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Ms Hilary Armstrong (Durham, North-West): It is interesting to sit through a large part of a debate and hear different ideas of reality. Several hon. Members claimed to deal with the real world, but their worlds seemed far from those that our constituents face.

The hon. Members for Croydon, North-East (Mr. Congdon) and for Milton Keynes, South-West (Mr. Legg) said how pleased they were that civil service administration is being cut. Their speeches seemed to be

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based mainly on press releases and they did not seem to have examined the fine detail. Red Book figures for the health service show anything but a real increase in spending of any note this year, and there will be a decrease next year. That is another broken election pledge.

In so many ways, the Budget is dishonest. It is aimed at a short-term fix for the Chancellor and his troubled party, rather than at devising long- term solutions for the economy and the British people. Whatever the Government may like to think, the electorate have not been fooled and will not be fooled. A former Conservative Member of Parliament who now holds a senior post in the Conservative party said:

"What we are saying is completely at odds with their experience."

There have been too many broken promises and wasted opportunities and too much public money has been squandered.

We have had many lectures from the Conservatives about our wish for more public spending but, in the past year, we have identified many spheres where public money has been squandered on the Government's ideological fantasies. Their latest escapade involves a private sector hospital in Scotland, which has not been bailed out although the Government intend to put a further £30 million into it to try to rescue something. It is a waste of money that could and should have been spent elsewhere.

The Budget gave the Government the opportunity to remedy some of their worst errors. The Chancellor was pressed to think again by some Conservative Back Benchers about what people regard as his most heinous crime--his failure to cancel the proposed increase in VAT on domestic fuel from 8 per cent. to 17.5 per cent. Instead, he claimed that he was introducing a wonderful rise in the compensation available but, if one examines the figures, one finds that there is no such rise. The amount that pensioners will receive is no more than they should have expected last week; there is to be no rise over and above what they had already been told.

The hon. Member for Brighton, Kemptown (Sir A. Bowden) has made it clear that he finds the compensation package inadequate. I hope that the Paymaster General will prove that he is listening to what Back Benchers are saying but I am confident that he will not. I therefore hope that the hon. Member for Kemptown will join us in our genuine attempt-- [Hon. Members: -- "Genuine?"] Yes, genuine. I hope that the hon. Gentleman will join us in our efforts to ensure that the Government learn to listen to people outside.

The Government offered no new money. Instead, the Chancellor gave us a cynical publicity stunt, of which he should be ashamed. Whatever he may think about that stunt, he should realise that it will not work because people do not trust the Government any more. However, at least he did not try to follow the example of his predecessor, who first announced the new tax and tried to tell us that it was a green tax imposed in response to the Rio summit. I suppose that we should be grateful for that.

The increase in support for insulation schemes is so derisory that it will probably create more problems than it will solve. The Chancellor announced that he was making available an additional £10 million for the scheme, which, I understand, will, on current costings, insulate

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approximately 60,000 more homes. There are already 90,000 homes on the waiting list, and in some areas there is a six- month backlog. The reality is that, far from being a wonderful effort to help people to pay the increase in VAT, the Chancellor's action will merely raise people's expectations. People will apply for the grant but the organisations that will deal with it tell me that their credibility will be undermined when they have to push people back down the queue. It is no surprise that people just do not believe what the Government say.

Let us think again. It is important to remember what the Government have said--I know that they do not like us to do this--and then to see how they have done something quite different. The Conservatives have, again and again, yesterday and today, proclaimed themselves to be the party of low taxation. They obviously did not like hearing the words of my hon. Friend the Member for Dunfermline, East (Mr. Brown)-- [Hon. Members:-- "Yes we did."] I hope that Conservative Members enjoyed them and that they learned from them, too.

The Conservatives cannot continue to say, in whatever way they want, that their instinct is for low taxation and then take no notice of their instincts, their words or anything else. The Conservative party said in its manifesto:

"We are the only party that understands the need for low taxation."

