Commons Sitting of 15 July 1999

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY
  The Secretary of State was asked—
  TRADE AND INDUSTRY

    Engineering Innovation
    Mrs. Linda Gilroy: What steps his Department is taking to encourage innovation in engineering. [900061]
    The Minister for Energy and Industry (Mr. John Battle): Engineering companies are eligible for a wide range of Government-sponsored schemes designed to stimulate innovation in industry. There has been a 20 per cent. increase in the innovation budget spread over three years, the purpose being to promote and foster innovation in engineering.
    Mrs. Gilroy: Will my hon. Friend acknowledge and encourage the sort of awards that the Design Council and the Royal Academy of Engineering make? Can I draw his attention to a remarkable product made in Plymouth by British Aerospace—the silicon gyroscope, which received the Design Council award and is on the shortlist for the McRobert award?
    Mr. Battle: Yes, I want to acknowledge all efforts to promote excellence and innovation in engineering. The Plymouth-based British Aerospace Systems has come up with a highly innovative silicon gyroscope, which is one of the four finalists for that prestigious Royal Academy of Engineering award. The device—which has been referred to as the transistor of the 21st century—will be used in cars, for example, to improve anti-lock braking systems and will improve safety and vehicle performance. That links in with the Government's priorities to build and blend in the cleaner, leaner, safer and smarter vehicles of the 21st century. That is what the Government and the people want.
    Mr. David Chidgey: I join the Minister in his congratulations for British technology. However, is he aware that, over the past 12 months, this country has fallen from fourth place in global competitiveness to eighth place? Studies have shown that the reasons are a combination of the strong pound, new business regulations and an underlying weakness in science and technology. I know that the Minister personally feels this
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    way, but will he make a commitment, on behalf of the Government, to provide some joined-up Government in tackling those problems so we can nurture British industry?
    Mr. Battle: I wonder where the hon. Gentleman has been. Of course there is a challenge in global competitiveness, but where was he when we boosted the science, engineering and technology budget by £1.4 billion to underpin basic research? We have £25 million for the science enterprise challenge and £20 million for the reach out fund, as well as funds for the SMART schemes and the foresight-link awards to foster engineering. We believe that we will address the shortfall not by doing things for industry, but by putting in schemes to underpin the innovative approach to competitiveness to ensure that our engineers make world-class products and can win their way forward.
    Mr. Michael Clapham: Does my hon. Friend intend to have discussions with his colleagues at the Department of the Environment, Transport and the Regions regarding regional development agencies and the way in which they might be encouraged to promote innovation in engineering, particularly by developing mechanisms to transfer technology from the universities and colleges into industry?
    Mr. Battle: My hon. Friend makes a good point. I am encouraged that the RDAs are already drawing up innovation strategies at the regional level. For example, in our region of Yorkshire, the RDA has drawn up an innovation strategy, and the same is true in the west midlands. We look for the template throughout the country, and then our schemes can be tailored in to help encourage the technology transfer to which my hon. Friend refers.
    Mr. John Bercow: What does the Minister of State say to the director of policy at the Engineering Employers Federation, who insists that UK-based companies will shift their production facilities to other countries or will simply close down if he and his right hon. and hon. Friends persist with their plans for an energy tax? Now it is clear that that tax will discriminate against high value-added, capital-intensive firms, is certain to cost jobs and will undermine British competitiveness, why does not the hon. Gentleman cease just to be a carpet on which Treasury Ministers trample and instead go to his right hon. Friend the Chancellor of the Exchequer and tell him to withdraw this stupid proposal?
    Mr. Battle: I seem to recall that the Conservative party imposed stupid proposals with no consultation in their Budgets. This is the first time that we have had two years of consultation. The consultation document has been put out, and there are sector meetings with the Deputy Prime Minister across Departments, including the Treasury and DTI, to work through the proposals. It has been encouraging that employers in all sectors have said that we need to do something about climate degradation and that they will come in to talk about practical measures to address it. Those details are being discussed.

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    Of course the measure will have different impacts on different sites, companies and sectors. That is the whole point of moving forward to a negotiated agreement. That is in stark contrast to the previous Government, who simply imposed taxes on business without a hint of consultation at any point.

    Ilisu Dam
    Mr. Harry Cohen: If he will make a statement on his Department's policy toward the proposed Ilisu dam project in Turkey. [90007]
    The Minister for Trade (Mr. Brian Wilson): No decision has been taken on whether to make Export Credits Guarantee Department support available. A project of this nature is bound to give rise to major environmental and social issues and I want to be sure that they are properly addressed. That is why we have commissioned our own research, including an assessment of the views of the local population. We are working closely with other Departments, and the other export credit agencies involved, as well as with the Turkish authorities and the contractors. When we have completed our analysis, we will decide whether to make support available.
    Mr. Cohen: Is my hon. Friend aware that the dam is being built in an area under emergency rule, to which the Foreign Office has advised against travel unless on essential business? It is a site of on-going ethnic conflict in which the local Kurds have been subject to oppressive action by the Turkish Government. Is my hon. Friend also aware that it has been alleged that the project will flood many Kurdish towns and villages, including the ancient city of Hasankeyf, and violate the World Bank's environmental and resettlement guidelines as well as the European convention on human rights? Hon. Members are highly suspicious of the project. Will my hon. Friend help to reduce that suspicion by guaranteeing that all environmental impact assessment reports that he receives are properly placed in the House of Commons Library?
    Mr. Wilson: I am aware of all those concerns. Some of them have been overstated and are not quite in accordance with the facts. It is precisely because such concerns exist that we have sent our own independent mission to the area to assess all aspects of the project, including of course the views of the local people.
    It is not in my power to say that reports that do not belong to the British Government will be placed in the Library without the consent of those to whom they belong, but I have undertaken to place the report by our own consultants in the Library as soon as it is available.

    Manufacturing (Job Losses)
    Mr. Nick St. Aubyn: How many jobs have been lost in manufacturing industry since 1 May 1997. [90009]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): In the two years between April 1997 and April 1999, 118,000 manufacturing jobs were lost, compared with an annual average loss of 150,000 manufacturing jobs in each year between 1979 and 1996.
    Mr. St. Aubyn: We have already heard how the index of the World Economic Forum, based in Geneva, has
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    shown that we have dropped under this Government from our zenith of fourth in the world competitiveness rankings to eighth. Which of the Department's measures have most contributed to that loss of competitiveness and how many more jobs will have to be lost before they are reversed?
    Mr. Byers: The hon. Gentleman ignores the fact that the labour market figures published yesterday show that more people are working in this country than ever before. I would have hoped that he would welcome this morning's report from British Chambers of Commerce showing manufacturing orders up, which is good news for the manufacturing sector. We are witnessing a clear trend of strength not only in the service sector and construction, but now in manufacturing as well. That is because we are steering a course of economic stability in an uncertain world.
    Mr. John Healey: It is not the past two years that bother people in Rotherham; it is the two preceding decades that they cannot forgive, when we lost nearly 12,000 manufacturing jobs in metal-working industries alone.
    Despite the pressure that manufacturing is under, will my right hon. Friend pay tribute to the work of local agencies such as the Rotherham industrial development office, which is bringing new jobs to our area at firms such as Toyoda Gosei, the Japanese car company in the constituency of my hon. Friend the Member for Rotherham (Mr. MacShane), and the United States tool manufacturer, Morgan Leigh, at Hellaby in my constituency?
    Mr. Byers: I am very pleased to endorse the excellent work carried out by many agencies, including those in Rotherham. During my visit to Japan, when we formally announced the decision of Toyoda Gosei to locate in Rotherham, creating about 400 jobs, it struck me that one of the reasons why it was so enthusiastic was that it could see a real sense of partnership in the agencies in Rotherham. That stands in stark contrast to the situation under the previous Government, when on average 150,000 manufacturing jobs were lost every year from 1979 to 1996. That is the Conservative record in office.
    Mr. Richard Page: Is the Secretary of State aware that several Labour Members are calling the climate change levy the industrial equivalent of the poll tax? When will his Department argue with the Department of the Environment, Transport and the Regions and the Treasury that any changes must be sustainable, otherwise they are not worthwhile? Is he not aware that if those changes take place, they will mean the loss of tens of thousands of jobs and a reduction in production in this country that will lead to imports coming in that have been made by processes that would not be allowed here? When will he fight for British industry on that issue?
    Mr. Byers: The climate change levy is a principle that is accepted by many businesses and the hon. Gentleman should accept that. We are consulting on the detail of its implementation and I believe that our proposals will command broad support in the House and in the business community.
    Mr. Barry Sheerman: Will my right hon. Friend comment on the fact that we have seen yet again this week that Britain is the No. 1 choice for overseas investors looking for the right place to manufacture and to invest in the high technology, innovative sectors? Is that not a cause for celebration, rather than the whingeing that we hear from the Opposition?
    Mr. Byers: Yesterday we were pleased to announce the results from the Invest in Britain bureau for 1998, which showed clearly that the United Kingdom was an attractive place for inward investors because they support our policy on the single currency. They do not like the Opposition's policy of ruling out joining the single currency for 10 years and most of those inward investors would not have come to the United Kingdom if we had a Government with that policy. We do not, which is why we remain an attractive place for inward investors.
    Mrs. Angela Browning: Office for National Statistics figures show 140,000 fewer jobs in manufacturing than this time last year. Does the Secretary of State still support the words of the Prime Minister at last year's Labour party conference, when he told business:
    "your fundamental problem is not high interest rates or a high pound. It is too few first class managers. Too little investment. Too little productivity."?
    Mr. Byers: I support the comments made by the Prime Minister and I hope that the hon. Lady would agree that we need to improve productivity and the management of British companies. That is certainly on the agenda of my Department and will remain there. The hon. Lady should reflect on why this country is so attractive to inward investment. Some 40 per cent. of all Japanese investment in Europe comes to the United Kingdom, because those investors recognise the positive measures we have taken. That is a strength of this country and, instead of carping on the sidelines, the Conservatives should occasionally celebrate the success of our economy.
    Mrs. Browning: Perhaps the Prime Minister was referring to his Front Benchers. With manufacturing jobs slumped to their lowest in six years, a north-south divide now clearly evident and a widening traded goods deficit, does the Secretary of State think that it will be of help to manufacturing for the Prime Minister to hold a conference on manufacturing to tell people how they should run their businesses?
    Mr. Byers: We make no apology for consulting the manufacturing industry, because that is important. The hon. Lady should reflect on the record of the Government for whom she was a Minister. Under them, on average, 150,000 manufacturing jobs were lost every year. We will not repeat the days of Tory boom and bust, with interest rates at 15 per cent. for a year, inflation at 10 per cent. and more than 1 million manufacturing jobs lost. That is the record of her Government, but we will not repeat those mistakes. Manufacturing industry recognises that we are putting in place the policies that will lead to long-term success and strength.

    Single European Currency
    Dr. Julian Lewis: What assessment he has made of the effect on small businesses of Britain remaining outside the single European currency. [900111]
    The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): The hon. Gentleman will be aware that my right hon. Friend the Chancellor of the Exchequer has set out five economic tests that will have to be met before UK membership of the single European currency will be considered. These tests will assess whether it is in our national economic interest—and hence in the interests of small firms—to join. They will include an assessment of whether joining will promote higher growth, stability and a sustainable increase in jobs. The Government have said that they will make that assessment in the next Parliament.
    Dr. Lewis: Is the Minister aware that the chairman of the policy unit of the Federation of Small Businesses, Mr. Brian Prime, has stated that about 94 per cent. of the federation's 127,000 members are implacably opposed to membership of the single currency? Mr. Prime has stated also that membership of the single currency has little to do with economics, but is a political device for political ends. Why does the Minister think the Federation of Small Businesses can see so clearly that to which the Government are evidently blind?
    Mr. Wills: What the hon. Gentleman has just revealed is an insight into the attitude to Europe not of the Federation of Small Businesses but of the Conservative party, for which the matter is purely one of politics and ideology. For Conservative Members, the matter does not depend on the national economic interest. However, if they want to say that it does, perhaps they will answer two simple questions.
    First, do they think that it could ever be in the national economic interest for this country to join the single currency: yes or no? Secondly, if it could be, would they join: yes or no?
    Mr. Ian Bruce: Is the Minister resigning so that he can answer the question?
    Madam Speaker: Order. It is normally for Ministers to answer questions.
    Mr. Denis MacShane: Did the Minister see the remarkable speech by the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude), reported last Monday in the Financial Times, in which he said that the euro ultimately would be a success? Whose side does my hon. Friend think the right hon. Gentleman is on?
    With regard to the promotion of small businesses, does my hon. Friend agree that encouraging employee share ownership is a good way to keep businesses alive, because it encourages a commitment to the employees of small businesses to the success of this vital sector?
    Mr. Wills: I agree with my hon. Friend's second point. On his first, I can tell him that I did see the shadow Chancellor's remarkable speech, which revealed the

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    Conservative party's attitude to the euro. Even if the currency is a success, the Conservatives will still rule out joining it for 10 years.
    Dr. Vincent Cable: Does not the Minister accept that small firms are much more vulnerable than large firms to currency fluctuations, and that they are much less able to hedge against risk? Does he acknowledge that the present fluctuations of sterling against currencies accounting for more than half our visible trade are seriously damaging to the small firm sector?
    Mr. Wills: I accept that every small firm and every business in this country has an interest in the success of the euro. It may be worth recalling that 45 per cent. of small and medium-sized companies in this country have a trading link with Europe. It is crucial that those firms are ready for the euro and to make preparations if this country decides to join.
    Mr. Geraint Davies: Does my hon. Friend accept that the majority of small businesses are commercially linked, directly or indirectly, to larger multinational firms that are linked into the euro? In the same way, they are also linked to companies in Japan and China—which my right hon. Friend the Secretary of State visited recently—whose inward investment depends on the belief that Britain will join the single currency when the conditions are right. Does that not suggest that it is in the interests of small business as well as big business to move towards a single currency? What advice has been provided on the medium-term impact on jobs and investment—both internal and inward—that taking up the option of joining would have?
    Mr. Wills: I agree that it is in the interests of every small firm—not only those who trade in the euro, but those whose customers or suppliers trade in the eurozone—to be ready for the single currency. The Government are helping them to get ready: we have issued 380,000 national information packs of fact sheets, 100,000 euro planners and a self-help computer programme to help all businesses to prepare.
    Mrs. Angela Browning: As the Minister is responsible for small businesses, what calculation has he made of the cost of the single currency to the independent retail sector? Does he expect the sector to absorb the costs, or to pass them on to customers?
    Mr. Wills: A number of estimates have been made of the costs of getting ready and of joining the single currency, should we choose to do so. The costs vary.
    Miss Julie Kirkbride: How much are they?
    Mr. Wills: If Opposition Members will be silent, I shall tell them, and they might learn something. Estimates of costs depend on the methodology used. The estimates vary, and it is too soon to tell what the costs will be. However, as Opposition Members are more eager to peddle their own prejudices than to learn anything about the single currency, I shall explain to them that discussions of costs should also involve benefits.
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    Their unremitting emphasis on costs displays their simplistic attitude towards businesses. What matters to all businesses—small and large—is the bottom line. If Conservative Members would concentrate a little more on the opportunities that the euro may offer the UK and our companies, they might do better for themselves and their constituents.

    Rover (State Aids)
    Miss Julie Kirkbride: What discussions he has held with the European Commission concerning state aids for Rover. [90014]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): I have discussed the matter with Commissioner van Miert; my officials have also had detailed discussions with with Directorate-General IV.
    Miss Kirkbride: The Minister will be aware of the great importance of this bid to my constituents who work at Longbridge and to investment and jobs in the midlands. Does he recognise the concern in the midlands that he has put the bid in jeopardy by announcing it prematurely before the Commission approved it, and that we are in an invidious position, as the Commission appears to be blackmailing us? Is the Minister aware of the Commission's double standards? Last year, the Commission agreed that France could spend £2 billion on its state industry, Air France, a decision that the European Court deemed illegal. The Minister's former leader then declared that he did not have to obey the court. Will the Minister bear in mind that double standard during his negotiations with the Commission?
    Mr. Byers: For the record, and to help the hon. Lady, let me explain how applications for state aid are made to the European Commission. The procedures that we have followed are exactly those followed by our predecessor. When agreement is reached between the UK Government and the company concerned, an application is made to the European Commission. An application can only be made when the two parties agree, and that is the process in which we are involved. The previous Government went through the same process towards successful applications.
    For the record, we have not put the aid—£129 million in regional selective assistance—at any risk because of the procedures that we have adopted. From my conversations with Commissioner van Miert, and from those of my officials and DG IV, the relevant department of the Commission, I am confident that we will succeed in achieving Commission approval for the application.
    Mr. Richard Burden: May I assure my right hon. Friend that after months of uncertainty and negotiation, my constituents at Longbridge were pleased that the Government shared the details of the deal with them—as was their right—and that, now that uncertainty has ended, Rover can move to achieve its potential? Does my right hon. Friend agree that it is most important for west midlands Members of Parliament to try to contribute to stability rather than talking down Rover's success?
    We have fought off substantial competition from outside the European Union to secure the deal and to ensure that work will commence this week to bring the

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    new Mini to Longbridge. Will my right hon. Friend join me in hoping that the new Mini will be a world-class car for the millennium, bringing success to Birmingham and Rover as the Mini did in the 1960s, 1970s, 1980s and 1990s?.
    Mr. Byers: This is one of those opportunities for all Members of Parliament, who have an interest in, and a concern for, the future of Rover—especially at Longbridge—to celebrate the fact that, this week, BMW began a £400 million investment in the new Mini line at Longbridge. In the months and years ahead, the company will build on that within its investment of more than £3 billion in Rover in the UK generally. We were able to secure that investment with £129 million of regional selective assistance, linked to improving skills and raising productivity. That is the new way for regional selective assistance in the future. Rover now has a real opportunity to become a world leader in car production. I urge all Members of the House—whichever party they represent—to celebrate the success that we have been able to achieve, and to work together to ensure that Rover has a real future as a major player in the world car market.

    Electricity Companies (Prosecutions)
    Mr. Peter Bradley: On how many occasions since electricity privatisation (a) Her Majesty's Government and (b) the regulator have brought a prosecution against an electricity company and on what grounds. [90016]
    The Minister for Energy and Industry (Mr. John Battle): There have been three prosecutions by the Department for breaches of the regulatory framework governing overhead lines and related equipment. Two of those were for breaches of the safety requirements for overhead lines and ancillary equipment, and one was for a breach of the overhead lines approvals regime under section 37 of the Electricity Act 1989. There have been none by the regulator.
    Mr. Bradley: I thank my hon. Friend for that reply, and for the personal interest that he has taken in the long-running saga of the Hadley pylon in my constituency. About 18 months ago, the Midlands electricity board erected the pylon, without seeking or receiving consent. Will my hon. Friend join me in congratulating the Hadley pylon action group—especially Mrs. Sandra Hodnett and Mrs. Ann West—on the sustained campaign that has been waged during the past 18 months? Does he share my concern about the utter contempt with which MEB approached the matter—in its dealings with the community, the local authority and, latterly, the DTI? Can he give me and the campaign group an undertaking that, in the absence of a complete, valid retrospective application for consent from MEB, he will institute legal proceedings against the company?
    Mr. Battle: I compliment my hon. Friend on the tenacious and patient way in which he has raised the Hadley pylon case, both with the company and with the Department, on behalf of his constituents. I have urged the Department to investigate the case, to insist on the information that is required from the company, and to take the necessary steps to call the company to legal account.
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    As my hon. Friend will understand, it is for solicitors to take counsel's advice with regard to prosecution, but I certainly intend to keep a close eye on the case. It is a saga that has gone on for far too long.
    Mr. Nick Gibb: This is the first time that I have had the pleasure of questioning the hon. Gentleman; I very much hope that, despite press briefings to the contrary, it will not be the last.
    On electricity privatisation, will the Minister explain why the announcement of the privatisation of BNFL was sneaked out through a written answer, rather than being made in a statement to the House that is subject to questioning and debate? Does the Minister believe that the taxpayer is receiving full value from the sale of 49 rather than 51 per cent. of the company?
    Mr. Battle: I am not sure how that question connects to pylons. The hon. Gentleman mentioned the privatisation of electricity. We have spent two years in government sorting out the botched job that the Conservatives did on privatising the electricity industry. That is why we are now trying to sort out the wholesale market, and introducing proposals to improve regulation and put the consumer first—which the Conservatives manifestly failed to do.
    With regard to the nuclear industry, I recall holding the same position as the hon. Gentleman when the last lot privatised that industry; they left the liabilities with the Government and sold off the income stream. We do not intend to take that route; we shall do it in a way that benefits the people, the taxpayers and the Government. The announcement was not sneaked out; it was well trailed in the media, it does not need primary legislation and, what is more, a full parliamentary answer was given on the matter. It is open for consultation; I look forward to the hon. Gentleman's further comments.
    Mr. David Chaytor: In fact, it was my written question earlier in the week that provoked the statement from my right hon. Friend the Secretary of State for Trade and Industry, whom I congratulate on his interesting and skilful announcement on the future of BNFL.
    Will my hon. Friend the Minister for Energy and Industry assure the House, given that this is a matter of major public importance with many billions of pounds' worth of public assets at stake, that there will be the fullest consultation on the detailed implementation of the proposals over the next few months? Will he assure the House that we have learned lessons from the previous Government's mistakes, whereby billions of pounds of public assets were sold at knockdown prices and the taxpayer lost out? Will he also assure the House that, whatever form the introduction of private sector investment in BNFL takes, we shall not find ourselves in a position in which the lucrative side of the business has gone to shareholders and the taxpayer has been left to pick up the bill for many decades to come for the cost of storing our mountains of plutonium?
    Mr. Battle: I thank my hon. Friend for those questions, and I can reassure him on all three counts. Yes, there will be full consultation. There has already been full

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    consultation with those who work at the plant and the trade unions, as my hon. Friend will be aware from their comments, and that consultation is now being widened. The lessons to be learned from the previous Administration have been spelt out in the comments of the Public Accounts Committee and the National Audit Office. They are as plain as day and we are not going down that route, which is why our proposals are innovative and different. I can give absolute assurances on health and safety at the plant. The changes will be good and beneficial.
    BNFL has world-class technicians, technologists and scientists who can help to handle the legacy of the nuclear industry from the past 50 years. I have visited work that the company has won in America, where it is cleaning low-level waste from power stations and laboratories. BNFL has management strategies and methods that have been practised here in Britain, at Berkeley and other power stations. Its workers can restore sites so that in future they can be used as offices, perfectly clean and uncontaminated. It is a world-class business, and BNFL needs to be free to win the work and become a world leader in cleaning up and decommissioning the nuclear legacy of the past 50 years.

    National Minimum Wage
    Mr. James Plaskitt: What action he is taking to ensure that employers comply with national minimum wage regulations. [90017]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Inland Revenue is enforcing the national minimum wage with inspectors who respond to complaints from workers and employers. The inspectors have powers to inspect records and to issue enforcement and penalty notices. They can prosecute the worst offenders for the criminal offence of refusal or wilful neglect to pay the minimum wage, and for offences relating to record keeping and obstruction of officers.
    Mr. Plaskitt: I thank my right hon. Friend for that answer. A strong enforcement mechanism is clearly welcome, but do not the figures so far tell an interesting story, namely that the vast majority of employers have fully and quickly embraced the national minimum wage, in clear contrast to the Conservative party?
    Mr. Byers: I am delighted that the implementation of the minimum wage, which makes such a fundamental change, has gone through so smoothly. It will be interesting to learn how the hon. Member for Tiverton and Honiton (Mrs. Browning), now that she has responsibility for these matters, views the minimum wage and whether she now supports the principle. In the past, she was fundamentally opposed to its introduction—
    Mrs. Angela Browning: We voted against it.
    Mr. Byers: The hon. Lady is saying that she voted against it. I am sure that we have all noted that that remains the Conservatives' position.
    My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) is right to say that the principle of the national minimum wage has won broad acceptance
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    but that we need to have in place strong methods of enforcement. We have that framework in place through the Inland Revenue, whose officers will have new powers as a result of amendments made to the Employment Relations Bill as it passed through the House of Lords. It is clear that the minimum wage is here to stay under the Labour Government, and that it would be threatened by the policies that the hon. Member for Tiverton and Honiton would pursue.
    Mr. Desmond Swayne: Does the Secretary of State agree that compliance will be greater the more reasonable the regulations are? Will he undertake to examine the regulations as they affect the provision of lodgings, for it is unlikely that he would be able to find lodgings anywhere in this country for less than £20 a week? Will he also examine the regulations as they affect the provision of full board, of which the minimum wage takes no account?
    Mr. Byers: Both issues are currently being considered by the Low Pay Commission, which is due to report to me in December with its views on how those items are having an impact on the national minimum wage.
    Ms Harriet Harman: Does the Secretary of State share my view that one of the most important aspects of the national minimum wage is that, coupled with the working families tax credit, it means that parents with young children do not have to work all hours to make ends meet? What plans does he have to monitor another important aspect of the Government's family-friendly policies—the forthcoming rights to parental and family leave?
    Mr. Byers: My right hon. Friend makes an important point. We intend to ensure that there is compliance with the national minimum wage, which is why I can inform the House that we have received 1,900 complaints of underpayment since its introduction. Of those, 800 have been settled, and the remaining 1,100 are now being pursued; we shall ensure that there is compliance by the employers concerned. That is part of our family-friendly approach to employment provisions.
    My right hon. Friend is absolutely right to say that we shall be setting up important initiatives, which are a result of the measures in the Employment Relations Bill. We have to ensure that the unpaid parental leave regulations are introduced in a way that has support from employers and employees, and that parental leave is a right and entitlement that is taken up by mothers and fathers, discharging their joint responsibility in that important area. I assure my right hon. Friend that we shall want to monitor that closely to guarantee that the rights that we are providing are taken up effectively.
    Mrs. Cheryl Gillan: I presume that the Secretary of State will agree that the Government are the employer of all locally engaged staff in every British embassy and high commission throughout the world. Are all those staff paid above or at the national minimum wage?
    Mr. Byers: They are employed in line with the normal civil service provisions.

    Biotechnology (Jobs)
    Dr. Phyllis Starkey: What estimate his Department has made of the number of jobs in the United Kingdom dependent on biotechnology. [90018]
    The Minister for Energy and Industry (Mr. John Battle): Although that information is not available from official sources because biotechnology cuts across traditional standard industrial classification categories, a report published earlier this year by the Biolndustry Association, entitled "Industrial markets for UK biotechnology—trends and issues", estimates that dedicated bioscience companies employ between 35,000 and 40,000 highly skilled people.
    Dr. Starkey: I thank my hon. Friend for that answer. Is he aware that the latest Ernst and Young European life sciences report revealed that this country is home to the largest number of biotech companies in the European Union, and that those companies are largely focused around Oxford and Cambridge and in Scotland? What is his Department doing to ensure that we build on those regional concentrations? May I point out that my constituency is midway between Oxford and Cambridge and is well placed to be part of a biotech innovation corridor?
    Mr. Battle: My hon. Friend had much experience in her former life in that sector and brings wisdom to the House in her campaigning for and championing of it. Ernst and Young estimates that the number of UK specialist biotechnology small and medium-sized enterprises has increased from 135 in 1995 to more than 270 in 1999. The sector is burgeoning. We are leading in Europe in that sector with our top-quality expertise.
    We ought to remember that the industry contributes to agriculture, health, manufacturing and new clean-up environmental processes. In the future, there will be much work to be won on the greening agenda, using biotechnology techniques. We aim to encourage the development of biotechnology. The Department's work is to focus on the natural clusters that are emerging and to ensure that the whole sector gets an underpinning boost. It is vital to the future of our economy, and it will be vital to the quality of life in the 21st century.
    Mr. Nicholas Winterton: From this side of the House I wish the Minister well, but, in seeking to increase the number of jobs in the important biotechnology sector, he should focus not only on the areas referred to by the hon. Member for Milton Keynes, South-West (Dr. Starkey), but on Macclesfield. The town boasts an extremely go-ahead biotechnology company called Proteus International plc, which is based at the Lyme Green business park in Macclesfield. What help and advice would the Minister give Proteus, which has developed a BSE diagnostic testing technology which could prove of very great benefit to this country, to help the company to market and develop that technology, to the advantage of our beef and cattle industry and of the whole country?
    Mr. Battle: I should tell the hon. Gentleman that biotechnology companies are developing in practically
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    every constituency. Biotechnology really is an industry of the future. It is the engineering of the future, and it will be not a small niche but a major segment of our economy in the 21st century.
    With regard to the use of the science that has developed, in January we launched the Bio-wise project, to encourage technology transfer and the take-up of that science and research by all sectors of industry, ensuring that the economic and environmental benefits of the research are realised by a widespread application throughout industry and commerce. We have put about £13 million into that scheme over four years, to help companies such as the one in the hon. Gentleman's constituency.
    Mr. Alan W. Williams: Does my hon. Friend agree that the term "biotechnology" is widely misused? The agricultural component, involving genetically modified foods, is highly controversial and does not receive the support of the general public, but much the larger component consists of applications to medicine—to health. In that sphere—the design of new drugs, taking a molecular approach to medicine—the prospects for the 21st century are extremely promising, and Britain, given the record of our excellent pharmaceutical companies, is very well placed to exploit those applications.
    Mr. Battle: My hon. Friend makes an important point. It is important to emphasise the full range of biotechnologies in the plural. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) asked about the number of jobs. The number of jobs in diagnostics—the medical area that my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) refers to—is estimated to be about 9,000. There are about 6,000 jobs in environmental clean-up, using what is called bio-remediation. There are 4,500 jobs in food biotechnology. It is important that we keep a sense of proportion while appreciating the full range of the sector, which can improve health and revitalise some of the traditional manufacturing sectors of our economy.

    Electronic Communications
    Mr. Ian Bruce: What representations he has received about the Government's proposed legislation on electronic communications. [90019]
    The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): I am delighted to tell the House that our recent consultation—"Building Confidence in Electronic Commerce"—announced by my right honourable Friend the Secretary of State for Trade and Industry on 5 March, resulted in more than 240 responses from industry and other interested parties.
    In addition, both my right hon. Friend and I have frequent meetings with senior industry representatives. The Government's proposed legislation on electronic communications features in those discussions from time to time.
    Mr. Bruce: I am surprised that the Minister cannot tell us yet that he is going to publish his electronic communications Bill, at least in draft, because he knows that the last time that the Government produced a draft

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    Bill on electronic commerce, the comments of industry and the Opposition enabled them to modify it enormously. He knows that, in the Queen's Speech, the Government announced that they would introduce a Bill that would become an Act in this Parliament. I hope that he will take the opportunity to publish the draft Bill, which is in a rather unformed state at the moment, so that industry can comment on it during the summer, thus enabling the Government to fulfil in the next Queen's Speech the intentions that they stated in the last Queen's Speech.
    Mr. Wills: I recognise the hon. Gentleman's keen interest in the matter. As he is probably aware, discussions are under way through the usual channels about the best way of bringing that measure forward. It will be brought forward as soon as possible.
    Mr. Brian White: Not for the first time, the Tories seem to be putting party advantage ahead of the country's interests. However, the Minister will be aware that biotechnology is a very fast-moving industry, in which six months' delay is the equivalent of two years' delay in any other industry. Given the need to keep Britain ahead in this industry, we cannot afford a six-month delay. Will the Minister outline what steps he will take over the summer, such as consultations with Oftel, to advance measures that will keep Britain ahead in e-commerce? If the price that the Tories want is just digital signatures, may we just have those now and the rest of the Bill in the next Queen's Speech?
    Mr. Wills: I thank my hon. Friend for his comments. We are moving ahead on the Bill as quickly as possible. From his keen interest in and in-depth knowledge of the subject, my hon. Friend will be well aware that we are moving ahead on a range of measures to promote e-commerce in Britain. In the past six months we have laid the foundations for a world-class infrastructure. We have announced a consultation on the introduction of broad-band wireless through making available two large packages of spectrum at 28 and 40 GHz. A few days ago, Oftel announced the results of its consultation on unbundling the local loop, which will be a crucial plank in building the access to broad-band that this country will need for effective e-commerce.
    We are moving ahead in other areas as well. We have launched the adviser skills initiative to make sure that small businesses get the help and support that they need to use the opportunities that are available to them through e-commerce. We have created Trust UK, which is an industry-led body to boost confidence in internet shopping through an on-line hallmark. We have done more, and I can reassure my hon. Friend that there is much more still to come.
    Mr. Alan Duncan (Rutland and Mellon): I fear that the Minister rather evaded the question asked by my hon. Friend the Member for South Dorset (Mr. Bruce). Does the Minister accept that we want a short, simple Bill to establish the law of electronic signature and contract? It seems that he is to publish a long, cumbersome blancmange of a Bill, which risks being a drag anchor on e-business. Will he drop his proposed voluntary licensing scheme for encryption service providers in favour of a
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    voluntary code? Will he put clauses dealing with interception in a different Bill? Above all, as my hon. Friend asked earlier, will he publish the Bill now, albeit only in draft form, so that he can hear representations over the summer? Regardless of any carry-over procedure, that would be the speediest way of getting good e-communications law onto the statute book for the benefit of Britain's position in this important commercial sector.
    Mr. Wills: I am sure that the hon. Gentleman does not seriously expect me to discuss the content of the Bill before it is introduced in the House. I am sure timt you would not appreciate that, Madam Speaker. I have already given my answer on the publication. The hon. Gentleman will just have to be patient a few days longer.

    Engineering Manufacturing (Business Activity)
    Mr. Michael Fabricant: When he plans to meet representatives of the engineering manufacturing industry to discuss the levels of business activity. [90020]
    The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): DTI Ministers are in regular contact with firms and representative organisations in the engineering manufacturing industry to discuss their industry's affairs, including activity levels.
    Mr. Fabricant: The Minister heard the comments of my hon. Friend the Member for Buckingham (Mr. Bercow) with regard to the Engineering Employers Federation. Does the Minister accept that the success of engineering depends to some extent on the success of retail trade in Britain? He will have heard the news this morning that Marks and Spencer's sales are down 10 per cent., although some of the company's problems are not related to the sort of frocks that it sells. Is he aware that the John Lewis Partnership is reporting a 3.2 per cent. drop in sales, in cash terms, compared to the same period last year? The Secretary of State said earlier that we should be celebrating the success of our economy. In any other place, would we not describe the economy now as being in recession?
    Mr. Wills: I shall revert briefly to engineering, which was the subject of the hon. Gentleman's original question. Of course I recognise the importance of that sector, and I am delighted to see that it is growing at 2.2 per cent. at an annualised rate, compared to the equivalent quarter last year. All hon. Members will welcome that evidence of growth in engineering.
    Mr. Barry Jones: Does my hon. Friend accept that a prime example of successful engineering manufacturing is the aerospace industry? With that in mind. may I persuade him to make available only £550 million investment launch aid for the Airbus 3XX project? That will create thousands of new jobs. By scheduling my constituency as an assisted area, our right

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    hon. Friend is giving a tremendous boost to engineering manufacturing in my constituency for the next century, and my people thank him for that.
    Mr. Wills: I am grateful to my right hon. Friend for those remarks. I know that the application for launch aid is now in, and I can assure him that it will be considered carefully and in great detail as he would expect.
    Mr. Peter Brooke: What is the reaction of the Government, who made a lot of noise about competitiveness when they were in opposition, to the sharp fall in the United Kingdom's place in the world competitiveness league announced in Switzerland this week?
    Mr. Wills: Of course we are doing everything we can to make sure that this country improves its competitive position. We inherited from the Conservative party not a golden legacy, but a situation that was severely threatening to all our manufacturing industry and businesses. We are taking every step to ensure that that is put right. Having put an end to the boom and bust that characterised the years that the Conservative party spent in government, we have created a new climate of stability, which is the core foundation for economic success. We have cut corporation tax to the lowest levels ever and we are creating a properly competitive environment in which business can flourish and prosper.
    Mr. Hilton Dawson: Is my hon. Friend aware that he has brought real hope to the manufacturing industry of Lancaster with the announcement that he has made today about levels 2 and 3 assisted area status for the city? Is he further aware that there is singing and celebration throughout the streets of that glorious city because of the coupling of that announcement with the fine announcement on single regeneration budget funding for the Luneside regeneration project? Is he looking forward to his visit to Lancaster on 5 October? Not only will he be celebrated throughout the entire city for putting the benighted Tory years behind us, but he will hear evidence and information about how we intend to use the money well to bring Lancaster back to full employment and prosperity.
    Mr. Wills: I have listened to my hon. Friend's eulogies about Lancaster for many months and I am delighted that I am to visit that great city. I am looking forward to that and I welcome his words of thanks about the work that we have put in on the assisted areas map. We have tried to address real need throughout the United Kingdom and I am delighted to hear that we have succeeded.
    Mr. Roy Beggs: The policies being pursued by the Government have safeguarded existing
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    jobs in Northern Ireland, and indeed have helped it to attract new investment, but will the Minister and his Department be very conscious of the fact that electricity costs in Northern Ireland are the highest of any region of the United Kingdom? We in Northern Ireland have reached our emissions target through the introduction and use of gas, but will he consider seriously the adverse impact—and the damage to stability, prosperity and peace that could be caused if jobs were to be lost—of increased costs for manufacturing industry caused by the climate change levy?
    Mr. Wills: I recognise the hon. Gentleman's concerns. I understand that there is now connection through an interconnector, which ought to bring costs down in the future. Let me say three things in relation to the climate change levy. First, there will be no overall increase in taxation. Secondly, of course we need to promote competitiveness, but we also need to balance that goal with the need to promote sustainable development. Thirdly, we recognise that the energy-intensive sectors have a special case and we intend to set significantly lower rates for them.

    Disqualified Directors
    Mr. Colin Burgon: What plans he has to increase the penalties for disqualified directors who run businesses. [90021]
    The Minister for Trade (Mr. Brian Wilson): There are no restrictions on disqualified directors running businesses on their own account. Accordingly, there are no penalties arising. There are no plans to change that. The penalties for directors who act in contravention of disqualification orders are imprisonment for up to two years or a fine, or both. There are no plans to increase those penalties.
    Mr. Burgon: I thank my hon. Friend for that reply. How can disqualified directors acting behind the scenes in the management of companies best be detected?
    Mr. Wilson: As my hon. Friend might expect, we are doing a great deal about that. In January 1998, the Insolvency Service launched a telephone hotline for the public and the business community to report disqualified directors who continue to act while banned. There has been a good response: 925 calls were made to the hotline and 125 cases were referred to solicitors for consideration. Companies House checks have also been introduced to ensure that all disqualified directors resign from all current directorships and are not appointed to any new ones. A great deal is being done to curb the activities of rogue directors.

Northern Ireland
12.30 pm
The Secretary of State for Northern Ireland (Marjorie Mowlam): With permission, Madam Speaker, I wish to make a statement.
First I apologise to the right hon. Member for Bracknell (Mr. MacKay) and the hon. Member for Montgomeryshire (Mr. Öpik) for having only just got them a copy of the statement. We thought it most important to finish writing the statement and come to tell the House at 12.30 pm what is going on in Northern Ireland. I hope that they will understand the speed at which we have had to move.
The House will be as sad as I am to hear that the Deputy First Minister designate of Northern Ireland, the hon. Member for Newry and Armagh (Mr. Mallon), has just resigned from that position. He will be greatly missed in Northern Ireland in that job because, as I know only too well from my position, his contribution has been crucial in holding everything together. The experience of over 30 years that he has brought to the process has been incredible. I hope that he can see his way to stand again for an office in the Assembly in the months and years ahead because without him it will be a sadder place. It will miss his skills, oratory and contribution greatly. I am sure that it is a great relief to all hon. Members that his skills, abilities and oratory will not be lost to this House.
On 2 July my right hon. Friend the Prime Minister proposed with the Taoiseach a way forward to implement the Good Friday agreement. It was a way forward to secure both devolution and decommissioning, with a clear failsafe for both. As proposed on 2 July, the Assembly met this morning to select the departmental Ministers to take office on devolution. Devolution would have followed on Sunday.
The decommissioning process would then have begun within a period specified by the Decommissioning Commission—as General de Chastelain said on 2 July:
"literally within a couple of days."
Actual decommissioning would then have followed, according to a timetable laid down by the Commission, "within a few weeks". If commitment on either devolution or decommissioning had not taken place, there was a failsafe: parties would not have been expected to continue in government with those in default.
As many in the House will now know, the Ulster Unionist party, the Democratic Unionist party and the Alliance chose this morning not to nominate any Member to ministerial office. All parties have agreed on the principle under the Good Friday agreement of an inclusive Executive exercising devolved powers. With those parties not nominating Ministers, it was clear beyond doubt that such an inclusive Executive could not be formed. Therefore, this morning I acted immediately to undo the appointment of Ministers designate since the requirement for a cross-community Executive had not been met. I will now take steps with the Irish Government to institute a formal review under the Good Friday agreement.
The Minister of State, Northern Ireland Office, my right hon. Friend the Member for Torfaen (Mr. Murphy), and I will be available to the parties in Northern Ireland over the next few days for discussion as to the nature of that review. My right hon. Friend the Prime Minister will meet the Taoiseach next week to announce the arrangements,
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agenda and timetable for this review. It will take place under paragraph 4 of the review section of the agreement. It will be a review not of the agreement itself but of its implementation.
Earlier this week the House debated the Northern Ireland Bill which provides the failsafe envisaged under "The Way Forward" proposals. We judged that it would help to reassure Unionists and nationalists, but particularly Unionists, that we were serious about the failsafe if we published the Bill and demonstrated that it was on its way to becoming law. I am grateful to the House for considering the Bill at such speed on Tuesday. We shall not withdraw it, because it may well be that a failsafe on those lines will be necessary to underpin whatever way forward is eventually agreed. However, the Bill will not now proceed at emergency speed in the other place this afternoon.
I still believe that the way forward proposed by my right hon. Friend the Prime Minister and the Taoiseach is a balanced approach that could have succeeded. I do not seek to blame any party in the House. The last thing that the people of Northern Ireland need now is an outbreak of recriminations. I believe that all those who supported the agreement when it was made genuinely wanted to see it implemented. The reality is that we either move forward together, or we do not move forward at all.
Today is a setback: it would be foolish to deny that. It would be even more foolish to conclude that the Good Friday agreement cannot continue. Apart from those who have always opposed the agreement, no one is seriously suggesting an alternative way forward. There is still a wide measure of agreement on the issues that have divided people in the past, such as on the resolution of the fundamental constitutional question on the basis of consent; on a fully inclusive form of government, with both communities represented; on a fair and just society in which both traditions are respected and rights are safeguarded; and on the decommissioning of all paramilitary arms in a manner determined by an independent commission, and the eventual normalisation of society.
That is, in my opinion, a massive consensus, which was inconceivable before the Good Friday agreement, and which puts today's setback, serious though it is, in perspective. One must never forget that, however fed up one may get with the results of this morning. Most of all, I place my faith in the people of Northern Ireland, who are bitterly disappointed, as is clear from the phone calls that we have received in the past 10 minutes—let alone what I believe will happen this afternoon in terms of public opinion.
During this year, and particularly in recent weeks at the beginning of the parades period, people in both communities have shown that the strongest of disagreements can be expressed peacefully. For their sake, we, the Irish Government and all the Northern Ireland parties must not be disheartened. We must continue to work to implement the agreement that the people have approved.
Mr. Andrew MacKay: I thank the Secretary of State for coming so quickly to the House to make the statement. In the circumstances, I fully understand why I did not get the draft of the statement very far in advance.

