What recent discussions he has had with other Governments on debt relief to Ethiopia. [172709]

Last month, the Governments agreed debt relief of $1.9 billion to Ethiopia, and then an additional topping up of $1.4 billion. Ethiopia is now the 13th country to reach decision point for debt relief and the 27th to be receiving debt relief.

I thank the Chancellor for that answer, and I thank him for the work that he has done in securing debt relief for Ethiopia, on which I congratulate him. I am sure that he is aware that that country still has some $3.7 billion in outstanding debt, particularly to Russia, from the days of the bad old regime. I know that that is causing a considerable problem to Ethiopia as it tries to move towards the eradication of poverty and an increase in education and health services. Will he redouble his efforts in that direction, to secure the relief of that debt as well?

I am grateful to the hon. Gentleman, who I know is secretary of the British Ethiopia parliamentary group and has visited Ethiopia on two occasions recently. He is absolutely right: Ethiopia is a very poor country, where the average income is less than $100. Some 82 per cent. of the population live on less than $1 a day. Half of its $5.5 billion debt is owed to multilateral institutions, so the situation is difficult. There is also a specific problem because of the size of the debt owed bilaterally to Russia.

I, too, congratulate the Chancellor on ensuring that Ethiopia and indeed Niger got their top-up debt relief. He has pointed out to the House the desperate poverty of Ethiopia and the fact that it still owes debts to many multilateral institutions. It has been calculated that it would cost UK taxpayers £3 each for the next 10 years to pay back our portion of the multilateral debt so that those in Ethiopia would not have to keep paying debts to the richer countries of the world. As Bob Geldof said in a recent meeting in this House, they cannot afford to pay it, but we can. Does the Chancellor think that that could be achieved by this country and by other countries?

I am grateful to my hon. Friend, who I know has been very prominent both at constituency and national level in fighting the case for debt relief not only for Ethiopia, but for countries around the world that are in need of it. A week on Friday at the G7 meeting in New York we will be discussing the possibility of deeper debt relief, which would certainly benefit countries such as Ethiopia. An extension of what is called the sunset clause would benefit countries that are still in conflict and are also desperate to be in a position to receive debt relief later.

Does the Chancellor agree that however desirable and attractive debt relief is from the point of view of alleviating poverty, it is justified only if it is accompanied by strict conditionality and if it is made clear that it cannot be repeated, otherwise, a tremendous moral hazard is created and we find ourselves simply subsidising failure and perverse policies? Does he agree that, in the case of Ethiopia, part of that conditionality must be the observance of the arbitration award with Eritrea and the avoidance of further conflict, otherwise, we shall be encouraging the reconflagration of violence in that very damaged part of the world?

The debt relief and additional aid that I am talking about are certainly conditional, and I made it clear in my earlier answers that that was the case. I think that the hon. Gentleman will agree that the signing of the memorandum of understanding with the Ethiopian Government, with clear target points for them to meet on transparency and other changes in the way in which they operate, as well as on the protection of human rights, is extremely important. That is why the additional aid that we are prepared to provide to Ethiopia is conditional on its meeting those benchmarks.

How many families in Watford he estimates are receiving tax credits. [172710]

In January 2004, around 7,000 Watford families were receiving child or working tax credits, and I can confirm that in the UK as a whole, the figure for families benefiting from the new tax credits has now risen above 6 million, affecting 10 million children.

Given the numbers that my right hon. Friend quoted, I am sure from my experiences in my constituency that many more families could benefit from tax credits. What can he do in his Department to encourage more families in Watford and in the rest of the country to take up their right to tax credits? Will he give an assurance that we have no plans to cut investment in tax credits, unlike Tory Front Benchers?

My hon. Friend reminds me that the shadow Secretary of State for Work and Pensions, the hon. Member for Havant (Mr. Willetts), said:

"The Government needs to face-up to the fact that tax credits are not reaching the people in need."

The Chancellor should stop misrepresenting the Conservative position: we are not opposed to tax credits and never have been. Has he read the damning Public Accounts Committee report, published three weeks ago, which found that the introduction of the new tax credits in Watford and elsewhere was nothing short of disastrous, that it caused hardship for thousands of people and that overpayments could still cost the taxpayer more than £700 million a year? What is his latest estimate of the number of low-income people in Watford and elsewhere who face clawback through no fault of their own, and how much is the taxpayer currently forking out in overpayments?

