Commons Sitting of 15 February 2000

Preamble
The House met at half-past Two o'clock
PRAYERS
  PRIVATE BUSINESS

    GREENHAM AND CROOKHAM COMMONS BILL (By Order)
    Order for Second Reading read.
    To be read a Second time on Tuesday 22 February.

  CHILD CARE PROCEDURES AND PRACTICE IN NORTH WALES
  Resolved,
  That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there shall be laid before this House a Return of the Report and Summary (including a Welsh translation of the summary) of the Report of the Tribunal of Inquiry into the abuse of children in care in the former county council areas of Gwynedd and Clwyd since 1974, entitled Lost in Care.—[Mr. McNulty.]

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS
  The Secretary of State was asked—
  FOREIGN AND COMMONWEALTH AFFAIRS

    World Peace Council
    Dr. Julian Lewis: If he will make a statement on (a) the status of, (b) the recent evolution and changes in the role of and (c) the identity of those funding the World Peace Council. [108519]
    The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): This Government have had no direct contact with the World Peace Council. It is an international non-governmental organisation, which has apparently been based in Paris since 1996. It has no member organisation in this country.
    Dr. Lewis: Is not that a rather thin account of the World Peace Council, which for more than 20 years was on the Labour party's list of proscribed organisations as the principal Soviet propaganda front? Given that that was its role and that it followed every twist and turn of Soviet foreign policy, will the Minister explain why the Foreign Secretary saw fit to appoint as the chairman of the Westminster Foundation for Democracy, which is intended to inculcate democratic values in ex-communist countries, someone who was a former active member of the World Peace Council at the height of the cold war?
    Mr. Vaz: I must tell the hon. Gentleman that, on Sunday afternoon between "EastEnders" and "Songs of
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    Praise", I spent a happy time reading his speeches on the World Peace Council. Nobody in the House has given the organisation more coverage than he has. I assure him that it is an out-of-date organisation. It is almost as out of date as the hon. Gentleman's views on the cold war.
    Mr. Michael Clapham: Does my hon. Friend agree that world peace can be advanced only by Governments who look to the future? Does he share my fear that, looking back over the past 10 years since the ending of the cold war, little progress has been made on nuclear disarmament? Will he assure the House that he will press the Russians to ratify START 2 and the Americans to ratify the comprehensive test ban treaty?
    Mr. Vaz: My hon. Friend is absolutely right. Of course, we use every international forum and every opportunity to encourage countries to be fully involved in these processes. My right hon. Friend the Foreign Secretary will visit Russia next Monday and Tuesday and he will use that opportunity, as he has always done, to encourage the process. Our views on the comprehensive test ban treaty are also very clear: we would like the United States to sign it. We were very disappointed that it did not, and we shall continue to urge all countries to be involved in this important process.
    Mr. Michael Colvin: Will the Minister acknowledge that other organisations came into being during the cold war and that some are now outdated? A good example is the Conference on Security and Co-operation in Europe, which is now the Organisation for Security and Co-operation in Europe. It succeeded in bringing down the Soviet bloc—that is why it was created—but it is now taking on other responsibilities and usurping the already well-established responsibilities of the Council of Europe. Have the Government thought seriously about reorganising the political structures of Europe following the collapse of the iron curtain? In that respect—
    Madam Speaker: Order. This is hardly relevant to the World Peace Council. [Interruption.] Order. I say to the hon. Gentleman that the question was entirely about the identity and the funding of the World Peace Council and it has been answered.

    Russia (Arms Exports)
    Mr. Andrew Miller: What representations he has made to the Government of Russia about the supply of weapons to countries in the middle east. [108531]
    The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): My right hon. Friend the Foreign Secretary discussed the dangers of arms exports and assistance to countries of concern with Foreign Minister Ivanov when he visited Russia in March last year. He expects to do so again when he visits Russia on 21 and 22 February, next Monday and Tuesday.
    Mr. Miller: I thank my hon. Friend the Minister for that answer. He will no doubt be aware that Russia, perhaps because of its financial plight, continues to supply missiles and missile-related technology to countries such

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    as Iran, which is not very supportive of the middle east peace process. He will also be aware of my interest in nuclear power. I am deeply concerned about such technology transfer because of the weakness of the technology and its potential application in enhancing Iran's nuclear weapons capability. When my right hon. Friend the Foreign Secretary visits Russia, will he use all his diplomatic skills to address these very serious problems?
    Mr. Vaz: I am most grateful to my hon. Friend for raising this matter. He has a great interest in those issues, and I can assure him that at every opportunity Foreign Office officials have raised them with the Russians. The Russians have assured us that their assistance to Iran is for civil nuclear application only and is in line with International Atomic Energy Agency standards. My hon. Friend has urged the Foreign Secretary to raise the matter again with the Russians, and I categorically assure him that my right hon. Friend has just told me that he will do so. I shall be happy to tell the House and my hon. Friend what happens as a result of those discussions.
    Mr. John Wilkinson: Is it not the case that client regimes in the middle east and elsewhere that are in the marketplace for weapons like those armaments to be well tried and tested? Could not Her Majesty's Government therefore argue to the Russians that it is iniquitous and wrong for them to use their genocidal conflict in Chechnya as a proving ground for the weapons systems that they sell in the middle east? It is high time that those weapons were no longer used on the Chechens within the Russian Federation and no longer sold to rogue regimes outside it.
    Mr. Vaz: Our position on Chechnya and the Russian action there is absolutely clear: we do not believe that the use of disproportionate activities by the Russians was right. I expressed that view to the Russian ambassador. The hon. Gentleman's other points are, of course, matters that will be raised. It is absolutely essential that the major arms export countries adhere to the Wassenaar arrangement so that there is full transparency and disclosure. That is one way in which we can ensure that the export of arms is controlled.

    EU Enlargement
    Helen Jackson: What recent discussions he has had with EU counterparts regarding enlargement. [108532]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I shall make a statement on the Government's policy on enlargement later this afternoon.
    As I speak, the European Union is launching accession negotiations with six more applicant countries to join the six already in negotiation. Along with my EU colleagues, I discussed the prospects for enlargement with the Foreign Ministers of those six countries last night. I was impressed by their commitment to making a success of their application. Their enthusiasm for the European Union
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    demonstrates a shrewder understanding of the benefits of membership than we often hear in the House from those on the Opposition Benches.
    Helen Jackson: Did my right hon. Friend read the comments of the former shadow Foreign Secretary, the hon. Member for Stratford-on-Avon (Mr. Maples), in The Daily Telegraph last week, when he argued that Britain should hold up European Union enlargement until it accepted his pick-and-choose interpretation? [Interruption.] I am aware that that will not have been the reason that he was sacked, because he never discusses foreign policy with his leader. Does my right hon. Friend agree that such a view of enlargement is a betrayal of Britain's interests and something that no responsible politician should advocate?
    Mr. Cook: I assure my hon. Friend and the House that the Government's policy is to do everything that we can to enable enlargement to proceed as quickly as possible. It is important for Britain's interests that, when those countries enter the European Union, they should remember Britain as a friend and an advocate of their membership.
    I have long been puzzled by the Conservatives' policy of vetoing enlargement treaties if they do not get their way, but I understood how they got themselves into that position when I read the former shadow Foreign Secretary's remark today that he never had a serious discussion on foreign policy with his leader, despite several attempts to do so. Perhaps the right hon. Member for Horsham (Mr. Maude) should now tell us whether he will advise his leader to ditch that embarrassing policy out of the back of his white van, or whether he has not yet had a chance to discuss the matter with him.
    Mr. Francis Maude: Everyone should be totally committed, as we are, to the European Union at last embracing the whole of Europe. It is a scandal that, 10 years after the Berlin wall came down, not one of the great European countries that regained their freedom and nationhood at that time has yet been admitted to the club. Will the Foreign Secretary commit himself today to arguing in the intergovernmental conference for a new framework of flexibility so that at least the new entrants to the European Union can be spared the stifling grip of the "one size fits all" straitjacket that is currently promised?
    Mr. Cook: We have no intention of using the intergovernmental conference to try to turn the treaty into a charter for opt-outs. We shall not do so, because we do not for one minute believe that it would be in Britain's interests for France to have the right to opt out of food safety regulations, Spain to opt out of animal welfare regulations, or applicant countries to opt out of environmental rules, such as the condition accepted by many of them to close nuclear reactors that do not meet safety standards faster. I repeat my question to the right hon. Gentleman: if he does not get his way, will he veto enlargement and so make the Tory party as unpopular among the 12 new members as it is among the existing 14?
    Mr. Maude: Is not the simple truth that, faced with a choice between the modern, flexible Europe of the sort that is increasingly advocated, in which nations can

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    co-operate in friendship and harmony, and the steady drift towards a single European superstate, the Government have unhesitatingly chosen the latter? They have done so step by step.
    The Foreign Secretary talks about a charter for opt-outs, but he is getting rid of opt-outs. He gave up the opt-out on the social chapter, with the result that social legislation can now be imposed on this country from outside without Parliament or the House of Commons having any right to discuss it. The Government have signed away our veto in 16 areas as they proceed step by step down the road to the superstate. They are taking forward the defence identity outside NATO, and thereby risk undermining NATO. What have they got in return for all those concessions? Nothing.
    Mr. Cook: The right hon. Gentleman must have picked up his response to my statement this afternoon by mistake. No one advocates a centralised European state and that will not be the outcome of the intergovernmental conference. However, he must recognise that not a single Government in Europe will accept his proposal for a pick-and-mix Europe—not even a sister party of the Tory party would accept such a proposal. The leader of one, John Bruton, has said that the Tory proposal is disastrous—that is what the right hon. Gentleman's own allies say. I repeat my question: even if no other Government agreed to the Tories' demands, would they really veto the treaty and stop enlargement of the European Union?

    Middle East
    Mr. Malcolm Savidge: If he will make a statement on the status of the middle east peace process. [108533]
    Ms Christine Russell: If he will make a statement on the current status of the middle east peace process. [108546]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I visited the region again last month. I found deep concern at the delay on a framework agreement on the Palestinian track and at the suspension of talks on the Syrian track, but I also found optimism that procedural problems could be overcome.
    Clearly, the situation in Lebanon is grave; we are worried and saddened by the violence. I spoke on Friday to the Foreign Minister of Syria and conveyed our view that all parties in Lebanon must exercise restraint. We have delivered the same message to the Israeli and Lebanese Governments. The crisis underlines the importance of efforts to find comprehensive peace for the region, which can be achieved only by the parties returning to the negotiating table.
    Mr. Savidge: I thank my right hon. Friend for appealing to all sides to show restraint in Lebanon. Does he recognise that a lasting solution for Lebanon can be found only within the framework of a comprehensive peace settlement between Israel and Syria? Will he urge both those countries to return to the negotiating table?
    Mr. Cook: I am grateful to my hon. Friend for that welcome. I agree that the only way forward is via the
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    negotiating table. It will be difficult to resolve the problems in Lebanon without a resumption of the Syrian track, on which I hope we can make progress on the basis of land for peace.
    Ms Russell: Will my right hon. Friend comment on reports that appear to indicate that the recent talks in Shepherdstown, West Virginia, broke down when it was revealed that the Israelis planned to leave 17,000 of their people living on Syrian soil? Will he reaffirm that our Government's position is that those settlements in the occupied territories and east Jerusalem are illegal?
    Mr. Robin Cook: It has been the long-standing view of Governments of both complexions that the settlements in the occupied territories are illegal under international law and are a block to the peace process. I am not sure that my hon. Friend is right about the current hiatus in the peace talks. It was undoubtedly unfortunate that one of the negotiating documents was published, it will be difficult to take such a sensitive and delicate matter forward if the negotiating documents get into the press.
    Mr. Jonathan Sayeed: Has the Foreign Secretary visited the middle east since March 1998? If not, is it because that visit was such a disaster for this country?
    Mr. Cook: I do not know where the hon. Gentleman has been during Question Time for the past six months. I visited Israel and the Palestinian Authority in October last year. I was well received and had useful discussions with the Israeli Government. [Interruption.] I do not understand why Tory Members find it hilarious that one is greeted well by the Israeli Government. Last month, I visited Jordan and Egypt where I carried forward discussions. We have been actively involved there; the hon. Gentleman should turn the record over.
    Mr. Francis Maude: We share the Foreign Secretary's hope that the talks, especially between Israel and Syria, will resume and prove fruitful. We understand Israel's desire to ensure the security of its borders against terrorist attack, but we hope that talks will resume quickly. What is the Foreign Secretary doing to assist the resumption of those talks? My hon. Friend the Member for Mid"Bedfordshire (Mr. Sayeed) recalled that, when the Foreign Secretary visited the area in March 1998, he managed to annoy everybody. Is not staying away the best that he can do?
    Mr. Cook: The Opposition should reflect on recent history and realise that there has been a change of Government in Israel. The Israeli Government are working closely with us; we have had frequent exchanges with Prime Minister Barak.
    Mrs. Cheryl Gillan: What about Lord Levy's involvement?
    Mr. Cook: Lord Levy has played a positive role in bringing the parties together. His visit to Damascus before the start of the Syrian talks was helpful in finding a formula to enable those talks to begin.

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    In the European Union, Britain is regarded as one of the leading advocates of the peace process. We shall continue to ensure that the European Union offers the necessary peace dividend if peace is to be permanent. The Government have fully supported the peace process; we are in contact with all the parties, and we shall continue to provide full support.
    Mr. Stephen Twigg: Is my right hon. Friend aware of recent anti-semitic propaganda in the state-sponsored Syrian Daily Tishreen, which suggests that the holocaust is a myth and condemns the Stockholm conference on the holocaust, which he attended? Will my right hon. Friend join me in condemning that propaganda, and will he make it clear to the Syrian authorities that the appearance of such articles poses a major threat to the peace process?
    Mr. Cook: I am happy to tell my hon. Friend that we have already made such representations. We understand from the Syrian Government that they regret the publication of those views, and that it is unlikely to happen again.
    Dr. Jenny Tonge: Does the Foreign Secretary believe that the Government's possible support for the Ilisu dam in Turkey and the water wars that might ensue will have a serious effect on peace in the middle east?
    Mr. Cook: The Department of Trade and Industry has set out four major conditions for providing export credit to the dam. They include considerations about the welfare of the people in the valley, provision for proper environmental impact assessments, treatment of any water that would be used or collected in the valley and consideration of the provision of a regular supply of water to countries such as Syria, which are further downstream.

    Zimbabwe
    Mr. John Randall: What recent representations he has made to the Government of Zimbabwe concerning good governance criteria. [108534]
    Miss Julie Kirkbride: If he will make a statement on human rights in Zimbabwe. [108536]
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain): Zimbabwe has reached a turning point. President Mugabe has the opportunity to unite the country around him in a process of reform and recovery, which is long overdue. For far too long, dreadful economic mismanagement has propelled that potentially rich African country into crisis. I appealed to President Mugabe not to miss the moment and to face the challenges head on. It is the duty of friends to speak frankly. I have done that in private on several occasions to President Mugabe—unfortunately, to no effect. I hope that he will now accept that Zimbabwe's economy is in trouble and that the international community wants to work with Zimbabwe, not against it.
    Britain, other donors and, crucially, the international financial institutions stand ready to help. However, the Government of Zimbabwe must understand that we will do that only if they show real commitment to sound
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    economic policies and if they work with the international community in a spirit of political co-operation, rather than against us in paranoid isolation.
    I am saddened that the referendum process that was designed to unite Zimbabwe on a programme of sorely-needed reform was so badly flawed. There was no electoral roll and no access to the media for opposition groups; there were no observers, and scant information was available to voters. The overwhelming victory for the no camp is a sign of the deep dissatisfaction with the Government over that and other issues.
    The Government of Zimbabwe must now ensure that general elections in the spring are free and fair, give the voters a real choice and set Zimbabwe on the road to success.
    Mr. Randall: I thank the Minister for that full statement. He will be aware that the Prime Minister said in a written answer last week that the Government
    "will not grant export licences for new military dual-use equipment where there is a clear risk that it would be used in the DRC."—[Official Report, 9 February 2000; Vol. 344, c. 184W.]
    Does that mean that this country has put an arms embargo on Zimbabwe?
    Mr. Hain: No, the Prime Minister's answer means what it says. If there are any applications for export licences to sell to Zimbabwe arms that could be used for external aggression in the Congo or by other African countries involved in the Congo conflict, they will be refused. That is what the Prime Minister said and that is what the hon. Gentleman should have read into the answer.
    Miss Kirkbride: In answering both questions together, the Minister clearly sought to avoid my request for a statement on human rights in Zimbabwe. It would have been nice to have heard a little more about that. Does he agree that today's rejection of the referendum proposals by the people of Zimbabwe is a step in the right direction against the despotic powers of President Mugabe? When will the Government match their announcements on an ethical foreign policy? Why do we not attach conditions, such as the improvement of human rights in Zimbabwe, to bilateral aid? Why have we sold spare parts for Hawk jets to enable President Mugabe to maintain a bloody civil war in the Congo? Why do not the Government have President Mugabe arrested for abusing human rights when he comes to this country, as they did with General Pinochet, or is it business as usual—say one thing and do another?
    Mr. Hain: I remind the hon. Lady that her Government sold Hawk jets to Zimbabwe as, indeed, they sold arms to virtually every country on any basis—Suharto in Indonesia, for example. We have repeatedly made clear our anxiety about denial of human rights in Zimbabwe and we have consistently been concerned and made representations about the failure to establish a proper referendum. I repeat what I said in my initial answer: we want free and fair elections and Zimbabwe launched on a programme for democratic pluralism, including respect for human rights.
    Mr. Donald Anderson: The Minister has made a robust and principled response. Does he agree

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    that it was unfortunate that Commonwealth Ministers rejected the proposal made at the Heads of Government meeting in Durban last year for an enhanced Commonwealth ministerial action group to deal with such abuses of human rights?
    Mr. Hain: My hon. Friend is right. A proposal was put to the Commonwealth and I was at the Commonwealth ministerial action group meeting that agreed to, and strongly supported, the suggestion that its remit should be expanded precisely to cover abuses of human rights and not only military juntas. I hope that the high-level group that has been established as a result of the Durban deliberations can take that agenda forward.
    Mr. Mike Gapes: Does my hon. Friend agree that there has been a steady deterioration of human rights and more and more authoritarianism during the 20 years in which the regime in Zimbabwe has been in power? Is it not hypocritical of Conservative Members suddenly to notice that now, when we are the first Government to begin to take action against those human rights abuses and authoritarian, anti-democratic practices?
    Mr. Hain: My hon. Friend is absolutely right. The Conservatives were in power throughout the 1980s and most of the 1990s when the situation in Zimbabwe deteriorated, but did very little, if anything, to challenge that deterioration. We want Zimbabwe to succeed. It has enormous wealth, infrastructure and skills compared with the rest of Africa and is the best-educated country on the continent. If it reforms its economic policies and commits itself to a democratic future, we shall work with it to achieve that success.
    Mr. Menzies Campbell: The Minister has rightly referred to the wealth and potential of Zimbabwe. In those circumstances, is it not a matter of profound regret that the people of that country should find themselves short of food, short of fuel, in a deteriorating economy and facing an AIDS epidemic? Will Her Majesty's Government assure the House that they will call upon Mr. Mugabe to observe the results of the referendum? Will they also make it clear that Britain's support depends on the adoption of the principles of good governance and that we expect Harare to observe the principles of the Harare declaration?
    Mr. Hain: Yes, we expect the Zimbabwean Government to comply with the results of the referendum, deeply flawed though it was, and with the Harare declaration, in terms of their membership of the Commonwealth. It is also absolutely vital that we see the kind of leadership in Zimbabwe that tackles the AIDS epidemic and deals with the economic failure that has led to fuel shortages and other problems. Without it, Zimbabwe is poised on the edge of an abyss and could go over the edge. That would be very serious for its people and, indeed, for South Africa, its major trading partner, and the whole of Africa. We want Zimbabwe to succeed.
    Mr. Peter L. Pike: While we recognise the problems with the referendum procedure, should not this country now, with the Commonwealth, tell Zimbabwe that we will help it with the preparation of an electoral register for the April election and that the Commonwealth will assist in monitoring a free and fair election?
    Mr. Hain: We would be well prepared, as I am sure the Commonwealth and the European Union would be, to assist with a properly planned free and fair election. Unfortunately, because of the telescoped timetable for a quick election, without the necessary fair preparations or transparency it is very difficult to dignify such an election by providing official observers. That is the difficulty that we face, which is why I urged President Mugabe to look again at when, and the basis upon which, that election will be staged.
    Mrs. Cheryl Gillan: Observers of this Question Time will see from the Minister's answers what a mess and muddle this Government are in. At the beginning of this month, when there were reports of the aerial bombardment of civilians in the Congo war, using Zimbabwean aircraft, the Prime Minister overruled the Foreign Secretary and the Foreign Office by insisting that spare parts for military aircraft were sent to Zimbabwe. How helpful did the Minister find that intervention? Does he think it will increase his effectiveness in influencing African affairs, when at the same time he was telling other African countries that we are determined to do everything in our power to stop fuelling the conflict in the Congo? Is he not even a little embarrassed that, rather than there being a fig leaf of an ethical dimension to the Government's foreign policy, he is now prepared to display on the international stage their willingness to do one thing and say another?
    Mr. Hain: Absolutely not. This Labour Government changed the whole policy on arms exports applications. Instead of being prepared to sell arms for internal repression or external aggression, as the Conservatives did year after year, to every dictator throughout the world, we have introduced strict criteria, which we are now applying, as my right hon. Friend the Prime Minister announced last week, to ensure that no country can use British arms, under new export licences, in the Congo conflict.
    I remind the hon. Lady that it was her Government who sold the Hawk jets in the first place. We have simply been obliged to honour contractual commitments and supply spares for the two Hawk jets that are still being used in the Congo.

    "Your Britain, Your Europe"
    Mr. Desmond Browne: What further plans he has for his Department's "Your Britain, Your Europe" campaign. [108535]
    Mr. Andrew Reed: What future plans he has for his Department's "Your Britain, Your Europe" campaign. [108540]
    The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): We have encouraged the Welsh Assembly and the Scottish Executive to organise regional roadshows later in the year to promote the benefits of our membership of the EU, to follow the successful roadshow of last November. I am also writing to the leaders of the city councils of Leeds, Liverpool, Reading, Southampton and Norwich to explore the possibility of their organising a Europe Day in those cities during the summer.
    The Foreign and Commonwealth Office will shortly publish a "UK in Europe" public information brochure that will cover the history of our involvement in the European Union, and hold a Europe Day on 9 May.
    Mr. Browne: I thank my hon. Friend for his reply. Is he aware that Ayrshire, which contains my constituency, accounts for 15 per cent. of Scotland's total exports; that 62 per cent. of that 15 per cent. are exported to the European Union; and that if the anti-Europe campaign launched by the Leader of the Opposition this morning works, about 40,000 jobs that depend on those exports will be put directly at risk? Will he accept my invitation—issued on behalf of those workers and their employers—to bring the information roadshow to Ayrshire, preferably to Kilmarnock, and use it to build on the productive relationship that has developed between Ayrshire and the European Union?
    Mr. Vaz: My hon. Friend is absolutely right: the benefits of EU membership are clear to the people of Ayrshire. I happily accept his invitation to visit him in Kilmarnock with the Scottish roadshow.
    I am delighted that the Leader of the Opposition has decided to follow my lead in engaging in a tour of the United Kingdom. He said first that he would travel in a flat-back lorry; that turned into an unmarked white van, and my sources in St. Albans now suggest that it is down to a moped, with the right hon. Member for Kensington and Chelsea (Mr. Portillo) at the front and the right hon. Member for Horsham (Mr. Maude) pushing from behind.
    I hope that, when the Leader of the Opposition goes around the country, he will hear what I heard: that the people of the United Kingdom support Britain's being in Europe. We benefit greatly from being in Europe, and we will continue that membership.
    Mr. Andrew Reed: As one who, in the 1990s, worked in the European Union—in Brussels—on behalf of the people of Leicestershire, may I say that those people were particularly angry that their views were not heard in Brussels because of the antics of the Conservative party? Does my hon. Friend agree that the Conservatives have learned nothing from their election defeat in 1997, and still peddle the anti-Europeanism that is of such disadvantage to the people of Leicestershire? Will he bring his roadshow to smaller areas—non-cities such as Loughborough? Will he also issue invitations to people in successful businesses such as Campbell Scientific, which I visited a couple of weeks ago and whose exports have risen by 26 per cent. in Europe alone?
    Mr. Vaz: I congratulate my hon. Friend on all his excellent work in the constituency, promoting local businesses. I will go to Loughborough with the roadshow
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    and I will not be in an unmarked white van—the benefits to this country of membership of the European Union will be clearly stated.
    As my right hon. Friend the Foreign Secretary said earlier, the former shadow Foreign Secretary has said that the renegotiators have taken over the Conservative party—a party whose spokesman is the man whose fingerprints and signature are on the Maastricht treaty.
    Mr. David Ruffley: Can the Minister estimate how many people he has spoken to during his roadshow about UK entry to the euro, and what proportion of those people have told him that they do not want this country to join?
    Mr. Vaz: I have spoken to about 5,000 or 6,000 people at public meetings and all over the country. Two people spoke against British membership of the European Union: their names were Ralph and Dave, and they were members of the Save the Pound campaign. The vast majority of people I spoke to supported our important role in Europe.
    Mr. Richard Spring: In his taxpayer-funded roadshow message, the Minister stated:
    "I want to let them know what the Government thinks."
    Does he not understand that, up and down the country, people know that the Government's views on Europe are minority views, day by day increasingly different from those of the clear majority of British people?
    Mr. Vaz: I congratulate the hon. Gentleman on his promotion to the post of shadow Minister for Europe. We remember fondly the contributions of his predecessor when he was here; he too did not understand the benefits of Britain's membership of Europe.
    Of course the people want to know the facts. That is why we went around the country to explain those facts. We do not support a campaign that is negative and that damages this country's national interest. A total of 3.5 million jobs depend on our membership of the European Union. The hon. Gentleman would do well to start campaigning on those issues.
    Mr. Bill Rammell: Is my hon. Friend aware that the Leader of the Opposition has not launched his campaign on a flat-back truck because he could not find one that did not depend on foreign investment? Would not that foreign investment, supplying those British jobs, be at stake if we ever supported the Tory party's policy of pulling out of the European Union?
    Mr. Vaz: My hon. Friend is absolutely right. As he has said on numerous occasions, the logical conclusion of the policy adopted by some Conservative Members—in the words of the hon. Member for Stratford-on-Avon (Mr. Maples), the renegotiators have taken over the Conservative party—is that Britain would withdraw from the European Union. We need to be in Europe. We are

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    fully engaged in Europe. We believe in the reform of Europe, as my right hon. Friend the Foreign Secretary will show in his statement at 3.30 pm.
    Mr. Tony Baldry: The Minister will know that few Conservative Members are more in favour of the European Union than I, but the campaign sounds a bit too much like spin with little substance.
    Mr. Denis MacShane: That is the Conservatives' policy.
    Mr. Baldry: The Minister's Parliamentary Private Secretary seems to be prompting him, but I hope that no Government money is going into the project. If Foreign Office money is going into it, would it not be better if it went to the British Council and BBC World Service? One does not expect Ministers of State in the Foreign Office to feel it necessary to go on roadshows throughout the UK. They should be doing other things with public money in the Foreign Office, rather than feeling that they need to go on what is effectively an election campaign.
    Mr. Vaz: I am going to be nice to the hon. Gentleman because I know that he is a pro-European in a party that is anti-European. The amount of money that was spent on the last roadshow was a tiny proportion of—[HON. MEMBERS: "How much?"] It cost only £60,000, plus travel and accommodation. It is a tiny proportion compared with the £20 million that was spent by the last Conservative Government on an information campaign that was designed to prepare Britain for the common market—a campaign that was authorised by the shadow Foreign Secretary.

    EuroMed Agreements
    Mr. Gordon Marsden: What recent discussions he has had with the Government of Tunisia and other near eastern states about their participation in the EU' s EuroMed agreements. [108537]
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain): My right hon. Friend the Foreign Secretary had a bilateral meeting with the Tunisian Foreign Secretary on 24 January. The Government have had regular contacts at various levels with the Tunisian Government.
    Mr. Marsden: I thank my hon. Friend for that reply and I am delighted, given the importance of Tunisia as a country of stability in the Maghreb, that those contacts have been so recent and extensive. I urge him and the Foreign Secretary to continue to make strong representations to our European partners about the importance of the Maghreb and the near eastern countries in that process. With the forthcoming investment seminar on the EuroMed coming up in Lisbon in two weeks, I also urge them and their colleagues in the Department of Trade and Industry to give British companies every encouragement and incentive to invest in that area.
    Mr. Hain: I will certainly give my hon. Friend, who takes a great interest in the matter, those assurances. We attach great importance to our relations with Tunisia, which was the first Maghreb country to sign up to an association agreement with the European Union.
    Miss Anne McIntosh: Can the Minister say whether those negotiations include such topics as asylum seekers and immigrants seeking entry to the European Union?
    Mr. Hain: They cover a range of matters.
    Mr. David Heath: I agree that contacts and dialogue between the countries of the Maghreb and Europe are vital. Might that prove a useful vehicle for persuading the kingdom of Morocco to comply with the United Nations referendum that is due in July 2000 on the future of Saharawi?
    Mr. Hain: As the hon. Gentleman is aware, both Morocco and others are committed to that UN policy. I had discussions with the Foreign Minister and, indeed, the Prime Minister on that policy when I visited Morocco only late last year.

    Sierra Leone
    Mr. Jonathan Shaw: If he will make a statement on the situation in Sierra Leone. [108538]
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain): The Lome peace agreement offers the people of Sierra Leone the best prospect of lasting peace and security, after eight years of brutal conflict. We remain concerned, however, about the continued violations of the peace agreement. We are pressing all parties to honour their commitments.
    Mr. Shaw: I thank my hon. Friend for that reply. Does he agree that the situation in Sierra Leone remains extremely fragile, and that the Lome peace agreement offers the best possible opportunity for that country to restore stability, so that people may once again live in peace and harmony? What are our Government doing to ensure that the Lome agreement works? If it is not successful, should we not be fairly pessimistic about the consequences?
    Mr. Hain: I agree with my hon. Friend that the Lome peace agreement is very fragile. Last month, I visited Sierra Leone and was able to see at first hand the agreement taking root. There is now a United Nations peacekeeping force in Sierra Leone that Britain has supported. Indeed, we are providing more support than any other country outside Africa for the progression of that agreement. However, some of the individuals and parties to the agreement have still not fulfilled the full terms of the agreement which they signed. In particular, Foday Sankoh, leader of the RUF, is still not complying with the disarmament measures. I am concerned that he should return as soon as possible from Abidjan, which he recently visited, to carry through the full terms of that agreement.

    Austria (Bilateral Meetings)
    Mr. Jim Murphy: If he will make a statement on the UK's future bilateral relationship with the Austrian Government. [108541]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): Britain fully supports the position of the 14 European Union countries which have announced that they will not hold bilateral meetings with Ministers in the new Austrian Government. Mr. Haider's appeal to xenophobia and racism is in flat conflict with the values of tolerance and mutual respect on which the European Union is founded. I also fully understand the grave offence to Jewish communities, including here in Britain, of Mr. Haider's statement that the Waffen SS were "decent men of character".
    Austria is entitled to exercise its full rights at meetings of the European Union, but, with regret, we cannot maintain our traditionally warm bilateral relationships while its Government includes people who reflect Mr. Haider's repugnant views.
    Mr. Murphy: I welcome that response. Is my right hon. Friend aware of Jörg Haider's description of the concentration camps where 6 million Jews were murdered as "punishment camps"? I also welcome the sanctions taken by the British Government and by our European Union partners against the Austrian Government. Will my right hon. Friend confirm that, if necessary, further action will be taken, not against the Austrian people but against the Austrian coalition Government?
    Does my right hon. Friend share my sense of utter horror that, in the same month in which the British Government announced plans for a national holocaust memorial day, Austria formed a coalition involving a party that has an entirely different sense of history and of the holocaust?
    Mr. Cook: I was in Stockholm on that day, addressing the holocaust conference, and it was moving to see so many countries of Europe come together to make it clear that we have to be open and honest and face up to our past as a foundation for the future. I regret that Mr. Haider does not seem to recognise the importance of acknowledging what happened in the past if we are to ensure that it does not happen again in the future.
    As for our relations with Austria, the Austrian Government have issued a statement of full support for human rights. It is a very good piece of rhetoric and a wonderful statement. We shall now be watching very closely to ensure that they abide by those commitments.
    Sir Peter Tapsell: Does the right hon. Gentleman think that he should be disqualified from holding ministerial office now because of the very many foolish things that he said in the past when he was in opposition? Would it not be fairer and more democratic for him to be judged on his current record, disappointing though it has been so far?
    Mr. Cook: If the hon. Gentleman can produce any statement of xenophobia or racism made by me in the past, I shall happily resign.
    Mr. Ben Bradshaw: Has the Foreign Secretary had the chance to study the detailed programme and policies of Jörg Haider's Freedom party? If he has not, may I tell him that they are no more extreme those of the British Conservative party?
    Mr. Cook: I have to say that I am not aware of any hon. Member who has spoken of the SS in the terms that Mr. Haider has used. We should recognise that the consensus among the 14 member states has been built in the clear recognition that this is not a matter of political programme, but of values. Mr. Haider has rejected the values on which parliamentary democracy and the European Union are built.
    Mr. Eric Pickles: The Foreign Secretary talks about rhetoric. Does he realise that there is more than a whiff of armchair anti-racism about his attitude towards Mr. Haider who, with the Government's ethical foreign policy in tatters, is an easy target? If he wants to encourage Mr. Haider's policies in Austria, the best way is to continue the isolation.
    Mr. Cook: The polls do not support the hon. Gentleman's argument. Since the European Union's 14 member states took action, Mr. Haider's personal standing has dropped from 8 to 5 per cent. and his party's popularity has also dropped. Our action does not appear to be helping Mr. Haider, as the hon. Gentleman argues.

    East Timor
    Kali Mountford: If he will make a statement on the status of East Timor. [108542]
    The Minister of State, Foreign and Commonwealth Office (Mr. John Battle): East Timor was invaded by Indonesia in 1975. The United Nations never recognised Indonesia's annexation of East Timor. In the UN-organised ballot of 30 August 1999, the East Timorese voted by an overwhelming majority to reject the autonomy proposal put forward by the Indonesian Government and in so doing indicated their clear desire for independence. The subsequent violence led to the intervention of a peacekeeping force. Indonesia relinquished all claim to East Timor on 20 October. UNTAET—the United Nations Transitional Administration in East Timor—is now established and is carrying out its mandate to prepare East Timor for independence.
    Kali Mountford: I thank my hon. Friend for that reply. In the midst of the international efforts to restore justice and human rights in East Timor, will he assure that House the Britain will continue to play an important role in the transition from UNTAET, and will he join me in congratulating our armed forces on their excellent work in the early days of the multilateral intervention?
    Mr. Battle: I am sure that the whole House would be happy to congratulate the armed forces on their excellent work on behalf of the international peacekeeping forces. Our Gurkhas were among the first to go to East Timor.

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    When I visited in January, the Australian General Cosgrove, who was in charge of the forces, singled out the Gurkhas for special praise for having helped to bring about a prompt peace.
    The transition from the peacekeeping force to the UN administrative authority is due to be completed by the end of February. We are happy to continue to play a leading role in the UN process, as we have done since the outset. The Department for International Development pledged a further £13 million over 13 years at the recent World Bank conference in Tokyo, and the Foreign Office has opened a staffed support office in Dili. We shall do all that we can to rebuild the newly emerging country that was so badly devastated in the conflict.
    Rev. Martin Smyth: I share the Minister's hopes for the development of the new state in Timor and the speedy return of those in West Timor to their own land. Will he express his concern to the Government of Indonesia, now released from responsibility for East Timor, that they should exert discipline over their armed forces, which have sometimes perpetrated acts of terror against their citizens in other parts of Indonesia?
    Mr. Battle: The hon. Gentleman has frequently raised issues relating to the other islands that make up the huge complex that is Indonesia. As he knows, there was a change of Government in September. A civilian is now in charge of the armed forces. There has been a quiet revolution in Indonesia in the past few months. At the same time, the United Nations and Indonesia's national inquiry have reported on the activities of the military and are bringing them to heel. There will be trials to bring to book all those responsible for atrocities in East Timor. There are different causes for the conflicts in the other islands, but solutions will be found through democratic, peaceful means.

    Human Rights
    Mr. Elfyn Llwyd: In pursuing an ethical foreign policy what regard Her Majesty's Government have to a country's internal human rights record; and if he will make a statement. [108544]
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain): We consistently promote British interests and pursue British values in our foreign policy by supporting democracy and human rights wherever we can and however we can.
    Mr. Llwyd: I thank the Minister for that reply, but in the light of the Government's ethical foreign policy, why are they so supportive of Turkey, given its disgraceful human rights record in relation to the Kurdish people? Why is it thought ethical and proper that the British taxpayer should stump up £220 million to sponsor the Ilisu dam project? Is that ethical and proper when 20,000 to 60,000 Kurds will be displaced by that awful state?
    Mr. Hain: We have not made any decision on the Ilisu dam project. We have consistently raised human rights
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    matters with Turkey and, indeed, securing advances on human rights is one of the conditions it has to meet as a basis for admission to the European Union.
    Angela Smith: Although I accept my hon. Friend's comments that we need to have good relations with other countries to promote human rights, will he consider one country with which we have a special relationship—the United States? It is still that country's practice to keep minors on death row until they are old enough to be executed. Can he assure me that he will make strong representations to representatives of the US Government about that?
    Mr. Hain: Unlike the previous Government, we have played a leading role in opposing the death penalty wherever it is used, and we will continue to do so in the various international forums in which we have an opportunity to raise the matter. I answer my hon. Friend's question in that context.
    Mr. Owen Paterson: What is ethical about selling jet parts to Zimbabwe so that President Mugabe can bomb the Congo for private gain?
    Mr. Hain: I find questions like that very interesting from the party which sold arms to Iraq, as the Scott report exposed, and whose Ministers misled the House over the matter. As I said earlier, we were fulfilling a contractual obligation on Hawk jets sold by a Conservative Government, including two Hawk jets operating in the Congo and a few spares for them. We have also made it clear that we have tightened our policy on arms exports to such countries as Zimbabwe which are involved in the Congo conflict—a policy that the Conservative Government never got anywhere near adopting—and we deserve praise and credit for that.
    Dr. Phyllis Starkey: Does my hon. Friend agree that there are circumstances in which constructive engagement can encourage a country that has a poor record on human rights to improve that record? Does he agree that an example of that is Iran, where Britain's funding, bilaterally and through the United Nations International Drug Control Programme, for Iran's drug control agencies has helped to show the benefits of engagement with the west and has strengthened the more progressive forces in Iran, which is especially important given the upcoming election there?
    Mr. Hain: Yes. There is no point in having a detailed dialogue with some countries—for example, Burma, Iraq and the Yugoslav Republic—because there is no opportunity to do so. As my hon. Friend pointed out, we have recently had critical dialogue with Iran about, for example, the Jewish detainees and other issues. It is because we have supported the reform programme of President Khatami that we have had an audience on those issues and have been able to put our points of view. We have seen some results from that, and critical dialogue is a policy that we have successfully adopted and will continue to use with many countries with which we do not agree about every aspect of their government, policies or constitution.

    Burma
    Mr. Robert Syms: If he will make a statement on the UK's relationship with Burma. [108545]
    The Minister of State, Foreign and Commonwealth Office (Mr. John Battle): The Government are appalled by the human rights violations and lack of democracy in Burma, and we are at the forefront of international action on Burma. Our bilateral relations with the military regime reflect this. We take every opportunity to condemn the regime's disregard of human rights and to urge the regime to enter into dialogue with democratic leaders, including Aung San Suu Kyi—who was elected in 1990 with the National League for Democracy—and other ethnic minority leaders.
    Mr. Syms: There is no doubt that the Burmese regime is nasty. Apart from what it does to its own people, Burma
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    is the world's largest producer of illicit opium. Following the failure of the EU mission in July and the extension of sanctions in October, should not we this year redouble our efforts with the EU, the Americans and the Japanese to apply pressure for the release of Aung San Suu Kyi, to start Burma on the process towards the proper democracy that its people deserve?
    Mr. Battle: I agree with the hon. Gentleman. We are at the forefront of support for the European Union common position that was put in place, co-sponsoring United Nations resolutions on action in the International Labour Organisation, to combat forced labour. We do not encourage trade investment or tourism with Burma. It was this Government who announced on 19 June 1997 that we would not encourage United Kingdom companies to trade or invest in Burma. We will work within the European Union to do what we can to toughen the position and make it plain to the Burmese junta that it should enter into democratic negotiations with the democratically elected leadership.

Intergovernmental Conference White Paper
3.30 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): With permission, Madam Speaker, I wish to make a statement on the Government's support for the enlargement of the European Union and our approach to the intergovernmental conference, which is necessary to prepare the European Union for almost double the present number of member states.
I am today publishing the White Paper "Reform for Enlargement", which sets out in detail the steps that the European Union must take to get ready for enlargement.
Today in Brussels, the Portuguese presidency is opening negotiations with six more countries. That brings to a total of 12 the countries currently in negotiation for entry into the European Union.
Throughout central and eastern Europe, countries that have only recently emerged from a centralised state and a command economy are making heroic efforts and taking painful decisions to prepare themselves for membership of the European Union. It is in their own interests to do so. The reforms that they need to compete successfully within the single market are also the changes that they need to give their people a prosperous economy. It is also in our interest that they face up to the conditions of membership, not only because they will be better trading partners for British exporters and investors, but because the reforms that they have to make are of direct benefit to us. For example, three separate countries, as a condition of membership, are now committed to the early closure of nuclear reactors that do not meet our standards of safety.
There is no better way in which we can guarantee security and stability throughout central Europe than by providing its countries with a clear perspective of membership of the European Union. Given the difficult and courageous decisions that the candidate countries have taken to prepare for entry, the European Union owes it to them to show the same determination to make the reforms necessary for enlargement.
It is because we recognise the importance of the European Union to Britain that we want it reformed in order that it may do its job better. We have long argued for a Commission that is run on merit, not on influence. We lobbied for Neil Kinnock to have responsibility for reform, and we strongly support the package of measures that he has produced, which fully confirms our confidence in him. It provides welcome steps to measure performance against targets, to improve financial management and contract procedures, and to ensure that staff are recruited and promoted on merit, not on national quotas.
Europe must also embrace economic reform to meet the challenge of competitiveness in a global age. Next month's special summit in Lisbon will be an important staging post in the process of creating in Europe a knowledge-based economy which promotes opportunities for innovation. Britain will be pressing at that summit for commitments to remove obstacles to electronic commerce, to set targets for lifelong learning, and to match the lowest world prices for access to the internet.
We welcome the opportunity of enlargement for institutional reform. For the United Kingdom, the most pressing of these reforms is to increase the share of our
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vote in the Council of Ministers. France, Germany and Britain contain a majority of the population of the European Union, but together have only a minority of the votes in the Council. After enlargement, they will not even be a blocking minority. We will be seeking a fairer voting system in the Council of Ministers that gives more democratic recognition to the population of Britain.
The second institutional reform required by enlargement is a limit on the growth of the Commission. If all 12 countries were to join the European Union under the present rules, we would have more than 30 commissioners. It would be a challenge for such a large Commission to function efficiently as a single cohesive body—nor is it easy to see what jobs they could all do.
As a first step in containing the size of the Commission, we are prepared to consider that the larger countries should retain only one commissioner. That would enable the smaller countries to retain their own commissioners, at least through the first wave of enlargement. However, I stress that we see these two measures as a package. The larger member states cannot be expected to give up their second commissioners if they are not given a larger weight of votes in the Council of Ministers.
The third area for institutional reform is the balance between unanimity and majority voting. There will be double the risk of decisions being blocked if there are twice as many countries round the table with a veto. Those decisions that are blocked may well be in Britain's national interest and may concern matters on which we want agreement.
The White Paper repeats our commitment that unanimity must remain in cases such as treaty amendments, border controls, taxation, social security, defence and revenue-raising. More than 80 per cent. of legislative decisions in the Council of Ministers are already outside the veto as a result of the massive expansion of majority voting under the previous Government. There is therefore little room for further expansion of majority voting, but we are prepared to consider it in cases in which it might be in Britain's interest. For instance, it would be in our interest to reform the sluggish procedures of the European Court of Justice, but it would not be in our interest if any other country round the table could veto reform of its rules of procedure.
I do not underrate the difficult decisions and tough negotiations that will be essential before we can complete enlargement of the European Union. But the prize is great. It is the final burying of the division of Europe between east and west, which has scarred the continent for half a century. The prize is the reunion of Europe. The result will be an EU that stretches from Portugal to Poland. We will have a single market of 500 million consumers with a combined gross domestic product of £5,000 billion—the largest single market anywhere in the world.
That prospect offers exciting opportunities for our country. Those who would put at risk Britain's standing in such a powerful union are a danger to our national interests. We have no doubt that, faced with the prospect of a wider united Europe, Britain's place is playing a leading part in it and shaping its direction. The Government understand how important it is for Britain to make a success of our membership of the European Union. It is crucial to our trade, prosperity and quality of life. The majority of our exports go to existing members of the European Union. [Interruption.] The right

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hon. Member for Bromley and Chislehurst (Mr. Forth) and the hon. Members for Buckingham (Mr. Bercow) and for Gainsborough (Mr. Leigh) do not want to hear the facts about why Europe is important to their constituents. That is why their constituents will not entrust the Opposition with office.
Some 100,000 people in Britain work at any given time in Europe, where their professional skills are recognised. In the past year alone, more than 40,000 new jobs were created in Britain by inward investors, who came here because they could sell from here to the whole of Europe. Those are the gains to the people of Britain of membership of the European Union. The gains will be even greater in the wider Europe created by enlargement. At some time over the next few years, each of the 12 applicant countries will become members of the European Union. The Government want them to remember Britain as an advocate of enlargement, and want to be regarded as their natural ally when those 12 new members join us at the Council tables of Europe.
That is why the Government recognise that it is in the national interest of Britain to be both a leading advocate of enlargement and a leading partner in a reformed and reunited Europe.
Mr. Francis Maude: I thank the Foreign Secretary for making this statement on a matter of the utmost importance. Will he confirm that the House will have an early opportunity to debate these crucial issues in Government time?
It is absolutely right that enlargement should happen, but I agree with the right hon. Gentleman that it is equally inevitable that an enlarged European Union must undergo serious changes. The EU has today reached a fork in the road. Down one track lies flexibility, the creation of a modern and flexible Europe and a common-sense answer to the challenges of the global economy and the reality of a diverse Europe. Britain has an historic opportunity to chart such a route, and to lead Europe along it.
The second route—
Mr. Andy King: Lead or leave?
Mr. Maude: The hon. Member for Rugby and Kenilworth (Mr. King) may talk about leaving Europe, but of the Foreign Secretary and me, only one of us has ever stood for that. It was the Foreign Secretary, and he said so repeatedly. Few Members of the House have been more anti-European in their time than he has.
The second route at the fork is the familiar federalist walk, step by step, inexorably towards the single European super-state. What else did Romano Prodi mean just a few days ago, when he said that "step by step", the Commission was behaving like a "growing Government"? With the talk of a European army, a European Government, a single legal area, a European prosecutor, and no role for the national veto, there can be little doubt that, step by step, the destination is a single European super-state.
Has not the White Paper simply ducked what really matters—the fact that in a bigger European Union, within a fast-changing world, the one-size-fits-all model of inexorable integration has had its day?
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Why has the Foreign Secretary not ruled out the further extension of the loss of the veto in areas already identified by the Commission, which include measures on discrimination, transport, social policy, the environment, structural and cohesion funds, the common commercial policy, culture and industrial policy? Those are all areas in which an extension of the loss of the veto is proposed. Loss of each one of those vetoes would enable yet more laws to be imposed on Britain, with the House of Commons having no right to decide on them.
The Foreign Secretary says that he will consider such matters case by case. We know what that means. It means, step by step, the creation of the single European super-state. Does not his failure to rule out losing the veto mean that we are discussing not a White Paper, but a white flag?
Let the right hon. Gentleman answer these questions. Will he now rule out further loss of the British veto, so that further legislation cannot be imposed on Britain against our will? Will he reject the development of an EU defence identity outside NATO, which risks undermining NATO? Will he guarantee that the charter of fundamental human rights will never be incorporated in the treaty or made legally enforceable? [HON. MEMBERS: "Why?"] I note that there is a desire to extend the ambit of the European Union yet further.
Will the Foreign Secretary tell the House whether he, like Mr. Prodi's new Commission, is aiming at
"a new kind of global governance to manage the global economy",
based—however incredible it may seem—on
"Europe's model of integration"?
What a failure of vision by the Government, to give up the historic chance to lead Britain and Europe towards a braver future, where nation co-operates with nation in concord and friendship. Why are the Government so locked in the past and trapped by the dogma of rigid uniformity and relentless integration? Britain deserves better than that.
Mr. Cook: If I understood the right hon. Gentleman's opening remarks correctly, he welcomes the Government's support for enlargement, which, if I caught him aright, he described as right and inevitable. I am glad that that is common ground between those on the two Front Benches.
I ask the right hon. Gentleman for the third time: will he now ditch his party's policy of vetoing the enlargement treaty if the Opposition do not get their way in it? Three times I have given him the opportunity, and three times he has refused to do it, so we can only conclude that it is a question of not of the white flag, but of the white van, in which that policy is still alive and still a threat to the 12 countries of central and eastern Europe.
It is a piece of brass neck for the right hon. Gentleman, of all people, to demand that I should rule out any extension of majority voting. He is the man who, as a Minister, signed the Maastricht treaty—[Interruption.]— no wonder he is smiling. That treaty conceded majority voting in 30 different cases—on education, on health and safety, on public health and on freedom of movement. After that record, how does he have the nerve to posture as the champion of the veto?