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This is a sad day for the people of Northern Ireland, because it is clear from what the Secretary of State said that a devolved, inclusive Administration for the people of Northern Ireland is sadly still some way off. Will she confirm again that the real stumbling block to progress was non-decommissioning? Will she lay the blame fairly and squarely—[HON. MEMBERS: "Oh."] Can I ask the Secretary of State to lay the blame fairly and squarely with the paramilitaries, loyalist and republican, who have failed to fulfil their obligations under the Good Friday agreement by not decommissioning any of their illegally held arms and explosives? They are entirely to blame for the process not proceeding.
I endorse the Secretary of State's commendation of the hon. Member for Newry and Armagh (Mr. Mallon), who has just resigned as Deputy First Minister designate. Will the right hon. Lady also place on record the outstanding contribution of the right hon. Member for Upper Bann (Mr. Trimble), the First Minister designate? At all times he has behaved not only honourably but with great courage in trying to move the process forward.
May I ask the Secretary of State to confirm that the amendments that were much trumpeted and much spun by Downing Street yesterday, but never laid before Parliament, did not include any of the essential failsafes that the Unionists and I would have required to ensure that Ministers were appointed to the Executive? Let me remind the Secretary of State of the essential failsafes that we required. First, we required a tight, transparent timetable for decommissioning. Our second requirement was that, if any of the paramilitaries, republican or loyalist, failed to decommission, their terrorist prisoner releases would be halted. Our third requirement was that, if the IRA failed to decommission, Sinn Fein would be immediately excluded from the Executive.
May I also ask the Secretary of State to promise the House, as the paramilitaries are failing in their obligation to decommission their illegally held arms and explosives, that she will immediately halt the early release of terrorist prisoners back on to the streets of Belfast?
I entirely agree with the Secretary of State that the Good Friday agreement is still the best way forward, and I think it right and proper for a review of its workings to be carried out now. Will the Secretary of State confirm what I have heard her say before—that the Belfast agreement must be implemented in all its parts, not cherry-picked? The part that is not being conformed to at the moment is the requirement for decommissioning of illegally held weapons.
Marjorie Mowlam: Let me begin with the right hon. Gentleman's last question. We firmly believe that the Good Friday agreement should be implemented in full.
The hon. Gentleman raised another point about something that is not part of the Good Friday agreement. It is crucial for people to understand that the question of prisoner releases is part of the Northern Ireland (Sentences) Act 1998, and that suspension is related to the ending of the ceasefire, not to decommissioning. The right hon. Gentleman keeps repeating that there is such a relationship, but it does not exist.
On prisoner releases, I have made it clear—I have said this from the Dispatch Box on numerous occasions—that I, like the hon. Gentleman, desperately want to be sure that the commitment to a ceasefire is not broken.
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As Sir Ronnie Flanagan, the Chief Constable of the Royal Ulster Constabulary, said 10 days ago, I have not—by default, or by actions that I have taken—done anything contrary to the advice that he has given me.
As for evidence on prisoners, I will not shirk that. I will act if I have to—we have twice excluded parties—but I will not act on the basis of hearsay or allegations that keep being brought up. I assure the right hon. Gentleman that we will act; but there is no point in asking for the halting of accelerated release of prisoners. Yes, that was part of the Good Friday agreement, but it was not tied to the conditions that the right hon. Gentleman wants to be imposed.
Opposition members must understand that we cannot cherry-pick. We cannot suddenly say, "I think that I will stop this". That would guarantee the end of the Good Friday agreement.
As for the amendments proposed by my right hon. Friend the Prime Minister in relation to the speech by the right hon. Member for Huntingdon (Mr. Major) on Tuesday, they are there. They were not tabled last night, but they are there ready to go. As I said in my statement, we will continue with the legislation, because there may well be a chance for it to be used in future; but we will not force the Bill through on an emergency timetable when there is clearly no longer an emergency. I assure the House that the amendments are there, ready for tabling. We attempted to respond to the points made by the right hon. Member for Huntingdon and others, and we believe that we have done so.
The right hon. Gentleman referred to the outstanding contributions of the leaders in Northern Ireland, and mentioned in particular the right hon. Member for Upper Bann (Mr. Trimble). Let me say categorically that I believe the leaders of every party in Northern Ireland have tried hard—all of them. I condemn none of them because I believe that they have all tried with determination and courage to make progress. It is just very sad that we have not been able to do that today.
In response to the right hon. Gentleman's first statement, I do not want to indulge in blame and recriminations because that is the one way to guarantee that the whole process will unravel again. That is why it is crucial that, if we go backwards—
Mr. Crispin Blunt: Why don't you blame the terrorists?
Marjorie Mowlam: I blame terrorists who murder people. It is appalling. It is outrageous. It is disgusting. But I am here implementing the Good Friday agreement and the agreement is inclusive.
People have tried desperately in the past 18 months and, as I have said, sadly, we have not made it by today, but we will not make progress and we will not hold the fragile ceasefires that we have at the moment, if we start a whole exercise in the House today of saying who we think was to blame.
We all carry responsibility—everyone. As a result, everyone should do all they can to move the process forward, rather than try to unpick it. The basic problem that we experienced, as was clear in the House

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on Tuesday, was one of trust and confidence. We must all work to try to rebuild that over the summer because the Good Friday agreement is not lost; neither is the peace.
Dr. Norman A. Godman: May I say first how deeply I regret the resignation of our hon. Friend the Member for Newry and Armagh (Mr. Mallon). It has always been my view that both he and our hon. Friend the Member for Foyle (Mr. Hume) stand head and shoulders above most of those involved in politics.
We always knew that the negotiations would be protracted and cumbersome, but they have been deeply harmed by the intransigence of the hardliners in the Unionist parties and, indeed, among the republicans. This is a setback, but that is all it is. Matters have improved enormously in Northern Ireland over the past 20 years. We have to remember that. We have a peace of sorts, but it could help if General de Chastelain—not that he can be influenced by anyone, let alone a Back Bencher such as me—could come up with a definite timetable concerning the process of decommissioning over the next several months.
Marjorie Mowlam: I thank my hon. Friend for his contribution. I respect what he personally has done in relation to Northern Ireland. I say that just before I disagree with him, because I do not think that it helps at this point, sad though we all are at the loss of the hon. Member for Newry and Armagh from the process, to begin to do what I have just said to Opposition Members we should not do, which is boost some Members above others. Yes, everyone in Northern Ireland has to take risks. Yes, everyone has to change and that goes for hon. Members and for the two Governments. Unless that happens, it will be tougher to make progress.
I accept that there are hardliners on both sides who do not help the process. It is equally not helped by those who oppose the Good Friday agreement, but opposition to the agreement is Opposition Members' democratic right, which we have never denied. The real difficulty in the weeks and months ahead will come from those on either extreme who have not given up violence. They are there with the intent purpose of trying to destroy the agreement. What will be tough and difficult in the weeks and months ahead will be to ensure that they do not succeed in bringing down what can potentially again be built on.
In response to the final point on de Chastelain and a definite timetable, that is one of the things that was discussed yesterday. I hope that, when the review gets going, it is discussed again, but, as is patently clear from what is happening in Northern Ireland at the moment, it is the parties who will decide whether that is crucial, not us.
Mr. Lembit Öpik: May I also say that we understand the very important reasons that led to the late arrival of the information that came to us before the statement—indeed, I applaud the Secretary of State for doing her best to keep us posted at all.
May I first ask the Secretary of State to note some slight concern about the effect that the very late arrival of the new Standing Order that she determined this morning had on the proceedings in Northern Ireland? Perhaps she could explain why it was sent so late.
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Secondly, will the Secretary of State confirm that, according to the regulations, the resignation of the Northern Ireland Deputy First Minister creates a vacancy also for First Minister—although the current First Minister would be entitled to continue as acting First Minister for up to six weeks, by which time an election must be called?
Thirdly, does the Secretary of State agree that, although it may now be difficult to move forward, that is no excuse for moving back? Do we not have to recognise that the failure to choose the current process will do nothing to provide an alternative to what has come before us?
Fourthly, does the Secretary of State also realise that—despite protestations of it all being fair and square by the right hon. Member for Bracknell (Mr. MacKay) on behalf of the official Opposition—when something of such gravity is occurring in Northern Ireland, this is not the time to try to score party political points? Does she agree that it sounds to many Northern Ireland people as though some mainland politicians have forgotten that we are here in the Province's interests, not our own? Does she also agree that trying to justify some of the comments made in the Chamber has made it exceedingly difficult for Northern Ireland politicians who desperately want to make progress to do so?
Finally, does the Minister agree that there will have to come a time when all sides show some faith, even if that involves risk? Without that faith, the Province can have little faith in the future.
Marjorie Mowlam: The Standing Order was determined this morning because—last night, and until the early hours of this morning—it was unclear whether the Ulster Unionist party would be able to include someone in the process. That was clarified only when the UUP announced from Glengall street in Belfast that it would not field a nomination in the d'Hondt procedure. I had made a commitment, as had the Prime Minister, to run d'Hondt, and we had to give the Assembly 24 hours' notice before doing so. The process was therefore inevitably taking its course.
Subsequently, it became clear to me that if the UUP and the Ulster Democratic Unionist party would not make nominations, we would end up with an Executive composed of 10 nationalists. The spirit and words of the Good Friday agreement have always been that movement would have to be on a cross-community basis.
I apologise to the parties that were in the Chamber in Northern Ireland at lunch time, but I could not pull d'Hondt. Equally, if only one community had participated in it, it would not have worked or been cross-community. The Standing Order was drafted, therefore, when the situation became clear, at about 9.30 am to 10.00 am, so that we could have it in the Chamber, and avoid an even more unworkable situation.
As for the impact of the Deputy First Minister's resignation on the First Minister, the two posts are connected, and I believe that there will have to be an election for both. I believe that a six-week time frame, which the hon. Member for Montgomeryshire (Mr. Öpik) mentioned, is another dimension to the matter. Although we are—to be fair—still checking the details, I share the hon. Gentleman's view that, after six weeks, there will have to be an election for both posts.

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I do not really want—however frustrated I might feel—to deal with the hon. Gentleman's final point, on political parties, point scoring and bipartisanship. As so often in this process, we have to do all that we can to protect bipartisanship. It would not help for me to go through what we did when we were in opposition that has not been reciprocated, as I should be indulging in what I told the rest of the House would not be productive, today, of all days. Nevertheless, bipartisanship does help, and I hope that, from now on, we can continue acting positively and constructively in that manner.
Mr. Tony Benn: As the Secretary of State will know, the sense of disappointment that she expressed will be shared by the overwhelming majority of Members of this House and the people of Northern Ireland, because the Belfast agreement represents the majority of the people in Northern Ireland more even than any party there. May I thank her for the immense amount of work that she has done? No British Minister in history has ever devoted so much time, attention, care and thought to finding a solution, and the language she uses is clearly designed to keep all the participants in a position to negotiate. I am sure that she is right to talk about the future because of the majority in the referendum.
Is my right hon. Friend aware that, for many people, the ultimate decision by the Unionists will not come as a surprise? From the time of the first ceasefire, their feeling was that there could be no negotiations until it was permanent. Now we have the problem about decommissioning.
The impression has been given that the representatives of old Unionism, which commands the Ulster Unionist party, is interested in the Union with the United Kingdom only if we will send troops to support them, but not if they are asked to sit down with the Catholic community on the basis of equality. One of the consequences of that, as I am sure the Secretary of State is aware, is that if the emphasis now moves to London and Dublin running a condominium in Northern Ireland, that will be the first stage towards what many people—including myself, for all my life—believe; that the Irish people will have to settle their own future. I hope that she will use those arguments with the skill that she has shown to try to make the Ulster Unionist party—I am not speaking about the right hon. Member for Upper Bann (Mr. Trimble), but his party—realise that the old days are over, and that the majority of people in the Northern Ireland want that to be the case.
Marjorie Mowlam: I ask all hon. Members to avoid recriminations, however strongly we may feel; otherwise, we revert to oppositional behaviour, and today is not the day for that. I am sure that we will have debates in future when these views can be expressed clearly. Today, we are making a commitment to stick with the principles in the Good Friday agreement and to have a review. The details of the review will be discussed by the parties in Westminster and there will be input from those in the House. My right hon. Friend talks about the old days being part of the past and, for many people in Northern Ireland, they are. If one goes to Northern Ireland, one sees new buildings and increasing jobs and industry. Normality is coming to Northern Ireland, and all politicians have to show leadership and make sure that we make happen politically what is happening in many communities.
Mr. Peter Brooke: Does the Secretary of State agree that, not for the first time
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in our history, "Steady the Buffs" is not a bad national watchword, and that the important thing at this juncture is calm thought for the future about how the delicate plant that is the peace process can be fostered? That, of course, includes—as the hon. Member for Greenock and Inverclyde (Dr. Godman) said earlier—the work of General de Chastelain on the decommissioning programme.
Marjorie Mowlam: I acknowledge the work of the right hon. Gentleman, who will feel as sad as anyone that we have got to this point but no further, as he was one of the architects of the process. General de Chastelain will continue to work as hard as he has done, and he has made a positive impact on the process. I am sure that that will continue. "Steady the Buffs" might be his phrase. Mine would be "Keep your head, keep it down and we will keep going."
Mr. Kevin McNamara: Is my right hon. Friend aware that her right hon. and hon. Friends admire her stateswomanlike qualities this afternoon, as she must be under tremendous pressure to vent her opinions? We admire the way in which she continued her job, despite the fact that, from the time when the Good Friday agreement was made, the Official Opposition—in conjunction with the Ulster Unionists—sought to cherry-pick and alter the agreement, change it and bring in fresh conditions. As much as anything, the Official Opposition are responsible for bolstering the Ulster Unionists in their rejection of the agreement.
The Ulster Unionists are halfway through another Parliament, and still there is no change. That has always been their policy. Many of us believed from the start that they never had any intention of coming to an agreement.
Marjorie Mowlam: I thank my hon. Friend for the work that he has put into building the process, but I must also say to him that there has been change in Northern Ireland. Incredible progress has been made since the Good Friday agreement. The principle of consent has been agreed, so there is a way forward on the basic constitutional difficulty that has always been at the root of the problems in Northern Ireland. That, more than anything, is a good building block to start from; it was for the Good Friday agreement, and it will be as we move forward.
Mr. Tom King: I very much welcome the Secretary of State's insistence that this is not the end of the Good Friday agreement but that the review itself is being conducted within the agreement. I greatly appreciate her demeanour and presentation today, which are a signal improvement on some of the comments from Government Back Benchers to which she has had to respond.
When the Prime Minister talked in his original statement about a failsafe mechanism, which is obviously a very important agreement, I was concerned that he was not able to say what the mechanism was. The Government are trying to produce suitable amendments rather late in the day. I strongly endorse what the hon. Member for Greenock and Inverclyde (Dr. Godman) said. Surely the opportunity is now there for General de Chastelain to produce the mechanism, which could be put in the Bill. The Bill has been laid aside but not abandoned. The independent commissioner's report could be attached to

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the Bill and the mechanism would be endorsed, with the authority of Parliament—it would not be a bad thing if it were endorsed by the Dail as well—so people might be able to have real confidence that it was, indeed, a failsafe.
Marjorie Mowlam: I thank the right hon. Gentleman for his contribution, but unhelpful comments sometimes come from both sides of the House. I appreciate and reinforce strongly his point that this is a review; the Good Friday agreement is still there, we are certainly not going backwards and we fully intend to move forwards. However difficult it is today, and however disappointed people are, we must not lose sight of that. I have often thought in the past two years that we have come a long way quite quickly.
One can see from conflicts around the world that it will take years to build a strong, stable base. That we go three steps forward, one back, four steps forward, three back is in the nature of building a process of trust and confidence and achieving the reconciliation that is needed. I certainly endorse the right hon. Gentleman's statement that the review is to take place on the basis of the Good Friday agreement.
On tying the failsafe to the broader political statement and to the role of General de Chastelain, the best thing to say at this point is that I am sure that General John de Chastelain and the parties in Northern Ireland have heard what the right hon. Gentleman said. As the review progresses in the weeks ahead, I am sure that his points will have been heard.
Mr. David Winnick: Is my right hon. Friend aware that there will be much disappointment not only in Northern Ireland but on the mainland and that the overwhelming majority in Britain itself want the Good Friday agreement to be endorsed and implemented as soon as possible? I hope that, despite today's disappointments, that will come about later.
Will my right hon. Friend reaffirm that the Government intend to continue to work as closely as possible with the Government of the Irish Republic? Today, there may be a kind of victory for those who were against the agreement from the beginning—the majority of Unionist Members—but it is essential above all that we do not give them a permanent victory, because that would be a terrible disaster for Northern Ireland and the United Kingdom as a whole.
Marjorie Mowlam: The disappointment that my hon. Friend mentioned will be shared not only by people on the island of Ireland and in Great Britain, but—if my mailbag is anything to go by—by people across the world who have been watching the situation. What is important today is to reinforce the contribution from the right hon. Member for Bridgwater (Mr. King) and say, "Yes, it is disappointing and sad that we have not made progress, but we still have the Good Friday agreement and a review."
In a sense, we are where we were before "The Way Forward" document was put forward. We are where we were when the Hillsborough declaration failed. That is disappointing, but we are no further back than we were several months ago and that does not mean that we cannot find other ways forward. That is what we should focus on.
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My hon. Friend mentioned the Irish Government, and I may say that we would not have got to where we had got if we had not worked as closely as we have with the Irish Government. Previous Governments knew that, and Opposition Members who have spoken also know that. We have had a good working relationship with the Irish Government and we are still talking through the night about how we can go forward. We will continue to talk over the weekend. The Taoiseach and others in the Republic are as sad and disappointed as many people here are that progress is not being made.
Rev. Martin Smyth: I first wish to apologise for the absence of my right hon. Friend the Member for Upper Bann (Mr. Trimble). He expected the statement to be made later and was hoping to be here in time for it.
We are used to spin doctors and I understand the reference to the Good Friday agreement, but I thought that we were talking about the Belfast agreement rather than the spin on it. The harsh reality—when one considers what has been said across the Chamber—is that unlike those why buy from disreputable insurance salespersons who mention benefits but do not encourage reading of the small print, politicians should read the small print. From the beginning some of us saw where the problem lay. That emerged from the statements of the Prime Minister when he came to Belfast some two weeks ago and wanted everyone to subscribe to a document that stated, first:
"That Unionists are committed to an inclusive administration"—
and, secondly:
"that the Republican movement is prepared to decommission by May 2000".
We have answered the first point and we are prepared to go down that road, despite what has been said today by Labour Members. Unfortunately, they are following the big lie by the leader of Sinn Fein, who went on the media to say that Unionists did not want to share not with nationalists or republicans but with Roman Catholics. My right hon. Friend the Member for Upper Bann has answered that specifically in the House and elsewhere.
The second point about decommissioning has not been dealt with. The failsafe mechanisms did not deal with it. We live in the reality of Northern Ireland and it was none other than Gerry Adams who categorically denied that any commitment had been given to disarmament. Hence, there is no evidence that there has been a seismic change in republican thinking.
The Secretary of State mentioned movement in Northern Ireland in her statement and I would expect her to agree that that has been going on for a considerable time. If we went back to the report from the constitutional convention of 1975, we would find many of those points in it. Unionists have been moving forward, but we are not prepared to sell democracy at the price of terror.
Marjorie Mowlam: I have tried to acknowledge the role of the anti-agreement parties because in a democracy everybody's voice should be heard. We have not indulged in spin doctoring on this issue: I do not believe in it and will not do it.
Rev. Martin Smyth: You have.
Marjorie Mowlam: I have not and will not, but I can tell the House who has been spinning. It is all the parties

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in Northern Ireland, and the sooner they stop spinning and start talking to each other, the sooner progress will be made. On the hon. Gentleman's final point about looking back to what happened in 1975, it is important that we do not keep replaying history or living in the past: we must look to the future. We have a chance of looking to the future if we all try, by admitting the mistakes and errors in the past, to build for the future.
Progress has been made over the past 30 years, but hundreds of people have also been killed, as the hon. Gentleman and I know. The violence continued after the Good Friday agreement was reached, but the smaller number of people killed in the period shows that the agreement considerably lessened that violence.
Mr. Clive Soley: My right hon. Friend reminds us all that this is a good time to remember the lessons of the recent past, one of which is that there is a greater chance of agreement when the major Opposition party supports a Government. That is true even when strange things happen, such as the previous Conservative Government holding direct talks with the IRA. What has happened in the past few days is a result of the major Opposition party partially withdrawing support for the Government. In so doing, it has undermined the already severely divided Ulster Unionist party—so that those responsible members of that party who wanted the agreement found it almost impossible to go the extra mile—and allowed the agreement to slip through our fingers.
Marjorie Mowlam: I thank my hon. Friend, in view of all the work that he has done on this matter, but I must reinforce the point that we will make progress when people stop spinning and start talking to each other.
Mr. Tim Collins: If the ceasefires are "fragile"—the word that the Secretary of State used earlier—rather than permanent, firm and unshakeable, as we had been assured previously, does not that suggest that it is especially important to halt prisoner releases until there is some decommissioning of weapons?
Marjorie Mowlam: I am saddened that the hon. Gentleman has put that interpretation on my use of the word "fragile" in relation to the situation. The ceasefires become more and more fragile when there is no alternative political way forward. When there is a vacuum—
Dr. Julian Lewis: Ah.
Marjorie Mowlam: It is all very well to say "Ah", but that is the reality: a political vacuum makes it easier for people who use the road of violence to justify their course of action. At the moment, there is no political vacuum in Northern Ireland. The political way forward is still being debated and discussed. The fragility is not in the nature of the ceasefires which, as I have said many times in the House, I keep under constant review. I have made a clear commitment that I will act if and when I am advised that the ceasefires are not holding. The fragility stems from the possibility that people will not talk and from the presence of extremist groups who want to break up the agreement.
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Conservative Members may be trying to secure a statement from me that could be headlined as "Secretary of State Admits Ceasefires Fragile", but that is not the case. There is fragility in Northern Ireland at the moment: that is inevitable. People will be disappointed and worried, and there remain marches to be held. However, I hope that all hon. Members will play a part in sustaining confidence and ensuring that divisions are not exacerbated. We must do our best to try and hold the situation together.
Mr. Jeremy Corbyn: I add my congratulations to my right hon. Friend for her patience in carrying out all the duties associated with her office over the past two years. On this sad day, she has had to announce a review of the Good Friday agreement which, when it was agreed, was an enormous step forward.
Will the review look again at the basic principles of the Good Friday agreement, or will the basis of the review be that we retain the agreement, under which both communities must be represented and in agreement before any progress can be made? When does my right hon. Friend expect the review to be completed?
Finally, the First Minister designate has failed to attend Stormont this morning. He has not offered his resignation, but his party has not nominated people to the Executive. Does the right hon. Member for Upper Bann (Mr. Trimble) remain as First Minister designate, even though he has vetoed this final hurdle in the peace process, or will he remain in office only until such time as the two Governments have completed the review?
Marjorie Mowlam: I said earlier that I think that the Good Friday agreement will be the basis of the review, which will concern the agreement's implementation rather than its content. That is the perspective that we have adopted since it became clear, an hour or so ago, that we shall need a review pretty quickly.
Those discussions with the Irish Government are taking place now.
We have said clearly that we will discuss matters with the parties over the days ahead. I hope that by the time the Prime Minister and the Taoiseach meet next week, they will be able to outline the terms of reference, the nature of the review and its conditions. I can be no firmer than that at present.
I cannot give a specific time scale, either. I have come to the House within an hour and a half of knowing what was happening, and it would be premature, if not unwise, to start to set down times until we have talked to the Irish Government and to the other parties. I assure the House that the statement to be made by the Prime Minister and the Taoiseach after their summit next week will make those answers clear.
Like my hon. Friend, the hon. Member for Montgomeryshire asked about the First Minister remaining in office at the moment. The two appointments are connected, but within six weeks, the situation will change. That is our understanding, but I should like to check the details, because I have not yet had the chance to make sure that it is definitive. I am 99 per cent. sure that that is how things stand.
Mr. William Thompson: When will the Secretary of State and the Government recognise that the

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idea of an Executive for Northern Ireland composed of Unionists, nationalists and republicans is simple nonsense that will never work?. Has the time not come to end the farce played out at Stormont today, to scrap the agreement, so that Northern Ireland can be governed as it should be—according to the same principles and practices as apply in the rest of the United Kingdom—and to defeat terrorism, wherever it comes from?
Marjorie Mowlam: We will continue to work for what the people of Northern Ireland ask us for. In implementing the Good Friday agreement, we are implementing what 71 per cent. of the people of Northern Ireland voted for. We are acting not off our own backs, but because the people want progress. It would have been wonderful to move towards devolution today, as has happened in Scotland and Wales. Along with the Irish Government, we believe that the Good Friday agreement provided the best way of doing that, but we cannot act in Northern Ireland exactly as we did for the Scots and Welsh, because they have different histories, and the history of Northern Ireland, with its large element of violence, means that mechanisms are needed that include both communities. We are trying to achieve those mechanisms, and we shall continue to do so.
Mr. Harry Barnes (North-East Derbyshire): I am not the sort of politician who tends to praise my Front-Bench colleagues, but the Secretary of State's approach has been exactly right. Matters are still open and much work must still be done, but we must not give up hope. We must avoid the politics of blame, and shouting yah-boo against particular groups or people. We must recognise the complexity of Northern Ireland, and of the attitudes in the House towards resolving these matters. Some elements of Unionism may stand strongly against any change, but others would accept matters as they stand, while others still want progress, a timetable and an agreement. There are differing positions, too, within the Conservative party—but honourable positions are held and argued on all sides. We must try to pull all those views together to achieve the settlement that we all want.
Marjorie Mowlam: I agree. I certainly have not given up hope and belief in a vision of a better future for Northern Ireland.

Business Statement
1.19 pm
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): With permission, I should like to make a statement about the business for next week.
MONDAY 19 JULY—Second Reading of the Railways Bill.
TUESDAY 20 JULY—Opposition Day [19th Allotted Day].
Until about 7 o'clock, there will be a debate entitled "Deterioration in Health Care Provision in the United Kingdom", followed by a debate entitled "The Government's Proposed Energy Tax", both debates will arise on Opposition motions.
WEDNESDAY 21 JULY—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House which will include the usual three hour pre-recess debate.
Consideration of any Lords amendments which may be received to the Employment Relations Bill.
Remaining stages of the Contracts (Right of Third Parties) Bill[Lords].
THURSDAY 22 JULY—Remaining stages of the Food Standards Bill.
FRIDAY 23 JULY—Private Members' Bills.
The House may also be asked to consider any Lords messages which may be received. The House will also wish to know that on Monday 19 July there will be a debate on sectors and activities excluded from the—
Sir Patrick Cormack: Does the right hon. Lady mean Monday 26 July?
Mrs. Beckett: No. On 19 July, there will be a debate on sectors and activities excluded from the working time directive in European Standing Committee C. Details of the relevant documents will be given in the Official Report.
[Monday 19 July: European Standing Committee C—Relevant European Union documents: (a) 13526/98; (b) Unnumbered EM submitted by DTI dated 18 May 1999, Sectors and activities excluded from the working time directive; (c) Unnumbered EM submitted by DTI dated 21 June 1999. Relevant European Scrutiny Committee Reports: HC 34-vi and HC34-xxiv (1998–99)]
Although the hon. Gentleman was mistaken in thinking that the date was incorrect, there was an omission from my remarks. I referred to the consideration on Wednesday 21 July of Lords amendments to the Employment Relations Bill. That is correct, but before that, we shall take consideration of Lords amendments to the Access to Justice Bill [Lords] So, the business will be the Access to Justice Bill, followed by the Employment Relations Bill, followed by the Contracts (Right of Third Parties) Bill.
The only other thing that the House would want to know at this stage is that the new Session will be opened on Wednesday 17 November.
Sir George Young: The House is grateful for next week's business.

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In the light of the statement that has just been made by the Secretary of State for Northern Ireland, is the Government's intention now not to move the business of the House motion, in the name of the Prime Minister, at 7 o'clock?
Will the right hon. Lady confirm that the plan is still to rise on Tuesday week? Will she confirm that we shall have the promised debate on public expenditure before the House rises?
The Leader of the House will have heard your statement on 12 July, Madam Speaker. You noted that
"the Procedure Committee … report on the procedural consequences of devolution has still to be debated."
You continued that the matter would be reviewed:
"Once the House has had a chance to debate the fourth report of the Procedure Committee."—[Official Report, 12 July 1999; Vol. 335, c. 21–22.]
As the implications of the Government's constitutional reforms have consequences for the House, will the Leader of the House find an early occasion on which we may debate the Procedure Committee's report?
What has happened to the debate on small businesses? Does the Leader of the House recall what the then Minister for Small Firms, Trade and Industry, the hon. Member for Hornsey and Wood Green (Mrs. Roche), said last year? She stated:
"It fulfils a commitment that the Government gave while in opposition, when we said that we would institute an annual parliamentary debate about the small business sector in the United Kingdom."—[Official Report, 19 June 1998; Vol. 314, c. 606.]
Are the Government now anxious to avoid a debate, because of the problems currently faced by small firms?
At this time of year, there is pressure on Ministers to clear the decks before the House rises. May important statements on Government policy be made in the Chamber, rather than being slipped out in a written answer—as happened this week with the decision to privatise BNFL? Will the Leader of the House outline to the House what statements Ministers plan to make before we rise?
On Monday, does it really make sense to spend a whole day on Second Reading of the Railways Bill, when it will run out of legislative track because the Government introduced it so late in the Session? We shall have to have another day on Second Reading of the same Bill in the new Session. Could we not more usefully spend the time debating the report of the royal commission on long-term care?
Finally, on a more conciliatory note, the House is most grateful for the date of the state opening of Parliament.
Mrs. Beckett: I confirm that the right hon. Gentleman is correct; the Government do not now propose to move the 7 o'clock motion for the order on Friday. We still plan to rise on Tuesday 27 July; it is my intention and hope that we shall hold the public expenditure debate before that date.
The right hon. Gentleman asked me about the important debates that we need to hold on the report of the Procedure Committee. I am conscious of that matter and of the fact that Madam Speaker is also keen for the issue to be aired. The right hon. Gentleman asked whether we could find an early occasion for such a debate, and I hope and anticipate that we shall find time, perhaps relatively
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early in the overspill period. That will kill two birds with one stone, because it means that we shall have a debate before this House gets much further into dealing with the consequences and aftermath, but the new bodies will have had more time to gain their own experience. In that way, we shall have a clearer view of what reciprocal discussions might be possible.
The right hon. Gentleman asked about the debate on small businesses. I am aware of the indication given that there would be an annual debate, and I can think of no reason why the Government should want to delay it. In a whole range of matters—including, for example, introducing the lowest rate of corporation tax that small businesses have ever faced—we are doing a great deal to help the small business community. I assure him that. that matter has not been overlooked, but I cannot give a date for a debate at present.
The right hon. Gentleman also asked about statements. I remind him that, as Madam Speaker has made plain, there is nothing wrong with Government announcements being made by written answer. The House would never do anything else if we tried to make every announcement by way of a statement. I cannot tell him offhand what statements are likely between now and the recess, but I shall see whether we can provide some indication through the usual channels, if that would be helpful.
As for the Railways Bill, I do not accept that the Second Reading debate makes no sense—in fact, I think that it would be an extremely useful step. As I hope the right hon. Gentleman is aware, we hope that the Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs will agree to consider the Bill, in another variant on the theme of pre-legislative scrutiny, which most of the House wants to happen. We hope and believe that that will substantially improve the Bill, which will be extremely helpful to the House in future.
Finally, I thank the right hon. Gentleman for his kind remarks about our giving the date of the state opening. I apologise to the House for not being able to give it before, but there are always some complications in settling such matters.
Mr. Andrew Mackinlay: May we have a statement from the Home Secretary next week about files kept by the security services? Many hon. Members will have been concerned—although perhaps not surprised—to learn that the United States Environmental Protection Agency has a file on a Minister of the Crown. Bearing in mind that United States legislation does at least allow people to know that a file is held on them, we might, in addition to discussing that matter, consider our own proposed United Kingdom legislation, which, as I understand it, would not allow hon. Members or other people to know whether or not British security services held a file on them. It is time that the Home Secretary assured us that the British security services do not hold files on hon. Members.
Mrs. Beckett: I am afraid that I cannot promise a statement from the Home Secretary next week. I was not aware of the matter until my hon. Friend raised it, because I have not seen the reports that a file is held on one of our colleagues—I suspect that, although surprised, he is also deeply flattered. I shall certainly draw my

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hon. Friend's serious point to the attention of our right hon. Friend the Home Secretary, in case there is anything that he can usefully add.
Mr. Andrew Stunell: May I press the Leader of the House on the fourth report of the Procedure Committee, which is the subject of active political debate? A report before the House contains practical suggestions on a way forward, and I should have thought that an early debate and an early decision by the House would be greatly in the interests of this House, the Scottish Parliament and the Welsh Assembly.
May I also raise an issue that I believe my hon. Friend the Member for North Cornwall (Mr. Tyler) has already raised with you, Madam Speaker? It relates to the announcement today by the three relevant Secretaries of State of the new objective 1 status and single regeneration budget decisions. That important set of announcements affects almost all hon. Members, with some receiving good news and others bad news. Although the decisions are of great interest and importance, they have been announced not in a parliamentary answer or a statement, but at a press conference held this morning. Will there be an opportunity, before the summer recess, for hon. Members to question Ministers about the decisions and the implications of those decisions?
Mrs. Beckett: First, as I hope I have demonstrated, I understand the importance of the Procedure Committee's report, and the wish of the House to come a view on it. I am sorry that it has not been possible to accommodate such a debate before the House rises for the summer recess, but an early debate in the overspill period will be not merely satisfactory but perhaps even better than having a debate now, when the Scottish Parliament, for example, has yet to embark on its new Session.
The hon. Gentleman also referred to assisted areas. He helpfully flagged up what is always the dilemma for the House and the Government, in that the responsibility for such matters crosses a number of departmental boundaries. Who, then, would make the statement? Hon. Members might want to question Ministers from different Departments on different aspects of the statement. In addition, we were aware that, sadly, it would be necessary for my right hon. Friend the Secretary of State for Northern Ireland to make a statement today. There is always a business statement on a Thursday, too, and it would be difficult for the House if we had three statements on one day.
As the hon. Gentleman knows—if he does not, he will find out when he leaves the Chamber and gets his post—my right hon. Friends have written to every hon. Member giving the full details. Although hon. Members will seek other opportunities to raise points publicly, all the information that they would want is available to them, probably in a fuller form than would have been possible if a statement had simply been made to the House. The Government have tried to overcome the difficulties that the hon. Gentleman rightly identified.
Mr. Paul Flynn: Is there not now an urgent need for a debate on the future of the constitution, particularly regarding devolution in England, because of the extraordinary and irresponsible speeches of
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Conservative Members? They claim that the House should act as an English Parliament on certain occasions, which would mean that Welsh, Irish and Scottish MPs would have to neglect their duties and responsibilities as elected United Kingdom Members. Is it not right that we should proceed with devolution in an orderly way with the consent of the British people?
The suggestion that we should somehow turn ourselves into an English Parliament would inevitably mean that the Scottish Parliament and the Welsh Assembly would demand more powers, which would lead to the break-up of the United Kingdom. Should we not proceed by debate, decision and referendum, rather than by the Leader of the Opposition making opportunistic speeches purely for his own political gratification?
Mrs. Beckett: My hon. Friend, as I recall, raised the general issue of the role and responsibility of UK MPs on Monday, when you, Madam Speaker, made it plain that we were all elected as Westminster MPs to serve in the Parliament of the United Kingdom, and that we all enjoy the full panoply of rights and responsibilities here.
I entirely share my hon. Friend's view that the Leader of the Opposition, not for the first time—indeed, it is becoming an unfortunate characteristic of his leadership—has rushed into something that he presumably hopes will give him short-term political advantage, without thinking through the long-term consequences. Although he claims to support the Union of the United Kingdom, he is in danger of fomenting exactly the kind of debate and discussion that would lead to the UK breaking up into its several countries.
Moreover, the right hon. Gentleman has made those remarks at a time when we are debating a devolved Administration in Northern Ireland, and he has said not only to Welsh and Scots MPs, but presumably, although he was not so tactless as to include them in his remarks, to Northern Ireland MPs, that they should not have a voice in affairs that impinge on England. To make those remarks at this time is foolish and very dangerous.
Angela Smith: Can we have, as a matter of urgency, a debate on rural bus services, with particular reference to their privatisation? It is disgraceful that when the Government came to office, 75 per cent. of rural parishes had no daily bus service. Although I welcome the Government's commitment to provide funds for rural bus services, and my constituency has benefited from being given £38,000 for services to Horndon and Bulphan, it is of great concern that privatised bus services have cherry-picked profitable routes, while cutting back on essential local rural services. An early debate on that issue would give us the opportunity to contrast the Conservative party's phoney concern for rural areas with the genuine action by the Government.
Mrs. Beckett: My hon. Friend is right about the improvements that have been made in rural areas, with some 1,500 new and enhanced bus services. That is only part of the picture. There are 1,000 more train services a day, new freight terminals and 16 new stations. Bus investment is 80 per cent. higher than it was five years ago. My hon. Friend is right, though, to identify the fact that it will take time to remedy the damage done by the Conservative party. As for the Conservatives' recent transport document, apart from the fact that it seems

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designed to be a boy racer's charter, it flies in the face of the record of the previous Government, who cut spending on buses, on the tube and on road maintenance, and left things in a pretty parlous state, from which the present Government are seeking gradually to rescue them.
Mr. Robert Syms: May we have a statement, or perhaps a debate, on the position of junior hospital doctors? At their recent conference they voted unanimously to hold a ballot on industrial action because of the shabby treatment that they have received from the Government, not only in their exclusion from the working time directive but in the very poor compensation that they receive for the long hours that they have to work. If the Government propose that they should work excessive hours for the next 13 years, should they not be properly compensated? If the situation is not resolved, it will have an impact on patient care for all our constituents.
Mrs. Beckett: Junior hospital doctors' hours of work have fallen under the present Government, and we have every intention of ensuring that they continue to fall. There is no suggestion that hours will be increased. I am aware that there is concern among that group, and we are all well aware of the extent to which their dissatisfaction and concern swelled under the previous Government. However, I remind the hon. Gentleman, and the doctors, that their pay is set by an independent pay review body with the backing of the British Medical Association, and that the present Government—unlike the previous Government—have implemented the pay review body' s recommendations in full. We accept that things are not improving as fast as junior hospital doctors would like them to, and as we would like them to, but under this Government—unlike the previous Government—things are at least going in the right direction.
Mr. Ian Bruce: May we have an urgent debate next week on the Government's failure to respond to Members' correspondence? I am sure that the Leader of the House knows, because she keeps an eye on such things, that the Cabinet Office produced a report the day after the European elections, when everyone had their eye off the ball, showing how appallingly the Government were doing.
The right hon. Lady will know that there is an annual report, and that the figures for 1997 were by common consent appalling. The figures for 1998 are even worse. She will also know that in 1997 only three Departments met the Cabinet Office's target of dealing with 90 per cent. of correspondence within three weeks—which is an appalling target anyway. In 1998 only one Department reached that target—the Cabinet Office, the Department that is doing the measuring—and two Departments, including her own, failed to achieve what they had achieved in 1997. When are we going to see some action, instead of excuses?
Mrs. Beckett: I have not seen the recent figures to which the hon. Gentleman refers, but I am not quarrelling with his interpretation of them. If anyone was going to do that, it would no doubt be my right hon. Friend the Minister for the Cabinet Office, when he takes questions next Wednesday. The hon. Gentleman will have an opportunity to ask him about the figures then.
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Of course we recognise that it is important to try to improve the record on answering MPs' correspondence, and everyone greatly regrets the fact that no improvement is yet taking place. The amount of correspondence sent to several Departments is increasing sharply, which does not help. However, I share the hon. Gentleman's concern, and the Government will continue working on the matter.
Mr. Tam Dalyell: Before we return to Westminster in October the Serbian winter will have set in, so might there be an opportunity for a debate on the Red Cross's warning about Serb starvation? The president of the International Federation of Red Cross and Red Crescent Societies, Dr. Astrid Heiberg, has warned that many people in Serbia are on the verge of starvation because of the effects of the recent NATO air raids and the international sanctions. Dr. Heiberg told the BBC that not only Serb refugees from Kosovo, but many elderly people on fixed incomes, were suffering. She appealed to the international community to provide humanitarian aid to Serbia without conditions. Should not the topic at least be debated, before it is too late to do anything about it?
Mrs. Beckett: I fear that I cannot undertake to find time for such a debate for my hon. Friend before the House rises for the summer, but there are, of course, the pre-recess debates, as he knows. I am not aware of any Red Cross reports predicting mass starvation or stating that people are on the verge of starvation, although I know that the Red Cross is concerned about the prospects for the winter.
Certainly, humanitarian assistance is on offer. There are difficulties in Serbia because there is only limited independent access, but the Government would be prepared to consider any request for assistance through international humanitarian organisations. The European Community Humanitarian Office—ECHO—has allocated 26.5 million euros for humanitarian assistance to Serbia, and the UK's share of that will be some 2.5 million, so I can assure my hon. Friend that some action is being taken and that we will continue to keep the situation under review.
Mr. Eric Forth: May we please have a debate on the relationship between the Government, the Labour party, outside single-interest groups, large sums of money and legislation? There have been a number of stories recently, of which the President of the Council is no doubt aware, that there may be some connection between the appearance of legislative proposals and the passage of large sums of money, possibly with threats attached, and between outside interests and the Labour party. I am sure that the President of the Council would want to take an early opportunity either categorically to deny such accusations or, perhaps, to introduce proposals that draft Bills would routinely contain an itemisation of the sums of money that had changed hands in order to get them to the stage of a Government proposal.
Mrs. Beckett: I cannot offer to find time for such a debate, but I am deeply grateful to the right hon. Gentleman for giving me the opportunity to refute utterly the ridiculous allegations that have been made, and to point out that what was said by the Leader of the

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Opposition this morning on the "Today" programme was straightforwardly untrue. There is no truth in the suggestion that the Labour party changed policy on any issue after being given a donation by anyone.
Mr. Ian Bruce: Formula one.
Mrs. Beckett: Formula one is the classic example where we did not change policy. I am sorry that the hon. Gentleman is so ill informed. As I was the shadow Minister in charge of the policy at the time, I am perfectly well aware of the position. [Interruption]
We were never committed to abolishing funding for sponsorship from tobacco companies. Indeed, I had many conversations with people in the medical profession when they told me how much they welcomed our decision to ban tobacco advertising and how much they regretted that we would not extend it to banning sponsorship of sports, but how fully they understood that that was very much more difficult and that it was a step too far. They did not expect us to ban sponsorship in sports. We were not committed to doing so, and we did not change policy. Anyone who suggests that we did, I am afraid, is telling an untruth.
Mr. Gerry Sutcliffe: My right hon. Friend knows of the excellent work that the Government are doing to combat domestic violence. I do not know whether she had the opportunity to watch the "Newsnight" programme the other evening about the problems of domestic violence that are developing in marriages between British citizens and foreign nationals. The issue is causing great concern, and I have a case in my constituency. I will not name the people involved, but an individual is using every opportunity to prevent the proper rules from being applied, and his partner lives in constant fear of domestic violence. Will my right hon. Friend consider a debate on the subject at some time in the future?
Mrs. Beckett: I did not see the "Newsnight" programme to which my hon. Friend refers, but hon. Members across the House recognise that domestic violence is a difficult and sensitive subject. He will know that a statement about domestic violence was published recently and that the Government, including my right hon. Friends the Lord Privy Seal and the Home Secretary, who jointly published the major statement, are continuing to work on the matter. I recognise that there are circumstances in which what is always an appalling situation is exacerbated by other factors, and I understand the sensitivities to which my hon. Friend refers. I fear, however, that I cannot undertake to find time for a special debate on the subject in the near future, but he also might like to bear in mind the pre-recess debates.
Mr. Desmond Swayne: Is there no possibility that we could substitute Monday's debate on Second Reading of the Railways Bill for a debate on the BBC and, in particular, its plans to spend £100 million on landmark programming to celebrate the millennium, which will include a 27-hour live breakfast broadcast that is unlikely to include the proceedings of the House? Many Members of the House, including some on the Labour
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Benches, would no doubt like to express the view that that money would be better spent on concessionary licence fees for pensioners.
Mrs. Beckett: No matter how much the BBC is planning to spend on that programme, I rather doubt that the amount would stretch to a budget that could fund concessionary television licences for all pensioners. I was not aware of the proposals to which the hon. Gentleman refers, but I fear that I cannot find time for a special debate on the BBC in the near future. Indeed, I would be a little wary of setting a precedent whereby we in the House start to second-guess the television programmers. I think that we second-guess quite enough people as it is.
Mr. Jim Murphy: My right hon. Friend will be aware from the Secretary of State for Scotland of the excellent news from the Kvaerner shipyards in Govan in Glasgow. She will also be aware that this is a perfect example of a Labour Government helping a labour force to protect and enhance their jobs and their futures. I believe that the action taken by my right hon. Friend the Secretary of State, his ministerial colleagues and the trade unions at Kvaerner will save up to 1,200 jobs. I know that the legislative agenda is packed, but can she arrange for an early statement or debate on the detail of the deal? That would not only bring to the fore more information about what the Government have achieved, but provide an opportunity to emphasise to the whole House—including Conservative Members who, we should remember, represent a minority of the English vote—the importance of the continuing role played by my right hon. Friend the Secretary of State for Scotland in the Cabinet and in the United Kingdom Parliament.
Mrs. Beckett: The whole House will share my hon. Friend's pleasure at the decision that has been reached and the outcome for those whose jobs have been saved. We should pay tribute to my right hon. and hon. Friends who, I understand, engaged in 40 hours of discussions to secure the arrangements to which he refers. I fear that I cannot find time for a special debate, although I note that Scottish questions will take place on Tuesday week, and he may seek to raise the matter then. One thing is quite clear: I recall that less than courteous remarks were made by some on the Conservative Benches at the previous Scottish questions about what role and functions my right hon. and hon. Friends would undertake in future. I think they have demonstrated admirably both their usefulness and their skill.
Mr. Paul Burstow: I draw the attention of the Leader of the House to early-day motion 405, on the royal commission on long-term care:
[That this House congratulates the Government for its commitment to tackling the inequalities and inefficiencies of the present system of funding long-term care for older people; commends the Royal Commission on Long-Term Care for reporting within 14 months after consultation with over 2,000 organisations and experts in the field as well as members of the public; and joins with Age Concern in calling on the Government to produce a clear timetable for introducing long overdue changes to the system in recognition of the fact that older people do not have the time to wait for further debate.]

