Will the Leader of the House please give us the business for next week?

The business following the half-term week will be as follows:

MONDAY 23 FEBRUARY—Second Reading of the Gender Recognition Bill [Lords].

TUESDAY 24 FEBRUARY—Motions relating to the Draft Social Security Benefits up-Rating Order 2004 and the Draft Guaranteed Minimum Pensions Increase Order 2004, followed by an Opposition half-day [5th Allotted Day] (2nd Part). There will be a half-day debate entitled, "Crisis in pension scheme wind-ups", on an Opposition motion.

May I express my gratitude to the hon. Member for North-East Hertfordshire (Mr. Heald) on behalf of the House for the early notice he has given of the title of the Opposition day debate? It is 12 days away, but such notice gives hon. Members an opportunity to plan. Perhaps we can continue to discuss the titles of such motions to ensure that what appears on the Order Paper is not only consistent with what I announce, but accurately reflects the contents of the Opposition motions that he wishes to table, given that the titles that I announce sometimes do not appear on the Order Paper because of the need to conform with House rules.

WEDNESDAY 25 FEBRUARY—Debate on the report from the Privy Counsellor Review Committee on the Anti-terrorism, Crime and Security Act 2001, on a Government motion.

THURSDAY 26 FEBRUARY—Motion to approve a money resolution on the Employment Relations Bill, followed by a debate on Welsh affairs on a motion for the Adjournment of the House.

FRIDAY 27 FEBRUARY—Private Members' Bills.

The provisional business for the following week will be:

MONDAY 1 MARCH—Remaining stages on the Asylum and Immigration (Treatment of Claimants, etc.) Bill.

TUESDAY 2 MARCH—Second Reading of the Pensions Bill.

WEDNESDAY 3 MARCH—Opposition Day [6th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.

THURSDAY 4 MARCH—Motion to approve a money resolution on the Carers (Equal Opportunities) Bill, followed by a debate on women, equality and human rights on a motion for the Adjournment of the House.

FRIDAY 5 MARCH—Private Members' Bills.

The House may also wish to know that, subject to the progress of business, the House will rise for the Easter recess at the end of business on Thursday 1 April and return on Monday 19 April.

I should, of course, have asked for the business for the next parliamentary week, in which case it would have been quite in order for the Leader of the House to reply "gardening"; luckily, he did not.

May I raise two issues with the Leader of the House? Last year, he and I marched shoulder to shoulder through the Lobby to vote for a democratically elected second Chamber, which was the most popular option among hon. Members. The option that received the fewest votes was an all-appointed Chamber. Why, therefore, have the Government chosen to proceed with that option? Who was it who said:

"If there is one fault greater in a democratic society than not to consult, it is to consult and then to ignore the results"?

It was his predecessor. The Leader of the House has gone one better—he is now ignoring his own opinions, as set out in the Fabian Society speech that he made only last Saturday. If he wants to introduce a Bill, surely it must include ideas for electing the other place. May we have a statement in this place on the Government's intentions?

It has now emerged that the Home Office ignored warnings given last summer in a letter from the hon. Member for Morecambe and Lunesdale (Geraldine Smith) that illegal immigrants on pitiful wages were risking their lives collecting cockles among the currents and quicksands of Morecambe bay. The Minister's reply conceded that Home Office officials felt that

"little useful purpose would have been served by sending immigration officers",

and went on to point out that there were "resource issues". That attitude must have encouraged the gangmasters to continue the operations that led to the deaths of the 19 people. It was an appalling dereliction of duty, and hon. Members know nothing to suggest that any action has been taken to remedy the situation.

Do we live in a country where the Government do not care about clamping down on illegal immigration, or that reckless and greedy profiteers are putting people's lives at risk? Will the Home Secretary make a statement to the House today to explain his Department's lazy and complacent response to this dangerous situation? If not, we in the House and people throughout the country will know what the Government really think—they just do not care.

The idea that this Government do not care about a large number of illegal workers who died on the Morecambe sands is, frankly, beneath the hon. Gentleman—and beneath contempt.

As for doing nothing about it, may I place on record what did happen, and in doing so congratulate my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) on her excellent job in defending her constituents' interests and exposing the appalling gangmasters' rackets? Immigration officers were not present on that occasion, but police officers were. The purpose of the initiative was to ensure that the police got a grip and tackled the problem, which they, and the Home Office under the leadership of the Home Secretary, were trying to do.

Are you blaming the police?

No, I am not blaming the police; I am correcting the record. It is not true that the Government or the police did nothing. On the contrary, the appropriate officials—police officers—were on the case months ago, which is what the Home Office Minister concerned said in the reply that my hon. Friend the Member for Morecambe and Lunesdale received to her letter. We did not ignore the situation and there was no dereliction of duty. We were on the case, and we are on the case in other respects, such as seeking to eject a record number of illegal asylum seekers—more than any country across Europe—at the average rate of 1,500 a week.

I am glad that I stood shoulder to shoulder with the hon. Gentleman in the vote on the House of Lords. I have never hidden the fact that I have always believed in an elected second Chamber—I voted that way. The issue now is how we achieve that. First, we must get the Bill through, because it establishes a platform for subsequent consensus on final reform of the House of the Lords.

No.

Yes, it does; otherwise we are defending the indefensible situation of hereditary peers remaining in the second Chamber and voting on laws of the land although they are there by accident of birth rather than by election or any other democratically accountable system of appointment. That is the position.

Interestingly, Conservative peers in the House of Lords voted solidly for a fully appointed Chamber.

They would.

Ah—the cat has been let out of the bag. We have one message from Conservative Front Benchers, who are being purely opportunistic, as they always are on every policy, but another message from elsewhere—and not just a message, but a practical vote against the very policy that the hon. Member for North-East Hertfordshire (Mr. Heald) appears to be advocating. I am in favour of getting through the reform that will abolish hereditary peers and establish a more accountable and independent appointments system, and of building on that over the subsequent period. I shall happily talk to the hon. Gentleman about that. The Joint Committee, on which I hope Conservatives and Liberal Democrats will be represented, will be able to examine the system, which I hope will contain at least a strong element of direct election.

I have one final point on that matter, which is that I have been absolutely consistent in what I said to the Fabians last Saturday and in what I wrote in my book nearly 10 years ago. I have always believed that to have an entirely separate election for the second Chamber on a different date from the general election would be undesirable. I do not know what the turnout would be in such an election, and it would have the opportunity to offer a rival forum. We should examine, as the Lord Chancellor has said, the option of a secondary mandate whereby the votes cast at a general election would determine the composition of an elected second Chamber. It will be interesting to see what the Conservatives do in a serious debate on the matter, instead of their normal opportunistic posturing—which has been countered by the way in which they have voted in the other place.

Will the Leader of the House tell us whether and when we will have an opportunity here to debate the 26th report on senior salaries, which was published this morning, and—more importantly—the Prime Minister's written statement that has just been released? Does the Leader of the House recognise that the Prime Minister's spokesman has confirmed that the report means that the Prime Minister's salary will be increased to nearly £179,000?

Interestingly, the briefing given this morning referred to performance-related pay. Can the Leader of the House explain precisely how that will apply to Ministers? What would happen if there were an error of judgment at the highest levels of government? Would salary be docked if, for example, the Leader of the House made a mistake, or if the Prime Minister made a mistake and led the country to war under false pretences? Would his pay be docked sufficiently to take account of that error?

On Lords reform, can the Leader of the House confirm that there will be a debate in Westminster Hall on Wednesday 25 February? Since he has already said that he has taken the lead on this issue, and since it would seem that he alone in the Cabinet is sticking to the manifesto commitment to make the House of Lords more democratic and representative, which everyone else signed up to but has since reneged on, will he lead for the Government in that debate?

As the hon. Gentleman knows, the lead Secretary of State on the House of Lords reform Bill, which will be introduced in due course and which will abolish the hereditaries and establish an independent system of appointment, will be the Secretary of State for Constitutional Affairs. Yes, I can confirm that there will be a debate on the House of Lords on the first Wednesday after we return.

On public sector pay, the Senior Salaries Review Body recommended that Members' pay and Ministers' pay be increased in line with the general rate of inflation, which is about 2 per cent., and the Government have accepted that. I do not know whether the hon. Gentleman was suggesting that Members' pay should be docked on a performance-related basis, so that he might take a dock in pay depending on whether he performed well or badly at business questions. All that we are doing is implementing what the House has decided. Ministers' and Members' pay is linked to civil service grades. The pay review looked at civil service pay, and this is the result. The increase is in line with inflation, so I do not think that his arguments apply.

I have one other point to raise with the hon. Gentleman. I am very concerned about the number of Opposition Members who turn up for their own debates. I found it amazing that no Liberal Democrat Back Benchers were present during their party's debate on the environment earlier this week. Even more galling is the fact that the hon. Member for Lewes (Norman Baker) has tabled an early-day motion—

Order. I must stop the Leader of the House.

Before we launch forth on messing up the arrangements in another place, could we look carefully at the arrangements in this House? Is the House of Commons going to continue to limp along on the totally inadequate changed hours, which are not only affecting the work of Select Committees but destroying the Refreshment Department? They are also making it impossible for schools in the north to visit the House of Commons at any sensible hour. They really are a negation of any sensible access to a democratic establishment.