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The right hon. Gentleman should be proud that he is the champion of majority voting. I will share his words with the House. He said:
"The number of times that we are in the minority and are out-voted is tiny."—[Official Report, 11 June 1990; Vol. 174, c. 103.]
He was right at that time; he should have the courage to stand by his principles. We shall look carefully, on a case-by-case basis, at where majority voting would lift a block on reform. I may disappoint the right hon. Gentleman, but I cannot hope to match his all-time record of conceding the veto 30 times with one signature.
From the right hon. Gentleman's response, it is plain that the Tory party does not welcome anything that anyone else wants to discuss in the negotiations, and that anything the Tories propose will not be welcomed by anyone else. That is a recipe for isolation.
After three years in opposition, the Tories have still not grasped how much they damaged our national interest by isolating Britain in Europe. As long as they refuse to learn that lesson, the people of Britain will give them many more years in opposition to learn it.
Mr. Giles Radice: I welcome my right hon. Friend's support for enlargement. It will be in the interests not only of the new entrants, but of existing members, including the United Kingdom. I also welcome my right hon. Friend's support for sensible institutional reform. Does he agree that it is good that his White Paper concentrates on the real issues, rather than raising the foolish spectre of the veto, which the Conservatives say they are prepared to use to block enlargement? They said that at their last party conference.
Mr. Cook: I agree with my right hon. Friend in his welcome for the process of enlargement: I appreciatg the fact that he has focused on the issues that are before the House.
The House—and perhaps people in some quarters of our press—should try to throw their minds forward to what Europe will look like 10 years from now. It will be a Europe of 27, perhaps even 28, member states. It will be the largest single market in the world. That will be an immense opportunity for Britain, but only if we are wholehearted in making the best of our membership.
Mr. Menzies Campbell: I welcome the White Paper, which builds on the joint declaration made by the Foreign Secretary and myself during the past fortnight. Let me take the three issues with which the IGC is likely to be concerned. Is it not in the interests of the UK that there should be proposals on the balance of voting in the Council that are for the benefit of the UK? Is it not also true that it will benefit the whole of the European Union if the Commission is both cohesive and effective? Finally, on voting on a case-by-case basis, is it not common sense to examine a proposal on its merits, and to determine whether to support it depending on whether or not it is in the interests of the people of the UK to do so?
The right hon. Gentleman was right to raise the question of enlargement as though it was one of obligation upon those of us who are members of the EU. It would be a tragedy for Europe, and a betrayal of the applicant countries—such as Estonia and Slovenia, which are trying
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to provide a foundation for the democracy that they have so recently won—if their applications for membership of the EU became pawns in the anti-European game currently being played by the British Conservatives.
Mr. Cook: I agree with the last point made by the right hon. and learned Gentleman. I welcome the fact that the Joint Consultative Committee was able to produce a document setting out a joint policy on that issue. I can see from the negotiations in the EU that other countries benefit from the strength of the consensus in their nations on the commitment to Europe and to enlargement. I regret that we cannot achieve an all-party consensus in the House. However, I welcome the fact that it is not only the Labour party that is concerned with that matter and that we have allies in other parties.
I agree entirely that the three points made by the right hon. and learned Gentleman are also three issues of reform that will benefit Britain. It cannot be in Britain's interest not to go positively into an intergovernmental conference that could give Britain a greater weight of votes. It cannot be in Britain's interest not to go into that conference seeking a reformed, coherent, credible Commission. We welcome the opportunity for reform at this conference. We support Europe, we believe that Britain's place is in Europe but we want to ensure that we reform that Europe.
Mr. Tam Dalyell: In his opening statement, the Foreign Secretary took some pride in the conditions that have been imposed, including the closure of three nuclear power stations. If Koslodui in Bulgaria was closed, who would pay for the replacement? The Bulgarians have few other sources of power. And which were the two other stations to which the Foreign Secretary was referring?
Given that the Danube is poisoned, and that it is blocked at Novi Sad, what is the financial obligation to an applicant country—in this case, Bulgaria?
Mr. Cook: First, the three countries concerned are Lithuania, Slovakia and Bulgaria. Secondly, the European Union is providing very large sums of money to help the applicant countries in their preparation and in meeting the conditions that we are setting for membership. Yesterday, the Portuguese presidency and the Commission informed Bulgaria and others that, now that they have entered negotiations, they can expect that sum of financial help to be doubled.
On the blockage of the Danube, yesterday at the General Affairs Council we considered the Danube commission's proposals. I very much hope that that will lead the way forward for the unblocking of the Danube, and we are willing to help with that process. We have been unwilling, rightly—I do not think that the House would wish us to do so—to submit to the blackmail of President Milosevic that we reconstruct his country as part of the price of lifting the blockage in the Danube. The Government of Bulgaria stood shoulder to shoulder with us during the conflict in Kosovo, and that is one of the debts that we owe to them in the enlargement process.
Mr. Michael Colvin: I wonder whether it is evidence of the Government's offhand attitude to the rural economy and agriculture that there was no mention in the

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Foreign Secretary's statement of the common agricultural policy. Can he confirm that, at the moment, the common agricultural policy takes up nearly half the European Union's budget, and that the addition of Poland alone would almost double expenditure on the CAP? Is it really practical to think in terms of another 12 members without fundamental reform of the CAP?
Mr. Cook: My statement today did not mention agriculture because it is not a matter that will be before the intergovernmental conference—although at Berlin we did of course consider the reform of the budget of the European Union, both in relation to agriculture and in relation to structural funds. It is well known that we did not secure as much reform as we would have wished. Nevertheless, we have reduced prices in the European Union's agriculture policy, to an extent that will save the average British family of four £65 in any one year.
We need to make further progress and are determined to do so, but I would rebut the hon. Gentleman's assertion that cost stands in the way of enlargement. If he looks carefully at the proposals for enlargement, he will see that there is no commitment to direct payment for farmers in Poland or any other applicant country.
Mr. Donald Anderson: Surely the opening of the European Union to the new democracies of eastern and central Europe will be seen historically as an investment in democracy in our interests—just as earlier enlargements entrenched democracy in the Iberian peninsula and in Greece. Does my right hon. Friend hope, at the IGC, to see proposals for increased democratic control of EU institutions, including closer linkages between national Parliaments and those institutions? As we are talking about democracy, what will be the mechanisms for consulting the applicant countries about their views on the shape of the new Europe?
Mr. Cook: My hon. Friend makes an important strategic point about the need to support the new democracies of central and eastern Europe by embracing them within the family of nations of the European Union. I believe that one reason why we have had so much stability in central and eastern Europe is precisely that we hold out to them the prospect of membership of the European Union, on conditions that they respect borders but do not make borders into barriers. Already, throughout the applicant countries, major steps have been taken to improve the status and rights of ethnic minorities because that is a condition of membership of the European Union.
My hon. Friend also makes one or two valuable points about the importance of increasing transparency within the European Union. Britain has been at the forefront of that argument. We shall continue to be so. As my hon. Friend knows, we are encouraging closer ties between Scrutiny Committees and the European Parliament.
We will continue to do all that we can to keep the European applicant countries involved in any discussions about the future shape of Europe. That is why we had at dinner last night a discussion at which we reviewed the major strategic issues facing Europe, and we have shared our views with the applicant countries.
Mr. Ian Taylor: My right hon. Friend the Leader of the Opposition said recently and
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rightly that we are committed to membership of the European Union and, therefore, we must make a success of it. Enthusiasm for that point of view is, I am sure, shared by my colleagues who were humming the European anthem during the Foreign Secretary's presentation of the White Paper.
The Foreign Secretary is right to say that, if we are to make a success of the European Union, there are some things that need to be streamlined. We need a more streamlined Commission, a more sensible voting system in which qualified majority voting could be extended outside the core areas that he listed, and a more sensible weighting of votes in relation to population.
However, will the right hon. Gentleman address one item of flexibility that is being discussed not only in this country, but on the continent? What does he understand by potential flexibility? Under the Amsterdam treaty, members were restrained from moving ahead faster if they wished to use the institutions of the European Union to do so. What does he think the negotiations around flexibility will involve, because a few of the new entrants will move at different speeds? That fact could be accommodated by transitional arrangements rather than treaty changes.
Mr. Cook: I am not sure that I entirely share the hon. Gentleman's confidence that his colleagues were hymning the success of the European Union: I sometimes get the impression that nothing would suit them better or make them happier than to see to its failure, despite the immense damage that that would do to this country.
I welcome the hon. Gentleman's agreement to the three main proposals in the White Paper and our three main priorities. On enhanced co-operation, a number of countries wish to improve the procedures that can trigger enhanced co-operation. We are not entirely convinced that that needs to be a priority for this intergovernmental conference, given that the procedures were instituted only three years ago. However, we shall listen to the debate and consider whether it will be practical to make such changes.
Mr. Frank Cook: Will my right hon. Friend give his assessment of the prospect of developing European security and defence policies and of their effect on existing resources and relationships in NATO?
Mr. Robin Cook: The proposal for the European security initiative, in which Britain played a leading part when we started, produces the headline goal that we agreed to in Helsinki. European countries should develop the capacity to put into the field a core strength of service men—50,000 or 60,000—within 60 days and to support them in the field for at least one year. One reason for our adopting that target is our experience in Kosovo and the importance of our being able to provide such a peacekeeping mission.
I stress to my hon. Friend that that increased resource will be available to NATO in the same way as it will be available to the European Union. Should NATO decide to carry out a peacekeeping exercise, it could call on that force just as well as the European Union. Therefore,

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our proposals do not in any way weaken or undermine NATO: on the contrary, they make available to it a new resource that would otherwise not exist.
Mr. Michael Fallon: Why should welcome enlargement and desirable institutional reform necessarily involve more integration?
Mr. Cook: I have set out to the House this afternoon our three main priorities: increased votes for Britain in the Council of Ministers; an improved Commission that is streamlined; and, where it is appropriate and in Britain's interest, an agreement to majority voting. I do not honestly see in any of those a step to integration which the House should reject as a matter of principle. They are all important if we are to make enlargement work. The hon. Gentleman should be frank: is he in favour of enlargement, or is he not?
Mr. Andrew Mackinlay: Has my right hon. Friend noticed the dismay among young people at the flat-earth policy of the Opposition towards Europe, and their failure to recognise that the European Union has been a great vehicle for conflict resolution and is a ratchet and guarantor of democracy? Will my right hon. Friend stand firm during the negotiations in ensuring that there is no Europe a la carte? Although legitimate transitional arrangements are needed, flexibility could be the prescription for the dissolution of that which has been built up to guarantee democracy in Europe and to act as a force for good, for cohesion and for conflict resolution.
Mr. Cook rose—
Mr. Mackinlay: Will my right hon. Friend also tell us what he is going to do about Gibraltar in the negotiations?
Mr. Cook: I should have anticipated that my hon. Friend would mention Gibraltar. We continue to pursue Gibraltar's interests in several different forums within the EU. In particular, we are seeking a way to implement the ruling that the people of Gibraltar should have a vote in European elections, but we are doing so through the common statute of the EU, not through the IGC.
I can reassure my hon. Friend on his other point. What is interesting about the Conservatives' demand for a pick-and-mix Europe is that that demand is not being made by any of the applicant countries. They all want to be full members of the EU, to play their full part in it and to accept their full obligations. Transitional periods may be required for some of the countries, but unlike the Conservative party, they know why they need to be full members and what benefits they will get from that.
Mr. Michael Howard: Are there no circumstances in which the Government would veto the treaty of Nice?
Mr. Cook: If the treaty is produced by the time of Nice, it will be produced only because all member states, including Britain, have agreed to it.
Mr. John McFall: Does the Secretary of State agree that there is a still a lack of clarity from Opposition Front-Bench Members about their attitude to
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enlargement? Does he agree that there are compelling political, social, environmental and trade reasons for enlargement and that western help and technology will be of great benefit to those countries, not least because of nuclear reactors such as the one at Koslodui in Bulgaria?
Mr. Cook: My hon. Friend makes an important point. One should remember that the improvements in nuclear safety in central Europe are improvements in our safety, so we stand to gain. I share my hon. Friends' disappointment at the comments that we have heard from Conservative Members. So far we have heard a lot of criticism of the Government's position at the IGC, and many new demands, but very little support for enlargement. I have to warn Opposition Members that what they have been saying in the House will sink like a lead balloon in a dozen capitals of countries in central and eastern which are trying hard to get into the EU.
Mr. John D. Taylor: How many of the 12 applicant countries have said that it is their ambition eventually to have the euro as their currency? Will the principle of free movement of persons within the European Union apply to the applicant countries, and will the Foreign Secretary therefore welcome the free movement of Turks into Greece, Germany and Cyprus?
Mr. Cook: The principle of freedom of movement will certainly apply to all applicant countries when they succeed in becoming members. We have already said that negotiations with Turkey cannot commence until it conforms with the Copenhagen criteria on democracy, human rights and treatment of ethnic minorities. Turkey is therefore not one of the 12 that are currently in negotiations.
It is understood by most of the applicant countries that, realistically, they are unlikely to join the euro at the time of joining the EU, but many of them have their sights set on that eventual goal.
Mr. Michael Connarty: Does my right hon. Friend agree that the countries that are applying will be very happy with Britain's approach to the number of commissioners and understand why there must be reweighting of voting in Council to ensure that smaller countries, which may be in the majority, will never be able to outvote the countries that have the majority in terms of population?
Mr. Cook: My hon. Friend touches on the very fair bargain that we are offering to smaller countries within the EU and those that are applying for membership; namely, that they may retain their commissioner, at any rate through the first wave of enlargement, but that we in turn need to have a fairer weighting of voting within the Council of Ministers. That is a reasonable bargain which has something in it for all the present members, and I hope that we can achieve that package in the negotiations.
Mr. David Curry: Does the Foreign Secretary recall that the greatest motive for the advance of British interests in Europe has been qualified majority voting? If he intends to move towards a system in the Council of Ministers in which the votes are more

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proportional to population, will he contemplate a situation in which the big four members of the EU no longer enjoy the same number of votes?
Mr. Cook: At present, we would prefer that the existing broad banding be retained; that would mean that all four larger countries would remain in the same band. However, additional weight needs to be given to the votes of the four countries within that band. The right hon. Gentleman refers to votes being proportional to population: we seek an outcome that is more proportional, but we do not seek to disturb the principle that all member states are equal, so votes should not be strictly proportional to population. We do, however, require that fair recognition be given to the size of our population so that we do not find ourselves in the absurd position in which three of the four largest countries do not even constitute a blocking minority.
Dr. Phyllis Starkey: Does my right hon. Friend share my amazement at the false dichotomy proposed by the Opposition spokesman—that the choice is between a super-flexible Europe and a super-federalist Europe? Will he confirm that the Conservatives are the only advocates of those two models and that there is no way in which the IGC will bring either of those two models into being?
Mr. Cook: The limited remit for the IGC will certainly not create a European centralised integrated federal state. While travelling in Europe and meeting leaders of other European nations, I find no appetite for subordinating their nation to any grand federal European integrated state. President Chirac recently said that he believed not in a united states of Europe but in a united Europe of states, and Chancellor Schröder said that the nation state would continue to be at the centre of the hopes and aspirations of the peoples of Europe. We are very comfortable with those statements—we share that vision of the future of Europe.
Mr. John Townend: Is the right hon. Gentleman not at all worried that he is a leading member of a Government who are progressively turning the House of Commons into nothing more than a glorified county council? He failed to answer the question previously, so I shall repeat it: does he think that the IGC will result in more integration? If he does, is that in line with the Labour party's policy of creating a political union—a Europe of the regions? Finally, why did he not mention fishing? The fishing industry is on its knees because of the failure of the common fisheries policy. Why does the right hon. Gentleman not use the opportunity to negotiate a better deal for our fishing industry?
Mr. Cook: I did not mention fishing because it is not on the agenda of the intergovernmental conference. However, it is fair to say that successive Governments have had to wrestle with the extremely poor deal that the Conservative Government obtained on joining the common fisheries policy.
On the question of integration, I can only repeat the three main priorities that we have set out: more votes for Britain, a more sensible Commission, and a case-by-case
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approach to accept majority voting only when it is in our interests. If the hon. Gentleman chooses to describe that as integration, he is free to do so, but let us not try to frighten the public by dangling bogeymen in front of them.
Mr. Bill Rammell: Is it not true that, without some change in decision-making procedures, enlargement of the European Union will not be possible? Is it not also true that QMV currently serves our national interests well, given that we have lost only three of the last 393 votes carried out under QMV? Is it not true that changes in the rules of procedure of the European Court of Justice that could be achieved under QMV would be likely to bring about a speedier resolution to our dispute with France over the beef ban? Is it not about time that we in this country had a grown-up debate about such issues, instead of constantly trying to pretend that Britain loses out under any changes in voting procedure, which is far from the truth?
Mr. Cook: What is impressive about the Conservatives is their lack of confidence in Britain's ability to win a majority vote. In the past two years, we have been outvoted only five times; in the same period, Italy has been outvoted three times as often and Germany four times as often. If unanimity had applied on those occasions, Italy and Germany would have been able to veto decisions that were in our interests. The fact is that, on balance, majority voting has served Britain's interests.
Mr. William Cash: Does the Foreign Secretary accept that the Minister of State, the hon. Member for Leicester, East (Mr. Vaz), recently said of flexibility that the French would not stand for it? Now that they have changed their position, does he accept that flexibility will now not only be on the agenda but is likely to be accompanied by the removal of the veto in that respect, as the European Commission has proposed? Will he assure the House that the Government will insist on retaining the veto in respect of flexibility and that they will renegotiate those provisions?
Mr. Cook: The hon. Gentleman's proposal, as I understand it, is in conflict with the views expressed by the previous shadow Foreign Secretary in his last speech. He said that Britain would not wish to stand in the way of other countries which wanted to pursue flexibility. His sudden disappearance suggests that perhaps his view did not entirely find favour with the Conservative party. We wait to discover whether it remains Conservative Front-Bench policy.
Flexibility is not a pick-and-mix charter for opt-outs. The flexibility that other member states propose means the enhanced co-operation of a tighter group. We agreed to such a model at Amsterdam. It has never been used. It is hard to understand why a provision that has not been used already needs amendment.
Mr. Mike Gapes: What would happen if the British Government ruled out the single currency for ever and also blocked enlargement so that the potential 12 additional members of the European Union were not included in it? What would happen to relations between this country and the rest of the continent if such a policy was pursued by a Government led by white-van man?
Mr. Cook: My hon. Friend makes his case through his question. There is no point in this country remaining a

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member state of the European Union if we, like Conservative Members, are half-hearted about it. A halfhearted Britain in the European Union would secure only half a national interest. If we are to remain a member of the European Union—and we are committed to that—the only rational strategy is to be a full member playing fully to ensure full benefit for Britain.
Sir David Madel: Will the Foreign Secretary be more specific about Cyprus? I think he said that on joining the European Union, an applicant country must accede to free movement of peoples and capital. Does that mean that if Cyprus signs and joins, the division of the island is over, but if the division continues, Cyprus cannot join?
Mr. Cook: That is not our policy. I have long argued from the Dispatch Box that Cyprus's application for membership of the European Union must be judged on its merits. It would assist that process if the division of the island was settled, and the people of the Republic of Cyprus want that to happen. However, it must not be a condition of membership. Freedom of movement between the Republic of Cyprus and the occupied northern sector would apply only if Turkey simultaneously joined the European Union.
Mr. Crispin Blunt: What does the Foreign Secretary envisage as the end state of European political integration?
Mr. Cook: I have already told the House that we share the vision of other European leaders and that we shall continue to move towards a united Europe of states, not a united states of Europe.
Mr. Alasdair Morgan: Does the Foreign Secretary agree that one of the eventual consequences of enlargement will be the diminution of the amount of cash available in the United Kingdom for agrimonetary compensation and structural funds? Is it not therefore essential that we do not lose out on the money that is currently available because of the Government's reluctance to contribute genuine additional match funding?
Mr. Cook: We debated those issues in Berlin. I am sure that the hon. Gentleman will welcome the deal that Britain secured whereby the highlands and islands continue to receive exactly the same amount of money as they received when they were an objective 1 area.
Mr. James Paice: The Foreign Secretary is right that enlargement requires institutional reform, and I look forward to the enlargement about which he speaks. He was also right that retention of the veto could mean that reforms in Britain's interest might not occur. However, is not the reverse also true? Extension of qualified majority voting could mean that Britain would have to accept changes that would not be in our interest. Which is more important?
Mr. Cook: I have already made clear the subjects on which we do not accept an extension of qualified majority voting. They are: border controls; taxation and social security; revenue raising; treaty amendments; and defence. We will retain the veto on those matters for
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precisely the reasons that the hon. Gentleman mentioned. I welcome the hon. Gentleman's recognition, which is not shared by some of his hon. Friends, that retaining the British veto means retaining the veto for everybody else, and leaving our interests subject to it.
Mr. Graham Brady: Will the Foreign Secretary undertake to reject any treaty that does not accord France, Britain and Germany at least that blocking minority vote of which he spoke?
Mr. Cook: If we do not achieve the increase in weighting in the Council, there will be no change to the Commission. If there is no change in the size of the Commission and no change in weighting in the Council of Ministers, it is impossible for the European Union to proceed. That is clearly set out in the protocol to the Amsterdam treaty.
Mr. John Wilkinson: Does the Foreign Secretary realise the importance to Britain's economic interests of our sovereign right to negotiate international air service agreements, particularly as Heathrow is a premier gateway to Europe for those who cross the Atlantic? Can he assure the House that he will not relinquish our veto in transport matters?
Mr. Cook: I fully understand the importance of the air service agreement to Britain and regularly raise it bilaterally with countries that I visit. I assure the hon. Gentleman that I wish to retain the freedom to do so.
Dr. Julian Lewis: In my customary consensual way on these issues, may I ask the Foreign Secretary about systems of proportional representation, which he supports? Given the overwhelming opposition to such systems in the Labour and Conservative parties, will he guarantee that any veto that would prevent Europe from imposing on this country a proportional electoral system for which we had not voted ourselves is not among the many vetoes that he may be considering giving up?
Mr. Cook: I welcome the hon. Gentleman's attempt at consensus-building, although he will have to go a little further next time to secure it. I am aware of no such proposal and plainly would not welcome it. No European Union country—
Dr. Lewis: Would the Foreign Secretary veto it?
Mr. Cook: I am not even aware of the proposal. It would be my firm view that every nation should set its own electoral system.
Mr. Owen Paterson: Mr. Arne Otter of the Estonian Youth Council recently wrote to me. [Interruption.] Labour Members laugh, but they have mentioned Estonia and new applicant states. The letter says that the
"thinking of most Estonians is that an empire is an empire … The people sitting both in Moscow and in Brussels are not familiar … with the situation in small countries … it is usually impossible to make decisions that were good for small and for big."

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Does not the Foreign Secretary think that many applicant countries cannot absorb the full acquis communautaire in one hit and that a more flexible approach would be sensible?
Mr. Cook: I have good relations with the Estonian Foreign Minister, but I confess that I have not received a letter from Mr. Arne Otter. The bulk of the population of Estonia strongly supports its application for membership of the European Union. Indeed, the Estonian Government have taken heroic steps to meet the conditions, particularly in their treatment of the Russian-speaking ethnic minority. In those circumstances, in which Estonia is working hard for membership, we have to work equally hard to make it possible for it to join.

Child Abuse (North Wales)
4.18 pm
The Secretary of State for Wales (Mr. Paul Murphy): With permission, I should like to make a statement about the report of the tribunal of inquiry into the abuse of children in care in the former county council areas of Clwyd and Gwynedd since 1974. Copies of the tribunal's report are available from the Vote Office.
The report includes the testimony of many people who made allegations of physical and sexual abuse and gives an insight into the appalling suffering that they endured as children. It is a tragedy that such treatment should have been meted out to children in care.
The background to the inquiry is complex. Allegations about poor treatment of children in north Wales emerged in 1986. One result was an intensive investigation by the North Wales police in 1991, which resulted in a number of convictions. However, speculation continued that the physical and sexual abuse of children in care in the former Clwyd and Gwynedd was on a much greater scale. In 1996, when Clwyd county council—on legal advice—did not publish a report that it had commissioned, there was increasing concern in north Wales and in the House and renewed speculation in the media, leading to calls for a public inquiry.
The then Secretary of State for Wales, the right hon. Member for Richmond, Yorks (Mr. Hague), informed the House on 17 June 1996 that there would be a judicial inquiry, under the Tribunals of Inquiry (Evidence) Act 1921. Given what has emerged, I think the House will applaud his decision. Sir Ronald Waterhouse was appointed as chairman, with Margaret Clough and Morris le Fleming as the other members.
The tribunal sat for 201 days between January 1997 and April 1998; 264 witnesses gave oral evidence, and 311 submitted written evidence. The work of the tribunal was difficult and harrowing. I place on record our gratitude to the tribunal for the work it has done and our deep admiration of the courage of the many complainants who were willing to relive their childhood experiences.
The report records the testimony of the witnesses in detail and with great sensitivity. Recounting past events will have been distressing to some, and I have made arrangements for the services of the Bridge Child Care Development Service, which provided a witness support team throughout the proceedings, to be available again from today to witnesses and their relatives or partners for a period of up to six months.
In its report the tribunal has named many people: alleged abusers, convicted abusers, local government officers and elected members of local authorities and Welsh Office officials. It has not named complainants or some alleged abusers. The tribunal set out its policy on the naming of names, and did so in the knowledge that its report would have the absolute privilege afforded by the Parliamentary Papers Act 1840.
The tribunal has also confronted the serious questions that arise about the management and safeguarding of children in care. There are 95 conclusions. Those relating to the abuse of children are that there was widespread sexual abuse of boys, and to a lesser extent of girls, in local authority and privately run children's residential establishments and schools, and in an NHS psychiatric unit

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in Clwyd, between 1974 and 1990; that there was no evidence of persistent sexual abuse in children's residential establishments in Gwynedd; that many children in children's residential homes were subjected to physical abuse; that sexual and physical abuse also occurred in a small number of foster homes in Gwynedd; and that
"there was no evidence presented to the Tribunal or to the North Wales Police to establish that there was a wide ranging conspiracy involving prominent persons and others with the objective of sexual activity with children in care".
However, the tribunal also says:
"During the period under review there was a paedophile ring in the Wrexham and Chester areas in the sense that there were a number of male persons, many of them known to each other, who were engaged in paedophile activities and were targeting young men in their middle teens. The evidence does not establish that they were solely or mainly interested in persons in care, but such youngsters were particularly vulnerable to their approaches."
On the role of the police, the local authorities, the Welsh Office and central Government, broadly the tribunal concludes that, with few exceptions, the police carried out investigations properly; that standards of care and of education in children' s residential establishments were deficient; and that failures in the care system were widespread at all levels—including local authorities, the Welsh Office and central Government—embracing staff recruitment, supervision and management; qualifications and training; complaints and investigation procedures; registration and inspection; and policy making, implementation and monitoring by local authorities and by the Government.
There are 72 recommendations.
On the detection of, and response to, abuse, the tribunal recommends that an independent children's commissioner for Wales should be appointed and that every social services authority, not only in Wales, should be required to appoint an appropriately qualified or experienced children's complaints officer.
There are recommendations on advocacy services, complaints procedures and whistleblowers; on assessment and care planning; on inter-agency working when abuse is suspected; on the recruitment and training of staff and foster carers; on inspections and regulation of private residential schools and all forms of children's residential care; on common standards of care; and on support for young people leaving care.
The tribunal makes recommendations on the expertise required in social services management, on the responsibilities of local authority members for monitoring services to children, on the need for a wide-ranging review of children's services in Wales, on the monitoring of residential and fostering services across Wales, and on the appointment of an advisory council for children's services in Wales. Many recommendations are specific to Wales, and the National Assembly will receive a copy of the report today for the first time.
A number of the recommendations have wider implications. We have already put significant new work in hand to secure real improvements in the standards of care that we expect for children living away from home. As the tribunal recognises, there have been many far-reaching changes over the past decade, in particular those flowing from the changed perceptions introduced by the Children Act 1989.
More recently, we have taken a number of important steps to raise the quality of care for children in response to "People Like Us", the report by Sir William Utting of
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the review of safeguards for children living away from home, which was commissioned at the same time as the inquiry. The Protection of Children Act 1999 will create a statutory register of individuals deemed unsuitable to work with children. Regulated child-care providers will be required to check the names of all whom they propose to employ in posts involving regular contact with children against the statutory lists kept by the Department of Health and the Department for Education and Employment.
The Care Standards Bill will introduce improved arrangements in England and Wales for the independent regulation and inspection of local authority, voluntary and private sector services on an evenhanded basis. They will cover the inspection of all children's homes, including those with fewer than four children, fostering agencies, voluntary adoption agencies and residential family centres, and welfare arrangements involving schools. The Bill will also establish new care councils for England and Wales, which will provide enforceable codes of conduct and practice for all social care employees. They will set standards and regulate the work force, helping to ensure that staff receive the training and qualifications that they need.
The Children (Leaving Care) Bill will establish extensive new support arrangements to ensure that young people over 16 leaving care will continue to be supported until they are ready and able to stand on their own. A duty will be placed on local authorities to assess and meet needs, and to keep in touch with care leavers. Our plans for more general youth support—through the Connections programme that has just been launched in England, and a broadly similar scheme for Wales—will offer children in care, and others, a range of support in education, careers, housing and personal relationship issues.
The Government have launched major new programmes—"children first" in Wales, and "quality protects" in England—to improve the management and delivery of children's social services. That will include a distinct role for local councillors. There is revised guidance on inter-agency working to safeguard and promote the welfare of children. The revised paper "Working Together" was issued in England in December 1999, and will be issued in Wales in March.
The tribunal's report adds impetus to this programme for change, but also makes significant new recommendations. We will be looking hard at them to see how they complement changes that we are planning—or are already implementing—or whether a change of direction or emphasis is needed. At the top of the list is the tribunal's call for the appointment of a children's commissioner for Wales. The National Assembly is already working on detailed proposals for such an appointment, and we shall be considering how best to proceed.
Our key concern now must be to satisfy ourselves as far as we can that people who have abused children are not in a position to do so now. Those named in the report who are still working in one of the successor local authorities in north Wales have been traced and risk-assessed. Given the time span covered by the report, however, there are a number of individuals against whom findings have been made in the report who are no longer working for one of the successor authorities, and whose current whereabouts are unknown. We are working

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together to establish their current whereabouts, and to ensure that they do not now pose a risk to children or other vulnerable groups.
In order to achieve that, the Government are taking additional immediate action. We are today extending the consultancy index to permit the inclusion of names in the list otherwise than following a referral by an employer. My right hon. Friend the Secretary of State for Health will announce today that a number of individuals named in the report who have been convicted of offences against children, or against whom the tribunal has made a finding of having harmed children, or of being unsuitable to work with children, are to be included on the extended index temporarily, with immediate effect. That is an interim measure pending representations by those individuals, which will be carefully considered by the Secretary of State before deciding whether they should be included on the extended index permanently.
We are taking immediate steps to establish the current whereabouts of individuals named in the report who have been convicted of offences against children, or against whom findings of having harmed children, or of being unsuitable to work with children, have been made by the tribunal, but whose current whereabouts are unknown.
Today, the Department of Health and the National Assembly have written to all chief executives of health authorities and local authorities in England and in Wales asking them to check their employment records immediately to verify whether such individuals whose whereabouts are unknown are currently working with children, or with other vulnerable groups within their authorities. If such individuals are found to be working with any authority, that authority will be required to inform the Department of Health in England, or the National Assembly of that fact and of the action that the authority proposes to take.
The report is being sent to all local authorities, police authorities, health authorities, NHS trusts, voluntary sector bodies, area child protection committees and other bodies that have a key role in the protection of children. That will enable checks to be made where appropriate. To ensure that the messages in the report are widely read, greater numbers of a summary report are being issued.
The programme of action that we have already put in train is a demanding one for all levels of Government. We are determined to see it through and to use the report as a warning of the constant need for vigilance. The Secretary of State will direct the Government's work to drive through the programme, with advice from the ministerial task group on children's safeguards, which includes local government, the voluntary sector and young people themselves.
Sir Ronald's report catalogues deeds of appalling mistreatment and wickedness, of sexual, physical and emotional abuse, and of the total abuse of trust. To those whose lives have been shattered, to the families of those who have died and to all decent-thinking people, of course, we all say "sorry", but sorry is not enough. We are determined that the report will lead to a society where young people can be cared for in safety and where they can truly enjoy their childhood—just as most of us in the House were able to do.
Nigel Evans: I thank the Secretary of State for Wales for his courtesy in providing me with
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an advance copy of the report and statement. It is, rightly, a weighty report. Our thanks must go to Sir Ronald Waterhouse and to his team for providing us with such a thorough report, which is required reading for all bodies and organisations that deal with child-care provision away from home.
It is time to reflect on the report, to look carefully at its 72 recommendations, to take on board the reasons why it was set up by my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) in 1996 when he was Secretary of State for Wales, and to act with speed and determination.
Our thoughts are clearly with the victims who are at the centre of the report. It makes chilling reading. It has already been described as the greatest scandal to hit the modern welfare state. It contains descriptions of horrendous abuse, physical and sexual, over 20 years involving hundreds of children, the most vulnerable young people in our society, in many homes. It leaves one filled with many emotions and feelings. The main one for me is a sense of betrayal. Our system has betrayed the very people who needed our help most; it not only failed them, and failed to deliver for them and to live up to their expectations and our intentions: it betrayed them.
We do not look for a knee-jerk reaction to produce a short-term fix for what are long-term deficiencies and decay. It is the system that has let down our children, and it is the system that must be addressed. As the Secretary of State himself has acknowledged, the system—notably by means of the Children Act 1989 and other measures—is being addressed. Nevertheless, we must remember that not only the depravity of the acts that we are considering, but the utter scale of the abuse condemn the system that allowed such abuse.
This major inquiry followed many internal investigations into child abuse in north Wales, including a report by John Jollins. Sadly, however, on legal advice, that report was not made public. There was also a major police investigation, in 1991, that resulted in eight prosecutions and six convictions.
Subsequent to that inquiry and the non-publication of reports, my right hon. Friend the Member for Richmond, Yorks initiated the judicial review. At the same time, the then Secretary of State for Health, my right hon. Friend the Member for Charnwood (Mr. Dorrell), established his review—which the Secretary of State for Wales mentioned—under Sir William Utting, of safeguards for children living away from home.
Today's headlines will report and centre on the call for an independent commissioner for children and for children's complaint officers in each local authority. Although due consideration must be given to those recommendations—especially considering the backing that they have received from various voluntary organisations—all the recommendations should be considered carefully. Each of the recommendations should play an important role in building a strong fabric of detection and of protection for our children. I therefore have a number of questions about the recommendations.
Will the Secretary of State tell the House in what time scale he expects the Government to consider the report before they are able to provide their response? I appreciate that measures are being considered by the House now—Sir Ronald himself refers to that fact—but with today's

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publication of the report, we should know what time scale the Government envisage for consideration of and consultation on the recommendations.
The Secretary of State stated that counselling facilities will be available for six months to victims and their families, provided by the Bridge Child Care Development Service. We welcome that provision. However, will he give an assurance that he would be prepared to revisit the matter of counselling in the light of requests from those receiving help, with the possibility of extending the time for which counselling is available?
One of the report's recommendations is to examine the availability and adequacy of fostering provision. Will the Secretary of State give an assurance that such an examination will be made? My hon. Friend the Member for Woodspring (Dr. Fox) has established his own commission on the provision of fostering and adoption, which is being chaired by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis). Both fostering and adoption are vital to providing greater stability and security within a family atmosphere, and both can play an important role in child-care provision.
What role does the Secretary of State envisage for charitable bodies such as Barnardos, the National Society for the Prevention of Cruelty to Children and others in developing the Government's policy on child care? Those organisations have tremendous expertise. What additional role does he envisage them playing in addressing the issues?
After the publicity that the report will receive, it is likely that other victims will wish to come forward. Will the Secretary of State assure the House that sufficient measures will be put in place not only to cope with further complaints as they arise, but to encourage former victims to come forward? One of the reasons given by victims for not complaining at the time, or soon afterwards, was their sense of guilt and shame. Will the Secretary of State assure the victims that there is no guilt or shame for them, but that their evidence in coming forward will help further to root out abuses that still exist in the system? Will he also make public the best course for them in making their complaints?
The Secretary of State has stated that he will assist in helping to track down the people named in the report, but who have since moved on and whose location we do not yet know. Will he say how many people he believes fall into that category? In his requests for local authorities and other bodies to check their employee records, will he include a time limit in which those checks are to be made, to ensure that everyone is clear about the urgency of the situation?
Will the Secretary of State discuss with his colleagues in Government the need for fresh guidelines to deal with deficiencies in the system, so that internal inquiries, such as the Jollins inquiry, are made in such a manner that they can be properly published and acted on?
The Government's response to the Utting report states that children have a right to be protected against abuse. That is a provision of the United Nations convention on the rights of the child, which the United Kingdom has ratified. We cannot guarantee that abuse will never occur, but particularly for children living away from home, the Government have a responsibility to put all practicable safeguards in place to prevent it, to uncover it when it occurs and to deal severely with those responsible.
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Conservative Members fully endorse those aims. We shall work with the Government to bring about excellence in child-care provision throughout the country and to ensure that the horrendous and appalling acts of abuse that have stained and scarred so many lives in this country, particularly in north Wales, will never happen again.
Mr. Murphy: I agree with everything that the hon. Gentleman has said, particularly his comments on the victims of such terrible acts. I agree that we do not want knee-jerk reactions to such an important and sensitive report.
The hon. Gentleman asked about the time scale. We hope that matters will be dealt with as soon as possible. The Ministry working group will meet next week. We shall revisit the issue of counselling victims and others after six months if it is felt that there is a need. I entirely agree with him on fostering provision. The National Assembly for Wales and the Department of Health will be dealing with that. I also agree that charitable bodies play a hugely important role, working closely with the Department and the National Assembly. If others have complaints, they should be listened to seriously and the method by which they are able to do that should be made public. I also agree that no guilt or shame should attach to such complaints.
Approximately 200 people are named in the report, although not all are associated with abuse. Some of them needed to be named so that they could be exonerated. Twenty-five people have been convicted. A number have died. The report makes findings against 11 people—either that they have harmed children or that they are unsuitable to work with children. Information in the report brings into question the suitability to work with children of a further 30 to 40 people, but in relation to a wide variety of incidents of differing gravity. The letters to local authorities and health authorities requesting the information required by my right hon. Friend the Secretary of State for Health and the National Assembly have been sent today. We shall require a response by 5 pm on Thursday this week.
Mr. Martyn Jones: As my right hon. Friend knows, many of the private homes involved in the tragedy are in my constituency. Will he assure me and the residents of north Wales that all the alleged abusers and all those named by the victims—including those not named in the report—will be subject to investigation and prosecution if necessary?
Mr. Murphy: Yes, I think that I made that clear. My hon. Friend has played an important role as a north Wales Member of Parliament in watching the events closely. He represents his constituency well on these matters. We are asking every local authority and health authority in England and Wales to inquire as to whether anyone named in the report is working for them. If they are, the authority must report to the Department of Health or the National Assembly by Thursday. In addition, the report will be widely available to all sorts of authorities—including police authorities, health authorities, local education authorities and social services authorities—as well as in libraries. Everyone who needs to see the report will be able to do so. Employers will be able to read it and take appropriate action.
Mr. Richard Livsey: I thank the Secretary of State for doing me the courtesy of giving

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me a prior viewing of the report. That was very valuable. We endorse the congratulations to Sir Ronald Waterhouse on the very thorough conduct of his inquiry and report. The investigation has exposed a shocking catalogue of child abuse that is a massive tragedy for the victims who have been abused, and was a betrayal of children's trust.
We accept the report and its 72 recommendations, especially the recommendations for an independent children's commissioner for Wales—for which the Liberal Democrats in the National Assembly have pressed especially hard—and a children's complaints officer. We need to strengthen investigative powers and the complaints procedure, as well as to provide sufficient qualified staff and training, which are especially important. We also need advocates for children.
Will the Secretary of State ensure that the names of unnamed abusers in the report will appear on the register of known abusers? Will he clarify the situation of NHS-registered homes? Page 50 of the report mentions the Gwynfa NHS psychiatric unit in Upper Colwyn, where staff were suspended but their case could not be properly addressed by the tribunal. That is a problem that crosses the responsibilities of police authorities. Will the Secretary of State authorise compensation for those victims whose lives have been ruined by abuse in establishments in north Wales?
Mr. Murphy: I endorse the hon. Member's views on the tribunal. The three members worked unbelievably hard over a long time and had to listen to some terrible things. When hon. Members read the report in detail, they will see how well written it is and how many recommendations it makes that should be considered very seriously. I also wish to mention Sir Ronald Hadfield, who was the adviser to the tribunal on police matters and provided useful and important advice.
The hon. Gentleman asked whether unnamed abusers would be put on the register. I refer him to the policy on naming names that the tribunal describes in its report. The members thought carefully about what they should do, because they wanted to identify those persons who have already been subject to relevant court proceedings; individuals against whom a significant number of complaints had been made, with the tribunal's assessment of them; other persons who figured prominently in the evidence, whether they had been the subject of substantial complaints or not; a limited number of persons who should have been identified to exonerate them after rumours about them had circulated; and persons who had not been the subject of allegations of abuse but who were in positions of responsibility and whose acts and omissions were relevant to the tribunal's full terms of reference—including council officials and police officers—and who had not had the benefit of any anonymity ruling by the tribunal. That covers many people, and those who are covered by it should be named and, therefore, identified in the way that I described earlier.
Mr. Gareth Thomas: I endorse my right hon. Friend's expression of gratitude to Sir Ronald Waterhouse and his team for their valuable work. The priority now has to be to prevent any recurrence of that systematic abuse. In that connection, how do the
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Government intend to proceed through primary legislation? My right hon. Friend has referred already to two Bills that will be before the House shortly, but do the Government intend to amend those Bills to take on board the recommendations in the report?
With specific reference to the children's commissioner for Wales, is it my right hon. Friend's understanding that primary legislation will be required to achieve statutory authority for that role? What assurances can he give, especially to cash-strapped local authorities, that reform programmes will be properly resourced?
Mr. Murphy: I thank my hon. Friend, who represents a north Wales constituency, and has a particular interest in the findings of the report. As he knows, primary legislation for Wales on social services is a matter for this House, and he is right to point to the various relevant Bills going through Parliament, particularly the Care Standards Bill.
My hon. Friend will also be aware that a children's commissioner for Wales is a manifesto commitment of our party, which has the widespread support of other parties in the National Assembly for Wales. The Assembly has been considering the matter in its committees over a matter of months. I have been in close contact with the Assembly's First Secretary and Health Secretary. We are currently studying the implications of a legislative vehicle for a children's commissioner. However, my hon. Friend may rest assured that we will give it priority.
Mr. David Davis: I join the Secretary of State in his condemnation of the evil people who undertook these grotesque actions against just about the most vulnerable children in our society. However, we should not allow that condemnation to be used to tarnish the reputation of social workers who commit their lives and their efforts to supporting those young children.
I welcome the thrust of the 72 proposals, although obviously we have not read all of them yet. I welcome particularly the fact that they reinforce the "quality protects" initiative and the Care Standards Bill, now in the House of Lords.
All these matters interact in a complex way. The balance of adoption, fostering and care is difficult to get right, and more than one Government have struggled with it. Will we have an opportunity to debate the implications of this, not just for the homes in Wales, but for those in the other parts of our kingdom? Such a debate should allow us to cover the whole range of adoption, fostering and care, because these issues clearly deserve our detailed attention and understanding.
Mr. Murphy: I am grateful to the right hon. Gentleman for those comments. I agree with what he says. I particularly agree with his view that we must not tar all social workers with the same brush. There are many thousands of social workers who are currently working in the field and have done so over the decades to which the report refers, and who contribute tremendously to the well-being and protection of young children. We strongly support those people.
I agree with the right hon. Gentleman that the significance of the report of the tribunal is so enormous that it is extremely important for the House to debate it

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as soon as possible. I, of course, cannot determine when that will be, but I should have thought that it has to be fairly soon. In addition, it should deal not only with Wales but with the entire country.
Mr. Chris Ruane: My right hon. Friend mentioned the involvement of council officers and elected members of the old Clwyd county council. I find that particularly disturbing. Was that a significant factor in the abuse of these young people?
Mr. Murphy: My hon. Friend is another who represents a north Wales constituency. When he reads the report, which I know that he will do with great interest, he will see that so far as the local authorities were concerned, and the officials and elected members therein, the problem was that they simply did not listen to the children—or, indeed, the adults—who were complaining about what they thought were difficulties. There was a lack of decent management, a lack of decent guidance and a lack of direction over a period of 20 years. The report names a number of council officials throughout north Wales who really should have done their job better. That is not, in any sense, to say that they were necessarily involved in the abuse of children—it was more a case of not doing their job well enough.
The report makes an excellent recommendation that elected members who choose to sit on social services committees should take their duties very seriously and visit residential homes in their local authority areas. In the past, it would seem from the report, such visits were very perfunctory. The councillors did not discover what they should have discovered. There is an important role for elected councillors, throughout England and Wales, and I know my right hon. Friend the Secretary of State for Health and his colleagues are also dealing with the matter.
Several hon. Members rose—
Madam Speaker: Order. A number of hon. Members wish to ask questions on the statement, but the main business of the House is yet to begin and must start within the next hour. I should be obliged if hon. Members put one question briskly, and if the Minister replied briskly, so that I may call as many hon. Members as possible. I know that there is deep interest in the matter.
Mr. Elfyn Llwyd: I add my congratulations to Sir Ronald Waterhouse and his colleagues. I welcome the report, as many of us have campaigned for many years for a children's commissioner. The complaints officer will also be an excellent forward move. Will the Secretary of State be amenable to assisting Voices from Care and Children in Wales to advance amendments to the Children (Leaving Care) Bill, on which they have already lobbied Parliament? Their sensible amendments would ensure that the voice of young people was heard.
May I also thank the Secretary of State—I may be doing this in the wrong order—for extending me the courtesy of a preview of the report earlier today?
Mr. Murphy: I am grateful to the hon. Gentleman, who represents a north Wales constituency. I am sure that
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any representations made by organisations such as those to which he has referred will be taken seriously by my ministerial colleagues.
Ms Julie Morgan: Does my right hon. Friend agree that those who fought hard to have an inquiry set up should be congratulated? In particular, Councillors Malcolm King and Dennis Parry and the care worker Alison Taylor deserve our praise. It was extremely difficult to get the issues into the open.
Does my right hon. Friend agree that one of the great tragedies of this matter has been that young people who had to leave home—for whatever reason—ended up in much worse situations? They were supposed to be taken to places of safety, but they were not. I welcome my right hon. Friend's general apology, but would ask for arrangements to be made for apologies to be given to young people who have survived into adulthood. Sadly, many have died. Some of the children came from south Wales, and they have said that no one has ever said sorry to them.
Mr. Murphy: I agree with all that my hon. Friend said about the important role played by members of local authorities and others in getting the tribunal set up. My hon. Friend the Under-Secretary of State for Wales is, as I speak, in north Wales, where I hope he may have the opportunity to say sorry in the area where all the abuse occurred.
Mr. Lembit Öpik: Given the seniority of some of those involved in abuse, it seems likely that it could have spread further across Wales than we have yet established. Does the Minister have a plan that will allow us to break through the veil of secrecy and to find out whether other parts of Wales had similar horrendous catalogues that have not yet come to light?
Mr. Murphy: Many inquiries—32, I think—are being conducted in England and Wales. One large inquiry is happening in my own county, Gwent. The results of the tribunal report will ensure that we are even more vigilant.
Mr. Win Griffiths: I join everybody else in congratulating the team that produced the Waterhouse report. We have not yet taken in all its implications, but the House will surely put its full weight behind any proposals made by my right hon. Friend and the Government, particularly on the children's commissioner. May I plead for significant work on developing skills among both those in social work and those who want to do it? I ask, too, for more support for those people.
As well as focusing on child abuse, which is close to being endemic despite the good work of many social workers, we need to provide a great deal more family support.
Mr. Murphy: I am grateful to my hon. Friend who, as a former Minister in the Welsh Office, is conscious of many of the issues discussed today. I agree that we must make every effort to recruit and train more qualified staff. Too many staff are still unqualified. I know that the training support programme in Wales for 2000–01 is attempting to address these important issues.
Mr. Paul Stinchcombe: Is my right hon. Friend aware that, in a previous existence, I was one

795
of the barristers instructed by Clwyd county council to advise whether the council could publish its own, earlier report into this appalling and tragic scandal? Is my right hon. Friend also aware that had the council published, its insurance company could immediately have argued that its insurance policies were thereby vitiated? Does he agree that action should be taken so that insurance companies no longer have the right of veto over matters of such signal and painful importance?
Mr. Murphy: I am, of course, aware of my hon. Friend's previous existence and of his interest in the report published today. The question whether insurance can affect the publication of certain reports resulting from inquiries is important. When my right hon. Friend the Deputy Prime Minister and the National Assembly for Wales see the report of the proceedings of the House, I am sure that they will take account of my hon. Friend's remarks and consider future activity in that regard.
Mrs. Betty Williams: As a former member of Gwynedd council and chair of social services, I welcome with great emotion my right hon. Friend's statement, and look forward to working with our colleagues at the National Assembly for Wales. Does my right hon. Friend agree that when the commissioner is appointed, it is important that he or she should work in partnership with colleagues in other parts of the United Kingdom, as abuse does not have convenient boundaries? That is where we failed in the past, and we must make sure that we do not fail in the future.
I know that my colleagues at the Welsh Assembly will understand the point that it is important that advocates should be able to communicate with children and young people, and in Wales it is important that advocates should be bilingual. When children are placed in a vulnerable situation, they find it difficult to express themselves after the experiences that they have gone through, so it is imperative that there be sufficient numbers of suitably trained advocates who can communicate in the language of the child's or the young person's choice.
Mr. Murphy: I am grateful to my hon. Friend, who also represents a Gwynedd constituency. I agree that abusers do not recognise national boundaries, and that there must be the greatest co-operation between any children's commissioner for Wales and any counterpart in England. My hon. Friend's points about the need for the use of Welsh in advocacy are well taken.
Mr. Jon Owen Jones: Does my right hon. Friend agree that what he said today amounts to the most profound statement of failure of the state in its duty of care to the most vulnerable in our society? It is a failure of local government, central Government and society. In the 1970s and 1980s I was a teacher, and I sometimes taught children who were in care homes. I wonder whether I spent sufficient time talking to those children. The report reveals a failure of society as a whole. I approve of the proposal to set up a children's commissioner; I agree with many of my colleagues' comments about that.
May I make one criticism, however? The report, which was commissioned by the right hon. Member for Richmond, Yorks (Mr. Hague), has taken almost four
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years to come before Parliament. Would it not have been possible to issue interim proposals rather sooner? I know that the report is comprehensive, but it has taken a long time. Its recommendations should be implemented as soon as possible.
Mr. Murphy: As a former Minister in the Welsh Office with responsibility for health, my hon. Friend will know that these matters are especially difficult and sensitive. When he sees the size of the report, he will realise that the amount of time taken to produce it was necessary in order to get it right. However, I take the general thrust of his points. It is most important to overcome the difficulties outlined in the report.
Mr. Alan Williams: Is it not staggering that, after so much evil over such a long period, so few people admit to awareness of it? Will the Secretary of State confirm that the present statutory provisions do not include the vetting of volunteers? Is he satisfied that the inquiries that he has set up will not be impeded by existence of that loophole?
Mr. Murphy: I agree with my right hon. Friend's point about volunteers. Paedophiles will find their way into many different occupations and jobs; they will not confine themselves to those that we have discussed today. As a longstanding Member of the House, my right hon. Friend knows how important it will be to consider carefully the recommendations of the report; that is what the Government will do.
Mrs. Llin Golding: This is yet another damning indictment of our failure to protect our young people. As a trustee of the National Society for the Prevention of Cruelty to Children, I welcome the recommendation for a children's commissioner. However, evil knows no boundaries. Will my right hon. Friend speak to other members of the Government about the appointment of a children's commissioner for all our children?
Mr. Murphy: I am grateful to my hon. Friend. In England, there are some differences in the way we deal with these matters. As she will be aware, the relevant Bill will include a commitment to a children's rights official. We need some time to consider the implications for administration in the report, but she can rest assured that all 72 recommendations will be treated very seriously indeed—not only by the Welsh Assembly but by my right hon. Friend the Secretary of State for Health and his colleagues.
Mr. Hilton Dawson: Will my right hon. Friend confirm that the report will strengthen the Government's intention fundamentally to reform the entire care system throughout the United Kingdom? Will he also confirm that the children's commissioner will provide a service for all children? Does he agree that there is great strength of feeling throughout the House as to the need for linked offices—for a children's commissioner for all children in England, Scotland, Northern Ireland and Wales?
Mr. Murphy: I agree with my hon. Friend. However, as he is aware, there is devolution throughout the UK,

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so it is for the Administrations in Northern Ireland, Scotland and Wales to decide how they will react to the report. I have no doubt that they will all agree on the need to treat the recommendations seriously. As I said, there will be provision for the appointment of a children's rights commissioner in England in a relevant Bill. I am sure that our Scottish and Northern Ireland counterparts will consider the report seriously.
Mr. Frank Cook: I must first declare an interest in that I am a founding trustee and director of the Lucy Faithfull Foundation—an organisation that, over 10 years, has rapidly established an international reputation for leading therapeutic techniques for dealing with victims and with perpetrators.
I can hardly welcome the report, but I can register satisfaction that at least it has been produced. We feel relief, but we felt similar relief on the publication of similar reports before. I remember the Cleveland child abuse inquiry, conducted by Lord Justice Butler-Sloss. The report of that inquiry contained more recommendations than this report. However, the recommendations were implemented with great selectivity—driven largely by availability of Treasury funds.
Will my right hon. Friends the Secretaries of State for Wales and for Health and their ministerial teams institute monitoring, as called for by other colleagues today, throughout all the nations in the United Kingdom, to trawl the previous inquiries of this kind and pick up recommendations that have been discarded in the past? That would ensure that we have a comprehensive programme which should be constantly monitored to ensure that it is effective not only in the United Kingdom but against those characters who leave the United Kingdom to practice their scandalous procedures elsewhere, and those who visit the nation from outside.
Mr. Murphy: My hon. Friend is right to say that it is very important to treat all the recommendations with the seriousness that they deserve, but I should remind him that many of the recommendations in the report were anticipated in the drafting of the two relevant Bills before the House; that several measures have been implemented in the past few years, including "quality protects" and "children first"; and that we are in the middle of the biggest overhaul ever of ways in which we can deal with children's safety.
Ms Debra Shipley: This is a very important report and I wholeheartedly welcome the Minister's response. However, in his response he drew on the Protection of Children Act 1999 several times, and I feel that it is my duty to point out that there is a major loophole in the Act, concerning volunteers. At the moment, the 1999 Act only allows for the vetting of
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volunteers—it does not require it. If we do not shut this door when we know that it is open, it will be an avenue for abuse. I call on the Minister to consider that as a matter of urgency. None of the measures introduced by the Care Standards Bill or any of the other measures coming before the House in the foreseeable future close off that avenue, which is still open.
Mr. Murphy: I am grateful to my hon. Friend, who pioneered the Protection of Children Bill in the House and will be thanked by generations to come for what she has done. However, on the vetting of volunteers—a matter which my right hon. Friend the Member for Swansea, West (Mr. Williams) also mentioned—we do understand the point that my hon. Friend is making and we will examine the matter.
Mr. John McFall: The Secretary of State expressed it aptly when he said that what had happened was a total abuse of power and that sorry was not enough. Does he consider that these principles should be extended to other fields, such as educational and residential settings; that active child protection policies should be pursued; that a complaints procedure should be instituted; and that designated teachers and senior officers should be responsible for reporting at least yearly, thereby transforming their passive role into an active one?
Mr. Murphy: I agree with my hon. Friend and I believe that education departments, whether they be in England or in Scotland, Wales or Northern Ireland in the devolved Administrations, will take a very close interest in the tribunal's report. We already have the Department for Education and Employment measures, List 99 and others, which are very important, but in addition there must be close liaison between the social services departments and education departments of local authorities.

BILL PRESENTED
  GENETICALLY MODIFIED FOOD AND PRODUCER LIABILITY
  Mr. Alan Simpson, supported by Mr. Tony Benn, Audrey Wise, Mr. Norman Baker, Mr. John McDonnell, Mrs. Alice Mahon, Mr. Llew Smith, Mr. Robert Marshall-Andrews, Mr. David Chaytor, Mr. Jeremy Corbyn, Mrs. Maria Fyfe and Dr. Ian Gibson presented a Bill to make further provision with respect to the safety of and liability for the deliberate release or marketing of genetically modified organisms and genetically modified food; to establish a genetically modified organism compensation fund; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 10 March, and to be printed [Bill 68].

