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Westminster Hall

Wednesday 28 November 2001

[Sir Michael Lord in the Chair]

Poverty (Rural Scotland)

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. McNulty.]

9.30 am

Mr. Peter Duncan (Galloway and Upper Nithsdale): I welcome the opportunity to place before the House the subject of the growing divide between urban and rural Scotland. I also welcome the time afforded to me to outline the issues that must be addressed before significant social problems overrun Scotland's rural communities.

The past four years, since 1997, have seen a welcome development towards attempting to address the causes and symptoms of poverty in all its forms, although I suspect that I shall differ with the Minister on the success or otherwise of the Government's strategy.

It is often said that society is only as good as the manner in which it treats its most impoverished, and I welcome the fact that poverty has been placed higher on the political agenda. However, in my constituency—and in many others, I suspect—the feeling is developing that although poverty in general may be increasing in importance in political debate, another form of disadvantage is routinely not given the priority that it deserves. It cannot be permitted that some who struggle to make their way in life are deemed deserving of multi-agency help, while others remain perceived as less deserving of attention, even though their suffering and isolation may be just as traumatic and difficult to overcome.

The kind of poverty that I routinely encounter in Galloway and Upper Nithsdale is no less deserving than that in city centres and other urban conurbations throughout the United Kingdom, which so often hits the headlines. The poverty that I encounter may be more difficult to tackle, but that is no reason to forgive a Government who ignore the problem just because its solution may require more imagination and result in less direct political advantage.

I draw the House's attention to three main aspects of poverty as it affects rural Scotland. First, financial poverty exists in remote communities in as serious a form as in any city centre. Secondly, we are routinely blighted by poverty of opportunity caused by declining local infrastructure, which places rural communities at a severe disadvantage. Thirdly, there is a worrying trend towards poverty of ambition for all that rural Scotland could be.

I need not brief the Minister of State on the social geography of my constituency, because he is a neighbouring Member, but some statistics may help to put my comments into perspective. Galloway and Upper Nithsdale is one of the most rural constituencies in the United Kingdom. It represents two thirds of the land area, but less than half the population, of the Dumfries and Galloway region, which has 147,000

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residents and is spread over 2,500 sq miles, and is the third largest region in Scotland. The population density is only 60 people per square mile, compared with the Scottish average of 168, which the Minister will appreciate is already well below the UK average.

Apart from Stranraer, which has 10,800 residents, Galloway has no settlements of more than 5,000 people. That is not an extreme example. Many other Scottish constituencies that are similarly disparate are represented by hon. Members present today.

The Minister of State, Scotland Office (Mr. George Foulkes) : And Ministers.

Mr. Duncan : Yes, and Ministers, too.

Those striking population figures directly affect people's ability to access services and agencies' ability to deliver them. Employment opportunities in parts of rural Scotland are few and far between and are, on average, very poorly paid. Employees in Dumfries and Galloway have the lowest average earnings of people in any local authority area in Scotland. The region is heavily dependent on agriculture and tourism, both of which are seasonal and low paid, and were in decline even before foot and mouth disease devastated the area. In Galloway and Upper Nithsdale, the unemployment rate is 4.7 per cent., which is above that of Dumfriesshire and the national average.

As a crucial part of my argument, I must scotch once and for all the myth that the rural regions of Scotland are populated by well-off farmers and contented pensioners. The devastating decline in farming incomes of the past few years has greatly affected constituencies such as mine. Farm businesses remain very small and are often managed or run by more than one generation of the same family. As one attends the auction marts that have, blissfully, restarted following the devastation of foot and mouth, the most notable aspect is the average age of the participants. Generally, they are not slick, executive agribusiness men, as the most vociferous pressure groups would have one believe. In the main, the participants are of advanced years and attend markets every year because, principally, they cannot afford to retire. Even the meagre incomes to which they aspired three or four years ago have evaporated with the collapse of many of their markets. The average hill sheep farm derived an income of less than £350 for the entire year 2000-01. That figure belies the image of farming prosperity. The national minimum wage is irrelevant to the self-employed farmer on such average incomes.

Jim Sheridan (West Renfrewshire): The hon. Gentleman says that the Government do not give rural poverty the priority that it deserves. In a past life, I campaigned to save the agricultural wages boards, which the Conservative Government considered abolishing. Does the hon. Gentleman accept that that campaign to save workers' wages in rural areas was correct? I am offended by his comment that the national minimum wage is irrelevant to farmers.

Mr. Duncan : With respect, the hon. Gentleman misunderstood my comments. I said that the national minimum wage is irrelevant to self-employed farmers who were on an average income of £350 during 2000-01. That occurred before the foot and mouth outbreak.

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The Government could have done more to avert the decline of Scotland's agriculture businesses. In recent years, many businesses' problems have derived from exchange rate movements that have made United Kingdom exports less competitive, which led to a massive drop in prices achieved at auction. However, on too many occasions, the Government systematically refused to claim the agrimonetary compensation to which farmers were entitled. Ever-heightening bureaucracy and red tape have led to escalating costs, reduced incomes and increased poverty.

Sir Robert Smith (West Aberdeenshire and Kincardine): I agree with the hon. Gentleman about the problems of the high pound and the Government's failure to obtain more agrimonetary compensation. Does he recognise that the Government are failing to look to the future? The adoption of a single currency in the rest of the European Union means that the replacement of agrimonetary compensation with a different scheme has not been thought out or negotiated. It is crucial that the poorly paid farmers in both of our constituencies receive a fair price for their exported products and a proper exchange rate for support payments from the European Union.

Mr. Duncan : Yes, I absolutely agree. I simply observe that that is why agrimonetary compensation was introduced, and the lack of claims is of no credit to the Government.

Agencies that are geared towards central belt disadvantage find it difficult to tackle such financial poverty. However, employment opportunities are few and far between in an area where high fuel costs have made profitable business creation a declining art form. As a result, many local residents have never been employed. Even on the dole, however, the substantial disadvantages of rural life become all too clear. To give one example of many, benefit claimants in Upper Nithsdale where, as the Minister knows, the mining industry closed substantially in the 1950s and 1960s and where many families have been without work since, face a round trip of more than 60 miles to the benefits office in Dumfries. As a result, the take-up of some benefits is horrendously low.

Those attending mandatory jobseeker's allowance interviews may spend a full day travelling to attend a half-hour interview. Nationally, the number of 16 to 19-year-olds who are not in work, training or education—currently 14 per cent.—is worse than when the Labour Government came to power. In some parts of rural Scotland, that proportion is even greater.

Hon. Members must remember that the rate of local unemployment to which I referred earlier is in an area where mothers face the impracticality of returning to work, as child care provision is sparse. Many of those who in urban Scotland would be registered unemployed are unable actively to seek work because of their child-care commitments and are therefore hidden within the unemployment statistics of 4.7 per cent. in my constituency.

