With permission, Mr. Speaker, I should like to make a statement on the Government's five-year strategy, "Opportunity and security throughout life."

Since 1997, the Government have begun to transform the welfare state from a passive one-size-fits-all system to an active service that tailors help to the individual, enabling people to acquire the skills and confidence to move from welfare to work. When the Conservatives were in power, boom and bust twice led to unemployment reaching 3 million, and the numbers on incapacity benefit trebled to 2.6 million. By 1997, one in five families had no one in work and one in three children were growing up in poverty.

There are now more people in jobs than ever before. Unemployment is at its lowest for 30 years, with long-term youth unemployment 90 per cent. lower than in 1997. With almost three-quarters of the working age population in work, our employment rate is the highest of any of the G8 countries. By supporting people in work and providing financial security for those who cannot work, we have lifted 2.1 million children and 1.8 million pensioners out of absolute poverty since 1997.

But we can and will go further. Today's strategy sets our course for the next five years. It is a difficult course that will take us beyond concern for the unemployed to help those who are even further away from the labour market and who have more complex and substantial barriers to overcome. Its goal is genuine inclusion—stamping out the discrimination and disadvantage that prevents people from fulfilling their true potential.

The backdrop to the strategy is a healthier society where people are living longer. Two years from now, the number of people over state pension age will overtake the number of children. In just over 30 years, the proportion of the population aged 65 and over will increase by 50 per cent., while the number of pensioners aged 80 and over will double.

If we are to meet the challenges of our ageing society, we cannot afford to squander the skills and contributions of those who can and want to work but remain outside the labour market. Our strategy establishes a long-term aspiration of moving towards an employment rate equivalent to 80 per cent. of the working age population. That could involve supporting as many as 1 million people on incapacity benefit into work, as well as an extra 300,000 lone parents. We also envisage 1 million more older workers in the labour force, including many who will choose to work beyond the traditional retirement age.

As I have said—it bears repeating—between 1979 and 1997 the numbers on incapacity benefit trebled. Had that trend continued, there would now be 4 million on incapacity benefit instead of 2.7 million. New claims are down by almost one third since 1997 and we have even experienced the first small fall in the total numbers. People who claimed incapacity benefit have too often been told that they should not expect to work again. Yet we know that perhaps a million claimants say that they would like to work if they were given sufficient help and support. We also know that nine out of 10 people coming on to incapacity benefit expect to get back to work quickly.

There is growing medical evidence that for many conditions, such as back pain and depression, working is much healthier than being inactive, so failing to help those on incapacity benefit is bad not only for the economy, but for the people on incapacity benefit.

We already know that active intervention works. We have invested in Jobcentre Plus and the new deal to give people employment support regardless of the benefit they happen to be on. The Government's pathways to work pilots build on that platform and have achieved startling success, with six times as many people getting back to work help and twice as many people recorded as entering jobs, compared with the rest of the country.

The intervention is succeeding partly because it focuses on what people can do rather than on what they cannot. Although involvement is mandatory only for new claimants, more than 10 per cent. of those who take part are existing claimants who asked whether they could participate.

As my right hon. Friend the Chancellor announced in his pre-Budget report, the pathways pilots will soon be extended to cover one third of the country. Alongside the extension of pathways, today's strategy sets out the wider changes that are needed. Employers, health professionals and the Government must all work together more effectively to get people into work and help them stay there.

Employers must create healthier workplaces and play a bigger role in the rehabilitation of their employees. The Health and Safety Executive will trial and develop "Workplace Health Direct", which will provide support for occupational health in small and medium-sized firms. General practitioners and other health professionals must reinforce the message that work is a route back to health.

Against the background of the wider change, and when we have the extra support of pathways in place, we will implement a radically reformed incapacity benefit so that, like pathways, it focuses on what people can do rather than on what they cannot.

The main purpose of incapacity benefit is to support those who, through no fault of their own, are restricted in their ability to work because of a health condition, disability or injury. Financial security will always be essential. Society has a responsibility to provide financial support to people who are denied the opportunity to work because of health problems—and to do so for as long as necessary. That is why our reforms are not about cutting or time-limiting benefit.

However, the current incapacity benefit system is anomalous. Incapacity benefit classifies those receiving it as incapable of working, even before they have a formal medical examination. When they have the examination—the personal capability assessment—those who are entitled get no appraisal of their likely future ability to return to work. Furthermore, no distinction is made between terminal cancer and back pain. There are few incentives in the system to encourage those with more manageable conditions to consider their potential for work. Indeed, the benefit increases with time, thus creating an incentive to stay on it for longer.

Our five-year strategy sets out a better model for new claimants of the benefit. It represents the biggest change in benefit for sick and disabled people since Beveridge.

Our reforms will offer more support and help than is currently available for those with the most severe health problems and impairments, while ensuring that there are clear rewards for moving into work, and that the financial risks of trying out a job are minimised. In future, there will be an initial holding benefit—at jobseeker's allowance rate—payable until the personal capability assessment has been completed, which should be within 12 weeks.

This assessment will become the gateway to the new benefits, accompanied by an employment and support assessment which will provide a fuller evaluation of potential work capacity. The assessment will lead to one of two allowances. The majority will receive a rehabilitation support allowance, which will require claimants to engage in work-focused interviews, in return for which they will receive a conditional extra payment. At the interview, claimants will agree an action plan, and fulfilment of the plan will lead to a further conditional payment.

Recipients who co-operate fully will get more than the current long-term rate of incapacity benefit, but any who completely decline to engage will receive only the holding benefit minimum. Those with the most severe health conditions or disabilities will receive a disability and sickness allowance. Far from having their benefits cut, those recipients would get more money because they are at most risk of persistent poverty. But we are not writing anyone off, so their engagement in some work-focused interviews would be encouraged, in line with the pathways to work programme.

Our message is clear. There will be a basic benefit below which no one should fall; a speedy medical assessment linked with an employment and support assessment; increased financial security for the most chronically sick; more money than now for those who take up the extra help on offer; and less money for those who decline to co-operate.

As with the pathways programme, we will develop these reforms in partnership with all our stakeholders, including those on the benefit itself. The reforms will need to be shaped on the basis of the evidence of what works, with piloting playing an important role. The timetable for implementation will depend on the continued lessons learned from pathways, on the available resources, and on the timing of any necessary legislation. However, our goal is to have the main elements of the new system in place by 2008.

These reforms are, of course, only part of the much wider programme at the heart of our strategy for opportunity and security throughout life. Our approach must continue to provide tailored help and support at every stage of life, to offer real opportunity for those who can and want to work while ensuring financial security for those who cannot. We will continue to support families and children to ensure that every child has the best start in life and parents have more choice about how to balance work and family life. We will support parents in their parenting role by extending rights to paid maternity leave and enabling families to have access to affordable, flexible and high-quality child care. Our new deal for lone parents has already helped nearly 300,000 lone parents into work and taken the lone parent employment rate over the 50 per cent. rubicon for the first time ever. In fact, today I can announce that we have hit a new lone parent employment rate of 55.8 per cent.—a 10 per cent. increase since 1997.

Today's strategy sets out our intention to go further and to pilot a pathways to work model for lone parents—a more progressive model of active engagement and persuasion for all lone parents on benefit, based on clearer guarantees of advice and support. In line with our overall approach to rights and responsibilities, it will guarantee a clear financial gain from work, guarantee child care support, and guarantee the ongoing help of trained professional advisers—all in return for a responsibility to engage more intensively with our employment advisers. For those with children aged 11 or over, we will pilot the automatic payment of an activity premium, on top of all existing benefits, conditional on taking up agreed activity to help lone parents move into work.

Giving people the choice and opportunity to work for longer will also be crucial. That is not about raising the state pension age, but about helping people to work up to that age and offering better rewards for those who choose to work beyond it. Improved arrangements for state pension deferral will mean that a typical person who delays taking their state pension for five years could receive a lump sum payment of between £20,000 and £30,000, or an increase of 50 per cent. in their weekly pension for the rest of their life.

Working for longer, together with the increased confidence in saving that will result from the pension protection fund and other measures, will play an important part in helping people to save to meet their retirement aspirations. Guided by the work of the Pensions Commission, however, we will meet the long-term pensions challenges of our ageing society. We will set out the principles on which we will base our pension reforms separately in the near future.

In delivering this five-year strategy, my Department will continue to modernise its service delivery, reducing overheads, streamlining processes and delivering a more efficient organisation. Over the next five years, the Government will build on our employment record to open opportunity for those beyond the traditional definition of unemployment, and to move towards a ground-breaking aspiration of an 80 per cent. employment rate. We will build on the lessons learned from our successful pathways to work pilots to reform incapacity benefit and, with the support of employers and the medical profession, help and support incapacity benefit recipients who want to work to do so.

We will build on our progress in fighting discrimination, moving to a world in which opportunity and security are not dependent on age, disability or ethnic background. And we will build on our progress in tackling poverty, halving child poverty by 2010, continuing to lift pensioner income and helping another 300,000 lone parents into work.

With this strategy, we will build for the future—a future with opportunity and security throughout life. I commend this statement to the House.

I welcome the fact that the Secretary of State has come to the House to make a statement on his plans. After all the briefing and spin of the past few days, it is right that he should come here to clear things up, and we appreciate that.

We also agree with the Secretary of State that more must be done to help disabled people into work. Of course, we also have an obligation to provide decent support for people who are seriously disabled and cannot be expected to work. We believe that it is possible to save money on the cost of disability benefits, but that should be done by helping those who can work to do so. It would be wrong to cut benefits for people who are genuinely sick or disabled. I believe that those principles are shared on both sides of the House.

After eight years, however, the Government must expect to be judged not on their words but on their record. The Secretary of State talked today about tackling economic inactivity—but can he confirm that the number of economically inactive people has risen by 300,000 since Labour came into office, and that that accounts for nearly half the fall in unemployment over the same period? The Secretary of State says that the problem is people who have moved from unemployment on to incapacity benefits instead—but will he confirm that back in 1997 47 per cent. of people moving on to incapacity benefit were unemployed, and that that figure is now up to 60 per cent?

The Secretary of State said that the number of people moving on to incapacity benefits was down. Will he confirm, however, that the number of people leaving incapacity benefits is also down, and that the total number of people claiming the benefits is now 140,000 higher than it was in May 1997?

Therefore, everyone in the House agrees that there is a problem. We agree with the Prime Minister when he says,

"we can also reform incapacity benefit so that it returns to what it was meant to be: a benefit which compensates those who've had to give up work because of long-term illness or sickness. That's not what it is now. It's an alternative to long-term unemployment or early retirement."

The trouble is, that is what the Prime Minister said in May 1999.

Anyone who has followed this Government's endless reannouncements cannot help but think of that Bill Murray film "Groundhog Day". May I congratulate the Secretary of State on his brilliant timing? In America there really is a Groundhog day—and it is today. We are celebrating Groundhog day today in the House of Commons, and what better way for the Government to mark it than by making the same promises on welfare reform that they have made again and again and again? We have heard it all before.

