Commons Sitting of 11 July 2002

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair
PRIVATE BUSINESS
BARCLAYS GROUP REORGANISATION [Lords] Considered, to be read the Third time.
Oral Answers to Questions
  TRADE AND INDUSTRY
  The Secretary of State was asked—
  TRADE AND INDUSTRY

    Sub-post Office Network
    Tim Loughton: What recent representations she has received regarding the future of the sub-post office network. [66366]
    Dr. Julian Lewis: What recent representations she has received regarding the future of the sub-post office network. [66369]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): I receive representations about the future of the sub-post office network from numerous sources, reflecting the valuable role that sub-post offices play in their local communities, particularly in rural areas and for the elderly and less mobile. The Government are committed to ensuring that the post office network has a thriving future.
    Tim Loughton: Well, that did not tell us much. A recent letter from Consignia to Members of Parliament stated:
    "Our network of post office branches is too expensive to maintain…loss of traditional business, such as benefits being paid into bank accounts, will only make this situation worse."
    How do the Government intend to deliver on the Prime Minister's pledge that all those who wish to continue to receive benefits in cash will be able to do so if more than half the sub-post office network is closed, especially in places such as Worthing in my constituency where there are a great many old people who simply will not be able to travel to the few post offices that are still open? Can the Secretary of State also guarantee that the post office-based universal bank will be open for business in April 2003, given both the recent resignation of Basil Larkins, the
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    architect of the universal bank, and the fact that apparently no decision has even been taken on which software it will use?
    Ms Hewitt: We have significantly reduced the number of post office closures, especially in rural areas—[Interruption.] we have significantly reduced the number of post office closures. Two years ago, we lost more than 500 sub-post offices across the country, most of them in rural areas; last year, we halved the rate of closure, and more than halved it in rural areas. We are already seeing the benefits of our decision to put a duty on the company to prevent avoidable closures in rural areas. That is already benefiting customers of the Post Office
    We have made it clear that all claimants will be able to go on collecting their benefits in cash from the post office, whether they are using network banking, a new basic bank account or a post office card account. The universal banking service is indeed on track for introduction by April next year. The important point, which I have stressed to the sub-postmasters and mistresses, is that whatever kind of bank account or post office card account the claimant is using, they will be able to do their banking and get their cash at the post office, and the sub-postmaster or mistress will be paid for that.
    Dr. Julian Lewis: That answer sounded rather like Stalin claiming credit for the fact that he was running out of victims in the great purge. Is it not a fact that, up and down the country, hundreds if not thousands of communities fear the loss of their sub-post office, and hundreds if not thousands of people who invested their life savings in building up the business of the sub-post office network are wondering what is going to happen to their careers? When those post offices close—as they will continue to do—what compensation will the Government offer those people who have invested their life savings in building up businesses that are about to be destroyed?
    Ms Hewitt: The previous Conservative Government did nothing to reduce the rate of post office closures, nor did they do anything to compensate sub-postmasters and mistresses who needed and wanted to close their businesses. What we have done is to agree with the National Federation of Sub-Postmasters a compensation package that will include not only compensation for sub-postmasters and mistresses in urban areas whose post offices are closing, but investment grants for sub-postmasters and mistresses to improve the remaining offices so that we can deliver a much better service.
    The fact is that there are too many underused post offices in some of our towns and cities. Indeed, a sub-postmaster in a part of my city—Leicester—said that there were 10 sub-post offices within a square mile. They were all competing against each other and none was able to make a sensible living or deliver a good service. That is why, under urban reinvention, the Post Office will be making proposals for a reinvention of that network, which will mean a better service for customers and a much better future for the sub-postmasters and mistresses.
    Mr. Dennis Skinner: Is my right hon. Friend aware that it is not all black over Bill's mothers? In Bolsover, where there are more than 20 post offices in a constituency 30 miles long and where we have miners' welfare, there is an imaginative scheme to save the post

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    offices—although we have hardly lost any over the years; I spend my time trying to keep them open instead of yapping in here. The latest scheme is to make sure that we get the miners' welfare at Palterton to take on the post office because we could not find anyone to look after it. That looks like being a rip-roaring success. Cheques from the DTI will be gladly received.
    Ms Hewitt: My hon. Friend is absolutely right. In many parts of the country, we are getting partnerships between community organisations and the Post Office so that we can keep post office services open, but not simply as part of free-standing post offices because half of the rural post offices that closed last year were part-time and had only 70 customers or fewer a week. By combining them with miners' welfare or other community organisations, we can substantially increase access to post office services. That is what we want to do, and I would encourage my hon. Friend's constituents to apply for a grant from our community fund, which is designed to support exactly that kind of initiative.
    Mr. LindsayHoyle: Is my right hon. Friend aware that while Post Office bosses chatter, we see the network continuing to close? Will she use her good offices to ensure, as the sole shareholder, that the Post Office will remain a universal service but a sustainable one so that it will continue into the future? We need a good input from her good self.
    Ms Hewitt: One of the most important things that my hon. Friend the Minister for E-Commerce and Competitiveness and I have done is to ensure that we have a new chief executive for the post office network—David Mills, who comes from a retail banking background. He is already considering ways in which we can make the post office network much more commercially successful, with products such as household and travel insurance and so on, which are already proving hugely successful. As I have said in the House previously, I am expecting David Mills and Allan Leighton to produce a new strategy for the future of the network in September, and we will do everything to support them in ensuring that our post offices are not only as commercially successful as possible, but continue to play their absolutely vital role in local communities.
    Brian Cotter: May I point out to the Secretary of State that there is a great lack of confidence in the Government among sub-postmasters? That has not been helped by the fact that in my part of the country claimants are saying that they have received letters from the Department for Work and Pensions asking for their bank details with a view to the payment of benefits in the future. Will the right hon. Lady investigate that urgently with that Department? Irrespective of whether that is the case, may I urge her to ensure that letters are sent to claimants clearly saying that they can carry on receiving their payments over the counter?
    Ms Hewitt: We have already stated publicly and clearly that all claimants who want to get their benefit in cash at post offices will be able to do so. I want to stress a point that I have made both in the House and directly to the National Federation of Sub-Postmasters: the decision about what kind of account to use for benefit payments in
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    future will be one for the claimant, but irrespective of whether claimants use their own existing bank accounts, new bank accounts, basic bank accounts, or the new post office card account, they will continue to be able to get their cash over the counter at post offices. They will also be able to gain access to a much wider range of banking services thanks to the universal bank, and the postmaster and postmistress will continue to be paid for those services. That will be hugely beneficial to sub-post offices in ensuring that they not only keep their existing customers but get new ones as well.
    Mr. Russell Brown: May I tell my right hon. Friend that I met representatives of Consignia last week, and one of the issues that we discussed was the whole concept of the one-stop shop pilot project in Leicestershire and Rutland? They have assured me that that has been a significant success and that the footfall that they required has been achieved. What plans are there to roll out that programme UK-wide?
    Ms Hewitt: We have now received the evaluation of the results of the pilot project, and we have been considering the response of members of the public, who in many ways have welcomed the very useful access to Government information and services that "Your Guide" has provided. We have considered whether "Your Guide" has brought in new customers to the post offices in those pilot areas, as that was part of the intention. Of course we are considering whether a national roll-out of the scheme would provide value for money to Departments. We will publish the evaluation report shortly, and then discuss it with all the interested partners before making a decision on a national roll-out.
    Mr. John Whittingdale: But the Postcomm report advising the Secretary of State how to provide financial support for the rural network has been sitting on her desk for six months. Four weeks ago she said that an announcement was imminent. The performance and innovation unit's report said that the full roll-out of the "Your Guide" electronic information system should be achieved by mid-2002, yet today the Secretary of State is unable even to say whether the Government have decided to go ahead with it. We have had no details of the universal bank, despite calls that it should be up and running well before the April deadline. There is less than nine months to go before the changes to the system take place, but all we have had are words. Time is running out. When will the Government start delivering?
    Ms Hewitt: The Government are already delivering, as the hon. Gentleman knows because we have discussed this matter on many occasions in the House. We have already radically restructured the management and leadership of the Royal Mail Group and of the Post Office. We have a new chief executive in place and we will soon have a new chairman for the Post Office network itself in place. The universal banking service, on which an enormous amount of work has been done, is on track, just as we said it would be. Sub-postmasters and mistresses will benefit enormously from the creation of the universal banking service. We will meet the commitment that the Prime Minister gave that benefit claimants will continue to be able to obtain their benefits in cash at the post office. We

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    have significantly reduced the rate of post office closures, particularly in rural areas, and we are considering how best to put in a payment for the community service provided by rural post offices without in any way reducing the incentive to sub-postmasters and mistresses to maximise their commercial income as well.
    As I have just explained, we will publish the evaluation report on "Your Guide" shortly, and we shall consider value for money for the Government and, crucially, for the post offices. I should be astonished if the hon. Gentleman expected us to make a decision without taking value for money into account. We have, as I have said, a new chief executive who will come forward in the autumn so that we can put in place a comprehensive strategy to guarantee the future of our crucial post office services.
    Mr. Whittingdale: All that the Secretary of State seems able to say is that it will be all right on the night. Is she aware that this morning the National Federation of Sub-Postmasters, the Village Retail Services Association, the Federation of Small Businesses, the Forum of Private Business, as well as Help the Aged, the National Association of Citizens Advice Bureaux and Postwatch, the Government's own consumer body, have all joined us in expressing concern about the deafening silence from the Government on these vital issues? If she is not willing to listen to Conservative Members, perhaps she will start listening to those organisations.
    Ms Hewitt: We have been listening all the way through to all the organisations to which the hon. Gentleman referred and we have worked closely with them. The National Federation of Sub-Postmasters has warmly welcomed the compensation and investment package that we have put in place—some £210 million—for the urban reinvention programme. We discuss regularly with the federation and other partners who have an interest in the issue how best we can deliver on the strategy that was set out in the PIU report, and we shall continue to do that so that we have the action, not the words, that will deliver the post office services that everybody wants to see.

    Automotive Industry
    Lynne Jones: What action she is taking to support the automotive industry. [66367]
    The Minister for Employment Relations, Industry and the Regions (Alan Johnson): Recently my right hon. Friend the Secretary of State announced a package of £45 million for the automotive sector to include an automotive academy, two centres of automotive excellence, and support for cross-regional supply chains as a first step to implementing the recommendations of the automotive innovation and growth team. In 2001 the Department delivered regional selective assistance and training grant offers totalling £35 million. The Department also spent about £2 million last year on various other projects to promote competitiveness and productivity improvements in the sector. The Department is continuing to support process improvements through the Society of Motor Manufacturers and Traders industry forum and
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    research and development through the foresight vehicle programme, with commitments to date exceeding £13 million.
    Lynne Jones: My hon. Friend is aware that the livelihoods of many families in the west midlands depend on the success of the automotive industry. I welcome the setting up of the innovation and growth team and its report. My hon. Friend has given us some details of the action taken by the Government. What is he doing specifically to assist the components sector, which faces difficulties as a result of increased outsourcing from the eurozone?
    Alan Johnson: My hon. Friend raises an important point. We have 17 of the world's top 20 tier 1 component manufacturers located in the UK. The recommendation of the innovation and growth team specifically dealt with that in its work on the supply chain. My hon. Friend knows that we had a project in the west midlands called "Accelerate", which we are spreading across the country, in accordance with the recommendation from Sir Ian Gibson and his team. That focuses on the supply chain, and component manufacturers in particular.
    Malcolm Bruce: How does the Minister think it will help the automotive industry for the DTI's recommendation that in the end-of-life vehicle directive, responsibility for the final disposal will rest with the final owner? Does he think that people who have bought a cheap car will accept that responsibility at the end of its life, or does he anticipate that we will have an increasing number of abandoned cars, which already cost us £400 million a year? Does he not believe that that will reflect badly on the automotive industry? We need a system that will ensure that vehicles are disposed of safely and quickly.
    Alan Johnson: The issue to which the hon. Gentleman refers is still under consideration in Europe. As regards helping the industry, we have been instrumental in removing the block exemption scheme and in particular the location ban clause, which will allow retailers in this country to offer consumers better value in terms of new car sales. That, in turn, will help the automotive industry.

    Small Business
    David Hamilton: What steps she is taking to increase investment in basic skills among small firms. [66368]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The Government are committed to raising the level of adult literacy and numeracy in the work force and aim to provide free high-quality training and advice on basic skills for all small businesses. We have already trained 447 workplace basic skills brokers and we are recruiting employer champions, all with a proven basic skills track record in their sector, to help guide other businesses.
    David Hamilton: When I started in the coal industry in Midlothian at the age of 15, there were 12 companies employing more than 1,000 people. In Midlothian now, there are 1,000 companies employing fewer than

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    12 people. It is therefore critical that people acquire not just the basic skills, but the trade skills that are needed throughout the area. In the past, it was easy to get plumbers, electricians and so on, but now it costs an arm and a leg to get them, and they come when they choose to come, because there are so few in the area. How can the Government assess those micro-industries, which in most cases are family companies, to see how best they can deliver, so that we remain the fourth state in the world in economic terms?
    Nigel Griffiths: My hon. Friend is right. The Government already support training in small businesses through the small firms training loans scheme. We strongly support modern apprenticeships. My hon. Friend will share my pleasure at the fact that 728 young people resident in Midlothian are working towards vocational qualifications through skill seekers' training programmes. We are committed to training and we welcome all the support that we are getting from small businesses, as well as from all hon. Members.
    Mr. Richard Page: The Minister will be aware that small firms have a limited time horizon, and their employees have great difficulty in getting away from work for any sort of training. As we are speaking of hundreds of thousands, if not millions, of small businesses, what are the Government doing to support Learn direct on the Internet? What targets are they hoping to achieve for the hundreds of thousands of businesses that will qualify for such support, and how many people have indicated an interest so far?
    Nigel Griffiths: I am grateful to the hon. Gentleman for highlighting Learndirect. I had the pleasure of visiting J. and K. Ross in Warrington on 29 March this year to see the firm's pilot Learndirect pod. It is a worthwhile and valued project. We aim to roll it out as quickly as possible. We will learn from the pilots and then, I hope, apply them nationally.
    Mr. Tony McWalter: Does my hon. Friend agree that one way of improving basic accountancy and engineering skills is for workers in small firms to form that firm as a co-operative? Will he ensure that the Small Business Service is mindful of the virtues of co-operative forms of organisation when it gives advice to small firms about their training needs?
    Nigel Griffiths: I am grateful to my hon. Friend for highlighting that aspect. When I was in Plymouth I was able to visit a social enterprise and to learn from my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) the great value of co-operatives there. I also know of co-operatives elsewhere in the country.
    I join my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) in stressing the importance of co-operatives, the contribution that they make to the economy and the contribution that they make, which he asked me to highlight, to uprating the skills of the work force. Their commitment is second to none.
    Mr. Jonathan Djanogly: Basic skills, including reading and writing, are grossly inadequate in this country and rapidly falling behind those of our European competitors, and yet the Government
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    consistently fail both to support the further education sector in the way that they should and to put in place initiatives to encourage businesses to work productively with the FE sector to the benefit of all concerned. Would the Minister care to comment?
    Nigel Griffiths: I was shocked to learn that as many as 7 million people in the work force are functionally illiterate; that is the case, according to Digby Jones of the CBI. I believe that that figure is an indictment and an indicator of the sad decline in education in the 18 years from 1979. We are doing a great deal, as I have highlighted in earlier answers, to reverse functional illiteracy in the work force, and my right hon. Friend the Secretary of State for Education and Skills is doing a great deal to ensure that before people reach the work force we eliminate that sort of functional illiteracy—a shameful legacy of a previous Government.
    Jim Sheridan: Will my right hon. Friend recognise, as many of the more progressive employers throughout Britain do, the valuable work that the trade union learning reps do at the workplace? Will he use his good offices to work with the trade union movement in rolling out that programme, particularly among small businesses?
    Nigel Griffiths: My hon. Friend is quite right, and I am very pleased that in the Employment Act 2002 we have extended those facilities. Indeed, it is one of the great benefits of employers working with and recognising trade unions that they can ensure that the work force embrace that learning experience and upgrade their skills. That is vital for the modern economy and, as my hon. Friend the Member for Midlothian (David Hamilton) pointed out, as more and more small businesses become the driving forces in the economy, it is vital that they too have the skills to allow us to compete in the modern world.

    Agricultural Produce
    Mr. George Osborne: What action her Department is taking to reduce barriers to trade in agricultural produce. [66371]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): We are working with our partners in the European Union and the World Trade Organisation to deliver the Doha development agendas, which commits us to substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support.
    In parallel, of course, we are pressing within the European Union for significant reform of the common agricultural policy.
    Mr. Osborne: I thank the Secretary of State for that answer. She will be aware that while the developed world spends £50 billion on aid to developing countries, we also spend £250 billion on agricultural subsidies and on tariff barriers which shut the poorest countries of the world out of our markets. I would agree with the right hon. Lady that we should practise what we preach when it comes to free trade and open markets. Will she assure me that the British Government will do all that they can not to let

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    other European Governments—particularly the French Government at the moment—stop proper reform of the CAP and to pursue that agenda through the WTO?
    Ms Hewitt: I am entirely in agreement with the hon. Gentleman. We welcome the publication earlier this week of the European Commission's mid-term review document on agricultural support. It will certainly form a good basis for discussion within the European Union, which reflects United Kingdom thinking on many topics but does not go as far as we would like. However, we will continue to argue very strongly within the European Union for a shift away from subsidies that are linked to production, to income support for farmers that is linked directly to environmental maintenance, and to a slashing—indeed, elimination—of the appalling export subsidies that do so much damage to farmers in developing countries. I am very glad that we shall have the support of at least the hon. Gentleman, and I hope his party, in pursuing those very important reforms.
    Mr. Andy Reed: In discussions between the all-party third world debt group this week and high commissioners from west Africa and other countries in the region, it was clear that, despite all the efforts that we are making on debt relief and on aid, the crucial difference that will be made for these countries will be by our giving them free access to western European markets, particularly for goods that are both produced and have value added in those countries. I understand that the negotiations will take some time, but will my right hon. Friend ensure that real urgency will be put into them? The situation facing Africa as a whole is so urgent that, unless things are done in months rather than years, many will suffer as a consequence.
    Ms Hewitt: I entirely agree with my hon. Friend's points. He will know that my right hon. Friend the Prime Minister has been pushing and working immensely hard for a new partnership for Africa that will include not only access for African producers to markets in the west—following the example of the European Union's everything but arms initiative—but will also encourage Governments in those developing countries to pull down the tariff and trade barriers that they apply against other developing countries. There is huge scope there for greater trade. I also agree that there is an enormous responsibility on the European Union, as we are the biggest provider of agricultural subsidies in the world, and we must stop that.
    Mr. Roy Beggs: What action have the Government taken to promote fair trade in agricultural produce within the United Kingdom, which would provide the primary producers of agricultural products with cost of production and some fair reward for their investment in labour, which wholesalers and retailers can achieve with much less risk than primary producers?
    Ms Hewitt: The hon. Gentleman raises an extremely important point. As he will be aware, the whole issue of the relationship between the supermarkets in particular and the producers in the farming community has been considered extensively by the Office of Fair Trading and the Competition Commission. We now have a code of
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    practice agreed by the retailers with the Office of Fair Trading that is designed to give the producers of our food a much fairer deal in that marketplace.
    Mr. Ian Davidson: Can I urge the Secretary of State to do as much as she can to abolish the common agricultural policy, not only to ensure that imports are allowed from the developing world and to cut the costs of living for families in this country—each of whom pay more than £20 a week in additional food costs—but to try to reduce the dependency culture that we have built up among farmers?
    Ms Hewitt: I agree entirely with my hon. Friend that radical reform of the common agricultural policy will deliver enormous benefits to our consumers, benefits to farmers and rural communities, and, as we have been saying, real benefits to farmers and communities in some of the poorest countries of the world.

    Accounting Standards
    Mr. Desmond Swayne: If she will make a statement about the findings of the review of accounting standards. [66372]
    The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): The group set up in February to co-ordinate the responses of the key regulators to issues for audit and accounting raised in the aftermath of Enron—and now WorldCom—will produce an interim report by the end of this month. The Government have made it clear that it is important to restore confidence in the independence of auditors.
    Mr. Swayne: Does the hon. Lady agree that our procedures are more robust, largely as a consequence of the lessons learned from the Mirror Group Maxwell affair? If so, will she say why the reaction of the stock market in this country has been more alarming even than that in the United States?
    Miss Johnson: I agree with the hon. Gentleman that our systems appear to be more robust than those of the United States. Indeed, the UK's principles-based regime is a more effective basis for accounting than the rules-based system of the United States. Clearly, consideration is now being given to what changes might be made across the Atlantic. The response of the markets is unsurprising, because no one suffers more than business if the legitimacy of business is called into question. We believe that trust and confidence are key, which is why it is so important that confidence must be restored.
    Mr. Andrew Love: Does my hon. Friend agree that accounting standards cannot be entirely divorced from corporate governance and, in particular, the role of non-executive directors? Does she also agree that such directors should be more independent, take responsibility for the audit function and report directly to the annual meeting?
    Miss Johnson: I certainly agree with my hon. Friend about the importance of non-executive directors. That is why the Government have commissioned the review that is being conducted by Derek Higgs into their role and

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    effectiveness. The review was conceived before the events at Enron and WorldCom, but it is highly relevant to them. There is a question about the composition, duties and effectiveness of audit committees, and the review will look into it. We will consider the review and any other issues that arise post-Enron.
    Dr. Vincent Cable: Does the Minister accept that investor confidence in accounting standards has been seriously undermined as a result of the involvement of leading accounting companies in a succession of audit failures? If British standards are superior, as she said, why does she propose to abolish them in 2005 and replace them with an American-dominated global standard that will be significantly weaker?
    Miss Johnson: We certainly do not propose to abolish those standards and to replace them with any weaker ones. It is clear from current discussions in the USA that there may be significant changes in approach. Negotiations are currently under way to modernise EU accounting directives and international dimensions are also under discussion. Like the hon. Gentleman, we are keen, whatever happens, to examine ways to regain confidence in the independence of the auditor on both sides of the Atlantic, and we look forward to seeing regulatory activity and reform to support that aim.
    Mr. Colin Challen: Does my hon. Friend agree that we would have higher accountancy standards if there were a complete separation of accountancy services from consultancy services? How can accountancy firms advise the Government on PFI, but participate at the same time in consortiums that are making bids for those projects? We then get advice from other firms, such as Arthur Andersen, which seems to be the only advice yet available on the value for money of those bids. Does she agree that there should be complete separation?
    Miss Johnson: I agree with my hon. Friend that the relationships between auditors and clients can be too cosy and that there is a need to demonstrate independence. As my right hon. Friend the Secretary of State said in her recent speech to the Cambridge university faculty of law, there is a risk of having too many conflicts of interest. We are currently exploring questions in relation to audit firm rotation, more frequent rotation of partners and the supply of non-audit services to audit clients.
    Mr. Nigel Waterson: In the wake of the problems faced by companies such as Enron, WorldCom and now Qwest, it is clear that the overwhelming priority is to reassure investors and markets. The Opposition welcome the review of accounting standards. However, does the Minister agree that when all the evidence is collected, many of the problems may turn out to have been caused by simple fraud rather than audit failures? Is not a calm, measured response required, rather than a rush to place unnecessary extra burdens on business?
    Miss Johnson: I entirely agree with the hon. Gentleman that in some of those instances outright fraud has clearly been perpetrated. We believe that it is important that regulators identify the changes that they think are needed, including any that involve accounting
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    standards, audit firm rotation or the other issues that I mentioned. The co-ordinating group, which I lead with my hon. Friend the Financial Secretary, is ensuring that those issues are well thought through and properly "ordinated, and the Government will make any further changes that they believe are necessary. I agree that a considered response is needed.

    Broadband
    Jim Knight: What steps she is taking to encourage the take-up of broadband in rural areas. [66373]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): On 26 June, we announced a new broadband network of dedicated broadband advisers to help to boost roll-out and take-up of broadband across the UK. The Government have also made available £30 million as a broadband fund to help the regional development agencies and the devolved Administrations to develop schemes to extend broadband access.
    Jim Knight: I thank the Minister for that reply. I agree that we are making some progress in the roll-out of broadband to rural areas. Indeed, this week BT Group wrote to inform me that it is upgrading the exchanges at Portland and at Swanage for its asymmetric digital subscriber line—ADSL—broadband service. However, I remain concerned about more sparsely populated areas that are not as commercially attractive. I am particularly interested to know what the Department is doing to ensure that cross-Department initiatives, such as the regional broadband consortiums from the Department for Education and Skills, are co-ordinated so that there is no duplication, so that opportunities for piggybacking are maximised, and so that the roll-out of broadband, especially in rural areas, is accelerated.
    Nigel Griffiths: It is very important that no one is left behind in the roll-out of broadband, and my hon. Friend the Minister for E-Commerce and Competitiveness is taking three steps to ensure that it reaches rural areas more effectively: first, facilitating satellite broadband deployment through a fast-track online licensing regime and a review of planning regulations for satellite terminals; secondly, encouraging infrastructure sharing by industry to reduce the costs of roll-out; and thirdly, using more effective procurement of the public sector's broadband requirements to improve value for money and, in particular, to drive broadband into rural areas. I hope that those three measures will enable my hon. Friend's constituents to benefit from broadband through both private sector suppliers and the public services on which we all depend.
    Michael Fabricant: The Minister is right to mention satellite, but he knows as well as I do that that is very expensive. He may like to read a report about that in last month's "IEE Review". Given that the Government are very much concerned with joined-up government, has he read the report by the Select Committee on Culture, Media and Sport, entitled "Communications", which includes a chart showing the penetration of broadband in this country? I am not talking about low band, but middle

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    and high band broadband. In South Korea, penetration is 32 per cent., in Sweden it is four times that in Britain, in Italy it is twice that in Britain—indeed, the United Kingdom is right at the bottom of the table.
    Although I am pleased to hear that the Government are trying to expand broadband, will the Minister admit that we have a long way to go? Will he ensure that middle and high broadband are expanded, rather than the very low rates of transmission which are not much better than a telephone line?
    Nigel Griffiths: The hon. Gentleman is using out-of-date figures, and using them very selectively. I think that hon. Members will accept the straightforward fact that the need to drive forward the UK on broadband has been fostered partly by the success of narrowband and the fact that so many households—10 million—are connected to the internet. I gather that that is more than in any other country. In addition, more people are connected. The majority of the population use narrowband internet services. That slowed down some of the demand for broadband—(Interruption.] Many people can grasp that, even if the hon. Gentleman cannot, Mr. Speaker, but since his figures were wrong in the first place, it is good of you to be tolerant of him.
    The straightforward fact is that having made a tremendous success of internet access using narrowband, we are now extending that to broadband. We intend to honour our commitment to ensure that at the end of this year, and at the end of three years, we are in the lead in broadband in terms of Government procurement and Government services.
    Mr. Martin O'Neill: Does my hon. Friend appreciate the fact that much of the work on expanding broadband will involve digging up roads, and that concerns are being expressed about road charging for that purpose, which could inhibit some of the important work that he identified? I know that a scheme that operates in Camden and in Middlesbrough is under review, but does my hon. Friend agree that the current position could represent a serious expense to the companies that are trying to follow the Government's lead by making broadband available all over the country?
    Nigel Griffiths: As the Minister with responsibility for small businesses, I hear the other side of the story about the disruption caused by too many people digging up roads too often. My hon. Friend is right to let me highlight the need to co-ordinate that. I gather that his suggestion is under consideration, and I hope that on behalf of all our constituents we can reach agreement that intrusion into roads should be minimal, that the disruption in our high streets should be minimised, and that those who cause unnecessary disruption should pay—but where it is co-ordinated, obviously those costs can be absorbed.
    Adam Price: The Minister referred to outdated statistics. I wonder whether he has seen the latest Federation of Small Businesses survey, which shows that just 2 per cent. of businesses in Wales have broadband connection, compared with 11 per cent. in London. Not one business in my constituency is connected because we do not have a single ADSL-enabled
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    exchange. Does he not agree that the only sure-fire way of ensuring parity of access in rural areas is to make broadband part of the universal service obligation?
    Nigel Griffiths: The hon. Gentleman rightly highlights the fact that we need to ensure that every part of the country has access to broadband. My hon. Friend the Minister for E-Commerce and Competitiveness and his predecessor stressed that and, indeed, developed a strategy which has seen us accelerate the deployment of broadband. I am confident that we shall be able to report to the hon. Gentleman, so that he can report to his constituents, that the figures will be considerably improved in the short and medium term
    Mr. Philip Hammond: Local loop unbundling was one of the key elements in the Government's programme for broadband roll-out, especially in rural areas. When that initiative was announced, the expectation was that by now a substantial number of local loops would have been unbundled. Will the Minister confirm that the number of loops that have been unbundled is measured in hundreds? In view of that, do the Government acknowledge that they were wrong, that the initiative has failed, and that local loop unbundling will not be a significant factor in achieving broadband roll-out?
    Nigel Griffiths: The hon. Gentleman should acknowledge that we are making considerable progress —with more than 400 unbundled lines and rising. More than 40 service providers—the competition that was once much lauded by the Conservative party now seems to be disparaged by it—are offering services over BT's DSL-enabled network. I am pleased to inform the House that the legal and regulatory framework for local loop unbundling is now in place. Good advances are being made.

    Free and Fair Trade
    Helen Jackson: What action she is taking to promote (a) free and (b) fair trade. [66374]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): We played a very important role in securing agreement last November on the Doha development round. It is through the World Trade Organisation that we can create a framework of rules for free and fair world trade. We are working closely in the European Union and with other Governments across the world to ensure that we deliver on those Doha commitments.
    Helen Jackson: I thank my right hon. Friend. She will be aware that the campaign for fair and free trade attracts people across social classes and ages, and gives the lie to the belief that there is political apathy in this country. I am now in contact with more than 150 constituents, more than 20 of whom took the time and trouble to travel down from Sheffield to attend the lobby on free and fair trade a couple of weeks ago. In that context, will she ensure that, in her discussions with her EU counterparts

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    as part of the CAP mid-term review, she helps to establish a firm timetable for the elimination of export subsidies, to which the EU will make every effort to stick?
    Ms Hewitt: I entirely agree with my hon. Friend and, of course, we will continue to press for a firm timetable for reducing agricultural subsidies and then for eliminating them. I also agree strongly with the points that she made about the Trade Justice Movement, and I very much hope that the faith groups and other voluntary organisations involved in that movement will now spread their wings and make connections in other European countries and, perhaps most importantly, in the United States of America, so that we can spread throughout the rich countries of the world the understanding that we need free and fair trade, in the interests, above all, of the developing countries.

  MINISTER FOR WOMEN
  The Minister was asked—
  MINISTER FOR WOMEN

    Affordable Child Care
    Mr. Gareth Thomas: What steps she is taking to promote access to affordable child care. [66401]
    Mr. Anthony Steen: What steps she is taking to assist working mothers to obtain affordable child care. [66403]
    The Minister for Women (Ms Patricia Hewitt): The Government are committed, through their national child care strategy, to ensuring that accessible, affordable and good quality child care is available in every neighbourhood. I am glad to say that, in the last five years, we have already created nearly 500,000, new child care places, which are benefiting nearly 1 million children, and that we are on track to meet our target of creating new places for 1.6 million children by 2004.
    Mr. Thomas: Does my right hon. Friend accept that after-school clubs—such as those provided at Vaughan first and middle schools, Pinner Wood first and middle schools, and Earlsmead first and middle schools in my constituency—are a key form of affordable child care? Does she understand the frustration of head teachers and school governing bodies that they are technically, in law, unable to provide the after-school clubs directly themselves, and that they have to set up separate organisations to do so, with all the extra work load that that creates? What are the Government's plans to tackle that issue? If we have not solved the problem, will she undertake to discuss it as a matter of urgency with colleagues in the Department for Education and Skills?
    Ms Hewitt: I congratulate the schools in my hon. Friend's constituency that are already providing after-school clubs, which are hugely useful for children and their parents. In the Education Bill, we are already giving further powers to head teachers to deal with some of the problems that my hon. Friend has rightly identified. I will certainly ensure that we consider that matter in the review being led by the performance and innovation unit,
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    in which we are looking at our child care strategy right across government to ensure that we are doing everything possible to ensure that parents and children get the child care that they need.
    Mr. Steen: The Minister will know that I am a great fan of hers. I hope, therefore, that she will understand why I wonder whether it is discriminatory that she is the Minister for Women rather than the Minister for Parenting. Does she agree that we need to change the business culture in this country so that businesses provide creches for parents—whether they are men or women—with young children? Should we not give them some kind of tax break to encourage this?
    Ms Hewitt: I entirely agree with the hon. Gentleman that balancing work and family, and meeting the needs of children, are issues for fathers just as much as for mothers. He will be aware that from next April, under the Employment Act 2002, two weeks paid paternity leave will be available to fathers for the first time. Indeed, Fathers Direct has announced that tomorrow night is the key date for would-be parents if they want to be among the first to take advantage of the new provisions.
    I have to tell the hon. Gentleman that workplace creches are not always the preferred choice of parents, particularly those who work in cities and do not want to take small children to work on what might be a crowded commuting journey. We are, however, examining all those issues in the PIU review, to ensure that, with the support of employers, education authorities, the voluntary sector and so on, we get the range of child care services that will meet different parents' needs.
    Glenda Jackson: My right hon. Friend will be aware that there are huge discrepancies with regard to affordable child care, particularly in London. One of the issues that is causing difficulty for some of my constituents who wish to expand the physical premises on which a nursery is held has to do with the planning system. Will my right hon. Friend please speak to her colleagues in the relevant Department to see whether there is a way of speeding up this process, if not of reducing the relevant requirements?
    Ms Hewitt: My hon. Friend raises an immensely important point. Like her, I know of several nurseries and child care centres that are unable to expand because they simply cannot get the premises or the planning permission that they need. The Government have already embarked on a radical reform of planning law to ensure that businesses are not held back from desirable expansion, whether in this or any other sector. That reform will go ahead as quickly as possible.
    Sandra Gidley: Many organisations now require flexible working, but child care provision generally does not reflect that. Does the Minister agree that employers are best placed to make such provision? Is she happy with the fact that only 5 per cent. of employers provide creches, and if not, what will she do to remedy the situation?
    Ms Hewitt: There is no doubt that child care in the workplace can be useful in some circumstances. My Department provides several places at a Westminster

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    nursery, which are very popular with some of my officials. As I said earlier, however, most parents say that they do not want to take young children to work, and would prefer other forms of support from their employers. Many employers do provide other forms of support, by subsidising the cost of child care elsewhere or simply by ensuring that parents whom they employ obtain adequate information about all the choices available to them. We will, however, examine the issue further in the PIU study.
    Caroline Flint: As I have said before, it worries me that those responsible for driving our economic agenda in the regional development agencies and the Small Business Service do not seem to consider child care an important part of the infrastructure to help families combine work and family life. Will my right hon. Friend, wearing her hat as Secretary of State for Trade and Industry, seek reports from all the regional development agencies and, in particular, from the Small Business Service on what they contribute? Such provision is vital if we are to make work meaningful for people with families, and help others to get out of poverty and into work.
    Ms Hewitt: Following an earlier question from my hon. Friend, I raised the matter directly with the chairs of all the regional development agencies. I stressed that child care was as important a part of our economic and social infrastructure as roads, railways, broadband telecommunication networks and so forth. Increasingly, agencies are working with the Department for Education and Skills and other Departments involved in the child care strategy, and considering how they can help to expand child care facilities. That will depend on the particular needs of regions and on investment programmes.
    Mrs. Caroline Spelman: Along with, I am sure, most working parents, I am bracing myself for the six-week summer holiday. I am sure that I am not alone in being dismayed by a survey published in The Times last week, which revealed that nearly 50 per cent. of all working parents have no relatives or friends on whom they can rely to look after their children during the holiday.
    How would the Minister respond to the criticism expressed by Stephen Burke of the Daycare Trust, a leading child care charity, who said that parents were
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    forced to spend huge sums on child care during the summer holidays because of the shortage of play schemes? He added
    "Even where schemes do exist, they are beyond the reach of many parents".
    I hope that the Minister agrees that this is an area in which affordable child care provision is woefully inadequate.
    Ms Hewitt: We have been considering the whole issue and are looking at ways to expand provision of holiday play schemes for children of all ages throughout the country, but particularly in the most disadvantaged communities. Such schemes are hugely important, not just in ensuring that children are safe and properly cared for during the summer holidays while their parents are at work, but in preventing young people from being tempted into criminal activities because they have nothing better to do.
    Provision is indeed being expanded as a result of our early years partnership, but of course more needs to be done. That is why we are increasing investment in child care. We will soon have the PIU report, which will help us to do even more in this important area.
    Mr. Frank Roy: The Minister will know that the school holidays have already begun in Scotland. Thousands of working mothers are taking their children abroad. May I quote from the Civil Aviation Authority's cabin safety procedure bulletin?
    "Emergency situations have shown that the separation of family groups, especially children, may lead to problems in emergency situations. Of particular concern is that during emergency evacuations, group members…might seek each other out during the evacuation process. Such actions could have an adverse effect on passenger flow rates towards emergency exits, and might seriously"—
    Mr. Speaker: Order. The hon. Gentleman cannot do that. I call the Minister to reply.
    Ms Hewitt: My hon. Friend raises an extremely important point. I understand that some package holiday companies charge extra for a family who want to be seated together, even though, as he rightly says, the cabin safety guidelines say that that is desirable. I shall ask the Under-Secretary, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), who has responsibility for consumer affairs, to look into the problem and give my hon. Friend a more detailed reply.