Marine Wildlife Protection
5.13 pm
Mrs. Helen Brinton: I beg to move,
That leave be given to bring in a Bill to enable local authorities to prohibit the use of motorised marine leisure vessels in coastal areas for the purposes of protecting marine wildlife and promoting safety; and to make it an offence recklessly or intentionally to disturb marine wildlife.
The Bill would give local authorities power to designate any coastal marine area within its jurisdiction as a motorised marine leisure vessels free zone on a temporary or permanent basis. Such vessels would be defined as "motorised water craft used for leisure purposes" and include mechanically powered pleasure craft propelled by water jet—what are commonly known as jetskis or, more generically, wetbikes.
Local authority byelaws would also provide for fixed penalty notices with fines not exceeding £1,000 for each offence. Such fixed penalty notices would be issued by an appropriate local authority officer, who would have the power to require a suspected offender to give their name and address, and it would be an offence not to do so.
The Bill would also amend the Wildlife and Countryside Act 1981 to make it an offence intentionally or recklessly to disturb any cetacean—dolphins, porpoises and whales—in any location; any basking shark; or any sea bird in a breeding, moulting, roosting or feeding area where the birds congregate.
Under United Kingdom criminal law, a person is reckless if he or she commits an act that involves an obvious and serious risk of harmful consequence and either fails to give any thought to the possibility of there being any such risk or, having recognised that some risk is involved, none the less goes on to take it. That is an important concept, because it is usually very difficult to prove intentionality in the marine environment. Indeed, the main intention of most offenders is unlikely to be to cause injury to marine life.
I become involved with the issue last summer when I was contacted by The Sunday Times in my capacity as chair of the all-party group for wildlife protection. Since 1997, the newspaper has campaigned for the introduction of controls on the use of wetbikes. The campaign calls for legislation to bring in a minimum age for wetbike use, compulsory education, registration and insurance, zoning away from beaches and a complete ban in national parks and other sensitive areas. I was convinced of the importance of the campaign.
Wetbikes are capable of speeds of more than 65 mph, can easily be operated by inexperienced people and are particularly dangerous in that, if the motor is turned off, it is impossible to steer them. As a result, there have been horrific accidents involving riders, passengers and other water users.
Wetbikes are not covered by the same legislation as small boats and there is a tradition of minimal regulation of private pleasure craft. Local authorities can introduce byelaws and some councils, in particular Gwynedd in north Wales, have used their powers to the utmost to secure safer controls on wetbike use. However, at best, they are just piecemeal solutions.
The Sunday Times campaign has enjoyed widespread support. I have received many almost entirely supportive letters from people all over the United Kingdom and,
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indeed, from other countries. Some letters have concentrated on human safety and others on the impact on the environment and on wildlife in particular. There are serious issues of noise, and of pollution because of unburned fuel which affects humans and the natural environment as well as wildlife species.
On 11 November 1997, my hon. Friend the Member for Clwyd, West (Mr. Thomas) obtained leave to introduce a Bill to regulate the use of wetbikes. My Bill uses a more general definition—motorised marine leisure vessels—to cover the development of newer personal watercraft. Someone whom I talked to suggested that mini-hovercraft were not too fanciful a possibility. Rigid inflatable boats, such as those used by scuba divers, already sometimes cause problems.
Perhaps because of my involvement in the campaign for wildlife reform more generally, I was approached by the Whale and Dolphin Conservation Society. Its concerns, naturally enough, focus on the effects of uncontrolled wetbikes and similar craft on marine mammals.
In the United Kingdom, the main species affected is a type of dolphin, but even they are far from common and their numbers may well be in decline. There are only two or three places where they are regularly found together, with occasional sightings along the south-west coast. Many people, including me, have never seen them in our coastal waters. That may be why harassment of them is so common when they appear. They have long been reputed to seek out contact with humans and to enjoy jumping the waves created by boats. They can swim very fast. However, unfortunately for them, even the fastest can achieve a mere 35 mph, and that in short bursts. They most certainly cannot outpace wetbikes and other fast-moving craft. Unlike some other wildlife species, they cannot retaliate and protect themselves. As far as I know, they are not aggressive at all.
Tomorrow, I am delighted to be hosting a reception in the Jubilee Room for the Whale and Dolphin Conservation Society where it will launch a report entitled "Chasing Dolphins". The reception is supported by The Sunday Times and the Royal Society for the Protection of Birds, because marine birds would, as I said earlier, be covered by my Bill. I do not want to pre-empt the report, but I shall say simply that it documents many cases of prolonged harassment and resulting injury to cetaceans and basking sharks around Britain.
The report makes very distressing reading. One of those reporting an incident involving a number of speedboats writes:
"How would you feel if you saw five big trucks driving repeatedly at a herd of deer where there is no cover and mothers with young are frantically trying to escape?"
The WDCS and many other wildlife groups, which have come together in the Wildlife and Countryside Link to campaign for new wildlife laws, eagerly await the publication of the Government's countryside and access Bill later this month, as do many Members of both Houses. We were elated when it was included in the Queen's Speech. Many Members of both Houses have asked questions and engaged in debates, and many hon. Members from all parties signed the early-day motion tabled by my hon. Friend the Member for The Wrekin (Mr. Bradley).
It is possible that the Government's Bill will include measures to promote marine conservation, but it is likely to concentrate on terrestrial wildlife protection,

801
particularly for wildlife found on sites of special scientific interest. In any case, it will be a very large Bill, and no Bill can do everything.
The Government have signalled their intention to introduce new marine legislation at some future date. In October 1998, they accepted the recommendations of the working party on the review of byelaw powers for the coast. This January, the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Streatham (Mr. Hill), who is the Shipping Minister, announced a welcome number of voluntary measures, comprising a code of conduct for all types of recreational craft including wetbikes.
The need for the measures proposed in my Bill, however, is urgent. The incidence of harassment is increasing, as is the use of small, fast personal watercraft. Yet there has never been a prosecution for such harassment in this country. There must be zones known to be important to wildlife where it can be free from such harassment. The concept of recklessness is an essential element in the control of harassment because it is extremely difficult, in the marine context, to prove that any disturbance is deliberate. It is necessary to extend enforcement powers to locally designated officers other than the police and to give them the appropriate sanctions.
I hope that my Bill will be acceptable to the House and that its proposals, in some form, become part of UK legislation in future.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Helen Brinton, Mr. Peter Bottomley, Mr. David Drew, Mr. Lindsay Hoyle, Jane Griffiths, Mr. Ieuan Wyn Jones, Mr. Paul Keetch, Mr. David Lepper, Mr. Tim Loughton, Mr. Alan Simpson, Mr. Andrew Stunell and Ms Joan Walley.

Marine Wildlife Protection
  MARINE WILDLIFE PROTECTION BILL
  Mrs. Helen Brinton accordingly presented a Bill to enable local authorities to prohibit the use of motorised marine leisure vessels in coastal areas for the purposes of protecting marine wildlife and promoting safety; and to make it an offence recklessly or intentionally to disturb marine wildlife: And the same was read the First time; and ordered to be a read a Second time on Friday 7 April, and to be printed [Bill 69].
Orders of the Day

  Postal Services Bill
  [Relevant documents: The Twelfth Report from the Trade and Industry Committee, Session 1998–99, on the 1999 Post Office White Paper, HC 94, and the Government's response thereto, HC 50 of Session 1999–2000.]
  Order for Second Reading read.
  Mr. Deputy Speaker (Mr. Michael Lord): Before I call the Secretary of State, I say to the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition. I remind the House that there is a 10-minute limit on all Back-Bench speeches in the debate.
  5.23 pm
  The Secretary of State for Trade and Industry (Mr. Stephen Byers): I beg to move, That the Bill be now read a Second time.
  Mr. Peter Bottomley: Resign!
  Mr. Byers: I thank the hon. Gentleman. That is my usual welcome to the Dispatch Box.
  As hon. Members will know, the Government are committed to the modernisation and reform of public services, and the Bill is part of our programme for ensuring that the country has a postal service that is fit for the 21st century. It will establish a modern Post Office that is able to grow as a significant global player and to meet the enormous challenges now arising in the rapidly changing national and international markets. It will provide a firm basis for competition in the postal services market and a better deal for consumers, including the socially disadvantaged.
  Mr. David Chidgey: When he mentioned competition, the Secretary of State triggered in my mind a thought that I should like to put to him. He will be aware that the Benefits Agency contract with the Post Office will expire in a number of years and that, after that, the Post Office will have to compete for that contract. He will also be aware that many sub-post offices rely on that contract for their viability: nearly half the sub-post offices in my constituency derive 40 per cent. of their income from it. Will he guarantee that the Horizon project, which is essential to the modernisation of our post offices, will have been implemented and will be operating effectively before the Benefits Agency contract is relinquished?
  Mr. Byers: I am delighted to have been able to trigger a thought in the hon. Gentleman's mind—that is pretty good going. If the Government have not done so, I welcome the opportunity to make it clear that we expect Horizon to be fully operational in all post offices by 2001. I shall give details later in my speech of the measures that we want to introduce in the Post Office network. That is a matter of concern to right hon. and hon. Members on both sides of the House, so it is right that we devote some time to debating the Government's policies to support the network of post offices.
  The Bill will ensure that we have a strong Post Office that is better able to serve all its customers in all parts of the country. We believe that our proposal is important,

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  because it shows that we value the Post Office. We have tabled a package of reforms, of which the Bill is only one part, that will maintain and improve postal services in this country and enable the business to become a world player. Under the Bill, the Post Office will enjoy commercial freedom, while remaining in public ownership. That model has operated successfully elsewhere: Sweden and Denmark have shown that it is possible to give a post office commercial freedom, while keeping it in the public sector, increasing competition and guaranteeing a universal service.
  The Bill completes the implementation of the package of reforms set out in the Government White Paper on Post Office reform which I published in July last year. The Bill has been widely welcomed, as was the White Paper. The chairman of the Post Office, Neville Bain, said:
  "For the first time we are being given the commercial freedoms which are vital if the Post Office is to achieve its ambition to be one of the world's top distribution companies. It gives us a springboard to meet and beat the growing competition all around us."
  The postal users watchdog said that the Bill provided consumers with
  "a real avenue of redress for any failure in service",
  and it welcomed the emphasis on increased competition and choice. The Communication Workers Union hailed the Bill as
  "a victory for common sense."
  Mr. Alasdair Morgan: The Minister mentions the watchdog, but can he explain the logic behind the abolition of the Post Office Users Council for Scotland and the creation of a UK-wide consumers council? I accept that the Post Office is a reserved matter, but such an arrangement seems to fly in the face of devolution.
  Mr. Byers: I understand that concern. Within the UK-wide structure, there will be a specific committee to deal with Scotland. I hope that that goes some way to meeting concerns raised about the postal service in Scotland. That committee will be powerful within the overall umbrella of the new UK-wide consumers watchdog. When the hon. Gentleman has had the opportunity to examine our proposals, I hope that he will agree that mechanisms will be in place guaranteeing that consumers in Scotland and in the regions of England and Wales are able to express their views on the quality of postal services provided.
  The Bill has four main objectives. It will give the Post Office the scope to modernise and run a fully commercial business in the 21st century. It will achieve that by converting it from a statutory corporation to a public limited company, with ownership remaining with the Crown. That will complement the greater financial flexibility that we intend to give the Post Office.
  The measure will promote competition by establishing a regulator, which will reduce the part of the market that is reserved largely as a monopoly for the Post Office. The reserved area will be reduced and opened to competitors to the extent that the universal service obligation will continue to be fulfilled.
  The Bill will put consumers first by establishing a new independent regulator and a new consumer council. Both will have strong powers to protect and promote the
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  interests of those who use postal services. The Bill will reinforce the Government's commitment to a modern counters network, which will ensure reasonable access to the counter services offered by the Post Office.
  Part I creates a new regulator, which will be known as the Postal Services Commission. The commission's duty will be to ensure a universal postal service and to look after consumers' interests.
  Mr. David Drew: Will my right hon. Friend comment on one of the most difficult issues: the potential closure of sub-post offices? It is believed that local communities' ability to oppose such closures is insufficient. Can the new regulator beef up the procedures?
  Mr. Byers: My hon. Friend makes an important point. I shall tackle in detail the new procedures that we want to establish for the network. It is convenient to close sub-post offices because there are no access criteria for judging such a decision. The new access criteria that we intend to establish for the first time are important because they will constitute a benchmark against which such decisions can be measured. They will be established when the performance and innovation unit of the Cabinet Office produces its report sometime after Easter.
  In a matter of months, we shall produce access criteria for the first time. The Conservative party did nothing about such criteria in 19 years of office. That is the record of Opposition Members. Most people will be prepared to wait a few months for access criteria.
  Mr. Oliver Letwin rose—
  Mr. Peter Bottomley rose—
  Mr. Byers: I must make progress.
  Mr. Bottomley: Will the Secretary of State give way on the point that he is making?
  Mr. Byers: No, no, no. I must make progress because there is a 10-minute restriction on Back-Bench speeches and I want to allow Back-Bench Members to contribute to the debate.
  Mr. Bottomley rose—
  Mr. Byers: If the hon. Gentleman catches my eye when I specifically deal with the counters network, I shall give way to him. I shall address access criteria later, and I shall be more than willing to give way to him then.
  The Postal Services Commission will be responsible for a new licensing regime for postal services in the reserved area. It will regulate prices, enforce high standards and improve choice through greater licensed competition. The Post Office will initially be licensed to operate in what is currently its monopoly area. However, others will be able to apply for licenses to carry out services in that reserved area. That process is described in part II.
  As well as being able to promote regulated competition, the Commission will be able to propose reductions in the scope of the reserved market area. By introducing competition in that way, we will stimulate greater innovation and lower prices, and promote better services

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  for customers. When competition does not provide effective protection of consumer interests, the Bill will give the regulator new duties and powers to promote consumer interests, regulate prices and ensure a high standard of service to all users.
  Part I makes it the new regulator's duty to ensure provision of the universal service at a uniform tariff. That will provide for the first time in law that the cost of a stamp will be the same anywhere in the United Kingdom, regardless of the distance of delivery.
  The Post Office will be required to provide the universal service through a licence condition. The service will include daily delivery to all addresses at an affordable, uniform tariff.
  Part III provides further protection for consumers through the replacement of the Post Office Users National Council. We shall create a new Consumer Council for Postal Services. It will be given the same powers as the new consumer councils that are being established in the energy and telecoms markets—including wider access to relevant information from the Post Office—to enable it to do its job effectively. For the first time, there will be a single national body for postal users. In that national framework, the Bill also requires the consumer council to set up separate committees for Wales, for Scotland and for Northern Ireland and allows for regional committees to be established for England. I believe that those measures will give consumers the powerful voice that they have lacked for so many years.
  Mr. Letwin: If that array of new councils and the Secretary of State's access criteria show that a non-viable rural post office should not be closed, will he subsidise it?
  Mr. Byers: There is a question of definition of viability but, in Committee, the Government will consider very closely the need to include a provision that would enable a subsidy to be provided where it is appropriate to do so. Indeed, there will be a Government amendment to that effect. [Horn. MEMBERS: "Ah!"] Hon. Members should not jump to the conclusion that—
  Mr. Tony Baldry rose—
  Mr. Byers: May I explain? I shall give way later. We should not jump to the conclusion that we should always look for a subsidy from central Government. Other public organisations such as local authorities may want to invest if they think it appropriate to provide a subsidy but, as we are introducing a Bill that we would like to think will be on the statute book for a good number of years, it is sensible to cover all possibilities. At some time in the future, we may want to consider a subsidy to maintain a post office and the Bill is a suitable vehicle for providing that opportunity. We shall introduce an amendment in Committee to provide for that possibility.
  Mr. Baldry rose—
  Mrs. Angela Browning rose—
  Mr. Byers: I have a choice between a pro-European and an anti-European. I always prefer to give way to a pro-European.
  Mrs. Browning rose—
  Mr. Byers: The anti-Europeans will have their chance. I may describe the hon. Lady as many things, but pro-European is not one of them. I give way to the hon. Member for Banbury (Mr. Baldry).
  Mr. Baldry: I am grateful to the Secretary of State for giving way, although I am sure that my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) would have made the point more elegantly than I. It would be useful for those of us who are keen to sit on the Committee to know how many months we shall have to set aside. His introductory remarks gave the impression that the Bill is a done deal, but now he talks about Government amendments. May we have a sweepstake on how many will be introduced and a prize for every time that more than 100 are agreed to? Will the Committee sit until Easter, Whitsun or the summer recess, and of which year?
  Mr. Byers: As I know how many Government amendments are likely to be tabled, I would happily enter a sweepstake. I could do with the money. I was addressing the serious question of a subsidy. [Interruption.] I want to address the serious point. If the Opposition are against an amendment that would provide the opportunity to make a subsidy, so be it, but I happen to think that the Bill will be better if we cover that eventuality. I have thought about that since its introduction and the Government are prepared to provide such an opportunity. As it seems likely that we shall receive a report from the performance and innovation unit of the Cabinet Office while we are considering the Bill, we should be able to reflect on its recommendations. After consideration, that is what we intend to do. If the Opposition want to play games, so be it, but it will go down badly if they are seen to oppose an amendment—[Interruption.] We can tell from those comments that Conservative Members do not support an amendment that would allow a subsidy to be introduced. I regret that.
  Mr. Peter Bottomley: On a point of order, Mr. Deputy Speaker. The Secretary of State is discussing the reaction of other Members to an amendment that has not been tabled. The convention of the House is that amendments should be tabled. When he tables that Government amendment, will he also table the other amendments and new clauses that are needed because the Government have changed their mind since printing the Bill.
  Mr. Deputy Speaker: That is not a point of order. It is more a matter for debate.
  Mr. Byers: The report of this debate will be read by many people who have a real interest in the Post Office network. They will read with interest that when I replied to a specific point about a subsidy hon. Members opposite did not want us to proceed in the way that I described. That is the implication of what they are saying. They are playing games.
  I shall bring forward an amendment that secures the possibility of providing a subsidy. If Opposition Members do not agree with that, so be it. They can raise the matter in Committee and deal with it then. We intend to adopt that measure because we believe that it is a suitable course

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  of action to ensure that we can protect the network. In 19 years, the Opposition did not provide such an opportunity, but we intend to do precisely that.
  Mrs. Browning rose—
  Mr. John Bercow rose—
  Mr. Byers: The hon. Gentleman's Front-Bench spokesperson also wishes to intervene and, as both are anti-Europeans, I give way to the hon. Member for Tiverton and Honiton (Mrs. Browning)
  Mrs. Browning: I am grateful to the right hon. Gentleman. My original intervention was totally in accord with that of my hon. Friend the Member for Banbury (Mr. Baldry), who asked exactly what I was going to ask but, in his response to my hon. Friend, the Secretary of State said that he knew how many amendments would be tabled. That is contrary to what the Minister for Energy and Competitiveness in Europe told us. If the right hon. Gentleman knows how many new clauses he will table, will he kindly share that information with the House now?
  Mr. Byers: I do not know what comments my right hon. Friend has made. The hon. Lady might like to tell me when my right hon. Friend said that. We shall table amendments in Committee. There will be a number—[Interruption.] Opposition Members who have been in government know that the Government table amendments at the Committee stage. That will happen, and there will be a number. Some of us will try to have a serious debate about the matter. The Opposition may not want to debate a serious issue, which is about the Post Office network, and instead are trying to pursue this point. I shall continue to give them rope, and they will continue to hang themselves. I give way to the hon. Member for Buckingham (Mr. Bercow).
  Mr. Bercow: I am grateful to the right hon. Gentleman for giving way. I confirm that I believe in national self-government.
  What guarantee can the Secretary of State offer to Bruce and Yaeko Spilker, who run the post office in Station road, Marsh Gibbon, OX6 OHN, in my Buckingham constituency, where over 1,000 people have signed a petition in protest against the Government's plans for compulsory payment of benefits into bank accounts from 2003? In reflecting upon the question of a subsidy, will he confirm that he has no intention of discriminating between post offices, depending on whether they are in Conservative, Labour or Liberal Democrat constituencies?
  Mr. Byers: I can confirm that that will not be a factor. It will be a matter at looking at the viability of individual post offices and deciding accordingly.
  When I come on to address issues in relation to the Post Office network, I hope that I shall be able to answer the specific question.
  Dr. Vincent Cable: Will the right hon. Gentleman give way?
  Mr. Byers: I intend to give way once more, and then I want to make progress because I want Back Benchers to be able to take part fully in the debate.
  Dr. Cable: Following the Secretary of State's very helpful indication on accepting the principle of subsidies, can he now give an approximate upper limit to the annual amount that will be forthcoming in relation to the £400 million loss of income?
  Mr. Byers: No, I cannot, but what is crucial is a recognition that local post offices are a vital part of local communities. Over the last decade they have been in decline, as people's life styles and buying habits have changed.
  The network of post offices has never been static. However, the Government must acknowledge the important community and social role played by post offices, and should provide new opportunities to individual post offices. That is why, for the first time, under provisions in the Bill the Government will issue access criteria for Post Office Counters to ensure reasonable access to those services, particularly in rural areas and areas of social deprivation.
  The regulator and the consumer council will monitor the network closely against those criteria, and will advise the Government on the accessibility of public post offices. Access criteria will also provide a fundamental reinforcement of the public's right to appeal against individual closures. Rather than considering an appeal in a vacuum, the consumer council will be able to consider it against tangible access criteria, and will be able, through the regulator, to take up cases with the Post Office to ensure that those criteria are being met and will continue to be met. This underlines the Government's commitment to a nationwide network of post offices—a commitment that we are also implementing by giving the Post Office more commercial freedom, thus enabling post offices to offer new services and win new customers.
  Mr. Patrick McLoughlin: Will the Secretary of State give way?
  Mr. Byers: No. I want to make progress and deal with the important question of automated credit transfer.
  Concerns have been expressed about the impact of ACT on the network, but the Government remain committed to its introduction, both because an increasing number of new benefit recipients choose that method of payment and because it is more secure and more cost-effective than existing paper-based systems. The average cost per transaction by ACT is 1p; the cost of an order book counterfoil is 49p, and the cost of a giro cheque is 79p. Moreover, we estimate that we should save about £200 million a year by reducing the amount of fraud and theft associated with order books and giro cheques.
  For the avoidance of doubt, however, I can confirm that there will be no change in the existing methods of paying benefits before 2003. Between 2003 and 2005, the Benefits Agency will progressively withdraw the existing paper-based methods of paying benefits. The normal system will then involve payment into a bank account.

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  We recognise that, for some benefit recipients, payment into a conventional bank or building society account may not be appropriate or desirable. We have therefore given a commitment that all recipients who wish to do so can continue to gain access to their benefits in cash at post offices both before and after the change to ACT-based methods.
  Mr. Peter Bottomley: Has the Secretary of State any estimate of how much less money will be paid to sub-post offices as a result of the changes?
  Mr. Byers: The hon. Gentleman is confusing two separate contractual arrangements—Benefits Agency payments to the bankers automated clearing system and transactions between the bank and the Post Office. Those contractual relationships will remain in place. If the hon. Gentleman disagrees with that, I shall be happy to allow him to intervene again, but I think he will find that our arrangements will give benefit recipients a genuine choice: if they wish to continue to receive cash, they will be entitled to do so, and that will not change following the transition to ACT.
  Mr. Bottomley: Mine was not a trick question, nor was it confused. I merely asked what estimate of the change in sub-post office income was available to the Secretary of State.
  Mr. Byers: We should consider the hon. Gentleman's question in the round, in the context of the extra facilities that post offices will be able to offer as a result of the measures that we intend to introduce. That is one of the reasons for delaying the move to ACT until 2003. The Post Office network will be in a stronger position to ensure that, if the move results in a loss—and I am not convinced that that will be necessary—it can establish other facilities ensuring that customers continue to go into post offices, either to obtain benefits or to make purchases.
  Mr. Jonathan Shaw: The Secretary of State's assurances about cash payments are welcome, but can he deal with a couple of points made to me by sub-postmasters about recent communications from their organisation? Will holders of bank accounts who choose to have their benefits paid in cash at a post office be able to receive it in that form?
  Can my right hon. Friend also assure us that Crown post offices are safe under the Government? Sadly, two splendid buildings in the Medway towns were closed under the previous Government and the replacements are completely unsatisfactory. I should like that reassurance, too.
  Mr. Byers: I can reassure my hon. Friend on Crown post offices. A minimum standard is now provided to protect the Crown post office network. On his important point about an individual who has a bank account, but who chooses to have cash paid at the post office, that person will still be able to do that between now and 2003. He will still be able to do that between then and 2005 as we move towards ACT, and he will still be able to do that after 2005.
  The important point is that the individual benefit recipient will have a genuine choice. If he chooses to have his benefit paid in cash at the post office, he will continue
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  to be able to do that. That is the position. He will be able to do that because an arrangement will be put in place between banks and the Post Office to ensure that that facility is available.
  Mrs. Browning: For absolute clarity, will the Secretary of State confirm that if benefit recipients—people without a bank account—choose after 2003 to have their benefit paid in cash, that will be paid to them, without any cost to them, through a transferral from the bank to the post office? How will they receive the money? At the moment, they have books, which are being discarded, which we fully understand. Can he talk us through the procedure by which those people can exercise the option that he has described?
  Mr. Byers: I know that there are some people—I will not associate the hon. Lady with it—who are trying to misinterpret the Government's position. I say this in direct answer to her question. There are two categories: there are those people who have bank accounts at the moment and those who choose not to have a bank account. We are working on an arrangement with the banks that will cover those who presently are unbanked, so that they will be able to get their benefit at a post office in full, with no deduction. Let us be clear: they will get the full benefit in cash at a post office.
  For those people who have bank accounts, there will be an arrangement to ensure that the money is paid into the bank account. There will then be a facility to withdraw that money at a post office in cash, again with no reduction from the benefit payment. That is the situation that we are putting in place. It is simple. That is the position that will apply. There will be arrangements through Horizon to ensure that the individuals on the automated network will be able to secure that position.
  Mr. John MacGregor rose—
  Sir Peter Tapsell rose—
  Mr. Byers: I give way to the right hon. Member for South Norfolk (Mr. MacGregor) first. He is a former Chief Secretary to the Treasury, so I must give way.
  Mr. MacGregor: I fully recognise that the Secretary of State is talking about 2003 and later, but is he aware that rural sub-post offices currently fear what will happen in 2003? Many have invested lifetime savings or have heavy borrowings. They are therefore taking decisions now and are concerned about what the position will be. They do not think that the options that he is giving will be adequate. Therefore, the crucial issue is what alternative services they can provide, to which he has just referred. Can he say something about the sort of alternative services that he thinks they will be able to provide and which will replace the lost income?
  Mr. Byers: The right hon. Gentleman makes an important point. I want to come on to the alternative services that we might be able to offer through the network. The Post Office network system is a classic example of a public-private partnership. It is something that we should treasure and value. We need to put in place policies that will help to promote that. We have some ideas and I want to reflect on those, but may I address the wider point?

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  What has concerned me in the whole debate is that there are people who misunderstand the Government's intentions. We have a responsibility to make clear exactly what we intend as a result of going to a system of ACT. I know that there are many worries among people who have invested much of their own money in the post office and are wondering what will happen. We need to do more to explain to them exactly what Government policy is and what our proposals are. If the message is that we need to get that over more clearly, we will need to reflect on that.
  Mrs. Linda Gilroy: Will my right hon. Friend give way?
  Mr. Byers: I want to come to the right hon. Gentleman's point about alternative services, but before doing so I give way to my hon. Friend.
  Mrs. Gilroy: Will my right hon. Friend confirm that the Treasury is investing £500 million in bringing ACT to post offices? Does he agree that the Treasury, which is known for its prudence, is hardly likely to do that if it is going to shut down a large number of post offices?
  Mr. Byers: It is true that around £500 million is being invested by the Government in the Horizon network to automate fully the Post Office network. That is where the investment is being made. That is a tangible demonstration of our commitment towards the Post Office network, but I address again the point about the costs and the different contractual relationships.
  There is an issue about the cost to the Government being just 1p when we move to ACT. The reason is because the Benefits Agency pays a fee of around 1p to what is called the BACS system, which is owned jointly by the banks, for the transfer of the payment into the recipient's bank account. There is no contractual relationship as such between the Benefits Agency and the Post Office for such a transaction. Equally, that will be the position after the introduction of ACT.
  What concerns many sub-postmasters and mistresses is what will happen to the financial relationship that they have at the moment with many banks for providing a cash withdrawal system. Many of those contractual relationships are already in place. I understand that sub- postmasters and mistresses are paid in many cases in excess of 17p per transaction on a range of transactions carried out by the Post Office on an agency basis for the banks.
  Nothing that we are proposing should alter those arrangements. Indeed, there is an argument to say that there will be even more transactions because of the way we intend to develop the system through ACT, so there is no question but that the present contractual relationships between the banks and sub-postmasters and mistresses will remain in place. They will be able to get payment for the transactions that take place, which they carry out on an agency basis for the banks themselves. That will remain in place. Nothing that we are proposing will affect that.
  Mrs. Browning: Just for clarity, the press release that was issued by the Minister for Competitiveness on 11 February states:
  "Under the new system to be introduced by the Benefits Agency in 2003, sub-post offices can expect to get about the same amount for each over-the-counter cash transaction."
  What does that mean?
  Mr. Byers: I will say it a bit more slowly this time, so that the hon. Lady can follow. The point that I was trying to make was that the 17p transaction fee that is paid to post offices on an agency basis for the work that they carry out for banks will remain in place. Nothing that we are proposing changes that contractual relationship. Indeed, in some contractual relationships, they receive more than 17p per transaction, so the benefits of receiving that income will still remain. It is different from the BACS system, which involves a relationship between the Benefits Agency and the banks. The 17p per transaction is a commercial relationship between the banks and the Post Office, where the Post Office acts as an agent for the bank and charges the bank accordingly. Nothing that we are proposing affects that commercial relationship.
  I regret the fact that some commentators who should know better seem to have confused the two and, indeed, are briefing people that it will suddenly drop to 1p per transaction. The 1p is the sum that the Benefits Agency pays the banks under the BACS system. That does not affect the contractual relationship—a distinct relationship—between the Post Office network and the banks themselves. The agency transaction that applies there will remain in place.
  Mr. Russell Brown: Will my right hon. Friend give way?
  Mr. Byers: I will give way once more and then I want to make some progress.
  Mr. Brown: Will my right hon. Friend clarify something for me and, I suspect, for others? If someone goes in with a benefit book for a cash transaction, the sub-postmaster or sub-postmistress will receive about I1p or 12p for that transaction. Is my right hon. Friend saying that, in future, if that person opens a bank account and receives cash from that account over a post office counter, that sub-postmaster or sub-postmistress could well receive 17p for the transaction? Is that what he is saying?
  Mr. Byers: That is a transaction arrangement between the Post Office and the bank and will be dealt with on an agency basis. It will be determined, as it is now, in commercial negotiation between the Post Office and the bank system. On average, the transaction fee is now 17p, if not more, for each transaction that is performed. There is nothing in the Bill or in the ACT arrangements that will change that contractual relationship.
  I should like to deal with the point raised by the right hon. Member for South Norfolk on the alternative services that might be provided through the Post Office network.
  Mr. McLoughlin: Will the right hon. Gentleman give way?
  Mr. Byers: No, I should like to make some progress. [HON. MEMBERS: "Give way."] As Conservative Members

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  know, I am generous to a fault in giving way. However, I should like to make some progress, as many Back Benchers would like to speak in the debate.
  We are investing half a billion pounds in equipping all post offices with a modern, on-line computer system that will enable them to provide a wider and better range of services. The Horizon platform will enable the Post Office to extend substantially its arrangements with banks and building societies, which should greatly extend the banking facilities available to customers generally, but especially in rural and some urban areas from which the banks themselves have withdrawn. The platform has the potential of reinstating banking services in rural communities.
  The Post Office is an under-utilised resource, and its services need to he enhanced and more widely advertised. The provision of 3,000 new cash machines at post offices across the country is an indication of the new opportunities that business is exploiting.
  I am sure that Labour Members will have heard the hon. Member for Rutland and Melton (Mr. Duncan), on behalf of Conservative Members, say that his solution is to privatise the Post Office network—[Interruption.] That has gone on the record as being the policy that he wishes to pursue. However, it is interesting to note that when the issue has been debated, the public have rejected the option of privatisation—whether of the Royal Mail or of the Post Office—and the effect that privatisation would have on the rural network.
  The reality is that the Post Office network—which is, as I said, a very good example of a public-private partnership depends on having a network that is in public ownership. That is the reality of the situation. Privatisation is the preferred approach of the hon. Member for Rutland and Melton—[Interruption.] I am pleased that he agrees with my statement of his preferred approach. However, neither the Post Office network, nor sub-postmasters and mistresses, support that approach. Nevertheless, it is interesting to know his position on the issue.
  We can and will provide 3,000 new cash machines at post offices across the country.
  Mr. Gordon Prentice: Will my right hon. Friend give way?
  Mr. Byers: I should like to make some progress.
  People can now buy a lottery ticket from a post office and they can exchange foreign currency there. Over 4,000 post offices have national lottery on-line terminals, 1,500 of which are in rural areas. In the past 20 years, the number of post offices providing vehicle licences has doubled. Mobile telephone pre-payment cards are available from almost 5,000 post offices, and that number will rise to more than 6,500 by April 2000.
  We need to build on those types of facilities, and part of the modernising government agenda will ensure that we continue to do so. There is no doubt in my mind that our programme for the Post Office network will guarantee a future for the network, recognising the very important role that it plays in our communities.
  The Bill obviously offers much more on the Post Office. It provides a framework for modernisation of the Post Office so that it is able to deliver a world-class
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  service and compete with overseas competitors. The time has come to modernise the Post Office, to enable it to meet the challenges and opportunities of the changing market and of increased competition.
  Britain's Post Office has real achievements to its credit, and the Royal Mail is one of the country's most recognised and valued brands. However, to build on those achievements the Post Office will have to meet four major challenges: to respond to the growth of e-mail and other forms of electronic communication; to meet the challenges of the liberalisation of postal markets in Europe and elsewhere; to meet the growing competition for business consumers; and to adapt to the emergence of new business opportunities.
  The Post Office shares those challenges in common with Europe's other traditional postal service organisations. Change is occurring throughout Europe, and the pace is likely to accelerate. Already, the Post Office faces competition in the United Kingdom from overseas postal administrations and delivery companies, some of which are ahead of the game. The Bill will provide a framework to enable the Post Office to develop to its full potential, providing the greater commercial and financial freedom that it needs to compete effectively.
  The Bill will complete the reform package that we began last summer, giving the Post Office the flexibility it needs to modernise and to run a fully commercial business in the 21st century, but maintaining it within the public sector and delivering our promises on share disposals.
  Part IV of the Bill reinforces our manifesto commitments to give commercial freedom to the Post Office within the public sector. It will convert the Post Office into a public limited company that is able to be more responsive to market demands and to customer demands. A regulated, Government-owned plc is what the Bill proposes. The plc model is widely understood and clearly sets out the duties of directors to the company. It helps to establish the clear separation of the functions of ownership and of management. It also enables the Government to receive a proper dividend, rather than requiring the Post Office to build up cash deposits on its balance sheet.
  The Bill delivers our promise that there will be no sale of Post Office shares without primary legislation. The Bill prevents the Government from disposing of shares or share rights in the Post Office company unless parliamentary approval has been given under the set procedure which is clearly stated in the Bill. Primary legislation will be required to remove those restrictions, to allow a wider disposal of shares.
  The commercial future of the Post Office depends on its being able to compete effectively with other global players. The Post Office must therefore be equipped to develop its business, which may well involve forging alliances and commercial partnership with organisations that have complementary skills. We have to ensure that it has the freedom and commercial flexibility to do that, and the Bill achieves that objective. We have already acted to enable the Post Office to borrow at commercial rates for growth investments up to £75 million annually, without Government approval. Borrowing beyond that sum will still require Government approval. In recent years, an average of 80 per cent. of the Post Office's profits have gone to the Exchequer. The sum will be reduced to

  815
  50 per cent. this year, and to 40 per cent. in 2000–01. The Post Office will, therefore, have new finance to invest in the future.
  I am confident that the Bill will transform the Post Office into a more commercial organisation. It will enable the Post Office to realise its ambition to become a world-class distribution company. In the new global economy, we need a modern and competitive Post Office that can win new business, expand into new markets and create jobs and wealth in Britain. We also need to ensure standards of service and protection for disadvantaged groups and communities. The Bill does precisely that.
  The Bill provides for a Post Office with a modern commercial structure while keeping it within public ownership. It provides for strong consumer protection, wherever possible through competition, and ensures that the benefits of competitive, modern postal services are available to all. It provides the commercial freedoms that will enable our Post Office to become a major global player, while ensuring that we retain the important social obligations—including the counters network—that make the Post Office such an important part of the social fabric of our country.
  The Bill is forward looking. It creates a postal service that is fit for the 21st century, and I commend it to the House.
  6.9 pm
  Mrs. Angela Browning: I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:
  "this House declines to give a Second Reading to the Postal Services Bill because it introduces an unsatisfactory structure of ownership which falls short of granting full commercial freedom, introduces uncompetitive borrowing criteria and does not include provision for transparent accounting practices, imposes new burdens of regulation on private companies rather than encouraging competition and fails to introduce clear access criteria to protect the network of sub Post Offices."
  Last July, following the Secretary of State's statement on the Post Office White Paper, we debated many of the issues that have been raised again tonight. It is extraordinary that, seven months later, we should be presented with a Bill to which, we are already informed, there could be as many as 200 Government amendments. A pattern is emerging. A couple of weeks ago we gave a Second Reading to the Utilities Bill, which also came from the Department of Trade and Industry. It is an affront to the democratic process that the Government—particularly the Secretary of State for Trade and Industry—cannot arrange for the Bills announced in the Queen's Speech to be properly and thoroughly drafted before the House has an opportunity to debate and scrutinise them. The Secretary of State has told the House that he knows how many amendments he intends to table. If the right hon. Gentleman will not return to the Dispatch Box, I hope that the Minister for Competitiveness will tell the House the number. We have to judge the Government's proposals not by relying on the Bill that is printed, but by second-guessing errors and omissions that occur as a result of the way in which the Government bring their legislation before the House.
  In July, the Secretary of State told us with great pride that the postal privilege was to be reduced from £1 to 50p. Indeed, he laid a statutory instrument to that effect,
  816
  only to remove it after pressure from the Post Office unions in the run-up to the Labour party conference. The Bill has been surrounded by muddle and confusion from the time when the Government announced at least some of the detail that we might expect to find in it. Perhaps the Minister for Competitiveness was instrumental in that U-turn. Confusion helps no one, particularly the sub-post office network.
  We have had three debates on the Post Office since then, focusing particularly on sub-post offices. There has been muddle and confusion in much of what the Government have said. They have produced a hybrid structure of a Government-owned plc with a regulator and a consumer body. Despite all the cant and the language of competition, we know that the Government's proposal is a compromise. I have no doubt that the Secretary of State would have liked to privatise the Post Office, not least because the Government have shown that they are willing to accept the concept of privatisation. We expect the privatisation of the National Air Traffic Services shortly, and I am sure that that will not be the Government's only privatisation. Given that they have accepted the principle, it is extraordinary that, rather than proposing the confused structure that we are considering tonight, they have not grasped the opportunity to release the Post Office—particularly the postal services—to competition and allow it to compete and raise money on the open market.
  The Bill is ill prepared and sloppily drafted because the Government want to rush it through. A measure of such importance requires much more attention than that. Let me deal with some of the issues on which I hope the Secretary of State will be able to reassure us that he already has some details.
  Mr. Michael Connarty: Did I discern a policy among all the muddle? Was the hon. Lady saying that the Conservatives would privatise the postal services?
  Mrs. Browning: We shall look at the mess that we inherit from the Government. We support the principle and the need for the Post Office to compete globally, but we are dealing with a hybrid structure and we have no relevant experience to allow us to judge how it will proceed. Interestingly, the Secretary of State has tried, as ever, to allay Labour Members' fears by saying that the Government are not going to privatise fully because they do not intend to dispose of shares at this stage. He has said that primary legislation would be required to do that, but he has never given a guarantee that the Government have ruled it out. The hon. Member for Falkirk, East (Mr. Connarty) might intervene on the Minister when he winds up to ask whether the Government intend to make it clear tonight that they will never dispose of shares in the new structure. We should be interested in that.
  Mr. Edward Leigh: Some of us have spent the best years of our lives, in and out of government, trying to privatise the Post Office. Will my hon. Friend confirm that it was the policy of my right hon. Friend the Member for Henley (Mr. Heseltine) when he was the President of the Board of Trade—and that it is still the policy of those on the Conservative Front Bench—to privatise the Royal Mail?
  Mrs. Browning: We shall be very enthusiastic to do so, but we shall give the Post Office full freedom while

  817
  setting minimum standards for universal delivery of letters and support for the sub-post office network. We already have a good track record on privatisation. We have protected services but freed up industries to the marketplace. I am pleased that the Government seek to emulate that, although they are being a little timid. That formula has been advocated and copied around the world.
  Mrs. Gilroy: If such protection was offered, why did one in five sub-post offices in the network close while the Conservatives were in government?
  Mrs. Browning: I do not know how many sub-post offices the hon. Lady has in her constituency. I have about 60. There are many reasons why sub-post offices have closed. Some that were combined with the general store in a village have closed because of competition from supermarkets. If the hon. Lady was aware of what happens in rural communities—a subject on which the Labour party is not knowledgeable—she would know that many factors have affected the viability of post offices, including demographic changes. People tend to go away from villages to work, so they are not always there during post office opening hours. That has also affected post offices that rely for their income on the trade of the general village store or the sale of other goods. There has been a natural decline in post offices as a result of social changes. When the Conservatives left office in 1997, we left in place a system which recognised that post offices would need to be automated with computers to improve their income. Having said that they will produce the computers, the Government are now saying that post offices must depend solely on computers to make up the loss of the £400 million-worth of income that they currently receive from benefits.
  Mr. Bercow: Does my hon. Friend agree that, to brief herself adequately, the hon. Member for Plymouth, Sutton (Mrs. Gilroy) need do no more than consult her hon. Friend the Member for Forest of Dean (Mrs. Organ) who is sitting next to her, who has eloquently denounced the Government's proposals for compulsory payments into bank accounts? Is it not important that we should hear the hon. Lady's criticisms of the Government during the debate?
  Mrs. Browning: As usual, my hon. Friend is correct. I recall visiting one of the excellent sub-post offices in his constituency in September. The same concerns were voiced there as in the two dozen other sub-post offices around the country that I have visited. Sub-postmasters are concerned because the Government have taken a significant amount of the income that they previously enjoyed and told them that they must not only catch up with the competition from supermarkets and elsewhere but find the means to make up the drop in income. That is why many have told stories similar to that which I heard from the sub-postmistress to whom I spoke in Liverton, in the constituency of my hon. Friend the Member for Teignbridge (Mr. Nicholls) last Friday. Having looked at the projected income for the next three or four years, her bank manager has advised her not to risk borrowing another £15,000 to expand the shop by opening up what was once a store room. That is how fragile sub-post offices are as a result of the Government's policies.
  Mr. Charles Wardle: Does my hon. Friend agree that what she has just described is likely to put between 9,000 and 10,000 sub-post offices on the margin financially?
  Mrs. Browning: My hon. Friend has struck on the right amount, because some 50 per cent. of the sub-post offices will be affected—all of them private businesses. Many of them are owned by people who have sunk retirement capital from other jobs into them only to find that—at a time in their lives when they thought they were building up a nest egg for retirement—the bank managers see them as risky business.
  Mr. David Borrow: If advances in technology mean that the payment of benefits is cheaper and more efficient through the automated credit transfer system, and if that leaves post offices vulnerable, is maintaining an antiquated system the best way to subsidise post offices, or should it be done through a direct clearly accountable subsidy, as my right hon. Friend the Secretary of State suggests?
  Mrs. Browning: I refer the hon. Gentleman to the excellent speech made by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) in a debate on this subject in Westminster Hall in January. My right hon. Friend clearly spelled out the Conservative policy when we left office, and explained why we thought it was worth putting £400 million-worth of taxpayers' money into supporting the sub-post office network. We recognised that sub-post offices fulfil an important social function in communities—and the hon. Gentleman may be disappointed to discover that Ministers do not recognise that.
  We agreed to introduce computerisation because of the problems of fraud associated with benefit books, which would have led to the use of swipe cards and, ultimately, of smart cards. Computers clearly have benefits in allowing small post offices to provide additional services. However, the difference between new Labour and the Conservative party is that my right hon. Friend, who served both as Secretary of State for Trade and Industry and as Secretary of State for Social Security, looked at both sides of the issue and made a value judgment, which was that we were prepared to spend taxpayers' money to sustain vulnerable communities.
  Mr. Martin O'Neill: In the event of the Post Office being privatised, does the hon. Lady envisage that a privately owned company would subsidise a retail network that it did not own to the tune of £400 million a year?
  Mrs. Browning: Any policy that the Conservative party puts forward will be based on what we inherit, and I cannot second-guess what that will be. I shall certainly not speculate now on what might be in the Conservative manifesto, or a policy of the next Conservative Government. Labour Back Benchers seem to be interested in whether and how we would privatise the Royal Mail. If they are so nervous, they should seek a guarantee from the Secretary of State that the Bill is not a precursor to

  819
  full privatisation. The Government should guarantee to their worried Back Benchers that they will never dispose of the shares that they will create and own under the Bill.
  Several hon. Members rose—
  Mrs. Browning: I shall give way to the hon. Member for Plymouth, Sutton (Mrs. Gilroy) once more, because she is from Devon, and I should like to think that the people of Devon can feel that they are represented by somebody who understands the Post Office problem.
  Mrs. Gilroy: I spent some of my younger years in Ottery St. Mary and I am fully aware of the challenges faced by rural areas, as well as by deprived areas. If we were unfortunate enough to have a Conservative Government in future, would they give the guarantees on access that my right hon. Friend the Secretary of State has given tonight? My right hon. Friend said that there will be robust criteria to protect the post office network in the future. Would the hon. Lady uphold them?
  Mrs. Browning: I have explained fully the Conservatives' concern about the Bill, and that we would wish to examine what we inherited from new Labour. However, if the hon. Lady thinks that she has received any guarantees from the Secretary of State about access, she must have better hearing than I have. It is true that the right hon. Gentleman mentioned the subject, but he did not give any guarantees. Perhaps if she catches your eye, Mr. Deputy Speaker, the hon. Lady might like to press the issue, because we would be interested in the actual nature of the access guarantees. As I understand it, they have not yet been worked out and they await a Cabinet Office report.
  Mr. Letwin: Does my hon. Friend agree that, having decided to deprive the rural and other marginal post offices of a large sum of money in an attempt to save money, the Secretary of State has discovered that he is not going to save that money, and—having not saved the money—is going to subsidise them to make up the difference, the result being that those post offices get less money at more expense to him?
  Mrs. Browning: That was beautifully and succinctly put, as I would expect from my hon. Friend and neighbour. He raises an important point: the smash-and-grab raid by the Treasury to save £400 million from the social security budget seems to be rapidly diminishing because the Government will have to shore up other aspects of the Post Office—on some of which we have not yet heard the details—to save their face. It will be interesting to see the balance sheet when everything is done and dusted. My instinct is that little saving will made overall, although the £400 million will have been redistributed. It will not necessarily go through the accounts of the sub-postmasters, who regard it as an essential part of their income.
  Several hon. Members rose—
  Mrs. Browning: I have been generous in giving way and I shall now make some progress.
  820
  I hope that the Minister will be able to provide the answers to some important points when he winds up. The powers of the Secretary of State, especially in the financing of the Post Office, are important. I note that the Bill mentions
  "loans to the Post Office company or any of its subsidiaries."
  Why have the Government used the word "any" rather than "relevant"? The Bill also provides for privileged loans, which could distort the market for other private sector companies, and we shall want to examine those provisions—including the interest rate for any such loans—carefully in Committee. The Secretary of State said that such loans would be at commercial rates, and I hope that we may take him at his word, as there could be distortion of the market if preferential loans were made through borrowing facilities made available by the Government which put the Post Office in a more favourable position than other operators.
  The Secretary of State will have the powers to extinguish certain liabilities of the Post Office or "any of its subsidiaries". Why does the Secretary of State believe that "any" of the subsidiaries should be eligible, as opposed to the "relevant" subsidiaries outlined elsewhere in the Bill? The limit on the loans that will be available to the Post Office is to be increased from £1.2 billion to £5 billion. That will provide reasonable access to the national loans fund for commercial acquisition. Can the Minister identify how that threshold was reached? Why was the sum of £5 billion chosen?
  The Government have allowed the Post Office to spend a sum of money without permission, but when it comes to loans that require the sanction of the Secretary of State, we have the bizarre prospect of a Minister who claims that he wants to take politics out of competition policy authorising loans that could affect the market and give one company a competitive edge over another. How will the Government square that facility with their declared position on competition policy and the Secretary of State's desire not to make political decisions about competitive issues between companies?
  The Bill contains provisions for far too much involvement by the Secretary of State, and he has created a confused structure. Why does the definition of "relevant subsidiary" vary throughout the Bill? Should not the definition in clause 52(8) apply throughout? We are concerned about that.
  Another disappointment is the Government's failure to identify clear accounting procedures so that transparency is guaranteed. We shall be seeking a lot more information about how public money and public risk are to be analysed in a transparent and accountable way. Perhaps that information will be contained in the 200 or more amendments yet to be tabled. In any event, we shall certainly expect the proposals to be tabled before the Bill is considered in Committee, so that they receive full and proper scrutiny.
  European Union countries and others exclude public corporations from their primary measures of public accounts. If the Government insist that the Post Office is not self-financing—which they do, because they have not allowed it the full freedom of the marketplace through privatisation—the accounting procedures and borrowing rules are important. We assume, because of Government ownership, that it will be financed out of public funds. Will the Secretary of State confirm that? Will he also say how those finances are to be presented?