My hon. Friend will be aware that I have announced that we shall review the hours, and I am taking soundings on that and consulting everyone across the Floor as well as our own Back Benchers, including her—[Interruption.] Perhaps I could address the specific issues that she has raised. First, the question of when Select Committees meet is a serious one. The Chairman of the Liaison Committee and, indeed, the Liaison Committee itself raised the issue with me when we met before Christmas. There is now an opportunity for Select Committees to meet in convenience, as it were, on a Wednesday morning, not least because the parliamentary Labour party has decided that, after the Easter recess, it will meet on a Monday evening. Perhaps my hon. Friend will look at whether that will give her an extra opportunity. I realise that there have been changes to the catering arrangements as a result of the new hours, but the Refreshment Department's income has actually gone up—[Interruption.]

Order. The hon. Lady asked the Leader of the House a question. She should not then interrupt him.

Within the rules, I always enjoy my hon. Friend's heckling from the Bench Benches. Indeed, I admire her—

Order. It does not help me, and the hon. Lady should not do it.

I realise the frustration that my hon. Friend and many other out-of-London Members, including me, feel about the limitation on tours and school visits. That is why I have talked to the official responsible for such visits, and we are considering making adjustments to improve the opportunities for school visits and other visits that Members arrange from their constituencies, because this has undoubtedly been a very negative outcome over the past weeks.

I think that we can move forward and resolve the three issues that my hon. Friend has raised, but I want to see a consensus created on the wider question of hours, by people on both sides of the argument talking to each other and finding a way to move forward. There is every sign that Members are showing a willingness to do that. I want us to have a vote that achieves a consensus rather than a narrow vote that leaves one side triumphant and the other side embittered.

The Leader of the House has just confirmed that a Bill will shortly be introduced on the House of Lords. Will he give the House an assurance that the Government will not draw the long title of the Bill so tightly that it will not be possible to table amendments on a directly elected element?

I can give the right hon. Gentleman no such assurance.

May I draw to the attention of the Leader of the House the importance of professional football to the national way of life? Many football supporters are extremely concerned about the recent spate of takeovers by billionaires from outside the country—such as the takeover of Chelsea—and about the current situation at Manchester United. Speaking as a Manchester United supporter, I must tell my right hon. Friend that it will not go down very well in Manchester if a takeover bid is made for United without reference to the interests of football, and if such a decision is made only in the interests of business. Can we expect an early statement from Ministers on how they intend to approach takeovers in professional football?

I recognise my hon. Friend's concern. I know that he is an avid Manchester United supporter, and that he will be mourning last night's results just as I, as an avid Chelsea supporter, am celebrating them. I understand his concern, however. The takeover of Chelsea football club, which has brought much needed relief and many tens of millions into our coffers, whereby we are now creating the best club in the world, has nevertheless raised the important issue of foreign takeovers that my hon. Friend identifies. I know that the all-party football group has done a lot of work on this matter and expressed much concern about it. It is an important issue that my right hon. Friend the Secretary of State for Culture, Media and Sport will want to take close account of. I am sure that she will also study what my hon. Friend has said and be happy to talk to him about the implications.

I do not know about the Chelsea PFI scheme from Russia, but will my right hon. Friend have a statement made by the appropriate Minister regarding the supreme court proposals and the statement by the Lord Chief Justice, no less, that he will oppose the proposals unless he gets a £50 million prestigious home for the supreme court? We are not talking about a few rolls of wallpaper here. I regard this as blackmail, extortion or bribery. I do not know whether some legal interpretation can be made, but it ill becomes a Lord Chief Justice to act in this fashion.

Knowing my hon. Friend's fearsome reputation, I am sure the Lord Chief Justice is quivering over what he said. If the reported remarks are correct—and I do not know—I find it surprising if that is the principal reason for objections by the Lord Chief Justice to modernising reforms, which will establish a genuinely independent senior judiciary and a new, modern system of a supreme court, and ensure that the system of appointments to the senior judiciary is independent, rather than being in the Prime Minister's hands. I would have thought that most people of common sense around the country, including those in the Lords, would recognise that. I hope that the Lord Chief Justice will in due course do the same.

On Tuesday evening at Earls Court the British music industry will once again host the now annual, increasingly popular, Brit Awards ceremony, which, I am sure the Leader of the House is aware, is where the cream of the British music industry comes together to celebrate another year of success and achievement. The right hon. Gentleman will also be aware that the industry is currently experiencing real difficulties, mainly in the form of piracy, counterfeiting and illegal downloading. May we therefore have a debate on the British music industry, to examine these issues and to celebrate the success of what is still one of our most dynamic, creative and successful indigenous industries?

Unfortunately, I shall not be at the Brit Awards, as I shall be visiting people across Wales, although I received an invitation. I am glad that many hon. Members will take advantage of their invitations, because our music industry is vital in terms of exports and Britain's reputation world wide for being in the vanguard of modern music. I know that particular notice will be taken of the hon. Gentleman's concerns, as he was a distinguished rock musician in his previous career.

Having recently returned from a visit to Israel and the occupied territories, and spoken to members of the Palestinian Authority and the Likud Government, two things are clear. One is that everybody knows the way forward and what needs to be done. The second is that there is a literally deadly impasse at present. Will my right hon. Friend therefore try to find time for a debate on this issue on the Floor of the House, particularly in the light of continuing loss of lives on both sides, issues over the line of the security fence and the possibility of unilateral withdrawal from Gaza? It is vital that the House keep an eye on these issues and lobby for the road map to peace and for long-term peace and prosperity for all the people—Palestinians and Israelis.

My hon. Friend eloquently puts what I think is a position widely shared across the House and across all parties. He will have the opportunity to question my right hon. Friend the Foreign Secretary on this matter very soon after we return. The vision that he has offered is that there must be negotiations for an independent Palestinian state, but one that gives the Israelis the security they need from suicide bombers and other attacks. That is the only way forward, and the sooner they get down to the road map again and the negotiations to achieve it, the better.

There has already been a reference this morning to the tragic deaths of the Chinese workers in Morecambe bay. Council officials calculate that in the Breckland district council area, part of which I represent, there are some 15,000 foreign workers, some of whom are there legally, some illegally. I have been warning Ministers about the implications of this for at least two and a half years, but my efforts have been greatly hampered by the fact that it seems that no one Department is in the lead and that no one Department wants to know the facts.

There is no excuse now for Ministers not knowing the facts, in the light of the tragedy and also in the light of the report of the Environment, Food and Rural Affairs Committee on gangmasters, published last September. Will the Leader of the House arrange for an early debate on the implications of Morecambe bay and the issues raised in the Select Committee report, and allow Members to question the Government on their extremely limp response to the report?

I am grateful to the right hon. Lady for raising this point, which affects the coastline near her constituency. Indeed, it affects us all. I do not agree that there has been a limp response. We have been pursuing the gangmasters, and are doing so in the Morecambe bay area. That is the purpose of the investigation. The police—the appropriate security officials, rather than immigration officials—came in and were on the case in order to track down the gangmasters. My right hon. Friend the Home Secretary will want to consult closely on the matter—his consultations will include the right hon. Lady, if she wishes to make any representations—because this is a common problem that we have to solve together.

We have seen in recent days Eurotunnel yet again falling into serious financial difficulties. In one way or another it will have to be bailed out by the public purse. Will my right hon. Friend make time for a full debate on rail freight, because only by pushing more freight through the channel tunnel will it eventually become financially viable? The same is true of the channel tunnel rail link. The only way in which it will be fully utilised and really become viable is if more freight is put through the CTR tunnels currently being constructed. Will my right hon. Friend make time for that debate, so that we may also look in particular at the way in which we can get full-scale road haulage trailers on to trains? That is the way forward.

My right hon. Friend the Secretary of State for Transport will study carefully what my hon. Friend said. I agree with everything that he said, as, I am sure, does my right hon. Friend. The objective must be to get more freight on to rail and off the roads, for environmental and congestion reasons, apart from anything else. That is one of the many reasons why record investment is going into the railways and will continue. The channel tunnel is a vital link for our exports.

Following the NHS ombudsman's ruling against South Cambridgeshire primary care trust that a person with dementia should receive free NHS care at home, may we have a debate to explore the implications for people with all forms of dementia in residential care, whose health care should surely be funded by the NHS? We must now take the opportunity, after the South Cambridgeshire ruling, to end the discrimination against people with dementia.

The hon. Gentleman raises a problem that is common to all our constituencies. It is one of the reasons why we are introducing the Mental Incapacity Bill, initially in draft. He will have an opportunity to see whether it meets the concerns that he has identified. It is a serious issue, and I hope that those responsible locally will take note of his comments.

I congratulate the Government on implementing their ten-minute Bill on the 92 remaining hereditary peers. Of the Lords who sit in the upper House simply because their ancestors received titles, many have titles that were given centuries ago. Indeed, the ancestor of one was given the title on 28 June 1283. How can it be possible to defend people sitting in the House of Lords, part of Parliament, simply because their ancestors were given titles centuries and centuries ago? The matter should have been dealt with long ago, and I am pleased that the Government are to take action now.

