Commons Sitting of 15 October 2002

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]

PRIVATE BUSINESS
HSBC Investment Banking Bill [Lords](By Order)
Order for Third Reading read.
To be read a Third time tomorrow.

COMMITTEE OF SELECTION
Motion made,
That Mr. John Hayes be discharged from the Committee of Selection and Mr. Peter Luff be added to the Committee.—[Keith Hill. on behalf of the Committee of Selection.]
Hon. Members: Object.

Oral Answers to Questions
  TRANSPORT
  The Secretary of State was asked—

  Railways (Overcrowding)
  Mr. Paul Burstow: What measures are proposed to tackle overcrowding on the rail network. [71411]
  The Secretary of State for Transport (Mr. Alistair Darling): The Strategic Rail Authority's strategic plan sets out how it proposes to achieve its objectives, including a reduction in overcrowding.
  Mr. Burstow: I am grateful to the Secretary of State for that answer. Can he confirm that one of the first acts of this Labour Government in 1997 was to introduce regulations to deal with the overcrowding of chickens on our trains? Can he confirm that in the five years during which the Government have been in office they have failed to deal with the problems of overcrowding on our railway network, especially on Thameslink services through my constituency? Will he today commit to putting in place the systems that will ensure that we drive down overcrowding on our trains, so that commuters are not stuck every morning and night on what are effectively cattle-truck trains?
  Mr. Darling: I agree with the hon. Gentleman to the extent that congestion on the railways, especially those
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  in the south-east of England, is a problem. However, action is being taken to address that. Last year, 600 items of new rolling stock came on to the system and this year 800 more new carriages will be delivered. By 2005, nearly 2,800 new carriages will be delivered. In addition, the SRA is also taking action to make better use of the existing network by re-timetabling to ensure that we make sensible use of the railways. It is estimated that on some routes we will achieve 20 per cent. more capacity, which will allow more frequent and more reliable services. The railways are taking action in both investment and organisation.
  The hon. Gentleman is right that extending capacity and increasing the number of routes on the Thameslink lines would be of some assistance. At the moment, the matter is still being considered as part of a planning inquiry—the hon. Gentleman will be aware of the inspector's findings—but I am anxious that we make progress to open up the network to enable more people to be carried across the city. He can be assured that the Government are taking action through the SRA and other players in the industry to improve frequency and reduce overcrowding.
  Mr. David Drew: My right hon. Friend will know that under the previous Government's privatisation overcrowding was explicitly excluded, but before privatisation we had some measures that could be taken to control the number of people on trains. Does he agree that overcrowding is a problem partly because too many trains are cancelled? Will he consider the franchise negotiations through the SRA with particular regard to First Great Western, which is one of the biggest offenders?
  Mr. Darling: My hon. Friend raises several points. In relation to franchising, I hope to be able to tell the House something further in the next few weeks that will constitute a significant change to the way in which franchises are organised. I also emphasise again the point that I made to the hon. Member for Sutton and Cheam (Mr. Burstow)—that the SRA's proposals to make better use of existing rail track will allow improved frequency and greater reliability, on the Great Western line and on others. Hon. Members will be aware that the west coast main line will now be upgraded, thanks to the significant investment that could only have been made possible by this Government. That will allow greater capacity, faster journey times and more train services. That will all contribute to building a far more reliable and safer railway.
  Mr. John Horam: Is the Secretary of State aware that cattle-truck commuting on the Kent line is now so bad that Connex South Eastern, the operator, is bringing in trains that have the seats and toilets removed to pack in more people? He has failed to recognise that the problem is not one of new trains, but of infrastructure. All the plans put forward by the SRA so far suggest no foreseeable improvement in the next five years. What infrastructure improvements can be made within the next five years to give some hope to my commuters?
  Mr. Darling: The hon. Gentleman tempts me. He is absolutely right that infrastructure is one of the major

