers are provided.

By happy coincidence, this debate follows one on genetic modification. The mess that we have got ourselves into with GM should be a salutary lesson. Let us hope that we do better with this latest emerging technology.

Nanotechnology is the science of the small. The breakthrough came in 1990, when IBM manipulated 35 individual atoms so that they spelled the letters IBM. That was an extraordinary scientific achievement, given that atoms are clubbable little numbers that like to stick together. Stringing them out was quite an achievement. It was also an advertising opportunity, and I do not suppose that it was a mistake on the part of the company that it strung the letters out into the magical three letters. The fact that it did gives us a window on to the opportunities and risks inherent in the technology, and this debate gives us a chance to address the risks and opportunities and what the Government are doing about them.

I am delighted to have the opportunity to lead the first debate in Parliament on a technology that has the potential to revolutionise the way we live. It is important to explode a few myths. Michael Crichton, author of "Jurassic Park", has written another book called "Prey", the starring cast of which are an army of nanobots, self-replicating miniature robots that end up covering the planet in what is described as grey goo. His Royal Highness the Prince of Wales has taken the matter up in a fairly big way, andThe Mail on Sunday led in April with "Charles' Grey Goo Threat to the World." Two Nobel prize winners for chemistry, Sir Harry Kroto and Sir Aaron Klug, take a contrary view to that of the Prince of Wales. The former says:

"It shows a complete disconnect from reality. He should take a degree in chemistry, or at least talk to someone who understands it, rather than reading silly books."

I am not sure that Crichton's multi-million pound bestseller can be so easily dismissed and Prince Charles should not be, but that is Nobel laureates for you.

Secondly, practical nanotechnology is here already. It is not something for decades in the future; we have nanomachines cruising our bodies in the form of antibiotics. Many of us will have been fascinated by the elegant schematics recently shown on the television featuring fuzeon, the latest drug in the fight against HIV, which works at a molecular level. We are dealing with extensions of what we have already, rather than futuristic things of the sort conjured up by Michael Crichton.

So what are the risks, if any? Much of the excitement over nanotechnology rests with the nanotube, a small cylindrical structure of carbon-based molecules that shows great promise as the basis for the next generation of semiconductors, and therefore microchips. However, animal tests suggest that inhaling them could cause serious lung damage. Important though that is, such risks do not seem to be as apocalyptic as those that Prince Charles may have envisaged. They seem akin to the occupational health challenges that many already encounter. Presumably, they could be dealt with in a similar way. The Royal Society of Chemistry, which I have the pleasure of advising, is keen to make that point. It says that the ethical, social and environmental issues to do with nanotechnology are not unique and can be dealt with using existing regulations. I agree.

It appears to have dawned on the Government later than on most that nanotechnology could revolutionise manufacturing and commerce, and that we had better address it. That is where nano parts company with genetic modification. The former will pervade all sectors, whereas GM is more discrete. Not doing nano means not competing in great swathes of industry. One may prevaricate over GM and blight the farming sector, but if one prevaricates over nano one stands to blight the whole of our industry and commerce. That is not an overstatement.

Dr. John Taylor, the director general of Research Councils UK, was asked to produce a report, which surfaced in the Office of Science and Technology last June as "New Dimensions for Manufacturing: A UK Strategy for Nanotechnology." It contained a road map—we seem to be in the season of road maps, and we have one for nanotechnology—for the UK Government to follow to bring them up to speed in turning the basic science in this field, which we do very well, as we do most basic science, into commercial reality. It is ambitious and sets an ambitious time scale, which suggests that Dr. Taylor feels that we have much ground to make up. The tightness and ambition of his time scale are symptomatic of the urgency that he feels is necessary to bring us up to speed.

According to Taylor's road map in the OST report, we must have a nanotechnology applications strategy board immediately to

"develop and articulate a coherent and coordinated strategy for accelerating the applications of nanotechnology as widely as possible across the economy."