Conservative party policy has been to oppose tax credits. The shadow Secretary of State for Work and Pensions has said that they "will not work", and went on to say:

"It is a benefit paid through the tax system … There is no need for a new system."

"They're putting money into schemes that don't work."

If he will make a statement on levels of unemployment in (a) Amber Valley and (b) the east midlands. [172711]

The claimant count in the United Kingdom has decreased by 50 per cent. since 1997. During that period, the claimant count in Amber Valley decreased by 1,087, which is a 53 percent. fall; and in the east midlands as a whole, it decreased by 48,000, which is a 47 per cent. fall. The claimant count For Amber Valley now stands at 2.1 per cent., and for the east midlands it is 2.7 per cent.—the lowest figures for unemployment for 30 years.

With 1.9 million more people in work since 1997, the latest east midlands business survey indicates that there are some problems in recruitment, especially for skilled workers, and that the available labour pool includes many people who are severely disadvantaged. Will my right hon. Friend therefore confirm that instead of abolishing the new deal, as the Conservatives would, we will extend it to ensure that it overcomes those barriers, to enhance skills and qualifications, and in particular will he consider how we can extend the modern apprenticeships programme to ensure that it attracts women, who are often severely under-represented in some areas of skills shortage?

I am grateful to my hon. Friend. She has taken a major interest in the creation of jobs and the safeguarding of industry in her constituency, and I congratulate her on that. She will agree that even though in her constituency long-term unemployment is down by 85 per cent. and youth unemployment is down by 75 per cent., there are many people who the new deal wishes to get to and to help. The new initiatives from the Secretary of State for Work and Pensions are designed to help those people by giving them the chance to get jobs and to acquire the necessary skills. The future of my hon. Friend's constituency will be enhanced by the new deal for skills, more details of which will be announced next week by the Secretary of State for Work and Pensions.

Does the Chancellor welcome the creation of additional jobs in South Derbyshire and the east midlands through the creation of a manufacturing plant for JCB engines in the Dove Valley business park just off the A50 as a further demonstration that manufacturing is far from dead in my constituency—it is alive and thriving? Has he witnessed also the growth in employment at Toyota, which is just down the road at Burnaston?

I am grateful to my hon. Friend, who has taken a big interest in the success end development of manufacturing in his constituency. Our aim is modern manufacturing strength. We have introduced research and development tax credits, which are available to the companies that he mentions; we have strengthened the Government's regional policy to make it possible for people to invest; and we are providing a manufacturing advisory service at a regional level. Unfortunately, every one of those services would be put at risk by the policies of the Opposition, who would not only cut the new deal but abolish all the help that we are rightly giving to manufacturing industry.

How many pensioners in Hastings and Rye are receiving pension credit. [172713]

At 31 March, 5,048 pensioners in Hastings and Rye were receiving the pension credit.

I am grateful to my hon. Friend for that reply. I congratulate her and the Government on the success of the pension credit in my constituency. It has made a great difference to many of my older constituents, many of whom are now more than £30 a week better off than they were under the Tory income support plan. However, does my hon. Friend share my concern that, should the Conservatives ever achieve office, their plans to abandon means-assessment would mean—

Order. The hon. Gentleman is out of order and should please sit down. It is not for the Chancellor to answer those questions, but for the Opposition. The hon. Gentleman can write to the Opposition's party headquarters to find out about these matters.

My hon. Friend is right to draw attention to the success of the pension credit in alleviating pensioner poverty. Indeed, if he compares the current average pensioner household with that in 1997, he will find that in real terms it is more than £1,350 better off as a result of the pension credit.

Help the Aged has described the pension credit as a "profoundly inefficient means-testing mechanism" that "is deeply flawed." How many pensioners in Hastings and Rye are entitled to that benefit but do not claim it for one reason or another? How many pensioners in Hastings and Rye have become subject to means-testing since the Government came to power in 1997? Is that why so many pensioners in Hastings and Rye feel profoundly let down by Labour?