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  problems we face. One of the monumental failures which the hon. Gentleman's Government left was a Railtrack that was constitutionally incapable of delivering the improvements that the railway system needed.
  The hon. Gentleman says that the SRA has not concentrated on the southern region. I mentioned the new rolling stock, and the SRA is bringing forward the upgrading of the power supply to lines south of the Thames. That is something which neither Railtrack nor the previous Conservative Government, during their 18 years in power, did anything about. With respect, the hon. Gentleman should think before he speaks.
  Mr. Tim Collins: I join the Secretary of State in paying tribute to the privatised train operating companies, which are purchasing hundreds of new rolling stock items. I agree that the problems that he has discussed this afternoon were caused by decades of underinvestment in the railways by Governments of both parties, that future investment will require both public and private money, and that it is in the national interest that Network Rail be given a fair wind. We all hope that it succeeds, but tackling the long-term problem of overcrowding will require long-term planning. Given that, does the Secretary of State share my disappointment that, 25 per cent. of the way into the Government's 10-year transport plan, so many rail projects are already well behind schedule?
  Mr. Darling: Yes I do, as I said last week when we announced the plans to upgrade the west coast main line. It would have been far better if the industry had got a grip on the costs and had fully understood the sheer scale of the projects that it has to undertake.
  As the parties are in the mood to be nice and not nasty, I shall agree with the hon. Member for Westmorland and Lonsdale (Mr. Collins) that the fault does not lie exclusively with either Railtrack or the former Conservative Government. We are dealing with decades of underinvestment and a failure to grasp the sheer scale of what needed to be done. The hon. Gentleman's Government yielded to a temptation to which, to be frank, most Governments have yielded—that is, to live off investment made in Victorian times rather than to produce new investment as needed.
  I remind the hon. Member for Westmorland and Lonsdale—and this is a difference between the parties—that the Government have allocated some £64 billion for investment in the railways. As I understand it, it remains Conservative party policy not to match that investment. If a Conservative Government were ever returned to power, the money for investment would simply not be available, and we would be back to the bad old days. I do not like to inject a note of nastiness into the proceedings—I prefer to regard it as injecting a note of reality into what the hon. Gentleman said.
  Mr. Collins: Perish the thought that the Secretary of State could ever be nasty, but, given that he is talking about long-term investment plans, what does he have to say about the announcement made a few weeks ago by the Government's own Rail Regulator? The regulator stated that the Government's plans mean that Network Rail faces a "significant risk" of running out of money in the next two years. What is the right hon. Gentleman's
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  response to that, and what will he do about it? Does he think that simply raising the access charges for the train operating companies will provide the whole answer?
  Mr. Darling: The Rail Regulator made those remarks in the context of announcing the interim review of access charges that he decided to undertake following the establishment of Network Rail. However, all parties must face up to the inescapable fact that the cost of rebuilding the railway and making it reliable and safe is far greater than, I suspect, anyone realised in the past. The difference now is that the SRA, Network Rail and the train operating companies are working together rather than against each other, which unfortunately was how they spent much of the 1990s. They are getting to grips with the big infrastructure problems. As I said earlier, they are making better use of the capacity of the line, so that they will be able to get more trains running more frequently.
  There will be a cost, and in the end political parties and Governments must decide whether they are willing to meet that cost and put the railways into a state in which they are fit for the 21st century. I am in no doubt that we can build a railway service that is more reliable and safe, but the hon. Member for Westmorland and Lonsdale is right to draw attention to the fact that the costs will be substantial.

  South-East Manchester Multi-modal Study
  Mr. Andrew Stunell: If he will make a statement on progress on the South-East Manchester multi-modal transport scheme. [71413]
  The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): We announced in March 2002 our endorsement of the recommended strategy of the south-east Manchester multi-modal transport study and asked the delivery agencies to develop the elements of the strategy in more detail. An implementation group has been established and progress is being made.
  Mr. Stunell: I thank the Minister for his reply and for the prompt and positive start that has been made on implementing the study. He will be aware of the importance to my constituency of the Hazel Grove bypass, which is part of the integrated transport package. Will he agree to meet a deputation from Stockport to see whether ways can be found to take advantage of the consents granted at the original public inquiry a decade ago, so that time is not lost, public money is not wasted and, more to the point, the scheme is not delayed?
  Mr. Jamieson: I note the hon. Gentleman's welcome not only for the multi-modal study but for the Government's swift action in looking at the plan. I am sure that he also welcomes the extra funding that we have made available through the local transport plans in his area and the £9 million that was made available to Manchester and Cheshire to take forward some of the initial programme of work in the scheme.
  The hon. Gentleman will know that there are problems with the road that he mentioned because of the planning inquiry conducted at the time by the Highways

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  Agency and through the Secretary of State. The road has now been detrunked and I accept that there are some problems with going through the whole procedure again.
  I met a cross-party group from Stockport when I was in the area in April. If the hon. Gentleman wants to bring another cross-party group to talk with me about these concerns, I shall of course be delighted to meet both him and them.
  Sir Nicholas Winterton: In essence I support the hon. Member for Hazel Grove (Mr. Stunell). Would the Minister be happy for a Cheshire Member to be included in this deputation, and perhaps my hon. Friend the Member for Tatton (Mr. Osborne)? Although in my area there is some difference regarding the improvements that are required, does the Minister believe it right that the Macclesfield silk road, which is a wonderful dual carriageway, should, between Macclesfield and Poynton, become a single carriageway with just some on-line improvements, to link up with the Poynton bypass which is also a single carriageway and would link up with the Manchester airport eastern link road? Does he accept that SEMMMS is dealing with the country's road requirements for 2021 onwards, while the Government's recommendations do not even deal with the roads that are required today?
  Mr. Jamieson: I am not quite sure which Cheshire Member the hon. Member for Macclesfield (Sir N. Winterton) had in mind for me to meet, although I would be happy to meet the hon. Member for Tatton (Mr. Osborne) as well.
  The multi-modal studies were established to enable local authorities to work closely with each other and the other delivery agencies—the Strategic Rail Authority, the Highways Agency and the Government office in the area—to come up with solutions that were based on local knowledge. On the road to which the hon. Gentleman refers, the recommendation came not from the Government but from local groups that know the situation in the area. I appreciate his point about inward development, prosperity in the area and the need for those road links, but I reiterate that those proposals came not from the Government but from his own area, perhaps from some of his own councillors. He may want to use some of his energies and efforts to address matters locally. If he wants to join in discussions about it, I say the more the merrier.