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In the light of earlier questions, when will the House have the opportunity to debate the royal commission's recommendations, not least because of the Secretary of State's desire to have such a debate? Will a debate be held before the Government come forward with their conclusions and response to the royal commission?
Mrs. Beckett: As the hon. Gentleman is well aware, the royal commission has produced a detailed report and the commissioners themselves called for a full debate across the country about its implications. I anticipate that that debate will continue for some time, and we should like to use it to inform the decisions that the Government may take on the matter. I am aware of the pressure for a debate in the House, but I fear that I cannot undertake to find time for it in the near future. However, I am sure that this will be one of the issues that is on everybody's list of matters for debate after the recess.
Mr. Brian White: I appreciate that there will be a wide-ranging health debate next week, but can my right hon. Friend find time for a debate so that we can review the progress of NHS Direct? One of the original NHS Direct pilot schemes took place in Milton Keynes and more than 250,000 phone calls have been made to it since then. Is my right hon. Friend aware that the general practitioners in my constituency now put NHS Direct's phone number on their ansaphone messages to direct people to it outside surgery times? Can she find time for a debate so that we can review the progress of the NHS roll-out?
Mrs. Beckett: I am grateful to my hon. Friend. The experience of his constituency, where one of the early pilot projects took place, is particularly interesting. I am most encouraged by what he says about the partnership that is developing between general practitioners in his area and NHS Direct, as the House will be. It is particularly interesting because, as he will recall, of late there have been comments in the news media suggesting that general practitioners oppose NHS Direct. It is clear from an area where the scheme has been piloted that not only is it successful with the public, but it is adding an extra, useful dimension to health care provision.
Rev. Martin Smyth: May I support the plea of the hon. Member for Poole (Mr. Syms) for a debate on junior doctors' hours and specifically request the attendance of a Northern Ireland Health Minister for Tuesday's debate? At a recent British Medical Association conference in Belfast, a Belfast graduate speaking of the situation in an English hospital made a tremendous speech on this issue and actually said that the situation in Northern Ireland was even worse.
The Leader of the House will be aware that there has been a delegation dealing with human rights in Pakistan in the House this week. Concern has been expressed about cultural and political apartheid, with separate lists. I welcome Pakistan back into the Commonwealth, but will it be possible to have a statement shortly so that we can see whether we are encouraging political apartheid within the Commonwealth?
Mrs. Beckett: I believe that the hon. Gentleman may be able to raise that last matter at Question Time on Tuesday. I cannot undertake to find time for a special
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debate on it now, although I know that the House has had discussions of the kind that he indicates and that many hon. Members have taken part.
As for junior doctors' hours, I understand that the debate on Tuesday, as the hon. Gentleman anticipates, will be taken by Department of Health Ministers. It is not at present within my knowledge whether it is possible for a Northern Ireland Minister to attend. I shall certainly draw the hon. Gentleman's wish to the attention of my right hon. Friend the Secretary of State for Northern Ireland and I am sure that, if she and her colleagues can accommodate it, they will do so.
Mr. Dennis Skinner: In view of the letter yesterday from the Leader of the House to the Leader of the Opposition regarding the tax fiddle arrangements of Michael Ashcroft, the Treasurer of the Tory party, will there be a statement on the matter at some point? Will all the relevant authorities make all the necessary inquiries to find out how the previous Tory Government arranged the tax fiddle? Can we have assurances that every single Foreign Office Minister and other Ministers in other Departments at that time will be investigated about the role they played in arranging for Michael Ashcroft to divert money away from the British taxpayer and into Tory party coffers? Can we know how much money the Tory party has had over the years from this person who seems to own and run it?
Mrs. Beckett: My hon. Friend has asked a series of questions, many of the answers to which are not in the public domain, as he will know. Papers on whatever exchanges took place are not available to Ministers in this Government. They would have to be released by a decision—
Mr. Andrew Mackinlay: Leak them.
Mrs. Beckett: We cannot leak the papers. I am just making the point that there is no access to them. It is not open to Ministers in this Government to see them or to have access to their contents, let alone to leak them. They are the property of the previous Government. They could be released—[Interruption.] The right hon. Member for Wokingham (Mr. Redwood) is not paying attention or perhaps not bringing his scintillating intelligence to bear on the matter. Ministers in this Government do not have access to those papers. They have not been released, although presumably they could be, if former Ministers were prepared to allow that.
As for how much money Mr. Ashcroft gives to the Conservative party and what proportion it is of Conservative party income, until now the Conservative party has refused to release any information on this subject, although it claims to be committed to the principle of openness about party funding. This morning, the Leader of the Opposition gave an indication of a sum that Mr. Ashcroft had recently given, but the whole picture is not clear. If the right hon. Gentleman means what he says about openness in party funding, presumably it shortly will become clear.
Mr. Mike Hancock: May I draw the attention of the Leader of the House to early-day motion 796?
[That this House is deeply concerned by the findings of the investigation by the Computer Weekly magazine into the fatal crash of RAF Chinook ZD576 on the Mull of Kintyre in 1994; notes that the Ministry of Defence did not inform Air Accident Investigation Board personnel that they were suing the manufacturer of a problematic engine control system at the time of the accident; notes further that problems with safety-critical engine software were not resolved before the Chinook Mk 2 was released into service; believes that new evidence from the United States demonstrating that other factors may have been responsible for the accident undermines the burden of proof required to sustain the verdict of gross negligence against the deceased pilots; and calls upon Her Majesty's Government to re-open the Board of Inquiry.]
The early-day motion refers to the RAF Chinook crash on the Mull of Kintyre in 1994. I urge the right hon. Lady to bring some pressure to bear on the Secretary of State for Defence to come to the House and make a statement on the attitude of the Ministry of Defence to the recent report and inquiry carried out into the crash by Computer Weekly. If he is not prepared to make a statement to the House, will the Leader of the House prevail on the powers that be to allow a debate, so that at long last we can do justice to the memory of the two pilots who were killed by providing some answers? Air safety could be improved generally when the causes of the crash are publicly announced once and for all. Anything short of that is a disgrace to the memory of all the people who died in that helicopter, and continues to put at risk the lives of the men and women who fly Chinooks on behalf of this country.
Mrs. Beckett: I know that the whole House shares the sympathy expressed by the hon. Gentleman for the families of those who died. He has continued to pursue this issue. It was a tragic accident. My right hon. and hon. Friends have always said that they would consider any fresh and relevant evidence. Until now, the judgment has been that no evidence has been produced that could lead to the issue being reopened.
The hon. Gentleman has asked several questions on this issue, and the Minister for the Armed Forces will hope to reply to those questions in the near future.
Mr. Peter Bradley: Further to the points raised by my hon. Friend the Member for Bolsover (Mr. Skinner), will the Leader of the House arrange for a debate on political party funding, so that the Labour party can make its arrangements completely transparent to the House and the general public? It would afford the Conservative party the same opportunity, particularly in relation to foreign funding and the evidence that it gave to the Neill committee that it would not take foreign funding.
Such a debate would also allow the Conservative party to explain how it squares that evidence with the appointment of Mr. Michael Ashcroft as its treasurer and the receipt from him of major financial donations, given that he is a United Kingdom tax exile resident in the United States with principal business interests in Belize, of which, along with the Turks and Caicos islands, he is a citizen. It is alleged that he funds the Government party in Belize and, extraordinarily, he is that country's
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ambassador to the United Nations. If that is not foreign, I do not know what is. If we had a debate, the Conservative party would be able to explain why it thinks he is not, and why, when diplomats told Ministers in the previous Government that a shadow hung over his reputation that ought not to be ignored, they ignored that advice—and the Conservative party continues to ignore it now.
Will the Leader of the House grant this request for a debate on party political funding, so that all those issues and the revelations exposed in the newspapers this week can be properly aired?
Mrs. Beckett: I understand the pressure that my hon. Friend is exerting. I share his view that it is a little hard to square what the Conservative party has said about taking funds from foreign sources with its relationship with Mr. Ashcroft. I take my hon. Friend's point that this interesting question could be explored by the Leader of the Opposition, who could explain to us how he squares those views if there were time for a debate in the House. However, tempting though that is, I fear that I cannot undertake to find time for such a debate in the near future. Who knows, at some point the Conservative party, which has Opposition time, may want to explore such an interesting issue.
Dr. Julian Lewis: The right hon. Lady will probably not know that I previously raised with her predecessor as Leader of the House the issue of the conduct of the Deputy Prime Minister—whom I am delighted to see in the Chamber—when he refused to answer a question posed by me in the House. He wrongly said that the question was untruthful.
I now return to the question of the right hon. Gentleman's conduct in relation to his other role as Secretary of State for the Environment, Transport and the Regions. I request a debate on early-day motion 820.
[That this House notes with concern the failure of the Secretary of State for the Environment, Transport and the Regions to respond to a letter from the honourable Member for New Forest East when originally sent on 16th March and when faxed to his office on 25th May; further notes that the only matter discussed over the telephone by the Secretary of State's and honourable Member's offices was the Secretary of State's repeated failure to reply; therefore deplores the misleading written Answer on 8th July to a written question from the honourable Member for New Forest East, in which the Secretary of State wrongly stated that his reason for repeatedly failing to reply, was that 'the matter was dealt with by our offices over the telephone'; and accordingly calls upon the Secretary of State to handle his correspondence from honourable Members properly in future, rather than seeking to shield his incompetence and discourtesy.]
The motion relates to the right hon. Gentleman's failure to respond to correspondence from me, his further failure to respond to reminders about his failure to respond to correspondence from me, and his eventual misleading written answer, which wrongly claims that he does not respond to correspondence from me because the matter has been dealt with on the telephone.

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Back Benchers are fed up with this sort of arrogance and disregard for their attempts to do their duty, particularly when it is covered up by erroneous claims.
Mrs. Beckett: I readily admit that much of what the hon. Gentleman said struck me as somewhat opaque, but I gather that there is a dispute between him and my right hon. Friend the Deputy Prime Minister. Someone in the hon. Gentleman's constituency is under the impression that he has seen my—I had hitherto thought unmistakeable—right hon. Friend in the constituency. My right hon. Friend says that he has not visited the hon. Gentleman's constituency, and that his office has written to the hon. Gentleman to say so.
We all recognise—[Interruption.] As I say, I am not as fully acquainted with all the details as I would like to be in order to give the hon. Gentleman the fullest possible answer. I can only say that we all understand that it is a matter of sensitivity when Members are, or are thought to be, in other Members' constituencies. I am confident that, had my right hon. Friend the Deputy Prime Minister been in the hon. Gentleman's constituency, he would have intended no offence thereby.
Mr. David Heath: Will the right hon. Lady confirm that the Government intend to publish a second annual report on human rights before the recess? Can she confirm that this year, it will be a Command Paper? If it is published, will she be able to find time, either immediately before the recess or immediately after it, for the House to debate its contents? Many hon. Members are very committed to the cause of human rights around the world, and want an opportunity to discuss the matter in detail.
Mrs. Beckett: I fear that I am not in a position to assist the hon. Gentleman at this stage. I have rather lost track
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of the timing of these issues, but I shall certainly make inquiries, and if there is any further information that I can give the hon. Gentleman, I shall write to him.
Mr. John Bercow: Will the Leader of the House arrange a full day's debate next week, in Government time, on the harrowing plight of this country's heart patients? Is she aware that the patients charter specifies that no heart patient should be obliged to wait for more than 12 months for cardiac surgery? Is she further aware that a recent survey of 35 NHS trusts in England shows that no fewer than 21 of those 35 are failing to meet the target, and that in some cases, heart patients are having to wait for up to 17 months to receive the surgery to which they are entitled?
In view of the evident gravity of the situation, and given that constituents of right hon. and hon. Members on both sides of the House are directly affected by the crisis, will the right hon. Lady arrange for the debate that I have requested, so that it can be urgently addressed?
Mrs. Beckett: I fear that I cannot undertake to find time for another full day's debate on health care—particularly on one aspect of health care—in the near future, but I am aware that there have been difficulties, especially in some key parts of the country, and that local health authorities and local trusts are working to address them. I know that, in some instances, additional funds have been awarded in an attempt to resolve the problems.
Although I fear that I cannot provide a whole day in Government time, I am sure the hon. Gentleman will have observed that there is a half day of Opposition time on Tuesday. He may have an opportunity to raise the matter then.

Opposition Day
[18TH ALLOTTED DAY]
Opposition Day

  Motorists
  Mr. Deputy Speaker (Mr. Michael Lord): I inform the House that Madam Speaker has selected the amendment in the name of the Prime Minister.
  2.4 pm
  Mr. John Redwood: I beg to move,
  That this House deplores the Government's anti-car policies and believes that the motorist deserves a fairer deal; condemns the Government for increasing congestion with massive cuts in roads investment, whilst imposing congestion and non-residential parking and motorway taxes; regrets that the Government's transport policies are bringing Britain to a standstill at the same time as undermining the competitiveness of business; regards the car as a force for good, bringing unparalleled freedom and opportunities to millions; recognises that 93 per cent of all passenger journeys and nearly 80 per cent of freight transport is by road; regrets that roads are now in their worst condition since records began, causing accidents, delays and congestion; urges the Government to bring forward a comprehensive transport policy for modernising Britain's road system so that road users can enjoy a more efficient, safer and environmentally-friendly service, pursuing policies to remove through-traffic and heavy lorries from towns and villages; and urges the Government to increase investment in public transport, facilities to let people get out of their car on to a bus or train, and alternatives to the car such as walking and cycling so that more people have real choice, instead of trying to force motorists out of their cars before the alternatives are available.
  It gives me great pleasure to move the motion and to oppose the amendment in the name of the Prime Minister. For once, some joker has been at work in the drafting of the amendment. It says that the Government now
  "recognises the freedom that the car has given",
  but that recognition does not seem to extend to any policy initiative to help the motorist; indeed, many Government initiatives make the motorist's life hell on wheels.
  The amendment says that the Government
  "deplores the previous Government's record of under-investment".
  If that is so, perhaps the Deputy Prime Minister can tell us why he has slashed London Transport investment, from £1,060 million in the last Conservative year to £564 million, and why his documents show roads expenditure, local transport expenditure and transport investment are down across the board. He has a lot to answer for.
  It will be a pleasure to welcome the Deputy Prime Minister to the Dispatch Box shortly to explain, if he can, the pitfalls of and troubles with his disintegrating transport policy. The other day, when I saw him in the newspapers beaming out in his customary friendly way adjacent to some elephants, I wondered whether he was about to announce a new transport initiative—whether it was going to be elephant rides for all, and whether that perhaps was the new fast form of transport to be introduced to new Labour's Britain. It would certainly be faster than many of the modes of transport that are on offer under the Government's disintegrating transport policy.
  Mr. Nicholas Winterton: Trunk roads cut.
  Mr. Redwood: My hon. Friend has got there before me. Trunk roads cut; trunk transport in.
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  Today, the Opposition are proud to present a transport policy that would get Britain on the move again, a policy that tackles the standstill Britain that is being created by the Government: an answer to their policy of jams today and jams tomorrow.
  The Government seem to think that people use cars wilfully and unreasonably and that we are a nation of planet wreckers driving around for the sake of it. They have to understand that most people use their cars to go about their daily business: to go to work, to go to a business meeting, to visit family members, to go out with friends, to go to the cinema or theatre. They often go by car because there is no alternative public transport for the journey, or the alternative public transport is inconvenient, slow, difficult or too expensive.
  The Deputy Prime Minister should recognise that most of us do not live near a train station, or have a bus stop at the bottom of our garden. Many of us would like to use trains and buses more, but we first have to get to the station or the bus stop, and that often means a car journey. That is why our overall transport policy includes the fair deal for the motorist which my hon. Friends and I had the pleasure of launching earlier this week. We need to be able to get to the bus stop or the station. The motorist needs a break and a choice.
  The House might be interested to know that, since we made some announcements along those lines, I have been inundated with letters praising our initiative and showing enormous frustration at the Government's anti-transport, anti-traveller, anti-motorist stance. May I give the House a little flavour of the many letters that I have received? One says:
  "Cars are absolutely essential to modern living".
  The author goes on to say:
  "In the recent Euro elections I broke the habit of a long lifetime to vote Tory for the first time (I'm a Euro sceptic); if you can cobble together a rational transport policy there is a grave danger that I might also vote Tory at the next general election".
  That is exactly what I intend to do. I am pleased that my correspondent is on my side.
  Mr. Gordon Prentice: I wonder whether the right hon. Gentleman has received a letter from his colleague, the right hon. Member for South Norfolk (Mr. MacGregor), who said during the trunk roads review when he was Secretary of State for Transport:
  "Increases in fuel duty, and motorway tolling, will help people to make more informed choices about the cost of using their cars."—[Official Report, 30 March 1994; Vol. 240, c. 930.]
  Has he received such a letter?
  Mr. Redwood: I have not, but I have had praise from my right hon. Friend the Member for South Norfolk (Mr. MacGregor), who thinks that my initiative is excellent. He gives it his full support; he stopped me only the other day to say just that.
  Another correspondent writes to me to say that
  "We have in yourself someone who will speak up for the overtaxed motorist".
  He goes on to say something that Labour Members should listen to very carefully:
  "As a retired senior citizen of 71 years, I own a small economical car to enable me to take advantage of the freedom of movement it gives me. Furthermore, public transport is so expensive that even allowing for road tax, insurance and repairs it is still much cheaper than buses and trains. Time too is a consideration."
  Mr. John Bercow: I am sorry to trouble my right hon. Friend—and it is rare, indeed, for any of

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  his colleagues to have the opportunity to trump him. But is he aware that I have an 81-year-old constituent—Mrs. Elizabeth Zettl, who lives in High street, Buckingham—who was literally incandescent about the Government's most recent hike in petrol prices, and pointed out to me that she depended on her car; that she travelled to outlying areas in the course of her voluntary work for two local charities; that she did not think that those charities could afford to reimburse her petrol expenses, and that she did not wish to ask them to do so? I am sure that that lady, who is a person of the most splendid commitment and courage, will warmly welcome my right hon. Friend's new and fair deal for motorists.
  Mr. Redwood: I am very grateful.
  To reinforce the point for Labour Members, another correspondent says:
  "Well done on your clear water between the Opposition and the Government—a cause for real rejoicing. Could I suggest that you do everything possible to publicise the damage, especially to the weakest and most disadvantaged in our society, which the Labour policy is causing?"
  She had in mind the high taxation on motorists who have no other way of travelling and for whom there is no public transport alternative.
  Mr. Ian Bruce: My right hon. Friend will probably have seen that the Automobile Association has done a survey of motorists—who basically said that they would be happier if money collected in additional taxes were being used to improve roads and public transport.
  Is my right hon. Friend aware that a road scheme to relieve traffic in Weymouth and Portland was ready to go when, more than two years ago, the Government came to power, but that Ministers have still not told local authorities whether they may go ahead with the scheme—on which millions of pounds have already been spent? Is it not about time the Government started to sort out their integrated transport policy, rather than simply handing over money to the Treasury?
  Mr. Redwood: My hon. Friend is right. However, I am sure that the truth is that there is no money for lots of schemes, such as the one he has in mind, and that the Government's dithering is a cover for their failure with the Treasury—or their hatred of the motorist, and their wish to cancel every sensible road scheme.
  Mr. Geraint Davies: Will the right hon. Gentleman give way?
  Mr. Redwood: I really do not have time, as I have promised to limit my remarks to 20 minutes, to give hon. Members on both sides of the House the chance to debate—[HON. MEMBERS: "Frit."] The House knows that I am not frit, and that I usually frequently give way. However, if we are to make use of the short time available, I cannot show my normal generosity by giving way, as I have some points that I want to make and I want other hon. Members to have a chance to speak.
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  Another correspondent says:
  "I massively resent being told by Prescott and his people that by using my car as I do I am practically a criminal. Please fight against this rabidly anti-car Labour Government."
  My hon. Friend the Member for South Dorset (Mr. Bruce) has rightly mentioned the problem that local government is already experiencing under the new Labour Government in trying to make the books balance and to make the investment that they would like. It is no wonder that local government is in trouble. Compared with the final year of the Conservative Government—one of their least generous years—in the first year of the Labour Government, there was a £70 million cut in local transport expenditure; in the subsequent year, a £169 million cut; and, this year, a £48 million cut. [Interruption.] Those figures are from the Government's own book on expenditure, so Labour Members cannot argue with them.
  The same document on roads and traffic shows the damage that the Government are doing across the board on investment, including big cuts in overall national road expenditure. In Labour's first full year, national road expenditure was down £138 million; in their second year, it was down £87 million. That expenditure reduction explains quite a lot of the current chaos—[Interruption.]
  Labour Members ask whether we would reverse the reduction. If they had listened, they would know that I am announcing—both today and in the document that we announced earlier this week—that, yes, a much better deal is needed for the motorist, and that it will have to include additional road building in areas that need bypasses—[Interruption.]
  I shall tell hon. Members exactly how this would be done. We would privatise the tube, so that we could raise London Transport investment and have money left over for transport elsewhere in the country, as we should not have to milk the taxpayer for that particular necessary investment.
  Several hon. Members rose—
  Mr. Nicholas Winterton: Will my right hon. Friend give way on that point?
  Mr. Redwood: I am afraid that I do not have time.
  Mr. Geraint Davies: Will the right hon. Gentleman give way?
  Mr. Redwood: No.
  We shall oppose the Government's plans to tax the motorist more. We want to take the motorist off the fuel escalator—we have gone high enough: it is now time to stop the higher taxes. We are against Labour's unfair congestion and parking taxes.
  Those new taxes are Labour's poll tax on wheels.
  Mr. Davies: Will the right hon. Gentleman—
  Mr. Deputy Speaker: Order. The right hon. Gentleman has made it quite clear that he is not giving way at the moment. I should also be grateful if we could have fewer interventions from a sedentary position.
  Mr. Redwood: We are against Labour's poll tax on wheels—about which there have already been many rows

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  in Scotland. There will be many more such rows, as Labour has bizarrely decided to introduce the poll tax on wheels in Scotland first. After all that the Government, when in opposition, said about the original poll tax, it is a bit rich that they should decide to experiment with a new and deeply unpopular set of taxes first in Scotland, trying out their new Scottish Parliament for that purpose. I think that it means that we shall have a lot of good opposition in Scotland ahead of us, and we shall rally the Scottish people to our side because of the anger that will be expressed there about having congestion taxes and parking taxes foisted upon them first.
  The motorist had certainly better watch out—Labour has not finished yet. The Government plan further massive raids on the purses and pockets of drivers. Labour's latest hopeless document, entitled "Road to Ruin"—it is their road, not ours—states that its proposal for extra fuel duty, congestion taxes and cuts in the road programme amount to between £10 billion and £20 billion extra. That is a massive sum. So my message today to motorists is, "Beware: the Government do not like you, and they are going to hit you so hard it will hurt even more."
  The Government are really planning a further massive tax raid on the motorist and are slashing the road programme at the same time. Most of the additional motoring taxes are being siphoned off to pay for their disastrously expensive welfare policies.
  Several hon. Members rose—
  Mr. Winterton: Will my right hon. Friend give way?
  Mr. Redwood: I shall, just this once.
  Mr. Winterton: May I support the argument being advanced by my right hon. Friend? He has been criticised and challenged on whether a Conservative Government would invest in roads. As the hon. Member for Manchester, Blackley (Mr. Stringer) will know, one of the final acts of the Conservative Government and the former Minister, John Watts, was to put into a priority road programme the Poynton bypass, the Manchester airport eastern link road and other roads linking to it. One of the Deputy Prime Minister's and the Government's first acts was to remove those roads from the priority programme. Those roads will serve Manchester airport, which, in about 12 months, is to open a second runway.
  Mr. Redwood: My hon. Friend has made his powerful point in his own inimitable way, and I agree with what he said. He has given another example of the damage that the Government are doing.
  The Opposition propose better car parking and better arrangements for motorists to leave their cars at stations and close to bus routes, so that more journeys, and more of a journey, may be done by public transport when the roads are busy. Will the Government act on such proposals proposal? Do they have any money left after the mess they have made of London Transport investment—created by their stubborn refusal to privatise the tube and free the money that is needed? Does the Deputy Prime
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  Minister understand that people need to use their cars, or need a better alternative if they are to be persuaded out of them?
  Does the Deputy Prime Minister understand that the railway industry has been plunged into uncertainty by his refusal to make decisions and by his delay in setting a new statutory framework for it? His famous legislation was cancelled last year, delayed this year, but may arrive late in the next parliamentary year—if he is lucky.
  The real problem, of course, is that the Secretary of State has now fallen out with practically everyone. I do feel sorry for him in his wars with the Prime Minister, but hope that they are able to patch it up in good time for the summer holidays. I look forward to seeing whether the right hon. Gentleman is left in charge when the Prime Minister goes on holiday, as that will be a test of how lethal the relationship has become.
  The Prime Minister did serious damage to the bash-the-motorist policy with his journey up the bus lane, which became an understandable cause of anger among all those motorists who did not have that privilege. Ever since, it has been rows between Prime Minister and Deputy—over everything from transport to the future of the public sector. Presumably, the delay to the Railways Bill is part of the row over what the role of the public sector should be.
  Worse still for the Secretary of State, there are persistent rumours from sources close to the Prime Minister that he wants to take his Deputy's closest aides away from him. The few Ministers that the Deputy Prime Minister does like, clustered around him at the Department, are under threat of eviction from the DETR, as the Prime Minister is clearly suspicious of this grouping. There could be a high price to pay for the Deputy Prime Minister falling out with the right hon. Member for Hartlepool (Mr. Mandelson), who still seems to pull a lot of strings—surprising for one who resigned in disgrace.
  I do not feel so sorry for the Deputy Prime Minister in his rows with the Secretaries of State for Scotland, for Wales and for Trade and Industry. They have reason to be vexed by the way in which he has behaved over the haulage industry and regional assistance.
  Mr. Geraint Davies: As the great jammy dodger, how does the right hon. Gentleman reconcile his commitment to reducing jams with his commitment to abolish the fuel escalator—thereby encouraging jams by making fuel cheaper, with the result that billions of pounds less will be available for investment in public transport? How can he have it both ways?
  Mr. Redwood: The hon. Gentleman has not been listening to the argument. The extra money that Labour is raising is not going into transport. We had a better record on transport expenditure than the Government. We are making a commitment to the right kind of selective investment in roads and car parks to encourage people to take a better option.
  We have shown where the money is coming from—we will save the money on London Transport investment by privatising the tube. As a result, we will increase investment in London Transport, because the private sector will do a much better job than the Deputy Prime Minister is allowed to do. The hon. Member for Croydon,

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  Central (Mr. Davies) really must listen and learn—he has wasted two minutes of the House's time. I was obviously foolish to give way—I was too generous.
  The Minister for Transport does not look too happy in her brief, either. Transport Ministers have a short shelf-life under the Deputy Prime Minister, who seems to get in the way of their doing their job properly while not doing it properly himself. No wonder the chaos on the roads and at the stations gets worse.
  Our new document is based on five important propositions: freedom to travel; choice of travel; care for the environment; supporting enterprise; and enjoying lower taxes. Those are the five crucial principles which would produce a much better answer. Unlike the Government, we do not want to frustrate travellers and attack motorists, but we do want a cleaner world. That means more incentives for cleaner and more fuel-efficient cars. It means fewer traffic jams—congestion is causing pollution, and the policies of the Deputy Prime Minister are causing a great deal of pollution, as well as frustration among the travelling public. Our policy means encouraging more use of other forms of travel by offering something better and working out what it is that people need to encourage them to leave the car at the station and to get on the train.
  Let us take the case of the tube. We would not close down lines for weeks at a time in the way the Deputy Prime Minister has done. We would get the work done in the quieter times. We would put forward a much bigger investment programme, as we did when we were in office, thanks to privatisation.
  Instead of spending money on reducing the amount of road space available with dangerous projects such as the M4 bus lane, we would free up the main roads and spend the money on safer routers to school and work for pedestrians, away from the main road.
  The Government wrongly claim that we want to make things less safe. [HON. MEMBERS: "You do.''] Labour Members are so silly. The document states clearly that there is a role for traffic-calming safety measures in the right places, such as on residential roads and near schools. However, the document makes it clear also that there should be main routes into principal cities and towns where the traffic can flow more freely and at a better speed. We need to segregate pedestrians from fast-moving traffic. We should not stop all traffic moving at a sensible speed, as the Government want to do. It is because they are so muddled up, and because their policy is disintegrating, that we have frustrated motorists. However, they have not made things as safe for pedestrians as they should have done.
  We are offering these positive suggestions, and we are offering 10 pledges to the motorist and traveller in our document. [Interruption.]
  The Minister for Transport (Mrs. Helen Liddell): The right hon. Gentleman does not know his own pledges.
  Mr. Redwood: Of course I know my own pledges. I helped to draft and write them but, for the sake of accuracy, it is a good idea to have them in front of me when presenting them to the House.
  We will halt the annual fuel duty increases. We will publish a clear balance account, showing what the Government raise in tax and how it is spent. We will
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  oppose Labour's plans for increased tax burdens on the motorist. We remain opposed to Labour's plans to tax people who have to drive to and park at their place of work. We will challenge the Government to commission a full and fair inquiry into the competitiveness of the haulage industry, which they are gravely damaging. We will promote schemes to take heavy lorries and through traffic out of our towns and villages that need bypassing.
  We will publish, and keep updated, a list of the most pressing road improvement schemes needed on the main trunk roads, and we will not cancel them all in the way the Government do. We will penalise water, electricity, gas and telephone companies for excessive delays, which cause problems when they extend their roadworks unnecessarily. We will set up local traffic flow forums to work with motoring organisations to try to find good ways of easing traffic flow on the existing road space. We will consider minimum speed limits to improve traffic flow on major routes.
  Those are good, sensible suggestions. We offer them to the Government for the next couple of years in a helpful spirit. Will the Deputy Prime Minister take up any one of them, because any one of them could make the position better? What can the Government offer, other than division at the top and bashing the motorist?
  Out of new Labour comes transport chaos. Out of new Conservative comes the traveller's friend. Will the Deputy Prime Minister bury the hatchet, help the motorist, get on with improving trains and buses and adopt some of our ideas? I recommend the motion to the House.
  2.26 pm
  The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
  "deplores the previous Government's record of under-investment and disintegration in the transport network, its failure to tackle congestion as traffic rose by 75 per cent., and its cut in road maintenance; commends the Government for producing the first Transport White Paper for 20 years which has a comprehensive approach to transport across all modes and welcomes the Government's new deal for the motorist in the Transport White Paper; applauds the Government for its clear and open framework for appraising and informing the prioritisation of trunk road investment, taking a far-sighted and more integrated approach than the previous administration; notes that the present Government has begun to tackle the inherited problems of under-investment, pollution and increasing traffic congestion, by a new radical integrated strategy, including an extra £1.8 billion for public transport and local transport management, improving road maintenance, encouraging greater fuel efficiency, reducing pollution, and introducing the long-term policies needed to increase transport choice and improve Britain's transport system; and recognises the freedom that the car has given and that congestion can remove the convenience and pleasure from driving."
  In his last few words, the right hon. Member for Wokingham (Mr. Redwood) made it clear why he has rejected so much of previous Conservative policy, to which I shall refer—he has discovered new Conservatism. Am I to accept that that is a complete change from everything the previous Administration believed in? [Interruption.] We shall wait and see whether that is confirmed. The right hon. Gentleman is rejecting everything that was done by the previous Administration, and the transport lessons learned over 18 years appear to have been wiped out. If that is so, I must tell the right

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  hon. Gentleman that I had more sympathy for the previous Administration's analysis of transport priorities and congestion than I have for the new Redwood plan.
  I believe that most people in this country—there may be agreement between both sides of the House here—want a transport system that is safe, efficient, clean and fair to all users. We can have consensus, right at the beginning of the debate. The argument appears to be about how we achieve that, how the resources are raised and whether we can build our way out of congestion. I suspect that there is a fundamental disagreement on that point.
  The previous Administration concluded that we could not build our way out of congestion, and their conclusions were similar to those in our White Paper. When I introduced the White Paper to the House, I said that much of the thinking in the previous Government's Green Paper had been adopted in our analysis and consultation, and that we had arrived at similar conclusions. It is now clear that new Conservatism rejects those ideas on transport, and I wish to address myself to that point.
  Before doing so, I wish to refer to the comments of the right hon. Member for Wokingham on investment in the underground. I inherited an underground system with a massive disinvestment of £1.2 billion. There is no doubt about that—it is clear, audited and there to be seen. That was simply because inadequate resources were put into core investment. Much of the money provided by the previous Administration was poured into the Jubilee line—quite rightly, as we need a Jubilee line. However, the contract was not very good, and has now cost well over £1 billion more than was needed. It was paid for by sucking out the core investment in the underground. We hope and believe that we have control of that now, and we are looking at the core investment needs of the London underground.
  I can announce today that more than £500 million extra will now be found for the underground system, and that information has been provided in a parliamentary answer today. Expenditure on the underground is set out in the Red Book. We can see the investment and expenditure pattern. In our first two years, 1997 and 1998, despite accepting the previous Government's expenditure plans, we found a further £300 million. I announced in a statement that the £1 billion and the further £300 million would restore the cuts that had been proposed for the London underground.
  We considered precisely where the extra resources are to come from, as we wanted to complete the public-private partnership bids in 1999–2000 and get the investment programme under way. Unfortunately, we have not been able to meet that timetable. I expressed a fear at the time that we would not be able to complete the deal on time. I am now concerned to get a good deal for the taxpayer and avoid reproducing the problems that we had with the Jubilee line contract and the channel tunnel rail link, both of which involved demands for an extra £1 billion.
  In 1999–2000, there will be an extra £763 million of investment in the London underground. Added to the resources available in 2001, that is a total of £1 billion. The previous Administration planned to invest
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  £161 million in the underground in 1999–2000, by contrast with our £763 million. That shows the clear difference between our priorities and theirs.
  Mr. Redwood: I am glad that our debate has at least provoked the Deputy Prime Minister into finding a bit more investment for the underground, which is sorely needed. I remind him that the investment was £955 million in 1994–95; £1.114 billion in 1995–96; and £1.06 billion in 1996–97. We were planning to have privatised the tube by now, so of course the numbers went down, because we expected a lot of money to come in from the private sector. The right hon. Gentleman cancelled that. The record of investment for the successive years of this Government is £843 million, £654 million and, according to the original plans for this year, £564 million. That is a massive slash in investment compared with the last three years of Conservative government.
  Will the Deputy Prime Minister confirm that he is increasing the investment in 1999–2000 from £564 million to £763 million—an increase of £199 million—and that that is still £300 million less than we invested in the last Conservative year?
  Mr. Prescott: The right hon. Gentleman has not denied that the Conservative Government planned to invest only £161 million in 1999–2000, whereas we are investing £763 million. That is a substantial difference. His argument is that he would have privatised the underground. Let us consider the previous Government's record on the privatisations that it rushed through.
  Billions of pounds were lost on Railtrack and the rolling stock companies, and the Conservatives paid a company £250 million to take the freight industry away from the state, rather than selling it or getting any money for the taxpayer. I have no faith that they would have been able to produce a privatisation plan in time, and even if they had, they would have rushed it to such an extent that it would have cost the taxpayer billions of pounds, as the Public Accounts Committee has reminded us.
  The right hon. Gentleman has said that he would sell off the underground for £560-odd million, as I understand it. I do not know how he arrived at that figure, but it is very small and entirely consistent with the value that the Conservatives got in previous privatisations, when they sold off our great public assets very cheaply, turning many of them into millionaires along the way.
  The right hon. Gentleman made great play of spending plans and national roads programmes. It is fair to keep telling him what the previous Government planned to spend had they been re-elected. There was a great deal of shouting about the fact that we said that our public expenditure would be similar to their plans—although we found a little extra, in the shape of the £300 million to restore the cuts—but the difference is that we have taken a view that we cannot build our way out of congestion. That is at the heart of the argument about transport.
  Sir Nicholas Lyell: Talking of building our way out of congestion, the Deputy Prime Minister knows that one of the bypasses that the Government have kept in the programme is Great Barford in Bedfordshire, which needs to be built because of the terrible congestion. Why will nothing happen until 2001, and why even then will we get only the publication of the orders? Can the plans be brought forward?
  Mr. Prescott: We constantly hear such pleas, but our record on building bypasses is very good compared with that of the previous Administration. We are reviewing road expenditure and using different criteria, to take into account the environment, safety, economic regeneration, the relief of congestion and other such matters. That is how we have put together our programme. We have not drawn up the £6 billion wish list that we used to debate in the House.
  The Conservatives put £6 billion of roads into the programme, with no chance whatever of getting them built, and spent only £1.5 billion. That was a load of nonsense. We have rejected that and said that it is right to spell out what we plan to build over three years. The right hon. and learned Gentleman should be grateful that his bypass is in the programme. We have designed the programme to reflect the fact that we want more and more of the resources to go into offering people more of an opportunity to use their cars less and public transport more, as we have taken the view that we cannot build our way out of congestion.
  Mr. Ian Bruce rose—
  Mr. Prescott: No, I must make some progress. There are real problems with time, and the right hon. Member for Wokingham also had to limit his taking of interventions because of the shortening of our debate.
  We should remind the House, and especially the right hon. Member for Wokingham, that in 18 years in office the Tories did nothing to sort out the transport problems. There was a fall of 11 per cent. in the number of public transport journeys, and the number of car journeys increased by 21 per cent. Bus journeys fell by 31 per cent. There was disinvestment in the London underground system. The privatised rail system was broken into 100 pieces and Railtrack was sold off very cheaply and has had great difficulty in keeping its investment promises to improve rail services. Roads fell into the worst condition since official surveys began. Official Government records show that road maintenance was as bad as it has ever been and constantly worsening. The situation was totally unacceptable.
  One would welcome the fact that the right hon. Gentleman is now converted to the notion of providing more resources for maintenance, but the Conservatives cut the maintenance programme by 8 per cent. We restored that cut because we understand the programme's importance. There was increasing gridlock and congestion.
  In an article in 1996, after 16 years of Tory government, the right hon. Gentleman said:
  "We have gridlock. The rush hour begins just after 6 am and is still in full flow three hours alter. In many parts of the south east the traffic queue for one junction runs into the queue for the next and for the one beyond that. The station car park is full. The queue for Heathrow is long. The M25 regularly seizes up. Everyone tells me something should be done about it."
  That was not after our policies but after all the wonderful things that the right hon. Gentleman tells us the previous Government planned. Perhaps it was old Conservatism that produced the problem, but I have to deal with what we inherited.
  Mr. Ian Bruce rose—
  Mr. Prescott: No, no. I have problems with time.
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  The Tory Government brought about the very things that the right hon. Member for Wokingham classically identified in his article almost 12 months before the general election. There were 70 cars for every mile of road in 1979 and there are now 100. We have predicted, and everyone accepts the analysis, that in 20 years, if we do nothing, there will be 6 million new cars on our roads, meaning 30 per cent. more traffic and 70 per cent. longer journey times.
  That is clearly unacceptable, but I pray in aid the 1996 Tory Green Paper, which admitted:
  "the road network is broadly complete, the Government's priority is to make more efficient use of our existing roads, and to reduce dependence on the private car."
  That did not come from my White Paper: it came from the conclusion of the previous Administration's Green Paper. They agreed that we had to get people to use their cars less and use public transport more. I happen to agree. That was the old Conservative view, and we have heard the new view from the right hon. Member for Wokingham. That Green Paper was called "The Way Forward", but the Redwood plan is the way back.
  There is a general consensus that we cannot build our way out of congestion, but this week the Conservatives set out a new transport policy almost entirely devoted to roads. It could not really be called a transport policy. The Tories have listened, but they have learned nothing. In our White Paper, we acknowledge the need to integrate transport, because in 18 years we learned the lessons that the right hon. Member for Wokingham apparently has not learned.
  We introduced the first White Paper for 20 years and it was welcomed by business groups, all the motoring organisations, consumers' organisations, environmentalists and the public. The Government's clear aim is to provide a decent transport system that is integrated and sustainable. No other White Paper has been so broadly welcomed in its definition of what we have to do in the short and long term.
  Since the White Paper, we have seen a dramatic increase in rail passengers and freight, more resources for rural buses and 1,500 new services. We have seen a greater commitment to concessionary bus fares so that all can benefit from greater mobility. Some 100 towns now have bus and rail links through through-ticketing. Some 430 railway car parks now have CCTV and I have announced extra resources for the London underground. Those are some of the benefits that are beginning to flow from improving confidence in the transport policy.
  Reaction to the Redwood plan has been very different. The right hon. Gentleman's transport policy is called "A Fair Deal for Motorists", but if he were able to implement it, it would be the most anti-motorist policy of all. It is not costed, it would be damaging to the environment and the resources for it would not be made available, according to what I read of it. One of the Tories' press releases said that all the proposals had been costed, but we did not hear anything about that today. We did not hear which roads or bypasses would be built as a priority. We did not hear what resources would be put into public transport. I do not doubt that the shadow Treasury team will not allow the right hon. Member for Wokingham to cost his proposals. We all face the rule of the Treasury on such matters.