I could not agree more with my hon. Friend. The idea that people sit in judgment on our laws, and vote on them, because a great, great, great, great grandmother was the mistress of Charles II is an astonishing democratic proposition. The Conservatives now support the hereditary peers and the principle of their remaining in the House. That will become a clear dividing line between a Labour Government who seek to modernise our democratic institutions and a Conservative Government who would seek to keep them in mediaeval times and put us in a situation in which our Parliament became a laughing stock internationally.

On that very point, does the Leader of the House seriously think that this blatant cherry-picking and gerrymandering of the House of Lords will get through Parliament without full-scale reform? What the Government are trying to do—let us be quite clear about this—is to fiddle the figures in the House of Lords by removing the hereditaries, without giving us proper reform following that. The right hon. Gentleman knows very well that the official Opposition are pledged to a democratic upper House, which his party apparently now is not, so we will take no lectures from him until we have a debate to flush all of this out. We will defend the hereditaries until we get proper, full reform of the upper House, and we will not accept his crude attempt at gerrymandering.

How on earth getting rid of hereditary peers can be called gerrymandering, I have no idea. The present composition of the House of Lords, partly because of hereditary peers, is gerrymandered in favour of the Conservative party. That is the reality. There is a vast majority of Conservative peers, including hereditaries. The Government have fewer peers in the House of Lords than Cross-Benchers, let alone Conservatives. That is a form of gerrymandering against the will of the people, who elected the Government to carry out our manifesto.

The right hon. Gentleman should join us in getting rid of hereditary peers through an independent system of appointment, which is light years away from gerrymandering, taking the power away from the Prime Minister. We will then move on to find a consensus on an elected second Chamber, or at least a second Chamber with a large proportion of elected peers. If the Conservatives will back us in that venture through consultation in the Joint Committee, which my right hon. Friend the Prime Minister is calling for, we can move forward. I suspect that in the end Conservative Members, like Conservative peers, will vote against modernisation and democratisation, because they are the last vestiges of a commitment to an elitist democracy.

Can I persuade my right hon. Friend of the growing case for a debate in Government time on the future funding of the national health service? I understand that work is underway at Richmond house on primary care trust allocations for the next three years. I know that a number of my hon. Friends whose primary care trusts are still some distance from their target funding would welcome the opportunity to influence the work that is underway at the Department of Health.

Is the case not made more pressing by some of the mixed messages that we have seen this week about lower taxes and higher NHS spending, which can have only a destabilising effect on NHS staff throughout the country?

On targets and funding levels in certain areas, my hon. Friend will be aware that waiting lists have been coming down steeply throughout England. That is a sign of the huge investment that the Government are now making. Against that background, I am astonished that the Leader of the Opposition is quoted as saying in a speech this week that the Government have spent a huge amount more on the NHS and that this approach has been tried and has failed. We have recruited thousands of extra nurses, doctors and consultants to make sure that waiting times are driven down to give people relief from pain, and the Leader of the Opposition is saying that we are spending too much money. As for the shadow Chancellor, the editorial of 12 February in The Daily Telegraph says that "The Tories are all over the place on tax and spend." We are seeing opportunism again. The same old extremist policies are coming back.

Has the Leader of the House had an opportunity to read the report published yesterday entitled "Obesity, the Time Bomb" by three eminent bodies, which recommended a cross-Government taskforce to look into a strategy for this problem? Looking at the Leader of the House, it is clearly a problem that he does not face. He gets plenty of exercise running from Government Department to Government Department putting out fires and, indeed, starting them. However, he knows that there is a problem, particularly with youngsters, who seem to believe that they can have a Big Mac and large fries twice a day and that that will have no long-term effect on them, whereas clearly it will. They need good dietary information and good exercise opportunities. This is not a case of Billy Bunter versus Twiggy: it is a matter of getting the right balance and getting information out to our youngsters. Will the Leader of the House consider seriously setting up a cross-Government taskforce to give guidance on and a strategy for this problem?

There is a strategy for the problem that my right hon. Friend the Secretary of State for Health, in combination with my right hon. Friend the Secretary of State for Education and Skills and other Ministers, is pursuing, including my right hon. Friend the Secretary of State for Culture, Media and Sport. It is to encourage people to take more exercise. I get most of my exercise in the Neath valleys and in the gym rather than engaging in my departmental responsibilities.

We are bringing in new standards on nutritional content and we are increasing food labelling and food marketing, especially to stop or discourage advertisements that encourage young children to eat junk food and become obese. It is an extremely serious problem, and for that reason the hon. Gentleman is welcome to apply for a debate. However, the Government are on the case and will tackle the matter energetically. I am sure that his advice will be welcomed.

I know that my right hon. Friend the Leader of the House is a radical reformer. Does he think, therefore, that we should be having some full-day debates determined by Back Benchers? May I suggest as a starting point a debate that I know would have a great deal of support? We should have a full-day debate on the legacy of the National Coal Board, during which we could consider the unresolved issues concerning canteen workers. There are also issues involving the mineworkers pension scheme. In particular, we could have a proper and full debate about scandalous solicitors. One of them has today cited my right hon. Friend in defence of why they have been double charging miners, miners' widows and their families, despite the fact that the Government have already paid them. Given that we have a radical and reforming Government, does that not warrant at least a full-day debate?

My hon. Friend raises some important issues that I, like him, as a coalfield community Member, have been very concerned about. First, on the mineworkers pensions scheme, the Government's guarantee has ensured that despite the recent deficit, mineworkers' pensions have been topped up with taxpayers' funds. Therefore, they will be guaranteed their final salary pension schemes in a way that, unfortunately, people in the private sector are not. I think that former miners will welcome that.

My hon. Friend will know that the claim of canteen workers for equal pay is a long-standing grievance that was neglected by the Conservatives. It was resolved when I had responsibilities for energy. I know that some anomalies are still outstanding, with some individuals being not properly recognised and registered by the National Union of Mineworkers and by Arthur Scargill. That is a difficult problem.

I agree with my hon. Friend about applying for a debate on the scandal of solicitors who are taking Government money—taxpayers' money—to process compensation schemes. They are taking millions and millions of pounds of taxpayers' money and then penalising and exploiting often really sick miners by taking an additional cut of their compensation. That is a scandal. If it is not illegal, it is certainly against the code of the compensation scheme that was laid down by the court. The sooner that my hon. Friend is able to identify and, if necessary, name solicitors under privilege in the House, the better.

Will the Leader of the House find time for an urgent debate on the Floor of the House on the future of air transport? Since the publication of the White Paper in December, there have been demands from Members on both sides of the House for a debate. With the exception of one Westminster Hall debate, it is clear that not enough time has been provided. There is a serious demand for such a debate.

I appreciate the point that the hon. Gentleman has raised. He is free to apply for a debate at any time. When my right hon. Friend the Secretary of State for Transport made his statement and published the White Paper, I think that it was widely welcomed. There was a full opportunity then to hold him accountable.

In view of the recent exchanges in the House on the contribution of taxpayers to provide Short money for political parties in the UK, will my right hon. Friend find time for a debate on the contribution of UK taxpayers to the funding of European political parties of which British Members are members, particularly perhaps the strongly pro-federalist European Peoples party?

The fact is that taxpayers' money does subsidise, quite properly, European political parties. It is interesting that the Conservatives have now decided to affiliate to the most federalist party in Europe. I encountered its members when I was representing the Government on the European convention. They were in favour of more and more integration, the creation of a European federal superstate and stripping Parliaments like ours of their power to maintain sovereignty over European decisions. It is an interesting body swerve by the new Leader of the Opposition that he has joined the federalist superstate fanatics in the European Peoples party.

Is the Leader of the House aware of the Government's strategy on defence medical services? Is he aware that the two main features of this strategy are the closure of the Royal hospital, Haslar, which is bitterly opposed, and the building of a new Royal College of Defence Medicine on the site of the Selly Oak hospital in Birmingham, at a cost of £200 million? Is the Leader of the House aware that the Government have now run out of funds and cannot develop the Selly Oak hospital, which means that their strategy is in tatters? It is not surprising that the admiral responsible for the policy has resigned from the Royal Navy rather than implement it, but it would have been more dignified if the Ministers responsible for those policies had resigned instead. Can we have a statement, because the Government policy is in tatters, and there is no plan B?

I recognise that this is an important constituency matter for the hon. Gentleman, who has raised it with the Secretary of State for Defence on numerous occasions. However, I do not accept his description of Government policy as being in tatters. Indeed, the Government are continuing to invest record amounts in defence and the defence of our country. I have read reports that the shadow Chancellor may be considering a cut in defence spending, but we shall no doubt find out next week. The issue is where we will get the money. If taxes are to be cut for the few, as the Conservatives apparently advocate, what will happen to our defence forces, let alone our hospitals and schools? That is the dividing line that is now opening up in British politics, and the people will decide that it is a Labour Government who can best protect their interests in defence and elsewhere.