The Government have good intentions towards the reduction of poverty, but they must undergo a change in attitude away from their perpetual bias towards the

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resolution of urban social problems. Only yesterday, in his autumn statement, the Chancellor of the Exchequer announced a new initiative aimed at kick-starting investments in "deprived areas" and the abolition of stamp duty on business and property transactions of up to £150,000 in such areas. That is a fine initiative, capable of delivering real economic improvement.

On further investigation, however, I found that, of the 135 council wards in Scotland that are classified by the Government as deprived, only two are in Dumfries and Galloway. Hon. Members will not be surprised to learn that 58 are in Glasgow alone. The allocation of financial relief is based on the Government's deprivation indices. They militate deliberately against rural deprivation in favour of classic and appalling—I do not doubt that it is appalling—urban poverty. Until that bias is dealt with, social problems in the countryside will continue.

By anyone's standards, the problems to which I have referred are symptoms of severe financial poverty. What is even more worrying than that financial struggle is the poverty of opportunity that is a feature of rural Scotland. Opportunity has fallen away as small communities have suffered. As average incomes have collapsed so, too, have the communities who depended on them. The key institutions in each small village used to be the corner shop, the post office, the local garage and the primary school. On those entities were built the bones of a sustainable community.

Given the extent to which such sustainable communities are vital to the avoidance of poverty, one would have thought that this and the previous Government would have done all in their power to avert the cycle of decline that has set in. Regrettably, to a significant degree, the Government have been part of the problem, not part of the solution. With whatever little income was left, farming communities have endeavoured to support local service industries. Low-paid local employees have endeavoured, wherever possible, to support their local businesses, yet the same local businesses have had to face escalating costs combined with declining turnover.

For many communities, the other source of significant income was tourism, whereby at least for four or five months of the year, additional income was derived from visitors. Yet, once again, such micro businesses have seen trade collapse, first through the increasing drift towards Scottish tourism, such as Edinburgh and Glasgow city breaks, which I am convinced remains the main marketing objective of our tourist industry north of the border. They then faced the devastating outbreak of foot and mouth disease, which has blighted Scotland's rural economy this year—we must not pretend otherwise.

The major causalities of foot and mouth disease have been the thousands of hotels, bed-and-breakfast accommodations, corner shops and local garages. They have faced the collapse of their turnover with no direct compensation from the Government, who so mishandled the crisis. The Chancellor of the Exchequer announced yesterday that the cost to the UK taxpayer of foot and mouth disease was £2.7 billion. The most enduring legacy of this period has been the loss of many businesses in Dumfries and Galloway, to say nothing of the spin-off effect throughout Scotland.

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The plight of our sub-post office network—another type of micro business—deserves attention. The Minister will recall that we have crossed swords on that issue before. For the foreseeable future, the post office will, remain the key access gateway—the Government like the word "gateway"—to the many other opportunities and benefits that our society seeks to provide. Yet, as has been so widely documented and empirically shown by an increasing rate of closure, the Government's proposal for change is stimulating what can be described only as an implosion in rural communities. The proposed changes to the benefits system scheduled for 2003 are resulting in unprecedented numbers of sub-post offices either closing, or contemplating closure, leaving isolated communities further removed from the mainstream of our society.

The community garage, too, has suffered ever-increasing regulation. Its competitive disadvantage has been heightened by the Government's perpetuation of the fuel price escalator, which has ceased to be a tax on pollution and become a significant disincentive to living in rural Scotland. Not only do rural fuel stations have to contend with prices at an historic high, with tourist traffic declining; they also have to face the continuing burden placed on them by European legislation on fuel vapour emissions.

The picture is one of the fabric of existing rural communities being systematically dismantled by a combination of events within and outwith the Government's control. Were it not for the poverty of ambition in building countryside communities for the future, that would not be so worrying. We face a continuing decline and an ageing of the population in rural Scotland. That demographic time bomb will continue to tick for as long as the problem is ignored.

Government at all levels shows a worrying acceptance—somewhat fatalistically—that decline is inevitable. A classic example can be found in the proposal, currently before Dumfries and Galloway council, to close 42 primary schools. That proposal is perpetrated partly on the basis of cost, but also on the basis that population is declining and school rolls are falling. Nothing guarantees falling school rolls more than the closing of schools.

Central Government need to initiate a debate that focuses on the potential of our countryside, rather than simply on managing its decline. For example, the Government have a long way to go to make teleworking a real possibility, wherever in Scotland a person lives. We must appreciate that the young families of the future will not return to rural Scotland if the small village schools that they crave have been closed for some years.

The Government's policy has more than a passing resemblance to the mistakes made under Mr. Beeching. If we are to avert long-term increases in poverty, our rural areas must seize the opportunity provided by the telecommunications explosion. I have high hopes for the future of regions such as mine, which could offer a combination of high-quality telecom networks combined with the basic attractive requirements of rural life. Unfortunately, yet again, rural Scotland seems to be in the main excluded from the telecommunications revolution that could be the key to its revival.

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The picture of rural poverty is, I hope, becoming clear. I should like the Minister to respond to the debate with imagination and a constructive understanding of the problem that is developing. My contention is not that rural Scotland is experiencing only financial poverty—as I have said, rural incomes have declined hugely in recent years, in many cases to a level that makes the national minimum wage seem attractive—but that there is a new, emerging poverty: poverty of opportunity. Residents of Newton Stewart, Sanquhar, Blairgowrie or Wick are to a large and increasing extent significantly excluded from the opportunities that are developing for the vast majority of their fellow UK citizens. The Government's initiatives to encourage people to take public transport to work are laudable and to be encouraged, but they are of little comfort to people whose community is 10 miles from the nearest bus service or 40 miles from the nearest railway station. The Government's proposals to provide child care to encourage mothers to return to work are to be applauded, but they are of little consequence when local child care is non-existent.

I fear for the poverty of ambition for our countryside that is proving such an unhelpful contribution to my and other attempts to reverse our declining population. Rural Scotland has much to contribute to the UK. It is more than a playground for the discerning few who seek it out year after year; it is still a living, working area with huge social problems that the Government must tackle. I trust that they will do so over the remainder of their term, and I hope that the Minister will signal that change of heart in his reply.

9.52 am

Mr. David Stewart (Inverness, East, Nairn and Lochaber): I congratulate the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) on initiating this important debate. He has a keen interest in rural areas. I know his constituency well, having worked and served there for five years. In my youth, I was a councillor in the old Nithsdale district, and I have fond memories of working there.