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  I am critical of the Redwood plan, but that is only to be expected. Therefore, I shall pray in aid other organisations and publications. The spokesperson for the Royal Society for the Prevention of Accidents stated:
  "Ten people are killed every day in road accidents and my society will fight any move to raise speed limits … Many motorists already drive at 80 mph … if the motorway limit is raised then drivers will continue to push up their speed more and more."
  Mr. Christopher Leslie: It is dead wood.
  Mr. Prescott: The Redwood plan may be a dead-wood plan, but RoSPA is an authoritative voice on death and accidents. We have a proud record in reducing death and accidents on roads in this country that is better than those of many other countries. That has continued through Governments from the mid-1960s onwards. The Conservatives' new policy would reverse that trend and that is what RoSPA have complained about.
  The Financial Times quoted the AA:
  "The record of the previous government in transport matters speaks for itself. They took £100bn out of road taxes and diverted it elsewhere leaving the road infrastructure in an appalling state."
  That is the AA's view of the success of Tory policies.
  The Guardian, for all the intellectuals who read it, said:
  "The Tories are not so much jumping on a bandwagon as clambering into the back seat. Yesterday they unveiled what they called their 'motorists' charter' transport policy … uncosted tinkering, masquerading as a long-term strategy."
  The Times, which is not exactly a left-leaning newspaper, said:
  "The new transport policy, unveiled yesterday, is like a blast of stale air. Muddled thinking, uncosted plans and contradictory statements do not make a policy."
  It continues:
  "John Redwood … appears to define 'transport' solely as travel by car".
  The Tories' new policy purports to be the friend of the motorist but it does not offer solutions to congestion. In 18 years, they failed to relieve congestion. After billions of pounds of expenditure on roads, there were more cars on the roads and more coming. They could not keep ahead of the growth. Unless the right hon. Member for Wokingham intends to double or treble the road-building programme—and I can believe that he would propose to do so—he will not be able to keep ahead of car growth. However, the policy paper does not say that they will double or treble road building to meet their wish list. Would he do so? It is a possibility. It would not work, but the right hon. Gentleman should have the honesty to tell the motorist which roads he would build.
  The right hon. Member for Wokingham tries to kid motorists that he would not introduce charges, but his Government introduced charges for the Birmingham northern relief road. He said that there would be no tolls on the motorways.
  Mr. Redwood: No unfair tolls.
  Mr. Prescott: Now we see the picture. The hon. Member for North Wiltshire (Mr. Gray) said, "We're against congestion charging."
  Mr. James Gray: I am.
  Mr. Prescott: You might be—perhaps that is new new Conservatism—but you should have a chat to your mate on the Front Bench.
  Mr. Deputy Speaker (Mr. Michael Lord): Order. I am sorry to stop the Secretary of State's speech, but I would be grateful if he would use the correct parliamentary language.
  Mr. Prescott: I apologise, Mr. Deputy Speaker.
  Mr. Gordon Prentice: Will my right hon. Friend give way to an intellectual? [Interruption.]
  Mr. Prescott: I missed that comment, but I shall give way to my hon. Friend.
  Mr. Prentice: I have a copy of a document from the British Road Federation which reminds us that the 1997 national road maintenance condition survey showed that the condition of all types of road was the worst since national measurements were first published in the mid-1970s. Does not that information bear out the point that my right hon. Friend has just made that it is incredible brass neck for the Conservatives to point the finger at us when they systematically neglected the roads programme for half a generation?
  Mr. Prescott: I agree with my hon. Friend, who makes a sound and intelligent point. That was the conclusion of the Green Paper of the old Tory Government.
  Mr. Ian Bruce rose—
  Mr. Prescott: Are you standing for the old Tory Government?
  Mr. Deputy Speaker: Order. I remind the Secretary of State that the purpose of the conventions is to ensure that we choose our words carefully.
  Mr. Ian Bruce: The Deputy Prime Minister visited my constituency during the European election campaign and we were grateful to him, not least for the result that we achieved. He will know that at the end of the old Conservative Government, when they were cutting back on roads, the Dorchester relief road was No. 1 on the list for Dorset. The road is in his programme, but for two years he has failed to tell the local authorities whether they will be allowed to proceed. He has not answered my letters on the subject, so will he tell the House now whether he will allow it to proceed?
  Mr. Prescott: If I have not answered the hon. Gentleman's letter, I apologise and I will see that it is answered immediately.
  Dr. Julian Lewis rose—
  Mr. Prescott: The hon. Gentleman claimed that someone had seen someone who looked like me. I do not know whether there is another version of me somewhere. He was told that it was not true, but he pursued it through parliamentary questions. That was the height of stupidity, but we are used to that from the hon. Gentleman. We have made it clear that we will be building more bypasses. That is part of our programme which, as the hon. Member for South Dorset (Mr. Bruce) knows, is not for one year any more, but for three. If the bypass that he mentioned is part

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  of our programme, I shall have to discuss it with the local authority. I have set out a core road programme and also a regional programme. That is an entirely new structure for road programmes. However, I shall write to the hon. Gentleman and try to give him the best information available at this stage.
  Dr. Julian Lewis rose—
  Mr. Bercow rose—
  Mr. Prescott: I want to move to measures on congestion.
  Dr. Julian Lewis: On a point of order, Mr. Deputy Speaker. Is it in order for the Secretary of State to compound a misleading written answer to me, in which he wrongly claimed to have dealt with a matter over the telephone? In this debate, he has repeated that he dealt with the matter, but he has not, and he has refused to give way to me.
  Mr. Deputy Speaker: That is not a point of order for the Chair. The hon. Gentleman is just seeking to join in the debate.
  Mr. Prescott: There are many elements in the Redwood plan, as I shall continue to call it, that I should like to examine. Of the 52 proposals, the press release stated that 25 would cost a considerable amount of money, but we have not yet heard anything about their costing. Debates on these subjects involve much talk about tax raising. Given that the Opposition are making great play of the matter, I thought that I would look at the sums raised in transport taxes and the amounts that have been spent.
  In 1979–80, the final year of the previous Labour Administration, something like £4.1 billion was raised in revenue from vehicle excise duty and other duties. Expenditure on transport by that Government was £3.7 billion. Total transport expenditure expressed as a share of that revenue was 90 per cent.—in other words, we spent 90 per cent. of the amount collected. In the final year of the previous Conservative Administration, the amount raised rose to £21 billion, and expenditure was £8 billion, or 40 per cent. of the total raised.
  Under the old Tories—and I think that I must now make that qualification every time I refer to them—40 per cent. of the amount raised in tax was spent, whereas the preceding Labour Government spent 90 per cent. That is worth remembering. In addition, the right hon. Member for Wokingham needs to turn his attention to the fuel duty escalator, which he knows raises about £1.5 million extra a year. He has said that he would abolish it, but if he did, he would have to examine the expenditure programmes and decide either to raise more in taxation or to make cuts—in the transport expenditure plans, or in the programmes for education or health provision.
  When we were in opposition, we were constantly asked where the money would come from to pay for our plans. The question was, "Where's the beef?" Yet we have heard nothing from the Conservative party in response to the same question. I hope that we will be told later on.
  Mr. Redwood: I have enjoyed the knockabout from the Deputy Prime Minister, but he has been attacking a
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  policy and a document that are not the ones that I launched. My document is about a fair deal for the motorist, and we shall be launching policies on rail, the tube, buses and other transport elements over the coming months. We have a comprehensive approach to transport, and the document is just one element.
  However, in answer to the right hon. Gentleman's specific query, I can tell him that we believe that the tube should be privatised. That would mean that he would not need the £760 million taken out of the taxpayer's pocket for tube investment. That money would then be available for the other schemes that we propose in our 52-point programme.
  The right hon. Gentleman has said that his increase in tube investment—which is a lot of money—is in the budget for the coming year. That money would be available to spend elsewhere if only he would privatise the tube. We have costed our plans to live within that budget.
  Mr. Prescott: According to a quotation that I have seen, the right hon. Gentleman assumes that privatisation would realise an income of about £500 million a year, but the road programme alone costs £1.5 billion a year, even at the level of expenditure of the previous Conservative Administration. Privatising the tube cannot pay for all the right hon. Gentleman's proposals, such as building more roads, getting rid of "impediments" such as speed humps, and so on. Frankly, those proposals will not be financed out of such a small amount of money.
  The other problem with the right hon. Gentleman's proposals, apart from the impossibility of using income from tube privatisation as a substitute for investment, is that income would be taken away from the Exchequer as a result of his proposed ending of the fuel duty escalator. The escalator was introduced by the previous Government, for a number of reasons, and the right hon. Gentleman supported it.
  I am therefore left in some difficulty. The right hon. Gentleman has disowned—decoupled himself from—the actions that he took in government, and now says that he wants to start afresh. The trouble with starting afresh, however, is that money and solutions still have to be found. As I have said before, no Government can build their way out of the problem. The evidence for that is clear. The right hon. Gentleman should tell the House what he intends to do.
  Given the time and the interventions that I have taken, I shall now move to the important question of congestion charging. People have been given the impression that the Opposition intend to do away with congestion charging and motorway tolls. I think that the right hon. Member for North Wiltshire said as much—
  Mr. Gray: I am only honourable, not right honourable.
  Mr. Prescott: I apologise. The hon. Gentleman will probably never get that far: I was just feeding him up a bit. Brokers do not usually get on—they only get money.
  The Opposition are apparently wholeheartedly opposed to congestion charging, to workplace charging and to retail charging. Is that the position of the Opposition Front-Bench spokesman? I take that nod from the right hon. Gentleman to mean that the Opposition would repeal those measures. I find that difficult to believe when I read the right hon. Gentleman's document, which does not say

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  precisely that. It talks about "unfair" congestion charging. Does the right hon. Gentleman agree about that? He does not answer, but I need his help because I am in some difficulty here. Do the Opposition want fair congestion charging? Is that okay?
  Mr. Redwood: The Deputy Prime Minister is getting himself into a muddle. We are not in a muddle at all. We are against the unfair congestion and parking charges—the taxes—that the Government say they will introduce. Our document states that the Government have taxed the motorist more than enough—indeed, too much—so we shall oppose those new taxes tooth and nail. We are against them, full stop.
  Mr. Prescott: One of the difficulties that I have with that lies in the difference between the main document and an earlier paper that will be of interest to the Treasury. The word "fair" appears to have been inserted at some stage, and I wondered whether that meant that charges might be levied. The difficulty is especially awkward in relation to additional taxes on motorways.
  The earlier paper, which was compiled before the document that has been published, makes it clear that the Opposition are prepared to consider motorway charges. It states that they are against those charges, but adds that they are now prepared to talk about "unfair" motorway charges. Will the right hon. Gentleman say whether the Opposition are in any way considering placing charges on motorways?
  Mr. Redwood: The burden on the motorist is far too high because of this Government. We are against the charges, which we regard as taxes, that the Government are threatening to impose. We stated our intent very clearly, and we shall oppose the right hon. Gentleman tooth and nail over the new taxes that he is to introduce. We do not want them, and will vote against them. That means we are offering a fairer deal for the motorist.
  Mr. Prescott: I take that to mean that the right hon. Gentleman has set his face against any form of charges on motorways or congestion.
  Mr. Redwood: I did not say that—[Interruption.] I did not say that for the simple reason that I think the Conservative Government were right to build the Dartford crossing and to impose a toll for that new facility, which had an additional capacity to help the motorist. I am not about to abolish the toll on that rather good facility. I supported it at the time, and still support it.
  Mr. Gordon Prentice: All over the place.
  Mr. Prescott: As my hon. Friend says, that is all over the place. We shall wait with interest to see how the right hon. Gentleman works the matter out with the Treasury, whose fingers I can already detect in this matter. Of course, we all have to be accountable to the Treasury and make a case for resource allocation, but the right hon. Gentleman has given a confused statement of the Opposition's approach.
  Mr. Redwood: There is nothing at all confused about it. The previous Conservative Government held that if the
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  private sector was prepared to build the additional facility provided by a big, new, very expensive crossing and then needed a toll, we would support that toll. That is still our position. We are not going back on our support for a toll at a new facility provided by the private sector. However, we shall oppose tooth and nail the Deputy Prime Minister's wish to tax people for using motorways that they have already bought.
  Mr. Prescott: Now we have it. The document talks about new financial initiatives. It appears that the Opposition are quite prepared to allow tolls—and therefore profit—for private investment, but that the same levies to improve public transport are not acceptable for the public sector. We are beginning to see how the Opposition spokesman's mind works.
  I shall therefore give the right hon. Gentleman something else to think about. He says that he is against workplace charging. Of the people who work, 75 per cent. travel to work by private transport and 70 per cent. of them have access to workplace parking. The others use a car park of some sort, paying £8,000 a year in car-parking charges. In order to be fair to the motorist, will the right hon. Gentleman have different rules for those who have to use a car park when they go to work and those who have a free space? Will he make different rules for different types of motorist?
  Mr. Redwood: The fact that one person already suffers is no reason why everyone else should suffer a new tax from the Government.
  Mr. Prescott: The right hon. Gentleman is still considering all these matters, of course. I suggest that he reads our White Paper, "Breaking the Logjam", which is out to consultation. It might help him to think about how to implement his fair or unfair congestion charges.
  The right hon. Gentleman's proposals are a wish list without true costs. He has told us nothing about costs. The press release told us the costs would be given. I have waited to hear from him, but nothing has come. We were right from the first—his programme is a wish list with no estimate of its cost. It is also steeped in hypocrisy; the right hon. Gentleman wants us to believe that whatever happened under the old Tory Government had nothing to do with him. This is year zero, and he is creating a new policy for a new Conservative party. He rejects all analysis, no matter how intelligent or right it is.
  The right hon. Gentleman's new policy is all about populism, and it is designed to deceive the motorist. It leads motorists to believe that throwing in resources will relieve congestion, and it flies in the face of all the evidence. Even the motoring organisations know that we must do something new. The right hon. Gentleman's programme would cost us more deaths on the roads, and he ought to think very carefully about that. His ill-thought-out policy is irresponsible, opportunistic and dangerous. The Times was right to describe it as cheap populism, although this debate is revealing that its full implications will be neither cheap nor popular. The right hon. Gentleman is the Arthur Daley of the Opposition, trying to sell us a clapped-out policy that will make life worse for motorists.
  Mr. Redwood: I must ask the Deputy Prime Minister to withdraw the allegation that 1 want more deaths on the

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  roads. Our policy's top priority is safety. We are looking to improve speeds and flows only on main routes, and we wish to segregate them from pedestrians because we do not want more accidents or danger. Our document makes it clear that we support proper safety schemes in the right places.
  Mr. Prescott: I certainly would not accuse any individual of causing road deaths, and I naturally withdraw any remark implying that I did. However, the right hon. Gentleman's policies would increase deaths. Before road humps were placed in his own constituency, there were seven; since their introduction, there have been none. That is a powerful statistic, and he may wish to think about it before reversing the reduction in deaths and accidents that many Governments have worked to achieve.
  The right hon. Gentleman's policy is not a fair deal for the motorist. It is a raw deal. It is bad news for the motorist, for the environment and for the country, as the Tories will soon realise.
  3.3 pm
  Mr. Matthew Taylor: The Deputy Prime Minister has gone to some lengths to expose the hypocrisy of the Conservative Front-Bench team. Enormous costs are attached to the Conservatives' policies, and they have provided no information on how those costs would be met.
  I thought that the new policy might provide us with another example of a Conservative spokesman who has been told to apologise for the sins of the past. Many sins in the previous Government's transport policy would be worth an apology, but the changes that the right hon. Member for Wokingham (Mr. Redwood) has proposed are entirely wrong. Towards the end of the Conservatives' years in office, their Government began to accept some of the realities of congestion, pollution and road deaths.
  I had hoped that today we would hear a costed proposal, and a statement from the right hon. Gentleman that he was sorry for the past, for the tax increases, for the increases in vehicle excise duty and for raising an extra £25 billion from motorists. I might not have agreed with his policy, but I thought that he would give us an apology. Far from it; we have heard a pretence that the past never happened, that the world began in 1997, and that nothing that came before Labour's election victory is relevant.
  The right hon. Gentleman, disinclined to support Government intervention of any sort, has always taken an extreme free-market position. Now that he has his hands on transport, it would seem reasonable to assume that he is proposing policies that he has always believed in. That would excuse him from making a personal apology, as he could say that his colleagues had got it wrong, but that he had argued the right course. But we know that he supported tax increases on motorists without a whisper of dissent. He even voted for them—although for all the passion in his speech today, he did not bother to turn up to vote against the Labour Government's increases.
  Indeed, the right hon. Gentleman's position is even worse than that. At the general election his view was very different from the one that he presented at the press conference to launch his new transport policy. At that
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  press conference, his Front-Bench colleague, the hon. Member for North Essex (Mr. Jenkin) said:
  "This Government was elected to bring traffic reduction and they now recognise how ludicrous that policy is."
  But the right hon. Member for Wokingham did not see that policy as ludicrous when he sought votes. On 29 May 1997, he wrote to Mr. J. Keable of Reading:
  "Thank you for your letter. The Conservative Government offered its support to the road traffic reduction proposals in the last Parliament. I believe that the Labour and Liberal parties are also in favour. This being the case there should be no difficulty in pursuing the matter."
  When seeking election, it seems, the right hon. Gentleman was all too well aware of the demand for road traffic reduction, and happy to say that there should be no difficulty in pursuing it. He was happy to imply that there would be cross-party consensus on efforts to find a way to reduce traffic and congestion, but he now says something entirely different. After two years of listening, the Conservatives have found—surprise, surprise—that motorists are not happy about some of the problems caused by the previous Government, such as the extra £25 billion that motorists paid in tax, the difficulties of finding money for public transport investment, and the need to pay more if we are to get people off the roads.
  The Tories' focus groups have told them that there is some quick popularity to be had if they make a few promises, say that there will be no more taxes and no more traffic jams, and tell the people that there will be no more of the things that they do not like, and lots more of what they do like. The Tories think that that might win them a few votes, but unfortunately for the right hon. Member for Wokingham, people are not quite as stupid as he thinks.
  Recent editorials cannot have made happy reading for the right hon. Gentleman. Can his boss, who has suffered some pretty similar editorials of his own, have been happy about the impact of the glorious new Conservative transport policy? The real shame of it is that the Government—like the Conservative Government before them—are trying to grapple with serious issues.
  The issues are discussed in the White Paper that the right hon. Gentleman so cheerfully attacked, but the previous Government's Green Paper on transport was almost identical—almost the same, word for word. The Deputy Prime Minister may not wish to admit that.
  Mr. Prescott: On hypothecation.
  Mr. Taylor: As the right hon. Gentleman says, hypothecation is included in both documents.
  Motorists' taxes should reflect not only investment in roads but the real economic costs of road transport—the costs to business of congestion, the costs to the health service of treating problems arising from fumes and pollution, and the cost to society of damage to the environment.
  The previous Government's Green Paper—if the right hon. Member for Wokingham has not read it, he should—went into detail on all the matters that the Conservatives now criticise, concluding that
  "if local authorities are to take the main role in deciding the right strategies for their areas, they need to have sufficient tools for the job. These might include powers to restrain traffic by local licensing measures or electronic charging systems, or powers aimed at

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  reducing the provision of off-street non-residential parking. The Government accepts that there is a case for such powers to be available for use locally at the discretion of individual authorities."
  The issue is not purely urban, although it is true that the issues are different in rural areas. One of the advantages of congestion charging over an increase in petrol prices is that it can be targeted on motorists where public transport is available, so as to have the greatest effect.
  The document continues:
  "Car use can be particularly important in rural areas. Many rural locations do not produce sufficient passenger flows to allow cost-effective public transport services; so cars are often essential for rural inhabitants and businesses. There are concerns nevertheless about adequate access for those without cars"—
  who are entirely forgotten by the new modern Conservative party—
  "and about the environmental impact of high car use both in sensitive rural tourist locations and more generally … The Government believes more attention will need to be given to reducing car dependence in rural areas without damaging economic activity or restricting access to shops."
  The Conservative Government targeted congestion in urban areas; they argued in favour of allowing local authorities to levy charges on non-residential car parking and in congestion areas, and to implement electronic and pass charging. Those are exactly the things that the right hon. Gentleman now rails against and commits himself to oppose—unless, of course, they are fair, whatever that means. Yet the Conservatives used to accept the need for traffic reduction even in rural areas.
  Mr. Redwood: Will the hon. Gentleman explain to the House why it is fair to tax people on low incomes off the road, thus leaving the roads freer for those on high incomes?
  Mr. Taylor: The right hon. Gentleman misses the point of what I have just quoted from a Conservative Government document. Perhaps he should have considered that before publishing his policy. He also forgets that even in rural areas, one in five people—overwhelmingly the poorest, the old or people with disabilities—do not have access to a car. That consideration runs right through the document.
  If there were congestion charging in urban areas where public transport could be made available, what would that do for people? It would fund the provision of that public transport alternative. Indeed, using public and private links, provision could be made before congestion charging was introduced. There could be a twin-track approach, providing fast, efficient, clean and safe public transport to get people off the roads. It would be paid for through congestion charging, so that neither poorer people nor anyone else would have to pay high charges, and the roads would be clear for those who needed to use them.
  Mr. Lawrie Quinn: The hon. Gentleman rightly describes a form of social exclusion in rural areas. Will he comment on the deregulation policy of the previous Tory Government, especially as it affected bus services in rural areas such as his and my own? How much damage did that policy do, and how much worse did it make the problems of social exclusion in rural economies and communities? There were 18 years of increasing social exclusion.
  Mr. Taylor: The hon. Gentleman is right. However, there is a notable difference between London and the
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  rest of the country. In London bus use has grown; in the rest of the country it has fallen. The issue affects even those whom the Conservative party might regard as its natural supporters, those in business. Estimates of the cost to business arising from congestion range from £15 billion to £30 billion a year. Most of the increase in that figure occurred while the Conservatives were in office.
  The Deputy Prime Minister referred to traffic calming, on which the Conservatives' proposals are muddled, to say the least. Their policy document states:
  "We will not promote the use of environmentally unfriendly traffic humps."
  I am not quite sure what the phrase "environmentally unfriendly traffic humps" means. It may mean that the humps are made from some material that damages the environment, in which case I agree with the right hon. Member for Wokingham. However, I think that he means that all traffic humps are environmentally unfriendly because he does not like them in the environs of his roads. Presumably that is because the right hon. Gentleman and his colleagues would like to drive faster. Indeed, I am sure that is what he means, because he recently referred to road humps as "impediments".
  I represent a rural community, and every September I spend a couple of weeks visiting all the villages that I represent—about 70 different stops—holding travelling advice surgeries. During the past two years, the No. I overwhelming request has been for traffic calming. Village after village is being destroyed by the cars that drive through.
  Mr. Geraint Davies: The hon. Gentleman's constituents want to slow him down.
  Mr. Taylor: As I tow a caravan, there is no chance of my going too fast. However, the hon. Gentleman is probably right in that many people would prefer it if I did not travel with a caravan; motorists tend not to like them. However, I am a form of traffic calming process in my own right, so I point out to my constituents that I am doing exactly what they ask.
  I have made so many requests for traffic calming during the past two years that I wrote separately to the county surveyor to apologise for inundating him with requests. I know that he cannot pay for all the schemes, because he does not have the income stream to do so—although income has increased recently, and I praise the Government and the county council for taking that decision. Liberal Democrat county councillors wanted to give greater priority to such matters.
  The key point is that rural people want to slow down traffic in their communities. The right hon. Member for Wokingham has focused on the motorist; he has spoken to one or two organisations that are fixated on arguing the motorist's case and not to the organisations that take a more intelligent view and consider the safety issues.
  Mr. Tom Brake: Jeremy Clarkson?
  Mr. Taylor: Perhaps, but the Conservatives have not consulted people who have considered the issue rationally. The right hon. Member for Wokingham should talk to those in his party who had ministerial

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  responsibility for these matters before the general election. They learned and understood the lessons, and continue those arguments in their new roles.
  My criticism of the Government is not, and never has been, on the policies that they said they intended to pursue. We may have some differences. I would like vehicle excise duty on all cars up to 1600 cc to be abolished. It is sensible to charge people for use, not for ownership. That applies especially to small ordinary family cars; big petrol guzzlers may be another matter.
  However, I am concerned, as is the Deputy Prime Minister, about the lack of progress so far. After two years there has been no legislation to put the policies into effect—although I realise that the Deputy Prime Minister has fought for that. The process is now starting, but the Railways Bill will be held up until after the recess. There is likely to be a major traffic Bill in the autumn, but we do not know for sure; I hope that the right hon. Gentleman wins the battle for a broader Bill to implement the major features of the White Paper.
  The slowness emanates, as the right hon. Gentleman has suggested, from others in the Government, and from Departments that fear the very issues being raised by the Conservative party. Short-termism makes the matter politically unacceptable. That is wrong. Any member of the public who is stuck in a traffic jam, any family whose children suffer from asthma that is worsened by traffic-related pollution, and anyone who suffers from noise, will see the logic of introducing the policies—provided that they are sensibly implemented alongside public transport provision.
  Mr. Bercow: Will the hon. Gentleman give way?
  Sir David Madel: Will the hon. Gentleman give way?
  Mr. Matthew Taylor: I want to finish soon, so I shall give way only to the hon. Member for Buckingham (Mr. Bercow).
  Mr. Bercow: I am grateful to the hon. Gentleman for so charitably giving way. Whatever the merits of an improved railway service, and however desirable it may be to secure the passage of freight on such a service, can we take it that he is not committed to the destruction of the road haulage industry? If he acknowledges the centrality of that industry to our economic performance, does he agree that it was a regrettable omission by the Deputy Prime Minister when, while he was consulting his dictionary of quotations, he failed to refer to the letter from the director general of the Freight Transport Association that appeared in The Times on 15 March? That letter stated that not only did the Budget not improve the competitive position of the road haulage industry but it made it worse. The letter has been supported by a plethora of business organisations. Where do the Liberals stand—on the fence, or somewhere discernible?
  Mr. Taylor: The answer is simple: as with car users, so with lorry users. We believe that the principles should be that people pay for use, not ownership, and that if they use more environmentally unfriendly modes of transport, they should pay more. Linked to the increases in petrol prices should have been deep cuts in the duties paid
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  simply to put a lorry on the road in the first place. We do not want to get rid of lorries, but to make sure that they compete on a fair basis with other modes of transport, and that there are disincentives to the unnecessary use of transport. On that basis, I believe that there could be a better deal for the industry.
  Sir David Madel: Will the hon. Gentleman give way?
  Mr. Taylor: No, because this is a short debate and the hon. Gentleman might speak in it himself.
  The challenge facing the Government is to introduce the legislation and ensure that it is implemented earlier. The Conservative party should understand that the criticism of its policies expressed in The Times and the Western Morning News, which represents a rural community, is based on the fact that those polices represent ignorant short-term political opportunism that will not wash and has not washed.
  3.21 pm
  Mr. Richard Burden: Given the constituency that I represent, I am as aware as anyone that on transport issues, we need to balance different, totally legitimate interests and needs. My interest arises from the fact that my constituency contains the largest car plant in this country: 50,000 jobs depend on that plant, so it is of vital importance to my constituents. I sometimes worry that I am becoming typecast in the House, because I never seem to talk about anything else.
  Not only do many of my constituents work at that plant, but they live near it. They tell me that, although they want it to thrive, they are aware of the related problems of traffic movements, including lorries going to and from the plant. When the Conservatives consider their new transport policy, they should talk to some of the car firms such as Rover, which is talking about getting more of its freight off the road and on to rail. That is to be applauded.
  My constituents also suffer from a high incidence of asthma, so airborne pollution is a problem. There is also a problem of traffic congestion, both in the centre of Northfield and on the route from the south of Birmingham into Birmingham city centre. There is a railway station at Longbridge, which is the last stop inside the Birmingham boundary for what is known as the cross-city line, so it is a major rail route. My constituents want that line to be extended to another part of my constituency, so that the local people can enjoy greater access and mobility. My constituents know that our rail system needs greater investment.
  Conservative Members have talked about speed, and I have another interest to declare in that respect. I am not opposed to speed—indeed, I have a competition licence—but I know that speed is to be used on the track, not on the roads. We in Birmingham know that only too well: last weekend, a car came off a slip road off a major dual carriageway and ploughed into a party of nightclubbers; 41-year-old Selbourne Daly died and many others were seriously injured. The issue of speed cannot be ignored.
  Mr. Bercow: The hon. Gentleman makes a serious charge against the Conservative party's position on that subject. Can he give examples based on past evidence of accidents that would result from the application of the sensible policy of having minimum speed limits on major

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  roads, as advocated by my right hon. Friend the Member for Wokingham (Mr. Redwood)? Is the hon. Gentleman seriously saying that having a modest minimum speed limit on a major road will result in a serious increase in accidents? That is nonsense.
  Mr. Burden: Having studied the document, I find it difficult to understand what the Conservatives are saying about speed, although the document talks about increasing speed limits on motorways.
  I have yet to understand what the right hon. Member for Wokingham (Mr. Redwood) means when he talks about traffic-calming measures. Most of the places where traffic-calming measures are used or have been requested are residential roads, where they have been shown to reduce the number of accidents. My point is that absolutist views should not carry the day in this debate. Unfortunately, absolutist views are written all over the policy document that the right hon. Gentleman launched this week.
  The right hon. Gentleman says that he wants extra investment in our transport system, even in public transport, but we have yet to see how that investment is to be financed. He has said that the Conservatives would privatise London Underground, but I would dispute that that would raise the sums that he has forecast. He says that that privatisation would raise £760 million—presumably, that figure assumes that no public money would go into the process. Does he honestly believe that that is the amount of money needed by public transport in this country? Is that how much the roads programme that he wants to implement needs? I do not think so. What we need is not slogans, but a grown-up discussion about our transport policy. The policy document that was launched this week does not contribute to that debate.
  Yesterday, I attended the inaugural conference of the west midlands regional chamber, which was addressed by the chair of the west midlands branch of the Confederation of British Industry, Mr. Digby Jones—a man who argued fiercely in favour of the Birmingham northern relief road and who understands the need for a proper road traffic system. However, he made it clear in his speech that we cannot go on as we have been going, and that we are not facing up to the real issues unless we tackle congestion in our city centres, which might involve charging motorists or imposing restrictions on them.
  Transport polices require further investigation. I welcome the policy document published by Ministers at the Department of the Environment, Transport and the Regions. If we are to tackle the problems effectively, we need to consider different policies and pilot a full range of them. One such policy is workplace parking charges, with which I admit I have some problems. If such charges focus entirely on city centres, there is a risk of displacement of activity out of city centres; but if we widen the net too far, we might not achieve our objective of addressing congestion in those city centres. However, that is an argument not for throwing out such ideas but for piloting them properly.
  The same is true of congestion charging, on which Conservative Members should make their views clear. As I understand their comments today, they are not opposed to all congestion charging, but they are opposed to its use in all but new areas and on additional roads. Does that
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  mean one or more of the roads in the programme that they are halfway to announcing in their new policy document would be available for a congestion charging scheme? We need to know rather more about their policy.
  We also need to address environmental issues—my constituents, dependent as they are on the motor industry, want us to address those issues. We should applaud the efforts made so far by motor manufacturers, such as their agreement to reduce carbon dioxide emissions by 25 per cent. in 10 years. They have already achieved a great deal in terms of reducing harmful emissions: within 10 years, the emissions produced by a motor car will be about 100 times less than they were 10 years ago. However, manufacturers should be asked to do more.
  We can help, for example, in respect of vehicle excise duty, on which I disagree with the hon. Member for Truro and St. Austell (Mr. Taylor). Although relating excise duty to engine size is a good start, engine size is not an accurate measure of environmental friendliness. We have to move to more sensitive measures on carbon dioxide emissions and so on. We can also do more to encourage the use of environmentally friendly fuels such as liquid petroleum gas.
  Let us remember that there are no easy solutions, and that balances must be struck. We want to encourage manufacturers to make motor vehicles safer, but all too often that means increasing their weight, which brings with it the danger of decreasing fuel efficiency. We need to encourage a balanced policy.
  We can do far more through the use of technology, telematics, information signalling and so on, not only to improve the private motor car but to make our public transport much more reliable and accessible. Above all, we need investment. There are different routes for investment, but although our constituents understand the need for certain kinds of charging and restrictions on car use, they will rightly expect results, and they will expect them soon. That means that the way in which we phase expenditure, borrowing and charging will be crucial, because we cannot ask our constituents to wait for results in the distant future while charging them now. We must therefore take an imaginative approach. We cannot go on as we have been doing.
  We must take action quickly because the Conservative Government, sadly, left us with a chasm that we must cross. I do not know how one can cross a chasm by taking small steps. We need to take a large leap, which requires a great deal of investment and joined-up thinking. Most of all, it means that there should be no return to the days of slogans. We have seen such slogans in the policy document launched this week by the Conservative party, which had been starting to move away from their use. I was more impressed by the policies that were beginning to emanate from what I understand is now called the old Conservative party than by those from the new Conservative party. Let us have a grown-up debate and get our country moving again.
  3.32 pm
  Mr. Laurence Robertson: I very much enjoyed the Deputy Prime Minister's contribution, but I am confused about the Government's policies and objectives for transport. I am not sure whether they want to increase the revenue to the Exchequer—the right hon. Gentleman implied that that was a priority—to have an

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  integrated transport policy or to achieve sustainable development. The Government have certainly succeeded in increasing the revenue to the Exchequer, and the motorist has inevitably been hit hard as a result. However, they have failed to implement an integrated transport policy and to achieve their sustainable development objective.
  I declare an interest: smokers receive a poor return on the amount of money that is spent on health care to treat smoking-related diseases, compared to the amount that they contribute to the Exchequer. The same is true of road users because they contribute far more to the Exchequer than they ever receive back in money spent on roads.
  According to a written answer from the Minister for Transport, for the most recent year for which figures are available, the Exchequer received a total of £35 billion from all taxation levied on vehicles and those working in the industry. However, only £1.8 billion, a mere fraction of the sum that is collected, is spent on roads. The motorist, like the smoker, therefore gets a very poor return on his investment. That situation is made worse by a number of other Government policies.
  First, the amount that the motorist is being asked to contribute is increasing. The insurance premium tax has, from this month, been increased from 4 to 5 per cent. The fuel escalator, which the Government increased, continues to apply. However, the amount of money spent on roads is, by comparison, static. In fact, in a recent discussion, members of my local county council complained to me that because the funding rules have been changed, they are left with a decreasing amount of money to spend on B roads and small country lanes, forcing them to allow those roads to deteriorate.
  Secondly, there are further threats to the motorist in the form of direct charging for road use or charges for workplace or supermarket parking. When motorists already contribute such a huge amount to the Exchequer, why should they pay more for something that they now enjoy? In other words, a charge to enjoy a new road is one thing, but charging motorists to use roads that they have already paid for time and again is quite different.
  The Government have increased the amount paid to the Exchequer by road users, but have, I accept, improved the ratio of return to those road users on what is paid out by them. The Government have failed, however, to provide the motorist with an alternative to car use. They have failed even to begin to devise an integrated transport policy. I am not sure that anybody knows what that term means, although I am certain that nobody is benefiting from it. In spite of all the discouragement through taxation, car usage remains stubbornly high, and a great deal of freight remains on the roads.
  I shall give an example which I am sure all hon. Members will recognise. My constituency is only a two-hour drive from London, or at least it used to be, but now the dedicated bus lane in the fast lane of the motorway—or what CB enthusiasts used to call the suicide lane—has considerably slowed my journey. The only cars that I have seen using that lane are taxis with one passenger, so I am not sure what it has achieved.
  What are the rail alternatives for travelling from Tewkesbury to London? I could catch the train from Cheltenham, which usually involves changing trains twice along the way. The service is extremely unreliable, and it would take at least an hour longer than my car journey.
  620
  Following a discussion with members of the county council, I asked the Minister for Transport what discussions she had had with Railtrack and the providers of the rail services. She replied that there had been no discussions. There is not, therefore, a great deal of encouragement to use the trains.
  Mr. Quinn: Will the hon. Gentleman tell the House how much discussion he has had with Railtrack and the train operators?
  Mr. Robertson: I have had a great deal of discussion with them because of all the complaints that I have received about the level of service. I do not seem to be making any headway, which is why I went to a higher authority and asked the Minister to intervene. Until the date of that written answer, she had not done so, but I hope that, following this debate, she may be persuaded to intervene.
  I have referred to the enormous sum—£35 billion—that is taken from the motorist, of which £1.8 billion is spent on roads and £2.6 billion on alternative travel. There is not much encouragement for anybody to do anything other than drive his car.
  I sit on the Environmental Audit Committee, and I would welcome any move to reduce car travel and protect the environment if that were possible. The Corrunittee interviewed the Minister about that, and I am not sure whether the Government want to shorten car journeys, to reduce the number of car journeys or to make those journeys cleaner. There is a difference between those objectives, and their achievement would require different policies.
  Reducing the level of vehicle excise duty on cars below 1100 cc may have captured a few headlines, but it has achieved very little. If the Government had been serious about reducing the levels of emissions from cars—in other words, if their policies had been environmentally rather than economically driven—they would have set the level at 1500 cc engines. However, I accept that, these days, there is no direct correlation between the size of an engine and the emissions from it. Again, we have a headline-grabbing policy that means very little.
  I am advised by the Government that average emissions from cars with engines below 1100 cc are equivalent to 139 g of carbon dioxide per kilometre, and from cars with engines between 1500 and 1600 cc, 160 g. If the level of VED had been reduced for vehicles with larger engines, the policy would have encompassed more people. However, the Exchequer would have lost out, and that is the point—the Government's policy is economically, rather than environmentally, driven.
  There is no doubt that the motorist has been hit very hard by the Government's policies, with no benefit to the environment and no alternative transport provided for the motorist. Rural residents and those on low incomes, who have to use their car to travel to work, have been hit particularly hard. As always, those who can least afford it are made to pay the most. I have no objection to sensible, consistent policies to entice motorists to use other forms of transport, but we shall not achieve that by using the blunt instrument of high taxation on its own.
  3.39 pm
  Mr. Shaun Woodward: The hon. Member for Truro and St. Austell (Mr. Taylor), in true Liberal Democrat fashion, managed to misrepresent Conservative policies launched this week. For the record, we are not against traffic calming where it is fair. In rural areas and in villages, it is often—[Interruption.] Labour Members may laugh, but we believe in local choice, and where people in countryside areas, such as villages, want traffic calming, it is entirely appropriate that they should have it. The Labour party may wish to tell them what to do with their lives; we shall listen to people locally.
  For the record, we are in favour of traffic-calming measures where they are appropriate, but not where they are wholly inappropriate—on major routes or when they are imposed on people.
  Mr. Matthew Taylor: Will the hon. Gentleman give way?
  Mr. Woodward: No, I will not give way, because time is short and the hon. Gentleman has had a great deal of time to make his arguments.
  My hon. Friend the Member for Tewkesbury (Mr. Robertson) rightly drew attention to the unfair contract that the Government make with the motorist. They take his money in tax, they take it again in tax and they look for another way to take it one more time in tax, yet they offer little or nothing back. My hon. Friend has rightly revealed that Government transport policy is a major disaster area. If you want confirmation of that, Mr. Deputy Speaker, The Guardian/ICM poll this week revealed the depth of public unhappiness with the Deputy Prime Minister's handling of roads, rail and the London underground. The poll showed—doubtless the Deputy Prime Minister is grateful for anything that he can get at the moment—that one third of those surveyed were content, but more than half said that he was doing a bad job.
  Congestion on the roads in this country has reached sclerotic proportions. All over Britain, motorists sit in longer and longer queues, going more and more slowly, with many of them going nowhere. The number of standstill areas grows by the day. As the British Road Federation recently said:
  "The Government's proposals are unlikely to reduce congestion on the inter-urban network."
  Why? As independent research commissioned by the British Road Federation shows, whereas in the mid-1990s, trunk road and motorway infrastructure improvement spending ran at £1 billion a year, under the present Government, who like to claim so much, it has been slashed to £0.3 billion between now and the end of the Parliament.
  In addition, the backlog of maintenance on our roads is the longest in 20 years. The 1998 national road maintenance condition survey recorded the worst overall result since the survey was first produced in 1977.
  The most recent local transport survey published by the Institution of Civil Engineers has found that the backlog of maintenance of local authority roads stands at £4.9 billion. That is an increase of 20 per cent. in the backlog since 1996—and, as the Minister for Transport knows, the Automobile Association has just reported that the backlog continues to grow by £1 billion a year.
  622
  It will be interesting to see whether Labour Members try to make a genuine case to substantiate any suggestion that the London underground has got better in the past two years.
  Mr. Richard Page: By chance, this morning I received a letter from a constituent Mrs. Marriott. She says that she has been working in London for the past five years. She does not want to be selfish; she travels in by the Metropolitan line. She writes:
  "This summer, I was initially inconvenienced by a total and unpredicted closure of the entire Circle line, having then to change trains on crowded Liverpool Street and attempt to complete my journey on the Central line. It is on this line I experience the greatest chaos of all."
  Then follows a list of breakdowns and delays, which is a disaster.
  Will my hon. Friend please say why and how the Government's proposals for road tolls, and charges on parking and fuel will help my constituent on her travels on the tube?
  Mr. Woodward: My hon. Friend makes an important point, because his constituent's experience mirrors that of so many people. A recent survey found that 84 per cent. of people interviewed on the underground thought that it had dramatically worsened since Labour came to power.
  I challenge the Deputy Prime Minister, who has the nerve to come to this place and speak of benefits on the tube, to come with me to Moorgate station on the Northern line and meet the commuters there, 78 per cent. of whom were late for work on Monday last week because of the closure of the line between Moorgate and Kennington. Only last week, London Underground reported its "worst day for months." The Circle line was completely shut down. The Northern line was closed between Kennington and Moorgate. Extensive rush-hour cancellations occurred again and again on four other lines.
  Meanwhile, temperatures soared. Commuters travelled in temperatures of over 100 deg. As the Evening Standard reported, it would be illegal to transport animals in those conditions. And yet the Minister—
  Mr. Christopher Leslie: Will the hon. Gentleman give way?
  Mr. Woodward: I am sorry; there is no time.
  As the Minister knows—
  Mr. Geraint Davies rose—
  Mr. Woodward: I will take an intervention from the hon. Member for Shipley (Mr. Leslie).
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We do not want a Greek chorus from either side. This is a serious debate and there is very little time left for it to proceed. Is Mr. Woodward giving way?
  Mr. Woodward indicated assent.
  Mr. Leslie: I am just trying to clarify whether, under the hon. Gentleman's policy of privatising London Underground, the proceeds of privatisation would be ring-fenced for London or spent elsewhere.
  Mr. Woodward: My right hon. Friend the Member for Wokingham (Mr. Redwood) has made the position

  623
  entirely clear. We are in favour of privatising London Underground. We are wholly against the policies that the Government are pursuing; we are against them for one important reason. Under the present Government's policies, the tube is getting worse and worse. The people who are suffering are not people like the Deputy Prime Minister, who commutes everywhere in two Jaguars and a helicopter—they are the ordinary people of London, who have to try to get to work.
  Mr. Geraint Davies rose—
  Mr. Woodward: I will not take an intervention.
  When we left office, one train broke down every 21 minutes. I admit that that was not a good record. However, under the present Government, one train breaks down every 16 minutes. The Labour party's solution to all this is the ludicrous public-private partnership. It is condemned by everyone and is going nowhere.
  Mr. Davies: Will the hon. Gentleman give way?
  Mr. Woodward: I will not.
  The Deputy Prime Minister tells us again today that the public-private partnership will be delayed. Next year, the mayor will take up office, but he or she will not have charge of London Underground because of the delay caused by the Deputy Prime Minister.
  Yesterday, the mayoral candidate, the hon. Member for Brent, East (Mr. Livingstone)—it will be interesting to see whether his colleagues have views on this—said that the PPP would lead to tube fare increases of 30 per cent., and he condemned the Deputy Prime Minister's proposals. It will be interesting to see whether the Deputy Prime Minister supports the hon. Gentleman in his endeavours to become mayor of this city.
  Under the present Government, transport policy is in chaos. Road budgets have been slashed. Investment in the tube has been dramatically slashed to little more than half the £1 billion a year that was being invested when we left office. Under the present Government, the motorist is being taxed and taxed, and the Government are lining up new taxes for the motorist. A congestion tax is coming soon, as is a parking tax.
  Just for the record, the Minister for Transport might like to know that when the RAC surveyed people with NOP, it found that 75 per cent. of the public opposed congestion taxes. In addition, 49 per cent. would not be prepared to pay the parking tax, and made it clear that they would simply find other places to park their cars. Such a tax will not stop them from using their cars; they will simply try to evade the Government's tax policy.
  I am glad that the Under-Secretary of State, the hon. Member for Hampstead and Highgate (Ms Jackson) has returned to her place. On Tuesday, I asked her about the local transport strategy in Oxford—a strategy that the present Government encouraged and sanctioned, with £7million of credit for a £21 million disaster scheme. She questioned my brief and had the temerity to tell the House that the scheme in Oxford had not
  "been anything other than a success."—[Official Report, 13 July 1999; Vol. 335, c. 156.]
  I am afraid that it is she who is not up to her brief. She should read the Oxford Mail headlines, "Road works will kill us. Traders fear for the future" and, on Saturday 26 June, "Oxford's total standstill".
  624
  Perhaps the Under-Secretary wishes to sit there and laugh at the people of Oxford. Perhaps she has not got across her brief and learned of the real misery that people in Oxford are experiencing. However, I suggest that, for the few remaining days in which she is likely to hold her post, she gets across her brief and perhaps even goes to meet the people in Oxford—people like a man called Mr. Bonner, who runs a family florist's business in the covered market. He goes to Covent Garden every day to collect flowers for his business. He has to drive to London and, of course, he gets stuck in traffic jams going to London and coming out of London. He gets stuck in the traffic jams on the A40, then in those on the M40. He gets stuck in the jams on the M40-M25 interchange—or should I say inter-jam?—then the jams going into Oxford city. After 10 o'clock, he is not allowed to get to the covered market.
  As a result of the Government's policy, people like Mr. Bonner are realising that their livelihoods in the covered market may soon come to an end. More than a third of traders in the covered market fear that the local transport strategy will ensure that they go out of business. Perhaps the hon. Lady is happy with that; we are not content.
  For that reason, we are very unhappy with the Government's transport policy, and we condemn them for the way in which they callously rob the motorist, taking more then £30 billion in taxes from the road user, but offer less than £6 billion back. The truth is that the Government are anti-motorist, but have no credible public transport policy to offer in its place.
  At the beginning of the White Paper on transport policy, the Deputy Prime Minister stated that
  "there is a consensus for radical change".
  Most of us would agree. What we need, however, is a consensus for change not in transport policy but in the Department and the Ministers who now preside over standstill Britain.
  3.51 pm
  The Minister for Transport (Mrs. Helen Liddell): May I take the opportunity to welcome the hon. Member for Witney (Mr. Woodward) to the Dispatch Box? I understand that this is the first debate in which he has spoken under his new shadow portfolio.
  I am delighted to see that the hon. Member for North Essex (Mr. Jenkin) has joined us. I was beginning to wonder whether he was indisposed. He has not had the best of weeks. This time last week, the Conservative Opposition were to launch their transport strategy. We were promised 60 commitments to the motorist. By Monday, the figure was down to 52, and in the course of the debate this afternoon, the right hon. Member for Wokingham (Mr. Redwood) was ditching commitments faster than the dance of the seven veils.
  As the hon. Member for Witney gets further into his brief, he will learn that it is important that he does his homework accurately. When Labour came to power, we inherited a road network which, according to the Tories' Green Paper of 1996, was "broadly complete". However, the road network was suffering from a huge maintenance backlog. It was congested and crumbling.
  The hon. Member for North Essex acknowledged in writing to the Leader of the Opposition last week that the previous Administration had cut money for roads.