This Government have raised taxes by more than any other Government this century and they have ensured that the typical family is paying £840 more in taxes as a result of their changes over the past two years.

If I was being generous, I could imagine, I suppose, that the writer of the manifesto simply did not have time in the rush before the election to finish the sentence. Perhaps it should have read, "We are the only party that understands the need for low taxation the year before an election and the need for very high taxation in the intervening years."

The Government proclaim themselves as a Government of opportunity and a Budget is always a time for a new opportunity, yet this Budget is limited in the new opportunities it gives. Public expenditure cuts--real cuts--will mean job losses in the construction industry and in the civil service. Last night, Customs and Excise unions were told that 4,000 jobs were to be cut, including jobs in the front line of tackling drug smuggling. Yesterday, the Prime Minister told the House that this was simply an efficiency measure which would not affect the detection of smuggling. I do not believe that, and neither do drug officers or those who have been caught smuggling drugs at ports of entry.

The Budget was supposed to offer new opportunities for those seeking to get back into work and those seeking to equip themselves to get back into work. However, one of the meanest measures of the Budget deeply affects those who are seeking new opportunities for learning in their later lives. Yesterday, the Chancellor announced a mean measure to phase out the means-tested allowance for mature students. That will mean the loss of about £1,000 a year for the students over 29 who are least able to make the move back into education.

From my experience of training mature students before I came to the House, I know that before they take the decision to go back into education and training, they

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consider every option. The last thing that they want to do is to make life even more difficult for their families, so they work out in detail exactly how they will sort things out. The loss of an extra £1,000 for those who can least afford it--those who are means -tested--is penny-pinching and mean. More than that, it is an incredible disincentive for the very people whom we should ensure get back into learning, into reskilling and into developing their talents so that they can change their careers and get back into work.

Today, the Chief Secretary to the Treasury spoke about the effort that the Government had made to listen to unemployed people and to understand the barriers that they faced in getting back to work. I agreed with the right hon. Gentleman on the three points that he made, but he missed another two critical points. First, many people have become unemployed because their skills have become redundant. The men who have been made redundant at Swan Hunter, who should have been kept on, are now having to think about a change in their work pattern. That will not be solved by the sort of scheme that will give them three weeks' trial in a work trial. That will not be sorted out by giving them the sort of short-term measures that the Government seem to be proposing in this Budget. They need good-quality retraining opportunities, they need to be able to afford to take those opportunities and they need to be able to find those opportunities in the area where they live.

Mr. Aitken: If the hon. Lady would, just for a moment, look at this problem of Swan Hunter employees from the point of view of an employer from that area, she may see it from a completely different perspective. I think that I know the Swan Hunter work force quite well from my days as Minister of State for Defence Procurement. I had long talks with the convenor, Mr. Eddie Darke. One of the problems facing all the admirable men at Swan Hunter, who finished ships to the highest quality, will be finding a new job because all employers will doubt whether a man who has been on the employment register for a certain length of time is back in the habit of work and should be taken on.

Surely the scheme that my right hon. and learned Friend the Chancellor has proposed is good because it offers a trial work scheme and a range of measures that will make it easier for the employer to take such good people on. The hon. Lady is leaving out of her calculation what employers may think of the admirable schemes that my right hon.--

Mr. Deputy Speaker: Order. That was a very long intervention.

Ms Armstrong: I understand the anxiety that the right hon. Gentleman feels in trying to get to the heart of the problem. I agreed with his three points, I give him that. Those measures will meet some people's needs, but I am dealing with a different problem. One cannot, with those measures, sort out the needs of people who need proper reskilling and proper retraining. If his measures are the only measures on offer to the men who have been made redundant at Swan Hunter, they will join the ranks of the long-term unemployed before they get another chance. That is the problem. We want them to get jobs now. We want them to have other opportunities of proper reskilling

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and proper training. Instead, savage cuts have been made in the training programme, showing that the Government have no serious intention of reskilling the work force.