When I read the document that the Government published today, it had a strange familiarity. Perhaps I may quote:

"Our priority is to forge an entirely new culture which puts work first and is based on a modern, integrated, flexible service for all. This means a fundamental shift in the way we support people—away from merely asking 'What money can we pay you?' to 'How can we help you to become more independent?' . . . we aim to implement new legislation to make it a condition of receiving benefit that, when asked to do so, people take part in an interview to talk about their prospects of finding work. For people with a long-term illness or disability claiming incapacity benefits, as for others who are claiming benefits, attendance at such an interview will be an integral part of their claim."

But that is from a document called "A new contract for welfare: support for disabled people", produced in October 1998. Can the Secretary of State tell the House whether he has read it, and can he tell us in what respect what he is saying today is any advance on what we were told six and a half years ago?

We know what the Secretary of State has been up to. He has been told by No. 10 to come up with some eye-catching initiative on incapacity benefits. He is an ambitious man, so of course he agrees. He goes back to the Department and says to his permanent secretary, "We've got to do something about incapacity benefits; what on earth should we do?" The permanent secretary says "Here's something I prepared earlier—six and a half years earlier." And the Secretary of State has brought it back to the House today.

Why is it that these promises of incapacity benefit reform never materialise, and why should anyone believe what the Secretary of State says today when we have heard it so often from his predecessors? It is because Ministers do not learn from their mistakes that they are condemned to repeat them. When the Government means-tested new claims for incapacity benefit, we warned that people already on the benefit would be deterred from leaving it because they would fear that they might have to go on to the new means-tested benefit at a lower rate. Our warnings have been proved correct. That is why the number of people on incapacity benefit has gone up since the Government announced their last so-called reforms. What steps will the Secretary of State take to counteract that perverse effect when he has another new regime for new claims? Does he recognise that it is possible that today's announcement could make the problem worse?

Incidentally, will the Secretary of State confirm that the measures that he has announced today apply only to new claimants, and will have no effect on the 2.7 million people who are already claiming the benefit? Why has he not announced any measures to help those already on it? Does he recognise that the fundamental difference between his approach and ours is that we want to help existing claimants? All he is talking about today is a policy that might possibly apply to new claims in 2008. That is no help at all for people who are stuck on the benefit today.

Yesterday, the Prime Minister said:

"We want to reform the benefit rules which pay claimants more the longer they actually stay on benefit and, in fact, at the moment these rules penalise those who want to manage their condition and eventually return to work. So we've got to take that, if you like, perverse incentive out of the system."

Today, the Secretary of State said he was not cutting benefits. Yesterday, the Prime Minister talks tough and says that the Government are going to get rid of the long-term rate, and today, the Secretary of State says that they are not going to cut benefits at all. The Prime Minister marches people up to the top of the hill, and the Secretary of State comes to the House and marches them down again. The device that is being used to reconcile those apparently irreconcilable statements is that people will receive the new benefit only if they agree to turn up for a work-focused interview.

Will the Secretary of State tell us a little more about the conditions for receipt of the benefit? How will he police the boundary between the two new benefits that he has announced? How many new claimants will be entitled to receive the new higher rate? How many claimants does the Secretary of State think will refuse to turn up for the work-focused interviews and settle for the lower rate? How many people does he think will lose benefits for failing to attend? How many people does he think he will get into work as a result of these policies?

Will the Secretary of State recognise that the new work-focused interviews may be no more successful than any of the existing work-focused interviews that the Government have been launching for the past few years? Does he read his Department's own appraisals of their success?

Order. I find what the hon. Gentleman is saying very interesting, but he is making a speech. He should be putting questions, with no embellishment whatsoever. I also note that he has been on his feet for about 10 minutes, and I am expecting to give Back Benchers an opportunity to ask questions.

There are a good many questions to ask about this policy, Mr. Speaker, but the Secretary of State does need an opportunity to answer the questions that I have already put.

Conservative Members are not sure whether, after eight years in office, the Government have really learned the lessons of their failure to reform welfare in the past. We want to know why we should believe anything that the Secretary of State says today after his failure so far to deliver any of the promises on incapacity benefit that we have heard from him.

Where can I begin, Mr. Speaker? I certainly give the hon. Member for Havant (Mr. Willetts) 10 out of 10 for sheer effrontery. He asks what has been happening since 1997. The entire Conservative party should be sitting here—[Hon. Members: "Where are they?"] Probably at lunch—but if they were sitting here they should be wearing sackcloth and ashes; in fact, they would probably look better like that than they do in their normal suits.

The issues that we are discussing today are about lifting pensioners out of poverty. Who put pensioners into poverty? The Conservative party. The hon. Gentleman talks of giving help to disabled people. The Conservative party denied civil rights to disabled people throughout its 18 years in office.

Let me give another statistic. The hon. Gentleman asks what has happened since 1997. Not only have we crossed the 50 per cent. line in terms of the number of lone parents in employment, but more than 50 per cent. of disabled people are now in employment. That is an extremely important bridge to cross, given the perception of disabled people as being somehow incapable of work.

I remind the hon. Gentleman that 700,000 people were claiming incapacity benefit in 1979, and 2.6 million were doing so by the time the Conservatives left office. These, incidentally, were not people with medical conditions that could not be rectified; they were people who had left steel mills, shipyards and coal mines, been directed towards incapacity benefit and told to go away and be passive recipients of benefits for the rest of their lives.

What has happened since 1997? The hon. Gentleman asked about people who had been on incapacity benefit for 20 years. We have reduced the flow on to incapacity benefit by a third. None of these people are freeloading, by the way; this is not the 1980s. These are people with genuine health conditions who undergo a personal capability assessment to receive incapacity benefit. The number of new claimants has been reduced by a third. We have developed pathways to work, which I would describe as the most extraordinary development in the history of this issue. We built on Jobcentre Plus—which has had to be created over the last seven years—and the merger of the Benefits Agency and the Employment Service, which gave us a foundation for pathways to work.

If the hon. Gentleman wants to find out what we have been doing, and why ours is the right approach, he should visit a pathways to work area. He knows a thing or two about the issues—and to be fair, he is probably more to the left on them than the rest of his party. [Interruption.] I withdraw that remark immediately; but the hon. Gentleman should still visit a pathways to work area. He will be inspired, just as our staff at the front line are, by the stories that we hear there and by the help that can be given to get people back into work.

The hon. Gentleman asks what we will do to help people to try out work. They will not face never being able to get back on to benefit. That is crucial for people on existing benefits—"on the stock", as they are not very charmingly described. As we say in the five-year plan, we need to change the linking rules even further. The Chancellor of the Exchequer said in the pre-Budget report that we would relax those rules. We have introduced a greater permitted work regime to assist people in that position, but that is not all we can do for people on the stock. I confirm that these arrangements apply to new claimants of IB.

As I said in my statement, in pathways to work areas, we are already seeing people who have been on IB for many years wanting to become involved. This month, we will extend the pathways to work project to people who have been on IB for three years. We will offer the opportunity for anyone to become involved, but it would be wrong to pretend that it will be easy dealing with people who have been on IB for 15 or 20 years, because they get into a mindset. The important part of our proposals is to have a speedy process: a personal capability assessment within 12 weeks; and assistance and advice early on, so that people can be given the assistance that they need, without being, as they were previously, sent away to be passive recipients of benefits for the rest of their lives.

The plan needs to be seen in the context of what has gone on before: the development of Jobcentre Plus and pathways to work, which enables us to move even further in a climate where we have the lowest unemployment for 30 years and the highest employment of any major industrialised nation.

This is the five-year plan of the Department for Work and Pensions. Can the Secretary of State tell us what happened to "and Pensions" today? After seven years in office, all the Government have promised is a statement of principles in a couple of weeks that will underlie pension reform. What can Britain's pensioners expect by way of action? Have not women pensioners suffered injustice for long enough? In a five-year plan from the Department, will they not have expected something that amounted to action, not just a statement of principles? Can the Secretary of State update the House on how far he has got with persuading the Chancellor to adopt the Liberal Democrat policy of a citizen's pension? I welcome his openness on that front—how is he getting on with his mates?

On incapacity benefit, can the Secretary of State confirm that his central thesis—I quote from his statement—is that "benefit increases with time, creating an incentive to stay on it for longer"? Can he confirm his remark in the press—or was he misquoted this morning—that £75 a week of incapacity benefit was "comfortable"? That is the word that he used. Is it his thesis that people are comfortable on incapacity benefit of £75 a week and choose not to seek work? Where is the evidence for that basis of his reform? Can he confirm that incapacity benefit is high where joblessness is high and that, for many people on IB, there are not jobs for them to go for? Is there a danger that, under his incentive structure, a lot of those people will be forced to go through the motions of applying for jobs when there are not jobs there to take?

Can the Secretary of State confirm that, out of the 2.7 million on incapacity benefit, nearly 1 million get no money? Can he confirm that that is a fast-growing group and that real spending on incapacity benefit has fallen by £2 billion since 1997? What will he do for that group? As people in that group are not entitled to any cash from incapacity benefit, how does changing the rates of incapacity benefit affect their incentives? How will that group, which is the only fast-growing group of incapacity benefit recipients, benefit from his reforms unless he changes income support, too? Can he tell us, therefore, whether income support for disabled people will also be changed in the way he has described?

Seven years ago, it was said that 1 million disabled people wanted to work. Today, the Secretary of State used the same figure again, which is testimony to the failure of these repeated announcements to deliver. Is not incapacity benefit itself a barrier, because it is very much an all-or-nothing benefit? Is not it true that disability is much more shades of grey? Many disabled people can do some work, and the conditions of many fluctuate. Is not the system still far too rigid? Should not there be a partial capacity benefit to go with the grain of what people can do, instead of it being yes or no, black or white?

Britain's pensioners will be disappointed by the statement. We have yet to see evidence that people on incapacity benefit will get the support that they need to improve their life.

First, on pensions, as I made clear earlier, and it is in the five-year plan, we will publish a statement on our pension principles. The hon. Gentleman asks what we have done for pensioners. He should look at the Pensions Act 2004 and consider the fact that pensions credit has lifted 1.8 million pensioners out of abject poverty. A recent report by the Institute for Fiscal Studies, with which he has an intimate relationship, showed that, for the first time in history, pensioners are no more likely to be in poverty than any other group in society. That is significant. Age has always meant the workhouse—in Charles Booth's day in the early 20th century, it was linked to poverty. The measures that we have taken to deal with abject poverty are turning that situation around.

The Pensions Commission made the point that the last thing we want is for politicians to have a knee-jerk reaction to a problem that is 20 to 25 years down the road. Its advice is sound. There is no instant solution to that problem. We are keen to achieve a political as well as national consensus about where we should be in 2050, so that we can ensure that whatever we implement is consistent and remains in place.

I do not know where the statement about £75 came from. The hon. Gentleman keeps coming up with statements—

He makes them up.

My hon. Friend says from a sedentary position that the hon. Gentleman makes them up. I have never said that someone on £75 a week is comfortable—quite the opposite. Indeed, we are saying that those with chronic sicknesses, who will probably never be able to work again, require more support, as do people who can, with rehabilitation, get back to work, provided that they co-operate with the arrangements that we are putting in place. Therefore, I do not believe that anyone on £75 a week is comfortable.