  625
  Those cuts were made in an area that is important to motorists—maintenance. Maintenance is important for vehicles, but it is also important for safety. We have seen the Opposition this afternoon wriggling, ducking and diving on the safety issue.
  The right hon. Member for Wokingham described himself as "new Conservative"—that is, extreme Conservative. The position that the Opposition are adopting is extremely right-wing. It is libertarianism taken to a ludicrous extreme. Not even the safety of people matters to the Opposition, to judge by their transport policy.
  Mr. Redwood: Can the right hon. Lady explain what is right-wing about wanting good car parks at stations and less congested roads?
  Mrs. Liddell: Can the right hon. Gentleman explain what is safe about reducing traffic calming, having no proposals for road maintenance, and implementing, as the previous Government did, only one measure to ease congestion—the cones hotline?
  Mr. Andrew Dismore: Does my right hon. Friend agree that a right-wing policy was announced in The Sunday Times by a Tory spokesman, who stated:
  "We want to prevent dithering Sunday morning motorists causing unnecessary tailbacks"?
  The Tories want to eliminate the casual user of the motor car for recreational purposes, to make way for the latter-day Mr. Toads, such as hon. Members who drive sports cars.
  Mrs. Liddell: I could not have put it better myself. Given that the right hon. Member for Wokingham is so proud of his two Jaguars, I do not know why he keeps going on about the fact that Labour Members like to use vehicles. Moreover, it was hypocritical of the hon. Member for Witney to mention the use of helicopters. He seems not to be aware that the Leader of the Opposition travelled to Eddisbury on Tuesday for the by-election campaign by helicopter.
  I was speaking about safety. The hon. Member for Witney condemned the delays on the London underground. I acknowledge that the condition of the London underground is unacceptable. That is a result of so many years of underinvestment by the previous Government. The work currently being done on the Circle line—paid for by the present Government—is directly designed to deal with matters of safety. The London underground that we inherited was crumbling.
  Mr. Bernard Jenkin: Labour cut investment.
  Mrs. Liddell: The hon. Member for North Essex speaks of cuts. It was the previous Secretary of State for Transport, now the shadow Leader of the House, who said in March 1997 that there was no need for additional expenditure on the London underground.
  Mr. James Clappison rose—
  Mrs. Liddell: I shall take no more interventions.
  626
  The subject of today's debate is a fair deal for the motorist. The Government have gone to considerable lengths to give assistance to the motorist. We believe that motorists should have an opportunity to use their vehicles in conditions of comfort. Motorists are not a unique part of the population. They are parents, sons and daughters, working people. They want to use their vehicles in a way that is pleasant and efficient.
  In our White Paper, we have made it clear that we want a new deal for motorists that better meets their needs and allows them to use their cars more efficiently. We are increasing the provision for road maintenance by £600 million over three years to almost £3 billion. We are establishing three new traffic control centres to help focus on our motorways. We are improving driver information through radio, the internet, electronic motorway signs and the Highways Agency website.
  We have reduced vehicle excise duty for small cars. We have negotiated a 25 per cent. improvement in fuel efficiency with European car manufacturers by 2010. We are making it easier to import cheaper cars from Europe. The cost of motoring in real terms is now lower than it was in 1980. That is the work that we are doing to assist motorists. We recognise that motorists need real choice.
  The Conservatives have presented an uncosted, hypocritical document which shows that they suffer from collective amnesia. The cost of implementing those proposals would be £10 billion, which would mean considerably increased taxation for everyone. It would also mean reductions in health and education expenditure.
  When the Opposition suggested the subject for debate last week and published their document, they took us all for fools. They did not think that we would study their document and question its contents. We have checked up on the position that they have adopted on many of the proposals in the publication.
  We have heard a great deal from the Opposition this afternoon about road user charging. The previous Government spent £3 million on research into local road user charging in the 1990s, and £2.6 million of that was for the four-year London congestion charging programme. The then Secretary of State, the right hon. Member for North-West Hampshire (Sir G. Young), said:
  "It could be an effective way of reducing congestion and the environmental impact of traffic."
  The Opposition say that they are not hypocritical. They invented hypocrisy in their document.
  There are 10 commitments from the Opposition to the motorist.
  Mr. Redwood indicated assent.
  Mrs. Liddell: The right hon. Gentleman acknowledges that his proposals are very frightening indeed to those of us who want our roads to be safe and less congested. They are also very frightening to those of us who had thought that the Conservative party would have learned the lessons of the general election. Instead, it is moving further and further to the right, and further and further towards an extreme position that will be rejected by the people of this country.
  The House should reject the Conservatives' motion. Their proposals, which would lead to more congestion and more accidents on our roads, provide no answers and no

  627
  policies for building a road network, and achieving both an effective transport system and less congestion.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 121, Noes 325.

  Division No. 246]

  [4 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Lyell, Rt Hon Sir Nicholas

  Amess, David

  MacKay, Rt Hon Andrew

  Arbuthnot, Rt Hon James

  Maclean, Rt Hon David

  Atkinson, David (Bour'mth E)

  McLoughlin, Patrick

  Atkinson, Peter (Hexham)

  Madel, Sir David

  Baldry, Tony

  Malins, Humfrey

  Beggs, Roy

  Maples, John

  Bercow, John

  Maude, Rt Hon Francis

  Beresford, Sir Paul

  May, Mrs Theresa

  Blunt, Crispin

  Moss, Malcolm

  Body, Sir Richard

  Norman, Archie

  Boswell, Tim

  Ottaway, Richard

  Bottomley, Peter (Worthing W)

  Page, Richard

  Brazier, Julian

  Paice, James

  Brooke, Rt Hon Peter

  Pickles, Eric

  Browning, Mrs Angela

  Prior, David

  Bruce, Ian (S Dorset)

  Randall, John

  Burns, Simon

  Redwood, Rt Hon John

  Chapman, Sir Sydney (Chipping Barnet)

  Robathan, Andrew

  Robertson, Laurence (Tewk'b'ry)

  Chope, Christopher

  Roe, Mrs Marion (Broxbourne)

  Clappison, James

  Ross, William (E Lond'y)

  Clifton-Brown, Geoffrey

  Ruffley, David

  Collins, Tim

  St Aubyn, Nick

  Colvin, Michael

  Sayeed, Jonathan

  Cormack, Sir Patrick

  Shephard, Rt Hon Mrs Gillian

  Curry, Rt Hon David

  Shepherd, Richard

  Davis, Rt Hon David (Haltemprice)

  Simpson, Keith (Mid-Norfolk)

  Day, Stephen

  Smyth, Rev Martin (Belfast S)

  Dorrell, Rt Hon Stephen

  Soames, Nicholas

  Duncan Smith, Iain

  Spelman, Mrs Caroline

  Faber, David

  Spicer, Sir Michael

  Fabricant, Michael

  Spring, Richard

  Fallon, Michael

  Stanley, Rt Hon Sir John

  Forth, Rt Hon Eric

  Steen, Anthony

  Fowler, Rt Hon Sir Norman

  Streeter, Gary

  Fox, Dr Liam

  Swayne, Desmond

  Gale, Roger

  Syms, Robert

  Gibb, Nick

  Tapsell, Sir Peter

  Gillan, Mrs Cheryl

  Taylor, Sir Teddy

  Gray, James

  Thompson, William

  Green, Damian

  Townend, John

  Greenway, John

  Tredinnick, David

  Grieve, Dominic

  Trend, Michael

  Hamilton, Rt Hon Sir Archie

  Tyrie, Andrew

  Hammond, Philip

  Viggers, Peter

  Hawkins, Nick

  Walter, Robert

  Heathcoat-Amory, Rt Hon David

  Wardle, Charles

  Horam, John

  Waterson, Nigel

  Howarth, Gerald (Aldershot)

  Wells, Bowen

  Hunter, Andrew

  Whitney, Sir Raymond

  Jackson, Robert (Wantage)

  Whittingdale, John

  Jenkin, Bernard

  Widdecombe, Rt Hon Miss Ann

  Key, Robert

  Wilkinson, John

  King, Rt Hon Tom (Bridgwater)

  Willetts, David

  Kirkbride, Miss Julie

  Wilshire, David

  Laing, Mrs Eleanor

  Woodward, Shaun

  Leigh, Edward

  Yeo, Tim

  Letwin, Oliver

  Young, Rt Hon Sir George

  Lewis, Dr Julian (New Forest E)

  Lidington, David

  Tellers for the Ayes:

  Lilley, Rt Hon Peter

  Mr. John M. Taylor and

  Loughton, Tim

  Mrs. Jacqui Lait.

  628

  NOES

  Adams, Mrs Irene (Paisley N)

  Corbett, Robin

  Ainger, Nick

  Corbyn, Jeremy

  Ainsworth, Robert (Cov'try NE)

  Corston, Ms Jean

  Alexander, Douglas

  Cousins, Jim

  Allan, Richard

  Cox, Tom

  Anderson, Donald (Swansea E)

  Cranston, Ross

  Anderson, Janet (Rossendale)

  Crausby, David

  Armstrong, Rt Hon Ms Hilary

  Cryer, Mrs Ann (Keighley)

  Ashton, Joe

  Cryer, John (Hornchurch)

  Atherton, Ms Candy

  Cunliffe, Lawrence

  Atkins, Charlotte

  Cunningham, Jim (Cov'try S)

  Austin, John

  Dalyell, Tam

  Baker, Norman

  Darling, Rt Hon Alistair

  Banks, Tony

  Darvill, Keith

  Barnes, Harry

  Davey, Edward (Kingston)

  Barron, Kevin

  Davey, Valerie (Bristol W)

  Battle, John

  Davidson, Ian

  Beard, Nigel

  Davies, Geraint (Croydon C)

  Beckett, Rt Hon Mrs Margaret

  Davis, Terry (B'ham Hodge H)

  Bell, Stuart (Middlesbrough)

  Dawson, Hilton

  Benn, Hilary (Leeds C)

  Dean, Mrs Janet

  Benn, Rt Hon Tony (Chesterfield)

  Denham, John

  Bennett, Andrew F

  Dismore, Andrew

  Benton, Joe

  Dobbin, Jim

  Berry, Roger

  Dobson, Rt Hon Frank

  Best, Harold

  Donohoe, Brian H

  Betts, Clive

  Doran, Frank

  Blackman, Liz

  Dowd, Jim

  Blears, Ms Hazel

  Drew, David

  Blunkett, Rt Hon David

  Drown, Ms Julia

  Bradley, Peter (The Wrekin)

  Dunwoody, Mrs Gwyneth

  Bradshaw, Ben

  Eagle, Angela (Wallasey)

  Brake, Tom

  Eagle, Maria (L 'pool Garston)

  Brand, Dr Peter

  Edwards, Huw

  Brinton, Mrs Helen

  Efford, Clive

  Brown, Rt Hon Nick (Newcastle E)

  Ellman, Mrs Louise

  Brown, Russell (Dumfries)

  Ennis, Jeff

  Browne, Desmond

  Etherington, Bill

  Burden, Richard

  Fearn, Ronnie

  Burgon, Colin

  Field, Rt Hon Frank

  Burnett, John

  Fitzpatrick, Jim

  Burstow, Paul

  Fitzsimons, Lorna

  Butler, Mrs Christine

  Flint, Caroline

  Byers, Rt Hon Stephen

  Flynn, Paul

  Caborn, Rt Hon Richard

  Follett, Barbara

  Campbell, Mrs Anne (C'bridge)

  Foster, Michael Jabez (Hastings)

  Campbell, Rt Hon Menzies (NE Fife)

  Foulkes, George

  Fyfe, Maria

  Cann, Jamie

  Gapes, Mike

  Caplin, Ivor

  George, Andrew (St Ives)

  Casale, Roger

  Gerrard, Neil

  Caton, Martin

  Gibson, Dr Ian

  Cawsey, Ian

  Gilroy, Mrs Linda

  Chapman, Ben (Wirral S)

  Godman, Dr Norman A

  Chaytor, David

  Godsiff, Roger

  Chidgey, David

  Goggins, Paul

  Chisholm, Malcolm

  Gordon, Mrs Eileen

  Clapham, Michael

  Gorrie, Donald

  Clark, Rt Hon Dr David (S Shields)

  Griffiths, Nigel (Edinburgh S)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Grocott, Bruce

  Gunnell, John

  Clark, Paul (Gillingham)

  Hain, Peter

  Clarke, Rt Hon Tom (Coatbridge)

  Hall, Patrick (Bedford)

  Clarke, Tony (Northampton S)

  Hamilton, Fabian (Leeds NE)

  Clelland, David

  Hancock, Mike

  Clwyd, Ann

  Harman, Rt Hon Ms Harriet

  Coaker, Vernon

  Harris, Dr Evan

  Coffey, Ms Ann

  Heal, Mrs Sylvia

  Cohen, Harry

  Healey, John

  Coleman, Iain

  Heath, David (Somerton & Frome)

  Colman, Tony

  Henderson, Doug (Newcastle N)

  Connarty, Michael

  Henderson, Ivan (Harwich)

  Cook, Frank (Stockton N)

  Heppell, John

  Cook, Rt Hon Robin (Livingston)

  Hesford, Stephen

  Cooper, Yvette

  Hewitt, Ms Patricia

  629

  Hill, Keith

  Marsden, Paul (Shrewsbury)

  Hinchliffe, David

  Marshall, David (Shettleston)

  Hoey, Kate

  Marshall, Jim (Leicester S)

  Hood, Jimmy

  Marshall-Andrews, Robert

  Hopkins, Kelvin

  Martlew, Eric

  Howarth, Alan (Newport E)

  Maxton, John

  Howarth, George (Knowsley N)

  Meacher, Rt Hon Michael

  Hoyle, Lindsay

  Merron, Gillian

  Hughes, Ms Beverley (Stretford)

  Michie, Bill (Shef'ld Heeley)

  Hughes, Kevin (Doncaster N)

  Michie, Mrs Ray (Argyll & Bute)

  Humble, Mrs Joan

  Mitchell, Austin

  Hurst, Alan

  Moffatt, Laura

  Hutton, John

  Moran, Ms Margaret

  Iddon, Dr Brian

  Morgan, Alasdair (Galloway)

  Jackson, Ms Glenda (Hampstead)

  Morgan, Ms Julie (Cardiff N)

  Jackson, Helen (Hillsborough)

  Moriey, Elliot

  Jenkins, Brian

  Murphy, Denis (Wansbeck)

  Johnson, Miss Melanie (Welwyn Hatfield)

  Murphy, Jim (Eastwood)

  Naysmith, Dr Doug

  Jones, Mrs Fiona (Newark)

  O'Brien, Bill (Normanton)

  Jones, Helen (Warrington N)

  O'Brien, Mike (N Warks)

  Jones, Ms Jenny (Wolverh'ton SW)

  O'Hara, Eddie

  O'Neill, Martin

  Jones, Dr Lynne (Selly Oak)

  Öpik, Lembit

  Jowell, Rt Hon Ms Tessa

  Osborne, Ms Sandra

  Keeble, Ms Sally

  Palmer, Dr Nick

  Keen, Alan (Feltham & Heston)

  Pearson, Ian

  Keen, Ann (Brentford & Isleworth)

  Pendry, Tom

  Kelly, Ms Ruth

  Perham, Ms Linda

  Kennedy, Charles (Ross Skye)

  Pickthall, Colin

  Kennedy, Jane (Wavertree)

  Pike, Peter L

  Khabra, Piara S

  Plaskitt, James

  Kidney, David

  Pollard, Kerry

  King, Andy (Rugby & Kenilworth)

  Pond, Chris

  King, Ms Oona (Bethnal Green)

  Pope, Greg

  Kumar, Dr Ashok

  Pound, Stephen

  Ladyman, Dr Stephen

  Powell, Sir Raymond

  Lawrence, Ms Jackie

  Prentice, Ms Bridget (Lewisham E)

  Laxton, Bob

  Prentice, Gordon (Pendle)

  Leslie, Christopher

  Prescott, Rt Hon John

  Liddell, Rt Hon Mrs Helen

  Primarolo, Dawn

  Linton, Martin

  Prosser, Gwyn

  Livingstone, Ken

  Purchase, Ken.

  Livsey, Richard

  Quin, Rt Hon Ms Joyce

  Lloyd, Tony (Manchester C)

  Quinn, Lawrie

  Lock, David

  Radice, Rt Hon Giles

  Love, Andrew

  Raynsford, Nick

  McAvoy, Thomas

  Reed, Andrew (Loughborough)

  McCafferty, Ms Chris

  Rendel, David

  McDonagh, Siobhain

  Roche, Mrs Barbara

  Macdonald, Calum

  Rooker, Jeff

  McDonnell, John

  Rooney, Terry

  McIsaac, Shona

  Rowlands, Ted

  McKenna, Mrs Rosemary

  Roy, Frank

  Mackinlay, Andrew

  Ruane, Chris

  McNamara, Kevin

  Russell, Bob (Colchester)

  MacShane, Denis

  Salter, Martin

  Mactaggart, Fiona

  Savidge, Malcolm

  McWalter, Tony

  Sawford, Phil

  McWilliam, John

  Sedgemore, Brian

  Mahon, Mrs Alice

  Sheldon, Rt Hon Robert

  Marsden, Gordon (Blackpool S)

  Shipley, Ms Debra

  630

  Short, Rt Hon Clare

  Timms, Stephen

  Simpson, Alan (Nottingham S)

  Tipping, Paddy

  Singh, Marsha

  Todd, Mark

  Skinner, Dennis

  Tonge, Dr Jenny

  Smith, Angela (Basildon)

  Touhig, Don

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Trickett, Jon

  Turner, Dennis (Wolverh'ton SE)

  Smith, Jacqui (Redditch)

  Turner, Dr Desmond (Kemptown)

  Smith, John (Glamorgan)

  Turner, Dr George (NW Norfolk)

  Smith, Llew (Blaenau Gwent)

  Twigg, Stephen (Enfield)

  Smith, Sir Robert (W Ab'd'ns)

  Vis, Dr Rudi

  Soley, Clive

  Walley, Ms Joan

  Southworth, Ms Helen

  Wareing, Robert N

  Spellar, John

  White, Brian

  Squire, Ms Rachel

  Whitehead, Dr Alan

  Starkey, Dr Phyllis

  Wicks, Malcolm

  Steinberg, Gerry

  Williams, Rt Hon Alan (Swansea W)

  Stevenson, George

  Stewart, David (Inverness E)

  Williams, Alan W (E Carmarthen)

  Stewart, Ian (Eccles)

  Wills, Michael

  Stoate, Dr Howard

  Wilson, Brian

  Stott, Roger

  Wise, Audrey

  Stringer, Graham

  Wood, Mike

  Stunell, Andrew

  Worthington, Tony

  Sutclitfe, Gerry

  Wright, Anthony D (Gt Yarmouth)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Wright, Dr Tony (Cannock)

  Wyatt, Derek

  Taylor, David (NW Leics)

  Taylor, Matthew (Truro)

  Tellers for the Noes:

  Temple-Morris, Peter

  Mr. Mike Hall and

  Thomas, Gareth R (Harrow W)

  Mr. David Hanson.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments) and agreed to.
  MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House deplores the previous Government's record of under-investment and disintegration in the transport network, its failure to tackle congestion as traffic rose by 75 per cent., and its cut in road maintenance; commends the Government for producing the first Transport White Paper for 20 years which has a comprehensive approach to transport across all modes and welcomes the Government's new deal for the motorist in the Transport White Paper; applauds the Government for its clear and open framework for appraising and informing the prioritisation of trunk road investment, taking a far-sighted and more integrated approach than the previous administration; notes that the present Government has begun to tackle the inherited problems of under-investment, pollution and increasing traffic congestion, by a new radical integrated strategy, including an extra £1.8 billion for public transport and local transport management, improving road maintenance, encouraging greater fuel efficiency, reducing pollution, and introducing the long-term policies needed to increase transport choice and improve Britain's transport system; and recognises the freedom that the car has given and that congestion can remove the convenience and pleasure from driving.

Post Office
Mr. Deputy Speaker (Sir Alan haselhurst): Madam Speaker has selected the amendment in the name of the Prime Minister.
4.14 pm
Mrs. Angela Browning: I beg to move,
That this House is concerned that the Government's proposed arrangements for the Post Office put at risk its long-term viability by failing to free it from state control while also failing to maintain accountability; is concerned that these arrangements will create an uncompetitive distortion in the existing private sector mail delivery market; supports the Universal Service Obligation; and condemns the failure by the Government to implement the Horizon programme, with the resulting 30 per cent drop in income to the network of private sector sub-post offices which threatens the survival of rural sub-post offices and represents yet another government policy detrimental to the interests of those who live and work in the countryside.
Last week's statement that the Government intend to turn the Post Office into a public limited company ended a long period of speculation. We supported the liberalisation of the Royal Mail and freeing it up so that all packages over 50p could be subject to competition—something for which the Royal Mail itself asked. Indeed, the Minister received far more support for his proposals from my hon. Friends on the Conservative Front Bench than he did from the glum faces that surrounded him last Thursday.
We have some reservation about the Government's timidity in holding on to 100 per cent. of the shares, but no doubt we shall see some disposals in due course once Labour Members have come to terms with the fact that anything is now a candidate for privatisation—the Post Office, British Nuclear Fuels Ltd. or air traffic control. It is simply a matter of adjusting to their party's new policy.
Today's debate has been called because during last week's statement many questions were asked and, as usual, too few answers were given about the future of the network of some 19,000 post offices, the majority of which are small, independent businesses. I represent a large rural constituency and fully understand the fragility of rural post offices. Some have a thriving general store attached to them which is open seven days a week, while others are part time and may just have room to sell a little stationery and a few greetings cards. Until now the core of their income was the remuneration they received from administering some 20 benefits on behalf of the Government. On average that accounts for 30 per cent. of their revenue. As a result of the Government's abandonment of the Horizon project to introduce magnetic strip card payments of benefits, the post offices are now reliant on the proposals in the White Paper to make up that 30 per cent. drop and identify other opportunities through automation to secure their future.
On 24 May the Government abandoned the pathway project in favour of encouraging benefit claimants to open bank accounts and receive payment by automated credit transfer.
Mr. David Bendel: This subject has been of great interest to me for some time. In fact, I made my maiden speech on the subject of post offices. Does the hon. Lady accept that the abandonment of this
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programme, like the abandonment of so many other computer programmes that have gone wrong recently, is down to the Conservatives, because they introduced the programme in the first place and set up the contract in the wrong format?
Mrs. Browning: For one glorious moment I thought that I was going to agree with something said from the Liberal Democrat Front Bench, but how disappointed I was. Although I would certainly agree with the hon. Gentleman about the Government's competence when it comes to anything to do with automation, I certainly do not agree with him about the genesis of the problem. I shall come to that in some detail shortly.
The Government scrapped the policy of automated payment by card on 24 May this year. Every hon. Member was circulated with a "Dear colleague" letter from the Secretary of State, and we are grateful to him for his courtesy in bringing us all up to date with the fact that the Government had decided to abandon the project. We are now told that by 2003 all post offices will be fully automated and people drawing benefits will be required to have a bank account, but this will also involve the Post Office.
If, for example, someone banks with a high street bank, they will have their benefit paid straight to that bank, but so that they can still enjoy receiving that benefit in cash through their local post office, there will need to be an arrangement between the Post Office and the clearing banks. In that way the money can be transferred and people can access it in cash from their local post office. Naturally, there will be attendant costs in the administration of the transaction.
The Government's record on automation is not good, as anyone in need of a passport will know. It is ironic that the Government have turned to the Post Office to sort out this problem at the peak of the holiday season. The hon. Member for Newbury (Mr. Rendel) started to talk about the genesis of this and, as is characteristic of the Liberal Democrats, blamed the Conservatives. We are quite used to that. I am tempted to say that it is like water off a duck's back, but perhaps "quack, quack" will suffice.
On 5 May this year, ICL, which was piloting the project in some 200 post offices, said that
"it had no knowledge of any doubts in the Government's mind"
as regards ditching the programme. That is reported in the press. Yet only three weeks later every Member of Parliament received a personal message from the Secretary of State to say that the project had been abandoned. We have never had a proper explanation of why that should be.
Yesterday, the Select Committee on Trade and Industry took evidence on the subject of the Post Office. It became clearer why the Department of Social Security, having examined the costs of transactions through the Post Office, has decided in such short order to abandon the Horizon card. In giving evidence to the Select Committee, the Secretary of State for Social Security identified the transaction costs to the DSS of the processes that the Post Office has carried out. A giro cheque costs the DSS 79p; a transaction involving an order book costs 48p; had the Horizon project gone ahead, the payment card transaction would have cost 67p; but by insisting that people have their payments made by automated credit transfer through their bank account, the cost to the DSS is 8p.

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The Secretary of State is nodding in approval at that comparison of costs. He is a former Treasury Minister, so no doubt he is impressed by that menu. I put it to him that the reason why the Government abandoned the card system through the Horizon project was not what they inherited from the previous Conservative. Right up to the last minute, nothing in parliamentary answers, as confirmed by ICL, suggested that there was a problem so serious that the project had to be abandoned. It was a Treasury-driven decision, to which yet again the Secretary of State succumbed willingly.
The Secretary of State for Trade and Industry (Mr. Stephen Byers): For the benefit of the House, will the hon. Lady confirm that the Horizon project was three years behind schedule when we cancelled it, and that the key milestone of a live trial last autumn was failed by ICL?
Mrs. Browning: No, I will not, because in every parliamentary answer given by the Secretary of State and his colleagues during the two years of the Government's stewardship of that project, no indication was given that there was a problem. Indeed, they launched the pilot schemes, and ICL confirmed that there were no known problems. I have checked Ministers' written and oral answers in Hansard, and they gave no indication of any problems. This is a Treasury-driven decision, and it has put in jeopardy half the United Kingdom's sub-post offices.
Mr. Bob Laxton: Only yesterday, at the Select Committee on Trade and Industry, of which I am a member, I tried to elicit some information about the Horizon project. I am unclear about an issue on which evidence was not forthcoming. [HON. MEMBERS: "Ask the question."] I shall get round to the question in due course.
Mr. Deputy Speaker: Order. The hon. Gentleman must get round to his question precisely and quickly.
Mr. Laxton: Thank you, Mr. Deputy Speaker. Can the hon. Lady tell me why the automation contract under the Horizon project was signed with ICL in May 1996, yet soon after, in February 1997, the contract was renegotiated by the previous Government?
Mrs. Browning: Like most hon. Members, I have served on Select Committees. People are brought before Select Committees to answer questions. If the hon. Gentleman had an opportunity to question expert witnesses yesterday and did not get an answer to his question, perhaps he should consider transferring to another Select Committee.
Mr. Tony Baldry: Is my hon. Friend aware that, as recently as November last year—this belies the Secretary of State's point—the then Secretary of State, the right hon. Member for Hartlepool (Mr. Mandelson), confirmed to the Select Committee in oral evidence that he envisaged that all post offices would be automated for the Horizon scheme smart card by 2000? As recently as
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just before Christmas last year, the Government were determined to introduce the smart card. That was clearly Government policy.
Mr. Laxton: Will the hon. Lady give way?
Mrs. Browning: If the hon. Gentleman will excuse me, I have answered his question and I should like to respond to my hon. Friend. The record shows that right up until May this year no one in the DTI Front-Bench team, either in written or oral answers to hon. Members on both sides of the House, gave any indication that there was likely to be a problem with this system, let alone that the problems were so severe that it would be abandoned within three weeks of ICL making a public statement.
Mr. Mark Todd rose—
Mr. Tony Clarke rose—
Mr. Ian Bruce rose—
Mrs. Browning: I shall give way to my hon. Friend the Member for South Dorset (Mr. Bruce).
Mr. Bruce: Did my hon. Friend see the two press releases that were produced when the scheme was abandoned: one from ICL, which had been approved by the DTI, and one from the DTI? Those two press releases were at odds with each other. The scheme was clearly not keeping to the timetable, because the NIRS2 computer, which was to provide the information, was not available. It was nothing to do with the roll-out of the Post Office. When the Conservative Government introduced this scheme, they went for the more expensive option of paying through post offices for the social reason of keeping those post offices open.
Mr. Deputy Speaker: Order. This intervention is getting far too long.
Mrs. Browning: My hon. Friend is right. I have a copy of the Secretary of State's letter dated 27 May this year, in which he informed us of his decision. There is no attempt to explain the decision. He says:
"As you may know the project was entered into in 1996 by the previous administration."
The only explanation he gives is to say:
"It has suffered severe delays and setbacks."
That is contrary to what had been said in answer to questions only a matter of days before.
Mr. Tony Clarke: I refer the hon. Lady to the comments of the Secretary of State, who said that the project has been delayed for three years. We have been in government for two years. Which part of that mathematical equation does she not understand? Will she answer the question put by my hon. Friend the Member for Derby, North (Mr. Laxton)? Why was the contract renegotiated in February 1997?
Mrs. Browning: It is very simple. The Government have had full responsibility for this programme for more than two years. The hon. Gentleman asked me to answer a question. If there were problems with this system in the

635
past two years, one would have expected Ministers to have flagged that up in parliamentary answers. Even in the letter in which it is announced that the system is to be abandoned entirely, there is no explanation and no allegation that it was because of incompetence and serious problems with the computer. I repeat that this is a Treasury-driven decision with huge consequences for rural post offices.
I give way to the hon. Member for South Derbyshire (Mr. Todd), who has been very patient.
Mr. Todd: The hon. Lady set out clearly the cost differentials of the various methods. Does her analysis mean that the Opposition disregard those cost differences and regard them as unimportant?
When ICL Pathway announced its view of the closure of the scheme, the managing director said:
"We are now moving from one contract and two customers to one contract and one customer. Personally, I am delighted with that."
That was a fundamental problem with this project right from the start when it was conceived by your Government.
Mr. Deputy Speaker: Order. It was not conceived by anything to do with me. Mrs. Browning.
Mrs. Browning: When 1 read out the tariff, the hon. Gentleman will have heard me say that the payment card, which the Conservatives designed and put in place, would have cost 67p. We supported that, because we supported a vibrant rural post office system on which small communities depend. It was a cost that we were prepared to support, because it had far-reaching consequences for the heart of fragile communities in rural areas.
Mr. David Chidgey: Will the hon. Lady give way?
Mrs. Browning: I am answering a question. Whatever the consequences of the Secretary of State's decision to deny post offices that opportunity, if serious problems developed in the two years since they have had stewardship of the scheme, they kept them a well hidden secret. That is not characteristic of the Government, who are constantly baying about what the previous Government did. They keep repeating the mantra: we have inherited this, we have inherited that. Yet they kept discreetly quiet about the Horizon project. That is a suspicious indication that there is another agenda.
Mr. Chidgey: I believe that 3,500 sub-post offices were closed during the 18 years for which the hon. Lady's party was in power. The pathway project came to light in the final three years. I do not recall that the Conservative Government showed any concern about the closures that took place in the preceding 14 years or so. Can the hon. Lady tell me what they did then?
Mrs. Browning: The hon. Gentleman will know, as 1 do—I represent a large rural constituency—that one reason why post offices close is that all too often they are not viable in terms of the full range of services and products that they sell, sometimes purely on site. Post offices in my constituency are little more than converted sitting rooms in cottages. People who retire at, say,
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50 often take on such businesses, run them for 10 or 15 years and, when they retire from that, find that the businesses cannot be sold as going concerns.
Conservative Members are only too conscious of the fragility of the economy of those post offices—which, I should add, are not just post offices but village shops. That is why we were prepared to put public funds into the card system. That helped to deal with the DSS fraud problem, and also helped to support fragile rural communities.
Mr. Martin O'Neill: Will the hon. Lady give way?
Mrs. Browning: As the hon. Gentleman is the Chairman of the Select Committee, I will give way to him, but then I want to make some progress.
Mr. O'Neill: Perhaps the hon. Lady will share some information with us. What proportion of the 67p would have gone to the post offices, as opposed to the 7p? The hon. Lady might mislead the House, albeit by accident, if she suggested that all 67p would have gone to the post offices. I think that the administration costs were rather more substantial in the original scheme.
Mrs. Browning: I certainly would not wish to mislead the House. The hon. Gentleman is right, in that the tariff that I read out—with which he will be familiar—did, in my view, influence the DSS's decision to abandon the project. He will know, however, that the formula used for payments to post offices involves the number of transactions that they handle. If people went into their local post offices with cards, that would have meant remuneration for the post offices. Payment through bank accounts means no such remuneration—or so we think; I hope that the Secretary of State will give me a pleasant surprise by telling me otherwise. Moreover, there is the "lost opportunity" cost, in the case of post offices that sell other goods.
Mr. Edward Leigh: Will my hon. Friend give way?
Mrs. Browning: Yes, but this is definitely the last time.
Mr. Leigh: Will my hon. Friend confirm that it was for all the reasons that she has mentioned that the last Government decided not to privatise Post Office Counters, wishing to preserve the rural network? Will she also confirm that it was the wish of that Government. and that it is the firm and settled intention of the party that will form a future Conservative Government, to proceed with the privatisation of Royal Mail, while at the same time preserving that Post Office Counters rural network?
Mrs. Browning: We have already made known our support for the Government's decision to privatise Royal Mail, although, as I said earlier, we are a little disappointed that the Minister is to retain 100 per cent. of the shares. We shall have to see what we inherit at the next election, but 1 predict that, if it has not already happened by then, the sale and disposal of those shares will be imminent by the time of the next election. It is clear from the White Paper that the Government would

637
like fully to privatise Royal Mail—I make a distinction between Royal Mail and the Post Office Counters network—and we support them on that; but they have been held back by pressure from the unions.
Nearly 8,000 sub-post offices are in rural areas, and have limited opportunities to expand their business. They have a 35.4 per cent. dependency on the Benefits Agency work that they handle. Let me quote what the Secretary of State said about the rural network, on page 63 of the White Paper:
"The Government has repeatedly made clear its wish to see a thriving nationwide network of post offices. There may be a difficult transition as demand for traditional services declines whilst new services and new ways of working may still be at an early stage of development."
The Secretary of State also said:
"Similarly, the unique reach of the counters' network, coupled with the Horizon platform, should mean that POCL"—
Post Office Counters Ltd.—
"is well placed to offer a major channel to deliver the Government's ambitions to interface with citizens in a modern, convenient, efficient and coherent manner through the increasing use of IT."
It would be helpful if we could investigate in more detail today exactly how those words will be turned into income for small post offices in rural areas.
I remind the Secretary of State that it was on the eve of the countryside march that he was called in by the spin doctors, and was shown on our television screens giving an assurance about the future of rural schools. He made that statement, on a Saturday night, to try to placate people in rural areas who were going to march through London the next day. He promised that no rural village school would close, because the Secretary of State for Education and Employment would intervene personally. That statement was made against the background of a Bill that the right hon. Gentleman was taking through the House at the time and which clearly provided for those powers to be removed from the Secretary of State.
I know that the right hon. Gentleman was set up that night. He was probably the only Minister on call. Let me, however, say this to him—in the warmest way I can, but quite seriously. People in rural areas do not want empty promises and platitudes from the Government. The Government have a long way to go to persuade people in rural areas that they understand either how such communities function, or the importance of what is at the heart of the rural way of life. I can assure the right hon. Gentleman that the post office is at the heart of the life of rural village communities, and that those communities will not forgive the Government if they make empty promises about its future.
Post offices, their customers and Conservative Members now look for substantive replies from the Secretary of State, so that the post offices can plan for the future. They face a huge change by 2003, which is not very far away. I should be grateful if the Secretary of State would answer some of our questions.
First, who will bear the cost of the transfer of ACT payments from a bank account to a local post office, allowing cash withdrawals? Secondly, will post offices be free to contract with all private sector companies handling mail costing more than 50p per item? Thirdly, what did those words in the White Paper mean? Presumably,
638
the Government intend post offices to continue to offer services that are Government-generated, and to receive remuneration.
What is meant by that? Presumably, post offices will have to tender competitively if they are to deliver information on behalf of the Government. If POCL won such tenders from the Government for the extra work, what revenue would they produce? Have any calculations been made? Given that 30 per cent. of their revenue will disappear in 2003, it is important for these small businesses to know how to plan to make up that 30 per cent. Moreover, they will want to expand rather than remaining where they are today.
Fourthly, what guidance will be given to POCL concerning the cross-subsidy between urban and rural areas? At present, 200 post offices are closing each year. Yesterday Mr. Martyn Baker, director of consumer goods, business and postal services, was asked by the Select Committee about the number of future closures. His reply was interesting. He said that Germany had approximately half as many post offices as the United Kingdom, with approximately the same volume of business. Of course, they do not have to deliver any benefits—and that will be the position of the UK post offices by 2003.
What are we to conclude from such an answer? I seek specific reassurances from the Secretary of State, but I can only conclude that, if we are to produce a model similar to Germany's by 2003, we can expect approximately 50 per cent. of our existing post office network to disappear even before then.
Mrs. Maria Fyfe: One obvious point strikes me. Germany is not similar to the United Kingdom because large parts of the UK are rural, especially the highlands and islands, where populations are small and well spread out. That does not apply to Germany, so it is not just a case of x number of post offices for y number of people.
Mrs. Browning: I cannot explain why that was the answer that was given by someone with expertise on the subject to the Select Committee yesterday, but the point that the hon. Lady seeks to make is important. In the White Paper, the Government have promised that they will set standards on the geographic spread, so that people, wherever they live, can have access to a post office. It will be interesting to hear from the Secretary of State how, if there is a significant drop in revenue, with the attendant post office closures, those standards will be met. How will people be guaranteed access to a post office within a minimum distance if the network is to contract?
Will the Secretary of State guarantee that the present system of paying benefits will be retained until 2003 and that there will be no underhand schemes between now and then to persuade people to take their benefits by automated credit transfer? Clearly, post offices are worried about what will happen to them in 2003, but if, over the next three years, their position is undermined further by a Department of Social Security campaign to persuade more and more people who would not previously have thought of doing so to go for ACT, their concern will be exacerbated.