I am delighted to make a brief contribution, as I have been interested in poverty in rural areas for a couple of decades, having spent more than 20 years in social work in rural areas with the poor, the unemployed and the dispossessed. As hon. Members will know, my constituency is the largest Labour seat in the UK. It covers more than 3,000 sq miles and includes the islands of Rhum, Muck, Eigg and Canna, as well as the isolated splendour of Knoydart, of which many hon. Members will be aware, the grandeur of Ben Nevis and the breathtaking beauty of Loch Ness. If that is not a good tourist advertisement, I do not know what is.

As someone who was born and brought up in the highlands, I know first hand some of the problems of rural areas, such as sparsity of population, distance from markets, cost of and access to services, isolation, poor transport and low pay, to mention a few well-understood factors that contribute to rural disadvantage. It would, however, be slightly over-simplistic to portray rural and urban dwellers as two separate, distinct tribes, like something from central casting for "The Lord of the Rings". We need a strong, successful economy geared to Scotland's long-term interests. That would be good news for Scots, no matter where they live.

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It is ironic that Scottish Conservatives talk about rural poverty and cry crocodile tears. I am reminded of the last Tory Government's economic record: 3 million people unemployed; interest rates at 15 per cent.; a national debt that doubled; record evictions, and record repossessions in rural areas as well. Some 3,500 post offices were also closed under the Tory Administration. If Conservatives Members care so much about the poor, the low-paid and the unemployed in rural areas, why did they fight tooth and nail to stop the national minimum wage being passed? That was one of this Government's finest achievements.

I remember being up all night, along with other hon. Members, just to go through the Lobbies and make sure that we had a national minimum wage, which is a tremendous life jacket for the poorly paid and the exploited. The national minimum wage has what British economists would call a virtuous circle. What does that mean? The extra spend created by the national minimum wage is spent in small towns and villages, in local shops and post offices and on local goods. The multiplier effect therefore helps the local economy.

Why did the Tories fight to the last ditch to oppose the new deal—a hand up rather than a hand out for the unemployed? The Tories would have denied that help to the 1,200 young and long-term unemployed people in my constituency who have joined the new deal since the 1997 general election.

What will the Government do about fighting poverty in rural Scotland? First, it is important to stress the importance of getting the big picture right before focusing on anything else. What is the big picture? High and stable growth and employment are needed, along with low and stable inflation and interest rates. What is the next step? It is not a question of one size fits all; we need a basket of solutions to deal with rural poverty. For example, in relation to the minimum wage, we must ensure that work pays. We must develop the new deal, focusing on the young, the long-term unemployed and the over-50s. Let us not forget those who are disabled. Statistics in the UK show that more than 1 million people with some form of disability would want to work, and that, with enough support, some 400,000 could be in the job market.

Mr. Dominic Grieve (Beaconsfield): I want to pick up on something that the hon. Gentleman said about the minimum wage. I understand his view that the minimum wage was designed to stimulate the economy in local areas. However, he will agree that, even with the minimum wage, the situation in rural areas is worsening. The minimum wage has not therefore had an impact on that. I dare say that the reason for that is the crisis in agriculture. Does the hon. Gentleman agree with that? Does he therefore also agree that the minimum wage on its own will not be the panacea that he seemed to suggest that it was?

Mr. Stewart : I thank the hon. Gentleman for that intervention. It is important to stress that we need a basket of solutions. The minimum wage on its own is not a solution to all our problems. Evidence from the United States and from other industrial countries with a

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minimum wage suggests that, when it is set at the right rate, it is an important anti-poverty structure because it makes work attractive for many people who would not otherwise be in employment. I know people who work in the hotel trade in my constituency, whose wages were doubled when the minimum wage was introduced. Clearly, we must get the balance right, because employers also create wealth in rural areas. I therefore do not agree with the hon. Gentleman, as it is important to have a national minimum wage.

Let us not forget some of the other measures that have been introduced. The working families tax credit is vital because it makes the jump from no work and benefits, to work and no benefits. It is important to tackle the poverty trap, which is evident in rural Scotland.

The Government have made new proposals. The employment tax credit will help half a million people in the UK who have no children, and is worth up to £35 a week. That is an important anti-poverty strategy. As the Chancellor made clear, we want to ensure that a further 1 million children are taken out of poverty, and our longer-term aim is to eradicate child poverty within a generation.

The British social attitudes survey reported that 71 per cent. of those surveyed were in favour of topping up the incomes of the low-paid through tax credits, so we need to continue looking at that. The minimum income guarantee has been a great help to pensioners in rural areas and is now linked with earnings, which is important.

Annabelle Ewing (Perth): I was interested to hear the hon. Gentleman's list of Government proposals, which he says will make a difference to the plight of people suffering in rural Scotland. Do the Government propose to reduce fuel duty? Scotland has the highest fuel duty in the industrialised world, and that has a devastating impact on the whole of Scotland.

Mr. Stewart : I had intended to discuss transport later, but I shall make a couple of points now. The Government reduced the escalator—[Interruption.] The hon. Lady asked a question, and I am happy to answer it.

The Government are promoting environmentally friendly fuels, such as liquid petroleum gas, which, as a result of my personal experience, I have been very keen on in rural areas. Its cost has been preserved, so that rises in its price are lower than the inflation rate. The Government have developed a rural transport policy, the funding of which will lead to the opening up of transport links throughout rural Scotland. It is important to address the long term, and I shall develop that point later.

Sir Robert Smith : I have been running take-up campaigns in my constituency to help people to access the minimum income guarantee. Is not one of the challenges in rural areas to ensure that people claim such benefits—complex forms often have to be completed—by providing them with information and support?

Mr. Stewart : The hon. Gentleman makes a valid point. During my previous life in social work, I was very

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keen on maximising the take up of benefits. The Government are introducing low-cost helplines that provide a one-stop shop for retired people: they can call a central number to find out what benefits they are entitled to. It is important that we maximise take up; one of the advantages of the £200 winter payment is that, because it is a universal benefit, the take up has been high. A crucial challenge for the Government is to ensure not only that we offer good benefits, but that the take up of them is maximised. New technology provides the answer to many of the problems that face us, especially in rural Scotland.

Sir Robert Smith : Many people who apply for such benefits are refused at the first hurdle, so that they have to appeal. Does the hon. Gentleman recognise, from the evidence of his own casework, that the process of appeal is much enhanced if someone is present to assist? The collapse of funding for independent advice centres has major implications for the availability of access to such advice in rural areas. Therefore, it is crucial to link up with the Department for Work and Pensions, as a reserve power, so that some of its resources are used to ensure that people make the best use of the system that is designed to help them.

Mr. Stewart : With regard to appeals, all of the evidence suggests that representation increases the chances of winning. We must take account of the excellent work that is done in Scotland by independent advice agencies and citizens advice bureaux—I declare an interest, as I used to be a CAB volunteer—which, although they struggle for funding, do a fine job and can help maximise take up. I am enthusiastic about the work that they carry out in rural Scotland.