  821
  How does the Secretary of State balance the threshold of the borrowing for the Post Office with the possibility that the investment required would not generate the required return? Is the £5 billion ceiling designed to ensure that the return would be guaranteed in any commercial situation? Could the limit prevent investment that was economically justified? If not, the Post Office would have difficulty in meeting the Government's targets.
  If the Post Office owes the Government money via the national loans fund, the Government will have to borrow from the private sector to maintain their net borrowing or net debt repayment. In that case, why not let the Post Office borrow from the private sector in the first place through full privatisation? Will future Post Office borrowing be included in the primary measure of public sector borrowing?
  We shall want to scrutinise many aspects of the Bill in Committee. I hope that, from what he has heard tonight, the Secretary of State will recognise that the Bill contains much that is confusing. It includes words such as "modernise", "commercialism" and "competitiveness", but it does not really set the Royal Mail free to take its place in a global marketplace, despite what the Secretary of State says.
  The area of greatest confusion concerns the sub-post offices, which were discussed at the beginning of my speech. It is no longer acceptable for any Minister, including the Prime Minister, to dash around the country making statements and saying things simply to assuage public concern, particularly among the sub-postmasters. In the summer recess, the Secretary of State rushed into print, saying how the combination of Camelot and the Post Office in the new national lottery bid was going to be the answer for rural post offices. He must know by now—he clearly did not know then—that the procedures for installing a lottery terminal require a considerable number of transactions to be made a week. I believe that the minimum number is 3,000 a week, which is beyond many of the smallest and most vulnerable sub-post offices, which will not therefore benefit from the installation of a lottery terminal. In my, very rural, constituency, I occasionally have to fight to save a terminal in a small outlet where the number of transactions has dropped to between 1,500 and 2,000 a week. National lottery terminals are not the answer, and it is misleading for Ministers to make people think that they are.
  Only last week, the west country saw the now rather infamous visit of the Prime Minister, who told people in the rural areas that we had never had it so good. On that visit, the Prime Minister told people in the west country that they would receive 3,000 cash dispensers, and that that would be the answer for post offices. That has nothing to do with the Government—it concerns a commercial transaction between post offices and banks. In some of the most fragile of my rural post offices, and in other areas where they operate from clapboard buildings, I cannot imagine a cash dispenser being installed: it would be the first target for ram-raiders. The Government need to get real.
  I hope that we shall be given a commitment tonight that we will have more responsible statements, from the Prime Minister downwards. There is grave concern about the future of the sub-post office network. There is grave
  822
  concern among vulnerable, frail, elderly people about having access to a post office that will continue to provide the services that they have been used to receiving.
  We need to know, before the Division tonight, what else the Bill will contain. Whatever it is, we have been denied the opportunity to debate it this evening.
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I remind the House that a 10-minute rule applies to Back-Bench speeches.
  6.36 pm
  Miss Geraldine Smith: I am particularly pleased to have the opportunity to contribute to the debate. Not only do I represent a constituency in which a significant proportion of the population depends heavily on the service provided by post offices, but before being elected to the House in May 1997, I spent the whole of my adult life working in the postal industry. In my capacity as a Member of Parliament representing Morecambe and Lunesdale, and also as a former Post Office employee and trade union representative, I warmly welcome many of the measures in the Bill.
  I welcome in particular the conversion of the Post Office from a statutory corporation to a public limited company owned by the Crown. That will provide the stability and commercial freedom that the Post Office needs to expand and compete in the global market place, and it will curtail political interference in its affairs. The measures are long overdue, and will no doubt be warmly welcomed by all who work in the industry.
  I pay tribute to all the men and women who work for the Post Office and who, despite the continuous changes, reorganisations and uncertainty over their future, have continued to raise productivity, provide an excellent service to their customers, and play their part in ensuring that the Post Office is a profitable organisation that can compare favourably with any postal business anywhere in the world. The Bill, and the prospect of stability that it brings, is therefore most welcome.
  I have however a couple of areas of concern about the Bill. Clause 56 sets out the procedure to be followed to obtain the approval of Parliament to make share issues or disposals that would otherwise be prohibited by clauses 54 and 55. It appears that the main criterion to be met before a motion to dispose of the public's stake in the Post Office is brought before the House is that the Post Office should persuade the Secretary of State that it is in the company's commercial interest for him to do so.
  Bearing in mind the importance of the Post Office to the economy of this country and the essential role that it plays in the fabric of our society, I believe that the Secretary of State should have a wider obligation than that of simply considering the company's commercial interest. I am of the opinion that prior to any such motion being brought before the House, the Secretary of State must be convinced that the disposal of shares is in the national interest. I believe too that that should be reflected in the Bill. I hope that my right hon. Friend will consider this point, and I will listen with interest to his response.
  Opening up the reserved area to competition is also a matter of concern. The Bill enshrines, for the first time, a universal service obligation and a universal tariff, and I welcome those measures. However, we must be aware

  823
  that provision of that service will require the Post Office to subsidise high-cost, low-revenue services from the income generated by the most profitable areas. Any operator granted a licence in the reserved area must, therefore, face the same service and price obligations to prevent them from cherry-picking the most profitable areas.
  Closures of rural and sub-post offices, and the threat posed by the conversion of benefit payments from order books or giro cheques to automated credit transfer in 2003, are also matters of concern. Closure of post offices is by no means a new phenomenon; about 200—1 per cent. of the network—have closed in each of the past 20 years. There are many reasons for closure, but one of the most common, particularly in rural areas, is that the Post Office cannot find anyone to keep them open because of the low income offered.
  The village of Wray in my constituency is in that situation at present. The post office is up for sale, but no buyer can be found. Clearly, positive action is needed or that problem will continue, and ACT conversion will rapidly accelerate it. Rural post offices are not the only ones that will be affected by ACT, as those in the most deprived areas of towns and cities will be hardest hit because those areas host the largest number of benefit claimants. The west end sub-post office in Morecambe is a good example, because benefit payments constitute the vast majority of transactions carried out there. If revenue from that work is lost and not replaced, the office will undoubtedly close.
  Mr. Bercow: Will the hon. Lady give way?
  Miss Smith: I am sorry, but I do not have time.
  Even at this early stage, local residents are sufficiently concerned to have started a campaign to save the local post office. I accept that it would be foolish to argue against the ACT conversion programme, because its benefit to the Exchequer and its usefulness in combating fraud are plain for all to see. However, the Government must do all they can to mitigate the system's impact on post offices.
  The Horizon project, which will see post offices automated by 2001, will undoubtedly help to attract banking and financial services to post offices. However, I do not believe that that will compensate for the loss of revenue arising from implementation of ACT. The banking industry itself has experienced a sharp decline in demand for similar services.
  I do not offer a universal panacea that would overcome all the problems of post office closure, but I believe that many of them could be avoided if we imaginatively combined the different services that post offices provide. The universal letter guarantee ensures some postal activity in all areas, and it is invariably supplemented by parcel deliveries. When added to the Post Office Counters part of post office work, that can produce an economically manageable level of activity.
  Before any post office is closed, the Post Office should have a duty to examine the possibility of establishing a combined operation. In addition, the Post Office's findings should be made known through existing
  824
  consultative arrangements. Will the Minister consider what I have said? I shall be extremely interested in his response.
  I firmly believe that the Bill takes a huge step in the right direction. I look forward to its passage through the House. Having worked in the Post Office during the 18 years the Tories were in power, I feel that we have little to learn from them, and I dread to think what the Post Office would be like if they ever returned to power.
  6.45 pm
  Mr. Peter Lilley: I apologise for being unable to stay for the wind-up speeches, because I had entered into another commitment before the date of this debate was changed. I congratulate my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) on effectively dissecting a badly drafted Bill and on demolishing an even more poorly briefed Secretary of State, who gave one of the most inadequate explanations of a Bill that the House has ever heard.
  I had hoped to offer some support to the Secretary of State and his Bill. When the White Paper was published, I said that it merited at least one cheer from the Conservatives. I believed that the process initiated by the White Paper would lead inexorably to full privatisation of the Post Office, which would be in the interests of customers, taxpayers, the economy and the employees of the Post Office, who, under a Conservative Government, would be able to become shareholders in their own enterprise.
  Having read the Bill, however, I must reduce my applause to, at most, half a cheer. I still believe that it will ultimately lead to privatisation. However, the obstacles that have been erected to pander to the left wing of the Labour party and the trades union movement will slow the process, prolong the agony and uncertainty and mean that the Post Office misses many of the glittering prizes that would be available if it were in the vanguard of enterprise.
  The Government said that they aimed to modernise the Post Office. The Bill, however, is a "make us modern, but not yet" measure. It deals with a massive, important and rapidly changing industry. That industry needs the dynamo of competition and enterprise if it is to maximise benefits to this country. However, the industry also impinges on certain social priorities, which must be satisfied.
  The Government have acknowledged three main social objectives, which they inherited from the Conservatives. The first is the universal service obligation to deliver to every address at a uniform cost. The second is the universal delivery of benefits, not least to those who cannot afford to travel long distances to pick up their money. The third is the need to maintain a nationwide network of sub-post offices.
  The universal service obligation can readily be met by regulation. We can make universal provision a licence condition and prevent exploitation of any partial monopoly by turning on the tap of competition. The regulatory function does not require the continuation of state ownership. Indeed, if the state owns the company that it regulates, there is an inevitable conflict of interest. The Treasury will want higher prices, but the regulator will want them down at more competitive levels. That is

  825
  inherent in state ownership. Only privatisation can bring about a separation of regulation and ownership, which results in better regulation.
  Moreover, state ownership can lead to unfair competition through access to cheap borrowing. Avoiding that will mean restricting the Post Office's rights to borrow and to diversify, but those things are essential if it is to take advantage of the rapidly changing world of e-commerce and e-mail.
  Above all, the Bill will inhibit international mergers, takeovers and alliances. Indeed, it is clear from the opposition within the Labour party that Labour's main bogey is the threat of international involvement in our Post Office, or its involvement overseas. No group is more xenophobic than the Labour party. Mr. Haider could take lessons from it. By contrast, the Conservatives believe that free trade and free investment maintain and build links between countries, and those links are both to the social and economic good.
  The second and third social obligations—to deliver benefits and to maintain a nationwide network of sub-post offices—have until now been met simultaneously. The Department of Social Security contracts with Post Office Counters Ltd. on condition that the latter maintains a nationwide network of post offices through which benefits can be delivered.
  The Government now claim that they can deliver benefits through the banks instead, and save large sums of money. They say that they will save £400 million without hurting anyone, as if that money will come out of thin air. If the Treasury gains £400 million, somebody loses £400 million, and the losers will mainly be the post offices, which will lose a third of their direct income.
  When I was Secretary of State for Social Security, I received clear advice that a move to compulsory payment of benefits into bank accounts would destroy the network of sub-post offices as we know it. The only way to avoid such a catastrophe would be to introduce a subsidy, which of course would absorb a large part of the savings that the move was intended to make. The net effect would be minimal savings and maximum inconvenience for pensioners, disabled people, young mothers and those on income support.
  When I recently challenged the Secretary of State for Social Security to confirm that he had received similar advice, he refused to answer. He side-stepped the question and went off into auto-rant about my wishing to privatise the sub-post office network—apparently unaware, as was the Secretary of State for Trade and Industry today, that it is already privately run, owned and managed.
  I want the Minister or the Secretary of State to confirm today that the Government received advice similar to that which I received—that without subsidy, post office closures will accelerate. Can he explain why there was no provision in the Bill as originally drafted for such a subsidy? Can he confirm that because the Government have met pressure on their own Benches as well as from ours, they will agree to subsidise the network?
  Is the Secretary of State aware that even if he paid the post offices a subsidy equal to the money that they will lose as a result of the cancellation of the contract from the DSS, he would not undo all the damage that he will have done to the network? Paying the subsidy direct to post offices will not bring the customers back into those
  826
  shops. It was those customers coming to claim the benefits who spent some of that money in the shops and gave them a significant proportion of their revenues.
  Mr. Drew: On that point—
  Mr. Lilley: I am sorry, I cannot give way, but doubtless the hon. Gentleman will confirm that point when he speaks.
  Can the Minister confirm that the announcement that has already been made has caused many sub-postmasters and sub-postmistresses to sell up and get out? Can he confirm the estimate of the Post Office National Users Council that the rate of closures has almost trebled since that announcement, and will reach 500 in the year due to finish in a month's time? Can he confirm, too, the figures which show that it is not just rural but urban post offices that are among the most vulnerable?
  After today's extraordinary performance, we are left with a confused and confusing response to the key questions about how the new proposals will work. Above all, what will happen to those who do not have bank accounts at present—up to 20 per cent. of the recipients of benefits? Will banks be forced to set up shadow accounts for them, through which the money will be paid in order to get it to the sub-post office and then to them? How much will that cost the taxpayer? Certainly not a penny each—apparently, more like 17 times that sum on the figures given, but one suspects even more than that.
  Will people who have to open a new account—for example, mothers who want to have child benefit paid into it—be forced to pay bank charges? Will they receive any compensation for that? Can the Minister guarantee that there will be no withdrawal charges imposed by banks in future for the use of access machines? Where the access criteria show that there is more than a minimal provision of post offices in an area, will the Post Office be free to close those that the access criteria show to be superfluous?
  In short, the Bill shows that the Government are determined to exclude private enterprise from the part of the Post Office's operations where it could do most good, and to undermine private enterprise in the area where it already—
  Mr. Deputy Speaker: Order.
  6.55 pm
  Mr. Michael Connarty: I am grateful to be called in this important debate. This is a positive day for the Post Office and postal services.
  I listened in amazement to some of the contributions from the Opposition. It seems to have passed them by that many of their Front-Bench colleagues in the previous Government were swept out of office and out of this place with the assistance of the Stand By Your Post campaign. They were so blatantly determined to privatise the Post Office that even petitions signed by 10,000, 12,000 or 15,000 people in their own constituencies were ignored, because of the dogma and ideology that drove them on. If they continue with the commitment that they gave from the Front Bench to be the party of privatisation on the terms that they previously put to the British people, they will remain on the Opposition Benches for a long time.

  827
  Alongside my hon. Friend the Member for Morecambe and Lunesdale (Miss Smith) and the person who is now the Minister for Competitiveness, my hon. Friend the Member for Hull, West and Hessle (Mr. Johnson), I took part with pride in the Stand By Your Post campaign. People were angered by the Conservatives' attempt to privatise the Post Office, clearly for the profit of some of their friends in the City, and no doubt some of their friends who thought that they would be senior management in the privatised Post Office. The Conservatives ignored the fact that people did not want the Post Office privatised. People still do not want the Post Office privatised, and they will oppose any future moves towards privatisation.
  The people stood by their Post. This Government, in opposition and now, have stood by the Post. The Bill underlines the depth of their commitment to an integrated Post Office Counters and Post Office distribution service. The service will be modernised by the Bill, which will give the Post Office a chance to invest its hard-earned profits.
  I remind the House that the previous Government took £1 billion over three years from the Post Office through the external financing limit—a way of robbing the Post Office's efforts in order to finance the Government's poor policies, which were costing the country so much.
  The Bill will allow the Post Office to compete, but the Post Office would probably be better able to compete if it did not have such a low capital borrowing limit—£75 million. That limit should be reconsidered, as it may not allow the Post Office to compete at the right level. The Post Office will be able to compete externally and within the United Kingdom. I look forward to it becoming a worldwide and world-class distribution company.
  The Bill will benefit the consumer. Universal provision is frequently taken for granted, but if the Conservatives had had their way in government, universal provision would have gone. Scotland always invents "west" questions. There was a West Lothian question in connection with devolution, and a Western Isles question in connection with postal services, which was never answered by the Conservatives while they were in government.
  It was obvious that, with a privatised postal service, it would never be possible to have the same standard of first-class post delivery to the Western Isles as to West Bromwich or some parts of west London. That is dealt with by the Bill, which states that there will be universal provision in all the glens, valleys, islands and the mainland of this country. That is important.
  Another notable aspect of the Bill is clause 30, which guarantees the service for the blind. I remember the trauma experienced by those who provided books for the blind. Being in large print, such books obviously make very large parcels. They used to go free, and still do, through the postal services, but that was threatened by the Conservatives' privatisation policies. Now it is guaranteed that the books will be delivered as a free service to people who are blind or partially sighted.
  There will be a consumer council for postal services. I am glad that the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) referred to the provision of a
  828
  Scottish committee in a universal UK service council, because that underlines what we are doing. This is a British Bill in a British Parliament for everyone in Britain.
  The Bill should not be interfered with by people who want to break up the UK and deliver parochial services in Scotland. That would not be good enough—if they ever had the power to do so—because an independent Scotland would not have the finances to provide a proper service for the people of Scotland. Every economist knows that. The only people who are deluded enough not to believe it are members of the Scottish National party, who attend the Chamber sporadically—one a day. [Interruption.] I think that the First Minister is running Scotland—the Opposition in the Scottish Parliament are not.
  Mr. Letwin rose—
  Mr. Connarty: I am sorry, but none of us has time to take interventions.
  I look forward to the debates in Committee on licences, penalties and access criteria. I hope that those debates will clearly define access criteria and how they are to be applied. It is important that there are good definitions so that the public know what type of service they will receive. Such definitions were not provided during 19 years of Conservative Government.
  We need to discuss the use and scale of the proposed penalties. It is important that people know how they are to be applied. At present, there is no limit on penalties—according to the clauses that I have read—and that is a problem.
  The measure offers a real opportunity to put computers into the sub-post office network. I am a member of the Select Committee on Information. I make visits throughout Europe and hear people talking about the information age and its services to democracy. I have an image of Conservative Members walking along like the man with the red flag—a blue one in their case—in front of the first internal combustion vehicle. They are walking in front of the information age waving their flag, saying "We want to take political advantage of this—go as fast as we go." It is about time that they realised that this modern Labour Government are about to run them over.
  The post office network will be changed into a modern, technological part of e-commerce. That will make the service viable. If postmasters are not capable of making those changes, they will miss the best opportunity that they will ever be given—£500 million to put computers into post offices. That will give them the chance to move up and move on—to leave behind the old rubber stamp and wooden grille image of the sub-post office. It is time to put that aside.
  I welcome the possibility of subsidy for social reasons. In my constituency, we have lost a sub-post office in a village that is so small that little is viable. However, if the post office gets its act together, it can reconnect with the commuter society that has left it behind. People often live in large villages—as I do—and commute to the towns. It is time that sub-post offices showed that they can he of use to that commuter society—those people who live in dormitory villages outside the major conurbations. It is important that post offices develop new services.
  What level of computer training will be given? We must make our sub-postmasters competent and capable to enter the information age, in the same way as we are making our children computer literate.

  829
  I support the Bill for what it is not—and for what it is and will be. It is not privatisation. If we are to sell shares, it is important to hold debates in the House and to take into account the points made by my hon. Friend the Member for Morecambe and Lunesdale. It is good that the business will be viable, but there is more to the matter than that. We need to consider how it will affect the public interest.
  The Bill is good for the postal business; it is good for the consumers, users, distributors and recipients of the service. I support the Bill for what it could be; I hope to discuss that, if I am selected to serve on the Standing Committee. The Bill will be good for the staff—the stakeholders who work in the enterprise. They stood side by side with Labour Members and put the Conservatives out of government. The fact that postal workers realised that their contribution provided the Treasury with £1 billion—through the external financing limit—was a major factor in the loss of many Conservative seats. Their contribution should be respected in the eventual formation of the new company.
  I look forward to clarification, and even to amendments, so that we can create an empowered and motivated postal service—from the bottom to the top; from the post worker, to the manager and to the consumer. I look forward to the Bill being passed.
  7.4 pm
  Dr. Vincent Cable: First, Mr. Deputy Speaker, I must make my excuses as I shall not be in the Chamber for the winding-up speeches. The Government and the Rugby Football Union propose to convert the Twickenham ground into a world-standard athletics stadium. There are hundreds—perhaps—thousands of people in a public hall waiting to hear what I am going to do about that. [HON. MEMBERS: "Stop it."] That is good advice.
  The Bill has some positive elements. I subscribe to the idea of greater commercial freedom, on which there are some limited provisions. There is some advance in making more explicit the public service obligation. The strengthening of the consumer protection element—through the consumer council—is positive.
  However, there is a large negative aspect. As the debate has progressed, it has become painfully evident that there is a large gap—the doubt surrounding the whole Post Office network. Although the Minister is working hard on the development of ideas about subsidies and alternative forms of payment, most of us are far from satisfied as to how those will work.
  I shall concentrate on another aspect of the Bill—what has been called the hybrid system of ownership, and how that will work. In principle, it must be right that the Post Office will be given much greater commercial freedom—in order to face more competition and to cope with e-commerce and technological change. However, I am concerned about the limits.
  The borrowing limit of £75 million a year is small when it is set against the challenges facing the Post Office. The managing director said that he wants to raise about £3 billion, over eight years, for acquisitions and major investments. Simple arithmetic suggests that only 20 per cent. of that could come from annual Government borrowing—even if it were fully used.
  830
  How is the money to be raised? The Post Office could come back to Parliament, but most of us would find it difficult to imagine being called back during the summer recess to make a quick decision over a major business acquisition. That would not be a suitable means to deal with such a matter.
  In practice, the money will have to be raised from the capital markets. In that case, the balance sheet and the cash flow of the Post Office will have to be healthy. I am worried that the underlying financial position of the Post Office is weak. The Government have made a useful concession through the major advance of lifting the Treasury payment and replacing it with a dividend. Assuming that profits continue at their present rates, that would be a gain of about £125 million a year. Of course, the Post Office has to earn the profits, but that measure would provide a positive flow into the organisation and it is to be welcomed.
  However, on the other side of the account is the £400 million loss from automated credit transfers—a matter that has been raised many times. Furthermore, if the regulator presses ahead with the imposition of reductions in reserved business—the reduction of the monopoly from £1 to 50p, as the Government proposed some time ago—the loss has been estimated at about £100 million. We could debate the amount, but it will be another loss.
  The Post Office will lose the £100 million that it would have received from the Horizon project. There is then the problem of gilts, which are on the assets side of the balance sheet at present. After financial restructuring, the Post Office will lose the £110 million interest income from those gilts. I may have misunderstood that matter; perhaps the gilts can be deployed in other, more profitable ways. However, my understanding is that, with restructuring, that money will be lost to the Post Office. That is a substantial loss of income.
  Yesterday, I was told that a large hole had been discovered in the Post Office pension fund; that amounts to a substantial sum—£500 million. That hole will have to be filled over the next 10 years. It is difficult to understand why the pension fund is in that position when equity markets are booming. However, if that information is correct, the Post Office will have to find an additional £50 million a year to plug that hole.
  Mr. Letwin: I am surprised that the hon. Gentleman is surprised. Is he not aware of the Government's £5 billion raid on pension funds through the advance corporation tax dividend tax credit system, and is he not aware that that may be one of the major causes?
  Dr. Cable: It may be a contributory factor, but I understand that the position is considerably worse than was expected even by the actuaries looking at the impact of advance corporation tax. I should be grateful if the Minister would confirm how serious the problem is and tell us how it will be dealt with. If we add up these various losses of income, we are talking about £600 million or £700 million, which accounts for almost all the profits of the Post Office. If that is true, the benefits of the dividend payment will not be realised, and it is a substantial loss to the Post Office. The Post Office will be in a much weaker position from the point of view both of income and of its balance sheet.

  831
  If that happens, what will be the consequences? One of the consequences, which we have been discussing at length, would be the emergence of considerable pressures to cut unprofitable parts of the network. Another consequence, which is already evident, would be that the Post Office would be forced to raise its prices. If it raises its prices, it has the universal service obligation, and inevitably prices will have to rise in the competitive parts of the business. The Post Office will lose business; demand will fall. We are already witnessing a decline in demand for many of the letter services. That will aggravate a vicious spiral within the Post Office commercial operations.
  The question that I wish to pose is: how secure is the financial position of the Post Office? The Government are taking what is, in those circumstances, the fairly high-risk strategy of pushing the Post Office into the capital markets with its plc status. There may well be ways of reversing that process, and I may have added to the story elements that are not valid, but I should be grateful for reassurance. It is important that we have that.
  It is important that we also have some reassurance that the management team that will meet this challenge is composed of people who can handle what is potentially a very difficult financial position.
  It slightly worries me that I have never heard any discussion, on the future of the Post Office, about how to treat its one major asset—its door-to-door delivery service—as an asset rather than an obligation. It is not a parliamentarian's job to tell the Post Office how to do its business, but it seems to me that, in a world of e-commerce, in which there will be an enormous amount of logistic business, with goods being delivered to doors, the Post Office, with its system of storages, its lorries and so on, has a tremendous advantage. However, I have seen no statement of a vision about how the Post Office intends to move into that market. It would be reassuring, especially given the question-marks hanging over Post Office financing, to know how that long-term business future is to be secured.
  Mr. Letwin: The hon. Gentleman is making some serious points. Does he agree that one of the problems with the Government's rather muddled approach is the fact that the Post Office is being sent to the capital markets but not the equity markets, and that the flexibility that the equity markets would offer under privatisation will not be available to it to make up the deficiencies that he is bringing to light?
  Dr. Cable: That is factually correct and there are two ways of dealing with the hybrid situation. One is to advance towards privatisation; there are genuine problems with that and I am not advocating it. The other is to explore in much more depth the option that has been canvassed within the Government, given the current status of the Post Office—to try to turn the public corporation into a genuinely independent entity with much more of a commercial capacity to operate. It is a hybrid situation; one could go one way or the other. There is the BBC direction—the independent publicly owned corporation—or the privatisation route. Obviously, Conservatives will advocate privatisation, but I should like to hear a proper debate of the other option, which gets us away from the weaknesses of the hybrid solution.
  832
  I shall now briefly discuss the network problems, which have been mentioned. The right hon. Member for Hitchin and Harpenden (Mr. Lilley), the former Secretary of State, spoke to that subject very well. When we last debated the Post Office, some of us were accused of scaremongering when we said that a very large number of post office branches might close.
  I was struck by a quotation from the managing director of the Post Office in the press on 30 January, to the effect that, unless the branch network could be subsidised, he would expect up to 8,000 branches to have to close. That was not an alarmist politician; that was someone running the system. As the former Secretary of State pointed out, branches are already closing. He quoted the possibility of 500 closures during this financial year. There have already been 329 in the first nine months of this year.
  Mr. Mike Hancock: May I draw to the attention of my hon. Friend and the House the position in my constituency, which is one of the most densely populated in the country, with 89,000 electors living in a very small area? There are 22 sub-post offices, of which 15 depend for 50 per cent. of their business on benefit payments in one form or another. All of them are doomed to extinction, with no chance of diversifying because they are already in competition in the high streets in Portsmouth, South.
  May I also raise with my hon. Friend -the fact that the right hon. Member—
  Mr. Deputy Speaker: Order. The hon. Gentleman's intervention is far too long. It is not an opportunity to make a speech.
  Dr. Cable: My hon. Friend's intervention helpfully reminds us that the worries about the Post Office network are widely dispersed. They are prevalent in rural areas, especially rural Wales—which is the worst affected—rural Scotland and Cornwall, but they are also prevalent in inner-city areas.
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): As I recognise that the hon. Gentleman will be in a scrum later this evening, may I take up the point about a quote by the managing director? It was a quote, not by the managing director, but by the chief executive of the Post Office. The leader of the Liberal Democrats said at Prime Minister's questions:
  The chief executive officer of the Post Office predicts that, if the Postal Services Bill is passed, a further 8,000 post offices will close.—[Official Report, 2 February 2000; Vol. 343, c. 1036.]
  That was absolutely inaccurate and wrong, and I believe that the chief executive of the Post Office will be informing the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) about that. As for the accurate quote from the newspaper, the chief executive has made it clear that he was setting out to the journalists the available options, and saying that there would be a danger to the network if we could not provide new work or provide a subsidy.
  Dr. Cable: I am sure that we are grateful for the clarification and I am sure that The Observer, which printed that quotation, will feel suitably contrite.

  833
  However, I am glad that the Minister has mentioned that exchange in Prime Minister's Question Time because, when the leader of my party challenged the Prime Minister on that point, he raised the specific issue of a subsidy. I do not have the words with me, but it was something to the effect that subsidies were the kind of silly idea that the Liberal Democrats would come up with. I am glad that, in the past two weeks, the Government have advanced to accepting that subsidy is a necessary element in the picture. Naturally, I would want to press the Secretary of State, but he was unwilling to give way today.
  The fundamental issue is whether the subsidy will be a relatively small amount, doled out to a handful of cases that fail to meet the access criteria, or whether we are talking about the £400 million lost income, and whether the bulk of that lost income will now be recycled back into the Post Office. I believe that hon. Members from all parties must persist in asking that key question, which has never been answered.
  There are many technical issues in the Bill, but tonight we are dealing with the key issues. I should like to discuss the role of the consumer council. The Bill takes a step forward in giving the consumer council more authority, but there is a considerable oddity in that the consumer council will not be allowed to engage in activities to protect consumers outside the remit of the regulator. Therefore, competitive market activities such as registered mail are not subject to consumer protection in the same way as other activities. Equally, the consumer council would be severely constrained in what it can say critically about operators in the market—commercial as well as the Post Office itself. Therefore, there are big question-marks hanging over how far the commitment to consumer protection is followed through in the legislation.
  There are positive elements the Bill; I do not want to be churlish about it. We shall certainly support those elements when they are discussed in Committee. However, big question marks remain over the network, the underlying financial position of the Post Office and the disciplines to which it will now be subjected.
  7.19 pm
  Mr. Martin O'Neill: I would not say that the speech by the hon. Member for Twickenham (Dr. Cable) was characteristically gloomy, but the glass seemed to be more half empty than half full in his eyes. When he was discussing the various charges, he did not take proper account of what one would expect to be the improvement in the fortunes of the Post Office as a consequence of its foreign acquisitions in the past 12 to 15 months. The Post Office's international aspect will become increasingly important. It will develop through foreign activities and it will retain its markets if it smartens up its act.
  I hope that we shall be able to find the money to help the network. Taking £400 million out of it always meant that there would be difficulties. Not all the difficulties relate to the nature of the arrangements. The future of many small post offices, especially in rural areas, has been left hanging by a thread. Other post offices in urban or deprived areas have lost many of the transactions that make up the main element of their revenue because of the fall in unemployment. A consequence of the improvement in the employment situation and the reduction in the number of people receiving benefits has been a change in the fortunes of the postal network. Many of the difficulties are not related to the alleged decline in the economy.
  834
  The absence of anything constructive from the Conservatives has been significant. They say that they do not know—
  Mr. Alan Duncan: Where has the hon. Gentleman been?
  Mr. O'Neill: I have listened to speeches for a long time and I well remember that in 1992, when the hon. Gentleman was still somewhat inebriated by his election to Parliament, the Conservatives were elected to end the Post Office's monopoly. There was no talk of privatisation then; they came to power committed to ending the monopoly.
  When the hon. Gentleman winds up, perhaps he will tell us whether the Conservative party will end the monopoly. In the Netherlands, the model is one of privatisation, but on the basis of a monopoly. In contrast, in Sweden, the post office is still state owned, but it is state ownership with competition. I believe that competition in postal services is desirable and I want the regulator to consider that. I do not want to rehearse all the arguments on that point, but I wish to make my position clear.
  I am happy with the balance of the proposals. Over several years, my colleagues on the Select Committee on Trade and Industry have examined the issues. When the Minister was a trade union officer and came before us, we used to complain about the way in which the Post Office was run, the poor industrial relations and its absence of commercial awareness and sensitivity. In many respects, our criticisms have been met by the unions and by the management. Recent industrial relations agreements have removed many of the concerns that we expressed and we have the prospect of the management introducing substantial changes with the guaranteed co-operation of the unions.
  We were not prepared to support Government investment in the Post Office when there was no guarantee that that investment would be realised because of the obduracy at times of certain sections of the work force. I foresee the disappearance of such obduracy and I am pleased that the Post Office will have access to funds.
  We would have heard different arguments if the Post Office were to be given even greater access to borrowing facilities. People would have said that the Government were too free with their money. It is only correct that a business of this character must be flexible in its operation while having the opportunity to borrow. However, it should borrow not on the basis of soft loans, but on the basis of realistic market rates. That is the suggestion being made.
  I would like to ask my hon. Friend the Minister about the arrangements for the sale of shares. An interpretation of clauses 54 to 56 suggests that the meaning of the term relevant subsidiaries is vague. Does it refer to the core United Kingdom business or does it include other businesses and services? Does it mean that the sale of businesses, such as German Parcel and other foreign acquisitions, of services, such as catering, or of equities in Post Office Counters would be subject to the discipline of a parliamentary debate? That point is critical. I know that it may be explored in Committee, but it would help to have the matter resolved now. The vagueness and inadequacy of the definitions in clauses 54 to 56 suggest that certain share deals could be transacted without proper parliamentary scrutiny.

  835
  It is important that we afford the Post Office the opportunity, if appropriate, to sell off parts of its business. However, that must be subject to proper scrutiny. That would also help us to work through the financial difficulties that the hon. Member for Twickenham explained so lucidly. To carry with them everyone who supports the deal, the Government should make the position clear beyond peradventure at the earliest possible opportunity. We do not want people to be unduly suspicious about the disposal of assets.
  I am also somewhat concerned about the Crown Post Office network. It is not clear whether it would be subsidised by anything other than the Post Office. There are a number of towns in which the Crown post office is central to the commercial life of the town. For example, I know what problems would result if the post office in Alloa, the main town in my constituency, were in danger. A large proportion of its work is the paying of benefits. There are 600 Crown post offices, so we need clarity on this issue, too. If one retail outlet can be the flagship for the postal network, it is the Crown Post Office. It has access to funds and the deals that might be struck. I hope that those funds can then percolate through the system to smaller rural post offices.
  I have repeatedly said in the House in debates on the Post Office that one of the most exciting developments is to bring the retail services of the Post Office on-line as soon as possible. In particular, it should take advantage of the opportunities afforded by e-commerce in all its forms. We hear much pious talk about having on-line computer facilities available in libraries. Frankly, many of the people who are excluded from the e-commerce revolution never go into libraries, but they go into the post office or the shop at the end of the street. They have just as much right to have access to e-commerce even if they do not have computers or interactive television. Even if it is only a question of putting on a bet, they should be entitled to do that if the appropriate facilities are there.
  This is a substantial Bill. It needs fine tuning, but it is ridiculous for the Tories to rant on about the need for amendments. I give the Bill unqualified support. It has been the subject of years of consultation and discussion and I am pleased that my hon. Friend the Minister will reply to the debate, because so much of the Bill is due to his authorship and support.
  7.29 pm
  Mr. Simon Thomas: I am delighted to have the opportunity to speak on the Bill, which is of great interest to my constituents. During the Ceredigion by-election that sent me to the House, the future of rural post offices weighed heavily on the minds of the voters and it was one of the issues that was raised most often on the doorsteps. As I visited nearly all the sub-post offices in my constituency, I was approached several times to sign the petition to save our post offices. I can assure the Minister, who may receive the petition, that I signed it only once.
  As this is my first address to the House, I should like to take a few moments to explain why the Bill is so vital to us in Ceredigion. Hon. Members will know that the constituency is rural; indeed, only three towns have a population of more than 2,000. Given that Ceredigion's
  836
  total population is more than 70,000, hon. Members will appreciate not only the rural nature of the constituency, but the extreme sparsity of the population.
  Ceredigion is, however, one of the most dynamic, changing areas in Wales. We have the fastest growing population of any Welsh county and are second only to Cardiff in gross, rather than percentage, population growth. That growth is realised, on the whole, by net in-migration. As many as 1,200 people move into our county each year. They bring energy, fresh ideas and often a vision of how they want to live their lives. I claim to know that because I am one of them. One in three of the electorate were born outside Ceredigion, which is notable for a rural area.
  That leaves us with a rather unbalanced population. It is older than average for Wales, due to the number of people who retire into the area and the number of young people who leave in search of more productive pastures. Although the large number of in-migrants invigorates many small rural communities, it has affected the position of the Welsh language. Even so, 60 per cent. of my constituents are Welsh speaking and the language can be heard on every high street and in every school, mart and workplace.
  The small family farm remains the cornerstone of the economic and social bulwark of Welsh culture in Ceredigion. I hope that the House is already familiar with and sympathetic to the current farming crisis. If not, the by-election results should serve as a reminder. I emphasise only that low farming incomes have fallen three years in succession to as little as £4,500 a year, which must support two or three generations on one farm. The strong pound means that farming and tourism in Ceredigion are under siege. That economic context has given us objective 1 status.
  That situation is a real threat to our future because traditional farmers and the increasing number of organic farmers are the main guardians of our environment, which is tremendously captivating and beautiful and gives the county a huge advantage, albeit yet not fully realised, in tourism. Much of our coastline is a heritage coast and we have numerous sites of special scientific interest, particularly wetlands, as one might expect in Wales. Perhaps the most singular environment is Cardigan bay itself, much of which is now designated a special area of conservation and is home to Britain's only resident population of the bottle-nosed porpoise. I know that hon. Members will be interested in that, given that we have been discussing jet skis.
  The final part of the Ceredigion jigsaw is the public sector, which consists of local government, our two universities and an excellent general hospital at Bronglais, which we are all determined to retain and enhance. In an economy that is more dependent than the UK average on the public sector, the current policy of keeping public spending below 40 per cent. of gross domestic product has a disproportionate effect. It leads to frustration in our schools, hospitals and universities. Despite that, I am pleased to say that our local education authority achieved the best GCSE and A-level results in Wales last year.
  Such a diverse and dynamic mix of people demanded a very special Member. I am delighted to take this opportunity to pay tribute to my predecessor, Cynog Dafis. Hon. Members may recall that Mr. Dafis was elected with the biggest swing in the 1992 election as a

  837
  joint Plaid Cymru-Green MP. Until last year, he was the only Member elected on a Green ticket to a UK legislative body.
  Cynog Dafis quickly became respected in the House for his work on green and rural issues. He held office in Praseg—the all-party group on renewable and sustainable energy—and Globe UK. He was awarded the title of greenest MP, and I like to think that having been here for one week, I too hold that title, albeit in a different sense. Cynog Dafis also promoted three important Bills: the Home Energy Conservation Act 1997, the Road Traffic Reduction Act 1997 and the Road Traffic Reduction (United Kingdom Targets) Act 1998—targets still to be met, of course.
  In Ceredigion, Cynog Dafis was seen as having helped to create a vision of a sustainable future which a wide spectrum of opinion could share. I am sure that hon. Members will want to join me in wishing Cynog "lwc dda" in our National Assembly. His greatest accolade must be the affection and respect in which he was and still is held in Ceredigion. His leadership and personal qualities endeared not only himself but Plaid Cymru, the party that he represented, to the people of Ceredigion. If I cannot fill his shoes, I can at least try to walk in his footsteps.
  It is that context that makes the Bill important to my constituency. Eighteen years of free market economic policies has done little for rural services. Shops, surgeries, buses, pubs, dentists and banks have gone. It is unfortunate that policies have not substantially changed. The Bill, and attendant policies such as automated credit transfer, could undermine our last strong rural service: the post office. Nevertheless, I congratulate the Secretary of State and the Minister on trying to find a way forward for the Post Office that will allow it to remain in public ownership and to compete internationally. The drawback is that this brave new world of commercial freedom seems to have few safeguards for the rural post office.
  The introduction of ACT is of particular concern. Some 44 of the 73 post offices in my constituency derive over 40 per cent. of their direct income from benefit payments, so that does not account for the income that they derive from people coming into the shop. A Government-driven move to impose ACT would be highly injurious to those post offices and would have a huge knock-on effect on the services that they provide.
  I am concerned that the Government want the majority of benefit payments to be made by ACT after 2003. I therefore urge the Minister to read the performance and innovation unit's forthcoming study on the future of the network and consider how post offices could contribute to the Government's laudable aims of combating social exclusion and achieving joined-up government. It may well transpire that rural post offices can demonstrate the need for cross-subsidisation in recognition of the other services that they perform. The only warning that I would sound is that local government should not be expected to pick up the tab and savings from ACT should be utilised. I welcome the Secretary of State' s earlier remarks on that.
  These days a west Wales post office is like a corn store in the wild west. It sells everything and performs vital tasks such as delivering coal, gas and prescriptions to older people. It often sells many locally produced goods, and my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) is looking particularly well on the
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  honey that he has consumed as part of the campaign. That pattern of social support builds local communities, helps to reduce reliance on private cars and keeps resources in the local economy. I ask the House to consider whether the Bill and ACT will help or hinder the performance of that valuable service.
  I ask the Minister to look again at certain elements of the Bill. Will he give the House an assurance that the £1 monopoly will remain? Will he make it crystal clear that the Government are not seeking to privatise the service by the back door? I suggest that the way to do so is to reconsider clause 56 and to set a limit for share disposal. The Bill should make provision for the National Assembly of Wales to appoint a representative to the Postal Services Commission, because there would then be a far better balance on the commission. The Bill should make similar provision for the so-called regional committee of the Consumer Council for Postal Services to have devolved responsibilities in Wales and to report to the National Assembly on Welsh matters. The hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) made a similar point in an intervention.
  Those are some of the safeguards that could at least ensure that rural interests are represented in the new-look postal services, and I ask the House to support my suggestions to show that it does consider rural and Welsh interests.
  7.38 pm
  Mr. Sam Galbraith: I very much enjoyed the maiden speech by the hon. Member for Ceredigion (Mr. Thomas), which was splendid in content and extremely well delivered. I was particularly attracted by his description of his constituency. I have travelled extensively in Wales, and as a youngster I spent many a day there climbing. It is a country to which I have always returned with affection. The hon. Gentleman is fortunate to represent such a fine part of the British isles.
  I was also pleased by the hon. Gentleman's remarks about his predecessor. I worked with Cynog Dafis in Committees in the House. We did not take similar views, but his were always respected and given with honesty and decency. I know that the hon. Gentleman will continue with that tradition, and I am sure that he will become as much of an asset to the House as his predecessor was.
  I also enjoyed the speech of the right hon. Member for Hitchin and Harpenden (Mr. Lilley). I could see the pain of a man who has been a Minister and gone through many agonising considerations during the daily grind of decision making. The only problem is that he got the decisions wrong, especially in respect of ACT, which appears to be the focus of the debate.
  The right hon. Gentleman also got wrong the compliments he paid to the hon. Member for Tiverton and Honiton (Mrs. Browning). It is not that she made a bad speech—she made her usual sparky start, but her speech deteriorated into one more suited to Committee than to Second Reading. The especially bad part of her speech was the beginning, when she railed, ranted and raved about the Government having to make amendments to the Bill, which she appears to believe is disgraceful. The hon. Lady is trying to rewrite history. She and other Conservative Members will remember Bills introduced by the Conservative Government to which not several

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  amendments, but page after page of amendments had to be made, not only in Committee but in the other place and on Report. We would end up with a Bill that was completely different from the one with which we had started. Let us have no more hypocrisy on that subject.
  The hon. Lady also criticised the Bill for being, in her words, a hybrid Bill. I happen to think that one of the Bill's strengths is that it enshrines the value of partnership, whereby the efficiency and effectiveness of the private sector is merged with the true values and relationships of the public sector. If we create a true public-private partnership, we and all our constituents will get a much better system and much better provision of service.
  Like my hon. Friend the Member for Falkirk, East (Mr. Connarty), I pay tribute to those who have worked in the various branches of this nation's postal service, especially those who look after me locally—not merely through the service they provide to my house and my constituency, but through the consideration and the time that they have given to me. I want those people and their values, and the service that they provide to me and many others, to be maintained. The Bill is the way to achieve that.
  The position of the people I have described would be threatened by a decision to maintain the status quo—that cannot be the way forward. Like all of us, they know that the world is changing and that we cannot pretend that progress does not exist. Such an attitude would pose a threat both to postal workers and to sub-post offices—a subject I shall come to shortly. We are witnessing many changese—commerce, e-mail, globalisation and interaction between sectors—even in small matters: for example, I notice how many things that once came to me via the Post Office are now brought by other service providers. The notion that the Post Office cannot compete in such services threatens the whole ethos of the Post Office.
  We should not be afraid of change, and we must not pretend that we can hold it back. My right hon. Friend the Prime Minister said that he bore the scars of trying to make changes in the public sector; I bear a few of those myself. Resistance is always dressed up in some sort of pretence, always false—for example, that profits will be put before patients, or that safety standards will be compromised. We should not stand against the tide that is approaching the Post Office, otherwise we shall again be proved wrong.
  We must embrace change and modernise. We must stop talking about the producer, the system and the structure and start to talk about the service provided and the outputs produced by those who are involved in the work. That is what service is all about, and the great advantage of the Bill is that, by marrying the values of the public sector with the efficiency and effectiveness of the private sector, we can deliver a much better service.
  I understand the reason why many of us are concerned about sub-post offices. Sub-post offices fall into two categories: urban, like those familiar to my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy) and many others, and rural.
  Mr. Nigel Evans: Oh, "And rural"! That means a Tory gain.
  Mr. Galbraith: The two sorts are different, they have different problems and may require different solutions.
  Mr. Frank Roy: There are certainly two basic types of sub-post offices. In my constituency, 88 per cent. of post offices rely on the Benefits Agency for almost 50 per cent. of their business—a huge proportion of any business. Does my hon. Friend accept the guarantees that we have heard Ministers give repeatedly, namely, that all claimants will still be able to claim and collect their money from the post office in future? Does he agree that that is the way forward: to change, but to guarantee a future for the post offices and benefits claimants?
  Mr. Galbraith: I wholeheartedly agree with my hon. Friend. The way not to guarantee that future would be to stop the advance of ACT; to do that would be detrimental and would lead to the destruction of many more post offices. We cannot have a system that has to be propped up and that will probably change any way because the world is changing. More and more people will want to take advantage of ACT, so if we try to build a system that is protected from ACT, we shall not only do a disservice to those who want ACT and all the benefits it carries, but threaten the very sub-post offices we are trying to protect. If post offices do not change, they will come to be seen as bulwarks against progress—blasts from the past maintaining an out-of-date system in dingy offices, using inkwells and quills to process transactions. We must find ways to bring post offices into the new century.
  The same applies to rural post offices. I object to the hon. Member for Ribble Valley (Mr. Evans) implying that Labour Members do not know anything about rural areas. My constituency contains rural areas—not comfortable ones, either. In the Western Isles, there is a problem with service provision because of the vast distances that have to be covered before deliveries can be made. In such areas, we must consider the services that are already provided and look for ways to enhance them. I have travelled extensively in such areas and I know that, sometimes, it is not a post office that is wanted, but a bank. Perhaps we should look for ways in which banking and other services can be provided. In some villages, the post office and the shop are separate. Is it not time we considered how to integrate such services?
  I am grateful to you, Mr. Deputy Speaker, for calling me to speak. I welcome the Bill, which represents a major advance for the Post Office and those who work in it. More important, it will improve the service provided, not only to those of us who live in urban areas, but to those who live in rural areas throughout the country.
  7.48 pm
  Mr. Tony Baldry: I am sure that all Conservative Members welcome the maiden speech of the hon. Member for Ceredigion (Mr. Thomas). His was an interesting and enjoyable contribution, and we look forward to hearing him speak on many occasions in future.
  Two fundamental concerns arise from the Government's proposals as set out in the Bill. The first is that they represent the second-best solution for the Post

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  Office. I am a member of the Select Committee on Trade and Industry, which is chaired by the hon. Member for Ochil (Mr. O'Neill). In the past three years, it has held innumerable sittings during which we have considered the subject of the Post Office. It has produced three extensive reports, covering every aspect of the issue. In each report, its members have been unanimous in stressing that the solution for the Post Office is to make it an independent publicly owned company. How can a company that is 100 per cent. state owned be remotely independent?
  I welcome the Post Office being granted plc status and being freer to compete in a highly competitive marketplace. However, I do not welcome 100 per cent. retention of public ownership. The Post Office will still be subject to Treasury control, which is unfair. How can the Post Office compete effectively in the marketplace without being fully privatised? How can it compete on a level playing field with the rest of Europe, especially with Dutch and German post offices, without selling at least 51 per cent. of shares? The Bill simply will not give the Post Office the full freedom to manoeuvre that it needs to tackle such obstacles.
  Indeed, it is absurd that the Government do not allow meaningful competition or recognise that there is an alternative to state control. Privatisation works: it has been one of the striking success stories of the past 20 years. It brought about dramatic improvements in the former public sector utilities by removing the dead hand of state control, and subjecting companies to the fresh wind of competition and the discipline of the markets. Privatisation has created a substantial improvement in customer services and a substantial reduction in prices.
  It is clear that the Government have not fully privatised the Post Office simply because of pressure from the Post Office unions. The general secretary of the Communication Workers Union has already said that he is unhappy because possible share swaps might mean that some of the Post Office ends up out of Government hands. It is no wonder that no shares were sold.
  Even if the Post Office issued shares to acquire other companies under the Government's proposals, it might be able to do so only after Parliament had voted on the issue. The Secretary of State for Trade and Industry told the House last year that the Government would not seek to dispose of Post Office shares without further primary legislation. I appreciate that we are considering a sensitive issue, but the Post Office has been put in a crazy position.
  The Select Committee on Trade and Industry has examined the problems of the Bill and the potential hampering of the Post Office's competitiveness. It is again patently obvious that by not being fully privatised, the Post Office will be precluded from effectively competing. That is yet another obstacle to effective competitiveness with our fellow European countries.
  The Bill constitutes an example of competitive constraint. It would help if the Government did not blur the lines on when primary legislation was required. The possibility of seeking a resolution of both Houses is confined to cases when the Post Office, the Department of Trade and Industry and the Treasury agree that that is a good idea. However, the Bill places no restriction on limited sale.
  The Government did not give the Trade and Industry Committee an adequate explanation when questioned on the issue. Is there any limit to how much can be sold as
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  long as it is part of a joint venture? If not, how does that fulfil the Secretary of State's undertaking for only limited sales without primary legislation? Nothing in the Bill would prevent a sale of majority holdings.
  We have also already witnessed the adverse effects of union interference on customer service. Despite reducing the postal privilege for letters and packages from £1 to 50p last year, the Government reversed their policy under pressure from the Post Office unions in the run-up to the 1999 Labour party conference.
  The Government state that the new regulator will determine the rate at which postal privilege is set. That worried many witnesses who appeared before the Trade and Industry Committee, which recommended that the Bill sorted out postal privileges. However, it remains unclear which privileges, if any, have been dropped. It would be helpful if the Government could inform us of the various privileges enjoyed by the Post Office that have been abolished, and if any have been added. Doubtless we shall learn more about that when we consider the 300 or more amendments that we shall table as the Bill proceeds.
  There are also anxieties among the Periodical Publishers Association. It represents the magazine publishing industry, which is worth around £250 million each year to the Post Office. The PPA estimates that the Post Office costs approximately 30 per cent. more than the best-of-class comparisons. Its members are naturally worried about how fairly the Post Office will treat the industry and about the Post Office's commitment. The PPA believes that the new commission should introduce transparent benchmarking against best-of-class comparisons to provide a more competitive service. That benchmarking might be better all round if the Post Office faced the full winds of competition.
  The Post Office will be allowed to borrow only a derisory £75 million. As The Daily Telegraph pointed out last year, that figure will not increase. The Trade and Industry Committee found that worrying. Our report on the Government's White Paper stated that
  "it is questionable how far either new borrowing facilities at commercial rates or the Treasury foregoing the excessive level of dividend previously taken can be fairly represented as 'providing' vast sums of extra money for the Post Office."
  The requirement for ministerial approval is also wholly inadequate for a company with a turnover of £7 billion.
  The half measures in the Bill simply do not fully enhance the competitiveness of the Post Office. To compete internationally, it is imperative that the Post Office be able to make deals, alliances and acquisitions across the world, such as those that the German and Dutch post offices make. Again, I stress that the 100 per cent. state control that the measure proposes will make it impossible for the Post Office to act with the necessary vigour and decisiveness. Surely it is better for consumers to let the Post Office take full advantage of the fresh winds of competition. The Government have fundamentally failed to do that through the measure. They are failing the Post Office and consumers.
  My second anxiety is the uncertainty about the future of sub-post offices and village post offices after the sudden and somewhat reckless abandonment of the Horizon project. I represent a large rural constituency and there is considerable concern among my constituents that they may lose their local post offices. It is foolish of the Government not to incorporate the network in the Bill. Conservative Members recognised the real need and

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  genuine concerns of many people and the potentially harmful consequences that would occur without Horizon. As the Trade and Industry Committee stated in its report on the system:
  "this was recognised to be the only way to ensure the future survival and prosperity of the post office network."
  The Government's decision not to provide for the scheme in the Bill will threaten the future of the 19,000 sub-post offices, which rely for 40 per cent. of their income on administering benefits. The omission amounts to yet another Government attack on the fabric of rural Britain and on the livelihoods of people there.
  It is no good the Government using soothing words of reassurance to those who rely on the Post Office network that they will not suffer and that postmasters and mistresses will be able to compensate for their loss of income. Many people are simply not prepared for or do not want a new system forced on them.
  The Government also mislead by presenting an image of great floods of people opting for ACT. According to Department of Social Security figures, only 34 per cent. choose to have benefits paid by ACT. In our report on the Horizon project last year, the Trade and Industry Committee found that few pensioners opt for ACT; fewer than one in 10 income support recipients choose ACT; and fewer than one in three new benefit recipients opt for ACT. Indeed, the report states that
  "the fact remains that, for a variety of reasons, most new benefit recipients still opt for cash in hand from a post office … this choice must be respected in action as well as paper."
  However, that will not happen simply because the Government have decided not to progress with Horizon and have not included similar provisions for the Post Office network in the Bill. It is a shabby piece of work by the Treasury, which has put pressure on the Department of Trade and Industry, in the belief that a massive saving can be made. That does the Government no credit. It is a double blow to many people in rural areas. A recent survey in the Financial Times revealed that only 5 per cent. of parishes have bank or building society branches.
  The Bill is a bad measure. It is a hashed compromise to placate the trade unions and a genuine threat to sub-post offices and village post offices throughout the United Kingdom.
  7.58 pm
  Dr. George Turner: My constituency, like that of the hon. Member for Banbury (Mr. Baldry), is large and rural. Approximately half my constituents live in the market town of King's Lynn, and the others are divided between some 64 parishes. Much of my constituency is sparsely populated, and in many villages my constituents depend on access to the village post office.
  I have a long-standing interest in village post offices. My grandmother ran a rural post office in a village of a few hundred people. As well as bringing up her nine children, she worked hard in the post office. I also appreciated from an early age the benefits that the rural post office can bring to a village community. In those days, a village of a few hundred people had two or three shops, two pubs and a post office. Today, such villages have no shops, no post office and no pubs.
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  In my 30 years in Norfolk, I have seen an undramatic but steady decline in the rural post office network's ability to deliver. Despite the public regularly expressing their support for post offices and regularly protesting when one closes, no Government in recent decades have taken the actions necessary to halt that decline. I believe that the Bill offers that very opportunity, which is why it has my strong support.
  My local newspaper, the Lynn News and Citizen, is proud of its campaigning on behalf of its readers and has chosen today to launch its campaign to save our post offices. I hope that all its readers will not only sign the petition to show their support for the post offices in north-west Norfolk but will do more than that—use their local post offices. It is not enough for people to wear their hearts on their sleeves and say that they support post offices if they drive past them in their cars and do not take advantage of the services that they provide. I hope and understand from the assurances that have been given from the Front Bench that pensioners will feel reassured that they will be able to continue to congregate in post offices to collect their money in cash and experience the social intercourse that post offices provide in many villages.
  My fear is that if those who seek to protect post offices frighten the public, they will take other action even though there is no need to do so. People should not be frightened into opening bank accounts if they do not want to. In the absence of Government action, however, about 50 per cent. of new pensioners and those who receive child benefit are taking that option. We simply cannot sit there like Canute and try to hold back the tide of progress. The Bill's strength is that it seeks to protect by modernising and looking ahead rather than by turning back the clock.
  If we are to make progress, we must recognise not only the strength of public support for post offices, but the post offices' weaknesses. My grandmother has been dead for 35 years, but if she was able to go into many of the rural post offices in my constituency, she would feel at home almost immediately. She would probably recognise the paperwork—and certainly its style—and that very fact speaks volumes about lack of investment, which is one of the major problems of today's Post Office Counters. Governments of all colours are to blame for that, but we must recognise in particular that, although the previous Government talked about investment, which was needed desperately, they never delivered. I welcome the present Government's clear intention to ensure that substantial sums are invested in every post office in my constituency and throughout the United Kingdom so that they have the base not only to deliver the services that they currently deliver but to move into providing Government services and to take over the provision of services from which the commercial sector has run away.
  I recently complained in the House about the closure of the last bank in Heacham, which has 5,000 inhabitants and is the largest village in my constituency. Why did it close? There was a clear failure of the commercial marketplace. None of the banks had enough customers, they argued, to justify their presence, but hon. Members should remember that 5,000 people live in Heacham and that pensioners want access to cash and counter facilities. That represents a clear opportunity for a rejuvenated post office in Heacham to take custom and provide a service. I was sad that the local post office was not proactive in

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  advertising its services when the banks in Heacham were closing, but I understand that Ministers are seeking such opportunities through the policy unit and hope that they will be delivered in the months ahead.
  Post offices are crying out for investment, and I hope that it is delivered. Having used them most of my life, I know that the model of my childhood—which involved a friendly face, a helping hand with the paperwork if necessary and guidance from those who ran the post office—is not always what we find in the public sector. Over the years, I found that an element of the Post Office, mainly on the Royal Mail side, sometimes displayed the worst aspects of the public service. The attitude was, "We're doing you a great favour by being here. You should take what service we deliver and be grateful for it," but that encourages those who see "privatise, privatise, privatise" as a solution.
  Unless we face up to the problem, we shall strengthen that voice so it is important to address the ills of the monopoly. That is why I welcome the clear commitment to put into law a standard of access to postal services and access to post office counters. If we set up a regulatory system that looks not only to the maintenance of services but to their improvement—both are included in the Bill—we shall be doing more than merely paying lip service to making such improvements, and my constituents will be truly grateful for what the Bill delivers.
  Delivery is important. In my one of my villages, for example, Mr. Pitcher, who runs a small transport operation in Walpole St. Andrew, employs 16 people, but does not receive his one delivery until the afternoon. Next door to him, Mr. Atkin employs nine people in a business of the size that hon. Members would expect to find in a small village. He has 80 customers to serve, but the times of his deliveries vary from 10.30 am and 2.40 pm. When we talked about the Post Office, he said to me, "If I ran my business like they do I would be out of business within a week."
  Those issues need to be addressed and I hope that my hon. Friend the Minister will assure me that the standard of service that my rural constituents can expect will certainly not deteriorate and that they will have a substantial opportunity to see them improved. That improvement will be achieved by the Bill.
  8.8 pm
  Mr. Richard Page: I have a degree of sympathy for the poor Minister for Competitiveness, who has to sum up tonight and deal with the Bill in Committee. I say that because this is a sad and miserable little Bill. It is badly drafted, as has already been admitted, and will be subject to thousands of amendments. [Interruption.] Hon. Members may think I am joking, but I am prepared to bet that we get into four figures before the Committee stage is out.
  The Minister has an unenviable job, as he has to face two ways at once. He snaps his head to the left, turns to the neanderthals of old Labour and says, "Don't worry comrades." They still like to be called comrades. They are nodding their heads in agreement; that is what I like to see. The hon. Gentleman says, "The Post Office will still be under state control; we'll own 100 per cent; don't worry—the lunchtime directive is alive and well and living in government."
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  Then, quick as a flash, he will turn to the right and say "Don't worry. This is a golden opportunity to set the Post Office free to get out into those markets and to succeed in world competition. Look at the borrowing abilities that we are pushing into the Post Office."
  The reality is that it is a poor and staggering, faltering step, instead of a bold stride towards commercial freedom.
  I have noticed in this debate an enthusiasm by Government supporters to try to rewrite history. When we were in government we wanted to do a BT on the Post Office. I remember all the comments that were made when we set BT free—about the telephone boxes that would be closed, about the cherry picking that would happen. We were told that prices would go up. What was the truth? The telephone boxes are more accessible and more operative than ever before. Prices have come down and a welter of new services has become available.
  We wanted to do that for the Post Office, but when we suggested it the Labour party did not say, "We should like to see some form of liberalisation": instead, it went into a flat spin and opposed everything that we suggested.
  This is why I have only partial sympathy for the Under-Secretary: a very clever campaign was run; a public relations company put forward a number of messages and persuaded 12 to 15 alleged Government supporters, most of whom have now lost their seats, to say that the proposals would ruin the rural post offices.
  It was only later that I discovered from a television documentary that the union itself was the funder behind the campaign, though it kept a very low profile. It was very well done. I congratulate the Under-Secretary. He did it brilliantly. He undoubtedly had an involvement in his previous life. If he wishes to deny it, I should be only too delighted to hear him do it at the Dispatch Box.
  One thing that must be said from the Conservative Benches is that it is marvellous that the Government are taking the first step towards privatisation with the establishment of a plc. As someone who has moved an organisation from the public sector into the private sector, I regard this as one of the main hurdles to overcome. Therefore, I must say thank you to the Government for it.
  The neanderthals may look at the proposals with alarm, and in the debate so far one or two have put down markers about the possible sale or swapping of shares. That is only to be expected.
  My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) made a very powerful speech in the 10 minutes available. He rightly called the Secretary of State's speech a poor performance. It was policy being made on the hoof—so typical of this Government. It comes under the heading of, "It seemed a good idea at the time".
  What is wrong is to lay huge worries and concerns on the whole of our sub-post office network by talking about ACT without looking at the other side of the equation. Now the Secretary of State is scrambling around trying to fill the financial black hole created for the sub-postmasters and sub-postmistresses, when that work should have been done first. I hope that the Under-Secretary will say that the Government are undertaking an in-depth study to see just how the new equipment can be used to generate revenue for the sub-postmasters and sub-postmistresses. The quicker that is done, the better.
  There must be more than lovely words. The proposals must be costed. It must be possible to tell the sub-postmasters and sub-postmistresses, "It will mean a

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  revenue of X to compensate for what you will lose." As a number of hon. Members have commented—and not only from the Conservative Benches—that worry is being created in the minds of the sub-postmasters and sub-postmistresses, whose livelihoods are at stake. Not everybody grasps the fact that the sub-post offices are privately owned, and as they are privately owned they could go down.
  The Government are destroying the value of the sub-post offices. Who wants to buy a sub-post office when he or she can see perhaps 40 per cent. of its revenue disappearing out of the window? The quicker the Under-Secretary, who understands these matters, says, "We have calculated that there will be an increase to every sub-postmaster through using this new equipment," the better.
  Most of these matters will be raised in Committee, and that is only right. But I must express slight concern about the amount of money that the Post Office is allowed to borrow in its own right. We have only to see the sums of money that it has been necessary for post offices throughout the world to expend in order to consolidate their networks to see what the real world is about. It is not a matter of £75 million or even hundreds of millions: I think that we are into the billions.
  When TNT was bought by the Dutch post office the cost was 2 billion Australian dollars. That was quite a few years ago, and I wonder what the figure would be if it were inflation-counted.
  What did Deutsche Post pay for a quarter of DHL? It did not get that for £75 million. As we know, although it is terribly secret, and we must not say anything about it, the Post Office was given permission to expend some £300 million to buy German Parcel. The proof of the pudding will be in the eating, when we see how much money is made available by this Government in order for our Post Office to stand a chance against huge and savage competition.
  I should have liked to move into the whole area of possible subsidies for sub-post offices, where the Secretary of State seemed again to be making policy on the hoof. I can only say that the Committee stage should be interesting. It will be a very long slog. As all Oppositions should, we look to clean up the Government's act and ultimately to produce a viable Bill for the future of the Post Office.
  8.17 pm
  Mr. Tony Colman: I welcome the Bill, which gives us for the first time a framework for postal services in the United Kingdom.
  I should like to start by praising the staff who look after all the sub-post offices in Putney. I would particularly draw attention to the Danebury avenue sub-post office in Roehampton, and congratulate the work of Mrs. Valerie Cooper and Mrs. Linda Doran there. It is in a shopping centre which 10 years ago had five banks. Three years ago it had none. One of the reasons why I welcome the proposals for payment of benefits through bank accounts and the introduction of banking services through post offices is that areas like Roehampton, which has some 12,000 people living in it, will at last regain access to mainstream banking.
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  It is important to recognise the great advantages to many who are socially excluded because they cannot have contact with banks. There are great benefits if they have bank accounts: they can enjoy discounts for direct debits and can negotiate cheaper loans and overdrafts than would be available through other sources. There are many positive elements.
  It is very important to pick up what my right hon. Friend the Secretary of State said in opening, which is that we must ensure that where sub-post offices are undermined by the movement to payment of benefits through bank accounts, a subsidy should be available to them. The problem is not simply in rural post offices. It applies in all areas where the banks have moved out.
  Having praised the sub-post offices, I move on to talk about the bane of my life, which is the postal delivery service in Putney. There are three key issues in Putney. One is the local health economy. The second is aircraft noise. But the one that produces by far the greatest postbag relates to the postal service, which over the last two and a half years has got worse. I first raised the matter in the House on 7 December 1998, when my right hon. Friend the Member for Hartlepool (Mr. Mandelson), then Secretary of State for Trade and Industry, announced his proposals for opening up the possibilities for the Post Office to move into the wider remit afforded by the Bill. However, the various assurances that I have had following various meetings have come to naught.
  Before the debate, I asked the Clerks whether I could spend the remaining seven minutes of my speech reading out letters of complaint about postal services in Putney. I was told that that would not be possible; but I must make it clear that I could fill one hundred times ten minutes with such complaints, which have become more and more vociferous. In Putney, Christmas cards have been delivered only in the past two weeks. The situation is beyond a joke, and has been so for quite a long time.
  Giros sent by the Department of Social Security on 10 December arrived on 5 January. Bills from credit and charge companies arrive late, and customers incur late-payment penalties. Local vicars receive written confirmation of funerals the day after they have been conducted. Apparently, until November most complaints in one area concerned the fact that there was only one delivery—and that arrived at 11 am or later. This month, there had been a further deterioration. In many streets, there was no delivery at all on one or two days of the week.
  This information comes from Judith Chegwidden, of the Putney Society, who adds that the pattern in her own street this week is a common experience for many other residents. She says that on Thursday the post arrived after 3 pm, and that that was the only delivery of the day. Most of the mail had taken at least 48 hours to be delivered. There was no delivery on Friday, and on the Saturday morning, at about 8.30 am, a man who was clearly a stranger to the area, with no uniform, was seen struggling along with an overflowing trolley.
  Mrs. Chegwidden further informs me that a delivery was received, followed by a period during which residents redelivered items that had not reached their correct target. I do not agree with the comment that followed, but it is important to establish the strength of feeling in Putney. That comment was:
  "This sort of chaotic service is just not acceptable. The Royal Mail faces competition from electronic mail and from companies such as TNT, and the Royal Mail will rapidly lose customers".