Business of the House
12.30 pm
Mr. Eric Forth: May I ask the Leader of the House to give the business for next week?
The President of the Council and Leader of the House of Commons (Mr. Robin Cook): The business for next week will be as follows:
MONDAY 15 JULY—Consideration of Lords amendments to the Education Bill. Followed by proceedings on the European Parliamentary Elections Bill [Lords], which is a consolidation measure.
TUESDAY 16 JuLy—Consideration of Lords amendments to the Justice (Northern Ireland) Bill. Followed by Opposition Day [17th Allotted Day, 2nd Half]. There will be a debate on the peace process in Northern Ireland on an Opposition motion.
WEDNESDAY 17 JULY—Debate on defence procurement on a motion for the Adjournment of the House.
THURSDAY 18 JULY—Motion to approve a money resolution on the Proceeds of Crime Bill. Followed by consideration of Lords amendments to the Proceeds of Crime Bill.
FRIDAY 19 JULY—Private Members' Bills.
The provisional business for the following week will include:
MONDAY 22 JULY—Second Reading of the Mobile Telephones (Re-programming) Bill [Lords].
TUESDAY 23 JULY—Debate on public expenditure on a motion for the Adjournment of the House.
WEDNESDAY 24 JULY—The House may be asked to consider any Lords messages that may be received.
Motion on the summer recess Adjournment.
The House will wish to know that on Tuesday 16 July 2002, there will be a debate relating to 2003 Preliminary draft EC Budget in European Standing Committee B.
The House will also wish to know that on Tuesday 16 July 2002, the first meeting of the Committee on the convention on the future of Europe will take place to consider the First and Second Report of the United Kingdom representatives to the convention.
Details of the relevant documents will be given in the Official Report.
[Wednesday 15 July 2002:
European Standing Committee B—Relevant European Union document: Unnumbered EM, dated 5 July 2002, submitted by HMT; Preliminary draft budget 2003. Relevant European Scrutiny Committee Report: HC 152-xxxvi (2001–02)].
Mr. Forth: I thank the Leader of the House for giving us the business. I have no doubt that he will be aware of the publication today of the report by the Select Committee on Education and Skills, HC 445, on post-16 student support. As he always does his homework assiduously, I suspect that he will be aware that the
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conclusions and recommendations of the report of a Select Committee dominated, as they all are, by Government supporters and Labour Members include the following:
"It is our view that many of the problems encountered in the present system of student finance originate from a failure by the Government clearly in public to debate the essential elements of the Dearing proposals".
It goes on to say in paragraph 17:
"We believe that the current system of student support has failed in three important respects…The funding of institutions is a matter of grave concern…We have been disappointed in the Government's dismissal of the Barr and Crawford proposals."
I am sure that the Leader of the House, being a fair man, will want to make sure that the House has an opportunity fully to debate the conclusions of the Labour-dominated Education and Skills Committee. I hope that he will be able to give us an early date for that debate—he would not want to give us any impression that the Government wanted to avoid debating such an important Select Committee report.
On 4 July, the Leader of the House said in reference to the rather cloudy subject of the RMT union and hon. Members:
"I personally have no objection to putting in the Library exchanges with the RMT."
I stress that he referred to exchanges with the RMT. He went on to say, helpfully:
"For the avoidance of any doubt, I should perhaps say that we as a group acted collectively in responding to the letter from Mr. Crow the general secretary of the RMT. The collective response was given by my hon. Friend the Member for Streatham (Keith Hill), who is with me on the Front Bench and has given me permission to say that his letter may indeed be placed in the Library." —[Official Report, 4 July 2002; Vol. 388, c. 397.]
I have just checked with the Library and, indeed, the letter from the hon. Member for Streatham (Keith Hill) is there, but surprise, surprise, the letter from Mr. Crow has not yet reached the Library.
I wonder why we have only part of this story. There cannot possibly be anything to hide, can there? I believe that you got involved in this issue, Mr. Speaker, and I am sure that you would not want to be in possession of only partial information. The Leader of the House said that "exchanges with the RMT" would be placed in the Library, but I have seen only one exchange, not plural exchanges. I ask him again a very simple question: may we please have in the Library the letter from that nice Mr. Crow, of the RMT, to Labour Members of Parliament? That perfectly simple request is completely in accord with the undertaking that the Leader of the House gave.
I want to refer again to PMPs. In the exchange of 3 July, the Prime Minister said:
"Care homes have expressed worries about regulations on wheelchair access, room size, lifts and so on. I simply point out that those do not come into force until 2007".—[Official Report, 3 July 2002; Vol. 388, c. 220.]
On 10 July, my right hon. Friend the Leader of the Opposition took issue with that. He asked the Prime Minister:
"Of the 246 new rules that the Government are imposing, how many will take effect by 2007?"
The Prime Minister said:
"From memory, I said that provisions for matters such as widening rooms and bathing would take effect in 2007, and that those were the regulations about which people were complaining."

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My right hon. Friend pressed the Prime Minister on this point. He said that
"only four provisions do not come into effect until 2007. Almost all the others—some 240—came into effect on 1 April this year."
The Prime Minister replied:
"First, I said that the provisions that related to matters about which people were complaining, such as widening rooms, would not take effect until 2007." — [Official Report, 10 July 2002; Vol. 388, c. 879–80.]
Will the Leader of the House tell us who is right: the Prime Minister, or my right hon. Friend the Leader of the Opposition? It seems that, yet again, the Prime Minister changes his stories with great facility, shifts his ground and says the first thing that comes into his mind. May we have an explanation or an apology from the Prime Minister, or will the Leader of the House help to cure him of his apparent addiction to whoppers?
Mr. Cook: In a spirit of amity, I begin by recalling that, last week, the right hon. Gentleman celebrated Independence day with an appropriate tie, which resulted in exchanges in the House. May I take this opportunity to wish him a very happy forthcoming Bastille weekend? I am sure that he will wish to celebrate his enormous contribution to European equality, democracy and fraternity.
The right hon. Gentleman was good enough to describe me as a fair man, and as such I shall of course wish to consider the Education and Skills Committee's report fully and thoroughly. On the question of debating the report, I should point out that this Government have a good record in providing time for debating Select Committee reports. Of course, in the first instance the matter is one for the Liaison Committee, but there are a number of ways in which such a report can be debated. I am sure that many Members will want that report to be debated, and when it is, Labour Members will want to put it on the record that we are now spending a quarter more on education than did the previous Government. That has contributed to our having one of the highest rates of entry into higher education of any OECD country, and the second highest completion rate among students. A review of student finances is of course under way, and we can certainly consider the Select Committee report as part of it.
On the correspondence with the RMT, I am ashamed to say that it appears that I did not treasure, file and safeguard the letter that I received from the nice Mr. Crow as well as I perhaps should have done. However, I am now in a position to state that tomorrow the letter will be laid in the Library. Frankly, I doubt whether it will provide particular illumination for Members, or that they will wish to treasure it any more than I did, but it will be there for them to read when the Library receives it.
On the other matter that the right hon. Gentleman raises, he will not be surprised to hear me say that the Prime Minister was of course right. Indeed, the Prime Minister made it specifically clear on 3 July that he was referring to room sizes, and the provisions relating to them do not come into force until 2007—the year that he quoted. As the right hon. Gentleman asks, since yesterday I have checked with the authorities and I can confirm that the Prime Minister was also absolutely right to say that some 43,000 more households are now receiving intensive
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home care compared with when we took power. That is an increase of more than a third and is a tribute to our increased spending on social services.
Mr. Paul Tyler: We all recognise that there is great pressure before the summer recess for many statements to be made to the House, but why have we had no statement whatever on the very damaging announcements by Royal Mail about its reduction in service, especially for smaller businesses? The Leader of the House will have already seen what the Federation of Small Businesses has said, but the changes will also have a dramatic effect on the self-employed and other organisations. Although there was a brief exchange in Trade and Industry questions earlier, the Royal Mail is still a public service—thank goodness—and surely the Secretary of State should have made a statement to the House.
I shall take this opportunity to apologise to Royal Mail. The House may recall that on a previous occasion I drew attention to a letter that we had received addressed to Mr. David Lloyd George. Because the date stamp on it was indistinct, it looked as though it might have been delayed in the post since 1902. We have now had another letter, correctly addressed and with a date stamp for 2002, and I congratulate the Royal Mail on it having arrived at the correct address, despite the fact that the words "freepost" and "second class" have been written on it: there is, of course, no freepost to the House of Commons.
The other issue on which the Secretary of State for Trade and Industry should have made a statement is industrial relations and the Government's future relationship with the unions. The right hon. Lady was reported in The Independent this morning as saying that she
"will announce a government review of industrial relations legislation today."
Where will she make that announcement? It will clearly not be in the House, although she was here earlier. It is extraordinary that she should announce such an important issue in the columns of the press, and not in the House.
In the interview, the Secretary of State also said that the communication from the RMT, which was mentioned by the right hon. Member for Bromley and Chislehurst (Mr. Forth) —his support is late, but welcome—placed "unacceptable demands upon MPs". The Leader of the House told me in response to my questions on 27 June that he had declined to sign up to the oath of loyalty, and I congratulate him on that. I am grateful for the assurance that he has given that the letter will be placed in the Library tomorrow, but will he confirm that a full inquiry will be held into what is happening to those Members of Parliament who have apparently accepted the terms of the letter that he and the Deputy Prime Minister found so unacceptable?
Mr. Cook: The hon. Gentleman does not know how true it is to say that we will have a large number of statements between now and the rising of the House for the summer recess. The House will already be aware that we have the statement on the comprehensive spending review on Monday and statements thereafter on aspects of that review. In that context, it will unavoidably be the case that we will have to decide what we can bring before the House in an oral statement and what regard we must at the same time have to the very important business of the House, as we have much legislative business to complete before we rise for the recess.

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On the specific point that the hon. Gentleman makes about the pilot scheme for charging for early delivery by Royal Mail, I would stress that the schemes are being introduced only after discussion and agreement with Postwatch, the consumer organisation, and the Communication Workers Union. Any individual or business who receives 20 letters a day will be guaranteed early delivery without any additional charge, which should take account of all Members of Parliament. I am sure that the hon. Gentleman will be relieved to know that his constituency correspondence will arrive early and on time.
The scheme is only a pilot. I understand the concerns that have been expressed by small businesses and the self-employed, who perhaps do not get 20 letters a day. Their concerns and experiences must clearly be part of the overall evaluation of the pilot study before any further decision is taken.
On the question of the RMT, I am happy to repeat the assurance that I have already given the House that the letter from Mr. Crow will be deposited tomorrow. I anticipate that we will have a full textual analysis of it when we meet again next Thursday.
On the hon. Gentleman's other question, to my knowledge—and I am reasonably certain of this point—no Member who was previously sponsored or had a constituency agreement with the RMT accepted the terms of that letter. The decision to reject the terms of the letter was a unanimous decision by all Members who previously had a connection with the RMT. I cannot speak for what further discussions may have taken place with other Members; I am not yet aware of any decision having been taken by any of them and, as far as I am aware, there is no basis at present to believe that the privileges of the House have been infringed by any offence.
Mr. Tam Dalyell: When, on Monday and Tuesday, my hon. Friends the Members for Cynon Valley (Ann Clwyd), for Halifax (Mrs. Mahon) and I expressed unease about the circumstances of the sale of spare parts for F-16s, we were advised to wait until Trade and Industry questions on Thursday. Since Question 8 was barely reached, there was no opportunity to raise this issue. Will my right hon. Friend ask the Secretary of State for Trade and Industry if she will make a statement on Monday?
Secondly, will my right hon. Friend pursue the matter of the Marine Wildlife Conservation Bill, proposed by the hon. Member for Uxbridge (Mr. Randall)? It is an all-party Bill, and many of us stayed behind for it on Fridays. A great deal of work has been done by the Department for Environment, Food and Rural Affairs. It has passed all its Commons stages and is now, by late skulduggery, being scuppered in the House of Lords. I have given my right hon. Friend the letter from Lord Williams of Mostyn, and I should be grateful if he could look at it. It is intolerable that this private Member's Bill, which has gone through all its Commons stages, should simply evaporate in the other place.
Mr. Cook: On my hon. Friend's first point, I cannot provide time for a statement on Monday—and I give notice that I will say the same to anybody else who asks
1040
for one—because, as the House will know, we will be having a statement on the comprehensive spending review, for which I anticipate Members will want an extensive period of scrutiny. The statement on F-16s was made by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs in his written answer, and my hon. Friend may wish to pursue the matter with him.
On my hon. Friend's second point, I was heavily involved in discussions to ensure that the Marine Wildlife Conservation Bill got through its stages in this House. I took a full part in discussions with my right hon. Friend the Minister for the Environment and the Bill's sponsors, and I am pleased that we managed to secure its passage through the House. I fully understand the strong feeling behind it and the wide constituency of support from the country, particularly from the Royal Society for the Protection of Birds.
As Leader of the House, I have no responsibility for the actions of Members of another place. I regret that so many amendments were tabled by the Bill's opponents that it would require two and a half days of debate to clear the other place, and I am afraid that there is no realistic prospect of securing that before our last private Member's Bill day on 19 July. I am very sorry that this should have happened; I believe that it was a worthwhile Bill and regret that there are some in the other House who have chosen to stop it.
Sir Patrick Cormack: Is the right hon. Gentleman aware that earlier this week the Government produced a massive document, "Local Government Finance Formula Grant Distribution"; that they have given all of three months for consultation; that that period will have elapsed before the House returns in October; and that, as the business stands at present, this House will have no chance to debate a document that affects every English Member? Will the right hon. Gentleman therefore alter the business of the House so that we can discuss this most revolutionary change to local government finance and, if not, will he keep us here for an extra day to do so?
Mr. Cook: I am always open to representations to postpone the summer recess, and I am sure that the hon. Gentleman will be the first of many to find reasons why we should do so. Perhaps I should warn the House that I might be open to receiving some of those representations and accepting them.
On the hon. Gentleman's specific point, the local government finance document is out for consultation for three months—the standard period of consultation. Indeed, our guidelines provide for a minimum of 12 weeks of consultation. Many of those who will be producing results are in local government and will not be taking a three-month recess. However, I have just announced that there will be a debate on the spending review in the last week that the House sits, and it will be entirely appropriate for right hon. and hon. Members to refer to local government finance then.
Jane Griffiths: My right hon. Friend will know that the Tour de France is on and is being enjoyed by millions, although, sadly, in this country only viewers of ITV2 can watch it. Does he agree that a tour of Britain would be a wonderful opportunity not only to

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inspire our future cycling stars but to regenerate rural areas that suffered so badly from foot and mouth last year? Will he be able to find time for a debate on the future of cycling as a sport?
Mr. Cook: My hon. Friend is right. The Tour de France is followed closely by many residents of Britain. She made an interesting proposal, which I note was received favourably on both sides of the Chamber. For myself, as long as I do not have to take part, I am willing to give a fair wind to her tour of Britain.
Mr. John Wilkinson: The Leader of the House will be aware of reports of an increasing incidence of air misses in United Kingdom airspace, as well as flight delays, following the institution of the new air traffic control centre at Swanwick. Our constituents are also worried about press reports of new runways being planned around London and the south-east generally. When will we have a Government statement on civil air transport, and the long-awaited White Paper on the industry?
Mr. Cook: I am very much aware of that last point, and I assure the hon. Gentleman that the matter is very much in Ministers' minds.
The reports that have been around today on near misses are very much exaggerated. Some hon. Members may have had the good fortune, as I did, to hear Mr. Chisholm of NATS on the radio this morning being quite categoric that the reports are false and exaggerated and that safety has not been compromised by Swanwick or any other development.
John Mann: When the United States introduced legislation restricting donations to political parties in 1995–96, money from corporations and wealthy individuals went to think tanks instead. I note, through Hansard, that there has been no debate on the issue in the past 30 years, although there have been plenty of debates on state funding of political parties. Will my right hon. Friend find time for a debate on donations to think tanks such as the IPPR, which seems particularly keen on restricting donations to political parties?
Mr. Cook: My hon. Friend forcefully makes a very combative point that will not be lost on the IPPR. Political debate is enriched by those who may not necessarily be professional politicians and so perhaps have more leisure than we do to think deeply about such matters and stimulate future debate.
Mr. Patrick McLoughlin: I want to press the Leader of the House on the document that was published earlier this week. It says right at the beginning that local authorities spend 25 per cent. of all Government expenditure. For the past 18 years, I have been reminded many times by him and his colleagues that Derbyshire had a rough deal, supposedly, from the last Conservative Government.
Mr. Tom Levitt: Hear, hear.
Mr. McLoughlin: I welcome the hon. Gentleman's endorsement.
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Can the Leader of the House explain why Derbyshire will lose between £5 million and £2 million under the Government's proposals?
Mr. Cook: I regret the fact that the hon. Gentleman thinks that one can reach a conclusion about the amount going to any individual local authority on the basis of a range of different options proposed in a consultation paper. The Government have been explicit: we do not favour any one of the options. [Laughter.]The position is quite explicit: only when we have listened to local government and heard the responses to the consultation process will we put before the House the option that we have selected. Until then, no local authority can possibly pretend to know what the consequences will be for its finances.
Dr. Alan Whitehead: Will my right hon. Friend find time for a debate on the Government's proposals on changing the law on double jeopardy? I ask that on behalf of my constituent, Caroline Maddick, whose husband, Eddie Maddick, was murdered last year. Barry Whittle, a man clearly deeply implicated in the events surrounding the murder, was tried but, to general astonishment, acquitted, and the police are not pursuing any further inquiries. Mrs. Maddick is raising funds to pursue a civil case against Mr. Whittle, but is in a difficult position that could be eased if the Government implemented changes on double jeopardy.
Mr. Cook: My hon. Friend will be aware that this matter has been under consideration by my right hon. Friend the Home Secretary for some time, and there may shortly be a further development. My hon. Friend makes a powerful case as to why it is necessary for us to re-examine this rule. I hope that when we introduce any changes to the rule, they will get support from both sides of the House, especially from the party that poses as the party of law and order.
Pete Wishart: May I inform the Leader of the House of an historic event that took place this morning on College Green? The event in question was the all-party egg-and-spoon race for Sport Relief, which was won by my hon. Friend the Member for Ceredigion (Mr. Thomas). Out of the five Members who took part in the race, two were from minority parties. If anything, we were over-represented in that race. Is it easier for minority parties to have access to charity sports events than it is for them to get representation on Select Committees?
Mr. Cook: I congratulate the hon. Gentleman on the success of his political family. However, I offer him some avuncular advice: I would be careful how often I boasted about that success.
Glenda Jackson: My right hon. Friend will be aware of the almost daily press reports averring that the American Government have taken the decision to make, and are preparing for, a pre-emptive strike against Iraq. In addition to a statement on the Government's sale of spare parts for Israeli aircraft, may we have a full-scale debate on precisely what the British Government's approach is to any such pre-emptive strike in Iraq and to the worsening situation in the middle east?
Mr. Cook: I read with close attention the reports that have appeared in the press in the past few days. I have not

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seen any reports that a decision has been taken, although I have seen articles purporting that plans have been made by some in the US Administration. As I have said to the House repeatedly, and I say again, no decision has been taken by the British Government on this matter. No decision may ever be taken, but should we arrive at that point I am clear that the House will want to debate it thoroughly. In fairness, we have had several debates on our intervention in Afghanistan, and the Government's record on that is good.
Sir Michael Spicer: Is the Leader of the House able to give a definite date for the amendment to the data protection legislation, so that MPs can go about their business properly?
Mr.Cook: As the House will know from previous exchanges, I attach great importance to the ability of Members to fulfil their representational functions without being defeated by the provisions of the Data Protection Act 1998. I repeat that I am confident that, before the House rises, we will lay before Parliament a statutory instrument to exempt elected representatives—councillors, MPs, MEPs and Members of devolved Administrations—from the requirements of the 1998 Act when they are pursuing cases of constituents who have sought their assistance. I regret that it may not be possible for us to debate and approve it until we return from the summer recess, but the process is well under way.
Mr. Ian Cawsey: My right hon. Friend will be aware that in the past few days the American Government have failed to meet their own deadline for announcing all the exemptions from the steel tariffs. That has made an already worrying situation much worse, not least because I now understand that no deadline is being given for when the work will be carried out. In the short time we have left between now and the beginning of the summer recess, will there be an opportunity to debate this issue or have a statement, so that we can find out what the British Government are doing about telling the Americans to get their finger out?
Mr. Cook: I do not see the opportunity for a debate or a further statement, but I assure my hon. Friend and the House that the Government continue vigorously to follow this matter and to work in close co-operation with our allies and partners in the European Union to ensure that we take every possible opportunity, bilaterally in Washington and multilaterally through the World Trade Organisation, to get that decision changed, because it is damaging to our industry. We should not lose sight of the fact that it is also damaging to American consumers of steel.
Mr. Andrew Mitchell: The Leader of the House is very much aware of the widespread interest across the House in the future of British policy on Gibraltar. May we have an undertaking that there will be a statement on the Government's policy on Gibraltar before the House rises for the summer recess, and that it will not be smuggled in on a Friday when many of us will be in our constituencies, but will be made on another day of the week when the House is sitting?
Mr. Cook: We are well aware of the interest in the issue of Gibraltar, and we are conscious of the importance
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of keeping the House informed. If I recall rightly, my right hon. Friend the Foreign Secretary has already given an undertaking that he will report to the House before the recess. Without committing myself to an announcement of a specific date, which is not something that we do during business questions—
Mr. Dennis Skinner: Friday is a working day.
Mr. Cook: My hon. Friend makes a reasonable point. From time to time the House sits on a Friday, and I am confident that the hon. Gentleman will be in his place and will not let anything get passed that he believes should be challenged. I commend his diligence and assiduity to his hon. Friends on the Back Benches.
Mr. Gordon Prentice: Next Tuesday will be a big day for the House because the Prime Minister will submit himself to parliamentary scrutiny by appearing before the Liaison Committee for three hours. My right hon. Friend will have read my early-day motion 1505, signed by a small but influential group of Members.
[That this House enthusiastically welcomes the Prime Minister's decision to appear before the Liaison Committee in July and thereafter on a regular basis as one way of enhancing the accountability of his Office to Parliament; believes that the Committee with 34 members is far too large and unwieldy to perform the scrutiny function effectively in a three hour session; further believes that the chairmen of all domestic committees should be excluded from sessions involving the Prime Minister, hopes that the remaining members agree to divide into three groups, each one in turn quizzing the Prime Minister at length and in detail over the forthcoming three sessions; and further believes that no serious purpose would be served if the Liaison Committee is unable to put the Prime Minister under sustained and rigorous questioning, testing to the limit his views and the Government's policies.]
I wonder what will happen on Tuesday if every single one of the 34 Members insists on firing a question at the Prime Minister. Perhaps my right hon. Friend will tell the House what the arrangements are.
Mr. Cook: I commend my hon. Friend for his initiative in tabling the early-day motion. I see that it was signed by 18 Members, which may be small, although I cannot comment with confidence on the degree of influence as the names are not listed yet—
Mr. Prentice: There are 26.
Mr. Cook: My hon. Friend makes the sum even bigger—36 is a significant number of Members.
The point raised by my hon. Friend is well understood in the Liaison Committee and I know that its members have held a number of discussions to ensure that they make a success of that first hearing. The matter is primarily for members of the Committee, not for me as Leader of the House; they have taken it on board and they understand that next Tuesday they will be as much on show as the Prime Minister. In the meantime, I remind the House that this is a substantial new step in the scrutiny of Government by Parliament. No previous Prime

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Minister has ever come before an investigative Select Committee for questioning, and it is to the credit of the Prime Minister that he is willing to do so.
Sir George Young: A few weeks ago, the Leader of the House asserted that in his view there had been too much spinning by the Government. Against that background, may we have an assurance that on Monday we shall hear the outcome of the comprehensive spending review from the lips of the Chancellor and that we shall not read about it in the weekend press?
Mr. Cook: I can certainly assure the House and the right hon. Gentleman that it will be my right hon. Friend the Chancellor who makes the statement on Monday, and I can also assure the House that my right hon. Friend will of course want to be the first to break the news to anybody. Let us be realistic, however: our friends in the Gallery will spend the whole weekend trying to break a story, and will break legs to get it. In the meantime, I can only suggest to Members that they do not necessarily believe everything that they read in the papers between now and Monday afternoon.
Mr. Colin Challen: May I ask for an early statement on the steps the Government are taking to co-operate with the Irish Government in the wake of the publication this week of their report into the Ansbacher offshore banking scandal? The report named a significant number of British nationals who were clearly using that bank to avoid paying tax. Are we co-operating closely, and may we have a statement?
Mr. Cook: I assure my hon. Friend that the British regulatory authorities co-operate very closely with their counterparts in other countries, especially in the European Union, where some special arrangements apply. It is very much in our interests to do so, because we depend on that co-operation being reciprocated when we pursue issues of concern in our country. If the Irish Government want to take further follow-up action, we stand ready to help them.
Mr. Andrew MacKay: Is the Leader of the House aware that after last week's Hillsborough talks, when the Prime Minister promised to introduce moves to sustain the peace process and to report to the House by 24 July, it was widely reported and believed that that would actually give an amnesty for paramilitaries on the run, which would be unacceptable to many people on both sides of the House? May I have a categoric assurance from the Leader of the House that there will be a full statement from the Dispatch Box if that does occur and that such an amnesty will not be announced after we go into recess, as is so often the practice of the Government?
Mr. Cook: The right hon. Gentleman will be aware that there have been a number of exchanges on that subject and that the Government's position on it has not changed. I fully understand the point that he makes—that if any such steps are taken, the House should be kept fully informed—and I know that it will be shared by Members from Northern Ireland. We are well aware of the undertaking that we would try to seek a way forward on the wider question by 24 July.
David Hamilton: Is the Leader of the House aware of the Daily Record campaign, which
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started—rather belatedly—on Monday, on behalf of the hundreds of thousands of miners with chronic bronchitis? I belong to an ex-mining area. As I have been attempting to resolve the problem and speed up the process, I am well aware that the Department of Trade and Industry has done everything that it can. However, in thousands of cases it is possible, simply by looking at the medical evidence and without forcing the miner to come in for a medical, to see clearly that their circumstances are such that they would be entitled to an award. If that is the case, there is a regulation or a legal issue that must be overcome. If it was overcome, the process would be speeded up so much that it would help all those people, many of whom are dying before their award is made.
Mr. Cook: My hon. Friend will not be surprised to hear that the Daily Record is delivered daily to my office, and I have indeed noticed the very extensive and forceful publicity that the newspaper has been giving to the issue in the course of this week. I also know my hon. Friend's constituency and know that there will be many former miners there who suffer from respiratory diseases, which are only too common in mining communities.
I will draw my hon. Friend's remarks to the attention of the Minister for Energy and Construction, who, as he knows, has been very active in pursuing justice for miners and in dialogue with representatives of the mining communities. In so far as it is possible for us to respond to these concerns, I am sure that he will be willing to look sympathetically at how to do so.
Mr. Archy Kirkwood: May I again draw the attention of the Leader of the House to the question of CAP reform? We now have the Fischler proposals, which were published earlier in the week. If the right hon. Gentleman cannot arrange a debate in Government time before the recess or next week, will he arrange for the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Scunthorpe (Mr. Morley), to appear before European Standing Committee A or B to set out the Government's reaction to these important proposals, in an attempt to allay some of the uncertainties that they have occasioned in the farming community throughout the United Kingdom?
Mr. Cook: I am certainly well aware of the importance of the proposals and I also fully understand the controversy that surrounds them. There is a limit to what I can offer the House in the remaining eight sitting days before we rise, but I can assure the hon. Gentleman that this will be a high priority for the Government and that I am under no illusions that the House will not wish to discuss this before any final decision is taken, which is some time away.
In conclusion, I add, as I have on previous occasions, that we cannot have it both ways. We cannot constantly demand reform of the common agricultural policy and then complain about the specific proposals that are put to us. If we want reform, we have to face up to some very difficult and painful choices.
Mr. Malcolm Savidge: May I also request that we have an opportunity to consider the F-16s? Helping to supply arms to increase the spiralling

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bloodshed in the illegally occupied Palestinian territories, does not seem a very ethical dimension to our foreign policy. Surely there must be political principles and moral values that we are not prepared to sacrifice to ingratiate an increasingly right-wing, hawkish and unilateralist United States Administration.
Mr. Cook: I entirely understand the concern of many hon. Members and the genuine deep worry, particularly given the very recent use of the F-16s in the occupied territories. These are matters that both the British and United States Governments have raised with the Israeli Government, and I am sure that my right hon. Friend the Foreign Secretary will be very interested in any point that my hon. Friend wishes to put to him.
Gregory Barker: Further to the point raised by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), is the Leader of the House aware of the widespread anger and disgust in my constituency at the Government announcement that they are going to muck about with local government finance? Is he aware that that is seen as a blatant attempt to channel money from the south-east and into Labour heartlands? Furthermore, is he aware that the leader of East Sussex county council, the poorest county council in England, has calculated that if this plan goes ahead, council tax will have to rise by between 25 and 33 per cent.? Which would he prefer—that council tax goes up that much, or that the council slashes public services to the vulnerable?
Mr. Cook: I do not know where the hon. Gentleman has been for the last two general elections but, as it happens, we now have Labour heartlands in every region of Britain and it is simply not possible for us to be politically biased against any one region. I repeat what I have said before: the consultation document contains a series of different options—options for which we have expressed no preferences. It is therefore totally meaningless for any chief executive to try to pretend that he can produce a financial consequence for his local authority until the end of that consultation period. I should have thought that even the hon. Gentleman and his local authority's chief executive might recognise that there is merit in a local government grant distribution system that reflects changes in population, changes in the number of school pupils and degrees of deprivation.
Mr. David Kidney: I welcome all that my right hon. Friend has just said, as well as the consultation on local government finance, but may I point out to him that for 10 of the 12 weeks of the consultation period the House will be in recess and that for six of the 12 weeks schools, which are crucially affected by the proposals to change education funding, will be closed for their holidays? May I also impress on him that literally hundreds of right hon. and hon. Members who represent English constituencies have a very keen interest in how that debate will unfold? So may I make a plea that, as soon as we return in October, there will be time to debate that subject before the Government start to settle the provisional settlement for next year? May I make a
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helpful suggestion that, if there is no time in the Chamber for that debate, a full debate in Westminster Hall might be sufficient?
Mr. Cook: May I remind the House that we have put out for consultation the draft local government finance Bill, which is currently being considered by the appropriate Select Committee, and that this Government's record in trying to seek consultation on such drafts and proposals for change is very good. The House may well be in recess for the next 10 weeks; I personally think that is at the root of the problem. I have made proposals that we should return in September and should not have such long periods of absence from the British political scene. I very much hope that those proposals will be approved by the House. If they are, it will meet my hon. Friend's and other hon. Members' concern by ensuring that we are not absent for such a long period.
Sir Nicholas Winterton: May I pick up the request made by my hon. Friends the Members for South Staffordshire (Sir Patrick Cormack) and for West Derbyshire (Mr. McLoughlin) and the hon. Member for Stafford (Mr. Kidney) in respect of the Government's consultation document on the resourcing of local government, not least because my own county, Cheshire, has been short-changed under successive Governments, so I do not seek to score a political point? That has a huge impact on education and social service provision, not least on the ability of social services to fund care homes, which are currently in crisis. The Leader of the House, who is a most reasonable man, has said that he wishes to introduce reforms, which many hon. Members support. Will he say whether the consultation period on that proposal, which I agree contains options, can be extended to enable hon. Members to express a view before the Government put any firm proposals to the House?
Mr. Cook: The hon. Gentleman makes his point very diplomatically and temptingly, and I will certainly discuss with my right hon. Friend the Minister for Local Government and the Regions how best we can ensure that the House has an opportunity fully to express its view. The hon. Gentleman was quite frank and blunt in expressing his concerns on behalf of his local authority when he sat on the Government Benches, so, given the honourable role that he played, I exempt him from any criticism, but we should not lose sight of the fact that, of course, the Government have very substantially increased spending on education, social services and all the other aspects of local government spending. As a result, all the local authorities that have been mentioned are doing substantially better than they ever did under the previous Conservative Government.
Kevin Brennan: May we have a debate on the volume of parliamentary questions?
Mr. Forth: Nice tie.
Kevin Brennan: The Leader of the House will be aware from a parliamentary answer that he gave yesterday to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) that the hon. Member for Buckingham (Mr. Bercow) has now officially become the half-million-pound man, having asked 4,382 questions at