  Trans-European Networks
  Mr. Wayne David: What recent discussions he has held with his European counterparts on the development of trans-European networks. [71414]
  The Minister for Transport (Mr. John Spellar): I have met my European counterparts at four Transport Council meetings over the past year, and on each occasion the future development of the trans-European transport network has been discussed. In that time I
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  have also met Transport Ministers from Italy, Denmark and the Netherlands bilaterally, and each time the network was included in our discussions.
  Mr. David: I thank the Minister for that response. He will of course acknowledge the importance of trans-European networks for Britain and for the European Union as a whole. However, agreement was not reached at the last Transport Council meeting on the new list of specific projects under trans-European networks. Can the Minister give the House an assurance that at the next Transport Council meeting on 5 and 6 December, British interests will be firmly upheld?
  Mr. Spellar: They certainly will, but as my hon. Friend will know, the question of further routes under the TENS programme is also being addressed by the Transport Ministers Council, as is the percentage of grant that will go to those programmes and the overall size of the budget. Therefore, all those factors must be reconciled. It was not possible to do so at the last Transport Council meeting, but I know that the Commission and the presidency will be working hard to get agreement for the December Council.
  Mr. Don Foster: The west coast main line is part of the trans-European network of railway lines. Given that last week the Secretary of State was unable to say how much of the money for the much-needed improvements on that line was to come from the private sector and how much from the public sector, will the Minister at least tell the House whether he anticipates that any money for those improvements will come from the European Union? On the private sector money, given that the Government have rejected Liberal Democrat proposals for the future of Railtrack, is it not the case that another Liberal Democrat proposal on the use of bonds is about to be adopted?
  Mr. Spellar: It is always interesting to receive Liberal Democrat proposals, even when they are multitudinous and varied, come from all parts of the Liberal Democrat party and are often inconsistent and incompatible, as we see with monotonous regularity in the House on roads programmes. To return to railways, part of the Secretary of State's answer was that until we know the outcome of the Rail Regulator's review on track access charges, we will not know the balance of funding that will go into the west coast main line in the long term. What we do know is that getting a grip of the management of that programme—having a longer period of closures on certain sections of the line to improve it—will bring it forward by about two years. That is making considerable progress. On the final point, the hon. Gentleman should not believe everything he reads in the newspapers.
  Mr. Graham Brady: During the long periods of closure on the west coast main line, what steps are the Government taking to ensure that there is additional capacity on alternative routes and on domestic flights into Manchester airport in particular?
  Mr. Spellar: I am sure that the hon. Gentleman has looked carefully at the plan. given the location of his

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  constituency, and will realise that the Strategic Rail Authority has put considerable effort into ensuring continuing access to Manchester and the surrounding area, consistent with making a step change in the time scale of the project and its cost. I am sure that the SRA will be willing to engage with him on particular rail issues on behalf of his constituents. On aviation, obviously he may wish to take up that matter with Manchester airport and, indeed, the operators that operate out of there. If the hon. Gentleman is going to lobby for more flights, I hope that he will not then complain here about the impact of the noise on his constituents, which might qualify him for being a Liberal Democrat.
  Mr. Tony Lloyd: When my right hon. Friend is discussing trans-European networks with his colleagues, does he discuss the lamentable failure of train operators that operate through the channel tunnel to honour their promise that there would be direct services beyond London to Manchester and to other cities? That is still an outstanding demand. It is right and proper that there should be services to the great cities of this country, to link them to the great cities of the rest of Europe.
  Mr. Spellar: I fully understand my hon. Friend's concerns and the concern that has regularly been raised from the regions. Given the lamentable state in which the railways were left by the previous Administration, we must have a list of priorities for investment. The number one priority for his region is the completion of the west coast main line and improving that important artery for rail traffic and for the north-west.

