Barnett formula debates in Parliament

I refer Members to the Register of Members' Financial Interests, where I declare that I am a trustee of the Barony 'A' Frame Trust, which has had substantial funding from the Heritage Lottery Fund. I also stand here as a an arts graduate from the Glasgow school of art and Goldsmiths, university of London, so far be it from me ever to suggest that money is not well invested in the arts. I have also been an active supporter of a number of heritage projects in my area and across Scotland, and I stress my support for them. However, I am concerned about the proposals outlined by the Government, because there are general implications for some of our more disadvantaged communities, which, although they were not given special treatment under the previous arrangements, were at least recognised. I also want to raise interests specifically relating to Scotland.

First, let me pick up on the question about efficiency. As the Minister recognised, it is possible in theory for an organisation that simply disburses funds to a small number of large projects to be relatively efficient. He rightly accepted-I was glad to hear it-that the Big Lottery Fund, which deals with a large number of small grants and assesses many different proposals, might not, on the face of it, look so efficient. I understand, however, the Big Lottery Fund itself believes that it has got efficiency down to a fine art and that it is able get the best value for money.

Another important point, which was mentioned by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), is that many of the small organisations that apply for funds require support in capacity building; they do not have the infrastructure to produce business plans or elaborate proposals to sustain themselves as organisations over months and sometimes years in order to secure funding, given that many use a cocktail of funding from different sources. It is therefore important to recognise that the Big Lottery Fund's overheads are not simply about administrative costs, but about capacity building and support costs. I was pleased to hear the Minister refer to that, and I hope that he can give further reassurance that that will be taken into account.

I mentioned that I share some of the general concerns about the Big Lottery Fund. I am particularly worried about the aspect of additionality. We have not yet heard fully how it will be assessed. I have heard people express concerns about how cuts in departmental budgets for arts and heritage projects and moving Big Lottery Fund money into such projects will inevitably result in things that were previously funded by the Government taking lottery money away from smaller organisations that would otherwise have benefited.

The Minister talked about projects in the grey areas that should perhaps not have been funded. I am not entirely persuaded that we had answers on that, either. At a time when local government and other parts of the public sector are feeling the squeeze, I am not sure that the Minister has given a compelling explanation of how local authorities will be able to fill the gaps that will be created if the lottery funding stream is taken away from local communities.

I am particularly concerned about schools and other parent-led organisations in local communities. On the face of it, an application from a school might look like something that the local authority should deal with, but it might in fact be a matter of a group of parents working with a school to provide activities after school-after-school clubs are an obvious example, but I have also seen eco-garden projects in schools in my constituency, which are linked to improving the local environment. Other projects have provided children and young people with sporting opportunities which they might not otherwise have had. That has not been fully addressed.

There is a particular issue in Scotland. Scotland receives 11.5% of the total Big income in the UK. That is because the income is apportioned by applying the Barnett formula plus a weighting for deprivation to recognise the particular circumstances in Scotland, but it is my understanding that none of the other lottery distributors reflects that. Any change in the shares is therefore likely to result in an overall net loss of available lottery funding in Scotland, which is a concern for me. I appreciate that the Minister has tried to give me some assurance on that, but can he guarantee that Scotland will not lose out as a result of the changes, when it is secure under the current regime?

It is a pleasure to serve under your chairmanship, Dr. McCrea. I pay tribute to my constituency neighbour, the hon. Member for Preseli Pembrokeshire (Mr. Crabb), for securing this debate. The hon. Gentleman, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) and I have raised these issues on numerous occasions, and have ensured that, for the past five years, we have had an annual debate on agriculture in this Chamber.

As the hon. Member for Preseli Pembrokeshire said, some aspects of dairy farming are devolved. I shall endeavour to delve into the devolved settlement, but I want to focus on producers, suppliers and retailers and the relationship between them. That is the fundamental problem that our dairy industry faces.

I hesitate to use the word "crisis" as it is emotive, but figures on the long-term position of dairy farming in Wales show that it is in serious decline. In 1994, there were 5,300 dairy farmers. The number had fallen to 3,600 by 2004, and figures for December 2009 show that it has now fallen to 2,059. Those figures show that 60 per cent. of Welsh dairy farmers have left farming over the past 15 years, something that I think is reflected in England.

There was an important geographic message from the hon. Member for Preseli Pembrokeshire. He does not like the word "Dyfed". Neither do I; it is an old county term that describes our area. However, I will use it now because half of the dairy farmers of Wales are from Dyfed-from my constituency of Ceredigion, and from Carmarthenshire and Pembrokeshire.

We can wax lyrical about the social implications of the loss of the dairy sector, but it is a reality. We are talking not about isolated farms appended to big towns but about large areas of the rural economy being dependent on farmers and farming families. Losing those farms and those families has implications well beyond the production of milk. It affects village schools and the local economy more generally.

I concur with what the hon. Member for Stroud (Mr. Drew) said about county starter farms and encouraging young entrants into the industry. We lost our farms in Ceredigion a long time ago. One of the dispiriting things about making farm visits and meeting the two farming unions in Wales is the constant repetition of questions. Five years ago, questions were asked about young farmers and how to attract people into the industry, and we are still facing the same problems. I have had some emotive discussions with farmers who want to pass on their farms to their children, but find that their children drift away and move into other areas, because there is perceived to be no future in the industry. At the end of the farming hustings in Ceridigion, we always ask the question, "If you had a child, would you encourage them to stay in the farming industry?" Many say, "In all honesty, with hand on heart, we could never make that recommendation given the state of the industry."

There have been some glimmers. I congratulate the Minister on ensuring that Wales has received a fair distribution of the £25 million EU rescue package, which, as far as I can tell, was calculated on the proportion of dairy cattle rather than on the Barnett formula, and I pay tribute to the Assembly Government for their role in that. I share a constituency with the Minister who has responsibility for rural affairs, and I pay tribute to her for the work that she has done. However, I should like some clarification on future emergency spending. If we need such spending again-I hope that we do not-will it be allocated according to relative need rather than population?

It is a pleasure to serve under your chairmanship, Mr. Benton. I pay tribute to the hon. Member for Reading, East (Mr. Wilson) for securing this important debate. I feel slightly like a Welsh interloper in an English debate, but I hope that as I speak it will become apparent why some of the issues raised by the hon. Gentleman are directly relevant to my constituents.

I represent two universities in Ceredigion, at Aberystwyth and Lampeter. Lampeter has now merged with Trinity College, Carmarthen. The universities are a source of great pride to us and provide significant employment in the county. Approximately 18,000 students are enrolled at our two universities and, as the hon. Gentleman described, those students play a huge role in the local economy. The university of Lampeter has had a tough time in the last year or so with the merger. There has been a great deal of pain; there have been job losses. However, the merger was essential and I think that the worst is now over. The new vice-chancellor has a great vision for the way forward.

There is hope. We have moved forward, thanks to the support given by the Higher Education Funding Council for Wales and the Assembly Government. I will not stray into devolved matters, but I would like to place on the record our appreciation for that support. Higher education in Wales is rightly devolved. The Minister for Children, Education, Lifelong Learning and Skills, Jane Hutt, is talking to the Select Committee on Welsh Affairs this morning and the Minister present for this debate will come to see us on Thursday.

Last week, Jane Hutt made a statement about higher education in Wales. The point that I want to make is that decisions here and the review that we have been hearing about have a direct impact on the Welsh higher education sector as well.

Let me give some context for the higher education sector in Wales and its importance to the Welsh economy. Its annual turnover is £1.1 billion and it brings a further £1.1 billion into the Welsh economy. The sector provides 33,000 jobs directly or indirectly to Wales, and 640,000 jobs in the UK as a whole. It is fair to say that Wales punches above its weight in the higher education sector. If anything, the sector is more important to the Welsh economy than it is to the English, because it involves a larger proportion of gross domestic product. The Assembly Government have placed renewed emphasis on growing the knowledge economy. Higher education is one of our best sectors and we need to use that to our advantage.

Cross-border implications are of fundamental importance and need to be considered when policies are proposed, not least because Wales has the highest proportion of students coming from outside the country of any nation in the UK. We are having the review of fees. Such reviews and reviews of other higher education structures can have significant effect on how Welsh universities operate and their capacity to attract students. We need to keep the official lines of contact between the Minister's Department and his counterparts in Cardiff Bay. That issue was raised in one of our previous Select Committee reports. I am referring to the extent of that collaboration and the extent to which there is knowledge in the Minister's Department of a separate structure in Wales. I would be grateful if he outlined the extent to which that dialogue is ongoing.

I am a member of the Welsh Affairs Committee, and when we produced a report on cross-border higher education we identified a number of areas for improvement. The most stark was the £60 million funding gap between Wales and England. The hon. Member for Stroud (Mr. Drew) alluded to the funding differential between institutions in England. There is a real funding gap between Wales and England. I would be grateful if the Minister at least acknowledged that divide, as it has a huge effect on us, not least because Wales has a strong record of attracting students from overseas to our colleges. We also noted the importance of further education and the need for learners in some instances to cross the border. Again, that requires close collaboration between the Governments in Westminster and Cardiff.

We have heard about the importance of part-time study. In a refreshing speech, the hon. Member for Reading, East alluded to the importance of part-time education, including part-time degrees. Lampeter in my constituency has been at the forefront of developing models for part-time learning. Some 40 per cent. of the students in Wales are studying part time. At Lampeter, 6,400 of the 7,800 students are part time-a huge proportion. Again, Liberal Democrat Members want to break down the divide in that respect.

The higher education sector in Wales is an important driver of Welsh language provision. There are plans for a federal college to be established in 2010. That will make a major contribution to the development of the Welsh language at a higher level, and it is being supported at the universities of Bangor and Aberystwyth. We have made great strides in improving knowledge of the Welsh language through primary education, but there is a need to expand the knowledge of advanced and technical Welsh, and the higher education sector is starting to meet that need.

I am conscious of the time, but I want to touch on one other important matter affecting Welsh institutions. Concern has been expressed in Wales about the Secretary of State's apparent intention to concentrate research funding on a few elite universities that can demonstrate world-class capability. I stand to be corrected if that is not the case, but it is the perception of what he has spoken about. Currently, of the £2.8 billion distributed by Research Councils UK, Wales receives about 3 per cent. This is one of the rare areas where I would be pleased to see the Barnett formula applied. We have high-quality institutions that will continue to attract research funding, no matter what the situation, but I hope that we are not moving to artificial control of the supply of research funding to certain favoured universities and departments, which could have a real and detrimental effect. What did the Secretary of State mean? Can the Minister assure me that if quality bids are made, they will not be prejudiced if they are not deemed by the Secretary of State to be from world-class departments?

Research funding is hugely important. One case study is the Institute of Biological, Environmental and Rural Sciences, near Aberystwyth. It has received significant funding from the Biotechnology and Biological Sciences Research Council, which supports the institute.

I congratulate the hon. Member for Chorley (Mr. Hoyle) on securing this debate. A bit of a theme, or even a campaign, is developing.

Over Easter, I sat in my back garden in Southport putting on suntan lotion and complaining about the heat while people in the south shivered under grey skies, belying the myth peddled by generations of BBC weathermen that the weather is grim up north. Another, economic myth is that the future of the UK lies almost entirely in the City and that the finance and banking sector is somewhere in London. The Labour Government have hitherto been spellbound by and prisoner to that myth, and presumed that wealth does not come from the north because that happened only long ago in the 19th century. We talk about economic development in the south and London, but about economic regeneration in the north.

That was crystallised in a recent think tank report when a young gentleman, presumably from the south, suggested that the future for Liverpudlians was to get out of Liverpool and to move down south if they wanted employment and prospects. That myth is looking substantially less convincing now. It promised London and the south-east an unsustainable future because housing, transport and infrastructure pressures could be met only by turning the leafy south into a concrete jungle, which people in the south are prone to complain about. However, there has been a clear legacy in transport planning. Hon. Members have talked about expansion at Heathrow rather than regional airports, but no one mentioned the £5 billion commitment to Crossrail, which looks like being the great folly of the 21st century, or the billions of pounds of infrastructure spend that has been allocated to the south and the south-east, particularly the London area.

I have complained about the Department for Transport's colonial mindset, which is that all roads and certainly all railways should lead to London. Such an approach must be contested. It is still the case that if Tilbury wants a road, it gets it, but if Hull or Liverpool want something, they do not get it as quickly or on the same scale. Thameslink needs new carriages, and it will get them because it has been promised them with a secure allotment. That is hard luck for passengers of Northern Rail, which is the country's biggest franchise.

Turning to funding levels, I have heard a good analysis in this Chamber by the hon. Member for Manchester, Blackley (Graham Stringer). They differ massively if we consider everything in the round—the Minister may not want me to say that—when compared with funding for places such as Scotland and Wales under the Barnett formula. There does not seem to be a good reason for bridges in the north-west to receive less funding and support than those in Scotland. The hon. Member for Halton (Derek Twigg) is not now in his place, but I am sure that he would say "Hear, hear" if he were.

My point is not that that is unfair—life is not fair—but that it is no longer wise. Genuine, sustainable economic development in the north can be triggered by good transport infrastructure, whether through investment in road, rail or sea. Hull and Liverpool are hugely successful ports. With the right infrastructure, manufacturing in the north-west can compete worldwide. The tourist offer has been alluded to, and that could be uprated substantially with better communication. Light industry is prospering in many areas of the north-west. However, what we need locally in the north even more than fair funding is better judgment. So much of what has been attempted there has gone under the banner of regeneration rather than genuine economic development. It is seen in terms of sending out a lifeboat rather than backing winners.

Money for projects in the north-west has not always been as well spent as I would wish. An example from some years ago is the M58, which is the emptiest motorway in the UK, or at least in England. It was built in the expectation that linking Skelmersdale to the M6 would keep many unskilled people in work, but that did not work. Part of the reason why progress was not made on the Liverpool tram scheme and why there was not wholesale agreement across all local authorities, and so with the Government, was that to some extent the project was based on pious hopes rather than sure political and economic conviction. It was thought that running a tram line through highly deprived wards would encourage economic regeneration even though it paralleled an existing train line. Had the better alternative, which was to plan the tram line down to the airport, been chosen, there would have been a very sound economic case and vocal support throughout the region for that. What was proposed might have made some political sense, but it did not make the same economic sense as some of the alternatives on the table.

[Mr. Jim Hood in the Chair]

My fundamental point is that there are real winners in the north-west, but they need to be supported in the same emphatic way as they would be were they in the south or certainly in London. Merseyrail is a good example. That is a fantastically successful rail network at the moment, run by Serco and NedRailways. It needs help to expand. We could talk about the Burscough curves and the Halton curves, but we cannot question the fact that although they are awfully good at running a railway and awfully successful in economic and social terms, they need help to remodel Central station. The hon. Member for Crewe and Nantwich (Mr. Timpson) mentioned his local station, but Central station is a disaster area in Liverpool. It is an appalling communication network to have at the heart of a very good system. We need to get Network Rail properly engaged. Justifiable criticism has been made of Network Rail so far.

Exactly the same set of considerations applies in Manchester. There are things there that are working, and are economically beneficial and wholly desirable, but they do not receive the financial and strategic support that they ought to. We need to sort out the bottleneck in Manchester. I am talking about trains going through Manchester for the benefit of the whole north-west. We need to develop the tram where it is shown to be successful. We need to develop better links with central Lancashire, which is often left out. We need to link up Preston, Manchester and Liverpool in the way suggested.

In the north-west, we do not have a wish list of things that it would be nice to do—it would be lovely if we could turn the clock back to pre-Beeching days. We have a to-do list—a list of projects that require proper funding and need to be strategically planned and supported. Above all, we need to rethink how the funding is going and we need to prioritise the north-west as we prioritise London, the south-east, Wales and Scotland. However, I have the horrid feeling that given the current state of the public finances, the party and the Government who have relied so much and for so long on their north-west MPs to maintain their grip on power have to some extent, to use a transport metaphor, missed the boat.

In an intervention, my hon. Friend mentioned the Barnett formula. After a high-speed line reaches Carlisle and enters Scotland, whether on its way to Glasgow or Edinburgh, how is it funded? Are they UK funds or do they come from the Scottish Parliament?

I sincerely congratulate the hon. Member for Newbury (Mr. Benyon) on obtaining this debate on this very important matter and on his very comprehensive speech. At times, it was very touching, particularly when he dealt with the important case study of which he quite rightly reminded us. This debate is about people and families and their concerns.

For some years, I have had the privilege, with Lord Rix, to Chair the all-party learning disability group. The input from Mencap and the support for our work is quite profound. I hope to turn to that in a few moments. First, however, I say to my right hon. Friend, the Minister, that nothing that I shall say in the next few moments takes away from what I think are the Government's quite incredible achievements in the field of disability over the past 10 years. In particular, I welcome her support for advocacy, which she has expressed on many occasions, and which is central to the many issues being debated.

Almost two years ago, the all-party group on learning disability met to discuss the Healthcare Commission's report into learning disability services in Cornwall. Some 18 months ago, the Disability Rights Commission, as it then was, spoke to us about the findings in its report, "Equal Treatment: closing the gap". Those reports addressed systemac failings—the hon. Gentleman has rightly used that term today—in the NHS regarding patients with learning disabilities. In his response to those reports, the Minister who then had responsibility for those matters, my hon. Friend the Member for Bury, South (Mr. Lewis), now the Under-Secretary of State for International Development—we congratulate him on his promotion and thank him for his great work in his former role—was quite trenchant in recognising the problems. He said that things were not good enough and that there was evidence of "systemic indifference". That is what we are addressing today.

There have been positive aspects to the Government's response to the report, as we will no doubt hear from my right hon. Friend when she winds up. In its recently published strategy on health inequalities, the Department stated that it plans to use the reduction of health inequalities for people with learning disabilities as a standard against which to measure improvements for all vulnerable groups. I strongly welcome that, and I hope that the Minister will bring us up to date not only on those plans but on the Government's thinking as we move forward.

The Government's independent inquiry, published in July, to which the hon. Gentleman has referred, points us in the direction in which we want to go. It recommended that the Department should

"immediately amend Core Standards for Better Health, to include an explicit reference to the requirement to make 'reasonable adjustments' to the provision and delivery of services for vulnerable groups, in accordance with the disability equality legislation."

As we have heard, however, the NHS has largely failed to make reasonable adjustments to ensure that people with learning disabilities are not discriminated against. Health care information leaflets are not produced in easy-read format and they do not reach people with learning disabilities, their carers or their advocates. In many cases, no side rooms are made available for people for whom the confusion of an open waiting room and ward would prompt challenging behaviour. As a result, individuals might become stressed and feel obliged to leave, and some will be unable to access the treatment that they need.

I accept that seeking a solution to such problems, making progress and ensuring that there is not a postcode lottery means investing resources. I must make the point again that it is deplorable that sometimes in Scotland, there is no evidence that funding that has been clearly allocated for specific purposes is being spent on those purposes. That applies especially in relation to the Barnett formula and in the field of learning difficulties. I understand that in addition to the £34 million for disabled children and their families that was allocated to the Scottish Government under the Barnett formula—we have previously debated that matter in this Chamber—a further £20 million was recently allocated specifically to the NHS in Scotland. We are still looking for evidence that that money has been going where it was intended to go. I shall not dwell on that issue, although I feel passionately about it, as it will probably be an ongoing issue in debates between the Scottish Government and the UK Parliament.

The hon. Gentleman talked about the work that many of us do with Mencap. Mine has introduced me to the numerous alarming episodes experienced in hospital by people who have learning disabilities. I warmly congratulate Lord Rix on the fantastic job that he has done on this issue, among others. He approaches campaigns with all his fervour, intelligence and experience. We must thank him and Dame Jo Williams for everything they do. I also thank the individual supporters of Mencap throughout the country, particularly parents and carers, who do so much to focus attention on these important issues through their involvement in campaigns such as the "Death by Indifference" campaign.

One story that emerged from Mencap's research was about Laura—an active, talkative and independent woman with a learning disability who went into hospital for an emergency operation. After the operation, she was visited by her carer, who became concerned that no matter how much she chatted to Laura, she did not say a word. The carer said:

"On the third day I asked one of the nurses if she knew why Laura wasn't speaking. She looked surprised and said: 'Can she speak?' I told her that Laura could speak as well as anybody else. There was no reason for anybody to assume otherwise. I went back in to see Laura and I offered her a pen and paper, thinking that she might be able to communicate with me that way. Laura couldn't even hold the pen. When I saw the pen roll on to the floor, I suddenly thought, oh my god, she's had a stroke."

It took doctors another two days to confirm that Laura had indeed suffered a stroke during her operation.

I hope that the hon. Lady will forgive me for not giving way, but I want to come on to the second myth. I was—very generously—left a lot of time at the beginning of my remarks, but I have many more important points to make about, for example, the Barnett formula, among other things, which I am sure that hon. Members would like to hear.

A second myth has been floated: that it is possible to define an English Bill. It is in fact extremely hard, and anyone who has observed the legislative process in this House will realise just how difficult it would be to define one. The Higher Education Bill was adduced as an example of how the current system is unfair. At the time, in 2004, that Bill was dubbed a West Lothian Bill by the Conservative party, because student finance is devolved. I think that point was made earlier. However, part 1 of the Bill provided for the Arts and Humanities Research Council, which extended to the whole of the UK. In other words, this Bill, which so often is adduced as an example of an English Bill, was nothing of the sort.

Much more important, however, is the difficulty of isolating any Bill from having an effect throughout the United Kingdom, partly owing to the way in which the Scottish block grant is determined. However, there are other reasons, and I can do no better than to quote the Kilbrandon royal commission on the constitution, because it put the point extremely well. It said that

"any issue at Westminster involving expenditure of public money is...of concern to all parts of the United Kingdom since it may directly affect the level of taxation and indirectly influence the level of a region's own expenditure".

That is not a party political point; it is the extremely astute and elegantly expressed comment of a royal commission, and we should all bear it in mind when we discuss these issues.

I come to the Barnett formula and funding, which I think all hon. Members have mentioned today, and which is always a lively issue. We have heard a lot about the inequities of the system, and I should like to correct some common misconceptions about the way in which it operates. Some high-profile devolved administration decisions and much of the associated media coverage have created the impression that there are—to use the hon. Member for Epping Forest's phrase—unfair differences between public services in different parts of the UK, and that the devolved administrations receive funding for services additional to those available in England. That is not the case. They receive a block grant to spend on the public services for which they are responsible. The mathematical formula that underpins the Barnett formula has not changed since its inception, including through 18 years of Conservative Governments.