The hon. Gentleman's attitude is only too typical of the attitude of his party. I do not know how its Front-Bench spokesmen can claim that they are committed to tax credits while at the same time witnessing the hostility of individual Members. The proportion of pensioners now living in relative poverty is at its lowest since the mid-1980s, and is down by 0.5 million since 1996. Pensioners in Hastings and Rye, as across the country, are welcoming the introduction of the pension credit, and the poorest pensioners have benefited most.

I hope that you will allow me to begin, Mr. Speaker, by telling you that it is now possible to reach Conservative central office on the web. There is no need to write.

The right hon. Gentleman is talking absolute nonsense. For the first time in history, under the pension credit, every single pensioner in this country has an incentive to save. Those with modest savings, and small occupational pensions, will be rewarded under the pension credit.

I do not see how a pensioner in Hastings and Rye, who is losing between 40p and 85p in the pound on savings income, has been given an incentive to save. Will the Financial Secretary tell us how many pensioners in Hastings and Rye have been affected by the Chancellor's £5 billion raid on pension funds, and how many pensioners in Hastings and Rye will suffer from his attack on the tax advantages of ISAs?

Pensioners in Hastings and Rye are better off now than they have ever been. On average, pensioners in Hastings and Rye are £18.50 better off through the pension credit and other measures that this Government have introduced than if, for example, the basic pension had been connected to earnings. The right hon. Gentleman draws attention to the advance corporation tax reforms. He more than anyone should know that that was an example of this Government reducing corporation taxes and making sure that pensioners have resources targeted on them when they most need it.

It is a sure sign of what is going on in the Treasury at the moment if the Financial Secretary does not have a briefing telling her the answers to simple questions about Hastings and Rye. Let us turn to another pensions disaster that will deter pensioners in Hastings and Rye from saving, putting them on pension credit: the wind-up of their occupational pension schemes. Pensioners in Hastings and Rye who are in that position will have noted the Chancellor's statement in the Red Book that unclaimed financial assets should be "reinvested in society". Would not using those unclaimed assets to compensate pensioners in Hastings and Rye whose pensions have been devastated by wind-ups be a true investment in society?

I am not going to take lessons at the Dispatch Box from a party whose leader, when Minister with responsibility for financial services, presided over the biggest pensions mis-selling scandal in history. The Opposition talk about giving pensioners compensation when pension schemes have gone bust, yet they refused to support the Second Reading of the Pensions Bill, which for the first time in history will protect the pensioner promise awarded to pensioners. Yet again, they raise false hopes while being committed to savage cuts in public expenditure. I wonder how they would explain that to pensioners who are suffering.

Is it not pretty evident that, when the shadow Chancellor ran away during the election campaign, he must have gone to Hastings and Rye in a blanket? That was when he was missing longer than Maxine Carr.

My hon. Friend makes an excellent point. Unfortunately, the right hon. Gentleman did not reappear in the Labour seat, Hasting and Rye, but somewhere else in the country, wearing a toga. My hon. Friend knows how much pensioners have benefited from the measures introduced by this Government, particularly the poorest third of pensioner households who are £1,700 a year better off in real terms, in Hastings and Rye, than they were in 1997.

rose—

Order. The hon. Gentleman must speak about Hastings and Rye in his supplementary question, not North Norfolk, which is too far away. Can he manage that?

Thank you for that guidance, Mr. Speaker. I intend to concentrate fully on pensioners in Hastings and Rye. Will the Financial Secretary respond to the clear evidence given to the Treasury Committee by experts who said that pensioners in Hastings and Rye and elsewhere will be faced with a positive disincentive to save because of the extent of the means-testing introduced by the pension credit? Worse than that, anyone providing financial advice will clearly face the problem of mis-selling if they advise someone who is on a low or middle income on a pension product, because of the risk of losing out by not gaining the pension credit once they reach retirement age.

I do not accept that. I think that all Governments have a duty to protect the welfare of the poorest pensioners, and it is a duty that this Government have taken seriously. Moreover, for the first time in history we can say unambiguously to every pensioner that his or her money will not be withdrawn pound for pound, and that there is a clear benefit from saving.

What assessment he has made of the impact of Government policy on child poverty. [172714]

By 2002–03 there were around half a million fewer children in relatively low-income households than in 1998–99—4.2 million down to 3.6 million after housing costs, and 3.1 million down to 2.6 million before housing costs. Those data do not fully reflect the effect of increased support from the introduction of the new tax credits in April 2003, or the increase in the tax credits that took effect last month.