  A1
  Mr A. J. Beith: If he will make a statement about the Al multi-modal study. [71415]
  The Minister for Transport (Mr. John Spellar): We are currently considering the recommendations of the Al multi-modal study. We will make a statement once we have fully considered all the issues.
  Mr. Beith: In considering the issues, will the Minister take account of the views of most of the local authorities and the general public that the failure of the study to recommend dualling of the A1 right up to the border will leave a serious gap in the road system? Head-on collisions regularly take place on that road and at least one of the vehicles involved has usually just travelled a long distance on dual carriageway. Is the right hon. Gentleman also aware that there is considerable scepticism that the promised train improvements will ever take place or will be sufficient to meet the needs of people living in areas such as Belford or Widrington, which are not specifically included?
  Mr. Spellar: All the multi-modal studies have to weigh up the balance within the regions and, nationally, we must consider how those fit together. The right hon. Gentleman will be fully aware that the north-east will benefit considerably from the widening of the Al further south in Yorkshire and into Northumberland, which,
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  although it is not in his region, will be be of considerable benefit to the north-east. Beyond that, the multi-modal study had to look at the volume of traffic being carried and also—another important consideration—the road safety aspects.
  The right hon. Gentleman is right: there have been comments from some local bodies, but many local authorities and other interest groups in the region were involved in the study group, as indeed they have been in all other regions. We are evaluating the study, both internally for the north-east and as regards other investment across the country, to see how it fits into the national transport network. I shall take the right hon. Gentleman's views into account as we undertake that evaluation.
  Mr. Stephen Hepburn: I will buy the Minister a pint in the bar tonight if he can give me a comparable example of two major neighbouring cities the size of Newcastle and Edinburgh that are not linked by dual carriageway. We all know about multi-modal rubbish, but I remind the Minister that people who use roads such as the A1s are not computers—so will he review the position with a view to throwing the study in the bin and getting a proper road between Edinburgh and Newcastle, instead of linking them, in some parts, by no more than a glorified country lane?
  Mr. Spellar: Ah well, I will be buying my own pint again tonight.
  My hon. Friend will be aware that there is another party to the discussion—the Scottish Executive. They will have views about the priority among Scotland's roads that they give the A1 from the border up to Edinburgh.
  A number of road schemes have already been developed. Other multi-modal studies will be coming in. I have already mentioned the widening of the A1 to motorway standard going up to the north-east. I also made an announcement recently about the dualling of the A66 from the north-west to the north-east. Those are major schemes and the proposals have to be evaluated. To some extent that is what the local organisations represented on the study group were doing.
  Miss Anne McIntosh: May I draw the House's attention to my declaration of interest in the Register of Members' Interests?
  I welcome the conclusion in the multi-modal study that the A1 will be made up to motorway status between Bramham and Barton. Does the Minister join me in regretting that it will be a full seven years at least before that road is built? Will he give a commitment to the House today that there will be a moratorium on the building of motorway service stations on that stretch until we know exactly where the new motorway will be?
  Mr. Spellar: I would point out to the hon. Lady that, when in government, her party removed a number of the powers in respect of motorway service station location and allowed motorway service operators to make their own bids. Of course, if that question was a bid for us to change that particular legislative position we might have a look at it.

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  As regards the time taken to build the road, a key issue for the highways authorities—especially with any major widening project—is that, for understandable reasons, they want to do only so much at any one time, precisely because of the inevitable delays for on-going traffic. It is much easier when building a new road, such as the Birmingham northern relief road: widening an existing highway is a different issue. We are, therefore, trying to speed up the process, partly in the time taken by planning but also by estimating and engineering work. We are doing much of that work in parallel, rather than taking one step after another. That is compressing the time between making a decision to build a road and actually opening that road. As the hon. Lady knows, we have also been looking at how we can improve planning, while maintaining the proper right of people to lodge objections and taking into account environmental impact assessments. We are considering whether that needs to take so much time and how we can compress it. We have made some progress but we still have a way to go and we are working on that.
  Mr. David Clelland: May I add my support to the points that have been made about the A1 north of Newcastle? There is also a very serious problem on that road around the Tyneside conurbation, and specifically on the Gateshead western bypass. Although I welcome the fact that the proposal to relieve that problem by building another bypass through Gateshead's green belt has now been dropped from the plan, there is still a growing problem on that road—a serious problem, which is getting worse week by week. The road is very often brought to a standstill because of the congestion. I ask my right hon. Friend to look at that as a matter of urgency, and also particularly to look at the imaginative proposals of Gateshead council to relieve congestion on that road.
  Mr. Spellar: My hon. Friend has indeed raised this matter with me before. I undertake to have a further look at the new proposals, which he has just mentioned, and come back to him with a reply.