Devolved administrations have pursued some policies that are not replicated in England, but that is what they are there for. By increasing spending in certain areas, such as by giving free prescriptions and personal care, they inevitably have to make reductions in other key public services. That is the part that we do not hear about in all the public discussion on the spending policies of the devolved administrations. This year, universities in Scotland, which are an important part of the infrastructure, will have a real-term reduction in funding, whereas the total grant to the Higher Education Funding Council for England, which distributes public money to universities and colleges for teaching and research, will rise 2.5 per cent. a year between 2008 and 2011. Similarly, health spending in England will rise in real terms by 4 per cent. a year for the next three years, whereas in Scotland it will rise by only 1.5 per cent. We do not often hear about that sort of discrepancy, but it matters.

It is inevitable that devolved administrations will have different priorities and will make different choices, but that is not necessarily unfair—it is just different. The two are not synonymous. Another important issue is respite care for the parents and carers of disabled children. In England, it is funded by the Government through a £340 million programme, but in Scotland it is not guaranteed. That is another discrepancy, but it is not necessarily unfair to the people of England.

I was pleased to hear an hon. Member—not my hon. Friend the Member for Sittingbourne and Sheppey, but the hon. Member for Cambridge, I think—mention the importance of need when considering funding. The Barnett formula depends on assessment of need. My hon. Friend did some careful and nice per capita calculations, but with spending figures, the crucial consideration must always be need. That is what determines fairness—to pick up on the hon. Lady's phrase again. Fairness is absolutely essential; the Government believe that above all else. If one considers fairness in spending, one has to consider need. There will be differences in how precisely one defines it, but it is fundamentally important and one must bear it in mind when one considers the figures. I hope that my hon. Friend will remember that.

It is a pleasure to be here under your chairmanship, Mr. Chope, and also to follow my hon. Friend the Member for Kingswood (Roger Berry), who introduced the debate with an excellent and well informed speech. He and I have shared many a platform, been in many a debate, and supported many a Bill. We welcome my hon. Friend the Minister and acknowledge the role that she has played in many of the achievements in this area. However, as my hon. Friend the Member for Kingswood said, much more remains to be done. I appreciate that many hon. Members want to speak so I shall try to summarise the main points that I want to make.

My hon. Friend the Member for Kingswood dealt with the issues of poverty, which afflicts disabled people and their families. He quoted from the excellent report by Leonard Cheshire. I want to address most of my remarks to the evidence of poverty among disabled children and their families. I worry, as my hon. Friend does, about the poverty of opportunity. Although income and the right level of benefits are important factors, we must look at what is happening to public expenditure and seek to ensure that there is a desire to influence the quality of life of disabled children and their families in so far as we can do so. I welcome what he said about fuel poverty. I took part in a debate on that issue a few weeks ago and I initiated one in the Chamber last January.

In the review that I chaired last year on disabled children and their families, we made a specific recommendation that the allowance should be extended to disabled children and their families. Like my hon. Friend, I think that we would have gone further and addressed disabled adults, but that was not part of our remit.

When I was talking about poverty of aspiration in our debate in Westminster Hall on 16 January, I mentioned briefly the case study of a young lad called Stephen in my own constituency. Although he had received much assistance from North Lanarkshire council, his quality of life would have been better if the policy on short breaks, which involves resources from public expenditure, had been extended in a better way to suit him. I am very pleased that since that time, he has been given respite care in a place that suits his individual needs.

I thank North Lanarkshire council and my local newspaper, The Kirkintilloch Herald—that paper tends to give move coverage to such debates than, for example, the BBC in Scotland—for helping Stephen to ensure that he gets suitable short breaks. It is all about the quality of life. We all know the demands and would love to have more time to go into them. However, I want to move beyond that. My hon. Friend the Minister will know what is coming, as will the hon. Member for Edinburgh, West (John Barrett). During the all-party review of support for disabled and their families, the Government response was very welcome. They allocated an additional £340 million to England and specific amounts, based on the Barnett formula, to Wales, Northern Ireland and Scotland—£34 million to the latter. Again, I am appalled that we simply do not know where the Scottish Executive have put that money, which was made available by the Treasury on the basis of evidence presented and following an excellent response by the Treasury and the Department for Education and Skills.

None of us should be taken in by the red herrings about ring-fencing and the rest. That money was expected to be spent not simply on local government services—important though they are—but on the NHS in Scotland and, specifically, on disabled children and their families. Unless we have accountability, transparency and a clear indication of where that money has gone, some of us will return to the issue again and again.

I know that others are keen to speak in this important debate, so I shall simply summarise the issues that I think remain to be addressed, important though the progress is that we have made. It is right that we consider the poverty and, in particular, the quality of life of disabled children and their families. When considering public expenditure in the health service, transport, employment opportunities, the arts and creative industries, and the rest, we should set our sights much higher and focus on the millions of disabled children in Britain, including those whose needs we have addressed. In that spirit, and with an eye on tomorrow's Budget—I know that the hour might be late—we encourage the Chancellor to consider how, in fiscal terms, he can influence the quality of life of disabled people, including by looking at energy companies, who have not done too badly in recent years, and asking them to make a contribution.

This has been a very worthwhile debate and I look forward to hearing the comments of my colleagues and the Minister. Again, I thank very warmly my hon. Friend the Member for Kingswood, who has done so much in the fight for the rights of disabled people. I am sure that he will continue to do so.

I shall certainly accord with your exhortation to brevity, Mr. Gale.

At the heart of the debate, it seems, is a discussion of the fashion for formulae. I think that that is something that has eroded the quality of Government in recent times. The issue is over-reliance on those formulae, and under-reliance on the responsibility that every Government should embrace for decision making that takes an empathic view of the consequences that the formulae would impose. I love formulae. I am really a physicist at heart, and I have no doubt that mathematics and the formulae that it provides are very important for Government. However, we are dogged by bad formulae at the moment. The Barnett formula for allocating funds to Scotland, Wales and Northern Ireland is so bad that Joel Barnett, its progenitor, says that it should be abolished and changed. Objective 1 funding has displayed the same kind of catastrophic failure to think about the consequences of minuscule percentage changes in local circumstances. Indeed, my own constituency lost, by a tiny percentage, tens of millions of pounds, very much as Leeds seems to be suffering now.

The formula that is under discussion today may again be wonderfully precise mathematically, but it completely fails to consider the human consequences of that precision. The victims of that mathematical fluke are the people of Leeds. We heard from the hon. Member for Leeds, East (Mr. Mudie) that 95 areas qualify, but the bar is 96. As the hon. Member for Elmet (Colin Burgon) said, 0.04 per cent. is a rounding error that in any normal circumstances would be considered to be zero. Yet that small change will affect 63,000 workless people in Leeds, and 149,000 people who are considered to be in a deprived circumstance.

We have heard already that that will lead to the exacerbation of serious social problems, through the shutting down of many projects. My hon. Friend the Member for Leeds, North-West (Greg Mulholland) made it clear that a huge number of specific and well intentioned projects, which make a difference, will be lost for the sake of that rounding error. In a passionate and considered speech, the right hon. Member for Leeds, West (John Battle) again pointed out the ludicrous nature of the mathematical formula being used to make the cut. He suggested that by atomising the city into urban villages one could play the same game—and indeed one could. We might as well accept that if the mechanics of social policy are no more complex than a Rubik's cube we should move the boxes around until we find exactly the out-turn that would mean falling within the terms of the imposed formula. That is how I see the difficulty before us.

The challenge for the Government is not mathematical; it is political. If we are really so sure that formulae work, we may as well do away with Ministers and leave the government of the country to accountants. However, I believe that that is not the Government's intention, and I have to believe that the Minister will be able to assure us that he empathises, to the extent of being able to agree that what has happened is a ludicrously random, arbitrary and unfair way to determine the future of the inner-city elements of Leeds.

Let us consider again what the hon. Member for Elmet said: the decision can quite legitimately be considered as a rounding error. I wait to see why the Minister is so sure that the figures are so precise that he can know the figure of 0.04 per cent. is reliable within the bounds of variation. I joined the Liberal Democrats in 1990, when the papers said that our poll rating was 3 per cent., with a statistical variation of plus or minus 4 per cent., so I have been pretty sceptical about statistics ever since I joined a party that was in theory at minus 1 per cent. in the polls. I want the Minister to explain why he is so sure that the precision of the figures being used now is better than that of those polling calculations, or other calculations that are open to doubt.

I want to add my own questions for the Minister. First, does he feel that the Government are imposing a common-sense situation on Leeds with the loss of all the money? Secondly, does he recognise that the anger that has been described by Leeds Members of Parliament is not necessarily anger with the Government, but comes from a pride that those colleagues obviously feel, and frustration that the Government seem to be failing in their duty to exercise political judgment in simply depending on a mathematical formula? Thirdly, why does the Minister think that it is reasonable for finance to be switched off like a light, even though it is obvious that the deprivation is real and present, and pretty much at the same level that it was at when the millions were being handed out?

Lastly, is the Minister willing to reconsider the matter, perhaps by meeting with the Leeds Members? I would not need to attend that meeting, because I am speaking now on behalf of my party, against what I believe to be an injustice. At the very least, I hope that the Minister will say that on consideration he will have a non-confrontational meeting with the Members of Parliament for Leeds constituencies who want to make their points clear, and that it will be a worthwhile meeting—a genuine consultation, and not another opportunity to explain to the Members why the decision is "clearly right". If the Minister does that, there is hope for progress, but let us recognise that the decision that has been made is based on a rounding error. If the Minister does not reconsider, the cost, beyond the loss of good will, hope and opportunity, will in all probability be economically greater than the saving that he thinks he will make.

It is a great pleasure to serve under your chairmanship, Mr. Cummings. First, I pay tribute to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) for securing this debate. As he mentioned in his remarks, he and the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) have chaired a series of parliamentary hearings for the Secretary of State when he was at the Treasury. Those hearings and the efforts of the Every Disabled Child Matters campaign and of my hon. Friend the Member for South-West Devon (Mr. Streeter), whose private Member's Bill helped to raise this issue to prominence, secured the funding that the hon. Gentleman mentioned in his remarks. My hon. Friend the Member for Buckingham (John Bercow) is chairing another review for the Government. If the Government want to be even-handed about it, I hope that my hon. Friend's review is successful in securing an equivalent amount of funding for the area of policy that he is examining. We will know the results of that in due course.

Given the significant contribution from Scottish Members and the issues that they raised, it is worth mentioning that this issue and, indeed, health policy have been devolved to the Scottish Parliament. The issues that they raised are perfectly reasonable, but frankly, they are issues to be debated in the Scottish Parliament, because they are devolved—a policy that the Labour party supported and implemented—and this Parliament has no control over them. The right hon. Gentleman is right to say that extra funding has been allocated under the Barnett formula, but it is up to Members of the Scottish Parliament, who are accountable to their constituents on these issues, to have the debate. The right hon. Gentleman and his hon. Friends have no say over these policy areas in Scotland as a result of the devolution settlement implemented by the Government whom they support.

Opposition Members welcome the Government's funding for short breaks, which resulted from the inquiry that the right hon. Gentleman held and the other campaigning work that took place. Just this week—I think that he drew attention to this in his speech—the Government reannounced the funding, together with the breakdown by local authorities, spread over the next three years. I was pleased to note that my local authority, Gloucestershire, is one of the pathfinder authorities and has been allocated the money slightly earlier in the process. We will receive a more significant share of funding in the early part of those three years as some significant plans are rolled out.

I have spoken to one of my colleagues, Councillor Jackie Hall, the cabinet member for children's services on the county council, who confirmed to me that she and her colleagues are working closely with parents to develop provision that will suit their needs, rather than considering what would suit the local authority. I am very pleased that they have taken that approach. It is very much in the spirit of the inquiry chaired by the right hon. Gentleman. They are considering what parents need to support their families. One matter that Gloucestershire is examining is the extent to which its plans can include an element of choice, so that families can choose, from a range of options, the support and short breaks that best suit their family structure.

It would be helpful if the Minister could comment on the following issue. The right hon. Gentleman will know that the settlement announced in the comprehensive spending review is for the three-year period. I have concerns about this. The funding going to Gloucestershire rolls forward in 2009-10 and 2010-11 at just under £1.6 million a year. The concern that families will have is that if the county council puts together a package of short breaks that they find incredibly valuable and that helps to keep families together and support them, what will happen after the three-year period?

Most local authorities—this came out from the comments about Scotland—are cash-strapped. My local authority, particularly due to the severe flooding that we had last year and, sadly, the flooding that we may be experiencing this week, is very cash-strapped. It had to deal with a big expense last year as a result of flooding. We do not want the funding from the Government to cease after the three years and local authorities throughout the country simply to be unable to continue funding the package. There would be no crueller measure than to have rolled out the package of short breaks for families, have those families come to depend on those breaks and get used to them, and then snatch them away simply because there is no funding. Therefore, it would be helpful if the Minister could say what the Government's thoughts are about rolling the funding into a more permanent settlement for local authorities, so that they can have confidence.

Pathfinder authorities are receiving the money fairly early on, but the situation is different for many other authorities. If we look at the totals—obviously, these are figures for England—we see that the funding is very weighted towards the back end of the process, with £15 million in the 2008-09 financial year, £76 million the following year and £178 million in the final year of the process. Therefore, a number of local authorities will only just have rolled out their programmes and there will be no confidence that they will continue. It is important to give some guidance about what the Government thought would happen subsequently.

Given that the bulk of the money is rolled out throughout the country in years 2 and 3, it would be helpful to know what process the Department will follow in using the experience of the pathfinder authorities to roll out best practice to other authorities. In relation to the money being spent in the first year, we can see what works. Clearly, it would not be appropriate centrally to direct local authorities on how to spend the money, but it would be helpful to ensure that authorities receiving the bulk of their funding in years 2 and 3 have good access to the lessons of what has worked in the pathfinder authorities. Surely that is one purpose of a pathfinder programme: to spend the money better in the subsequent years of the programme.

The final point on the funding that the Government have agreed is that the Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), who is responsible for care services, committed that the money that would come from the Department of Health would match what was coming from this Minister's Department. I did not find the statement terribly transparent. The Health Minister said:

"Substantial new growth funding has been included in PCT allocations...to enable them to work with local authorities to...increase the range and number of short breaks."

This Minister will know that all PCTs in England were this year given a 5 per cent. increase in their funding. I have not been able to disentangle how much extra funding was given to PCTs to account for that pledge to match the funding for short breaks. Given that all PCTs were given a flat increase, it would be interesting to know whether the money for short breaks in the health funding has been equally distributed throughout the country, or whether it matches the money that has gone to local authorities.

Can we assume in Gloucestershire that the extra money that Gloucestershire PCT will have received in its funding settlement will match the £500,000, £1.5 million and £1.5 million that the county council receives in those three years? I know that those who run Gloucestershire PCT would find it very helpful to know what extra amount of money it has been given to fund those essential services.

I will try to keep my remarks brief so that the hon. Member for Blackpool, North and Fleetwood has an opportunity to speak before those on the Front Benches, but I want to say a few words about autism. The ten-minute Bill of my hon. Friend the Member for Ilford, North (Mr. Scott) will be presented today after Prime Minister's questions. That would make provision for the education and training of children with autism and Asperger's syndrome, and for a number of connected measures. I am very pleased that my hon. Friend will have the opportunity to present the Bill to the House.

I was fortunate just yesterday to visit TreeHouse—both the trust and the school—in north London. They are experts at dealing with autism. Indeed, I am very pleased with their slogan "Ambitious about Autism", which is about ensuring that children who are on the autistic spectrum are successful. That school was founded by parents of children with autism, who found that provision was lacking, and it has been very successful. It has an evidence-based process. It uses applied behaviour analysis and was the first school in the UK to use such analysis to teach children with autism. It has a very good evidence base of success.

Yesterday, I had the opportunity to meet not only the staff of both trust and school but a number of parents and to listen to them talk about their experience. I mention that because there is very good evidence on the issue from the Foundation for People with Learning Disabilities, funded by the Shirley Foundation. The evidence was gathered in the late 1990s and has recently been updated. It relates to the costs associated with health and social care support for people on the autistic spectrum. Apart from the significant number of people on the spectrum—433,000 adults and 107,000 children; obviously, children are the focus of this debate—the estimate made by the organisation is that the lifetime cost for someone with an autistic spectrum disorder and a learning disability is £4.7 million. It is £2.9 million for someone with a high-functioning autistic spectrum disorder. For children, if they are living in residential care or are in a foster placement, the annual costs can range from £16,000 to £62,000. The costs are considerably lower if they live at home.

I mention that because there is good evidence, particularly with autism, that early interventions are extremely valuable. Given the lifetime cost, the tragedy that I discovered when listening to two of the parents yesterday was, first, the delay that they experienced in getting a diagnosis and, secondly, the battle that they had with the local authority to get appropriate funding. Often, parents must go all the way through to a tribunal, which means that the child will not get the appropriate support in the critical early years unless the parents themselves can provide it. Obviously, that option is available only to those parents who have the appropriate resources. By not investing early, society must bare the significant costs through the lifetime of the child. Will the Minister say what work the Government are doing on lifetime costs and the extent to which early interventions make sense not only from a financial perspective, but from a human and family perspective, even if they are quite expensive?

I shall make only one more brief point on direct payments having seen your signal, Mr. Cummings, to keep an eye on the clock. The right hon. Gentleman mentioned direct payments. Many disabled people and their families welcomed the payments because they put control in their hands. The payments mean that people do not have to go to a local authority to receive services; rather, the people themselves control the services and can fit them around their individual experience. Will the Minister comment on the extent to which direct payments are being taken up? In a written answer on 7 January, the Minister for Schools and Learners said:

"The most recent data available are for 31 March 2006, and show that 649 children and 4,170 carers were receiving these payments".—[Official Report, 7 January 2008; Vol. 470, c. 205W.]

Given the scale of the number of people whom we know are receiving social care, those are small numbers. It would be helpful to know what the Government are planning to do to make direct payments more easily accessible, not only for the parents and carers of disabled children but, in due course, to those disabled young people themselves, to give them power and control over their own lives.

Indeed, it has been Welsh day in Westminster Hall with debates on Welsh ports, the Barnett formula and now the critical issue of police funding as it affects Dyfed-Powys. I am delighted to have secured this debate as we move towards publication of the policing grant report.

It would be inappropriate to comment on the sudden retirement of the force's chief constable on Monday evening because investigations are continuing, and I do not propose to go down that route, however much the media might suspect my motives for the debate.

I pay tribute to the continuing success of Dyfed-Powys police in providing a widely respected police presence. It is assessed as performing well in challenging circumstances, and in particular it has established a reputation in UK policing as a leader on child protection issues, and that deserves recognition.

The Minister does not need reminding of the area covered by the force, and the number of Members on the Benches around me indicate that it covers the largest police territory of any force in England and Wales. It covers Brecon and Radnorshire, Montgomeryshire, Carmarthen, East and Dinefwr, and other constituencies. That is more than half of Wales's land mass, and parts of the area are sparsely populated. Despite that challenge, the latest police performance assessment gives Dyfed-Powys police an "excellent" mark in three out of seven categories, and a "good" mark in a further two categories. There is no doubt that the force has a record to be proud of. It is ranked joint 3rd-4th of all forces in England and Wales, and comes top of the family of rural forces. It has the highest detection rate per 1,000 population of any force in the UK, and the lowest crime rate.

One of the force's excellent marks is for the category of resources and efficiency, in recognition of its impressive work in modernising its work force, ensuring that civilian staff rather than officers handle the more administrative side of the force's work. Much remains to be done, but the force has made great progress. The force was at the forefront of the move to employ civilians to run custody suites under the management of a custody sergeant, and the local feeling is that that has been successful. Civilian staff at its communication centre are complemented by six officers working in different sectors, in contrast with other forces where a much greater proportion of officers work in call centres.

The force is ahead of the game in many ways. It has engaged in collaborative projects with other Welsh forces, so that, where appropriate, resources can be pooled and efficiency savings made. The four Welsh forces have a formally constituted committee, the Police Authorities of Wales, which provides governance for a range of collaborative activities. On serious and organised crime, and on counter-terrorism, the four forces are already sharing information and practices. The Tarian centre is well known for its effective work. The point is that while there may be opportunities for efficiencies in support services, they are limited in comparison with efficiencies that other forces might make, because they have already been made.

In providing the background to the debate, we must not underestimate the huge expense and manpower commitment that the four Welsh forces were forced to undertake following the Government's abandonment of their plans to merge those forces into one. According to figures provided by the Police Authorities of Wales, when that policy was abandoned in July last year, some 30,000 hours of police officer work had been wasted in preparation, and, according to Rhodri Morgan, the First Minister, about £1.5 million was spent in the process. There are other cost pressures on the force. For instance, the Assembly Government's decision to phase out the rural relief scheme and to replace it with a small business scheme will mean extra costs of some £100,000 for the force.

The Minister will agree that Dyfed-Powys has a remarkably successful history of participating in the fight against serious and organised crime and in counter-terrorism through collaborative work, while keeping its focus fundamentally on good-quality rural policing. The police have done good work on developing their neighbourhood strategies, the problems of which are compounded by the huge challenges of rurality. When I talk to police officers, as I did in my constituency in Aberystwyth on Monday, I hear of the vast distances that neighbourhood police officers have to cover. The fear—the perception on the ground—is that, far from delivering neighbourhood policing more effectively, the police will have to retreat from it.

It is a great pleasure to be here today to discuss this extremely important issue. The Government are committed to improving economic prosperity in all our regions and within them, too, and in the devolved countries. The Government have a public service agreement target to increase growth in the poorer regions and to try to get more growth in areas that have lagged behind in the past. To some extent, I have a great deal of sympathy with some of the points that my hon. Friend the Member for Manchester, Blackley (Graham Stringer) made about productivity and differences between regions.

The longevity of the Barnett formula is a tribute to its effectiveness in determining the allocation of funding expenditure in Scotland, Wales and Northern Ireland and it continues to have some substantial advantages. We have debated some of the disadvantages, some of which are perceived and some real. However, no formula is perfect or above criticism. The Barnett formula has produced distributions of public funds over the period since it was introduced that have been perceived as generally fair and broadly acceptable. The formula has been used by both Labour and Conservative Administrations and it also underpinned the devolution settlements, which were supported by referendums in Scotland, Wales and Northern Ireland.

The Barnett formula has existed for many years, as hon. Members have said, but it is regularly updated. The most recent update was in the comprehensive spending review in October. That version of the formula uses the latest Office for National Statistics population figures produced in the summer, so changes in spending in the CSR reflect the latest changes in population relativities between countries.

The point of the Barnett formula in the first place was to avoid the need for detailed, line-by-line negotiations between Treasury Ministers and their counterparts in Scotland, Wales and Northern Ireland during public spending reviews, which happened before it was introduced. It has provided a transparent, endurable and fairly simple rule for reaching spending settlements without direct negotiation. As hon. Members have pointed out, the formula is written, in all its glory, in "Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly: a statement of funding policy", which is available as published by Her Majesty's Treasury.