There is no doubt that the various schemes introduced by the Government both to assist children in the poorest families and to help adults into work have had a real impact on child poverty, but I am sure my right hon. Friend accepts that we still have a long way to go if we are to help those 3.6 million children. Are the Government still committed to the eradication of child poverty in this generation? Is that still a priority, and does my right hon. Friend agree that the biggest single threat to its achievement is the lack of national consensus and, in particular, the failure of Opposition parties to support the Government's programmes?

Between 1979 and 1996–97, the proportion of children living in low-income households more than doubled under the last Government. Following the introduction of this Government's policies, by 2002–03 the number of children in low-income households, in absolute terms, fell by 50 per cent.

I acknowledge the priority that the Government have given to child poverty and the progress made towards reducing it, but in the light of the utterly chaotic introduction of the child tax credit last year, may we have an absolute guarantee that under the even more complex regime envisaged for this year—incorporating the child supplement to income support, for instance—hundreds of thousands of poor families will not once again find themselves plunged into poverty, either through non-payment or through demands for repayment of amounts that should not have been paid in the first place?

It is a shame that the hon. Gentleman did not take the opportunity to commit himself fully to the policies that the Government are pursuing to eradicate child poverty. He ought to look at the details of the introduction of the tax credit. It has proved a popular policy. The contribution made by the tax credit, and by the April increase, has been fundamental to lifting children out of poverty. As has been said outside the House,

"Following the increases in benefit anal tax credit rates, severe hardship among in-work families almost vanished in two years"

I stand here as a Member of Parliament who is proud to support a Government who maintain their commitment to eliminating child poverty within our lifetime, but has my right hon. Friend thought about the way in which we calculate child poverty levels? For example, if I win the national lottery on Saturday—as I fully intend to—the increase in my income will raise the threshold for the calculation, and more children below it will be deemed to be living in poverty. Is it possible for the Government to calculate in absolute rather than relative terms?

I congratulate my hon. Friend on the hard work that he undertakes in his constituency and in the House in drawing attention to the particular issues around child poverty. As he will know, the Government are well on course to achieving their target of reducing child poverty by a quarter by 2004, but he is quite right to identify the challenges for the medium and long term. To that end, the Government are introducing a series of three indicators, all of which will measure our progress on eradicating child poverty: an absolute low-income test, a relative low-income test and a test of material deprivation and relative low income. They will ensure that we have clarity and comprehensiveness in tackling the questions of child poverty. That means investment in tax credits, investment in public services, support for child care, support for training and a commitment to full employment—all policies that the Conservative Opposition do not support.

What steps he is taking to reach further agreements on trade in order to tackle poverty in the world's poorest countries. [172715]

Following last year's setback at Cancun, Britain and the European Union are now considering new proposals to break the deadlock on trade negotiations, not least to tackle agricultural protectionism. I hope that our proposals will have the support of Members on both sides of the House.

I thank my right hon. Friend for that reply. He obviously agrees with me that a large part of the problem is due to agricultural protectionism around the world. That includes the common agricultural policy, for which we have at least some responsibility. What more can be done to effect change?

The Treasury, with the Department of Trade and Industry, will next week be publishing proposals on trade and a major study of the impact of trade on developing countries. My hon. Friend will, I think, be pleased that on 9 May the Commissioner in charge of trade, Pascal Lamy, published a letter outlining new proposals to deal with agricultural protectionism. He says in his letter that

"we have a historical opportunity for a breakthrough … it is clear that the objective of eliminating all forms of export support is one which is shared by the great majority of participants."

Is the Chancellor prepared to say, apart from the advance on agricultural subsidies, whether there are any other areas in which we need to be more proactive to help world trade?

It is absolutely clear that there are two major areas on which resolution is needed in the trade talks. The first is that which we have mentioned. The developing countries will not accept the continuation of a system of agricultural protectionism, by either Europe or America, which deprives people in Africa, for example—where three quarters of the population are on the land—of being able to sell their products or, indeed, survive on the land. The second area concerns what are called the Singapore conditions, and I am grateful to the hon. Gentleman for raising the question of how we must break the deadlock on those. It is clear that the four Singapore conditions cannot be accepted by all countries. I believe that the European Union will now withdraw at least three of those conditions, which should help to achieve a breakthrough.