He insists that by 2004 we must have at least two national nanotechnology fabrication centres to "incubate new businesses" from the basic nanoscience that our scientists are so good at. So concerned was Taylor that he said that those centres should be established "urgently", and that funding by the end of 2002 should be

"one of the highest priorities for the DTI."

Dr. Taylor's insistence was no doubt influenced by the fact that the USA already has a number of highly advanced fabrication centres. It has stolen a march on us, that is for sure.

In the UK, to use maritime parlance, we appear to be under way but not making way. Mark Welland, professor of nanotechnology at Cambridge, is obviously frustrated and said in The Times last month:

"Every month that goes by without the decision being made is a month in which our competitors get further ahead. We were in a position to take a lead, and while I'm sure that we will be a very strong performer, it would have been nice to have led the way rather than scurrying along behind."

I should be grateful if the Minister could say where we are with the Taylor road map, the nanotechnology applications strategy board and our fabrication centres. Could he address those points specifically, head on?

What Ministers have done—hurrah, they have done something—is commission another investigation. The Royal Academy of Engineering and the Royal Society have been tasked to investigate nanotechnology and report back in late spring 2004. That investigation will be chaired by Professor Ann Dowling. Given Taylor's lengthy report, it is not entirely clear what more Ministers hope to get from that, other than being seen to do something.

Professor Dowling's tasking seems to be weighted in the direction of risks and regulations rather than opportunities and how the Government might provide support in the interests of British trade, commerce and industry. Anticipating harmful regulation, Otilia Saxl, the chief executive of the Institute of Nanotechnology, has fired a warning shot across the legislators' bows pointing out:

"A sharp knife in your kitchen can be used to cut a steak or to stab someone. You cannot legislate against knives because a few people misuse them. And it's the same for nanotechnology."

I concede that the Dowling study may be an attempt to balance the full-steam-ahead approach of the Taylor investigation. However, I remain concerned that in setting up this further committee we are simply parking the issue for another year at a time when the US, Japan, Germany and even France are forging ahead and far outstripping the UK Government in tangible support given to nanotechnology.

Public debate is very important. We need to get it right and address the legitimate concerns that so many have expressed about nanotechnology, even at this early stage. That should not be an excuse for prevarication and substituting committee investigation and one commission after another for definitive action. My fear is that that is precisely what we are doing. Surely we should have learned something from our handling of GM.

Others in the van of GM, if I may touch upon that briefly, are far better placed than the UK to capitalise on its likely benefits. Other Governments have clearly taken the view that the potential for GM to benefit the lives of the global many, not to mention their domestic agricultural centres and agri-industries is enormous. The UK, true to form, has parked GM by embarking on a series of consultation exercises. Are we doing the same with nanotechnology? Consultation is important but many have questioned the value of the public debate on GM orchestrated by the government.

Crucially, the Government's initiative "GM Nation?" will conclude before three valuable pieces of evidence are available. We heard at length about those during the previous debate. As a salutary warning for our future handling of nanotechnology, those are the Government field studies due in September, Professor David King's scientific report on GM in the summer, and the strategy unit's economic report also due in the summer. Those crucial pieces of evidence will not be available for the public consultation exercise. That exercise will cost £500,000, as opposed to £2.5 million for a similar exercise in little Belgium, and £2 million in the even less populous New Zealand.

The exercise will be poorly informed, badly advertised and certainly cheap. No wonder it has been dismissed as chaotic by an alliance of the Consumers Association, Friends of the Earth, Greenpeace, the National Trust, Unison, the Royal Society for the Protection of Birds, Sustain, and that repository of sound good sense, the National Federation of Women's Institutes. It looks to me like a window dressing exercise.

We must not allow the public debate on nanotechnology demanded by the better regulation task force report of January and accepted in principle by Government to be similarly ill informed and chaotic. The BRTF was quite right in calling for a public debate, and the Government were right to support it. I hope that the Minister will be able to offer some reassurance on that today and assure us that we will not see the kind of chaos and ill-informed debate that we have had on GM.