There is a widely held impression that the formula is responsible for determining the level of spending per head on services in Scotland, Wales and Northern Ireland. Some colleagues have used those levels as an argument to say that there is unfairness, but that is not so. The formula is a device to allocate to the devolved Administrations a relative population share of changes in planned spending on comparable UK Government Department programmes. It is not used to determine the initial baselines because, as hon. Members have pointed out, they are inherited from the past. It is only used to determine the overall increase in the budgets of the devolved Administrations, and it is for those Administrations to decide how to allocate their budgets to individual programmes.

The Barnett formula does not determine annually managed expenditure, such as devolved spending funded by council tax and business rates, and, for example, social security, which is why sometimes the figures on public spending per head give a false impression of the actual spending. My hon. Friend the Member for Manchester, Blackley argued for a shift away from a population base for public expenditure under the Barnett formula to one based on needs, but failed to recognise or acknowledge that the annually managed expenditure parts of public spending are already needs based, be they allocated through local government grants, national health service expenditure or, crucially, in poorer areas, through social security spending. So a considerable part of the expenditure of public money regionally, which appears in the figures that are often quoted, is already needs based.

I welcome the debate that the hon. Member for Buckingham (John Bercow) has secured, and I enjoyed his excellent speech. I know that he will be busy later today, as he is sponsoring a reception for the Children's Services Development Group, underlining his point that we owe so much to the many organisations involved in the field. They are right to seize the moment and focus on the issues that he raised, and which hon. Members from all parties have raised in the Chamber and in the various Committees and Departments with which we are associated.

When I saw just before the recess that the hon. Gentleman had secured this important debate, I welcomed it, as I am sure did hon. Members from all parties. During the recess, when I had the opportunity to visit schools in my own constituency, I saw the meaning of many of the things that he said. I welcome the fact that he did not paint a picture of doom and gloom, because there have been many achievements, and we are entitled to acknowledge that. Nevertheless, challenges remain. In my constituency, I have visited excellent schools such Drumpark school in Bargeddie, which deals with special needs children, and Portland school in Coatbridge, which deals with children with behavioural problems. What stood out principally was the dedication of the outstanding people working day in and day out for solutions to many problems and trying to ensure that their children achieve their absolute potential. I realised that this debate would give us the opportunity to offer support and to push things forward a little more urgently, as the voluntary organisations would wish.

I was also encouraged to listen to the hon. Gentleman and to follow his speech, in common with my hon. Friend the Member for Norwich, North (Dr. Gibson), the hon. Member for Mid-Dorset and North Poole (Annette Brooke) and others, because I was delighted to have had the opportunity to chair the all-party review on the needs of disabled children, a review that received outstanding support from the consortium and which campaigned under the slogan "Every Disabled Child Matters". Indeed, the right hon. Member for Normanton (Ed Balls), now the Secretary of State for Children, Schools and Families, was very encouraging and proactive, and we were able to produce a report that was inevitably much more general than the specific issues that the hon. Gentleman is dealing with this morning but which led to a very positive response.

I can tell the Minister for Schools and Learners, who will reply to the debate, of the very considered response to the work of the all-party group. It listened to those organisations that wanted to be heard, and even to some disabled children—for example, young people who were concerned about that period of transition. When considering the response to the all-party report, we saw that the Treasury and the then Department for Education and Skills was allocating an additional £340 million to deal with those issues. My Scottish colleagues will be delighted to know that under the Barnett formula we received £34 million—something that I hope the hon. Gentleman will remember in his review.

The all-party group made steady progress, but it would not have been right then to sit on our laurels and say "That's fine. We've done a good job. End of story." Our constituents would have told us that, as would parents, because our experience of visiting schools and working in education—I know that this debate is largely to do with education—shows that there are problems of poor provision and low attainment.

Speech, language and communication are extremely important. The challenge is to ensure that the policies of Government and Parliament, in their respective roles, have a clear influence to ensure that progress is made.

Like the hon. Gentleman, I welcome the contribution of the organisation I CAN. It has shown through projects such as Make Chatter Matter and initiatives such as the Chatterbox Challenge that, in many ways, the voluntary sector is leading the field. I doubt whether anyone would want to dispute the important role of the voluntary sector and the charities in this important matter because, in truth, they are addressing some serious problems, such as those of early identification—something that many local authorities have yet to address.

It is often said, although it is regarded as trite to say so, that to some extent there is a postcode lottery, and I am afraid that the facts indicate that that is so. Some local authorities appear to have other priorities. I do not criticise those priorities, but on the evidence and based on our experience it is absolutely right that we should address those issues this morning. For example, 1.2 million children in the United Kingdom have a communications problem that requires special help. On average, that is three children in every classroom. We are told that children are arriving at school without the skills to achieve their full potential. That is the principal challenge. In some areas, particularly in those with heavy unemployment and housing that is below acceptable standards—in other words, areas of deprivation— 80 per cent. of those children are being doubly penalised because we are not addressing, as we want to, the issue of speech and language services.

The hon. Gentleman rightly referred to the question of training, which is hugely important. He also mentioned the Communications Trust survey; and the trust is doing a first-class job. However, another finding of the YouGov survey was that preparation and training for serving children with special needs, who have speech and language difficulties, is that such preparations are often falling apart in some local authority areas. It showed that 61 per cent. of staff over the age of 45 had SLC training, yet only 37 per cent. of staff aged under 35 had it. That is extremely worrying, and obviously unacceptable. It is important, therefore, to underline training—as the hon. Gentleman did. Communications problems can occur in isolation and as a result of other disabilities such as autism or Down's syndrome, or even hearing impairments. We should have a proper collection of data. In other words, we should find out what the problems are so that we can compare and evaluate achievement and try to encourage a rise in standards; but that is not the case, and I think that they were doing a fine job in seeking to achieve the objectives upon which I think we can all agree.

I underline the excellent points made by the hon. Gentleman about early intervention. It is absolutely crucial. We hear of tackling the difficulties of children with behavioural problems, but who knows what lies behind those problems? Who knows what family influences there were as the children left for school in the morning? In some cases, I wonder whether attainment in speech and language is not influenced also by those other problems. If so, we must take it on board.

I welcome the debate. I know that the Minister takes these matters seriously, and I hope that he has the opportunity to respond to all the points raised this morning. I hope that there may be a closer working relationship—the Minister's body language is interesting—between Departments. We want to see them working together, and the Department of Health looms large in that. We want to ensure appropriate local authority responses, and we want to know that the Government will respond effectively to them and others in commissioning speech and language services.

I welcome the opportunity to speak on this important issue. I wish the hon. Gentleman well—particularly on the important review in which he is so heavily involved—and congratulate him on introducing the debate.

I, too, congratulate my hon. Friend the Member for Manchester, Blackley (Graham Stringer) on securing this important debate. I join my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) in praising the Labour Government for introducing the free transport scheme for elderly and disabled people and for rolling it out nationally next year. That is not something new for many metropolitan areas and certainly not for Tyne and Wear, where we introduced a free travel scheme in the late 1970s for pensioners and disabled people. Charges had to be introduced in 1979, when the Tory Government came in, and I certainly objected to that at the time. I felt that the free scheme ought to have been protected at all costs, but unfortunately that was not done, and fares have increased ever since, so I welcome the new scheme; indeed, it has been widely welcomed in Tyne and Wear.

As has been pointed out, however, there have been unintended consequences because of the way in which the funding for the scheme has been distributed. There must be a rethink on the distribution of funds when the new national scheme comes in. It is crazy that the Isles of Scilly received a share of the money when they have no bus services at all, that Scotland and Wales received a share of the money through the Barnett formula when they have their own funded schemes anyway, and that some local authorities received more than they needed to run the scheme in their areas and others received less.

As my hon. Friend the Member for Manchester, Blackley pointed out, that cost Tyne and Wear dearly. I am referring not to the £3.5 million to which he referred, although we did have to make £3.4 million-worth of cuts. Some £2 million also had to be taken from balances, so the total cost to Tyne and Wear of introducing the scheme in the last financial year was £5.4 million. As I have said, £3.4 million of that related to cuts. There was a 25 per cent. rise in child concessionary fares to 40p, a 50 per cent. rise in the cost of teen travel tickets for 16 to 18-year-olds in further education, and the scrapping of 11 subsidised bus routes providing services where no other public transport could be provided. Those were the consequences of introducing the scheme under the formula that applied.

If the national concessionary travel scheme will be funded in the same way as it has been up to now—on the basis of population, not journeys—Nexus, which is the Tyne and Wear passenger transport executive, faces the certainty of further cuts in years ahead. It is also certain that urban Tyne and Wear will be a hotspot area in attracting greater numbers of journeys than the net journeys made by its own citizens. That is because the Metro shopping centre and the Newcastle and Gateshead cultural and other leisure attractions, which bring people into the area. In 2008, local authorities and PTEs will have to cover the costs of all concessionary journeys that start in their areas, including those of non-residents, so we will be severely disadvantaged. We would therefore like the Government to reserve funds from the national concessionary travel budget to compensate hotspot areas as they emerge.

If possible—this is a serious request to the Minister—we would also like Tyne and Wear to receive some compensation, if not 100 per cent. compensation, for the £5.4 million that it lost last year. If we do not get it, we will start next year not on a level playing field with other PTE areas, but with a severe disadvantage, as we try to get back, if we ever can, to where we started from.

Will the Minister therefore give an assurance that the subsidy for the scheme will follow the passengers and that no local authority or PTE will be left underfunded? Will she provide an assurance that concessionary fares schemes for children and young people will not have to be cut because local authorities or PTEs have received insufficient funds for the Government's national concessionary fares scheme for pensioners? And will she reassure me that the introduction of the new national free scheme will not lead to the withdrawal of local authority-supported bus services, which would undermine the scheme's value to its users?

There is also the question of appeals by operators. PTEs and local authorities currently reimburse operators for the cost of providing free travel by means of local formulas, which are broadly based on a proportion of the off-peak fare. Operators have appealed against such reimbursement arrangements, and appeals in PTE areas alone gained operators additional revenue of about £12 million in 2006. That resulted in some PTEs having to raise fares for other groups, and fares for children in Greater Manchester had to be increased from 50p to 70p to cover the cost of appeals. A further 40 appeals are already in the pipeline for 2007.

There is a further problem. As the number of fare-paying bus passengers continues to decline, while the number of state-subsidised non-fare payers increases, there is a perverse incentive for operators to raise off-peak fares. As my hon. Friends the Members for Manchester, Blackley and for Sheffield, Attercliffe have said, the answer is the introduction of quality contracts or a franchising system, under which local authorities can have some control over fares and bus services in their areas. That would simplify the arrangements for concessionary fares and eliminate the perverse incentive to increase off-peak fares. The provision of a concessionary fares scheme would be part of the quality contract, and operators would have to build that into their overall tender price. Fare levels could also be regulated as part of the contract.

Finally, there is the question of attempting to prevent fraud when the national scheme is introduced. The Department for Transport has been slow to produce a strategy setting out how the national scheme will work, and it is already too late to have a working national smart card scheme in place for April 2008. Will the Minister guarantee that the national scheme will be secure? What measures will the Department take to minimise the dangers of fraudulent passes and applications? Will she provide an assurance that pensioners will have a new nationally valid pass in their hands by April 2008? Finally, will she provide an assurance that the scheme will continue to be locally administered so that local authorities and PTEs can offer a more generous scheme if they wish to?

We have recently announced the policy document "Putting Passengers First", which is about the biggest shake-up of buses for some 20 years. We have done so because we have found that bus deregulation did not provide uniform improvements up and down the country and the Government are keen to give maximum potential to people through improved bus services. Cross-border services are extremely important because they play a very strong part in beating congestion and promoting environmental alternatives. We would have wished to see greater success over the 20 years since deregulation. I hope that now, under the present Government's policy, we can seek greater improvements.

We have been working in government to address a legacy of under-investment in transport that goes back decades. The growth in our economy, although clearly beneficial, has put further pressures on all transport modes. That is why the Government are committed to sustained long-term investment in transport. We are now spending the equivalent of £260 million a week to improve transport. Almost £74 million of the increased transport funding for the north-west was awarded to Merseyside, Cheshire and Halton authorities. The local transport plans for those three authorities highlight the joint working that they have been undertaking with neighbouring Welsh authorities, and we encourage them to continue that.

Last year, we made announcements on regional funding allocations, provisionally allocating £1.25 billion to support major transport schemes in the north-west up to 2015. That included funding for the Bidston Moss viaduct, the Crewe Green link road and the Crewe rail gateway.

Looking ahead, I refer my hon. Friends to the productivity strand of the transport innovation fund, which will support the funding of regional, inter-regional and local schemes that are beneficial to national productivity. The fund is limited to schemes in England, but that is reflected in the funding allocation for Wales and in the Barnett formula. That there are administrative boundaries should not prevent any good proposal from coming forward. There is no reason why the TIF cannot contribute to the English part of any cross-border scheme.

I am grateful to the hon. Gentleman. I am on to something. Two things are happening just now, and I am sure that you have detected this, too, Mr. Caton. One is that a new sense of English political nationalism is developing, which is a good thing. We saw that reflected in the use of England flags during the World cup. That development should be welcomed, but it is looking for a new type of representation, and it is unfortunate that the Conservatives have backed off from trying to represent such views. Having said that, I should add that I have no idea what Conservative policy is, although I am sure that we shall hear about it later from the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell). A new, defined sense of English nationalism is emerging in the opinion polls.

The second thing that is happening is more disturbing. There is a growing sense of grievance in England, which we see reflected in several debates, including those that are taking place just now on funding issues. That is particularly true of the Barnett formula and the totally erroneous view that we in Scotland are subsidised to the hilt. English metropolitan commentators and Members believe that Scotland is somehow subsidised to the tune of—well, God knows what it is this week, but it gets more and more fantastic the more we look at it.

We also see this new development reflected in the way in which Scottish Members are looked at down here and in the way in which we are supposed to support a particular football team. All those things are coming together. However, the one thing that informs and defines the debate is the issue of Scottish Members' voting rights in this place. I am certain that the constituency postbag of the hon. Member for Broxbourne (Mr. Walker) will be full of letters about that, because I am seeing genuine concern about it down here. People recognise that the situation is unfair, and no democratic argument can be made—

I am grateful for the opportunity to have this debate, albeit in the dying moments of this Parliament. I again raise the issue of health, having done so at the Northern Ireland Grand Committee during the draft Budget debate. However, as the Minister who then responded was not the Health Minister, I hope for better answers today, and I am delighted to see the Minister in her place.

Health service provision is a major concern for people in Northern Ireland, because it has the worst waiting lists in the United Kingdom. As I said in the Grand Committee, the Audit Office report into the Province's hospital waiting lists, which was published last year, confirmed that Northern Ireland has the worst waiting lists in the United Kingdom. The Ulster public face longer waits to access services than patients in England, Scotland or Wales.

The latest quarterly waiting list statistics for the Province indicate slight improvements in relation to in-patient lists, which have been deemed a departmental priority. However the number requiring an initial hospital out-patient appointment continues to rise, and has almost doubled since 1998 to 164,672. In England, 1.8 per cent. of the population are on waiting lists for treatment, but in Northern Ireland the comparative figure is 3 per cent.

In seeking to improve the in-patient list, the out-patient lists are suffering. We even have waiting lists to get on to waiting lists. Greater investment in the training and recruitment of health professionals is essential and I also want to see the prompt restructuring of our dozens of health bodies to streamline decision making and enhance accountability.

Although a proposed increase of 9 per cent., up to £3.3 billion, in the current expenditure of the Department of Health, Social Services and Public Safety may, on the surface, appear generous, health service inflation continues to grow at a much steeper rate. By 2007–08, the percentage rise that direct rule Ministers have committed themselves to will be less than 6 per cent. The positive public messages from Ministers do not equate with the demands and restrictions that they are placing on senior managers away from the media spotlight.

Differential access to private health care, as well as rurality, and factors related to ability to pay, reduce the differential spend per head on health and social services. Statistics indicate that, after assessing relative needs, to provide services at a comparative level would cost 17 per cent. more per person in Northern Ireland than in England. Different levels of private health care elevate that to 21 per cent. more to achieve the same level of service. However, the Barnett formula makes no allowance for differential need.

I want to make a particular point about the quality of Northern Ireland's hospital stock, which is very poor. There is also a greater backlog of maintenance compared with that in England. Many of our hospitals are of a substantial age and require redevelopment or replacement. Imaging and laboratory equipment that is more than 10 years old needs to be replaced to improve quality, effectiveness and staff productivity, and to reduce patient delays.

Although the cost of treating the victims of 35 years of terrorism soaked up hundreds of millions of pounds from the local health budget in past years, some imagine that, because violence has significantly reduced, those extra costs are no longer being incurred. Sadly, however, apart from the many new victims requiring attention, which do not make the headlines to the same extent, the health service still has to care for the victims of the past. For instance, bomb victims still require prosthetic limbs, and many still live with the psychological consequences of terrorism. And, of course, the trauma has not stopped. I unsuccessfully sought an estimate of the costs associated with caring for recent victims of the ongoing paramilitary beatings and shootings.

I am sure that the Minister has been briefed on the fact that the local press in Northern Ireland were this morning reporting the tragedy that is waiting to happen as ambulance cover falls to dangerous levels across the Province. Union officials report that large swathes of the Province were left without sufficient cover over Easter. On Easter Saturday, the entire city of Londonderry had no ambulance crew. Staff in other divisions had to scramble around to provide personnel.

On the same night, there was no vehicle to cover the night shift in Strabane, County Tyrone, so the crew were forced to drive a minibus the fifteen miles to Altnagelvin hospital to find an ambulance. Staff from Enniskillen were sent to Londonderry to cover an area with which they were unfamiliar. A patient was transferred in a day-care vehicle in order to free an emergency ambulance. Last Saturday night in East Antrim there was only one crew covering Whiteabbey, Rathcoole and Carrick, but there should have been at least two. The depot in Downpatrick regularly takes ambulances off the road because staff are unavailable.

A major overhaul of ambulance staffing is required to ensure that each depot has the appropriate number of personnel. I trust that the Minister will address that most critical matter. I fear to contemplate what might happen were a major incident to occur while we are reliant on an unsatisfactory skeleton service.

I hope that the Minister will deal also with the question of chemotherapy drugs, which illustrates the problem of rising costs in Northern Ireland. A new regional cancer centre will open its doors at Belfast City hospital early in 2006. However, hospitals, including Belfast City, recently had to produce emergency contingency plans because of multi-million pound shortfalls. One area identified for savings was that of cancer drugs. Thankfully, an injection of cash averted the withdrawal of those vital medications, but it highlights the difficulties that we face.

Diagnosing cancer earlier, and keeping more people alive, means treating cancer as a chronic disease, with third and fourth-line drugs often being required. Experience in other countries indicates that the rapid growth in the use of chemotherapy and haematology drug-based therapies will continue. Cancer drugs are also being used more frequently for symptom control.

Chemotherapy drug costs at Belfast City hospital rose by about £3 million last year, and £1.4 million had to be found just to maintain the services currently being provided. More cancer patients are being diagnosed and treated in the Province every year. Day case and out-patient attendances at the City hospital were up by a staggering 30 per cent. in one year. We are building a new cancer centre of excellence and attempting to attract world leaders in the field to come and work in the Province, and funding is proving problematic. Cancer sufferers should be entitled to the very best treatments. It is dreadful to think that life-saving treatments may not be available to those in the greatest need because the local health service cannot afford them.

Haematology patients also have concerns. A constituent of mine, Anne Aitchison, a lovely lady, has been campaigning for many years for improved local health services. In particular, she has been promoting the provision of coagulometers. Not only would those devices benefit patients, but they would save the local health service money and time. Patients currently face a trek to the hospital warfarin clinic, and they often have to wait several hours for the results of an invasive blood test before seeing a doctor.

Regular hospital attendance can swallow up a significant part of the lives of patients whose blood needs to be checked every week; it can result in the loss of a whole day from work or education. Massive resources are used in warfarin clinics. Doctors and nurses are needed to conduct expensive blood tests, and ambulances are sometimes required to collect patients, whereas the new coagulometers can be used by patients in their own homes, and involve only a small pinprick, much like blood glucose monitoring. It is much easier to use them, especially where elderly and confused patients are concerned, than to take intravenous blood samples.

In Germany, hand-held coagulometers have been provided for approximately 100,000 patients, but in Northern Ireland, where some 1.5 per cent. of the population requires oral anticoagulation therapy, they can be acquired only by private means or through fundraising. The use of coagulometers empowers patients to take greater responsibility for their care, something that the Government have been keen to encourage. They should be made more widely available through the national health service, and I hope that the Minister will consider favourably the ongoing pleas of warfarin patients.

My party has been considering general improvements that could be made to the health service in Northern Ireland, and we aim to publish proposals in a policy document shortly. There is little direct responsibility or accountability in any tier of health care management in the Province. We need transparency in spending and detailed audit trails. In recent years, a huge amount of money has been thrown at problems, and it has disappeared without trace. There must be targeted strategies with clear responsibility and accountability. Under the 1998 Belfast agreement, the Sinn Fein Health Minister acted as she pleased, regardless of the views of the Health Committee, the Assembly or her Executive colleagues. If ever a new Executive is created, there must be more opportunities for scrutiny, and Ministers must be prevented from acting unilaterally.

The Minister will know that our health care staff perform complicated procedures in pressurised environments. However, they often feel unappreciated, and are suffering a morale problem. That must change if the national health service is to retain the cream of the health professionals, who are frustrated that they cannot deliver the optimum service. Maximum use should be made of highly trained staff. It is inappropriate for specialists to perform tasks that could be done by others who are less qualified.

Despite the new general medical services contract, general practitioners struggling to find beds for their patients feel undervalued, overburdened and unsupported. They do not have enough time to spend with patients, and that sometimes results in inappropriate referrals to already crowded emergency departments. Approximately 90 per cent. of national health service patients are dealt with in primary care. That speciality must not be allowed to suffer on account of acute care pressures.

The DUP wants to decrease administrative bureaucracy, not just to save money but also to streamline decision making and create a more efficient system. We advocate that, as a result of the ongoing review of public administration, the number of boards and trusts should be slashed to leave no more than half a dozen authorities. A single body should oversee regional services, and money must be channelled to front-line services rather than being frittered away in administrative costs. However, it is essential that the expertise developed over many years should not be lost as a result of such rationalisation. A co-ordinated health care network must develop, and replication of services must cease.