The Chancellor will be aware of last year's World Trade Organisation laws on intellectual property, which encouraged countries to relax their patenting laws on generic antiretroviral drugs, so as to tackle HIV/AIDS in the world's poorest countries. Will the United Kingdom Government follow Canada's sterling example by introducing legislation, thereby helping to attain our health and development goals while respecting the intellectual property rights of the pharmaceutical industry?

My hon. Friend takes a huge interest in these matters, and recently visited Africa, where he will have seen at first hand the problems arising from HIV/AIDS and the failure to tackle it. I met the Finance Minister of Canada and talked to him about the announcement that Canada made only a few weeks ago about intellectual property; we shall examine his proposals. At the same time, I was able to remind him that Canada might consider the proposal that we introduced in the Finance Bill—to give research and development tax credits for companies, even those outside the United Kingdom, that are developing and patenting drugs for conditions that are peculiar or specific to, or mainly found in, Africa and other such places. We are prepared to work with Canada on those issues. The most important thing to say is that the cost of the drugs is now coming down—but we must do more, through the global health fund, to get those costs down. Again, I hope that we can have all-party support on that matter, rather than suggestions for cuts in overseas development aid.

The Chancellor will be aware that many of the world's poorest countries are often riven with conflict; I am thinking of Afghanistan in particular. What progress is being made with his international partners in finding alternative crops to the traditional crop in such countries, the poppy?

It is clear—and we have discussed this with the Afghan Administration—that more of Afghanistan's income is coming from drugs and associated illegal activity than from any other commercial activity in the country. It is a condition of the support that we are giving that those in Afghanistan take action to destroy those crops. We shall continue to work with them to do so, but I think that the hon. Lady will understand that if we are to have any impact on the worldwide trafficking of drugs, that will demand action not simply in Afghanistan but right around the world. I know that there is all-party support for that.

I welcome the progress that seems to be being made at European level, but does the Chancellor agree that we need to work more internationally, particularly with the Americans, to ensure that the trade talks are a success? Can he give any indication of the timetable? As he rightly said earlier, some 6,000 children a day are dying in Africa, and the potential uplift from just 1 per cent. growth in world trade would far outweigh all the aid programmes, the international finance facility and much else. Can we move extremely quickly, because day by day, this is an urgent problem? Can he reassure us that even if the United States is dragging its feet, Europe can move forward?

I am grateful to my hon. Friend, who has chaired all-party committees on this subject in the House of Commons. At the last meeting of the International Monetary Fund only a few weeks ago, and at the G7 meeting, there was a declaration that there must be urgency in moving the trade talks forward. I can also tell my hon. Friend that Mr. Zoellick, the American negotiator, has been at meetings in Europe in the past few days, so that we can achieve that breakthrough. I believe that the significance of the Lamy letter on agricultural protectionism will be important in moving the talks forward, and we will do everything in our power, including the publication of our documentation next week, to move them forward. As for making more money available for Africa, I have drawn attention to what the Treasury has done to give extra support for drug research and development, and I should add that that will be carried forward by Her Majesty's Revenue and Customs, the new service, under its new chairman. Of course, the main hope is that, subject to all the conditions that have been laid down, we can persuade our partners that an international finance facility would not simply release just a few billions more in resources, but could front-load development aid by doubling the money available to halve poverty over the next few years.

What discussions he has had with the Secretary of State for Health regarding the efficiency review being conducted by Sir Peter Gershon. [172716]

Treasury Ministers meet their Department of Health counterparts frequently to discuss a range of issues, including the efficiency review. The Department of Health is working closely with Sir Peter Gershon and his team to maximise the benefits of the efficiency review for front-line services.

We have just heard a lot about the Government publishing things—but the Government commissioned this report. Why have they not published it, and when will they do so?

The Government intend to ensure that in the course of the publication of the spending review, we see the results of the efficiency review in relation to each of the Departments concerned.