The second point that the Chief Secretary missed is that jobs need to be created to get those who are unemployed back into work. Those men from Swan Hunter are not the only people on Tyneside or in Wearside who are looking for jobs. Thousands and thousands of people are looking for jobs who will not be re-employed until new jobs are created in the economy. The Budget has provided no new incentives for manufacturing investment, it has provided no incentives for business start-ups, and, if anything, opportunities have been reduced. The enterprise allowance, for example, will be all but extinct. Certainly, it will be extinct in my area because the single regeneration budget does not include the enterprise allowance scheme.

The Government have been in the habit of boasting that unemployment has fallen by more than 400,000 since the end of 1993; but they have neglected to mention that total employment has also fallen by a little under 440,000 since the middle of 1992 through the recession. Of the jobs which have been created since 1992, 90 per cent. are part-time. We want to see a flexible labour market so that people have the choice to work full or part-time. Instead, we have an economy in which employment opportunities have shrunk and those opportunities that are available tend to be limited far too much to low-paid, low-skilled and part-time work.

The Government have taken no steps in the Budget to increase the capacity of the economy. That limits our competitiveness and growth in employment. The Government's short-sighted approach is most apparent when we consider the building industry. My hon. Friend the Member for Dunfermline, East explained earlier how that problem could be tackled. We have spelt out clearly how we could have a decent welfare-to-work programme. We have acknowledged the importance of providing individual support and the importance of that for social cohesion. We could have got many more people back into work. The programme offered nothing for women. There was no incentive for women with children to take up opportunities for child care. From our previous exchanges, the Chancellor is aware that I know that that can be achieved in partnership with local authorities in ways that improve the quality of opportunity for the child and give parents a decent choice about their career and development.

In all ways, the Government have failed to meet the opportunities that were available to them yesterday. The Secretary of State for Education promised 10 days ago that there would be new money for nursery education, but no money was included in the Budget yesterday for nursery education: what a betrayal and a lost opportunity. We had a Budget yesterday that Conservative Back Benchers cheered. We should be used to that. Even in my short time in the House, I recall the way in which they cheered Nigel Lawson and I remember the real problems that the economy faced after that. I remember how Conservative Back Benchers cheered the present Chancellor's predecessor and how quickly his Budget unravelled.

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Order Papers were waved yesterday. Perhaps for once Conservative Members were really being honest. The speech made by the Chancellor yesterday was meant to satisfy Conservative Members that the Government's craving for short-term, short-fix income tax cuts in next year's Budget are what is really on the Chancellor's agenda. However, those cheers hide the stark reality for the British people this year. They hide the reality of the new taxes that they will face. They hide the reality of the increase in VAT on fuel and the attack on living standards. They hide the increasing divisions in this country.

The Government have thrown away the major opportunities to change and give this country long-term growth and opportunity. They are out of touch and, at the next general election, we will make sure that they are out of office.

9.42 pm

The Paymaster General (Mr. David Heathcoat-Amory): The background to this debate is one of a steadily strengthening economy in which all the main economic indicators are favourable. We heard a note of desperation creeping into some of the speeches made by Opposition Members today as they searched Europe for countries outperforming us in one sector or another. As they found fewer and fewer of them, they tended to go global in their search for economies which, allegedly, are outperforming us. However, if they found such a country, they would discover that the policies pursued by that country would have very little to offer the Labour party.

The point that was brought home in the debate by Conservative Members was that that transformed economic outlook still requires discipline, particularly over the public finances, and a continuing and sustained drive to reduce the deficit, which still exists, between what we are raising in taxation and what we are spending. That was one of the messages spelt out by my right hon. Friend the Member for Hove (Mr. Sainsbury) who made a speech--I do not think that we could exactly call it a maiden speech--which relaunched him on a new phase in his career as an elder statesman. [Interruption.] Perhaps I should rephrase that and call my right hon. Friend a statesman. In due course, he will become elder as well. My right hon. Friend made well the powerful point that the indispensable element in the recovery and in the Government's achievement over the past few years is the creation of macro-economic stability, which has eluded almost all Governments since world war two.