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  Businesses in Putney are suffering too. KWP Media says:
  "We are getting to a situation where no deliveries were made during the middle of January."
  Apparently, a neighbour knocked on the door two weeks ago and reported a huge delivery of between 5 and 7 kg, which
  "included all the papers we were missing as a business"—
  cheques, statements, invoices, and a reminder from the Inland Revenue sent in the middle of December to mind the deadline for a partnership tax declaration; worst of all, there was a VAT demand posted by Customs and Excise around 10 December, with a deadline of 31 January, which arrived in February.
  That is not acceptable. It is clear that the management of the Putney postal sorting office is appalling. I have had apologies from John Roberts, chief executive of the Post Office, who has said that he is dealing with it. Indeed, I have had three such apologies, and I want to ensure that the matter is brought to the attention of the House. I have asked the Post Office to ensure that compensation is available to those who have suffered as a result of the present ludicrous state of affairs. That is currently being dealt with by the chief executive, and I look forward to hearing from him.
  During their 18 years in office, the Tories did nothing to ensure that there was a universal service obligation, or any basis for compensation; and there was no accountability. The Bill provides for an independent regulator with a postal services commission. That establishes a basis for the setting of quality standards, for investigation and for the imposing of mandatory penalties for breach of licence conditions. I am disappointed to note that there is no mention in the Bill of compensation to consumers for the concerns of my constituents in Putney. I hope that the Minister will explain how individual consumers and businesses will be able to secure compensation if the universal service obligation is broken, as it has been so flagrantly in Putney over the past two years.
  POUNC will now have beefed-up responsibilities under its new name of the Consumer Council for Postal Services. I look forward to the establishment of a committee for London with teeth, which will be able to "get in amongst" the management of the Putney sorting office to ensure that the matter is dealt with. Let me also say in passing that I support the POUNC proposal to refer to the Secretary of State the increases of up to 10 per cent. in Royal Mail charges that have been introduced this week.
  I am not pleased to draw to the House's attention the lamentable performance of the postal services in Putney. I am extremely worried about the fact that the management seem continually to blame the trade unions. This has gone on far too long. The Bill gives power to the Secretary of State, the regulator and the users' council, at last, to take action.
  8.26 pm
  Mr. Nigel Evans: My credentials for a contribution to a debate on the Post Office are good. About four years ago, there was an Adjournment debate on the future of the Post Office. It was one of those debates that take place when the business of the House finishes early: rather than continuing for the usual half an hour, it continued for some time, and I spoke in it.
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  The major difference between four years ago and now is that those who sit on the Government Benches now were sitting on our Benches then, and accusing us of doing exactly what they are trying to do in regard to part of the Bill today. We were accused of ensuring that people's benefits were paid through their bank accounts, and it was said that that would be the death knell for post offices throughout the country. I remember the debate as clearly as though it was yesterday; it seems that a lot can happen in four years.
  I represent a rural constituency, containing 30 or so villages. It is very similar to the constituency of the hon. Member for Ceredigion (Mr. Thomas), whom I congratulate on his maiden speech. He said he felt that he was one of the greenest Members in the House. He is not sitting on his Bench, so I think he has learned a lot in a short space of time. Anyway, I think I, in my rural constituency, face problems similar to those that he faces in his.
  The Secretary of State said that he wanted a world-class Post Office. We all want a world-class Post Office, but we will not have one if many of the branches that we enjoy in villages and small towns are closed. The "world-class" Post Office will be available to a much smaller group of people.
  The Post Office is vital. Like many of my right hon. and hon. Friends, I have visited many post offices, particularly as I knew that the Second Reading debate was coming up. I have spoken to many postmasters and postmistresses. I have also spoken to customers of those post offices.
  I run a small retail business in Swansea. I know how tight some of the margins on which we operate are. A number of small businesses have gone under, irrespective of the fact they do not have post offices in the shop; so there is a lot of pressure on small businesses generally anyway, with whole businesses going under.
  If we visit post offices—the small rural businesses—and look at some of the other items that they sell, we realise that the service that they offer is vital; that is particularly true of small rural villages. It struck me that, if those businesses close, or if a major proportion of the local post office disappears, there will be problems. One postmaster told me that, if he lost much of the business from the post office, it would not be worth his while being there.
  Many such people open their premises early in the morning and close late at night. The post office is important to them because it acts as a magnet for customers coming in and buying other items. If a big chunk of their business disappears, they will think that it is not worth their while being there in the first place. It will not be profitable for them. It will not be profitable for them to sell the other items because, on their own, they will not make enough money. Those places will close.
  One postmaster told me about another aspect: what will happen if the footfall factor decreases. When customers walk into a post office, present their giro or benefit book and receive the cash there and then, they spend some of that money immediately in the post office. They could spend some of it to pay their electricity bill, gas bill or bill for another utility. The post office receives some money as a commission on that service.
  Those people may also spend some of their money—they have cash in their hand and happen to be there—on some of the other items that the post office sells. It could

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  be greetings cards, detergents, or a number of other items. Some post offices in our constituencies are small businesses. As my hon. Friend the Member for South-West Hertfordshire (Mr. Page) said, they are privately owned businesses. They are there to make a profit. Their customers will buy one or two other items.
  If the money is paid direct into people's bank accounts and it is no longer necessary for them to go into the post office once a week, we will find—it is the fear of the postmaster—that they will pay their electricity bill through the post. They will look for other ways to pay their other utility bills. The footfall in the post office will disappear, in other words.
  That will threaten not only the post office. Some villages contain two or three shops: a butcher's that is already under pressure, and perhaps one other small shop—a grocer or newsagent. Because the footfall has disappeared from the post office, it will disappear from other small shops in the village. All of a sudden, not just the post office, but a number of other smaller enterprises and shops in the village are threatened. That is why I ask the Government to think again about these proposals.
  We are told by the Secretary of State not to worry—3,000 post offices will have cash machines. Can the Minister for Competitiveness guarantee that post offices in West Bradford, Chatbum, Chipping, Boltonby-Bowland, Slaidburn and Downham—all relatively small villages—will get cash machines? I doubt it. Only 3,000 post offices out of 18,700 will get the cash machines. It will all be done, I assure the Minister, on a commercial basis.
  Since the Government came to power, 486 post offices have already disappeared. With the threat of what is ill thought out legislation—its ramifications have not been properly thought through—other post offices will close, too.
  This does not mean that I do not believe in, as the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) called it, taking the Post Office into the 21st century and having to commercialise. That is absolutely right. [Interruption.] I hope that we shall consider various ways of ensuring that post offices are able to survive.
  What other banking facilities are post offices able to provide? In my short time as the Member for Ribble Valley, I—like the hon. Member for Putney (Mr. Colman)—have seen banks close in my villages. Perhaps the closures are one avenue that post offices might explore in seeking extra business. The national lottery provides another possibility for more business, although smaller rural post offices may not be able commercially to sustain a lottery machine. Nevertheless—my goodness me—the lottery is supposed to be about good causes, and the survival of post offices in rural villages is a very good cause. I should hope that we will consider that possibility to support our post offices.
  E-commerce and e-mail are another possibility. In some smaller villages, an internet cafe would not be sustainable, and small rural post offices could perhaps provide internet services. I ask Ministers to consider that possibility too.
  Ministers should also take on board the fact that the Bill's provisions could threaten the viability of selling post offices. [Interruption.] Many small, privately owned
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  post offices were bought by people who had other careers, took early retirement and invested in a post office, as a nest egg for when they retire for good—[Interruption.] The Government, in their ill thought through legislation, are putting at risk the nest egg of many people who have put money aside, but will not be able to sell their post office.
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Before I call the next hon. Member, I should tell the House that I have heard an awful lot of sedentary comment, some from people who are still hoping to catch my eye. They may fail.
  8.36 pm
  Mr. David Borrow: I am pleased to speak in support of the Bill, particularly after the hon. Member for Ribble Valley (Mr. Evans) who, four years ago—when I was leader of the council in Preston—represented part of my council ward. How things change in four years!
  I welcome the fact that the Bill will give greater commercial freedom to the Post Office. However, we all have to recognise that the Post Office is not a single entity, and that its success depends on a public-private partnership to provide not only a UK-wide delivery service, but a UK-wide network of post offices from which postal services can be purchased. I should like to concentrate my remarks on that postal network.
  Since 1970, 6,000 United Kingdom post offices have closed. We now have slightly fewer than 18,000 post offices. One of the primary arguments in today's debate has been about the importance to sub-post offices of income from benefits transactions. Probably 8,000 sub-post offices rely on benefits transactions for more than 40 per cent. of their income. Some 34 per cent. of benefits payments are made through the automated credit transfer system, but, among new recipients of pensions and child benefit, the percentage is 50 per cent. and rising. Moreover, as my hon. Friend the Member for Ochil (Mr. O'Neill) said, the reducing number of unemployed people is causing a reduction in the number of benefits claimants.
  If we project the percentages into the years ahead, it becomes clear that we cannot sustain a Post Office network comprising 18,000 post offices that rely for their survival largely on benefits transactions. The Government will have to take the crucial decision on the network size that they will be able to maintain and on the mechanism by which the network can be maintained. The status quo is not an option. We cannot continue to allow the steady reduction in the number of post offices, the closure of which is determined solely by the mechanisms of market forces and of a steady increase in the number of benefits recipients receiving payment by ACT, with consequently reduced payments particularly to sub-post offices.
  We also have to get away from the myth that only sub-post offices are at risk from the changes. One of the most interesting statistics provided by the Library reveals that, of the constituencies with a large number of post offices at risk, most are located in the most deprived urban areas. I think that all the sub-post offices in the Liverpool, Walton constituency depend on benefit payments for more than 40 per cent. of their income.

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  We need to ask what sort of post office network we want and work out what we have to do to achieve that. Last Friday, I held a constituency surgery in the small village of Rufford. After spending three hours dealing with individual cases, I walked out of the surgery room to find a crowd of 20 people in the village hall waiting to speak to me about the future of the post office. Three quarters of an hour later, a number of clear messages had come out of the meeting.
  First, those who relied on the post office wanted to continue to be able to receive their benefits in cash there. The method—a receipt book or some other means—was not important to them. What mattered was that they should be able to get cash at the post office. Secondly, if they received cash through a bank machine or similar system, they did not want to have to pay bank charges. Thirdly, a significant number of recipients of benefits do not have bank accounts or are unbankable. The Government need to ensure that everybody who receives benefit has an account through which the money can be paid and that it can be received through the post office system. Fourthly, any system that is totally dependent on ACT needs to cater for the many pensions and other benefits that are not claimed in person, but are paid through the post office by somebody else on behalf of the recipient.
  The final concern is that Rufford is a small village with no bank and the nearest alternative post office is several miles away. If a computer-driven system crashes or there is no money in the cash machine, what happens to the pensioners or people on benefit? We all know the problems caused by a giro not arriving. In some ways, the ACT system can be better for claimants, because it is safer than relying on a giro, which can be mislaid or misdelivered or, for many people in houses in multiple occupation, can go astray completely. There are distinct advantages to the ACT system.
  How do we build a system that delivers what recipients want? That is where sub-postmasters and sub-postmistresses come in. We have to ensure that their businesses are viable. The Government must specify the size of network that is required in their advice to the regulator. They must ensure that the Post Office is proactive in delivering that network. Alternative sources of income must also be available to replace the money from the benefit system. We should not subsidise private businesses through the benefit system when there is a cheaper and more fraud-resistant system. If we are to subsidise the sub-post office network, it must be done through a direct subsidy so that our purpose is clear.
  There are other sources of income for sub-post offices. We need to consider the idea of a Government gateway. Lancashire county council has worked with BT to develop a number of computer terminals in rural areas that give access to information. I see a lot of scope for a gateway in sub-post offices that gives access to information such as public transport timetables and details of neighbourhood watch schemes, and allows people to purchase tickets, pay fines and perform other interactive functions. Some 28 million people a week use the post office network, which potentially means business worth £8 billion.
  We must ensure that the benefit system is run efficiently and is as free from fraud as possible. In the next few months, by the time that the Bill goes to the other place, the Government need to be clear about what
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  they have to do to ensure that the sub-post office network continues to deliver the services that our constituents need and deserve.
  8.46 pm
  Mr. Stephen O'Brien: From the outset, one of the Government's prime stated intentions in bringing forward the Bill is repeatedly proclaimed to be to give the Post Office more commercial freedom and the ability to compete. It is the genuineness of that intent that I wish to examine.
  In all walks of life, but above all in business, true competition can exist only if it is on equal terms. If that is so, consumers will get the service that they want at a value that they are prepared to pay. It is the leaders of those businesses who take the strategic, financial, human resource and day-to-day operational executive and management decisions that make a business an effective and successful competitor. In making those decisions, the board of a company—especially a public limited company, where the directors' functions are executive and their accountability is measured by performance judged by a broadly spread ownership—has daily to evaluate risk and decide courses of action in the best interests of the business as a whole.
  If the Post Office is to compete on equal terms with its international competitors, which it must, its board of directors need the full scope and authority of real commercial freedom to evaluate the risks and opportunities. That is all basic common sense to anyone with any experience of having responsibility for an independent international business, especially one with plc status. It is therefore a mystery to me why the Government have stopped woefully short of granting the Post Office that full commercial freedom, despite the stealthy cloak of plc status.
  I am bound to ask, in trying to understand the Government's intent, while retaining 100 per cent. ownership instead of selling at least 51 per cent. of the shares: what are the Government afraid of? Are they concerned that we do not, after all, have the most efficient postal service in the world, ready to take on all comers? Or are the Government, in their habitual style-over-substance way, sending a message to the Post Office's customers, competitors and the financial markets that they do not have the confidence in the senior management on the back of whose commercial judgment the Government are proposing to lend money to the new plc, potentially at below average commercial rates?
  No, it is none of those. I fear that the only possible conclusion is that the Government have been got at by the unions. And is it any surprise that the Government have no understanding of how commercial risk is judged and the conditions for success achieved in the boardrooms of UK plc? As I scan the Government Benches, I wonder how many Labour Members have ever served in a boardroom, let alone in the boardroom of a fully independent UK public company. If they had, they would know that one cannot evaluate risk and take commercial decisions in the best interests of the company when at the same time one has to look over one's shoulder at the crushing hand of Government.
  The Bill, an unholy compromise, a halfway house and half-hearted measure, will be like the difference between what we should have—a skilled, competitive risk-judging

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  high diver prepared to take the plunge—and what we are presented with in this Bill—the instant thrill-seeking, headline-grabbing bungee jumper, secure in the knowledge that he can always bounce back into the arms of Government. So much for the Government's genuine intent to release the Post Office from their clutches into the real, competitive, commercial, international world of the future.
  The Government's strategy on postal reform can be summarised in two words—compromise and uncertainty. It is a compromise between old Labour unionism and new Labour spin. It contains nothing to placate the fear and uncertainty over the future of the Post Office network, but plenty to serve the interests of the unions.
  As I study the Bill, I simply cannot find the logic—the glue that binds the whole policy together. I cannot see a clear-cut business strategy that will take our Post Office forward so that it can adapt, compete and continue to be great in the future. Instead, we have the Secretary of State's spin. He has promised modernisation but, in fact, his trumpeted plan of modernisation is based on a failed idea from the previous century—that of the state owning all the shares in a key industry. I dare say that many Labour Members must be thinking, "If only this were the sort of modernisation that the Secretary of State would talk of in the context of the utilities."
  The Government have, I admit, recognised the need for the Post Office to be competitive. Last July, during the statement on the White Paper, the Secretary of State said that the proposals for Post Office reform were
  "good news for the Post Office's millions of customers, who will benefit from improved services from a new, modernised Post Office and from greater competition for postal services."—[Official Report, 8 July 1999; Vol.334; c.1175]
  If the Secretary of State recognises that millions of consumers will benefit from greater competition, why not maximise that competition instead of limiting it, thereby limiting the benefit to the consumer? For if the plc structure proposed for the Post Office stands for anything under this Government it is, I suggest, "politically limited competitiveness".
  Certainly, the limitations on competitiveness are clear to see. In addition to the fundamental flaw that I have already mentioned regarding the socialist approach to share ownership, borrowing will be underwritten by the taxpayer, the long-standing privileges enjoyed by the Post Office will remain, there is no evidence that cross-subsidies will be avoided through greater transparency, and the £1 limit on the reserved area remains.
  So we are forced back to consideration of the Bill's genuine intent. The shape of the Bill has been driven by a compromise with the unions. The Government have guaranteed that actual privatisation would require new primary legislation. When the Secretary of State gave his assurance of primary legislation for any wholesale public share offering, the Communication Workers Union stated:
  "We attach great significance to these public assurances which guarantee that, of itself, plc status does not take the Post Office any nearer privatisation and any share disposal would require a full-scale Act of Parliament with comprehensive political debate during which we would obviously lobby and put our case."
  That is a statement of union backing for a union-driven fudge, if ever there was one. It is also clear evidence that, under new Labour, appeasing the unions comes before
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  pleasing the consumer. It is the consumers who would benefit most from the Post Office enjoying full competitiveness and commercial freedom, as a truly independent public limited company, untied from the nanny state. They are not getting that under this Government.
  As I said, the Bill is about compromise and uncertainty. It does nothing to address the uncertainty hanging over the future of the Post Office network. Post offices, small, medium and large—such as the ones in Tilston, Tarporley, Winsford, Audlem and Sandiway in my constituency, and especially the small, rural and suburban community sub-post offices—fear for their future. It is not just in my constituency—it is the same all across the country. There is great uncertainty. The only certainty is that the Government's decision to scrap the Horizon swipe card plan poses the biggest threat.
  The National Federation of Sub-postmasters has estimated that 40,000 sub-post office staff will lose their jobs. Against all the Government's words stating their commitment to social inclusion, the overall result of this measure will be a massive increase in social exclusion. And the Secretary of State's answer to the uncertainty over the future of the networks is posters. There is little chance that those posters will tell the truth. If they did, they would say, "Your post office is not safe in Labour's hands, and we have no intention of rethinking our scrapping of the policy that could have preserved the network."
  Overall, the Government's strategy for the Post Office is a combination of political fudge and economic uncertainty. The Secretary of State has consistently stated his support for greater competition in the wider economy to improve services and drive the best bargain for the consumer. Yet he is introducing a Bill in which competition is kept to a minimum to keep the unions happy. The Bill does not address any of the major questions hanging over the future of the Post Office.
  We shall have to work hard in Committee on the many new clauses and amendments that the Secretary of State has told us about. He knows what they are, but we are not allowed to know because that would go against his spin. My recent experience on the Standing Committee that considered the Freedom of Information Bill tells me that we shall argue a lot with the Government, who will put up a lot of straight bats. We may even receive some courteous rebuffs for our improving amendments. Ministers will read out hastily scribbled rebuttals handed to them by officials. They are never minded to let the benefits of a hard-won democratic procedure improve a Bill for fear that that would be interpreted as meaning that their original thinking was wrong, or even not 100 per cent. perfect.
  The Government should listen. There is little political benefit for the Opposition in improving Government Bills in Committee, far from the public gaze. Yet, in good faith, again and again, we shall try to do so, because we are determined to pass good law, even if, as Opposition Members, we disagree with the underlying policy. Many battles await us in Committee.
  8.56 pm
  Mrs. Diana Organ: The Bill has been long awaited. For years, the Post Office had to put up with Tory dither, delay and indecision coupled with continual

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  threats to break it up and privatise it. That remains Tory policy. The Post Office was not allowed to prepare for the challenges ahead. Labour, on the other hand, is keeping its manifesto commitment to modernise the Post Office by giving it commercial freedom within a public sector framework.
  The Post Office has welcomed our wide-ranging Bill, as have the Communication Workers Union, the Country Landowners Association and Action with Communities in Rural England. There is much in the Bill that will be welcomed by the 29 million people who use the Post Office every week. For the first time, service provision by a nationwide network and a universal service obligation are being enshrined in law. To ensure that that happens, we are introducing a new regulator and the Postal Services Commission to promote consumer interests.
  People in rural areas who are concerned by sub-post office closures will be able to call on the regulator to consider the full impact on customers when there is any future closure proposal. The Postal Services Commission will have to have regard for the interests of the disabled, the chronically sick, pensioners, those on low incomes and those who live in rural areas. The Bill gives the Secretary of State the power to direct the Postal Services Commission to impose a licence condition requiring the provision of free postal services to the blind, thus ensuring the continuity of free articles for the blind. All that is to be welcomed.
  For the first time, there will be a right to access, with the Government issuing criteria to ensure that everyone may have reasonable access to Post Office Counters services. Individuals will be able to appeal to the regulator on the provision of postal services in their rural areas.
  Together with the 250,000 people who have signed petitions highlighting concern about the future of local rural post offices, I hope that the Bill will deliver a framework to ensure the maintenance of a strong post office network. However, I seek some strengthening of that framework. We need to arrest the continuing decline in the number of rural post offices. We must specify what an acceptable network means, and we must safeguard vulnerable post offices that give much to the local community. We need to fund the network, and, as my right hon. Friend the Secretary of State said, that may mean subsidy.
  At present, 43 per cent. of rural parishes have no rural post office. The network in rural areas has reduced from 9,700 in 1994 to 8,900 at present. The Tories let the continual fall in the network go on year in and year out. The Labour Government are addressing decline. We need to build up the network. When, as often happens, a post office is linked to a village shop, it is an essential facility offering access to a vast range of services.
  Such post offices are fragile. As the 12th report of the Select Committee on Trade and Industry noted:
  "Given the fragility of the network … it is time for the Government to consider whether it should continue to rely on income generated from a range of postal and other services to maintain a national network which it regards as necessary for broader social and economic objectives; or whether it should accept that the network is a national asset—as recently demonstrated by its role in providing more or less instant passport renewal services—which may require an appropriate level of national financial support."
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  Services such as those suggested in the Select Committee report would greatly strengthen the framework outlined in the Bill. I welcome the comments of my right hon. Friend the Secretary of State suggesting that a possible subsidy may be considered in Committee.
  We can overcome the vulnerability of post offices through diversity. In Suffolk, one rural post office is situated in a local pub. In Herefordshire and Worcester, 20 sub-post offices are located in village halls. The range of services could be extended. We should allow rural sub-post offices to become the centre for a wide range of services, financial and otherwise.
  Why should not rural sub-post offices offer insurance, in addition to the holiday insurance that they are now allowed to offer customers? They could issue smart payment cards and Quantum cards for electricity, gas and water, and mobile phone prepayment cards. They could issue passport forms, vehicle licence forms, motor tax forms and other local services required in rural areas.
  I am glad that we will ensure that people can pick up their benefit in cash across a post office counter. The hon. Member for Buckingham (Mr. Bercow) commented on my earlier concerns, but I am now aware of the Government's commitment to that.
  We can allow post offices to become future banking centres for rural areas. There are already agency arrangements with the three major banks. That is important, as 91 per cent. of villages have no banking facility.
  The report to the British Bankers Association by Elaine Kempson of the university of Bristol showed that 15 per cent. of rural businesses are more than four miles away from a local branch. That creates particular difficulties for small retailers and the self-employed. Furthermore, 15 per cent. of the rural population have no local branch. That is especially difficult for people who are over 80 or disabled, and for women with young children. The report found that agency arrangements with post offices would be acceptable to those groups. That extra business would bring more footfall into rural post offices, giving them greater strength.
  The Horizon project to computerise 18,000 post offices by 2001 will give them modern, on-line IT systems and give the network the capacity to re-introduce banking facilities in the rural areas from which banks have withdrawn them.
  With my hon. Friend the Member for Stroud (Mr. Drew), I have written to our hon. Friend the Minister, inviting him to Gloucestershire to meet postmasters and discuss the possibility of running a pilot of the Horizon project, to monitor and evaluate the services that it can deliver and see whether it can effectively provide electronic government.
  The Bill will allow the Post Office to borrow up to £75 million at commercial rates in each of the next five years. That will give it a vast amount of investment, which is necessary to allow it to compete on a global and national scale. There will be major new business opportunities as e-commerce expands. More and more consumer purchases are made on the internet.
  As we move into the realms of mass food retailing through the internet, with Tesco rolling out a nationwide service, there will be huge opportunities for large-scale nationwide distributors. Only Parcelforce can meet that requirement. It is the only carrier with complete coverage across the UK, but it needs the provisions of the Bill to enable it to enter the future market competitively.

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  The Bill will provide a framework for modernisation, allow the Post Office to be competitive and remain a world-class service, and give a better deal to consumers in rural areas.
  9.4 pm
  Mr. Mike Hancock: First, I offer good wishes and congratulations to the hon. Member for Ceredigion (Mr. Thomas) on his excellent maiden speech. I also pay a generous tribute to his predecessor in that constituency.
  I am sorry that I cannot do the same for our colleague, the hon. Member for Putney (Mr. Colman). He painted a depressing picture of the postal service in Putney. The only glimmer of hope was that the 29 million other people who use the service every week have a much better service than the inhabitants of Putney.
  However, Putney may be where ministerial mail goes. When it leaves Ministers' offices, it hovers for several months over Putney and then descends on the House of Commons. I hope Ministers will not grab that as yet another excuse for the long delays in replying to letters from hon. Members, although I am sure that some of them will enthusiastically grasp at that excuse to defend the indefensible.
  My hon. Friend the Member for Twickenham (Dr. Cable) spelt out his strong reservations as to the financial consequences of the measure. The hon. Member for Forest of Dean (Mrs. Organ) mentioned that the £75 million available for borrowing would permit great scope for modernisation and development. Nothing could be further from the truth. One has only to visit one's main sorting office—if one is lucky enough to have one—to find out that the cost of the technology to speed up sorting runs is more than £1 million. It would cost that amount to get new technology into sorting offices—let alone the development and business opportunities outside.
  There are several flaws in the Bill. However, all that we have heard from the Conservative Opposition is that they have not learned any lessons. The only alternative that they offer is privatisation. That is where they were going during the previous Parliament, but they backed off. My predecessor as Member of Parliament for Portsmouth, South resigned from the Conservative Government in disgust at the fact that they had backed away from privatisation, but it did not save him his seat.
  It has been pointed out that many Tory Members lost their seats at the last election because they stuck rigidly to the line that the Post Office needed to be privatised and they wanted to carry that out. Today, Conservative Members are harking back to what was seen, even at that time, to be a lost cause. The Conservatives backed off then because the public do not want privatisation.
  Consumers have not said that they want the wholesale sell-off of the Post Office. The overwhelming majority of people believe that the Post Office offers an excellent service where it is needed. Deliveries are usually on time, although obviously there are occasions when things go wrong. However, as the representative of a large constituency of 89,000 voters, I receive few complaints about the service. I have nothing but high regard for the job done by postal workers in sometimes difficult circumstances. I am proud to be close to the organisation in my city.
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  Much has been said about the plight of rural post offices. I draw the attention of hon. Members, once again, to the plight of the urban post office. The distance between the sea and the northern boundary of my constituency is a little more than two miles; from east to west, the distance is probably less than three miles. More than 100,000 people live in that area—89,000 voters. There are 22 sub-post offices, 15 of which would have an even greater cloud looming over them if the changes in the payment system go ahead, and people take them up as the Government will, I am sure, encourage them to do. Why make changes, if they do not actively encourage people to make use of them?
  The problem faced by 15 of those 22 sub-post offices is that 50 per cent. of their trade comes from benefit claims. Many have no alternative; they cannot diversify. They have tried to do so, but some businesses have already gone down the tube because supermarkets have expanded.
  Banking was offered to post offices—the installation of cash dispensers. A postmaster came to see me last week with a letter about the 3,000 machines that would be available. He and his family have run a post office in the heart of the area for more than 30 years. He applied for that service, but there was no indication of how the choices would be made. Will there be any weighting in favour of the installation of those machines in sub-post offices? Or will it be as predicted by the sub-postmasters, who all believe that the machines will go to the highest bidder, or the one with the greatest number of customers passing through the door—the local supermarket? It would be very difficult for local post offices to compete with the supermarkets.
  The closure of any one of those sub-post offices will pose serious problems for many people whose only active meeting of other people, except for the occasional person who knocks at their door, takes place on the journey to that sub-post office. It does not matter that they are not too far from neighbours, and probably relatives. For many people, that journey to the post office is their trip to the outside world. On the way they may visit the library or pay other bills, but the post office is the main reason that many of them still make a journey out of the home.
  It is easy to ignore the situation in an urban population and say that that is not an issue because if the Government close 10 sub-post offices, 12 will remain in that very small area; but people will have to make difficult journeys, sometimes without public transport, across very major roads, in densely populated streets full of cars, which are double parked in most instances. It is a real nightmare. That is why thousands and thousands of people have already signed petitions to save post offices in my constituency and many other urban constituencies.
  Tonight we need to hear from the Minister some clarification about the possibility of subsidies. We need to hear who will choose from the 22 post offices in Portsmouth, South those that are seen to be viable and eligible for a subsidy, and we need to know what will happen to those who do not pass the harm test satisfactorily and consequently are not chosen.
  The right hon. Member for Hitchin and Harpenden (Mr. Lilley) did not mention the fact that he served in the Government who closed down the Crown offices. I remember that, when I was previously a Member of Parliament, they closed thousands of them throughout

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  the country. In Portsmouth, at least half a dozen were closed. We were all told, "Do not worry; jobs will be saved and we shall find alternative locations, or other people will take on those offices." Five of the six are now housing. All six no longer serve as post offices. There was nothing but crocodile tears. We were told, "It will not be a problem. Do not worry. You are over-hyping the argument."
  Now the boot is on the other foot. A Labour Government are in power, and they are saying that they intend to do something that appears to threaten the viability of the sub-post office network, whether rural or urban. Answers are expected and needed—not 18 months from now, not when the Bill has passed through the House and the other place, but tonight or very soon after tonight. The livelihood of thousands of people throughout the country is on the line, and so are the understanding and commitment of the people who use those post offices. They want to hear a clear message from the Government tonight.
  I do not envy the Minister's task in piloting this very complex Bill through its stages. Some Members have said that the Bill is a step in the right direction. My only fear is that it is a step in the direction in which the Conservatives wanted to take us, and that, if ever they were back, it would open the door to allow them to do what they did more easily the next time than they did it the last time.
  9.13 pm
  Mr. Lindsay Hoyle: Obviously, the debate is very important and many hon. Members on both sides of the House have taken part. There seems to be an interesting discrepancy between the views of the various members of the Opposition Front-Bench team. The hon. Member for Tiverton and Honiton (Mrs. Browning) said that she did not want to commit herself to privatisation, and that we must wait and see what the Conservatives would be saying at the next general election; but the hon. Member for Rutland and Melton (Mr. Duncan) was bouncing up and down saying, "Privatise, privatise, privatise." It is always very interesting to note the variation in the messages that are communicated by the Opposition.
  We should be talking about the future of the Post Office, which is very important. I welcome what we are achieving, or hope to achieve—a greater and better universal Post Office. I hope that we can take on the rest of the world and that we can continue to be proud of the Post Office. The Post Office has a proud history and we want it to expand and to have the freedom to allow that to take place.
  People shout that we should fully privatise the Post Office, but they then ask about sub-postmasters and postmistresses. They want the best of both worlds, but they are not facing up to reality. For 18 years, 40 sub-post offices closed every week. No matter what they say, the previous Government did not bat an eyelid. We take the future of rural post offices seriously, so much so that we believe that there must be an alternative approach. We cannot allow them to wither on the vine as previously happened.
  We should recognise that we now live in a plastic society. There are no two ways about that. New pensioners will use a post office less, because their pensions will be paid directly into their bank accounts.
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  We must grasp the nettle and ensure that the Post Office can provide alternative services. We must give it a viable future and that must be done through new technology. That is the new gateway for its benefit and its future.
  I am in contact with the owners of rural and urban post offices in my constituency. They are important and they recognise that they need a future. The future is not to do nothing, but to give them an alternative, and that alternative will come from new technology. We need new rural and urban banking facilities, and we want post offices to be able to offer a full range of services. They will be offered because we are willing to take up the challenge of new technology to provide a future for a Post Office of which we all can be proud.
  We shall stop what the previous Government allowed to happen—post offices withered away and not one Conservative Member who supported the previous Government for 18 years was even bothered. They might shed crocodile tears now, but that is all that they can do. In reality, they do not care. They say, "Privatise, privatise", but they do not say what would happen if they privatised the Post Office. That is a worry.
  Perhaps the hon. Member for Rutland and Melton will be willing to tell us how privatisation would help sub-postmasters and mistresses. We all know that it would not help them in the slightest—far from it. It would make their futures totally uncertain, but would do nothing about their problems. We recognise that the problems exist and that they must be addressed. However, talking about them will not help. We want a Bill that will help the Post Office in general—the new universal Post Office—and that will give a viable future to the rural and urban post offices that would have closed, as they did under the previous Government.
  I want the Bill to enable the Post Office to provide new enhanced services. What is wrong with small urban villages of 8,000 to 10,000 people having a second delivery? That does not take place at present, but I hope that not only will we maintain the service that we have now, but that it will be improved by a double delivery. People should expect that. We should not say that deliveries should be made before 2.30 pm. Instead, we should say that people will have a first delivery before 10 am and a second delivery before 5 pm. We should be pushing the service forward and enhancing it.
  I hope that my hon. Friend the Minister will take my points on board and that he will say that the Bill will lead to an enhanced service that we will all welcome. I know that the Government take seriously the future of the Post Office, and urban and rural post offices in particular. They have been allowed to close, but that should not have happened. We do not want it to happen again; we want a Post Office of which we can be proud.
  I am constantly in touch with the post offices in my constituency. I want to ensure that they have a viable future, and the Government will ensure that through the use of new technology and alternative services.
  9.19 pm
  Mr. Oliver Letwin: A good deal of concern has been expressed in this debate, as in three previous debates in this Session, about rural post offices and small post offices in general. We are dealing primarily not with a party political issue, but with a Government who are over-dominated by their Chancellor of the Exchequer. We all understand the problem.

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  The Chancellor and his officials communicated to the Department of Social Security the great apercu that they had come across 15 or 20 years earlier and of which they have been repeatedly notifying the Secretary of State for Social Security for all that time, which is that the Government could save an enormous amount of money if only they would pay benefits through the banks.
  In previous years, we have had, without an announcement, the introduction of something that I believe is now popularly called joined-up government. Under this present joined-up Government there is, alas, no joined-up government, and the Department of Social Security said yes to the Chancellor's proposal without checking what the effects would be, and reported to the poor old Minister's Department of Trade and Industry, saying "Jolly D. The Chancellor has said this and what the Chancellor says rules in this Government. Let it happen."
  The poor old Minister and his Secretary of State got to work and started to make all the discoveries that people had made many years earlier, but which the Government had not been told about by the Treasury officials who now run things. They discovered, of course, that the massive saving had a few disadvantages. First, it was admitted in an earlier debate that the Government would have to subsidise the banks to get them to open accounts for people who should not have a bank account because the banks do not want them and the people themselves do not want a bank account.
  It was then discovered that the people for whom the Government thought it would be nice if they could collect their cash through the post offices unfortunately would not have that option because there would be no post offices. They then came up with the whiz-bang solution, which is, as we now discover, to subsidise rural post offices and outlying post offices in towns and cities. Two of the net advantages of the idea were therefore to be a huge extra subsidy to the banks and a huge extra subsidy to post offices, but the Government discovered that that would not do because we still could not be sure that people would be able to get their cash, because the post offices would not be there.
  The Prime Minister went on a tour to the south-west and said that he would put cash tills outside all the post offices. He happened not to notice that when there is a cash till outside a post office, people do not go into the post office, so they do not use the post office, so they will not have payments made into the post office, so the post office will not remain open. Now the Prime Minister will put 3,000 cash tills in other places in rural areas—we know not where and he knows not where—and of course we have no idea whatsoever how people will use the cash tills because they will not be bank account holders so they will not have any reason to use a cash till.
  I could go on. I fear that what I am trying to describe is a right muddle. It is a muddle not because Ministers are evil or ill-intentioned or even because they are Labour Ministers, but because they have made a right mess of things by coming up with a policy that a certain set of officials has been promulgating for a long while but which has never worked and will not work now and will have to be got rid of sooner or later.
  It will have to be got rid of sooner rather than later because there is a huge movement against the proposals in the countryside and increasingly in towns and cities.
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  Hundreds of thousands of people are signing petitions. There is a cross-party group, of which I am proud to be a member, which takes in Members from all three parties represented in England. The fact is that the Government will give way.
  Once the Government have given way, we need to know what we need. I regret to say that the Secretary of State gave a lamentable performance earlier, and he revealed that he has not the slightest idea of what we need. It is simple and clear: we need a mechanism by which small post offices will be able to compete with the banks and deliver, sensibly and rationally, at low cost, benefits to the people who need them without their having to hold a bank account, without having to subsidise the rural post offices and without the collapse of village society that is otherwise entailed. That is within our grasp.
  We need an intermission. The arrangements will not be introduced by 2003; they could well be in place by 2005 and 2006. Technological problems have been encountered, but it is perfectly understood in principle how the task can be done. We must provide the average small post office with the electronic means to deliver benefits in the way that the Secretary of State for Social Security wants them to be delivered, and this poor old Minister would like them delivered, to keep open the network of post offices. That is perfectly doable if it is done slightly later.
  What is the remedy? The Secretaries of State for Trade and Industry and for Social Security must summon up their courage and remind themselves that they are not wholly in the hands of the almighty Chancellor of the Exchequer. They must go, if necessary on bended knee, up the stairs of the Treasury and say to the Chancellor, "Oh Chancellor, you are three years too early. Just give us a little intermission to install the technology in the post offices and there will be a miracle. You will not have to subsidise the banks. You will not have to subsidise the rural post offices. It is true that you will not save £400 million; you will save much more." I think that the Chancellor of the Exchequer, terrifying though he is—like my colleagues on the Treasury Opposition Front Bench team, I know just how awesome the right hon. Gentleman is at the Dispatch Box, and I have no doubt the same is true of him in his office—will turn out to be rational.
  The Government will thus find a way to get off the awful hook. From the point of view of my colleagues and me, that is politically highly regrettable, as we stand to gain seat after seat in rural areas from the Government's awful mess. If we were cynical, we would desist from speaking a word about it and our friends on the Liberal Democrats Benches would be equally silent, because we all know that one of the best ways to encourage people to vote for us is to allow Ministers to pursue a lunatic policy. Nevertheless, I hope that Ministers will take the opportunity to go to the Chancellor, that they will win the debate and that they will not pursue the policy.
  The reason why that is the right course of action is that it is in the interests of no party in the House to allow the widespread destruction of village communities that will ensue from the Government's proposals being implemented. It is in no one's interests if the hundreds of thousands of people who are benefit recipients find themselves in increasing social difficulty. We have a common interest as politicians in telling the officials at the Treasury to get back into the box.
  9.26 pm
  Mr. Alan Duncan: We have had a lively debate. Such is the enthusiasm of hon. Members on both sides of the House that the number who wanted to speak reduced us to a 10-minute rule.
  Having studied the Bill in detail, the best we can say is that it is better than nothing but not as good as it could have been. At its worst, it is a timid and potentially deceitful Bill—deceitful in respect of the structure chosen and the consequences that Ministers claim will arise from it.
  The fact is that the proposed structure is not a full public limited company. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, it is a hybrid structure that is full of conflicts and contradictions. It enjoys the pretence of commercial freedom, but the relationship that the Post Office will be compelled to have with the Government will continue to be more akin to that of a nationalised industry than to that of a freely owned company operating in the open market; it will always look to the Government for permission to act.
  The financial disciplines applying to the company will be contradictory. It will operate in an artificial climate of financial discipline: there will be no openly quoted share price, which would otherwise govern its financial strictures; nor will it borrow in quite the same way as other plcs in the open market. At its worst, the result could be a sort of mini-National Enterprise Board, like that of the 1970s.
  Let us imagine that, in a great venture, having been seized with the sort of vision for which every hon. Member who has spoken today has asked, the Post Office decides to enter into a share swap with another communications company, perhaps an overseas company. Some shares from the 100 per cent. Government-owned company are given to that overseas company and some shares from that company are given in return. The end result, lo and behold, is the British Government publicly owning shares in a foreign communications company.
  Such a bizarre structure cannot endure. It would be absurd if one Minister in one office at the DTI had to decide whether or not the Post Office could borrow money, while another Minister in the office next door—behind the Chinese wall—decided whether or not to refer some merger to the Competition Commission. The structure is untenable—a crazy pretence.
  The Bill is designed to deceive. I do not believe that the Government are intent on keeping the structure in the same form as it is created. Either old Labour will build it up until it resembles the National Enterprise Board that I described, or new Labour will do what it always does—go a long way against the wishes of Labour Members and take a dramatic step towards privatisation. I believe that the latter is more likely. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) lampooned that duplicity well in his contribution.
  There is massive suspicion about the future of the Post Office network. Although Labour Members have done their best to disguise it, many of them share our anxiety. The root of our concern is the future of the Post Office network in rural and urban communities after the introduction of automated credit transfer. The Secretary of State said that there would be no deductions from those who subsequently draw money in cash after the introduction of ACT. I welcome that statement as far as it went; however, it does not tackle our anxieties.
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  Last year, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) asked the Secretary of State for Trade and Industry
  what fee will be paid by the Department of Social Security to sub post offices for administering cash benefit payments under the arrangements applicable from 2003".
  He received the following reply:
  The contractual arrangements between the Benefits Agency and Post Office Counters Ltd. are commercially confidential, as are the contractual arrangements between Post Office Counters Ltd. and certain retail banks under which customers of those banks can access their accounts at post offices.—[Official Report, 26 July 1999; Vol. 336, c. 93W.]
  That directly contradicts the Secretary of State's comments today.
  The right hon. Gentleman did not fully answer a question that initially received no answer. He let a tiny patch of daylight into the magic and trickery without giving a full answer. As my hon. Friend the Member for Worthing, West (Mr. Bottomley) rightly said, what matters is the future of the income of the network of post offices, which rely so much on the payment of benefits. To that question, answer came there none. If there is no adequate post office income, from where can people get their cash? The Secretary of State's guarantee that there will be no deductions from money that is paid in cash is not a guarantee to protect the Post Office network
  Mr. Connarty: Earlier, Conservative Members gave a clear commitment that they would privatise the Post Office. What guarantee would a privatised scheme give to sub-post offices? A commercial free market gives no guarantees to any enterprise.
  Mr. Duncan: The hon. Gentleman shows that he does not understand the kernel of the issue. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) dealt with that point in his speech. If the hon. Member for Falkirk, East (Mr. Connarty) was not prepared to listen to my right hon. Friend, I pity him.
  There is much suspicion about the alleged savings that introducing ACT will make on fraud. Community post offices know who their customers are. Fraud tends to be caused by the mistaken issue of a book, not by the transfer of cash to the book holder.
  I shall dwell briefly on the speech that my right hon. Friend the Member for Hitchin and Harpenden, the former Secretary of State for Social Security, made. When in government, he had an impeccable track record of designing a system that would have protected the rural network. He openly described the way in which it would have worked. He made a devastating critique of the Bill's structure and said that its philosophy was, "make us modern, but not yet." He also said that the universal service obligation can be fulfilled through regulation; it does not require state ownership. That is the answer to the question of the hon. Member for Falkirk, East.
  My right hon. Friend explained the conflict between commercial and Treasury priorities, which will permanently bedevil the structure for which the Bill provides. He was open when he said that as Secretary of State for Social Security, he was advised that the introduction of ACT would destroy community post offices and lead to minimum savings and maximum disruption.

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  On the back of that and his experience in government, my right hon. Friend asked the Minister whether he had received similar advice or any guidance that might in any way match what he was told. I hope that the Minister replies, as the answer is bound to be yes; but that is part of the deceit of the Bill and of Government policy, which are designed to destroy the Post Office network without admitting what will happen. Government policy is already destroying many post offices: the value of their business is plummeting because of the doubt and the danger that they face. My right hon. Friend undertook a forensic dissection of the likely new payment arrangements and the Minister will have to answer many questions in Committee.
  The hon. Member for Falkirk, East recalled the Stand By Your Post campaign in his constituency and stood by it, but he should reconsider his view as he supports a Government who are ratting on that campaign and causing untold damage to our network. The hon. Member for Ochil (Mr. O'Neill) wants the Post Office to be able to have an international vision. I agree, but it will be able to have such a vision and act on it only if it has genuine commercial freedom, not the fake commercial freedom in the Bill.
  May I divert for a moment to pay my compliments to the hon. Member for Ceredigion (Mr. Thomas)? Like hon. Members on both sides of the House, I congratulate him on the quality and the generosity of his maiden speech, which was confident, amusing and took us on a vivid tour of his constituency, with all its rural quality. He and I can find common ground in that we represent constituencies of fields, not concrete. Perhaps we can find further common ground in taking pleasure in new Labour coming fourth in his by-election.
  I listened closely to the contributions of the hon. Members for Strathkelvin and Bearsden (Mr. Galbraith), for North-West Norfolk (Dr. Turner), for Putney (Mr. Colman), for South Ribble (Mr. Borrow) and for Forest of Dean (Mrs. Organ), who hopes that her constituency can be part of a trial of much of what a future Post Office might do. However, she was offered a trial in Gloucestershire before—the pathfinder trial—only for it to be cancelled by the Labour Government as soon as it was announced.
  Conservative Members brought a lot of experience to the debate. My hon. Friend the Member for Banbury (Mr. Baldry) put a clear case for the benefits of privatisation and my hon. Friend the Member for South-West Hertfordshire added his experience from his days as a Minister. If we are fortunate, he might be selected to serve on the Committee so that he can bring that experience more greatly to bear.
  My hon. Friend the Member for Ribble Valley (Mr. Evans)—the first phase of a Ribble double this evening—went to the heart of the debate to explain the value of small post offices to local communities, which we all want to protect, and the possible consequences of the Bill. My hon. Friend the Member for Eddisbury (Mr. O'Brien) said that the Post Office needs genuine commercial freedom if it is to thrive and that the existing plc stands for "politically limited competitiveness". I agree with him. My hon. Friend the Member for West
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  Dorset (Mr. Letwin) was cogent and convincing as always, but his remarks were difficult to take in on this occasion as he was rather quick.
  The House is aware of a depressing aspect of the Bill: we are debating its principles on Second Reading and considering a detailed text of 93 clauses even though we know that a massive number of amendments will be tabled. That has already happened with the Utilities Bill and it is fast becoming a pattern. In his opening remarks, the Secretary of State said, "I know the number of amendments we plan to table", but he has not made them available to the House. A massive raft of amendments that will make dramatic changes are already in the pipeline, but they are not before us to help us to decide whether we agree with the Bill's principles.
  Whereas we all accept that a number of amendments are bound to be put down in Committee—after all, that is what the process is for—to have them ready now, before Second Reading, and for the right hon. Gentleman not to come absolutely clean about them is disrespectful of the process in which we are all engaged.
  We on this side of the House want proper commercial freedom for the Post Office. We want it to be able to thrive in a world of increasing competition and global corporate competition. We want to see it free to enter into those sorts of relationships into which genuine plcs are free to enter.
  The structure before us is a mess. It is a pretence of a structure. It will not give the managers the freedom and initiative to do what they really want to do, to build up their businesses.
  We also want to defend rural post offices, which undoubtedly are under threat. We value them. If the Government really were honest about this, they would have accelerated the process of designing the access criteria so that at this stage we could see what is planned to protect the rural network that the Government say they wish to defend. In the absence of those access criteria, the suspicion that we have in so many areas will grow.
  There are many things that we could debate further about whether the Post Office should become a bank. However, at this stage, on Second Reading, we see before us a Bill which is a hotchpotch hybrid. It does not give the commercial freedom to the Post Office that the Government pretend. Our reasoned amendment gives all the reasons for our wishing to criticise what is in the Bill. I hope that, if the Bill goes as far as Committee, we shall manage to improve it.
  9.42 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): All the self-preening pontification of Opposition Members cannot disguise their total lack of credibility on this issue. If I was being kind about their stewardship of the Post Office—[[Interruption.] There are members of the previous regime sitting on the Conservative Benches. We do not want to upset them unduly. If I was being kind, I would call their stewardship maladroit. If I was being unkind, I would say that Postman Pat's black and white cat would have provided better stewardship of the Post Office over the term of the previous Government.
  Let me take hon. Members opposite through this issue—it will not take long. This is a "Hitchhiker's Guide" to the previous Government's policy on the

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  Post Office. First, in July 1992 they announced that they would split away Parcelforce and sell it off. Then they announced, two weeks later, that they were going to review the rest of the business. Then they announced that they could not split Parcelforce away from Royal Mail, because that would be detrimental, so they would bring it back again. Then they announced that they would split Post Office Counters away from the Post Office business and keep Royal Mail and Parcelforce together as a privatised part of the Post Office—so there would be that small public sector minnow called "Counters" split away from all the synergies, all the cross-fertilisation in terms of work and finance, that it received from the rest of the business.
  The Government spent £1,613,002.28—I am grateful to Hansard for telling me this—of taxpayers' money on consultancy fees to go out to consultation on a Green Paper that said they would privatise Royal Mail and Parcelforce and keep Post Office Counters in the public sector. I am told that receiving 200 replies to a Green Paper is doing well. They had 15,400 responses, only 60 of which were in favour of their proposals.
  I have not ended the "Hitchhiker's Guide" yet. Then the Conservative Government said that they would reduce the external financing limits to half the Post Office's forecast post-tax profits in the autumn, something that we are doing in the Bill: 50 per cent. this year, reduced to 40 per cent. next year. They said they would make progress on that in the autumn. That autumn they hiked the EFL to 300 per cent. of that year's Post Office profits. The reason why a first-class stamp costs 26p is that the Post Office was forced to respond by increasing the tariff four years ago.
  After all that, the Conservatives ended their term of office with a miserable little paragraph in their 1997 manifesto saying that, if elected, they would sell off Parcelforce and review the status of the rest of the business—right back to where they were in July 1992.
  The pity of all that is that the solution was there all along. The solution was staring them in the face. The hon. Member for Tiverton and Honiton (Mrs. Browning) said that the Conservatives were enthusiastic about privatising the Post Office; well, we are enthusiastic about the Conservatives standing at the next election on that basis.
  The right hon. Member for Hitchin and Harpenden (Mr. Lilley) said that the Post Office network was already in the private sector. I have heard that myth before, and it is ludicrous. The Post Office network—Post Office Counters Ltd.—is driven and financed from the centre, from a publicly owned Post Office network. The private business is a public-private partnership, but private businessmen come into the business on the basis of a network 10,000 of whose constituents make a loss, and have to be cross-subsidised to the tune of £30 million a year from the rest of the network. They can do nothing about that because the system is socially necessary, although not always commercially viable.
  The right hon. Member for Hitchin and Harpenden said—I thought this a bit rich—that the Post Office had missed the glittering prizes that would have belonged to it if it had been in the vanguard and not in the rear. After all the Conservatives' maladroit handling of the Post Office, the answer was staring them in the face all along. It was the Select Committee on Trade and Industry in 1995, under a Conservative majority, that rejected the
  870
  argument that the only way to commercial freedom was through privatisation; there was a public sector solution. The Committee said:
  "We recommend that the Government introduce legislation to convert the Post Office … into a 100 per cent. government-owned plc … in the knowledge that the future sale of any of the Government's shares in Post Office plc would be subject to parliamentary approval."
  An earlier speaker suggested that there was no enthusiasm among Labour Members, or among the Post Office work force, for anything other than the status quo. That is not true. We always argued that the Post Office needed commercial and financial freedom, but we rejected the dogmatic approach of the then Government and argued that our approach would provide a solution.
  Arrangements were introduced in 1995. The Post Office has been under permanent review for the past eight years, and has suffered as a consequence. All our rivals in Europe have gained ground; we could have been much further forward. Conservative Members are talking out of the back of their collective lorries. Their record demonstrates that we need no lectures from them.
  The other great myth that has featured in the debate—the other issue that I believe needs to be addressed—is the argument that we are debating the future of the Post Office network in relation to problems experienced in the transfer to ACT, and the fears raised in that regard. Let us be clear—the Bill has been welcomed by everyone, including the National Federation of Sub-Postmasters, the Mail Users Association, POUNC and others. They see it as a way of underpinning the viability of the Post Office Counters network.
  The problem for the last Government, and the problem that the Opposition have now, is that they never found a solution to privatisation of the Post Office that did not involve breaking it up—and breaking it up, and making a split with counters, provides no viable solution, even under the measures that they have proposed.
  The Bill is good news for the whole Post Office, including the counters network. The introduction of access criteria is a positive advantage for the network. However, we need to deal again with the issues that were raised in the debate about whether or not the network is condemned to decline. I thought that the hon. Member for West Dorset (Mr. Letwin)—perhaps I can ruin his career as well—made a good speech, which should have been a speech from the Front Bench. If the argument is just about timing, all the scare stories that are going around will be removed.
  On the position in relation to the Post Office Counters network, Conservative Members cannot continue to say that they have found a solution through the benefit payments card. By the time we came to office, that solution was already curling at the edges. They had to reconfigure it themselves before we even came to office. We found a private finance initiative where the financier was the same as the developer. The project had overrun by three years and was vastly overspent. As the Select Committee on Trade and Industry has rightly said, it was blighted from the start.
  We had a choice. One was to continue to watch decline turn to crisis and crisis turn to collapse, leaving it as someone's else problem down the road. The network has shrunk by 20 per cent. in 20 years. Under the previous Government between 1990 and 1997, 10 per cent. of the rural network closed. It was gradually seeping away.