Is my right hon. Friend aware that Sir Peter Gershon's reports contain some hard targets that are difficult to meet, and will he look closely at the methods for calculating public sector efficiency and productivity? I am thinking in particular of the proposals of the Office for National Statistics, on which the Opposition have commented. Their perverse effect is such that, even if my right hon. Friend were to fan an epidemic throughout the country—I would not put such a task past his considerable powers—create a conflagration the size of the great fire of London, double class sizes and imprison half the population, he could show some remarkable increases in productivity on the basis of ONS procedures. Can we therefore hope that the reviews of Sir Peter Gershon and Sir Tony Atkinson will provide a much better basis for measuring efficiency and productivity, and put an end to the irresponsible exploitation of what are experimental figures—as the ONS itself describes them—by the Opposition?

My hon. Friend makes a very good point—in his inimitable way. He is absolutely right: the current productivity measures give a distorted picture, which is why we welcome the decision of the national statistician and Registrar General to ask Tony Atkinson to develop better measures of public sector productivity. We look forward to the involvement of Front-Bench spokespersons from all parts of the House in ensuring that we get a productivity measure on which we can agree.

No tangible efficiency savings have been announced in health or education; Home Office staff numbers have grown so much that they cannot fit into the new office; the Minister for Local and Regional Government is backtracking on Gershon procurement and back-office savings; Treasury administrative costs are up by 16 per cent.; and the Prime Minister was wrong about UK administrative costs, which are up by 8.5 per cent. as a percentage of total spending. Are the Government serious about Gershon, or is the £20 billion-worth of savings just smoke and mirrors?

I recommend that the hon. Gentleman try the alternative remedy of some camomile tea. As he knows very well, there is no backtracking but an absolute commitment to maximising the benefits of the efficiency review to front-line services. That is why, not least in relation to the Department of Health, the concentration is on procurement, making better use of professionals' time and ensuring that the IT programme delivers real benefits to patients. But we all know what the hon. Gentleman really feels about public sector workers, because he shared that view with us in one of his occasional missives. He said:

"The whole mentality in the public sector then and now is to do as little as you can."

What plans he has to increase expenditure on international aid in the coming spending round; and if he will make a statement. [172717]

UK development aid has doubled since 1997. It has risen from £2 billion to more than £4 billion, and will rise from 0.26 per cent. of gross domestic product to 0.4 per cent. by the end of the spending round. As I announced in the Budget, we will not cut aid in the new spending round, but will continue to increase the resources that we give to the poorest countries.

Will my right hon. Friend reassure the 700 young constituents whom I recently met at Culloden academy, Inverness, and who called for an end to child poverty throughout the world, that this Government are committed to increasing international aid and to meeting their millennium goals?

I am grateful to my hon. Friend, whose interest in this issue has been shown not just in Parliament, but in the campaigns that he has run in his own constituency. I can assure him that our commitment is that every child be given the chance of primary education, and that that goal be achieved over the next 10 years, with 120 million children who do not receive education being given that education as a result of our proposals. Our commitment is to cut by two thirds child and maternal mortality, and to halve poverty over the next few years. We will do that best by the world coming together to make resources available. In our view, that will be best achieved through the international finance facility, and we are ready to talk with all our international partners about how we can tackle poverty in the poorest countries by increasing the resources that the richest countries give.

In addition to increasing international aid, the Chancellor will surely appreciate that it is important to target it, particularly in sub-Saharan Africa. What steps has he taken to ensure that we root out corruption? Clearly, it is a major problem that much international aid goes to several war-torn sub-Saharan countries, so what steps has he taken to ensure that we target international aid money to best effect?

As I said just a few minutes ago, the protocol signed with Ethiopia made it a requirement that, before further aid would be given, the country had to sort out human rights issues, problems of corruption and the misuse of resources. Also, under measures agreed with the IMF, two centres have been set up in Africa to advise on the proper preparations of fiscal and monetary policy, which the hon. Gentleman would accept is important. It is a condition of the international finance facility and, indeed, the Monterrey consensus, that countries receive the proposed development aid only if they show that they are tackling problems of corruption, lack of transparency and those associated with fiscal and monetary stability as well as opening up to trade and investment.

If the Government are proposing to provide future aid through the international finance facility, does my right hon. Friend agree that, in order to prevent aid flows from falling after 2015, when the millennium development goals are due to be met, the Government must make a clear commitment to reach and maintain an aid budget of 0.7 per cent. of the UK's gross national income?