We need to know to what extent the debate will exist in the realm of the hypothetical given the constraints imposed by the European Union. Drawing on our experience of GM, we know that EU directive 2001/18 means that a decision on the authorisation of GM products is subject to a majority vote of member states. We must assume that there will be directives from the EU dealing with nanotechnology in due course. However, the RAE-RS study on nanotechnology makes no mention of that in its preamble or opening remarks. As the Minister formulates our position on nanotechnology, I would like to know to what extent and in what areas he anticipates the EU impacting on the Government's latitude.

I look forward to hearing the Minister's mitigation for the UK's late start, because that has happened very much on his Government's watch. Perhaps he can say where his early thoughts lead him in terms of Government funding opportunities, what he is doing to assess the risks of the emerging technologies and where he thinks the risks might lie. That would be very useful. I should be especially grateful if he could tell us what has become of Taylor's road map, and the nanotechnology applications strategy board and the fabrication centres, to which the Taylor report and the OST road map referred. Perhaps he would let us know what, if anything, has happened. Finally, we need to know whether the Minister intends a permissive regulatory environment, in what areas he anticipates constraints and to what extent his room for manoeuvre is likely to be limited by the EU. Nanotechnology deals with the very small, but its potential is very large and we must not miss this opportunity.

I congratulate the hon. Member for Westbury (Dr. Murrison) on his success is securing the debate. He is a distinguished member of the Select Committee on Science and Technology. Nanotechnology promises benefits for the environment, our health and the wealth of our economy. Put simply, it is the application of material sciences at around the nanometre scale—that is, one billionth of a metre. It consists of a collection of technologies derived from other areas of science and engineering such as electronic engineering, chemistry, physics and biology. In that respect it is not new. Nanoparticles have been detected in the glazes of 15th century pottery and carbon black has been used in the manufacture of tyres for the past 100 years. Nanotechnology is available now in self-cleaning glass, vehicles with nanocomposite panels and computers containing processors and memory with nanoscale features.

It is important that as the technology develops people feel confident about it. My colleague in the Department of Trade and Industry, Lord Sainsbury, recently commissioned an independent study by the Royal Society and the Royal Academy of Engineering to look at current and future developments in nanotechnology and to find out whether the technology raises new ethical, health and safety, environmental or social issues that have not already been covered by current regulations. An important function of the study will be to separate fact from fiction and to focus on Crick rather than Crichton. It is worth noting that one of the original proponents of the "grey goo" theory, Eric Drexler, has recently stated that such fears should not be used as an excuse to halt research or to introduce crude and oppressive regulatory regimes.

The study has been commissioned as a reflection of the Government's response to recommendations by the better regulation task force in its report on "Scientific Research: Innovation with Controls", which was published in January this year. The wide range of disciplines and views connected with nanotechnology will be represented, including ethical, social and regulatory considerations as well as science and engineering. Wider stakeholder groups, including academia, industry and interest groups, will be approached for input and the public will be engaged. The final report of the study will be published and made public.

Few industries will escape the influence of nanotechnology. As the Prime Minister said to the Royal Society last year:

"Nanoscience…is startling in its potential. This kind of technology may create whole new industries and products we can't begin to imagine".

Some predict a global market in nanotechnology worth more than $1 trillion in a decade. We need to ensure that the UK wins a share of that prize with a prosperous, world-class nanotechnology sector in the UK. As the hon. Gentleman is aware, in 2001 Lord Sainsbury set up an advisory group chaired by Dr. John Taylor, director general of Research Councils UK, to advise on actions needed to improve the UK's capability in nanotechnology and related technologies. His group found that the UK's strengths in nanoscience and nanotechnology provided a strong foundation on which to develop nanotechnology for the benefit of companies in the UK. His report in June 2002 highlighted a number of actions that should be taken. They include the reduction of the mismatch between our research and industrial capabilities, improved UK access to international research and development, improved access to manufacturing facilities to enable industry to trial its ideas and to create a stable, visible and coordinated strategy for public support. Following that report, Lord Sainsbury's officials have visited key fabrication facilities in the US and Europe to gain firsthand knowledge of how best to implement such manufacturing facilities in the UK. They also visited a number of UK academic and industrial centres to gain a clear picture of the depth of capability already present in the UK.