Significant investment is required in order to improve efficiency in the service. We advocate increased funding, in excess of the Barnett formula, to ensure that those in the Province receive a standard of care that not only matches the best found elsewhere in the United Kingdom, but relates to need. We are talking not just about providing extra beds but about finding more staff, which will lead to an improvement in hospital services. We urge the provision of more radiographers and extra physiotherapists, occupational therapists and speech therapists, and we would like more doctors and nursing staff to be trained locally.

We should invest in areas in which improvements are most likely to result in reduced spending in future. We must think holistically about the impact of ill health on our society; that includes the costs of long-term care, benefits and absence from work. There are insufficient residential, domiciliary and nursing home places and, of those that exist, a large proportion are nursing home places, which are the most expensive. At any one time in the Province, there are 400 individuals blocking beds in Northern Ireland hospitals because the resources do not exist in the community to support them. That contributes to access difficulties at the opposite end of the hospital admission cycle. A concerted effort must be made to remove that persistent brake on the system.

We have to plan for our ageing population. People are living longer now, which means a growing demand for health care among the elderly. More patients require treatment for conditions such as fractured hips, dementia and strokes. Our health service has been consistently overstretched for a number of years. That cannot continue indefinitely without repercussions. Rapid patient turnover contributes to rising levels of health care-acquired infections such as MRSA. Patients, including the infirm or disabled, and particularly their relatives, are fearful of their even going into hospital in case they come out in a worse condition than when they went in. That is totally unacceptable in today's age.

Aside from the threat to life, those acquired infections have massive resource implications for the health service. The Government must clearly address that issue rapidly. The capacity levels at which our hospitals consistently operate also raise questions about how we could cope if there was a major outbreak of influenza or an unpredicted pandemic. We must ensure that we have and maintain a sufficient stockpile of antiviral drugs for such an eventuality. I would be interested to hear from the Minister what level of preparedness exists in Northern Ireland.

I have previously expressed concerns regarding the contracting out of cleaning services at local hospitals. There must be appropriate regulation centrally of standards of cleanliness in each trust.

Individuals should be encouraged to adopt greater personal responsibility for healthy living, particularly in relation to diet and exercise. There still needs to be greater awareness of the danger and effects of binge drinking, smoking and illicit drug use. I strongly support a comprehensive ban on smoking in public places, which should be introduced with immediate effect. Another issue that concerns the general public is the difficulty patients and their relatives have in accessing details about their condition or treatment. Those on waiting lists should be provided with the best possible indication of when they are likely to be called for treatment. Uncertainly only exacerbates their ill health. Greater health service transparency would be welcomed.

Conditions such as diabetes are rapidly becoming more common. Many such illnesses do not attract media headlines, but lead to lifelong suffering for those affected. The long-term costs are very high when people with those conditions deteriorate. I contend that early and best treatment is not only best for the patient but for our economy. Equally, new anti-TNF medications have the potential to transform the lives of the most severe sufferers of rheumatoid arthritis. Such patients could return to or remain in work if more of those drugs were funded. Let us ensure that that medication is distributed where needed, rather than on a postcode basis.

Mental health and learning disabilities have traditionally been underfunded. The child and adolescent psychiatry service in the Province requires major improvement, particularly given the large number of suicides among young people in Northern Ireland.

This Government maintain that, alongside education, health is one of their greatest priorities. The public in Northern Ireland have not seen the improvements over the past four years that they would like to have seen. It is to be hoped that whoever has responsibility for the Province's health after the election will do everything that they can to ensure that the people of Armagh, Antrim and Ards are treated exactly the same as those anywhere else in England, Scotland or Wales.

I congratulate the hon. Member for Ceredigion (Mr. Thomas) on securing the debate. I am genuinely grateful for the opportunity to explain the Government's proposals for future EU structural and cohesion policy after 2006. It has been an interesting and often passionate debate, and I pay tribute to my hon. Friend the Member for Caerphilly (Mr. David), who added some important perspective to the hon. Gentleman's remarks, both on the strengthening of the Welsh economy in recent years and the reality of the proposals under discussion.

The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) made a characteristically understated speech, if I may say so, some of which I shall endeavour to respond to. I shall be happy to address the points that he raised. The hon. Member for Brecon and Radnorshire (Mr. Williams) wisely acknowledged, as he put it, that £1 from London is worth as much as £1 from Brussels, and he went on to acknowledge the streamlining of European funds that has taken place in recent years.

I am grateful for the support of the hon. Member for North-West Norfolk (Mr. Bellingham) for our approach to the Lisbon agenda. On the specific issue of the rebate, with which he concluded, it will be no surprise that I can assure him that the position remains as stated by the Chancellor of the Exchequer, and that work continues on the rebate and the wider issue of the financial perspective. As the hon. Gentleman will appreciate, other parties are privy to those discussions.

I assure the House that the Government are committed to a strong regional policy that is at the heart of our efforts to achieve high and stable levels of growth and employment, ensuring that economic prosperity reaches every part of the United Kingdom. We have significantly increased spending on regional policy across the UK, focusing resources on drivers of productivity such as skills, infrastructure, enterprise and new technology.

As a consequence of devolution in Wales, the Welsh Assembly Government are driving forward their programme for regional development, and are currently driving forward the "Winning Wales" strategy to provide an over-arching framework for Wales's continued regeneration. The Welsh Assembly Government are providing significant match funding for Wales's current structural fund programmes. As we have heard, Wales has benefited from a unique funding arrangement with the UK Government, "Barnett Plus", to support the programmes. In the spending reviews of 2002 and 2004, the Welsh Assembly Government were allocated an extra £106 million for 2005–06, an extra £128 million for 2006–07 and an extra £147 million for 2007–08, in addition to the block grant under the Barnett formula in order to provide match funding for its objective 1 programmes.

I accept that the structural funds have played an important role in supporting valuable initiatives in recent years in Wales and other parts of the United Kingdom. However, domestic spending—national programmes and co-financing for structural funds projects—plays an increasingly important role in regional development. I would add to that a personal perspective from my constituency: there should be recognition that although real expertise has developed, not least within local government, and a capacity to deal with Brussels, that expertise all too often reflects a mindset that developed during the time of the previous Government, when many of us looked to Brussels hoping for regional support when Whitehall and Westminster were providing very little such support.

There is an opportunity now, not least given the significant uplift in regional expenditure being made by this Government, to develop our thinking on regional funding. It is essential to understand that three quarters of public spending on regional development in the UK already comes from domestic sources, and we must recognise that in any scenario that proportion is set to increase in the near future. The enlargement of the European Union and the entry of 10 poorer countries means that EU regional funding will, inevitably and rightly, shift to the new member states, and the richer countries such as the UK will increasingly depend on national resources to fund their regional development. This new situation calls for a fundamental reappraisal of the EU's regional policy. We are determined to push for effective reform of the structural and cohesion funds that delivers a good result for the UK and its nations and regions, as well as for the other member states and the EU as a whole.

On timing, the current regulations governing the structural and cohesion funds will expire at the end of 2006. Negotiations on the future of the structural and cohesion funds began in September 2004 and are continuing under the Luxembourg presidency.

Let me set out the Government's objectives for structural funds reform. The UK has five main objectives for reform of the funds, which were set out by the Secretary of State for Trade and Industry in two statements to Parliament in September and December 2003. First, we want to develop an EU regional policy that fully supports, and adds value to, the ambitious devolution, decentralisation and regional development agenda already being pursued domestically. Secondly, we wish to ensure that the structural funds actively support the EU's agenda, set at Lisbon, Gothenburg and elsewhere, for higher productivity, employment and sustainable development. Thirdly, we wish to concentrate the EU's necessarily limited financial and administrative resources on the poorest member states, which are most in need of assistance. Fourthly, we want to develop simpler and more flexible implementation and monitoring arrangements for structural funds programmes, which are proportionate to the amount of funding available. Finally, we are determined to secure a fair budgetary deal for the UK taxpayer and a total EU budget of no more than 1 per cent. of EU gross national income.

The Government have put forward detailed reform proposals as a means of securing those objectives. We have proposed that richer member states should, in future, fund regional programmes from domestic sources, and that the EU's limited resources should be focused on the poorest member states, where EU intervention is likely to have the greatest impact and value. That would introduce genuine EU solidarity and help to ensure that the enlargement of the EU to 25 members is recognised as a success. However, for clarification, I want to point out that the Government are not advocating that regional policy should be renationalised in the richer member states. On the contrary, we believe that there should continue to be EU-wide co-ordination of regional policy in all member states, so that we continue to work towards shared goals across the Union.

I would like to tell the Chamber that the Government's estimate of the impact on London council taxpayers of the Greater London authority—[Interruption.] That was not the right hon. Gentleman's question, but if he wants to accuse me of selective quoting, I must draw attention to the facts that he wants to ignore: the massive cost of the elected regional government in London that is in excess of what the Government told us it would be when it pushed through the Greater London Authority Act 1999.

Significant indirect costs are already occurring. An article from The Guardian yesterday tells us that, in Ribble Valley, one of the reasons for turning down a PFI project was the uncertainty over the district council's future. Already, local authorities' activities are being blighted in areas where referendums will be held.

Where will the money for all these costs come from? Some of it will come in the form of central Government grants—more wasted taxpayers' money—but regional assemblies will also have the power to impose a precept to raise additional funds, which will be an additional burden on the already hard-pressed council taxpayer. The White Paper makes it clear that they will be expected to make a contribution to their administrative costs through a precept on the council tax. We do not know whether the Government propose to impose any limits on the powers of elected regional assemblies to set a precept. Perhaps the Minister will clarify that.

The publicity campaign, the referendums, the reorganisation of local government, the administration cost of elected assemblies and the buildings are all going to cost us hundreds of millions of pounds, and for what? For the answer, I turn to the Minister's colleague in the other place, Lord Rooker, the Minister responsible for matters involving the Office of the Deputy Prime Minister. He assured the other House that there would be no new money and no new powers for elected regional assemblies. From what we have seen so far, it is clear that the powers that elected regional assemblies will have will largely be taken from local government: fire, planning, housing and so on.

Our problem with scrutinising cost is that we simply do not know the extent of the assemblies' powers and functions, and thus the cost that will be imposed. The White Paper set out the powers that the Government propose to give elected regional assemblies. The Deputy Prime Minister has then run around the country talking up those powers, telling a closed meeting in the north-west that an elected regional assembly will be an opportunity to reopen the Barnett formula, and telling others that transport, the police and learning and skills councils will be transferred to elected regional assemblies—all in a desperate attempt to shore up a rather flagging Government policy agenda.

Tony Flynn, the ousted leader of Newcastle city council, asserted that the closure of the Swan Hunter yard would never have happened if there had been an elected regional assembly. We were also told a few weeks ago that the trans-Pennine rail link would be safe if only there were an elected regional assembly.

Conservative Members have serious concerns about the time scale involved. The Government have reluctantly indicated that they will try to publish a draft Bill setting out the powers of regional assemblies before the referendums. That is an absolute requirement, and I hope that the Minister will be able to tell us in more detail today when that Bill will be published and how much detail it will contain. It will be of no use to anyone if it simply contains enabling powers that provide for Ministers to set out the powers in secondary legislation later.

When my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) was a shadow Secretary of State, he wrote to the Deputy Prime Minister—

We are all grateful to the hon. Member for Battersea (Martin Linton) for having introduced this timely debate. He need not feel guilty for having done so, unless there is guilt by association with the socialist administration in City hall, which has not fulfilled the promises of the Labour Administration to improve transport in London. We shall hear more about that in the election campaign—but for now, on with the debate.

My constituents' principal concern is that the tube system should be improved, and I shall concentrate on that. It is understood that the mayoralty has invested a great deal of money and political energy in London's buses. There are even bus lanes to prove it, and more buses too. There has not been too bad a service on the buses—in fact, there has been an improvement. Whether that improvement has been cost-effective is for others to decide, particularly our representatives on the hustings.

The tube is another matter. I am pleased to see the Under-Secretary of State for Transport, the hon. Member for Harrow, East (Mr. McNulty) in his place representing the Department for Transport, because he will understand the west London perspective. My constituents rely on the tube system for commuting, but it is unreliable: trains are slower than they should be, the track needs repair, the stations are often dirty and people fear that the system is not secure. The public-private partnership has yet to deliver the results that were promised. However, it cannot bring anybody any delight to know that the facilities for disabled passengers are well below standard. I cannot think of one tube station in my constituency, which has eight, with proper lifts and other facilities to enable disabled passengers to get to the platform easily. We need better leadership and higher standards.

We also need much more investment, and that should be the central theme of today's debate. We are all conscious that London is the powerhouse of the country's economy. We are aware that London pays a great deal more in taxes than it receives back in public service investment. We are also somewhat sore that so much of our hard-earned money goes to subsidise the Scots—with no change in the Barnett formula, even after the establishment of the Scottish Parliament—rather than being reinvested in services for the benefit of the Londoners who earned the money.

Let us consider the investment plan for the next few years. Transport for London reckons that under its business strategy, an extra £1 billion of Government money needs to be invested in transport in the capital for the foreseeable future. That is quite right. Even the much vaunted congestion charge is not bringing in the money that had been anticipated; the administrative costs of introduction were far higher than had been programmed, and the mayoralty is facing a shortfall in revenue from that source.

I will make only modest proposals relevant to west London for the consideration of the Chamber and the Minister this afternoon, and I will set them in the context of the air transport requirements of the capital. Air transport is very important to my constituents as a source of jobs, particularly at Heathrow, and as a source of local economic prosperity, but it is also the cause of much congestion on the overburdened road system. We need investment in tube extensions and links that can get people out of their cars and on to the tube system.

The first proposal that I shall put to the Minister is one with which he is familiar, and with which he probably instinctively has sympathy; whether the Treasury has such sympathy, I do not know. He has reminded me of the spending review being conducted this year, and I am sure that if the Treasury does its sums properly, it will find that the Croxley link to connect the metropolitan tube network to the west coast main line rail network at Watford Junction would bring substantial returns for a modest investment. The line is essentially there already, and it would take a great deal of passenger traffic from the west coast main line directly on to the tube system, and also make it easier for people to get on to the west coast main line.

The second proposal is to extend the Piccadilly line from Uxbridge down to Heathrow. If there is to be a fifth terminal—we know that it would be in service quite soon—it deserves an improvement in the transport facilities that service it. That proposal would be such an improvement, at modest cost. Another idea would be to extend the Central line from West Ruislip to Heathrow.

I suspect that those two extensions are especially relevant because Crossrail, which we so earnestly desire, seems to have slipped further and further into the future. I wish that Her Majesty's Government would put money into it now. We would be much more likely to get the Olympic games if Crossrail was a definitive project, officially supported, properly funded and effectively programmed. The fact that Crossrail is not an official Government-sponsored project creates a built-in headwind for our Olympic promoters. As Crossrail is so delayed, the two extensions of the tube to which I have referred are particularly important.

In conclusion, let us consider the promotion of the Olympics at the Stratford site in connection with air transport in London. London is already well served by air transport facilities—Heathrow, Gatwick, Stansted, Luton and City airports. For business aviation within the Greater London authority area, there is Northolt for movements up to a fixed limit of 7,000 a year, and Biggin Hill. We do not have a shortage of facilities, but we need better transport access to them. Another Heathrow runway would make the road congestion in west London intolerable. Let us concentrate on the road connections that need improving, at modest cost, but above all, on investment in tube infrastructure.

If we can do that, and the extra £1 billion a year can be provided for Transport for London, there is, I think, hope for west Londoners. Otherwise the present financial situation may continue, with money siphoned off from the capital for use elsewhere, and the congestion charge bringing in no more money. In that connection I ask the Minister to state now that he will veto any imposition of a congestion charge for access to Heathrow.

If the Government adopt the modest projects that I have proposed, London, particularly west Londoners, will benefit substantially. Congestion will be eased and a good return will be gained for relatively modest input by the taxpayer.

Yes, I accept the points that my hon. Friend makes.

The point is that interest rates away from the headline rate-that is, the interbank charging rates-were in real danger of going up. I know that we on the Government Benches are derided when we mention Greece, but the thing that we must recognise about the Greek economy is that the borrowing of money and the interest rates that went up were ultimately fed back into the market because action was not taken.

I listened carefully to the comments made by the hon. Member for Dundee East (Stewart Hosie) about his amendment. Obviously, he does not want to see VAT raised at all-he wants it left at 17.5%. I was going to make an intervention, but I thought it was worth waiting to see how he expanded his point. I was not sure whether he was commenting on the impact of the Budget on the country overall or just on Scotland. He made an important point when he said that it would have an impact on the health service in Scotland to the tune of £150 million. Of course, the national insurance rise under the previous Government would have had a similar effect.

I want to make a suggestion. The hon. Gentleman asked whether we could find other areas where the money could be found. The hon. Member for Nottingham East (Chris Leslie) also made a point about looking for other sources for the £12 billion to £13 billion involved. If the Scottish National party tabled an amendment to cut the grant to Scotland under the Barnett formula by that £12 billion to £13 billion, that amendment would have support from many Members and would avoid the need for the VAT rise. Perhaps they might want to consider that point in the later stages of this Bill's passage. It is a great disappointment to me that the hon. Member for Dundee East is not here; I am sure that he would have liked to react.

We are borrowing £3 billion a week. It has also been mentioned that the VAT rise will have an impact on charities, but the national insurance rise, which we reversed, would have too. We must return to the fact that we have put together a package of changes. Saying that £8 billion will be taken away from pensioners is not a generous comment because it assumes that that £8 billion will be taken from the poorest pensioners. As has been made clear, that will not necessarily come from the poorest pensioners at all. It could come from all pensioners.

There will be questions on Wales on 28 July, I think. In the mean time, I shall bring the hon. Gentleman's views to the attention of my right hon. Friends the Secretaries of State for Wales and for Scotland. I am aware of the importance of issues concerning the Barnett formula.

The Prime Minister might have noticed that the people of Scotland did not choose his party, except in one seat out of 59, and they did not choose the Conservatives' poodles, the Liberal Democrats, either. Can he assure the House, as an absolute chill runs through Scotland at the 1.3 million hidden job losses that he did not publish, that any proposals for cuts in public services and expenditure in Scotland, and any Barnett formula cuts, will be brought before the Select Committee on Scottish Affairs- [Interruption.]

In my speech today, I will examine several different issues of Welsh, UK and international significance, noting the impact of the new Budget on the Welsh economy and Welsh families and communities. However, I begin by asking whether the Budget was even necessary, never mind whether it deserves the billing of an "emergency Budget." It was clearly a political and ideological Budget, designed to shrink the state, and not one that was economically needed.

Indeed, even the Financial Times columnist, Sam Brittan, called it a "totally unnecessary budget" in his column of 18 June. We already had figures from the March Budget from the new Office for Budget Responsibility, and we all knew that the major announcements are actually the cuts that will be announced in October in the comprehensive spending review.

On Tuesday, the UK Government confirmed that, except for health and overseas aid, departmental budgets are to be cut by 25% during this Parliament. If we map that level of cuts on the position in Wales, around 60,000 public sector jobs are at risk-15,000 more than the 45,000 job cuts planned by Labour in March. Indeed, based on today's Financial Times figures, 65,000 public sector jobs are in danger in my country. That is very worrying for many families in Wales, and we believe that it is unnecessary and avoidable.

Clearly, the national debt and deficit must be tackled, but there is a question of timing, and I cannot believe that increasing the cuts in this way and at this time is in any way beneficial to the people of Wales. However, the implementation of the recommendations of the Holtham commission on funding and finance in Wales would be beneficial. A major plank of that was the recommendation that a floor of 114% of English spend be implemented immediately, to ensure that Wales does not lose out further under the Barnett formula.

Plaid Cymru is not alone in calling for that. Government Members may recall that the Liberal Democrat leader in Wales said on 7 June 2009 that

"the Westminster Government should act immediately"

in introducing a floor. That £300 million a year would save around 9,000 public sector jobs in Wales, but would be only the first step on the way to the fairer, needs-based formula that we need. It is therefore disappointing that all this has been put on the back burner. With so much work on the issue contributed by Gerry Holtham and his team, as well as three other independent reports, I cannot see the need for an additional commission after a successful referendum on further powers for the National Assembly.

There were other areas where the new Budget is both tough and unfair. The most important are the cuts in the welfare budget, to the tune of £11 billion in coming years. As figures in the Financial Times showed, any cuts in welfare or the public sector hurt areas that are already in need of more. The change from upgrading benefits according to retail prices index inflation to upgrading them according to the consumer prices index will mean a lower rate of benefit growth than before, as well as a stealth saving. Having worked for Citizens Advice Cymru, I can tell hon. Members that people who rely on benefits will struggle because of those changes, and we are talking about real people and families on low incomes, not the "welfare scroungers" that the political right like to caricature.

Specifically, the proposals to lower the number of people on disability living allowance are a cause for concern. In Wales, there are more than 240,000 people on DLA. Having seen the impact of tribunals and stricter qualification criteria on other benefits, we have concerns about how the new changes to eligibility will be implemented and who will make the final decision. What appeals system will be in place, for example? We and disability groups support getting people into work. That is a good thing, but when such schemes are suggested, especially in such a manner and in such a Budget, there is a wider concern that they are just a means for getting people off benefits, rather than supporting them back into work.

I must also say that, in many parts of the UK, even if people are able to work, they cannot. Some parts of my country have very few jobs available, with between 10 and 15 registered jobseeker's allowance claimants for each advertised job, and that is even before adding people who are switched from disability benefits. It is the same with parents of young children going back to work. If the work is not available and we are forced into making savage cuts in the public sector, how are those people to find work?

However, there are some steps in the Budget that we welcome. There was a recognition that Wales and other parts of the UK have not shared in economic growth in the past and that a level playing field is required. Quite how Labour managed to create or accept a situation where only one private sector job was created in the north or midlands of England, but 10 were created in London, is beyond me. That shows Labour's failure of imagination in growing or developing a balanced economy. However, the Conservatives' proposal to allow a national insurance holiday is hardly likely to correct the years of economic centralisation in London and the south-east of England, or re-balance the economy geographically.

A more far-reaching idea might be the regionalisation of corporation tax according to gross value added. That would give the poorest nations and regions a competitive advantage. In west Wales and the valleys-the areas that I represent-GVA is only 64% of the UK average, so additional assistance to equalise that across the UK would be warmly welcomed. Another avenue might be the devolution of that tax, so that the Welsh Government could make their own decisions, within EU regulations. Bolder moves to develop the Welsh economy are needed than those given in the Budget. The route map for economic renewal, to be launched in a few weeks' time by Welsh Deputy First Minister Ieuan Wyn Jones, will provide more nuanced, Welsh solutions.