I know that my hon. Friend has taken a big interest in this matter. I can reassure her that we are committed to reaching that 0.7 per cent. target. We will announce in the next spending round what we can do in the next few years. I have to tell my hon. Friend, however, that even if we reached that 0.7 per cent. target tomorrow, the amount of resources created for the international community would be about £3 billion. The additional resources created by front-loading aid under our proposals could, if the whole international community came together, amount not to £3 billion, but $50 billion.

What progress is being made in the transfer of Government jobs out of London and the south-east following the Lyons review. [172719]

The Lyons report gives details of Departments' relocation plans, which are being taken forward and refined as part of the spending review. The Government will come forward with detailed proposals for implementing and monitoring the dispersal plans in the review.

I thank my right hon. Friend for his reply and I thank the Chancellor for initiating the Lyons review. Years ago in north Staffordshire, pottery owners did not want new jobs or diversification, and they opposed the opening of a car factory because they did not want to pay car workers' wages. Does my right hon. Friend agree that moving Government jobs to the regions is not just about cost-cutting or taking advantage of what is already there, but about helping regeneration, diversification and assisting areas such as north Staffordshire to be ambitious for their future?

I would certainly agree with my hon. Friend that Sir Michael Lyons's proposals and report contain real opportunities for the regeneration of his constituency, and, indeed, many others throughout the country. Sir Michael Lyons concluded that the concentration of national public sector activity in and around London was, in fact, not consistent with the objectives that my hon. Friend outlined. I am glad that he welcomes Sir Michael's report.

As the Chief Secretary makes clear, this important report by my constituent Sir Michael Lyons presents an unanswerable case for moving decision-makers and decisions out of London. Will the right hon. Gentleman accept that there is in enormously strong geographical and cost case for moving them to Britain's second city, Birmingham?

I am not getting into the business of selecting cities, although I might wish to assist the hon. Gentleman with his canvassing in that respect at least. However, I assure him that all Departments will put forward their proposals when making their spending review submissions. The criteria that Sir Michael Lyons's report provides will be borne in mind, and considered in the context of operational requirements. I can promise the hon. Gentleman, and all my hon. Friends, that, when we reflect on spending review submissions, we will look very hard for clear evidence that each Department has taken to heart the lessons that Sir Michael has taught us.

Will my right hon. Friend assure me that the relocation of jobs to Liverpool under the Lyons review will compensate for the threatened loss of current civil service jobs there, and that it will also address the north-south divide? How many new jobs will Liverpool receive under the plan by 2008, when it becomes European capital of culture?

My hon. Friend knows that Liverpool is already receiving a number of new jobs, by way of foreign direct investment and, as she was kind enough to acknowledge, through the award to it of the status of European capital of culture, for which I know that she and other hon. Members with Liverpool constituencies fought very hard. My hon. Friend can therefore be sure that employment in Liverpool will continue to grow. Depending on departmental requirements, the city may also receive some additional extra jobs in this relocation.

In his recommendations, Sir Michael says that Departments should implement their relocation plans alongside efforts to introduce locally flexible pay in the public sector, and that any failure to do so would limit efficiency gains accruing from the dispersal of jobs. Does the Chief Secretary agree with that recommendation? How far advanced are plans to introduce local pay in the public sector?

No, I do not agree with that recommendation—far from it. The Government support fair systems of pay that are backed up by tax credits and—above all—the minimum wage. The latter is something that many Opposition Members opposed tooth and nail.

The White Paper "Your Region, Your Choice" contains a fascinating table that shows the regional distribution of civil servants around England during the first four years of this Government. In that period, 2,500 extra civil service jobs were created in London, but there was a decrease in such jobs in the north-west. I am not convinced that we needed the Lyons review: if it is possible to create extra jobs in London, it should be just as possible to move officials and civil servants out of the capital. We should do that as quickly as possible, as that would benefit the overheated economy in London and the structure of the economy in the regions. Will my right hon. Friend assure me that civil servants will be moved out of London, quickly and effectively, and that some of the jobs will go to Manchester?

My hon. Friend has done more than anyone to ensure that Manchester is a magnet for jobs, in both public and private sectors. I can certainly assure him that the Lyons review provides a sound evidence base on which Departments can make the decision that we will require of them—that is, to relocate a number of their workers outside London and the south-east. That is something to which individual Secretaries of State, and the Government, are committed. I urge my hon. Friend to accept that the great value of the Lyons review is that it provides a sound evidence base for that policy.