Of particular interest are the two interdisciplinary research collaborations in nanotechnology which have been established at Oxford and Cambridge universities. Those collaborations are funded by three of the Government's science research councils. DTI officials are also in regular contact with other Government Departments and agencies with a clear interest in nanotechnology, such as the Department of Health, the Department for Environment, Food and Rural Affairs and all the research councils.

The hon. Gentleman asked about funding. The Government are investing£184 million to ensure that we gain maximum advantage from our investment in nanotechnology. We are determined to put the UK at the forefront of nanotechnology development. Existing Government investment in nanotechnology already totals£94 million, which includes all research council funding with £70 million from the Engineering and Physical Sciences Research Council and £16 million from the Biotechnology and Biological Sciences Research Council. Last week, Lord Sainsbury announced a cash injection of a further £90 million over the next six years to implement those recommendations and so help industry to harness the commercial opportunities offered by nanotechnology. Of that fund, £90 million will be available for collaborative research and development between industry and our science base. That should encourage UK companies to take advantage of the strength of our science base to develop new products and processes and provide their academic partners with new challenges to drive forward new areas of research. Strengthening those collaborative links is vital if we are to gain maximum advantage from the EU sixth framework programme, particularly the third priority area of nanotechnology, materials and processes, which we estimate to be worth some £900 million.

The UK development agencies have responded positively to the creation of a UK nanotechnology network. That netwc rk will receive £40 million from the fund to provide industry with access to cutting-edge nanotechnology research and resources in academic and industrial facilities throughout the UK. Existing and anticipated micro and nanotechnology projects supported by the UK development agencies are expected to exceed £200 million over the next few years. That substantial investment will help UK companies to take advantage of the exciting commercial opportunities offered by scientific advances in nanotechnology and compares very favourably with the level of investment of our major competitor nations.

Nanotechnology will change the future and I hope that the actions that I have outlined on behalf of Lord Sainsbury will ensure that it is a change that will benefit the UK as a whole. I thank the right hon. Gentleman again for the opportunity to contribute to this important debate today.

I want to make three essential points. The first is on a particular matter that I have been examining—I think that you chaired a previous debate on this, Mr. Deputy Speaker—which is the use of blood, and the alternatives, in cancer. I want to use that as an illustration to lead into my second point, which is the processes that the National Institute for Clinical Excellence allows, and what happens after them. Finally, I will look at how we can make change and improve those processes in doing so.

I am a great supporter of NICE. It was a great idea to set it up. It is a world-class organisation, largely because of the quality of the people involved in it and the integrity of its processes. That is shown once NICE makes a recommendation in the way in which that is accepted in the community. It deals with the right range of matters. It deals with clinical guidance for all conditions, medical interventions and the broader question of technologies—not only physical equipment, but such things as drugs.

One of the great things about NICE is that it has a citizens council. It tries to be participatory in a range of ways, and those can be applauded as ways forward. It tries to address postcode prescribing, as it has been called—consistency in the application of treatments once they have been decided on. It is timely to have this debate now—more timely, in fact, than I initially understood—because having done a little research, I find that the World Health Organisation is conducting a peer review into some of NICE's activities and that NICE has announced its own reviews of its appraisal processes. It is almost exactly 12 months since the Select Committee on Health did serious work on the operation of NICE.

Some 18 months ago I looked at the predicament of cancer patients who suffer from the debilitating effects of anaemia stemming from their treatment. Blood transfusions are used as part of the process to help with that and are one of the main treatments for that common side effect of cancer. I discovered that 30 per cent. of the blood supply is used for that.

Over that period, I have asked 40 ministerial questions and had two Adjournment debates in Westminster Hall. There are clear alternatives to using blood transfusions, such as a drug process called Erythropoietin, more commonly known as EPO. EPO has been licensed for use in the national health service since 1995, but NICE, newly established since then, has not approved that as the normal practice that should operate, which is interesting. Were it to do that, its application would clearly have a different effect than at present. Last November, the Department of Health indicated that it was considering referring EPO to NICE, to get the arrangements consistently applied. On 11 February, the Minister for Crime Reduction, Policing, and Community Safety, then the Under-Secretary of State for Health, confirmed in a parliamentary answer to me that that was under consideration.

