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Bob Spink (Castle Point) (Con): Has my right hon. Friend had any indication from the Home Secretary of the impact on the council tax police precept? Does he agree with the figures that have been suggested for the merger of Essex police force, which might put up the police precept by 20 or 30 per cent.?

David Davis: The Home Secretary was asked that question in an intervention, but he dismissed two important assessments of the issue as guesswork. I shall now address it in some detail. The O'Connor report, on which the Home Secretary bases his argument, is 113 pages long, of which just one and a half pages cover how the merged forces will deliver savings. A figure of   £70 million is asserted, but is completely unsubstantiated. The report says that the change "could save" some £70 million in the long run, but equally it might not. There is every chance that costs will go up, not down, especially information technology costs in which both the Home Office and the police do not have a brilliant track record.

If nothing else, all experience shows that the process of amalgamation will be a ferociously disruptive and distracting exercise, for probably several years, during which time neither the terrorists nor the criminals will take a rest. The draft calculations in the report are far from convincing, and so is the evidence from history.

I am sure that many hon. Members will remember what happened on a previous occasion when a Labour Government amalgamated two institutions to try to drive up standards and cost-effectiveness. They took one poorly run car company and one very successful international lorry company, put them into one and created a disaster called British Leyland. The history of amalgamations does not inspire confidence. Rather than raising the average of all, they often pull successful institutions down. Even if the projected operational and cost improvements can be achieved, it is clear that they could also be achieved through the simpler federated structure, with forces providing mutual support and co-operation. That would have the added benefit of avoiding heavy up-front costs.

Mr. Henry Bellingham (North-West Norfolk) (Con): My right hon. Friend will be aware that after the Tony   Martin case there were several cross-border policing issues. Norfolk constabulary entered into a federation with Cambridgeshire and Lincolnshire, which has achieved a great deal. It meets many of the aspirations in the inspectorate's report. Does my right
 
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hon. Friend agree that the Home Secretary has not answered the question that was put to him about federation and that that is surprising, given that he is a Norfolk MP?

David Davis: My hon. Friend is right. When the Home Secretary was questioned on that point, he dismissed federation as not having sufficient strategic direction. However, within a couple of minutes, he gave an example of four different armed response units being within 10 miles of one another. That is precisely the situation in which a federated solution would provide both economy and an improvement in effectiveness without any need for a strategic direction.

Mr. Mark Francois (Rayleigh) (Con): My right hon. Friend is, like me, an ex-Territorial Army soldier and will appreciate an analogy with the armed forces. It is possible for different regiments to work together—the British Army does that all the time at brigade and divisional level—but they do not need to be merged into one super regiment to achieve efficiency. If it can work for the armed forces, why cannot it work for the police?

David Davis: My hon. Friend is right. Ministers are obsessed by the idea of scale economies, without realising that scale can bring real disadvantages to an organisation that is supposed to be, in some part, representative of the local community.

Mr. Mark Oaten (Winchester) (LD): The right hon. Gentleman has set out a case for closer co-operation between various forces. Would he also consider using existing national organisations, such as the Serious Organised Crime Agency, as resources to be called on by local forces if they need help?

David Davis: Of course, SOCA could be used in that way. As has been said many times in this debate, when extra resources, expertise or support are needed, it is commonplace for it to be forthcoming. The Home Secretary mentioned 7 July and the 352 officers from other forces who came to London—the biggest of our forces—to help out. Just under a year ago, after the tsunami disaster, when the Metropolitan police led our end of the recovery operation from a base in Hendon, there were hundreds of people from other forces, both volunteers and formally seconded officers. That is normal. I would expect an organisation such as the Serious Organised Crime Agency to give strategic direction, assistance and intelligence to a federated structure, especially the lead player on terrorism or serious crime in such a structure. That is how the process would work, if there was a rational solution rather than one driven by the Government's prejudices.

Mr. Robert Walter (North Dorset) (Con): On anti-terrorism, one of the best examples is the regular Dorset police operation to police the party conferences. It is one of the smallest police authorities but it brings in resources from neighbouring authorities on a co-operative basis without the need for a regional superstructure.