639
Last week, we gave support to the Secretary of State. It was qualified support. We have come back only a week later to raise the issue of the Post Office network because we are extremely concerned about the future of our post offices.
We are not the only ones. I quote from a statement by the National Federation of Sub-Postmasters. It said in June, before the details of the White Paper were known to the House:
"Many post offices already operate on the edge of viability. In these circumstances, with a loss of work on such a large scale, the local post office will not survive"—
it was, of course, referring to the decision to abandon the Horizon project. It goes on to say that local post office closures will result
"in a loss to those beneficiaries who want to use post office services, including the elderly, infirm and those without transport, people who are comfortable with transacting their business in the post office environment."
I understand that, in his evidence to the Select Committee yesterday, the Secretary of State prayed in aid his experience of small post offices. He said that he would like to use his post office as a bank and perhaps buy a newspaper and a tin of beans at the same time. Whatever solution he comes up with—I hope that he will—to save our post offices, a tin of beans and a newspaper will not make enough difference to make up for a drop in revenue of 30 per cent.
Mr. Chidgey: Or knickers.
Mrs. Browning: Indeed. The Secretary of State knows that he has our support in releasing Royal Mail to participate in the global communications market. Of course, we are disappointed that he has decided to hold on to the shares, but as I have said, we anticipate that that will change.
It is not always recognised that, within what people euphemistically call the Post Office, there are really two distinct entities. One is Royal Mail; the other is the post office network under Post Office Counters. While the Royal Mail is given new opportunities to expand, in the White Paper, one cannot say the same of the post office network, which is primarily a co-operative of independent businesses, dependent on Post Office Counters to negotiate contracts, particularly with the Government.
If the post office network were a company, the White Paper's proposals on it would be described as a downsizing exercise. Both the Opposition and the post offices look to the Secretary of State to identify clearly why they should look forward to 2003 with optimism and hope—not the concern that they clearly feel about the fact that the White Paper threatens at least 50 per cent. of the existing Post Office network. I hope that we can rely on the Secretary of State to give some straight answers to what have been some straight questions.
4.45 pm
The Secretary of State for Trade and Industry (Mr. Stephen Byers): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"welcomes the important White Paper on the Post Office published by the Government; notes the contrast with the years of Tory dithering, blinkered by ideology, that left the Post Office to decline;
640
welcomes the slashing of the EFL which contrasts with the Tory use of it as a variable tax on Post Office users; welcomes for the first time the clear commitment of the Government to a network throughout the United Kingdom of post offices which will be automated; welcomes the fact that for the first time the Universal Service Obligation will be guaranteed in legislation; and notes that the Opposition believes in immediate privatisation of the Post Office, showing they are still an ideologically-driven party, not one intent on improving services to the British public."
I want to use the opportunity of the debate to address the concerns that have been expressed by the hon. Member for Tiverton and Honiton (Mrs. Browning) about the future of the post office network. The Government believe that the measures that result from the White Paper will safeguard the position of the network by putting in place a mechanism that was not there before—and was one of the reasons why 3,500 rural post offices closed during the lifetime of the last Conservative Government. I should also like to explain why we have rejected the benefits payment card.
I am pleased that the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who was responsible for signing the contract on the benefits payment card, is in the Chamber. I hope that he will catch your eye, Mr. Deputy Speaker, because he needs to answer many questions about the difficulties that were created by the contract that he entered into as Secretary of State for Social Security.
The White Paper that we presented to the House last week contains a vision of the Post Office in the 21st century, but it does not address the concerns or needs just of the Post Office itself—it examines the specific needs of the post office network because we value that network. It is the single biggest retail network in the whole of Europe.
Because of that, great strengths attach to the network. We want to build on and enhance those, although not in the old way—the payment of benefits—because, to be honest, that is not where the future of the network lies. It lies in people such as me who are not in receipt of benefits going in, getting cash and spending money on other goods in the post office. I will not be tempted to mention what.
Mr. David Heath: Will the right hon. Gentleman explain what the position is in relation to Crown post offices, particularly those in smaller market towns? A few years ago, we had a disastrous conversion programme. It was stopped about 18 months ago; since then, conversions have not happened. If I read the White Paper correctly, those conversions will restart. Will he assure me that, if that is the case, the consultation will be much more effective than that two or three years ago, when it seems that when the consultation started, everyone said, "No, that is not what we want in the local community", but the Post Office went ahead anyway.
Mr. Byers: The White Paper makes it clear that we expect 15 per cent. of all transactions through the network to be conducted in Crown post offices. I am more than happy to give an assurance that we shall have an effective consultation on that issue, to ensure that local communities and local interests are represented. I also take the point that in the past, under the previous Government, that did not happen.
The previous Government put a hold on further development of the Crown network, whereas we want to give new life to Crown post offices. We believe that,

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by having 15 per cent. of the network's volume going through Crown post offices, we shall be able to do precisely that. When we come to agree the five-year strategic plan with the Post Office—I shall say a little more about that in a moment—that is one of the issues that will have to be addressed before we agree to the plan's detail.
Given that the White Paper touched on some matters that are, politically and commercially, extremely sensitive and controversial, I was pleased that there was a broad welcome for the proposals that it contained. Yesterday, as part of the Post Office's annual report, the Post Office chairman said:
"As we have been saying for more than five years—and the Government repeated in the Commons last week—the status quo is not an option for the Post Office … it is a White Paper that frees us. We can do business with it."
The Post Office chairman, therefore, has said that he welcomes the broad thrust of White Paper. He does so because it brings good news for customers, the Post Office, people who work for the Post Office, and the network.
Mr. Patrick McLoughlin: Last week, when the Secretary of State made his statement, I asked him about the payments received by sub-post offices. A few minutes ago, he said that 3,500 sub-post offices have closed in the past 20 years—under the previous Government—which works out at approximately 175 closures annually. Is he aware that in my constituency in the past 18 months, nine rural post offices have closed? Does he agree that one reason why they have closed is that the payment they receive from the Post Office is under ever greater pressure? Will he give an assurance that, as a result of his announcements today, the Post Office will continue to offer reasonable pay rates to those who provide an excellent service to communities in very sparsely populated rural areas—where there is no commercial alternative, and not many activities into which they might diversify?
Mr. Byers: Those are exactly the post offices that we want to continue. I believe that, as a consequence of the commercial freedoms that we have now given the Post Office, it will have the opportunity of investing in the network.
One reason why the network has had difficulties is that the Post Office has been starved of resources. The hon. Gentleman will know that during the period in which he was serving in the previous Government, the Treasury was taking 95 per cent. of the Post Office's profits. The White Paper that we published last week makes it clear that we shall bring that down from the current rate of 80 per cent. to 50 per cent. this year and 40 per cent. in subsequent years. Next year, that will free up £175 million extra for the Post Office; this year, it will free up about £100 million. I hope that the Post Office will use that extra money to secure the future of the Post Office network—and that is what we shall be looking for in the five-year strategic plan.
Mr. Alasdair Morgan: The White Paper goes a bit further than that, saying that the Government are committed to supporting
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post offices that are of "special value" to the community. Will the Secretary of State tell us which post offices are of special value, and how he will assess special value? Moreover, will the support be specific Government support, or—as he has just outlined—simply allowing the Post Office to keep more of its own money?
Mr. Byers: The White Paper puts in place, for the first time, a mechanism that will allow local people and local communities to express their view on the value of the post office in their own area. In a moment, I shall say a little more about the process and mechanism that we have created on the basis of the White Paper's provisions. There have been so many closures in recent years first, because the Post Office has not had commercial freedom; and, secondly, because we have not had a mechanism for local people to express their objection to a local post office closure. We provide such a mechanism in the White Paper.
I hope that if we can find a slot in the Queen's Speech later this year, we shall be able to introduce legislation securing the right of individual consumers and communities to express their view on the value of their local post office, as such a right would act as a very real deterrent against potential closures.
Mr. Ian Bruce: I think that the right hon. Gentleman will know that many people who have been dealing with the Government's proposals to deliver electronic government have suggested that post offices would be a good place for people to access information technology. Will he tell the House more about how he intends to get such an IT network installed in post offices, in light of the fact that implementation of the Horizon contract—which was signed by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley)—was financed by private industry, which would be paid on the basis of transaction costs? There was virtually no provision for cancellation costs in Horizon because of the way in which the contract had been drafted. From where will the right hon. Gentleman find the money for that IT network? Will the Government sign real contracts with the post office network to deliver new electronic services?
Mr. Byers: Even as we debate the issue, agreements are being signed between the Post Office and Departments. I am pleased that, in just the past week or so, a three-year agreement has been signed for the Post Office to issue vehicle licences. Such developments are already occurring, and I think that the Post Office network has a great future role to play in implementing the modernising government agenda, using the benefits and opportunities available in new technology. I do not think that we have done enough to take advantage of those opportunities, but the Post Office network is in a great position to be the interface between the Government and communities—such as the rural communities that were mentioned earlier, and inner-city communities on housing estates that need the same type of provision. The White Paper will provide the means by which we will be able to do that, and the agreement that we have secured with ICL and Post Office Counters will guarantee that automation of the network will occur by 2001. When we achieve that, a raft of new opportunities will be open to the network.
Ms Helen Southworth: Does my right hon. Friend agree that the opportunities that are

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opening in electronic commerce to small businesses provide a tremendous opportunity for the Post Office network, much of which runs alternative businesses to support the network? The modernisation of the Post Office will encourage sub-post offices, such as the one in Lymm in my constituency which e-mailed me yesterday to express enthusiasm for some of the things that we have been talking about, including action on automation and enhancing skills to take advantage of e-commerce.
Mr. Byers: My hon. Friend makes an important point about the new vision for the Post Office and the network. There will be a need to embrace new technology to meet the challenges that lie ahead. The important thing to remember about the Post Office and the network is that things cannot stand still. People are choosing to have their benefits paid through automated credit transfer rather than by the traditional giro or other means through post offices. People are making a choice, and it is wrong for the Government to stand in the way of that choice. The challenge for the Government is to find alternative means by which we can protect the network. We believe that the White Paper, with the new commercial freedoms and the new mechanism, will do precisely that.
The White Paper is a good deal for consumers, the network and those who work for the Post Office. It has been clear for a number of years that the Post Office has to meet the global challenge it faces from other postal services, which are moving rapidly. We can see developments on the continent and other postal services worldwide where the post office has had the freedom to invest and acquire other like interests and, as a result, has gone from strength to strength. We have reflected that in the White Paper, and we want the Post Office to become a global player. We will introduce a new structure and corporate personality for the Post Office, but based on our manifesto pledge to give new commercial freedom to the Post Office while it remains part of the public sector. That is what the White Paper does.
The White Paper has been well received. I mentioned the views of the Post Office. The Post Office Users National Council said that it thought that there would be "considerable benefits for users" of Post Office services. The Mail Users Association has described the package as a
"positive move towards an improved postal service for all."
I received a very friendly letter from the general secretary of the Communications Workers Union, who said that, despite his reservations about the reduction in the monopoly threshold, he thought that the White Paper was an "extremely good document". There we have it—someone who knows the industry and its future direction has extended a warm welcome to the White Paper.
The Opposition motion talks about concern about the long-term viability of the Post Office. In fact, the Post Office is in now in a far stronger position because of the new commercial freedoms that we are giving to it. We are giving it the opportunity to borrow, without further approval, £75 million a year. If it wants to borrow more, it will have to get approval for that, but we will fast-track any application. The application will be judged on how robust it is commercially, the strategic plan—which has been agreed with the Government—and the risk that might be attached for the taxpayer. If the Post Office can satisfy those three tests, approval will be given and it can borrow substantially more than £75 million, if appropriate in the circumstances.
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In addition, the Treasury take from the profits of the Post Office is to be reduced substantially—from about 80 per cent. last year to 50 per cent. this year, and 40 per cent. next year. That will give the Post Office £600 million extra between now and 2003.
Mr. Edward Davey: Why did the Government light on the figure of £75 million of borrowing without approval and what amount would the Secretary of State and the Treasury be prepared to permit after consultation with the Post Office?
Mr. Byers: It would be inappropriate to give a fixed figure, but it is a matter of public record that when I was Chief Secretary I agreed to borrowing of £300 million or thereabouts for the acquisition of German Parcel. That is an example of a sum that we would be prepared to consider. We are talking about hundreds of millions of pounds, provided that it is in the interests of the Post Office, as it was in that case.
A large acquisition will almost certainly require more than £75 million, and we felt it appropriate for that to require Government approval; borrowings below that figure are likely to be for investment in the infrastructure within the United Kingdom, which will be able to go ahead without Treasury approval.
Mr. McLoughlin: Even under the freedoms that the Secretary of State says he is giving the Post Office, the taxpayer will ultimately pick up any liability arising from failure, which I expect is why there has to be Treasury approval. What does he regard as fast-tracking Treasury approval, bearing it in mind that I have been waiting some considerable time for an answer from him about the future of post offices? What time scale does he envisage?
Mr. Byers: I apologise for the delay in replying to the hon. Gentleman. I will ensure that he gets an answer as speedily as possible. I am trying to remember how quickly we managed to agree the German Parcel deal. We are talking about days rather than months. We can move quickly if there is a commercial need for a fast decision.
The commercial freedoms that we have granted will help the Post Office. We will guarantee for the first time, in the five-year strategic plan, the strategic direction of the Post Office; but we will not get involved in its day-to-day running. For the first time, we will protect the universal service obligation in law, so that for the same fee a letter can be posted and delivered anywhere in the country. We think it an important principle that it should cost the same to send a letter from Westminster to the Isle of Skye as from Westminster to the Isle of Dogs.
I know that there is a lot of interest in why we thought we should not proceed with the benefits payment card in the Horizon project. The previous Government initiated the project and contracts were signed in 1996. The concept of the card was first officially announced by the right hon. Member for Hitchin and Harpenden at the Conservative party conference in 1994. He set out clearly the benefits that he thought would come from the card.
It quickly became clear that the contract would not work, and in February 1997 the previous Government began to renegotiate it with ICL. We are unaware of the details surrounding that renegotiation or of the advice that was received by the right hon. Gentleman before he

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entered into the contract with ICL for the benefits payment card. Perhaps he will tell us what advice he received before he gave the go-ahead. It is clear that the contract has not been in the public or the national interest. It has cost the taxpayer hundreds of millions of pounds. The right hon. Gentleman has many questions to answer. The public rightly demand answers about his conduct and actions.
We tried to make the contract work, but it became clear early on that there were great difficulties, primarily because there were two parts to the agreement—the automation of the network and the benefits payment card—and it was a complex matter to put them together. The automation of the network itself was difficult. There are 19,000 post offices in the network and it is the biggest single retail network in Europe. Automation was necessary, but the inclusion of the benefits payment card on top of that created the difficulties with which we had to deal.
I first became aware of the problems in July last year when I was appointed Chief Secretary to the Treasury. One of my first actions was to call a meeting of the relevant officials to discuss the way forward. As a result, certain actions were taken during the autumn to try to get the parties to agree a way forward. We were unable to do that within the costs that had been agreed with ICL and, as a result, negotiations continued early this year to try to resolve the matter. In the end, an agreement was reached with ICL and Post Office Counters for a new Horizon—a new contract based on automation by 2001. Discussions are taking place now to ensure that we can put in place the platform for automation in the Post Office network and seize the opportunities that will arise from the smartcard technology.
The hon. Member for Tiverton and Honiton had a joke at my expense about my evidence to the Select Committee yesterday when I said that I would welcome the opportunity to go into a post office to get some cash and spend some of it on a newspaper or a can of baked beans. That is an important issue. At the moment, I cannot get cash from a post office and I go elsewhere to get my newspaper and to do my casual shopping. Most post offices would welcome more people coming in and spending money who do not go in to collect benefits. We should seize that opportunity for the Post Office network.
The contract that we now have will provide such opportunities and it will be in place in 2001. Automated credit transfer will be phased in from 2002 to 2005. The hon. Member for Tiverton and Honiton raised specifically the issue of whether the Benefits Agency would attempt to manage people into the banking system before 2003. I am pleased to be able to tell the House that the agency and the Department of Social Security will not adopt that course of action, as my right hon. Friend the Secretary of State for Social Security told the Select Committee yesterday.
The Post Office network has no grounds for complacency. People are choosing ACT. Some 54 per cent. of new recipients of child benefit choose ACT, as do 48 per cent. of new pensioners. The benefit payment card, if it had been introduced, would not have been the panacea that it has been held up to be, because people are drifting away from that approach. We need something
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new, and we believe that automation, followed by the smartcard technology, will provide new opportunities for the Post Office network.
Mr. O'Neill: Who will pay for the new computers that will be located in the post offices, especially those in financial straits?
Mr. Byers: My hon. Friend raises an important point. The Post Office calculates that the cost of the whole system will be some £800 million to £900 million. The Treasury has agreed that £480 million will come from access to gilts held by the Treasury, which will effectively be a grant towards the costs. The additional amount will be made up by charges that will be made by the Post Office on people who choose to use the service, especially Government agencies. For example, the contract that has been signed with Driver and Vehicle Licensing Agency will provide opportunities for the Post Office.
The Post Office is developing new ideas and initiatives to meet the new challenges. I am keen that we should involve all the parties to ensure success, and that is why I have established a working party made up of the Post Office, representatives of the network and of the workers in the Post Office to carry through that initiative.
I have no doubt that the new financial arrangements and the new technology will be of benefit to the Post Office network. However, I feel that that will not be enough on its own and that we have to put in place a new mechanism to support the network.
We shall look for a clear indication, in the five-year strategic plan that the Post Office will have to bring forward, of how it intends to meet the new access criteria that the Government will lay down. The White Paper makes it clear that, for the first time ever, access criteria will apply to the network, so that people will know that a particular percentage of the population must live within a certain number of miles of a Post Office facility. Those criteria have never existed before, but they will be introduced by this Government. Another of the duties placed on the regulator will be to ensure that the criteria laid down by the Government will be met.
Mrs. Browning: Will the Secretary of State clarify the point about funding the capital cost of the automated system? He said that there would be some Government funding and that the rest would be made up through contracts from Government agencies. Will that take the form of a down payment in a lump sum? For example, if the Driver and Vehicle Licensing Agency contract is to be secured and continued through the Post Office network, would the DVLA be required to pay a premium or a lump sum in advance?
Mr. Byers: Agencies pay for the service that they receive. The business was put out to tender, and the agencies have recognised that the Post Office network offers the best deal for them.
However, I do not want to mislead the House by implying that only Government agencies will be involved. Financial services will also use the network. We know that the Post Office is in discussions with the Co-operative bank, Alliance and Leicester and Lloyds TSB about how financial services could be offered through the network. It is worth bearing in mind the fact that the network is in

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a very attractive position commercially. For example, 60 per cent. of rural parishes have a Post Office outlet, but only 10 per cent. of them have a bank. The network is in a strong position to secure an important part of that market and to charge the banks commercial rates for the services that it can offer.
Mrs. Browning: The Secretary of State has described what would be a revenue payment. Where would the £1 billion of capital investment come from to put the system in place before contracts can be offered for tender?
Mr. Byers: When the hon. Lady sees the figures, she will understand that the £800–£900 million that the Post Office has in mind is spread over the whole contract period, which extends to 2008–09. By then, there will be a clear revenue stream, which will help to meet those costs.
I was talking about the mechanisms in place to protect the network. For the first time, the stronger Post Office Users National Council will be able to express its views about the closure or proposed closure of a particular rural post office.
Mrs. Gwyneth Dunwoody: I apologise to my right hon. Friend for intervening, but he has placed some emphasis on rural post offices. Those of us who led fairly energetic campaigns to protect Crown offices and rural post offices know that, although it is important to be able to express a view, it is even more important to ensure that post offices are retained. Will my right hon. Friend give the House some assurance on the retention of rural post offices, rather than simply on the right to express a view? Some communities express their views with vigour and intelligence, but are still ignored.
Mr. Byers: I know that my hon. Friend has been a vigorous campaigner on a number of issues, including the need to retain post offices in her constituency. However, for the first time, the Government will provide a mechanism to protect post offices. Access criteria will be laid down, also for the first time. The regulator will have a responsibility to regulate and ensure that those criteria are met, and the five-year strategic plan, once more for the first time, will contain requirements about preservation of the network.
Clearly, I cannot guarantee that every post office will be safeguarded and preserved by the procedures that I have described. As the hon. Member for Tiverton and Honiton said, a post office may become non-viable for other reasons. For instance, it may not be able to sell goods and services over and above the post office provision supplied on site. However, we are putting in place the commercial freedom that will support the network, a mechanism to protect offices, and access criteria. Moreover, the new technology to be introduced will make post offices far more attractive than at present. That combination will put the network in a stronger position than it has occupied to date.
Mr. David Heath: Will the access criteria apply to places from which the sub-post office has disappeared? Will there be a mechanism for people to identify holes in rural areas in which there should be a post office? That would be useful to the many rural areas in my constituency that lost their sub-post offices over the years and where it has proved difficult to get them back.
Mr. Byers: We will produce access criteria later in the year. We will have in mind a national figure within which
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to provide the Post Office network. Some parts of the country may be able to say that a post office is needed in their community, and the criteria will provide that opportunity. There will be plenty of debate about that matter if we win a slot in the Queen's Speech and put a Post Office Bill before the House for debate at doubtless great and interesting length.
I welcome the opportunity to concentrate on the post office network in the opening exchanges of this debate. The Government have a strong case on the network. We have put procedures in place to safeguard the network and have introduced technology to provide new opportunities in future. The new commercial freedom that we are giving the Post Office will allow it to invest in the network where it thinks it strategically important to do so. The network serves a valuable function, not just commercial but social. We recognise that, and the White Paper takes steps to ensure that we can be proud of the network. The amendment in the name of my right hon. Friend the Prime Minister reflects our pride, and I commend it to the House.

Post Office

  ROYAL ASSENT
  Mr. Deputy Speaker (Sir Alan haselhurst): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

  Appropriation Act 1999

  Protection of Children Act 1999

  Trustee Delegation Act 1999

  Post Office
  Question again proposed, That the amendment be made.
  5.17 pm
  Mr. Peter Lilley: I congratulate my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) on securing a debate on an important matter and on effectively and forcefully drawing the attention of the House and the country to the risks that face our sub-post offices.
  It is unusual on Opposition days for Opposition Members to praise hon. Members on the other side of the Chamber, but I offer one cheer to the Secretary of State for Trade and Industry for his White Paper on the Post Office. I applaud the White Paper because I believe that it will inexorably lead to full privatisation of the Royal Mail. That would benefit the Post Office, customers, employees, the taxpayer and the whole country. I offer only one cheer, however, because the Government stop short of privatisation; they pretend that what they are doing will not lead there; and they disguise the full import of their changes.
  In his statement on the White Paper, the Secretary of State said:
  "There have been suggestions from some quarters that this is part of a plan to privatise the Post Office by stealth. There are no such plans."—[Official Report, 8 July 1999; Vol. 334, c. 1176.]
  Those words seemed strangely familiar, and I remembered that when I was Secretary of State for Trade and Industry—or President of the Board of Trade as I now

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  realise I then was—I had the task of weaning my party from a commitment to maintain the Royal Mail in public ownership. I used almost exactly the same words then to reassure those who were not in favour of moving rapidly in that direction. Labour Members should not be fooled; it is clear that Members on the Treasury Bench intend—probably before their pledge has expired—to move towards the sale of equity in the Post Office to the private sector. Conservative Members would welcome that, but Labour Members obviously would not relish it.
  Those Members who are not enthusiastic about the privatisation of the Post Office may put some faith in the fact that the Government will retain 100 per cent. of the shares of the new company. They may think that that retains the essential features of nationalisation—that the organisation does not have to operate as a purely commercial entity, pursuing such dreadful objectives as the maximisation of profits, but that it can pursue political and social ends. They would be mistaken. Under company law, a limited company of the type that is to be established will have to behave commercially—as is made clear in the small print of the White Paper. Directors would not be able to pursue political objectives, even if asked to do so by their principal shareholders—the Government.
  The Government can set social and political objectives through the regulator. It is right and proper that there should be a regulator governing the monopoly and the universal service obligation. However, it is not necessary to retain 100 per cent. ownership of the company for regulation to operate in that fashion. A private entity could be just as easily regulated as a publicly owned one. The only consequence of retaining 100 per cent. ownership is that the Government retain the conflict of interest between ownership and regulation. We would never allow the privately owned electricity companies to own the regulator; that would lead to a conflict of interest. Surely, it is sensible for the Government to get out of ownership and to stick to regulation. They should hand over ownership to the private sector in this case—as we did in other cases where there was a potential conflict between ownership and regulation.
  The decision to retain 100 per cent. of the shares of the company in Government hands means that the Government forgo the most attractive benefits of privatisation. Above all, the company is not free to raise extra risk equity capital; nor is it able to make its 200,000 staff into employee owners by giving them shares in the company—as I hope that we shall do, if we are able to complete the process that the Government have begun. I can think of nothing better than for every employee of the Post Office to have a stake in the success of the company that they serve—most of them to the great satisfaction of the British people.
  I have every confidence that the process unleashed by the Government will ultimately lead to the full privatisation of the publicly owned aspects of the Post Office—at least of the Royal Mail. However, an important part of the Post Office service is already in the private sector: the 18,000 sub-post offices are private businesses. They are privately managed, privately owned and privately run. Their future is in jeopardy as a result of the changes that the Government have made to the Horizon project.
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  Those sub-post offices are crucial. They are crucial not just to the elderly, to disabled people or to young mothers, who have to collect their benefits from them, but to the whole community which they serve in the other ways that their function makes possible. They are now vulnerable; one third of their business comes directly from the contract with the Department of Social Security. In addition, a substantial chunk of their business comes from footfall—people who come in with no money, cash their benefit order, and then spend some of the money in the shop. That happens in few other shops or enterprises.
  Mr. Lindsay Hoyle: The right hon. Gentleman seems to have a problem with his memory. Is he aware that most closures of rural post offices took place under the previous Government?
  Mr. Lilley: As far as I know, rural post offices have been closing at a rate of roughly 200 a year for as long records have been kept. The Conservatives wanted to prevent them from closing at a rate of thousands a year, which is clearly in prospect as a result of the changes the Government have now put in train—either that, or massive subsidies will be required to keep them open. I am not the only one who thinks that. The National Federation of Sub-Postmasters has said that the decision to make it compulsory to have payments of benefits made direct into a bank account
  "will have a disastrous effect"
  on the network of sub-post offices.
  The reason for the decision to cancel aspects of the Horizon project became apparent at yesterday's hearings, when the current and two previous Chief Secretaries to the Treasury gave evidence together on the subject. The decision represents a Treasury victory: the Treasury has secured a long-desired goal, which is the sacrifice of the sub-post offices to achieve a short-term cut in the cost of delivering benefits.
  Mr. O'Neill: I am aware that the right hon. Gentleman attended yesterday's hearing, and I hope that he can now answer a question that I should like to have asked him then. In what circumstances was the contract renegotiated in February 1997? Was he a party to that renegotiation? Was it exclusively his concern, or was the Treasury involved? I ask that, because there is a seamlessness about the Treasury's attitude across the decades. Was the Treasury looking over the right hon. Gentleman's shoulder and that of the Secretary of State for Trade and Industry when the contract was renegotiated?
  Mr. Lilley: Not only do contracts of that complexity need to be signed: they have to be managed. When I was in charge of the DSS, I told my officials that, in respect of that contract and everything else for which I was responsible, I did not want to hear the good news, but the bad news. In contrast to the current Administration's attitude, mine was that I wanted to be the first to hear if something had gone wrong or if there were problems, not the last. Therefore, I heard that problems had been encountered soon after the contract had started. I took action: we altered the contract, and I announced that publicly and the reasons for it within weeks. The current Government have been in power for two years before telling us that they are aware that there are problems, but they have done nothing about those problems until now.

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  In the statement to the House, the Government claimed that the principal reason for abandoning the benefit payment card, which I seem to recall they welcomed wholeheartedly when it was first announced to the sub-postmasters conference by the seaside—at Bournemouth, not Blackpool—was that it was now technologically outmoded, because it was now possible to move forward from the magnetic strip to the chip. I have to point out that the original contract specifically required the contractors to be ready to move to a chip, if ever that was beneficial, so the whole thing was designed to make that possible, even though none of those competing for the contract thought that the chip would add any value. However, a previous DSS Minister, the right hon. Member for Birkenhead (Mr. Field), had said:
  "The Payment Card is a magnetic stripe card and not a smart card. It holds very little personal data and … is therefore highly secure."—[Official Report, 6 May 1998; Vol. 311, c. 428]
  According to Ministers, that which was previously a benefit is now a disadvantage.
  Ministers then said that the contract was undeliverable and could not be brought to completion, but, as we heard yesterday, both the consultants' report and an internal report stated that it could be completed. Then, Ministers said that the contract was running three years behind schedule—indeed, the Secretary of State said today that he had known all along that the project was running late and could not be delivered in its entirety. However, in May 1998, when the hon. Member for Newbury (Mr. Rendel) asked the Secretary of State what date the smart cards were expected to be in operation, the then Minister responsible replied:
  "by the end of 2000."—[Official Report, 6 May 1998; Vol. 311, c. 428]
  Yesterday, en passant, Ministers told the Trade and Industry Committee that they knew that the contract was undeliverable. However, the previous Secretary of State for Trade and Industry, the right hon. Member for Hartlepool (Mr. Mandelson), had told the Committee:
  "The current plans provide for post offices to be automated by the end of the year 2000 … I feel confident that the project will be properly completed".
  The Chairman asked him, "Will it be 2000 …?" to which he replied:
  "That is still the objective … it is still on track."
  In November 1998, therefore, the project was still on track.
  Ministers then said that in December they had many meetings because of developments of which they had previously been aware but about which they had not told Parliament. Indeed, they had been denying to Parliament that those developments had taken place. So they knew then that the project could not go ahead.
  In January, a DTI Minister was asked when the project would be ready, and he replied that it would be ready
  "by the end of 2000."—[Official Report, 26 January 1999; Vol. 324, c. 174]
  In February, a former Social Security Minister, who clearly would have been aware of any evidence of the project going wrong, asked when it would be ready, and he too was told that it would be ready by the end of 2000. I do not think that those who replied to him would have thought that they could pull the wool over his eyes.
  It is clear that the Government either have known all along that there are problems and have been deliberately misleading the House, or have not known because they
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  have not been on top of their jobs and have not been competent. Perhaps when the Minister winds up, he will be able to explain the contradiction between what the Government are now telling the House and what they have said in written answers for the past two years.
  Far more worrying than the contradictions concerning the past is the lack of clarity about the future. Ministers simply have not thought through what the new arrangements will entail, because they have been forced on them by the Treasury. The new system will require everybody who is in receipt of benefits to have a bank account. However, 15 per cent. of those receiving benefits do not have a bank account. According to the Minister, 5 per cent. of them—the best part of 1 million people—cannot be expected to operate a bank account. Memorising a PIN number would not necessarily be easy for some frail and elderly people, and having to let other people know their PIN number obviously renders them extremely vulnerable. What will the Government do about that? Ministers are still thinking about it.
  Young mothers who want their child benefit to be paid in cash so that they can spend it on their children will in future have to have it paid into their bank account. If they have only a joint bank account, it must be paid into that and may not, therefore, be used in the way that was intended. Will they have to open a separate bank account? If they do so, will they have to pay bank charges out of their child benefit? Ministers have no answer. What will be done about bank charges generally? Ministers are thinking about it.
  Will banks be compelled to take as customers people who have no income other than benefit, even if they do not want those people as banking customers? Ministers are still thinking about it.
  What will be the impact on the revenues of sub-post offices? Ministers are unable to tell us. What will happen to the network, when sub-post offices lose a third of their revenues and the extra business that handling benefits brings in its train? Ministers are unable to tell us. How many offices throughout the country will be put at risk? Ministers will not say. If Ministers intend to keep all those offices open, how much will it cost to subsidise them when they are no longer generating profits from footfall and the extra trade from channelling benefits? Ministers have not yet thought that through and cannot tell the House.
  I have to tell the House that the policy is the result of a Treasury victory and it is a defeat for the sub-postmasters and postmistresses of this country. It is a defeat for the customers, benefit claimants and communities that depend on those sub-post offices. Ultimately, it will prove to be a defeat for taxpayers, who will have to pick up the bill at the end of the day.
  5.34 pm
  Mr. Martin O'Neill: I welcomed the White Paper last week and I still do a week later, after spending yesterday afternoon questioning Ministers and officials at a public hearing of the Select Committee on Trade and Industry. I still believe that this is a good deal for the Post Office and for the people of Britain.
  Many of us were becoming extremely impatient and wondered whether we would ever see the White Paper. As has been said, there have been more Secretaries of State than White Papers. It was obvious that, the longer

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  we delayed, the more difficult it would be for the Post Office to get its act together to face the challenges of the new millennium, which, to a large extent, are already with us.
  The German Parcel deal will give the Post Office access to the central European network and will transform at least part of its operations, but far more investment must be made if the north American market and others are to be cracked.
  Among the most encouraging parts of the White Paper are the sections on consumer protection and service obligations. We also look forward to hearing more about the regulatory arrangements. I use the word "arrangements" because I hope that the regulatory system will not be the remit of one person, but that several people will be appointed who are capable of developing that complex and innovative area of regulation.
  One aspect of the White Paper that disappoints me is the restricted role that is envisaged for the regulator in respect of securing access to information about other players in the postal and parcels market, apart from the Post Office. That role needs more consideration.
  If the Post Office is anything to our constituents, it is either the letter delivery service or the local post office. The universal service obligation and the manner in which that will be enshrined in legislation is extremely encouraging; it suggests the seriousness with which the Government are addressing that fundamental part of their responsibilities, which the postal service must embrace.
  In today's debate we have heard incessantly about rural post offices. I have a semi-rural constituency. Parts of it were, and still are, mining villages with considerable unemployment, where people depend on the post office not only because that is where they obtain their benefit, but because it is the only facility in their community that offers anything approaching financial services and banking of the most limited and basic kind. We should remember that about 60 per cent. of rural parishes have post offices but only 10 per cent. have banks or building societies. Of necessity, therefore, people have to go to the local post office to get their money.
  The Opposition are scaremongering. That is a fair enough tactic—Oppositions do it. We spent long enough perfecting scaremongering ourselves to know when we see a scare story being fomented. We acknowledge that, as has been said repeatedly, the post office network is fragile. That is one reason why the Post Office must start generating profits that it can use, and why the Treasury must not filch 95 per cent. of Post Office profits.
  We hear a great deal about the malign role of the Treasury. We do not hear much condemnation of the way in which the Treasury creamed off so much of the profits of the Post Office when the previous Government were in power.
  Mr. John Bercow: Does the hon. Gentleman accept that the concerns that have been expressed are not Opposition scaremongering? Is he aware that it is the general secretary of the National Federation of Sub—Postmasters who has expressed the concern that payment via bank accounts will result in a
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  30 per cent. cut in the turnover of the average rural post office? That individual is not a member of Her Majesty's Opposition.
  Mr. O'Neill: I believe that that figure is an exaggeration. With respect to the hon. Gentleman, it is only natural for the National Federation of Sub-Postmasters to exaggerate, because it must ensure that its members obtain as good a charge as possible for the services that they provide. That is megaphone diplomacy at an early stage of what will be a prolonged negotiating process. We must recognise that there will be many arguments, one way and the other.
  We should aim for a deal to get all the post offices in the UK on-line. That need not cost as much as was suggested from the Dispatch Box this afternoon by my right hon. Friend the Secretary of State for Trade and Industry. The price of computers is dropping rapidly and access to the network is becoming cheaper, so the figures that have been quoted may be exaggerated.
  If we have an on-line postal service in the United Kingdom, there will be access to the internet from every community. In two or three years there will still be many people who do not have computers, but in every community there will be trained people who can offer a service, albeit at a modest price. At their local post office, people will be able to make purchases through the net and pay with their smartcard. We hope that all the appropriate consumer safeguards will be in place by then.
  It is unrealistic to suggest that there should be computers in libraries and access to the net from them. Among my constituents who are most dependent on post offices, the only book that most of them ever read is their benefit book. They are never seen in libraries.
  We want on-line facilities in post offices, to give people access to world markets. That could be a liberating influence and could generate revenue. We have only begun to scratch the surface. As my right hon. Friend the Secretary of State told us yesterday in the Select Committee on Trade and Industry, he envisages good deals being struck. Given the number of benefit payments that are transacted, it should be possible for the banks to reduce their charges to a minimum.
  We know that the Post Office has been able to negotiate a deal with British Gas, for example, whereby the payment of gas bills in post offices across the country is free to the consumer. That should be replicated on a wider scale. The deals have yet to be struck, but we now have a clear timetable in which to operate and a deadline, which will help to concentrate the minds of Ministers.
  Mr. Hoyle: Does my hon. Friend agree that the Horizon project was a disaster, which we must put behind us, although it left a financial hole that must be plugged? Does he agree that urban and rural post offices could benefit from the link-up and attract new business, which would give them greater freedom through our proposals?
  Mr. O'Neill: I agree with my hon. Friend. Probably the only body that would be capable of getting to the bottom of the Horizon story is the National Audit Office. The capabilities of Select Committees are somewhat limited in that respect. The National Audit Office would be better equipped to scrape below the surface —[Interruption.]—especially when the hon. Member for

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  Buckingham (Mr. Bercow) is no longer assisting us in the Select Committee on Trade and Industry. Even with his talents, I doubt whether we would have got to the bottom of the matter, which requires close examination.
  I know that initially, Ministers showed a relaxed attitude to the Horizon programme, but that changed suddenly. There was a realisation that the project would not be delivered within a reasonable time, and that the sums involved were getting ever greater while the returns on the investment became ever smaller. A line had to be drawn under it and a new approach had to be taken, but it would benefit us all if the NAO undertook a proper examination of the project so that we could establish what influence the customer and the Treasury had on it, in the first instance and afterwards, and how they were involved.
  The Government have said that the proposed timetable can be realised and that, within the next five or six years, we will have a proper system across the United Kingdom that does not look back to the old benefits system, but which is geared to the future.
  Mrs. Dunwoody: The only point that concerns me greatly is that British banks have no particular record of either innovation or imagination. Indeed, they have to be pushed into making most changes and they show no desire whatever for people with small amounts of money to have accounts. Since that is the case, and particularly in view of their reaction to the code of conduct—they are supposed to support it, but they make sure that nobody knows about it—there are grave reservations about their attitude.
  Mr. O'Neill: I share my hon. Friend's concern about the indifference of the banks to many poor communities. They are not prepared to establish facilities in those communities, even to the extent of providing automated teller machines. However, although we could put ATMs in post offices and make proper arrangements, not all the banks conform to the picture that she paints. The Co-op bank and the Alliance and Leicester, which has taken over the Girobank, have links with the Post Office and they are currently positioning themselves to take advantage of the market opportunities.
  Many of the arguments that we hear being made in respect of the poor and disadvantaged are the same ones that many of us advanced when we were anticipating the worst excesses that would follow the liberalisation of the supply of electricity and gas. The cherry-picking has not been as bad as we had anticipated, however, and arrangements have been reached for looking after the disadvantaged people in the community. A great deal more still needs to be done and one would hope that the regulatory criteria that are set down for the operation of the new system will include meeting serious social obligations so that the concerns of my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and myself are given due recognition.
  Anxieties are being expressed about the monopoly and the reduction in the mail monopoly price from £1 to 50p. Although the likely reduction in the profitability of the Post Office by £100 million in a year is a cause for concern—superficially at least—it must recognise that it must face severe competition if it is to survive in an internationally competitive world. Cutting the monopoly price will give the Post Office a cold shower and provide a salutary lesson to it, but if it can survive that, I cannot see it having the difficulty that some of my hon. Friends suggest it might face.
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  The Post Office is an admirable institution and it has a tremendous opportunity to expand and develop as a consequence of the sound approach that the Government have mapped out for it to take. The financial arrangements, such as the fast-track for borrowing, and the experience that has already been gained through the acquisition of the German Parcel business are encouraging signs and, under the White Paper, the future of post offices in rural and deprived areas is not anything like as bleak as people believe. I certainly think that we have little to fear if the Post Office is to be backed up by a counters network of the kind that we have at present and if proper commercial advantage is taken of the opportunities available.
  The motion is nothing less than scaremongering of the kind that frightens people in rural communities, but they are somewhat cynical about the crocodile tears that the Conservatives are shedding for people to whom they paid no attention during the years when they were in power.
  5.50 pm
  Mr. David Chidgey: To pick up the theme of the closing remarks of the hon. Member for Ochil (Mr. O'Neill), my impression from today's debate is that Conservative Members are somewhat off target. They are in danger of being so wide of the mark that they could be indulging in an exhibition of collective shooting in the foot.
  We are to understand that the Conservatives are condemning the Government for not privatising the Post Office fast enough. I recall the Conservatives, when in power, backing away from it as a privatisation too far. From today's comments, we are given to understand that the Conservatives are condemning the Government for delays in automating the Post Office. Yet, again when they were in power, they mismanaged and bungled the Pathway project to such an extent that it effectively ground to a standstill.
  We are also expected to understand that the Conservatives are wringing their hands in deep concern at the fate of rural communities being deprived of sub-post offices. Yet, for most of their 18 years in power, they stood idly by while 3,500 sub-post offices closed their doors. I do not recall them showing a care in the world about their fate. This is one of the best examples that I have witnessed in this House of an Opposition party offering free target practice to the Government. No doubt the Government will take full advantage in due course.
  The key issues that we should address are surely how best to turn a highly successful and respected public service into an equally successful international enterprise; how best fully to automate a network of 19,000 post offices so that they can retain their core business with the Government agencies—their prime customers; and how best to improve efficiency and attract new business sufficient to sustain the national network of sub-post offices, and reverse the disastrous pattern of closures in rural and urban areas alike—the key social obligation that post offices serve so well. Those are the key issues about the future of post offices and it is on them that the Government's proposals in the White Paper should be tested.
  The Liberal Democrats argue that although we welcome the sentiments of support for the Post Office in the White Paper, we are concerned that, as they stand, the proposals lack the political will and the plans for action essential for the Post Office to thrive.