Changes that bring about real-terms cuts in benefits and public sector pay freezes punish those who had nothing to do with the economic mess created by the banks. The general public will contribute £13 billion extra towards the deficit through the VAT hike. The bankers will pay a measly £2 billion a year through a levy, yet still see huge benefits in shifting their profits from income tax to capital gains tax. The levy is not only small; it is being introduced only gradually. The banks will not be squealing as a result of this Budget, as the cuts in corporation tax will compensate for the levy. Considering that the Public and Commercial Services Union estimates that there is £123 billion of uncollected tax, far from demonising vulnerable people struggling to get by, would it not be better if the Government targeted the super-rich for their tax avoidance and evasion? Instead, cuts to Her Majesty's Revenue and Customs staff will reduce capacity to collect due tax from those intent on not paying their fair share.

There were elements of the Budget that must be welcomed, not least the increase by £1,000 of the level at which income tax is paid by basic rate taxpayers, a Plaid Cymru policy at the general election.

However, a further disappointment for my country in this Budget is that although confirmation was given of other transport schemes in England, the electrification of the Great Western line was noticeable by its absence. I do not need to remind you, Mr Deputy Speaker, that Wales ranks alongside Albania and Moldova at the bottom of the electrified rail track league table. Without a concrete timetable for either electrification of the Great Western line or the creation of a high speed rail link to south Wales and north Wales, we will languish there much longer.

Far from all of us being in this together, the emergency Budget aimed its axe at the poorest and the most disadvantaged communities, while being more or less "business as usual" for the economic elite.

Do the Minister and the Secretary of State recall that last November the Treasury was persuaded to accept an historic reform ensuring that Wales was not disadvantaged under the Barnett formula? Why are they not ensuring that the agreement to protect the Welsh Budget is implemented? On Barnett, the Chancellor promised on 12 February 2010 to

"move on it pretty quickly, as soon as a new Government is elected."

How on earth can the Secretary of State and the Minister have allowed that pledge to be dumped in the long grass? Instead of capitulating immediately to savage cuts, why do they not stand up and fight for Wales as their Labour predecessors did?

Does the hon. Gentleman recognise that in the autumn, around the same time as the consultation document on rebalancing the Northern Ireland economy is published, the Executive and the Assembly will find out the outcome of the review of departmental expenditure limits in the current comprehensive spending round? That will have an effect on what Northern Ireland gets through the Barnett formula. The Budget also projects serious reductions in annually managed expenditure in the form of social security benefits, and those two squeezes on Northern Ireland combined could have a high economic impact that would make what is in the consultation document pretty irrelevant.

The Minister will be aware that the decision to have a concessionary scheme in England had consequential effects on funding in Scotland through the Barnett formula. The scheme is already underfunded by the Scottish Government, so may I have an assurance that there will be no further cuts in funding in Scotland through the effect on the Barnett formula?

Does the Secretary of State agree that the fiscal relationship between Scotland and the United Kingdom as a whole is more complex than just the Barnett formula or crude overall spending-per-head figures, and that great care should be taken in any review to consider all aspects of the fiscal relationships between all parts of the UK?

Congratulations, Madam Deputy Speaker, on your election to that important post.

I begin with the constitutional background to the role of Members of Parliament in general and Ministers in particular. I have said on several occasions over the past few years that one of the reasons why the importance of the House in the public mind has been so reduced is Members' lack of involvement and attendance in the Chamber, which has not been the case during this debate or since the new Parliament commenced. The use of procedural devices such as the guillotine, and the manner in which the previous Government handled Government business over the past 10 years, have been a disgrace. Indifference on the part of Members of Parliament has increased to an extent that I did not think was possible when I entered the House 26 years ago.

However-I say this as one who has a certain scepticism about coalitions-I congratulate the Leader of the House and the Deputy Leader on the speed with which they tabled the motion. I say that with feeling, because if used properly, it has the capacity to improve greatly the involvement of the House and the quality of debates.

People often imagine that we do next to nothing in the Chamber. That is partly because of the failure of parliamentary reporting of what goes on in the House. For those who do not have the parliamentary channel, for example, and who are reliant on the few minutes that are given to "Today in Parliament", it is difficult to have any concept of what goes on here. That is partly due to the fact that Back Benchers have been largely excluded from the briefing processes now available to the media and the machinery that is available to enable Members to be heard by the public outside.

I say that with feeling as one who, if not a serial rebel, has consistently held strong views, if I may say so-for example, on a debate that took place in Westminster Hall this morning on the sovereignty of the United Kingdom Parliament and the European Union. I would be extremely surprised if that makes the "Today" programme, "Yesterday in Parliament" or "Today in Parliament".

The way in which the House is perceived is profoundly affected by the sucking away of the deliberations of the House from the Chamber at a time when the whole of Europe is imploding, the German Government is in a state of implosion, the Greeks are in a state of implosion, unemployment is rampant and the impact of immigration is flowing all over the continent. It is astonishing that, as heard from the outside, matters of such importance cannot get the coverage in Parliament that they deserve.

We heard yet again from my right hon. Friend the Leader of the House that the Wright Committee proposals will be accepted in full. If I have slightly misunderstood, I am happy to be corrected, but I see that paragraph 177 states:

"On some business there needs to be an explicit partnership between Ministerial and backbench scheduling: this includes the length of debates on the Budget and Queen's Speech, the timing of Estimates Days and the handling of secondary legislation and European documents on the floor."

One of the things that I noted was excluded from the province of the Back-Bench committee is European documents. If the Wright Committee proposals are to be accepted in full, I cannot see why European documents should be excluded.

I say that for good reason. I have been on the European Scrutiny Committee for 26 years. I doubt whether many other Members have served on a Select Committee for anything like that length of time. As I said in the debate this morning in Westminster Hall, not once, at any time in those 26 years, has any vote ever been passed on the Floor of the House or in a European Committee to overturn a decision in the Council of Ministers, bar one that I can recall, and that was immediately overturned on the Floor of the House. In other words, the very fact that we are committed to the European Communities Act 1972 has meant that we are not allowed to pass any legislation inconsistent with it. So I am puzzled as to why that partnership arrangement, which was described in paragraph 177, has not been included, as far I can judge, in the proposals before us.

However, on the extent of the committee's terms, I again have considerable sympathy with those who have tabled amendments to the proposals to restrict the period for which the chairman and committee members can be elected. Indeed, that is why I have put my name to a variety of them. Despite the responses of the Deputy Leader of the House and the Leader of the House to interventions, I cannot understand the real reason behind restricting the chairman and members to election merely for one year-until, perhaps, we consider the review of the committee's operational arrangements. Despite the sophistry that I heard from the Deputy Leader of the House and, indeed, the Leader of the House regarding the length of time, I am still extremely unhappy about the idea that the chairmanship, the membership and the length of time for which the committee is to be given a full opportunity to be seen to operate should be temporary arrangements. The operational restriction to one Session is a very suspicious business.

I know my right hon. Friend the Leader of the House quite well; I have watched him over many years and I would not normally regard him with suspicion. He is very shrewd and intelligent, and he tells me that he can justify a review after one year, but I am not impressed by the answers that we have received so far. The measure just does not stand up, and I know that many other hon. Members feel the same way. It has-to use another expression-a bit of a pong about it.

Some people might use the Back-Bench business committee to advance causes, and that, after all, is what Back Benchers are supposed to do. Members do not just react to Government business; they might want to promote ideas. I do not agree with all the arguments that the minority parties have presented on, for example, aspects of devolution, and there are many arguments on the Barnett formula and all sorts of things where we might have serious differences, but they and Back Benchers generally have a right to be heard.

As I have said on previous occasions, what we need more than anything else in this House is Back Benchers with backbone. During my 26 years in the House, I have been involved in quite a few controversies and I have seen some serious ones develop. Ultimately some Members have seen them through and some have not. I hope that the Back-Bench business committee will not just represent a vague opportunity for people to have their say but that they will actually do something, and that the committee will therefore be used effectively in relation to causes as well as Government business.

A Select Committee in the other place found that reform of the Barnett formula could lead to a reduction in the budget deficit. In terms of the imperative of achieving that, will not the Treasury team look once again at that Select Committee report?

I congratulate the hon. Members for Wolverhampton North East (Emma Reynolds) and for Bristol North West (Charlotte Leslie) on their maiden speeches, both of which promised much for the future. I well remember my own maiden speech. It was supposed to have been non-controversial, so I chose the entirely non-controversial subject of holiday homes in Wales!

In this new Parliament, Plaid Cymru and Scottish National party Members will be vigorous participants in the business of the House. I am glad to say that the new Green MP, the hon. Member for Brighton, Pavilion (Caroline Lucas), has joined us on this Bench, because she, too, has much to contribute. I would have been glad to hear contributions from our erstwhile colleagues, the former independent Members Dai Davies and Richard Taylor, both of whom worked very hard, and I pay tribute to their work while in the Chamber. Richard Taylor is a consultant physician, and I remember him saying in his maiden speech, "Since I joined the NHS, there have been 28 reorganisations. I rather liked the 19th." That is a cautionary word for the Government and their aim of reorganising the health service in England.

Much education and health legislation is not directly relevant to Wales. However, there is a great deal to be said about education and health in Wales, not least the First Minister's incomprehensible decision last week to sabotage Welsh medium education in Cardiff West. No doubt the Welsh electorate will make their view clear on that next spring-but I shall not stray into devolved matters in this speech. Health is largely a devolved matter, although some important matters are not. Early in my career here, I tackled the then Secretary of State for Health, Alan Milburn, over nurses' pay. His erroneous response was, "It is an abiding joy to me that I have no responsibility for things Welsh." He was actually wrong, and I hope that this Government and their Ministers are better informed and will show at least a modicum of better grace in dealing with all matters Welsh.

The question from Wales is, what is the significance of the Queen's Speech for education and health? The Academies Bill will apply to England only. I was interested to hear the Secretary of State refer repeatedly to "this country", whereas, of course, he should have referred to "England". He should be aware that there are other parts of the United Kingdom that will not go down the route of academies or any of the other measures for education in England that he has outlined. The education and children's Bill and the health Bill will have some provisions that apply to Wales, but it is not particularly clear which ones.

The main effect in Wales of the Queen's Speech will of course come from cuts. We know already that the Government are postponing looking at the Barnett formula, even though successive independent reports have shown clearly that Wales is underfunded. The last report, the Holtham report, showed that Wales is already underfunded to the tune of £400 million. Added to that are the cuts already announced for Wales as part of the first £6 billion tranche and the much bigger cuts that we are facing in the future. Clearly, public services in Wales are in great danger. That is even more pressing because the easy-or easier-efficiency savings available in some parts of England are not necessarily applicable in Wales. The Prime Minister mentioned this morning savings from development agencies, but that opportunity has gone in Wales. It is particularly galling, I am sorry to say, that we are facing these cuts, given that the Liberal Democrats campaigned in Wales very much on the prospectus of raising public spending. Now we have not only cuts but no changes to the Barnett formula, in the foreseeable future at least.

We also have cuts in the numbers of additional university places. Again, the number for Wales is unclear, although one might speculate that it might be 500. This is particularly difficult given that universities in Wales are clearly underfunded as well. A study of cross-border education by the Welsh Affairs Committee, of which I was a member in the last Parliament, showed that universities in Wales were underfunded to the tune of £60 million per annum, and that university research in Wales was underfunded to the tune of about £40 million. Both sums of money, of course, would go far in filling the funding gap. Successive Labour Secretaries of State claimed that the Barnett formula has served Wales well, but it does not apply to research moneys. If it did, we would get not 2% but 5.6% of research money, which would make a huge difference.

I will not take up much more of the Chamber's time, because many people are waiting to make their maiden speeches. I will add, however, that the One Wales Government-the red-green Government-in Cardiff are committed to social justice, sustainability and inclusivity, and firmly reject NHS privatisation and the market models in the health service. That might come as a surprise to some hon. Members who do not know the ins and outs of Welsh politics, but that is how it stands at the moment. That refers back to my earlier point about this country being the UK and not just England. The Welsh Assembly Government are also responsible for the Wales-wide practical curriculum, including a foundation, play-based phase for four to seven-year-olds. Were I in charge of taking lessons from Sweden, I would look at the universal child care available there, which I saw a couple of years ago on a visit with the all-party Sweden group, rather than at some of the other lessons that the Government are taking. We also have in Wales the Welsh baccalaureate and are developing 14-to-19 education in general. In this respect, I hope that Wales will be protected from the coalition's wilder enthusiasms in respect of health and education, and I genuinely regret that that choice is not open to people in England.

On 26 November 2009, the then Secretary of State for Wales made a commitment, which was supported by the current Secretary of State for Wales, that the Government will take action if Wales is adversely affected by the outdated Barnett formula. Will the Chief Secretary and the Government make a similar commitment, particularly as regards Barnett consequentials resulting from Government spending reductions?

Does my right hon. Friend recall that one of the most shameful episodes in the history of social services in Scotland was when the Scottish Government accepted £34 million that was allocated for disabled children and their families and used it to give to local councils to keep council tax steady? Will he continue to consult with colleagues so that never again can we have such a distortion of the Barnett formula, and never again can we trust those who claim to speak for Scotland and attack the most vulnerable?

Is it not the case that preserving the NHS budget would also benefit Wales through the Barnett formula?

The fact is that the Barnett formula has survived in various versions for more than a century. It survived 18 years of a Conservative Government. That funding formula has been in place, in whichever form, since 1888. It has been protected and has survived those 18 years of Conservative Government, but it now seems to be under threat from this Conservative Opposition.

What recent discussions he has had with the Chancellor of the Exchequer on the operation of the Barnett formula in Wales.

The position in relation to the Barnett formula is that it continues to be the Government's policy, and it is the basis on which allocations will be made to Wales, Scotland and Northern Ireland. Over the past 10 or 12 years, Wales has benefited from the increase in public expenditure right across the piece.

I hope that, one way or another, the Government have recognised Northern Ireland's special needs, not just in the regular spending rounds but, as the hon. Gentleman well knows, in other discussions as well. As I have said, the Barnett formula will apply to the announcements that I have made today where appropriate in the usual way. All the devolved Administrations know the spending that they are getting for the rest of the spending review, but spending reviews have been fixed for three years in the past to give some certainty. I think that people will accept just now that, given what is happening, it is not possible to set out definitely what spending might be in three or five years' time, but they have that certainty for the next year, which will help them.

I want to concentrate on the proposal to abolish attendance allowance, apparently now only for new claimants, and disability living allowance for the over-65s. As we know, that would affect 2.4 million vulnerable pensioners, including 1.6 million who currently claim attendance allowance and 800,000 over-65s who are on disability living allowance. However, whatever happens to the current claimants, presumably we are talking about higher numbers in future, so those are the minimum numbers at least.

We have received various reassurances from Ministers in recent weeks and months. They have suggested that people will receive similar services, rather than money. Previously, we were told that

"people will be guaranteed an equivalent level of support".-[ Official Report, 19 November 2009; Vol. 501, c. 241.]

One of the problems in this debate is the lack of clarity about the phrase "equivalent level of support", because frankly it can mean absolutely anything to absolutely anyone. The hon. Member for Crawley (Laura Moffatt) said that reassurances had been given, but the first reassurances that I heard were given yesterday, at Department for Work and Pensions questions. I am not sure when she thought she had heard reassurances before that.

Quite a lot of concerns have been expressed, not least today, about some of the statements that have been made and the phrases that have been used. The Secretary of State said that the present system was "not sustainable" and that the cost could rise by 50 per cent. A number of hon. Members, including the right hon. Member for Stirling (Mrs. McGuire), have talked about a demographic time bomb, which the hon. Member for Norwich, North (Chloe Smith) also mentioned. I feel that those statements are slightly over the top, because the reality is that we, as a Parliament, and the Government need to set priorities. The question is: what priorities are they to be? If we are saying that the present pot of money that looks after the elderly and vulnerable will continue to be the same pot, despite an increasing number in those groups, I would very much question whether that is the right priority.

Yesterday we received clarification that those already receiving the benefits in question would get

"the same level of cash support."-[ Official Report, 7 December 2009; Vol. 502, c. 6.]

The Secretary of State said today that he had "said it all along" and that there would be no cash losers. However, to reiterate what other Members have said, we did not really hear that, and it might have been helpful if he had said it a bit earlier. Although that statement seems to be reassuring, it still leaves new folk looking ahead and wondering what will happen if they do not receive attendance allowance in future. That seems to go in the opposite direction from the Welfare Reform Act 2009, in which I was involved in the Public Bill Committee. Great play was made of the right to control and all parties agreed on that.

I would like to make a number of points. The first is that attendance allowance and DLA do a lot of good. I should like to quote again-I have quoted from this before-from a paper that I received from SAMH-the Scottish Association for Mental Health. What SAMH says is probably typical of what a lot of similar groups would say. SAMH refers to the 194,000 people of working age in Scotland and the 145,000 over-65s who receive attendance allowance and to the 110,000 older people who receive DLA. The advantages that SAMH quotes are similar to those that we have heard about already this evening:

"For example, people with mental health problems can experience much smaller social networks and can feel isolated and alone. Anxiety may mean that a person feels unable to leave their home by themselves. People can choose to use their DLA to use a taxi to access social activities and cover the costs of an informal carer to provide the additional support and assistance needed. Without this additional support the person could experience greater anxiety and social isolation, increasing the potential of a period of hospitalisation or more intensive and costly community support."

SAMH also says:

"Disability benefits and free personal care enable older people in Scotland to remain independent in the community, providing older people with a personal budget to help with their care and support needs. This could include covering the costs of a friend or family member coming to the home in the morning to help the person get out of bed, prepare meals or do shopping and cleaning. Any changes to disability benefits could affect the provision of this care and support and result in an older person needing more costly forms of social care in the home, or lead to a person moving into residential care if they were not able to manage their household."

It has been said before, but it is worth re-emphasising, that much of the present system involves unpaid carers, of whom we hear a lot, and that the danger of just transferring even the same money to local authority or to any other control is that we will get less of a service.

I enjoyed being involved in the Public Bill Committee on the Welfare Reform Act 2009, in which other Members who are present were also involved. It is worth quoting again from the then Bill and from a clause in the part dealing with the right to control. It said:

"The purpose of this Part is to enable disabled people aged 18 or over to exercise greater choice"-

not the present choice, but greater choice-

"in relation to, and greater control over, the way in which relevant services (as defined by section 31) are provided to or for them"

The Government seemed to be saying-and I agree with them-that they wanted to move in the direction of individuals having greater control over the services. However, what we are seeing now is a move towards less control. Nobody has explained to me-perhaps the Minister could explain this evening-exactly how those two things are meant to relate to each other.

Previously I asked-and would like to ask again-what would happen to the money in Scotland, Wales and Northern Ireland. Will it be handed over as a lump sum? Will attendance allowance be based on need or will it be based on the Barnett formula? Will it be open to the devolved Governments to continue with attendance allowance in Scotland and Wales, even when it is eventually phased out in England? I did not quite hear the Secretary of State's earlier answer, but if I understood him correctly, he said that he would brief the devolved Governments. I hope that he would go a little further than just briefing them and enter into a consultation with them on how the proposals might work out.

We have received the assurance that only new claimants will be affected, but that leaves a number of questions about the future. Who will be paying for the protection? Will the money go through the local authority or will it be transitionally protected under the social security system? Will it affect local authority budgets, and what happens if local authorities cannot or will not pay? Is the money inflation proof, or will it not be increased each year in line with inflation and thus gradually reduced in real terms? If that is good enough for existing recipients, why should other disabled elderly people not receive at least the same? We will end up with a two-tier system, and potentially for quite a long time.

What happens to people on the middle or high rate of DLA if they reach 65 after the new system is in place? Will they be protected or will they lose the benefit when they reach 65? The current protection appears to affect those on benefit at the time of change, not afterwards, but if so many people are to be protected, what is the point? Should we not continue with something much closer to the present system? What would the impact be on carer's allowance? It is not particularly generous at the moment, at £53.10, but if it is abolished, what will happen to someone who looks after a person who receives attendance allowance or DLA at the higher or middle rate? Similarly, will there be an impact on pension credit?

Locally, the Labour campaign against me often refers to how often I might vote with the Conservatives, but sometimes it forgets to say that, very occasionally, the Conservatives are right and the Labour party is wrong. I must admit that, in this particular debate, I remain suspicious of the Conservatives' motives. I am suspicious of what they might cut instead, if they are going to protect these benefits. However, it is hard to say that Labour has not moved further to the right of the Conservatives on this issue.

The Government have rightly given undertakings about DLA for the under-65s, and, yesterday, new reassurances that those receiving cash will continue to do so. I suggest, however, that it was cynical to get people this worried in the first place, and then apparently to give ground. In the longer term, how can it be right to change the system to give future claimants less control over their benefits?

I congratulate my neighbouring colleague, the hon. Member for Glasgow, North-East (Mr. Bain), on an excellent maiden speech. I hope that he will be available to his constituents and take on some of the casework that I have been covering in recent months-I had to survive only three weeks of a campaign, but he had four or five months, which is extraordinary. He mentioned several important issues on which I hope he will press the Government, because there might be slight differences between him and his Front-Bench colleagues. For example, perhaps it is time that we saw an increase in the minimum wage. He suggested that a fiscal stimulus would help unemployment, whereas, I believe, his Front-Bench colleagues are planning cuts.

I will concentrate on the proposal to abolish attendance allowance and disability living allowance for over-65s, which would affect 2.4 million vulnerable pensioners-1.6 million claiming attendance allowance and 800,000 living on DLA. We have received various reassurances from Ministers suggesting that people will receive similar services, rather than money. On Thursday, the Health Secretary said that

"people will be guaranteed an equivalent level of support".-[ Official Report, 19 November 2009; Vol. 501, c. 241.]

"Equivalent level of support" could mean cash, home help or similar support in kind, and people are asking, "Which is it?" It is not good enough. That phrase is worrying a lot of people and I hope that we will receive some clarification. Clearly, the same money cannot be in two places at the same time, so increasing services in one area will mean cuts in payments in another area, and presumably the people who lose attendance allowance will not necessarily be the people who receive the new services.

Attendance allowance and DLA do a lot of good. I shall quote from a briefing that I received from the Scottish Association for Mental Health. It provides several examples of how DLA and attendance allowance can be used to good effect, but we are short of time, so I shall limit how much I quote. It states:

"Disability benefits and free personal care enable older people in Scotland to remain independent in the community, providing older people with a personal budget to help with their care and support needs. This could include covering the costs of a friend or family member coming to the home in the morning to help the person get out of bed, prepare meals or do shopping and cleaning. Any changes to disability benefits could affect the provision of this care and support and result in an older person needing more costly forms of social care in the home or lead to a person moving into residential care if they were not able to manage their household."

SAMH gives similar examples:

"Changes could increase the pressures on informal carers which could limit the opportunities of carers being able to work and therefore lead to them not contributing through the income tax system."

The fear is of a lose-lose situation.