In the past, we had a good combination of growth and low inflation, but the tendency has been to watch with increasing exasperation how inflation tends to rise and how prices and assets start to take off. After three or four years, the bright economic outlook runs into the sands of yet another macro -economic hitting of the buffers. As my right hon. Friend said, this time we have the fundamentals in place. All that we hear from the Opposition is how they would add to public expenditure and relax taxation.

Mr. Livingstone: Will the hon. Gentleman give way?

Mr. Heathcoat-Amory: The hon. Gentleman has made his contribution. I hope to respond to one or two of his points.

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The easy part of politics is to spend other people's money. The difficult part of politics is to restrain public expenditure and, where necessary, to put up taxes to cover the deficit. By history and by nature, the Labour party is the party of public expenditure, whether it is good or bad, efficient or inefficient, affordable or unaffordable. For Labour Members, the state, almost by definition, is better than the individual when it comes to making decisions.

Dr. Spink: Is my hon. Friend aware that the right hon. Member for Kingston upon Hull, East (Mr. Prescott) is even calling for inefficient public expenditure at the moment?

Mr. Heathcoat-Amory: Yes, we have noticed that. Instead of modernising and reforming the public service, Opposition Members want to load it with excess labour, against the wishes of the organisations involved.

We heard the voice of the past from the hon. Member for Durham, North-West (Ms Armstrong), when she bemoaned the prevalence of part-time jobs. She has not understood a recent labour force survey showing that 85 per cent. of people in part-time work are quite happy to have that part-time work. The world has changed since the Labour party was in office.

Despite Opposition Members' efforts to update their economics--the so- called new Labour economics--we still hear the authentic voice of the Labour party from the hon. Member for Brent, East (Mr. Livingstone), who tried to intervene. I listened carefully to his speech. Not for him the new Labour gloss. He gives us a more authentic voice of a Labour party which might be past but which is not unrepresented in the House. Labour Members still believe in the power of officialdom over the power of the market. They always will, and, to some extent, they always should. At the election, people should choose between that philosophy of the economy and the one which we offer.

On taxation, we had again the two new Labour friends, loophole and windfall. That is not a tax policy, it is an illusion. It gives a glimpse of what a future Labour Government would be like, running around looking for loopholes and windfalls, instead of taking clear, if difficult, decisions on how to run the economy.

We had the shadow Labour Budget last week. It was certainly a shadow, but it was not a Budget. There was no precision in it, no figures, and nothing was costed. It was another appeal to their new friends, loophole and windfall. The Government believe in picking up and blocking loopholes where they exist. This Budget, like the ones before it, protects revenue against potential loss from real loopholes where they are identified.

I will not weary the House with technical and complex details, but I will give hon. Members an idea of one loophole. There is a perfectly good commercial practice of lease and lease-back. However, businesses which are exempt from VAT--particularly those in the insurance and banking sectors-- have been exploiting this practice to spread their VAT over 2,000 years. We are all in politics for a long time, but we wish to see VAT on transactions made today at least recouped in our own lifetime, even if not in the present Parliament. We have closed that genuine loophole. The value of that and other measures on the indirect taxation side--which is my particular concern--amounts to £340 million.

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They are real anti-avoidance measures, which have been properly and precisely targeted, in contrast with the broad political sideswipe attempted by the Labour party.

The subject of VAT on fuel was raised again. No Conservative Government like to increase taxes, but the VAT on fuel is an indispensable element in the package of tax-raising measures announced in last year's Budget. The value of that package has been demonstrated in getting national finances under control and creating real growth with low inflation. Now is not the time to relax our discipline and knock away the very foundations of the economic recovery.

Fuel is a rather sensible commodity to tax. That is why all other countries in the European Union impose VAT on fuel--most of them at standard rates. The four Nordic countries, many of which are considerably colder even than Scotland, tax fuel at rates of either 22 per cent. or 25 per cent. It makes environmental sense to tax a commodity which is so directly related to environmental concerns such as the build-up of carbon dioxide in the atmosphere, which leads to the greenhouse effect.