Let me return to my basket of solutions. I mentioned the minimum income guarantee, but we should not forget middle-income pensioners—people who have some savings and occupational pensions. The pensioner credit will help many such pensioners in rural Scotland.Finally, I wish to flag up the importance of the integrated tax credits that the Government will introduce, as joined-up thinking is important in the fight against rural poverty.

The hon. Member for Galloway and Upper Nithsdale said that economists sometimes talk about the poverty of opportunity, and the hon. Member for Perth (Annabelle Ewing) asked about that with regard to transport in rural areas. I welcome the work that the Scottish Executive have done. The rural transport fund is now worth £18 million over three years, and 350 new or enhanced services have been introduced, particularly bus routes, and—as I am aware from my constituency—ferry links, which are crucial.

Let me offer an example from my constituency. Money from the rural transport fund has enabled the Grantown community car scheme to be set up. It works simply: elderly, unemployed and low-paid people are provided with links to shops, and to hospitals to visit relatives. It is a good example of what can be achieved in areas without a bus service; crucial links are established so that normal community life can continue.

Rural poverty in Scotland is being tackled by social inclusion partnerships. I offer another example from my area. The Highlands and Islands social inclusion

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partnership aims to equip vulnerable youths with the skills that they need to make the transition to adulthood. It targets young people in fragile rural communities, such as the Highlands, Orkney and the Western Isles.

The Scottish Executive's report on poverty suggests:

There is strong evidence, however, that development of information and communication technology can overcome social exclusion and poverty in rural areas. It is clear that barriers to work, such as lack of child-care facilities, remain a big issue throughout rural Scotland. Access to services such as rural post offices is vital, which is why I welcome the Government's formal requirement that the Post Office maintain the rural network and prevent avoidable closures until 2006.

By far the most important factor, however, is rigorous economic management during global slow-down, combined with strong Government redistribution to those in poverty. As Bharti Patel, director of the Low Pay Unit, said:

In their first term, Labour were the most redistributive Government since the 1960s. As a result of changes to the tax and benefit system, the incomes of the poorest 10 per cent. of the population rose by 13 per cent., and the incomes of the next poorest groups rose by 10 per cent.

There can be few higher goals for this Government than fighting poverty across Scotland. Scots in rural and urban areas need a Labour Government not just for economic competence but for social justice.

10.6 am

Pete Wishart (North Tayside): I, too, congratulate the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) on securing this important debate. My constituency is similar in size and geography to his, although I would of course contend that mine is much more scenically attractive.

I know at first-hand the suffering caused by what can only be described as a rural recession, or even a depression. The outlook for the rural economy in Scotland has never been so bleak. There is real pain out there, and there seems little prospect of any significant improvement. Every sector of the rural economy and every countryside activity is experiencing real difficulty. Farming, tourism, food production and even rural manufacturing are struggling in an environment that is clearly deteriorating.

My constituency is dominated by the large rural industries of farming, food production and tourism, but unfortunately we have a Government who seem almost blind to the suffering in rural communities. So far, they have been unable to respond to rural communities' clear appeals for help. Perhaps uniquely in the economic cycle, the first port of call for the impending economic slow-down or recession will be our rural communities. When the chill wind of recession blows, it is usually heavy industry and urban concerns that catch the first cold. This time, it is our rural economies and countryside that will catch that cold—if they are not already suffering from pneumonia.

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Rural activities such as farming, food production and tourism are already suffering because they have been weakened by high fuel costs, foot and mouth disease, the BSE disaster and an unfavourable exchange rate. Those industries are now highly susceptible to changing economic circumstances that cannot be offset by the hard work, endeavour and forward planning of employees. Those who work in such industries have to confront pressures that are completely outwith their control. Our rural communities have faced blow after blow, and many are on their knees.

In her evidence to the Scottish Affairs Committee, the Scottish Executive's then Communities Minister admitted that one in four people in poverty lived in rural areas. According to a report published by the Scottish Executive in May 2000, earnings in rural areas tend to be below the Scottish average. The Government also concede that farming incomes have reduced by some 90 per cent. since the mid-1990s. A 200 hectare farm that earned £80,000 a year five years ago must now survive on an income of £8,000. That is a spectacular loss of income. One would think that, on being presented with figures such as those, the Government would develop many strategies and approaches to offset the problem, but all that we get is complete inactivity.

We must not talk about the crisis in rural Scotland solely in terms of farming and agriculture, because there is much else that goes on in those communities. Highland Perthshire and the Angus glens are in my constituency and they almost entirely depend on tourism for economic viability.

Tourism has had an awful year—more than that, it has had an awful five years. It is worth some £0.25 billion to the Scottish economy and, at its height, it employs about 8 per cent. of the Scottish workforce. This year, however, the Scottish Tourism Forum estimated that in March £10 million was being lost every week in tourism. While that may be a problem for the whole of Scotland—I have no doubt that urban settings suffered because of foot and mouth—its impact on rural communities is disproportionate. In my constituency, hoteliers are considering moving out and people who run bed-and-breakfast accommodation have had only a handful of bookings this year. The potential offered by tourism in Scotland is enormous—especially in North Tayside, where there are so many scenic attractions—if only the Scottish Executive could see that. We must get people there and start to treat tourism as an important industry that is crucial to the well-being of the Scottish economy.

We must not overlook the contribution of manufacturing to our rural economy. It is doubly important because there is evidence of a prevalence of low-skilled, low-paid employment in rural areas, as well as a large number of seasonal and part-time jobs. Manufacturing provides a career for young people and is a means of keeping them in our rural communities, but it is hurting. During the past few weeks, some 30 manufacturing jobs have been lost in my constituency. If that happened in an inner-city area, it would concern few apart from those families involved and would impact little on the local economy. However, to lose 30 jobs in a rural setting—a town of between 5,000 and 8,000—is an almost unsustainable crisis.

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I have spoken to managing directors who have had to announce job losses, and I have discovered the increased costs of manufacturing in rural areas. Distances from markets create high fuel and logistical costs. Small manufacturers are under boardroom pressure to relocate to the central belt in out-of-town modern facilities, close to the motorway network. There is also a lack of support from the enterprise network, which seems to be more interested in assisting inner-city initiatives. People talk about social exclusion and deprivation in cities; what about the evidence of real poverty, social exclusion and deprivation in the countryside?

The closure of factories, with the loss of associated jobs, means that young people are becoming unemployed. Their prospects of finding work in another industry in a rural setting are practically nil, given the situation that confronts them. I maintain that unemployment in rural Scotland is a worse prospect than unemployment in an inner city. Benefit take-up is also a problem due to the lack of provision and information on how to claim benefits. Rural people are proud, especially farmers of a particular generation, for whom claiming benefits has a stigma attached. A self-reliant culture in our rural communities and the countryside inhibits people from coming forward to claim the benefits to which they are entitled. Thus in addition to visible poverty, a strata of people live in hidden poverty. Unemployment is the most crucial element of that, which is why job creation is so vital.