Would the Leader of the House consider a debate on terrorist activity in the United Kingdom, and could it include consideration of the disturbing facts revealed this week on the BBC programme "File on 4", which looked at the recruitment of British citizens to terrorism? Would he also note the comments of Dr. Tamimi, a senior spokesman of the Muslim Association of Britain, who is reported in the English edition of "The Jerusalem Report" on 9 February as saying that he

"occasionally acts 'informally' as a public relations adviser for Hamas"?

Hamas, of course, is a proscribed terrorist organisation.

I am obviously disturbed by my hon. Friend's account of what has appeared in "The Jerusalem Report". I am sure that the Home Secretary and, indeed, the security authorities will want to study carefully the points that she has made.

The Financial Secretary made a written statement today about Equitable Life, which raised more questions than it answered. We now know that the Penrose report, which was given to the Treasury more than seven weeks ago, has been given to the Financial Services Authority, the Serious Fraud Office, the Department of Trade and Industry, a group of independent actuaries and Equitable Life senior management, but it is not available to the public or the policyholders most affected. Could the Financial Secretary come to the House today to tell us when we will get that report, and whether it will be published in full or will be edited, given some of the comments by bodies that already have it, and given her response to a parliamentary question?

As I hope the hon. Gentleman is aware, the Financial Secretary made a written ministerial statement on 5 January which clarified our plans to publish the report in full as soon as possible, and said that Treasury Ministers will answer questions after publication. I am sure that he will agree that the issue is important. It has been raised with me on a number of occasions in recent weeks, and I am well apprised of its significance. It is an important issue to get right before a Minister comes to the House or the report is published with the Government plan of action in response. I am sure that he will understand that this is a complex matter. We have to get it right in the interests of everyone affected.

Does my right hon. Friend agree that since deregulation in 1986 bus services have declined a great deal? On that note, I draw his attention to early-day motion 519, which calls for the extension of the bus franchising system in London to the rest of the country:

[That this House recognises the success of the franchised bus network in London which has improved service quality and resulted in much greater use of services; notes the decline in bus patronage and continuing reductions in socially necessary services since the industry was deregulated outside London; and therefore calls upon the Government to change the current legislative framework in order to make it easier and quicker for local authorities and passenger and transport executives outside London to introduce franchising in circumstances where the industry has failed to provide a socially inclusive service and deliver the quality necessary to achieve patronage growth in line with national targets.]

Does my right hon. Friend agree that if that system is good enough for the people of London, it is good enough for our constituents? Will he arrange for an early debate, so that we can talk about ways in which we can give bus passengers a much better deal?

My hon. Friend's desire for a better deal for bus passengers is one that the Government and I share. I agree that the bus deregulation carried out by the previous Government was a disaster, which is why we have encouraged the rationalisation of bus services and put record amounts of subsidy into the provision of local services, as I have seen in my own constituency, especially in remote areas. That is important in ensuring that people living in rural areas have a better quality of life and much easier forms of transport.

Does the Leader of the House share my disappointment that we did not reach question 14 in Education questions earlier, as that deprived Members on both sides of the House of the opportunity to express concern about the continuing crisis in school funding? Last year, there was a dreadful situation in which schools throughout the country threatened redundancies of teaching and non-teaching staff. We were assured that it would be better this year, but I have already received communications from schools in my constituency. The head teacher of Woodheys primary school, Mrs. Daniels, wrote to me:

"I have spent hours and hours agonising over an impossible task—I am supposed to give staff more support time, release and a better work/life balance (as promised by the government) and through not fault of my own or my governors we will have to lose all support staff, many trained in-house, in September '04."

It is a dreadful problem, which the Government promised would not happen again this year. Can we have an urgent full-day debate in Government time on school funding so that we can try to head off the crisis before it causes redundancies next year?

The real crisis would arise if the Conservatives' policy of 20 per cent. cuts in school funding were implemented. The hon. Gentleman is free to apply for a debate on this subject at any time, but the Secretary of State for Education and Skills has frequently answered questions on it. As the hon. Gentleman will be aware, an estimated 180 schools across England will benefit from the £2.2 billion capital investment programme announced today, on top of the recruitment of 25,000 more teachers and 80,000 more support staff, as well as the repair or refurbishment of 21,000 schools. That is a dramatic contrast with the Tories' record of cuts, closures and teacher redundancies. However, two problems remain. The first is getting the school funding route through local authorities right—my right hon. Friend the Secretary of State is working on that—and the second is falling rolls in certain areas, which is a big problem in my own constituency.

May I ask my right hon. Friend about the membership of the Standing Committee considering the Higher Education Bill? What happened to the convention that the composition of a Bill Committee reflects the vote on Second Reading?

We have a significant reduction in the Government's usual majority for that Committee to just three, to reflect precisely the balance of opinion in the House. That is something of which we took account, and the usual channels accepted it, so the hon. Gentleman's point has been recognised.

Has my right hon. Friend seen early-day motion 532?

[That this House believes that the powerful campaign being run by the Daily Mirror for medals recognising the bravery of six military policeman killed in Iraq also shows the need for medals which recognise all British servicemen and women who have been killed in the line of duty as proposed in Early Day Motion 445.]

The motion supports the Daily Mirror's campaign for medals to recognise the bravery of the six military policemen killed in Iraq, but goes on to argue that there should be general provision to recognise all British servicemen and women who have died in the line of duty. As I would love to be a friend of the Ministry of Defence, will it make a statement saying that that request will be looked at favourably and granted?

This matter has been raised before by the hon. Gentleman and hon. Members on both sides of the House. I know that it is an important issue, as one of my constituents died in Iraq only a few months ago. However, if we focus on granting awards to people who have died on active service, there is a problem of balancing that against recognition for those who carry out their duty and come back safe and sound. We will certainly look at the matter very closely indeed, but the traditional view of the armed forces is that it would be wrong to overcompensate, as it were, for those who unfortunately die and sacrifice their lives, when others come back, having performed individual acts of bravery.

As the pensions Bill was published today and as the Leader of the House has announced both a Second Reading and an Opposition debate on a related subject, will he take the opportunity in the meantime to speak to his Cabinet colleagues at No. 10, the Treasury and the Department for Work and Pensions to emphasise the fact that the plight of people who have lost their pensions as the result of insolvency is not the same as the Equitable Life issue, not least because many of them were compelled to join their pension schemes and never received a health warning that it was possible that their pensions would not be paid in full? Will he make sure that that point gets across while compensation is still being considered?

My hon. Friend makes an important distinction affecting Allied Steel and Wire workers in his constituency—precisely the kind of issue that my right hon. Friend the Secretary of State is studying. The question is, where can a boundary be drawn on such claims? The ASW workers were treated absolutely appallingly, along with thousands of others who suffered a similar predicament. The Government are looking at the issue in a way that will not extend the boundaries, such that could give rise to millions of potential claims but recognises the particular plight of the workers concerned. I hope that my hon. Friend will continue to discuss that matter with the Secretary of State. I am sure that my hon. Friend will welcome the pensions Bill published today, which will provide protection against precisely such exploitation and scandal in future.

In response to a note helpfully passed to me by the shadow Leader of the House, perhaps I may add to an earlier reply. If I misled the hon. Gentleman or the House in my remarks about the usual channels, I meant to say that the Committee of Selection had a Division and that the hon. Gentleman's side lost—that is the usual way of doing things when there is disagreement.

The fact remains that we have significantly reduced the normal majority for a Committee with a membership of 25 to just three. Included among its Labour Members are some who voted against the Government. [HON. MEMBERS: "One."] That shows that we recognise the strength of opinion on the Floor of the House.

Will my right hon. Friend arrange a debate on the Strategic Rail Authority and its ability to remove from train operators obligations to service improvements in their original franchise agreements? Such a debate would allow me to pay tribute to the Yorkshire Post for helping to expose the fact that the SRA has removed from Midland Mainline the obligation to provide an hourly fast service between Sheffield and Leeds, which is badly needed. Apparently, that obligation was removed because Midland Mainline is so poor at delivering the rest of its services that the company cannot be trusted with a new one. That action was taken without consulting the passenger train executive and Members of Parliament, and with no compensation payable by Midland Mainline. The PTE was told that if it could find another operator to deliver the service, it would have to meet the cost. That unaccountable and unacceptable decision strikes at the heart of the SRA's activities and deserves a debate.

My hon. Friend will have the opportunity for a debate and my right hon. Friend the Secretary of State for Transport will want to take note of that matter. There is a record investment totalling billions of pounds to improve the railway infrastructure, with 1,400 new vehicles and many more train journeys. The railways are carrying more passengers than for more than 40 years. The Government will continue modernisation and investment to meet the transport and congestion challenges of the future.

In the gaps between gardening next week to which the shadow Leader of the House referred, will my right hon. Friend find time to read the National Audit Office report on the Criminal Records Bureau's early years of operation, in particular the debacle surrounding Capita's computer systems? Will he consider whether we should re-evaluate the love affair with private finance—now that the first flush of romance has paled and the initial ardour has cooled—and examine why we are being further seduced down a path that has already produced commitments for future taxpayers of £120 billion? Is not the private finance initiative prohibitive in cost, flawed in concept and intolerable in its consequences for the British people?

I do not recognise that description or outcome in the many schools and hospitals throughout the country that have been built with the benefit of private sector investment. Nor is the NAO report likely to be at the top of my reading list next week—when I will not be gardening but visiting various parts of Wales.