During that period, I conducted my own survey of health trusts. Some 30 per cent. said that funding was the biggest hurdle to prescribing EPO and that it would be beneficial to have an early reference of the drug to NICE. The then Minister also reaffirmed that that was being considered in the ninth wave of work that NICE would undertake.

There has been no certainty in the community since the earlier debates, so I conducted my own survey of cancer networks to find out how the uncertainty was affecting them on the ground. I do not mean this to be pejorative, but the replies that I received were that it was rather disingenuous to suggest that there were no funding barriers. The current situation with EPO is that it is a non-NICE approved product, whereas a NICE-approved product would have considerable funding weight. There are barriers to funding if a product has not been approved.

That led me to look further into the costs, and I did some analysis and put some information to the Treasury and others about the relative economics of blood versus alternative treatments. I tried to contribute to that part of the debate, but it came out clearly that NICE is the vehicle for doing a total cost analysis of one treatment versus another. The national health service and health economists do not seem to be able to introduce a proper, consistent process for which funding follows.

I have given information to the Treasury, which seems to think that it would be a good idea to assess the treatment. The industry that produced the product thinks that it is a good idea, and the medical profession seems to think so as well. Patient groups and charities tell me that it is a good idea. According to the latest information, a joint planning group of officers from the Department of Health and NICE are to consider whether assessment should go forward. I ask myself, therefore, exactly what it takes for something to get on the list for appraisal and to be included in the programme of work, given such a body of evidence. I am still waiting for confirmation that that particular treatment will be considered in the ninth wave of NICE's work. I have written to the Minister and ask her again today to give assurances that that will happen.

As well as issues about how something is selected, there are questions about what happens after the reviews are done. The reviews of reviews are taking place at present, in that the WHO is examining the way in which NICE does its work, and NICE is re-evaluating its own appraisal processes, but there are questions about what happens after reviews are done.

Let me give some examples. I am particularly concerned about the speed at which the process works. The first example is the one that I have already given of EPO. If it were to be included in the next programme of work, the evaluation would start later this year. The evaluation—approval, recommendations, promulgation and so on—would take 12 months. By the time funding was in place in the health service, it would be 2005. The process takes that long. Ten years after a product is licensed for use, it gets NICE approval and, possibly, funding.

I try to imagine what would happen if tomorrow I came up with a bright idea and a cure for the common cold. If it were referred to the evaluation process, it would be at least two years before it was applied in the national health service. The general public would think that bizarre.

What happens if a product goes through the process and is approved? I am happy about the confirmation that, within three months of approval, funding should be made available by the commissioning authority, whether it is a local health board in Wales or a primary care trust in England.

However, there are exceptions. One of the latest reports deals with insulin pumps. It took two years for that treatment to be selected. It then took a year for it to go through the process that I have just described. Within three months it should have come into application, but it has not. Implementation has been delayed because of problems with acquiring the technology and with training people to use it properly. There are post-appraisal effects that require serious examination.

There are other effects. For example, the Government are laying themselves open to charges of anti-competitive practices. If the reverse of the situation that I described earlier occurs and EPO is approved and gets funding, the truth of the matter is that it gets funding over and above something else. The Government know that they need to be careful in that area. There are classes of things that are already approved. I want to know how something being approved, or not being approved, fits with articles 81 and 82 of the EC treaty and the Competition Act 1998.

We need a process that allows a review of classes of treatment, because technology is moving so quickly that even though we can protect ourselves against a charge now, within months we are open to that charge again. There needs to be an interim guidance process, because there will be a sound clinical and evidential base for those things to happen.