When he expects to publish his analysis of use of economic instruments in relation to waste generation. [172720]

The first stage of the review of environmental and health effects of waste management was published last week. The second stage will be published shortly. Together these reports will help inform the development of policy and the much wider debate on the future of waste management. Any decisions on tax, however, will be made by the Chancellor in the usual Budget cycle.

I am grateful to the Minister for his answer. I endorse the Government's waste hierarchy, with minimisation at the top, followed by reuse and recycling, and incineration and landfill beneath. Does he accept, however, that the economic signals in place do not deliver that hierarchy? Does he accept in particular that he needs to incentivise minimisation, reuse and recycling, because if he does not we will end up with a chain of incinerators up and down the country?

No, I do not accept that the policies are not in place. They range from public spending to regulation, instruments of taxation and trading allowances, which come on stream next month. The polices are encouraging the very waste hierarchy that the hon. Gentleman talks about, which is essentially reducing the production of waste and increasing rates of recycling and reuse. Surely he must welcome the fact that the rates of recycling and composting from household waste are on target—we met the targets we set in 2002 and are expected to meet the targets we set in 2003. I would have thought that he and the whole House would welcome the efforts that are being made, especially by local authorities, which play such an important part in waste management.

My hon. Friend will know that his comments will be welcomed by hon. Members who care about the environment. He should also be aware, however, that most of us know that the landfill tax money is building up. The Government have a rather bureaucratic response to how they disburse those moneys. Is not it nonsense, when the Environment Agency is starved of funds and cannot fully carry out its functions as a regulator, that that money is locked up somewhere in the Treasury?

I hesitate to reply because my hon. Friend is a recognised expert on the subject in the House and well connected outside with the industry, so he speaks with a great deal of authority. However, I do not accept his argument that the increasing resources that we are putting into waste management are locked up in bureaucracy. As he well knows, because we have discussed it, we altered the landfill tax credit scheme precisely so that the money from the increase in receipts from the landfill tax would be put to more strategic use in waste management. The evidence is that that is having an effect. I also remind him that the coffers from the landfill tax are not yet swelling in the way that he suggests, but it is true that we will raise the rate of landfill tax from April next year not by £1 a tonne, which we have done in the past, but by £3 a tonne. That will play an important part in helping us to meet our targets.

What progress he has made on developing fiscal incentives to aid the growth of football supporters' trusts. [172721]

As announced in the 2004 Budget, under the review into the Inland Revenue treatment of football supporters' trusts announced in the 2003 pre-Budget report, the Government are currently examining how best to assist trusts in their valuable work in the local community, by maximising the benefits they receive from the contributions of their members. I know that my hon. Friend is very involved in the work of the trusts, and I thank him for his substantial contribution to the review.

I declare an interest as unpaid chair of Supporters Direct.

Football supporters' trusts play a very valuable role in giving football fans a voice in the running of their clubs within the community, especially when clubs find themselves in financial difficulties. My hon. Friend will know that the matter is complex; the issues need to be dealt with by the Inland Revenue review and all the possibilities considered. I understand that the all-party football group has also submitted evidence. Once we have considered all those issues, we need to take them forward. I certainly concur with my hon. Friend's view that it is important to ensure that football supporters' trusts are supported and enabled to contribute to their local communities, and that the Government address how we can assist them in that task.

What assessment he has made of the impact of increasing petrol fuel prices on the economies of rural areas. [172722]

When making Budget decisions, all relevant economic, social and environmental factors are of course taken into account.

In my constituency, we are paying at least 10p per litre, and sometimes 15p per litre, more for our petrol than people in mainland communities and that is a major barrier to the competitiveness of local businesses. Does the Minister think that is fair and, if not, what does he propose to do about it?

We take very seriously concerns about duty levels and we are also seriously concerned about world oil prices at present. We are working through the European Union—my right hon. Friend the Chancellor raised the matter this week—and through the G7 with the OPEC nations, as they seek to lower world oil prices in a controlled and stable way. The issue is much wider than simply UK duties, but we keep those closely under review. As the hon. Gentleman knows, the normal, annual revalorisation of fuel duty announced in the Budget has been approved by the House, and I remind him that since 2000 the main duty rate for motorists and hauliers has in fact fallen by 6½p per litre.