The report to which my hon. Friend refers stated that the Criminal Records Bureau has made many improvements since the problems that arose originally:

"It is now reliably delivering over twice the number of checks undertaken by the police each week than under the old arrangements into children and vulnerable adults."

That is a sensitive area and the CRB is doing much better. Admittedly, that is at extra cost, but I am sure that my hon. Friend welcomes our clamping down on all sorts of problems affecting children and vulnerable adults.

Will my right hon. Friend organise an early debate on the extraordinarily laid-back attitude of the Post Office's major shareholder—the Government? The Post Office wants to shut sub-post offices in my constituency, meaning that many residents will have to spend 10 per cent. of their pension on a taxi to collect it or wait hours for a bus—and bus drivers can accept only three passengers with Zimmer frames before others must be turned away. Where sub-post offices are closed, pensioners' quality of life is massively reduced. Will my right hon. Friend please call in such decisions for urgent review?

I can see that at this stage in the Government's life, we have a new definition of being on message among some Back-Bench colleagues. My hon. Friend makes the important point that sub-post offices often represent a vital facility in small communities. We aim at keeping as many offices open as possible and are providing record amounts of subsidy to help ensure that that is done in areas where there is no alternative facility. Lifestyle changes are helping to close local post offices, almost regardless of what the Government could do—except at prohibitive cost. The ease with which pensioners can travel to post offices is a critical issue and one of which the Post Office takes close account. I am sure that my hon. Friend's strong representations will be recognised.

With permission, Mr. Speaker, I should like to make a statement.

Last June, I had the pleasure to announce that we had secured the most radical reform of the common agricultural policy since its inception. Today, I will make a statement on how I propose to implement key features of that groundbreaking reform in England.

To place the proposals in context, it is—as I said to the House at the time—hard to overstate the importance of reform in transforming the core elements of the common agricultural policy and laying down a new direction for its future evolution. Crucially, the link between the subsidy paid to farmers and the level of production has been broken—so called "decoupling". That means that farmers' activities will no longer be dictated by what the subsidy regime requires them to produce—with all the costs and bureaucracy entailed—and frees them to farm in accordance with what the market wants.

Decoupling also reduces the environmental impact of farming by removing an incentive for intensification and over-production and by making subsidy dependent on compliance with a range of environmental standards. Moreover, decoupling of subsidy from production reduces the trade-distorting nature of the common agricultural policy and paves the way for a deal in the current round of world trade negotiations.

The challenge before us is now how best to maximise the potential benefits of the reform with our approach to implementation. In particular, which of the options available to member states should we take up? How far should we decouple? How should we apply the new decoupled scheme—the single farm payment? We consulted widely on those issues in the autumn of 2003, and received more than 800 responses. I have given careful consideration to the arguments put forward, which advocated a wide range of different approaches.

In reaching my decision, I have been guided by several key principles. They are: coherence with the Curry commission report and our own sustainable farming and food strategy launched in 2002—with the emphasis in both cases on bringing the industry closer to the market and the increasing importance of environmentally sensitive farming; consistency with our wider objectives for the CAP—including greater simplicity, transparency, minimal bureaucracy and as few deductions as possible from the basic payment available; and the need to attract the widest possible support of the stakeholder community for continuing payments to farming—which, we believe, requires moving towards a system in which public money delivers public goods. I was also determined to give as many details as I could at this stage of the scheme in order to give the industry a clear path of adjustment so that farm businesses can plan.

Those principles led me to a conviction that the more fully support is decoupled, the greater the degree of freedom farmers will be given in respect of their own business decisions. So I have decided that in England we should fully decouple all direct payments in 2005, including the new payments for milk producers. Therefore, a single farm payment will replace the plethora of existing schemes and simplify the bureaucracy that is associated with them. However, the exact form of the payment is also important. The options available included a straightforward allocation of available moneys on the historical basis of an individual farmer's receipts in the reference years 2000–02; and allocation of different flat-rate payments on the basis of whether land was under grass or under crops in 2003.

I have concluded that we should avoid a situation in which subsidy is allocated solely on the basis of past activities that were themselves undertaken in the context of production-linked support policies. For England, I do not believe that it would be right to adopt a purely historical approach. I do not believe we can justify to our public a situation in which at the end of this decade or later, farmers continue to receive aid wholly based on business decisions taken 10 or more years earlier in a very different policy context.

Instead, guided by the principles I outlined earlier, and having listened carefully to the many compelling and carefully argued cases put to me by the National Farmers Union, the Country Land and Business Association, the Royal Society for the Protection of Birds and others, I propose to exercise the option in the agreement to adopt a flat-rate payment per hectare.

Of course, a fully flat-rate system paid immediately in 2005 would have been the simplest and cheapest to implement. However, the redistribution and the immediate impact on some incomes that would result would be too destabilising. More importantly, it might act against the sort of behavioural change that we want to take place in helping the industry to become fit for purpose in getting closer to the market.

In order to mitigate these effects, I propose to introduce the flat rate progressively and to divide England into two regions: land in the severely disadvantaged areas—SDAs—of the less favoured areas; and all other land. A different flat rate will apply in those two regions. During the transition years—it will be the same period in both regions—a steadily increasing proportion of the funds available would be directed towards the simple flat-rate payment, with most farmers receiving an additional, but over time diminishing, payment related to the subsidies that they received in the reference period 2000–02.

I have also decided that the period for the phasing in of the flat-rate payments will be eight years, starting in 2005 and ending in 2012. The proportion of the available funds to be allocated on the flat-rate basis in each year will be 10, 15, 30, 45, 60, 75, 90 and 100. In other words, 10 and 15 in the first two years, after that rising by 15 per cent. a year until we reach 100. My intention is that the flat-rate payment element should be low in the early years to allow farmers time to adjust and plan for the situation that will appear by the end of the decade.

I recognise that the framework that I intend to implement will involve some redistribution of current subsidies between farmers and between sectors and areas, but it will be introduced over a reasonably extended period of time that allows farmers to adjust during the transition. We will end up with a system that is increasingly equitable between farm types; is much more market focused; has a greatly simplified bureaucracy; and can deliver a better landscape and environment, and a more sustainable long-term future for English farming.

There are many related issues that will need to be addressed over the coming months. I can say now, however, that I do not propose to take advantage of the option for so-called national envelope measures in England. Although in certain circumstances they could offer potential benefits, I judge that the accompanying complexity and loss of transparency outweigh those advantages in English conditions.

As to cross-compliance, conditions will attach to the subsidies that are payable, and we will consult on the approach to be taken in respect of those to ensure that they are implemented effectively, proportionately and, again, with the minimum of bureaucracy—an approach that we shall take to all forms of regulation. In addition, I am keen to ensure that our implementation of cross-compliance will fit into the approach of the whole farm model for regulation that is being piloted in England.

I believe that this approach constitutes a forward-looking package of measures that fits the principles I outlined earlier. It is a decisive and irreversible shift which offers huge opportunities to the industry. I know that many in the farming industry would have preferred the Government to adopt the approach of allocating aid on the basis of historic subsidies received. However, many others, including some in the farming industry, took a different view, as did some members of the wider stakeholder community; I have to take all those views into account in developing a workable system.

My Department and I will work with the industry over the coming months to implement these decisions in the best way possible, and in the spirit of partnership and co-operation with all stakeholders that has run through the Curry commission and our own sustainable farming and food strategy on the central issues here, and any other measures that might be helpful in due course.

Everybody in the farming community told us that they sought clarity in the direction of policy, and simplicity and transparency with less bureaucracy, and that they hoped that we would not implement all the options for deductions from the basic payment that were available to us. We are heeding all those calls.

I have set out today a basis for payment that I believe to be the fairest, because it moves us in the direction of public money going to support public goods across the whole of farming.

I begin by thanking the Secretary of State for coming to the House to make this statement and for giving me prior sight of it.

I thank the right hon. Lady, too, for at last trying to end the uncertainly that has dogged our farmers for so long. British farming has been through the most difficult of periods in recent years, particularly in recovering from the foot and mouth outbreak, and after a great deal of uncertainty and anxiety, our farmers will at least begin to have a clearer picture of their future fate.

The right hon. Lady will know that my party has actively backed Commissioner Franz Fischler in his desire radically to reform the expensive and unwieldy common agricultural policy. We support the need to end the red tape, form-filling and over-regulation that came to embody the CAP, and we agreed wholeheartedly when he said that the reform could lead to a new, more market-focused agricultural industry under the slogan "freedom to farm".

However, it is hard to see how the scheme laid out before us today will achieve those goals. The last few months have indeed seen vigorous debate in the farming community about what method of allocation to adopt, but the Secretary of State has managed to come up with the one scheme that absolutely nobody recommended. She said that she received 800 responses to the consultation. How many of those supported this scheme?