  871
  There is no question that any responsible Government would fail to recognise, first, that people were going to move to ACT as a safe, secure system of paying people's benefits; and secondly, that it needed to be planned on the back of an automated Post Office network, which is what the Horizon platform is all about.
  I understand the concerns that have been expressed by sub-postmasters, sub-postmistresses and their communities. We understand that fully. We ask: where is the winning post? If it is a Government commitment to a national Post Office network, we have given it. If it is a Government commitment to modernise that network, we have given it. If it is a Government commitment on choice—the general secretary of the National Federation of Sub-Postmasters, a very astute trade union leader, said:
  "All we are asking for is choice"—
  the choice is there. We will ensure that anyone who wishes to draw their payments in cash across the post office counter will continue to be able to do so. We will not force people to open bank accounts. We will not dilute their benefits through bank charges and so on.
  We have given those assurances, but the argument sometimes creeps in, particularly from those who are whipping up the furore that will undermine the Post Office network, in favour of the status quo—that we should force people to queue up for benefits and should not give them the option of having them paid into their bank account
  Therefore, we have given all the assurances in terms of the Post Office network. We admit that, at this stage, not every answer is in place. That is why the migration will not be completed until 2005. That is why we have said that we will approach the issue through a performance and innovation unit study that was commissioned last year, which will look at the whole network and its contribution to the Government's aims and objectives.
  Mr. Page: Will the Minister give way?
  Mr. Johnson: No, I do not have time to give way.
  By having the debate and by putting a spotlight on the Post Office network, we have demonstrated for probably the first time that the Post Office network is under-utilised and not properly promoted. There are enormous opportunities in the network. A trial is being operated in Cornwall, where 270 rural post offices provide banking services for Barclays. We are putting bank machines into rural post offices, an initiative which has been greatly welcomed by the local communities. Yes, people do draw from their accounts and then go into the post office and spend their money.
  Mrs. Browning: Will the Minister clarify what he means by "we" when he says, "We are putting bank machines into post offices"? We have a clear written answer that says it is not "we"—the Government; it is a commercial transaction between banks and post offices.
  Mr. Johnson: The fact that I spent 30 years in the Post Office makes me talk about it in that sense, but the Government are encouraging the Post Office. We sit with
  872
  the National Federation of Sub-Postmasters and with the Post Office on the Horizon working group to find ways, in partnership, of utilising that invaluable, crucial network.
  Many other opportunities are available. We have the opportunity, in modernising government, to make the Post Office network the gateway for on-line services by 2008. We also have the opportunity to reintroduce banking into rural areas that lost their banks many years ago. As I said, the Post Office network will not be well served by opposing Second Reading. It is crucial that the Bill should be passed to underpin the Post Office network.
  I should like to reply to a couple of the speeches that have been made in the debate. The hon. Member for Tiverton and Honiton asked about the Post Office's ability to borrow—which she described as a hidden subsidy—from the national loans fund. It is not a subsidy. As the White Paper made clear, the Post Office will be charged commercial rates by the national loans fund. Moreover, if we had allowed the Post Office to borrow commercially on the open market, lenders might have expected the Government to act as lender of last resort or as the guarantor of loans. We are therefore ensuring a level playing field in borrowing.
  The hon. Lady also mentioned the £5 billion indebtedness limit. The British Telecommunications Act 1981 introduced a £1.7 billion indebtedness limit. We have merely brought up to date that figure and included it in legislation that is meant to last for many years.
  I do not have time to reply to the many effective and eloquent speeches made by Labour Members or to the speeches made by Opposition Members, but I should like to mention the maiden speech of the hon. Member for Ceredigion (Mr. Thomas). The other week, we had a mouse in the Chamber. Today, thanks to his speech, the House was treated to a description of a bottle-nosed porpoise. He also painted a very vivid picture of his constituency.
  As it was the hon. Gentleman's maiden speech, I shall respond very quickly to the three issues that he raised. He asked whether the £1 monopoly would be safe. The £ 1 monopoly will be there as long as it protects universal service at a uniform tariff, which we believe should be low enough to protect competition while protecting that very important principle.
  The hon. Gentleman asked whether we are trying to privatise by the back door. The answer is no. He asked whether there should be a Welsh council, separate from the consumer council, for postal services. There is a national postal service and we need one consumers representative with regional and country committees spread around the United Kingdom. The hon. Gentleman made a very important contribution to the debate and an eloquent maiden speech.
  I should also reply to the very important point made by my hon. Friend the Member for Ochil (Mr. O'Neill), who is the Chairman of the Trade and Industry Select Committee, on the sale of shares in relevant subsidiaries. The Bill will protect the universal service part of the Post Office—Parcelforce, Royal Mail and Post Office Counters—from any future share sales without the matter requiring primary legislation. We do not think that such provision is necessary for Post Office subsidiaries—such as German Parcel, which the Post Office only recently purchased. We are therefore saying that there is a clear

  873
  difference between the main, universal Post Office services and the Post Office's subsidiaries, such as German Parcel.
  This has been a good debate. We are modernising the Post Office. It was a Labour Government who, in 1969, took the Post Office out of the civil service and made it a public corporation. We are now modernising it so that it is able to face the new challenges of the 21st century.
  We can be proud of the United Kingdom Post Office. We have provided the blueprint for postal services around the world. The Bill will preserve those cherished services while ensuring that a publicly owned Post Office is able to compete effectively in the communications market of the 21st century.
  Question put, That the amendment be made:—
  The House divided: Ayes 115, Noes 374.

  Division No. 74]

  [9.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Howard, Rt Hon Michael

  Amess, David

  Hunter, Andrew

  Ancram, Rt Hon Michael

  Jack, Rt Hon Michael

  Arbuthnot, Rt Hon James

  Jackson, Robert (Wantage)

  Atkinson, David (Bour'mth E)

  Jenkin, Bernard

  Baldry, Tony

  Johnson Smith, Rt Hon Sir Geoffrey

  Beggs, Roy

  Bercow, John

  Key, Robert

  Beresford, Sir Paul

  King, Rt Hon Tom (Bridgwater)

  Blunt, Crispin

  Kirkbride, Miss Julie

  Body, Sir Richard

  Laing, Mrs Eleanor

  Bottomley, Peter (Worthing W)

  Lait, Mrs Jacqui

  Brady, Graham

  Lansley, Andrew

  Brazier, Julian

  Letwin, Oliver

  Brooke, Rt Hon Peter

  Lidington, David

  Browning, Mrs Angela

  Lilley, Rt Hon Peter

  Burns, Simon

  Lloyd, Rt Hon Sir Peter (Fareham)

  Butterfill, John

  Loughton, Tim

  Cash, William

  Luff, Peter

  Chope, Christopher

  MacGregor, Rt Hon John

  Clappison, James

  McIntosh, Miss Anne

  Clark, Dr Michael (Rayleigh)

  MacKay, Rt Hon Andrew

  Clarke, Rt Hon Kenneth (Rushcliffe)

  McLoughlin, Patrick

  Maples, John

  Clifton—Brown, Geoffrey

  Maude, Rt Hon Francis

  Collins, Tim

  Mawhinney, Rt Hon Sir Brian

  Colvin, Michael

  May, Mrs Theresa

  Cran, James

  Moss, Malcolm

  Curry, Rt Hon David

  Norman, Archie

  Davies, Quentin (Grantham)

  O'Brien, Stephen (Eddisbury)

  Davis, Rt Hon David (Haltemprice)

  Page, Richard

  Dorrell, Rt Hon Stephen

  Paice, James

  Duncan, Alan

  Paterson, Owen

  Evans, Nigel

  Portillo, Rt Hon Michael

  Fallon, Michael

  Randall, John

  Forth, Rt Hon Eric

  Redwood, Rt Hon John

  Fox, Dr Liam

  Robertson, Laurence

  Fraser, Christopher

  Roe, Mrs Marion (Broxbourne)

  Gale, Roger

  Ruffley, David

  Garnier, Edward

  St Aubyn, Nick

  Gibb, Nick

  Sayeed, Jonathan

  Gill, Christopher

  Shephard, Rt Hon Mrs Gillian

  Gillan, Mrs Cheryl

  Shepherd, Richard

  Gray, James

  Simpson, Keith (Mid-Norfolk)

  Greenway, John

  Soames, Nicholas

  Hamilton, Rt Hon Sir Archie

  Spicer, Sir Michael

  Hammond, Philip

  Spring, Richard

  Hawkins, Nick

  Steen, Anthony

  Heald, Oliver

  Streeter, Gary

  Heathcoat—Amory, Rt Hon David

  Swayne, Desmond

  Hogg, Rt Hon Douglas

  Syms, Robert

  Horam, John

  Taylor, Ian (Esher & Walton)

  874

  Taylor, Sir Teddy

  Widdecombe, Rt Hon Miss Ann

  Townend, John

  Wilkinson, John

  Tredinnick, David

  Wilshire, David

  Tyrie, Andrew

  Yeo, Tim

  Viggers, Peter

  Young, Rt Hon Sir George

  Wardle, Charles

  Tellers for the Ayes:

  Waterson, Nigel

  Mr. Peter Atkinson and

  Whitney, Sir Raymond

  Mr. Stephen Day.

  NOES

  Abbott, Ms Diane

  Clark, Rt Hon Dr David (S Shields)

  Ainger, Nick

  Clark, Dr Lynda (Edinburgh Pentlands)

  Ainsworth, Robert (Covtry NE)

  Alexander, Douglas

  Clark, Paul (Gillingham)

  Allan, Richard

  Clarke, Rt Hon Tom (Coatbridge)

  Allen, Graham

  Clarke, Tony (Northampton S)

  Anderson, Donald (Swansea E)

  Clelland, David

  Armstrong, Rt Hon Ms Hilary

  Coaker, Vernon

  Ashdown, Rt Hon Paddy

  Coffey, Ms Ann

  Ashton, Joe

  Cohen, Harry

  Atherton, Ms Candy

  Coleman, Iain

  Atkins, Charlotte

  Colman, Tony

  Austin, John

  Connarty, Michael

  Baker, Norman

  Cook, Frank (Stockton N)

  Ballard, Jackie

  Cook, Rt Hon Robin (Livingston)

  Banks, Tony

  Corbett, Robin

  Barnes, Harry

  Cotter, Brian

  Barron, Kevin

  Cousins, Jim

  Battle, John

  Cox, Tom

  Bayley, Hugh

  Cranston, Ross

  Beard, Nigel

  Crausby, David

  Beckett, Rt Hon Mrs Margaret

  Cryer, Mrs Ann (Keighley)

  Berth, Rt Hon A J

  Cryer, John (Hornchurch)

  Bell, Martin (Tatton)

  Cummings, John

  Benn, Hilary (Leeds C)

  Cunningham, Rt Hon Dr Jack (Copeland)

  Benn, Rt Hon Tony (Chesterfield)

  Bennett, Andrew F

  Cunningham, Jim (Cov"try S)

  Benton, Joe

  Curtis-Thomas, Mrs Claire

  Bermingham, Gerald

  Dalyell, Tam

  Berry, Roger

  Darvill, Keith

  Best, Harold

  Davey, Edward (Kingston)

  Blackman, Liz

  Davey, Valerie (Bristol W)

  Blears, Ms Hazel

  Davidson, Ian

  Blizzard, Bob

  Davies, Rt Hon Denzil (Llanelli)

  Boateng, Rt Hon Paul

  Davies, Geraint (Croydon C)

  Borrow, David

  Davis, Rt Hon Terry (B'ham Hodge H)

  Bradley, Keith (Withington)

  Bradley, Peter (The Wrekin)

  Dawson, Hilton

  Bradshaw, Ben

  Denham, John

  Brake, Tom

  Dismore, Andrew

  Brand, Dr Peter

  Dobbin, Jim

  Breed, Colin

  Donohoe, Brian H

  Brinton, Mrs Helen

  Doran, Frank

  Brown, Russell (Dumfries)

  Dowd, Jim

  Browne, Desmond

  Drew, David

  Bruce, Malcolm (Gordon)

  Dunwoody, Mrs Gwyneth

  Buck, Ms Karen

  Eagle, Angela (Wallasey)

  Burden, Richard

  Eagle, Maria (L'pool Garston)

  Burgon, Colin

  Edwards, Huw

  Burnett, John

  Efford, Clive

  Burstow, Paul

  Ellman, Mrs Louise

  Butler, Mrs Christine

  Ennis, Jeff

  Byers, Rt Hon Stephen

  Etherington, Bill

  Campbell, Alan (Tynemouth)

  Fearn, Ronnie

  Campbell, Mrs Anne (C'bridge)

  Field, Rt Hon Frank

  Campbell, Ronnie (Blyth V)

  Fisher, Mark

  Campbell—Savours, Dale

  Fitzpatrick, Jim

  Cann, Jamie

  Fitzsimons, Lorna

  Caplin, Ivor

  Flint, Caroline

  Casale, Roger

  Flynn, Paul

  Caton, Martin

  Foster, Don (Bath)

  Cawsey, Ian

  Foster, Michael J (Worcester)

  Chapman, Ben (Wirral S)

  Foulkes, George

  Chidgey, David

  Fyfe, Maria

  Clapham, Michael

  Galbraith, Sam

  875

  Galloway, George

  Lepper, David

  Gapes, Mike

  Leslie, Christopher

  Gardiner, Barry

  Levitt, Tom

  George, Andrew (St Ives)

  Lewis, Ivan (Bury S)

  Gibson, Dr Ian

  Lewis, Terry (Worsley)

  Gilroy, Mrs Linda

  Liddell, Rt Hon Mrs Helen

  Godman, Dr Norman A

  Livsey, Richard

  Goggins, Paul

  Llwyd, Elfyn

  Golding, Mrs Llin

  Love, Andrew

  Gordon, Mrs Eileen

  McAvoy, Thomas

  Griffiths, Jane (Reading E)

  McCartney, Rt Hon Ian (Makerfield)

  Griffiths, Nigel (Edinburgh S)

  Griffiths, Win (Bridgend)

  McDonagh, Siobhain

  Grocott, Bruce

  Macdonald, Calum

  Grogan, John

  McDonnell, John

  Gunnell, John

  McFall, John

  Hall, Mike (Weaver Vale)

  McGuire, Mrs Anne

  Hall, Patrick (Bedford)

  McIsaac, Shona

  Hamilton, Fabian (Leeds NE)

  McKenna, Mrs Rosemary

  Hancock, Mike

  Mackinlay, Andrew

  Hanson, David

  Maclennan, Rt Hon Robert

  Harman, Rt Hon Ms Harriet

  McNamara, Kevin

  Harris, Dr Evan

  McNulty, Tony

  Harvey, Nick

  MacShane, Denis

  Healey, John

  Mactaggart, Fiona

  Heath, David (Somerton & Frome)

  McWalter, Tony

  Henderson, Doug (Newcastle N)

  McWilliam, John

  Hepburn, Stephen

  Mahon, Mrs Alice

  Heppell, John

  Mallaber, Judy

  Hesford, Stephen

  Marsden, Gordon (Blackpool S)

  Hewitt, Ms Patricia

  Marsden, Paul (Shrewsbury)

  Hill, Keith

  Marshall, David (Shettleston)

  Hinchliffe, David

  Marshall, Jim (Leicester S)

  Hoey, Kate

  Marshall—Andrews, Robert

  Hood, Jimmy

  Martlew, Eric

  Hope, Phil

  Maxton, John

  Hopkins, Kelvin

  Meacher, Rt Hon Michael

  Howarth, George (Knowsley N)

  Merron, Gillian

  Howells, Dr Kim

  Michie, Bill (Shef"ld Heeley)

  Hoyle, Lindsay

  Michie, Mrs Ray (Argyll & Bute)

  Hughes, Ms Beverley (Stretford)

  Milburn, Rt Hon Alan

  Hughes, Kevin (Doncaster N)

  Miller, Andrew

  Hughes, Simon (Southwark N)

  Mitchell, Austin

  Humble, Mrs Joan

  Moffatt, Laura

  Hurst, Alan

  Moonie, Dr Lewis

  Hutton, John

  Moore, Michael

  Iddon, Dr Brian

  Moran, Ms Margaret

  Illsley, Eric

  Morgan, Alasdair (Galloway)

  Jackson, Helen (Hillsborough)

  Morgan, Ms Julie (Cardiff N)

  Jamieson, David

  Morley, Elliot

  Jenkins, Brian

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Johnson, Alan (Hull W & Hessle)

  Johnson, Miss Melanie (Welwyn Hatfield)

  Morris, Rt Hon Sir John (Aberavon)

  Jones, Rt Hon Barry (Alyn)

  Mountford, Kali

  Jones, Mrs Fiona (Newark)

  Mudie, George

  Jones, Helen (Warrington N)

  Mullin, Chris

  Jones, Ms Jenny (Wolverh'ton SW)

  Murphy, Denis (Wansbeck)

  Murphy, Jim (Eastwood)

  Jones, Jon Owen (Cardiff C)

  Naysmith, Dr Doug

  Jones, Dr Lynne (Selly Oak)

  Oaten, Mark

  Jones, Martyn (Clwyd S)

  O'Brien, Bill (Normanton)

  Jowell, Rt Hon Ms Tessa

  O'Brien, Mike (N Warks)

  Keeble, Ms Sally

  O'Hara, Eddie

  Keen, Alan (Feltham & Heston)

  O'Neill, Martin

  Kemp, Fraser

  Öpik, Lembit

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Organ, Mrs Diana

  Pearson, Ian

  Kennedy, Jane (Wavertree)

  Pendry, Tom

  Kidney, David

  Perham, Ms Linda

  Kilfoyle, Peter

  Pickthall, Colin

  King, Andy (Rugby & Kenilworth)

  Pike, Peter L

  Kirkwood, Archy

  Plaskitt, James

  Kumar, Dr Ashok

  Pollard, Kerry

  Ladyman, Dr Stephen

  Pond, Chris

  Laxton, Bob

  Pope, Greg

  876

  Pound, Stephen

  Stewart, Ian (Eccles)

  Powell, Sir Raymond

  Stinchcombe, Paul

  Prentice, Ms Bridget (Lewisham E)

  Stoate, Dr Howard

  Prentice, Gordon (Pendle)

  Stunell, Andrew

  Primarolo, Dawn

  Sutcliffe, Gerry

  Prosser, Gwyn

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Purchase, Ken

  Quin, Rt Hon Ms Joyce

  Taylor, Ms Dari (Stockton S)

  Quinn, Lawrie

  Taylor, David (NW Leics)

  Radice, Rt Hon Giles

  Taylor, Matthew (Truro)

  Rammell, Bill

  Temple—Morris, Peter

  Rapson, Syd

  Thomas, Gareth (Clwyd W)

  Raynsford, Nick

  Thomas, Gareth R (Harrow W)

  Reed, Andrew (Loughborough)

  Thomas, Simon (Ceredigion)

  Reid, Rt Hon Dr John (Hamilton N)

  Timms, Stephen

  Rendel, David

  Tipping, Paddy

  Robinson, Geoffrey (Cov"try NW)

  Todd, Mark

  Roche, Mrs Barbara

  Tonge, Dr Jenny

  Rogers, Allan

  Trickett, Jon

  Rooker, Rt Hon Jeff

  Truswell, Paul

  Rooney, Terry

  Turner, Dennis (Wolverh'ton SE)

  Ross, Ernie (Dundee W)

  Turner, Dr Desmond (Kemptown)

  Rowlands, Ted

  Turner, Dr George (NW Norfolk)

  Roy, Frank

  Turner, Neil (Wigan)

  Ruane, Chris

  Twigg, Derek (Halton)

  Ruddock, Joan

  Twigg, Stephen (Enfield)

  Russell, Bob (Colchester)

  Tyler, Paul

  Russell, Ms Christine (Chester)

  Tynan, Bill

  Sanders, Adrian

  Vis, Dr Rudi

  Sarwar, Mohammad

  Walley, Ms Joan

  Savidge, Malcolm

  Ward, Ms Claire

  Sawford, Phil

  Watts, David

  Sedgemore, Brian

  Webb, Steve

  Shaw, Jonathan

  Welsh, Andrew

  Sheerman, Barry

  Whitehead, Dr Alan

  Sheldon, Rt Hon Robert

  Wicks, Malcolm

  Shipley, Ms Debra

  Wigley, Rt Hon Dafydd

  Simpson, Alan (Nottingham S)

  Williams, Rt Hon Alan (Swansea W)

  Singh, Marsha

  Skinner, Dennis

  Williams, Alan W (E Carmarthen)

  Smith, Rt Hon Andrew (Oxford E)

  Williams, Mrs Betty (Conwy)

  Smith, Angela (Basildon)

  Willis, Phil

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Wills, Michael

  Winnick, David

  Smith, Jacqui (Redditch)

  Winterton, Ms Rosie (Doncaster C)

  Smith, John (Glamorgan)

  Wise, Audrey

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

  Woodward, Shaun

  Snape, Peter

  Woolas, Phil

  Southworth, Ms Helen

  Wright, Anthony D (Gt Yarmouth)

  Squire, Ms Rachel

  Wright, Dr Tony (Cannock)

  Starkey, Dr Phyllis

  Steinberg, Gerry

  Tellers for the Noes:

  Stevenson, George

  Mr. Don Touhig and

  Stewart, David (Inverness E)

  Mr. Clive Betts.

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—
  The House divided: Ayes 331, Noes 155.

  Division No. 75]

  [10.15 pm

  AYES

  Abbott, Ms Diane

  Austin, John

  Ainger, Nick

  Banks, Tony

  Ainsworth, Robert (Cov'try NE)

  Barnes, Harry

  Alexander, Douglas

  Barron, Kevin

  Allen, Graham

  Battle, John

  Anderson, Donald (Swansea E)

  Bayley, Hugh

  Anderson, Janet (Rossendale)

  Beard, Nigel

  Armstrong, Rt Hon Ms Hilary

  Beckett, Rt Hon Mrs Margaret

  Ashton, Joe

  Benn, Hilary (Leeds C)

  Atherton, Ms Candy

  Benn, Rt Hon Tony (Chesterfield)

  Atkins, Charlotte

  Bennett, Andrew F

  877

  Benton, Joe

  Eagle, Angela (Wallasey)

  Bermingham, Gerald

  Eagle, Maria (L'pool Garston)

  Berry, Roger

  Edwards, Huw

  Best, Harold

  Efford, Clive

  Blackman, Liz

  Ellman, Mrs Louise

  Blears, Ms Hazel

  Ennis, Jeff

  Blizzard, Bob

  Etherington, Bill

  Boateng, Rt Hon Paul

  Field, Rt Hon Frank

  Borrow, David

  Fisher, Mark

  Bradley, Keith (Withington)

  Fitzpatrick, Jim

  Bradley, Peter (The Wrekin)

  Fitzsimons, Lorna

  Bradshaw, Ben

  Flint, Caroline

  Brinton, Mrs Helen

  Flynn, Paul

  Brown, Russell (Dumfries)

  Foster, Michael J (Worcester)

  Browne, Desmond

  Foulkes, George

  Buck, Ms Karen

  Fyfe, Maria

  Burden, Richard

  Galbraith, Sam

  Burgon, Colin

  Galloway, George

  Butler, Mrs Christine

  Gapes, Mike

  Byers, Rt Hon Stephen

  Gardiner, Barry

  Campbell, Alan (Tynemouth)

  Gibson, Dr Ian

  Campbell, Mrs Anne (C'bridge)

  Gilroy, Mrs Linda

  Campbell, Ronnie (Blyth V)

  Godman, Dr Norman A

  Campbell—Savours, Dale

  Goggins, Paul

  Cann, Jamie

  Golding, Mrs Llin

  Caplin, Ivor

  Gordon, Mrs Eileen

  Casale, Roger

  Griffiths, Jane (Reading E)

  Caton, Martin

  Griffiths, Nigel (Edinburgh S)

  Cawsey, Ian

  Griffiths, Win (Bridend)

  Chapman, Ben (Wirral S)

  Grocott, Bruce

  Clapham, Michael

  Grogan, John

  Clark, Rt Hon Dr David (S Shields)

  Gunnell, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  Hall, Mike (Weaver Vale)

  Hall, Patrick (Bedford)

  Clark, Paul (Gillingham)

  Hamilton, Fabian (Leeds NE)

  Clarke, Charles (Norwich S)

  Hanson, David

  Clarke, Rt Hon Tom (Coatbridge)

  Harman, Rt Hon Ms Harriet

  Clarke, Tony (Northampton S)

  Healey, John

  Clelland, David

  Henderson, Doug (Newcastle N)

  Coaker, Vernon

  Hepburn, Stephen

  Coffey, Ms Ann

  Heppell, John

  Cohen, Harry

  Hesford, Stephen

  Coleman, Iain

  Hewitt, Ms Patricia

  Colman, Tony

  Hill, Keith

  Connarty, Michael

  Hinchliffe, David

  Cook, Frank (Stockton N)

  Hoey, Kate

  Cook, Rt Hon Robin (Livingston)

  Hood, Jimmy

  Corbett, Robin

  Hope, Phil

  Cousins, Jim

  Hopkins, Kelvin

  Cox, Tom

  Howarth, George (Knowsley N)

  Cranston, Ross

  Howells, Dr Kim

  Crausby, David

  Hoyle, Lindsay

  Cryer, Mrs Ann (Keighley)

  Hughes, Ms Beverley (Stretford)

  Cryer, John (Hornchurch)

  Hughes, Kevin (Doncaster N)

  Cummings, John

  Humble, Mrs Joan

  Cunningham, Rt Hon Dr Jack (Copeland)

  Hurst, Alan

  Hutton, John

  Cunningham, Jim (Cov"try S)

  Iddon, Dr Brian

  Curtis—Thomas, Mrs Claire

  Illsley, Eric

  Dalyell, Tam

  Jackson, Helen (Hillsborough)

  Darvill, Keith

  Jamieson, David

  Davey, Valerie (Bristol W)

  Jenkins, Brian

  Davidson, Ian

  Johnson, Alan (Hull W & Hessle)

  Davies, Rt Hon Denzil (Llanelli)

  Johnson, Miss Melanie (Welwyn Hatfield)

  Davies, Geraint (Croydon C)

  Davis, Rt Hon Terry (B'ham Hodge H)

  Jones, Rt Hon Barry (Alyn)

  Jones, Mrs Fiona (Newark)

  Dawson, Hilton

  Jones, Helen (Warrington N)

  Denham, John

  Jones, Ms Jenny (Wolverh'ton SW)

  Dismore, Andrew

  Dobbin, Jim

  Jones, Jon Owen (Cardiff C)

  Donohoe, Brian H

  Jones, Dr Lynne (Selly Oak)

  Doran, Frank

  Jones, Martyn (Clwyd S)

  Dowd, Jim

  Jowell, Rt Hon Ms Tessa

  Drew, David

  Keeble, Ms Sally

  Dunwoody, Mrs Gwyneth

  Keen, Alan (Feltham & Heston)

  878

  Kemp, Fraser

  Pound, Stephen

  Kennedy, Jane (Wavertree)

  Powell, Sir Raymond

  Kidney, David

  Prentice, Ms Bridget (Lewisham E)

  Kilfoyle, Peter

  Prentice, Gordon (Pendle)

  King, Andy (Rugby & Kenilworth)

  Primarolo, Dawn

  Kumar, Dr Ashok

  Prosser, Gwyn

  Ladyman, Dr Stephen

  Purchase, Ken

  Laxton, Bob

  Quin, Rt Hon Ms Joyce

  Lepper, David

  Quinn, Lawrie

  Leslie, Christopher

  Radice, Rt Hon Giles

  Levitt, Tom

  Rammell, Bill

  Lewis, Ivan (Bury S)

  Rapson, Syd

  Lewis, Terry (Worsley)

  Raynsford, Nick

  Liddell, Rt Hon Mrs Helen

  Reed, Andrew (Loughborough)

  Love, Andrew

  Reid, Rt Hon Dr John (Hamilton N)

  McAvoy, Thomas

  Robinson, Geoffrey (Cov'try NW)

  McCartney, Rt Hon Ian (Makerfield)

  Roche, Mrs Barbara

  Rogers, Allan

  McDonagh, Siobhain

  Rooker, Rt Hon Jeff

  Macdonald, Calum

  Rooney, Terry

  McDonnell, John

  Ross, Ernie (Dundee W)

  McFall, John

  Rowlands, Ted

  McGuire, Mrs Anne

  Roy, Frank

  McIsaac, Shona

  Ruane, Chris

  McKenna, Mrs Rosemary

  Ruddock, Joan

  Mackinlay, Andrew

  Russell, Ms Christine (Chester)

  McNamara, Kevin

  Salter, Martin

  McNulty, Tony

  Sarwar, Mohammad

  MacShane, Denis

  Savidge, Malcolm

  Mactaggart, Fiona

  Sawford, Phil

  McWalter, Tony

  Sedgemore, Brian

  McWilliam, John

  Shaw, Jonathan

  Mahon, Mrs Alice

  Sheerman, Barry

  Mallaber, Judy

  Sheldon, Rt Hon Robert

  Marsden, Gordon (Blackpool S)

  Shipley, Ms Debra

  Marsden, Paul (Shrewsbury)

  Simpson, Alan (Nottingham S)

  Marshall, David (Shettleston)

  Singh, Marsha

  Marshall, Jim (Leicester S)

  Skinner, Dennis

  Marshall—Andrews, Robert

  Smith, Rt Hon Andrew (Oxford E)

  Martlew, Eric

  Smith, Angela (Basildon)

  Maxton, John

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Meacher, Rt Hon Michael

  Merron, Gillian

  Smith, Jacqui (Redditch)

  Michie, Bill (Shef"ld Heeley)

  Smith, John (Glamorgan)

  Milburn, Rt Hon Alan

  Snape, Peter

  Miller, Andrew

  Southworth, Ms Helen

  Mitchell, Austin

  Squire, Ms Rachel

  Moffatt, Laura

  Starkey, Dr Phyllis

  Moonie, Dr Lewis

  Steinberg, Gerry

  Moran, Ms Margaret

  Stevenson, George

  Morgan, Ms Julie (Cardiff N)

  Stewart, David (Inverness E)

  Morley, Elliot

  Stewart, Ian (Eccles)

  Morris, Rt Hon Ms Estelte (B'ham Yardley)

  Stinchcombe, Paul

  Stoate, Dr Howard

  Morris, Rt Hon Sir John (Aberavon)

  Sutcliffe, Gerry

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Mountford, Kali

  Mudie, George

  Taylor, Ms Dari (Stockton S)

  Mullin, Chris

  Taylor, David (NW Leics)

  Murphy, Denis (Wansbeck)

  Temple—Morris, Peter

  Murphy, Jim (Eastwood)

  Thomas, Gareth (Clwyd W)

  Naysmith, Dr Doug

  Thomas, Gareth R (Harrow W)

  O'Brien, Bill (Normanton)

  Timms, Stephen

  O'Brien, Mike (N Warks)

  Tipping, Paddy

  O'Hara, Eddie

  Todd, Mark

  O'Neill, Martin

  Trickett, Jon

  Organ, Mrs Diana

  Truswell, Paul

  Pearson, Ian

  Turner, Dennis (Wolverh'ton SE)

  Pendry, Tom

  Turner, Dr Desmond (Kemptown)

  Perham, Ms Linda

  Turner, Dr George (NW Norfolk)

  Pickthall, Colin

  Turner, Neil (Wigan)

  Pike, Peter L

  Twigg, Derek (Halton)

  Plaskitt, James

  Twigg, Stephen (Enfield)

  Pollard, Kerry

  Tynan, Bill

  Pond, Chris

  Vis, Dr Rudi

  Pope, Greg

  Walley, Ms Joan

  879

  Ward, Ms Claire

  Winterton, Ms Rosie (Doncaster C)

  Watts, David

  Wise, Audrey

  Whitehead, Dr Alan

  Woodward, Shaun

  Wicks, Malcolm

  Woolas, Phil

  Williams, Rt Hon Alan (Swansea W)

  Wright, Anthony D (Gt Yarmouth)

  Wright, Dr Tony (Cannock)

  Williams, Alan W (E Carmarthen)

  Williams, Mrs Betty (Conwy)

  Tellers for the Ayes:

  Wills, Michael

  Mr. Clive Belts and

  Winnick, David

  Mr. Don Touhig.

  NOES

  Allan, Richard

  Gray, James

  Amess, David

  Greenway, John

  Ancram, Rt Hon Michael

  Hamilton, Rt Hon Sir Archie

  Arbuthnot, Rt Hon James

  Hammond, Philip

  Ashdown, Rt Hon Paddy

  Hancock, Mike

  Baker, Norman

  Harris, Dr Evan

  Baldly, Tony

  Harvey, Nick

  Ballard, Jackie

  Hawkins, Nick

  Beggs, Roy

  Heald, Oliver

  Beith, Rt Hon A J

  Heath, David (Somerton & Frome)

  Bell, Martin (Tatton)

  Hogg, Rt Hon Douglas

  Bercow, John

  Horam, John

  Beresford, Sir Paul

  Howard, Rt Hon Michael

  Blunt, Crispin

  Hughes, Simon (Southwark N)

  Body, Sir Richard

  Hunter, Andrew

  Bottomley, Peter (Worthing W)

  Jack, Rt Hon Michael

  Brady, Graham

  Jackson, Robert (Wantage)

  Brake, Tom

  Jenkin, Bernard

  Brand, Dr Peter

  Johnson Smith, Rt Hon Sir Geoffrey

  Brazier, Julian

  Breed, Colin

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Brooke, Rt Hon Peter

  Browning, Mrs Angela

  Key, Robert

  Bruce, Malcolm (Gordon)

  King, Rt Hon Tom (Bridgwater)

  Burnett, John

  Kirkbride, Miss Julie

  Burns, Simon

  Kirkwood, Archy

  Burstow, Paul

  Laing, Mrs Eleanor

  Butterfill, John

  Lait, Mrs Jacqui

  Cash, William

  Lansley, Andrew

  Chidgey, David

  Letwin, Oliver

  Chope, Christopher

  Lidington, David

  Clappison, James

  Livsey, Richard

  Clark, Dr Michael (Rayleigh)

  Lloyd, Rt Hon Sir Peter (Fareham)

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Llwyd, Elfyn

  Loughton, Tim

  Clifton—Brown, Geoffrey

  Luff, Peter

  Collins, Tim

  MacGregor, Rt Hon John

  Colvin, Michael

  McIntosh, Miss Anne

  Cotter, Brian

  MacKay, Rt Hon Andrew

  Cran, James

  Maclennan, Rt Hon Robert

  Curry, Rt Hon David

  McLoughlin, Patrick

  Davey, Edward (Kingston)

  Maples, John

  Davies, Quentin (Grantham)

  Maude, Rt Hon Francis

  Davis, Rt Hon David (Haltemprice)

  Mawhinney, Rt Hon Sir Brian

  Dorrell, Rt Hon Stephen

  May, Mrs Theresa

  Duncan, Alan

  Michie, Mrs Ray (Argyll & Bute)

  Evans, Nigel

  Moore, Michael

  Fallon, Michael

  Morgan, Alasdair (Galloway)

  Fearn, Ronnie

  Moss, Malcolm

  Forth, Rt Hon Eric

  Norman, Archie

  Foster, Don (Bath)

  Oaten, Mark

  Fox, Dr Liam

  O'Brien, Stephen (Eddisbury)

  Fraser, Christopher

  Öpik, Lembit

  Garnier, Edward

  Paice, James

  George, Andrew (St Ives)

  Paterson, Owen

  Gibb, Nick

  Portillo, Rt Hon Michael

  Gill, Christopher

  Randall, John

  Gillan, Mrs Cheryl

  Redwood, Rt Hon John

  880

  Rendel, David

  Taylor, Matthew (Truro)

  Robertson, Laurence

  Thomas, Simon (Ceredigion)

  Roe, Mrs Marion (Broxbourne)

  Tonge, Dr Jenny

  Ross, William (E Lond'y)

  Townend, John

  Ruffley, David

  Tredinnick, David

  Russell, Bob (Colchester)

  Tyler, Paul

  St Aubyn, Nick

  Tyrie, Andrew

  Sanders, Adrian

  Wardle, Charles

  Sayeed, Jonathan

  Waterson, Nigel

  Shephard, Rt Hon Mrs Gillian

  Webb, Steve

  Shepherd, Richard

  Welsh, Andrew

  Simpson, Keith (Mid-Norfolk)

  Whitney, Sir Raymond

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

  Widdecombe, Rt Hon Miss Ann

  Soames, Nicholas

  Wigley, Rt Hon Dafydd

  Spicer, Sir Michael

  Wilkinson, John

  Spring, Richard

  Willis, Phil

  Steen, Anthony

  Wilshire, David

  Streeter, Gary

  Yeo, Tim

  Stunell, Andrew

  Young, Rt Hon Sir George

  Swayne, Desmond

  Syms, Robert

  Tellers for the Noes:

  Taylor, Ian (Esher & Walton)

  Mr. Stephen Day and

  Taylor, Rt Hon John D (Strangford)

  Mr. Peter Atkinson.

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

POSTAL SERVICES BILL [MONEY]
Queen's recommendation having been signified—
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Postal Services Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of—

(a) any expenditure incurred by a Minister of the Crown or government department in consequence of the Act; and

(b) any increase attributable to the Act in the sums payable out of money so provided under any other enactment;

(2) the payment out of the National Loans Fund of sums required by the Secretary of State for making loans to the Post Office company or any of its subsidiaries;
(3) the extinguishment of liabilities of the Post Office company or any of its subsidiaries by order of the Secretary of State;
(4) the payment out of the National Loans Fund or the Consolidated Fund of any increase attributable to the Act in the sums so payable under any other enactment.—[Mr. Clelland.]
Question agreed to.

POSTAL SERVICES BILL [WAYS AND MEANS]
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Postal Services Bill, it is expedient to authorise—

(1) the inclusion in licences granted under the Act of provisions requiring payments to be made;

(2) payments into the Consolidated Fund or the National Loans Fund.—[Mr. Clelland.]

Question agreed to.

London Government
10.28 pm
Mr. Bernard Jenkin: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Greater London Authority Elections Rules 2000 (S.1. 2000, No. 208), dated 1st February 2000, a copy of which was laid before this House on 8th February, be annulled.
We are dealing with two consecutive orders. The first is detailed above; the second is the Greater London Authority (Election Expenses) Order 2000. They are related in the matter that we want to pursue: our fundamental objection that neither order provides for free mailings for candidates in the forthcoming London elections. We object to both orders, in order to apply as much pressure as possible on the Government to change their mind. I shall raise specific concerns about expenses during the debate on the second order.
We are joined in our objections by every party except the Labour party. The House will have noted that the motion is in the name of my right hon. Friend the Leader of the Opposition and that of the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), the leader of the Liberal Democrats; it is a prayer in joint names.
We are genuinely mystified as to why the Government have got themselves into this situation, finding themselves defending a lonely position in glorious isolation—a position that is in fact indefensible. Tonight's is something of a phoney war, because the real battle will be fought in the other place next week, when these orders come before their Lordships; and the Government, if they maintain their present position, will lose both orders in the upper House. If that happens, it will be the first time the upper House has defeated secondary legislation since 1968, when the issue of Rhodesian sanctions was being debated more than 30 years ago.
The Government cannot possibly sustain their present position. No doubt we shall be accused of wrecking—I hear the echo from the Labour Bench already—but there is plenty of time to put these matters right on the basis of compromise. We shall be accused of being irresponsible, but we are in fact taking a constructive approach. Last night in the other place, the official Opposition tabled a constructive amendment to the Representation of the People Bill, providing for mandatory free mailings in London elections.
The Government should already be aware of the weakness of their case and the strength of the arguments against it. I hope that the Minister who replies to tonight's debate will not simply read out the rather weak speech delivered by Lord Bassam of Brighton.
No doubt we shall be told that the upper House has no legitimacy to sustain the argument that we are pursuing tonight, but the upper House is doing no more than pursuing what has become known as the Jay doctrine—the doctrine enunciated by Baroness Jay of Paddington, who explained that the upper House is more legitimate as a result of the recent reforms,
"because its members have earned their places, and"
it is
"therefore more effective in playing its part in our bicameral constitution."
Those are her words, not ours, and that is why the upper House feels able to exercise its authority in that way.
882
Let us first place on record the importance of the mayoral and Greater London Authority elections. These are exceptional elections. There will be 5.1 million voters voting in the election for the mayor of London. There are 350,000 electors per super-constituency, and the only way the candidates can get information to their voters in this extraordinary and unique city is by way of the free mailing. If there is not a free mailing, millions of ordinary voters will have absolutely no direct contact with their constituency candidates.
Our position, as set out in the amendment to the Representation of the People Bill tabled in the other place last night, is that there should be one free mailing for each mayoral candidate and one free mailing for each of the candidates in the super-constituencies. We propose that the mailing of the mayoral candidate and the mailing of a super-constituency candidate should be able to endorse one set of list candidates. We need to amend the spending limits in the second order to reflect the availability of the free mailing.
At the time of the passage of the Bill that became the Greater London Authority Act 1999, there was every expectation that free mailings would be available. At no point was it ever suggested that the precedent set by Scotland, Wales and Northern Ireland would not be followed.
Since the Royal Assent to the 1999 Act on 11 November there has been ample time for the Government to conduct a proper and open consultation, but they delayed more than a month before writing to the other parties to suggest what their proposals might be. It was on 15 December that the Under"Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), wrote to us in solemn tones about the GLA's unique position in the electoral processes of this nation, and told us that the election would be treated in the same way as any other local authority election as far as free mailings were concerned.
Every political party except the Labour party responded in the strongest terms to that consultation. The letter from the Conservative party said:
"Like every other political party involved in the London elections, we have strong objections to many of your proposals. Each of the innovations that Labour is proposing seems purpose made to disadvantage the smaller and less well financed and organised parties."
The absence of free mailing is at the top of that list.
Mr. Simon Hughes: Does the hon. Gentleman agree that there is another strong reason why our case should be followed? We are putting through the House—it was in another place yesterday—the Representation of the People Bill, which is designed to increase voter turnout and to engage more people in elections. That is the Government's declared objective. Yet every piece of evidence suggests that, if we do not allow the electorate to receive literature through a free mailing, voting numbers will go down and the first London election will have a lower turnout. The credibility of campaigns will be under threat both this year and thereafter.
Mr. Jenkin: The hon. Gentleman is absolutely right. It is extraordinary that the Minister got up to the strangest antics in Trafalgar square—he let off balloons and tried

883
to dance a rap for the benefit of the cameras—but will not pursue the most obvious course to increase the turnout in these important elections by allowing voters to receive information directly from the candidates.
We have an extraordinary and unprecedented situation. It is customary for election arrangements to be dealt with as a matter of consensus, but we have finished up with the governing party imposing its will without regard to the views of any other party and in an unfair, undemocratic and dictatorial fashion.
Ms Diane Abbott: Some Labour Members find it regrettable that it should be left to Her Majesty's Opposition to defend democratic processes. None the less, does the hon. Gentleman not agree that many inner London constituencies, in particular, have endemic problems with low turnouts, and that anything that is calculated to make that turnout even lower is not in the best interests of a successful launch for the new Greater London Authority?
Mr. Jenkin: I totally concur with the hon. Lady. That is why it is all the more mystifying that the party that says that it is desperately worried about low turnouts should shoot itself in the foot and discredit one of its own prized constitutional reforms. The Government's actions seem tailor-made to reducing turnout and interest in the election. The process that they have chosen seems designed to create the very apathy that they say they are against.
The orders are particularly unfair to the smaller parties. Higher spending limits with no free mailing—that implies that one has to raise one's own funding for mailshotscan suit only the largest and best financed parties. We know that money is little object for one particular party, but the provision is extremely unfair on smaller and less well funded parties.
Three principle arguments were advanced by Lord Bassam of Brighton last night. First, he said that it will simply be a local election and that the precedent is set by elections to the Greater London council. In fact, that is not the precedent. The GLA will have a completely different electoral system and constituencies are very much larger. However, the key point relates to the mayoral election. There will be 5.1 million voters in a single constituency and they will take part in a single election.
It would be unprecedented if there were no free mailing to enable the mayoral candidates to communicate with those 5.1 million voters. That electorate is substantially larger than the Scottish, Welsh or Northern Ireland electorates. What phoney distinction are the Government trying to make to justify the fact that those electorates are entitled to free mailings while London is not?
If these are local elections, why do the candidates have to make large deposits? We have deposits in parliamentary elections, European elections and elections for the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly because those elections are important, so they also have free mailings. The Government cannot have it both ways and demand deposits from candidates without providing free mailings.
The second argument concerns cost. I am afraid that if there is to be a Greater London Authority and a mayor, a certain amount of expense will be involved in making sure
884
that the elections to the mayoralty and the Assembly are free and fair, and if the Government were not prepared to meet those costs, they should have thought of that before starting the process of reform.
I hope that the Minister will not come up with the ludicrous, scaremongering, Treasury-type costings of between £30 million and £35 million for those free mailings. That is utterly absurd. The Government are living in cloud cuckoo land if they think that such figures are realistic. If free mailings would be such bad value for money for Londoners, why were they such good value in Scotland, Wales and Northern Ireland? That is completely inconsistent.
The Government's third argument against free mailings is becoming known as the curry house argument, because they say that the free mailings would somehow be abused by people who run curry houses, so leaflets trying to sell curries would be circulated rather than election addresses. That, too, is totally ludicrous. First, as was pointed out in the debate in the other place last night, the Post Office has to vet leaflets for election free mailings, and if it is not satisfied that the information is bona fide, the leaflet falls at the first fence.
Secondly, if such abuse is so serious, why has there been no such abuse in parliamentary elections, European elections or Welsh, Scottish or Northern Ireland elections?
The Minister for Housing and Planning (Mr. Nick Raynsford): Because of the size of the electorate.
Mr. Jenkin: But the size of European constituencies is considerable, and the list mailings for the Scottish, Welsh and Northern Ireland elections covered large electorates. The hon. Gentleman is living on a different planet. He is making it up because he is in a corner and does not know what else to say.
In any case, the curry house argument does not stand up because the curry house would have to print the leaflets, pay the deposit and pay for the envelopes, which would be a considerable outlay. A free mailing is not a free ride, as the hon. Gentleman seems to think, but it gives small parties a chance to communicate with electors who would not otherwise receive a thing. There are vast swathes of London where, to the shame of us all, there is precious little political activity and no large parties are able to canvass actively. The electorate consists of many single households, many people who are ex-directory and many people who are out at all hours and who would never have direct contact with the representatives of any of the candidates.
It is also an exaggeration to suggest that there might be a large number of mayoral candidates—it was mentioned in the upper House that there might be 20 candidates—all using the free post facility.
The purpose of this debate is to send the Government a strong, clear signal. As I said earlier, there is a joint prayer from the two main opposition parties in the House against the Government's position. All the other, smaller parties support our action. Ours is not a wrecking manoeuvre; we have set out constructive proposals in the other place. Tonight's debate is a dress rehearsal for what will happen in the upper House if the Government do not see sense. The Government will lose the vote in the upper House, not because of the Conservatives, but because they will be opposed by peers of all parties represented there.

885
Some of their colleagues in the upper House and in House of Commons are extremely unhappy with the Government's decision.
To threaten the electoral process is not the right way forward. All we ask is for dialogue, compromise, consensus and reason—all of which are sadly lacking at present. We could ascribe to the Government all sorts of motives for their behaviour, but that is not our purpose in pursuing the matter tonight. We want a reasonable solution. We want the orders ultimately to obtain consent, so that the elections can proceed in an orderly manner. It is in the Government's gift to ensure that that happens.
10.46 pm
Ms Diane Abbott: The hour is late, but as a London Member of Parliament I would be remiss in my responsibilities to my constituents if I did not put the interests of London electors on the record this evening. For nearly 20 years, I have been, first, a local government councillor and now a Member of Parliament for an inner London constituency. I know only too well the problems with election turnout in inner cities—the problems with getting people out to vote and making them aware of the real issues on which elections are fought.
We have created a brand new political structure; we face the first ever election for a mayor for London. It is astonishing to some of us that the Government seriously propose not to have a free post in the election. It might technically be just another local authority election, but Ministers know full well that it is not the same. The number of people involved and the significance of the mayoralty mean that it is more than a local authority election. Ministers cannot get away with that argument.
If the House of Lords knocks the issue back to the Commons, Ministers should not argue that it is just another example of the peers versus the people. In fact, it will be the Government versus the people. It cannot be in the interests of my constituents or of the other electors of London that candidates should have no access to free mailing. Many of my constituents do not read a daily newspaper or watch "Newsnight" and other-political programmes. They expect to receive their mailshot from the political parties—indeed, they look forward to it, because it enables them to learn about the issues.
The proposal is ill thought out and the justifications that Ministers have offered do not stand up to examination. The idea that the mailshot can be used to publicise hairdressers and restaurants is utterly absurd. For the sake of short-term advantage, Ministers appear willing to play fast and loose with my constituents' access to information. I shall support the Government in the Lobby tonight, but I was anxious to put my remarks on the record. Members of the other place should be in no doubt that, even at this late stage, many London Members of Parliament and thousands of London electors are looking to the Government to change their mind.
Mr. Michael Jack: Will the hon. Lady tell me what short-term advantage she thinks Ministers will gain from the proposal?
Ms Abbott: The question of currying favour with the Treasury is always alive in the eyes of Ministers. However, let me put a wholly speculative proposition to
886
the House: let us imagine that there was an independent candidate who had led in the polls for the past two years; and let us imagine that the Government were frightened that that independent would attempt to run, albeit without the benefit of the funds available to major parties. It would be extremely convenient for the Government if that independent candidate were deprived of a free post and had to raise the money from his own sources—but that is a wholly speculative suggestion and I shall not detain the House by exploring it.
We are considering an important issue: the London electorate's right to gain access to information about the mayoralty. To put it as politely as I can, every single aspect of the mayoral campaign, from the original decision to go for a directly elected mayor onwards, has not been managed as well as it might have been and has tended to discredit the Government. It is with great regret that I say that to the House tonight.
10.51 pm
Mr. Edward Davey: The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) put her finger on it when she exposed the Government's motivation for their treatment of the issue of free mailing. I hope that the hon. Lady will not support the Government in the Lobby, and that she will at least abstain to send a signal to some of her colleagues on the Labour Benches in another place. Many of them share her anxieties.
The Government's problem stems from their approach to the mayor and the Greater London Authority. From the beginning, they have been confused about whether the new form of government was regional, city or local government. The Government claim tonight that it is local government and that therefore there is no need for free mailing. However, that has not always been the Government's position. On Second Reading of the Greater London Authority Bill, my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes) asked the Deputy Prime Minister:
"Will the proposal in the Bill be the first of England's regional governments or merely another form of local government?"
The Deputy Prime Minister gave a clear reply in his characteristic style:
"The proposed authority is not similar to any local government authority as we know it. It will be a new type of city government, with a city executive and an elected mayor … Therefore, it is fair to say that it is not the normal local government structure."—[[Official Report,] 14 December 1998; Vol. 322, c. 624.]
The Deputy Prime Minister said that the proposed authority was not a form of local government.
Mr. Raynsford: It is city government.
Mr. Davey: If the Government believe that, they should establish a new system of rules for electing city governments. As was said yesterday in another place, anxiety exists that, if other cities get mayors and hold elections, the expense may grow. Surely the way round that is to produce a new set of election rules and a new, specially designed process for city government. The Government should not try to create a hybrid form. That has got them into their mess.