The other concern is that I thought that we were aiming to support direct payments. In fact, the Welfare Reform Act 2009, which went through Committee only recently and which I was involved with, made some good statements in that direction. For example, clause 30 of the then Bill said:

"The purpose of this Part is to enable disabled people aged 18 or over to exercise greater choice in relation to, and greater control over, the way in which relevant services...are provided to or for them".

The idea is to move to giving people more control over their services, but if we abolish attendance allowance, it appears that there will be less control.

What will happen to the money if DLA and attendance allowance are abolished for Scotland and Wales? Will it be handed over as a lump sum? If so, will the amount be based on need or on the Barnett formula of population? Will it be open to the devolved Governments to continue with attendance allowance in Scotland and Wales, even if they do not continue in England? Perhaps we could also have some clarification about whether only new claimants are affected, or will some of the current recipients lose benefits? There seems to be a lot of uncertainty about that, too. Can we have a clear statement from the Minister? I do not think that disabled pensioners and their carers should have to wait for clarification on that key issue.

There is also the potential for an impact on carer's allowance, which is extremely low at the moment, at £53.10. However, what happens if carer's allowance is paid to someone who looks after a person receiving attendance allowance and attendance allowance is abolished? It seems bizarre to me that the party planning to cut benefits is the Labour party. That is the kind of thing that I would have expected from the Tories, who seem to be the ones trying to protect those benefits, although I do not entirely trust their version of events. That is a reverse from my younger days, perhaps 30 years ago, when Labour was to the left of the Tories. Many of my constituents now tell me that they cannot tell the difference. I fear that parts of the electorate still think that Labour is the party that will protect the poor and downtrodden, but when I hear things such as what I have described, it makes me wonder.

Clearly there are overlaps between work and pensions and other aspects of the Queen's Speech, such as health. Another example is the minimum wage. If the Government are strapped for cash, why are we subsidising profitable employers to pay below a living wage? Tax credits are a good thing, because they boost the income of low earners. I certainly welcome that, but the Government's policies effectively mean that we are encouraging some employers to pay a wage that people cannot live on. I consider that to be immoral. If we are looking at benefits and encouraging people into work, part of the equation has to be increasing the minimum wage.

Let me briefly discuss one or two other areas of concern that have been mentioned today. We certainly welcome the Child Poverty Bill. There has been a lot of support for the Bill from across the House, but there is concern that we will not be even halfway there by 2010-11. The Home Secretary said in opening this debate that he hoped to be there, but I do not think that he was widely believed. There are apparently no resources coming in to support the intention to abolish child poverty by 2020. The hon. Member for Northampton, North (Ms Keeble) said that there would be "real teeth" in the Bill, but I have seen no sign of teeth whatever. Indeed, I would like to see what those "real teeth" might be, and that is without mentioning the fact that taking child poverty down to only 10 per cent. is hardly abolishing it.

I do not want to spend much time on immigration, but it has been mentioned once or twice. There are just a couple of points that I would like to make, the first of which is about bogus colleges. We need action on that issue, on which there is agreement across the House. The colleges in my area, including John Wheatley college, which covers an area that I share with the hon. Member for Glasgow, North-East, are concerned about the issue, as I know Scottish colleges will be in future.

At the same time, while there is concern about people coming in in an uncontrolled manner, my experience is that the Border Agency can be extremely strict with a lot of people. As I have mentioned before, a pipe band from Pakistan was refused entry and I know that a number of people from north America who had been well funded to work with the homeless in Glasgow, for example, or who had come to speak at a Christian conference have been sent right back from the airport. Yes, we need border controls, but there also needs to be flexibility. I echo the point made previously that Scotland's population is such that we would welcome more people coming in and boosting our economy.

The final area I want to touch on briefly is the Calman commission, which I believe is an omission from the Queen's Speech. Whether it was there in the original version or not is a matter for debate, but the reality is that there is no firm commitment by the Government to take forward the Calman commission's proposals, despite the fact that many of them could very easily be brought into being. Sir Kenneth Calman himself said of his report:

"I think there are a lot of bits, as I mentioned, which I think can be implemented quickly and easily without too much fuss, others will take a bit of time to think through."

I appeal to the Government, where there is agreement across the board, not to leave matters until after the election, which will only cause delay. Let us act sooner rather than later.

The drink-driving limit is one example. Clearly, there is an alcohol problem in Glasgow and the west of Scotland and I know that it exists south of the border as well. Minimum pricing has been mentioned, which we certainly welcome and encourage for Scotland. I hope that the hon. Lady and others who have spoken in support of this measure will speak to their colleagues in Scotland and encourage them to support it, too. If Northern Ireland can have separate limits for drink-driving, surely it would be helpful if we moved quickly so that Scotland can take a lead, as I argued earlier that it has on other issues.

My Lords, I, too, am pleased to join this important debate, which covers such important issues as communities and remote parts of the country, and to have the opportunity to address a Minister who not only is involved in farming but comes from a fairly remote area. I also farm and run small businesses in tourism and printing in an LFA almost six hours' travel from this House, and I declare an interest in both farming and those businesses.

Although I am based in Scotland, and many of my activities fall under the Scottish Government, remote and upland issues tend to be similar throughout not only England but the devolved regions, and Westminster is still our link with Europe. It is true that, often, the uplands and remote communities of the United Kingdom are forgotten in the rush of modern life, and come to the attention of the public only when there has been a sad case of an errant gunman, or foot and mouth disease.

However, the uplands play an important part not only in the agricultural sector but in tourism and small business. The diversity of business is often less than in other regions and often has considerably lower income levels-through either market forces, restrictions on development by planning authorities, or simply the weather. Notwithstanding that, the weather is now contributing to the uplands economy through the proliferation of wind farms, balanced by the impact on often unspoiled countryside. Upland farming tends to be extensive by nature, not a high-income generator, and a low employer.

However, in industry, uplands create the base for a wide spectrum of business, from suppliers to small manufacturers and niche businesses. Sadly, that often means that the size of the business is too small to sustain whole families, and low incomes are often the cause of the drain from rural communities to centres of population. Rural enterprises often also lose out because they are unable to compete due to simple things such as broadband provision and transport links. As a result, many younger members of the community often feel obliged to move. That depopulation does not help the retail sector either, and many small shops are forced to close. The convenience shop used to be in the village but increasingly the large supermarket or store, in the eternal quest for territorial domination, now sweeps many small shops in rural towns aside. Sadly, that is increasingly seen in towns, with rows of closed shops moving the heart of town centres to the peripheral areas. Indeed, that is so bad in some rural towns that closed shops have large landscaped photographs placed in the empty windows to try to camouflage them.

To my mind, the solution should be fairly straightforward. I am aware that the enterprise networks in Scotland have been changed, and I believe that there are alterations in England. I am a great supporter of forward-thinking and effective enterprise and development agencies to help to support and advise on business start-up and development. That needs to involve proactive and experienced advisers and focused funding for support with a degree of flexibility.

The noble Lord, Lord Greaves, made some interesting points about foot and mouth disease in the Lake District. I am not aware of what went on in the rest of the country but, without a doubt, the fast reaction of our local council in Dumfries and Galloway, along with the enterprise network, to source funds for loan support for small business, prevented many of the non-agricultural small businesses from going under at a critical moment.

I am aware that there are initiatives in Scotland, and I assume that there are initiatives in England, to supply broadband to outlying exchanges. My noble friend Lord Cameron covered the need for broadband very well. However, I recently heard of a business local to me that received a quotation in excess of £10,000 to complete the link from the exchange to the business. That is not an incentive for a business to develop in a remote area.

I also want to cover transport, but would prefer to come back to it later.

Over the next few years, the single farm payments system is being reviewed, along with other European funding. I urge the Minister to focus on discussions with the devolved Governments to discover exactly how remote communities can be best served before accepting any agreement from Europe, to ensure that we can rebuild our remote communities and stop further deterioration. Too often schemes are produced that focus not on the business but on the community, which can often result in an excessive supply of play areas and similar things, but without the business development there will be no young people to enjoy the playground. Without a doubt, successful communities rely on successful business. Perhaps we should look at local abattoirs built on greenfield sites and subject to full, up-to-date European regulations, which would demonstrate a complete interlink between upland food production and would, without doubt, be better for the welfare of the animals, which are otherwise transported for long distances.

Returning to transport, I ask the Minister to indulge me because he will know that the town I am talking about is in Scotland, which is under a devolved Administration. Stranraer is two hours west of Carlisle, is surrounded by sea on three sides and is in an area dominated by farmland. The only industrial employment comes from a cheese factory and two ferry ports. It definitely qualifies as a remote community. However, my example can be applied to many remote towns and villages, where the formula can be adjusted but the results are the same if one of the principal employers ceases. About five years ago, an economic assessment was commissioned to study the effect of the withdrawal of the ferry services on that route. Stranraer already had an unemployment rate of over 5 per cent, and it was predicted that unemployment would rise to almost 15 per cent.

The key to the survival of Stranraer was the ferry ports, and the withdrawal of the ferry companies was a real possibility, entirely due to the condition of the road approach. There are other crossings to Ireland, but none as short and therefore as fast. The road to the town and port is the A75, which is also a trans-European network link from Ireland to mainland Europe through Scotland and England. Although of European merit, it is funded by the devolved Scottish Parliament, which did not consider it to be a priority. As a result of lobbying the Scottish Parliament, some road-widening improvements have taken place, but not nearly enough. However, Stena Line, one of the ferry operators, now has the confidence to invest almost £240 million in the sea route, securing for the time being the future of this one remote community. This money has been spent on building a new port facility and purchasing two new ships. It demonstrates the welcome and continued interest in the British maritime industry of Dan Sten Olsson, the managing director of Stena.

While not asking the Minister to respond on what has happened in the past in Scotland, I ask that, when the Government reorganise whatever may follow the Barnett formula, special attention is given to funding for devolved issues that affect all the regions of the United Kingdom-for example, road links-and that may not be a priority for the devolved Government. If not, other remote communities caught in the middle will continue to suffer.

If he wishes, the noble Lord can take the view that that is a massive justification for a non-elected legislative Chamber; I am bound to say that I do not. I have a simple view on this, and I have persisted in it for many years now: if you are a legislator, you should be elected by the people who are going to be affected by your legislation. It is a simple proposition.

I am pleased that the Government, with the extraordinary coalition that they now have, seem to have come to the conclusion that a mainly elected second Chamber is desirable. I share that. What we need in our constitution is a predominantly but not exclusively elected second Chamber. I am fortified in that, because that is almost the wording that John Smith used to describe what Labour Party policy was supposed to be when he was leader of the party, and that is going back a very long time. The noble Lord, Lord Strathclyde, is now in exactly the same position on this issue as he was in 1997 and 1998. His position has not moved on, but it has to.

I support the idea that there needs to be legislation, but I have one or two reservations. The first concerns the powers of this Joint Committee. For the life of me, I do not see how it is going to produce a Bill. I do not see how you could conceivably instruct parliamentary draftsmen when there may be opposition on that committee. If we get a piece of paper in our hands that says, "This is the Bill", I shall be extraordinarily surprised.

I shall make just two further points, because I am anxious to sit down within my seven minutes. It is easy to see the ends that one wants. Very often we get to this stage of the negotiations: you agree what you want to achieve, but how on earth do you get there? We had this the other day on the Barnett formula-everyone on the committee agreed that it ought to be reformed and what we ought to see, but how on earth did we move from were we were now to where we wanted to be?

I emphasise that the transition provisions will be crucial to this enterprise. I follow the noble Lord, Lord Strathclyde, on that. Many of the people in this House are life Peers who came here on the basis that they were here for life. Maybe they will not be-I do not know-but it was a legitimate aspiration on their part, given the way that they were approached and introduced. Personally, I had a fond notion that I would be staggering into the House on my Zimmer frame at the age of 85, and I sincerely hope that that will still be the position. I do not know how the grandfather concept is going to work, but I look forward with great interest to hearing about it. The transition is very important.

The second thing that is important is the system by which Members will be elected to the House. I am sure that this will shock the noble and learned Lord, Lord Howe, and many other Members of this House, but I am totally heretical about this: it should be an election on the basis of constituencies, rather like the present European constituencies, and it should be done by PR. Elections to this House should be fixed and they should not be coterminous with elections down the other end.

In terms of the health of British democracy, the situation in which this House can provide a better check upon the Executive because of the way in which it has been elected, and because of the composition of this House compared with the composition of the other House, is a greater check on the power of the Executive than the glorious speeches that we make in this Chamber and the glorious debates that we have. If you want to check the Executive you have to have power, and in order to have power you have to earn it-it has to come from an election. It has to have a legitimacy that arises from the people.

I hope that this venture moves, although perhaps not too quickly, towards fruition. I will give it my support. I hope that at the end of the day this House will be more efficient and effective, it will be heard more and it will be more democratic and more justified.

My Lords, when allocating resources in the future, will the Government take into account the recent recommendations of the Select Committee on the Barnett Formula, which said that Scotland had far too much, Wales had far too little, Northern Ireland needed a little more and England needed some more?

To ask Her Majesty's Government what action they propose to change the Barnett formula.

My Lords, I, too, welcome the new Ministers and congratulate them on their appointments. However, I wish to refer to the noble and learned Lord, Lord Wallace of Tankerness. He and I sat next to each other in Cabinet for five years in a coalition Government-although one of a different hue-in Scotland. I formed a very high regard for him during that time, for much of which he was Minister for Justice and I was Lord Advocate. Jointly we had responsibility for the justice system and faced some very difficult issues. I hope that I do not embarrass him by saying that I always thought there was very little political difference between us, but it is perhaps a measure of the times that we find ourselves so far apart across this Chamber. He is very highly regarded in Scotland across all the political parties and his appointment will be warmly welcomed.

In a recent speech, the Deputy Prime Minister promised us the greatest set of political reforms since 1832. Quite why he chose 1832, I was not clear, because many historians would say that 1867-although of course that was a Tory Administration-or the enfranchisement of women were more significant. He could also have mentioned the more recent reforms: the establishment of the Scottish Parliament; the National Assembly for Wales; the Good Friday agreement, which led to the new constitutional arrangements in Northern Ireland; the Mayor of London and the London Assembly; proportional representation for the European elections; the establishment of the Supreme Court and the new arrangements for judicial appointments; or the start of the reform of this House. Indeed, in that speech, unless I misread it, the only reform of the past 13 years to which he made any reference was the Human Rights Act.

Had the Deputy Prime Minister acknowledged those reforms, he could, with justification, have claimed some credit for his party in the passing of many of them because the Liberal Democrats added considerable intellectual muscle and political weight to the arguments. However, he eschewed any such claim, perhaps because they were all opposed by the very party with which they are now in coalition, or perhaps because he did not want to acknowledge any achievement by the Labour Party. Well, I am happy to take the credit-collectively, of course-for the Labour Party.

The attempt to airbrush out 13 years of constitutional development is, I believe, worrying because it fails to recognise the very profound constitutional developments that have happened, the way in which the constitution has changed and, indeed, the way in which politics themselves have changed. The relationship between the United Kingdom Government and Parliament and the devolved Administrations, and more widely between the nations of the United Kingdom, will be of great significance during the course of this Parliament, however long it lasts.

The Prime Minister has said that the Government will rule Scotland with respect. In my judgment, he got off to a good start by visiting Edinburgh, Cardiff and Northern Ireland and attempting to establish good relations with each of the Administrations. However, it will be on their deeds that the Government are judged, not on style and rhetoric.

With the noble and learned Lord, Lord Wallace, I served on the commission under Sir Kenneth Calman on Scottish devolution, so I welcome the announcement that the Government will bring forward a Bill to enact the commission's recommendation. I worry a little about the timing of the introduction. We know that the elections are due in May next year so it would be right and proper if these new powers could be in place for the new Parliament and Executive. Will the Minister let us know whether the timescale of the Bill will meet that timetable?

Central to the Calman proposals are tax and borrowing recommendations. In the Scotsman yesterday, the Secretary of State, Danny Alexander, was quoted as saying the he could not confirm that the recommendations would be in the Bill. If they are omitted, that would be extremely serious. My view is that the Government need not bother introducing the Bill in that case because those recommendations are so central to it. I worry that that is the start of a rearguard action by the Treasury to roll back on the commitment given by the previous Government that they would enact, more or less, the recommendations on tax and borrowing. The Secretary of State, to be fair, says that he has to speak to Scottish Ministers, which is well and good, but he and the Government collectively should know that on constitutional issues the Scottish Ministers do not speak for Scotland. The Scottish Parliament is representative of Scottish opinion and the SNP Government are a minority Administration. The Scottish Parliament co-sponsored the Calman commission and welcomed its recommendations. I remind the Government that the Labour Party fought the election on a promise to implement Calman and won 42 per cent of the popular vote in Scotland.

In speaking to Scottish Ministers, will this Government, like the previous Government, first speak to representatives of the parties, including my own Labour Party in the Scottish Parliament, and take their views on board? When will we get an announcement about what is to happen on tax and borrowing powers?

There are three areas on which we need a more coherent United Kingdom approach. One is the West Lothian question and I note the Government's intention in relation to a commission on that matter. I am sceptical whether there is an answer but I am happy to look at it. Secondly, the Barnett formula on funding needs to be on a UK-wide basis. Thirdly, I doubt that in Scotland there will be a referendum for independence because of the arithmetic within the Scottish Parliament. We ought to set down a principle that there should be no referendum unless there is a majority in the Scottish Parliament who want it. The time has come for a written constitution that sets out not just the relationship between the various parts of the United Kingdom but between the other institutions of the United Kingdom.

My Lords, like all noble Lords I am grateful to the noble Lord, Lord Richard, for having chaired the committee and produced this report and to all members of the committee, who have worked so hard on this important topic. My noble friend indicated that he thought that I might have a difficult task at the Dispatch Box responding to the report. I always have a difficult time at the Dispatch Box, but particularly when dealing with Select Committee reports. The great advantage of the operation of Select Committees is that a cross-examination has already gone on during the process, so the Government line has been well identified long before the committee concludes its report. Furthermore, the Government's response in formal terms-prosaic, perhaps, and a little limited for some tastes-is always published before we have the advantage of the debate. The great danger from this Dispatch Box is that I might mechanically read out and reflect on the paragraphs already submitted in the Government's response.

If I am to retain any reputation at all for responding to a debate, I propose not to follow either of those formulae but to respond to the actual points made in the debate and deal with the issues that have been raised rather than spend a great deal of time advocating a Government position that is all too clear and is well known from the documents already presented.

Noble Lords have quite clearly cohered around certain significant positions. In looking at those positions, I hope to be able to throw some light upon the situation and perhaps give a greater note of optimism about the position than has been reflected in the course of this debate. Divergences among the Members of the Opposition about their economic policies has stood out-divergences that are reflected in approaches to this issue as well. When David Cameron went to Scotland he indicated that he did not foresee-I concede that this was a couple of years ago-any real changes with regard to the Barnett formula. I wonder why that speech was made in Scotland. His speech on his most recent visit to Wales was full of suggestions that, in fact, the Barnett formula was out of time and that there was a need for significant reform. I wonder why that speech was made in Wales-I give way to the noble Lord.

My Lords, in view of the hour and the lengthy list of speakers who have indicated their interest in what is undoubtedly a very important report on the Barnett formula, I propose to your Lordships' House that we abandon the debate that is timetabled. I give an undertaking to the House that I will use my very best endeavours with my colleagues in the usual channels to ensure that we secure for the House the opportunity to provide a fulsome debate on the Barnett formula on another occasion. When we timetabled this business, we did not reasonably expect that it would take quite so long to complete the Report stage of the Bribery Bill, but unfortunately that has transpired. We will have to retreat and find another opportunity to debate the Barnett formula.

My Lords, I confess to a number of interests. I am president of Alzheimer Scotland and of Scottish Care, and I do some work with the English Community Care Association.

That being said, some of us have waited 10 long years. We looked for a response from the Government to the royal commission report on The Funding of Long-Term Care for the Elderly, and response had we little. Indeed, it was so little that a rump of Members, after five years, sent a reminder to the Government. The message of the reminder was, generously I thought, "Well, you don't like what we recommended-have you an alternative?" They had, after a fashion, but I characterise it as follows: it promoted a postcode lottery; there were thousands of complaints to the health ombudsman, who in key cases ruled against the Government; resulting compensation payments ran into hundreds of millions of pounds; there was much articulated discontent; and for many real, often silent, suffering and puzzlement because they could not understand and work with a far too complex and unfair system. There was, I would suggest, no recognisable policy, but just a series of unfortunate happenings.

As a result, one has reduced hopes and expectations. Some of us had hoped, hearing that a Bill was coming, that we might at least have half a loaf; better than no loaf at all, as the old saying is. Perhaps the Wanless report offered more than that, but it was turned aside. However, now we have a Bill, admittedly a short piece-indeed, one might say, a modest piece, something of a morsel, perhaps even a crumb. Unfortunately, no longer a crumb from a rich man's table, but I shall return to that. What about this morsel? Is it to be rejected, to be postponed until it is stale, and in its staleness nibbled into extinction by the mice rumoured to be invading the Back Benches of this House? What are we to make of this morsel, this crumb, this "legislative opusculum", as one of my friends put it? In terms of evaluation, I am among those who welcome this morsel, but noble Lords must understand I am a hungry man. I digest the crumbs with alacrity, and I do not want to leave them to go stale for the mice to nibble into extinction.

I hasten to add that the most important feature of this Bill is not on the face of it. I hope that the Minister will speak plainly and put things on the record on the critical element, which is the context and promise the Bill offers of a new direction of travel towards a national care service. I know there are many problems with setting that up-there were problems in setting up the health service-but are they problems to faced, or to be recounted and the Bill withdrawn prematurely?

I remind the House what a national care service minimally involves. It involves a single point of entry to a system of assessment of need, not to a bureaucracy or clutch of different funds which you might raid if you have expert advice but not if you have not. It involves a single point of entry. When the royal commission sat, this was one of the biggest cries that we heard from those whom we met in large numbers throughout the country. I know that there are dangers-my noble friend Lady Murphy has pointed these out very fairly-but it needs a single set of criteria of eligibility, pointing towards a degree of equity and fairness. Without a single framework, we will be back to a postcode lottery and divisions that we should be fleeing from. Such a service needs a single point of commissioning. I came to realise that this is what all the talk about personalisation of the service means. The person in need of support-the carer-or the person needing care needs to talk to an individual about what is to be commissioned and what the needs are.