Moreover, although the Secretary of State explained that in England there will be a dynamic hybrid model for the single farm payment, Wales will have an historical system with a national envelope, Northern Ireland will have a static vertical hybrid system, and Scotland, as I understand it, will have a different historical system. That means that there will be four different systems for farmers in the United Kingdom; and that will mean four different sets of rules with four different armies of civil servants implementing them on our shell-shocked farming industry. It is hard to see how that is likely to cut red tape or do away with bureaucracy. One of the clear aims of decoupling was to reduce bureaucracy. The Secretary of State said in her statement that her aims were simplicity, transparency and minimal bureaucracy. Perhaps she could explain how replacing one system with four is a simplification.

I am not alone in my concerns. Franz Fischler, the commissioner who was the architect of these very reforms, said in a letter to Ministers:

"the original intention…was that the Single Payment should be based on the historical payments…The idea was to promote competitiveness and market orientation while securing the income of farmers".

He continued:

"I would like to point out that such a departure from the historical model could have important redistributive effects in terms of payments to individual farmers resulting in some farmers obtaining significantly lower amounts".

Franz Fischler is not alone in voicing his concerns. Sir Ben Gill, president of the National Farmers Union, said earlier this month:

"The hybrid option will bring the worst of both worlds, but the advantages of neither. There is no point in changing one complexity for another."

That hardly sits well with the original idea of cutting bureaucracy.

Of course there may not just be four systems in the United Kingdom. As the Secretary of State said, there will be yet another scheme for disadvantaged areas. Britain's farmers compete not only on a global basis and with competitors throughout Europe. but with each other. Under the proposed systems, Britain's farmers will receive different levels of support but compete in the same marketplace. With four different systems, surely someone will be better off and someone the loser. Who is it likely to be? There will be huge disparities in the continuing support that our farmers receive in the coming years.

Let us look at the practicalities. Take two farmers, one on the Welsh border in Leominster and one on the other side of the border in Brecon, both currently growing exactly the same crop and getting the same entitlement and both continuing to grow the same produce in future. One could experience a difference of tens of thousands of pounds in the aid that they receive in future. Does the Secretary of State really believe that to be fair or amicable? Does it not encourage the perception that the English farmer will be put at a disadvantage compared with his Welsh, Scottish or Northern Ireland colleague, let alone with the French, who are doing their best to retain production subsidies?

The Secretary of State has not made clear what the announcement will mean for cross-border farms. Are we likely to see farms that straddle the border having to adopt two different systems? Will they have a choice to opt for the best one? Or has she not addressed that problem at all?

Many farmers around the country will be asking themselves today what the new scheme means for them. What figures does the Secretary of State have for possible losses to farmers in England, most notably in the dairy and beef sectors and tenant farmers, compared with other UK farmers as a result of today's decision? What, if any, mitigating measures has she put in place to deal with those problems?

The proposal is the biggest disruption that our agricultural industry will have seen in a generation. It involves a huge redistribution of support and upheaval to the lives of our farmer communities. It is essential that they know, as a matter of urgency, what the implications will be for their businesses and their families. What measures has the Secretary of State put in place to inform and guide farmers across the country about the implications for their businesses? That must be a matter of urgency. What studies have been conducted on the impact not only on farm structures but on the environment of implementing this hybrid model?

The Secretary of State said in the statement that implementation with the minimum of bureaucracy is "an approach which we shall take to all forms of regulation". She also said that she wanted to attract the widest possible support from the stakeholder community. Sadly, the statement suggests that, far from minimising bureaucracy, the Government have changed one complexity for another. Far from attracting the widest possible support, it is the one scheme that no one recommended. Far from ending uncertainty, it will leave many farmers wondering what future they have under the Labour Government.

I am grateful to the hon. Member for Maidenhead (Mrs. May) for her initial welcome for the CAP reform proposals, although I note—and perhaps she has not caught up with this—that her view does not seem to be shared by her colleagues in the European Parliament, who have just voted against them all.

However, I am grateful to the hon. Lady, and she is right to say that we need to reduce red tape and form filling and connect people with the market. There is no question but that the biggest impact of the changes that we have negotiated is the decoupling itself, which will have a major—and, everyone believes, a positive—effect on farm incomes.

The hon. Lady said several times that none of the consultation responses supported a fully flat-rate option. That is not correct. I am afraid that I do not have the figures with me, but it is not the case that no one supported that option.

The hon. Lady dwelt at great length on the freedom for the different constituent parts of the United Kingdom to have different structures. Northern Ireland is looking at its relationship with us, and also over the border to Ireland, where there is 100 per cent. decoupling but not on the same basis. I remind her that Wales and Scotland are able to adopt a different system—it is their free choice; they are responsible for agriculture under the devolution settlement—precisely because I negotiated that freedom for them. It would be ridiculous for me, having sought to obtain that freedom, to attack them for exercising it. It is for them to make the decisions that they believe to be right in their own context.

The hon. Lady drew attention to a letter that Commissioner Fischler sent to Ministers the other day, referring to the potential advantages of a historical payments system. I have read it with care and subsequently talked to Commissioner Fischler. I have also spoken to him since we made the decision that I announced today. I note that what concerned the commissioner particularly was whether any member state would be seeking a redistribution of itself and for that reason: seeking to redistribute the subsidies that are paid. That is not what we are doing. We are seeking to institute a different system. That system brings in its wake some redistribution, but we are seeking to minimise the degree of that. That is a rather different issue.

The hon. Lady described the system as being neither fair nor amicable and said that English farmers would be at a disadvantage, particularly vis-à-vis the French. If she speaks to the English farming community—indeed, the UK farming community—which almost universally supported decoupling, I think she will find that it believes that the French are putting themselves at a disadvantage by not 100 per cent. decoupling. I remind her of the example of Ireland, which campaigned as hard as anybody against full decoupling in the negotiations. However, once its farming community began to examine the implications—keeping two sets of systems and keeping bureaucracy in perpetuity for one of those sets—Ireland speedily decided to decouple 100 per cent. I believe that, over time, farming communities throughout Europe will reach the same conclusion as British farmers, who, perhaps because of the impact of the terrible problems that British farming has experienced in recent years, were looking more acutely at their future, rather than protecting their historical position.

The hon. Lady asked me about the overall level of redistribution. I cannot give her detailed figures for each sector immediately, but we will do what we can to make information available. What I can tell her is that the overall level of redistribution will be 13 per cent. to 15 per cent. of moneys now distributed, but that will happen over eight years. She asked about mitigating measures. Of course, we are acutely conscious of the impact on tenant farmers and various of the sectors, and we will be talking to the farming community about what is available to it. Let me return to one point that the hon. Lady made repeatedly in a number of contexts. She said that Ben Gill had attacked the so-called hybrid option. That is true; he said that it was not an option that we could possibly advocate. Let me emphasise that what we propose is not a hybrid system, but a flat-rate system, towards which we are moving on a transitional basis. The two are not the same. [Interruption.] If the hon. Lady waits a second, I shall explain the big difference. When the system is completed, there will be one form, one payment date and one payment for one producer. I call that simplicity.

I largely welcome the statement, which some Labour Members will perceive as a dynamic compromise. However, some of us believe that one element has possibly been missed out, although I appreciate that the leading farming organisations would not necessarily have argued in public for it. We continue to pay a subsidy to some of the richest people in the country. I have always taken up the cause of tenant farmers, and I should like some genuine redistribution to take place, if not in the current review, to those who need some subsidy to continue their work. Will my right hon. Friend comment on that?

As I said earlier, the Commission would certainly have set its face against a proposal for redistribution for its own sake. However, I am grateful to my hon. Friend for reminding me that I could have said a little more about one aspect that the hon. Member for Maidenhead raised. This is obviously no more than a very general picture in terms of gains and losses, but generally speaking the flat-rate payments will redistribute subsidy from more intensive to less intensive producers and to land that did not previously receive a subsidy. However, the size of the redistribution is mitigated by having two flat rates, not one. Analysis of the farm business survey suggests that general cropping farms and horticulture will gain relative to historical payments, as will cattle and sheep, both in less favoured areas and in the lowlands, but other farm types will tend to lose. Within farm types, however, there will always be cases of individual winners and losers, so even though, for example, typically, lowland cattle and sheep farms gain as a group, it will tend to be sheep farms that gain, and cattle farms, particularly intensive beef producers, that lose. In addition, in the dairy sector, larger producers tend to lose while small producers tend to gain. In relation to my hon. Friend's general remarks about smaller and less well-off farmers, one impact of the redistribution will probably be to move income towards some of those smaller farms that have had less support in the past, particularly in the hills.

I am grateful to the Secretary of State for advance notice of the statement, and for the statement itself, albeit after the decision is made.

This announcement represents the most significant change to agricultural support in more than a generation and is likely to have a significant and far-reaching impact on farming, as the Secretary of State acknowledges. I am surprised that the Government have not given any indication of assessments that they have made, with or without the Treasury, on the likely impact of the proposed model on a variety of sectors—not just on tenant farmers, traditional farming practices, the environment and new entrants to agriculture, which were mentioned today, but on many other sectors.

I do not know whether the Secretary of State intended it as a deliberate steer, but the statement as circulated to me, and to the rest of the House now, includes an adviser's note halfway down page 2: "Secretary of State: Andy"—I do not know whether that is a familiar reference to me—

"feels that, if possible, we should clarify this point about deductions".