  Road Charging
  Mr. John Wilkinson: What recent meetings he has had with interest groups about proposed road user charging. [71416]
  The Secretary of State for Transport (Mr. Alistair Darling): I have had a number of meetings to discuss road user charging with the British Chambers of Commerce, the Freight Transport Association and the Road Haulage Association.
  Mr. Wilkinson: Is the Secretary of State aware that the London chamber of commerce insists that road user charges should be introduced only after there has been a measurable improvement in public transport in London? Is it not the case that that has not happened since the right hon. Gentleman's Government came to power, or his erstwhile colleague the present Mayor took office? Will the right hon. Gentleman undertake to review the situation? We have enough taxes on businesses and individuals in London already, and is not the deal very poor, inasmuch as in the first year of
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  operation road user charges will cost £200 million to introduce, whereas the income will be £130 million? It would be much better to put the £200 million into the tube system now.
  Mr. Darling: I agree with the hon. Gentleman that before any charging is introduced public transport must be improved. Although I have many differences with the Mayor of London, the one thing that is clear is that he has put more money into public transport, particularly buses, and bus usage in London is increasing. The congestion charging scheme in London is a matter for the Mayor of London, and the Mayor alone. The Government have no jurisdiction over it. However, any congestion charging scheme must have clear and deliverable objectives, it must be designed to cut congestion, pollution and accidents, it must be a workable scheme and the consequences of its introduction must be properly thought out. There also needs to be general public acceptance of the scheme. It is for the Mayor to satisfy himself on those points.
  The final thing that I would say to the hon. Gentleman, who I think is trying to tackle this matter in a reasonable way, is that those people in London who have concerns about the scheme should also ask themselves what measures they would adopt to reduce congestion. The Tory party has no such suggestions at all.
  Kate Hoey: The Secretary of State really cannot be allowed to wash his hands of this. He is the Secretary of State for Transport, so what is he going to do to stop the dictatorship of Transport for London? Residents are beginning to feel completely powerless; they are not listened to. As for the likely effects of congestion charging in my area, every single school that is within the congestion charging zone is already being told by teachers that they plan to leave because they are not prepared to pay £1,000 extra every year. Those are people who have travelled into the area for many years. I appeal to the Secretary of State—he cannot afford to wash his hands of this matter. He must intervene and do something for the people of London.
  Mr. Darling: The Secretary of State can do many things, but he cannot act outwith his powers. Whether my hon. Friend likes it or not, Parliament decided to devolve to the Mayor of London powers in relation to transport. Whether we like it or not—and I do not and I do not think that my hon. Friend does—the good people of London decided to elect the present Mayor. I do not suppose that she supported him any more than I did, but the fact is that this is the Mayor's responsibility. I have told the House that I believe that any congestion scheme must have clear objectives, must be workable and should command broad support. It is a consequence of devolution that these powers have gone to the Mayor of London. It is for the Mayor of London to make them work. Although I fully understand my hon. Friend's point of view because I have read comments about it in the "South London Press" and elsewhere, the fact is that the Mayor must get the scheme right because it is his responsibility.
  Mr. Jonathan Djanogly: The Secretary of State says that this is a matter for the Mayor alone, but what about all those non-Londoners—the commuters who have to come into London every day—who will be made to suffer? They are not additional optional extras; they are needed in the capital to work and to make this country work. They will be suffering, and that is a matter about which the Secretary of State should be concerned.
  Mr. Darling: The point that I was making is that, for the most part, responsibility for transport in London is devolved to the Mayor. It is for the Mayor to decide whether he introduces a congestion charge and, if so, in what form. I understand fully the point that the hon. Gentleman makes about people coming in and out of London, but it is not just a question of congestion charging; other measures designed to alleviate congestion on the streets of London are being taken. We discussed earlier rail improvements and other road improvements, so action is being taken across the piece to improve the situation—but the responsibility for the congestion charging scheme lies with the Mayor as a direct consequence of devolution to London.
  Mrs. Gwyneth Dunwoody: The Secretary of State will be aware that the Select Committee is starting an investigation into road user charges. I look forward to hearing from him on that occasion. Can he confirm that he does, in fact, support congestion charging, as incorporated in the Transport Bill in 2000?
  Mr. Darling: Many of us voted for that Transport Bill—now the Transport Act 2000—and I shall make my position clear. I have been very clear about the fact that measures need to be taken to tackle congestion not only in London, but in many other towns and cities in this country. Whether such measures are introduced is a matter for the local authorities concerned. That has to be the case because it must be the job of local councillors to decide what is right for their areas, but, again, I make the point that those people who say that they will have nothing to do with congestion charging, road pricing or anything like that have to consider the consequences of what they say, because the status quo of simply allowing streets which were never designed for the present volume of traffic, to become more and more clogged is simply not a realistic option. Whether or not the London scheme in particular or any other scheme that happens to come along is workable—whether it has clear objectives and is deliverable—is a matter for those charged with responsibility for introducing such schemes: the Mayor of London and councils in other parts of the country.

  Road Building
  Mr. David Amess: What recent representations he has received from the Civil Engineering Contractors Association about new road building projects. [71418]
  Richard Ottaway: What recent representations he has received from the Automobile Association about new road building projects. [71419]
  The Secretary of State for Transport (Mr. Alistair Darling): I have met representatives of the Automobile Association and the Motorists Forum, on which the AA is represented, to discuss road transport. My right hon. Friend the Minister for Transport hopes to meet the Civil Engineering Contractors Association soon.
  Mr. Amess: I had anticipated that answer, but does the Secretary of State agree that, in the interests of the efficient delivery of the Government's road building programme and best value in public investment, it would be jolly helpful if there could be some indication of when there will be demand for the services of the Civil Engineering Contractors Association? So in that spirit, will he tell the House when there is likely to be an announcement of major road improvements such as those in the multi-modal integrated transport studies?
  Mr. Darling: That is a very fair point, and I hope to be able to make an announcement on a number of the multi-modal schemes that are before me in the next few months.
  Richard Ottaway: The Secretary of State will be aware that the A23 Coulsdon relief road in my constituency was one of the 34 projects announced by the Government in July 1998. He will also be aware that responsibility for building that road was transferred to the Mayor of London in 2000. In 2001, the Mayor said that he could not build it because the Government had not given him enough money to do so. Now that the Mayor is looking at it again, can the Secretary of State assure me that the Government will provide enough funding for that project to be built and that there will be no excuses about it being a matter for the Mayor?
  Mr. Darling: I am not certainly going to get into the position where the Mayor comes to me every time that he has run out of money and says, "Please give me the money to meet all my commitments." The hon. Gentleman very fairly recognises that that road is the responsibility of Transport for London. The Government give TEL its budget—it is a significantly increased budget—but the Mayor, who is democratically elected, has to decide what are his priorities. We cannot be in a position where he simply spends the money and then comes back to the Government saying "Please pay up." No Government of whatever political colour would ever get themselves into that situation.
  Mr. John Redwood: Is the Secretary of State aware that south-east England is chronically short of transport capacity of all kinds—railway routes and roads? Will he come to the House soon to tell us how he proposes to ease road congestion by road widening and junction improvements? Is he aware that the South East England Development Agency does not speak for people in my constituency, as it has tried to block necessary expansions of capacity and turned a blind eye