Behind this, it needs a single budget-a budget that will reflect that need. That budget will need to be portable so that you can, if necessary, move around the country. This point was made very well by the noble Baroness, Lady Campbell of Surbiton. The provisions made will then follow you, and you will not enter again the morass of renegotiating on five or six different fronts. It is important to treat the needs of older people equitably, with no artificial distinctions set by the way in which we administer the money and care. There are three different sources of funding for care for older people: the health service, local authorities and the Department for Work and Pensions. Are these flowing in the same direction? I have not seen the evidence, but I have seen plenty of contrary evidence. The Government have been unwilling to tackle a single budget. It is too difficult. There has been sucking of teeth up and down Whitehall as the Government say "How could they suggest such a thing?". I will listen with great interest to what the Minister has to say about what many of us are currently saying to her about the shape of a national care service and its preconditions.

There are plenty of counterarguments; we have heard them all and some are very good. I pay tribute to the noble Lord, Lord Best, who is unduly modest. The sort of schemes being outlined by, for example, the noble Baroness, Lady Gardner of Parkes, are of the type that he was instrumental in putting together when running the Rowntree trust. A very large sum of money-over £20 million, I understand-was invested in creating a care village, effectively, where one could do exactly the sort of thing that the noble Baroness, Lady Gardner, rightly holds up as a good example. The noble Lord knows what he is talking about. What he says about housing is very important; I am completely with him on all of that.

We have heard much about the bad legislative and governmental process. I am no more than a spectator to personal grief within the Labour Party on this. What grief and agony transports between individuals there is a matter for consenting adults in private, rather than in public. Of course the Bill comes from a bad legislative process. Of course it is inadequate. However, it is not the first Bill of which that has been said and doubtless it will not be the last. It must be improved massively-of course it must-but it will not be improved by being put on the back burner. I say to the right reverend Prelate the Bishop of Norwich, who suggested that waiting and considering are important: of course they are. However, we do not all have the biological constitution of Methuselah. We have waited a long time already. Perhaps we would like to see some action that might lead to a policy. There are those who say of such a wait that the amendment that might be tabled is not a wrecking amendment. They have said it in an email that I received, as, no doubt, did the Minister. If I were a cynical man, I would say, "Pull the other one", but I am not so I will not comment.

Those who argue against the Bill rightly raise questions of affordability. This is not affordable; there is much that we are doing that is not affordable. It is suggested that in Scotland we are talking about affordability again. We have never stopped talking about affordability. It has been a constant discussion and so it should be. However, if we are talking about what is and is not affordable, why do we seem always to start here? We can whip up a headline about the cost of long-term care of the elderly. I give a few alternatives because affordability is often assumed to be within the constraints of these three sources: the National Health Service, local authorities and the Department for Work and Pensions. This country's financial position transcends that. We should look more broadly at priorities across government, not within artificially constrained government departments.

On affordability, national identity cards are not at the top of my list. These were initially budgeted at perhaps £1 billion to £3 billion but the LSE came up with an estimate of £18 billion. These things are very elastic. There is our current foreign policy and the associated defence costs. I do not suggest that we stop having decent defence, but it is a matter for discussion. Malcolm Rifkind makes that point in the Times today, stating his own conclusion. These are major issues. Are we overextending ourselves or are we not? This should be talked about when we discuss affordability and priorities. The bureaucratic costs, including consultancy in the current health service structures, are massive. Rewards and payment for general practice have escalated without any obvious benefit. I speak as someone who looks for a general practitioner sometimes in vain. The cost of merit increments for consultants is massive for the health service; is it something that we can continue to operate with? I am sorry to any consultants who happen to be present, but it is an issue of affordability. We are talking about priorities. Dare I even add public sector pensions, which doubtless many of us in this Chamber benefit from? Finally, I add to my short list-noble Lords will have their own-an elected House of Lords, which will cost more money but seems to be pushed up various groups' list of priorities.

Cost is now a matter of priorities across government. That is the one thing that we are learning from the huge financial constraints that we find ourselves under. We cannot opt out and say, "Just a little bit here or a little bit there". We have to look again. I am in no doubt that the outlook for the next few years is very sombre. It will be a time of real cuts, but we are looking for a national care service and a means of dealing with all the problems that have been paraded around the House today about how we are not serving the needs of the elderly well-and we are not. If we are looking for a solution to that, I suggest that we incorporate the costs of providing for the needs of the elderly in a single budget, covering the health service, the Department for Work and Pensions and local authorities. Then we sit down and ask where the cuts will fall.

At the moment, folk see the rather tall poppy of care of the elderly threatening to grow again and want quickly to slash it and cut it down. It should be incorporated with other matters and then a decision taken. In my view we cannot afford the health service that we have, but when the cuts come-as I believe they will-they should not start with the elderly before looking at the rest. There should be a rounded discussion. I am not asking for false and unsustainable prioritisation of the needs of the elderly; I am asking for them simply to be taken into the same pot. However the decision is made, and by whatever form of deliberation, fairness, equity and rationality should lead the discussion.

I did not want to talk about Scotland but I have been goaded, or prompted, into it. I am sorry; I have to do this for just a couple of minutes. I sometimes think that I hear the following, adapted from Animal Farm: Scotland bad in the area of care for the elderly, England good. Perhaps that is occasionally permissible and, sometimes, I regret to say, justifiable in Wembley or Twickenham, but is it fair to give that impression of what is happening in Scotland? There is not a sense of national catastrophe, as there has been in the hysterical language that we have heard. The myth is that Scotland is a spendthrift country which has become more profligate since devolution. The fact is that at the time of devolution-and, indeed, 10 years ago in 1999-Scotland spent 16 per cent more per head on public expenditure. In 2009, Scotland still spent 16 per cent more. There has been no escalation as a result of that policy of devolution. Scotland operates within a cash-limited budget. English public expenditure has increased by exactly the same amount-16 per cent. It is true that it starts from a different baseline, but it is more or less true that there has been the same increase for Wales and Northern Ireland. The rate of increased spending is no different in Scotland. The idea of profligacy is not correct.

The reason that Scotland spends more is of course due to the Barnett formula, which, as we have learnt this afternoon, was introduced by a Labour Government who possibly were advised by the noble Lord, Lord Lipsey. If you want to tackle the larger expenditure on the public sector, look at the Barnett formula. I am open to that as a suggestion-indeed, I make it. It would be a very odd policy to say to Scotland, "We've got this formula; it's a bit funny but we are not willing to change it. You get all this extra cash, but you may not spend it on social care for the elderly. You can spend it on anything else that you like". Scotland lives within cash limits, just as everyone else does. That means that it has to take decisions not to do things that we are going to do down here.

I shall give a good example. Last year, we improved what I can only call the raising of the school leaving age in England. It was suggested that that will cost £750 million in the first year of operation. I bet that that is an underestimate. While it may be something that England can afford, Scotland cannot, because it is spending its money in other ways. There are other aspects of expenditure in Scotland that I could examine, but I shall not because I have used up my time.

This Bill points forward. It is weak, it is inadequate, and it has been presented at the wrong time-it should have been put through 10 years ago-but it is the best crumb that I have, and I am going to live with it. I commend it to noble Lords.

To ask Her Majesty's Government whether they have any proposals to amend the Barnett Formula.

My Lords, I was pleased to hear the very good maiden speech of my fellow countryman, the noble Lord, Lord Martin. We have had several meetings. As chairman of the Clydesdale Bank, I was able to welcome him as the first Speaker of the House of Commons who had ever been a customer. I am pleased that he is here with us.

I suppose that, at the beginning of a speech such as this, it is good to congratulate the Government on something that they have done. I am pleased to do that. Their decision, after a long gestation period, to build new nuclear power stations is extremely responsible. They have faced down criticism of nuclear power, which I happen to believe is essential for keeping the lights of the United Kingdom burning and the factories with enough power to exist.

However, given that I come from north of the border, I am dismayed that the Government have not looked at the terms of the Scotland Act, which transferred to the Scottish Parliament powers over planning on matters such as power stations. This means that instead of being an exporter of power through the interconnector from Scotland to England, which is the case now, the reverse will happen, because apparently no new nuclear power stations are scheduled to be built in Scotland as a result of the Scottish nationalist Government's views on nuclear power. This is wrong, and both the present Government and any future one should consider amending the Scotland Act to allow strategic industries such as nuclear power to come under the control of Westminster as opposed to a regional, devolved Parliament. The decision of the Scottish Government to remove any chance of nuclear power stations being built in Scotland, particularly to replace ageing ones like Torness in East Lothian, which has been very successful, is wrong. I do not see why those of us who live north of the border should be disadvantaged in this way, particularly when one considers how Scotland led the way on nuclear power at Dounreay and other places.

Have the Government any plans to reconsider the terms of the Scotland Act regarding strategic planning for nuclear power stations north of the border? It may be helpful to remind the House of a recent report from the respected Fraser of Allander Institute, which warned that Scotland was facing a deeper recession than the rest of the United Kingdom and will take longer to recover. It predicts that unemployment will be significantly higher than previously forecast and that the Scottish economy will grow by just 0.1 per cent next year. It is not too late-surely Westminster understands the need to encourage the building of a successful nuclear industry in Scotland. After all, jobs are scarce. New jobs and employment in Scotland would give the flagging economy a welcome boost.

I declare an interest as a director of a medium-sized firm manufacturing in Scotland. I welcome my party's commitment to helping us to survive and flourish, hopefully by reducing corporation tax and certainly by not increasing national insurance contributions. Increasing taxes on small business stifles enterprise and employment. Fraser of Allander points to the fact that it will be another three years before Scottish economic output reaches pre-recession levels, partly because Scotland is more reliant than other parts of the United Kingdom on the public sector. Against that background, I maintain that those of us involved in the private sector must drive the recovery. The Scottish National Party Government must stop wasting time and money on a referendum Bill to break up the United Kingdom, thoughts of which destroy confidence-which, as my noble friend Lord Wakeham said, is so important at this time.

On the subject of Scotland, another issue has already been mentioned in this debate. An extremely good, unanimous report from your Lordships' House on the Barnett formula was published on 17 July. It is a weighty document, and to have a unanimous report on this subject is a very good thing. In the run-up to a general election, something should be said by the Government and the Opposition about the Barnett formula. It is totally outdated. It was good at one time, but with changes in population and need these matters must be reviewed urgently.

I turn to my second subject, which no doubt the Government will not welcome me talking about-I got a pretty dusty answer on pensions last time I spoke in one of these debates. Offering final-salary benefits means serious cash commitments for a pension scheme. In a recession this means that companies feel that they are running into grave trouble because of the enormous burden that they have to face. The schemes were set up to provide members with a pension based on final salary, as opposed to the defined-contribution schemes that rely on the performance of the stock market. The threat of closure is a blow to private sector workers, many of whom are having to delay their retirement to earn the extra money needed to top up poorly performing schemes. I ask the Government: if this is happening in the private sector-and it is-what are they prepared to do about workers in the public sector who continue to enjoy gold-plated pensions? Recent figures suggest that town hall pensions cost council tax payers £300 each per year. I believe that local councils paid out £5.4 billion in pensions to retired council workers in the tax year ending 2009-almost double the £3.5 billion paid four years ago. Do the Government think that this is fair and reasonable to all workers? I do not and I would like to see action taken.

My Lords, I apologise to the Minister for my absence at the start of the debate. I was plunged into the crisis in Cumbria in order to respond to the Government's Statement at that time.

I wish to concentrate on eight words from the Queen's Speech. They are:

"will continue to devolve more powers to Wales".

I ask the questions: how and when?

Devolution in Wales is undoubtedly a success and the current opinion polls confirm it. I have been involved in campaigning for a Welsh Parliament since the 1950s and I took part in the 1979 and 1997 referendums. Progress was so slow, frankly, as to be painful. Indeed, it was only the door opened by the agreement between my noble friend Lord Maclennan and Robin Cook which produced the possibility of a referendum on an Assembly for Wales. The Government of Wales Act 1998 was embryonic. There was no separation between the Assembly and the Executive but, in their coalition with Labour, the Liberal Democrats advocated a commission to investigate this. The Richard Commission under the noble Lord, Lord Richard, produced a splendid report containing an ideal template for a Welsh Parliament, with primary legislative powers, an 80 Member Assembly and election by single transferable vote.

I congratulate the noble Lord, Lord Richard, on the wonderful work that he did at that time. Unfortunately, the Welsh Assembly Government and the Wales Office lacked the courage to incorporate those principles into the Government of Wales Act 2006. They settled for a compromise with the Welsh Labour Party, some Labour MPs being opposed to more powers and some in favour. The current system of legislative competence orders is cumbersome and time-consuming, and subject to veto by the Secretary of State. It should be a fundamental principle that powers for domestic legislation should reside in Wales, not in Westminster. If we have a Welsh legislature, why does it not have the competence to legislate for functions in Wales without seeking approval for every dot and comma of a legislative competence order-for such things as rubbish disposal and education-from Westminster? It is demeaning.

We must now, 10 years after the Assembly's creation, introduce the Scottish model of governance, whereby certain domestic functions are written into the competence of the Welsh Assembly, as specified in the Government of Wales Act 1998 and reinforced by the Government of Wales Act 2006. Education and other important matters should surely be within the total competence of a Welsh Assembly, with certain functions being excluded as in the Scottish model; for example, foreign affairs, defence, social security and other matters. It is crucial, too, that the Barnett formula is resolved on a basis of needs. The Barnett Formula Select Committee in this House has endorsed that. We believe that it should go ahead, and I hope that it will.

The current position creates economic disadvantages for Wales. Its gross domestic product has fallen to less than 80 per cent of the UK average. Its average income is £4,000 less than that of the UK, and much less on a family basis. The resolution of these financial problems is vital. We need economic and infrastructural support which we do not have.

We should introduce a Bank of Wales. There is no better time to do it because the Government own two banks. Such a move could be greatly advantageous, because we have a public sector-based economy, with many people reliant on it. When the cuts come after the general election, we fear for our employment in Wales. Wales is crying out for private sector employment. Progress on making available risk capital and working capital for business start-ups has been lamentable. The encouragement of local entrepreneurship is vital. Far too many branch operations in Wales are far too easy to close down. Wales needs its own banking sector to help create Welsh-based industries. The Labour Government have missed out in their inability to deploy sufficient Objective 1 capital into the private sector. However, Wales also needs co-operative enterprise and companies with employee share-ownership. It is no fluke that the original John Lewis was a Welshman. We need legislative powers to create that kind of economy.

We now have an opportunity, because on the same day as the Queen's Speech, which devoted a mere eight words to Wales, with a vague reference to devolving more powers, the report of the All Wales Convention was published. That substantial document, produced by a convention group chaired by Sir Emyr Jones Parry, came out unanimously in favour of more powers for the Assembly and concluded that a referendum, provided for in Part 4 of the Government of Wales Act 2006, could be won. What more evidence do the Government require? The report states at the beginning that the choice for the public debate focused on two issues:

"Firstly, the current arrangements, where the National Assembly for Wales acquires powers to make laws step by step, with the permission of the UK Parliament"-

which is the current situation-

"Or for the National Assembly for Wales to get powers to make laws in all 20 areas all at once after an affirmative vote in a referendum".

That is backed by the Jones Parry report.

A referendum should be held in the autumn of 2010. I believe that it will be won and that Wales will get a legislature with full primary law-making powers based on the Scottish model. Now is the time for boldness to secure justice for Wales.

Listen, my Lords. I have a definition of being a Chief Whip:

"Being chief whip is a case of endeavouring to give information early and being very pleasant to people".

That is the opinion of my noble friend Lord Shutt. It certainly fits, especially with an enforcer like Josie.

My first and most pleasant duty is to add my congratulations to the proposer and seconder of the humble Address. The noble Baroness, Lady Symons of Vernham Dean, as the noble Lord, Lord Patel of Bradford, reminded us, has had a most distinguished trade union career, followed by an equally successful ministerial career. She is now one of the grandes dames of the House, sitting usually on the Privy Council Bench like a Baroness Trumpington in waiting. The noble Lord, Lord Patel, comes to us with an outstanding record of community and educational service on both sides of the Pennines. I can bring to the House the information that that record is approved by no less a person than the noble Lord, Lord Greaves, of Pendle. Ministers will know that it is not the easiest thing to get the seal of approval from the noble Lord, Lord Greaves, of Pendle. Indeed, successive leaders of the Liberal Democrats have found that it is not that easy.

Although he is no longer in his place, I shall use this opportunity to welcome back to the House the noble Lord, Lord Barnett, who gave us a scare a few weeks ago. However, it has now been made clear to him that in no way can he leave us until he has given us the answer to the Barnett formula.

One of the pleasures of speaking in this slot at the very beginning of the Queen's Speech debate is that it gives me the opportunity to follow my very good friend, the noble Lord, Lord Strathclyde. As he has reminded us, it is his 11th speech as Leader of the Opposition. That continuity encouraged me to do a little historical research. The noble Lord, Lord Strathclyde, has now been Leader of the Opposition for longer than the 10-year record in the 20th century of the noble Lord, Lord Richard. I researched further and found that only Lord Derby in the 19th century spent longer as opposition leader-17 years. Tom, I tell you with all sincerity that there are many in this House who would like to see you go on and beat Lord Derby's record.

Last year I introduced the concept of "boing" into our study of politics. For those noble Lords who were not awake at the time, "boing" is the phenomenon, rather like the echo of Big Ben across the Thames from St Tommy's hospital, whereby a good idea from the Liberal Democrats is played back a short time later as government policy. The concept is now so fully accepted that I understand that the noble Lord, Lord Norton of Louth, is running seminars on it at the University of Hull.

This year I should like to bring another concept-"pouffe". "Pouffe" is what happens when a notable talent joins the Prime Minister's Government as one of the GOATs. They appear at the Dispatch Box; we all admire them-and then "pouffe". The noble Lord, Lord Jones-"pouffe". The noble Lord, Lord Carter-"pouffe". The noble Baroness, Lady Vadera-"pouffe". The noble Lord, Lord Darzi-"pouffe". The noble Lord, Lord Malloch-Brown-"pouffe".

There are two notable exceptions. Who can read the first lines of the epic poem "Casabianca" without bringing into mind the behaviour of the noble Lord, Lord West of Spithead? We all know the first lines:

"The boy stood on the burning deck,

Whence all but he had fled".

The admiral, good sailor that he is, has clearly decided to go down with the ship. In contrast is the case of the noble Lord, Lord Sugar, who seems to have gone from landing stage to lifeboat without bothering to join the ship at all. [Laughter.]The Benches opposite are not supposed to laugh at that. The noble Lord, Lord Mandelson, is not laughing.

The sad fact is that the Prime Minister is now a very lonely goatherd. There is a death rattle about the Government that the gracious Speech did little to dispel. On both the economy and constitutional reform, there is a desperate scramble to get on the record intentions to do things that have been left undone. On the economy, recent events have made a mockery of the Prime Minister's hubris in his decade-long claim to have removed boom and bust from the economic cycle, based on a housing bubble and loose credit. On constitutional reform, the Government do not have even the fig leaf of world events to cover their failures. It is almost beyond belief that a Labour Government, equipped with large parliamentary majorities, which would have been increased further by support from the Liberal Democrats, waited until the last six months of their third Parliament to bring forward ideas on electoral reform, Commons reform and Lords reform.

The rush of good intentions is easy to understand. The electorate now see clearly that reform is a matter not just for anoraks who attend Constitution Unit and Hansard Society seminars. People now understand that there is a direct linkage between the quality of the rules that govern our politics and the quality of governance that such rules provide. As one newspaper put it the other day, if the Conservatives emerge from the upcoming election with a 5 per cent lead in the popular vote but without a parliamentary majority, even they might concede that the present voting system frustrates rather than reflects the will of the people.

As for Lords and Commons reform, the sad truth is that this Labour Government have missed the boat and the Conservatives have never wanted to catch it in the first place. Voters in the general election will be left in no doubt that only a vote for the Liberal Democrats will guarantee that electoral and parliamentary reform are pursued with the vigour that the present crisis of confidence in our politics demands.

In the mean time, we will look at the constitutional measures in the Queen's Speech and those presently before Parliament with an eye to the national good. We are not interested in simply making running repairs to the reputation of a Government who have spent 10 years arguing in Cabinet and dithering in government.

As my right honourable friend Nick Clegg has pointed out, this gracious Speech is no more than a charade concocted by a Government who have run out of ideas but who dare not go to the country. As a result, we find ourselves in a political never-never land of the Government's own making. We will co-operate with those measures where urgency is required-for example, the digital revolution mentioned by the noble Lord, Lord Patel. The technological changes around it do not work to a government or parliamentary timetable, so we will help where we can with the Digital Britain Bill.

Let me lay down a marker, however, to both Labour and Conservative parties: whatever Faustian pacts for electoral support they try to make with international media moguls, we on these Benches will fight tooth and nail to protect the integrity of our public service broadcasting. The battle will go beyond the Digital Britain Bill and the general election and into the next Parliament, but I am grateful to Mr James Murdoch, the Sunnewspaper and the behaviour of Fox News in the United States for so clearly drawing the battle lines. I find it shaming to watch the government and opposition parties fawning over people to whom Mr Baldwin or Mr Attlee would not have given the time of day. I know that times have changed, but being the best politician a media mogul can buy does not seem to me to be a qualification for high office.

I have reached the point in my speech where I usually promise the Government support where we think that their proposals are good and constructive criticism where we think that they are bad. However, over the next week, my colleagues will use the debate on the gracious Speech to look beyond this charade within a charade. We will expose the quite literal bankruptcy of the Government's case, but we shall also point out that a Conservative Party that aspires to lead must explain how it intends to defend Britain's interest in trade talks, climate change, energy security or the war on drug trafficking, people trafficking and terrorism while alienating itself from the broad centre right in Europe and making common cause with its more eccentric fringes. Indeed, there was a timely warning on that from the Lord Mayor in this week's Mansion House speech.

My party has a more solid bedrock of support than it has had in over 80 years. It has demonstrated its capacity to take responsibility in government in six out of our eight largest cities. It has been shown to be right on the major issues of the day-on the environment, Iraq, the economy and the urgent need for radical constitutional reform to bring fair votes and a clean Parliament. Like the noble Lord, Lord Strathclyde, we will do our job on these Benches as long as the Government keep us here, but we are ready to take our case to the country whenever the Government dare to go. In the mean time, new Labour can take satisfaction in the fact that the song that it came in singing is now sung by the whole country-"Things Can Only Get Better".

My Lords, I thank the noble Lord, Lord Vallance, for what he has said and how fairly he has summed up the unanimous views of the sub-committee, on which I was happy to be able to participate. I will not deal with all four of the issues with which we dealt; I will deal just with pensions. As always, we did not look at these matters from a political standpoint. We did not have a Minister before us. We had only officials. I say "only", but we had the people who matter on these occasions. HMRC was unable to answer for us what is happening, for example, on the effects of the policy—although we were not looking at the policy— on savings, on pensions and on the future of people who save. I declare a past interest as a substantial beneficiary, like many in professional activities, who invested through annuities, and received tax relief and benefits from it. I thank whoever was in charge at that stage.