David Davis: My hon. Friend is right. Dorset provides us with a great number of examples, in terms of who the
 
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force would prefer to amalgamate with, as a highly efficient and relatively small force. That one county manages to defy almost every precept that the Home Secretary puts up.

The O'Connor report admits that reorganisation is "bound" to entail up-front costs. It states that they "cannot be avoided". In view of that warning, did not it occur to the Government that it might be a good idea to find out what the costs might be before they demanded that amalgamation proceed? That job has been left to police authorities. The estimates are as wide ranging as they are disturbing. Figures of £25 million or £30 million have been suggested simply to amalgamate the IT systems of two neighbouring forces. The hon. Member for Stockton, North has been vocal about that. His local force in Cleveland was told that it would have to merge with Durham and Northumbria. The authority thinks that it would have to borrow £50 million to pay for that. Servicing the loan will cost £5 million a year.

Some forces will have to borrow even more. I have before me a memo from Leicestershire police authority, which puts the cost of amalgamation to create an east midlands regional force at more than £100 million, with ongoing costs—not ongoing savings—of between £30 million and £52 million.

Mr. Philip Hollobone (Kettering) (Con): I very much confirm the figures that my right hon. Friend has just read out. Is he aware that Northamptonshire police authority, which is being threatened with merger with the east midlands force, confirms that no efficiency savings have been identified to cover the costs of the merger proposals, so there is a direct threat to the roll-out of neighbourhood policing?

David Davis: My hon. Friend demonstrates that there are only two places for the money to come from—a point to which I will return; it will either come from the pockets of council tax payers or current policing. Both options are unacceptable.

The chief constable of Gloucestershire, who has already received honourable mention from a number of my colleagues, is ACPO's head of finance and resourcing. He estimates the total set-up cost as £500 million. The Association of Police Authorities assesses it at between £500 million and £600 million. I suspect that the cost of the process will be like that for the infamous identity card scheme: the harder we look at it, the more expensive it gets.

The full cost could be astronomical, yet we are told by the head of the police resources unit at the Home Office that the

"Government does not have the money"

to pay for it. However, it is amazing what Ministers can do when their backs are against the wall. After the APA refused to meet the Home Secretary's rushed deadline of 23 December he suddenly found £50 million for next year and £75 million for the year after, in a rather clumsy attempt to bribe forces to accept his merger plans without question. The APA—

Madam Deputy Speaker: Order. Perhaps the right hon. Gentleman would like to reconsider the words he has just used.

David Davis: That was a quote from the APA, Madam Deputy Speaker, not my words, but if I offended the House I withdraw them.
 
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The APA was rightly outraged. In its response, "Policing not for Sale", it condemned the Home Secretary's attempt to—I am sorry, it is the same word: how can I put it?—"influence" police authorities into abolishing local police forces. Its chairman, Bob Jones, said that

"we will not be bought off . . . It is disappointing that the Home Secretary is now trying to bribe"—

I am sorry, Madam Deputy Speaker—

"some police authorities to merge their local police forces at the expense of those police authorities who still have serious concerns about whether this will deliver the best policing for local people".

Even with the Home Secretary's rather cack-handed attempt to influence opinion, the shortfall in funding will be massive. There are only two ways to fill the gap: borrow the money, or raise it through a higher precept on the council tax. It is clear that the cost of the exercise will fall on council tax payers, and that is just one reason why the APA opposes the Government's plan. As its highly critical statement of 7 December put it:

"the APA does not accept that HMIC's Report 'Closing the Gap' provides a complete or comprehensive business case for the creation of strategic forces and   . . . the APA will urgently explore alternative models, such as a Federated approach to establish if these offer a quicker, more cost effective approach to improve protective policing services".

I welcome that approach. It makes sense to explore alternative options, especially when the O'Connor report itself proposed them.

Why is the Home Secretary so hostile to federation? He says that a "compelling case" for federation has not been made, but does he seriously contend that he has made a compelling case for amalgamation? Alternative options must be explored objectively and costed properly, not summarily ruled out because they do not fit the Government's regional blueprint.

My survey of police authorities, which was conducted last week, revealed overwhelming opposition to the Government's plans. Most authorities cited the speed and cost of the mergers as a major factor behind their opposition, together with worries about the lack of accountability.

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