Small businesses and other rural industries must be created and supported, and barriers to employment, such as the red tape involved in creating a business, must be addressed and overcome. We must hold on to our young people because they are the life blood to rural communities. Educated and skilled workers must be retained.

I agree with much of what the hon. Member for Galloway and Upper Nithsdale said about failed Labour policies in the countryside, but we must go back further to pinpoint when the crisis began. I suggest to the hon. Gentleman that the BSE crisis, and the appalling way in which the Conservative Government handled it, was the first blow. The countryside never fully recovered, and it made subsequent blows all the more difficult to sustain. I remind the hon. Gentleman that it was the Conservatives who introduced the fuel price escalator, which has had a great impact on rural communities. Perhaps, it is the biggest burden that the countryside has had to endure.

Car dependency is, perhaps, the best example of how rural poverty is substantially different from urban poverty. When assessing poverty in urban areas, car ownership is considered indicative of a better standard of living, but in rural areas, a car is more likely to be seen as a necessary financial burden that gets a person from A to B. That burden is further exacerbated by high fuel costs in Scotland and the fact that fuel is even more expensive in rural areas.

Our rural areas are going through a period of profound change. For the first time in a generation, we have the opportunity to map out a new type of future for the countryside. Unfortunately, that opportunity has been presented to a Government with little interest in rural affairs. If we do not get it right, there will be a second wave of clearances in rural Scotland. Many

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talented young people are already leaving owing to the lack of opportunities. For many people, Scotland is our hills and glens. Let us ensure that the strategies are put in place to retain our talented young people and effectively to tackle poverty in rural communities.

10.15 am

Mr. Archy Kirkwood (Roxburgh and Berwickshire): I am happy to take part in this important debate and I congratulate the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) on securing it.

I listened with interest to the contributions of the hon. Members for Inverness, East, Nairn and Lochaber (Mr. Stewart) and for North Tayside (Pete Wishart). We all have a common interest in trying to look forward when dealing with the issues that face our constituents and our country. It is not instructive to look back or to try to allocate blame for what went wrong and for which Government were responsible. It is better to focus on the problems that face us in the future.

Depopulation is a problem that is unique to rural areas—it does not affect urban and city populations. The hon. Member for North Tayside mentioned the highland clearances. That is rather extreme language. However, depopulation is a spectre that will continue to haunt our communities unless the right long-term planning policies are put in place through central Government working with other agencies. I have reservations about the extent to which central Government can solve such problems in a top-down way, and they are always, understandably, tempted to put their name on initiatives and new policies. Many issues are better dealt with if they are devolved and decentralised to local government, the voluntary sector and corporate entities—some companies are now shouldering their social responsibilities, which is welcome.

The massive changes simultaneously experienced by the agriculture, forestry and fishing industries have created difficulties, and it is hard to be optimistic about what will happen in any of those three sectors. I suspect that we will end up with much larger farm units—agribusinesses instead of family farms—that the fishing communities around our coasts will face increasing resource conflict in terms of stocks and the catching capacity of the fleet, and that the forestry industry will remain in a state of flux owing to the high level of the pound and competition from other parts of the world where production costs are lower.

The future of our rural communities must be considered against that background. Unless policies are put in place to deal with it, employment will continue to suffer attrition. In my constituency, particular problems are faced by men who have worked on farm units for generations as tenants dealing in livestock. The combination of BSE, foot and mouth disease and a series of other problems is putting them under a degree of pressure that I have not seen in the past 20 years. Central Government must deal with that, but I am not sure that the Scotland Office is in the front line of policy making. If I were the Minister, I would spend a lot more time trying to get the Department for Environment, Food and Rural Affairs to understand that the agriculture industry in Scotland cannot be left to market forces in the way that parts of it can in some areas of the

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United Kingdom. Scotland Office Ministers have much work to do with the Minister for Environment and Rural Development in Edinburgh to try to give some hope and security to the farming, forestry and fishing sectors.

Depopulation and the future of the farming industry are integral issues when planning to deal with poverty in rural areas. I was interested to hear, and agree with, the remarks of the hon. Member for North Tayside on manufacturing industry. We might not have large-scale manufacturing sectors in our rural constituencies, but pockets of small-scale manufacturing industry need to be nurtured and supported. Most operate in niche markets. In my constituency, the textile industry has passed through a difficult phase in the past few years, exacerbated by such things as the banana war. That industry has a contribution to make, and needs help from central Government in securing trading conditions.

I agree with the hon. Member for Inverness, East, Nairn and Lochaber that we need to keep the big picture in mind. The big picture of economic stability is integrally important, but with skill, innovation and creativity, central Government can help industries such as the textile industry to flourish. I am pleased to see Ministers making good use of Dover house for trade promotions in a way that plays to the industry's strengths. I hope to see more useful initiatives of that kind.

On the wider issues of poverty and social security, I do not subscribe to the view that there are differences between urban and rural populations, and I would not encourage people to create such differences. The issues are generally the same. Looking at the incidence of incapacity benefit take-up on the west coast, and the epidemiology of heart and lung, and other, diseases prevalent in that area, it would be a dereliction of duty if central Government failed to concentrate on such problems. However, it is not an either/or situation. Getting a basic framework within which people can operate is the way forward, and whether one agrees with the policy or not, it is irrefutable that, since 1997, the Government have at last had a policy: welfare to work.

I support that welfare policy. Work for those who can and security for those who cannot is a catchphrase, but it encapsulates a changing culture that I warmly welcome. However, I am becoming concerned about implementation problems, which apply in rural areas as well as everywhere else and revolve around the means testing now being used and the complex interrelation of some benefits.

That leads on to the points made by hon. Members earlier about take-up and eligibility. People can test their eligibility and do a better-off calculation to find out whether they will do better in low-paid work. Although the Government's strategy is heading in the right direction, difficult problems will emerge if we do not take account of the fact that we have moved away from a social contributory system where people, through national insurance contributions, pooled risk, paying in during periods of employment when they had an income and drawing out when they did not. Call me old fashioned, but that concerns me. The classic Beveridge system set up after the second world war has been abandoned by default.

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New plans coming from the Treasury, such as those for tax credits, are making matters more complicated. From 2003, we shall have the employment tax credit, the pensioner credit and the integrated child credit. By that time, the national insurance contributory principle will have been all but abandoned. That has happened by default, and we should have a discussion on the long-term consequences of that change for welfare and social security in rural and other parts of the country.