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a cost of £565,278 in this Session alone. Although in no way do I wish to fetter the right of hon. Members to hold the Government properly to account, is not there a difference between proper parliamentary scrutiny and the obsessive compulsive exegesis of the hon. Gentleman?
Mr. Cook: First, may I congratulate my hon. Friend on his tie, and particularly on its admirable politically correct tone? On the point that he raises, it is not for the Leader of the House to discourage Members who believe that they have a bona fide concern from pursuing it through the Order Paper and parliamentary questions. I have answered many questions from the hon. Member for Buckingham (Mr. Bercow)—I think that I have answered more questions from him than from the rest of the House added together—and I am relaxed about the fact that he chooses to table so many. It is perhaps time, however, that he reflected on whether the product, in terms of what he can do with those answers, has justified all the effort that he has put in. Perhaps the time has come for a redirection of his admirable energy into a more productive channel.
Mr. Roy Beggs: Will the Leader of the House arrange for a statement by the Foreign Secretary on United Kingdom-Iran relations? Many hon. Members on both sides of the House wish to know what recent representation has been made to the Iranian Government about the continuing abuse of human rights by that regime of repressive, fundamentalist Islamic mullahs, which brutalises its people and uses torture and execution to terrorise its political opponents.
Mr. Cook: I assure the hon. Gentleman that the respect for human rights—or the absence of it—in Iran is a matter of high priority in the Foreign Office, on which representations are frequently made. It is also fair to note, however, that there have been movements in the politics of Iran that have resulted in a return to a democratic parliament, and the great majority of the public of Iran have voted for people who want to take Iran forward into the modern era and put behind them the rule of the mullahs to which he referred, which was the product of the revolution. It is in all our interests that we handle our relations with Iran so that we strengthen the role of, and support for, those who want to take Iran forward and enter into a responsible relationship with the rest of the world, and that we marginalise those who would rather take Iran back into the middle ages.
Mr. John Taylor: Can we have a debate on town and country planning, and particularly on the Government's planning policy guidance, which is elegantly known as PPG3? In my constituency, the planning department is under siege as developers put in application after application—followed by appeal after appeal—in respect of the same site, which causes considerable distress to long-suffering neighbours of the site who are objectors to the proposals. Is there an end in sight to these repeated, excessive and sequential planning applications and appeals?
Mr. Cook: The hon. Gentleman will be aware that changes to planning law and guidelines are very much at the forefront of the Government's mind at present, and I am sure that, in the forthcoming Session, there will be
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opportunities to explore some of those issues. As I have mentioned to him, I am familiar with his vicinity, which has some admirable country that is well worth preserving, and it is very important that we make sure that our planning laws strike the right balance between ensuring that development can proceed, and, at the same time, protecting the rich heritage of our countryside. I am proud that, under this Government, the green belt has been expanded by a substantial volume of territory, and we do not want that put at risk.
Mr. Mike Hancock: Can the Leader of the House find time for a statement or debate on the future of the Millennium Commission, and on the way in which it has dealt with the 24 Landmark projects around the country? In particular, the debate should include discussion of the fiasco relating to the millennium tower in Portsmouth.
Mr. Cook: I sense that this is an important constituency issue, on which I regret that I am not briefed. The hon. Gentleman has made his point, and I am sure that he will find other ways to pursue it in the House.
Mr. Henry Bellingham: Is the Leader of the House aware that my constituent, Tony Martin, is back in the news again because he is being sued by one of the burglars who broke into his house? Does he agree that we ought to have a new legal principle whereby criminals who break and enter into properties leave their civil rights outside? Would he also agree that it is monstrous that someone should get legal aid in a case in which their solicitor has already agreed to act on a contingency—no win, no fee—basis? I am trying to table an early-day motion on this matter, but I am told that it may be sub judice because the case may be brought in the future. How would the right hon. Gentleman advise me to bring this protest forward?
Mr. Cook: As Leader of the House, I must strongly defend our convention on sub judice, however frustrating it may be from time to time. On the particular point that the hon. Gentleman raises, it would plainly be proper for the courts to take into account the way in which the event took place, and the fact that the people in question had broken into property, in making any judgment about whether they were entitled to compensation. The Government have no control over the Legal Aid Board, to which, quite properly, we have devolved decision making. As a constituency Member, I frequently find its decisions baffling.
Hugh Robertson: The Leader of the House is aware that many hon. Members in all parts of the House represent constituencies where agriculture is a sizeable contributor to the local economy or shapes the pace of rural life and the environment. It is increasingly difficult to ask questions on particular aspects of farming in Department for Environment, Food and Rural Affairs questions, so will he make time available in the next Session for a proper debate on the future of farming?
Mr. Cook: I am conscious of the demand from both sides of the House for a proper discussion on the countryside, perhaps going wider than the agricultural

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economy. That is a matter that we will bear in mind. The matter of DEFRA questions was raised at the start of the Session, when DEFRA brought together the previously separate Question Times on farming and the environment. We considered the request from some hon. Members to separate out the time, but, on balance, we took a decision that the point of DEFRA was to ensure that we had a seamless approach to the countryside that embraced all other aspects of the countryside economy, and therefore that it was important to retain a single DEFRA Question Time, rather than suggesting that farming could be subdivided from it.
Mr. Paul Goodman: Since the Minister for Pensions told the House:
"Older people will have the choice of doing their business through pension centres…or receiving home visits"—[Official Report, 20 May 2002; Vol. 386, c. 4.],
and since his account was directly contradicted in public evidence given to the Select Committee on Work and Pensions by a senior civil servant in his Department, Ms Alexis Cleveland, who said:
"We are not building a model which is actually showing that anyone can just choose to have a home visit",
will the Leader of the House, notwithstanding what the Minister told the House yesterday, arrange for the Minister to come to the House and correct a serious error?
Mr. Cook: My right hon. Friend the Minister for Pensions informs me that he dealt with the matter at points of order yesterday, that he was absolutely correct and that the hon. Gentleman is in error. I shall happily discuss the matter further with the hon. Gentleman and write to him. I have the fullest confidence in my right hon. Friend, and if I am obliged on the spur of the moment to choose which advice to accept, I shall certainly take the advice of my right hon. Friend.
Mr. Christopher Chope: On Wednesday and Thursday next week, the gentleman described by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) as "the nice Mr. Crow"—most other people think that he is pretty nasty—is turning his bully-boy tactics against 3 million Londoners and is determined to disrupt the underground services. Does the Leader of the House accept that that is a political strike and, in that sense, an unusual strike, because the supposed justification for it—safety—has been removed by the approval of the safety case? Does he further accept that, because of its significance as a political strike and the disruption that it will cause, it would reasonable for the Secretary of State for Transport to come to the House early next week and explain what he intends to do to prevent similar strikes, and how he will alleviate the suffering that Londoners will otherwise undergo?
Mr. Cook: I agree with the hon. Gentleman that the safety case relating to the public-private partnership project for the tube has been thoroughly examined. We have given clear assurances on that, and we have made it plain that the Health and Safety Executive will have the
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final lock on whether the proposals are safe. There is therefore no valid ground of safety for an industrial dispute or for any other form of concern. I do not see any merit in the industrial action to which he refers, and I very much hope that those who work on the London underground will reflect on whether they are really assisting their own cause by taking part in it.
Mr. Mark Francois: On an entirely non-partisan point, as the proposer of a ten-minute Bill seeking to amend the Data Protection Act 1998 to remove the impediments to hon. Members going about their duties on behalf of their constituents, I welcome the confirmation by the Leader of the House this afternoon that he intends to produce, by the Summer recess, a draft statutory instrument to resolve the problem. I and other hon. Members look forward to reading the detail of that statutory instrument and, hopefully, returning after the summer recess to vote it into law to solve the problem once and for all.
Mr. Cook: It would be less than gracious of me to do other than accept what the hon. Gentleman said and I am grateful for his support. I should clarify that it is not I who will lay the statutory instrument but my colleagues in the Lord Chancellor's Department. However, I shall make a point this afternoon of telephoning them as soon as I leave the Chamber to draw the hon. Gentleman's comments to their attention.
Michael Fabricant: Further to the point made by the hon. Member for Stafford (Mr. Kidney) and other hon. Members, can the Leader of the House understand the frustration felt by teachers, head teachers and parents in Staffordshire when the formula grant distribution document offers four alternative options for the funding of schools in England that would leave Staffordshire worse off? One would leave us marginally better off but still with a greater distance than now between the richest and poorest counties. To put that in context, Staffordshire receives the lowest funding per pupil bar one other English county, and that is just not fair. Can we have a debate on the issue? In 1997, the Government promised to put the matter to rights. In this document, all four options make Staffordshire worse off, not better off.
Mr. Cook: As the hon. Gentleman fairly said—I congratulate him on his candidness—there are a number of different options in the consultative document. It is open to his local authority and to others to object to any or all of those four options if they believe that they do not make the correct division. That is why we had a consultation period. I hope that when he corresponds with his local authority and his teachers, he will point out that spending on education is now one quarter higher than it was when the Conservative party was in office and, under the forthcoming spending review, there will be a further increase. There is no local authority in England that does not now have substantially more to spend on its schools and teachers than was the case before 1997. If he would care to admit that publicly, I shall listen sympathetically to what he says about distribution.

Pickering Review
1.27 pm
The Secretary of State for Work and Pensions (Mr. Andrew Smith): With permission, Mr. Speaker, I should like to make a statement on the Pickering report that was published this morning.
The report is the culmination of nine months of hard work by Alan Pickering and his team. I should like to thank him and also everyone who took the time and effort to submit their views—some of whom are here today.
In his report, Alan Pickering acknowledges the encouragement that he received not only from my right hon. Friends the Secretary of State for Transport and the Minister for Pensions, but also from the right hon. Member for Hitchin and Harpenden (Mr. Lilley) and the hon. Members for Havant (Mr. Willetts) and for Northavon (Mr. Webb).
Pensions simplification has to be at the heart of any strategy to encourage greater pension provision. We need to deal with the complexities built up over the years by successive Governments.
Alan's report makes 52 recommendations. The key ones include: a new pensions Act to consolidate all existing pensions legislation; a new more proactive regulator; a better, more targeted approach for communicating with pension scheme members; more flexibility to modify schemes; allowing employers to make membership of their occupational pension scheme a condition of employment; and the ending of compulsory indexation for defined benefit pensions, and compulsory survivors benefits.
The report, together with Ron Sandler's proposals, announced by my hon. Friend the Financial Secretary on Tuesday, represents the first stage of a comprehensive review of occupational and personal pension provision.
The Government will take a radical look at the issues, together with the results of the Inland Revenue review of tax simplification, when that is completed. In the autumn we will come forward with our proposals in a Green Paper.
That will initiate a wide-ranging consultation. It will look at private pensions policy in the round, including the opportunities open to people around retirement, and will set out the Government's proposals to enable people to build up more pension savings.
Alan Pickering's report covers complex issues and includes some tough choices—the inevitable dilemmas faced by all simplifiers. The report presents challenges to us all: employees and their unions, employers and commercial pension providers, the Government and the Opposition. I believe that we will need to be guided by the following principles and objectives, grounded in a long-term approach: fairness; security in retirement; informed choice for consumers; simple and proportionate regulation; ensuring that incentives are effective and well understood; promoting employment among older workers; and flexibility to give individuals more choice about the pace at which they retire from the labour market. I hope that we can secure all-party agreement on those matters.
The Government believe that pension provision should be based on partnership, which can secure lasting buy-in from all key players. We must strike the right balances between sometimes competing goals. We want the
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simplicity that enables people to make informed choices without stifling product innovation and competition. We want a proportionate regulatory framework that provides sufficient security for savers while making it worth while for employers and commercial providers to make available good pension products. We need to ensure that we remove unnecessary barriers to employer provision and employer contributions. We also need to make it easier for people to save and make it easier to sell pension products, as Ron Sandler's report proposed on Tuesday. We need to achieve all that and more against the remorseless arithmetic that tells us that, because we are living longer and want to maintain a good standard of living in retirement, we need to save more or work longer, or a combination of both.
We wanted Alan Pickering to present a strong challenge to the degree of regulation around private pensions. He has done that—he has made some valuable proposals for simplifying pensions legislation and reducing administrative burdens on both schemes and employers, cutting costs and simplifying choices for individuals. His recommendations also present some tough choices. Take, for example, his recommendation that employers should have the choice to make joining a company pension a condition of employment. Some 16 per cent. of people who could benefit from a company pension scheme currently choose not to do so. Compelling people to join would restrict their choice, but against that consideration, we need to balance the beneficial effects for schemes and the overall effect on extending pension coverage.
Alan has also made a number of specific recommendations on easements of legislation—in particular, repeal of section 67 of the Pensions Act 1995. Again, that throws up a tough choice. The recommendation would mean that, if employers faced funding constraints on their scheme, they could have an option to reduce future funding costs rather than close the scheme. Of course, that would remove an absolute guarantee against the consequences of change, but might well secure a better outcome for members and the future of the scheme, set against the alternative of its closure.
Alan also recommends an end to compulsory indexation of pensions and removal of compulsory survivors' benefits as a condition of contracting out. On first reading, those proposals are not attractive. They go against the drive of the past 30 years to price protect pensions and to enhance survivors' benefits, but again, in the light of the report, we will need to look carefully at all the consequences.
As well as the big themes and recommendations to which I have referred, a number of more modest issues are addressed to my Department and others. For example, they include improving the way in which contracting out is administered; streamlining procedures and reducing general administrative burdens; looking at ways better to provide advice through the workplace; and improving information going to pension scheme members. Those recommendations have considerable merit, and subject to the responses that we receive to the report, I intend to take them forward.
In conclusion, I believe that Alan Pickering's report offers clear options for simplification and makes a valuable contribution to the debate that we need to have on the next stage of pension reform. We need to face up to the tough choices that he sets out. In seeking to simplify

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the future we must also face up to the—in many ways harder—challenge of simplifying the past, in that we need to simplify the different regulations that have built up over the years. Otherwise, we will end up adding yet another layer to the existing layer cake of regulation and complexity.
Alan Pickering's proposals are radical, ambitious and pragmatic. I urge hon. Members, the public, employers, trade unions and pension providers—all those whose partnership is essential for effective pension reform—to give them full and constructive consideration. The Government certainly will. The acid tests for the Green Paper must be increasing the level of savings for retirement and making a secure occupational pension accessible to as many people as possible
1.35 pm
Mr. David Willetts: I declare my interests that appear in the Register of Members' Interests and thank the Secretary of State for an advance copy of this very important report
Let me make it clear that we welcome the report, just as we welcomed Alan Pickering's review when it was established. I join the Secretary of State in expressing our respect for the expertise and wisdom that Alan Pickering brought to the exercise. He has produced a valuable report.
Conservative Members respond to the Secretary of State's comments by saying that we understand that the regulatory regime for pensions must be stable to ensure long-term planning, and we will contribute constructively to the debate about the best ways of cutting the burden of regulations on pension funds. That is an obligation on all hon. Members on both sides of the House.
The starting point of the debate has to be a frank recognition of the scale of the problem that faces funded pensions. For years, Ministers have been shockingly complacent, saying that everything was all right when it clearly was not, and citing statistics that they have since admitted were seriously misleading. The Secretary of State should accept the stark warning in Alan Pickering's report that
"without change, the current trajectory suggests less private pension provision in the future."
That warning lies at the heart of his report.
We shall obviously want to study the proposals in the Pickering report very carefully, but I can tell the Secretary of State that we welcome the themes that are expounded in it. For example, we support the call for a proportionate regulatory environment, and we welcome Alan Pickering's vivid expression that a pension is a pension is a pension. There are too many different forms of pension, and it is right to try to simplify them. It is also true that too much pension provision has become a form of archaeology, with pension providers delving deep into the past to identify the date on which a pension was first set up in order to understand the tax and regulatory regime around it. That needs to be tackled
Can I press the Secretary of State for more information about the timetable to which he is working? The
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recommendations will be pointless unless the Government act quickly. As Alan Pickering said in his report
"Time is not on our side."
Yet the Secretary of State offered us a second Green Paper on pensions. I have here the Government's previous pensions Green Paper, which was published nearly four years ago. That contained the Prime Minister's promise that his Government would increase the proportion of pensioners' incomes that comes from private savings from 40 to 60 per cent. Since then, the Government have made no progress whatsoever towards achieving that objective. Instead, they introduced stakeholder pensions that were supposed to go to the 5 million people in their target group, although they reached only about 100,000, and scheme after scheme has closed. Why should the second Green Paper make any progress, given the comprehensive failure of the first?
If we do not get legislation until 2004, as has been suggested, the changes will not be implemented until 2005 at the earliest. Yet, if pension scheme closures carry on at their current rate, there will not be any pension schemes open to new members by the time that the Government finally get round to implementing the proposals in Alan Pickering's report. Will the Secretary of State take this opportunity to inform the House of the likely timetable of any legislation to implement proposals for reform?
May I also press the Secretary of State for more information about the burden of regulation, which is still increasing? Since the Pickering review was established in September 2001, we have had 251 pages of new regulations. We are still waiting for the final results of the Myners review. It is good to see a Treasury Minister on the Front Bench because the Treasury, in its commitment to implementing Myners, has been threatening pension schemes with yet more regulation. There is a useful warning in Mr. Pickering's report: he hopes that the people taking forward Myners—he might be thinking of the Financial Secretary—will
"keep in mind our arguments for simplification."
Can we have an assurance from the Secretary of State, as the minimum to show his good will on this exercise, that more regulation will not be imposed on pension schemes while we wait for his supposedly deregulatory legislation? Without such an assurance, it will be difficult to take the Government's commitment to deregulation seriously.
The terms of reference for Alan Pickering's report were very narrow and excluded some of the main factors that have been driving the crisis in funded pension provision. Why was Alan Pickering unable to comment on the structure of state pensions, including the state second pension, which left-wing think tanks such as the IPPR are now saying should be abolished before it has even begun?
What about the burden of ever more means-testing of pensioners? Why could not Pickering comment on the spread of means-testing, which will soon result in more than 50 per cent. of all pensioners finding themselves on a means test? If so many pensioners are to face means tests, which will mean that they are not fully rewarded for their saving, does the Secretary of State recognise the serious danger that the main beneficiaries of the review could be the richer half of the population? They will not be trapped by the means test that he is imposing on the less affluent 50 per cent. of pensioners.

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What about the financial burdens that the Government have placed on pension funds which are their direct responsibility? What about the £5 billion a year tax on pension funds, and the £1.5 billion a year cost of the insufficient value for the contracted-out rebate? Does the Secretary of State recognise that that adds up to £6.5 billion a year being taken from our pension funds? That is the real reason why our pension funds are closing, and nothing that he said today showed any willingness to recognise the scale of that problem and what needs to be done to tackle it.
Mr. Smith: I thank the hon. Gentleman for his comments. He was considerably more constructive at the beginning than at the end. Indeed, his tone at the beginning is the one more likely to lead to a productive outcome for this House, the country and pensioners at large. I appreciate his welcome for the report and echo his praise for Alan Pickering's expertise and everything that he and his team have brought to the recommendations.
I welcome the hon. Gentleman's commitment to constructive engagement on these matters because pension policy is by definition for the long term. As Alan Pickering points out in his report, it does not coincide with the electoral cycle. All of us in this House have an interest in doing—indeed we have a duty to do—our very best to pull together to lay some foundations for occupational and private pensions that can stand the test of time. Therefore, as far as possible, constructive all party engagement on these issues is very much to be welcomed.
The hon. Gentleman raised the issue of complacency. We are certainly not complacent on these matters. Indeed, the very reason that my predecessor, my right hon. Friend the Member for Edinburgh, Central (Mr. Darling), and the Chancellor commissioned not only the Pickering report but the Sandler review as well as the Inland Revenue tax simplification report before the recent events that have caused additional concern is that we were seized of the importance of getting the framework for occupational and personal pensions right.
There is a tendency for the debate to oscillate between hysteria at one extreme and complacency at the other. As a recent Financial Times editorial pointed out, the right thing to do is to take a hard-headed, realistic look at the challenge that we face—the challenge is certainly there, which is why we are producing a Green Paper—and not to be distracted from the seriousness of that purpose.
On the timetable, of course we want to move as quickly as is sensible on a matter such as this, but, to get a considered reaction to these complex and, in some areas, contentious, proposals, it would not be right to proceed without hearing what the public, the other parties in the House, and the providers—the essential partners to successful future pension provision—have to say about them. We also have to await the tax simplification review, and any tax implications from these proposals would, in any event, be considered on a Budget timetable.
The hon. Gentleman referred to the burden of regulations, which we are countering here. As I said in my statement, we are tackling regulations that have been put in place by successive Governments. I do not want to turn this into a partisan ding-dong—
Mr. Andrew Love: Why not?
Mr. Smith: Tempting though my hon. Friend's suggestion is, the truth is that we have only to read the Pickering report to see the number of measures that he suggests need to be tackled that were actually the product of legislation passed by the previous Conservative Administration, albeit often with the best of intentions. One of our problems is that layer upon layer of complexity and regulation has been built up in response to short-term events, and that has left us all with a huge long-term problem.
On Myners, I am sure that we and the Treasury will bear in mind the need for simplification that Alan Pickering points to. On the hon. Gentleman's reference to means-testing, I have to say that the Conservatives seem deliberately and consistently to overlook the enormous benefit that the pension credit brings. It cannot be stated too often that, for those saving above the basic pension, the pension credit will, for the first time, reward that saving rather than penalising it as the Conservatives did.
I welcome the hon. Gentleman's constructive response to the report, and I look forward to our working with colleagues on both sides of the House to carry this forward in an all-party spirit.
Mr. Steve Webb: I thank the Secretary of State for advance sight of this detailed report. I welcome the fact that Alan Pickering is seeking to create an all-party consensus on pensions structures, and I can confirm to the Secretary of State that, if he decides to approach prospective legislation in that way, the Liberal Democrats will certainly play a full and constructive part.
I want to raise two areas of concern, however. One involves issues that were in the report, the other matters that should have been in it. It terms of what was in it, I disagree with Alan Pickering in that I do not believe that benefits for widows, or the post-retirement raising of pensions, are bells and whistles. In our view—and, I sense, in the Secretary of State's view—they are an integral part of what pensions should be. Given that many old pensioners—the poorest pensioners in the land—are often elderly widows, can it be right to undermine provision for widows or to have more pensions frozen for 20 years of retirement? I do not believe so, and I hope that the Secretary of State will confirm his intention to look very sceptically at that proposal.
In terms of what the report perhaps should have said, will the Secretary of State accept that, given the tens of billions of pounds shortfall—whatever the figure is—in the amount of saving that should be going on, these proposals, although many are welcome, are not up to tackling that scale of problem? With the best will in the world, the Green Paper, and subsequent legislation a few years down the line that will probably take effect decades down the line, will not tackle the crisis now, though they are part of the overall strategy. Is it not time to require all employers to put money into their employees' pensions, and to give good employers and their employees the incentive to go further and to build on that? Without such provisions, we shall see a continued haemorrhaging of money from pension funds.
Mr. Smith: I thank the hon. Gentleman for his constructive response, and for his commitment to resolving the matter with as much cross-party agreement as possible.

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The hon. Gentleman mentioned a description of survivors' benefits as bells and whistles. It is certainly not a description that I would use—such benefits are valued features of current schemes—but we cannot escape the tough choice, and the tough question, posed by Alan Pickering. He says that, in the event of a choice between maintaining those benefits and the closure of schemes—resulting in lower contribution rates—people might end up substantially worse off. I do not find that proposition attractive, but at this stage I am not ruling anything in or out. I want to examine all the proposals and all the responses.
As for the scale of the problem and the extent to which the report addresses it, the terms of reference can be found in the appendix. They refer specifically to simplification of regulation, and Alan Pickering rightly focused on that. Of course this report will have to be judged alongside our response to the Sandler report and the Inland Revenue's work on tax simplification. As I have said, the Green Paper will be a substantial and wide-ranging document that will meet what is a considerable challenge.
We must think carefully about the implications of compulsory employers' contributions. Again, I am ruling nothing in or out at this stage; but if employers withheld wage increases or even cut wages to pay for those contributions, as some might be tempted to do, the cost would be effectively transferred from employer to employee. Furthermore, if employers were tempted or indeed forced to cut jobs, people might lose not just their occupational pensions but their wages.
Those attracted by the Australian example would do well to remember not just the differences in basic state provision in that country, but the fact that compulsion was introduced there as part of an historic compromise with the trade unions. There was a deliberate drive to hold down wages to help pay for pensions. We need to think carefully before embarking on such action.
Mr. Frank Field: The Secretary of State told us more about what he hopes to do in six minutes than most of his colleagues tell us in five times as long. I thank him for his statement, and join him in thanking Alan Pickering for producing a report on how best we might protect the one obvious welfare success of the last 100 years—and, in so doing, serving up to the Secretary of State not just the soft options but some of the hard options that we may have to take in preserving that great welfare success.
When the Secretary of State drafts his Green Paper in the autumn, taking a radical look at what needs to be done, will he take account of the economic cost to taxpayers of past failures to ensure that everyone has an adequate, decent minimum pension in the first place? The current cost of those welfare failures to each standard-rate taxpayer is 5p in the pound, and according to the Government's own calculations it is expected to rise to 13p. Are there not better ways of spending taxpayers' money than paying the cost of a failure to guarantee adequate pensions for all in the first place?>
Mr. Smith: I thank my right hon. Friend for his kind remarks. The whole House greatly admires and respects his expertise, even if we do not always agree with every detail of his proposals.
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My right hon. Friend makes a fair point about the importance of fully assessing economic costs, and I shall examine them closely. When considering the proper use of taxpayers' money, however, we must recognise the need for decisions about how thinly to spread resources for pension enhancement across the pensioner population, and about how much sense it makes to concentrate at least some additional state resources on the poorest pensioners. I make no apology for the fact that an important strand of the Government's policy has been concentrating a proportion of the available resources on the poorest pensioners, thus helping many out of poverty.
Mr. Archy Kirkwood: Does the Secretary of State agree that Alan Pickering is a wise man and that the report will repay careful study? First, may I tempt the Financial Secretary to whisper in the Minister's ear the possible outcome of the Inland Revenue negotiations. Those in the industry to whom I have spoken are encouraged by the discussions so far and have been led to expect a fruitful outcome. However, it must be an early outcome, so can he say a word about that? Secondly, if he is being sceptical about some of these things—and I hope that he is—may I refer him to some of the advice that he may have been getting from the Government Actuary Department about the loss of cover to ill-health retirement as that would merely increase the number of people who would be passported straight on to incapacity benefit, which is already a huge problem for the Government?
Mr. Smith: I thank the hon. Gentleman for his constructive remarks. He tempts me to say what the outcome of the Inland Revenue tax simplification review will be before it is completed. Sadly, I am not in a position to do that. However, it is important that every dimension of the review is approached in a radical spirit and that we entertain the bold action that is necessary as a consequence properly to secure the future for occupational and personal pensions. I also take his point about incapacity benefit.
Mr. James Arbuthnot: Is the Secretary of State aware that I am one of the culprits in introducing some of the previous legislation? As he rightly says, it was for good reason at the time, whether it was Robert Maxwell or pensions mis-selling or whatever. I thank the Secretary of State not only for what he said but for the tone in which he said it. In the interests of increasing the cross-party support that I am sure that this report will garner over the months, will he consider referring the pensions Bill which the Pickering report mentions to a Special Standing Committee rather than to an ordinary Standing Committee, so that evidence can be taken from pensions experts during the Bill's passage through the House and we can get the detail right on difficult issues such as pensions on divorce?
Mr. Smith: I thank the right hon. Gentleman for his kind remarks on tone and reciprocate by thanking him for the way in which he made his remarks. I have noticed the spirit in which he has contributed to previous debates on this matter. It is good of him to own up as a culprit, having introduced some of the legislation that we are dealing with. I hope that I do not have to do the same at some point in future. He invites me to consider referring a

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future pensions Bill to a Special Standing Committee. I shall certainly consider it, but as he will understand, I cannot commit to that at this stage.
Mr. Peter Pike: Is it not important that all of us interested in occupational pensions, not only in the House, but in the country, study carefully the proposals in the Pickering report? It is also important that we do not allow a knee-jerk reaction because of the two headline-grabbing proposals that we may not like on index linking and pensions for surviving spouses.
My right hon. Friend referred to important matters to be included in the Green Paper that will be published later in the year. I remind him that pension security is crucial. In my constituency, so many pensioners in different schemes have lost out over the years, including those affected by the Bellings pension fraud, that we should make sure that all workers get what they expect from their pensions when they retire.
Mr. Smith: Yes, indeed. My hon. Friend makes some wise comments. On his second point on security, it is worth highlighting what Alan Pickering says in the foreword to the report:
"Our proposals will lift the regulatory burden on employers, but it remains incumbent on those employers to keep their side of the bargain with employees and meet their pension promises."
It is timely to have a reminder that rights and responsibilities in these matters cut both ways. My hon. Friend was wise to rule out knee-jerk reactions to the report.
The more one reads the report and sees its careful structure and inbuilt balances, the more one realises that it pays to reflect carefully on it before reaching conclusions.
Mr. Tam Dalyell: The sobering if joyous fact is that, in the year that I was elected to this House, the Queen sent 200 telegrams to those who had reached their 100th birthday, but last year, she sent 3,900 such telegrams. Does that not reflect the size of the problem? Will my right hon. Friend consider the difficult issue of whether equivalent pension benefits are to be commuted at the discretion of trustees, unless a member objects? That is an urgent problem.
Mr. Smith: On the first point, which my hon. Friend puts characteristically graphically, greater longevity is of course one of the challenges that we are addressing. It is great news that so many people are living much longer, and that many are receiving telegrams from Her Majesty, but as I said in my statement, that presents us with some remorseless arithmetic. Given that we are living longer, and that we want to maintain a high standard of living in retirement, we must either work more, save more, or a combination of both. I have noted my hon. Friend's concern about equivalence, and I shall certainly reflect further on it.
Mrs. Cheryl Gillan: The Secretary of State is doubtless fully aware of the problems with which my local Buckinghamshire authority must deal in respect of pension funds, and of the fact that local council tax payers face the prospect of having to make up the shortfalls out of their diminishing pension income. Does he plan to review local authority pensions, will the
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forthcoming Green Paper deal with that issue, and does he consider that the Pickering report has any implications for such pensions?
Mr. Smith: As the hon. Lady should be aware, the system of allocation to local authorities through standard spending assessments is under review, and where relevant, the pensions aspect will doubtless be factored in. However, we are talking about a matter for which public authorities have to pay from their allocated budgets. As with other public bodies, it behoves local authorities properly to meet their responsibilities in this regard.
Mr. Andrew Dismore: So far, we have heard nothing about the self-employed, 54 per cent. of whom have no additional pension provision. Does my right hon. Friend see anything in the Pickering report to encourage the self-employed to take out pension policies? Can he confirm that the consultation will address this issue in particular, and will perhaps consider the question of compulsion?
Mr. Smith: My hon. Friend points to an aspect of the current pattern of provision that warrants re-examination. In the past, the general assumption has been that the self-employed are responsible for making their own provision. However, as he says, many do not—at least, not through pension products—although they might be building up other assets. As we draw up the Green Paper, I shall look closely at the position of the self-employed, along with other categories of workers.
Mr. David Ruffley: Has the Secretary of State ruled out making a second pension compulsory for everybody?
Mr. Smith: The statement is about Pickering, pensions and regulation. As I said in relation to the forthcoming autumn Green Paper, I am not ruling matters in or out, being just a few weeks into the job. However, I am not setting hares running on extending compulsory state second pensions.
Mr. Andrew Miller: As someone who, in a previous life, negotiated with large companies on pension matters, I know that many people will welcome simplification and better information in the workplace; indeed, that is mission critical to the success of future schemes. However, like my hon. Friend the Member for Burnley (Mr. Pike), I have had to deal with the sad case of a scheme that was abused by an employer, H. H. Robertson. [Interruption.] The Minister for Pensions, my right hon. Friend the Member for Makerfield (Mr. McCartney) nods—he is obviously familiar with the background. When my right hon. Friend removes the parts of the legislation that he proposes to remove, may I caution him to ensure that he does not diminish the protection provided to workers under the Pensions Act 1995? Does he recognise the need for greater transparency so that employees can see problems arising earlier than they can at present?
Mr. Smith: I am not proposing to remove any parts of anything, because we are at present considering the recommendations that Alan Pickering has made. However, my hon. Friend makes an important point. It is

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appalling when workers who have placed confidence in the conduct of their employers have that shattered by the sort of behaviour that he mentions. I agree that workers will welcome simplification and better information in the workplace, and that is one of Alan Pickering's recommendations that we will wish to take forward, in conjunction with the Financial Services Authority, in terms of education and information. I agree that more transparency is important and, as we prepare the Green Paper, we must also keep a close eye on the security dimension.
Mr. Jonathan Sayeed: I thank the Secretary of State for the balanced tone in which he presented his statement and for responding so positively to the attempt—often made from this side of the House—at a constructive engagement with the long-term problem of pensions. Does he accept that if company pension schemes are freed from some of the performance indicators, it is likely to mean that final pay-outs will be lower? I was pleased to hear that the Secretary of State did not sound too keen on the proposal to ditch the obligation to pay benefits to the widows of pensioners. That would be an anti-family proposal that would hit middle-aged women who have spent their life bringing up their family.
Mr. Smith: I welcome the tone in which the hon. Gentleman poses his question. He is right to say that if company schemes were given greater flexibility, that might result in lower final pay-outs, but the tough choice that the Pickering report invites us to consider—and which we would be wise to consider—is how far some modification, within certain limits, is preferable to the closure of schemes on the likely pretext of greatly reduced contributions, or is an essential element in making schemes simpler to administer so that we can overcome the layer cake of complexity to which I have already referred. Without ruling anything in or out, I have already given a clear signal of how I feel about the important question of survivors and widows. It is also important that when we prepare the Green Paper in the autumn—and I have already briefed my officials on this point—we have a comprehensive analysis of the implications for women of present private and occupational pension provision and the reforms we might entertain.
Miss Anne Begg: If the Government are to achieve their stated aim of a ratio of 60 per cent. private and 40 per cent. state provision of pensions, the issue of public confidence and trust is important. There is no doubt that the best way to provide for one's old age is through an occupational pension with employer contributions. However, does my right hon. Friend agree that at the end of this long process—and it will be long—if people of working age are to invest their hard-earned cash in occupational pensions, they will have to have a guarantee that the money will be there for them when they reach retirement age?
Mr. Smith: Yes, that is why I have said that security in retirement is one of the objectives against which our preparation of the Green Paper will be judged.
Miss Julie Kirkbride: It is a sad fact that in my constituency, the issue of pensions is fast
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becoming the biggest in my postbag. People are concerned about the collapse of occupational schemes, as the Minister for Pensions will know, as well as their closure to new entrants, so speed is of the essence.
On a more specific point, can the Secretary of State promise my elderly constituents that the forthcoming Green Paper will contain plans from the Government about the reform of annuities?
Mr. Smith: Yes, that is our intention. The hon. Lady will be aware of the consultation that we have already undertaken on the future of annuities, and we are considering the responses. We shall be making a further statement on this as part of the Green Paper. However, I do not want to raise the hon. Lady's expectations as she might subsequently be disappointed, and we would do well to remember that an annuity is still the only way of guaranteeing an income throughout retirement. That said, there are important changes in terms of encouraging a better, more competitive and responsive market in the sorts of annuities that are available, so that they suit individual preference. We will respond to that matter in the Green Paper.
Mr. Tom Levitt: It has always struck me as odd that those people who are for ever telling us that they are so valuable to the economy—the entrepreneurs, the innovators, the movers and shakers—tend to retire early on very generous pension packages, whereas those who have not been so fortunate have to work right up until state retirement age to get a modest income from their pensions. When reviewing his response to the Pickering report, will my right hon. Friend consider not only the interests of those on low pay and those entering or re-entering the labour market late in life but the pension rights of people who, after a lifetime of employment, seek to go to a step-down employment position for a few years before they retire which can, at present, jeopardise their pension rights?
Mr. Smith: Yes, I referred in my statement to the importance of the Green Paper looking at the wider opportunities around retirement, and this is precisely the sort of thing I meant. Instead of facing a cliff edge, many people would like to move into retirement more gradually. My hon. Friend is quite right that their options are artificially constrained. Indeed, there are perverse incentives on far too many people to pack in work sooner than they would like. I want the outcome of our further work and the Green Paper to bring forward some truly radical proposals that will open up new choices and opportunities for these most valuable members of the population.
Hugh Robertson: May I draw the House's attention to my entry in the Register of Members' Interests?
I welcome the Secretary of State's commitment to take a radical look at this issue in the near future and, as part of that review, will he give an undertaking to look at the diversification of investment asset classes, particularly the cost of trading in and out of those alternative asset classes? For example, if people could have had greater exposure to the commercial property market in their pensions in recent years, the returns on them would have

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been significantly boosted. They are currently prevented from doing so by the level of stamp duty. Will the Secretary of State look at that?
Mr. Smith: I will look at these matters, but when investment in any form of asset is urged on me, in the House or elsewhere, it is wise to remember the adage about not putting all one's eggs in a single basket.
Mr. Barry Gardiner: I welcome the report and the commitment to a Green Paper in the autumn. Does my right hon. Friend accept that there is a tension contained in the report? Pickering argues that in the workplace, the pension is part of the remuneration package, yet one of the recommendations in the report is that section 67 of the Pensions Act 1995 should be repealed, which would allow employers facing funding constraints to change their funding contribution to the scheme. It refers to an overall replacement of benefits, so although the overall benefits package from those employers may remain the same, unilateral change in the individual remuneration of workers might be possible. Will my right hon. Friend look extremely carefully at that recommendation before allowing it to go ahead?
Mr. Smith: My hon. Friend makes a very good point. I agree that it makes sense to consider that recommendation extremely carefully, not least because of its implications for the rights of individuals. One possible approach would be to put limits on any detriment that might be involved. We should not underestimate the importance of getting to grips with these issues if we are really to have the far-reaching simplification that we need. That is true not only for the ease of schemes' administration but to allow us to have some actuarial equivalence for all the different pots under different schemes for different periods that people have built up. There are great prizes in the efficiency and overall benefit of pension provision if we can crack that, which is why it would be unwise to rule out any change in this area.
Mr. Mark Hoban: What assessment has the Secretary of State made of the cost to the Treasury of ending compulsory indexation and compulsory survivor benefits? It strikes me that the proposals will end up transferring costs from pension schemes to the Exchequer, so it is right to be wary of them.
Mr. Smith: I am sure that my colleagues in the Treasury are keeping a close eye on that aspect of the proposals.
Mr. Jim Cousins: National insurance payers are a substantial collective investor in occupational pension schemes, so I urge my right hon. Friend not to accept the recommendations relating to survivor benefits and the provision of cost of living increases in pensions. Down that path lies not consensus but a great deal of hidden misery for people in occupational pension schemes and their relatives, when old. Many survivor benefits will go not to women but to men, and that should be borne in mind. Inevitably, following that hidden misery, there will be more means-testing and more cost to the Exchequer.
Mr. Smith: Those points are forcefully and well made and I shall certainly bear them closely in mind.
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I appreciate the arguments about the impact on individuals and families in the future, as well as the logic of the position concerning how far it is justified, when the national insurance system provides particular benefits, for schemes that are funded in part by contracting out from those benefits not to provide them in turn.
Sandra Osborne: I share the concerns of other hon. Members who have seen constituents paying into pension schemes all their lives only to find that they do not get the benefits when the time comes. I welcome the proposals for increasing scheme membership on the boards of trustees, but does my right hon. Friend agree that it is absolutely vital that such trustees have the proper training, so that they have the necessary skills and knowledge to make sound judgments about pension schemes?
Mr. Smith: Yes. That is a very important part of the Myners agenda. Given the importance of the role that such trustees are fulfilling, it is crucial that they understand it and are well equipped to fulfil it.
Mr. Andrew Love: Like my right hon. Friend, I used to work for the retail Co-operative movement, which had a very good final salary scheme. In 1988, it was not allowed to continue to include all employees in the scheme, so many lower-paid employees left. They did not take up any of the alternative pension provision that was available, so they are now retiring on inadequate pensions. I commend the recommendation that employers should be allowed to have all employees included in their scheme.
I also welcome the emphasis in the report on simplification, and especially on education and advice for consumers. Does my right hon. Friend agree that a system that people can fully understand will gain their trust and confidence, ensuring that we can fill the pensions gap?
Mr. Smith: I welcome my hon. Friend's comments. He is right about the importance of education, so that people can have a better understanding of the pensions situation. One of the tragedies is that it is an impenetrable maze for many people. Tragically, workers have lost out because they did not understand what was happening to them or the choices that were open to them.
I hear what my hon. Friend says, and we will think carefully about the question of compulsory membership of schemes, which may not be to some people's advantage. Instead, they should have a good, defined contribution alternative. That depends on the level of contributions, which is the acid test against which proposals should be judged. It is the end result that is important—the level of contributions and thereby the security and standard of living people will have in retirement. I shall bear all my hon. Friend's points closely in mind.