I understand that the whole point about NICE is that it provides a clear, well-established evidential base to make changes, and I support that, but we are talking about incremental change over time. We need a process to deal with the interim period and re-evaluations. With peer reviews, licensing and so on, there would be enough evidence to provide processes by which an interim guidance procedure could be introduced. Otherwise, the Department opens itself up to charges of being anti-competitive, as well as of not necessarily keeping pace with the best developments for patients. I want to know whether there is any thought of issuing that sort of guidance and, if not, why it cannot be issued.

On change, we are talking about ways of deciding what is the best thing to do, and about doing away with the old processes and introducing better, new processes. NICE is, first of all, about making consolidated incremental change. However, we need ways of dealing with step change. I have made that point time and again in relation to other areas. Without that, we lack consistency of application.

I want to comment on postcode prescribing, because the issue is even more extended than that. As a Member of Parliament from Wales, I want to consider the devolved environment. Although NICE covers England and Wales, Wales has the All Wales Medicines Strategy Group and Scotland has the Scottish Medicines Consortium. Those bodies do similar things to NICE, but they can do assessments within three months. The disparity in the speed of application in different parts of the United Kingdom needs to be considered.

The Select Committee rightly dealt with the idea that quality of life should take precedence, or have a high priority, in all the assessments. Everything that I have said until now tends to suggest a technical view of the world as a place that is evidentially based in terms of technology, regimes and epidemiological studies, but, within that, there is another aspect: the quality of people's lives. if we are to do something about that, we need to do things better and quicker.

To do that, NICE needs more resources. It is all very well for me to claim that it should do things more quickly, and to a better standard, but the reverse of that point is to ask what resources it has to do that. What, if any, additional funding and resources will be given to NICE to appraise more treatments more quickly?

I have covered three areas. I would like confirmation that EPO is being referred to NICE for appraisal. I would like some understanding that interim guidance could be introduced to keep pace with technological change and avoid restrictive practices, and I would like to know that additional resources are to be given to NICE to allow it to appraise more treatments more quickly.

I congratulate my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) on securing the debate and on his interest in a subject that I know he has pursued vigorously for some time. When we came to office in 1997, we inherited a national health service with an absence of national standards. There was no means of spreading good practice or of eliminating bad practice. There was no process for developing national guidance on the use of new treatments, and no independent inspection of local services. The health service was starved of the investment that it needed to meet the legitimate expectations of patients.

Since coming to power, we have established a clear national framework within which local NHS services can operate. We have developed new national standards for cancer, mental health, care of the elderly and coronary heart disease, and others are in the process of being developed. We have introduced a new duty of quality, and a new system of clinical governance to drive up standards of care across the NHS.

Central to our modernisation programme is the National Institute for Clinical Excellence, which we established to give clear national guidance on the use of drugs and other treatments. Its work reaches into all aspects of the NHS, from wider judgments on whether a new treatment is both clinically and cost effective, to assessments of what care is best for individual patients.

My hon. Friend recognises that NICE forms part of our plan to give us a world-class health service. I am grateful for his supportive comments. NICE was established in February 1999. As my hon. Friend said, it has a clear range of objectives. He supports the way in which it works for common standards, the fact that it seeks to promote a faster uptake of treatments, and the fact that it wants to ensure that resources are used more effectively by focusing on the treatments that work best for patients.

My hon. Friend has done much research on the Erythropoetia treatment that concerns him, and I understand the benefits that he believes cancer patients will receive. I also recognise the knock-on effects on the future supply of blood, and for the NHS more generally through the potential saving in bed days that he described. He made a strong case, but that is only side of the argument. Some argue that EPO may be useful in only a minority of cancer cases and that it is simply not effective enough to be used as a standard treatment in the majority of cases. Some would further argue that the savings in bed days might not be quite as high as estimates suggest, because cancer patients need to be seen in hospital regularly, and blood transfusions may be one of several procedures required in a single visit. The beds will be needed not only for transfusion. The cost of treatment with EPO is likely to be more than the cost of the blood used in transfusions.

I do not want to get involved in those arguments today, however, because I am neutral on the matter. We have said that it is for NICE to consider it, and NICE is the most appropriate forum to consider the use of EPO versus blood transfusions. NICE has the responsibility and, most importantly, the expertise to consider the wealth of evidence collected by my hon. Friend, and it can provide independent and authoritative advice.