My question to the Secretary of State— [HON. MEMBERS: "And Andy."] And to Andy. My question is whether the Secretary of State can clarify the point about deductions. I noticed that it was not clarified in the statement.

The Secretary of State said in her statement that a key principle in reaching her decision was coherence with the Curry commission and the food and farming strategy. Does she not recognise, however, that one clear outcome of that commission was the establishment of the tenancy reform industry group, which was facilitated by her Department, the key objective of which was to create a viable tenant sector for the long term? Does she not realise, however, that payment based on land will shift fundamentally the balance of agricultural support towards landowners? Given that in this country 40 per cent. of land, formally or informally, is rented, does she not accept that that will have significant impacts on the viability of tenanted farms? I thought that a Labour Government would support the sons of the soil rather than landowners who will ultimately reap the benefits from this system. What assessment has she made of the likely impact, as I think that it is likely to be far-reaching?

What assessment has the Secretary of State or her Department made of the impact of this model on new entrants to farming? It is vital that we get new blood into farming, and we need a system that enables that to happen. I am not sure whether the Secretary of State has properly accounted for that in her assessment. What assessment has she made of the impact on family farming structures? She said in answer to previous questions that she believes that the proposals will favour small family farming. She must recognise, however, that it is the bedrock of many of our rural communities and it is important that we have a system that supports that fundamental part of our rural communities.

I agree with the Secretary of State that taxpayers will not tolerate for long paying farmers merely for existing. Which public goods, however, does she have in mind—access, amenity, archaeology or farming traditions? For which of those does she want cross-compliance, and how will that be measured and enforced? As the hon. Member for Maidenhead (Mrs. May) said, concern exists about different systems in different countries and about those farms that cross those border areas. How will those questions be handled? Will she consider mitigating measures for those sectors that we know will be hard-hit? The dairy sector, as we know, is particularly hard hit, and is already going through a severe crisis.

This is the most significant change in agricultural support in a generation. So that we do not conclude that the Secretary of State is treating this House with breathtaking disdain, will she ensure that she allows the House an opportunity to debate these measures? This decision has been taken, and as with genetically modified crops, decisions will be taken before we get an opportunity to debate such measures. Will she ensure that we have an opportunity to debate this measure so that we can identify the problems, influence and alter those aspects, and put it to a vote of the House?

It is a bit odd that the hon. Gentleman should talk about treating the House with disdain when we have come here to make the statement. I share the hon. Gentleman's view, however, that this is the most significant change in farming support in a generation, and that it will impact on all sectors. There are lots of figures and graphs, which I am sure we will be able to make available to the House, but which we do not have the time or opportunity to discuss now.

"Andy" is Andy Lebrecht, the director-general of the food, farming and fisheries directorate. We indeed heeded the advice and fleshed out the section on deductions. For greater accuracy, as the hon. Gentleman asked the question, let me tell him the potential deductions that we would still have to make. One would be a deduction on some scale for the national reserve—I cannot answer all the questions about the precise figures, because those are still in negotiation, they are not agreed, and we do not have the detail from the Commission. Another would be the deduction that is made for modulation, which in future will be made across the EU—and let us not forget that in this country we began voluntarily to modulate to make a deduction from the payment to support wider rural activities, when no other member state was doing that. The competitiveness pressures that Members have sometimes identified will be eased on that basis, because everybody will have to follow the same step. There will be whatever decisions we take on national modulation. In the fullness of time, there will probably be some deduction for financial discipline. That remains to be argued out and negotiated, however, and currently it does not apply. Those are therefore the only deductions that we need to make at present.

The hon. Gentleman then talked about the tenancy reform group. Yes, it has done excellent work, and I look forward to hearing from it about what we can do to assist and support tenants in the present circumstances. I also say, however, that I of course understand—we took full account of it and considered it very carefully—the anxiety that this system of payment would shift the balance of moneys towards landowners. It seems to me, however, that potential exists for landowners to reap the benefit of a changed system, no matter what we do. I am aware that situations have already occurred in which tenancies have happened to come to an end and the renewal of the tenancy has been made conditional on the entitlement being part of the landowner's asset in the new system. That is before anyone knew that we were planning to go down an area payment route. I accept, of course, that there will be an impact, and we will want to look at it.

The hon. Gentleman asked about new entrants. In relation to the deduction to which I referred for the national reserve, that is exactly the kind of purpose for which a national reserve could be used, and we will consider it on that basis. He also talked about the need to maintain family farming structures. Of course, one of the reasons that we began to make deductions to put them into the so-called pillar 2 was exactly so that we could do other things to support rural areas and social and economic structures in rural areas. I anticipate that that shift will also continue to occur, not just in this country but across Europe. It is therefore not just through this payment that those concerns would be addressed. We are discussing cross-border issues with the devolved bodies, but again we must talk to the Commission about what and how regulations can be drawn up, and clearly, we will examine measures in mitigation.

I make one simple point to the hon. Gentleman, who is, in effect, asking why we have made this shift. The thrust of his remarks is that we should have stayed with the historic basis, which would not, for example, have caused the shift from landlord to tenant. I take the view that it would not be consistent with my duty to this House and to the farming community as Secretary of State to encourage people to believe that over the long term it is sustainable to base the farming system wholly on historic payments in England. It is one thing to say that payments will be made in 2008, 2010 or 2012 based on what a specific farmer did in 2000–02, but entitlements and land will be traded. Soon, payments will be based not even on what the individual concerned did on a farm in 2000–02, but on what somebody else did in 2000–02. Perhaps I am unduly cynical, but the British public would require a justification, and the justification that we are offering is the best that they will get.

rose—

Order. Before I call the next speaker, may I say to the House that we have had a statement on a very important matter today, and that a large number of hon. Members are seeking to catch my eye? Unless questions, and perhaps answers, are shorter, an awful lot of hon. Members will be disappointed.

Does the Secretary of State accept that she has made some difficult but decisive and correct decisions? It is decisive to change the CAP radically, it is right to decouple entirely, and it is different to accept that less favoured areas should be compared with the rest. I am sure that she knows that the announcement will not be universally welcomed in the farming community. Will she therefore ensure that the details are publicised to farmers as quickly as possible, that the Rural Payments Agency is in a position to make the changes and. most importantly, that she speaks loudly and clearly about the reforms so that the general public know that they will benefit in terms of both public good and environmental enhancement?

My hon. Friend echoes a remark made to me a couple of days ago by an experienced individual in the farming community, who said that in his judgment this was the most difficult decision that any Agriculture Minister has ever had to take—as hon. Members can imagine, that made me feel good. My hon. Friend said that the decision would not be universally welcome. I shall be honest with him and the House: I expect it to be universally condemned, because people who want us do more on environmental issues will say that we are not doing enough, and people who want us to do something different on farming will also say that we are not doing enough. That is life, is it not? I assure him that we have carefully discussed the matter with the RPA. Whatever we do, the RPA must begin by establishing a system based on historic payments, and the pace of transition will assist it in making the scheme work efficiently.

In welcoming the new opportunities for farmers to move closer to the markets, may I follow the comments made by the hon. Member for Sherwood (Paddy Tipping) by pointing out that if the Secretary of State is right to say that she wishes to introduce the proposals from 2005, nine months is a somewhat heroic timetable in which to introduce a change of such enormity? At this stage we do not know the shape of the final regulation or the cross-compliance requirements, and we have received no detail from the RPA about the procedures that will be involved. When will such details be made available to farmers, and in what form?

I am grateful to the right hon. Gentleman, because his question allows me to clarify one or two points. The closing date for applications to take part in the scheme will be 15 May 2005. During this year, the RPA hopes to issue to all farms, particularly those who are in receipt of subsidy—obviously people who receive nothing at the moment and who will get something under the new scheme will have to apply—an illustrative outline of what they can expect to get under the new system. It hopes to begin making payments in December 2005 and issue them between then and June 2006.

I congratulate my right hon. Friend on negotiating this significant change. I am one of those who were sceptical about previous statements, which did not seem to change very much, but this statement is clearly very different. I am also one of those who have called for a long time for a shift from price maintenance to income support systems for agriculture, and this statement seems to be a decisive shift in that direction, in which I hope that we will make further progress later. The statement also seems to be a step towards the dissolution of the CAP and the beginning of a gradual move towards national systems of agricultural support. I wonder whether my right hon. Friend will comment on that point. Will she also comment on how this decision might affect the rest of the world in the wake of the Cancun debacle, and on how poorer producers across the world react to the CAP and other unjustified systems of agricultural support that benefit only richer countries?

May I begin where my hon. Friend ended, by saying that this decision will help to get across the message that a great deal is changing in the CAP? I had a conversation in Geneva in January with the Brazilian ambassador, who said that one of the reasons why countries such as his own had not fully realised or accepted the scale of change in Europe was because the negotiating mandate for the world trade talks had not changed, which is testament to the flexibility that the commissioner negotiated for himself. None of us realised that that signal had been taken in quite that way.