BILLS PRESENTED

  CONTROL OF FIREWORKS (No. 2)
  Mrs. Cheryl Gillan, supported by Mr. Laurence Robertson, presented a Bill to make provision with respect to the sale and use of fireworks; and for connected

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  purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 July 2002, and to be printed [Bill 172].

  ENVIRONMENTAL AUDIT (No. 2)
  Mr. Laurence Robertson presented a Bill to require the Comptroller and Auditor General to examine and report on the environmental impact of public expenditure, and the environmental performance of government departments and certain other public bodies against targets set by Ministers; to provide for the establishment of an Environmental Auditor General to carry out such functions and report thereon to the House of Commons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 July 2002, and to be printed [Bill 173].
  HOME ENERGY CONSERVATION (No. 2)
  Mr. Jonathan Sayeed presented a Bill to make further provision about energy conservation in relation to residential accommodation; to make further provision about the eradication of fuel poverty; to amend the definition of house in multiple occupation in Part 11 of the Housing Act 1985; to amend the law relating to registration schemes for houses in multiple occupation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 July 2002, and to be printed [Bill 174].

Intelligence Agencies
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
2.22 pm
The Secretary of State for the Home Department (Mr. David Blunkett): After the heat of yesterday, we have the cool of today. First, I want to thank my right hon. Friend the Foreign Secretary for sharing these annual debates. I will lead today and, God willing that we are still in present posts, he will lead the debate this time next year. I am not making any predictions, so hon. Members should not get hot under the collar.
It is appropriate that my right hon. Friend and I share these debates, because much of the work on internal security was undertaken by him when he had my present post, and his understanding has made a big difference in the past year when we have worked together with the Secretary of State for Northern Ireland on these important issues. Given the debates in the House in the past year—the Foreign Secretary has led on a number of them—hon. Members are familiar with the issues that have arisen following the tragic events of 11 September.
Hon. Members are also familiar with the debates that have taken place on the terrorist threat that has emanated from Ireland, and we pay tribute to members of the three major intelligence services, to whom we owe a great debt of gratitude for the conduct of their work. That also applies to the anti-terrorist branch of the law enforcement agencies and those who work with them. There is now greater collaboration than ever before between the services and other agencies, including Customs and Excise and the immigration service.
I also pay tribute to the work of my right hon. Friend the Member for Dewsbury (Ann Taylor), as the new Chair of the Intelligence and Security Committee. I welcome the considerable contribution that she and the members of that Committee, with their range of experience, have made to its excellent report. It deals with the important issues in depth, but because of its nature much of it must remain private. I commend the way in which they have handled that. It has enabled those of us who have regular briefings from the services to be open and transparent. My right hon. Friend and I greatly appreciate the report that they have produced.
I am also pleased to acknowledge that we and the Prime Minister were in agreement with the direction of the report and the powerful points that were made in it. That has enabled us to come to Parliament with confidence for today's debate, and for debates such as that on the Anti-Terrorism, Crime and Security Act 2001.
Hon. Members would not forgive me if I did not pay tribute to the intelligence service, the interception commissioners and the president and members of the investigatory powers tribunal. They deserve our thanks, because they are unseen and do a tremendous job both at my elbow and for my right hon. Friends the Foreign Secretary and the Secretary of State for Northern Ireland. They also provide reassurance to the House and to the public.
Strange things have been written in recent weeks, and I heard at least one strange interview, which was rigorously taken up privately. It implied that some of us delegate our task, and that we nod things through. My right hon. Friend

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the Foreign Secretary and I can affirm that many hours are spent not nodding things through and not delegating the task entrusted to us. We take that task seriously: it is a matter of honour. We are responsible to the House and to the British people for getting it right. I mention that because there is a feeling outside the House that arbitrary action is taken and that there is no surveillance of our surveillance, but there is, although understandably little is known about it. The work that is undertaken makes a big difference.
I also want to thank John Warne, the director of the international and organised crime division, who is retiring. We wish him well and thank him for the work that he has done. We also thank Sir Stephen Lander, who is head of the Security Service and is also retiring. I do not think that their retiring has anything to do with me: they have come naturally to the point of retirement. Sir Stephen Lander has had a difficult task, which in recent years has become more transparent and visible to the world compared with the days when no one would mention the building they worked in, never mind the name of the director general of the service. We welcome Eliza Manningham-Buller, who is taking over from him and who I know will do an excellent job.
Mr. Tam Dalyell: This may be an improper question that my right hon. Friend is not prepared to answer, but we read in the public press that Eliza Manningham-Buller led the investigation into Lockerbie from the intelligence point of view. Is there anything more he can say about that?
Mr. Blunkett: My hon. Friend answered the question before he asked it, for which I was grateful, because regrettably the answer is no. I admire his persistence.
The debate over the past 10 months has obviously been dominated by the tragic events of 11 September. It has thrown into sharp relief the importance of putting into perspective the question of how we deal not only with terrorism, but with the global nature of organised crime and terrorism and the methods used.
As I mentioned earlier, we have become tragically familiar over a long time with acts of terrorism both in Northern Ireland and on the mainland. That has developed expertise and skills in the security and intelligence services and the anti-terrorism branch of the Metropolitan police that have stood us in good stead. However, the current terrorist threat is perceived very differently by the public, as it is too—as my right hon. Friend the Foreign Secretary will explain in greater detail—from the point of view of the security and intelligence services in respect of our liaison with other countries.
It is worth noting that our links with Europe and with the FBI, the CIA and the NSA in the United States have been strengthened since 11 September, although they were already growing strongly. The will across our continent to link with others to counter threats of terrorism is standing us in good stead. We are co-operating not only to combat terrorism but, as we debated at great length in the autumn, on the directly related issue of organised crime. That co-operation assists us in combating non-violent but underpinning threats in respect of finance and other measures.
In the aftermath of 11 September, actions were taken globally some of which we all regret because we would have preferred not to implement such measures in a free
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society. Part 4 of the Anti-Terrorism, Crime and Security Act, which is emblazoned on my heart, is one such area of that debate and we shall return to it. Obviously, we have already agreed about the debate after 15 months. There will be a review of part 4 and we are grateful to Lord Carlile for undertaking it. Privy Councillors, chaired by Lord Newton, will review the whole Act. I am grateful to Lord Newton and the members of that committee for the work that they will be undertaking. There is also the sunset clause, so there are several safeguards and opportunities for review.
It is worth noting that all of us who deal with such decisions do so with regard to the sensitivity and proportionality that was promised before Christmas, and with regard to the real concerns expressed then and since by Members on both sides of the House. The role of Parliament, of a free society and of a free press is to give reminders and place restraints on Ministers—both those who see the internal advice and those who reflect on the nature of the threat—so that we are not allowed to let the task and the measures that have to be implemented get out of proportion.
We all understand that in the cut and thrust of debate it can be suggested that we take people's liberty lightly. That is not true. In a free and democratic society, it behoves Parliament and a free press to remind people in our position of that fact, and to see such reminders and checks not as detrimental but as an advantage. It is only because we have a free society that we can debate the protection of those freedoms as we do; otherwise we should not be holding this debate. Nor could those of us who are responsible for recent legislation be recalled. My right hon. Friend the Foreign Secretary oversaw the passage of some difficult measures when he was at the Home Office. I am glad that he did so, because I should otherwise have had an even more difficult time during our debates in the autumn.
Mr. A. J. Beith: Does the Home Secretary also agree that, in the heat of debate, there can be a failure to recognise that those who want to draw attention to important civil liberties are also concerned about the safety and security of the people of this country? To pursue the civil liberties aspect, especially as Departments are notorious for inserting in legislation provisions that they have wanted to implement for a long time, is not to be unconscious of the security needs of the country, but rather to want to be certain that statutory measures that go beyond the normal powers of the state are wholly justified.
Mr. Blunkett: There is no dispute between us. In the heat of the moment, we may sometimes be a sword's length apart—it is probably a good job that the line was drawn. In the debates in which I was involved, we have always acknowledged that those who are questioning or opposing have an equal commitment to those safeguards and to securing our liberty and freedom. I am sure that was also true for my right hon. Friend during the debates on the Terrorism Act 2000 and the Regulation of Investigatory Powers Act 2000. We attempt to achieve that by debating the right ends. I accept that we need to be vigilant about the propensity for people to seek, with the best intentions, wider powers than are needed, while ensuring that at a moment of crisis they are not held to account for having failed to see what might be coming.

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I think my right hon. Friend will have something to say about hindsight. One does not need a guide dog for hindsight—one of the things that strikes me most—but people always hold to account the current holder of the office, whether Foreign Secretary, Northern Ireland Secretary or Home Secretary, for things that they might have done, perceived or legislated on if only they had seen them coming. We are all in that boat, whatever our political persuasion.
Some parts of the measures that we passed and some of our debates are not only right in the context of the legislation; they have an impact on the culture and on the way other people can contribute to safeguarding our liberty by being more vigilant. Such provisions can put those who would too easily take their liberty for granted on to another road; above all, they act as a deterrent.
Like the security and intelligence services, I am convinced that our actions during recent years have been a deterrent to those who would use our country as a base for terrorism, to set up cells and develop the support services and finance for terrorism. That rebuts newspaper reports in this country and elsewhere that suggest that we are a soft touch, and that prior to 11 September London was an easy base. People cannot have it both ways. They cannot claim that our actions are on the very edge of disproportionality while countenancing the view that we host those who should be ejected from our country or incarcerated. We have to get the balance right; the fact that we have been well and truly taken to task by holders of both those points of view offers us reasonable grounds for believing that we have done so.
Simon Hughes: The Home Secretary has spoken in extremely measured tones, as one would expect him to do on this subject. In the light of his comments about the safeguards built into recent legislation, does he agree that those safeguards were the result of parliamentary intervention, which corrected, amended and improved the original measures? I hope that we would all agree about that.
There is however another safeguard that people outside this place regard as important: the independent judicial overview of any decisions that affect or take away someone's liberty, or give excessive power to the state. Does the right hon. Gentleman accept the principle that if, for example, we take away the normal rights of defendants, there should always be independent judicial scrutiny—as provided by the commissioners to whom he has paid tribute—in addition to any scrutiny undertaken by Parliament?
Mr. Blunkett: I agree entirely with the hon. Gentleman's first point. That is why, although for obvious reasons I have not gone through every detail of the proceedings on the Terrorism Act that my right hon. Friend piloted through the House, on Second Reading of the Anti-Terrorism, Crime and Security Act I deliberately made it clear that we would listen and respond and that we would remove provisions from the Bill, or amend it, in the light of the arguments made by the House, the Joint Committee on Human Rights and the Select Committee on Home Affairs. That is exactly what we did. Sometimes since then, I have been accused of making proposals and
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backing off; I should rather be accused of backing off and finding a different way forward than of blind stubbornness for the sake of it.
Parliament is at its best when hon. Members are prepared to listen to one another and respond; the press is at its worst when it misinterprets that as muddle, confusion, weakness or something else. We need to stick with that process if we believe in democracy. As we do not have the whole fount of wisdom in our heads and hands, we are prepared to do so, and I will carry on doing so whatever the consequences. We did not always agree, but amendments were made to improve the Anti-Terrorism, Crime and Security Act 2001, and that is why the reviews are important in discovering whether any further change would enhance it.
Of course I agree on the second point. In fact, in the next few days, the Special Immigration Appeals Commission and judges will hear major challenges in relation to the decisions that the House and Parliament as a whole have taken on derogations and the rights of the individual. That is how it should be, and it is proper that that should take place.
Measures were taken in part 4 of the 2001 Act to recognise that al-Qaeda was not finished and that there were networks abroad, as there had been in preparing to attack the World Trade Centre. That has since been proved true very recently in Germany and Milan, as well as in my right hon. Friend's bailiwick, given what has been taking place in Morocco and the attacks in Pakistan. Clearly, we receive evidence from time to time that risks are foiled by the early action that is now taken and the vigilance that exists. That is right, and it is true internally as well, with the security measures that we have been able to put in place, with the collaboration of Departments, with the work of the security and intelligence services and with the Civil Contingencies Committee and the committee established by the Prime Minister to develop internal security measures. All that has made a real difference to what we believe to be a safer Britain and United Kingdom since the events of 11 September.
Cash has been seized and assets have been frozen, under United Nations auspices in the latter case. Ministry of Defence police have been involved in such work on 19 occasions, including the use of armed patrols, as Parliament has granted them the ability to act outside their jurisdiction. Between the beginning of April and June, British transport police have been engaged in 375 arrests in interventions outside their former jurisdiction. That has been extremely helpful, and 16 separate bank accounts have been identified in relation to money laundering. So substantial change has been possible already because of the 2001 Act and the way in which it has been implemented.
Mr. Menzies Campbell: The Home Secretary is being characteristically generous in giving way. I hope that I have not anticipated his dealing with another matter, but it is widely reported that, when the new Cabinet Secretary takes up his post, responsibilities that might otherwise have been his will be discharged by Sir David Omand. Sir Andrew Turnbull and Sir David Omand are men of the highest integrity and reputation. Can the right hon. Gentleman explain to the House—

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indeed, is it in his bailiwick to do so—precisely what advantages are thought to be derived from that departure from the previous arrangement?
Mr. Blunkett: My right hon. Friend the Foreign Secretary will deal with that in a whole section in his speech, which I shall not presume to duplicate. Suffice it to say that Sir David Omand is assisting with civil contingencies in a very helpful way. He is leading that work, as has been reported to the Select Committee on Defence in its recent investigations. I am very pleased that he had agreed to do that because it will help us enormously. So there is a new role, and my right hon. Friend will expand on it very shortly.
I mentioned Irish terrorism, and it is very important that we do not allow the debate to pass without saying that the work of the security and intelligence services has made a difference to our safety, with the changing situation in the past year and the development of the peace process, but also with the continuing threat from the so-called Real IRA and the continuity group.
Co-operation has also developed in related areas. It would be remiss to allow the debate to pass without saying how important I believe such work has been in dealing with people smugglers and drug runners and in facing down organised criminals, and work has been done with Customs and Excise. That is a very important part of the security and intelligence services' role, and we should not underestimate the importance of maintaining of what we and the Intelligence and Security Committee described as the necessary back filling to ensure that that work can continue, while the reshaping of the focus on global terrorism has to be carried out.
I shall keep my speech short because other hon. Members will want to contribute and to allow time for proper debate, but it is important to recognise the enormity of the change that has taken place in the past 10 months. My role, as well as that of my right hon. Friend, has changed not only in terms of the time and energy devoted to such issues, but in terms of perspective, in linking that role with our wider roles and in trying to ensure that we do justice to it while not losing our focus on the other issues that are so important to the people of this country.
I want to thank those hon. Members who serve on the Intelligence and Security Committee, as well as those who serve on the Joint Committee on Human Rights and the Select Committee on Home Affairs, particularly in relation to my responsibilities. We have not always agreed with them—sometimes the language used has been interesting to say the least—but when I take the first view of the morning newspapers, I reflect on the fact that, without them, it is likely that some of us would forget that we are accountable to Parliament and the people. If we forget that, we do so at our peril.
2.47 pm
Mr. Oliver Letwin: I share the Home Secretary's pleasure in moving to a calmer moment in our proceedings. I have to begin by saying that I shall be brief because I do not believe that the major contributions to this debate can be made from the Dispatch Box, but rather by those who are members of the Intelligence and Security Committee, who have much to tell us and who know and understand things that, at least on this side of the House at the moment, we quite properly do not and cannot know or understand.
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I did, indeed, reflect when I realised that it was one of my tasks to speak in this debate on whether it needed to exist in the first place or whether it served any useful purpose, given the sublime level of ignorance that inevitably exists among Opposition Members, apart from my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), who serves on the Committee, but then I thought that it probably does make sense for this debate to occur.
I hope that it may be possible for the members of the Committee to play a more formal role in such a debate in future. However, this debate is useful, as it allows the Committee's role in relation to the security and intelligence services to be played more widely by the House in relation to the Committee. Each level of check and each level of limited transparency probably helps to reinforce the image of the security and intelligence services as bodies that are ultimately answerable to the electorate, not as items that spin off into a world of their own and engage in their own activities. That is a useful phenomenon.
I want to raise a specific issue and then to reflect a little further on the general question of balance, on which the Home Secretary also reflected. The specific issue relates to serious crime. The Committee tells us in paragraph 87 of its report:
"The Agencies, when engaged in fighting serious and organised crime…make a real and valuable impact".
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): Which paragraph?
Mr. Letwin: Paragraph 87. But the Committee goes on to say:
"However, due to limited resources, their contribution is less than it might be. The Committee has commented on this twice before, making the point that providing extra resources to combat serious crime has been shown to bring a demonstrable return to society. Drug, tobacco and people smuggling could be further combated and curtailed."
I very well know that I shall incur the righteous indignation of the Home Secretary if I call for more resources without specifying how on earth they should be paid for.
Mr. Straw: Especially you.
Mr. Letwin: Especially, as the Foreign Secretary so rightly says, me. However, very conscious of the likelihood of these jolly jibes, I have investigated, to the limited extent open to a Member of the House who is not a member of the Committee, the distribution of expenditures within the security and intelligence services, and the Security Service in particular, because in relation to serious crime it is the Security Service that is most relevant, and most relevant to my brief.
I think that I am right in discerning that of the total of about £1 billion that is spent on the security and intelligence agencies, about £140 million is spent on the Security Service, and that of that, about 7 per cent. is spent on serious crime. I think that means that about £9 million a year is spent on what is classed here as combating serious crime, out of the total of £1 billion; or, by comparison with the police budget, out of the total of about £11 billion a year, including police and security and

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intelligence agencies, that is spent on protecting us in one way or another. In that context, £9 million is a fairly small sum. I think that I am beginning to understand the comments that the Committee has made in paragraph 87 of its report.
I do not know, am not in a position to know, and do not want to be in a position to know, to what extent it is possible for the proportion of the effort and money that is spent within the Security Service on terrorism to be distinguished from that which is spent on serious crime. The Home Secretary said in his remarks, and my right hon. Friend the Leader of the Opposition has said in public speeches, that terrorism and organised crime are deeply linked, so I have no doubt that in combating the financial aspects of terrorism, for example, the Security Service is also combating organised crime to a considerable extent. Therefore I do not allege that the £9 million is the full extent of that which is spent on something that is, or is connected with, serious crime.
Nevertheless, when that small sum appears as the figure specifically quoted for serious crime and when the Committee—which the House has established specifically to look at these questions—comments, on the basis of what I take to be knowledge vastly greater than can be gained from public sources, that the resources devoted to serious crime are too limited, that does seem to me to call into question whether Ministers need to look at the distribution within the available resources to see whether more should be devoted to serious crime. [Interruption.] I want to make one more observation on that, but first I give way.
Adam Price: I was wondering whether the right hon. Gentleman would tell the House the source of these figures, because they do not seem to appear in the report.
Mr. Letwin: The total expenditure figures, which I quoted, appear towards the end of the report, under the heading, "Expenditure"—unsurprisingly—but the distributional figures are from the very secret source of the websites of these organisations, which the hon. Gentleman may consult. I do not have any special knowledge and, as I have repeatedly mentioned, I do not wish to have any special knowledge of these matters. It is the lucky case that it is the Home Secretary and the Foreign Secretary who have to deal with these on a day-by-day basis and I daily bless the fact that that is not something that I need to do.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane): For a long time.
Mr. Letwin: Although I hope that it may not be as long as the hon. Gentleman hopes, I think that we can guarantee at least three years.
Having said that it seems important to focus more attention on the implications of paragraph 87 of the report, I want to add one further point on that specific issue. It seems clear that NCIS and the National Crime Squad are doing very serious and effective work, which has a long trajectory, beginning in many cases with the activities of the then Home Secretary, my right hon. and learned
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Friend the Member for Folkestone and Hythe (Mr. Howard), and carrying on through the previous Home Secretary—now the Foreign Secretary—and into the aegis of the present Home Secretary. They are doing very serious and useful work in beginning to apply the most rigorous forms of high-level intelligence activity to unearthing the intricate connections that exist within serious crime.
Mr. Blunkett indicated assent.
Mr. Letwin: I am glad to see the Home Secretary nodding, not least because I much prefer to agree with him than to disagree with him; I have been doing a bit of disagreeing with him.
Sir David Phillips has personally developed a huge amount of international respect for the British model of high-level intelligence gathering and putting together. He and the Association of Chief Police Officers have done really sterling work in that respect.
It seems likely to me that if we are particularly good, given the scale of our own overall resources, at establishing those connections and at the work of criminal intelligence, the further integration—I take the points that are made elsewhere in the report about the degree of integration that already exists—of the Security Service with the work of NCIS and of the National Crime Squad may yield very considerable dividends. I tread warily here because I do not know whether it is true, as I suspect, that the Security Service has available to it talents and experience that are not normally available even to the most refined reaches of the police forces, but if it is true I suspect that the further integration of those people's expertise and abilities with NCIS and the NCS may yield surprising benefits.
If that were the case, it seems to me that we would see the effects very directly on our streets. I certainly do not want to re-enter yesterday's arguments about our drug policy but there is a point on which the Home Secretary and I would agree, which is that the heights of the pyramids that distribute the hard drugs in our country are intimately linked with the most serious types of financial crime and with street violence, which both he and I, in our different ways, seek to combat.
If we could find the means of disrupting those activities more effectively than at present, and if that were to involve spending some multiples of the £9 million—if I have the right figure—currently spent within the £1 billion, out of this budget, on serious crime, it might save 10 times that amount in policing at a lower level, if we were to achieve the same bang for the buck. Getting rid of people higher up those pyramids, doing better at disentangling the webs that join them to street crime, could have huge benefits. I take it that that is what the Committee, in its elegant and coded language, was trying to say when it said that there could be
"a demonstrable return to society."
It might also be a demonstrable return to the Exchequer, so I hope that that might recommend itself to the Chancellor of the Exchequer.
Mr. Beith: The right hon. Gentleman, given the severe injunction that he is under not to increase public expenditure, is in danger of misinterpreting the Committee's report, because what the Committee said

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was that resources added to this area could yield dividends, but nowhere in the report will he find an indication that there is other work being done by the agencies from which money could be diverted into this activity. It is a choice that is open to us to spend more money through the agencies using their talents, but the Committee has never indicated anywhere in its report that there is slack or spare in other key tasks, and indeed the political attractiveness of getting some work done on drugs and serious crime can be slightly dangerous if it reduces work on terrorism or other dangerous threats to the United Kingdom.
Mr. Letwin: I am grateful to the right hon. Gentleman for that clarification. If—and to the extent that—that is true, it may make sense, from within the totality of Home Office resources, to find such an addition. The Chancellor of the Exchequer may even have other sources to apply. I do not want to enter that argument in detail, not least because of the profound ignorance under which I suffer about the coming comprehensive spending review announcements. What I am clear about, however, is that a tiny sum is currently being spent in this area, in which there might be great dividends. On that, I suspect that the right hon. Gentleman and I might find ourselves in agreement.
On the balance between the activities that necessarily go on in secret, the statutory support that they receive, and our civil liberties, I want to put on the record, in the calm of these proceedings, a general position, which the Home Secretary sometimes finds inconsistent, but which, in fact, is consistent. He mentioned that we sometimes accused him of disproportionality, of going too far in invading civil liberties and of taking liberty too lightly. At the same time, however, he mentioned that we seemed to demand of him the protection of society against very dangerous and obnoxious elements. He displayed a little anxiety or irritation that we might be demanding of him things that were inconsistent. I recognise that sentiment, and I might even feel it were I sitting in his position—[Interruption.] The Foreign Secretary is chuntering happily from a sedentary position that these are the musings of a tortured liberal, and they are. The position of a tortured liberal is the only respectable position to adopt.
Mr. Straw rose—
Mr. Blunkett rose—
Mr. Letwin: I shall continue in a moment, but I shall give way to the Foreign Secretary first.
Mr. Straw: My right hon. Friend the Home Secretary, who, as the House knows, can speak very well for himself, said from a sedentary position that there were several of those whom he would like to torture himself—
Mr. Blunkett: With due trial.
Mr. Straw: With due trial, as my right hon. Friend says. I add for the record that what I was saying from a sedentary position to the right hon. Member for Berwick-upon-Tweed (Mr. Beith) was that I was encapsulating his remarks as those of the tortures of a Liberal by St. Oliver.
Mr. Letwin: This badinage is getting very rude, and I shall not continue it. All of us are tortured liberals in the
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sense that we all, to varying degrees, wish to protect civil liberties. I have to admit, in my better moments, that even the Home Secretary has that desire. We all wish to protect society against the dangerous elements against which it needs to be protected—in particular, the terrorist. It is a question of proportionality. I want to put on record a critical distinction, which I think is the foundation of the difference between us and the Government on a series of issues. By exposing it, the need for further such discussion may be prevented.
There is a difference between those agencies of the state whose primary function, and, in some cases, whose whole function is to protect us against people who want to blow us up, rob us or murder us, and other agencies of the state, whose primary and, in some cases, whole function is devoted to other ends. I draw a very clear distinction—clearer than Whitehall, under any Administration, is often inclined to draw—between those two kinds of agencies. I accept the need for the security and intelligence services to engage in activities that are necessarily intrusive and that are impediments to our liberty. Because I am worried about those impediments and intrusions, as Ministers in every Government for a long while have been, I welcome the intricate apparatus that has been devised, over a long period, to control those activities and to subject them to the kinds of scrutiny to which they can be subjected, consistent with their remaining secret as they need to so remain.
The Home Secretary is the principal locus of just that kind of scrutiny and control, but the Committee and other bodies, including, for some purposes, the courts—acting, in some cases, in special ways—are also part of that apparatus of control. Under the circumstances in which those controls are in place, I accept the need for that level of intrusion and that level of impediment to our liberties. I distinguish between that and the cases of those other agencies that are not involved in such activities.
The Food Standards Agency, the Environment Agency, the Post Office or any other such body will often find that their activities would be materially easier to carry out—or they imagine that, in some future world, they will find that their activities are materially easier to carry out—if they also have the ability to engage in activities that are intrusive and an impediment to our liberties. I understand that motivation, and were I working in those bodies, or were I an official charged with the question of how to make the work of those bodies easier, I would constantly be tempted to engage in enlarging the scope of their ability to intrude.
Parliament should not, however, accept the same kind of logic in relation to those kinds of bodies that it accepts in relation to the bodies that we are discussing today. That distinction is critical. If we could agree on that as a permanent feature of our political discussions, a good deal of the difficulties that we have had in the past nine months or so would evaporate. I am not saying that the disputes would not continue—they would at the margin—and I accept that, in relation to some of part 4 of the Anti-terrorism, Crime and Security Act 2001, for example, we would continue to have real debates, as is proper. A large part of the difference between us, however, is related not to the scope of bodies that we are

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discussing today but to the scope of action of other bodies. In future, I hope that we make that distinction more clearly, and more as a matter of consensus.
Mr. Blunkett: It is a fair point, and we need to make clear what is new intrusion and what is an endeavour—including under the Regulation of Investigatory Powers Act 2000, for which my right hon. Friend the Foreign Secretary was responsible—to codify and pull in those things taking place around us. If we can do that—I respect those who believe that we were on the wrong trajectory, although, in fact, we were trying to do something that was totally misinterpreted and that looked, to the world outside, as if we were going the other way—we might get it right. I do not have a fundamental principled disagreement with that, as Parliament's role is to pull in, and to make sure that others do not have the right that the security and intelligence services have—under the kind of surveillance and review that they have—to intrude in other people's information or their lives. Getting that right will be important in future.
Mr. Letwin: That is welcome. As we move forward in the next few months and debate several of these issues, I hope that we can refer back to this discussion of general principle. It may frequently turn out to be the case that, as more transparency is given through the operation of the orders under the RIPA, we shall collectively discover what I must admit that I have been discovering—in some cases, agencies that are outside the sphere that we are discussing today are engaging in activities, and have been doing so for a long time, that are worrying in the degree to which they have not been properly controlled and made transparent. I see Ministers nodding. That is highly constructive. I hope that we can achieve a clearer basis on which to operate, and a clearer distinction between other agencies and those that are the subject of today's debate.
Mr. Dalyell: On a point of order. Madam Deputy Speaker. The shadow Home Secretary promised us a short speech. He has now been going for 22 minutes, ad-libbing in a rather unfocused way for the past 20 minutes. Is there some way in which Back Benchers can get a look-in, in what will be a truncated debate?
Madam Deputy Speaker (Sylvia Heal): That is not a point of order for the Chair.
Mr Letwin rose—
Mr. Mark Prisk: My right hon. Friend the Member for West Dorset (Mr. Letwin) speaks of the need for greater transparency. Does he agree that one way in which we might achieve that would be for every piece of legislation, whether primary or secondary, to be tested, so to speak in terms of the specific impact that it would have on individual liberties?
Mr. Letwin: My answer to my hon. Friend is, as he knows, yes. I hope that that suggestion will be adopted; it is one that I made in the public prints.
I am acutely conscious of the observations of the hon. Member for Linlithgow (Mr. Dalyell) and I shall desist from engaging in further discussion, having made both
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the specific point and the general point that I wanted to make. I hope that the hon. Member for Linlithgow and others will have a chance to say what they wish to say to the House.
3.11 pm
Ann Taylor: I shall return to some of the points made by the right hon. Member for West Dorset (Mr. Letwin), particularly in respect of serious crime.
I start by thanking my right hon. Friend the Home Secretary for his words about the report published recently by the Intelligence and Security Committee. We welcome the fact that Ministers responded speedily to our report this year; we also welcome the early debate.
The Committee, as the Home Secretary said, is a new Committee. Some of its members are new to the field, but several of its members have served on it for many years. As Chair of the Committee, I take this opportunity to thank my colleagues for their work over the past nine months or so. Many of them have found that it requires a greater time commitment than they anticipated, but I think that many of them have found it interesting and worth while.
I agree with the Home Secretary about the work and the quality of the agencies that serve us in the security and intelligence field. He said that we owe a debt of gratitude to them, and the Committee would agree. We state in paragraph 7 that although our report highlights areas about which the Committee has concerns, our concerns must not overshadow the tremendous work of the agencies and the quality of the staff therein. All members of the Committee share the Home Secretary's admiration for the level of co-operation between the agencies in the UK and between our agencies and those in other countries, particularly—but not exclusively—those in the United States.
As Chair of the Committee, I shall say a word at the outset about the Committee's work, especially our relationship with the agencies. I am sure that some colleagues in the House feel frustrated at times by the circumspect nature of the reports of the Intelligence and Security Committee, especially by such things as asterisks in our report. I see the hon. Member for Hertford and Stortford (Mr. Prisk) nodding. We share that frustration at times. It is difficult sometimes to know things that one would like to say to colleagues, but cannot say.
As a new member of the Committee, as well as the new Chair of the Committee, I have been extremely impressed by the amount of information given to us by the agencies, the nature of the information available, the frankness of those who have given evidence before us and the documentary evidence that we have been able to see on some occasions, including some Joint Intelligence Committee assessments, known as JIC papers, which the Committee has found especially useful.
Our report covers all the issues that we are tasked to examine—the policy, administration and expenditure of all the agencies. I am sure that my hon. Friend the Member for Linlithgow (Mr. Dalyell) will be pleased to hear that I do not intend to cover in detail every issue that we raise in our report; some of my colleagues on the Committee will raise others.
Since the Committee was appointed last August, its work has obviously been dominated by the events of 11 September—but not to the exclusion of everything

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else. Every one of us—members of the Committee, hon. Members and members of the public—was incredibly shocked by those events, the scale of the tragedy, which was the biggest loss of life through any terrorist attack, the fact that such an attack could take place in the heart of the United States, and the fact that those who committed the atrocities had no regard for their own lives or the lives of thousands of other people of many different nationalities and religions.
In Britain, as the Home Secretary said, because of the threats that we have faced over many years from Northern Ireland-related terrorist groups, we have, unfortunately, had a great deal of experience of the shock of terrorist outrages. As a result, terrorism has always been a high priority of our intelligence agencies; it has, indeed, been the first order of priority for many years. We must recognise that, by their nature, it is very hard to penetrate terrorist organisations or get a real insight into them.
Experience over many years has shown us that that difficulty can too often lead to tragic loss of life. That is why a high priority has been given not just to terrorism from Ireland, but to international terrorism. The UK agencies have worked hard on that priority over many years, both internally and by monitoring people in various parts of the world, co-operating with agencies elsewhere, exchanging intelligence and comparing assessments. That has been going on for some time.
As the Home Secretary said, although it cannot always be publicised, there have been successes in countering the activities of terrorist organisations, including those related to Irish terrorism and those related to Osama bin Laden and al-Qaeda. In view of that, and because we are led to expect successes from our intelligence agencies, it was not surprising that after 11 September one of the first questions for the intelligence community was, "Was there an intelligence failure?" Perhaps that is the first question for the United States agencies. Congressional committees are looking into US agencies, what happened and what warnings were given. That dimension is not an issue for our Committee.
Perhaps the fact that the question is asked and that many people regard it as a genuine question is a symbol of what we expect from our agencies. In some respects, because we know that they are good, and because we know that they have intervened and prevented events from happening, some people assume that our agencies should know 100 per cent. of all that there is to know about everybody all the time, while, as the shadow Home Secretary suggested, protecting civil liberties at the same time.
Our expectations of the agencies must be realistic. It is clearly not possible for them to know everything all the time. The kind of question that we have to ask is whether the priorities set by the agencies are the right ones, whether enough attention has been paid to international terrorism, whether their levels of expertise are sufficient, whether there is sufficient co-operation, whether there is joined-up working, and whether information and assessment are adequate.
We say in our report that Osama bin Laden was a "notably hard target", and was recognised as such. We also say, and in some cases we quote papers that we have seen as well as evidence that we have been given, that there was
"an acute awareness in the period before 11 September that UBL and his associates represented a very serious threat".
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We report that
"the level of concern in June 2001"—
just a couple of months before the attack—
"was such that discussions about UBL and his organisation occupied a considerable time during a joint summit"—
between the United Kingdom and the United States. The Committee, in its report, also quotes a Joint Intelligence Committee assessment paper of July 2001 that concluded that
"plans for attacks were in their final stages but that the timings, targets and methods of attack were not known."
Dr. Julian Lewis: In view of the right hon. Lady's explanation of the difficulties that were faced by the intelligence services, does she agree that one unnecessary difficulty was that, after an earlier attack, it was disclosed that intelligence services in the United States had had some success in listening in on Osama bin Laden's satellite phone, but that thereafter they were never able to do it again? Does not that confirm exactly what the right hon. Lady has been saying about the balance that has to be struck between oversight and the maintenance of security on desperately secret information?
Ann Taylor: Yes, when I heard that information I was struck by exactly that kind of difficulty, although I am afraid that these days we have to expect that terrorists will be sophisticated and will have some idea of the attempts that are being made to monitor what they are doing. The hon. Gentleman makes a valid point, and it was partly because of the openness of other people's systems that that information got out as early as it did; perhaps it would have been better if the information had not got into the public domain so quickly.
In looking back, the Committee asked itself whether the agencies had missed anything that they were in a position to know or whether assessments made at the time were wrong. That was not an easy question and our conclusion was that
"with hindsight"—
mention has already been made of that today because it is a wonderful thing—
"the scale of the threat and the vulnerability of Western states to terrorists with this degree of sophistication and a total disregard for their own lives was not understood."
I am pleased that in paragraph 6 of the Government response, which was published shortly after our report, Ministers indicate their agreement with our assessment.
We did not conclude—I want to make this point directly, and I am glad that the Chairman of the Foreign Affairs Committee is in the Chamber this afternoon—that
"important indications in Summer 2001 that an attack might be imminent were not acted upon."
We did not conclude that, but I use those words because they come from the press release issued by the Foreign Affairs Committee when it published its report on foreign policy aspects of the war against terrorism on 19 June. My Committee takes issue with the Chairman of that Committee when the press release goes on to say:
"I note with interest that our Parliamentary colleagues on the Intelligence and Security Committee, who enjoy a degree of access to the security agencies which is denied to the rest of us, have concluded likewise."