Another recent, significant change is the increase in the disparity of wealth, which is as much a feature of rural as of urban life. People face much wider scales of wealth disparity, and the Labour Government are encouraging it, which surprises me. Central Government, the Prime Minister and the Chancellor seem to have no concern at the increasing disparity. Those who are rich are becoming very much richer and those at the bottom of the pile are becoming disproportionately and relatively poorer. I am not saying that people are starving. The indicators of poverty are relative, not absolute, and we must be careful not to get matters out of proportion. However, I fear that if we are not careful we shall end up with great disparity of wealth, which is more obvious in a rural than an urban context. We should be careful about that because it will make matters significantly worse.

Since I was elected in 1983, I have become increasingly convinced that there is no evidence base on which to make informed policy decisions about the incidence of poverty in rural areas. I make no complaint about that—it is not a party political point. The statisticians are challenged because statistical samples are often difficult to obtain in a disparate population. I believe that the Secretary of State, with whom I have had one or two informal as well as official conversations, understands the problem. In my constituency, the unemployment claimant count is useless as a measure of anything. Unemployed people go away: they do not hang around in Hawick or Galashiels for six months; they go to Edinburgh or Newcastle. That is not necessarily so in inner cities because the population is more stable in urban areas, but in rural areas there is a predilection and an incentive for people to leave. The statistics and indicators used to calculate local government spend are not secure or robust. If I had one wish this morning it would be that we were all better provided with robust data on which we could plan for the future.

I was pleased that the Scottish Executive's rural poverty and inclusion working group, which has been working on some of these issues for the past year, produced a report in September 2001. One of the key messages in that report is that the evidence base is insufficient and that a particular problem in rural areas is that people tend to move away and remove evidence of the problem. The group identified that as a difficulty and I hope that the Government will put some resources into investigating the problem. We would all be better off if we had more robust data.

During the 18 years that I have represented Roxburgh and Berwickshire, the nature of the working economy has changed substantially. When I was elected in 1983, there was male domination in the proportion of those employed. Work was full time, highly paid and highly

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skilled in industries such as textiles and electronics. We have now moved to more casual employment with more women in the workplace, which is good, often in part-time and casual work. I was startled when I first came across two-earner households that are still living in poverty, but that is a regular occurrence now. In 1983, households with two people bringing in wages were relatively well provided for. It is true that average earnings in rural areas are much lower than in other parts of the country. I am not too bothered about that by itself, but I am bothered about the fact that, following the decimation in the manufacturing and agriculture sectors, the new type of jobs that people are finding is part-time, casual work in the service sector. Although they are bringing two wages into the household, they are still struggling and falling in and out of poverty.

I welcome the fact that the Government have recognised that problem by introducing the working families tax credit, which will be a significant help. The minimum wage has also been a significant help, because it has put a wage floor under some of those casual and part-time jobs.

The adage is, "Work for those who can", but just because people are in work, it does not mean that they are well off. Even in two-earner households, people are classified by any meaningful relative measure as falling in and out of poverty. Benefit levels are not designed or high enough to support families over periods of time, particularly those with children and loan families with children. It is possible to live a serious life with proper inclusion for weeks or months—perhaps it is not easy, but it is possible —but the benefit system does not adequately cope with big household items having to be replaced. Some families are in real distress as a result.

Families now drop in and out of poverty. It is not just the number of families that are in poverty that is worrying, but the way in which they fall in and out of poverty and the length of time that they are below the level that it is sensible to live on.

The issue of debt in my constituency is frightening. I do not know whether it is just a rural problem. I suspect that it may be even worse in our cities. The extent to which people are now using catalogues, money lenders and loan sharks to get by from week to week is frightening. It is now a culture. Again, there has been a substantial change since I was elected in 1983. People are being encouraged to go into debt. People are knocking on their doors and saying, "How about a loan to pay the loan, to pay the loan?"

Those people need proper access to advice. Central Government should look at how to encourage agencies such as the citizens advice bureaux to help in that regard. Excellent work is done by welfare rights officers in local government in my constituency, and I am sure in others too. Such help is essential to protect people from the clutches of loan sharks.

As a result of what I have said about debt, the social fund, which seeks to help people as a fund of last resort, needs to be substantially reformed. We need to put more money into it, because it can throw a lifeline to people who are in desperate circumstances. It does not work properly at the moment.

The Government need to sort out housing benefit in this term, which they have not done to date. I am worried about the increased charges for water, council

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tax and other housing costs in the coming weeks and months. The whole issue of child care needs to be properly addressed, so that people can take jobs in rural areas.

I do not want to prolong my speech, because I know that hon. Members want to get to the Scottish Grand Committee and the Minister wants time to respond to the important points that have been made in this debate. The rural economy needs specialist treatment, but central Government cannot produce all the solutions themselves. I hope that the Scotland Office will look carefully at what local government, the voluntary sector and some industries and companies can do to produce local variations of projects and initiatives that come from the bottom up, rather than the top down. If we do that, it will make a difference in all our constituencies. If we do not do it, the spectre of depopulation will not go away. If the Government are not careful, they will look back in five years and rue the day they left our hills and valleys with no one working in them. That would be in no one's interests.

10.35 am

Mr. Dominic Grieve (Beaconsfield): My hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Duncan) is to be congratulated on having brought the subject up for debate this morning. It has been educational. I represent what the literature with which I am bombarded describes as a rural constituency. That seems to indicate that there are more green areas than built-up areas. However, it is a million miles removed in description and economic profile from the sort of constituency that my hon. Friend represents. When discussing rural areas, particularly rural areas in Scotland, it is easy to use generalisations that bear little relation to reality or to their diversity.

I was interested to hear the contributions this morning. The majority of hon. Members have described areas that by national standards are now something of a rarity. The indicators produced by various councils for environmental conservation describe them as quiet areas. They should be attractive to people to move into precisely because some of the environmental aspects are so desirable.

I know a little about the constituency of my hon. Friend the Member for Galloway and Upper Nithsdale because I have walked over parts of it, and I remember having crashed my car on the night of new year's day some years ago—[Interruption.] I was not the driver. I first-footed a family at a farm called Palgowan 18 hours after new year, which is a reflection of how isolated the farm is. It is noteworthy that it had diversified by trying to attract visitors in the summer. I shall return to that in a moment.

I was struck by the comments of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). My family used to farm in that area but was forced off the land in the 1930s by the agricultural depression. There is a cyclical pattern to some of the problems affecting rural areas. The hon. Gentleman made a point about rural depopulation, but in many rural areas the principal concern, if we listen to south-east Members, is the fear of rural over-population and the disappearance of the attractiveness of the areas that they represent.