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  to chronic shortage and congestion? Would it not be better to abolish that body and spend the money on road improvements?
  Mr. Darling: I admire the right hon. Gentleman's brass neck in many ways. It would have been nice if investment in road and rail had been sustained over the past 20 to 30 years. Many of the problems about which he and his constituents rightly complain are a result of two things. One is growing prosperity—there are more cars and more people with reasons to travel. Unfortunately, however, that comes on top of a failure of successive Governments to make the necessary investments in transport infrastructure. In relation to junctions, I hope that, if we are able to make progress, I will be able to say something that may cheer him up.
  Mr. Tony McWalter: Will my right hon. Friend bear in mind the urgent need for new road systems for east-west traffic in counties such as Hertfordshire? For instance, the M10—now about 20 years old—between the M1 and the A1 gets halfway and suddenly disintegrates, and a large number of bottlenecks occur over a five-mile stretch. Will my right hon. Friend try to ensure that east-west links are properly considered in relation to new road building?
  Mr. Darling: I agree with my hon. Friend. I know that there is a problem with east-west links in a number of places. As I said, I hope to make announcements in the not-too-distant future following the multi-modal studies. I have noted that representations have been made not just by Labour Members but by Conservatives and Liberals, too. I hope that those representations will be as robust when the shouts of protest go up, when the decisions are made by people who hold completely different views.
  Mr. Christopher Chope: Is the Secretary of State ashamed that his Government have cut investment in roads over the last five years? Last night, at the Freight Transport Association dinner, he made a welcome U-turn, recognising that congestion causes accidents, creates pollution and costs money. In the past five years, under his Government, 50 per cent. more time has been wasted by employees owing to congestion on the roads. When will the Government be able to claim that they have reduced congestion to the levels that existed in 1997?
  Mr. Darling: One of the reasons why congestion was less of a problem before 1997 was very high unemployment and one of the deepest recessions that this country has ever seen, of which, if I remember rightly, the hon. Gentleman was one of the principal architects as it was his ideology that got us there. In the spirit of being nice, I am glad that he enjoyed my speech last night, in which I simply reiterated what I have been saying since I was appointed to this job in May. If he holds his horses, I will make another speech tomorrow in which I will develop those themes and my approach towards road building more fully.

  Regional Development Agencies
  Lawrie Quinn: How his Department will work with the regional development agencies in planning improvements for transport routes and systems within England. [71420]
  The Secretary of State for Transport (Mr. Alistair Darling): My Department is committed to working closely with regional development agencies to identify transport improvements that can enhance regional economic prosperity.
  I am also asking the Highways Agency to press on with a package of improvements to tackle congestion and improve safety at around 90 junctions across the motorway and trunk road network in England. The package is valued at about £145 million. The agency aims to open all these schemes to traffic in the next five years. I will place a list of the junctions and a map giving their locations in the Libraries of both Houses of Parliament.
  Lawrie Quinn: I warmly welcome that answer to my question. In the light of that, would the Secretary of State care to look at the Highways Agency's final strategy for the A64 corridor? Given that economic development should drive road schemes, should not schemes such as the improvements required on the A64 to the Yorkshire coast be somewhere near the top of that package in relation to the trans-Pennine routes?
  Mr. Darling: I know that the A64 is currently the subject of a development agency study that will be considered by the Highways Agency. My hon. Friend is right that economic development is a consideration, but so too is the pressing need to tackle congestion and to improve road safety in different parts of the country. There are, therefore, different considerations in different parts of the country, and they all need to be addressed in their own way. Our objective is to make sure that we can build a more reliable road network that will assist and underpin our economic growth. A successful economy needs a transport system that can move people and goods around more effectively. However, we must also get our priorities right. Pollution and increasing safety, as well as economic regeneration, are also important.
  Mr. John Butterfill: The Secretary of State will be aware that the south-east Dorset conurbation is the largest one in the south-west, yet there are no rail links between it and the Government offices in Bristol or westwards to the proposed regional seat of government in Exeter. The condition of the road links is even more parlous. Parts of the A31, A35 and the A350 resemble mediaeval cart tracks, so is it not the responsibility of the regional development agency and the Secretary of State to make an effort to improve communications?
  Mr. Darling: I have some sympathy with the hon. Gentleman's view. He is right to highlight the fact that in some parts of the country—parts of the south-west of England, in particular—transport links historically look to London and not, for example, to the south coast and to Bristol. He is right to suggest that such issues need to