As for where the jobs will come from, we now have not just the lowest unemployment for 30 years, the highest employment in the G8, the lowest redundancies since records began, 55 per cent. of lone parents in work, and more than 50 per cent. of disabled people in work, but 600,000 vacancies. We have a good, strong economy. The hon. Gentleman can come with the hon. Member for Havant (Mr. Willetts) to a pathways to work area to talk to people in Gateshead, south Wales and in difficult areas. It is not lack of jobs that is the problem; the problem is helping people to overcome the barriers to get back into work.

I know that it is difficult for the Liberal Democrats, who are kind of a trumped up think-tank. When it comes to implementing policies, it would be nice for them to say either what their policy is or what the problem with our policy is. We got a little hint of it in relation to the "shades of grey". We agree—we are pleased that the Lib Dems are adopting our policy—that there are shades of grey. The one-size-fits-all solution, the single benefit, no matter what the sickness is, with no flexibility for people to work without fear of losing their benefit, and the things that we have done on earnings, drive this reform. I look forward to the Liberal Democrats joining us in heralding it as the breakthrough that it is.

May I draw attention to the confidence of Labour Members and the country in the skills of my right hon. Friend in tackling welfare reform? I urge him, however, to be slightly more radical than he has suggested he will be today. Does not the fact that we now have a record low level of unemployment offer the opportunity to abolish benefit for the unemployed and for those on incapacity benefit, to have a single benefit for those of working age who are not in work and to assume that everyone, from the moment that they sign on, will, when they can, seek work, with all our efforts being tailored to get them to achieve that objective?

My worry about the scheme is that we as politicians are not very good at deciding who is capable of work and who is incapable. In my opinion, some of the people in Birkenhead who cannot get incapacity benefit ought to be getting it. Others are rightly claiming and getting it, but there are many other claimants who ought not to be getting it, but who spend all their energy on ensuring that they remain on it. How will my right hon. Friend's reforms address that issue? Does not the low level of—

Order. The right hon. Gentleman knows that I have given him more than one supplementary.

I accept that, at a time of low unemployment, we can be bold and radical. I believe that the proposals are bold and radical, but obviously there is still a process to go through. It is a five-year strategy and, as I said in my statement, we need to talk to everyone with an interest in this issue about how we firm up these proposals.

I am not immediately attracted to the argument in favour of a single benefit. As I said to the hon. Member for Northavon (Mr. Webb), a one-size-fits-all solution is difficult to achieve, but my right hon. Friend is right to argue, as he has consistently done, for benefit simplification. Such simplification presents us with a big challenge. The various benefits in the system have been layered one on top of the other, and there is a real case for radical transformation and simplification. In doing so, it might be possible to provide some of the improvements that my right hon. Friend wants.

My right hon. Friend mentioned people on incapacity benefit in his constituency, which is an issue in many constituencies, particularly in the north. I have not given up on those people and I am not going to worry them by saying that a draconian measure will be introduced. In fact, the new measure, which applies to new benefit claimants, is not draconian. I want to help get those people back into work. Pathways to work is in its very early stages and we have yet to deal with the stocks; indeed, we have only reached those who have been on incapacity benefit for 12 months. We are discovering that there are real lessons to be learned about how to reach those people. A combination of reducing the inflow and reducing the number on the stocks—for the first time in years, the stocks are down by the albeit small figure of 9,000—is the way to ensure that, regardless of the economic situation, those people's lives are enhanced and transformed.

Does the Secretary of State accept that everything that I have learned about benefit reform in the past 20 years leads me to conclude that the most important thing to do in the next five years is to make a serious effort to simplify the system? The introduction of tax credits and the pension credit has improved poverty levels, but it has also increased complexity. Will he undertake to give due emphasis to such simplification during this five-year programme, and in view of the widespread interest in incapacity benefit proposals, may I make a bid, from the departmental Select Committee point of view, for draft clauses to be published and pre-legislative scrutiny to be allowed in the next Parliament?

The answer to the first question is yes and the answer to the second is probably. Such matters have to go through the usual channels, but I certainly see the benefit of publishing draft clauses and of ensuring that this necessary legislation—we cannot implement the proposals without it—can be scrutinised in full before we publish it. With that caveat, I am happy to give the hon. Gentleman the assurance that he seeks.

The detail of the Government's proposals will obviously have to be carefully considered, but I warmly welcome the provision of additional help in getting back into work those people who can work, not least because, as we have noted, incapacity benefit is not a generous benefit. Indeed, those on it are living on the margins of poverty. Can my right hon. Friend assure me that the benefit system will have the capacity to distinguish between those more able to work and the less able, and that personal advisers—a crucial component of this very welcome package—will have the skills, expertise and sensitivity to ensure that such people's needs are met properly?

I welcome my hon. Friend's comments. He has far greater experience of dealing with these issues than I have, and I can only learn from it. On the capacity to distinguish between the more able to work and the less able, 20 per cent. of people who go through the system are already classified as personal capability assessment-exempt. They are so chronically sick that it is considered perverse even to ask them to go through the PCA, and they are an obvious 20 per cent. who flow into the second category, to which very little conditionality is applied. The medical profession carries out the PCA, and I certainly do not want to hand over such assessment to civil servants or anyone else.

We are extending the capacity of individuals working in Jobcentre Plus all the time. On meeting a personal adviser working outside a pathways area, one would conclude that they have an enormous amount of expertise, as indeed they have, but those who work in pathways areas receive extra training. Not only are staff motivated and enthused by such training, it transforms the service that the customer receives. So I can reassure my hon. Friend that we will ensure that personal advisers have the necessary skills and sensitivity to carry out their important role.

The Secretary of State will know that there have been conflicting messages in the past few days. For the sake of clarity, can he point to anything in his statement that will benefit existing claimants of incapacity benefit, not new ones, or to anything that will be detrimental to them—or is there no change?

Let me be absolutely clear: this is about new incapacity benefit claimants. I may be wrong, but I doubt whether any such change has ever been applied to those who are already in the system. Because the new system is predicated on pathways to work, it provides help and support for people who are already on incapacity benefit. It enables them to participate in work-focused interviews, make use of the assistance provided, take advantage of the £40 a week in-work credit if they are taking up a job that pays less than £15,000 a year, and take advantage of the condition management that health professionals provide as part of the service. I am absolutely sure that people in the hon. Gentleman's constituency, and in mine, who have been on IB for some time will want to participate voluntarily in the new system.

As politicians, we can say today that this is the right way forward and that it is very important that people who have been out of the workplace because of disability or illness should get back into work. The real test, however, will be the experience of the people themselves, and it is word of mouth that will sell the Secretary of State's proposal. Some of the people to whom I speak who fall into this category still fear that they will be somehow worse off, or that coming off incapacity benefit and taking up work is too risky. They do not realise that the linking rules and the permitted work rules have changed. What can the Secretary of State do to allay those fears, so that everybody presently on incapacity benefit, severe disablement allowance or any other disability allowance will know that if they take that first step across a jobcentre threshold, they will have nothing to fear and everything to gain?

My hon. Friend raises an important point. Many of even those who are considered the most chronically sick want to work. As she well knows, severe disability does not prevent people from working and it should not prevent them from being helped to find work, which is why we need to get such people to attend a work-focused interview. For the most chronically ill, the only condition that applies in pathways to work areas is that they should attend such an interview occasionally. That allows us to explain to them the rules on linking and allowed earnings, and the various other parts of the package, which makes it clear that they can put their toe in the water. If they are worried about taking that step, they can see how they get on without losing their right to benefit. The work-focused interview with a highly trained and professional personal assistant is a crucial part of this system, whatever level of benefit the person in question is on.

It is strange that the only reference to pensions in a five-year strategy plan is the rather wimpish statement that the Government will set out the principles on which pension reforms will be based. Is that happening because the Chancellor is fighting a last-ditch attempt to save the rather discredited means-tested pension, rather than moving towards a citizen's pension? If so, what does the Secretary of State intend to do about it?

Let me be absolutely clear. When the hon. Gentleman has had a chance to read the five-year strategy, he will see that we have lifted 1.8 million pensioners out of poverty. It also makes it clear that whereas earnings have increased by 12 per cent. net, pensioners' incomes have increased by 19 per cent. net, and that the introduction of the pension protection scheme—one of the most radical changes ever taken to protect occupational pensions and to deal with auto enrolment—has helped to transform the pensions scene. I accept that we have not said much about pensions today, but that is because we are concentrating on one specific issue. I can assure the hon. Gentleman that he will hear lots about pensions—not just in the coming weeks up to what may well be a general election, but beyond.

May I congratulate my right hon. Friend on his statement and on his openness to receiving ideas and advice over the past few months? I particularly congratulate him on his comments about occupational health in the workplace and his linking of that issue with the public health White Paper. What prospects can we offer people whom so many employers abandon for the 28 weeks during which they are on statutory sick pay? More specifically, what role does he see for the excellent voluntary sector occupational health projects up and down the country?

I thank my hon. Friend for his comments and for his input as chairman of the Back-Bench parliamentary Labour party Department for Work and Pensions group. First, let me tell him that we can offer people assistance in the workplace. A third of those on incapacity benefit come directly from the workplace when their statutory sick pay runs out after 28 weeks. Suddenly, they are on something called incapacity benefit. We then put a good deal of time and effort into trying to get them back into the job that they occupied in the first place.

There is a lot to be done, and today's announcement that the Health and Safety Commission will be allotted £26 million to expand its work on occupational health issues will help employers better to manage the problem. Employers should not just stack up the days lost through sickness absence, but actively engage with individuals to find out what is wrong and help them back to work. It is also important to create a healthier workplace, which might prevent employees from becoming sick in the first place. Once my hon. Friend has had time to read the five-year strategy, he will see that we are also looking further into statutory sick pay to establish whether a change could support the overall aim of helping more people to either stay in work or return to it.

The Secretary of State talks about better rewarding those who choose to work beyond state pension age, but he is not giving them the right to do so. I know from my own experience of a 65-year-old widow, a highly competent school secretary, who was forced out of her job solely because of her age. Does the Secretary of State defend that? Does he not feel strongly about age discrimination? Should not the only criterion for keeping a job be a person's competence in it?

Actually, I have a great deal of sympathy with the hon. Gentleman's point, but—[Interruption.] Yes, I can see the hon. Gentleman's letter. I can understand why the constituent would feel that she was being discriminated against on account of her age. Where do we go from the current climate in which most people are out of the workplace by the time they reach 62 rather than 65? We would greatly like to see a position in which companies have no fall-back position on pension age and people can work to whatever age as long as they are fit and efficient at doing their jobs. I do not think that we are quite in a position to be able to implement that right now, but I am also unsure about official Opposition policy on that.

With the introduction of age discrimination legislation in 2006—I do not want to upset Conservative Members too much, but it derives from a European Union directive, so it could be uncomfortable for them—we take the view that it is still too soon to have no default retirement age at all. That is why we have said that no one can be retired below 65, which is a major change; that there is a right to request to work beyond 65; and that five years after implementation, in 2011, we will conduct a review to see whether we can lift any remaining barriers. I believe that we will eventually reach a position in which those barriers have gone, but it is important to listen to the business community, employers and others who have said that it is not possible to do it in one fell swoop.