From experience and observation, fundamentally, the areas described by hon. Members are underpinned by agriculture. Although there may be arguments about

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diversification, its contribution to the local economy in percentage terms will not be a major one. It has always seemed to me that the agricultural sector in those areas underpins not just the economy but the whole way of life. That is what makes those communities tick. The agricultural crisis that has hit this country, particularly areas that depend on stock raising, is the fundamental issue that must be dealt with.

The hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) gave a long list of initiatives that the Government are taking to alleviate poverty. I do not disagree with the initiatives, and they may have an impact. However, I hope that he will forgive me—I do not mean this pejoratively—for saying that they are, by necessity, palliatives that attempt to ease the problem. They do not deal with the underlying difficulties.

In the areas of which hon. Members have spoken, the economic base has been either seriously eroded or is in danger of collapse. The structure of society has collapsed without agriculture because of communication problems, which are considerable in Galloway, and high fuel costs that act as a disincentive and make it difficult for business to relocate to such areas.

I agree that there is no difference between rural and urban poverty. Poverty exists in parts of my constituency despite its wealth and proximity to urban areas. However, rural poverty is out of sight and out of mind. I have always been struck by the fact that it is easy to overlook the frequently dire conditions in which people live, their lack of access to services and isolation from each other because of the general attractiveness of their environment. There has been fragmentation of the social networks that used to underpin rural areas, which may not have enjoyed the wealth of an urban area but gave a greater quality of life and, therefore, made the area pleasant and attractive, which drew people to it.

My hon. Friend the Member for Galloway and Upper Nithsdale told me that despite the isolation of such areas, charges other than fuel duty may be very high. I gather that band D council tax in his constituency is £978 per annum. That compares unfavourably with some London boroughs. Therefore, these places have their social structure assaulted by economic problems and general difficulties of overburdening council tax, bureaucracy and general taxation.

The fuel escalator—and its past manifestations—tipped the balance in rural areas. I received enormous representation on the matter when I was a spokesman on Scottish matters. I accept that the fuel escalator was introduced by a Conservative Government and justified by environmental benefits. However, there is always a point when someone should have the common sense to observe that a scheme has gone wrong or too far. The Government failed to observe the extent to which the fuel escalator moved from being a disincentive for urban dwellers to use their motor car, to being a powerful factor that forced rural areas into considerable recession. I am glad that the policy has been reversed, but much damage has been done over the past four years.

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A point was made about sub-post offices. I am not clear where future strategy lies in view of the contribution that they make to maintain rural communities. If rural areas such as those of my hon. Friend the Member for Galloway and Upper Nithsdale are to recover, the key will be to solve the agricultural problems. Without agriculture, such areas are deserts with nothing but small pockets of population. We must provide a general economic climate and framework that makes it worth while for people to diversify into local businesses that are essential for the return of rural prosperity.

One has to compare only my hon. Friend's area with parts of rural Cambridgeshire to see the contrast. In Cambridgeshire, there is a mix of agriculture and dynamic local businesses that operate out of small, village trading estates. Communication, ease of transport and the desirability of the environment make it worth while for people to settle and invest there. Ultimately, only investment, not Government, will solve the problem. That is a real challenge.

I do not wish to be overcritical of the Government, in view of the problems that they face. We must consider those matters, rather than—or perhaps in tandem with—making palliative efforts to alleviate poverty immediately. I wait to hear the Minister's response. I thank my hon. Friend the Member for Galloway and Upper Nithsdale for introducing the debate. I am now far better informed than I was when it began.

10.45 am

The Minister of State, Scotland Office (Mr. George Foulkes) : I have represented a rural constituency of 800 sq miles—not quite as big as Inverness, East, Nairn and Lochaber—for almost 23 years. That is a little longer than the period for which the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has represented his constituency. My constituency has had significant problems with poverty.

I, too, congratulate the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) on securing the debate. After all, rural Scotland is important to all of us. Rural Scotland covers 89 per cent. of the Scottish land mass, and includes 29 per cent. of the population. The hon. Member for North Tayside (Pete Wishart) said that one in four people in Scotland is in poverty. Given that some 29 per cent. of the population live in rural areas, that is perhaps not much of a surprise. Rural Scotland provides 27 per cent. of total employment in Scotland.

We recognise that the area has distinctive needs. The hon. Members for Galloway and Upper Nithsdale and for North Tayside have painted a picture that distorts the reality, and what the Government are trying to do and have done to tackle the problems in the past five years. I sometimes think that Scottish National party Members are more concerned with the welfare of the SNP than with what is best for Scotland.

My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall)—a more urban constituency could not be found—was Chair of the Select Committee on Scottish Affairs when it produced its report on poverty, which acknowledged that there were problems

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with employment, farming, transport and benefit take-up. The report also said that Scotland had many natural assets, including the wonderful environment. Some hon. Members have claimed that theirs is the most beautiful constituency in Scotland. I beg to differ; hon. Members should come to see mine. We must maximise such assets, and not talk Scotland down or minimise the opportunities that we have.

The Scottish Executive, as the hon. Member for Roxburgh and Berwickshire mentioned, produced a report on rural poverty and inclusion, which was honest about the problems with access to services, transport and visibility in rural areas. People in rural areas notice those who are poor much more than those in urban areas do. There is a culture of self-reliance in rural areas. We recognise those problems. We are not complacent about them, and we are tackling them.

The hon. Member for Beaconsfield (Mr. Grieve), of all people, had a bare-faced cheek to raise the question of unemployment. He should think back to 1986, when unemployment in Scotland was at 331,000. I do not know whether that was when he crashed in Galloway, but if it was, I can understand why. Unemployment was at 12.9 per cent. It is now less than a third of that figure, and we are taking measures to bring it down further.

In the constituency of the hon. Member for Galloway and Upper Nithsdale, unemployment, at 4.9 per cent., is a little greater than the national average, but we have helped. Some 961 people have benefited from the new deal, and 512 of them—people who would not be in work if it had not been for Government measures—have received jobs. Unemployment among 25 to 49-year-olds in Dumfries and Galloway has fallen by 14 per cent. in the past year.

Mr. Peter Duncan : It is worth restating the excellent point made by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). He said that many of the unemployed never appear in unemployment statistics, because if a person does not have a job in Ballantrae, never mind Traigh Mhor, he or she moves. That is the problem.

Mr. Foulkes : The unemployment level is low throughout Scotland and throughout the United Kingdom, so such people have found jobs, even if they have gone to Edinburgh to get those jobs. It is not the end of the world to move to Edinburgh to find employment. In his balanced speech, the hon. Member for Roxburgh and Berwickshire acknowledged what the Scotland Office is doing for cashmere, and we could now add Harris tweed to that. We also provided much help during the banana wars, but I shall explain more about that on another occasion.