Mr. Robert Ainsworth rose --

Mr. Heathcoat-Amory: I am answering the point raised by the hon. Member for Orkney and Shetland (Mr. Wallace). In front of other audiences, the hon. Gentleman and his hon. Friends have constantly argued for environmental taxes, including a carbon tax. One of the Liberal party's slogans from a few years ago was "Think globally, act locally". That has now been changed to "Tax globally, but not specifically". The Liberal Democrats are very keen on the idea of environmental taxes, but when measures are brought forward to tax fuel, of course they oppose them.

Mr. Wallace rose --

Mr. Heathcoat-Amory: I hope that the hon. Gentleman will forgive me, but I must press on as I have to respond to a number of other points which were raised during the debate.

Sensible environmental pressure groups like Friends of the Earth have agreed that a tax on fuel is a sensible measure.

Mr. Wallace rose --

Mr. Heathcoat-Amory: I will not give way because I need to make some other points.

Of course, fuel tax must be allied with other measures in order to protect the most vulnerable. That is why the Government have provided substantial help to pensioners, widows and the disabled. Assistance is also given to other poorer households, such as to those on income support.

I want to pick up the point made by my hon. Friend the Member for Brighton, Kemptown (Sir A. Bowden), whose work for pensioners and pensioner organisations is well known and much appreciated on both sides of the House. He understands not just the problems of pensioners, but the solutions to those problems.

He was generous in his praise of the raising of the age allowance. I am therefore particularly concerned to examine the figures that he brought to the House and the worries that he has about uprating. If I cannot answer his questions decisively this evening, I will write to him about the matter. I believe that there is a genuine misunderstanding about the effect of the uprating on this

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year's pensioner figures. I can assure my hon. Friend that next year there will be a full 50p uprating for a single person. It will amount to that in April of next year. I hope that, with the uprating that takes place in any case of the rest of the pension, that meets the concerns that my hon. Friend raised.

Mr. Robert Ainsworth: Will the Minister give way?

Mr. Heathcoat-Amory: I am sorry. The hon. Member for Durham, North- West (Ms Armstrong) who answered the debate for the Labour party has left me extremely short of time and I have a number of points to make.

My hon. Friend the Member for Gloucestershire, West (Mr. Marland) made the valid point that pensioners are often not aware of the help that they are receiving. I have no doubt that we shall have to return to that issue. He made the specific suggestion that we should drop the second tranche of VAT and instead put a penny on road fuel tax. I have to tell him that a penny would not be enough. An extra 2p a litre on fuel would be required. I ask him to consider the consequences that would flow from doing that. My hon. Friend and I both represent rural constituencies. Motorists in rural areas would begin to find such an increase, on top of the extra 5 per cent., not simply taxation but penal taxation. As the fuel cost would also feed through into the costs of hauliers, there is a competitiveness argument to be answered, too.

I shall have to get back to my hon. Friend on his point about the uniform business rate. I wish to make some further points about the compensation package for VAT on fuel that we have put in place. The home energy efficiency scheme has been mentioned several times. The funding for the scheme has been more than doubled in the past two years. It provides grants, usually at 100 per cent., for insulation, draught-proofing and so on. More than a million homes will have been treated by early next year and we expect another million homes to be grant-aided in the next three years.

Cold weather payments were the subject of some disparaging remarks from Labour Members. I remind them that, when the Labour party was last in office, there were no such things as cold weather payments. All the cold winters that we remember in the 1960s and 1970s happened without cold weather payments going to anyone.

The other point about VAT on fuel is on prices. Some Labour Members talk as if energy prices have risen continually. Perhaps they remember the days of the last Labour Government. Since the utilities have been privatised, prices have fallen substantially in real terms. Even with the addition of VAT this year, gas and electricity prices are 1 per cent. lower in real terms than they were two years ago. If one adds the compensation package to that, one can see that, arithmetically, many people must be better off.