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We have not concluded likewise and we think it important to put that on the record.
Donald Anderson: We await the results of the inquiries in the United States, but my right hon. Friend will be aware that we in the Foreign Affairs Committee made our conclusions on the basis of the information that was available to us. She and the members of her Committee have a certain degree of privileged access. She will recall that when the Intelligence Services Act 1994, which set up her Committee, received its Second Reading on 22 February 1994, the then Foreign Secretary, Lord Hurd, gave a pledge to the House that the new Committee would not truncate in any way the existing responsibilities of Select Committees. In the light of her experience, not least in an area such as this, does she in any way feel that that pledge has not been kept, and that perhaps Committees such as the Foreign Affairs Committee could be better focused if they had better access?
Ann Taylor: No, is the simple answer to that. All I would say is that the Foreign Affairs Committee did not have access to this kind of information before the Intelligence and Security Committee was established, so I do not think that that has made any difference to the work that his Committee can do. I take his point about the United States, but as I said earlier, we have not been looking at the agencies there, and it is important that parliamentarians here stick to their own ground rather than second-guess conclusions over there. I did think it important that we should not have any misinterpretation about what the Intelligence and Security Committee believes and that is why I sought to put it on the record, not to attack the Committee, as I believe an Opposition Member sought to suggest.
Mr. Alan Duncan: I do not want to throw the right hon. Lady off her stride, but in congratulating her and her Committee on their work, may I invite her to say, if she is able, whether she thinks that the two main intelligence agencies in Britain—the distinction between domestic and overseas intelligence having been rendered somewhat artificial by the modern nature of the terrorist threat—are now working well together to counter that threat, or does she harbour concerns that the separation remains?
Ann Taylor: I think that I can speak for every member of the Committee when I say that we are very impressed by the levels of co-operation between British agencies. We have all read discussions in the public domain about the situation in the United States. It is not for us to comment on that, but we are impressed by the level of co-operation that we have seen and know to exist between the agencies that we oversee.
That is not to say that we have no concerns at all. We do have some concerns, and, even following the point that I just made to my right hon. Friend the Member for Swansea, East (Donald Anderson) about 11 September and the build-up, we highlight some in our report. For example, we point out that the reduction in funding of the agencies in the 1990s meant that they were resource limited and operating under financial pressures, and that
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while there were improvements in the late 1990s, there were shortfalls that probably impinged on the work of the agencies in that longer-term context.
We were also concerned—one of my colleagues may wish to talk about this later—whether the agencies had sufficient flexibility to cover all the languages that were needed, and so respond quickly enough. Perhaps the most significant concern that we have post-11 September is the fact that the concentration of effort in that area of work means that gaps are developing that could lead to unacceptable risks in the future, although not necessarily at the moment. We believe that the agencies responded rapidly and well post-11 September. The staff worked long hours and were flexible and responsive to all the requests about what they should he doing. There was a great deal of co-operation and collaborative working.
The Committee also recognises that the Treasury responded very quickly and well to the agencies' extra needs, but even with those resources it will take time to recruit and train new staff, as they will be inexperienced and will have a lot to learn. We therefore believe—and perhaps it is timely for us to say so—that the agencies must have secure funding to allow them to fulfil the new demands that have been placed on them. We are worried about the gaps that are developing and believe that it is important that funding and planning are got right now to prevent the gaps from getting out of hand and creating serious dangers. To prevent that from happening, we need some very significant decisions now. That is why the Committee will consider with interest the statement on spending that the Treasury will make in the very near future.
I should like to turn briefly to one of the other matters raised by the shadow Home Secretary, which again is linked to funding: serious organised crime. We all recognise that such crime is an increasingly challenging problem for all law enforcement agencies and that the intelligence agencies can contribute in that regard. Class A drugs, organised immigration crime, serious financial crime and the funding of terrorist activity are all first-order priorities for the agencies. I hope that that will reassure him and others.
Of course, work in that area can make a tremendous difference. We cite one example in our report involving money laundering in the north-west, where fantastic amounts were channelled through bureaux de change over a very short period. The unique role and skills of the agencies, which the right hon. Gentleman mentioned, meant that they could assist law enforcement agencies in achieving a satisfactory result. We believe that such assistance shows its own worth.
The right hon. Gentleman was wrong to say that the money was so limited. Ministers may want to put him right about that. The Committee mentions some of the ring-fenced money for drugs-related work that is in the public domain and which also goes to the agencies. None the less, he was right that the work was good value for money—I am not sure whether he is a good ally on that point—and that more should be available.
As the right hon. Member for Berwick-upon-Tweed (Mr. Beith), a colleague on the Committee, mentioned, it cannot be right simply to transfer money from another aspect of the agencies' work. If extra work is to be done, it will have to be done with new resources and new money. The right hon. Member for West Dorset will have

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to square that politically with his colleagues, although in political terms it is not a matter that the Committee even started to discuss. We regard such expenditure as an investment and make a very strong recommendation in our report that more resources are required in this area and that there will be a very good return for the Treasury as well as for society if we increase our activities in tackling drugs, money laundering and people smuggling. There is a very significant payback to the Treasury and, perhaps more importantly, to society.
I should like to say one or two more words about expenditure, although I do not want to continue for too long. The Committee was very pleased in conducting its investigations that the then Chief Secretary to the Treasury gave evidence to it for the first time. We were slightly alarmed that he was moved from his position almost immediately afterwards, but we trust that the two events were completely unrelated and hope that the new Chief Secretary will give evidence in due course. The Committee made all those points about expenditure to the Chief Secretary, as one of its responsibilities is to examine the agencies' expenditure.
It is important to mention on the Floor of the House a couple of the Committee's concerns about GCHQ. First, for 2000–01, the Comptroller and Auditor General was
"unable to determine whether proper accounting records had been maintained",
so the validity of the GCHQ accounts was qualified. We regard that as a serious matter, not least because this is not the first time that it has happened. The Committee acknowledges that some action is being taken and recognises that GCHQ is getting help from the National Audit Office, but it believes that the director of GCHQ, the Cabinet Secretary and the Foreign Secretary must ensure as a matter of priority that appropriate management processes and procedures are in place.
Secondly, and perhaps even more important, the Committee has been watching with great interest the progress of the new accommodation project for GCHQ. In particular, we are concerned about the changes to the projected cost of relocating to the new building. Of course, the situation has changed since 11 September, because of the need for additional staff, which we know will result in extra costs, but we are worried that the agreed relocation budget may be too low. We do not want GCHQ to be forced to reduce its operational effectiveness in order to keep within the relocation budget. The Government say in their response to our report that they are confident that that will not be a problem, but we will watch the matter very closely indeed, as we think that it could be another difficulty that looms up in future.
Finally, I should like to say a word about the national intelligence machinery. As has been mentioned, recent changes have been announced by the Prime Minister, with the appointment of Sir David Omand as security and intelligence co-ordinator. The Committee has had the opportunity to discuss the changes that will take place with Sir Andrew Turnbull, who is to be the new Cabinet Secretary, as well as with Sir David. We have been able to discuss with them some of the thinking behind the change and the reasons for it. However, the system will be new and it is not yet in place. The Committee has already made it clear in its future work programme that we will consider the role and function of the national intelligence machinery. The Home Secretary indicated
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that my right hon. Friend the Foreign Secretary might say a little more about that later. We look forward to finding out about how the system will work and to hearing anything else that he has to say.
I must make one more point about the machinery before I conclude. I know that other colleagues will want to mention the same issue, on which the Committee of the previous Parliament also homed in: the fact that the ministerial committee on the intelligence services—the CSI—has not yet met. Obviously, since 11 September, there have been a lot of ministerial meetings on intelligence, but the whole Committee believes that it would be in everybody's interests for Ministers to have proper and formal meetings to discuss the overall performance, priorities and funding of all our agencies. I cannot understand why the CSI has not met. I think that it will be a great help to Ministers to discuss priorities collectively and that that will add an important dimension that is not available under the current system. I hope that they will consider that issue carefully and move in that direction.
As a newcomer to the process of oversight, I am pleased by the way in which the situation has evolved. This is still a relatively young Committee, and the access that has been given to it and the roles that it has taken on have evolved since it was first established. It represents a good basis for oversight of the agencies, but the situation is not static, and I am sure that oversight involving the Committee, as well as other aspects that have been mentioned, will evolve further over time. It is useful to have that oversight, and I thank my colleagues for their help and co-operation in my chairing of the Committee.
3.40 pm
Simon Hughes: I am conscious that many hon. Members wish to speak, so I shall limit myself to 10 minutes. I hope that that will be helpful.
In following the right hon. Member for Dewsbury (Ann Taylor), who chairs the Intelligence and Security Committee, I begin by saying that all those to whom I have spoken share the view that although it is good that we are having the debate—I hope that it becomes an annual, instead of an irregular, event in the parliamentary calendar—there should be a corresponding meeting of the ministerial group to which the right hon. Lady referred. I hope that between this year and next year the calendar for our discussion of these matters will be confirmed and Ministers will be able to find time in their diaries to come together under the chairmanship of the Prime Minister to review across all the relevant Departments the way in which our intelligence and related agencies do their jobs. We are all grateful to, and pay tribute to, those who work in those agencies, as well as to those who do similar work in the police and in the defence services, not least in the past year.
I do not come to this debate as an expert. In that respect, I defer to my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who preceded me in speaking on home affairs for the Liberal Democrats and has for several years served with distinction on the Committee, and to my right hon. and learned Friend the Member for North-East Fife (Mr. Campbell), who has surveyed such matters from a foreign affairs perspective over many years. However, after two and a half years of

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dealing with home affairs, I am already a veteran of many pieces of legislation concerning such issues. The Home Secretary and his predecessor may have been trying to make us tortured liberals simply by giving us so much relevant legislation. We have survived, and I do not feel tortured yet.
I hope that the record will show that we have seen it as a fundamentally important part of our job to scrutinise legislation on increasing the general powers of the state or the specific powers of part of the state. Given that on one occasion last year such a piece of legislation was put through Parliament on an emergency timetable, we have had a particularly important job to do in ensuring that citizens' liberties are properly looked after and defended and that the legislation that we pass is subject to the same level of scrutiny as we would wish for were we on the receiving end of the activities of the intelligence services or other agencies of the state.
Until recently, intelligence issues were the interest of the few, but the events of 11 September have made them much more the interest of the many. The press—tabloid as well as broadsheet—report much more of what we and other countries do as regards such matters. It is fair to say not only that intelligence is as essential to our national security as it has ever been, but that our defence now depends as much on intelligence as on anything else. If one surveys what happens around the world, it is clear that the activities of enemies of the state, which used to be principally overt, have become increasingly covert, so we depend much more on intelligence activities to know what other countries and people are doing. At home, we have intelligence-led policing; in foreign affairs, we have intelligence-led foreign policy. That is right, and we need to ensure that the people who do that job are up to it.
Mention has been made of one balance that needs to be struck, but it seems to me that we need to strike two balances. There is the balance between the level of information and accountability that the intelligence services need to have to Parliament and the balance between the level of liberty and entitlement that the citizen has vis-a-vis the security and intelligence services.
Since 11 September, particularly in recent days, a huge debate has raged in the United States about whether everything was done properly as regards intelligence gathering and understanding. As a result, no less a person than the President has decided that there should be an entire review of the working of the traditional intelligence agencies—the FBI and the CIA—and effectively a new start through the creation of a new organisation. I think that my right hon. Friends share the view that because defining the boundaries between work at home and work abroad by people seeking to undermine the state is increasingly problematic, merely to collaborate and work well together—to pick up the point made by the hon. Member for Rutland and Melton (Mr. Duncan)—may not be sufficient. I should like both the Committee and the Government to look afresh at whether the old division between MI5 and MI6—the two principal services—and the link between them and the National Criminal Intelligence Service should be reviewed, because they often undertake overlapping and interconnected tasks in a way that may not be the most helpful, let alone the most efficient from a budgetary point of view.
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We have no reason to doubt that our services do a world-class job, and we pay tribute to them for that. Given that, Parliament perhaps needs to have more ability to direct, and Ministers to co-ordinate, what they do and how they do it. Four questions follow from that. First, one of the lessons of the past 12 months has been that we have benefited hugely from our intelligence-sharing links with the United States. That will remain fundamentally important, irrespective of our position in Europe and our Commonwealth obligations. However, if the US is now calling for much greater intelligence co-operation, and expects and needs that to happen, we must ensure that we are in a position to participate appropriately. That begs several questions. Are we sharing enough information? Are we sharing the right information? Are we sharing it with all the people who need it? If so, how do we regulate and manage the process to ensure that we do it properly and accountably?
Secondly, we are having this debate a matter of days before the announcement of the comprehensive spending review. As my right hon. Friend the Member for Berwick-upon-Tweed said, if more work is to be done in relation to internationally organised crime, such as drugs crime, the report does not suggest that there is any current capacity to secure additional resources for that, and there may be a case for providing more resources. If so, that should happen. Two areas leap out as being ones in which we cannot afford to have resources that are not up to the job.
The first is information technology. We have not been the best country in the world for public services with the most up-to-date and well-functioning information technology, and the report makes it clear that deficits in that respect need to be addressed.
The second area is secure communications equipment. Hon. Members will remember that that issue cropped up a few weeks ago in the context of somebody who had been intercepting domestic communications between special branch personnel guarding royalty and the diplomatic service. I happen to know from an incidental personal experience that the police have been very troubled by the inadequacy of their communications equipment. The report tells us that the same applies in relation to our intelligence agencies, so that, too, is a budgetary priority.
Thirdly, if terrorist organisations are increasingly involved with international criminality—if that is how they get their money and resource themselves—we need to consider with greater urgency the arrangements for co-operation between the intelligence services and domestic and other police services. I pay tribute here to the Metropolitan police, who, I know, do a lot of international anti-terrorist work, as do others. I have been privileged to understand, share and be briefed on a considerable amount of that work. The Met must be in the loop and part of the planning and decision making.
I want to take further the exchange between the Home Secretary and the shadow Home Secretary. There have been four major pieces of legislation over the past two years: the Terrorism Act 2000, the Anti-terrorism, Crime and Security Act 2001, the Regulation of Investigatory Powers Act 2000 and the Freedom of Information Act 2000. In addition, we are about to have a proceeds of crime Act. In each, we have looked afresh at the definitions of national security, and there have been different justifications for when agencies can intervene.

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For example, under the proposed extension of the RIPA to other agencies such as local government—a controversial issue on which the Home Secretary had to withdraw a Government proposal—there were eight grounds on which access to data could be justified. Some were to do with the economic well-being of the UK, public safety, national security, and the prevention or detection of crime. For the sake of everybody involved, there must be a common definition of when agencies working on behalf of the state can acquire information. I would welcome a debate across Departments and parties to ensure that we do not have to row about wording, which in the end produces different ad hoc solutions to very important and tightly defined areas of power and responsibility.
Lastly, now that we have dealt as well as we can with the events following last September, I suspect that citizens in this country think that the biggest threat facing the world—it certainly appears to be the view in the United States—is that posed by Saddam Hussein and his chemical, biological and nuclear weapons potential. Although my party, like others, has been appropriately briefed on the best information that there is about the weapons that he has and his capacity, it strikes me that if we are to make intelligent decisions on policies that have public confidence, they need to be informed by our own intelligence gathering and assessment. We must not rely on second-hand intelligence. If we are to be party to a responsive action with allies to deal with a threat from Iraq, we need to know of that threat from our own sources. The history of intelligence, perhaps as recently as last year, shows that one weakness is that although there may not have been a shortage of information, there has been a shortage of analysis and of understanding of the conclusions drawn from the information. If we do not analyse and interpret it properly, it is often not much use.
The report notes that we are deficient in people who speak all the languages that may be needed in the intelligence services. If the BBC World Service, to its great credit, can manage to recruit people to communicate across the world, especially in areas of tension and conflict, it is a great failing when the intelligence services cannot do the same.
The recruitment policies of intelligence agencies are much more open than they used to be. It is no longer exclusively the tap on the shoulder at university. Much more frequently, adverts appear in the weekly jobs column of the national press. We should be careful not to discriminate inadvertently against those whom we might need most. We need more people who come from the Arab world and from Muslim backgrounds in our intelligence services. I therefore hope that our deficiency in the spread of people doing the job can be urgently corrected.
Mr. Prisk: Although I understand the hon. Gentleman's wish to see a more positive approach to recruitment, I am sure that he recognises that the employment criteria and vetting for the intelligence services are somewhat different from that of the BBC World Service.
Simon Hughes: Absolutely; I mentioned the World Service only as an example.
There has been a terrible growth in gun crime in this country; we are not stopping guns coming across the borders. The Home Affairs Committee recommended a
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common border force. I would be interested to know whether the intelligence agencies and the Government have considered whether we would do far better on all our external border issues if we reduced the number of different agencies that have different objectives—the police, the immigration service, Customs and Excise—to achieve more efficient management of people, goods and traffic reaching our shores.
The Liberal Democrats have always argued that there should be greater accountability of the intelligence services to the House. We keep to that case: there ought to be and could be more openness, and it would be good if, in this Parliament, the Committee became a proper Select Committee like the Defence Committee. I hope that that can be achieved, and that we can therefore continue to support the intelligence services while exercising greater but appropriate scrutiny of them both on the Floor of the House and in Committee.
3.55 pm
Joyce Quin: I too speak as a new member of the Intelligence and Security Committee, and as someone who has found its work during the past year fascinating and worth while. I pay tribute to my right hon. Friend—and good friend—the Member for Dewsbury (Ann Taylor), who as a new Chairman has chaired it with skill and total fairness.
None of us who serves or who has served on the Committee could have expected that the issues with which we deal would suddenly become so pressing or topical as they certainly have been since the tragic events of 11 September. Indeed, it is remarkable that, in the debate in the House on intelligence services slightly more than a year ago, there was little mention of Afghanistan and no mention of al-Qaeda. However, it is also true that my right hon. Friend the Member for Livingston (Mr. Cook), the then Foreign Secretary, struck a telling note when he said:
"The threats to our national security do not come only from other Governments. The danger to the life and safety of British citizens is more likely, in practice, to come from terrorist groups."—[Official Report, 29 March 2001; Vol. 365, c. 1124.]
All members of the Committee are interested in and sometimes concerned about the perception of it. I well remember the recent press conference at which we presented our report. Members of the press were uncertain about which breed of dog we were—tame poodles or Rottweilers leaping from our kennels. I agree with my right hon. Friend the Home Secretary that people are sometimes inconsistent in criticising our work or that of the agencies as either threatening liberties or not going far enough in protecting our citizens and taking effective action against those who pose a threat.
I certainly did not join the Committee simply to listen meekly and accept what I was told unquestioningly. There would be little point in that and little job satisfaction in not using the opportunity of Committee membership to ask searching questions to probe the workings of the agencies. I therefore believe that all of us on the Committee approach that role very seriously.
From reading our debates in Parliament on the subject, I know that colleagues take a much more measured and realistic view of the Committee's role, although I note that interesting comments have been made about how it might evolve. As members of the Committee, we are always thinking about that. Occasions such as this allow

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opportunities for an exchange of views between those of us who happen to be members of the Committee and those of us who are not but who none the less are tremendously concerned about and interested in the issues with which we deal. My right hon. Friend the Chairman of the Committee recently sent hon. Members a booklet about its work, in which I hope all hon. Members, whether or not present today, will take an interest and use as a way to foster dialogue with those of us who serve on it.
I agree with the comments that have been made about the valuable nature of the work of the agencies. I also endorse what has been said about the fact that some of the targets that the agencies are attempting to find out about are, by their very nature, hard and elusive ones. Unfortunately, the price of failure by any intelligence agency anywhere in the world is high. It is often said that terrorists have to be successful only once to cause havoc and have a huge impact.
I shall refer briefly to one or two items in the report about which I feel particularly strongly. One involves resources, which a number of right hon. and hon. Members have already mentioned. We believe strongly that the services should be able to access the resources that they require, although it is always true that they could always do more with more money. That is self-evident, but, at the same time, we have to ensure as far as we can that they have the resources to carry out the necessary range of tasks.
Language training has been mentioned, most recently by the hon. Member for Southwark, North and Bermondsey (Simon Hughes). That is an important issue, although it must be recognised that there is a long lead-in time involved in such training, which is why assessments, and their analysis, are important in ensuring that action taken to recruit and train can, if possible, be taken at the right time to ensure the availability of those language abilities to the services.
I also feel strongly about the issue of co-ordination. My right hon. Friend the Member for Dewsbury mentioned the fact that the ministerial Committee had not met, and that is something that I, too, feel strongly about. Obviously, we know that the relevant Ministers meet during a crisis, and that has been happening with great regularity and frequency since 11 September. We all feel, however, that if hindsight is a wonderful thing, so are lateral thinking and the sharing of information. Having Ministers across the relevant Departments looking at the issues, evaluating trends, and asking questions of the services in a joined-up way is an important task that should be undertaken. I do not believe that there should be self-contained ministerial bailiwicks in this field. Having been a Minister myself, both in the Home Office and the Foreign Office, I am aware of the usefulness of co-ordination. If the Home Office is examining drugs policy, for example, the fact that some of the states that supply drugs might also—from a foreign policy point of view—present real dangers and threats to the rest of us should be considered jointly, and we would like to urge Ministers to adopt such a joint approach.
International co-operation is also important, as a number of hon. Members have mentioned. Obviously, our co-operation with the United States is very close, and very welcome, as is our co-operation with other countries such as Canada, Australia and New Zealand, and, increasingly,
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with the European Union. We must also examine opportunities for working with other countries, as they appear. The situation with Russia, for example, is very different from what it used to be, and Russia and other countries could well have intelligence information that it would be extremely useful to share.
There are difficulties involved in such international co-operation. Building up sufficient trust presents a challenge, as does the fact that countries work in different conditions and geographical contexts, and have different legal systems and priorities. The gains from effective international co-operation are, none the less, important, and can benefit us all. One striking feature of the events of 11 September—and the preparations that had gone into them—was the fact that the terrorists concerned had passed through and stayed in several different countries, and shown themselves to be highly internationally mobile. International co-operation is, therefore, the key to an effective response to such operations.
A number of challenges have arisen specifically from the experience of 11 September. The disruption to terrorist networks is certainly welcome, but it may also mean that many well-known terrorist networks could now disappear or go underground, and that terrorists themselves could move on to different countries from the ones in which they have most recently been operating. That provides a real challenge for the intelligence services.
As the hon. Member for Southwark, North and Bermondsey mentioned, it is important that new technologies provide effective communications systems that can withstand electronic attack from outside, as well as systems that are capable of penetrating terrorist networks. That, too, is a continuing challenge.
New technologies must continue to be combined with traditional approaches. If we think of the threats to the communications and transport systems here in the capital, for example, vigilance by travellers and the public is also an important, but basic, need. The ways in which the Government and the police alert people to the action that they should take if they perceive a threat will continue to be important, and I urge Ministers seriously to consider that dimension.
Reference has been made to the new machinery of government that has been set up, along with the appointment of Sir David Omand as security and intelligence co-ordinator as well as permanent secretary to the Cabinet Office. I would like to take this opportunity to pay personal tribute to Sir David, with whom I had the pleasure of working when I was a Minister in the Home Office along with my hon. Friend the Member for North Warwickshire (Mr. O'Brien), now the Under-Secretary of State for Foreign and Commonwealth Affairs, who was a Minister with me at that time. My hon. Friend and I, and other hon. Friends, will be delighted that Sir David, after battling courageously with illness, has been able to take up such a key role, and it would be impossible to find a better qualified candidate to do this work. I hope that he will ensure that some of the points about co-ordination that we have raised in this debate will be properly addressed.
I conclude by reiterating my thanks to the staff of the services, who deserve respect for the work that they do in protecting and defending us in the sometimes dangerous and always complex world in which we live.
4.8 pm
Sir John Stanley: I wish to devote my remarks largely to the intelligence dimension prior to 11 September and, even more importantly, subsequent to that date. First, I wish to make a point about the status of the Intelligence and Security Committee. The Chairman of the Committee, the right hon. Member for Dewsbury (Ann Taylor), made a helpful and informative speech, in which she said that her views on the evolution of the Committee were not static. I would like to offer her a proposal relating to evolution.
When the Committee was established under the previous Conservative Government, it was established not as a Committee of the House but under statute, reporting not to the House but to the Prime Minister. Those special arrangements were made as a reflection of the sensitive work of the Committee and were, by implication, coupled with a degree of anxiety at that time about the security reliability of a Committee of Members of Parliament. I am not a member of the Committee, but on the basis of many years' experience of its work I can say that, as far as I am aware, there has not been a single leak from it.
Some of us serve on Select Committees that deal with classified material from time to time—[Interruption.]
Mr. Deputy Speaker (Sir Michael Lord): Order. Members must control electronic devices.
Sir John Stanley: I am a member of the Select Committee on Foreign Affairs, which does indeed deal with classified material from time to time. I know of no occasion on which a Select Committee has not reached an agreement with the Government of the day on what material should be excised from its report on security grounds.
Against that background, I think it right in constitutional terms for the Intelligence and Security Committee to become a Select Committee of the House. That does not imply that there should be any change in its membership, or that it should cease to meet in private and at its chosen location. The intelligence services, however, are an extremely important element of the Executive of the day, and I believe that, like all parts of the Executive, they should be accountable to this sovereign legislature, the House of Commons.
Let me now return to 11 September, which was by definition an intelligence failure. Whether that failure was entirely forgivable and understandable in the circumstances or whether it was preventable remains to be seen. As the right hon. Member for Dewsbury said, the relevant congressional committees are subjecting the matter to detailed investigation; we await their reports and such evidence as they can place in the public domain. What is undeniable, however, is that the appalling and tragic events of 11 September were the logical continuation of a clearly established pattern of terrorism in which United States personnel were the principal targets and in which modes of transport were steered, directed or driven by those who were prepared to take their own lives in a suicide attack.
The use of suicide attacks by truck drivers began most intensively in Beirut in 1983. Members will recall that more than 200 US marines were murdered in that way. The mid-1990s saw the uncovering of a plot for the multiple takeover of US civil airliners, and the crashing
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of those airliners, with passengers, into the Pacific ocean. Less than a year before 11 September, al-Qaeda had adopted a new, seaborne mode of transport and had killed 17 US sailors on USS Cole. That was a demonstrable pattern of terrorist attack. It was observed and documented, and its logical progression was at least seen by a limited number of people.
In paragraph 18 of our latest report, we on the Foreign Affairs Committee refer to the report of the US National Intelligence Council, which was placed in the library of Congress in 1999. It stated:
"Suicide bombers belonging to al-Qaeda's Martyrdom Battalion could crash-land an aircraft packed with high explosives (C4 and Semtex) into the Pentagon, the headquarters of the CIA or the White House".
That was an extraordinarily perceptive and prescient warning—given, as I said, in 1999.
As the right hon. Member for Dewsbury observed, these issues are principally for the American intelligence agencies. The Committee rightly pointed out, however, that 11 September saw a greater loss of life among United Kingdom citizens than any other single terrorist attack. I feel that there are key questions for the British intelligence agencies, and therefore for the Committee.
First, is the Committee satisfied that our own intelligence agencies did all they could before 11 September to identify al-Qaeda operatives who were either living in or passing through this country? Details of a number of them have at least appeared in the press and in court proceedings since 11 September. Secondly, is the Committee satisfied that our agencies did all that they reasonably could in the circumstances to try to identify the target of the next al-Qaeda attack, of which there were clearly considerable, at least generalised, warnings?
Dr. Julian Lewis: May I ask a question in that context, relating particularly to the first point? Is my right hon. Friend aware that the assassination of General Masoud appears to have been orchestrated by a man called Yassir el-Sirri—who provided the assassins with press credentials which they used to get into Masoud's presence—that this man had been sheltered in London for a long time, and that we had refused Egypt's request for his extradition for past terrorist offences?
Sir John Stanley: I depend on open sources, as does my hon. Friend, but I am well aware of the extensive press comment about various individuals alleged to be associated or connected with al-Qaeda who have been resident in and have passed through this country.
I welcomed what the right hon. Member for Dewsbury said about the way in which 11 September issues had dominated the Committee's work. I was not sure whether that was so on the basis of the report, but the right hon. Lady made it very clear today. Looking at the paragraph about the future programme of work, I was somewhat surprised that it did not include—explicitly and clearly—scrutiny of the agencies' work to counter terrorist threats to the UK. Perhaps that is implicit, but the House and indeed the wider public might have been reassured had it been stated more explicitly.
Let me now deal with the situation post-11 September. Our intelligence agencies are now more important to the country's security than they have ever been in peacetime.