Will my right hon. Friend say something about training arrangements to help people come off incapacity benefit? More particularly, what does he think about the Opposition's commitment to abolish the new deal on the ground that it is a wasteful operation?

I can tell my hon. Friend that the training aspects are, indeed, important. Pathways to work has helped twice the national average number of people back to work. It has also helped six times the national average number of people—including some who have been out of work for a long time—to get closer to the labour market through skills training. That shows how crucial it is to provide such intervention. The views of Conservative Members, who want to abolish many of the new deal programmes and privatise Jobcentre Plus, are a matter of great perplexity to me. If my hon. Friend could help me to understand them in the Labour end of the Tea Room, I would be pleased to speak to him there. However, the hon. Member for Havant (Mr. Willetts) seems fairly sympathetic. He is quoted as saying in today's newspapers that our proposals "look good". That being the case, I do not understand how abolishing the new deal and privatising Jobcentre Plus will make any improvement at all on the current position.

The first year of the pilot of pathways to work—including the one in Chesterfield and north Derbyshire, which I have visited—shows that help, support and providing incentives to work can be successful where threats and sanctions cannot. It is therefore hard to understand why the Government want to extend pathways to work only to one third of the country rather than to the whole of it. In that light, will the Secretary of State clarify what he meant in his statement when he said that, with the extra support of pathways in place, the Government would implement a radical reform to the incapacity benefit system by 2008? Does that mean that, by 2008, pathways to work and the new system will have been extended to the whole country or only to one third of it? Or does it mean that the new system will apply to the two thirds of the country that does not have the support of pathways to work? If so, it would undermine the Secretary of State's point about the success of pathways to work.

I am glad that the hon. Gentleman is a fan of pathways to work, and I shall soon visit the Derbyshire scheme. Pathways to work is essential for the reforms that we are setting out today. The Chancellor announced that the scheme will be extended to a third of the country, but the wider reforms are predicated on the operation of pathways to work across the whole country. It is a five-year plan, but we are in a three-year spending review, so we have the usual process to go through beyond 2008. We certainly hope that, by 2008, the major elements will be in place. That will include legislation to make changes so that the PCA can be accompanied by an employment ability test. Some of the linking rules will have to be changed, along with other aspects. However, 2008 will not see pathways to work extended throughout the country—only to a third—but the elements for change will be in place, ready to advance across the whole country thereafter.

May I congratulate my right hon. Friend on a very forward-looking statement? I look forward to the imminent arrival of pathways to my constituency. Does he agree that one of the greatest difficulties for people who suffer from chronic conditions—they can, of course, fluctuate—that has prevented them from aspiring to work in the past has often been the attitude of employers who fail to understand how to get the best out an individual who is managing a condition? If we are to ensure that these welcome reforms are effective, we must work hard to persuade employers to be much less narrow minded in their treatment of people with disabilities, and achieving that change might require legislation on disability rights.

I agree entirely with my hon. Friend. There is a lot of evidence of discrimination by employers, especially against people with mental illnesses. That is on top of the huge discrimination that has gone on for years against people who are physically disabled. In part, the answer lies with our disability discrimination legislation, whose passage through the House was the final fulfilment of our manifesto commitment to deal with what my predecessor called the great emancipation issue of our time.

That is not the total answer, however. The legislation may be in place, yet the inherent and underlying prejudices continue to exist. The legislation is a crucial part of the reform, but we must also ensure that we produce a society in which people are genuinely empowered, irrespective of their disabilities. We are still quite a way off that, and there is more work to do.

I welcome the Government's action to assist people on incapacity benefit and to give them an incentive to go back to work. I also welcome their commitment to give increased benefit to people who cannot work because of chronic and serious illness. I have coped with serious back pain for short periods over the past 30 years. I have been in traction in hospital, I have worn the steel corsets and taken the painkillers. However, I have been privileged in that I have been able to pay for private treatment when I needed it. I have not had to resort to the NHS for at least 10 or 15 years.

Will the Secretary of State discuss with his colleague the Secretary of State for Health the possibility of funding people who suffer from back pain so that they can benefit from the manipulative skills of physiotherapists and chiropractors in the private sector, where those skills are not available on the NHS?

Order. That was a very long question.

I listened with interest to what the hon. Gentleman said. I will talk to my right hon. Friend the Secretary of State for Health, but the hon. Gentleman should read chapter 7 of the recent "Choosing Health" White Paper. That speaks at great length about how the attitude of the health profession has changed in respect of conditions such as his.

Condition management is a major element in helping people off incapacity benefit and back to work. It is especially crucial for people who suffer back pain, and central to it is the need to ensure that they can see NHS experts as part of a return-to-work programme that might include physiotherapy. I shall talk to my right hon. Friend the Secretary of State for Health about the wider aspects of using the private sector.

Will my right hon. Friend confirm that pathways to work has been successful because it is voluntary and based on encouraging and helping people to go back to work? Will he also confirm that those principles will be part of the new system, and that people will not be taken off benefit compulsorily simply because they fail the interview or are unable to comply in some way with the new regulations?

I can give my hon. Friend that assurance. Pathways to work has been a huge success, and will be extended to his area. It is a voluntary system: that is why it works and why the disability lobby supports it completely. The House can call me "Anne of Green Gables" if it likes, but my feeling is that people offered an opportunity to reconnect with society grab it with both hands. After all, they do not live in the lap of luxury on £4,000 per year.

As for our proposals for future incapacity benefit recipients, more money will be available as long as those people attend the required interview and agree a work plan. That is not the same as throwing them back on to jobseeker's allowance, as the process does not depend on them finding a job. The extra payments require only that people actively work towards acquiring the necessary skills, and so on. Some people advocate a time-limiting approach, but I think that that is regressive and doomed to fail.

Currently, about half the total number of incapacity benefit claimants deemed by the Department to be fit for work win their appeals against the decision. Does not that suggest that Government policy has in part been about pressurising sick people back into work against their will? What confidence can the sick and disabled have that the new proposals are anything more than another cost-cutting measure?

No, I do not accept what the hon. Gentleman suggests. The fact that 50 per cent. of people who appeal win their cases is a matter of some concern to me, and the point was raised by someone on my own side yesterday evening. That needs to be looked at.

As to whether the Government are trying to force people back to work, I remind the hon. Member for East Carmarthen and Dinefwr (Adam Price) that the PCA is a medical test. It is one of the most stringent in the world, but I do not apologise for that. In its current form, the PCA is meant to determine only whether a person should be looking for work or should receive benefit. That is what needs to change. The hon. Gentleman's claim might look good in a constituency leaflet, but there is no basis for saying that this Government have done anything but try and help disabled people. The disability lobby accepts that a combination of the Disability Discrimination Act 1995 and the assistance provided by the pathways to work measures mean that this is a different era for disabled people compared with what happened between 1979 and 1997.

I warmly welcome the comprehensive package presented by my right hon. Friend this afternoon, but will he say more about how people with mental health problems will fit into the support system that he has outlined? All too often, the medical assessment procedure does not take account of people's specific mental health problems, or the fluctuating nature of the illness. How can he assure me that people with such problems will benefit from the support that he has outlined?

I accept that fluctuating conditions are a problem. The PCA system acknowledges that, and my hon. Friend's question is therefore extremely valid. It is a problem more for the medical profession than for politicians, but it is something that we need to pursue. A fair chunk of the total number of people claiming incapacity benefit suffer from some form of mental illness, but they are probably the people who would be worst served by being told to sit alone in a dark room.

As I have said before, the suicide rate among people who have been unemployed for a long time is 30 times higher than that faced by people in employment. Being written off is not good for people with any sort of condition, but it would be very strange to tell people with depressive illnesses to go and divorce themselves from society. Our condition management approach is focused on helping people with mental illnesses, but we acknowledge the problem arising from the fluctuating nature of such illnesses. We need to resolve that.

The subject of mental illness is one of the most important that we have dealt with today. The problems are different from day to day, as people have good days and bad days. The Minister has talked about the stick approach of legislation designed to prevent discrimination, but has he thought of adopting a carrot approach too? Such an approach would mean that employers were not disadvantaged by employing people who they knew in advance would probably have bad days on which they could not work. Does the right hon. Gentleman agree that we need to give people in that position a chance?

The hon. Lady is right, and employers and our national employment panel are already looking at this issue. The fair cities initiative deals mainly with ethnic minorities, but it is intended that it will also move on to other matters. Ensuring that people who go through the pathways to work process—and similar processes—find employment means that employers must recognise the points that she raises.

In my statement, I said that it was crucial to have employers working alongside the Government in this matter. At their worst, these are discrimination issues: at their best, they arise from employers' lack of understanding of the problems arising from mental illness.

Finally, I remind the House that today's labour market is very tight, with 74.8 per cent. employment. Social issues notwithstanding, it is economically important that employers are able to use the best talent in the country. That means taking on people who receive incapacity benefit and people from the ethnic minorities, where the unemployment rate is higher. The hon. Member for Romsey (Sandra Gidley) raises a valid point, and we need to pursue it.

I warmly welcome my right hon. Friend's statement, which was balanced and badly needed. Bearing in mind how important personal advisers will be to the operation of the system, what assessment has he made of the number of personal advisers who are likely to be required and, in particular, will they be protected from the Gershon review requirements to ensure that we are able to employ the people we need to help people back to work?

They will be protected while this party is in government. That is absolutely clear. In terms of spreading out—

You are the party of Gershon.

Well, the Tories are the party of the James review, which would take 100,000 jobs from the Department for Work and Pensions. That was the last figure I heard, but I do not know what figures have since been invented.

The roll-out of the pathways to work programme to one third of the country was announced, thankfully, in the pre-Budget report and the money came with it. That requires another 1,000 personal advisers. I cannot comment about 2008 because that will involve a different spending review, but the programme now requires more front-line staff and we do not need to change our plans—they are already stringent enough—under the Gershon review.

I welcome the balanced approach of my right hon. Friend the Secretary of State. He said that it is part of a framework to try to drive forward efficiency and reconstruction in the Department. The yellow brick road of pathways to work has not yet reached my constituency and the Jobcentre Plus I was promised in Bo'ness seems to be fading into the distance. Will my right hon. Friend assure me that he understands the need to have a footprint in the community? We need a sense of the Department in the community, not a service delivered from a distance, particularly to a community that is under stress because it has lost its mining and industrial base. It has a number of people on incapacity benefit who need the help that he is offering, but from a base within the community.

As my hon. Friend knows, I have met him to discuss Bo'ness. I accept his comment about a presence in the community and we are offering that in Bo'ness. My hon. Friend, for understandable reasons, believes that that presence should be a more widely advertised presence in the high street, whereas we are suggesting two outreach programmes in more deprived areas. We need to get the balance right and I promise my hon. Friend that I will continue to reflect on his representations.

rose—

Order. I am afraid that we must move on.