I draw the attention of the House to another feature of the energy industries. We all agree that one of the criteria that we use in judging a supplier company or industry is the way in which it treats its customers who get into trouble with debt and face disconnection. Does the company reach for the disconnection switch or help the customer manage the debt? The old state-owned domestic utilities presided over by the right hon. Member for

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Chesterfield (Mr. Benn)--I see that he is in his place--when he was Secretary of State for Energy reached for the disconnection switch far more frequently than today's privatised utilities.

I can give the figures to the House. Since privatisation, the electricity companies have reduced their disconnections by a remarkable 98 per cent. British Gas has reduced its disconnections--I have the precise figures with me--from more than 45,000 in 1986 to just more than 16,000 in 1993. That is a reduction of two thirds. All that the Opposition parties want to do is reduce the wages of the chief executive. We have reduced prices--or the companies have--and the incidence of disconnection. Those old, cosy, state- run utilities were far more brutal with the old and the cold than the private sector companies are today.

The debate has shown up the natural sharp divisions between both sides of the House, but it is increasingly recognised that the Budget is building on firm foundations. The recovery is based on production, investment and exports and builds on the supply-side reforms of the 1980s, which turned those sluggish domestic utilities into world-class companies. It is not a recovery based on consumer expenditure, or on an asset boom. For that reason it may not get the quick--

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow .


Motion made, and Question put,

That Mr. Tony Benn be discharged from the Committee of Privileges.--[ Mr. Andrew Mitchell .]

Hon. Members: Object.


Mellor Primary School

10 pm

Mr. Keith Vaz (Leicester, East): My first petition has about 1,500 signatures, which have been collected by parents, staff and local councillors on behalf of Mellor primary school in Clarke street, Leicester. The people who signed the petition are very concerned about the traffic situation outside the school and have been campaigning every Tuesday and Thursday morning for a crossing to be installed.

The petition states:

we urgently need a pedestrian crossing to be installed outside Mellor primary school, near the Checketts road entrance, to protect the lives of pupils and parents who have to cross the busy Checketts road every day on journeys to and from school,

Wherefore your petitioners pray that your honourable House takes note of the danger faced by children and parents every day on journeys to and from the school and makes provision that local authorities should provide safe crossings where necessary, to protect lives.

And your petitioners as in duty bound, will ever pray etc. To lie upon the Table .

Millennium Commission

10.1 pm

Mr. Vaz: The second petition is presented on behalf of Mr. Gurdip Gujral, Mr. C.B. Patel, Mr. G.K. Noon and

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about 1,000 members of the Asian community in Britain, who are very concerned that the new Millennium Commission which has been set up by statute in the National Lottery etc. Act 1993, does not contain a representative from Britain's Asian community. They felt strongly that, to be fully representative, the Commission ought to contain someone of Asian origin. I pointed that out to the Secretary of State for National Heritage. The community has, therefore, asked in the petition that the Government appoint someone of Asian origin to that Commission.

To lie upon the Table .

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Merseyside Police Budget

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Conway.]

10.2 pm

Mr. George Howarth (Knowsley, North): First, I offer the Minister an apology, as he has had less than the usual notice of this debate. I do not know whether he is aware of the fact, but my original title was changed because of a material change in the subject, so the Home Office did not get the usual amount of notice. Secondly, I thank the Office of the Speaker for advice on how I could change the title last Friday.

The funding of the Merseyside police budget is a matter of great concern and speculation, especially in respect of the funding formula and how it is applied to Merseyside. The Minister will be aware that the standard spending assessment, as applied to public expenditure for the police, amounts to about £6 billion per year. The formula proposed, which has caused all the problems nationally and on Merseyside in particular, is based on seven areas of police work that the Association of Chief Police Officers identified from an activity analysis. Those are: core management, crime management, public order, traffic management, community relations, security and pensions. Those are now built into an adjusted regression analysis formula which is, in effect, the funding formula. ACPO provided those suggested areas of activity, but it has serious reservations about the way in which the formula will be applied.