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Until the advent of al-Qaeda and 11 September, security in major defence terms depended essentially on deterrence, and on possession of military capability to ensure that deterrence was credible. Today, we must deal with a security threat to this country involving people to whom deterrence must be more or less meaningless.
I cannot believe that someone who is prepared to commit suicide as part of a terrorist attack will be influenced in the least by the prospect of retaliation. Nor can I believe that someone with nothing to lose—who is not head of a state organisation, and has no massive personal power as such—will be deterred by any prospect of retaliatory action.
Therefore, although for the whole period since the second world war we have relied on deterrence to protect the security of this country, and indeed it has done so, we are now confronted by a terrorist enemy for whom deterrence is no deterrent at all in terms of this country's military capability. In my view, that means that the intelligence agencies are now our first and possibly our last line of defence for the civilian population. Coupled with that is the clear evidence that this terrorist enemy is bent on moving from conventional attack to attack using weapons of mass destruction. That was made clear as early as 14 September last year by the Prime Minister. Three days after the terrorist attack on New York, he said to the House:
"We know that they would if they could go further and use chemical, biological or even nuclear weapons of mass destruction."—[Official Report, 14 September 2001; Vol. 372, c.606.]
The Prime Minister's statement on 14 September has subsequently been amply confirmed, certainly by what has appeared in the press, by the discoveries made by our forces in Afghanistan in al-Qaeda safe houses and buildings of documents clearly pointing to al-Qaeda's determination to try to move towards weapons of mass destruction.
The implications for the civil population of this country are potentially horrendous. Conventional attack can lead to the death of thousands as happened in New York. Attack using weapons of mass destruction could lead to the possible loss of lives in the hundreds of thousands or conceivably a million or more.
The Brooking Institution, in a detailed paper published in April, put the possible fatalities from a terrorist attack using a nuclear bomb detonated in a major US city at 100,000 and the possible fatalities of an
"Efficient biological attack (for example, clandestine wide dispersal of a contagious agent such as ebola, smallpox or anthrax)"
at 1 million.
The Foreign and Commonwealth Office, in the paper that it placed in the Library of the House of Commons on 4 February 1998, stated:
"One hundred kilograms of anthrax released from the top of a tall building in a densely populated area could kill up to three million people."
I now move on to the probability or possibility of such a threat materialising and I refer to the House what was publicised by the European security chiefs just a few
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weeks ago. The article reporting what they said was published in a number of papers. On 20 June, the International Herald Tribune said:
"Top European security chiefs said Wednesday that a terror assault on Europe was almost inevitable, and that the next attack on the West could be nuclear.
David Veness, the head of Britain's anti-terrorist police, said that a nuclear or biological attack was 'sadly, the next logical step' while the director of the European Union's police agency, Europol, said that it was a question of 'when and where,' not 'if' an attack would occur in Europe."
Against the grim realities that deterrence cannot begin to be relied upon against this particular threat, that intelligence is now our first and possibly last line of defence, that al-Qaeda is moving towards acquiring weapons of mass destruction and that the top European security chiefs are saying that it is not a matter of if, but when and where, I believe that only one policy conclusion can be adopted. Nothing must be spared to give our British intelligence agencies the financial resources that they need, the skilled personnel resources that they need and the technology and equipment that they need in order to try to identify and prevent such an attack. I repeat: nothing must be spared—absolutely nothing.
4.25 pm
Mr. Tam Dalyell: I was a friend from 1967 until he died in March 1981 of the late Sir Maurice Oldfield, head of MI6 from 1973 to 1978. During my national service with the Scots Greys in the Rhine Army in 1951–52, I had a good deal to do with field intelligence. As Richard Crossman's Parliamentary Private Secretary from 1964 to 1970, on account of his wartime background in intelligence dealing with the Americans on General Bedell Smith's staff in Algiers from 1943 onwards, I got to know well George Wigg, Solly Zuckerman, Harry Chapman Pincher, Hugh Carlton Green and other members of the intelligence community.
I say this simply to establish that I am neither silly about nor antagonistic to the intelligence community. Many fine people have worked for it to the advantage of us all.
I want succinctly to raise one aspect of intelligence and it refers to Lockerbie. The Lockerbie relative, Martin Cadman, who lost his son in the Pan Am disaster, tells me that relatives of air victims including Dr. and Mrs. Jim Swire, Barrie Berkley, Mrs. Elizabeth Delude-Dix and himself met the US President's Commission on Aviation Security and Terrorism in the US embassy in London on Friday 16 February 1990 from 18.10 to 19.10. Much of that important meeting was taken up with the treatment of relatives by the US authorities after the disaster.
After the meeting was over, Mr. Cadman, who is highly credible and well known to a number of hon. Members, said that one commissioner, whose name he did not know said to him:
"Your government and our government know exactly what happened at Lockerbie. But they are not going to tell."
That statement has been published in a letter to The Guardian, in the film "The Maltese Double Cross" and in the special report from Private Eye "Lockerbie, The Flight from Justice May/June 2001". It has never been denied.
The commission was set up on 4 August 1989. It began its work in November 1989 and reported on 15 May 1990. The seven commissioners comprised two members from

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the US Senate, two from the House of Representatives, representing both parties equally, and three other members from the private sector with expertise in aviation transportation, aviation security or counter-terrorism. Their names were as follows: the chairman was Ann McLaughlin, former Secretary of Labour; Representative John Paul Hammerschmidt from Arkansas; Senator Frank Lautenburg from New Jersey; General Thomas Richards, deputy commander of US forces in western Germany; Senator Alfonse D'Amato of New York; Edward Hidalgo, the former US Navy Secretary and James Oberstar, Representative from Minnesota. They were serious people.
Against this background I ask the following questions. First, do the British security and intelligence services have any knowledge of an $11 million payment having been received by the PFLP-GC, the Palestinian Front for the Liberation of Palestine—General Command, on or about 23 December 1988 evidenced by a credit to a bank in Lausanne and a credit to the Degussa bank in Frankfurt and moved from there to an account at the Banque National de Paris and thence to one at the Hungarian Development bank?
Secondly, does British intelligence have knowledge of a payment of $500,000 on or about 25 April 1989 to Mohammed Abu Talb, a convicted murderer, who was an incriminee at the Lockerbie trial, and a long-term suspect in the Pan-Am 103 bombing? Incidentally, I was at Camp Zeist when Talb was questioned.
If the security and intelligence services had any knowledge of either payments, did they communicate it—in whole or in part—to any police force in the UK, and/or to the Crown Office, Edinburgh? If such knowledge was imparted, when was it imparted?
What was the relationship between British intelligence and two officials—Mr. Dana Biehl and Mr. Brian Murtaugh—from an office that forms part of the US Department of Justice, who sat beside the prosecution in a supposedly independent Scottish court throughout the Lockerbie trial?
These questions are well known to Ministers through the work of the distinguished Austrian jurist Hans Koechler, who was asked to attend the trial at Camp Zeist by Kofi Annan.
When Mr. Alan Turnbull and Mr. Norman McFadyen went to the US embassy in The Hague on the Lord Advocate's behalf on or about 1 June 2000 to view unredacted CIA cables—recording meetings with the prosecution witness, Jiacha—was an assurance or undertaking given by them, whether written or verbal, to British intelligence or to the US authorities that they would not disclose what they had been shown? If any such assurance or undertaking was given, to whom was it given, and in what words?
It is a matter of public record that the new head of MI5, Miss Eliza Manningham-Buller, has been greatly involved in Lockerbie. I do not know Miss Manningham-Buller, but I should recall that her father—the late Lord Dilhorne, as Sir Reginald Manningham-Buller—was the first Attorney-General in this House with whom I had dealings when I was a very young MP. He was extremely kind, painstaking and nice on the one occasion that I had to speak to him in his capacity as Attorney General, and subsequently as Lord Chancellor. I can say nothing other than that I think extremely well of him.
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Ministers should have a very frank discussion about what Miss Manningham-Buller and her colleagues know about the public record in relation to Lockerbie. We are not talking about simply a few who share my view. President Mandela has visited Abdel Bassett al Megrahi in Barlinnie prison. I spent two and a half hours visiting him, and in my view this is the most spectacular miscarriage of justice in not only Scottish, but British legal history. There ought to be a public inquiry, because in this instance, adversarial court procedures were wholly inappropriate to the objective of finding the truth. In keeping with his promise to the relatives, I hope that, before the summer recess, the Foreign Secretary will announce the setting up of a public inquiry into the international aspects of the crime that was Lockerbie.
4.34 pm
Mr. James Arbuthnot: I echo the remarks of the right hon. Member for Gateshead, East and Washington, West (Joyce Quin) by congratulating the Chairman of the Intelligence and Security Committee on the way in which she has taken on her role. She has had the difficult task of keeping us effective and focused, and she has carried it off with style.
I should begin by declaring an interest. I am an underwriting member of Lloyd's, and as such I, along with other members, suffered in a financial way on 11 September. However, I should count my blessings. Many people lost much more than their money—they lost their lives or members of their family. On 11 September, the world came to recognise that not everyone shares the same values, and that if we want liberal democracies to continue to exist, we will have to fight for them. Indeed, that is what our intelligence and security services do, day in, day out. Although the Committee's report has criticised certain aspects of what they do, those criticisms must be seen in the light of the fact that this country is extremely well served by those services.
Take, for example, our criticism of the accounts of GCHQ, which was mentioned by the Committee's Chairman. It is a matter of serious concern to the Committee that GCHQ has yet to get to grips with the consequences of resource accounting. For GCHQ to have its accounts qualified two years running is not at all impressive, and the Committee is concerned that that might happen for a third year running. GCHQ really must begin to take this issue seriously. It says that it is doing so, and I hope that we shall discover next year that it has.
On the other hand, GCHQ's communications work is extraordinarily impressive, and after all, that is what it is there for. It makes an internationally and rightly acclaimed major contribution to the fight against terrorism, drugs and serious crime. So when we criticise the bean counting, let that not overshadow our views on the war fighting.
The same goes for the Secret Intelligence Service and the Security Service. They work energetically and effectively, and sometimes in circumstances of considerable danger, in defence of this country. I shall not discuss our report in detail because the House has read it and would rapidly lose patience, but in general, the intelligence machinery in this country works as well as we allow it to. It is clear that we put checks on the activities of the intelligence and security services, and for good reason—we were all brought up on the book

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"Nineteen Eighty-Four." However, in the Committee's opinion there is one respect in which the system simply does not work. Ministerial meetings to discuss the policy and direction of the intelligence and security services are, in the Committee's opinion, essential to scrutiny of the services, and to giving them genuine and informed political direction. Provision is made for such meetings, but for reasons which are not sinister, they simply have not happened.
As a result, although there is political direction from relevant individual Ministers—including the Prime Minister—no opportunity exists for Ministers to spark off each other, to cross-fertilise ideas, to fire the imagination of other Ministers, and to create a view that is perhaps anarchic but none the worse for that. Because of 11 September, the need now exists in this field for a sparky imagination—a point to which I shall return.
Inevitably, the Joint Intelligence Committee comes up with a pooled assessment of intelligence—that is what it is there for. In that respect, it avoids the communication problems—sometimes experienced in the United States—to which the existence of numerous different organisations leads. That is the advantage of our system, but the pooling process inevitably knocks some raw edges off the intelligence that passes through it. It may be unfair to call the product bland, but it would be fair to call it homogenised. In those circumstances, it is not at all a good thing that the ministerial committee for overseeing the intelligence machinery has not met, other than in the extraordinary circumstances of the War Cabinet. I do not believe that there is anything sinister about that, but only one person can put it right—the Prime Minister. It is possible that he may feel that the system works well enough. He sees the papers, receives the advice and gives the political direction, and he may feel that further ministerial involvement would be more of a nuisance and a waste of time than a benefit. If he does feel that, he is wrong. Collective discussion by Ministers about the general direction of the intelligence and security services might throw up ideas that people were not expecting, and the fact that Ministers might have an overwhelming number of issues to discuss should not be reason for failing to discuss any of them. The Prime Minister should perhaps remember that he leads the Government rather than is the Government.
I said that I would return to the issue of imagination, and I shall do so in the context of 11 September. How easy it is to say, with the torchlight of hindsight shining full on those dreadful events, that there was a failure of intelligence. In various respects, that can be said, but the agencies both here and in the United States received masses of bits of information—sometimes hundreds of different strands a week, some of it conflicting and almost all of it inaccurate. For us, with the benefit of hindsight, to expect them to know which bits were true and which were not, and to be able to add all those together in the right order and with the right emphasis and then to deduce some method of stopping what was about to happen, would not—on the basis of what I currently know—be either fair or realistic.
My right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) said that there was an intelligence failure, and he was right in some respects. However, for the intelligence services to know what was
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going to happen would have depended on a security lapse in the al-Qaeda organisation. That security lapse did not happen in a way that meant that the security services could take advantage of it.
Dr. Julian Lewis: If what my right hon. Friend is saying is correct, surely the implication is that the intelligence services have to be proactive. If we cannot rely on a terrorist cell to leak, we need to acquire enough intelligence to disrupt it so that it cannot proceed with its plans, even if we do not know what those plans are.
Mr. Arbuthnot: My hon. Friend is right to say that the intelligence services must be proactive. However, we should not give the impression that this country's intelligence services—or for that matter, those of the US—are not proactive, because they are highly so. However, they cannot know everything that is thought, done or planned. If they could, I suspect that the House would be extremely concerned.
In one respect, I agree with the remarks on the failure of intelligence by my right hon. Friend the Member for Tonbridge and Malling. The security of the western world has been predicated on the idea that those who would attack us would wish to survive themselves. We had not paid enough attention to suicide as a weapon. That charge cannot be laid solely at the door of the security services or those in charge of them in this country, because the western world as a whole had failed to follow through the implications of what had begun in Beirut, been taken up by Hamas and been pursued in the attack on the USS Cole. For example, the normal procedure in dealing with hijacking was that those in charge of the aircraft should go along with whatever it was that the hijackers asked. That was a weakness that Osama bin Laden recognised and acted on with ruthless imagination.
Osama bin Laden was capable of using imagination, and we knew that. He had done so in many different aspects of his life and the western world did not have the imagination to predict how far he would take it. So it was a failure of imagination more than a failure of intelligence. Our imagination could fail us again. If we spend the next few months trying to stop people flying aeroplanes into buildings, we will miss the point. We need to do that, but we also need to think more like those who threaten us think, instead of how we have thought in the past. The issue is not what al-Qaeda, or similar groups, did last but what they might do next.
Where are we vulnerable? We used to need to protect strong points, such as power stations, water supplies and critical manufacturers. Now that our society has become so complicated and interdependent, the key to our survival is not so much strong points as systems. Those systems are often in the control of the private sector. Public confidence in our computer systems, for example, is as important as public confidence in the World Trade Centre. Therefore, we need to use our imaginations to build up a picture of how those computer systems could be vulnerable. I know that much thought is going into that and it is essential that it should.
We also need to consider not only the spectacular results of terrorism, but what gives birth to terror in the first place. That is not an issue that we consider in our report, perhaps because we think that it would be more the province of the Foreign Affairs Committee.

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Nevertheless, the question came up at a conference that we hosted in May, in London, of international intelligence review agencies. It was suggested that one cause of terrorism was the widening global socio-economic divide. It is possible that the western world has drastically underestimated the effect of global climate change. As water becomes scarcer, or poor hot countries become less amenable to growing food for us, the seeds of conflict will grow. Those are essential questions and the country will need to be reassured that they are being considered by someone, whether in government, the agencies or the academic world, on the basis of proper intelligence and with the ability to take the necessary policy decisions that will flow from the answers. I should be most grateful for assurances on that issue from the Foreign Secretary when he winds up.
4.48 pm
Dr. Gavin Strang: I am pleased to follow the right hon. Member for North-East Hampshire (Mr. Arbuthnot), who is a conscientious and highly effective member of the Committee. I fully endorse the tribute that he paid to my right hon. Friend the Member for Dewsbury (Ann Taylor) for the excellent leadership that she has provided in the past year.
Four years ago I was pleased to have the opportunity to speak in what was the first parliamentary debate on an Intelligence and Security Committee annual report. It was the first speech I had made in the House since rejoining the Back Benches. I sought that opportunity to speak because of the importance I attached to the work of the intelligence and security services and the Committee. Having had a year as a member of the Committee, I am now very pleased to be able to participate in this debate. I feel that I have secured a better understanding of the state's security apparatus, and also believe that the Committee is well served by its staff.
I have never been under any illusion as to the necessity of deploying adequate resources in this area. It has been a pleasure to meet many of the dedicated public servants who work for the agencies. I do not intend to spend much time on the role of the Committee in relation to the agencies. It is a fascinating question, which I am still in the process of trying to answer for myself. However, I am convinced that there is a legitimate function for the Committee. I also believe that the senior people in our security and intelligence services recognise the Committee's value to the democratic process. One reason for that recognition is that, to my knowledge, no secret information shared with the Committee has leaked into the public domain, a point that a number of right hon. and hon. Members have made this afternoon. It goes without saying that the value of the work of the Committee depends on the extent to which senior Ministers and senior staff in the intelligence community are fully open with the Committee.
On the day my hon. Friends and I were appointed to the Committee last summer, no one could have guessed that before we would hold our first formal meeting, the landscape that the Committee surveyed would be drastically altered. It is worth mentioning that all four members of the Committee who have spoken so far this afternoon, including me, are relatively new and were appointed a year ago.
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I am in no doubt that the atrocities of 11 September changed the world because of the scale of the civilian slaughter, which left 3,000 people dead, the spectacular nature of the attacks—images of which were brought straight into our living rooms by television—and the level of organisation required to co-ordinate the strikes throughout the United States. Moreover, the United States had not previously seen its homeland as a target for international terrorism. It is my view that if the terrorists responsible for the atrocities on 11 September could have killed more people, they would have done so. We should be concerned that terrorists in the future will try to do just that.
In its second report published in December, the Select Committee on Defence concluded:
"There seems little doubt that terrorist organisations could obtain the necessary materials for chemical, biological or radiological weapons…Although we have seen no evidence that either al Qaeda or other terrorist groups are actively planning to use chemical, biological and radiological weapons, we can see no reason to believe that people who are prepared to fly passenger planes into tower blocks would balk at using such weapons. The risk that they will do so cannot be ignored".
The Select Committee is right. We ignore the risks of terrorism and weapons of mass destruction at our peril.
In its annual report, the Intelligence and Security Committee sets out a future programme of work. The threat from international terrorism is one reason why I am very pleased that the Committee has included in its future programme an item on the work of the agencies to counter the proliferation of weapons of mass destruction. The Committee looked at the issue and reported on it in its annual report of 1998–99, but matters have moved on in the three years since then, and we need to do more.
Until recently, terrorist leaders apparently did not consider that mass civilian slaughter on the scale that we have now witnessed would further their aims. Perhaps the Tokyo sarin gas attack in 1995 marked the watershed. The concern is that to achieve the desired effect—terror—terrorists need continually to increase the levels of violence to secure the necessary impact on the target population and in the media. We have to ask ourselves what they will try next. There is surely a real and increasing threat that terrorists will obtain and use weapons of mass destruction.
I should like to concentrate on the orthodox categories of chemical, biological and radiological or nuclear weapons of mass destruction, although the House will be all too well aware that terrorists have already proved capable of turning a jet plane into a weapon of large-scale destruction.
Acquiring chemical weapons is relatively easy. There is access to ingredients for nerve agents, and so on, on the open market, and the science is not difficult. As I have mentioned, the Aum group in Japan successfully prepared and released sarin gas in the Tokyo underground in 1995. Terrorists may not need to bother preparing chemical weapons—there are great stockpiles world wide. As the Defence Committee stated, there is concern that these weapons may find their way into the hands of terrorist groups.
Getting hold of biological agents can also be straightforward. Many agents can be bought from legitimate suppliers or acquired from laboratories by theft or through a laboratory worker. There have been a number

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of incidents in which terrorists have been found in possession of biological agents. Professor Graham Pearson, former director of the chemical defence establishment at Porton Down and visiting professor at the university of Bradford, told the Defence Committee that, of the three types of weapons of mass destruction,
"it is clear that biological weapons present the greatest danger today…as they are the easiest to acquire, have the weakest regime and yet have effects comparable to nuclear weapons."
The availability of the ingredients necessary to construct a nuclear device is increasing. With plutonium and highly enriched uranium becoming more available, it will be increasingly possible to get the fissile material necessary to make a nuclear explosive device. The increasing trade in mixed oxide fuel is of particular concern. The assessment of Dr. Frank Barnaby of the Oxford Research Group is that it would be relatively easy to remove plutonium oxide from mixed oxide fuel and use it to fabricate a nuclear weapon.
Opinions vary as to whether terrorists could use nuclear material to manufacture and successfully detonate a nuclear bomb. Mr. El Baradei, director general of the International Atomic Energy Agency, said last November that such a development is "highly unlikely" but that "no scenario is impossible". However, Dr. Frank Barnaby believes that the construction of a crude nuclear weapon need not be beyond the capabilities of a sophisticated and well resourced terrorist group.
There is a flourishing black market in fissile materials. The International Atomic Energy Agency recorded 175 cases of trafficking in nuclear material between 1993 and 2000, 18 of which involved highly enriched uranium or plutonium.
We should not overlook the risk that nuclear warheads in the countries of the former Soviet Union could fall into the wrong hands. The International Atomic Energy Agency observed:
"another legacy of the Cold War are the disturbing reports, albeit unsubstantiated, of missing nuclear weapons."
There are rumours of missing suitcase bombs. David Kyd of the IAEA told The Guardian in November that when he was in the Russian army, General Alexander Lebed claimed that a number of them had gone missing.
Finally, I should like to mention radiological weaponry. There has been a fair amount of press coverage recently of "dirty bombs"—that is, radioactive material distributed by a conventional explosion. Some radioactive isotopes suitable for constructing a dirty bomb have been smuggled on to the black market. Indeed, Chechen rebels placed a container of caesium-137 in a Moscow park in 1996.
IAEA experts are concerned that terrorists will develop a crude radiological dispersal device. The agency database includes 284 confirmed incidents of unauthorised movements of radioactive material other than nuclear material. Just two weeks ago, the agency warned that safeguards on powerful radioactive sources are inadequate, and called for cradle-to-grave control.
The security and intelligence services will be vital in countering the threat from terrorism and weapons of mass destruction. Human intelligence—infiltrating and recruiting—and signal intelligence in intercepting communications will be of huge importance. Because the
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wherewithal to create some weapons of mass destruction is available perfectly legally, intelligence will be our only defence against them.
Dr. Frank Barnaby warns:
"The intelligence and security communities should take the threat of the acquisition and use of weapons of mass destruction much more seriously than they do at the moment."
I do not consider myself in a position to assess whether that is the case. It is a crucial question, and I am glad that the Committee will address it in the coming months.
Organised crime and terrorism have long been closely linked, and with the increase in global transport, trade and communications, organised crime and terrorism are spreading and strengthening their links. As terrorism and international crime endeavour to globalise, we must ensure that intelligence and security services are not hindered by national boundaries. I was pleased to see that at the recent summit in Canada the leaders of the G8 countries agreed to launch a new global partnership against the spread of weapons of mass destruction to help prevent such weapons from falling into the hands of terrorist groups. I should be interested to learn what effect that programme may have on the work of our security and intelligence agencies in this field.
I said at the outset that I valued the opportunity to consider these matters, along with my colleagues on the Intelligence and Security Committee. The world did change on 11 September. The Government have already recognised that by providing extra resources for the agencies. I agree with colleagues who have said that further investment will be needed in the medium to long term. I look forward to an important announcement on that next week.
Of course, international terrorism is not the only challenge that the agencies face—far from it. Indeed, we were only recently reminded that we still have a significant domestic terrorist threat. It is hard to think of anything more degrading to civilisation than the wanton slaughter of innocent people. There is all the difference in the world between the loss of life on the battlefield, among combatants, and the killing of men, women and children who just want to go about their daily lives in peace.
Of course, we must not be blind to the underlying historical or social causes of terrorism, but at the same time the House and the Government should give the highest priority to thwarting terrorists from wherever they come.
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Mr. A. J. Beith: The right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang) is a conscientious new member of the Committee. In concentrating his remarks on traffic in weapons of mass destruction, he helps to underline the point that there are areas in which the agencies are currently actively involved from which it would be very wrong to divert funds. If we impose additional tasks on them, we must provide additional resources. We must maintain a high level of effort, but it does not come cheap: it is expensive and demanding work.
I echo the appreciation that has been expressed of the work of the agencies and their staff, and especially those who face real danger in going about that work. I also pay

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tribute to Sir Stephen Lander, who is about to retire and move into an interesting new field—I am glad that he is doing that rather than writing books. He has been an effective head of his organisation. He understood what it needed to do and what it was not appropriate for it to do. He knew where to concentrate the effort and where to draw the boundary lines.
I want to discuss the judgment on the forewarning, or lack of forewarning, of 11 September, and to underline what the Committee Chairman said: that we were talking about the United Kingdom, not about the United States. We have been in close contact with our US counterparts and observed their work, and clearly they have judgments to make about how the American system functioned or failed to function and about the movement of intelligence through that system. Information that could have been useful seems, to a layman, not to have been in the right place at the right time.
Our job was to consider the United Kingdom agencies, how they co-operated with the US agencies and the role that they played—especially in assessing the threat to the United Kingdom. We made a judgment on the basis of the information that was gathered and presented to Ministers in the Joint Intelligence Committee's assessment papers. We refined and worked over our judgment, modifying our conclusions to some extent, as we looked at the various documents. Our conclusion was not a snap judgment. It was reached very carefully.
We said:
"The July 2001 JIC paper concluded that plans for attacks were in their final stages but that the timings, targets and methods of attack were not known. This assessment was not a stark warning of immediate danger to the UK. The shortage of specific intelligence and UBL's record could have warned all concerned that more urgent action was needed to counter this threat. Whether this could have forestalled any of UBL's actions can only be a matter for conjecture."
Even if we had rushed additional resources into intelligence and prevention at that point, the information before Ministers was not sufficiently specific to enable our efforts to be directed in such a way as to prevent the attacks. The Committee concluded that,
"with hindsight, the scale of the threat and the vulnerability of Western states to terrorists with this degree of sophistication and a total disregard for their own lives was not understood."
We should be a bit careful about using the expression "intelligence failure", because it might be taken to imply that there is such a thing as total intelligence—knowing everything. The expression is more usually used in circumstances in which intelligence could freely have been obtained, processed and used, but was not. That was not the position with 11 September.
We reached a different conclusion from that of the Foreign Affairs Committee, which quite properly pointed out that it was not in possession of the same information. It said:
"It would appear that before 11 September both the US and the United Kingdom failed to gather or share good intelligence, or they failed to interpret it correctly, or they failed to act on it. We are not in a position to judge which was the case."
That implies that at least one of those alternatives was the case, but I am not convinced that any of them was. We did not fail to gather or share good intelligence. The UK gathering effort was significant, and the sharing effort considerable. I am not convinced that there was a failure
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to interpret it correctly, so it follows logically that there was not a failure to act on it, because it did not point clearly to a particular course of action.
I disagree with the Foreign Affairs Committee's conclusions in that respect, although the report as a whole is extremely valuable and useful, and I hope that hon. Members will take note of the many interesting points in it.
There may be a broader criticism to make of the west as a whole in its approach to Afghanistan. The Foreign Secretary reflected that when he said that the west had virtually walked away from Afghanistan, allowing problems to mount. It is conceivable that the west could have made a greater effort to stop a failed state falling under the total control of a terrorist organisation—for that is what happened. Along with the drugs trade, Al-Qaeda terrorists were the paymasters of the Taliban. With a great deal of hindsight, it is conceivable that we could have denied them that opportunity. It would have been no easy task, but not to have done it is perhaps a more perceptible failure than what some have described as an intelligence failure.
I want to comment on the new arrangements for dealing with intelligence. That gives me the opportunity to talk about the forthcoming retirement of Sir Richard Wilson as Cabinet Secretary. He has devoted a lot of valuable and productive effort to the intelligence community, and we should appreciate that. Responsibility for intelligence will now pass from the Cabinet Secretary to the Second Permanent Secretary, possibly because the Prime Minister wants the Cabinet Secretary to concentrate on service delivery—a commendable object on the face of it, but one about which one could have some suspicions concerning centralisation of power in the hands of the Government and the Prime Minister. Our concern today, however, must be with whether intelligence responsibilities will be effectively discharged when they are transferred to someone who does not have the status that the Cabinet Secretary has.
I venture to suggest that, if Sir David Omand had not been available to carry out the task of Second Permanent Secretary, the move would have been seen by many as a downgrading—and potentially a dangerous one—of intelligence. The Foreign Secretary has had to be away from the Chamber for some time, but I hope that this point will be drawn to his attention, because he should bear it clearly in mind.
Sir David Omand has a unique background in relevant areas of work and a unique standing. Indeed, some of us would argue that he could have been the Cabinet Secretary. The fact that he has taken on this responsibility is a fair indication that it will be made to work. I am far from convinced that this arrangement should be continued when the two present post holders eventually retire.
The Committee will want to review the arrangement as it beds in, but we also need to look ahead. We should consider whether that ad hominem arrangement will work because of the individuals involved but, if it were retained and became part of the practice of government, might in the longer term deny the intelligence community the position within government that the Cabinet Secretary's responsibility had previously given them. That position has been relevant in many ways. When problems occurred with the new accommodation project at Cheltenham, the role of the Cabinet Secretary was crucial.

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It should be said that access to the Prime Minister enjoyed by the Chairman of the Joint Intelligence Committee, the heads of agencies and Sir David Omand is guaranteed, as we are assured that such access will be undisturbed. I am more concerned about resourcing and the position of the intelligence community within government.
The Chairman of the Intelligence and Security Committee referred to the qualifying of GCHQ's accounts. It is pretty serious for accounts to be qualified two years in succession. Its appearance in our report is the alternative route available to the National Audit Office for its work in this field. The Public Accounts Committee cannot handle that side of the work, because it requires the security measures to which our Committee is subject. The Chairman of the PAC has access to what is being done, and as a member of the Intelligence and Security Committee I am grateful that successive Chairmen of the PAC have worked so readily with our Committee and enabled us to give the NAO the public recognition that its report requires. The Comptroller and Auditor General wrote:
"I have not obtained all the necessary information and explanations that I considered necessary for the purposes of my audit; and I was unable to determine whether proper accounting records had been maintained."
That is a pretty serious matter.
I emphasise that the qualification is not about the new building, difficult though that project has been, and it is not about the operational efficiency of GCHQ, of which the Committee is well aware, and the remarkable contribution that it makes to intelligence work and to this country's readiness to deal with terrorist attacks. GCHQ is an extremely valued and internationally recognised asset. However, it is unsatisfactory that its financial procedures should merit such criticism. It is all about resource accounting and its failure to grasp the difficult task described by the right hon. Member for North-East Hampshire (Mr. Arbuthnot), who serves with me on the Committee, as bean counting—it has not been counting the beans accurately or has not known precisely where they all were. That problem needs to be remedied, and the Committee has spoken strongly on the subject.
I want to refer in these disparate points to the Regulation of Investigatory Powers Act 2000 and the orders that have been introduced under it, but I do not want to discuss them in detail. Communications data are important in the detection of serious crime and in dealing with threats to the United Kingdom. They are a valuable intelligence tool. The orders that were brought before the House recently were not primarily about that. They were about access to such data by a variety of bodies with legitimate responsibilities for food safety, public finance, preventing benefit fraud and other such matters. Many of us think that those bodies should not have such wide powers. I appreciate the distinction that was drawn by the Conservative shadow Home Secretary, the right hon. Member for West Dorset (Mr. Letwin), between the areas that are crucial to the central security of the country and its inhabitants and those many other important matters that do not merit the same range of powers. We share that view, and I am glad that he articulated it clearly, as it is relevant.
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There was some confusion, because different orders cover different things. I over-simplify a little, but the orders that related to covert human surveillance were, as the Home Secretary said, primarily about bringing under regulation things that happen already and that are, on closer reflection, recognised to happen, whereas those related to communications data went much wider and were rightly the subject of concern. The Home Secretary will have to have a major rethink about that.
My fear is that there is a real danger in extending security-related powers into other areas. That undermines the case for the highly selective use of powers that are regarded as intrusive if that is necessary to prevent major threats to our lives and our safety, and when those threats cannot readily be detected, investigated or challenged in other ways. It is of a piece with the tendency to use the need for security to justify matters that should not be given that justification. Every time that happens, it slightly undermines the credibility of powers in areas where they are vital. That is why we should be careful about using such justifications.
Over the years, emergency, fast-tracked anti-terrorism legislation has often included provisions that are not justifiable, or even justified, by Ministers on security grounds; they are merely slipped into the legislation. For example, anti-terrorism legislation included provisions relating to conspiracy because the Home Office saw a fast train so booked a seat on it for other, no doubt reputable, provisions that were thought justified. When we have to abbreviate parliamentary scrutiny on the ground of urgency we should be cautious about the extension of security justifications beyond their proper scope.
I offer another example. It was widely claimed that the failure to use competitive tendering for the smallpox vaccine was for security reasons, despite the fact that the United States had used open tendering for the same vaccine. If there had been a security reason for that closed process, I am sure that it would have been drawn to the attention of the Intelligence and Security Committee, but it was not. I can say that openly because the Minister responsible confirmed it from the Dispatch Box in the other place—recorded in Lords Hansard on 22 May at column 765. He used a rather broader notion of security, which the statutory provisions allow, but it was not security in the sense that we are using the word in this debate, whereby it justifies extremely wide powers or special procedures. We must always beware of that factor in all our debates and discussions.
Finally, I want to discuss what the Committee is for. It has two broad aspects. The first is the scrutiny of the agencies; of their policy, administration and finance and, going more widely than their statute, their efficiency, probity and fitness for purpose. That is the job on which the committee spends a great deal of time. It draws those matters to the attention of the House through its annual report, which has to be published to the House by the Prime Minister. That also means that the committee draws those matters to the attention of the Prime Minister, which is one of the merits of our non-Select Committee status that might usefully be replicated if the Committee's status were to change.
The fact that the Prime Minister is under an obligation to meet the Committee, having read its report, and to discuss the report in some detail is generally useful and is one of the few means whereby the Prime Minister's mind can be focused on the broad issues of intelligence,

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especially in the absence of meetings of the ministerial committee to which several of my colleagues have referred. That is a valuable process, as most Prime Ministers would agree. That scrutiny process is one side of the Committee's work.
The second aspect of our work is reassurance. The Committee was set up—as were committees in several countries, including the United States—partly in response to the fear that all sorts of dubious things might go on within the veil of secrecy that surrounds intelligence and security organisations and nobody would know, possibly not even Ministers. Ministers might of course be party to such things, which might be done in their interest, and could be politically expedient or involve incursions into people's liberty far beyond those that could be justified in statute or publicly defended. There was a fear that such things might happen in future and some evidence that they had happened in the past.
Hon. Members look to the Committee to provide reassurance. The next best thing to every Member of Parliament being able to check for himself whether anything nefarious is going on is to have confidence that a group of colleagues in whom he can repose some trust has that access and would act if anything bad was happening. In order to provide that reassurance, the Committee must be privy to the widest possible range of information and, over time, we have reached that position.
Circumstances occasionally arise when we need to go further and there are sometimes skirmishes when we try to obtain the information that we require. Some of those skirmishes are ongoing, but it is vital for Members to be sure that we obtain the information and that when it is in our possession we apply the same judgments that they would apply. That is what members of the Committee try to do and we are enabled to do so by the now extensive range of information that we are given. It is what Members expect us to do and I hope that we live up to the task.
5.19 pm
Alan Howarth: It is a pleasure to follow the right hon. Member for Berwick-upon-Tweed (Mr. Beith). He was one of the founder members of the Intelligence and Security Committee, and he and the longer serving members of the Committee have mentored those of us who are more newly recruited, and I hope that we have brought a useful, fresh approach. Let me add my appreciation of the admirable chairmanship of my right hon. Friend the Member for Dewsbury (Ann Taylor). Let me also express my appreciation of the immensely competent efforts and hard work done in support of us by our secretariat.
I wish to reiterate the admiration of the agencies' professionalism that we have expressed in our report. My impression is that the agencies' professionalism grew during the 1990s, and I suspect that that has something to do with the legitimation of their establishment and their work in legislation from the mid-1980s onwards, particularly under the Security Service Act 1989 and the Intelligence Services Act 1994. That may also be the view of the agencies themselves. It has been helpful that their task has been made explicit and defined more clearly. It has been helpful in establishing some boundaries for what they do. It has been good for their esteem and standing in the public eye, and it has assisted them in recruiting the sort of people whom they need to recruit.
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The agencies certainly need people with a remarkable range of skills and human qualities, among which is courage. The work at every level of the agencies is characterised by courage on the part of a very great many individuals, and I would add that the judgments and decisions that need to be made by those at the most senior level—particularly, of course, the chiefs—really do take courage. They undertake massive responsibilities on behalf of us all, so I gladly pay tribute to them, particularly Sir Stephen Lander, who is shortly to depart as head of the Security Service.
The Committee works on a basis of trust. The need-to-know principle is indispensable because, of course, sources must be protected. As the right hon. Member for Berwick-upon-Tweed has just said, we see a greater range of official papers and are privy to a greater amount of information than was the case in the past. One has to be pragmatic about this, but, because trust has grown, the scope for the Committee to work effectively has grown. When all is said and done, it is not in the interests of the agencies or Departments to fail to convince the Committee of the appropriateness of what they do, let alone to mislead us.
The Committee has done much to win the confidence of those whom it is our responsibility to scrutinise and, correspondingly, the Committee has much confidence in them, but it is, of course, our job to probe, to ask the awkward questions and to apply pressure, which is what we certainly intend to continue to do.
As the right hon. Member for Tonbridge and Malling (Sir John Stanley) noted, we are not a parliamentary Committee in a certain formal sense, but we are all extremely conscious of our responsibilities as parliamentarians and our responsibilities—albeit through the Prime Minister—to Parliament, so we must hope that our parliamentary colleagues trust us as members of the Committee. That is for them to judge and to say, but I have been pleased to hear several right hon. and hon. Members express their approval of the work of the agencies this afternoon.
Irrespective of whether the members of the Committee are appointed by the Prime Minister or whether we are constituted as a Select Committee, there would still be the need for confidentiality. I find it difficult to foresee that our modus operandi would change radically if we were to become a Select Committee, and I fear that those wretched asterisks would still appear in our reports. The irony is that we have to limit our accountability to Parliament to protect our democracy.
It is important that the agencies are in some ways insulated from the pressures of politics. Some of the earlier speeches, including that made from the Front Bench by the right hon. Member for West Dorset (Mr. Letwin), show us how public concern on high-profile and urgent matters—such as serious and organised crime—will very properly be mediated through Parliament. I am very well aware, as a Member of Parliament representing a Gwent constituency, how much we in Gwent and the Gwent Police owe to the expert support that the police have received from the agencies in certain investigations.
It has been noted that serious and organised crime is highly relevant to counter-terrorism. None the less, the agencies' priorities need to be balanced and must not be distorted by understandable public pressures.