My hon. Friend is not right to say that this is basically the dissolution of the CAP, because there is still a great core of common provision and common circumstances. On 10 February, Commissioner Fischler said that it did not matter if different states went down different routes because that is allowed and is part of the compromise, and that the challenge was to get the best model for each situation. He also made the point that redistribution in, for example, the UK might be limited compared with that in countries with varied climates such as those bordering the Mediterranean. There is still a core element to the CAP. but I share my hon. Friend's view that the change is big and that it will be beneficial in the long term.

May I remind the right hon. Lady that one of the anxieties faced by British farmers is that they are confronted with a raft of animal welfare regulations that are not matched in third countries that export products to the European Union? One of the important changes that should be made is to enable the EU to impose restrictions on imports into the EU of products that are not produced in accordance with animal welfare regulations imposed within the EU.

I understand that British farmers are concerned about whether there are welfare requirements here that are not imposed elsewhere. I touched on cross-compliance but I did not deal with it in great detail. Every member state—there will shortly be 25—will, of course, be required to meet cross-compliance measures in order to obtain entitlement to payment. Many of those measures are contained within existing directives, but there is also the requirement to maintain land in a generally good agricultural condition. Events are moving in the direction of narrowing the previously perceived gap between standards in this country and those elsewhere.

The Secretary of State is right to turn her back on the historic system of funding agriculture, which was effective at shovelling bucketfuls of money into the pockets of a small number of grain barons as opposed to the larger number of working farmers. What assessment has she made of the danger of falling into the different trap of moving from funding the richest farmers to funding the richest landowners? She will know that under the proposed scheme the Duke of Westminster will probably be entitled to subsidies of £1,000 a day whether he bothers to get out of bed in the morning or not. Will she re-examine the EU proposals to impose a ceiling on the land-based subsidies so that the money clearly goes into sustainable farming, rather than sustainable and profitable landholding?

I hear what my hon. Friend says, and obviously I am familiar with the argument on the issue. It is fairest to have a system that pays the same on each hectare—which it broadly will, within the two different regions—irrespective of the nature of the ownership. I repeat that it is the public goods that will be required for which public money will be paid. Although the SDA—severely disadvantaged area—split will make a difference to the receipts of the richest landowners, I urge my hon. Friend to look at the wider impact of the redistribution and not just at that one comparatively narrow point.

I am sure that the Secretary of State will be aware that the south-west branch of the NFU calculates that the scheme announced today will mean a reduction of £18.6 million a year in payments to the south-west area, primarily because it is a livestock and dairy area. She said earlier that some sectors would be adversely affected. Will she do an analysis of self-sufficiency in the livestock and dairy areas, and put it in the Library? The key test of the changes announced will be whether we produce more of our own food as a result, or suck in more imports. UK self-sufficiency has dropped in the past 8 years, from 75 per cent. to 65 per cent. Will the changes improve that situation or make it worse?

Frankly, it would be hard to assess what impact the changes will have on self-sufficiency, because the effect on the marketplace will make an enormous difference. I recognise the concerns that the hon. Lady expresses about the impact in the south-west, but it will not be disadvantageous to everyone. People on Exmoor, Dartmoor and Bodmin moor, like those in the north Yorkshire moors, will benefit—

They are not in my constituency.

I am sorry that they are not in the hon. Lady's constituency. Unfortunately, we are not able to allocate subsidy per constituency. We have already got a lot of analysis and we will continue to do more. I am sure that everyone else will also analyse the proposals in detail, and that will illuminate the exact position for all of us. In overall terms, there will be winners and losers, as always happens when things change, but the impact of the movement of resources is anticipated to be about 13 to 15 per cent. over eight years. We will then have a system of support that is much more defensible, and that will be worth it.

I congratulate my right hon. Friend on a skilful and historic statement. I also lend my support to those who have asked her to continue to explore how best that huge public subsidy can be used to support those who actually work the land, rather than simply to inflate the asset value of land. Now that subsidy has been decoupled from production, will it mean an end to export subsidies under the CAP, which have been so damaging to so many of the world's poorest people?

I am grateful to my hon. Friend for his welcome, and I am especially grateful to him for taking that point on board. I know that he has been greatly concerned about the distorting effect of export subsidies and has expressed his anxieties about the form of reforms hitherto. He is right: what created the need for export subsidies was the overproduction for the European market. There will be no incentive for overproduction any more, so the need for export subsidies should wither on the vine. If my hon. Friend can get that message across to some of the well-meaning and honourable people who campaign against this reform, I would be grateful to him.

Complex rules will be necessary to calculate the payments made in the transitional period, and especially to fix the base historical payment—although admittedly that will be phased out. Can the Secretary of State confirm that there will be a fair, independent and objective appeals system, so that individual farmers can appeal against determinations made by her Department?

My understanding is that farmers in the hon. Gentleman's area will do rather well out of the changes. However, some will feel, for a variety of detailed reasons, that they will be disadvantaged. I urge all hon. Members to tell their farming constituents to provide us with as much information as they can as soon as possible, because the more information we have, and the more accurate it is, the less the likelihood of errors. Information will also assist us when we consider how great a provision we need to make for a national reserve. Part of the purpose of such a reserve will be to deal with anomalies that cannot be dealt with any other way, with hardship cases, and with unusual circumstances— perhaps land or leases changing hands in the reference period. [HON. MEMBERS: "Appeals?"] Yes, there will be an appeals system to correct the basis of payment, but just as important is a system that deals with harmful anomalies even if the payment has been assessed correctly.

Does my right hon. Friend accept that today's announcement will be particularly welcomed by the completely unsubsidised horticultural sector? Indeed, the NFU horticultural committee, under the able chairmanship of my constituent, Mr. Graham Ward, has argued long and hard that if the historic payment system had been adopted it would have created market distortions in that highly successful sector.

I am grateful to my hon. Friend. He is right, although it is important to utter the caveat that it will not be open to people to expand the areas of enterprise that they have previously had and claim extra payment on that basis. The arrangements will be for existing areas, with some exclusions for top fruit. Generally speaking. however, he is right to say that the changes will be helpful to horticulture. Many in that sector have made the grade in an unsupported market, but the changes will make a difference for some.

Will one of the effects of the changes that the Secretary of State has announced be that a dairy farmer who currently receives a lot of subsidy but probably does not make any money will gradually have much of that subsidy taken away and given to farmers who currently farm profitably without any subsidy?

There will be impacts on dairy farmers, as on everyone else. At present the dairy sector receives direct support, but we are about to move towards a system with a dairy premium. It is our proposal to decouple that premium from the beginning, and to make that part of the general approach. However, there will be winners and losers in the dairy sector, as in other sectors, and we are willing to examine the redistributive effects and see what can be done to mitigate them. In the long term, a simple system such as we propose will be to everyone's advantage.

I invite the Secretary of State to say a little more about the impact on horticulture. She will know that the high-quality agricultural land in areas such as south Worcestershire and the Vale of Evesham can just as easily be used to grow subsidised cereals as unsubsidised field crops such as salad onions. Can she reassure horticulturists that they will not suffer an adverse competition effect as the high subsidies paid for arable crops such as cereals have an impact on the marketplace in the transitional period?

I cannot say that there will be no effect in the transitional period, although I shall think some more about the point that the hon. Gentleman makes. In the longer term, payment will be made on the same basis for everyone. I know that those with unsupported crops were anxious that those who received support would be able to compete, with the assistance of that payment, against those who had never been entitled to a payment. That fear cannot be totally removed in the short term, but it should be diminished.

I declare a very real interest, as a farmer. The changes are a sensible step in the right direction and, as the hon. Member for Luton, North (Mr. Hopkins) said, signal the end for the CAP. Presumably the money paid under the flat rate will eventually be paid straight to the landowner. Many of my local farmers are council tenant farmers, the landlord being Leicestershire county council. How does she envisage the changes affecting the relationship between the landlord and tenant, especially in starter farms, which many people still want to take on? The proposals need fleshing out.

I am grateful to the hon. Gentleman for his welcome. I am conscious of the fact that tenant farmers are anxious about whether some council starter farms will continue to be made available. We are looking at the issue in general terms and seeing whether we can do more to assist. I can tell the hon. Gentleman that the payment will go to the person who is farming the land.

The Secretary of State said that Exmoor was a probable winner under this system, and I welcome that, but as I also represent other parts of Somerset, I cannot welcome the implications of her comments. Perhaps there is one silver lining—less bureaucracy, as she described it. I accept that the system is not hybrid, but the transition appears to be so. What assurances can she give that there will not be an explosion of associated regulations and bureaucracy as we move towards 2013?

The hon. Gentleman is right: it is not a hybrid system and ultimately it will undoubtedly be less bureaucratic. But there is a transitional period, and the same invidious choice is before the House as was before the Government—between a much more compressed transition period, with a bigger impact on farm incomes and farm planning, or an extended period that would lead to greater complexity. I regret the need to make such an invidious choice, but we had to make it and on balance, given that people will understand clearly what the pattern of transition is, it will assist them in planning for the longer term.

Many farmers will be very pleased that they now have some information on which to make planning decisions—although the devil will be in the detail. But perhaps the Secretary of State should give us some background on her decision to split England into severely disadvantaged areas and the rest. If she is serious about supporting the most vulnerable farming businesses and those that make the biggest contribution to the environment, will she be putting more resources into severely disadvantaged areas, or doing the opposite?