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  For the past 350 years, the Post Office has served the nation well. The uniform price and next-day postal service delivered nationwide are a fundamental commitment. Each year for the past 23 years, the Post Office has returned a profit to the Treasury, hitting its external financial limit targets time and again. Since 1981, the Post Office has contributed £2.4 billion to Government finances. But for some years—all hon. Members will recognise this—it has been clear that without greater commercial freedom, the Post Office has been losing ground to its competitors in an increasingly liberalised world postal market.
  Yesterday, the Post Office announced its pre-tax profits for 1998–99 as some £608 million. That is good in itself, but those figures are down by £65 million from the previous year. That is a clear sign of the impact of increasing competition and of the fact that without greater commercial freedom, the Post Office will decline.
  Analysts tell us that in a liberalised global postal market, there is room for only four or five really global players. At present, the Post Office is hanging in at about fifth place. Without greater commercial freedom and the ability to internationalise its business, the Post Office is bound to slip out of the major league. Therefore, the case for greater commercial freedom is crystal clear. The question is: what form should it take?
  The Government propose to turn the Post Office into a plc which, I think, is a clear departure from the previous Secretary of State's preference for an independent, publicly owned corporation. Why? What extra benefits would a plc bring over an IPOC? In all its pleading for greater commercial freedom—and very well justified it is—the Post Office has not shown any desire to become a plc. The Government claim that, by raising shares, the Post Office could expand its business through share swaps and transfers. So it could, but it could equally well make direct investment in other companies internationally, as it has already started to do.
  Anyone in the City would say that the prime purpose of raising shares is to sell them. It is clear that whatever Ministers may say, turning the Post Office into a plc will pave the way for a future privatisation. I give Opposition Members credit for noticing that. The Government tell us that they have no plans to sell shares in the Post Office for the foreseeable future, and that any proposed share sales would have to gain parliamentary approval. As most Governments are incapable of predicting events a week away, referring to "the foreseeable future" is meaningless. As Governments invariably exercise their majority to impose their will, seeking parliamentary approval is just as meaningless, unless the Government are prepared to pledge that any proposals brought before the House to sell shares in the Post Office will be subject to a free vote. The Minister makes no comment.
  It seems to me that converting the Post Office into a plc is the result of pressure from the Treasury. It is interesting that the two principal spokesmen were both Chief Secretaries to the Treasury.
  Mr. Lilley: I was not.
  Mr. Chidgey: I beg the right hon. Gentleman's pardon. He corrected me, but he knows that Treasury influence is
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  clearly present, and it is here to stay. The Treasury is bridling at losing Post Office profits, and is determined to retain an option to cash in Post Office shares when the coffers start to empty.
  The Government have made no case to show that conversion to a plc would bring more benefits to the Post Office than would a conversion to an independent, publicly owned corporation. It would give no greater freedom, flexibility or competitiveness. In his statement on 8 July at column 1188 of Hansard, the Secretary of State claimed that his research had found fundamental weaknesses in the IPOC model. That sounds like a smokescreen for his failure to prize the dead hand of the Treasury from plans to modernise the Post Office.
  The plain fact is that the Treasury rules established in the 1920s prevent the Post Office from converting to a publicly owned corporation fit for the 21st century. The political will is needed not just to convert the Post Office, but to modernise the Treasury at the same time and prevent it from continuing to operate under the same rules as have applied for almost a century.
  Even under the Government's proposals for greater freedom, the Post Office will still not be able to compete equally. At the same time, the Government plan to add to the threat to the Post Office by reducing its monopoly in its home market, in advance of similar agreements to liberalise postal services elsewhere.
  Under the Government's proposals, the Post Office will face new financial pressures that could amount to a future loss of profits of some £300 million a year. The key to international success for any enterprise is a strong home market. To succeed overseas, the Post Office must be able to offer a full range of flexible services, delivered with the benefits of modern technology to its home market. Yet the Post Office is expected to cope with the halving of the letter monopoly, resulting in the loss of £100 million profit; the loss of interest on Post Office reserves, which is a loss of £107 million profit; and the DSS's decision to pay benefits directly into bank accounts by 2003, which is a loss of another £100 million of income. That will hit rural post offices in particular, which, as many hon. Members have noticed, are going out of business at the rate of 200 a year.
  The Post Office is doing its best. It has responded well to the impact of the closure of thousands of branch banks in small rural communities and in urban areas. There have been 3,500 such closures since 1990. More than a quarter of inner-London wards have lost all their banks since 1990. I raised that issue in my early-day motion 203 on 19 January, in which I urged closer co-operation between clearing banks and Post Office Counters Ltd. to accelerate the transfer of over-the-counter services from closing branch banks to local post offices.
  Closure of branch banks and no over-the-counter cash services at post offices have had a tremendous impact on the viability of small retailers, who need to be able to bank their cash at the end of every day's trading. Such retailers also lose the benefit of additional trade for the bank, which brings business into their shops, and all too many go out of business. In Botley, a small village in my constituency, Lloyds bank customers were so incensed by the prospective closure of their branch that both personal and shopkeeper customers marched on Lombard street with a big black plastic horse, upside down, to demonstrate their views on the bank's policies.

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  I am glad to say that over-the-counter services are now being transferred to post offices. A contract has been signed providing for 15,000 post offices to take over such services from Lloyds-TSB. The Post Office, however, cannot provide the full service until it is completely automated. The sorry saga of the Pathway project, which was supposed to link Benefits Agency and DSS payments to a swipe card, has severely damaged the viability of thousands of sub-post offices throughout the country. The debacle of mismanagement, added to the rivalry between Departments, has led to the demise of the project, the loss of £1 billion to the taxpayer, and the risk of closure for thousands of rural post offices.
  It is because the Government have failed to get a grip on their legacy from the Conservatives that the replacement Horizon project will arrive years later still. Hundreds more sub-post offices will close—and, to make matters worse, the delay in automation could result in 10,000 rural post offices' losing £350 million of business when the Benefits Agency and the DSS convert benefit payments to automatic transfer in 2003. Without an automatic platform, the Post Office cannot compete, and the business will be lost.
  I listened carefully to what the Secretary of State said. He guaranteed that the contracts to introduce the automated platform would be in place by 2001. That is reassuring, but we know from recent experiences of huge computer projects how easily they can fall behind, and how easy it is for delays to mount up. I want a commitment from the Government that the re-tendering of service contracts that are currently placed with the Post Office by the Benefits Agency and the DSS will be phased in following the successful introduction of the Horizon platform project. I do not want to see another disaster brought about by delays in the Government's sponsored computerisation programme. We need a commitment for the Post Office to be given a fair chance to retain the business that is crucial to the survival of rural and urban sub-post offices alike.
  The Government have claimed that they propose to extend the range of services available to post offices. I could not agree more that that is a vital ingredient of post offices' viability, but the Government could make a start with the DVLA. It is a fact that only about 4,000 post offices out of 19,000 are able to issue vehicle tax discs, which is a source of intense frustration throughout the country. The postmaster at Fryen Hill post office in my constituency has been complaining for years that he cannot get POCL to give him the right to sell vehicle tax discs.
  A few weeks ago, on a Wednesday afternoon, when all the other local post offices were closed, 33 people went to that post office trying to buy tax discs. That shows the level of frustration caused by the DVLA's rather arcane view that only a limited number of post offices—less than one in four—should be able to sell the discs. The reason that it gives is the increased cost of the extra paperwork to the taxpayer.
  Mr. Hoyle: As the hon. Gentleman will know, the problem is that if every post office issued vehicle licences, the income of other post offices that are very reliant on vehicle licensing would be diluted.
  Mr. Chidgey: I agree, and the question of which post office is most vulnerable is interesting, but we must also bear in mind the frustration of customers. Many people find that continued frustration difficult to bear.
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  With that sort of approach—that lack of joined-up government—it is hardly surprising that, since 1979, over 3,500 sub-post offices have gone out of business and that the rate is continuing at some 200 a year. The approach is removing vital services in poor and socially excluded communities every week of the year. With the closure of bank branches, it is accelerating the failure of thousands of small shops throughout the country. The Government have a duty to ensure that sub-post offices can retain their core business and develop new flexible services through modern technology.
  The Government statement is very good on sentiment and concern, but my colleagues and I are concerned that they are ducking the key issues in the creation of a dynamic enterprise overseas and a robust and reliable post office service at home. The Secretary of State has lost his fight with the Treasury for an independently owned public corporation which is free from state control, leaving the Treasury free to dip its hand in the till. Any further delays in modernising the system will place at risk the future of thousands of sub-post services, which are vital to the survival of the communities that they serve. I urge the Government to think carefully about how they bring their White Paper forward to legislation.
  6.6 pm
  Mr. Bob Laxton: Unlike some Opposition Members, I feel buoyant about the Post Office's future. I welcomed the White Paper when it was presented to the House on 8 July. Not being, I trust, an over-cynical individual, unlike some hon. Members who have spoken, I take at face value the absolute assurance that, although the Government propose to convert the Post Office to plc status, there is no prospect in the foreseeable future of a share sell-off. In fact, we have been assured that that would require primary legislation. Unlike some hon. Members, I am eminently satisfied with that assurance.
  I welcome the statement in general because, for the first time in years, the Post Office will have some stability and a clear knowledge as to what the future holds for it. For a long period during the Conservative Government, a debate raged within the Conservative party. We remember the desire of the hawks to sell off the Post Office, with little, if any, concern for the future of rural sub-post offices. The plan was: "Just get rid of it. Take the money into the Treasury. That is all we are after."
  During that process, we saw how well loved and respected the Post Office was. The British public were hostile to that plan. It drove huge wedges between the ideologues and the perhaps more pragmatic individuals—the very few pragmatic individuals—in the Conservative party. There were enough of them for the prospect of privatising the Post Office to diminish. The statement will provide stability for the future.
  About an hour and a half ago, I made an intervention because I was particularly interested in the Horizon project issue. The hon. Member for Tiverton and Honiton (Mrs. Browning) left-footed, or right-footed, my intervention and side-stepped answering it, so I was particularly keen to listen to the speech by the right hon. Member for Hitchin and Harpenden (Mr. Lilley). I was not at all satisfied with the response.
  I was particularly concerned about the fact that the contract for a computer project of this magnitude was signed in May 1996, and after only nine months,

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  I understand, went through major renegotiation. I readily understand the comment that it was part of managing the project, but there is a lot of difference between tweaking and managing a project and rewriting a contract. We do not have access to the information—which is privileged—on how decisions on the project were made. Moreover, the other day, members of the Select Committee on Trade and Industry were unable to get answers to our questions on the matter because the relevant documents were not available to either Department of Trade and Industry Ministers or to the Secretary of State.
  The current Government inherited plans for a technology—yesterday, it was described as "Lilley's legacy"—which, had it been introduced, would have been not only extremely expensive for the Post Office, thereby impacting on Post Office Counters Ltd. and the rural sub-post office network, but obsolescent, and perhaps even obsolete. Nevertheless, we have to be mindful of new technology, new work practices, and new methods of service delivery.
  I have great respect for, and some involvement with, the Post Office, as many of my constituents work for it. Derby is a Post Office centre of excellence, with a huge mail sorting office and a mammoth mail operation located at East Midlands airport, moving mail by aeroplane at night around the countryside, and to and from the Isle of Man and the Channel Islands. As the Post Office employs many of my constituents, with whom I am closely involved, I know a great deal about how it operates.
  In the debate, there has seemed to be an air of despondency about the future of rural sub-post offices. However, as we move into the new millennium, there are new opportunities and ways of working—such as using the worldwide web, electronic commerce and e-mail. Sub-post offices, particularly, will have to adapt to those new technologies, and—as my hon. Friend the Member for Ochil (Mr. O'Neill) said—thanks to drastically reduced computer hardware costs, will have to start providing services utilising those technologies.
  Across the United Kingdom, including many of our rural areas, about 1.5 million people are working—teleworking, as it is euphemistically called—from home. Increasingly, people in rural areas will work from home and want services that, hitherto, they have not used. Previously, many people went to urban areas to work and to shop—like the Secretary of State, to get their newspapers and tins of beans. In the new millennium, with the new technology, people will want sub-post offices to offer high-technology services.
  The message for the Post Office, therefore—particularly for rural sub-post offices—is not of despondency, but of buoyancy and hope.
  6.14 pm
  Mr. Christopher Chope: This debate has been dominated by the threat to our sub-post office network. That threat is totally unnecessary: it was avoidable; it would not have happened if the Government had stuck with the Horizon project, as they should have done. I am not persuaded that the Government's decision to abandon the project was the right one.
  After hearing the speech of my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), I am even less convinced that the Government's decision was
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  the correct one. I am convinced that my right hon. Friend left a golden legacy to pensioners, other benefit recipients, sub-postmasters and rural communities—a legacy of a network of post offices that could continue to pay out benefits over the counter on an exclusive basis. He left a system which would have guaranteed the future of thousands of sub-post offices across the country. That system was destroyed by the Government.
  Many of the observations of the Government are disingenuous in the extreme. As my right hon. Friend the Member for Hitchin and Harpenden said, the responses to parliamentary questions show that the Government have shifted their ground. Last July, the Minister of State—who we believe is ill, and who we hope gets better soon—told me that the current plans provided for all post offices to be automated by the end of the year 2000. I then asked him why the date had been shifted to the end of 2000, as against 1999. The right hon. Gentleman replied that it was always expected that the original planning assumptions for this project would be tested and reviewed as the programme moved forward. There was no mention of the programme being three years behind, or of the fact that the Government had inherited a situation from the previous Government that was untenable or unmanageable.
  In July last year, I asked the then Paymaster General, the hon. Member for Coventry, North-West (Mr. Robinson), why the Government had decided not to assess alternative options to the ICL Pathway project. The hon. Gentleman had plenty of time to think of his answer, which was that ICL Pathway was engaged in a project to automate Post Office Counters Ltd. under contracts agreed in 1996. He said that the Government remained committed to the objectives of the project.
  We have heard today—and from the Secretary of State yesterday—red herrings about renegotiations in February 1997. This time last year, it was satisfactory for the Government to refer to the contract in 1996, and there was no talk of modifications, changes or difficulties. I am not convinced by the Government's story on this.
  Nor am I convinced by comments to the effect that the points that we are making are exaggerated or scaremongering. In today's edition of The Independent, John Roberts, chief executive of the Post Office, is quoted as saying that the decisions of the Government
  "inevitably put at risk a pretty substantial chunk of the network. There are 10,000 rural post offices and benefit payments generate £350 million of business—nearly 40 per cent. of Counters' total turnover."
  He is in a strong position to know the facts, and he is expressing grave concerns about the Government's claims.
  Earlier this year, I was speaking to a 97-year-old constituent about the pleasures of life in Highcliffe-on-Sea. She told me that one of her great pleasures is walking to the local post office every Thursday to collect her pension, having a gossip with people on the way, and perhaps taking a bit longer than some of us would do. She does not want her post office to be closed by the Government so that she can no longer gain access to her pension once a week. She is one of 15 million people in a similar position.

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  In the amendment, the Government have said that they have a commitment to "a network"—not "the existing network", or a "network similar in extent to the existing one", but
  "a network throughout the UK of post offices which will be automated".
  That is just not good enough.
  In the White Paper, the Government said that all benefit recipients who wished to collect their benefits in cash at post offices would continue to be able to do so, both before and after the change. But what happens if the post office from which those benefits have been collected in the past is closed? What do they do then? I have been told that about half the existing 18,000 sub-post offices are not viable without cross-subsidy—even with income from benefit payments. Without the benefit payment income, they will need much more cross-subsidy to survive, but the post offices that will provide that subsidy will themselves be under financial pressure.
  That is why it is not an exaggeration to say that up to half the existing sub-post offices are threatened with closure by the Government's policies. If a network is halved, is it safeguarded? It would be consistent with the Government's use of language for them to say that they had safeguarded the network but reduced it by half.
  We wondered whether a future official line was being tried out on the Select Committee by Mr. Baker yesterday, when he told my hon. Friend the Member for Banbury (Mr. Baldry) that Germany had a much larger population and half as many post offices. One can imagine Ministers trotting out that line when half the network has been closed down.
  On page 63 of the White Paper there is a reference to the Government standing by, ready to play their part in easing the transition, and supporting existing post offices "of special value". Which post offices are of special value? Are not all post offices of special value? I believe that one Minister was forced to concede that.
  The Government have erected a false prospectus in the White Paper. The Post Office Counters network carries out over 800 million transactions a year. To find a replacement for all of them will take more than the Secretary of State going along to the post office and making a withdrawal from his savings. The policy is disastrous, and I strongly commend the motion to the House.
  6.21 pm
  Mr. Lindsay Hoyle: There is a lot of emotion about today. People's jobs are at stake and we are discussing the future of urban, rural and town post offices. It is too easy to forget that for 18 years post offices withered on the vine and closed without a word from Conservative Members. They have a memory of convenience, which is not acceptable. If we are serious about the future of post offices, we should say that we welcome the White Paper and the freedom that it offers, and we should look for new ideas.
  We should introduce a people's bank. The main facility that is missing from rural areas is the bank. Everyone seems to agree that the local post office is the focal point, and we have a golden opportunity to introduce the bank back to the post office and give banking facilities to those who have been denied them. We can extend the facilities on offer well beyond tax discs.
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  With the new technology links that will come to rural post offices we can provide many new facilities. Instead of bickering and scoring cheap political points, why do we not sit down and concentrate on saving our post offices and protecting the work that they provide for self-employed people by ensuring that they can take advantage of the new opportunities?
  Let us support the Post Office and give it the freedom that it needs to ensure that it has a long-term future and does not continue to wither on the vine, as it did under the Conservatives.
  6.24 pm
  Mr. Tony Baldry: We are considering two things this afternoon. The first is the Government's proposals for the future of the Post Office. I, like many other hon. Members who have spoken, am a member of the Select Committee on Trade and Industry and we seem to have had innumerable sessions on the subject in the past two years while the Government have changed their mind about the future of the Post Office.
  The decision to grant plc status is welcome, but the Post Office will still be subject to Treasury controls. As the Financial Times said last week, it is.
  "disappointing that a Government that prides itself on its market savvy has turned its face against privatisation. This is a company with nearly £7 billion turnover and profits of £650 million. It has to prepare for competition and the huge challenge thrown up by the intemet. The sooner it is allowed to make its choices and bear the consequences the better."
  On the Government's proposals for the future of the Post Office, The Economist observed:
  "The results are an uneasy and probably unworkable political fudge. The Government have defended the decision not to press ahead with even a partial share sale on the grounds that the necessary legislation could not be introduced for years. The White Paper's backing of plc status reveals just how thin this excuse is. The reality is that the unions have blocked privatisation and the Government, even with its huge majority, is unwilling to risk taking them on."
  We will end up with a Post Office that will be hobbled in terms of international competition.
  It became clear yesterday, in hearings before the Select Committee, that when Ministers were drafting the White Paper they did not take into account the decisions that would be taken on the Horizon project. Amazingly, the business plan that the Post Office has drawn up for the next five years has taken no account of Ministers' decision on that project.
  The history of the Government's relationship with the Horizon project is a sorry tale. In April last year, the DTI told the Select Committee that
  "the Government is committed both to the maintenance of a nationwide network of post offices and to providing a secure, convenient and cost-effective means of paying benefits to customers. That is why the Horizon automation programme is designed to do what it is designed to do. Post Office Counters Ltd and the Benefits Agency are continuing to work closely with ICL Pathway to progress the Horizon programme and the Government is monitoring development closely."
  No scintilla of a suggestion appears that there was any problem with the Horizon programme at that time.

  665
  In November, the then Secretary of State for Trade and Industry—the right hon. Member for Hartlepool (Mr. Mandelson)—appeared before the Select Committee. He said:
  "There have been delays, but the Benefits Agency and the Post Office continue to work closely with ICL and the Government is closely monitoring progress. The current plans provide for post offices to be automated by the end of the year 2000 and in that context the Government is committed to the maintenance of a nationwide network of post offices. I feel confident that the project will be properly completed and that it will provide a very important platform, a computer-based platform springboard for the Post Office to introduce and develop a diversity of services. We remain confident on the basis of the information that we have at the moment that it will reach completion."
  That was only a few months ago, and again, there was no scintilla of a suggestion of any problems.
  Suddenly, out of the blue at the end of May, there was a complete change of plan. In effect, what has happened is that Ministers have, for whatever reason, changed their mind in the middle of a major contract. One suspects that they were rolled over by the Treasury. ICL, the contractor, must have been left with a substantial loss. I imagine that the only reason why it has not issued litigation is that its parent company, Fujitsu, hopes to float some time next year and would like to retain the Government as a major client.
  I agree with the hon. Member for Ochil (Mr. O'Neill), the Chairman of the Select Committee, that the matter should be referred to the National Audit Office. I hope that the Select Committee will find a way unanimously to recommend that approach and I hope also the Public Accounts Committee will examine the issue. It is a scandal and we need to get to the bottom of it. There is no way that Ministers can pretend that it was the previous Government's problem, when just a few months ago—the record—the Secretary of State made it clear to the Committee that he supported the project.
  Scrapping the ability of post offices to pay benefit is a threat to the network of sub-post offices, to rural post offices and to post offices on the edges of towns, on housing estates and elsewhere. Yesterday, the Select Committee heard a clear acknowledgement that 40 per cent. of the revenue of Post Office Counters Ltd. comes from benefit payments.
  How will that lost revenue be made up? We heard about the automated platform, and were told that the revenue would be made up by allowing rural post offices to have cash cards. Another suggestion—which I hope hon. Members will investigate when they look at the record of our proceedings—came from a senior official from the Department of Trade and Industry. He said that when people moved house in future they would be able to tell every Government Department where they had gone by filling in one form. If that was the best that he could do, it was rather bizarre.
  When asked how many post offices the Government thought would close as a result of the proposals, DTI officials said that Germany had only half as many post offices as this country, even though it is twice the size. The only reasonable inference to be drawn from that is that, because German post offices do not pay out benefits, the proposed change would cause the closure of something like half of our post offices in the areas to which I have already referred.
  666
  The proposals will also cause many village shops to close. In the areas that I have mentioned, post offices and shops are mutually dependent, but, in future, people who cash benefit cheques in the post office will spend the money in the part of office that is a shop. The proposal amounts to yet another attack by the Government on the fabric of rural Britain and on the livelihoods of people there.
  Three Secretaries of State lined up yesterday before the Select Committee to explain that they were going to do away with previous proposals to protect the secure network of post offices, but they did not have the smallest suggestion as to how post offices will make up the 40 per cent. of revenue that they will lose. I asked them why the marketplace had not already caused post offices to use all the bright technological ideas that they described. They had no answer.
  The truth is simple: the Treasury has put pressure on the DTI and thinks that a massive saving can be made. The people who will pay for it are those in rural England and on housing estates, because the numbers of post offices available to them will be decimated. Moreover, many people will be forced to use bank accounts against their wishes. At no time has any Minister attempted to explain who will deal with the bank charges or with mothers who will have to open a separate bank account if they want to keep their child benefit payments to themselves. The Government have not even begun to anticipate the number of letters that will come from constituents receiving benefit when they understand the full implications of the measure, and that they will be forced to open a bank account if they are to receive benefits in the future.
  This is a shabby piece of work by the Treasury, and it does the Government no credit. The people of rural and urban Britain alike will pay for it and, sadly, the most vulnerable in our communities will pay the most.
  6.34 pm
  Mr. Edward Davey: Before entering the House, I was a management consultant for Omega Partners, one of whose niche markets was providing specialist advice to international postal administrations. On election, I relinquished all financial links to the firm, but I have maintained my interest in international postal issues. During four years with Omega, I had the privilege of visiting about 30 post offices around the world from Correos de Chile to New Zealand Post. I met the director general of post in Taiwan and visited the privatised Singapore Post plc. I became a bit of an anorak on post offices, so hon. Members will be pleased that my time tonight is limited.
  Of all the projects I was involved in, the most relevant to our debate was a study that I co-authored, commissioned by the United States Postal Service, entitled "A Strategic Review of Progressive Postal Administrations: Competition, Commercialisation and Deregulation". The study considered 10 post offices around the world, including those in the UK, Sweden, Australia, New Zealand, Germany, Canada and the Netherlands. It focused on issues such as the ownership and structure of postal administrations, their financial mandate, the extent of competition, the degree of managerial freedom and the ability of managers to set pay, borrow capital and form joint ventures free of

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  Government control. It examined the key parameters for analysing how far a country's postal market is liberalised and the extent to which a company was established as a commercial organisation.
  On 8 July, the Secretary of State for Trade and Industry told the House that his proposals would give the House new commercial freedoms. If that is what he seeks to do, he is redefining "commercial". Under his White Paper, postal managers will be forced to keep pay settlements within public sector constraints. They will be unable to borrow freely on capital markets and unable to form joint ventures without prior parliamentary approval. I am intrigued to know the commercial model on which the Secretary of State based those proposals.
  The Secretary of State chose his words carefully on 8 July, saying:
  "We have based the plc and public ownership model for the Post Office on one that works very well in other countries, such as Australia, New Zealand, Finland and Sweden. The post offices in those countries have flexibility and commercial freedom, and are able to work in the wider national interest."—[Official Report, 8 July 1999; Vol. 334, c. 1184.]
  He may have used the Antipodean and Nordic models for his proposals on ownership and structure, but he has ignored them with respect to commercialisation.
  On borrowing powers, the Government propose to allow the Post Office to borrow £75 million a year without prior Government approval. Even for domestic concerns, that is a self-evidently inadequate amount for a company with a turnover of £7 billion. The much-needed project for a new sorting site at Feltham, which would serve my constituents, will cost £40 million—more than half of the Post Office's annual limit.
  The fast-tracking of other requests—as in the German Parcel project—may improve on the status quo, but it keeps the Post Office inside Treasury public sector borrowing requirement constraints. In some years, that is likely to bite unnecessarily hard on the Post Office. When considered in the context of the borrowing powers of other genuinely commercial post offices, the Government's proposals look even more out of date. My study notes:
  "New Zealand Post is free to raise capital and borrow at commercial rates and on commercial terms. It has lines of credit with four banks and can issue equity bonds."
  With no state guarantee for its borrowings, New Zealand Post pays the commercial rate. Its borrowings do not score against the public sector borrowing requirement, and it can operate as a commercial organisation.
  Sweden Post has similar freedoms. Again I quote from my study:
  "Posten (Sweden Post) is free to borrow in commercial markets. Despite 100 per cent. public ownership, Sweden Post no longer enjoys a government guarantee and can raise money on a fully commercial basis."
  Both New Zealand and Sweden Post have had a price to pay for their freedoms, namely significant deregulation. In both postal markets, there are significant private sector competitors, and their presence has forced the state postal companies to become more efficient and to manage their balance sheets commercially. But that is the proper combination of liberalisation and commercialisation.
  If all this was simply about the retention of controls on borrowing, one could perhaps understand the logic of the Government's position; but the detail of the White Paper
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  shows that the Government are giving the Post Office the worst of all possible deals. Page 56 states that
  "in order to ensure that the Post Office competes fairly with other postal operators in the private sector; and to reinforce commercial disciplines, the Post Office will borrow at a rate which is broadly comparable to the rate it would be charged in the market without an implicit or explicit Government guarantee."
  The Post Office moves from controlled borrowings at a cheaper rate than a commercial company to controlled borrowings at commercially comparable rates. What nonsense. If the Post Office has to pay a commercial rate for borrowings, it should at least set its own borrowing limit.
  Faced with such absurdities, the House might want to reflect on why the Post Office has not gained freer access to the capital markets. The reason is the Treasury, whose officials are so committed to privatisation that, if they do not get their way, they will secure a proposal that is designed to fail—in the hope that privatisation will be seen as the only way out. The Conservatives are right to say that the proposals are paving the way to privatisation; it will be a long and painful path, on which the UK's post offices will be badly damaged.
  6.40 pm
  Mr. Nick Gibb: This has been a good debate, although, in his opening comments, the Secretary of State failed yet again to answer the important questions put to him by my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning). In an excellent speech, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) made it clear that the Government have either known about the problems with Horizon all along, and hence have misled the House in written answers, or they did not know that there was a problem, so they were not on top of their job. He is right.
  My right hon. Friend is equally right to highlight the fact that the Government have not thought about the long-term consequences of their policies. The hon. Member for Ochil (Mr. O'Neill), who is the Chairman of the Select Committee on Trade and Industry, made the correct point that not only rural post offices, but those in some of the less accessible urban areas, are at risk. His proposed solution seems to be to, turn the network of sub-post offices into cyber cafén However, he does realise that the Post Office faces the very real problem of survival in an internationally competitive world.
  The hon. Member for Eastleigh (Mr. Chidgey) welcomed the sentiments of the White Paper and supported the proposals, but claimed that they lacked something or other to ensure that the Post Office would survive. That is typical of Liberal policy—wanting more of something without paying the price. The Liberals want more commercial freedom, but they oppose plc status because they cannot face up to the realities of Treasury rules. An independent, publicly owned corporation remains subject to state control, because it is still in the state sector.
  The hon. Member for Derby, North (Mr. Laxton) exposes his wishful thinking in his belief that the Government's assurance not to privatise the Post Office in the foreseeable future means that they will not privatise it at all. My hon. Friend the Member for Christchurch (Mr. Chope) is correct to say that the system left by my.

  669
  right hon. Friend the Member for Hitchin and Harpenden would have guaranteed the survival of the sub-post office network. My hon. Friend is right not to be convinced by the Government's explanation of the failure of the Horizon project. The hon. Member for Chorley (Mr. Hoyle) wants to end the bickering and open a people's bank—perhaps we should leave that comment alone. My hon. Friend the Member for Banbury (Mr. Baldry) rightly said that the Post Office will remain subject to state control, despite a White Paper that refers to commercial freedom. He is also right to say that the Government's handling of the Horizon project is a scandal.
  This has been an important debate. The House has assessed the Government's competence as guardian of the nation's post offices. The debate has shown how very unsafe the Post Office is in the hands of the Government. The Post Office White Paper fails to deliver the Post Office from the clutches of the public sector—a sector that is despised by one part of the Labour party and loved by another. Because of that division, which extends right to the top of the Labour party, the Government are failing to give the Post Office the freedom that Ministers know is right. Ministers know that that is right—or at least some of them know it—if the Post Office is to survive in the new internationally competitive and changing environment that it faces.
  Post offices are unsafe in the hands of the Government, because the Government's decision to abandon paying benefits through a swipe card over the counter at 19,000 private sector sub-post offices will put at risk the very survival of those post offices. It will threaten the communities of many rural towns, villages and hamlets. It is yet another attack by the Government on rural life, and yet another piece of incompetent computer project management by Ministers. That piece of Government incompetence will cost taxpayers £940 million—the equivalent of three new hospitals. It is a piece of incompetence that, by the Government's own admission, will result in £320 million of extra social security fraud.
  As my right hon. Friend the Member for Hitchin and Harpenden rightly said, contracts of such complexity do not only have to be signed, they have to be managed as well. He told his officials that he wanted to hear bad news as well as good news, so that he could take early remedial action. That is what management is all about. Will the Minister tell the House why, after two years in office, he believes that the problems are not the current Government's fault, but that they must be someone else's fault—the previous Government's, or, in the words of the Chancellor, the fault of his officials?
  There is a pattern of incompetence developing in the Government. We have seen it in the computerisation of the Passport Agency and in the Government's handling of gold sales, and we are now seeing it in the way in which they have mismanaged the Horizon project. I do not want to preach to the Government, because we hear enough preaching from them, but to be a successful Minister of the Crown, one has to do more than jet around the world, languish in five-star hotels, be driven in a Government Rover, or make speeches at conferences designed to push the latest focus group-tested soundbites. Being a Minister is about managing a Department or a policy area—it is
  670
  about detail. It is about ensuring that decisions are made competently and for the long term, not for the short-term newspaper headlines.
  We are simply not getting the proper level of competence from Ministers in the current Government. The problem is that the penalties for such incompetence are paid not by the man who appointed the Ministers in the first place, but by the people—by the small businesses trying to keep a rural sub-post office afloat; by the elderly and infirm who rely on their local post office; and by rural communities which, yet again, are suffering the consequences of a Government who have no conception of the harsh realities of rural living.
  In the detail of the Post Office White Paper, we see even more incompetence. Not only is the Post Office unsafe in the Government's hands, but so too are the 4,000 private sector companies and businesses that already deliver parcels, express packages and letters. That is because the Government are not putting the Post Office fully into the private sector, with all the risks that come with being outside the cosy, protected world of the state sector. Instead, the Post Office will have huge unfair advantages over its competitors in the United Kingdom. Size, state protection and hidden subsidy will enable Post Office plc to undercut and crush small, entrepreneurial private sector British businesses, while the dead hand of state control will hinder its response to innovative and fierce competition from American and European privatised multinational postal services.
  The White Paper speaks of ensuring that Post Office borrowings are at market rates of interest, and that it is not allowed to subsidise its non-monopoly services from its monopoly services, but what does that mean in practice? This year, Parcelforce made a £25 million loss, following a £14 million loss last year. No private sector parcel delivery company can survive year after year of multimillion pound losses, so if the losses continue, by definition, Parcelforce is being subsidised. What charge will be made to the non-monopoly divisions of the Post Office for the use of its fixed assets? Will the special traffic regulations for Post Office vans apply to the non-monopoly sector of the Post Office? If so, will that privilege be extended to the private sector?
  Lending to the Post Office will come not from the private sector, but from the national loans fund, which is a part of government. Apart from the interest rate, how can the Post Office's competitors be sure that the other terms of such loans will be fair, including repayment periods? How can they be sure that the margin of several points above base that is applicable to most businesses in this country will apply to the Post Office? We need answers to those questions to be sure that the new arrangements will not be as damaging to the private sector's long-term viability as they are to the Post Office itself.
  The Government's policy on the future of our post offices is in complete disarray because of incompetence and cowardice: the incompetence of Ministers who are unable effectively to manage the detail of a computerisation programme, the consequences of which will put at risk thousands of rural sub-post offices, and the cowardice of a Government failing to do what they know is right for the competitiveness of the Post Office. They should fully release it from the clutches of the state. The policy is being dictated by Labour party divisions.

  671
  rather than the imperatives of what is right. The Government are bad for postal services and bad for rural communities, and I urge the House to support the motion.
  6.50 pm
  The Minister for Energy and Industry (Mr. John Battle): This debate on the future of post offices has been useful, and it has opened up the discussion of our White Paper and its reforms.
  The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), who spoke from the Front Bench, was not a Member of the House under the previous Government, and it may have slipped his mind, or perhaps he was not aware, that that Government held back the Post Office from modernising Parcelforce. That denied the Post Office the investment that it needed. Before the hon. Gentleman started haranguing us across the Dispatch Box, perhaps he should have reflected on the contributions of hon. Members sitting behind him who were Ministers in the previous Administration.
  I shall tackle the concerns that were common ground in the debate. The Post Office network needs to have a positive future, and we must recognise the vital role of post offices, particularly in local communities, whether in rural villages or our towns and cities. That concern is shared across the Chamber.
  I was interested to hear Conservative Members express concerns for the poor and those on benefits who currently have no access to a bank account. After 13 years in the House, that is the first time I have heard such remarks from Conservative Members, although I welcome them. Under our proposals, there will for the first time be access criteria. With the new regulatory structure and the five-year strategic plan, that will mean that there is potential to protect and enhance the network, using new technologies to make post offices more attractive and enable the Post Office to realise its potential at home and internationally.
  Interestingly, Opposition Members who were Ministers in the previous Administration, and who were known for their impeccable new right credentials, complain that we are not privatising the Post Office. They are free to set out their stall, and they are right to say that we are not privatising the Post Office.
  I was surprised that the right hon. Member for Hitchin and Harpenden (Mr. Lilley) even mentioned the Horizon project, Questions need to be asked about the roots of that project, which were established under his authority, and he is in the best position to answer those questions. We have had no answers so far, however.
  My hon. Friend the Member for Ochil (Mr. O'Neill), the Chairman of the Select Committee on Trade and Industry, welcomed the White Paper and urged us to get on with it so that new opportunities will not be missed. He asked whether the regulatory system will be operated by a board rather than an individual. I can tell him that it will be run by a commission, and I hope that he welcomes that.
  My hon. Friend also reminded us of the important fact that 60 per cent. of rural parishes have a post office while less than 10 per cent. have a bank or building society. Some of the comments made by Conservative Members need to viewed in that context, and we should not be beguiled by the scaremongering in which they have tried to indulge tonight.
  672
  The hon. Member for Eastleigh (Mr. Chidgey) reminded us that Conservative Members scarcely raised a finger when 3,300 post offices closed. I remember that when I was in opposition, the post office in Huntingdon, the constituency of the then Prime Minister, closed, but I do not remember those on the Benches around the right hon. Gentleman jumping up and protesting about that. For years afterwards they said that there was nothing they could do.
  The accounts published yesterday confirm that there is pressure on the Post Office, and greater commercial freedom is needed to enable it to invest more, to internationalise its business and to reinforce the network. The hon. Member for Eastleigh suggested that there is a potential for the Post Office and banks to build new relationships. That idea was powerfully and imaginatively reinforced by my hon. Friend the Member for Chorley (Mr. Hoyle), who made positive proposals. He suggested that post offices could act as banks in local communities. Why not? Let us explore that suggestion as part of the consideration of the White Paper.
  My hon. Friend the Member for Derby, North (Mr. Laxton) asked for reassurance that there is no intention to sell shares in the future. There is no such intention. As my hon. Friend reminded us, that would require primary legislation. We have no intention of introducing that primary legislation.
  My hon. Friend also mentioned the Conservative ideologues who, trapped in an out-of-date ideology, are failing to get to grips with the potential of the new communication technologies that could transform post offices for the 21st century. Our approach to the Post Office is not driven by ideological dogma, or by the burnt-out traditional neo-liberal economic agendas still peddled by Conservative Members, who would privatise anything that moved, regardless of whether it was beneficial.
  Interestingly, the Opposition motion does not even take a passing glance at the detailed challenges, here and now and globally, that the Post Office faces. Where is the challenge of global competition from postal services worldwide? There is not a reference to it in the motion. Where are the references to the challenges of being allowed to compete with other services in countries, such as Germany and Sweden, that are opening up their markets? Where are the references to the challenges of new forms of technology and communication? We believe that the Post Office needs to take a step change into the future as customers demand change, as technology advances and as new players—courier services, e-mail providers and so on—come on line. The Opposition motion is evidence of a tired old agenda. The Conservatives are locked into the "privatise regardless" attitude. Our proposals, set out in the White Paper—
  Mr. Lilley: Will the hon. Gentleman give way?
  Mr. Battle: I will. Perhaps the right hon. Gentleman will tell us about the roots of what went wrong with Horizon.
  Mr. Lilley: I am grateful to the hon. Gentleman for giving way. Several of my colleagues and I have given chapter and verse a direct contradiction between what Ministers have been saying today and assurances that they

  673
  gave the House on five occasions over the past 18 months. This is a very serious matter. The hon. Gentleman is noted for his personal integrity. I am sorry that he has not thought fit to try to restore the integrity of the Government Front Bench. Either the Government knew all along that there were problems—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order.
  Mr. Battle: The hon. Gentleman has the nerve to question my integrity. I seem to remember that he belonged—[Interruption.] Okay. He belonged to the previous Government and he spoke eloquently tonight about the needs for banking and post office provision for people in poverty. He may like to reflect upon the social loan fund that he introduced, offering loans which no one could take up because they could not afford to repay them—yet he then asks us to do joined-up thinking. He may now have found a new role in life on the Back Benches, and part of that new role may help us if he will explain what went wrong some of the time, because it seems that we are still picking up the pieces after what went wrong under the previous Administration.
  Mrs. Browning: On what date were Ministers advised by officials that the Horizon project should be abandoned?
  Mr. Battle: The hon. Lady will remember that, in this debate, two hon. Members—one my hon. Friend the Member for Ochil, the Chairman of the Trade and Industry Committee, and the other a member of the Conservative party—said that they thought that perhaps the Public Accounts Committee should trawl over this whole business. That would be very interesting for all Members of the House.
  Our proposals in the White Paper will ensure that the universal service obligation continues to be supported. They will set out arrangements for a new independent regulator, with a duty to ensure that the Post Office holds to that universal service obligation. The regulator's job will be to keep the network of post offices, and the Post Office will move in the direction of new electronic platforms to transform it.
  For the first time, the Government are setting access criteria which will ensure that specific areas of population must have access to a post office, and the regulator will have a duty to police that. Therefore, for the first time in history, deliveries to every address in the country and collections every working day will be set out in law. That is an improvement. The Government propose to strengthen the Post Office Users National Council. We will give the Post Office commercial freedom for the future.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 126, Noes 328.

  Division No. 247]

  [6.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Baldry, Tony

  Amess, David

  Beggs, Roy

  Arbuthnot, Rt Hon James

  Bercow, John

  Atkinson, David (Bour'mth E)

  Beresford, Sir Paul

  Atkinson, Peter (Hexham)

  Blunt, Crispin

  674

  Body, Sir Richard

  Lidington, David

  Boswell, Tim

  Lilley, Rt Hon Peter

  Bottomley, Peter (Worthing W)

  Loughton, Tim

  Bottomley, Rt Hon Mrs Virginia

  Lyell, Rt Hon Sir Nicholas

  Brazier, Julian

  Maclean, Rt Hon David

  Brooke, Rt Hon Peter

  McLoughlin, Patrick

  Browning, Mrs Angela

  Madel, Sir David

  Bruce, Ian (S Dorset)

  Malins, Humfrey

  Burns, Simon

  Maples, John

  Butterfill, John

  Mates, Michael

  Cash, William

  May, Mrs Theresa

  Chapman, Sir Sydney (Chipping Barnet)

  Moss, Malcolm

  Norman, Archie

  Chope, Christopher

  Ottaway, Richard

  Clappison, James

  Page, Richard

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Pickles, Eric

  Prior, David

  Collins, Tim

  Randall, John

  Colvin, Michael

  Redwood, Rt Hon John

  Cormack, Sir Patrick

  Robathan, Andrew

  Curry, Rt Hon David

  Robertson, Laurence (Tewk'b'ry)

  Davies, Quentin (Grantham)

  Roe, Mrs Marion (Broxbourne)

  Davis, Rt Hon David (Haltemprice)

  Ross, William (E Lond'y)

  Day, Stephen

  Ruffley, David

  Dorrell, Rt Hon Stephen

  St Aubyn, Nick

  Duncan, Alan

  Sayeed, Jonathan

  Duncan Smith, Iain

  Shephard, Rt Hon Mrs Gillian

  Faber, David

  Shepherd, Richard

  Fabricant, Michael

  Smyth, Rev Martin (Belfast S)

  Fallon, Michael

  Spelman, Mrs Caroline

  Flight, Howard

  Spicer, Sir Michael

  Forth, Rt Hon Eric

  Spring, Richard

  Fox, Dr Liam

  Stanley, Rt Hon Sir John

  Gale, Roger

  Steen, Anthony

  Gibb, Nick

  Streeter, Gary

  Gillan, Mrs Cheryl

  Swayne, Desmond

  Gorman, Mrs Teresa

  Syms, Robert

  Gray, James

  Tapsell, Sir Peter

  Green, Damian

  Taylor, Ian (Esher & Walton)

  Greenway, John

  Taylor, John M (Solihull)

  Grieve, Dominic

  Townend, John

  Gummer, Rt Hon John

  Tredinnick, David

  Hamilton, Rt Hon Sir Archie

  Trend, Michael

  Hammond, Philip

  Tyrie, Andrew

  Hawkins, Nick

  Viggers, Peter

  Heathcoat-Amory, Rt Hon David

  Walter, Robert

  Horam, John

  Wardle, Charles

  Howard, Rt Hon Michael

  Waterson, Nigel

  Howarth, Gerald (Aldershot)

  Wells, Bowen

  Hunter, Andrew

  Whitney, Sir Raymond

  Jackson, Robert (Wantage)

  Whittingdale, John

  Jenkin, Bernard

  Widdecombe, Rt Hon Miss Ann

  Johnson Smith, Rt Hon Sir Geoffrey

  Wilkinson, John

  Willetts, David

  Key, Robert

  Winterton, Mrs Ann (Congleton)

  King, Rt Hon Tom (Bridgwater)

  Winterton, Nicholas (Macclesfield)

  Laing, Mrs Eleanor

  Woodward, Shaun

  Lait, Mrs Jacqui

  Yeo, Tim

  Leigh, Edward

  Tellers for the Ayes:

  Letwin, Oliver

  Mr. Keith Simpson and

  Lewis, Dr Julian (New Forest E)

  Mr. Geoffrey Clifton-Brown.