It is not only unemployment that is the problem. People who are in employment must be paid properly. The national minimum wage, which is so derided by Conservative Members, has made a huge difference to poverty in Scotland, as my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) said. More than 135,000 people have benefited from it. It is particularly helpful in rural areas where there has been a tradition of low pay, and to women, as my hon. Friend the Member for Ayr (Sandra Osborne) knows.

My hon. Friend the Member for Inverness, East, Nairn and Lochaber outlined the actions of the rural transport fund. It has assisted 33 filling stations in the

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highlands, the importance of which has been recognised. During the next three years, the Executive are to spend an extra £60 million on transport in the highlands and islands. That includes £13 million for Caledonian MacBrayne, £21 million for Highlands and Islands Airport Ltd., almost £20 million for piers and harbours and £1.5 million for lifeline air services. That is evidence not of neglect, but of understanding the problems and tackling them. I am sorry that my friend, Sarah Boyack, is no longer the Scottish Minister with responsibility for transport. She did a great deal for rural areas in the highlands and islands. When I was with her in Orkney, she was one of the most popular Ministers I have ever known.

The hon. Member for Galloway and Upper Nithsdale and I have crossed swords on the Floor of the House about post offices. The hon. Member for Beaconsfield had the cheek to raise the matter of post offices but, as my hon. Friend the Member for Inverness, East, Nairn and Lochaber said, 3,500 closed when the Tories were in power. We have placed a formal requirement on the Post Office to maintain the rural network and to stop avoidable closures. That will apply until 2006 in the first instance. We have invested £480 million to modernise the network and the spending review for 2000 included further provision for ring-fenced funding of £270 million.

I have taken a particular interest in the constituency of the hon. Member for Galloway and Upper Nithsdale, as well as my own. I told him that no post offices had closed in my constituency. Two have closed recently at Kipford and Dunragged in his constituency: one person who was the manager became ill, while the other person gave it up. The job in Dunragged has been advertised and interest has been expressed in it. I hope that the post office will reopen.

The Government have a fund to help rural post offices to reopen. I take an interest in such matters as a Minister as well as a Member of Parliament. Others can take a personal interest in their constituencies and find people to take over post offices. Rural post offices provide good job opportunities. I advise the hon. Gentleman and others to take up the issue. It will help them to get re-elected, too, which is not unimportant.

It is worth tackling issues such as transport and the future of the post office network, but we must recognise the need to tackle poverty suffered by individuals. Supporting businesses and supporting individuals go hand in hand. The Scottish Executive have established 48 social inclusion partnerships, including those in Argyll and Bute, the east Ayrshire coalfields, the highlands and islands, Moray and the Scottish Borders. Lots of money is coming in to help rural areas. I was pleased to find out yesterday that nearly £8 million in health compensation has gone to ex-miners and widows in my constituency, although it is not as much as has gone to yours, Mr. Illsley.

Another significant issue for rural areas is the take-up of benefits and tax credits. My hon. Friend the Member for Inverness, East, Nairn and Lochaber referred to help lines and take-up lines. We are encouraging people to use them, so that they can access information and ask for forms to be sent to them. We are improving the position with new information and communications technology. Ukonline will make it possible to claim benefits through the computer as well to register births

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and to apply for passports. Such new technology will be especially important to rural areas. Thirty-three per cent. of rural households have access to the internet at home and the Government are committed to having all public services delivered electronically by 2005 where that is feasible. That will be of great value to rural areas. Even people my age can understand how to use modern technology. By modernising the Government's funds, a number of pilot schemes—including six in rural Scotland—have been supported. We recognise the problems. We are not ignoring them or being complacent. We are tackling them.

I went to Dumfries and saw the work being done by all the agencies to tackle foot and mouth disease. The co-operation was fantastic. I was really impressed and congratulated everyone involved. We have tackled foot and mouth and are providing many resources for the constituency of the hon. Member for Galloway and Upper Nithsdale and the neighbouring constituency of Dumfries. We gave £13.5 million in hardship relief and £7 million for interim support of the worst affected areas. On 2 August, we gave £10 million for long-term recovery, particularly of agriculture and tourism.

We did not start foot and mouth disease. Listening to some Conservative Members, one would think that we caused it. We tackled it a great deal better than the Conservative Government tackled bovine spongiform encephalopathy. I agree with the hon. Member for North Tayside that we are still suffering the legacy of BSE.

Mr. Grieve : The Minister is so satisfied with the way in which the Government have handled the foot and mouth outbreak, but why have they refused to have a public inquiry into its handling, resorting instead to a series of inquiries where the evidence will not be heard in public?

Mr. Foulkes : We have had not one inquiry, but three, because we are concerned about the matter. We are working to ensure that the farmers' products are exported. The hon. Member for Beaconsfield spoke of the importance of farming. It is vital for farmers to be in operation, but they need markets to sell their goods. I am pleased that, after much work, we have successfully negotiated our way back into the European market. The whole of Scotland can now export pig meat, sheep meat and beef, subject to the requirements, which I am aware are stringent, of the date-based export scheme. There is hope for the future.

I find this type of debate strange. Where were the hon. Members for Galloway and Upper Nithsdale and for Beaconsfield between 1979 and 1997? Were they asleep? Have they woken suddenly, to discover those problems? Do they not remember the huge increase in rural unemployment— the biggest cause of poverty—that we suffered under 18 years of the Tories? In my constituency and that of Galloway and Upper Nithsdale, 5,000 people were thrown on to the scrap heap because of pits closed by Thatcher and her cronies. Also 3,500 post offices were closed.

I say to the hon. Member for Beaconsfield, a home affairs spokesman who is allegedly interested in crime, that crime doubled under the Tories. Conviction rates fell. Now we are tackling the common agricultural

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policy. The Conservatives made no effort to tackle that. When they were in office, this country spent less on rural development than any other European Union country, except for Spain and Greece. They managed the BSE crisis hopelessly. They created a decline in the number of affordable rural homes for local people. Public transport in Scotland was underfunded, and deregulation devastated bus services. That is still causing havoc in my constituency, and no doubt in Galloway and Upper Nithsdale, too. The Conservatives voted against us, rejecting a national minimum wage. People should be careful.

It seems unlikely, especially to me and you, Mr. Illsley, that there will ever be a Tory Government again. There is, however, an outside chance, and if that were to happen, rural Scotland would again suffer badly. I have not spoken about fuel, but the present Government are taking measures to provide cheaper fuel and cheaper motoring in rural areas. They support public transport.

If the Tories were to be re-elected, they would, instead of dealing with such issues, slash extra funding for rural schools, cut funding for rural police, and axe school transport for rural areas. There would be increased rural unemployment and poverty. Food safety would be put at risk and farmers would be affected. That is why the people of Scotland, including people in the rural areas of Scotland, will continue to return Labour Members of Parliament.

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