887
The Minister's comments in Committee on amendments that paved the way for the statutory instrument show that the Government are in a mess. He said:
"The amendments modify the usual local election provisions when that is necessary as a result of the proposed new electoral system."—[Official Report, Standing Committee A, 28 January 1999; c. 76.]
In Committee, the Minister admitted that the GLA was not like local government and that the election rules had to be amended.
Mr. Jenkin: Scotland has a Parliament and Wales and Northern Ireland have Assemblies. Are not the London elections akin to national or regional elections, not local government elections, and should not London be treated with the same respect?
Mr. Davey: The hon. Gentleman is absolutely right. The Government have been schizophrenic about whether the authority constitutes local or regional government. Consequently, they have not been able to deal with the matter consistently. That is principally why we are here tonight, although there are other reasons, to which the hon. Member for Hackney, North and Stoke Newington referred.
As the hon. Member for North Essex (Mr. Jenkin) said, the difference between the GLA and local elections lies in the rules, which are set out in the statutory instrument. There are significant differences between the rules for the GLA and local elections in terms of personal expense limits and deposits. If GLA elections are so similar to local elections, why do we need the order and 100 pages of new rules? The Government's argument stands no test, as the size of the electorate shows: is the Minister suggesting that one of more than 5 million is similar to that of an ordinary council ward? That is patent nonsense.
We must return to why the free post was introduced by the Labour party by Act of Parliament in 1948. It rightly saw the need for equality in the way in which people and parties fought elections to ensure that candidates had a fair crack of the whip. In Committee, the Minister for Housing and Planning said:
"Our objective will be to set expenses limits that are realistic and allow candidates to campaign properly and without incurring technical problems. At the same time, we do not want to give unfair advantage to those with large financial resources."—[Official Report, Standing Committee A, 28 January 1999; c. 80.]
If that was his intention, why is he not proposing a free post tonight? That is clearly the way to ensure equality between candidates, and he is hoist by his own petard.
As the hon. Member for North Essex said, the free post is needed more than ever in London so that candidates can communicate with their electorate, because many people live in blocks of flats and residential developments with entry phones and locked gates. They are difficult to enter. Liberal Democrat Members are often teased for delivering the "Focus" newsletter around their constituencies, but I can vouch for the fact that it is difficult for anyone who is not a Post Office official to gain access to many houses in my constituency. It is important that the candidates have that chance and surely that need is even greater in this election.
The electorate are likely to be relatively confused about what is going on as the GLA is wholly new and not at all like the Greater London council, as Ministers have argued
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many times, and there will be three new electoral systems. If the voters need information about any election, surely it is this one, and that information would enable them to understand what on earth is going on. However, the Minister is not prepared to allow them to have it and that is an absolute and utter disgrace.
Spurious arguments were made in the other place last night in defence of the Government's position, but the hon. Member for North Essex demolished them and I do not intend to cover the same ground. However, it was said that the issue of free mailing was not raised in Committee. That is factually incorrect. The right hon. Member for Bromley and Chislehurst (Mr. Forth) questioned the Minister for Housing and Planning:
"Does he not envisage at least one free mailing, as is allowed in normal parliamentary elections?"
The Minister replied:
"The right hon. Gentleman raised the different issue of whether a free mailshot should apply, as in parliamentary elections, or whether it should not, as in local government elections. Perhaps he has raised one more issue."—[Off cial Report, Standing Committee A, 28 January 1999; c. 79.]
What sort of response is that? It shows that he was aware of the issue as he answered the question, but he was clearly hiding and not coming forward.
As one reads the Committee Hansard with the benefit of hindsight, it becomes increasingly evident that Ministers always intended not to provide a free post, but did not have the guts to tell us. I questioned the Minister on that very issue:
"As concern has been expressed that private companies will nominate candidates for the mayoral position, and use the free post for free advertising. On 26 October 1998, The Guardian reported that Ministers were concerned about such abuse of the free post and the electoral process … The report was written by David Hencke."
His article said that Ministers sent a memorandum to the Neill committee about that. I went on:
"It is not good enough for Ministers not to take this opportunity to clarify their thoughts and give us all an indication of when and how they will deal with the specific difficulty that arises from this unique election process."—[Official Report, Standing Committee A, 28 January 1999; c. 91.]
In other words, the issue was fully raised and Ministers had the chance to explain their position, and they did not. Again, the arguments put forward in the debate last night in the other place are shown to be inadequate.
Mr. Simon Hughes: Having also watched and listened to the debate in the other place, I should like to add that there is one other argument. The Minister in the other place speculated that it might cost about £30 million. Do Ministers not realise that already polling cards are delivered, and will be delivered, and that one could perfectly reasonably combine the polling card delivery with the free post delivery, and perfectly reasonably combine the information from all the candidates in one or two mailings? Ministers are inventing figures to undermine an argument that everybody else accepts.
Mr. Davey: My hon. Friend is exactly right. Ministers and other Labour Members may shake their heads and say that it is a ludicrous suggestion, but they should talk to the Electoral Reform Society, which says that this is done in other countries. Indeed, it is done on the continent and in the United States of America for elections for mayors of cities. If exactly that process can be applied elsewhere,

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are Ministers saying that they run such an incompetent administration that they are not able to do it? That would be the logic if they said that they could not. On the issue of whether the free post is too expensive, the Government really have no grounds for their position.
Finally, I should like to address what happens if the statutory instrument falls. It may not fall tonight, but we are fairly sure that it will fall when it comes before the other place. Who will be to blame for the elections for the Greater London Authority not going ahead? The Government and their spin doctors will, of course, try to blame the Opposition parties, but the people of London will not believe them. The people of London see a Government with a majority of 179, a Government who put forward this new authority in their manifesto, who went to a referendum on it. They are expecting the Government to deliver the election, and they are very well aware that the Government have a few internal problems over the issue. They will suspect, quite rightly, that the Government backed down because there were such internal problems and divisions in their own party.
The idea that the Government will be able to blame the Opposition parties just will not wash. The reality is that the Opposition parties, throughout the process of setting up this new authority, have been very constructive. There has been an attempt to achieve consensus about the form of the new authority and over the electoral system. Indeed, the Government have been active in trying to achieve that consensus in many of their constitutional reforms, through setting up commissions, having cross-party working parties and so on. When it comes to the grubby issue of whether they are prepared to put their money where their mouth is and allow people to contest the election on a fair basis, they do not seek consensus; they just go with what suits the Labour party. That is a democratic outrage, and we shall be supporting the Conservative party tonight in the Lobby.
11.4 pm
Mr. John McDonnell: To preface what I shall say, I have campaigned in every general election and every local election in London Ace the abolition of the GLC in 1986, and the central plank of our campaign in all of them has been a policy programme based upon the restoration of democratic strategic government in the capital city.
Like my right hon. Friend the Prime Minister, who described himself as a foot soldier in the party during that period, I have knocked on doors, delivered leaflets, spoken from soapboxes and run street stalls. All the way through, we have been arguing that what distinguishes us from the Conservative party is our commitment to democracy. Therefore, I am somewhat saddened by what has happened tonight and recently, because some incompetent bungle or tactical manoeuvre has now presented us with a situation in which the Tory party, which abolished democratic strategic government in this capital, can present itself as the defender of a democratic process by which candidates can communicate with the electorate. There is an irony there somewhere, that the party has moved on so much.
Let me say this to my own side. We can play games with party rules; we can manipulate selections—I suppose that that is all part of the political process—but I think that we interfere with the democratic process at all our
890
perils. It is one thing to sort out selections; it is another to undermine a basic freedom that we established as a party in 1948.
It is worth remembering the arguments that our Government—a Labour Government—advanced in 1948 for the establishment of a free post. First, they argued that elections should be based on an informed choice by electors. The free post would allow candidates to set out directly to electors the policies on which they wanted to determine their votes. They also argued strongly that it would overcome the problem of any one party's having a monopoly of resources, either financial or in terms of ownership of the media. They reserved it to large-scale elections; they left it to local volunteers at local elections to be able to contact each House.
I feel that the arguments in defence of the Government's position have opened us up almost to ridicule, certainly in the other place and now, I think, among the public. We have discussed some of those arguments, but the one about scale is overwhelming. We have a 5.1 million electorate for the mayor here; in Scotland there was a 4 million electorate, in Wales one of 2.2 million and in Northern Ireland one of one of 1.2 million, and they all had free posts. This is not like some by-election in Ambridge; this is a major election.
There is another argument about the status of the capital. This election will have implications for every Londoner but, because this is the capital, it will also have implications for the whole country. We are the gateway to the country; we are a major resource of the country; we are the ambassador for the rest of the country throughout the world.
We have heard an argument about cost. A mail-out to each household would cost £420,000. Even the figures presented by a Minister in the other place do not "stack up", but I do not think that there is a cost to democracy. If we carry the argument to its logical conclusion, why have five-yearly elections? Why not have them once every 10 years? That would be cheaper. Why not have a Prime Minister for life? That would be much cheaper altogether.
If we want to be more creative, let us look at some of the proposals presented by the electoral registration officers. They suggest a ballot standardising election addresses, and one delivery for all that are used elsewhere. The arguments about abuse of the system have been dealt with adequately, in the other House and here. The material is already vetted by the Post Office. There are already powers for intervention to prevent abuse of candidatures. It is noticeable that we argue that this is a local government election, and at the same time introduce a deposit as though it were a national election. We cannot have it both ways.
The weakest argument that I have heard so far is that a direct free post is not needed because the media will cover the election so intensely that candidates will have no problem in putting their policies across. Such faith in the fairness, balance and competence of the British media is touching. The gentle objectivity of The Sun, and the philosophical jesuitical balance of the debate in the Murdoch media empire, will of course be accepted by all candidates.
Mr. Tom Brake: Is the hon. Gentleman's experience the same as mine? Does he

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think that, in many cases, the addressed free post will be the only delivery that multi-occupancy houses will receive during the election campaign? That very group of people are probably least likely to vote in an election.
Mr. McDonnell: I rarely have the same life experiences as a Liberal Democrat, but in that respect I do.
It is largely because of the bias, prejudice and, at times, bigotry of the media that the free post was introduced to give a candidate at least one opportunity to communicate directly, in an untrammelled way, with the electorate.
The arguments against the free post for the elections have been demonstrated in both Houses to be specious. The debate goes beyond the normal knockabout of party politics. A healthy democracy is founded on a ferocious and combative debate on policy issues, and on principles; but there must be a general consensus about the procedures on which that debate is based. That is why election orders such as this are usually agreed on a consensual basis.
That manipulation undermines that consensual approach, but, more important for me and for many of my colleagues, I think, it sets a precedent. A more ruthless Government may pray it in aid for more serious curtailments of democratic processes. By denying candidates the free post, we edge towards the American system, whereby democratic participation for candidatures is available only to those who can afford it. In that way, politics and candidatures become almost a commodity. When we have a commodity, people can be bought.
It is a mistaken act. We need to think again about it and to come back with a compromise formula before it goes to the other place.
11.10 pm
Mr. John Wilkinson: Thank God for old Labour. It is striking that it is new Labour which is Leninist now. It is new Labour for which the end justifies the means. The end is the imposition on London of the Prime Minister's preferred candidate. It does not matter if democracy is sacrificed in the process.
As usual, the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) spoke with intellect on her side. The sad thing was that force majeure is against her. I am sure that her natural courage would have induced her to vote against the order, but the Labour party now deselects individuals who vote against the party line on a three-line whip. The hon. Member for Brent, East (Mr. Livingstone) admitted as much in the early stages of the Greater London Authority Bill.
The hon. Member for Hayes and Harlington (Mr. McDonnell), who is a political neighbour and whom I know well, is one of the foremost experts on local government in the House of Commons. He knows more about local government in London than me. I defer to him on many matters. When he speaks as eloquently as he does, I take note, but he, too, does not have the courage of his convictions. I do not think that he is prepared to take on the Labour leadership and to say that it should not foist what is an ill-begotten idea on London—that London is so unimportant that it does not merit a free post.
As Londoners, we know that it is we who have subsidised the free post for the Assembly election in Northern Ireland, the Assembly election in Wales and the
892
parliamentary election in Scotland, yet, although we have the biggest electorate, we are led to suppose that we are not important enough to merit a free post, even though we have perhaps the most complicated system of them all.
In my constituency in outer London, the areas to be covered are huge. Harefield ward in rural Middlesex is as big as the whole of the Islington borough. This is just one ward. To ensure that every elector is informed about the programme of the candidates, it is our democratic duty to ensure that each and every elector receives an election address.
The electors have to be informed not only about the respective programme of the candidates, but about the system. With the mayoralty, there is the question of the double vote—how the second vote should be exercised. The mayoral candidate might want to give advice on that.
Mr. Jenkin: Has my hon. Friend noticed how the Government are not shy about putting out their own information? I have no doubt that London voters will be deluged by publicity at public expense to educate the masses about the great new assembly and mayoralty that is being created, but the Government do not want voters to receive information from other parties. There is something deeply unsavoury about that whole aspect.
Mr. Wilkinson: It is not only unsavoury, but dishonest. The Government insisted all through the passage of the Greater London Authority Act 1999 that one of the merits of proportional representation would be to ensure the inclusion of representatives of smaller parties. Smaller parties are important for London, as they represent perhaps different communities and ideologies. If the assembly is to be a working democracy, it is crucial that they should have a chance. Clearly, they will not have a genuine chance if there is no free post.
The hon. Member for Hackney, North and Stoke Newington, with her candour and her charm, let the cat out o the bag. She did not name the feline specimen to whom she was referring, but it is a specimen red in tooth and claw, the hon. Member for Brent, East whom at all costs—but at zero cost to the electors—the governing party wishes to keep from office.
Nevertheless, I suspect that—having fraudulently put a double question in the referendum, then having tried to rig the ballot for the Labour candidacy, and now having sought to do away with the traditional democratic process of a free mailshot to all electors—they will get their come-uppance, which I suspect will be that the Labour candidate will not win the mayoralty on 4 May. That will be wonderful news.
11.16 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): Rather unusually among the speakers in this debate, I intend to speak to the issue that we are debating. We are not debating the Greater London Authority (Election Expenses) Order 2000—on which it might be possible to hang a discussion of the issue of free mailshots—but the

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Greater London Authority Elections Rules 2000, which are about organisation of the election. If the rules were to be annulled, there would be no London elections at all.
Mr. Eric Forth: Good.
Mr. Hill: Opposition Members say good. Perhaps the prayer is part of a deep-laid plot to stop the elections.
The Greater London Authority Act 1999, approved by the House at the end of the previous Session, provides for the establishment of a Greater London Authority consisting of mayor and a London assembly. Section 4 and schedule 2 to the Act specify the voting systems for electing the authority, and schedule 3 amends section 36 of the Representation of the People Act 1983, so that rules can be made for the new elections. We are debating those rules today.
Those rules make possible the election of the Greater London Authority—which is a manifesto commitment. I also remind the House that the Greater London Authority was the subject of a London-wide referendum in 1998, which resulted in a clear yes vote from the people of London. The Greater London Authority was also the subject of legislation that was passed by both Houses and that, in November 1999, gained Royal Assent. That legislation specified the date of the election—May 4—in section 3. There can be no doubt that Parliament was clear about the date of the election. Without the election rules, there can be no election.
We have heard today that the Opposition's intention is to annul the rules, if not in this place, then in another place. They are attempting to do so not because there is anything wrong with the rules—which have been consulted upon widely, and are widely precedented—but because of an entirely extraneous issue that is not relevant to the rules at all: the Opposition's desire to have free mailshots. That desire is nothing to do with this order at all, and the Opposition's action is virtually unprecedented in the history of Parliament. It is incredible.
My noble Friend Lord Bassam, the Home Office Minister, made it quite clear in the debate in another place on the Representation of the People Bill why there would be no free mailshots for GLA elections. The GLA elections are local elections, and those do not have mailshots. Moreover, the cost of mailshots would be not only astronomical, but uncontrollable. The fact is that 20 mayoral candidates alone could spend £15 million, and there would be a real risk of abuse by frivolous candidates.
The GLA is a small streamlined authority with a budget of £35 million, and expenditure of £15 million to £20 million on mailshots would be quite disproportionate.
Mr. Brake rose—
Mr. Hill: I dare say that the hon. Gentleman would like to talk about the composite free mailing—an issue beloved of the Liberal Democrats, but not so enthusiastically endorsed by the Conservatives. However, the issue is not so straightforward. There are innumerable technical difficulties, possibly including statutory issues.
The electoral registration officers have made representations to the Home Office, saying that the task of producing a composite free mailing would undermine their independent role in the elections. The Liberal
894
Democrats may not like that, but it is the truth. If the electoral registration officers do not organise the composite free mailing, who would be acceptable to the British National party and the Liberal Democrats, who would have to share and agree the delivery process? [Interruption.]
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I am hearing an awful lot of noise from below the Gangway.
Mr. Malcolm Bruce: Yes.
Mr. Deputy Speaker: The hon. Gentleman says yes, but I say no. There should not be any noise.
Mr. Hill: I am grateful for your support, Mr. Deputy Speaker, but they cannot shout me down.
The rules are not even about mailshots. They are about the details of the election. I shall explain some of those details in the hope that Opposition Members will understand that they are technical and uncontroversial.
Mr. Jenkin: Will the Minister give way?
Mr. Hill: No, I shall not. There were seven speakers in the 46 minutes of debate before I rose to speak. It is my responsibility to respond with an explanation of the Government's position and, importantly, of the contents of the order.
The people of London would not understand what the Opposition were up to if the election were jeopardised over such an issue. Election rules instruct returning officers on the practical details of setting up the election, running the poll and counting the votes. They do not deal with how much money candidates or parties may spend in advancing their cause. That is covered by the order that will be the subject of our next debate.
Members of Parliament are only too well acquainted with the parliamentary election rules, which govern their entry here. Many of us also have personal experience of the workings of the principal area rules that govern election to large local authorities. The rules before the House, for the new Greater London Authority, are based solidly on the local election rules with which we are all familiar. They vary only in ways made necessary by the different voting system or some other factor special to this election.
The rules are a sizeable document, running to over 100 pages, so I am sure that hon. Members will forgive me if I pause to explain their relatively simple structure. There will be three elected elements to the Greater London Authority: constituency members of the London Assembly; London members of the Assembly; and the mayor. Each is elected according to a different system. Not surprisingly, schedules 1, 2 and 3 of the rules are three freestanding sets of rules for enabling each of those elements of the authority to be elected. Schedule 4 modifies those three sets of rules when all three elections happen at the same time—once every four years when there is an ordinary election of the whole authority. Schedule 5 revises the wording of normal electoral forms for the new election and will not contain any surprises for those used to electoral law.

895
However, schedule 6 contains something different. For the first time in a British election, we have rules enabling the votes to be counted electronically instead of by a large staff of people. Schedules 7 and 8 modify the election rules when a GLA election is combined with a local authority election or with a parliamentary election. The latter combination would require amendments to the Representation of the People Regulations 1986, which will be effected by an order under section 405 of the Greater London Authority Act, and which I shall lay before the House shortly.
Mr. Edward Davey: What do the Government intend to do when the other place votes these statutory instruments down?
Mr. Hill: It would be an act of the grossest irresponsibility for an unelected Chamber to seek to dictate electoral practice to the elected House and we would resist it.
Mr. Simon Hughes: Answer the question.
Mr. Hill: I have answered the question.
Mr. Jenkin: The Minister is not addressing the debate we have had this evening. Will he now put away his brief? We know what is in the rules and they are of only tangential relevance to the question that is preoccupying the House—how can he possibly justify denying the usual democratic process of a free mailing for candidates in the greater London elections? He should address that point rather than just read out what has been typed up by civil servants.
Mr. Hill: There is no point in the hon. Gentleman trying to tack on to an order relating to the election rules the wider considerations of free mailshots. There is no power in the Greater London Authority Act 1999 to introduce such mailshots.
Ms Abbott: My hon. Friend has argued that he does not have to meet the detailed arguments that were put in the debate, under your supervision, Mr. Deputy Speaker, about the question of a free mailshot. He says that the rules say nothing about the free mailshot, but the Opposition will vote against them tonight because they say nothing about the free mailshot. Will my hon. Friend now answer the arguments that have been put tonight?
Mr. Hill: What I find astonishing about this whole process is that there were several clauses and schedules—which were dense, detailed and lengthy—in the GLA legislation that dealt with electoral procedures and rules, but the Opposition totally failed to raise the issue in any serious way during the protracted hours of debate on the matter.
Several hon. Members rose—
Mr. Hill: I must continue, because it is my duty to report on the contents of the rules to the House.
Mr. Jenkin: Will the Minister give way?
Mr. Hill: No, it would be wrong for me to do so at this point. I have spoken about the innovatory content of the
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rules in the introduction of electronic counting. On May
4 this year, the votes in a British election will for the first time be counted not by people, but by electronic scanners. I think that that is something that the House will want to take note of and applaud.
The rules also set the scale of deposits and signatures that candidates for all three elections have to provide in support of their nomination. The rules propose that each mayoral candidate will be required to pay a deposit of £10,000 and to gather 330 signatures—10 from each London local authority—in support of their candidacy. Assembly candidates will not have to collect signatures, but those contesting constituencies will have to pay a deposit of £1,000, and parties and independent candidates wishing to contest London-wide seats will have to pay a £5,000 deposit.
The mayoral deposit will be forfeit if a candidate fails to obtain 5 per cent. of the vote. A candidate for a constituency seat in the Assembly would also have to gain 5 per cent. of the vote or forfeit their deposit, and a party or independent candidate contesting the London-wide seats would have to get 2.5 per cent. of the vote or forfeit their deposit.
The rules that are before us now have been crafted with care to ensure that the poll can be democratically conducted under proper conditions of fairness and secrecy and with a proper balance between the interests of voters and candidates. A number of matters have been touched on in the debate which, while of interest in themselves, are not actually part of the content of the rules. For instance, they do not, and could not, include a power to provide free mailshots, to prescribe candidates' expenses or to give directions about how any publicity is handled.
The rules are purely and simply about controlling the way in which the GLA election is run so that everyone involved knows clearly what may and may not be done and what the terms of the contest are. They follow the traditional pattern, and often the traditional wording, of our other sets of election rules. There are no surprises. Both the main Opposition parties represented in the House have been kept informed of the proposed content of the rules while they were in draft. The rules are the right ones for the GLA election. That election, which the House has earlier determined on, cannot proceed without the rules and I invite the House to approve them.
It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 17 (Delegated Legislation (negative procedure)).
The House divided: Ayes 102, Noes 296.

Division No. 76]

[11.29 pm

AYES

Ainsworth, Peter (E Surrey)

Bruce, Malcolm (Gordon)

Allan, Richard

Burnett, John

Ancram, Rt Hon Michael

Burns, Simon

Arbuthnot, Rt Hon James

Burstow, Paul

Ballard, Jackie

Cable, Dr Vincent

Beith, Rt Hon A J

Cash, William

Body, Sir Richard

Chidgey, David

Brady, Graham

Chope, Christopher

Brake, Tom

Collins, Tim

Brand, Dr Peter

Cotter, Brian

Brazier, Julian

Curry, Rt Hon David

Breed, Colin

Davey, Edward (Kingston)

Brooke, Rt Hon Peter

Davies, Quentin (Grantham)

Browning, Mrs Angela

Fearn, Ronnie

897

Forth, Rt Hon Eric

Michie, Mrs Ray (Argyll & Bute)

Foster, Don (Bath)

Morgan, Alasdair (Galloway)

Fox, Dr Liam

Moss, Malcolm

Gale, Roger

Norman, Archie

Garnier, Edward

Oaten, Mark

George, Andrew (St Ives)

O'Brien, Stephen (Eddisbury)

Gill, Christopher

Öpik, Lembit

Gray, James

Paice, James

Hammond, Philip

Paterson, Owen

Hancock, Mike

Portillo, Rt Hon Michael

Harris, Dr Evan

Randall, John

Hawkins, Nick

Rendel, David

Heald, Oliver

Robertson, Laurence

Heath, David (Somerton & Frome)

Roe. Mrs Marion (Broxbourne)

Hogg, Rt Hon Douglas

Russell, Bob (Colchester)

Horam, John

Sanders, Adrian

Hughes, Simon (Southwark N)

Sayeed, Jonathan

Hunter, Andrew

Shepherd, Richard

Jack, Rt Hon Michael

Soames, Nicholas

Jenkin, Bernard

Spring, Richard

Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

Steen, Anthony

Stunell, Andrew

Key, Robert

Swayne, Desmond

King, Rt Hon Tom (Bridgwater)

Syms, Robert

Kirkbride, Miss Julie

Thomas, Simon (Ceredigion)

Kirkwood, Archy

Tonge, Dr Jenny

Townend, John

Lait, Mrs Jacqui

Tredinnick, David

Lidington, David

Tyler, Paul

Livsey, Richard

Tyrie, Andrew

Lloyd, Rt Hon Sir Peter (Fareham)

Webb, Steve

Llwyd, Elfyn

Welsh, Andrew

Loughton, Tim

Widdecombe, Rt Hon Miss Ann

MacGregor, Rt Hon John

Wilkinson, John

McIntosh, Miss Anne

Willis, Phil

MacKay, Rt Hon Andrew

Young, Rt Hon Sir George

Maclennan, Rt Hon Robert

McLoughlin, Patrick

Tellers for the Ayes:

Maples, John

Mr. Peter Atkinson and

May, Mrs Theresa

Sir Robert Smith.

NOES

Abbott, Ms Diane

Burgon, Colin

Ainger, Nick

Butler, Mrs Christine

Ainsworth, Robert (Cov'try NE)

Campbell, Alan (Tynemouth)

Alexander, Douglas

Campbell, Ronnie (Blyth V)

Allen, Graham

Campbell—Savours, Dale

Anderson, Donald (Swansea E)

Cann, Jamie

Anderson, Janet (Rossendale)

Caplin, Ivor

Armstrong, Rt Hon Ms Hilary

Casale, Roger

Atherton, Ms Candy

Caton, Martin

Atkins, Charlotte

Cawsey, Ian

Austin, John

Chapman, Ben (Wirral S)

Banks, Tony

Clapham, Michael

Barnes, Harry

Clark, Rt Hon Dr David (S Shields)

Barron, Kevin

Clark, Dr Lynda (Edinburgh Pentlands)

Battle, John

Bayley, Hugh

Clark, Paul (Gillingham)

Benn, Hilary (Leeds C)

Clarke, Charles (Norwich S)

Benn, Rt Hon Tony (Chesterfield)

Clarke, Rt Hon Tom (Coatbridge)

Bermingham, Gerald

Clarke, Tony (Northampton S)

Berry, Roger

Clelland, David

Best, Harold

Coaker, Vernon

Betts, Clive

Coffey, Ms Ann

Blackman, Liz

Cohen, Harry

Blears, Ms Hazel

Coleman, Iain

Blizzard, Bob

Colman, Tony

Boateng, Rt Hon Paul

Connarty, Michael

Borrow, David

Cook, Frank (Stockton N)

Bradley, Keith (Withington)

Corbett, Robin

Bradley, Peter (The Wrekin)

Cousins, Jim

Bradshaw, Ben

Cox, Tom

Brown, Russell (Dumfries)

Cranston, Ross

Browne, Desmond

Crausby, David

Buck, Ms Karen

Cryer, Mrs Ann (Keighley)

Burden, Richard

Cryer, John (Hornchurch)

898

Cummings, John

Jones, Helen (Warrington N)

Cunningham, Rt Hon Dr Jack (Copeland)

Jones, Ms Jenny (Wolverh"ton SW)

Cunningham, Jim (Cov'try S)

Jones, Martyn (Clwyd S)

Dalyell, Tam

Jowell, Rt Hon Ms Tessa

Darvill, Keith

Keen, Alan (Feltham & Heston)

Davey, Valerie (Bristol W)

Kemp, Fraser

Davidson, Ian

Kennedy, Jane (Wavertree)

Davies, Geraint (Croydon C)

Kidney, David

Davis, Rt Hon Terry (B'ham Hodge H)

Kilfoyle, Peter

King, Andy (Rugby & Kenilworth)

Dawson, Hilton

Kumar, Dr Ashok

Denham, John

Ladyman, Dr Stephen

Dismore, Andrew

Laxton, Bob

Dobbin, Jim

Lepper, David

Donohoe, Brian H

Leslie, Christopher

Doran, Frank

Levitt, Tom

Dowd, Jim

Lewis, Ivan (Bury S)

Drew, David

Lewis, Terry (Worsley)

Eagle, Angela (Wallasey)

Linton, Martin

Eagle, Maria (L'pool Garston)

Love, Andrew

Edwards, Huw

McAvoy, Thomas

Efford, Clive

McCartney, Rt Hon Ian (Makerfield)

Ellman, Mrs Louise

Ennis, Jeff

McDonagh, Siobhain

Etherington, Bill

Macdonald, Calum

Fisher, Mark

McDonnell, John

Fitzsimons, Lorna

McFall, John

Flint, Caroline

McIsaac, Shona

Flynn, Paul

McKenna, Mrs Rosemary

Foster, Michael J (Worcester)

Mackinlay, Andrew

Foulkes, George

McNamara, Kevin

Fyfe, Maria

McNulty, Tony

Gapes, Mike

MacShane, Denis

Gardiner, Barry

Mactaggart, Fiona

Gerrard, Neil

McWalter, Tony

Gibson, Dr Ian

McWilliam, John

Gilroy, Mrs Linda

Mahon, Mrs Alice

Goggins, Paul

Mallaber, Judy

Gordon, Mrs Eileen

Marsden, Gordon (Blackpool S)

Griffiths, Jane (Reading E)

Marsden, Paul (Shrewsbury)

Griffiths, Nigel (Edinburgh S)

Marshall, David (Shettleston)

Griffilhs, Win (Bridgend)

Marshall, Jim (Leicester S)

Grogan, John

Marshall—Andrews, Robert

Hain, Peter

Martlew, Eric

Hall, Mike (Weaver Vale)

Maxton, John

Hall, Patrick (Bedford)

Meacher, Rt Hon Michael

Hamilton, Fabian (Leeds NE)

Meale, Alan

Hanson, David

Merron, Gillian

Healey, John

Michie, Bill (Shef'ld Heeley)

Henderson, Doug (Newcastle N)

Milburn, Rt Hon Alan

Hepburn, Stephen

Miller, Andrew

Heppell, John

Mitchell, Austin

Hesford, Stephen

Moffatt, Laura

Hill, Keith

Moonie, Dr Lewis

Hinchliffe, David

Moran, Ms Margaret

Hodge, Ms Margaret

Morgan, Ms Julie (Cardiff N)

Hoey, Kate

Morris, Rt Hon Ms Estelle (B'ham Yardley)

Hood, Jimmy

Hope, Phil

Mountford, Kali

Hopkins, Kelvin

Mudie, George

Howarth, George (Knowsley N)

Mullin, Chris

Hoyle, Lindsay

Murphy, Denis (Wansbeck)

Hughes, Ms Beverley (Stretford)

Murphy, Jim (Eastwood)

Hughes, Kevin (Doncaster N)

Murphy, Rt Hon Paul (Torfaen)

Humble, Mrs Joan

Naysmith, Dr Doug

Hurst, Alan

O'Brien, Bill (Normanton)

Hutton, John

O'Brien, Mike (N Warks)

Iddon, Dr Brian

O'Hara, Eddie

Illsley, Eric

O'Neill, Martin

Jamieson, David

Organ, Mrs Diana

Jenkins, Brian

Pearson, Ian

Johnson, Miss Melanie (Welwyn Hatfield)

Pendry, Tom

Perham, Ms Linda

Jones, Rt Hon Barry (Alyn)

Pickthall, Colin

Jones, Mrs Fiona (Newark)

Pike, Peter L

899

Plaskitt, James

Stevenson, George

Pollard, Kerry

Stewart, David (Inverness E)

Pond, Chris

Stewart, Ian (Eccles)

Pope, Greg

Stinchcombe, Paul

Prentice, Ms Bridget (Lewisham E)

Taylor, Rt Hon Mrs Ann (Dewsbury)

Prentice, Gordon (Pendle)

Primarolo, Dawn

Taylor, Ms Dari (Stockton S)

Prosser, Gwyn

Taylor, David (NW Leics)

Purchase, Ken

Temple—Morris, Peter

Quin, Rt Hon Ms Joyce

Thomas, Gareth (Clwyd W)

Quinn, Lawrie

Thomas, Gareth R (Harrow W)

Radice, Rt Hon Giles

Timms, Stephen

Rammell, Bill

Tipping, Paddy

Rapson, Syd

Todd, Mark

Raynsford, Nick

Touhig, Don

Reed, Andrew (Loughborough)

Trickett, Jon

Reid, Rt Hon Dr John (Hamilton N)

Truswell, Paul

Rooker, Rt Hon Jeff

Turner, Dennis (Wolverh'ton SE)

Rooney Terry

Turner, Dr Desmond (Kemptown)

Ross, Ernie (Dundee W)

Turner, Dr George (NW Norfolk)

Rowlands, Ted

Turner, Neil (Wigan)

Roy Frank

Twigg, Derek (Halton)

Ruane, Chris

Twigg, Stephen (Enfield)

Ruddock, Joan

Tynan, Bill

Russell Ms Christine (Chester)

Vis, Dr Rudi

Salter, Martin

Walley, Ms Joan

Sarwar, Mohammad

Ward, Ms Claire

Watts, David

Savidge, Malcolm

Whitehead, Dr Alan

Sawford, Phil

Wicks, Malcolm

Sedgemore, Brian

Williams, Rt Hon Alan (Swansea W)

Sheerman, Barry

Sheldon, Rt Hon Robert

Williams, Alan W (E Carmarthen)

Shipley, Ms Debra

Williams, Mrs Betty (Conwy)

Simpson, Alan (Nottingham S)

Wills, Michael

Singh, Marsha

Winnick, David

Smith, Rt Hon Andrew (Oxford E)

Winterton, Ms Rosie (Doncaster C)

Smith, Angela (Basildon)

Wise, Audrey

Smith, Jacqui (Redditch)

Woodward, Shaun

Smith, John (Glamorgan)

Woolas, Phil

Snape, Peter

Wright, Anthony D (Gt Yarmouth)

Southworth, Ms Helen

Squire, Ms Rachel

Tellers for the Noes:

Starkey, Dr Phyllis

Mrs. Anne McGuire and

Steinberg, Gerry

Mr. Gerry Sutcliffe.

Question accordingly negatived.

London Government
11.41 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I beg to move,
That the draft Greater London Authority (Election Expenses) Order 2000, which was laid before this House on 3rd February, be approved.
The draft Greater London Authority (Election Expenses) order prescribes the maximum amount of election expenses of candidates and their agents, and third parties, in elections for the mayor of London and the London assembly. In my opinion, the draft order is compatible with the European convention on human rights.
There are separate limits for mayoral candidates, assembly constituency candidates, and parties and independent candidates contesting the Londonwide list, reflecting the Greater London Authority's unique structure and voting systems.
We need to prescribe limits to the spending of GLA election candidates and parties to ensure that the election is contested on as level a playing field as possible, and to prevent extravagant spending. We consulted political parties on our proposals in December 1999, and listened carefully to the points that they raised. The limits that we propose take account of the points made in the responses to the consultation.
The candidates' expenditure limits are £420,000 per mayoral candidate; £35,000 per candidate contesting an assembly constituency; and £330,000 per party or independent candidate contesting the Londonwide list.
Mr. Simon Hughes rose—
Mr. Hill: It is a little premature in the proceedings, but as I have rejected the hon. Gentleman in the past, let me embrace him now.
Mr. Hughes: The Minister properly received representations, as he said, and we are grateful that on the mayoral expense limit, he accepted in broad terms what my colleagues and I proposed. Can he tell us how many representations he received in favour of not having a freepost?
Mr. Hill: We received no representations in favour of not having a freepost, as the hon. Gentleman well knows. He was gracious enough to recognise that we listened carefully to the representations made, and we reduced the level of election expenses precisely to the level suggested by the Liberal Democrats. The Government listen and respond to reasonable representations. It seems, however, that on this occasion the Liberal Democrats are the party of no compromise and no surrender, which is not a good precedent.
I emphasise that we have significantly reduced the mayoral and Londonwide list limits from the levels that we originally proposed, which were £990,000 and £495,000 respectively, because parties considered them too high, and likely to put smaller parties at a significant disadvantage.
Mr. Bernard Jenkin: Why did the Minister think that £990,000 was initially the correct

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figure, and then accept representations from the Liberal Democrats and us to reduce it substantially on the basis that there should be a free mailing instead? Why did he accept that there should be a reduction in the spending limit, but not provide for the free mailing? Is there not some inconsistency in accepting only one half of the representation? What is the point of that?
Mr. Hill: I do not know how many more times I have to explain this matter to the hon. Gentleman, or in how many more ways I can put it—there are no powers in the Greater London Authority Act 1999 to secure the free mailshot on which he and other hon. Members dwelt at such length during our earlier proceedings.
We have calculated the limits using the most appropriate comparator from other expense limit regimes. The mayoral and Londonwide list limits are broadly derived from the amount of £30,000 per parliamentary constituency used in the Political Parties, Elections, and Referendums Bill as the building block for calculating the national spending limits for political parties. The assembly constituency limit is broadly equivalent to the sum of parliamentary constituency limits within an assembly constituency area. The limits are enough to enable candidates and parties to fight effective campaigns either London wide or at constituency level, while not allowing their spending to become unacceptably high.
When the order comes into force, GLA candidates and parties will not be permitted to spend in excess of the limits on their election expenses. Election expenses are defined in the Representation of the People Act 1983 as expenses incurred
"whether before, during or after an election, on account of or in respect of the conduct or management of the election".
Spending by GLA candidates or their agents before 14 December 1999—the date when the relevant provisions in the Greater London Authority Act were commenced—will not, in our view, count towards the limit.
Article 2 of the order prescribes the maximum expenditure that a person other than a candidate, his agent or persons authorised in writing by the agent—that, is a third party—may incur at such elections. The limits are set at £25,000 per third party supporting or opposing mayoral candidates; £25,000 per third party supporting or opposing Londonwide list candidates, including independents; and £1,800 per third party supporting or opposing an assembly constituency candidate.
Those limits are calculated using the same formula that we intend to introduce, as an amendment to the Political Parties, Elections, and Referendums Bill, to limit third-party spending in local elections. I realise that the limits are high compared with the current £5 limit set out in the Representation of the People Act 1983. However, I believe that they are justified in the light of the Bowman judgment in the European Court of Human Rights—where the court ruled that the £5 limit constituted an unjustifiable restriction on freedom of expression—and because they ensure that third parties can adequately put across their case to the electorate.
The GLA Act does not entitle candidates in GLA elections to have an election address delivered free by the Post Office, and election mailshots are not, therefore, a matter for the order. GLA elections are classed as local
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elections in section 17 of the GLA Act; that approach puts GLA election candidates on the same footing as local election candidates generally.
There is nothing new about Londonwide elections without free mailshots.
Mr. Paul Burstow: Will the Minister name one other local authority election in which deposits are required?
Mr. Hill: That is not relevant. The provisions in the order and in the Act are commensurate with elections in London.
Every four years, elections are held for each London borough council at the same time across the whole of London—exactly the same area and same electorate as the GLA—without free mailshots. During those elections, parties mount campaigns, without free mailshots, across the whole of London, exactly as they will for GLA elections.
In the White Paper, we made clear our concern to ensure that the election did not become a platform for frivolous candidates or publicity seekers, who could gain unfair access to public funds simply in an-attempt to promote either themselves or obscure causes. [Interruption.] Do I detect a note of envy in hon. Members' response? We have considered carefully whether there should be free mailshots for GLA elections. We decided against, for three reasons.
The first reason was the cost. The total cost to the public purse of a free mailshot would be very significant. The total could be well over £10 million and possibly as much as £20 million, depending on the number of candidates.
Sir Robert Smith rose—
Mr. Hill: Such costs would be disproportionate to the GLA's proposed budget of some £35 million and would be equivalent to more than £3 for every council tax payer in London—almost twice as much as London council tax payers will contribute to the costs of the mayor and assembly.
Mrs. Jacqui Lait rose—
Sir Robert Smith rose—
Mr. Hill: The public would, rightly, be extremely critical if large sums of public money were spent on free mailshots—especially if that encouraged frivolous candidates—instead of on the vital issues that concern Londoners.
Mrs. Lait: I am afraid that the hon. Gentleman has left me extremely confused because, although he said that there were no powers in the Act in respect of mailshots, he has just explained that the Government considered carefully whether there should be mailshots within the Act. Will he please at least make it clear at what point the Government decided that mailshots were not appropriate because this was a local government election?
Mr. Hill: The hon. Lady will be aware that there are other routes to achieving the objective that she evidently

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seeks, but it is absolutely the case that there are no powers within the 1999 Act, and to that extent all the representations about free mailshots, especially in connection with these orders, are entirely otiose.
Mr. Jenkin: Will the hon. Gentleman give way?
Mr. Hill: No; I will not. I must make progress. I have allowed the hon. Gentleman in once. I have been very generous to other Members—perhaps excessively so—and I know that many in the Chamber await with bated breath the continuation of my remarks.
Sir Robert Smith rose—
Mr. Hill: Our second consideration in opposing free mailshots was the related issue of precedent. GLA elections are classed as local elections and will be run broadly under local election rules. Candidates in local elections do not receive a free mailing, and to allow GLA candidates a free mailing would set a precedent for local elections generally, and for elections of directly elected mayors in particular. That would take the public subsidy of political material to previously unimagined levels.
Thirdly, we took into account the risk of abuse by unscrupulous candidates. For the cost of a £10,000 deposit, a mayoral candidate could get a free Londonwide mailing worth up to £750,000 if sent to each London elector. The risk is real. There has been at least one media report of an individual planning to back a mayoral candidate's campaign as a way of promoting his business. To allow such candidates a free election mailing would make a mockery of the democratic process.
We have heard much from the Opposition parties about their concern—
Mr. John Wilkinson: Will the hon. Gentleman allow me?
Mr. Hill: First let me finish the sentence, for the benefit of the consecutive order of my remarks. We have heard much from the Opposition parties about their concern at the lack of a free mailshot, and I suspect that we are about to hear more.
Mr. Wilkinson: Is not the purpose of a deposit to eliminate frivolous candidates, and are not mayoral candidates required to pay a £10,000 deposit? Furthermore, who is the Minister to decide which candidate is frivolous or not? Is that not a wholly fascist notion? Should he not be ashamed of himself?
Mr. Tony Banks: That is not what the hon. Gentleman said about General Pinochet.
Mr. Hill: Do I hear a cry of "General Pinochet"? I do not want to pursue that particular road.
The concept of the frivolous candidate is common parlance in discussions about electoral practice and electoral procedure. The Government are not making a judgment about the frivolity of candidates, but I have to tell the hon. Member for Ruislip-Northwood (Mr. Wilkinson) that we know that there is adequate evidence that there are
904
such candidates available. [HoN. MEMBERS: "Name them."] I will name them. In the aftermath of the recent Kensington and Chelsea by-election, a gentleman by the name of Sam Rosen, who was the sponsor of a candidate in the election who rejoiced in the name of Lisa Lovebuckett, declared that the advantages to his business of sponsoring that candidate had been so enormous that he was perfectly prepared to pay a deposit for the GLA elections so that he could advertise his business. If he is prepared to do that without the benefit of a free mailshot, the scope for such commercial candidatures is endless. It is a serious consideration and a proper one for the Government to take into account.
I am somewhat surprised about the concern that Opposition Members have expressed about free mailshots.
Mr. Paul Flynn: Will the Minister explain whether his comments will apply to future parliamentary elections?
Mr. Hill: To the extent that there is already the well-established convention of deposits, the practices already apply. We do not have to think about the future; that is current reality. However, I am grateful to my hon. Friend for that thought.
Mr. John Greenway: Will the Minister give way?
Mr. Hill: No, for the sake of other hon. Members who wish to participate in the debate, I need to make progress.
Free mailshots are not a matter for the election expenses order, and primary legislation would be needed to provide mailshots at the public expense in such elections. We did not include provision for free mailshots in the Greater London Authority Act 1999 for the reasons that I have just described. The Act was scrutinised at length both in this House and in the other place. Hon Members in the opposition parties had ample opportunity to table amendments to provide for free mailshots, but they did not. If this were really an issue of such great concern, that would have been sheer political incompetence.
I understand the concern raised that the lack of free mailing could favour the richer parties. That is precisely why we have adjusted the election expenses limit downwards by a substantial amount to help level the playing field. That was done to help the smaller parties and independent candidates, and was a direct response to points made to us in the consultation. The limits will allow candidates and parties to put their message across to the electorate. They will allow parties with both a mayoral candidate and a Londonwide list, or independent candidates who stand both for mayor and as a Londonwide assembly member, to send a mailshot to every household in London if they wish.
I reject the Conservative party's accusation that the proposal is ballot rigging. That is an absurd suggestion. I have made it quite clear why there will not be free mailshots. For an outlay of £10,000, a mayoral candidate could get a benefit worth up to £750,000: they would be queueing up at the door with their nomination papers and pound notes in their hands. The cost to the public purse would be open-ended and could add up to a sum equivalent to the first-year budget for the GLA itself—

905
£35 million. I do not think that spending public money on this scale on campaigning would be a priority for Londoners or, indeed, taxpayers elsewhere.
Then there is the scope for abuse. The GLA is all about reconnecting people with democracy at a local level. Frankly, a long list of frivolous, publicity-seeking candidates with campaigns subsidised by the taxpayer would simply alienate Londoners, and would risk damaging the public's perception of the new authority before it has even started. Finally, elections to the GLA are local elections that will be run under local rules that do not include a free mailing paid for by the Exchequer.
The limits provide for GLA elections to be as fair as possible while allowing candidates and parties the freedom to put their message across to the electorate. They take account of the GLA's unique structure and voting systems, and will allow parties with a mayoral candidate and Londonwide list to pay for a mailing to each London household.
11.59 pm
Mr. Bernard Jenkin: Rarely can the House have seen a Minister of the Crown treat matters of democracy and fairness with such contempt. I wish that the Minister could have sat here and seen the faces of his hon. Friends, because they told the true story of the mess that they think he is making. He has been deliberately churlish and obtuse in his denial of the strength of the arguments that hon. Members from both sides of the House have presented.
The Minister's behaviour is like that of a spoilt child who does not want anybody else to play with his toys. That is the basis on which he has conducted consultation. He has dictated his terms on the democratic process instead of genuinely listening to the case put before him. He might tonight command the votes of the House, but he does not command the hearts of Members who believe in real democracy.
The hon. Gentleman said the matter should have been raised during the passage of the Greater London Authority Act 1999, and that it was a matter of high political incompetence that amendments on the issue were not tabled then. I invite him to consider the Scotland Act 1998 and the Government of Wales Act 1998. I sat through all the proceedings on those Bills on the Floor of the House, but we never even discussed free mailings. It was taken as read that there would be free mailings. It is ludicrous to suggest that there are free mailings in elections at an important point of constitutional reform only if the Opposition raise the matter.
The first the opposition parties knew about there being no free mailings in the London elections was when the Minister's letter of consultation, dated 15 December, landed on our desks. We were required to do all the work in response to that letter in the run-up to Christmas. The Minister now generously describes that as consultation for which we should be unctuously grateful. It was said in the previous debate that there is no precedent for such matters being tackled without proper consensus. The hon. Gentleman has made the mistake of reading out the speech that was read out by Lord Bassam in the Upper House last night. That fully explains the hon. Gentleman's dusty brush-off by some of his colleagues tonight.
The Minister mentioned General Pinochet, who held a referendum and sought consensus on Chile's transition to democracy. General Pinochet and the hon. Gentleman are
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ships that pass in the night: while General Pinochet brought Chile back to democracy, the hon. Gentleman is taking London away from democracy.
Mr. Banks: I do not know how old the hon. Gentleman was, or where he was, when his father, then the Secretary of State for the Environment, now a noble Lord, was abolishing the Greater London council, and we were on the other side of the House asking for a referendum that he never gave us. How dare the hon. Gentleman stand up and talk about referendums in the same breath as the fascist Pinochet?
Mr. Deputy Speaker: Order. Perhaps we should get back to the order before us.
Mr. Jenkin: I am very happy to get back to the order.
What we managed to do was get rid of the hon. Member for West Ham (Mr. Banks) and that was doing London a favour at the time.
Mr. Banks: I am still here, but the hon. Gentleman's father is not.
Mr. Jenkin: The hon. Gentleman should take a tablet and lie down in a dark room. He would feel much better.
As the hon. Member for Kingston and Surbiton (Mr. Davey) pointed out, the Minister, in his letter of 15 December about the consultation for the proposals, talked at length about the comparability of these elections with Westminster, European, Scottish and Welsh elections.
In his letter, the Minister refers to the necessity of setting fair and reasonable expenditure limits on candidates,
"while not placing candidates without significant personal or party resources at a significant disadvantage."
Even though he has adjusted some of the spending limits, those who have substantial resources will still have a significant advantage over those who do not, and the absence of free mailing compounds that advantage in spades. The letter continues:
"We believe that a higher limit could encourage unscrupulous candidates or parties to spend excessively in seeking votes, putting other candidates with more limited means at a disadvantage."
Yet by maintaining higher spending limits instead of allowing free mailing to which voters think candidates should be entitled, the Minister is allowing unscrupulous candidates or parties to spend excessive sums chasing votes, thereby putting candidates with more limited means at a disadvantage. The most extraordinary feature of the letter of consultation is that it sets out the very disadvantages of the scheme that the Minister has finally proposed to the House, all on his own, without a single ounce of support from any other political party that will participate in the elections.
The reason why the Minister has put himself in that position is a mystery. There are only two possible explanations. The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) alluded to one: the "stop Ken" campaign, bringing party factionalism into the very conduct and fairness of our democracy. Never has there been such an abuse of the responsibilities of office in the face of all the opposition parties. The other explanation, which I believe contains some truth, is that the Minister

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and his Department have become caught between a rock and a hard place: the rock is the principle of democracy, which will be upheld by the other place when it votes on the orders next week; the hard place is the Treasury.
If the sort of arguments that have been deployed by the Minister this evening—the ridiculous, extreme, reductio ad absurdum arguments about excessive cost and the potential for abuse—apply to the London elections, they must apply to parliamentary elections. Whatever abuses may or may not occur in parliamentary elections, we tolerate them because we believe that democracy, openness and direct contact with voters are more important. In any case, were such abuses to occur, they could be dealt with by other legislative means—one of my colleagues has pointed out that we suspended an entire Assembly in 24 hours of legislating, so it cannot be beyond the wit of man to devise legislative means to provide free mailing for mayoral candidates and constituency candidates in the forthcoming London elections.
Mr. Roger Casale: I am following the hon. Gentleman's argument closely. However, I have to tell him that his democratic arguments are somewhat undermined by his calling in aid the unelected House of Lords, the Conservatives' abolition of the GLC and even General Pinochet.
Mr. Jenkin: The hon. Gentleman should bear in mind that the Labour Leader of the House of Lords, Baroness Jay, made clear her belief that the Upper House now has the legitimacy needed to deal with such matters. If she believes that the reforms forced through by the Labour party have given the upper House the necessary authority, it ill behoves the hon. Member for Wimbledon (Mr. Casale) to say that the other place should not interfere. According to his own lights, the Labour Government have enhanced the credentials of the Upper House.
Mr. Greenway: My hon. Friend might care to speculate on a point that I wanted to raise with the Minister but he would not give way. There is consensus between the Home Secretary, the House and the other place on the Representation of the People Bill, which will encourage voter participation in elections—yet the order does the opposite. Denying a free mailshot to all mayoral candidates will reduce participation in the mayoral elections.
Mr. Jenkin: My hon. Friend is right. The inconsistency in the Government's position is glaring, but it is for them, not me, to explain it. An amendment was discussed in the Upper House during proceedings on the Representation of the People Bill. It set out the exact way in which we want free mailings to be tackled. The Government will not only lose the orders next week, but if they want the amendment to be put to the vote on Report, they will also lose that vote.
The Government's position is inexplicable because it is impossible to understand how they can win. Ministers should return to their offices tomorrow morning, pick up the telephone and start organising a meeting so that we can sort out the problem in a proper, open, democratic and consensual fashion.
12.11 am
Ms Diane Abbott: I spoke in the earlier debate on related matters, so I wish to confine my remarks to the arguments that Ministers presented time and again tonight. They say that they will not allow a free mailshot because we are considering a local authority election, which is like any other. I shall give three reasons why it is not simply a local authority election.
First, the electorate numbers more than 5 million people. Secondly, as my hon. Friend the Minister knows, in most local elections in urban areas it is possible to organise the delivery of a mailshot through volunteer labour—I know that because I have worked in every local and general election since 1978. It will be almost impossible to organise the delivery of a mailshot through volunteer labour in Greater London.
Thirdly, in London many people live in houses and flats with entry phones and there are many houses in multiple occupation. Even if we were able to mobilise a co-ordinated army to cover London from Hillingdon to Croydon, many people would not receive their election address without the provision of a free mailshot.
Mr. Denis MacShane: Will my hon. Friend give way?
Ms Abbott: I am afraid not; it is late and my arguments address a specific point.
We all appreciate the energy with which the Minister has prosecuted the Government's case tonight. However, it is not intellectually sustainable to claim that the election is simply a local authority election like any other.
12.13 am
Mr. Edward Davey: Most of the Government's fairly weak arguments have been demolished in our two debates. I want to focus on one specific argument. The Government claim that the issue that we are discussing was not raised in Committee. Earlier, I quoted exchanges from our Committee proceedings which proved that the issue was debated then.
The Government said that they would consult widely to gain consensus on election limits. If the Minister is in doubt about that, I shall quote again an exchange that he and I had in Committee on 28 January 1999. I said:
"I believe that the Neill report and the White Paper say that the Government intend to hold consultations with the Association of London Government. Have those consultations started? It is important that we move ahead. If they have not started, will the Minister tell us when they will take place?"
The Minister replied:
"I have already given the Committee an absolute assurance that we will consult before we come forward with proposals. I have undertaken that those consultations will include both the hon. Gentleman's party and the principal Opposition party."—[Official Report, Standing Committee A, 28 January 1999; c. 84.]
The Committee considered the issue in that spirit, so does the Minister honestly think that sending a letter to various people on 15 December with a closing date of 4 January represents the consultations that he assured the Committee he would provide? if he does, that is nonsense and no one will believe him. It is an act of bad faith and if that is how the Government approach consultations on running elections in the capital city, the Minister should