I beg to move,

That leave be given to bring in a Bill to introduce a public holiday on the third Monday in October in recognition of public service and for connected purposes.

I have two reasons for wishing to introduce this Bill today. The first is to provide a much needed additional day of rest for the British worker. This Government have done much to encourage a sustainable work and family life balance. The extension of maternity rights, better financial support for working parents and more child care have certainly helped many parents to juggle their lives more successfully, as has the right to a minimum of four weeks paid holidays a year.

Families need more quality time, however, because the British work some of the longest hours in Europe and many families do not have as much time together as they would like. That has an impact on relationships between couples and on the influence that parents have over their children. An additional public holiday might not hold the key to all the ills of family life, but it would certainly be a further step towards giving British workers a little more time away from their workplace.

We have eight days of public holiday in England, Scotland and Wales at present. Our Northern Ireland citizens are rather better off, benefiting from an additional two days. With the exception of the one-off public holidays granted by Her Majesty in 1999 for the millennium and in 2002 for the golden jubilee, we have little to celebrate regarding public holidays. Sadly, as the law stands, some workers cannot even be guaranteed public holidays free from work, and I hope that the Government will address that at some time in the future.

The meanness of our current public holiday provision is highlighted by comparison with our European counterparts. France has 11 days a year, Belgium has 10, Germany and Greece have up to 12, while Portugal and Spain have up to 14. Before the enlargement of the European Union in May last year, the average for EU members was 10.8 days. Since welcoming the new members to the European Union, the average has increased to 11.35 days, boosted by the fact that Slovakia has 18 days, Cyprus has 16 and Hungary has 13. Meanwhile, Britain languishes at the bottom of the table, with eight days.

Not only do our citizens work the longest hours in the European Union, they have the fewest public holidays. A survey conducted by the TUC last year polled more than 20,000 people, with 99 per cent. wanting an additional holiday—hardly surprising, one might argue. The poll asked people to vote for the most popular time to take an additional holiday: 40 per cent. wanted it to be in the third week of October, which was the most popular of any of the suggested dates.

Suggestions have been made in this House that we should have an additional holiday to mark the various patron saints representing the nations. Other suggestions have been for a holiday to commemorate international women's day, Trafalgar day or Armistice day. The third Monday in October might fall on Trafalgar day—21 October—in some years, but I am not convinced that a chance to create a new public holiday should be linked to a battle that took place almost 200 years ago. The commemoration of those who died in service to their country in all wars, which is marked by Armistice day, is a commendable objective, but I believe that we have a chance to make our new public holiday mark the contribution of all who work in public service.

Many families would benefit from an additional public holiday during the week of half-term in October. The date of half-term varies throughout the country, but the most popular time seems to be the third week in October. This Bill would encourage all local authorities to select the same week for half-term to be in line with the public holiday—for example, the third Monday would fall on 17 October this year. A further reason why this would be a good time of the year for a public holiday is that there is a 16-week gap between the public holiday in August and Christmas. That is far too long to have to wait during the darkest, most miserable and depressing months of the year. I know that that does not directly affect Members of this House, but it affects millions of their constituents. How good it would be to leave the summer behind knowing that there would be one more chance of a rest before the Christmas frenzy.

Of course, it might be argued that those who wish to have an additional day's holiday should be able to negotiate that with their employers, but the reality is that many employees are unable to take additional time from work without pressure from employers. A public holiday is an opportunity for all employees to feel entitled to that day without any fear that employers are losing competitive advantage by granting time off.

I said at the beginning that I was introducing this Bill for two reasons. The second major reason is to pay tribute to the work that is done by all those who work in public service. I mean the broadest definition of public service, not just those who toil in our hospitals, schools, military, postal services, emergency services, central Government and local government. It would also pay tribute to those who give their time and effort to serve the public good. Every Member of this House will know of the impressive network of community and voluntary activists without whom many of our essential services would grind to a halt. In my constituency, residents organise neighbourhood watch schemes and residents associations, volunteers work with charities and good causes, parents run parent-teacher associations in schools and members of the league of friends assist in our hospital. Those are just some of the people who help to make our lives and our communities work, usually without pay and often without thanks. They are our local heroes and it is to them, as well as our paid public servants, that I would dedicate this public holiday.

Some would argue and even vote against the Bill. Business, it will be claimed, would have to foot the bill at an estimated cost of £2 billion and suffer reduced productivity. I would argue that giving employees an additional day for leisure, time with their families and rest would be better for business in the long term. British workers already top the poll for productivity, with the least amount of holiday compared with other European countries. Another day away from work will not damage their competitiveness, but may make them more refreshed in the final weeks of the year.

I urge the House, and particularly the Government, to support this Bill. The British people deserve to have more public holidays. At the very least, the citizens of England, Wales and Scotland should be treated equally with those of Northern Ireland. I am aware that the provision of public holidays is now a devolved issue for the Scottish Parliament. It took little time in recognising that there could be great benefit in an additional public holiday for the Scots, especially where it may result in increased tourism. The Parliament is already consulting on the possibility of introducing a public holiday to mark Scotland's patron, St. Andrew. We should not delay any further; nor should we allow the possibility that the people of England and Wales will become even further disadvantaged by other nations introducing new holidays. I look forward to the progress of the Bill and, with the will of the House, to being able to celebrate public service day.

The trouble with this sort of thing is that it is one of those motherhood and apple pie issues that sounds so attractive, especially when put so attractively by the hon. Member for Watford (Claire Ward), but it worries me considerably. It is the subliminal message underlying the matter which is bothersome.

The hon. Lady started out by putting the proposition, which she obviously regarded as unarguable, that the British people were in great need of an additional day's rest. That sets the tone for the whole argument, suggesting that we are so hard pressed, in a rather easy, casual world, that we need more time off. Nothing could be further from the truth. The hon. Lady must listen, until she is as bored with it as I am, to the great leaders of her party talking about the global market and global competitiveness. She went on to compound her crime by saying that the British already work the longest hours in Europe. So what? If the hon. Lady were to look at the unemployment rates in the very countries that she quoted with so much approval, and compare them with those of the United States on the one hand or those of the emerging economies of Asia and the far east on the other, she would be much more worried about the idea of British workers taking yet more time off in an ever more competitive world.

The whole basis of the argument that started with the proposition that our poor, hard-working people need lots more time off needs to be challenged. I wonder whether the hon. Lady has checked with her Front-Bench colleagues to see whether she is on or off message on this matter. I should have thought that the Chancellor, for example, might well have a word to say to the hon. Lady if he learned that she was arguing that British workers need more time off when he keeps telling us that we need to be more competitive—which, sadly, under his Government and hers, has not been the case. By the way, the hon. Lady's claim that British workers are now the most productive in the world certainly requires some analysis. I put it no more strongly than that.

Let us move on to the specifics of the hon. Lady's argument. She said that we could do with another day's holiday in October, and I am sure that many people would agree. In fact, I am sure that many of my colleagues would agree. We would probably suggest that we could scrap the May day holiday, with all that it symbolises, and instead have a day off in October. That would be my solution, so that we are not giving people extra time off; we are giving them an alternative day off in the year which would have much more significance. Let us get rid of the ghastly May day and have, for example, Trafalgar day. Why not? It is one of the great days in our history and should be remembered. Or how about Thatcher day or Churchill day? There are any number of possibilities that would bring joy to our people. Instead of the shame of the May day holiday with all its ghastly socialist and communist overtones, we could have a proper holiday in October. I am offering the hon. Lady a helping hand. If her Bill were to make any progress in the House, she and I might work together to amend it to achieve that objective.

I turn now to my third objection to the Bill. The hon. Lady made a plea for recognition of public service, which she went on to define in two ways. The first was to talk of the voluntary sector. I agree with her that we all now should, and increasingly do, recognise the value of the voluntary sector in our society. That is something that President Bush has been encouraging in the United States, and it is something that my party wants to encourage. We can all agree on that as a worthy objective.

When the hon. Lady went on to link that recognition to those working in the public sector, her argument became more problematic. We are rather prone in this House to lavishing endless praise on people who work in the public sector, forgetting that those in the private sector arguably work as long, or longer, and harder to create the wealth that pays for the public sector. To single out those working in the public sector for praise and recognition in an additional bank holiday seems to me slightly odd. Certainly those involved, for example, in retail and in other service provision in the private sector might find it rather hard to swallow the idea that their long hours of hard work dedicated to us consumers were being ignored in favour of those doing excellent work in the public sector.

What I am really saying is that the Bill is wrong at every level. It is wrong because it is arguing for more time off; it is wrong because it does not substitute a day in October for the horrible day in May; and it is wrong because it singles out those in the public sector apparently to the neglect of those working to create the wealth in the private sector. For all those reasons I hope that the Bill makes no further progress.

Question put and agreed to.

Bill ordered to be brought in by Claire Ward, Andy Burnham, Mr. Parmjit Dhanda, Mr. Andrew Dismore, Janet Anderson, Mr. Kevin Barron, Shona McIsaac and Mr. Martin Salter.

Public Service (Bank Holiday)

Claire Ward accordingly presented a Bill to introduce a bank holiday on the third Monday in October in recognition of public service: And the same was read the First time; and ordered to be read a Second time on Friday 18 March, and to be printed [Bill 53].

I beg to move,

That—

(1) the Order of 25th January relating to Business of the House be discharged; and

(2) at this day's sitting, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mr Secretary Clarke relating to Police Grant Report (England and Wales) not later than three hours after the commencement of proceedings on the first Motion, and shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mr Secretary Prescott relating to Local Government Finance (England) not later than three hours after the commencement of proceedings on the first Motion relating to Local Government Finance (England), or six hours after the commencement of proceedings on the first Motion relating to Police Grant Report (England and Wales), whichever is later; proceedings may continue after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.

The Police Grant Report (England and Wales) 2005–06 and the Amending Report 2003–04 were laid before the House on 27 January. Both reports are due to be considered jointly by the House in the next debate, and this business motion will allow them to be debated at the same time. It will facilitate the discussion on police grant for next year and allow three hours for the debate. Hon. Members will clearly be grateful for that, as it will enable us to explore the issues in considerable detail.

The Amending Report 2003–04 takes account of changes to Office for National Statistics population data for that year. However, the reports for both years are inextricably linked because the outcome of the amendment proposals inevitably feeds into policing activity in 2005–06, in the number of people in any given area that the police have to look after, and funding in 2005–06 also takes that into account. I hope that the House will agree to the motion.

Question put and agreed to.

I am grateful for the co-operation of the House—

Order. I admire the hon. Lady's enthusiasm, but we have not quite got there.

I beg to move,

That the Police Grant Report (England and Wales) 2003–04: Amending Report 2004–05, HC 247, a copy of which was laid before this House on 27th January 2005, be approved.

With this it will be convenient to discuss the following motion:

That the Police Grant Report (England and Wales) 2005–06, HC 246, a copy of which was laid before this House on 27th January 2005, be approved.

I am grateful for the invitation to address the House. I am occasionally criticised for my enthusiasm and the fact that I speak rather quickly in the House. I shall endeavour to speak as concisely as I can, as I am aware of the number of hon. Members who wish to make a contribution this afternoon.