  NOES

  Abbott, Ms Diane

  Banks, Tony

  Adams, Mrs Irene (Paisley N)

  Barron, Kevin

  Ainger, Nick

  Battle, John

  Alexander, Douglas

  Bayley, Hugh

  Allan, Richard

  Beard, Nigel

  Allen, Graham

  Beckett, Rt Hon Mrs Margaret

  Anderson, Donald (Swansea E)

  Bell, Stuart (Middlesbrough)

  Anderson, Janet (Rossendale)

  Benn, Hilary (Leeds C)

  Atherton, Ms Candy

  Benn, Rt Hon Tony (Chesterfield)

  Atkins, Charlotte

  Bennett, Andrew F

  Austin, John

  Benton, Joe

  Baker, Norman

  Bermingham, Gerald

  675

  Berry, Roger

  Dobbin, Jim

  Best, Harold

  Dobson, Rt Hon Frank

  Betts, Clive

  Donohoe, Brian H

  Blackman, Liz

  Doran, Frank

  Blair, Rt Hon Tony

  Dowd, Jim

  Blears, Ms Hazel

  Drown, Ms Julia

  Bradley, Keith (Withington)

  Dunwoody, Mrs Gwyneth

  Bradley, Peter (The Wrekin)

  Eagle, Angela (Wallasey)

  Bradshaw, Ben

  Eagle, Maria (L'pool Garston)

  Brake, Tom

  Edwards, Huw

  Brand, Dr Peter

  Ellman, Mrs Louise

  Brinton, Mrs Helen

  Ennis, Jeff

  Brown, Rt Hon Nick (Newcastle E)

  Etherington, Bill

  Browne, Desmond

  Fearn, Ronnie

  Buck, Ms Karen

  Field, Rt Hon Frank

  Burden, Richard

  Fisher, Mark

  Burgon, Colin

  Fitzpatrick, Jim

  Burnett, John

  Fitzsimons, Lorna

  Burstow, Paul

  Flint, Caroline

  Butler, Mrs Christine

  Flynn, Paul

  Byers, Rt Hon Stephen

  Foulkes, George

  Cable, Dr Vincent

  Fyfe, Maria

  Campbell, Mrs Anne (C'bridge)

  Galloway, George

  Campbell, Rt Hon Menzies (NE Fife)

  Gapes, Mike

  George, Bruce (Walsall S)

  Cann, Jamie

  Gerrard, Neil

  Caplin, Ivor

  Gibson, Dr Ian

  Casale, Roger

  Gilroy, Mrs Linda

  Caton, Martin

  Godman, Dr Norman A

  Cawsey, Ian

  Godsiff, Roger

  Chapman, Ben (Wirral S)

  Goggins, Paul

  Chaytor, David

  Gordon, Mrs Eileen

  Chidgey, David

  Gorrie, Donald

  Chisholm, Malcolm

  Griffiths, Nigel (Edinburgh S)

  Clapham, Michael

  Grocott, Bruce

  Clark, Rt Hon Dr David (S Shields)

  Gunnell, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  Hain, Peter

  Hall, Mike (Weaver Vale)

  Clark, Paul (Gillingham)

  Hall, Patrick (Bedford)

  Clarke, Charles (Norwich S)

  Hamilton, Fabian (Leeds NE)

  Clarke, Rt Hon Tom (Coatbridge)

  Hancock, Mike

  Clarke, Tony (Northampton S)

  Hanson, David

  Clelland, David

  Harman, Rt Hon Ms Harriet

  Clwyd, Ann

  Harris, Dr Evan

  Coaker, Vernon

  Heal, Mrs Sylvia

  Coffey, Ms Ann

  Healey, John

  Cohen, Harry

  Heath, David (Somerton & Frome)

  Coleman, Iain

  Henderson, Ivan (Harwich)

  Colman, Tony

  Hesford, Stephen

  Connarty, Michael

  Hewitt, Ms Patricia

  Cook, Frank (Stockton N)

  Hill, Keith

  Corbett, Robin

  Hinchliffe, David

  Corbyn, Jeremy

  Hodge, Ms Margaret

  Corston, Ms Jean

  Hoey, Kate

  Cotter, Brian

  Hood, Jimmy

  Cousins, Jim

  Hopkins, Kelvin

  Cox, Tom

  Howarth, George (Knowsley N)

  Cranston, Ross

  Hoyle, Lindsay

  Crausby, David

  Hughes, Ms Beverley (Stretford)

  Cryer, Mrs Ann (Keighley)

  Hughes, Kevin (Doncaster N)

  Cryer, John (Hornchurch)

  Hughes, Simon (Southwark N)

  Cunliffe, Lawrence

  Humble, Mrs Joan

  Cunningham, Jim (Cov'try S)

  Hurst, Alan

  Dalyell, Tam

  Hutton, John

  Darling, Rt Hon Alistair

  Iddon, Dr Brian

  Darvill, Keith

  Illsley, Eric

  Davey, Edward (Kingston)

  Jackson, Helen (Hillsborough)

  Davey, Valerie (Bristol W)

  Jenkins, Brian

  Davidson, Ian

  Johnson, Miss Melanie (Welwyn Hatfield)

  Davies, Rt Hon Denzil (Llanelli)

  Davies, Geraint (Croydon C)

  Jones, Mrs Fiona (Newark)

  Davis, Terry (B'ham Hodge H)

  Jones, Helen (Warrington N)

  Dawson, Hilton

  Jones, Ms Jenny (Wolverh'ton SW)

  Dean, Mrs Janet

  Denham, John

  Jones, Jon Owen (Cardiff C)

  Dismore, Andrew

  Jones, Dr Lynne (Selly Oak)

  676

  Jowell, Rt Hon Ms Tessa

  Primaroto, Dawn

  Keeble, Ms Sally

  Prosser, Gwyn

  Keen, Alan (Feltham & Heston)

  Purchase, Ken

  Keen, Ann (Brentford & Isleworth)

  Quinn, Lawrie

  Kelly, Ms Ruth

  Radice, Rt Hon Giles

  Kemp, Fraser

  Rammell, Bill

  Kennedy, Charles (Ross Skye)

  Reed, Andrew (Loughborough)

  Kennedy, Jane (Wavertree)

  Rendel, David

  Khabra, Piara S

  Robertson, Rt Hon George (Hamilton S)

  Kidney, David

  King, Andy (Rugby & Kenilworth)

  Rooker, Jeff

  King, Ms Oona (Bethnal Green)

  Rooney, Terry

  Ladyman, Dr Stephen

  Rowlands, Ted

  Lawrence, Ms Jackie

  Roy, Frank

  Laxton, Bob

  Ruane, Chris

  Leslie, Christopher

  Russell, Bob (Colchester)

  Lewis, Terry (Worsley)

  Salter, Martin

  Linton, Martin

  Sarwar, Mohammad

  Livingstone, Ken

  Savidge, Malcolm

  Livsey, Richard

  Sawford, Phil

  Lloyd, Tony (Manchester C)

  Sedgemore, Brian

  Lock, David

  Sheldon, Rt Hon Robert

  Love, Andrew

  Shipley, Ms Debra

  McAvoy, Thomas

  Short, Rt Hon Clare

  McCafferty, Ms Chris

  Simpson, Alan (Nottingham S)

  McDonagh, Siobhain

  Singh, Marsha

  Macdonald, Calum

  Skinner, Dennis

  McDonnell, John

  Smith, Rt Hon Andrew (Oxford E)

  McIsaac, Shona

  Smith, Angela (Basildon)

  McKenna, Mrs Rosemary

  Smith, Rt Hon Chris (Islington S)

  Mackinlay, Andrew

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  McNamara, Kevin

  McNulty, Tony

  Smith, Jacqui (Redditch)

  MacShane, Denis

  Smith, John (Glamorgan)

  Mactaggart, Fiona

  Smith, Llew (Blaenau Gwent)

  McWalter, Tony

  Smith, Sir Robert (W Ab'd'ns)

  McWilliam, John

  Soley, Clive

  Mahon, Mrs Alice

  Southworth, Ms Helen

  Mallaber, Judy

  Spellar, John

  Marsden, Gordon (Blackpool S)

  Squire, Ms Rachel

  Marsden, Paul (Shrewsbury)

  Starkey, Dr Phyllis

  Marshall, David (Shettleston)

  Steinberg, Gerry

  Marshall, Jim (Leicester S)

  Stevenson, George

  Marshall-Andrews, Robert

  Stewart, David (Inverness E)

  Martlew, Eric

  Stewart, Ian (Eccles)

  Maxton, John

  Stinchcombe, Paul

  Merron, Gillian

  Stoate, Dr Howard

  Michie, Bill (Shef'ld Heeley)

  Stott, Roger

  Mitchell, Austin

  Stringer, Graham

  Moran, Ms Margaret

  Stuart, Ms Gisela

  Morgan, Alasdair (Galloway)

  Stunell, Andrew

  Morgan, Ms Julie (Cardiff N)

  Sutcliffe, Gerry

  Morley, Elliot

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Murphy, Denis (Wansbeck)

  Murphy, Jim (Eastwood)

  Taylor, David (NW Leics)

  Naysmith, Dr Doug

  Temple-Morris, Peter

  O'Brien, Bill (Normanton)

  Thomas, Gareth (Clwyd W)

  O'Brien, Mike (N Warks)

  Thomas, Gareth R (Harrow W)

  O'Hara, Eddie

  Timms, Stephen

  Olner, Bill

  Tipping, Paddy

  O'Neill, Martin

  Todd, Mark

  Öpik, Lembit

  Tonge, Dr Jenny

  Osborne, Ms Sandra

  Touhig, Don

  Palmer, Dr Nick

  Trickett, Jon

  Pearson, Ian

  Turner, Dennis (Wolverh'ton SE)

  Pendry, Tom

  Turner, Dr George (NW Norfolk)

  Perham, Ms Linda

  Twigg, Stephen (Enfield)

  Pickthall, Colin

  Vaz, Keith

  Pike, Peter L

  Vis, Dr Rudi

  Plaskitt, James

  Walley, Ms Joan

  Pollard, Kerry

  Wareing, Robert N

  Pond, Chris

  White, Brian

  Pound, Stephen

  Whitehead, Dr Alan

  Powell, Sir Raymond

  Wicks, Malcolm

  Prentice, Ms Bridget (Lewisham E)

  Williams, Rt Hon Alan (Swansea W)

  Prentice, Gordon (Pendle)

  677

  Williams, Alan W (E Carmarthen)

  Wright, Dr Tony (Cannock)

  Wills, Michael

  Wyatt, Derek

  Wise, Audrey

  Wood, Mike

  Tellers for the Noes:

  Worthington, Tony

  Mr. Greg Pope and

  Wright, Anthony D (Gt Yarmouth)

  Mr. Robert Ainsworth.

  Question accordingly negatived.
  Question, That the proposed words be there added,put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
  The House divided: Ayes 293, Noes 140.

  Division No. 248]

  [7.11 pm

  AYES

  Abbott, Ms Diane

  Coffey, Ms Ann

  Adams, Mrs Irene (Paisley N)

  Cohen, Harry

  Ainger, Nick

  Coleman, Iain

  Alexander, Douglas

  Colman, Tony

  Allen, Graham

  Connarty, Michael

  Anderson, Donald (Swansea E)

  Cook, Frank (Stockton N)

  Anderson, Janet (Rossendale)

  Corbett, Robin

  Atherton, Ms Candy

  Corbyn, Jeremy

  Atkins, Charlotte

  Corston, Ms Jean

  Austin, John

  Cousins, Jim

  Banks, Tony

  Cox, Tom

  Barren, Kevin

  Cranston, Ross

  Battle, John

  Crausby, David

  Bayley, Hugh

  Cryer, Mrs Ann (Keighley)

  Beard, Nigel

  Cryer, John (Hornchurch)

  Beckett, Rt Hon Mrs Margaret

  Cunningham, Jim (Cov'try S)

  Bell, Stuart (Middlesbrough)

  Darting, Rt Hon Alistair

  Benn, Hilary (Leeds C)

  Darvill, Keith

  Benn, Rt Hon Tony (Chesterfield)

  Davey, Valerie (Bristol W)

  Bennett, Andrew F

  Davidson, Ian

  Benton, Joe

  Davies, Rt Hon Denzil (Llanelli)

  Bermingham, Gerald

  Davies, Geraint (Croydon C)

  Berry, Roger

  Davis, Terry (B'ham Hodge H)

  Best, Harold

  Dawson, Hilton

  Betts, Clive

  Dean, Mrs Janet

  Blackman, Liz

  Denham, John

  Blair, Rt Hon Tony

  Dismore, Andrew

  Blears, Ms Hazel

  Dobbin, Jim

  Boateng, Paul

  Dobson, Rt Hon Frank

  Bradley, Keith (Withington)

  Donohoe, Brian H

  Bradshaw, Ben

  Doran, Frank

  Brinton, Mrs Helen

  Dowd, Jim

  Brown, Rt Hon Nick (Newcastle E)

  Drown, Ms Julia

  Browne, Desmond

  Dunwoody, Mrs Gwyneth

  Buck, Ms Karen

  Eagle, Angela (Wallasey)

  Burden, Richard

  Eagle, Maria (L'pool Garston)

  Burgon, Colin

  Edwards, Huw

  Butler, Mrs Christine

  Ellman, Mrs Louise

  Byers, Rt Hon Stephen

  Ennis, Jeff

  Campbell, Mrs Anne (C'bridge)

  Etherington, Bill

  Campbell, Rt Hon Menzies (NE Fife)

  Field, Rt Hon Frank

  Fisher, Mark

  Caplin, Ivor

  Fitzpatrick, Jim

  Casale, Roger

  Fitzsimons, Lorna

  Caton, Martin

  Flint, Caroline

  Cawsey, Ian

  Flynn, Paul

  Chapman, Ben (Wirral S)

  Foulkes, George

  Chaytor, David

  Fyfe, Maria

  Chisholm, Malcolm

  Galloway, George

  Clapham, Michael

  Gapes, Mike

  Clark, Rt Hon Dr David (S Shields)

  George, Bruce (Walsall S)

  Clark, Paul (Gillingham)

  Gerrard, Neil

  Clarke, Charles (Norwich S)

  Gibson, Dr Ian

  Clarke, Rt Hon Tom (Coatbridge)

  Gilroy, Mrs Linda

  Clarke, Tony (Northampton S)

  Godman, Dr Norman A

  Clelland, David

  Godsiff, Roger

  Clwyd, Ann

  Goggins, Paul

  Coaker, Vernon

  Gordon, Mrs Eileen

  678

  Grocott, Bruce

  Marshall, Jim (Leicester S)

  Gunnell, John

  Marshalt-Andrews, Robert

  Hain, Peter

  Martlew, Eric

  Hall, Mike (Weaver Vale)

  Maxton, John

  Hall, Patrick (Bedford)

  Merron, Gillian

  Hamilton, Fabian (Leeds NE)

  Michie, Bill (Shef'ld Heeley)

  Hanson, David

  Mitchell, Austin

  Harman, Rt Hon Ms Harriet

  Moran, Ms Margaret

  Heal, Mrs Sylvia

  Morgan, Ms Julie (Cardiff N)

  Healey, John

  Morley, Elliot

  Henderson, Ivan (Harwich)

  Murphy, Denis (Wansbeck)

  Hesford, Stephen

  Murphy, Jim (Eastwood)

  Hewitt, Ms Patricia

  Naysmith, Dr Doug

  Hill, Keith

  O'Brien, Bill (Normanton)

  Hinchliffe, David

  O'Brien, Mike (N Walks)

  Hodge, Ms Margaret

  O'Hara, Eddie

  Hoey, Kate

  Olner, Bill

  Hood, Jimmy

  Osborne, Ms Sandra

  Hopkins, Kelvin

  Palmer, Dr Nick

  Howarth, George (Knowsley N)

  Pearson, Ian

  Hughes, Ms Beverley (Stretford)

  Pendry, Tom

  Hughes, Kevin (Doncaster N)

  Perham, Ms Linda

  Hurst, Alan

  Pickthall, Colin

  Hutton, John

  Pike, Peter L

  Iddon, Dr Brian

  Plaskitt, James

  Illsley, Eric

  Pollard, Kerry

  Jackson, Helen (Hillsborough)

  Pond, Chris

  Jenkins, Brian

  Pound, Stephen

  Johnson, Miss Melanie (Welwyn Hatfield)

  Powell, Sir Raymond

  Prentice, Ms Bridget (Lewisham E)

  Jones, Mrs Fiona (Newark)

  Prentice, Gordon (Pendle)

  Jones, Ms Jenny (Wolverh'ton SW)

  Primarolo, Dawn

  Prosser, Gwyn

  Jones, Jon Owen (Cardiff C)

  Purchase, Ken

  Jones, Dr Lynne (Selly Oak)

  Quin, Rt Hon Ms Joyce

  Jowell, Rt Hon Ms Tessa

  Quinn, Lawrie

  Keeble, Ms Sally

  Radice, Rt Hon Giles

  Keen, Alan (Feltham & Heston)

  Rammell, Bill

  Keen, Ann (Brentford & Isleworth)

  Reed, Andrew (Loughborough)

  Kelly, Ms Ruth

  Robertson, Rt Hon George (Hamilton S)

  Kemp, Fraser

  Kennedy, Jane (Wavertree)

  Rooker, Jeff

  Khabra, Piara S

  Rooney, Terry

  Kidney, David

  Rowlands, Ted

  King, Andy (Rugby & Kenilworth)

  Roy, Frank

  King, Ms Oona (Bethnal Green)

  Ruane, Chris

  Ladyman, Dr Stephen

  Salter, Martin

  Lawrence, Ms Jackie

  Sarwar, Mohammad

  Laxton, Bob

  Savidge, Malcolm

  Leslie, Christopher

  Sawford, Phil

  Lewis, Terry (Worsley)

  Sedgemore, Brian

  Linton, Martin

  Shipley, Ms Debra

  Livingstone, Ken

  Short, Rt Hon Clare

  Livsey, Richard

  Simpson, Alan (Nottingham S)

  Lloyd, Tony (Manchester C)

  Singh, Marsha

  Lock, David

  Skinner, Dennis

  Love, Andrew

  Smith, Rt Hon Andrew (Oxford E)

  McAvoy, Thomas

  Smith, Angela (Basildon)

  McCafferty, Ms Chris

  Smith, Rt Hon Chris (Islington S)

  McDonagh, Siobhain

  Smith, Jacqui (Redditch)

  Macdonald, Calum

  Smith, John (Glamorgan)

  McDonnell, John

  Smith, Llew (Blaenau Gwent)

  McIsaac, Shona

  Soley, Clive

  McKenna, Mrs Rosemary

  Southworth, Ms Helen

  Mackinlay, Andrew

  Spellar, John

  McNamara, Kevin

  Starkey, Dr Phyllis

  McNulty, Tony

  Steinberg, Gerry

  MacShane, Denis

  Stevenson, George

  Mactaggart, Fiona

  Stewart, David (Inverness E)

  McWalter, Tony

  Stewart, Ian (Eccles)

  McWilliam, John

  Stinchcombe, Paul

  Mahon, Mrs Alice

  Stoate, Dr Howard

  Mallaber, Judy

  Stott, Roger

  Marsden, Gordon (Blackpool S)

  Stringer, Graham

  Marsden, Paul (Shrewsbury)

  Stuart, Ms Gisela

  Marshall, David (Shettleston)

  Sutcliffe, Gerry

  679

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Wareing, Robert N

  White, Brian

  Taylor, David (NW Leics)

  Whitehead, Dr Alan

  Temple-Morris, Peter

  Wicks, Malcolm

  Thomas, Gareth (Clwyd W)

  Williams, Rt Hon Alan (Swansea W)

  Thomas, Gareth R (Harrow W)

  Timms, Stephen

  Williams, Alan W (E Carmarthen)

  Tipping, Paddy

  Wills, Michael

  Todd, Mark

  Wise, Audrey

  Touhig, Don

  Wood, Mike

  Tricket, Jon

  Worthington, Tony

  Turner, Dennis (Wolverh'ton SE)

  Wright, Anthony D (Gt Yarmouth)

  Wright, Dr Tony (Cannock)

  Turner, Dr George (NW Norfolk)

  Wyatt, Derek

  Twigg, Stephen (Enfield)

  Vaz, Keith

  Tellers for the Ayes:

  Vis, Dr Rudi

  Mr. Greg Pope and

  Walley, Ms Joan

  Mr. Robert Ainsworth.

  NOES

  Ainsworth, Peter (E Surrey)

  Day, Stephen

  Allan, Richard

  Dorrell, Rt Hon Stephen

  Amess, David

  Duncan, Alan

  Arbuthnot, Rt Hon James

  Duncan Smith, Iain

  Atkinson, David (Bour'mth E)

  Faber, David

  Atkinson, Peter (Hexham)

  Fabricant, Michael

  Baker, Norman

  Fallon, Michael

  Baldry, Tony

  Fearn, Ronnie

  Beggs, Roy

  Flight, Howard

  Bercow, John

  Forth, Rt Hon Eric

  Beresford, Sir Paul

  Fox, Dr Liam

  Blunt, Crispin

  Gale, Roger

  Body, Sir Richard

  Gibb, Nick

  Boswell, Tim

  Gillan, Mrs Cheryl

  Bottomley, Peter (Worthing W)

  Gorman, Mrs Teresa

  Bottomley, Rt Hon Mrs Virginia

  Gray, James

  Brake, Tom

  Green, Damian

  Brand, Dr Peter

  Greenway, John

  Brazier, Julian

  Grieve, Dominic

  Brooke, Rt Hon Peter

  Gummer, Rt Hon John

  Browning, Mrs Angela

  Hammond, Philip

  Bruce, Ian (S Dorset)

  Hancock, Mike

  Burnett, John

  Harris, Dr Evan

  Burns, Simon

  Hawkins, Nick

  Burstow, Paul

  Heath, David (Somerton & Frome)

  Butterfill, John

  Heathcoat-Amory, Rt Hon David

  Cable, Dr Vincent

  Horam, John

  Cash, William

  Howard, Rt Hon Michael

  Chapman, Sir Sydney (Chipping Barnet)

  Howarth, Gerald (Aldershot)

  Hughes, Simon (Southwark N)

  Chidgey, David

  Hunter, Andrew

  Chope, Christopher

  Jackson, Robert (Wantage)

  Clappison, James

  Jenkin, Bernard

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Johnson Smith,

  Rt Hon Sir Geoffrey

  Clifton-Brown, Geoffrey

  Key, Robert

  Collins, Tim

  King, Rt Hon Tom (Bridgwater)

  Colvin, Michael

  Laing, Mrs Eleanor

  Cormack, Sir Patrick

  Leigh, Edward

  Cotter, Brian

  Letwin, Oliver

  Curry, Rt Hon David

  Lewis, Dr Julian (New Forest E)

  Davey, Edward (Kingston)

  Lidington, David

  Davies, Quentin (Grantham)

  Lilley, Rt Hon Peter

  Davis, Rt Hon David (Haltemprice)

  Loughton, Tim

  680

  Lyell, Rt Hon Sir Nicholas

  Spring, Richard

  Maclean, Rt Hon David

  Stanley, Rt Hon Sir John

  McLoughlin, Patrick

  Steen, Anthony

  Madel, Sir David

  Stunell, Andrew

  Malins, Humfrey

  Swayne, Desmond

  Maples, John

  Syms, Robert

  Mates, Michael

  Tapsell, Sir Peter

  May, Mrs Theresa

  Taylor, Ian (Esher & Walton)

  Norman, Archie

  Thompson, William

  Öpik, Lembit

  Tonge, Dr Jenny

  Ottaway, Richard

  Tredinnick, David

  Page, Richard

  Trend, Michael

  Pickles, Eric

  Tyrie, Andrew

  Prior, David

  Viggers, Peter

  Rendel, David

  Walter, Robert

  Robatnan, Andrew

  Wardle, Charles

  Robertson, Laurence (Tewk'b'ry)

  Waterson, Nigel

  Wells Bowen

  Roe, Mrs Marion (Broxbourne)

  Whittingdale, John

  Ross, William (E Lond'y)

  Widdecombe, Rt Hon Miss Ann

  Ruffley, David

  Wilkinson, John

  Russell, Bob (Colchester)

  Willetts, David

  St Aubyn, Nick

  Winterton, Mrs Ann (Congleton)

  Sayeed, Jonathan

  Winterton, Nicholas (Macclesfield)

  Shephard, Rt Hon Mrs Gillian

  Woodward, Shaun

  Shepherd, Richard

  Yeo, Tim

  Smith, Sir Robert (W Ab'd'ns)

  Smyth, Rev Martin (Belfast S)

  Tellers for the Noes:

  Spelman, Mrs Caroline

  Mrs. Jacqui Lait and

  Spicer, Sir Michael

  Mr. Keith Simpson.

  Question accordingly agreed to.
  MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the important White Paper on the Post Office published by the Government; notes the contrast with the years of Tory dithering, blinkered by ideology, that left the Post Office to decline; welcomes the slashing of the EFL which contrasts with the Tory use of it as a variable tax on Post Office users; welcomes for the first time the clear commitment of the Government to a network throughout the United Kingdom of post offices which will be automated; welcomes the fact that for the first time the Universal Service Obligation will be guaranteed in legislation; and notes that the Opposition believes in immediate privatisation of the Post Office, showing they are still an ideologically-driven party, not one intent on improving services to the British public.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
NORTHERN IRELAND
That the draft North/South Co-operation (Implementation Bodies) (Amendment) (Northern Ireland) Order 1999, which was laid before this House on 28th June, be approved.—[Mr. Allen.]
Question agreed to.

Railways Bill
Motion made, and Question proposed,
That Standing Order No. 63 (Committal of bills) shall not apply to the Railways Bill.
That, if the Bill is read a second time, it shall stand referred to the Environment, Transport and Regional Affairs Committee, which shall consider the provisions of the Bill and report by 12th November 1999.—[Mr. Allen.]
Hon. Members: Object.

Railways Bill

  DELEGATED LEGISLATION
  Ordered,
  DATA PROTECTION REGISTRAR
  That the Motion in the name of Mr. Secretary Straw relating to the salary of the Data Protection Registrar shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Standing Committees on Delegated Legislation) in respect of which notice has been given that the instrument be approved.—[Mr. Allen.]
  Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.
  Ordered,
  FOOD SAFETY
  That the Food Safety (Fishery Products and Live Shellfish) (Hygiene) Amendment (No. 2) Regulations 1999 (S.I., 1999, No. 1585) be referred to a Standing Committee on Delegated Legislation.
  NATIONAL HEALTH SERVICE
  That the National Health Service (General Medical Services) Amendment (No. 2) Regulations 1999 (S.I., 1999, No. 1627) be referred to a Standing Committee on Delegated Legislation.
  That the National Health Service (General Medical Services) (Scotland) Amendment (No. 3) Regulations 1999 (S.I., 1999, No. 1620) be referred to a Standing Committee on Delegated Legislation.
  EDUCATION
  That the Education (Head Teachers) Regulations 1999 (S.I., 1999, No. 1287) be referred to a Standing Committee on Delegated Legislation.
  FIRE PRECAUTIONS
  That the Fire Precautions (Workplace) (Amendment) Regulations 1999 (S.I., 1999, No. 1877) be referred to a Standing Committee on Delegated Legislation.—[Mr. Allen.]

Luton Hat Industry
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
7.26 pm
Ms Margaret Moran: May I first doff my hat to my colleagues and to you, Mr. Deputy Speaker, for clarifying that it is entirely permissible for us to wear hats in the Chamber? We are thus re-establishing an important tradition for the House, which I hope many more of my colleagues and friends will take up in support of the Luton hat industry.
I take my hat off to the Minister for Energy and Industry for the work that he and his Department have done in identifying the issues that surround the hat industry, particularly the Luton hat industry. The Department's research has been extremely valuable, so our congratulations are in order.
Luton has been long recognised as the centre of the United Kingdom hat industry. It is a centre of international renown. The debate is important for the future of that industry in this, the year of the hat. I thank my colleagues, many of whom are here, for helping me to promote the Luton hat industry by modelling hats earlier. I much appreciated them joining me in the promotion and acknowledgement of the hat industry.
The hat industry is part of Luton' s history, heritage and future. It has given the town a distinctive and rich industrial past, which is visible in Plaiters Lea, the hatters' quarter. It has given the nickname to our football team, which is, sadly, now in receivership. I hope that, like the hat industry, it will soon rise like a phoenix from the ashes—come on the hatters, as they say.
The Luton hat industry has its roots in the 17th century and the production of highly-quality, locally grown wheat, which is ideal for the straw hat and boater. Initially, the straw plait was sewn together for gentlemen's hats, much like the cricket hat. Plait schools soon developed. Allied trades such as blocking, block making, which is, I understand, unique to Luton, and dyeing grew up to support the industry.
In the 19th century, the straw hat industry dominated Luton's economy; it was the feather in our cap. It transformed Luton into a major industrial centre. As I have said, today, Luton is the heart of the UK hat industry. It employs around 1,000 workers, predominantly in small and medium—sized enterprises—often family owned-65 per cent. of which have turnovers of less than £1 million. Fewer than 10 of those companies employ more than 75 workers.
Products range from specialist hats such as protective and safety headgear, mass market hats and traditional hats such as the trilby to high-quality couturier hats, which are sold throughout the world and are recognised by couturier houses in Italy, Germany and France. They all come to Luton to buy our product, such is its international renown. Names such as Olney, Bermona, Snoxells and Right Impressions are famous around the world.
The year of the hat provides an opportunity to review the long-term prospects of an industry that is important to Luton. The industry employs many people—including many women, many of whom work part-time. It also offers home-working opportunities. At first sight,

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the industry appears—despite the appearance in the Chamber today of such glamorous hats—to be in long-term decline, although I hope in this debate to prove that it is not. Unfortunately, however, there is a decline in the market for low-cost hats—not like those being worn today by some of my hon. Friends. Nevertheless, a Department of Trade and Industry survey reveals that the industry has good long-term prospects in producing high-value, high-quality hats, such as those being worn by some of my colleagues.
The first issue affecting the hat industry's future could be summarised as competition from overseas producers located in low-wage economies. Such producers are putting pressure particularly on the mid-range, traditional hat sector. Dealing with that pressure will require a sharper competitive edge, especially by Luton's small and medium-sized enterprises.
I ask the Minister not for tit-for-tat export restrictions, but to consider what I call bad hats—those manufactured in the far east, especially China, which are brought into the United Kingdom simply for trimming or, worse, simply to insert the "made in the UK" or "made in Luton" label. Although I realise that that practice is a matter of production law, it undercuts Luton's hard-earned reputation on the international market for high-quality and high-value hats.
Judy Mallaber: Does my hon. Friend realise that some of us who are wearing hats—and some of us who are not wearing hats—in the Chamber also have clothing and textile industries in our constituencies, and that we are here to celebrate Luton hats as one example of the high-quality products made in much of the British textiles and clothing industry? Is not high quality the basis on which we have to compete internationally?
Ms Moran: My hon. Friend is quite right.
The hat industry needs more support in maintaining its excellent reputation. Marida Hats has specifically raised with me the issue of high mark-up by retail chains. In the hat industry, retail sale prices are high, but producers' profit margins are low. It is not fair for retailers to mark up by three or four times a product's finished value, because that deters people from buying the excellent hats produced in Luton.
Large retail stores are using their buying power to source globally, putting further pressure on producer profit margins. I hope that both the industry and the DTI will address that issue.
I have a particular bee in my bonnet about the skills shortage. The industry's specific skills, such as blocking, and transferable skills, such as machining and finishing, are in short supply. Right Impressions, in High Town, has told me that many skilled milliners are retiring with no skilled labour pool on which to draw for replacements.
The young talent that we need is certainly available in design, but not in manufacture and millinery. Although 64 per cent. of manufacturers and 87 per cent. of milliners recognise that there is a skills problem, few of them use external training and reskilling sources, such as existing education and training establishments.
Skills shortages are causing high labour mobility and wage inflation, in a cost-competitive environment. As the DTI report points out, without skills the industry is not sustainable, and there needs to be much closer and defined
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links between the industry and colleges to ensure that that skill shortage is rectified. At this point, I pay tribute to Barnfield college in Luton, which is one of the few colleges with the city and guilds course which creates those industry links. Also, we need courses that introduce management skills for the new hat market.
To cap it all, there is a low level of technology in the sector which can adversely affect productivity levels. One manufacturer told me proudly that the company had only one ancient computer, which was used sometime for the payroll, but mostly was not used at all. In any discussions that I have had with the industry about the possibilities of e-commerce, I have been met with blank faces. I have pointed out the need for the industry to recognise that new technology can afford it greater export opportunities through e-commerce.
We need to ensure that the industry is encouraged to look to new technology for supply chain initiatives to co-ordinate information about total demands and new trends, and an export information service to identify growth markets for high-value hats, to retain Luton's excellent reputation as a high-quality supplier and to disseminate changes in the overseas markets.
It is clear from my experience of visiting many Luton companies that the industry performs best in areas where there is evidence of technological innovation, such as high-performance materials for sportswear and safety headgear, and where there are technological innovations in process and design innovation for the low-volume, high-margin fashion market.
It is in the high-value fashion market that the future of Luton's hat industry belongs. Bespoke high-fashion hats make up 52.7 per cent. of the UK production market for export, and it can and should grow with our support. That requires us to be constantly promoting the excellence of our Luton hat industry abroad, and it means that we need to ensure that the export of products for the middle to high-value market does not suffer to the extent that other low-cost sectors have.
By and large, the high-value end of the market is not so influenced by macro-economic forces such as the strength of the pound, and it can withstand those forces because customers from Italy, France and Germany are less price sensitive and are often willing to pay substantial amounts for a fashionable Luton hat.
I hope that the Minister will not think that I am talking out of my hat if I raise the issue of the financial support that the Department can give to the Luton hat industry. In the past, the DTI—with the support of the British Knit and Clothing Council—provided sponsorship for the cost of exhibitions abroad to promote export markets. Hats, unlike clothing, have high costs in terms of packaging and shipping, while exhibition incomes are often low. I am told by manufacturers that a £500 to £1,000 order from a single exhibition is not unusual. However, the costs of packaging and export are considerably higher—making it not worth while for many companies in the hat industry to export and exhibit abroad.
In the year of the hat, there is an opportunity for the DTI to reinstate that sponsorship, to sponsor such missions—again in conjunction with the British Knit and Clothing Council—and to assist in our bid for Luton hats to be more widely accessible in the export markets across the world. I hope that the Minister will seriously consider that in an effort to promote the Luton hat industry.

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The Luton hat industry needs wider promotion. The excellent examples that we have seen today will stand us in very good stead and are excellent news for the retention and growth of jobs in the industry, for which my thanks are due.
Mrs. Teresa Gorman: On behalf of those of us who have stayed to listen to the hon. Lady's most fascinating debate, we would all jointly like to say that we take our hat off to her.
Ms Moran: I thank the hon. Lady for her support. Perhaps next time, she, too, will wear one of our excellent pieces of headgear. In fact, we have a spare demonstration model here, should she choose to wear it.
The hat industry is very sensitive to the fashion climate and the way in which celebrities, Members of Parliament and the royal family wear their hats.
Mr. Kelvin Hopkins: As another Luton Member—and a daily wearer of hats, come rain or shine, for obvious reasons—I wonder whether my hon. Friend agrees that a revival of the cloth cap, and perhaps even the cloth-cap image, among Labour Members, would be beneficial to the hat industry and to the economy of Luton.
Ms Moran: All contributions to the promotion of the industry are welcome. Both cloth-cap and high-fashion hat wearers are part of the broad strand of politics embraced by our party.
The promotion of the industry is essential. Hat wearing by high-profile personalities is crucial. Exports and purchases of hats increase, for example, when there is a royal wedding. I encourage everyone to follow the example of the late Princess Diana, who was a regular wearer of hats.
May I be so bold as to suggest that when my right hon. Friend the Prime Minister next meets the Queen, he invites her to put hats and the wearing of hats high on the list of priorities for the next royal wedding? After all, the royal family receives money from the civil list, which includes contributions from Luton taxpayers and members of the hat industry, so we would like its members, in turn, to wear hats and support our industry on each and every possible occasion.
To cap it all, I would like to thank my hon. Friend the Minister for attending the debate. I hope that he, too, will encourage and support the Luton hat industry. We are not all as mad as hatters in trying to promote the industry. It is a serious industry providing many jobs, especially for women, as well as much enjoyment, entertainment and pleasure, as many of my hon. Friends here today have demonstrated.
7.43 pm
The Minister for Energy and Industry (Mr. John Battle): At the end of a long day—today started with Trade and Industry questions at 11.30 am and continued with two Opposition debates—it is usual in the House to dread Adjournment debates, but I am absolutely delighted that I am the one whose name was in the hat to respond tonight.
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I come from Leeds, where Leonard Sachs was known for many years in the varieties for his overworked puns, and I would not dare to try to compete with my hon. Friend the Member for Luton, South (Ms Moran). The purpose of Adjournment debates is to raise matters of concern to our constituents, and I have never seen it done in such an imaginative and witty way that makes an important point. My hon. Friend is to be complimented for getting off the Order Paper and bringing a serious subject, about the textile, clothing and hat industry in Luton, to life.
Long may Luton be known as the centre of our hat industry. This year is the year of the hat, which is the first promotion event of its kind for the hat sector. Hats have been worn at various events and activities. Swing tags have been produced to attach to the brand labels on hats manufactured in Luton to publicise the year of the hat. Male Members are not allowed to wear hats in the Chamber, and perhaps we should change the rules to ensure that my hon. Friend the Member for Luton, North (Mr. Hopkins) could participate. However, I am not sure that wearing swing tags would ever replace pager tagging.
The British Hat Guild has organised promotional events, which are vital to the survival and prosperity of the industry. The hat industry in Luton is a small, highly specialised sector, but it produces some of the world's most sought-after hats. The UK hat sector's annual turnover is some £90 million and it employs some 2,600 people. It is estimated that there are 130 to 140 companies in the sector, and the majority employ fewer than 50 people. The sector is based in Luton, which is traditionally the millinery centre for Britain.
The Government recognise the importance of the sector to the economy of Luton and the rest of the United Kingdom. It is a flagship industry.
Mr. Andrew Stunell: I come from Stockport, which has the UK national museum of hats, and we might dispute which town is the traditional centre of hatting. However, I appreciate the imagination and spirit behind this debate, and I hope that competitiveness is maintained so that Luton's hatting industry does not go the same way as Stockport's.
Mr. Battle: The hon. Gentleman makes a good point. We do not want to see a museum of the past, but an industry with a bright future. Europe is the industry's main export destination and figures show that 43 per cent. of manufacturers' sales are to Europe. However, more than half the UK's net supply was from outside Europe. The industry faces a real challenge in import and export markets.
We should emphasise our strengths. If the sector faces unfair import competition, especially in the details on clothing and hats, there are ways to tackle that within the European competitiveness rules. My hon. Friend the Member for Luton, South made the important point that the key to making progress in global competition is innovation and quality. That is where the real strength of the industry has lain traditionally and it is where it will lie in the future.
Companies and individuals are producing sports, protective and hygienic headwear. Headwear generally is becoming increasingly fashionable, and we also have.

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high fashion, independent milliners who are performing well. The likes of Philip Treacy and Kangol have made a considerable impact on the fashion industry in recent years and are household names in Britain and overseas. Kangol has managed to launch its branded goods throughout the world's best high streets. It is such high-profile images that are enhancing consumer appeal, especially with younger people, which must be encouraging for the industry.
Only one company can be the cheapest, and the rest must rely on quality, innovation, new products and new processes to make progress. Our job in the DTI is to act as a catalyst to nudge British industry forward so that we face up to the challenge of new markets and global competitiveness. I am often amazed by the levels of skill and craftsmanship in our manufacturing industry. The traditional handcrafts are often blended with the most modern technology. That is the key to the future of manufacturing, and the hat industry is a prime example.
People, their skills, experience, expertise and talent, are the greatest assets of companies, and it is the companies that invest in training and building up skills that will have a competitive edge. In the past, there was no specific vocational training programme for the hat-making industry. Last year, CAPITB—the national training organisation—and the British Hat Guild developed a new programme of national vocational qualifications specifically designed to develop hat-making skills. My hon. Friend the Member for Luton, South mentioned the colleges running those courses and, as well as Barnfield college in Luton, Huddersfield offers a city and guilds certificate in millinery as part of the link between training and industry.
In common with most traditional, craft-based industries, the hat industry has to address the difficulty of recruiting skilled labour. I hope that the launch of the new NVQ programme will go some way to addressing the problem.
The NVQ in manufacturing sewn products includes mandatory and optional units, within which candidates can develop the vital hat-making skills of sewing, blocking and trimming. That will ensure that those skills are not lost and that examples of their use are not just museum displays in the future. It offers a real potential for developing the industry. In addition, the university for industry, when it is launched, will contribute to retaining skills and to upskilling in the workplace, for small and larger businesses.
There is no denying that trading conditions are difficult. The performance of the hat industry is affected by both external and internal factors. The hat sector has faced difficult trading conditions, as has the rest of the textile and clothing industries throughout Britain. The crisis in south-east Asia, the well-publicised strength of sterling, as well as wider factors in trading and manufacturing processes, mean that the international trading environment is fast moving and complex.
The size of the sector has declined over the past 40 years, as hats are no longer essential everyday wear. Increasingly, the trend has been towards wearing them
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for special occasions only. However, as my hon. Friend said, that does not need to be the case, as wearing hats could again become ordinary and a matter of common sense. There is a long way to go, especially in protective and safety headgear—which is increasingly fashionable—and also in sportswear and high fashion.
Kangol has done a lot to improve the street credibility of hats with the young. In the wider world of fashion, London style is taking off, and its designers and brand names compete with the best in Paris and Milan. I am sure that Luton hats can feature in that future.
As my hon. Friend mentioned, my Department funded a competitive analysis report on the UK hat sector. Cranfield Innovative Manufacturing Ltd. produced a report that was presented to industry representatives in October, at a seminar funded by the DTI and the British Hat Guild. It concentrated on the competitiveness of the UK hat sector, highlighting its strengths and weaknesses, but also the real opportunities open to it.
The report contained recommendations to improve the industry's cutting edge and competitiveness. It looked in particular at the development of a supply chain initiative for hat making to co-ordinate information to suppliers about total demand and market trends. It proposed that suppliers should compete but also co-operate, through the supply chain, so that the whole sector could be strengthened.
The report also proposed the establishment of education and information services for managers in the industry, to equip them with the skills needed to lead their companies and to use the new technologies, including e-commerce, as my hon. Friend mentioned. In addition, it proposed education and training initiatives to integrate design and production skills so that producers become more aware of the potential of design and designers. Independent milliners especially could benefit from greater awareness of the potential of volume production.
Finally, the report recommended the establishment of an export information service to identify growth markets and to support the export potential of the high-value hat industry in particular by promoting Luton—and other centres in the UK—as high-quality suppliers. The service would also help by disseminating information in the UK about changes in markets so that suppliers can respond quickly.
I understand that, following the analysis report, a steering group has been set up this year to develop an action plan for the UK hat sector, based around the report's recommendations. The steering group is made up of representatives from industry and the British Hat Guild, while officials from my Department will work in partnership with the industry to do everything possible to promote its future.
I hope that I have demonstrated that the DTI has a commitment to helping to improve the competitiveness of this sector, as of all manufacturing. We want this creative sector to flourish, and we want to support international export efforts. We will continue to work in partnership with the sector to ensure that it has a bright future.
However, I want to compliment my hon. Friend the Member for Luton, South on her most imaginative way.

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of going beyond mere words to demonstrate in a practical, bright and colourful way that there is a serious point to campaigning for manufacturing industry on behalf of the country and our constituencies. Presented in a lively and witty way, as was evident this evening, such a campaign deserves to attract a lot of attention.
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We must build on our traditional strengths and thereby add to the creative potential of the 21st century. All of us in what I am tempted to call the capacity crowd attending this debate should thank my hon. Friend for detaining us this evening.
Question put and agreed to.
Adjourned accordingly at six minutes to Eight o'clock.