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  be considered, but that will take time. However, in the next few months I hope to make announcements about a number of road and rail improvements. One thing that is striking in the south-west and other areas is that for everyone who wants a road there are rather a lot of people who do not want one. [Hon. Members: "The Liberal Democrats."] Yes, the Liberal Democrats are on both sides, and usually in respect of the same road. Very often the same people say different things to different people. However, the Liberals are not the only ones to do that. All of us as motorists want to be able to drive around the country, but all of us as environmentalists and conservationists want to be absolutely sure before we give the go-ahead to road improvements.
  I will consider these issues, but let no one think that that is easy. We live in an extremely overcrowded island and all these proposals are controversial. As I said, my fundamental objective is to see what we can do to reduce the amount of congestion and to improve safety. That is how I will approach the issue in the south-west of England and in other areas.
  Caroline Flint: In my right hon. Friend's dealings with the regional development agencies, what thought has he given to the Government reviewing the way in which bus services are delivered? In south Yorkshire and Doncaster, we have erratic and dirty services that are taken off on a whim. The service needs to be expanded but the money is not there. Furthermore, when will we consider the expansion of school transport as a fundamental means of reducing congestion on our roads?
  Mr. Darling: I have some sympathy with my hon. Friend on that latter point. She will know that in three areas—two in England and one in Wales—FirstBus is trying out the yellow buses that are used in the United States to take children to school. The objective is to encourage children to use a dedicated bus service rather than have their parents drive them to school. The reports will not be ready until the end of next year, but the interim reports are encouraging. Therefore, I certainly want to consider such schemes and, if possible, extend them further.
  On the general point about buses, the fact is that in some parts of the country bus usage has gone up quite dramatically. For example, in Oxford—where there is a good bus service and a local authority that has gone out of its way to encourage bus travel—usage has gone up by 50 per cent. In other parts of the country, the record is lamentable. Therefore, rather than embark on fresh legislation, which I suspect would lead to a degree of planning blight, my objective is to see whether we can extend what works in some parts of the country to others, so that we can make far better use of bus services and make sure that they are as reliable as other forms of transport.

  Cotswold Line
  Mr. David Cameron: What plans he has to discuss the Cotswold line with the Strategic Rail Authority. [71422]
  The Minister for Transport (Mr. John Spellar): The Strategic Rail Authority has consulted on the possible combination of the First Great Western and Thames Trains franchises, which will include the Cotswold line, and will announce the outcome in due course.
  Mr. Cameron: I thank the Minister for that reply. Is he aware that the Cotswold line provides a lifeline to my constituency in west Oxfordshire because it is the only significant rail service? Is he further aware that it is a single line for most of the way between Oxford and Moreton and that most rural stations have extremely short platforms that limit the number and type of services that can use them? Will he hold urgent discussions with the SRA about dualling and upgrading the line, because there is very little in the 10-year plan for people living in west Oxfordshire?
  Mr. Spellar: The SRA is considering means in the existing structure that might allow it to provide an hourly service. That would be much welcomed. Indeed, it is indeed one of the demands of the partnership. The hon. Gentleman rightly identifies short platforms as a problem in a number of areas and we are looking again at cost effective ways of lengthening some platforms so that longer trains can run on many more sections of the railway.
  We know from the Chiltern line, which is not too far from the hon. Gentleman's constituency, that such measures lead to a considerable increase in ridership and a sizeable modal shift. A further extension of that line in the west midlands means that it now runs from Kidderminster to London and provides a welcome service. The hon. Gentleman can see how we have managed to expand the service. The SRA is working not just with the train companies but with local councils to see how we can replicate some of those measures on the Cotswold line.

  CABINET OFFICE
  The Minister of State was asked—
  CABINET OFFICE

    Public Services
    Mr. Ben Chapman: If he will make a statement on the progress with monitoring customer satisfaction with the delivery of public services. [71403]
    The Minister of State, Cabinet Office (Mr. Douglas Alexander): Thirty pieces of research were undertaken over a three-year period from 1998 through the people's panel. This research stimulated a significant increase in the amount of customer feedback collected by Departments and contributed to the reform agenda for customer-focused public service and effective allocation of public resources.
    Mr. Chapman: Does my hon. Friend agree that given the levels of investment now being put into public services, people might reasonably expect to find improvements in quality, productivity and timeliness in

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    their delivery? What plans does he have for the benchmarking of public service standards so that people can be told effectively whether or not those are achieved?
    Mr. Alexander: My hon. Friend will be aware that benchmarking exists in a number of Departments. Perhaps the best known example is the British crime survey undertaken by the Home Office. I should also point out that the Prime Minister's recent speeches, pamphlets and comments make our determination clear to the whole country not just to put resources into public services, but to match those resources with reform and thereby achieve the productivity and efficiency gains of which my hon. Friend speaks.
    Mr. Eric Forth: Does the Minister accept that asking people whether they are satisfied or not is an important part of the process? Why do the Government persist in denying choice to the customers of public services? When will they allow patients and parents to choose to seek another source of a public service if they are dissatisfied? It is one thing to ask them: why not let them vote with their feet?
    Mr. Alexander: I commend to the right hon. Gentleman the Fabian pamphlet written by the Prime Minister just before the party conferences which made clear our ambition to have not just universal provision but the customised service that the British people now desire. There is, however, a fundamental divide between those of us who want such choices within the public sector and those who would starve the public sector of the resources necessary to match the reform.