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hang his head in shame. We have a new electoral system, so a full and proper consultation on the rules and election expenses was required, but it took place during the Christmas and millennium celebrations. That is an absolute outrage.
Many people answered the consultation invitation and we only just managed to submit our replies. The Minister has already admitted that no one suggested that there should not be a mailshot, so taking this approach to the free post suggests that the Government have not listened to anybody. He says that expense limits have been reduced in line with Liberal Democrat proposals—he is right and we welcome that—but he failed to say that our reply linked reducing the high expenditure limits to the provision of a free mailshot. As usual, he tries to have his cake and eat it. Our submission states:
"An alternative to the high expenditure limits and lack of free mailshot could be solved by granting a free mailshot to all political parties and then deducting the cost of this from the expenditure limit of £990,000."
Mr. David Chidgey: So clear.
Mr. Davey: Yes, but still the Minister is trying to pull the wool over our eyes.
The Minister may win tonight's vote, but he and his colleagues will not win the vote in the other place and we all need to know what will happen then. Are the Government seriously saying that they will allow the elections not to take place? Without the two orders that we have debated tonight, they will not happen. That would be a matter of great regret, because we support the Government's general proposition that we need to return democracy to the capital city. The Liberal Democrats and the Labour party have argued that case for many years, ever since the Conservatives abolished the Greater London council. We have supported and worked with the Government, so it is a great shame that they are trying to reduce the democratic voice at the last minute.
Mr. Gerald Bermingham: I live in a block of flats in north London and have a vote in the GLA election. About 200 others also live there. I will know the candidates as I am a member of a political party, but how will the other residents know the candidates of the various competing political parties if those parties cannot carry out a mailshot? That is why I am a little worried about there being no mailshots.
Mr. Davey: I am grateful for the hon. Gentleman's intervention. Perhaps he joined the debate at a late stage—I am not sure, as I did not notice whether he was in his place earlier—but he is very welcome if he backs our case. If he has not realised it, the Conservatives and the Liberal Democrats are arguing for a free post.
Mr. Simon Hughes: As are the hon. Gentleman's colleagues.
Mr. Davey: As my hon. Friend says, so are some Labour Members. Clearly they have another recruit to the cause, and we are glad that the hon. Gentleman sees the logic of our argument for democracy.
Mr. Simon Hughes: We are adding up the balance of supporters. Am I right in thinking that so far we have not
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heard, apart from the Minister's, any speech in favour of the Government's proposition from any part of the House, including the Government's side?
Mr. Davey: My hon. Friend is absolutely right, as always. We wait in anticipation for some Labour Back Benchers to put their heads above the parapet and try to make the case for the Government, because the Minister clearly has not been able to do so.
Part of the Government's argument tonight has been about frivolous candidates—the idea that people will run for the position of mayor, have a free post and waste taxpayers' money. As a Conservative Member said earlier, it is outrageous that the Government are to decide who a frivolous candidate is. That is against all democratic principles in this country. We have seen for many years in parliamentary by-elections, and indeed in general elections, a variety of candidates from the less serious wing of British politics: the Monster Raving Loony party, for example. No one has questioned its right to free post. I have never seen in a Labour party manifesto or speech by a senior Minister a suggestion that free post should be taken away from such parties, and I hope I never shall.
The Minister makes a spurious point, and indeed goes against the whole theory behind this new form of government. The Government used to argue that, with the new position of mayor, non-political people would be encouraged to come into running the capital: that there would be independents. So if the Government wanted a system to encourage independent candidates, why are they trying to prevent them having the chance to put their case? Again, logic is against what the Government are trying to do in the order.
The Minister made a point with respect to third party expenses. We believe that the third party expense limits in article 2 are rather high. That third parties can spend up to £25,000 supporting a candidate for the mayor of London seems to me ridiculous. One might hypothesise that this was put in to enable various institutions—trade unions, for example—to support various candidates, but the Government might want to think again, given the way in which the unions seem to be stacking up behind certain candidates. Not only is it wrong in principle that the limits should be set so high, but it is also foolish in terms of what the Government are trying to do. Again, the Government seem to be incompetent even with regard to their own motivations.
Mr. Robert Syms: Is there not a danger with third party campaigns, particularly from particular pressure groups, that instead of a campaign in favour of a candidate there will be a campaign against candidates—negative campaigning, as the United States has at present?
Mr. Davey: I am grateful for the hon. Gentleman's intervention. He makes a very powerful point. We could see in the mayoral elections, if those third party expense limits stay as high as they are, a whole series of people running appallingly negative campaigns. And the Government will have permitted that in their rules.
If the Government were so worried about frivolous candidates, why did they not raise the matter in Committee? Why did they not ask Opposition parties to talk to them to find out how we could change the rules to

911
ensure that frivolous candidates could not stand? It could be done by raising the deposits, increasing the number of signatures needed for nominations, or tightening up the rules with respect to free post. The Post Office's rules and guidelines are already very tight. They prevent people from abusing free post for commercial purposes or asking for money. If the Government believe that the rules are not tight enough, why do they not ask us to join in reviewing those guidelines to see whether they can be made tighter still? I see the hon. Member for North Essex (Mr. Jenkin) nodding in agreement. I am sure that we could arrange to tighten them up. Then the logic of their position—assuming there is any remaining logic—would certainly go.
It is bad enough when the Labour party tries to fix its own internal elections. It is outrageous when it tries to rig public elections.
12.25 am
Mr. Denis MacShane: My constituency is far from London, but never have I heard such metropolitan elitism from the Opposition parties. I have heard the unusual combination of a Conservative party pleading for a significant increase in public expenditure at the taxpayer's expense, and a Liberal Democrat party that is prepared to consign its own activists and members outside London to the hard electoral work of delivering leaflets through letter boxes—indeed, to tower blocks. My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) seems to have left, but I assure her that it is difficult to get into some tower blocks in the north of England, not just those in east London.
Liberal Democrats have argued tonight that their poor, suffering activists must deliver leaflets in Sheffield or Manchester, but that in London they should all be able to sit on their sofas watching "EastEnders" while Her Majesty's postal workers do their political work for them. I consider that insulting, patronising and unworthy of a party with which, in many respects, my party is prepared to co-operate.
Mr. Simon Hughes: Will the hon. Gentleman give way?
Mr. MacShane: I would prefer not to.
Assuming there are about 4 million voters in London—[HON. MEMBERS: "Five million."] The number is increasing by the minute. We are being asked to spend more than £1 million per candidate of my constituents' money because we are not confident that our parties are keen enough on their candidates, whoever they may be. Certainly, when the time comes, I will be out there delivering leaflets for my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), without demanding that money be spent. That is how elections are conducted at local level in this country.
The new shadow Secretary of State for the Environment, Transport and the Regions is one of the richest Members of Parliament. It is extraordinary that he should encourage one of his junior satraps to increase public spending, when tomorrow his leader—the leader of the Conservative party—will be talking about tax promises, and cutting public expenditure. That is the
912
hypocrisy that we see tonight, in miniature. There are about 40 million voters in the country. If the same rule is applied to London as is being called for tonight, I assure the metropolitan chattering classes on the Opposition Benches—
Mr. Jenkin rose—
Mr. Simon Hughes rose—
Mr. Greenway rose—
Mr. MacShane: I will not give way. I am trying to finish my speech.
Let me assure those chattering classes that what they hear in the way of London Liberal Democrat and Tory arrogance tonight they will hear from Rotherham, Sheffield, Exeter and Scarborough tomorrow. I see many Members from other areas present. As I have said, there are some 40 million voters in the country. If we apply the London rule that in local government elections there is to be a free post, we are talking about between £5 and £6 million per main party candidate, which means £40 million or £50 million if the same principle is applied throughout the rest of England—I am not talking about Scotland and Wales. That is unacceptable.
I do not want public expenditure to be increased unnecessarily to support unreasonable causes. I will not vote to increase public expenditure in order to satisfy the laziness, inaction and unwillingness of Opposition parties to campaign effectively in the London election.
I ask the Minister to stand firm. I ask my hon. Friends not to vote for an increase in public expenditure and not to set an example that will demoralise party activists in the north of England—the heartlands of England. Every Tory and Liberal Democrat local party will be absolutely scandalised that the slovenly, lazy Conservative and Liberal Democrat parties in London want the taxpayer to pay for their post delivery, when the rest of us believe in British democracy and are prepared to deliver our leaflets so as to promote our policies and beliefs.
12.30 am
Mr. Peter Brooke: I apologise for my costume. I came straight to the House from the annual dinner of a national organisation. I have remained in the Chamber ever since.
As always, it is a pleasure to follow the hon. Member for Rotherham (Mr. MacShane). He made much of the fact that Rotherham is a great distance from London and ignored the fact that Scotland and Wales are, too. We have already discussed the fact that the free mailshot does not appear in legislation relating to those countries.
The hon. Gentleman exaggerated massively the amount of money that the Government themselves think will be spent by each candidate in a free mailshot. Rotherham itself was never part of the Government's constitutional reforms.
Mr. Greenway: Will my right hon. Friend give way?
Mr. Brooke: No. We are short of time. I apologise to my hon. Friend.

913
As ever, the Minister for Housing and Planning is sitting next to the Minister for London as his minder; he has done so consistently on other occasions. Towards the end of the Napoleonic wars, the great Napoleon wished to give a marshal's baton to General Lefebvre, one of the great old soldiers of the republic. He sent him to capture a major city in eastern Europe, accompanied by Marshal Oudinot.
Marshal Oudinot had already been wounded in the Napoleonic wars 33 times. Although he was only there with a watching brief, he managed to get wounded during that campaign, too. The Government's apprehensions that they will get wounded in the London elections bring the Minister for Housing and Planning to the House tonight.
The Minister has a powerful historical sense. He knows that, in 1906, the Tory party suffered its largest defeat in a general election this century, until the recent one. He knows that the first sign of the party's recovery was that, for the first time in 18 years since the London county council founded in 1889, it took the LCC the following year, in 1907.
The Minister further knows that, although the Labour Government had a majority of 150 in the general election of 1945, by 1949, although Herbert Morrison had held London for 15 years for Labour, the Conservatives had a majority of 120,000 votes in London at large. They got exactly the same number of seats. The one Liberal who was elected was prepared to vote for the Tories. It was not one of the finest moments in the history of the London Labour party. I have had to listen to a lot about the Greater London council since 1986, but the Labour party insisted on retaining control by fiddling the aldermanic vacancies.
Before the election, the Evening Standard said that the mayoralty of London was the Prime Minister's big idea and that, in that respect, it was going to march with Scotland and Wales. The Minister will remember it. We devoted a whole day to the governance of London on a Friday in June 1997. It was not the equivalent of discussing Rotherham. It was a major part of the Government's constitutional reforms.
I represent an inner-city seat. In the 1983 general election, it had the lowest turnout in the country. On the eve of 1987 general election, I told my agent that we were going to improve. We overtook eight seats. Six were inner-London seats, or on the periphery of inner London. In 1992, we moved up a further eight seats. Again, we overtook inner-city seats. In 1997, we moved up a further eight seats. Again, we overtook inner-city seats.
It is difficult to run elections in inner-city seats, whichever the city—I am not including Rotherham in my remarks. The consequence is that the mailshot is a matter of extreme importance. If the Prime Minister really does have a big idea about London and wants to make the mayoralty a success, he will accept the argument on the mailshot; otherwise, the turnout will be the same as it has been historically. That is, frankly, going to be a loss to everyone. The media attention to which the Minister for London referred is present in a general election, when we again have the problem of getting out the inner-city vote.
The Minister cited three reasons for the Government's position on the matter. He was not on the Committee, so he will not recall—as the Minister for Housing and Planning will—my telling the story of the Polish bishop who arrived in a parish in his diocese and said to the curate, "I am usually accustomed when visiting parishes
914
to be greeted by the sound of bells. Why am I not greeted by bells?" The curate said, "My lord, there are three reasons. The first is that there are no bells." "Pray go no further," said the bishop.
The Minister for London made the great mistake of going further, so that, having rested his argument on the principle that the Greater London Authority Act 1999 is local government legislation—to which my hon. Friend the Member for Beckenham (Mrs. Lait) referred—he then produced other reasons why the Government were not going to pursue the matter. In the process, he totally demolished his basic argument—he delivered an Exocet at it—about the local authority.
We know about the Scotland Act 1998 and the Government of Wales Act 1998 and the fact that they contained no provision for a free mailshot. We know, too, that—until the Political Parties, Elections and Referendums Bill—the Government have made up the laws on referendums as they have gone along. In Committee, I accused the Minister for Housing and Planning of making up the Greater London Authority Act 1999 as we went along. I realise that consistency can be castigated as the hobgoblin of little minds, but there is no possible way in which, on the basis of how the Government have conducted their constitutional reform so far, the Minister can rest on the fact that the 1999 Act is local authority legislation and, therefore, that local government arrangements should apply.
Regardless, I say to the Minister, as I say to the House, that democracy is more important than all such issues.
12.37 am
Audrey Wise: I shall make a very short and plain statement. The debate has been conducted largely as though we were discussing a matter affecting only London, which may seem to be a reasonable conclusion as the order is about elections for the London assembly and the London mayor. However, the matter has a wider significance.
It is not true, as has been well established, that the London elections will be simply local government elections. It is not even true that the major problem is that it is hard work to run elections and difficult to canvass and to deliver. That is not really the essence of the matter at all, as that problem applies anywhere in the country and also in parliamentary elections. I have sat in the Chamber, through the previous debate and this one, asking myself over and over, "What arguments would Labour Members be adducing if we were facing a proposal from the Opposition—were they ever again in a position to do it, which I hope that they will not be—to abolish the free mailshot in parliamentary elections? How would we defend the free mailshot?"
I accept the free mailshot at general elections in my constituency. I would not dream of saying that we have plenty of workers, or that we rely on the fact that we shall have one leaflet delivered by post. We still organise as many people as we possibly can to deliver and to canvass, because one leaflet does not make an election. The issue is not about Labour Members or Liberal Democrat Members or anyone else being short of election workers: it is about providing a reasonable minimum standard so that everyone is able to deliver at least one leaflet. If they can do more than that, it will have to be down to their own efforts. As has already been pointed out, the leaflets and envelopes have to be paid for. It is not a free ride; it is simply a free delivery.

915
I worry a great deal about the possible implications for parliamentary elections. When my hon. Friend the Member for Rotherham (Mr. MacShane) was looking for people who might be affected, I was glad that his gaze passed over me and he did not say Preston. I would not have liked to be prayed in aid to that speech.
Never mind clever-clever passion and grandiloquence. When all is said and done, it is a pity that the Opposition have been handed a weapon to use against us. We have been reduced to saying "Yah-boo, you've done worse." Of course they have done worse. They abolished the Greater London council, which was a downright disgrace. However, we are not improving on that by what we are doing tonight. We are giving them a cover so that people can say "Oh well, none of the parties are really very good. None of them are much devoted to democracy." It is a pity to do that.
If we were to add up the cost of the parliamentary mailshots, how would we defend them? If cost is the true issue, it is shameful. I do not know what the true issue is, but the order is a mistake. We should not have handed the Opposition this weapon.
12.41 am
Mr. Michael Jack: We have heard some brave speeches from Labour Members this evening—three of them in defence of basic democratic rights. The Government have been promulgating so-called freedom of information, but the lack of a freepost will deny electors who seek the freedom to know who is standing in an election their right to know what is going on. If the best defence that the Government can put up is the hon. Member for Rotherham (Mr. MacShane), it says a great deal about the paucity of their arguments. All that he could do was rail against what he called lazy parties. I have always thought that he was a democrat, but he seems to have failed to take into account the position of vigorous smaller parties, or even good independents. They will find it difficult to get their message across, because they may well be crowded out by the more conventional methods of communication of the media. The electorate have a right to know who is standing in the elections.
When I had to defend difficult wickets as a Minister, I remember falling back on one of two strategies: the first was to laugh at the Opposition and the other was to pray in aid lots of technicalities in the hope of running out of time before having to defend the central issue. The Minister has done that this evening. He has illogically told the House that freeposts are not applicable in ordinary local government elections, and then gone on to tell us about the unique structure of the Greater London Authority and the special nature of the elections. He cannot have his cake and eat it. The electorate will expect a freepost to tell them what is going on. It is incredible that the Labour party is prepared to connive in denying people their basic rights to information.
What has happened in the Department? The civil servants will have given the Minister a brief. Options will have been put before him and factors will have been considered. I have no doubt that many of the arguments about comparability with other forms of election that my right hon. and hon. Friends have made will have been put to the Minister. I see him smiling, so I assume that that is
916
what happened. However, he turned round, for political reasons—I do not know what they are, because he has not engaged in the debate to tell us this evening—and said to the officials, "No, we are not having a free mailshot, so construct me some arguments that will enable me to make that point." He has not come up with any logical explanation to deal with the coherent arguments put forward by the hon. Members for Hackney, North and Stoke Newington (Ms Abbott), for Hayes and Harlington (Mr. McDonnell) and for Preston (Audrey Wise), and unless he does so, we will know that it was a political decision, and a shoddy one at that.
The decision marks a nasty turn in our electoral processes. We have seen the first manifestation of electoral censorship. The Minister turns his face from that, but we have heard all sorts of fallacious arguments about what sort of candidate will be able to get their message across. The Government's attitude breaks the cross-party consensus that had grown up on the way in which elections should be conducted in the United Kingdom, given an election that caters for such a large and diverse electorate. What will the ethnic minority groups think when the Labour party denies people information in their own languages about the candidates? As they say, "You ain't seen nothing yet."
Mr. Bermingham: Is the right hon. Gentleman saying that in any local government election at whatever level—whether for mayors in Liverpool or Birmingham or generally—there should be a free mailshot? If he is, I will understand his argument.
Mr. Jack: My argument addresses a unique occasion in our democratic process—the first election of a mayor for London. The Minister said that the election had a unique structure, and that is why I argue that candidates should have a free mailshot. The size, scale and diversity of London demand that that type of communication be made available, and the Government have advanced fallacious cost information to justify their position. What price democracy? Tonight, if the Government have their way, electoral censorship will arrive in this country and our democratic processes will be the worse for it.
12.47 am
Mr. Simon Hughes: I wish to add a brief word in support of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) and the right hon. Member for Cities of London and Westminster (Mr. Brooke), and on behalf of those constituencies, whatever their party allegiance, that traditionally have very low turnouts. It is unarguable that it will be impossible to reach all the electors in any of the constituencies unless there is a free mailshot. I say to the hon. Member for Rotherham (Mr. MacShane), who knows as much about Europe as about Rotherham, that the largest European constituencies have always had a free mailshot in elections, so that every elector can have the facts.
People often complain that we only take an interest in them at election time. They will get their polling card, but if they get no literature, what will that do to restore the political process? What will it do to make people feel engaged? What will it do to make people feel included? What will that do to make politics more valued? It will

917
do nothing. All it will do is ensure that those who feel marginalised and excluded already feel even more alienated from the political process.
If nothing else will persuade the Government, I repeat the question that my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) asked earlier. The Government have to come up with an alternative, because if they persist in their approach, they will be defeated. That is a solution that they do not want—and neither do we, because we want the election to go ahead.
There is a debate in the Labour party about Labour re-engaging with its heartland. At the last election, the majority of people in London voted Labour. The largest number of local authorities in London are Labour controlled. It will be to traditional Labour voters that the Government do the greatest disservice.
Mr. Bermingham: Will the hon. Gentleman give way?
Mr. Hughes: No, I will not. Many of those traditional Labour voters will be disengaged; many of them will not receive communication, and many of them will feel that their Government have let them down.
I join colleagues from all parts of the country and both sides of the House in saying that the Government have about seven days in which to think again. If they do not, they will be making a terrible political mistake.
12.50 am
Mr. Gerald Bermingham: The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) refused to give way to me. If he had, I would have asked him a very simple question—the same question that I asked the right hon. Member for Fylde (Mr. Jack) a short while ago. If we are to have a referendum, and if we are to have freepost, should we not have it in all elections? Why did the hon. Member for Southwark, North and Bermondsey not give way and answer that question? It is because he does not want to know the answer, which is that if we do it for one election, we must do it for every election. It must be as simple as that. [Interruption.] Wrong. I am saying that if we do it for London, we have to do it for Liverpool, Birmingham, and everywhere else.
Mr. Mark Fisher: Will my hon. Friend accept that London has local elections? They are for the boroughs. This is a regional election involving 5 million people—the electorate is larger than that of Scotland and Wales. This is not a local election, but a regional election, and of course there should be free post.
Mr. Bermingham: That is exactly why I am saying that there should be free distribution at elections. We cannot distinguish between elections. That is why I asked the question of the hon. Member for Southwark, North and Bermondsey. It is as simple as that. If we differentiate one election and another, where the heck do we go?
12.52 am
Mrs. Jacqui Lait: I have been fascinated in both debates about the confusion that appears to be emerging at the heart of the new Greater London assembly. Having a mayor and assembly was the one clear policy for London that we thought the Labour
918
Government were introducing. We now appear to be challenging the role of the mayor and the assembly. On the one hand, the Minister insists on maintaining that this is a local government election; on the other, he is introducing to that election a system of deposits that is alien to local government elections.
The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) made exactly the point that I wish to make, which is that London is a region. It is defined as a region by the Greater London Authority Act 1999, and the London development agency is, by any definition, a function of regional government. If we are talking about regional government, we have to be talking about an organisation that is not a local government organisation.
Mr. David Heath: I wonder whether the hon. Lady can help me on a point made by the Minister. He suggested that if there was a free post for the whole of London, frivolous candidates or commercial interests would flood Londoners' post boxes with leaflets in support of their businesses. The hon. Lady represents a London constituency. Was she aware of that happening during the European elections, when similar circumstances prevailed in that London was treated as a region and there was a free post?
Mrs. Lait: The hon. Gentleman has picked up on another point that I was going to make. During my by-election, when one expects frivolous candidates, there were none, apart from the British National party. Therefore, I suggest that the idea that there are always frivolous candidates, and that the organisation of these expenses is designed to eliminate them, is a fantasy to bolster Ministers' confused arguments. I can understand their confusion. Last Saturday, I campaigned with our prospective candidate for the assembly in a nice, respectable, Conservative part of Beckenham—[Interruption.] The Minister would do well to listen to this. Reaction in that area suggested that people would vote for Steve Norris or, in fewer numbers, for—whisper his name—the hon. Member for Brent, East (Mr. Livingstone). Not a single person mentioned the right hon. Member for Holborn and St. Pancras (Mr. Dobson) or the hon. Member for Hampstead and Highgate (Ms Jackson).
When I told people that I was accompanying their prospective assembly candidate, the usual reaction was, "What's the assembly?" If there is any strong argument for free post, the understandable ignorance of the London electorate about the assembly's existence is it. There is no evidence that ordinary voters even know that there will be an assembly. I hope that the Government do not decide to solve that problem by themselves advertising the assembly. That would be an even greater travesty of democracy. We need to allow all prospective candidates for the assembly to benefit from a mailshot, just as the candidates for mayor should.
Mr. Casale: Did the hon. Lady remind her constituents on the doorstep that her party is profoundly antagonistic towards London government? Did she tell them that her party abolished the Greater London council and did not want these elections to happen? In opposing the motion, does she not intend to bring about a situation in which we have no election at all to the London authority?
Mrs. Lait: If I understand the hon. Gentleman correctly, he is suggesting that a mailshot would put

919
people off voting for the assembly. We have all argued that the opposite would be the case. The Minister would be rash to ignore the arguments advanced in favour of democracy for all Londoners and for residents of all the other cities in which the Government propose to introduce mayors. Candidates for mayors in other cities will have huge fund-raising requirements if they are to stand. In some less-well-off areas, I can see people being deterred from standing by the sums that will have to be raised if the electorate is to be reached. I beg the Government to add to their proposals for mayors of other cities the implications of what they are doing in Greater London.
Mr. Greenway: I am grateful to my hon. Friend for giving way as it means that I shall not need to detain the House with a speech. Her last point is extremely strong. The hon. Member for Preston (Audrey Wise) said that this matter goes wider than London. Does my hon. Friend agree that if we are to have regional assemblies, which many Opposition Members do not want, there should surely be free postal delivery in Yorkshire, the south-west and the west midlands, just as there was in Scotland and Wales?
Mrs. Lait: My hon. Friend is absolutely correct. He points up the confusion that lies at the heart of the proposal not to provide a mailshot for the mayoral and assembly candidates. The Government ought to think hard about this matter, and they will have an opportunity to do so when the orders are defeated in the House of Lords. They must think hard about the role of the mayor and the assembly in our constitution.
Question put:—
The House divided: Ayes 262, Noes 168.

Division No. 77]

[12.59 am

AYES

Abbott, Ms Diane

Campbell, Alan (Tynemouth)

Ainger, Nick

Campbell, Ronnie (Blyth V)

Ainsworth, Robert (Covtry NE)

Campbell—Savours, Dale

Alexander, Douglas

Cann, Jamie

Allen, Graham

Caplin, Ivor

Anderson, Donald (Swansea E)

Casale, Roger

Atkins, Charlotte

Caton, Martin

Austin, John

Cawsey, Ian

Banks, Tony

Chapman, Ben (Wirral S)

Barnes, Harry

Clapham, Michael

Barron, Kevin

Clark, Rt Hon Dr David (S Shields)

Bayley, Hugh

Clark, Dr Lynda (Edinburgh Pentlands)

Benn, Hilary (Leeds C)

Bermingham, Gerald

Clark, Paul (Gillingham)

Berry, Roger

Clarke, Charles (Norwich S)

Best, Harold

Clarke, Rt Hon Tom (Coatbridge)

Betts, Clive

Clarke, Tony (Northampton S)

Blackman, Liz

Clelland, David

Blizzard, Bob

Coaker, Vernon

Boateng, Rt Hon Paul

Coffey, Ms Ann

Borrow, David

Cohen, Harry

Bradley, Keith (Withington)

Coleman, Iain

Bradley, Peter (The Wrekin)

Colman, Tony

Bradshaw, Ben

Connarty, Michael

Brown, Russell (Dumfries)

Cook, Frank (Stockton N)

Browne, Desmond

Corbett, Robin

Buck, Ms Karen

Cousins, Jim

Burden, Richard

Cox, Tom

Burgon, Colin

Cranston, Ross

Butler, Mrs Christine

Crausby, David

920

Cryer, Mrs Ann (Keighley)

Lepper, David

Cryer, John (Hornchurch)

Leslie, Christopher

Cummings, John

Cunningham, Jim (Cov'try S)

Levitt, Tom

Dalyell, Tam

Lewis, Ivan (Bury S)

Darvill, Keith

Lewis, Terry (Worsley)

Davidson, Ian

Linton, Martin

Davies, Geraint (Croydon C)

Davis, Rt Hon Terry (B'ham Hodge H)

Love, Andrew

McAvoy, Thomas

Dawson, Hilton

McCartney, Rt Hon Ian (Makerfield)

Dismore Andrew

Dobbin, Jim

Donohoe, Brian H

Macdonald, Calum

Doran, Frank

McDonnell, John

Dowd, Jim

McFall, John

Drew, David

Edwards, Huw

McGuire, Mrs Anne

Efford, Clive

Mackinlay, Andrew

Ennis, Jeff

McNamara, Kevin

Etherington, Bill

McNulty, Tony

Fisher, Mark

Flint, Caroline

MacShane, Denis

Flynn, Paul

Mactaggart, Fiona

Foster, Michael J (Worcester)

McWalter, Tony

Fyfe, Maria

McWilliam, John

Gapes, Mike

Gardiner, Barry

Mahon, Mrs Alice

Gerrard, Neil

Marsden, Gordon (Blackpool S)

Gibson, Dr Ian

Marsden, Paul (Shrewsbury)

Gilroy, Mrs Linda

Goggins, Paul

Marshall, David (Shettleston)

Gordon, Mrs Eileen

Marshall, Jim (Leicester S)

Griffiths, Jane (Reading E)

Martlew, Eric

Griffiths, Nigel (Edinburgh S)

Maxton John

Griffiths, Win (Bridgend)

Grogan, John

Meacher, Rt Hon Michael

Hain, Peter

Meale, Alan

Hall, Patrick (Bedford)

Merron, Gillian

Hamilton, Fabian (Leeds NE)

Hanson, David

Michie, Bill (Shef'ld Heeley)

Healey John

Milburn, Rt Hon Alan

Henderson, Doug (Newcastle N)

Miller, Andrew

Hepburn, Stephen

Mitchell, Austin

Heppell, John

Hesford, Stephen

Moffatt, Laura

Hill, Keith

Moonie, Dr Lewis

Hoey, Kate

Moran, Ms Margaret

Hood, Jimmy

Morgan, Ms Julie (Cardiff N)

Hope, Phil

Hopkins, Kelvin

Mountford, Kali

Hoyle, Lindsay

Mudie, George

Hughes, Ms Beverley (Stretford)

Mullin, Chris

Humble, Mrs Joan

Murphy, Denis (Wansbeck)

Hurst, Alan

Hutton, John

Murphy, Jim (Eastwood)

Iddon, Dr Brian

Murphy, Rt Hon Paul (Torfaen)

Illsley, Eric

Naysmith, Dr Doug

Jamieson David

O'Brien, Bill (Normanton)

Jenkins, Brian

Johnson, Miss Melanie (Welwyn Hatfield)

O'Brien, Mike (N Warks)

O'Hara, Eddie

Jones, Rt Hon Barry (Alyn)

O"Neill, Martin

Jones, Mrs Fiona (Newark)

Jones, Helen (Warrington N)

Organ, Mrs Diana

Jones, Ms Jenny (Wolverh'ton SW)

Pearson, Ian

Pendry, Tom

Jones, Martyn (Clwyd S)

Perham, Ms Linda

Keen, Alan (Feltham & Heston)

Kemp, Fraser

Pickthall, Colin

Kidney, David

Pike, Peter L

Kilfoyle, Peter

Plaskitt, James

King, Andy (Rugby & Kenilworth)

Kumar, Dr Ashok

Pollard, Kerry

Ladyman, Dr Stephen

Pond, Chris

Laxton, Bob

Pope, Greg

921

Prentice, Gordon (Pendle)

Taylor, Rt Hon Mrs Ann (Dewsbury)

Primarolo, Dawn

Prosser, Gwyn

Taylor, Ms Dari (Stockton S)

Purchase, Ken

Taylor, David (NW Leics)

Quin, Rt Hon Ms Joyce

Temple—Morris, Peter

Quinn, Lawrie

Thomas, Gareth (Clwyd W)

Radice, Rt Hon Giles

Thomas, Gareth R (Harrow W)

Rammell, Bill

Timms, Stephen

Rapson, Syd

Tipping, Paddy

Raynsford, Nick

Todd, Mark

Reed, Andrew (Loughborough)

Touhig, Don

Rooker, Rt Hon Jeff

Trickett, Jon

Rooney, Terry

Truswell, Paul

Ross, Ernie (Dundee W)

Turner, Dennis (Wolverh'ton SE)

Rowlands, Ted

Turner, Dr Desmond (Kemptown)

Roy, Frank

Turner, Dr George (NW Norfolk)

Ruane, Chris

Turner, Neil (Wigan)

Ruddock, Joan

Twigg, Derek (Halton)

Russell, Ms Christine (Chester)

Twigg, Stephen (Enfield)

Sarwar, Mohammad

Tynan, Bill

Savidge, Malcolm

Vis, Dr Rudi

Sawford, Phil

Walley, Ms Joan

Sedgemore, Brian

Watts, David

Simpson Alan (Nottingham S)

Whitehead, Dr Alan

Singh, Marsha

Wicks, Malcolm

Smith, Rt Hon Andrew (Oxford E)

Williams, Rt Hon Alan (Swansea W)

Smith, Angela (Basildon)

Williams, Alan W (E Carmarthen)

Smith, Jacqui (Redditch)

Williams, Mrs Betty (Conwy)

Smith, John (Glamorgan)

Winnick, David

Southworth, Ms Helen

Winterton, Ms Rosie (Doncaster C)

Squire, Ms Rachel

Wise, Audrey

Starkey, Dr Phyllis

Woodward, Shaun

Steinberg, Gerry

Woolas, Phil

Stevenson, George

Wright, Anthony D (Gt Yarmouth)

Stewart, David (Inverness E)

Stewart, Ian (Eccles)

Tellers for the Ayes:

Stinchcombe, Paul

Mr. Mike Hall and

Sutcliffe, Gerry

Mr. Kevin Hughes.

NOES

Ainsworth, Peter (E Surrey)

Chidgey, David

Allan, Richard

Chope, Christopher

Amess, David

Clappison, James

Ancram, Rt Hon Michael

Clarke, Rt Hon Kenneth (Rushcliffe)

Arbuthnot, Rt Hon James

Baldry, Tony

Clifton-Brown, Geoffrey

Ballard, Jackie

Collins, Tim

Beith, Rt Hon A J

Colvin, Michael

Bercow, John

Cotter, Brian

Beresford, Sir Paul

Cran, James

Blunt, Crispin

Curry, Rt Hon David

Body, Sir Richard

Davey, Edward (Kingston)

Boswell, Tim

Davies, Quentin (Grantham)

Bottomley, Peter (Worthing W)

Day, Stephen

Bottomley, Rt Hon Mrs Virginia

Dorrell, Rt Hon Stephen

Brady, Graham

Duncan Smith, Iain

Brake, Tom

Evans, Nigel

Brand, Dr Peter

Faber, David

Brazier, Julian

Fabricant, Michael

Breed, Colin

Fallon, Michael

Brooke, Rt Hon Peter

Fearn, Ronnie

Browning, Mrs Angela

Flight, Howard

Bruce, Ian (S Dorset)

Forth, Rt Hon Eric

Bruce, Malcolm (Gordon)

Foster, Don (Bath)

Burnett, John

Fox, Dr Liam

Burns, Simon

Fraser, Christopher

Burstow, Paul

Gate, Roger

922

Garnier, Edward

Nicholls, Patrick

George, Andrew (St Ives)

Norman, Archie

Gibb, Nick

Oaten, Mark

Gill, Christopher

O'Brien, Stephen (Eddisbury)

Gillan, Mrs Cheryl

Öpik, Lembit

Gorman, Mrs Teresa

Ottaway, Richard

Gray, James

Page, Richard

Green, Damian

Paice, James

Greenway, John

Paterson, Owen

Grieve, Dominic

Pickles, Eric

Hamilton, Rt Hon Sir Archie

Portillo, Rt Hon Michael

Hammond, Philip

Prior, David

Harris, Dr Evan

Randall, John

Hawkins, Nick

Redwood, Rt Hon John

Hayes, John

Rendel, David

Heald, Oliver

Robertson, Laurence

Heath, David (Somerton & Frome)

Roe, Mrs Marion (Broxbourne)

Heathcoat—Amory, Rt Hon David

Ruffley, David

Hogg, Rt Hon Douglas

Russell, Bob (Colchester)

Horam, John

St Aubyn, Nick

Howarth, Gerald (Aldershot)

Sanders, Adrian

Hughes, Simon (Southward N)

Sayeed, Jonathan

Hunter, Andrew

Shephard, Rt Hon Mrs Gillian

Jack, Rt Hon Michael

Simpson, Keith (Mid-Norfolk)

Jackson, Robert (Wantage)

Soames, Nicholas

Jenkin, Bernard

Spelman, Mrs Caroline

Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

Spicer, Sir Michael

Spring, Richard

Key, Robert

Steen, Anthony

King, Rt Hon Tom (Bridgwater)

Streeter, Gary

Kirkbride, Miss Julie

Stunell, Andrew

Kirkwood, Archy

Swayne, Desmond

Laing, Mrs Eleanor

Syms, Robert

Lait, Mrs Jacqui

Taylor, Ian (Esher & Walton)

Lansley, Andrew

Taylor, John M (Solihull)

Leigh, Edward

Taylor, Sir Teddy

Letwin, Oliver

Thomas, Simon (Ceredigion)

Lewis, Dr Julian (New Forest E)

Tonge, Dr Jenny

Lidington, David

Townend, John

Lilley, Rt Hon Peter

Tredinnick, David

Livsey, Richard

Trend, Michael

Lloyd, Rt Hon Sir Peter (Fareham)

Tyler, Paul

Llwyd, Elfyn

Tyrie, Andrew

Loughton, Tim

Wardle, Charles

Luff, Peter

Waterson, Nigel

MacGregor, Rt Hon John

Webb, Steve

McIntosh, Miss Anne

Welsh, Andrew

MacKay, Rt Hon Andrew

Whitney, Sir Raymond

Maclean, Rt Hon David

Whittingdale, John

Maclennan, Rt Hon Robert

Widdecombe, Rt Hon Miss Ann

McLoughlin, Patrick

Wilkinson, John

Madel, Sir David

Willis, Phil

Malins, Humfrey

Wilshire, David

Maples, John

Winterton, Mrs Ann (Congleton)

Maude, Rt Hon Francis

Winterton, Nicholas (Macclesfield)

Mawhinney, Rt Hon Sir Brian

Young, Rt Hon Sir George

May, Mrs Theresa

Michie, Mrs Ray (Argyll & Bute)

Tellers for the Noes:

Morgan, Alasdair (Galloway)

Mr. Peter Atkinson and

Moss, Malcolm

Sir Robert Smith.

Question accordingly agreed to.
Resolved,
That the draft Greater London Authority (Election Expenses) Order 2000, which was laid before this House on 3rd February, he approved.

Children's Ombudsman
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
1.11 am
Mr. Tom Cox: I am a member of the British parliamentary delegation to the Parliamentary Assembly of the Council of Europe—a Parliamentary Assembly of 41 member states. I chair the social, health and family affairs committee of that Assembly and I am the rapporteur for the European strategy for children. The committee that I chair has produced many major reports, especially on issues that concern the welfare and protection of children, such as child abuse, international adoption, the effects of social exclusion, child labour, sexual abuse, child soldiers and refugee children. I work very closely with the United Nations Children's Fund on children's matters.
The aim of my debate tonight is to seek the appointment of an ombudsperson for children—or as some countries say, a commissioner for children. Within the Council of Europe a number of member states, such as Norway, Belgium, Sweden, Finland, Germany, Luxembourg and Iceland, already have such an ombudsperson or similar organisation to consult with children and to protect children's interests. Many countries in other parts of the world—Australia, Canada, New Zealand, Costa Rica and Guatemala—have either an ombudsperson or a commissioner. Other European countries are at present considering such an appointment. The role of the ombudsperson is to work with children, to listen to their concerns, to ensure that their rights are safeguarded and developed and to work and co-ordinate with children's organisations on issues of concern.
I have spoken many times to the people who perform the role of ombudsperson. They speak in support of that role, and describe the confidence of young people in contacting them on issues of concern. We can point to examples of European countries where an ombudsperson has been successful in developing the rights of the young and protecting their interests and welfare.
I am sure that my hon. Friend the Minister would be the first to agree that one of the major achievements on the protection and welfare of children was the United Nations convention on the rights of the child. Sadly, the Committee that I chair at the Council of Europe knows that children's interests are still often totally disregarded. In the United Kingdom, no independent body is responsible for promoting children's rights in this country. There are many excellent child care organisations and they do excellent work in the interests of young people, but I do not think that anyone would dispute that there is far too much duplication and overlapping of their work.
An ombudsperson would be there to consolidate the views of various children's organisations. There is clear evidence that that is what such organisations want. That is what they tell me, as I shall confirm later in my speech. I am often told that paper commitments are not enough and that what Governments say they will do and what they actually do are not always the same thing.
We know some of what has been done regarding our systems. Inadequate measures are in existence to enable children's views to be listened to when decisions about them are made. I regularly speak to youngsters attending
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junior schools in my constituency and, in the past two weeks, I have visited St. Mary's Church of England and Ravenstone junior school, both in Balham. The youngsters to whom I speak are knowledgeable, intelligent and want to ask many questions. They repeatedly ask, "Why don't they listen to us, Mr. Cox?" They are right. Why do we not listen to the views that youngsters want to express?
We know that not enough attention is given to the importance of respecting the best interests of children in legislation. There is no independent system of monitoring how legislation works for the benefit of youngsters. Despite Government initiatives, there is very deep concern about the welfare and protection of young children in this country. One has only to ask child care organisations for their views.
How can youngsters make their views known to a Government Department or a Minister? Do we have press or television campaigns saying that the Government are considering changing the law or introducing a new one that will concern young people and do we say to them, "We want to hear what you think about it"? We know that young people need people to pursue their rights. What independent body exists in this country with the responsibility to monitor or, indeed, promote children's rights here? If there is one, I hope that my hon. will tell the House about it.
That is surely just the role for which an ombudsperson would be responsible. I ask the Minister to check the role and work of the ombudsperson in those countries that have such a post and consider the trust, the respect and the achievements that have been made. We know that young people have views, concerns and needs, but where are their rights? We talk about human rights, but when do we talk about or develop systems in which children's rights are promoted or even talked about?
We often hear of the most appalling cases of child abuse—either sexual or physical. In last Sunday's Sunday Express, there was an article on the report that has now been published by Sir Ronald Waterhouse, who headed the inquiry into sexual abuse at children's homes in north Wales where 650 allegations of abuse were made. In that article, the child protection director of the National Society for the Prevention of Cruelty to Children, Neil Hunt, said of the inquiry:
"The disturbing facts about past abuse were that children had no one to turn to for help, and when they tried to speak out they were ignored. If these children had had access to advocacy services to stick up for them, this tragedy might well have been avoided.
Last week Sir Ronald told a conference that children in care need trustworthy and independent adults to listen to their concerns."
Yesterday, The Times published a letter from the NSPCC's chief executive and the president of the Association of Directors of Social Services, which was headed, "Abused children need a champion". It said:
"The NSPCC and the ADSS are united in calling for the Government to appoint an independent Children's Commissioner to champion the needs of UK children".
Today the House heard the statement by my right hon. Friend the Secretary of State for Wales on that report. The comments that I have read out, including those made by the leader of the inquiry, set out the role that an ombudsman would play.
I fully support the introduction in recent years of bodies to promote the interests of women and disabled people, such as the Equal Opportunities Commission and the

925
Disability Rights Commission, and the Commission for Racial Equality. However, there is still nothing for children.
The Minister may well tell me about the provisions for the children's director in the Care Standards Bill, but many organisations that work with children have expressed clear reservations about that appointment. They think that the terms of reference are too narrow and they remain committed to the establishment of an independent ombudsman. There is no great support in this country for the appointment of a children's director.
We all know that children have no vote, no political power, and often no formal way of making their views known. What influence do they have in any lobby or institution that informs political change? We know that when children's issues are determined, whether at a national or local government level, the responsibilities for children's services are often split between different departments and there is poor communication or collaboration between them.
We should think of the appalling, brutal cases of child abuse with which we are familiar. In many of those cases, children died as a result of the abuse that they suffered. The point that is repeatedly made in the inquiries that follow those cases is that there was a lack of co-ordination between the agencies that were supposedly involved in securing the welfare of the abused children.
The committee on the rights of the child, which was established to monitor the implementation of the United Nations convention, said that without an independent role to monitor progress, children's rights are rarely given the priority and scrutiny that they require. The committee clearly recommended the appointment of an ombudsman or a commissioner in the United Kingdom.
I have spoken of the contact that I have with schools in my constituency, and I am sure that all Members have such contact. I suggest to my hon. Friend an ombudsman would be the best way to seek young people's views; to ask them to become involved in projects; to make them aware of the distribution in schools of leaflets and reports on children's rights; and to inform them of issues under discussion which concern them. Indeed, in countries where the post of ombudsperson or commissioner has been established, it has given young children their first opportunity to have direct access, to make their views known, and to be listened to. That is what I want this country to do.
I have already mentioned the views of organisations that work with children in various roles. I have a list of more than 100 such organisations in the UK, all of which support the appointment of an ombudsperson or a commissioner for children. I shall give a short list: the Child Poverty Action Group, Barnardos, the Association of Directors of Social Services, Gingerbread, Family Welfare Association, the Association of Lawyers for Children, the Local Government Association, the National Association for Maternal and Child Welfare, the National Children's Centre, Save the Children, the Council for Disabled Children, the National Children's Bureau, the National Society for the Prevention of Cruelty to Children, the Royal College of Nursing, UNICEF UK and Oxfam UK. That is an impressive list.
There is also wide support in the country for the appointment of an ombudsperson or commissioner for children. A UK opinion poll held in December 1996 gave
926
the following results: 85 per cent. of the people asked said that there should be an ombudsperson; 13 per cent. said that there should not; and 2 per cent. said that they did not know. There is clear and overwhelming support for such an appointment.
In those countries that already have ombudspersons or commissioners, their achievements, the respect they command and the way in which young people relate to them are known. I suggest that it is time for this country to move forward and appoint such a person to promote awareness of children's rights; to analyse and comment on proposed Government legislation or policies in respect of their effect on children and young people; to examine failures to practice and follow guidelines on children's rights; to undertake or commission research relevant to children's rights and interests; and, above all, to establish a system in which children and young people can contact with confidence someone they know will listen to them, in the knowledge that their rights and interests will not be ignored. Many organisations and the vast majority of the general public in this country believe that that would be achieved by the appointment of an ombudsperson.
I, with others, will listen with great interest to the Minister's reply. I hope that what I seek will link with the proposals of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly for the welfare and protection of young children.
1.29 am
The Minister of State, Department of Health (Mr. John Hutton): I thank my hon. Friend the Member for Tooting (Mr. Cox) for the opportunity he has given the House to discuss the general issue of the welfare and well-being of children. I know that he feels strongly about such issues and I assure him that I share his feelings.
Today, we all have on our minds the particular needs of children in the care of local authorities. Earlier today, the House heard the statement made by my right hon. Friend the Secretary of State for Wales about the report of the inquiry into the abuse of children in care in north Wales. My hon. Friend knows that the Government will give careful and urgent attention to the recommendations of Sir Ronald Waterhouse.
My hon. Friend drew attention to the fact that Sir Ronald today recommended the appointment of an independent children's commissioner for looked-after children in Wales. Our proposal, to which my hon. Friend referred, to appoint a children's rights director to the proposed National Care Standards Commission captures the spirit of that recommendation.
Children's social services are one of the most difficult and demanding categories of social care. All the professionals involved have to make tough decisions and deal with some difficult situations. However, if we as adults find this area difficult and intimidating, we should never lose sight of what it must mean for the children. It is our responsibility to get the services right and we fully intend to discharge it.
The Government agenda for children is ambitious and wide ranging. In November 1997, the Government published the report known as the "Review of Safeguards for Children Living Away from Home"—the Utting report. It made 20 key recommendations and more than 130 other recommendations, with the principal aim of improving protection for children who live away

927
from home. The Government published their response to the Utting report in November 1998. The document sets out a detailed and comprehensive programme of policy and management changes across government to deliver a safer environment for all children who live away from home. Many of the Utting report recommendations are being addressed through the introduction of the Care Standards Bill and the Children (Leaving Care) Bill.
A ministerial task force was established in November 1997 to take forward the Government's response to the children's safeguards review. It involves Ministers from 10 Departments and outside representatives from social services, education, the police and the voluntary sector. It is an excellent example of working across government to deliver a safer environment for all children who live away from home. As my hon. Friend knows, the task force's job is to co-ordinate and take forward urgently the Government's response to the Waterhouse inquiry.
My hon. Friend did not refer to the Government's "quality protects" programme, which is a flagship policy of which we are proud. We are seeing it through the three years of the current spending review. My hon. Friend knows that it is a £380 million programme. We want a transformation in the quality of care that local authorities provide for looked-after children.
The care system must help children and young people to make the most of their talents, to achieve at school and in further education, and to become confident and successful adults. Local councils must act as proud and concerned corporate parents who know about their children's achievements and do all they can to meet their needs.
We must also provide earlier support for children and families, which will mean that fewer children suffer abuse and neglect. My hon. Friend referred to a child protection system. Such a system must provide effective safeguards for all children, wherever they live. Positive action on all those important matters is now under way.
My hon. Friend mentioned the importance of listening to children. Listening to their views and wishes is a key principle underpinning the "quality protects" programme. We issued guidance to local authorities in October 1999 which stressed that
"particular attention should be given to the involvement of young people collectively and to enhancing their individual voices, for example through the development of independent advocacy services."
That is a priority area for grant funding under the "quality protects" programme. In the first year, £5 million was allocated to developing children's participation. That will again be a funding priority in the second year.
Careful assessment of local authority management action plans, which must be submitted to the Department under the "quality protects" programme, will enable us to identify accurately and precisely the progress that has been made to date and where money should be targeted to develop that work in future. That is an unprecedented investment in listening to children.
Listening to children makes sense not only in terms of improving services; it can also contribute enormously to promoting their safety and welfare. However, it should not be the job of one person—a commissioner, an ombudsman or anyone else—to listen to children.
928
We need a culture change for children's social services which is powerful enough to ensure that listening to children is the job of everyone who is involved with their care. We believe that, and we are taking steps to ensure that it happens. "Quality protects" is beginning that process of change.
We are also trying to practice what we preach. That is why young people are being involved with the development of all the major policy initiatives in this area and will continue to be so in future. They are, for example, full members of the ministerial task force that is developing policy in this area.
The challenge for local authorities in the second year of "quality protects" is to implement their local action plans fully, improve services and achieve much better outcomes for children and young people. Next year, we are increasing the grant available from £75 million to £120 million and we expect real improvements to be delivered in return for those extra resources. My hon. Friend will be glad to know that in the following year the grant will be increased to £180 million. We are making good progress. By the end of next month all authorities expect—for the first time—to meet their statutory duties to inspect children's homes, and there has been an increase in the number of adoptions and the support being given to those leaving care and in councils listening to children.
Mr. Hilton Dawson: Will my hon. Friend give way?
Mr. Hutton: I will not, if my hon. Friend will forgive me. I have more to say.
The Care Standards Bill, which my hon. Friend referred to, makes an important contribution here. The debates in Committee in the other place were completed on 18 January, and it sets out a wide reform of the systems to protect vulnerable people and to improve standards in children's homes, care homes, private and voluntary health care and other care services. It will establish a National Care Standards Commission—a new independent body to regulate children's homes and services and care homes for the elderly and disabled people.
As my hon. Friend said, the Bill will establish a national children's rights director, which will be a senior post in the commission. Further consultation is required on the specifics, but the Government believe that the appointment will ensure that children's rights and safeguards are given the highest priority by the new commission. It is an important and innovative development for children's welfare.
The children's rights director will be a unique appointment and a real breakthrough for looked-after children. The postholder will, for the first time, be able to take a national overview of the rights of looked-after children and the way in which they are being cared for by local authorities. The scope of the post was originally set out in the White Paper "Modernising Social Services", which envisaged a number of roles. He would, for example, be able to help the commission to give full and effective coverage of children's services and rights within its statutory regulatory responsibilities and its reports on the discharge of those responsibilities.
The director would also be able to ensure that the views of children placed in the facilities and services regulated by the commission were given proper weight in that

929
regulatory task, and he would report directly to the chief inspector of the social services inspectorate any significant evidence relevant to the rights and safety of children gained from the commission's regulation and assessment of services for children. That might help local authorities or other providers to improve the services and support that they give to children.
I emphasise to my hon. Friend that we shall be very happy to discuss the role and exact function of the children's rights director. Hon. Members will accept that his role and function need to be consistent with the role and function of the National Care Standards Commission as a whole. I make it clear that the director will be senior in the commission. We are well aware that further consideration of and consultation on the specific role is required, and we shall of course ensure that he or she is appropriately supported and that other members of the commission also have significant experience of children's social services and related issues.
The measures that the Government have already taken show clearly that we are committed to ensuring, through a range of initiatives, that children's rights remain clearly and firmly on our collective agenda. Ministers have previously considered whether there is a case for a children's rights commissioner with responsibilities extending further than looked-after children, and discussed it with children's rights groups early in 1998.
930
In our response to the second report of the health committee on children looked after by local authorities, which was published in December 1998, we announced our decision not to proceed with the appointment of such a commissioner.
The Government are not convinced that it would be desirable to create a new national mechanism additional to the courts, the police and the prosecuting authorities, the various existing commissioners, including the Parliamentary Commissioner and the health and local government ombudsmen, the responsibilities of local and health authorities to deal with complaints, and the various inspection and regulatory arrangements for ensuring that safeguards for children are properly implemented and that their voices are heard.
This has been a short, but none the less useful, debate. I can assure my hon. Friend that we are committed to safeguarding the welfare of children. The Government are determined not to let children down and to ensure that their voices are fully heard. The prompt and decisive action that we have taken today in response to the Waterhouse report amply demonstrates our commitment to ensuring that this happens in the future too.
Question put and agreed to.
Adjourned accordingly at twenty minutes to Two o'clock.