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Counter-terrorism, dealing with espionage, and dealing with the very dangerous threat from the proliferation of chemical, biological, radiological and nuclear weapons, about which my right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) spoke so eloquently, are at the heart of what the agencies do and they must be enabled to pursue a balanced approach, as I believe that they do.
Often what we hear less about is no less important, and of course we rarely, as members of the public, hear about the successes of the agencies. Al-Qaeda has inevitably been a huge preoccupation over a very considerable period and well before 11 September, but the danger from Irish terrorism remains a major preoccupation. Although there is less in the media about Irish terrorism than there is about al-Qaeda it does not mean to say that it matters any less. Equally, the India-Pakistan conflict and problems of Kashmir are almost unspeakably important, and no amount of other public preoccupation should distract the agencies from what they need to do in respect of that problem.
The agencies work in a changing environment. We now live in a world of macro-terrorism. As the right hon. Member for North-East Hampshire (James Arbuthnot) put it very well, the world had really failed to grasp imaginatively the reality of the possibility of suicide missions in the west, and of terrorist activity on the scale and of the pitilessness and effectiveness that we witnessed on 11 September. The Home Secretary effectively acknowledged that, when he met us in the Committee. We need to be at new levels of alert, of vigilance and of protection.
We also live in a rapidly changing technological environment. The technical capacities of Government communications headquarters, Cheltenham, working very closely and effectively, as it does, with the National Security Agency in the USA, and of the Ministry of Defence and its agencies working with the American National Imagery and Mapping Agency, are extraordinary. The capacity may be great but that itself creates a new problem because, whereas in the past there was a problem of a lack of intelligence information on the scale that might have been required, the agencies now perhaps suffer from a surfeit of information. The problem is looking for the needle in the haystack and the new challenge is how to ask the right questions so that one can interrogate these colossal databanks in order to focus on and pin down the vital information.
Hon. Members have spoken about the difficulties of balancing security and liberty, but what is clear is that without security there can be no liberty, and that presents endless dilemmas upon which we can torture ourselves. Parliament is right to be vigilant about the extension of powers to obtain communications data, and about the systems to ensure that data requests are properly authorised. I very much appreciate the words spoken by the Home Secretary on that issue this afternoon, and the important and constructive exchange between himself and the shadow Home Secretary. These matters may primarily be the responsibility of Committees other than ours. The Intelligence and Security Committee, however, has an important responsibility to satisfy itself that systems of warrantry, which are a key part of the guarantee of freedoms in this area of work, are operating as they
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should. We have paid particular attention to questions of staffing. If—I am glad that it is only a hypothetical possibility—there were significant extensions of power to other agencies to obtain communications data, it would be extremely important that the commissioners have the staff that they need to be able to oversee the system. The Government, in their response to our report, assert that there will be an appropriate level of resources. The Committee will wish to satisfy itself as to what that may mean in practical terms.
As many Members have asked, and as almost everyone outside the House asks in anguish, could the horror of 11 September have been prevented? Like others on the Committee, I was startled by the press release from the Foreign Affairs Committee. We must guard against the search for scapegoats. If there really were culpable failures, they must be identified, but such inquiries need to be pursued in a calm frame of mind. They are being pursued in the United States, and we shall see what the findings prove to be. We raised in our report the question of whether the assessment made by the Joint Intelligence Committee in June and July was sufficiently stark. My view is that the agencies, the Joint Intelligence Committee, and, in their turn, Ministers, acted as they should have done in that period. There were many indications that something very important and very dangerous was afoot—the reports coming in to Ministers made it very clear that al-Qaeda was preparing something monstrous. I do not believe, however, that anybody—certainly, in our agencies—was in a position to identity the precise nature of that threat. After all, it is fair to recall that the atrocity did not take place in the United Kingdom, although it affected many British lives and families.
Attempting to be wise after the event, I ask, what might have been done differently? I think that we were too greedy with the peace dividend after the end of the cold war. Budgets were reduced, and they began to rise only at the end of the last decade and at the beginning of this one. Even the civil contingencies unit was disbanded, which was surely a mistake. It represented a naive view of human nature. Of course we wanted to turn swords into plough shares, and to release resources to spend on public services or other good projects, but it was foolish to suppose that, with the fall of the Berlin wall and the end of the cold war, human nature had somehow altered. Tragically, hatred, violence, conflict and terror are endemic in human affairs.
As my right hon. Friend the Foreign Secretary said, and as the right hon. Member for Berwick-upon-Tweed has already recalled, essentially, the west walked away from Afghanistan, ignoring the pathology of that failed state. We need to reflect on the lessons of that mistake. We do not have to agree with everything that has been proposed by Samuel P. Huntington in his extremely interesting book, "The Clash of Civilizations and the Remaking of World Order". We should take very seriously, however, his suggestion that the real faultline—the areas where the risk of conflict is liable to be most acute—is where different civilisations and cultures meet and encounter each other. The lesson from that, if I may risk stating the obvious, is that, where Iraq is concerned, we should handle with care. Were we to pursue policies that caused the Islamic world to forget its many differences and to rally in antagonism to the west, that would be devastatingly unfortunate. Equally, we do not have to accept everything that Mr. Robert Cooper

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suggests to us, to accept none the less that we should give our serious attention to the pathology of failed states. There are implications there for countries in the west that make fine professions—for example, in the Doha round—but then introduce protectionist policies that might have been calculated to further impoverish already very poor areas of the world and to make them breeding grounds for resentment, hatred and terrorism. The better our policies and our diplomacy, the less pressure there will be on our security and intelligence agencies and on our armed forces.
Thinking again about what might have been organised better over the period, it has become commonplace to note that one of the distinguishing differences in this area between ourselves in the United Kingdom and our friends and allies in the United States is that in the US there is no MI5. The FBI is an organisation of a different character. It is essentially a policing operation, and its remit has been to apprehend criminals and bring them to justice after the crime has been committed. The culture of the FBI is being radically recast and the US is engaged in the creation of its Office of Homeland Security, but that is a difficult culture change. It is an immensely important one, and I wish our friends and colleagues there well.
Simple security routines are always liable to be neglected. How do we maintain the state of alert that we need? Airport security, as we saw, was perilously lax before 11 September. It is more laborious now; I wonder whether it is yet as efficacious as it needs to be. How are we to scan the myriad parcels and containers that come into our country day by day? It is not in human nature to maintain a permanent state of vigilance, yet it is extremely important that we do so.
Andrew Mackinlay: I have been listening intently to my right hon. Friend and I agree with what he says. The Government should address themselves to the nature of our seaports, where there is wholly inadequate security and law enforcement. Most sensible countries have a dedicated police force in their ports and we do not. We should have one, which would supplement and complement the immigration service, Customs and Excise and the county police forces. In that regard, I think that we are sleeping while Rome burns, so I hope that my right hon. Friend will not mind my intervening.
Alan Howarth: My hon. Friend makes an important point.
I am mindful that other hon. Members want to speak. I will therefore not say what I would have wished to say about co-ordination, and I will not explain why I strongly support the arguments that have already been advanced by colleagues on the Committee as to why the ministerial committee on intelligence services ought to meet. I simply conclude by saying again how much I personally esteem and value the agencies. I believe that they are hugely appreciated in Washington; I know that they are greatly appreciated by Ministers. It is a pleasure and a privilege to have the opportunity to be a member of the Committee.
5.39 pm
Dr. Julian Lewis: The right hon. Member for Newport, East (Alan Howarth) may be a new member of the Intelligence and Security Committee, but it is obvious to me as a non-member of that Committee
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that he has taken to his new role admirably. His comments, particularly about the continuing need to monitor and counter potential Irish terrorism, were well made. Indeed, one of the points that I wish to put before the House this afternoon is that intelligence must not be excessively compartmentalised. It may be that some of the techniques that Britain has sadly had to learn in combating Irish terrorism will need to be applied to the new threats that we face from fundamentalist Islamist terrorism.
My right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) rightly said that it cannot be regarded as a failure of intelligence not to know the details of a specific plan before it is put into action. He rightly talked of the need for imagination so that one does not spend one's time analysing what one's terrorist enemies have done in the past, but rather tries to foresee what new steps they are likely to take in the future.
What we have to face in dealing with fundamentalist Islamist terrorism requires a new type of approach and an ethos rather different from the way in which the Security Service has had to operate in the past. In the past, MI5 has often had to sit back, watch, monitor, bide its time and stay its hand so that when eventually the crisis came, speedy action could be taken. Now we are dealing with organisations that are rudimentary in terms of structure, lethal in terms of operation and limited in terms of numbers carrying out whatever particular plan they seek to implement.
It follows from that, as my right hon. Friend said, that unless there is some major failure of security within the terrorist cell itself—which will not happen often—one must be proactive, as I said in an intervention on him earlier, in seeking to dislocate, deceive and disrupt the organisation itself. We must keep the terrorist organisation on the back foot, and prevent it from having the time to reflect, plan and choose the moment at which it will implement action, rather being continuously on the defensive ourselves. In order to wage that sort of campaign against terrorism, we need a form of offensive intelligence.
In the slight spat that we have seen developing this afternoon between some members of the Intelligence and Security Committee and some members of the Foreign Affairs Committee over whether it was a failure, not necessarily on the part of British intelligence agencies, but on that of western intelligence agencies, that 11 September happened, I incline somewhat more to the view of my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley), who made a superb, indeed magisterial, speech.
I believe that it was known that al-Qaeda existed, what aims it entertained and what modus operandi it preferred. As I said earlier, it is precisely because individual schemes are unlikely to leak in advance, that pre-emptive measures must be taken to undermine terrorist organisations before they can get anywhere near to putting those schemes into action.
Old habits die hard, and having been fortunate to be called to speak in every debate on the intelligence services since they began in the previous Parliament, I am well aware of the fact that there are Members wishing to speak in this one who are in danger of not being able to do so unless I am particularly brief, so that is what I propose to be.

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Last year I made rather a long speech about several small topics. This time I wish to make a much shorter speech about rather a large topic. The topic is, of course, terrorism, but only one aspect of it, and that links directly to something that has been a recurring theme in all my speeches, year after year, since we were fortunate enough to have these debates in the House on a subject that used to be regarded as out of bounds. That theme is the need for an active counter-subversion arm in the Security Service. We know that F branch used to do that job. We also know that with the end of the cold war, F branch was successively wound down and eliminated. I am not particularly concerned about whether, when the Security Service revives anything analogous to F branch—if it has not already done so—it uses the same name or an entirely different one. What we must realise is that in fighting fundamentalist Islamist terrorism, the Security Service has a particular task in hand: to ensure that such terrorism is not allowed to put down roots and grow, expand and fester in this country.
Terrorists operate in a strange arena of warfare. Using standard terror techniques, they can hope to do one of at least four things. They can hope indiscriminately to kill some hundreds or even thousands of civilians. More specifically, they can hope to target individuals such as politicians, service men, police officers or security personnel. By doing all that, they can hope to provoke repression in free societies. Sometimes, they can even hope, as is the case in Northern Ireland, to gain concessions, many of which they do not deserve.
By using weapons of mass destruction, however, terrorists can threaten the existence of entire communities and cities, and possibly even of entire democratic states. They are unlikely by themselves to be able to acquire free-standing weapons of mass destruction that would operate on the largest of those three levels. However, they have a way of getting around that problem by infiltrating other regimes such as those in countries that already either have nuclear weapons, such as Pakistan, or may have nuclear weapons in future, such as some of the countries in the now notoriously named axis of evil. It is especially disturbing that time and again, while we hear that the President of Pakistan is doing everything that he can to help the alliance forces root out al-Qaeda and its sympathisers, those terrorists seem to be supported, buttressed and reinforced by elements of Pakistan's own intelligence organisation. That is a very worrying issue and it must be a prime concern for MI6.
Returning to the problem in this country, we have to be concerned that if the organisation is not to put down the roots to which I referred, it must be completely transparent to our security authorities. In making the one key point that I wish to make in this speech, I want to divert for a moment to an obituary from yesterday's edition of The Daily Telegraph. Its relevance may not be immediately apparent, but I assure the House that it will become so very quickly. The obituary is for General Benjamin O. Davis Jr., who was commander during the second world war of the 99th Fighter Squadron at Tuskegee, Alabama. He flew 60 combat missions and then commanded the 332nd Fighter Group, escorting US bombers on 200 raids over Europe and ensuring that not one of them was lost. That fighter group shot down 111 aircraft and destroyed 150 more on the ground, for
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the loss of 66 of its own fighters. It destroyed hundreds of railway wagons, dozens of boats and even sank a destroyer.
What is the relevance of that information? It is quite simple: all the pilots in those two units were black. All were fighting two wars—the first was against the Nazis, but the second was against the prejudice in their own great country, the United States of America, against black service men. The obstacles that they had to overcome to be able to volunteer to fight and go on those missions would have deterred most people from even wanting to bother. They were descendants of people who had not become citizens of the US voluntarily, but had been brought there against their will. They nevertheless fought to save an imperfect democracy, which, on occasion, had given them little cause to admire it. In short, they were proud to be American patriots.
In the fight against terrorism in this country, we need allies, and those allies are members of the moderate Muslim community. Those people—or their forebears—came to this country voluntarily because they thought that this country's methods, freedom and tolerance would give them better lives than the countries that they left. The appeal that I want to put out, in so far as I can do so through the medium of a House of Commons debate, is to ask members of the moderate Muslim community to follow the example of members of the black community in America—and, if I may say so as a member myself, members of the Jewish community in this country. Jewish people fought in all the conflicts that have taken place since they became a community here, and they have won awards—the Victoria cross, the George cross, and probably just about every gallantry medal imaginable—in the course of serving with Her Majesty's armed forces.
Members of the moderate Muslim community now have an opportunity to assist our democracy to fight against an extremist awfulness that any right-thinking person who wants to be a citizen of a democratic country would utterly reject. The hon. Member for Southwark, North and Bermondsey (Simon Hughes), whom I am delighted to see in his place, made—if I may say so without prejudice against the many other excellent speeches—the most important single point when he said that it is vital for the Security Service to recruit members of that community to be able to wage the campaign against Islamist terrorism.
Joining the Security Service and becoming agents for democracy will be a very dangerous thing for members of the moderate Muslim community to do, but they will follow in a proud tradition. Black people fought for democracy in America, even at a time when America should have behaved rather better towards them. Those people have now risen to the very top. Colin Powell is Secretary of State and was formerly chairman of the joint chiefs of staff. I have every confidence that British moderate Muslims are as patriotic as British Jewish community members and British members of other communities that fought with the armed forces in war after war, for generation after generation. We think, of course, of the Gurkhas in particular.
I hope that one day, when people look back on this battle as they now look back on previous battles, it will be possible to say that it was not a war of race against race or of class against class, but of democracy against

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totalitarianism. I am sure that there will be brave British Muslims who will want to take part in that war on the right side.
5.53 pm
Mr. Kevin McNamara: I thank the Intelligence and Security Committee and its Chairman, my right hon. Friend the Member for Dewsbury (Ann Taylor), for its pamphlet telling us how the intelligence services work and for its last report. I also thank my right hon. Friend the Secretary of State for the Home Department for the compliment that he paid to the Select Committee of which I am a member—the Joint Committee on Human Rights. The right hon. Member for West Dorset (Mr. Letwin), who is no longer in his place, wondered why such matters are not dealt with in considering Bills. I can assure him that our Committee examines every Bill with any human rights aspect and publishes a full report. We do not take at face value what is written on the front of a Bill by any Secretary of State.
I read the Committee's report with great interest and I welcome the opportunity to debate it. I am one of those who believes that a large proportion of the work that is carried out by the intelligence and security agencies should not be secret at all, but should be wholly open to debate, and that the services should be held publicly accountable. That was our policy in opposition. We might be moving towards greater transparency, but the pace of change is so slight as to be imperceptible to the public at large.
Having been associated with affairs in Northern Ireland for some years, I have some knowledge of the intelligence agencies and their fight against terrorism and its impact on the political process, which we have not really considered today. The Committee's report states that the Security Service
"devoted 33 per cent. of its efforts to Irish Counter Terrorism".
Immediately, I am faced with problems—33 per cent. of its budget, of its agents, of its policy deliberation, of its time? Was the proportion of "effort" adjusted after successful negotiation of the Belfast agreement? What further adjustments were made to resources available for combating specifically Irish terrorism in the light of changing priorities following 11 September?
The intelligence services claimed credit for the successful conviction of three IRA terrorists for arms-trafficking charges. We all welcome that, and it is to the credit of the agencies. I know that an agency is able to claim credit for an operation only after the case has been successfully taken through the courts, so we do not really know how many operations have been thwarted—though I imagine a great number. However, many tricks of the trade must remain secret if they are to be successfully deployed on other occasions.
The upside of that secrecy is that terrorists might be led to believe that the intelligence agencies are all-seeing and all-powerful. They do not know where the subterfuge begins and ends, how deeply agent penetration goes or what are the agencies' objectives at any time. The downside of the policy is that we do not know either. We do not know to what extent, if at all, the agencies are overrunning the ethical boundaries.
There is a plethora of agencies in the field, each running agents, collecting information and conducting operations. The terrorist might be confused over who is
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who, but so are we, especially when something goes wrong and we want to find out who is responsible. So I should be grateful if the Foreign Secretary answered the following fundamental questions—in writing if he does not know the answer now. Which agency has the lead role in intelligence gathering in Northern Ireland, and what is its relationship with the reformed Police Service of Northern Ireland and other agencies there?
At times, the responsibility has been given to the Security Service—MI5—but the Royal Ulster Constabulary ran its own secret undercover unit in addition to special branch, which itself is described as a force within a force. The Secret Intelligence Service—MI6—ran operations at certain times, and an agent known as "the mountain climber" is widely acknowledged to have performed a most valuable role as a channel of communication between the Government and the IRA. More particularly, in relation to the Ministry of Defence, which agency is to be held responsible for the work of the former force research unit, which has been rebranded with a new name that is still an official secret? There was of course no mention of that unit in the report.
On 1 May 2001, Ulster Television broadcast an interview with a former RUC detective in the CID, Detective Sergeant Johnson—"Jonty"—Brown. In that interview, a number of allegations were made that the RUC special branch routinely blocked investigations and destroyed evidence in order to protect informers. That affected, among other things, the ongoing investigation into the death of the solicitor Patrick Finucane.
Jonty Brown insists that those actions were not random or opportunist, but were set out and codified in a set of instructions governing the relationship between the RUC special branch and CID. The instructions were in a memorandum issued from RUC headquarters on 23 February 1981. They, in turn, were based on a report commissioned by the Chief Constable in January 1980. That report was known as the Walker report. Its author, Patrick Walker, was at the time—I believe—second in command of MI5 in Northern Ireland. I understand that in 1989 he was appointed overall director of the Security Service. That memorandum was quite specific. It stated:
"All proposals to effect planned arrests must be cleared with Regional Special Branch to ensure that no agents of either the RUC or Army are involved."
The Intelligence and Security Committee pamphlet states, on page 3 that the requirements of the European convention on human rights led the Government to put the agencies on a statutory footing. But what is the relationship between MI5, special branch and the rule of law, when they appear to be breaking the rule of law?
It is alleged that young joyriders have been recruited as agents or informers in return for a promise of non-prosecution. Will the Minister guarantee—later, in writing, if necessary—that the intelligence agencies are prevented from running child agents or recruiting child informers? I cannot believe that such activities would be compatible with our obligations under the United Nations convention on the rights of the child. That allegation has been widely circulated in Northern Ireland, however.
I turn to another issue involving the rights of the child. In the late 1980s, the then Member for Brent, East brought a number of allegations to the Floor of the House concerning the Kincora boys' home in Belfast. The central allegation was that Kincora was run by vicious

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paedophiles who regularly subjected the children in their care to violent sexual abuse, and that attempts by the RUC to investigate the scandal were blocked by M15 to protect the director of the boys' home, who was providing valuable information about fringe loyalist paramilitaries at the time. If that is true, could such action by the intelligence services conceivably be justified? I ask that—in relation to the question of thwarting the role of the police—because a public inquiry into the circumstances surrounding the death of Pat Finucane now looks virtually inevitable. In that inquiry, an attempt will be made to hold the security services to account, and, by all accounts, the security services—in one guise or another—are in it up to their necks.
We have a British undercover agent, Brian Nelson, who worked his way up to be head of intelligence for a loyalist paramilitary group, the Ulster Defence Association. He is accused of selecting their targets, and he provided Finucane's personal file. We also have the special branch informer, William Stobie. He was the UDA quartermaster who provided the weapons to carry out the hit on Finucane and collected them afterwards. He warned his special branch handler that the attack was coming. Then we have the alleged hitman himself, Ken Barrett. He confessed to carrying out the murder, but special branch decided that it would be better to drop the prosecution and to run him as an agent instead.
The credibility of those allegations may rest in part on the necessary limitation of the intelligence services remaining secret. But the Stevens inquiry will be coming out shortly, and there are enormous policy implications for the work of the agencies, following the incidents that I have described, that would also have enormous long-term political implications, not only for Northern Ireland but for here, if they were to spread to the rest of these islands. Those of us who were in the House at the time will remember, during the early part of Harold Wilson's second Ministry, the rumours about what was happening in the special intelligence agencies. It was eventually established that they were true. That could happen again, and we need to be certain that it is not going to.
The Irish Government have established a judicial inquiry into the investigation of the Dublin and Monaghan car bombings in 1974 that resulted in 33 deaths—a higher death toll even than the Omagh bombing. The British Government have agreed to assist the inquiry in answering persistent allegations that the operation was conceived and engineered by undercover agents working inside loyalist paramilitary groups. It is also alleged that Irish police intelligence on the identity of the perpetrators that was passed on to the RUC was not acted on. This version of events is endorsed by several former policemen and security service personnel. I trust that, in helping the Dublin inquiry, there will be no withholding of information by our own specialist intelligence services.
On another matter, the Ministry of Defence is currently fighting a legal battle to enforce its injunction against the Sunday People newspaper to prevent it from printing further information concerning the operational role of an undercover agent, "Stakeknife", alleged to be a leading figure inside the IRA. The newspaper has claimed that the agent participated in up to 40 murders in order to maintain
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his cover and protect his identity. That is an amazing statement, if it is correct, and we ought to be very concerned about it.
I have made grave criticisms, and I hope that one day we shall be given some answers. Before I finish, however, I want to pay tribute to the many men and women in the security forces and intelligence agencies who have not behaved in the way I have described, but have acted with great bravery and dedication. They put their lives on the line because they believed that their work would allow others to live in safety. I pay tribute to them: the nation owes them a great deal.
It is ironic that just as the Belfast agreement offers us a chance to move on, the culture of secrecy threatens to engulf some former agents who say they are being left high and dry with no acknowledgment of their work and no pension. Those people feel that they have no one to turn to. I understand that they intend to release a video to publicise their grievances. It is possible that the nature of their employment prevents them from going to the tribunal that has been established. If that is so, I urge the Committee to consider inviting them to give evidence so that these matters can be established. It cannot be for the good of the country that a group of people who have put their lives at risk should have such an enormous sense of grievance about the way in which they have been treated that they are prepared to release a video explaining their actions.
I think it is a matter of urgency for the Committee to consider a new approach in Northern Ireland, given the recent history of the intelligence agencies there; for it to urge the agencies to co-operate fully with public inquiries relating to the Patrick Finucane murder and the Dublin-Monaghan bombings, and any other cases that may appear; and for it to begin to develop a new mode of operation that will bring all its activities within the rule of law, and make them comply with the human-rights obligations into which this country has entered.
6.7 pm
Adam Price: This has been a fascinating debate. I am pleased to be able to speak briefly; I am conscious of the time constraint.
One theme that has run through the debate is the fact that intelligence can never be 100 per cent. accurate. It is often said that the only certainty in the world of intelligence is its inherent uncertainty. Echoing that in a recent article in The Guardian, the outgoing head of M15, Sir Stephen Lander, denied that 11 September was due to a failure of intelligence but conceded that it was due to a failure of security. He said that those who expected 100 per cent. success from intelligence were living in cloud cuckoo land.
We should bear in mind, however, the fact that there have been some fairly spectacular failures on the part of British intelligence in the past. Time prevents me from going into detail, but I think it can be said that, in general, intelligence failures occur not during the gathering of information but during assessment. As the right hon. Member for Newport, East (Alan Howarth) pointed out, that problem is becoming more critical in an age of information overload in which intelligence-assessment pressures are greater than ever before.
Indeed, we live—more generally—in a world of far greater ambiguity and uncertainty in terms of geopolitical realities. In that context, it is difficult to assess the

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objectives of adversaries. There are no objective criteria; everything is based on finely balanced judgments. In that context, certain preconceptions and prejudices can creep into intelligence assessments. Intelligence agencies rely on mental maps, filters and assumptive words which allow them to make connections and assess the wealth of information at their disposal. It is therefore vital that we have the widest possible engagement with the a priori assumptions that lie at the base of the operations of our security services.
I accept that, by their very nature, the day-to-day operations of the security services have to remain confidential, but given the mental maps that lie at the base of intelligence service activities, it is vital that we have a full debate. In that sense, security is too important to be left to the security services.
Several hon. Members have referred to the culture of the security services. It is something that we can perceive only through a glass darkly. Certainly I have no direct experience, but historically there have been suggestions of institutional sclerosis within the intelligence agencies and a degree of retroactivity. The hon. Member for New Forest, East (Dr. Lewis) referred to the possibility that they were recruiting from too narrow a base in cultural and social terms, a fact which, since the end of the binary certainties of the cold war, may have inhibited the ability of the security services to think outside the box—to use lateral thinking.
As we know from management thinking, large, centralised, vertically integrated, hierarchical organisations are not the best environments for sparking creative thinking. Perhaps we need a discussion about the culture and the wider institutional setting that will allow the intelligence agencies to engage more effectively with a world that is characterised by more chaotic phenomena than in the past. There is a role for public debate, certainly in terms of the assumptions that underlie the work of the intelligence agencies.
Internal co-ordination also fits into this context. Clearly, it is useful to be able to draw on a wide variety of different sources and views within Government in terms of setting priorities, and there may be a debate as to whether our more collegiate, community-based intelligence system serves us best in terms of facilitating that internal co-operation.
There is also a need for external co-ordination in terms of intelligence sharing. It is one of the contradictions of intelligence that, while it needs to be kept confidential, it has to be shared if it is to be acted on internationally. As the Secretary of State for Defence said recently, we need to create a new community of interest as a basis for trust in which intelligence sharing can be facilitated within NATO and, increasingly, in other forums within the European Union and more widely through the UN Security Council.
The right hon. Member for Tonbridge and Malling (Sir John Stanley) eloquently drew attention to the changing nature of security threats. The meta-narrative of security threats and the sources of global insecurity raise issues that stray into foreign policy and international development is at the heart of the debate. That point was made by the right hon. Member for North-East Hampshire (Mr. Arbuthnot) and by Mikhail Gorbachev in his visit to Parliament yesterday, who also picked out the issue of water shortage as a key long-term threat to global security.
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That is an important element in considering the sources of the next wave of insecurity. As has been said, our focus has shifted from the cold war to international terrorism, primarily in the context of Islamic fundamentalism. However, what will be the next source of global insecurity in 10, 15 or 20 years' time, and how does that relate to the wider issues?
Greater transparency and accountability improve the security services' efficiency and effectiveness. Importantly, certain intelligence failures during perhaps weaker periods in the British intelligence services' history occurred not because of a surfeit of parliamentary scrutiny, but because of an absence of it. In keeping with the point made by the right hon. Member for Newport, East, the greater professionalism of—and perhaps the change in the cultural ethos of—the security services may in part be attributable to this House's increased openness and transparency in its dealings with security matters. The creation of the Committee is a very important step forward, but it still operates within a ring of secrecy. I hope that the process will be evolutionary, and that we will see greater transparency. It is legitimate to ask Juvenal's question: who watches the watchers? It is vitally important that we maintain scrutiny.
Although we are very grateful for the report, it reads slightly curiously. Paragraph 21 states:
"For example, analysis of *** *** and the Service has worked to develop *** ***."
That does not exactly illuminate the Committee's deliberations. Will the Minister say whether such asterisks could be removed, at least in relation to the security services' priorities? The order of priority of the different sources of security threat is a legitimate area for parliamentary scrutiny
6.17 pm
Patrick Mercer: I am delighted to follow the hon. Member for East Carmarthen and Dinefwr (Adam Price), and I was also very interested to hear the comments of the hon. Member for Hull, North (Mr. McNamara). The latter worried me slightly, until he started to discuss those brave men and women who died in action against loyalist and republican thugs in an often very dirty war in Ulster. I am delighted that he paid tribute to them, and I join him by paying my own.
I was especially impressed by the speech of my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley), who expressed in practical terms and with particular clarity the threat that we face. He made it clear that the United States of America is taking this threat seriously. I have no doubt that the tempo of al-Qaeda terrorist operations—its attacks on embassies in east Africa and on the USS Cole, and its attacks of 11 September—is being repeated. I very much hope that the intelligence agencies' successes can be translated into successes on the part of those agencies that can do something about this threat. It is all very well being warned and having good intelligence agencies, but we have to do something about the threat. On 4 July, the American nation took the threat very seriously. I wonder if this nation takes it seriously, and I wonder about the level of complacency that we sometimes see—certainly on the surface.
I wish now to bore down—perhaps "bore" is the wrong word—into the relationship between the Security Service and special branch. The Security Service was reorganized

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in 1989 so that the 53 special branches came under the leadership of the Security Service for operational purposes. However, one or two things have gone wrong with that relationship. For example, the Security Service is excellent at gathering intelligence. The right hon. Member for Dewsbury (Ann Taylor) mentioned gaps inside our security agencies, and the fact that the Security Service gathers the intelligence but has great difficulty with its executive arm—in the shape of the special branch—is one of those gaps
Ann Taylor: The gaps that I was talking about were not of that nature. We were concerned that the concentration on post-11 September issues might mean gaps in intelligence cover in other parts of the world and that future problems might develop. I just wish to put the record straight on that point.
Patrick Mercer: I am grateful to the right hon. Lady. She might like to add my gap to her list for a future occasion. It is difficult for the Security Service to act on the intelligence that it produces so long as special branch exists in the way that it does. For instance, the chief constables of the various regions are called upon to provide the officers from their special branches for operations dictated by the Security Service. At the moment, there is no cohesion of effort from the Security Service down.
All the Security Service can do is to disrupt operations. What does disrupt mean? As far as I can understand it, disruption means the Security Service going to those who are intent on badness and saying to them, "We know what you intend. Pack it in—stop it." The service might also instruct its surveillance agents to make themselves obvious. That may have worked in the cold war era. Russian agents may have been deterred by such operations, but these days, disruption—against a terrorist enemy—is not well defined. Indeed, it is not sanctioned by legislation and it may clash with the Human Rights Act 1998. That is why there is a need for special branch to be able to carry out the work of the Security Service on a clearer basis.
If we look in more detail at how chief constables organise their special branches, we see that it has been suggested that one of the northern constabularies has reduced its special branch establishment from 23 officers to eight. Of course, chief constables have to provide the funding for special branch operations that are not necessarily their own. Indeed, the Metropolitan police's special branch may require chief constables to provide officers to help them when operating in the regions. One can empathise with the chief constables reducing the numbers if they are told to achieve results in fighting what the Royal Ulster Constabulary used to call ordinary, decent crime. Special branch officers are expensive and a drag on chief constables' budgets.
The three operational areas with which special branch deals—Irish terrorism, domestic terrorism and international terrorism—have completely different operational procedures. Strangely, special branch has no remit at present for dealing with loyalist terrorism. The Security Service clearly supervises it in that role.
On domestic terrorism, which includes animal rights, environmentalist and extreme left-wing and right-wing terrorism, special branches fall under a completely
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different organisation—the national public order intelligence unit, not the Security Service. For some unaccountable reason, the National Criminal Intelligence Service deals with sporting public order, such as football hooliganism—as opposed to non-sporting hooliganism, whatever that is.
Finally, special branches also have to deal with international terrorism not via the Security Service, but via an organisation called the police international counter-terrorist unit. I am sure that the Foreign Secretary will agree that that is a move in the right direction, but may I enter a plea to the effect that PICTU is far too small? It is about six people strong, and it needs extra resources if it is to prove effective.
My point is that special branch never really knows who its boss is in any of these circumstances. Under the current, rather muddled system, the Metropolitan police special branch can quite frequently be called on to deploy its anti-terrorist branch for operations anywhere inside the United Kingdom. That means that budgets from the Metropolitan police are used to counter terrorism elsewhere inside the British isles. Officers from the constabularies can be conscripted to work under the anti-terrorist branch, but there is no cohesion or chain of command. There is nothing that special branch understands in terms of anti-terrorist operations on a day-to-day basis.
There are other points which, regrettably, time prevents me from making. However, I should like to quote a senior special branch officer who says:
"In short, and in my view…the whole British structure is an inefficient mess, and speaking as a practitioner, it is not clear to me which agency is ultimately responsible to the British public for protecting them from terrorism (below the level of Home Secretary, that is). It could be the Security Service, the Chief Constable of the area concerned or the National Coordinator".
In other words, the Metropolitan policeman could be called on in these circumstances.
I do not wish to carp and complain. I believe that two distinct things could make special branch more efficient and make it work with the Security Service more efficiently. The first is regional special branches, an idea that I believe is being considered. More efficient, perhaps, would be a national special branch which, understanding the limitations of budgets, could provide a solution to the problem.
I very much hope that we are not recalled again this summer, either for a drama, emergency or disaster abroad or, more particularly, for a disaster in this country. If we are, it will not be because of a failing of the security services but because of complacency on our part.
6.28 pm
Mr. Alan Duncan: May I begin by presenting the apologies of my right hon. Friend the Member for Devizes (Mr. Ancram) for being unable to contribute to the debate? He has, of course, written personally to the Foreign Secretary.
We have witnessed a responsible and enlightened debate, albeit a slightly surreal one. We have witnessed a display of openness conducted in a strange penumbra of secrecy. There is a risk with the format that has emerged in the House that people either know too much and must choose not to say it or know too little yet have to choose something to say. None the less, this has been a valuable exercise.

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The House has chosen to place its trust in those of our number who sit on the Intelligence and Security Committee to act out in their work the difficult balance that it has been decided to strike between democratic accountability and the serious exercise of covert intelligence, both domestic and foreign. It is a balance that I think we have got right. We have a model that many might study and that we may yet export to other democracies across the globe.
I congratulate the members of the Intelligence and Security Committee on their report and on all their work. They fulfil a vital, if necessarily mysterious role in ensuring the proper and responsible oversight of our intelligence and security agencies.
Following the terrorist outrages of 11 September, we are all only too aware of the uncertain and dangerous world in which we must now work. The attacks on the United States were, arguably, not the turning point. That had perhaps come much earlier, with the fall of the Berlin wall and the end of the cold war. Those events ushered in a new era. Gone were the old certainties of the two superpower blocs and their allies facing and counterbalancing each other, and in had come a new fluidity not seen for decades.
That fluidity has given rise to new challenges that we must face: international terrorism, which can strike anywhere, without warning and without scruple; weapons of mass destruction in the hands of unscrupulous regimes or rogue states; and instability engendered by famine, insurgency or civil war, with the failed states that can result.
We should not forget that, domestically, we must be aware of the need to guard our homeland against internal as well as external threats. Intelligence has always been at the centre of the war against terrorism in all its forms. Good intelligence can make all the difference between a threat materialising or being tackled before it can cause damage. In this world of asymmetric threats to our country and to our citizens, where tanks and missiles are no defence against the perilously placed chemical jam jar, good intelligence and forewarning can be a far more potent weapon in our armoury
In taking on the challenges posed by moving away from the bloc mentality to greater fluidity, and perhaps also from containment to pre-emption, accurate knowledge and intelligence are vital for us to determine the appropriate level of response or pre-emptive action. Intelligence, human and technical, becomes an ever more important resource for us and our allies.
There has perhaps been too little mention of our allies in this debate. There has been very little mention of the United States. In a climate of growing anti-Americanism, which I absolutely deplore, we should never underestimate the value of our close and friendly links with the United States on the very topic that we are discussing.
It is invidious to single out one of the 15 speeches that we have heard today, but the whole House will applaud the work of the right hon. Member for Dewsbury (Ann Taylor) in her chairmanship of the Committee. She spoke of counter-terrorist successes. It is good to know that there have been some, but it is unhappy to know that we were at risk. It is better that such threats were pre-empted than if we had had to witness the carnage that would have followed. She was impressed by the new
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co-operation among the various agencies, which is heartening to know about. She referred to the reduction in spending in the 1990s, which led to the shortfalls mentioned in the report and by the right hon. Member for Newport, East (Alan Howarth).
The only tiny failure that I can spot is that, as Chairman of the Committee, the right hon. Lady interviewed the previous Chief Secretary to the Treasury in ignorance of the fact that he was about to be moved.
I want to place on record my respect and praise for the work undertaken, often at great personal risk, by the men and women of our intelligence and security services in protecting each and every one of us, often from threats that we do not even know exist.
I am encouraged that the report, and indeed the Government's response, shows a refocusing of money and priorities on meeting the challenges posed by 11 September. In these circumstances, it is essential to adapt, and it is encouraging to see that that is what we are doing.
I strongly agree with the Committee's comments on the appointment of John Scarlett as chairman of the Joint Intelligence Committee, and as intelligence co-ordinator, in line with an earlier ISC report suggesting that those posts should be filled by someone from within the intelligence community. We welcome the appointment of such an able person.
As many right hon. and hon. Members have said, the report recommended that the ministerial committee on the intelligence services—the CSI—meet annually to review intelligence requirements and priorities. We believe that the services need policy guidance if they are continue to do what is expected of them. That point was made in particular by my right hon. Friend the Member for North—East Hampshire (Mr. Arbuthnot).
Although the report is generally positive and the work of members of the services is rightly praised, it is concerning that, at an administration level, the report notes some weakness in the United Kingdom's secure communications equipment and in the languages that the services are able to cover. Those points were mentioned by the hon. Member for Southwark, North and Bermondsey (Simon Hughes) and in paragraphs W and S of the recommendations. I trust that the Government are addressing those issues as a priority. I invite the Foreign Secretary to comment when he winds up the debate.
Domestically, the Security Service should remain seized of the need to engage constructively with mainstream Muslim sentiment in the United Kingdom. Those participating in the debate have touched on a point of the utmost importance. Much of the perceived threat comes from people from Muslim countries who are furious, or rendered furious, by differences in their own countries or by other global issues that inflame their thinking and their actions. I cannot praise too highly the comments of my hon. Friend the Member for New Forest, East (Dr. Lewis), who pointed out the importance of drawing into the culture of our security and intelligence services people in our country who are not the conventional Oxbridge types whom we assume step into these jobs. We should also engage people from Muslim communities and of a Muslim background who are, as my hon. Friend said, as much patriots as any of us in the House. That is crucial to the future efficacy of those services.