After our committee had met, I put down a Written Question on whether the Government agreed with the CBI, which said that there was an effective tax rate of 150 per cent in some circumstances. The answer from my noble friend was that they did not agree, but it was a somewhat less than absolutely clear reply. He tried again this evening, but he did not altogether convince me then either. When he winds up, I should like him to have another go at perhaps 149 per cent or 100 per cent. What is likely to be the effect on, possibly, a small number? That small number is not unimportant because professional men and women prepare for their retirement in a variety of ways. This way is very important both personally and, from the point of view of the country as a whole, it is beneficial. I hope that my noble friend will give us a clearer reply.

However, I mainly want to say a few words about the economy. As one recognises on these occasions, the noble Lord, Lord Lang, made a great deal of his criticism of the present economic position of the country. I listened carefully to what he had to say—but unlike the unanimous views of the Select Committee, for which I thank him, on the Barnett formula where I absolutely agree with what it said—but tonight I found him less than constructive in his alternative proposals to what the Government are doing. No doubt, future speakers—there seem to be a great number of them on the Opposition Benches—will give us the benefit of those constructive proposals. The noble Baroness, Lady O'Cathain, is pointing to this side of the House, which I appreciate, but the Government have got my noble friend Lord Sheldon and I, and they are more than happy with the two of us.

On the economy, I very much agree with what the Government are trying to do. They have not, during the course of a recession, started to cut public expenditure and perhaps increase taxes. That would not reduce debt; it would be more likely to increase it. I very much agree with the Government, but that is about the only thing on which I will agree with them tonight. Precisely what do they propose to do—I know that my noble friend likes to be precise on these occasions—when the recession comes to an end? Incidentally, I was pleased to hear him say that—he told us about a sort of preview of the Pre-Budget Report—we are at the bottom now. I have forgotten his exact words, but he certainly implied that we were out of the recession. Perhaps I may add that he did not refer to green shoots. Outside the Government, economists almost across the board have come to the conclusion in their guesses—we all know that they are guesses—about the future of the economy that the recession is largely coming to an end. Unlike my noble friend, they seem to feel that when the upturn comes it will be rather slower than seemed likely even in the last Budget. Perhaps my noble friend would comment on that too.

When the recession comes to an end and we are in a reasonable upturn, the important question that faces any Government is how they will balance the books—except no one balances the books—and bring them more closely into line and sustainable. I should like to know whether my noble friend has seen the report—I have not—which was referred to in the press this morning, about the study on public expenditure by the King's Fund and the Institute for Fiscal Studies. The Guardian had a headline, "'Tax or axe' warning on future NHS spending". It is clear that with an ageing population—I am happy to say especially for Members of your Lordships' House—the National Health Service—whoever is in charge, private or public—will need to spend rather more than less in the years to come. In many areas of National Health Service spending more will need to be spent. The article quoted the study as saying that "across-the-board" there would need to be a,

"2.3%-a-year cut in spending",

which did not exclude the National Health Service.

With £700 billion of public expenditure of course there is waste. Everyone talks about cutting waste. When I had some slight responsibility as Chief Secretary to the Treasury, public expenditure was a much lower figure and I had to cut it for five years almost, but there was waste. There is always waste. When £700 billion is being spent, there is bound to be waste even when it is being spent by the private sector, let alone by the Government. Everyone is in favour of cutting waste, but how it is done, and where and when, we have yet to hear from any of the major political parties.

We are told that all parties are telling us the truth about the fact that there will be a need for cuts after 2011. On the surface that is being honest and telling the public the truth, but just saying it does not tell us where people are going to be hurt, and when. Speaking for myself as a former, retired politician—an emeritus politician, unlike the Cross—Benchers in your Lordships' House—I do not expect either of the major parties to tell us, before the election, where it will hurt. We will not hear the truth, but we will hear talk of honesty. But we will not hear anyone say precisely where the cuts are going to fall, on whom and when.

However, major cuts will have to be made when the recession is over, and very likely tax increases as well. I would be surprised if VAT does not go up substantially. VAT has been mentioned in this context, and if the recession is not really over, I do not know if the Government will seek to extend the cut for another year; it may be sensible to do so. Again, I wait to hear what my noble friend has to say. However, on public expenditure, on the tax front and on balancing the Budget, will my noble friend tell us whether it is the Government's clear intention when we see a reasonable upturn in the economy—not a huge rise but perhaps 2 or 3 per cent, which were the average levels of the past—to make those precise cuts after the recession is over?

My Lords, I thank the noble Lord, Lord Bates, for introducing this debate, which has enabled those of us who live in the north-east to blow its trumpet. Of course, we are all very aware of some of the problems. One or two themes are running through the debate. The region has the lowest GDP and is dependent on the public sector. There are transportation problems, as the right reverend Prelate said, including the ever present problem of dualling the A1 throughout the country. I have spoken about that many times before, so I shall not do so today, but I hope that the Minister is well briefed on it and can perhaps say something about it. There is also the issue of a fair deal for those in Northumberland. I live in the very north of the north-east, in north Northumberland, right up against the Scottish border, so the fair deal and the Barnett formula are very close to my heart.

I want to say a little about the differences that affect us in north Northumberland. We need more help with education and training and with communication—not just the transportation on the A1 but also internet access in rural areas. I shall say more about that in a minute. We need a fair deal. Our local government has been reorganised. Under the old system, we had six districts and a county. The rural areas received extra funding to deal with their problems, and the urban south-east—the Ashington and Blyth area—got extra funding to deal with the deprivation there, too. The area has all been put together in one authority and we do not get any of that now. I ask the Minister to look carefully at that. I know that the Secretary of State, John Denham, at CLG, is aware of this, but can we please have more pressure to ensure that we have a fair deal on funding?

The take-up of further education and higher education in my area is very low. We have been particularly badly hit in Northumberland by the debacle of the Learning and Skills Council and the funding for further education colleges. Northumberland is the only county not to have benefited from the substantial budget of more than £20 billion already spent on the further education capital programme. Recently, the bid from Northumberland College has fallen apart, which means that in Berwick we shall not get a £20 million skills centre. I would like to quote from a letter from the principal of Northumberland College. She wanted me to bring this to the attention of the Minister. She says:

"I do not believe Ministers are fully aware of the hugely destabilising effect the whole LSC capital funding debacle has had on individual colleges, made even worse by the subsequent announcements of a reduction in adult funding and demands for £500m efficiency savings, all at a time of economic recession. The FE sector historically has been able to help individuals and communities hit by mass redundancies retrain, finding new skills which equip them to access new employment opportunities ... Ironically, the college finds itself in a position of having to make some of its own staff redundant as a result of funding cuts and the hugely challenging aim to achieve a surplus against all the odds in one of the largest, and most sparsely populated county in the country".

That sums up the problems that we have in further education, but we are miles from higher education. Berwick-upon-Tweed in north Northumberland is further from higher education than almost anywhere else in the country. A local group there are putting in a bid to HEFCE, under the auspices of A New "University Challenge". I hope that the Minister can ensure that we get some help on that front.

We have already talked about the A1, but I am grateful to the Commission for Rural Communities, which has pointed out the problems that we have in north Northumberland with access to the internet. Three-quarters of rural internet users say that they use the internet for transactions, which is a larger proportion than of those who do not live in rural areas, but only 1.5 per cent of homes in villages and hamlets can access cable-based broadband services, whereas almost 60 per cent of urban homes can. That limits access to government services and to the full range of social benefits available, such as cheaper bills and healthcare diagnostics through the internet. The UK has the highest number of public services available online, but if you look at a map showing the spread of high-speed broadband in the country you will see that Northumberland has big blobs without it. That also affects people trying to get jobs. Only 31 jobcentres, out of a total of 868, are in rural areas.

My time has run out and the Whip on the Front Bench opposite is indicating that I should wind up. I hope that the Minister can address some of these issues. I believe that north Northumberland is particularly disadvantaged.

My Lords, in the gracious Speech we were reassured that Her Majesty's Government would continue to work closely with the devolved Administrations in the interests of all the people of the United Kingdom. Before I move on to talk about some of the recent constitutional developments in Scotland in relation to the rest of the United Kingdom, I wish to highlight one area where I very much hope that there will be close co-operation. It relates to the coroners and justice Bill, which has been mentioned a number of times. What progress is being made on the jurisdiction and arrangements for inquiring into the deaths of Scotland-based service personnel who are killed on duty overseas? I tabled a Question on this in April and was advised by the noble Baroness, Lady Taylor of Bolton, that:

"Contacts between the UK Government and the Scottish Executive continue on this sensitive and complex issue".—[Official Report, 21/4/08; col. WA218.]

I have not heard anything about the content of the Bill that might reflect that, but perhaps the Minister can update us on where we have got to. It is an important issue that does not simply concern jurisdiction. Families of deceased personnel living in Scotland have to travel to the inquests and at the moment the bodies are returned to England, which is where the inquests take place.

I declare an interest as a member—I hasten to add, unremunerated—of the Commission on Scottish Devolution, or the Calman commission, to reflect the chairmanship of our distinguished chair and public servant, Sir Kenneth Calman. The commission was established by a vote of the Scottish Parliament in December last year and was subsequently given official support by the United Kingdom Government. Its terms of reference, as approved by the Scottish Parliament, are:

"To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom".

It started its work in April and published a first and interim report last week. By the very nature of an interim report, it did not reach any major conclusions and, in the absence of a shopping list of more functions for further devolution, it inevitably received a somewhat muted press. However, it came to one important conclusion: that the Scotland Act 1998 has worked well. To those of your Lordships who laboured hard for many hours trying to secure the passage of that legislation, I hope that that is some reassurance.

The evidence and views received by the commission indicated that the devolved institutions have established themselves in Scottish life and are widely valued by a majority of Scots and that devolution within the union remains by some margin the preferred constitutional model. In a debate in which we have discussed the relationship between government and the people, it is important to remind ourselves of some of the underlying principles behind devolution—bringing government, and indeed parliament, closer to the people. It has allowed an opportunity for different policy approaches to take account of different circumstances and for there to be different methods of delivery.

Furthermore—this is something that I always hoped would happen through devolution in Scotland, England, Wales and Northern Ireland—it has allowed for comparisons of different approaches and the opportunity to learn from each other, be it the Scottish Parliament, the National Assembly for Wales, the Northern Ireland Assembly or this Parliament in legislating for England. Noble Lords will recall that earlier today at Question Time my noble friend Lord Lester of Herne Hill raised the issue of the Scottish approach to DNA samples. The Liberal Democrat/Labour coalition took a different approach and it is possible that there is something to learn there.

We should be conscious that we do things differently now and we should be able to share each other's experiences—something that goes two ways. I have to confess that the Calman commission found that the second report of this House's Constitution Committee in the 2002-03 Session, on interinstitutional arrangements in the United Kingdom, had not been paid too much attention north of the border—I was as guilty of that as anyone. There were important findings in that report about the structure of the relationships between the United Kingdom Parliament and the Scottish Parliament, and between the Government of the United Kingdom and Scottish Ministers, to which we would certainly do well to pay further attention.

The report also dwells on Scotland's place in the union and gives a persuasive analysis of what makes us a united kingdom. Behind the political and legal union, with the monarchy and the United Kingdom Parliament, are important, fundamental principles such as those referred to in the debate by my noble friend Lord Goodhart and the noble Baroness, Lady Kennedy: the rule of law, the culture of human rights and the independence of the judiciary. The international dimension, in which the United Kingdom exercises its functions as a sovereign state, provides us with defence and national security and a permanent seat on the UN Security Council. There is also the economic union. The 1707 Act created perhaps one of the most successful single markets of modern times, very much to Scotland's advantage. We have seen the hurricane blow through the financial markets in recent times and that economic union continues to be to Scotland's advantage. I would rather that our interests were shared with the rest of the United Kingdom than see them linked to the arc of prosperity with Iceland, as proposed by Scotland's First Minister.

It has been a cultural union—the "bond of sympathy", as the late 19th-century Scottish jurist James Bryce said—with family and business links. There was even the success that we shared in Team GB at the Beijing Olympics. There is also a common social citizenship—the fact that we value and cherish some very fundamental principles. The obvious ones are free universal school education, free healthcare at the point of need and a common system of social security benefits, which are accessed by people whether they come from Surrey or Shetland. If those people move from Surrey to Shetland or from Shetland to Surrey, those things will still be available to them as citizens of the United Kingdom.

I think that we can be confident of Scotland's place in the union. In my view, the work of the commission is to see how we can better serve the people of Scotland by building on the devolution that we already have. There was an overwhelming tide of opinion where there was a wish to transfer one particular function rather than another, and that may reflect the strength of the 1998 Act. However, the commission has agreed to look further at issues such as the misuse of drugs, drink-driving limits, firearms legislation and aspects of health and safety. We welcome the fact that, according to the gracious Speech, the Marine and Coastal Access Bill will make provision for further executive and administrative devolution to Scottish Ministers.

Crucially, we must also look at the future of finance. I think that tomorrow the House Committee is due to propose a committee to look at the Barnett formula. That will be very important provided that we all work together and that account is taken of what the Calman commission and the Welsh Assembly Government Commission on Funding and Finance are saying. The point about the Barnett formula is that it has not produced an extra penny for Scotland compared with what the position would have been if there had been no devolution. The formula continues. It establishes not the amount but the annual change in the base, the base having been established in the late 1970s. Although it has the advantage of being predictable, it does not have the advantage of accountability.

In delivering the 2003 Donald Dewar lecture, my noble friend Lord Steel of Aikwood said that,

"no self-respecting parliament should expect to exist permanently on 100 per cent handouts determined by another parliament, nor should it be responsible for massive public expenditure without any responsibility for raising revenue in a manner accountable to its electorate".

I believe that that is the challenge that we now face on the question of how to make funding the Scottish Parliament's expenditure more accountable and more transparent. We want to look at the balance between a direct grant, assigning tax revenues and tax devolution itself. In a recent submission on fiscal powers to the commission, Reform Scotland recommended that each tier of government should be responsible for raising the bulk of the funding for its spending. We must look at that as we move forward because the status quo is not an option. We have been asked to improve the accountability of the Scottish Parliament and so we must look at the range of options available to make those who take the decisions on spending much more accountable to the voters.

I conclude by echoing the noble Lord, Lord Norton of Louth, who said that Tony Blair embarked on devolution but became rather frightened by it after the genie was out of the bottle. We do not need to be frightened. Scotland can be confident of its place in the United Kingdom and the United Kingdom can be confident of the glue that keeps us together. I am afraid that that fear influenced the evidence that the commission received from the United Kingdom Government. However, as Professor Robert Hazell said in his keynote address to the Constitution Unit's annual devolution conference in May this year:

"The UK government can and should be far more confident about the future of the Union than it appears to be. I have suggested that the Union rests on much broader and firmer foundations than the government seems to realise ... The panic which gripped UK ministers last summer after the formation of the SNP government was extraordinary. They confused the threat to their party with a threat to the nation. They need to calm down, be a lot more confident".

I very much hope that we can reflect some of that confidence as the Calman commission moves into its next phase.

My Lords, the report relates to a proposal for a new, one-off, ad hoc committee on the Barnett formula, a proposal for the continuation for a further Session of the existing ad hoc committee on intergovernmental organisations, and a proposal that the Liaison Committee's advice restricting the size of sub-committees of the European Union Committee to 11 be withdrawn. We also report to the House the fact that the House of Commons is not in favour of establishing a Joint Committee on the UK Statistics Authority, a proposal which we supported in our previous report.

The House will recall that the committee has previously not supported the case for a committee on the Barnett formula for reasons we set out in our report. The noble Lord, Lord Barnett, accordingly came back to us with a revised proposal, narrowing the orders of reference for such a committee and excluding the consideration of political aspects of the devolution settlements or the application of public expenditure within different regions of the United Kingdom. We think that this revised proposal now meets our concerns and we accordingly recommend that an ad hoc committee on the Barnett formula be set up in the new Session with the orders of reference set out in our report. As we suggest in our report, we think that such an inquiry could be relatively short and we suggest that the committee could report by the 2009 Summer Recess.

We also considered a proposal by the noble Lord, Lord Soley, that the ad hoc committee on intergovernmental organisations, which the House established at the beginning of this Session, be continued for a further Session. We did not support this suggestion, for two reasons, as set out in the report. First, we consider it very important to uphold the principle that ad hoc committees are appointed for a specific purpose and for a specific and finite length of time. The appointment of an ad hoccommittee on an open-ended basis goes against this principle. Secondly, we are not convinced that the mechanism of an ad hoc committee with the terms of reference of the intergovernmental organisations committee is the right way to address the sorts of issue which the noble Lord, Lord Soley, has suggested as potential future subjects of inquiry. If the noble Lord wishes to pursue this, we suggest that he might reconsider how best to achieve it.

I should mention two other matters. The House will recall that in our previous report we gave our support in principle to the establishment of a Joint Committee on what is now the UK Statistics Authority. We noted that the Leader of the House had agreed to relay our views to the Leader of the House of Commons. The Leader of the House has now reported back to us that she has not been able to persuade her colleagues in the Commons of the merits of this idea. Given this, we do not see any practical way to pursue the suggestion further.

Finally, we endorse the principle that the maximum number of members of a sub-committee of the European Union Committee should be raised to 12—the same as that of other sub-committees. I beg to move.

My Lords, on funding, I refer the noble Lord to Treasury documents that I have here and which I am happy to make available to him and to any other noble Lord. They go into great detail on how funding is allocated—not just through the Barnett formula but way beyond that; the noble Lord might find that useful.

On the general discussions, Ministers of the UK Government talk to the devolved Administrations in a whole range of ways; from phone calls and regular meetings to plans set out between the Leader of the House of Commons and the Administrations when looking at the draft legislative programme. They range across everything the noble Lord can think of, but are working, as far as we can see, quite effectively.

My Lords, the noble Earl is always tempting me down paths I ought not to go. It is not for the Government to suggest to Parliament what it ought to do in matters governing its own affairs. If I were to do that, I would be out of order. I recognise that the noble Baroness, Lady Howe, has expressed a legitimate concern that many issues around sexual behaviour need to be addressed. All I was saying is that this is entirely a matter for this House. However, there are ways in which we may debate these matters: in Thursday debates, in Questions for Short Debate, or, if the House authorities agree, by setting up a special Select Committee.

As noble Lords will know, there was a great deal of controversy over the authorities' decisions on a number of proposed Select Committees. Noble Lords will remember, for instance, the arguments over whether there should be a Select Committee on the Barnett formula. My noble friend Lord Barnett, who is not present today, would remember. I am simply saying that I recognise the point raised by the noble Baroness. These are important matters and Parliament has an important role in discussing them.

My Lords, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, who we all know is a very caring and constructive person. I particularly appreciate the moral philosophy that he introduced into this debate when opening it. It is important to take account of, and indeed act on, the principles involved in addressing inequality.

Financial inequality exists widely in the nations and regions of the United Kingdom. The result is, on the one hand, poverty, poor housing—and unaffordable housing at that—social exclusion and unemployment; on the other, relative prosperity, a better quality of life, quality employment and more life opportunities, with better housing and better health. If we have a social conscience, we must address this and try to put it right.

I am grateful that this debate is about the whole of the United Kingdom. In the other place I represented a part of Wales. Because of the devolution settlement, we do not have much chance these days to make comparisons, but in this case we can make some. I will concentrate to some extent on the situation in Wales and say that it is almost identically replicated in the north-east of England and in Cornwall, which have very similar economic indicators, and in some other parts of the EU. I shall then suggest how we might address these matters and improve on them.

The current performance of the Welsh economy is well below expectations, particularly taking into account the application of EU funding in west Wales and the valleys. The evidence is that the gross domestic product per head remains stubbornly fixed at 80 per cent of the UK average. It was that before devolution and it has not moved much. If one applies the gross value added measurement, which takes on board some services as well, it has declined from 84 per cent in 1995 to 78 per cent in 2004. In west Wales and the valleys, it has gone down to 65 per cent. We do not have a very sound economy. Much of the spending has been in the public sector rather than the private sector. If one compares these figures with those for other parts of Britain and Europe, one finds that the gross domestic product of west Wales and the valleys is 79 per cent of the UK average. It is slightly lower in Cornwall. But in Bucharest, Romania—which has not been in the EU for very long—it is 74 per cent. In Warsaw it is 81 per cent. It is even higher in Prague and Bratislava than it is in west Wales and the valleys. In contrast, the figure for Ireland is 143 per cent, as a result of a revolution in the way that it has been managed in recent times. Noble Lords will not be surprised to learn that inner London is on 303 per cent of the EU average, which is an extraordinary situation.

Average disposable income for a family in Wales stands at £21,182, a figure which may reflect two people working. What interests me is that that family spends 13.3 per cent of its income on food. When I was lecturing 25 years ago, it was 27 per cent, which is a percentage that poorer members of our society are probably still on. On a per head basis in Wales, people are on £11,900 compared with £15,000 in London, a difference of £3,100. I do not see that that is fair at all. We know that the cost of living in London is higher, but it is quite hard to make a living in my part of the world. It is clear that where I come from there has not been enough focus on innovative and entrepreneurial economic activity, both private and social, but that is now being addressed.

The success of Ireland over the past 20 years should be an inspiration to many of the regions and nations of Britain which are not so well off. For the first time in the history of Ireland, an indigenous moneyed class has emerged after a long economic boom. The Bank of Ireland estimates that from a few hundred euro millionaires 20 years ago, there are now 300,000, which is hard to believe. Ireland has an educated labour force and a strong demand for labour in well-paid jobs. An in-depth study of the Irish experience and the application of the principles involved is something that many of the poorer nations and regions of Britain could benefit from.

We have a huge mountain to climb. The Joseph Rowntree Foundation has laid bare the scale of the challenge. More than a quarter of Welsh children live in poverty, while average family incomes, to which I have already referred, show huge disparities with other parts of the United Kingdom. I believe that the Barnett formula should be revised so that it is based on need. At the moment in Wales, with its GDP running at 80 per cent of the EU average, the question of need is not being met.

In conclusion, Wales, Cornwall and north-east England are way behind other parts of the United Kingdom, and indeed in many sub-regions of those areas, incomes are only two-thirds of the UK average. The result of that is poverty, child poverty and a lack of opportunity in employment. Essentials such as food and housing are rendered unaffordable because they absorb an ever larger proportion of net income. This creates debt. Of the 10 regions with the highest rates of unemployment benefit for longer than five years, five areas are in Wales.

I finish by saying that the Barnett formula needs to be completely updated on the basis of need and government policy needs to concentrate on upgrading investment and entrepreneurship in our poorer regions so that average incomes are brought up to a level where essentials are affordable. In that way, the populations of these areas will not continue to suffer.