For example, the formula does not take into account the willingness--or, for that matter, the unwillingness--of the victim of a crime to report that that crime has taken place. Anybody with experience of localised crime, such as burglaries, thefts from cars, break-ins and so on, realises that there are many reasons why people often do not feel able to report that a crime has taken place. That means that the true level of crime in any given area can often be underestimated. Merseyside police authority certainly feels that that applies in our case.

People may not report a crime because of their perception of what might happen if they report it. It is not unknown for people to be afraid of reprisal if they report a crime, and it would be unwise to underestimate the fact that, in some areas, people are physically afraid of reporting crime because of the consequences. It also depends on whether the victim has adequate insurance to cover the replacement cost of any item that has been stolen, because it is invariably necessary to have a crime number to report to one's insurance company if a theft has taken place. If they are not insured, people may take the view that--as there is little chance in some crimes of goods being recovered--there is no point in reporting it. It becomes a vicious circle. People do not report a crime because they do not think that the criminals will get caught. Because they do not report it, the crime statistics are suppressed and not enough resources are put in to make sure that proper levels of policing are applied. There are specific problems about the way in which the formula can be applied.

ACPO questioned the statistics. It feels that in some cases when an incident has been reported, there may be more than one crime involved, but that not all the specific crimes that have been committed within the compass of

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one incident will find their way into the reporting system. Again, that leads to a statistical under-recording of the actual level of crime.

Merseyside police produced statistics to show that the cuts will have a major effect on the police and civilian numbers employed by the police authority. Those estimates show that a reduction of 2 per cent. would mean the loss of 170 police officers and 35 civilians. Given the fact that the Government place great stock on taking away paperwork from police officers and moving it to civilians, the number of civilians lost will equally affect the fight against crime. If we take the upper end of the possible reductions that have been talked about--a 6 per cent. reduction--that would mean 500 police officers and 100 civilians lost. The effect of that would be catastrophic. As a result, there has been a great deal of pressure from the police authority, the local community and local hon. Members-- particularly my hon. Friends the Members for Liverpool, Garston (Mr. Loyden), for Liverpool, Riverside (Mr. Parry), for Knowsley, South (Mr. O'Hara) and for Bootle (Mr. Benton), who are here tonight. Some Conservative Members have been involved also. I understand--although I have not seen it in print--that a member of the Cabinet has lobbied the Home Secretary on this very issue. That ought to speak volumes about the public reaction on Merseyside to the possible consequences.

The Government did appear several weeks ago to climb down on the formula, but there are no guarantees that that will resolve the problem. They have not resolved the underlying difficulties with the formula itself, and there has been no effort on the part of the Government to enter into any meaningful consultation with the police authorities and other bodies, such as the Association of Metropolitan Authorities and the Association of County Councils.

Mr. Alun Michael (Cardiff, South and Penarth): My hon. Friend is right to draw attention to the considerable difficulties that have arisen because of the Government's failure to produce the fair and transparent formula for which we have been calling for a number of years. Does he agree, however, that that formula would change only the size of the pieces into which the cake is cut? During the 1992 general election campaign the Conservative party promised to increase the number of police officers by 1,000, but they delivered a cut by 401 in the 12 months following the general election. Surely that shows that we have a problem with a formula that is designed to share out a cake that is not as large as the Government had promised to make it.

Mr. Howarth: As ever, my hon. Friend hit a well aimed hammer on a nail that was presented to him. The figures that he gave are correct. He is also right that the Government have failed to deliver even a proportion of their electoral promises on law and order.

The Minister should be aware that it is not just a Cabinet Minister and Labour politicians who have been exercised about the formula. I have a press release from Merseyside police authority, which hon. Members may be surprised to learn is controlled not by a Labour chairman but by a Conservative councillor from the Wirral.

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