The Government remain committed to providing the resources that the police need to do their work effectively and to fulfil the many commitments that we ask them to undertake. We will continue to provide further investment, but that will be linked to change and reform of the way in which the service is provided, to make the police even more effective than they are.

The hon. Lady will not be surprised to hear that as a Surrey Member I am not enthusiastic about Surrey's proportion of the grant. As the motion will almost certainly be agreed by the House tonight, will she agree to meet me and a few of my colleagues from Surrey to discuss some peripheral issues along the lines of her opening words?

If the hon. Gentleman would like to discuss effectiveness, efficiency and how we can work with the police to help them provide an excellent service to his constituents, I am more than happy to meet him and a delegation. I have met several delegations and I am always keen to hear ideas from the front line about how we can be more effective.

My hon. Friend spoke about investment and reform. Nottinghamshire police have had record investment. We have a record number of police officers and the force is changing and performing better. Having visited the area, however, she knows that there are still concerns about the formula for funding police authorities. Will she give a commitment to examine that in the future?

My hon. Friend has been a champion of police services in his constituency. I have visited the area on a number of occasions and I have seen the dedicated work carried out by officers there. Since their engagement with the police standards unit, their performance has improved dramatically. I commend the police force for that. My hon. Friend knows that we are considering the formula for future years. That review is taking place together with the Association of Chief Police Officers and the Association of Police Authorities, and we will take account of the need of all forces for sufficient resources. I commend the recent work of the police service in Nottingham, which is making a significant difference for local people.

We have a fine force in North Yorkshire, which is well led and delivers a good service. Over the past two years there has been a 93 per cent. increase in the precept, which has had a devastating effect on many of my constituents. I now find that some £25 million is currently held in balances, and that 60 per cent. of the capital that the Government have provided for the past three years has not been spent. What steps will the hon. Lady take to ensure that the money allocated by the Government and by council tax payers is effectively spent, not dumped into balances?

The hon. Gentleman makes an important point. From the comments that I am about to make, he will see that efficiency savings and an efficiency drive are important this year to ensure a balance between the record amount of central Government investment and the amount raised from local people. We will look at efficiency and the use of balances as well. That combination means that local authorities should be able to provide an excellent standard of policing to their communities without excessive council tax rises.

Government investment over the past five years has increased by 39 per cent., or more than £3 billion, so significant investment is taking place. Crime has fallen by 30 per cent. since 1997. In the past year, according to the British crime survey—the most authoritative survey that has been conducted under parties of all persuasions—crime is down by another 11 per cent. We are pleased that the investment is producing results. The risk of being a victim of crime is the lowest it has been for 25 years, and fear of crime is also coming down, which I am particularly pleased about.

We have record numbers of police officers—140,000 in August last year—and of police staff. There were about 4,500 community support officers out on patrol at the end of December, an increase of 400 since September, so we are making excellent progress there. We are making progress on tackling bureaucracy, an issue that concerns all hon. Members. We are trying to get more of our officers out on the front line by using video identification, the Livescan units and our work force modernisation projects. In our recent White Paper, "Building Communities, Beating Crime", we set out an ambitious programme of change. The introduction of widespread neighbourhood and community-based policing will help build trust and confidence in local areas, because there will be much more direct contact with the police service.

The police funding settlement for 2005–06 will support the priorities that we set out in the national policing plan, which range from tackling terrorism all the way through to dealing with antisocial behaviour and the acts that make people's lives a misery in local neighbourhoods. We have a particular drive to increase the rate of sanction detections, which had gone down in recent years but is, I am happy to say, improving across the board.

The settlement is considerably better than the police service anticipated. When representatives of Cheshire police authority came to see me recently, they acknowledged that they were about £1 million better off than they had expected under the assumptions that they had made. They still did not think the sum was quite enough and they made some important points to me, but they recognised that it was a much better settlement. The Association of Police Authorities had anticipated a 3 per cent. increase in grant and a possible 3 per cent. precept uplift. We have managed to do significantly better than that.

We are providing grant to support overall police spending of £11.8 billion. That is an overall increase this year of almost £750 million, or 6.7 per cent. That is a significant settlement, and one of the best in recent years. Central Government revenue grant funding will increase by 5.1 per cent.—that is, 4.8 per cent. in the total revenue grant and 0.3 per cent. in specific grants. There is increased funding for important central support services including IT, extending the DNA database, looking at the Bichard recommendations, and the Independent Police Complaints Commission. That brings the total increase, as I said, to 6.7 per cent.

Among all the special payments that the Minister just mentioned, is any funding allowed for the new unit to combat animal rights terrorism, a crucial issue in my constituency? I welcome the tougher line that the Government have taken on animal rights terrorism. Now that we have a national unit, it needs funding to carry out the intelligence work necessary to combat the evil people behind those acts.

The hon. Gentleman is right that that work is important. The amendments that we have tabled to the Serious Organised Crime and Police Bill indicate the importance that the Government attach to such work. The funding for the Serious Organised Crime Agency will consist of the existing funding from the agencies that have been brought together, and increased funding of some £24 million to tackle the priorities that have been outlined. I do not have the detail of the exact sum that we will be able to allocate to that important area of work, but I can let him have that as the situation develops. We recognise that an increased focus is needed in order to protect our very important industry and the individuals whose lives have, in some cases, been destroyed by these people's actions. He makes an important point.

The police grant report deals with Home Office general police grant for revenue expenditure. That is £4,574 million in 2005–06. In addition to that, police authorities will receive £3,043 million of revenue support grant as local authorities. In Wales they will get £14 million of special Home Office grant. There is no floor as there are only four police authorities in Wales, so we have put extra money in to help Wales. The total sum represents an overall increase of 4.8 per cent.

In addition, we are providing £766 million for specific initiatives and £358 million for capital programmes. There is a 13 per cent. increase in capital support for the police, which I hope will be welcomed. Hon. Members will be aware that we spend a massive amount on our national drugs strategy. Although that is not included in this settlement, £1.5 billion will be spent next year to tackle the scourge of drugs in our communities.

Will there be any increase in the rural policing fund?

The rural policing fund has been in place for three years. It is £30 million again this year. That is a flat rate. There is no inflation increase for the rural policing grant because we consider it fairer to put the inflation increase into the general grant, but the £30 million is to be divided among the local authorities, which find it extremely useful in trying to improve policing services to their more sparsely populated areas.

In 2004–05, we took the wholly exceptional decision to provide a broadly standard flat rate increase of 3.25 per cent. to all police authorities in England and Wales. Since then, I have been pressed by many forces to see whether we can move to a more accurate reflection of the funding formula, and I am pleased to say that in this settlement we are able to move some way towards more accurately reflecting the policing needs that the formula has identified.

On policing in rural areas, is the Minister aware that in North Cotswolds, which covers an area of 300 square miles, there is only one patrol car on at night? When I have taken that up with the chief constable he says that there is not enough money in the formula properly to police rural areas. When the Minister is considering the formula, will she look carefully at the real costs of policing remote rural areas? Will she also consider providing more custody suites, because the police have to travel 30 miles to Stroud from parts of my constituency to place someone in custody, and that is an enormous waste of time for police and individuals? Will she consider those two aspects?

Yes. I am sure that the hon. Gentleman will recognise that during the past four or five years there has been a massive increase in police investment in every force in the country, including his area, to enable them to provide services for their community. Clearly, the amount of policing in different parts of his constituency and in different parts of the force area is a matter for the chief constable, who must allocate the resources in accordance with the policing needs.

On custody—we have had this discussion before—it is a matter of getting the balance right: ensuring that we obtain economies of scale in a custody process versus having small custody areas. We are trying, particularly with our civilianisation programme, to ensure that custody services are run in the most cost-efficient way, to free up police officers for the front line, but also to free up some of those resources that are currently used for custody purposes for other important policing activities. These are very much operational matters, but I am delighted that the hon. Gentleman supports our move towards civilianisation and our modernisation of custody procedures. [Interruption.] At least, I hope he supports that kind of reconfiguration.

We in the west midlands were clearly delighted with the progress that you are making on the funding formula. We had an increase of £27 million, which was received with great appreciation by the West Midlands police authority, the area's parliamentary Labour group and the chief constable. May I put on the record our sincere thanks to you as the Minister and to our Government for acknowledging the shortfall in the formula, and urge you to continue this work on our behalf?

Order. The hon. Gentleman has been here long enough not to be using the word "you". I have had nothing at all to do with these matters. But I am sure we are all pleased that those paeans of praise are on the record.

None more so than me, Mr. Deputy Speaker.

I am grateful to my hon. Friend. It was perhaps the comment that I was expecting the hon. Member for Sutton Coldfield (Mr. Mitchell) to make in his contribution. I have no doubt that he, as a west midlands Member, will welcome the record increase of 6.8 per cent. in general grant for the West Midlands police, and I look forward to hearing that.

On civilianisation and cutting down on paperwork, the Minister, like me, will know, as a frequent visitor to the Police Federation conferences, that one issue is the form filling. I appreciate that under the Police and Criminal Evidence Act 1984 some are absolutely necessary and have to be adhered to. What work is going on to reduce that huge work load? I am sure that some of the forms are unnecessary and can be done away with, and others could surely be civilianised utterly.

We are making progress. More than 7,000 forms have now been disposed of. The hon. Gentleman is right that some of the form filling is about accountability, both under the law and to communities, but we need to bring it down to the absolute minimum. We have now instituted a gateway process whereby for a proposal to get through it has to be scrutinised and be seen to be effective and necessary, so that we weed out not just the forms, but some unnecessary policy items. We have an assistant chief constable who is now focused on this, visiting forces to go out with the officers on the front line to obtain those practical suggestions that often make the most difference.

When I tabled a question to the Minister asking about those 7,700 forms, she responded that no information on what those forms were was being kept by her officials. Can she do a bit better than that? Could she write to me, or put a letter in the Library, explaining what categories these forms fall into, so that we can understand a bit more clearly how much progress the Government have made in this important task?

I will do my best, but I do not propose to ask forces to fill in a form telling me what forms they have disposed of, as that might fall into the unnecessary bureaucracy category. I will certainly do my best to see whether we have any further information on this without putting an undue bureaucratic burden on the rest of the system.

I think that I heard the Minister say that there was a significant increase in capital grant amounting to 13 per cent. There is no mention of capital grant within the police grant report that we are debating today, so we are in the dark as to exactly what her intentions are. But the view of the Association of Police Authorities is that the figure for this year is £358 million, an increase of only £3 million over the £355 million last year, which is certainly nothing like 13 per cent., and in fact is less than 1 per cent.

We are at one on the £358 million and I will look further into the percentage increase. Perhaps before the end of today's debate I will be able to give the hon. Gentleman that information. If not, I will certainly write to him.

Last year we had the flat rate increase and we have now moved towards the formula in a better way. There will be a funding floor of 3.75 per cent. to protect forces that would otherwise have fallen below that level, and that is substantially above police pay increases, which are about 3 per cent., and non-pay increases, which are about 2.6 per cent. We have also removed the funding ceiling—something that many people asked us to do—and that has been widely welcomed, and the increases for forces range from the 3.75 per cent. all the way up to the 6.8 per cent. for the West Midlands, and some in between, so it is a very good settlement.