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The right hon. Member for Newport, East also made a thoughtful contribution. He said that we should understand what generates terrorism, and why people act as they do. It is not just an understanding of our own country that is sometimes lacking, but an understanding of other countries, which is crucial to our understanding of the broader interest and motivation that causes many of the problems that we face. We must understand opinion everywhere if we are to understand the problems with which we are all trying to wrestle.
I am pleased that the Government accept the need to address problems with the management and accounting processes at GCHQ, and that they are monitoring these matters. I hope that they will move swiftly to resolve any remaining problems over meeting the required accounting standard, which, as my right hon. Friend the Member for North—East Hampshire said, may bedevil us for a third year—we hope that it will be only two.
I think that everyone in the Chamber agrees that the form of oversight that has emerged in the past few years works well. The Committee's reports are useful in ensuring that channels of accountability and parliamentary oversight remain effective. The nature of the work of the intelligence and security services obviously causes constraints to be placed on the degree of openness and oversight that is possible, but the requirements of the European convention on human rights, among other things, have necessitated a more defined statutory footing for the services. The Security and Intelligence Committee, the commissioners and the tribunal all serve to provide oversight and accountability, as do debates such as this one today, and the persons of the Prime Minister and Secretaries of State.
It is always difficult to strike a balance between openness and accountability and the need for secrecy to protect agents and work being undertaken, but I believe that we have been pretty successful. I hope that that balance will be carefully preserved in the future, and that the Committee will continue its good work.
6.39 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): When I became a Member of the House 23 years ago, the very existence of the security and secret intelligence services was not publicly admitted, still less was there any semblance of parliamentary scrutiny of their work. It is a great tribute to the maturity of our democracy that in the intervening period there has been a considerable increase in the depth and breadth of parliamentary scrutiny of the work of the agencies. Far from that undermining public confidence in the work of the agencies and the esteem in which the individuals working for them are held, the reverse has been the case.
As someone who for five years had responsibility for the Security Service and, for the past 13 months, for the Secret Intelligence Service and GCHQ, I pay my tribute to the Intelligence and Security Committee for the way in which, by holding us to account, its members enable us better to fulfil our statutory responsibilities in respect of those services. I know that I also speak for my right hon. Friend the Home Secretary.
I begin, therefore, by paying a warm tribute to my right hon. Friend the Member for Dewsbury (Ann Taylor) and to all her fellow members of the Intelligence and Security
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Committee in both this and the other place for their work. The fact that Ministers from five Departments provided evidence to the Committee this year shows the value that the Government as a whole attach to its work.
By way of a further preliminary, I endorse the remarks of my right hon. Friend the Home Secretary in respect of the retirements of Sir Stephen Lander, as director general of the Security Service, and of Mr. John Warne, as director general of the organised and international crime directorate—although as he is usually the first to point out, he is director general against organised and international crime and not for its propagation.
I was loyally and proficiently served by Stephen Lander and wish him well. I was also extremely well served by John Warne. who had the task, within the Home Office, of co-ordinating its arrangements for holding the Security Service to account, for liaising with special branch in London and elsewhere, and generally in developing the work of the Home Office with other agencies, including the National Crime Squad and the National Criminal Intelligence Service, against organised and international crime. I warmly wish him well for the future.
We have moved from a period when there was almost no scrutiny of any of the agencies, which were all non-statutory, and there was no statutory provision for intercepts of any kind to the present situation where the oversight of our intelligence and security agencies is as comprehensive as any in the world. I shall deal in a moment with the point raised by the right hon. Member for Tonbridge and Malling (Sir John Stanley) as to whether that might be further developed with a Select Committee.
When we consider the arrangements in other European Union countries, we can see how far ahead we are; no European country has comparable arrangements. In endorsing the tribute paid by the hon. Member for Rutland and Melton (Mr. Duncan) to our relationship with the United States agencies and to those agencies themselves, I note that the only country with the same depth of accountability is the United States.
Mr. Dalyell: Before the Foreign Secretary leaves the United States, is he minded, before the recess, to accede to the request made to him by the Lockerbie relatives that there should be a public inquiry into the international aspects of Lockerbie?
Mr. Straw: I explained to the Lockerbie relatives that I did not see a case for a public inquiry into what had happened, but that I was going to look into whether other arrangements for scrutiny could be established. I realise that my hon. Friend put a number of detailed questions while I was away from the Chamber and I shall write to him in response to them.
I welcome the recognition given in the Committee's report to the work of the agencies in protecting national security and economic well-being and in tackling the threat of organised crime. I also pay tribute to all the individuals who work for the agencies for their esprit de corps and courage. I have met many of them during the past five years, and they are very dedicated people who are not able to seek public or even semi-private social endorsement for the work that they do.
Hon. Members have mentioned the work of the Joint Intelligence Committee, under John Scarlett, and I greatly endorse their comments. I would say to those who have

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asked questions about the co-ordination of intelligence work in this country that co-ordination is always difficult because there will be different intelligence sources, and there would be even if there were a single intelligence and police operation for domestic and overseas operations—not something that I would propose—but we work more effectively at co-ordinating intelligence sources than most other countries in the world. That has a great deal to do with the JIC.
Several right hon. and hon. Members—including the right hon. and learned Member for North-East Fife (Mr. Campbell), my right hon. Friend the Member for Gateshead, East and Washington, West (Joyce Quin) and the right hon. Member for Berwick-upon-Tweed (Mr. Beith)—have raised the issue of the appointment of Sir David Omand as the security and intelligence co-ordinator and permanent secretary to the Cabinet Office.
As the House knows, Sir David Omand has huge experience in relation to intelligence and security. He was my permanent secretary at the Home Office, until he had to step down from that position when he got lymphatic cancer at Christmas 2000. It is a tribute to his tenacity, as well as to the treatment that he received in the national health service, that he has made a full recovery and has been appointed to his new post. He will bring singular qualities to his position. He will act as the accounting officer for the single intelligence account. He will be the chairman of the permanent secretaries committee on the intelligence services and of the official committee on security, both of which meet regularly. He is also chairman of the Civil Contingencies Committee and has oversight of the civil contingencies secretariat.
One of Sir David's many experiences was of being responsible for civil contingencies when we were at the Home Office. That included dealing with the hijacked Afghan aeroplane that landed in February 2000, and the fuel dispute, both of which he and I will remember in almost every particular.
Mr. Arbuthnot: I am worried because I agree with absolutely everything that the right hon. Gentleman has said so far, particularly his tribute to Sir David Omand. Does the Foreign Secretary agree that scrutiny of the intelligence and security services would be strengthened even more if the ministerial committee were to meet? Will he prevail on the Prime Minister to cause that to happen?
Mr. Straw: I wanted to deal with that issue later, as several right hon. and hon. Members have raised it—including my right hon. Friend the Member for Dewsbury and the hon. Member for Southwark, North and Bermondsey (Simon Hughes)—but let me do so now. Formal meetings of such committees is a matter for the Prime Minister, but I want no hon. Member to get the idea that the Ministers concerned do not meet regularly, particularly my right hon. Friend the Home Secretary, myself and the Secretary of State for Defence and the Prime Minister. At one stage, post 11 September, such meetings took place two or three times a week, so there is a lot of co-ordination at ministerial and official levels.
I shall deal with some of the other points that have been made during the debate.
Mr. Beith: Will the right hon. Gentleman give way?
Mr. Straw: I shall deal with those points, and I promise that I shall then give way to the right hon. Gentleman.
1130
The hon. Member for Southwark, North and Bermondsey asked whether the current split between the National Crime Squad, the National Criminal Intelligence Service, the Security Service and the Secret Intelligence Service should continue, and other hon. Members asked whether the split between Customs and Excise and the immigration service should continue. I simply say that the exact organisation of our security and law enforcement agencies nationally is kept under review. My instinct is that the first test should always be, "If it ain't broke, don't fix it", and a huge amount of time and cost can be wasted in reorganisation, but if a case can be made for it, it should be considered. I certainly recognised—although it is now much more a matter for the Home Secretary and the Chancellor of the Exchequer—that there was a strong case for better co-ordination and for joint operations between, for example, customs and the immigration service.
The hon. Member for Southwark, North and Bermondsey asked me about secure communications. We are taking active steps, about which I am happy to brief him and other hon. Members outside the House, to improve the availability and usefulness of secure communications.
Interwoven in several contributions have been comments about the Regulation of Investigatory Powers Act 2000 and amendments made two years later by the Home Secretary. There was an interesting exposition by the right hon. Member for West Dorset (Mr. Letwin), the shadow Home Secretary, which led to him suggest—himself in the end, with a bit of prompting from others—that he was a tortured liberal.
Mr. Colin Pickthall: All liberals should be tortured.
Simon Hughes: Some of us are fine.
Mr. Straw: My hon. Friend the Member for West Lancashire (Mr. Pickthall), who is as good a socialist as ever I have met, and who also happens to be my Parliamentary Private Secretary and therefore has no need to protest his liberality, says that all liberals should be tortured. However, there is a serious point here.
Of course we have to secure a balance between law enforcement and civil liberties; that is what this place is for. However, listening, as I have done in the past 13 months, to some comments about the Regulation of Investigatory Powers Act and the Home Secretary's subsequent provisions, I have sometimes thought that I was in a different world from everyone else, because it is worth placing on the record the fact that RIPA and the subsequent measures were introduced not to strengthen the hands of law enforcement agencies but rather to regulate them more effectively.
I take for example one area of regulation—that of the availability and usefulness of call data. By that I mean not the contents of telephone calls but data showing who has called who and when. That information is very important for law enforcement agencies. I first became aware that that had not been the subject of statutory regulation during a debate on the 1996 Police Bill, when my hon. Friend the Member for Cynon Valley (Ann Clwyd) intervened on the remarks that I was making from the Opposition Front Bench to ask whether that was a gap in the law. I had not been aware of that before. I said that yes, it was,

1131
and made a note of it. When I got to the Home Office I followed it up, and that was the main reason why, subsequently, we ensured that that area was properly regulated. To suggest that what the Home Secretary is doing, and what I did, was to introduce new powers against liberties is a perversion and the reverse of the truth. Instead, we have been better securing the regulation of those powers.
The right hon. Member for Tonbridge and Malling raised the issue of whether there should be a Select Committee in place of the present statutory Committee. I have always said—I made it clear to the Committee previously—that I am open-minded on the matter. If there were a Select Committee, it would have to report in a similar way to the present Committee—it is a great tribute to the Committee that it operates, as it were, as a Select Committee—but I understand the importance of Parliament's having Select Committees to do this work and I consider that we need to keep the matter under particular review.
My hon. Friend the Member for Hull, North (Mr. McNamara) asked who had the lead responsibility in respect of security in Northern Ireland. The answer is that because of the special situation in Northern Ireland, the Police Service of Northern Ireland has that lead, although obviously it works in close collaboration with the other security and intelligence agencies.
Mr. Beith: I wanted to intervene earlier because I was not sure that the right hon. Gentleman had fully conceded or recognised how dependent this new arrangement between the Cabinet Secretary and Sir David Omand is on the quality of Sir David. If he had not been available for the position, it is very questionable whether it would have been right to transfer responsibility for the intelligence agencies from the Cabinet Secretary, who plays such a vital role. I hope that the right hon. Gentleman will recognise that, some time in the future, when new personalities become involved, we might have to look at the matter again.
Mr. Straw: Without going into all the details, which would be quite inappropriate, of course, the Prime Minister made the appointment bearing in mind the high qualities of Sir David Omand. There are many other people around in Whitehall who have similar high qualities, but it goes without saying that the Prime Minister would not have made the appointment unless he was absolutely satisfied about the quality of the candidate that he chose.
I want to deal with one of the central elements of the report from the Intelligence and Security Committee: the question of whether the agencies were in any way negligent in failing to predict the terrorist attacks in New York on 11 September. I want to put on record that, during 2000 and 2001, right up to 11 September, there was a high level of awareness among the agencies of the threats posed by Osama Bin Laden and the al-Qaeda network to United States and United Kingdom interests. The ISC has noted that both the United Kingdom and United States agencies achieved some notable successes against al-Qaeda targets in the three-year period running up to 11 September. Although, for obvious reasons, details of those successes cannot be made public, I can
1132
say that plots to carry out attacks in the United Kingdom, the United States and elsewhere in Europe and the middle east were thwarted.
The ISC notes that the UK was active in focusing international attention on Afghanistan and the Taliban before 11 September. The intelligence reports and assessments provided by the UK intelligence community in the period up to 11 September left no room for complacency about the likelihood and imminence of major terrorist attacks. I therefore fully endorse the Committee's conclusions that the agencies did not overlook any intelligence that would have forewarned of the attacks on 11 September. There was intelligence, but it was not complete, and it was not known where or when the attacks were to take place, nor who would carry them out. A re-examination of material across the intelligence community has not found any evidence that, even with the benefit of hindsight, that intelligence could have been used to deter or to give advance warning of the attacks.
Of course, what the agencies have done, as we have done, is to seek to learn the intense lessons of 11 September. Throughout the period since 11 September we have been guided by the principle that the causes—to pick up a point made by my right hon. Friend the Member for Newport, East (Alan Howarth)—as well as the symptoms of the problems must be treated. Our goal remains as set out in our paper on "Campaign Objectives", a copy of which was deposited in the House last October.
Our most visible action has been in Afghanistan, where the military operations succeeded in severely disrupting the al-Qaeda operations. With our assistance, the Interim Administration have destroyed what is probably up to 25 per cent.—we are not entirely sure of the proportion—of this year's poppy harvest, a crop that has funded terrorism and put heroin on our streets. Meanwhile, a huge international humanitarian, diplomatic and political effort has underpinned political and democratic change in Afghanistan, without which there can be no permanent solution to Afghanistan being a seedbed and school for terrorism elsewhere in the world.
We have promoted counter-terrorism measures in the European Union, in the G8 and in NATO. and we have been working with the international community to disrupt sources of finance for terrorists. In that context, I hope very much that the official Opposition and the Liberals will give full support to the Proceeds of Crime Bill as it passes through Parliament. Of course, everybody has signed up to the principle of fighting terrorism, including the funding of terrorism, in which crime plays such an appalling part, but what we must do is ensure that the law enforcement agencies and the courts have effective powers to do that.
As I said, our international strategy in the war against terrorism recognises causes as well as symptoms. Although no political cause can justify terrorism, our approach has been informed by the need to resolve conflicts that breed violence and resentment.
The role of the intelligence agencies in protecting our national interests has never been under greater scrutiny. Commentators in the United Kingdom as well as in the United States have sought to portray the events of 11 September as an intelligence failure. That is not the case. Those critics fail to recognise a fundamental point about intelligence work: by its very nature, when it works—which is usually the case—the public rarely get

1133
to hear about it. The criticisms neglect to take account of a depressing but fundamental fact about the intelligence business: the agencies have to be right all the time; terrorists only need to get lucky once. In that—
It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

PETITIONS

  A11
  7 pm
  Mr. Richard Spring: I wish to present a petition signed by 1,271 readers of the Bury Free Press, residents of Tuddenham in my constituency and other towns and villages, to express their concern about the dangerous crossing of the C624 and the A11, which has claimed lives. The petitioners ask that the Secretary of State for Transport take urgent action to prevent further accidents.
  The petition states:
  The petitioners therefore request that the House of Commons urge the Secretary of State for Transport to take immediate action to improve the A11 at Tuddenham.
  To lie upon the Table.

  Firework Safety
  7.1 pm
  Mr. Henry Bellingham: This petition is signed by more than 500 constituents of mine, who are extremely concerned about firework nuisance. Over the past few winters, there has been a big increase in firework abuse, with injury to pets and farm animals. I wrote to every veterinary surgery and many local action groups—hence the 500 signatures.
  The petitioners request that the House of Commons urge the Government to conduct an urgent review of our fireworks legislation and to legislate, among other things,

  To restrict the times of the year fireworks can be bought;

  To restrict the times of the day fireworks can be set off; and

  To license all vendors of fireworks to meet strict safety criteria and to give trading standards the power to revoke the licence of any vendor caught selling fireworks to under-age children.

  To lie upon the Table

Graffiti
Motion made, and Question proposed, That this House do now adjourn.—[Jhon Ryan.]
7.2 pm
Siobhain McDonagh: I am grateful to have secured the opportunity to draw the attention of the House to an issue that is a constant, nagging headache for my constituents. Although it never features in nationwide opinion polls, it is the matter about which I receive most letters and about which people stop me most in the streets of my constituency.
We have debated graffiti on a number of recent occasions in the House, and I have received countless surgery visits, letters, telephone calls and e-mails from people whose homes, streets and local surroundings are persistently blighted by the mindless handiwork of the graffiti vandals. Not only does it visibly drag a community down when there are graffiti on fences, shop fronts, stairwells, bus stops and post boxes, or the windows of local buses have been scratched with glass-cutters or drawn on with permanent marker pens, but it tangibly affects the fear of crime in a community. In the end, it affects the community deeply.
I grew up in the constituency that I now represent, and in recent years I have seen a marked increase in graffiti in Mitcham, Morden and Colliers Wood. It often seems that as fast as the graffiti are cleared away, they reappear—often in a much worse form. People, particularly the elderly, are scared to go out if their neighbourhood is targeted by graffiti vandals. If we are serious about doing more to tackle crime and the fear of crime, we must do more to tackle graffiti. My constituents are deeply aggravated by graffiti vandalism. They want effective action on it, as do most hon. Members, I am sure.
Graffiti vandalism is commonly thought of as the random, thoughtless activity of an isolated few. That is only partly true. It is a far more organised criminal activity than many people realise, and like paedophilia and drug crime, it includes a great deal of underground activity on the internet. Because the activity has reached such an organised scale, businesses and private individuals spend millions of pounds each year trying to prevent and remove graffiti, and local authorities in London are spending millions to deal with the problem, too. Graffiti vandalism is a very costly crime indeed.
In the London borough of Merton, half of which covers my constituency, dealing with incidents of graffiti has become increasingly challenging for the council over the past two years. The volume of graffiti has increased and local residents feel that the action that has been taken to remove graffiti and to identify the culprits has not been enough to address the scale of the problem. One has only to walk down roads near Mitcham common, in Ravensbury or at Tooting junction, or even down my own road, to see what they mean.
Along with robbery, burglary and race crime, quality of life crimes such as graffiti are now one of Merton's big policing priorities. In common with other London boroughs, Merton council has its own graffiti strategy focused on three key aims: first, a reduction in the incidence of graffiti; secondly, improved responsiveness in graffiti removal; and thirdly, integrated communications, including campaigns, publicity and information.

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Because of that approach, some progress has begun to be made, largely due to the council responding to the concerns of residents. The key during the past six months has been the funding made available from the Home Office, which was secured by Merton Metropolitan police, supported by Merton council. That created the innovative FLAG project, which covers fly tipping, abandoned cars and graffiti.
The result has been better partnership between the council and the police, and significant progress in intelligence gathering and information exchange, enforcement, graffiti removal, public engagement—awareness raising, reassurance and participation in graffiti removal squads—and the engagement of other key stakeholders, including the London fire brigade, the utilities and transport providers and, on graffiti, to a more limited extent, the business community. I understand that Merton will round off the FLAG initiative with a clean-up day in hotspots in the borough in late September, in which I hope to take part.
Merton is now building on the experience gained through FLAG by integrating many of the initiatives into its crime strategy and continuing the monitoring and working relationship by embedding it into its own partnership against crime implementation group. The council hopes that some projects that it has initiated on a voluntary basis can be backed up by legislative change and funding made available to take the work into integrated baseline services.
But all Merton's work and all the targeted policing in the borough does not stop graffiti. Anyone who stands in virtually any street in my constituency can see that the battle is not yet being won. Stopping graffiti completely is virtually impossible, but it is possible to limit, contain and police it while tackling the root social causes. That is where Government and business can and must play a stronger part.
We need concerted action from Government. A borough-by-borough approach can displace criminal damage activity simply as a result of different standards being applied. Equally, when one borough gets tough on environmental crime, vandals may go further afield to commit their crimes and obtain the necessary tools. Interviews with young people arrested for graffiti show that the spray paint was often obtained outside the borough. Have spray can, will travel; do not have spray can, will travel. As likely as not they will scratch and graffiti the public transport that they use in doing so, so strong central direction is needed from Government.
I realise that the Minister will have difficulty in commenting on a matter of business, but I for one would like to see more support coming from businesses, first in the form of voluntary restrictions on the sale of the tools of graffiti. A recent, small-scale, voluntary scheme in Colliers Wood high street has been successful in that 26 of the 27 businesses approached signed up to restricting their sales once the full seriousness of the problem that they were inadvertently adding to was explained to them. But small shopkeepers need to be helped in the fight against graffiti by larger companies, especially the companies that make the very paints, pens and cutters that they sell.
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Corporate social responsibility is a hot issue. On its website, the Corporate Responsibility Group, which is just one of the many bodies that big businesses of all kinds are signing up to, states:
"A key part of any corporate social responsibility programme will be a focus on involvement with the local community—either directly or via partnerships within the community or voluntary sector organisations…community involvement can take the form of charitable donations, gifts in kind, employee volunteering initiatives and staff secondments. Yet many companies are also now developing sustainable and mutually beneficial partnerships with community and voluntary organisations working in a variety of fields—including education, regeneration, employment and homelessness."
I hope that the Minister will agree that there is a case for the companies that make and distribute the tools of graffiti—the spray paint manufacturers, glass-cutter makers, DIY shops, craft shops and garage and car maintenance shops—to do more to combat the environmental crime and local misery that their products are causing. A proportion of their profits should be used to clean up the areas in which they supply products or trade. I want to encourage the makers and sellers of the tools of graffiti to do more to ensure that their products do not fall into the wrong hands. I also want the Government to do more to achieve the same ends by introducing legislation to ban the sale of spray paints to people under 18.
The Minister will know that I have urged the Government in the past to take legislative measures to deal with graffiti. Last year, I exchanged letters with the Home Office to press for an amendment to the then Criminal Justice and Police Bill to prohibit the sale of spray paints and marker pens in the same way in which the sale of fireworks is prohibited. This was the reply from the Under-Secretary of State for the Home Department, my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth):
"Such a measure, although initially attractive, may penalise those who do have a legitimate reason for purchasing these products. It is also unlikely to deter the determined graffiti artists from obtaining them and continuing their criminal activity and it is hoped that retailers would as a matter of course give consideration to those to whom they sell such products. With regard to the sale of glass-cutters, Section 6 of the Offensive Weapons Act 1996 prohibits the sale of knives and certain articles with a blade or point to persons under the age of 16."
Of course, there may be young people with a legitimate reason for purchasing such items, but I still do not see why, if they have such a reason, they could not ask parents or responsible adults to obtain them on their behalf. That is the situation with fireworks—and it works and is wholly sensible.
Nobody would seriously suggest that we can entirely stop the determined graffiti vandal—I will not use the word "artist" because graffiti is a crime of vandalism and vandalism is not art—but the point is that such a measure would be a significant step towards weakening the resolve of the casual and less determined. Incidentally, with regard to glass cutters, I do not agree that retailers of such items regard them in the same way as knives and other bladed items.
I also wrote to the Home Office about extending police stop-and-search powers to cover spray paints, marker pens and glass cutters. This was the reply:
"There are no plans for this…the police already have the power to arrest anyone whom they reasonably suspect has committed or is about to commit the offence of criminal damage. Where vandals are

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found in possession of these items with the intention of damaging property or already having done so, the criminal law can be brought to bear."
Will the Minister indicate whether the Home Office position is open to change on that point? I ask that question because the discussions that I have had with serving police officers suggest that, although they have powers of arrest, they do not feel that they have what they would consider more appropriate powers to stop and search.
In chapter 2 of "Police Powers", it is made clear that the tools of graffiti are not
"prohibited articles for the purposes of the power of stop and search under section 1 of the Police and Criminal Evidence Act 1984."
To paraphrase section 1 of that Act slightly,
"A constable…may search…any person or vehicle"
or
"anything which is in or on a vehicle, for stolen or prohibited articles".
A later provision explains that prohibited articles are intended to mean articles likely to be used in burglary, theft, vehicle theft or obtaining property by deception.
It appears to me—perhaps the Minister can clarify this point for me—that there is still a grey area that needs to be dealt with in terms of police stop-and-search powers for the tools of graffiti. Certainly, it is the belief of serving officers that they do not have the powers that they need to deal with graffiti vandals. To check on that issue in the light of the difference of opinion between my local police force and the Home Office, I have today spoken with our area commander and a number of police sergeants. They are all adamant that they do not have those powers.
I fully appreciate that stop-and-search issues, especially in London, are difficult and have been so for years. I believe, however, that the problems of street crime are now so great that many people would be happy for those powers to be extended, especially if they are used sensitively and if some upper or lower age limit were applied to those changes in the rules.
No one would seriously suggest that central or local government is to blame for the eyesore of graffiti on our streets. Nor would anyone suggest that manufacturers and retailers are to blame. The vandals are to blame and it is up to the Government and business to join the local authorities and police in seeking ways to limit and discourage their criminal activities. It is a matter of social responsibility and I implore the Government, as they did with abandoned cars, to take firm legislative action on graffiti.
715 pm
The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): I begin by congratulating my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on securing the debate. In a very constructive and purposeful speech, she clearly explained why the problem of graffiti is a serious issue—not only in her constituency, although she graphically described the situation there, but in many other parts of the country. She is right to say that we need a concerted effort that must involve the Government, police and local authorities, but also the corporate sector, in tackling the problem. I shall try to respond to a number of the points that she raised.
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Just to confirm the impact of graffiti, a Home Office study published in 2000 estimated the cost of criminal damage, which includes graffiti, to be £4.1 billion in the year 1999 to 2000. Of course, that is not all down to graffiti, but it is a significant issue. As my hon. Friend said, it has a social cost and can have a negative impact in terms of making an area feel run down and contributing to the fear of crime. It can also be a factor in deterring small or large businesses from investing in an area that looks neglected.
The British crime survey shows that public concern about graffiti and vandalism is increasing. I cannot anticipate the British crime survey that we will publish tomorrow, but it would be in line with previous trends if public concern was rising. I entirely agree with my hon. Friend that we cannot allow criminal damage, which is a crime, to be described as or claimed to be art. That needs to be said very clearly.
The Government want to take the graffiti problem seriously. If we are able to tackle graffiti successfully, we will contribute to more attractive public spaces for everyone to use, and one of our objectives in the next few years, especially in many of our urban areas, must be to reclaim public spaces for ordinary, decent, law-abiding people and their families to enjoy free of the fear of crime and antisocial behaviour.
Given the title of the debate, I want to make a few points about business. There will be potential in future for making use of the business improvement districts described in the local government White Paper that was published last year. Business improvement districts will allow local authorities and local businesses to work together to put in place local projects to improve their area. Projects can cover a wide variety of objectives, including improvements to the quality of the local environment, the street environment or parks and open spaces.
There would effectively be a contract between local authorities and local business for additional services or improvements, funded by a levy raised through an additional rate. Businesses would know in advance how much would be raised and what it was being raised for. All businesses in the area would have a say in whether the scheme went ahead. If a majority were in favour, all ratepayers would contribute to the costs of the scheme; if a majority were against, it would not go ahead. We will need legislation to implement the business improvement district scheme. It is a way, among a number of important environmental initiatives, of building on existing collaboration between local businesses and local councils to tackle graffiti. In London, Great Yarmouth and Coventry, the circle initiative has set up business improvement district-type schemes, which are running successfully.
My hon. Friend mentioned restricting the sale of graffiti materials. Many people say that that makes sense to business people and local residents who are trying to eradicate graffiti from their area. We are aware of several local authorities that have been in the process of developing voluntary codes for vendors, of which my hon. Friend gave an example. Those are schemes whereby shops agree not to sell graffiti materials to people who are under the age of 16 unless they are accompanied by an adult. Shops taking part in the scheme display notices in their windows, and often the local authority trading standards department tests how effectively the code is

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working. A recent report by the London Assembly's graffiti investigative committee cited such voluntary initiatives, saying that although they work well, they need to be part of a range of measures to be most effective in preventing graffiti.
Clearly, as my hon. Friend said, retailers need to be supported in their efforts by integrated schemes to tackle graffiti at local level. Crime reduction partnerships have an important role in examining issues in their areas and developing the right local solutions. I congratulate my hon. Friend's council on explicitly mentioning graffiti as one of the top priorities in its partnership, reflecting the importance given to antisocial behaviour in its strategy.
The London Local Authorities Bill includes measures that would make it an offence in the course of business to supply aerosol paint or indelible marker pens to any person apparently under the age of 18. It would require retailers to restrict physical access to those materials, and that would apply to the area covered by London borough councils. The Bill has now had its Second Reading in the House of Lords.
My hon. Friend rightly said that we have resisted calls for national legislation banning the sale of spray paints and marker pens to those aged 18 or under. There has always been an argument about the balance to be struck between denying access to materials that can be used to cause criminal damage and allowing others who have legitimate uses to purchase them. My hon. Friend made her case rather persuasively. The measures in the London Local Authorities Bill, if enacted, could provide a useful pilot for determining the effectiveness of such an approach and whether we should be seeking to extend it further.
My hon. Friend raised what is probably a fresh issue: the extent to which manufacturers of materials that are used for graffiti should in some way be invited, encouraged and possibly even, as she suggested, compelled to contribute to the costs of the clean-up. I am not sure whether that issue has been examined in any detail, but I am certainly more than happy to refer her comments to my colleagues in the Department of Trade and Industry who have primary responsibility for the matter. I cannot make a commitment on the outcome, but the issue is certainly worth drawing to their attention.
There is another area of corporate responsibility for the clean-up. Clearly, the quicker graffiti can be cleaned up, the longer areas are likely to stay clean. Not all but a lot of the graffiti is so-called tagging, the aim of which is to leave a personal mark on a property. Some of the incentive to do that would be destroyed if graffiti were removed pretty quickly after it had appeared.
It is right to say to businesses that they need to play their part—especially companies that own street furniture such as telephone boxes, bus shelters and cable company utility boxes. They need to take responsibility for removing graffiti promptly from those structures. Local authorities are not able to require private companies to remove graffiti from their property. There needs to be a common, responsible approach towards graffiti among all service providers.
In most cases, the siting of cable boxes on the highway will have been exempt from planning control. That calls for companies to think carefully about where boxes are
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placed and to have agreed ways of keeping them in good order. Those producing street furniture need to think about how it can be made less attractive as a target to those intent on causing damage. As my hon. Friend said, I am aware that in Merton utility companies and transport operators are being approached regarding partnership working in order to achieve effective and timely removal of graffiti from their equipment and property in conjunction with council-led initiatives. I hope that that is successful; it is certainly the type of corporate responsibility that we want to encourage.
Others have not taken responsibility for removing graffiti from their property, and local authorities have found that they cannot do so because they would be liable for any damage caused. It is interesting that the London borough of Southwark secures a written disclaimer from companies before removing graffiti. Other local authorities are adopting that way of working, and we would like to encourage that.
Various town and country planning legislation enables local authorities to secure the removal of advertisements, but not graffiti. The legislation also allows local authorities to take action against occupiers and owners of land whose condition adversely affects the amenity area.
In view of the lack of time, I will not go through a list of local authority initiatives, such as hotlines for the reporting of graffiti and priority for the removal of racist, sexist and other offensive graffiti. Fortunately, such initiatives are developing in many places up and down the country. One of the responsibilities of my Department, under our overall commitment to reducing antisocial behaviour, is to bring together these examples of good practice and to make them widely available to crime and disorder reduction partnerships, so that people can build on that good practice.
There are a number of circumstances in which offending behaviour and cleaning up graffiti can be brought together, not least in relation to the role of the national probation service, which often requires groups of offenders to clean off graffiti as part of their community punishment order, enabling them to carry out work that is of benefit to the community and that can help them to see the effects of the damage on local communities and businesses.
My hon. Friend raised the issue of the ability to stop and search to establish whether a person was carrying materials that had been, or might be, used for creating graffiti. She highlighted the lack of clarity in this area that had been described to her by serving police officers in her borough. The law allows police officers to stop and search in relation to any arrestable offence. There is, however, a question about whether creating graffiti qualifies under that definition; it would depend on the extent of the damage. She is right, however, to put her finger on an operational problem for the police, whatever the law might say.
My hon. Friend is also right to say that, for a whole range of reasons, stop and search is a sensitive issue, and we would need to take steps in that area only after proper consideration. We just happen to be carrying out a fairly extensive review of the guidance relating to the Police and Criminal Evidence Act 1984, to which my hon. Friend referred. As she has raised this issue, I will ensure that that review—which is being undertaken jointly by the Home Office and the Cabinet Office—takes the

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opportunity to examine the passages that she has quoted from the underlying legislation, to see whether it might be appropriate to make any change. I cannot make any commitment on the outcome of that tonight, but, as that review is taking place, let us take the opportunity to see whether we can help with this issue.
My hon. Friend referred to public transport, including its use to go to another borough to get hold of spray paint. She is right to say that the damaging of public transport by glasscutters, and the spraying of graffiti on to vehicles, trains and their surroundings on the underground, in bus stations and at bus stops is a persistent problem. As a result, we face the costs of repair and replacement, the dangers that this behaviour can cause to the travelling public and to staff, and the delays to services through people being injured while producing graffiti. We must also take into account people's fear for their personal safety and the fear of crime, both of which are engendered by graffiti, which can make travelling unpleasant and may, in some cases, deter the public from travelling at all. We certainly see it as an important role of local crime and disorder reduction partnerships to examine graffiti issues on and around the transport system, and to work with private transport companies to tackle graffiti quickly and effectively.
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Another area in which the corporate sector has a role to play, particularly in innovation, is in good design, whether of street furniture or of the materials used in construction, so as to make them less prone to attack by graffiti criminals, and to make clean-up quicker, cheaper and more effective where it does take place. We would like to encourage work on that.
I should like to highlight the initiatives that the Government are taking to increase the number of people available to patrol the streets of our towns and cities, involving a huge expansion in the number of neighbourhood and street wardens. Also, the measures in the Police Reform Bill—which received its Third Reading last night—to introduce community support officers and accredited community support officers will provide an enormously valuable complement to the work of the police in my hon. Friend's constituency and many others. One way of deterring graffiti is to have a sense of public order in our streets and communities, and the larger number of people—along with the police and the specials—who will be able to patrol those communities will help to tackle many types of antisocial behaviour, not least of which will be graffiti.
Question put and agreed to.
Adjourned accordingly at half-past Seven o'clock