My question is whether consideration of EPO will be part of the ninth wave of NICE. I do not contest that it is the appropriate body to examine such incremental changes.

I shall come to that point next, as my hon. Friend has raised it. Work on developing the ninth wave of NICE's work programme is complete. Ministers are considering the items to be included in that wave, and an announcement will be made shortly. I am sure that my hon. Friend will understand that I am not in a position to make that announcement today. The remit, or terms of reference for each study, is made public when the ninth wave goes out for consultation, as happens with each wave. When NICE receives its work programme, it determines the timing of topics within each wave, taking account of such issues as the licensing of important new drugs and clinical need. Again, I believe that my hon. Friend comes from the same position as I do on this, in that he argues strongly that NICE is the right mechanism for determining such matters.

NICE determines who should be consulted during the study and draws up a list of stakeholders. My hon. Friend supported the arrangements for engaging and participating with patients and other key stakeholders as part of the work that is done. NICE carries out as part of its work an investigation of both the clinical effectiveness and the cost effectiveness of particular drugs and treatments. My hon. Friend will therefore have to await announcements in the fullness of time to learn what is included in the ninth wave.

We have made drugs that treat cancer a priority. My hon. Friend mentioned the postcode lottery for chemotherapy drugs, which we are concerned about. By implementing NICE appraisals on chemotherapy drugs for ovarian, brain, pancreatic, lung and breast cancers, as well as leukaemia and lymphoma, we are tackling the problem of the postcode prescribing lottery that he mentioned. Some 31,000 patients a year are eligible to benefit from those drugs; EPO, which is primarily a therapeutic drug is currently being considered for referral, as he knows. I agree that quality of life is also important in such circumstances, although treatment for cancer is clearly a high priority, and sometimes such things will have to be weighed against each other.

On NICE's capacity, we obviously cannot send everything to the institute at once. NICE is already considering a growing number of cancer technologies. The rate of innovation in cancer research means that there are always many topics for potential referral. That is a good thing in many ways, although it obviously has its downside. It would not be right to fast-track EPO, a primarily therapeutic drug, ahead of drugs that treat and potentially cure patients. We must decide where and when NICE can best add value. EPO must go through the normal channels, but I am optimistic that it will be referred to NICE.

In response to my hon. Friend's questions about competition, I should say that there are no competition issues to address in that context. He mentioned three months, which is sufficient for the majority of NICE's guidance. The NHS should gear up to establish robust arrangements, if it has not already done so, to release funds when required. In any event, we are prepared to issue bespoke directions if, following consultation, NICE advises that implementation over a longer period is desirable. Such matters will always be watched over carefully, and it is appropriate that they should be, because they are matters on which both patients and clinicians have a keen interest. It is therefore appropriate that there will be ongoing discussions and consideration of how well the arrangements are working. However, we have certainly put in place arrangements to make such things work as well as they can.

As I understand the matter, there are no plans to extend the funding of NICE beyond current plans. My hon. Friend will understand that it is resourced to do the job, and that there will always be a balancing act between the resources we direct to any such special health authority and the money that is spent directly on patients. We set up NICE to tackle postcode prescribing and inequality, and it is central to our plans to modernise the NHS and drive up standards. NICE has issued 41 guidelines and 44 technical appraisals, which are in simultaneous preparation, making it the largest programme in any country. That is an impressive record. In the first four years, NICE published 62 appraisals, which gave advice on pharmaceuticals, surgical procedures, diagnostics and medical devices.

I understand my hon. Friend's interest in the subject, which he has pursued with his usual vigour. From what he said today, I am sure that he will await the announcement of the ninth wave with great interest. I hope that what I have said recognises sufficiently the interest that he has shown in the matter, and the way in which he has advanced his case and brought to our attention evidence about the issues surrounding the therapeutic treatment in question. We place our faith in NICE to deal with such matters through appropriate processes, which I am sure my hon. Friend fully supports.