Does my hon. Friend accept that one of the problems with smaller forces such as Gloucestershire is that the perceived efficiency savings impinge quite hard now? To be fair to the Gloucestershire force, it has made efficiency savings over the years, but it is beginning to come to the end of those. Will she assure me that there is realism in what efficiency savings are expected to be made?

Yes, we are realistic, and police services have a good record on achieving efficiency savings. We think that what we have asked them to do is realistic. My hon. Friend makes the point about smaller forces, and that is why we have told them to work together. We now have regional groups considering efficiency, because economies of scale are often to be had by forces working together, not just with the police service but with their local authority colleagues, on call centres for example, squeezing more efficiency out of the system in that way.

Pensions have been a big issue this year. Many police authorities have said that there is a spike in the pensions costs because there is the 30-year retirement after the big recruitment campaign about 30 years ago. We were able to put an extra £20 million, a special uplift of 0.25 per cent., into the grant in order to take account of that. For next year we have proposed to change the pension system so that we will reduce the volatility that is out there, and the risk of that volatility will be held at the centre, in that there will be a separate pensions pot in which people will put their employee and employer contributions, and if that is not enough to meet the pensions requirement, the Government will top it up. That should even out the spikes that we have seen in recent years, which will be hugely welcomed by police authorities throughout the country. The pensions system is changing quite dramatically as well and will be less expensive in future and provide a better range of more modern and flexible benefits.

I have spoken about the formula review, on which we are now engaged. We also want to try to ensure that the formula better reflects the domains that are in our police performance assessment framework, and that work is ongoing. Again, that will make the funding system more transparent and more easily understood. We are also working with our local government colleagues to look at the possibility of three-year settlements, which again would give some stability and enable people to look ahead and be sure of the funding available.

We want to see 3 per cent. efficiency savings, half of which is to be cashable and half non-cashable, and all used to reinvest in services or, I hope, to keep the precept down as well to ensure that we have reasonable council tax increases of less than 5 per cent., as the Deputy Prime Minister has made clear. Last year, 11 police authorities achieved efficiency gains of 3 per cent. or more, so I think that is a realistic expectation. I know that it is tough, so we are supporting the police in achieving those gains. I am told that forces such as Thames Valley provide horses and mounted officers for a number of adjoining forces, which relates to the point made by my hon. Friend the Member for Stroud (Mr. Drew) about small forces having to provide such things on their own. South Wales has reorganised its custody function to release its officers to the front line, and it has managed to get more efficiencies in that way.

We also need to keep pressing on sickness rates both in the police force, in terms of officers, and among police staff. The figures are still too varied. The best force is down at 6.1 days per officer per year lost through sickness, while the worst is still at 13.8 days. That is a big variation, and there is more to be done on that issue.

For the first time ever, we have the front-line policing measure, enabling us to see the amount of time that officers are spending on front-line duties. If we can get the figure up from the current 63 per cent. to about 72.5 per cent., we will be able to release the equivalent of thousands of officers back on to the front line to do policing in their communities. That is a very important issue for us.

On pensions, I was pleased to hear this morning that my hon. Friend's Department has found a way of correcting the mistake of the Government actuaries in assessing the Derbyshire police pension fund, so it will get back its missing £500,000. In view of the continuing pressures on the budget, however, and the need to review Derbyshire's formula, along with others, and to preserve our excellent record, including record police numbers and a fall in crime of more than 14 per cent. in the past year, will she give me an assurance that when the amending report on this matter is produced next year, the figures will be fully assessed and agreed with Derbyshire, so that there is no detriment to the service in that report? Will she put that in writing, in reply to the letter that I sent her last week?

My hon. Friend is right to highlight the calculations in respect of Derbyshire. I am aware of the issue and I am giving it my close personal attention so that we can try to ensure that the police authority is not in a detrimental position. I undertake to write to her. I know that the force is doing in an excellent job in providing good policing to its community, and I want to do everything I can, along with my colleagues in the Office of the Deputy Prime Minister, to ensure that the force is not in a worse position than if we had got the data correct in the first place. I am glad to give her that reassurance.

On precepts, as I said, we expect council tax increases to be no greater than 5 per cent., and we think that the budget settlements for local government and the police authorities can help us in that regard. The Deputy Prime Minister has made it clear that we will use our capping powers if necessary. In fact, we were able to get possible police precepts down from the high 20s last year to about 12 per cent. by making it clear that we would be very firm in this area. I shall certainly take a close interest in the capping criteria and work closely with my hon. Friends to look at the impact on police authorities.

Since we published the provisional settlement, I have received representations from 32 police authority areas. I received 45 representations this year and 63 last year. Perhaps that reduction is indicative of how generous the settlement is this year and suggests that people feel a little more reassured by it. The representations fell into 11 broad areas and covered a range of issues. I am informed that none of them covered the licensing issues, which is interesting in view of the salience of those issues in recent times.

I think that I have dealt with pensions, on which we are making good progress after many years of not reforming the scheme. I know that many forces have been concerned about probationer training costs. We are now delegating training to forces themselves. Instead of training being done at the centre through Centrex, we are saying that it is important that our initial probationer training is carried out in the community. I hope that that will mean that we can attract a wider range of recruits, including people who have family responsibilities and who do not want to spend 12 weeks in a residential setting. Such training is now increasing, but we want to ensure that we provide some additional funding to forces if they are going to take on that extra responsibility of probationer training. We will provide extra revenue funding for the transitional costs of £1,900 per recruit, and there will be extra capital funding of £7.5 million to help that transition, and £4.8 million of revenue funding for forces that are early implementers of the new probationer training scheme. The fact that training will be done together with members of the local community will help us with neighbourhood policing, because we will begin to get some very different attitudes and work.

We continue to provide the crime fighting fund, which has enabled us to fund 9,560 officers over the past few years, and we have put £8 million inflation into the fund and £18 million to support the special priority payments that have been paid to officers carrying out particularly difficult jobs. We have also put extra funding into the Metropolitan police: their general grant increase is 5.8 per cent., so they have a good settlement this year. We have increased the capital city functions for the Met by £10 million, to £217 million, and they will also get specific counter-terrorism funding to enable them to carry out that work. They get £61 million in ring-fenced counter-terrorism funding, and the provincial forces will receive £35 million of revenue and £8 million of capital for that dedicated and very important counter-terrorism work.

We will continue to provide £50 million—we are providing it again this year, for the third time—to basic command units for them to use together with their crime and disorder reduction partnerships in local crime reduction initiatives. That has been one of the most useful funds for the police, as it is completely flexible and they can use it to lever in extra funds from their partners to drive down crime. That is why we have seen burglary, vehicle crime and robbery fall so significantly.

We will also continue to fund the community support officers. We have put £50 million into the neighbourhood policing fund for the extra tranche of CSOs, who are hugely welcome in communities. We continue to fund Airwave, and we are putting a final £17.3 million into Airwave support, because some forces have been delayed in rolling it out. I was up in Cumbria just last week looking at the dreadful effects of the floods. The local force did not have Airwave because the earlier foot and mouth problems had prevented it from putting up the masts, which was a difficulty during the flooding crisis. We are ensuring that it gets the full amount, despite the delay. It borrowed Airwave from its neighbouring force during the flooding crisis, and they found it an incredible improvement for communications. They borrowed the handsets and were able to use the system.

The street crime initiative has now been going for a couple of years. It should have come to an end this year, but we are again providing a grant of £6.5 million to ensure that the lessons from the initiative can be learned and mainstreamed. I see that the hon. Member for North Thanet (Mr. Gale) is in his place. I am pleased to say that we are providing some street crime moneys to British Transport police, and we are also providing some Airwave moneys and terrorism funding to them. I hope that he will feel that I have taken note of some of his contributions on how important the British Transport police are in protecting our infrastructure in this country. I have also mentioned the Serious Organised Crime Agency, which will be funded to carry out its very important work.

I commend the police settlement to the House. It is a very generous settlement this year. There will always be more that people want and more that we can do, but we have taken another £50 million out of the general Home Office budget on top of the £100 million that we took out last year in order to maximise the income and grant for the police service, because we recognise that that is a top priority for every single community in this country. Tackling crime, making our communities safer, giving people that essential reassurance and ensuring that the police are visible, accessible and responsive to the communities that they serve will continue to be an absolutely top priority for this Government, and results really will be delivered from the investment that we are commending today.

Let me first and foremost put the Minister's fears to rest: the Opposition will not oppose the two motions. Indeed, we have decided that in certain circumstances, which I shall describe to the House, spending on the police will have to be increased further.

The Minister made specific mention of the settlement in the west midlands, and it would be churlish of me not to say that we are all pleased that the former Home Secretary, to whom I made representations, along with many other west midlands Members of Parliament, acted and that our voices have been heard in the Home Office. That goes some way, although in my view not far enough, to address the £27 million shortfall last year in the west midlands and, indeed, the £27 million shortfall the year before.

In any debate about this year's funding settlement for the police, we need to consider more carefully than the Minister did the context of rising police precepts throughout the country. The police precept increased by more than 87 per cent. during the three years to April 2004, which represents an increase in local taxation of nearly £1 billion. Assuming an average cost of £50,000 per officer, that could have paid for 19,110 fully trained policemen and women. However, because of the excessive costs and bureaucracy that the Government have imposed on the police, police numbers have risen by only 16,386 during that period. In other words, the public have been short-changed by 2,724 police officers. In the west midlands, which includes my constituency, the public have been short-changed by 549 officers. In Greater Manchester, which includes the Minister's constituency, they have been short-changed by 857 officers.

The Minister said in her written ministerial statement on provisional funding last December:

"If police authorities deliver efficiency gains, and exercise judicious . . . planning, there is no reason for police authorities to set excessive increases in police precepts on council tax next year."—[Official Report, 2 December 2004; Vol. 428, c. 55WS.]

She thus said that an excessive burden would not be placed on council tax payers, but we dispute that judgment. Owing to the gearing effect, any increase in the council tax precept involves a high overall increase in council taxation. The average increase in tax doubled from 12.2 per cent. in 1996 to nearly 24 per cent. in this financial year. Although central funding amounted to 80 per cent. of police funding in 2001, it now amounts to 70 per cent., with local authorities left to provide the rest.

Let me be absolutely clear. Following a Conservative election victory, we will immediately set about the task of ensuring that Britain has an extra 40,000 policemen and women. The proposal is costed and it is an absolute commitment to be implemented over eight years. Some 5,000 extra officers, which is the current maximum training capacity, would be recruited each year. There are no ifs and buts in the proposal, and it will be clearly set out by my right hon. Friends the shadow Home Secretary and the shadow Chancellor in our election manifesto.

This year's settlement is at least an improvement on that of recent years, so it is to be welcomed. I congratulate the police authorities, and councillors and hon. Members of all parties, who persuaded the Home Office to reverse its clear previous indication that it would give a lower settlement. However, the Minister will forgive me for a modest degree of cynicism as I probe a little further for the reasons behind that.

In 2003–04, the average unhypothecated increase was 4.3 per cent. In 2004–05, the increase was 3.25 per cent., which had serious repercussions for forces such as mine in the west midlands. This year—surprise, surprise—the Home Office has decided to give an increase of 5.1 per cent., which is 6.7 per cent. when one takes account of the increase in central funding for police communications, information technology and support services. It is, of course, a mere coincidence that that sudden burst of generosity comes a couple of months before a general election.

Nevertheless, was it really necessary to cause the anxiety to local government and the police that led this year to the Association of Chief Police Officers issuing statements of profound concern following Home Office briefings that the settlement would be a flat-rate, real-terms increase of about 3 per cent.? Is it really necessary to keep police forces and police authorities in the dark in such a way? Police authorities should not think that they are facing deficits of millions of pounds just a few weeks before the Home Office unveils the funding figure.

Is the hon. Gentleman suggesting that it is somehow wrong for the Government to respond to representations and thus come up with a generous settlement after taking account of all considerations put before them?

What was wrong was the extensive game of cat and mouse that was played with the people who implement decisions on the ground. I shall later address a way in which we can help the Government to ensure that that does not happen in the future.

I can tell the House that the Conservative party, when re-elected, will make local funding more sustainable by ending the current system of annual grants and moving to a system of three-year budgets. That would enable the police to make their strategic planning and implementation more effective, and end the unsatisfactory routine of short-term initiatives that last only a year or two before their funding dries up.

If the shadow Chancellor is going to cut the budget, will the hon. Gentleman explain how extending it over three years will make any difference?

The hon. Gentleman is not listening to what I am saying. Three-year budgets would make it much easier for those with the difficult job of implementing such measures to work out how to fund police work locally.

I want to ask the Minister several detailed questions. She helpfully said something about pensions and mentioned the expected 12 per cent. increase to the cost of pensions this year. The money that has so far been made available to address the situation has not been anything of that order, so the House is entitled to a commitment in her winding-up speech that she will keep the matter closely under review. What will happen about the considerable costs not funded by the settlement that are associated with IT and technological developments, including the important yet unfunded recommendations of the Bichard report and the costs associated with the Government's deluge of Home Office legislation?

We should consider not only inputs, but outputs, because it is clear that the Government's record on that is truly appalling. The Minister frequently cites the British crime survey, but she knows perfectly well that it does not include one of the fastest growing areas of crime, which is crime against children. It excludes specifically the most serious crimes and the survey embraces only 40,000 people. The fact that it is a flawed way of identifying trends in crime was why the leader of her party, when he was shadow Home Secretary, persistently rejected it and said that he preferred to deal with recorded crime figures. I agree with the leader of the Minister's party and disagree with her.

The sad facts are these. Violent crime in Britain has virtually doubled under the Government and, for the first time ever, the number of such crimes has risen to more than 1 million. There is a specific worry that youth crime is out of control, with a massive growth of 63 per cent. in persistent young offenders appearing before our courts. Meanwhile, detection rates have slumped. Detection rates for burglary have practically halved under the Government. For the record, before the Minister asks, when my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the leader of the Conservative party was Home Secretary, recorded crime fell by the largest amount since records began, but under the Labour Government, recorded crimes are up by 800,000. These are extremely serious matters, so we must examine outputs to discover how the Government's policies on law and order are proceeding.

What is the Minister's estimate of the time and cost that will be incurred policing the Government's legislation to allow 24-hour licensing? Stephen Green, the chief constable of Nottinghamshire police and ACPO's spokesman on alcohol-fuelled violence, has warned specifically that policing the new measure will

"deprive people who need our services most"

because it will tie up police power and divert the police from other vital tasks.

What will the Minister do to help Lincolnshire police, which faces a £4 million shortfall in meeting its requirements, although the Government have presided over a doubling in violent crime since 1997? Following the intervention made by the hon. Member for Stroud (Mr. Drew) and the comments of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), will she say a little more about Gloucestershire police, which is extremely worried that it will face a shortfall of £1.1 million merely by maintaining front-line services? What can she do to assist Gloucestershire police? The excellent chief constable of the force, Tim Brain, described her settlement as "an undoubted disappointment".

What comfort was the Minister able to give to my hon. Friends the Members for Eddisbury (Mr. O'Brien), for Tatton (Mr. Osborne) and for Congleton (Ann Winterton), other Cheshire Members and the chief constable of Cheshire police when they warned her that as a result of the Government's settlement, the people of Cheshire face a significant hike in their council tax or a reduction in front-line policing—or both? They face the prospect that uniformed officers will have to fill up to 50 civilian posts. Such direct worries—hon. Members of all parties could give further examples—show the way in which the settlement rubs uneasily against local circumstances. I will be grateful if the Minister comments specifically on those two points.

I am grateful to my hon. Friend for highlighting the very serious challenges faced by the police in Cheshire. The tension arises between the exhortation, whether directly by the Minister or by others, to seek the flexibility to put up the council tax precept, over which they will have no control, versus the obligations put on the police and the expectations that the Government have raised in the population of Cheshire regarding police resources. Does my hon. Friend agree that in fairness the Government should fund that instead of asking councils, yet again, to raise taxes?

My hon. Friend makes a powerful point that the Minister will want to pick up when she winds up.

I turn to the way in which the Government make this money available to local forces. Significant sums arrive ring-fenced for particular schemes that are dictated by the Home Office, not by local circumstances and needs. The Minister mentioned many of them. We are told that £277 million will be available through the crime fighting fund. There will be nearly £61 million for the Metropolitan police and £35 million for other forces for counter-terrorism; £50 million for basic command unit funds; £210 million for the safer and stronger communities fund, which is clearly a breach of trades description legislation, since virtually no communities are safer or stronger under this Government; £69 million for the special priority payments fund; and £6.5 million for phone theft and other robberies. Two grants are ring-fenced for community support officers: £49.5 million for continuing support of CSOs recruited in the first three rounds and £50 million for additional CSOs in a new neighbourhood policing fund. If one assumes an approximate cost of £50,000 per officer, that money alone could have made available an extra 2,000 policemen and women.

I draw the Minister's attention to the fact that in Hampshire, the police authority decided by a majority of two to one to reject ring-fenced funding from the Home Office for CSOs. Its chairman, Simon Hayes, said:

"If the Government is making money available we would like to be free to spend that on properly trained police."

As long ago as 2001, in a very balanced set of remarks, the Association of Police Authorities said:

"Central funding to pump prime new initiatives and priorities can be effective. However, the growth in funding now held centrally by the Government is reaching a level where local discretion—and the ability of Police Authorities to invest in local initiatives to meet the needs of local communities—is being threatened."

The next Conservative Government will scrap all this micro-management in favour of a much more honest and straightforward approach. Money from central Government will come in a block grant. The days of ring-fenced funds will come to an end. Central Government will no longer hold local policing to ransom by keeping control of the purse-strings in this way. We will not force police forces to choose between the latest gimmick handed down from Whitehall or increasing the number of bobbies on the beat. The funding settlement will be transparent and the funding formula will be simpler. Under the Conservatives, there will be no more fiddled funding for the pet projects of politicians in Whitehall.

Along with micro-managing funding comes this Labour Government's obsession with micro-managing how policing takes place around the country. No wonder police morale, described by the Home Secretary when he was last a junior Minister in the Home Office as being defined by the number of people leaving the service, has fallen sharply. The Government have been somewhat evasive about the number of police officers resigning from police forces, but we know that the number of resignations more than doubled between 1997 and 2002. In 1997, there were 774 resignations. In 2002, there were 1,634—an increase of 112 per cent. Needless to say, since then the Home Office has stopped recording the number of resignations in its reports on police service strength. In October, when the shadow Home Secretary tabled a parliamentary question to identify how many resignations had taken place, the Minister advised that those figures were no longer kept.

Police morale is low because local policing is fettered by this Government's obsession with micro-management, targets, bureaucracy and top-down management. It is low because of the state of the criminal justice system, whereby even if more villains were arrested, courts in many parts of the country, including London, would not have the capacity to process them; and even if they did, the prisons are bulging at the seams. Even if the police solve a crime, the courts convict, and the prisons accommodate, 90,000 criminals have been let out of prison under the home detention curfew scheme. What thanks and encouragement does that offer to our policemen and women?

A good illustration of morale in the police today can be deduced from a poem written last year for the Christmas edition of the Police Federation magazine, which is no doubt required reading for the Minister as well as for me. It was penned by a constable who has worked on the streets of Merseyside for 18 years, and it sums up how our police feel let down by this Government. If I may, Mr. Deputy Speaker, I should like to quote a few lines:

"We are thin on the ground and spread all about

Whether we can cope is always in doubt

Officers are now managers and always pressing

For figures that make for good window dressing

The Sergeants they work in total despair

In front of computers, glued to a chair

The troops themselves used to carry cuffs and staffs

We now go out armed with pie charts and graphs."

He expresses the lack of morale and concern of the police extremely clearly and well.

I dare say that my hon. Friend is aware that one of the major complaints of the police at all levels has been that the removal of the policeman's notebook means that they have to do everything in triplicate through e-mail and now have to spend the first hour or even two hours of their day checking all their e-mails before they can get out on the streets. Will he urge the Minister to look at the basis on which that evidence can be adduced in court, not least because there was nothing wrong with notebook evidence in the past?

My hon. Friend makes an interesting and helpful point. I have no doubt that when the House debates the specific subject of police bureaucracy we shall return to the Government's appalling record in that respect as well.

After eight years of Labour Government and cynical waffle about being tough on crime and tough on the causes of crime, we have a demotivated police force who are tied up in bureaucracy, central Government diktats, performance indicators and red tape, and unable to respond to local requirements and local demands in the way that they would wish.

Above all, we have had eight years of rising crime. These are the Home Office figures: total crime is up 16 per cent. since 1998; violent crime is up 83 per cent. and has now passed the 1 million mark for the first time ever; and gun crime has doubled under Labour, with a gun crime committed every hour of every day. Before the hon. Lady protests about our record, I have consulted the Library and discovered that when my right hon. and learned Friend the Member for Folkestone and Hythe was Home Secretary, gun crime fell by a third—32 per cent.

Meanwhile, detection rates for all types of key offences have fallen since 1997. Fewer than one in four sexual offences and fewer than half of all violent crimes are cleared up. Fewer than one in seven burglaries is cleared up, and last week the latest quarterly statistics showed that crime levels are continuing to escalate. The Minister can repeat as often as she likes that crime is falling, but the public know differently and her own Department's website makes it clear that the figures are very different. Only last week, we saw that violent crime was up yet again, by 6 per cent.; firearms offences were up by a further 5 per cent.; and sex offences were up by a massive 22 per cent.

The most important fact in this debate is that the long-suffering taxpayer has paid up—massively so—yet the Government's performance in cutting bureaucracy, supporting the police and cracking down on crime and disorder is a woeful litany of failure. It is the public who will hold this Government accountable for that.

Order. I should remind the House that there is now a 12-minute limit operating on speeches from Back Benchers.