    Women (Public Appointments)
    Dr. Phyllis Starkey: What progress has been made in increasing the number of women in public appointments. [71406]
    The Minister of State, Cabinet Office (Mr. Douglas Alexander): At 31 March 2001, 34 per cent. of appointments were held by women, compared with 23 per cent. 10 years previously. This Government are committed to increasing diversity in public appointments. Each Government Department has an action plan in support of this aim.
    Dr. Starkey: I welcome the progress that has been made. Obviously there is considerable room for improvement, however, because women constitute the majority sex in the country and that is not reflected in public appointments. May I suggest that a way forward might be to provide training events for people who would otherwise not consider themselves the sort to apply for public appointments? That would encourage not just women but people from other parts of the community who are also under-represented to understand what it means to be on a public body and to appreciate the skills that they might bring to it so that they are more likely to apply.
    Mr. Alexander: I could not agree more. Let me point out first that a number of regional seminars have been held to encourage women to apply for public appointments to ensure that there is balanced coverage
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    across the country. In addition, in the coming days the Secretary of State for Trade and Industry will host a specific seminar on the opportunities for women from ethnic minorities to participate fully in public bodies. I certainly welcome that initiative, which shows the direction that the whole the policy is taking.

    Broadband
    Mr. Michael Connarty: What progress he has made on the co-ordination of the use of broadband by Departments in providing access to Government services to the public. [71408]
    The Minister of State, Cabinet Office (Mr. Douglas Alexander): In response to a study by the Office of Government Commerce commissioned by the Prime Minister, the Government will launch the regional broadband unit later this autumn. That will aim to coordinate at a regional and local level broadband initiatives that support e-government initiatives.
    Mr. Connarty: I thank my hon. Friend for that answer. I know that his attention is focused on the power of broadband. Does he concur with those who have studied the matter that the rollout of broadband, with its instant, permanent online access, is the equivalent of the infrastructure built before the industrial revolution took off? Does he agree that the Government must do more to link up all existing networks, including SuperJanet, so that everyone can have access to public services? Surely he realises that the use of television for access means that we have to link up with people in their homes to give them access, rather than have them come to us, seeking our services.
    Mr. Alexander: I pay tribute to my hon. Friend's knowledge of and familiarity with this issue. I recently heard him on the radio in Scotland, campaigning on the subject. We face two challenges: to extend the coverage of broadband across the country and to drive up usage levels. I am pleased that we now have 1 million broadband subscribers, but I am not satisfied. There is further work to be done, and as my hon. Friend suggests, it will support the drive towards e-enablement of government services, to which this Government are committed.
    Mr. A. J. Beith: How will rural areas get access to government services or run small businesses through broadband given the limits to BT resources and to the extent to which BT thinks that it can supply broadband through its exchanges? Are the Government expecting to rely on satellite, with higher charges and lower quality, to supply broadband in rural areas?
    Mr. Alexander: No, we are not relying exclusively on satellite, although it has a contribution to make. There are now 1,117 BT exchanges enabled across the country, and homes in approximately two thirds of the country can now receive broadband services. There is no silver bullet; we need to take several different steps, which is why I commend to the right hon. Gentleman the

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    s£30 million regional development fund established to support broadband initiatives in every region through the Department of Trade and Industry.
    Jim Dobbin: What are the Government doing to widen access to the internet through digital TV?
    Mr. Alexander: The Government have already put in place a digital TV action plan. In April the Office of the E-Envoy launched UK online interactive. Digital TV offers tremendous opportunities for government services to be accessed online and reaches a section of the community who may not have a personal computer in their home.
    Mr. Simon Thomas: How many of the 3 million broadband subscribers are in rural areas? How many of the exchanges that have changed over to broadband are in rural areas? Does the Minister share my concern that there is an impending digital divide between rural areas and the rest of the country? Will he therefore work with his colleagues in the Department of Trade and Industry to place an obligation on Ofcom, the new body that will regulate broadband, to ensure that all areas of the country have access to the digital revolution?
    Mr. Alexander: There are a couple of ways forward. We are establishing 6,000 UK online centres, not only in urban Britain but throughout the country. I commend the Welsh Executive for their efforts in this matter. The Welsh Assembly has taken imaginative policy initiatives, and we will work not only with the DTI but with the devolved Administrations to make sure that a digital divide does not open up as this new technology becomes available.

    E-government
    Paul Flynn: What proposals he has for e-government. [71409]
    The Minister of State, Cabinet Office (Mr. Douglas Alexander): My right hon. Friend the Leader of the House announced the Government's proposals for e-democracy on 16 July. The aim of the policy on e-democracy is to strengthen representative democracy by the use of the internet and other communication technologies.
    A copy of the consultation paper, "In the Service of Democracy", has been sent to every Member of this House and Members of the other place.
    Paul Flynn: Does not e-democracy, especially in the form of MPs' websites, provide wonderful new opportunities for us to serve our constituents in direct, instantaneous ways that are particularly valuable to the housebound, the elderly and the disabled? The Government are to be congratulated on achieving 95 per cent. of their e-government targets. How much progress has been made on improving participation in voting via e-democracy?
    Mr. Alexander: Again, I pay tribute to my hon. Friend's work. We have made significant progress, not least by allocating through the last comprehensive spending review additional resources specifically for pilots of e-voting. We face two fundamental challenges: first, progressing the work on e-voting and, secondly, facing the challenge of e-participation—how to make policy making in this country more porous and more open to contributions from a range of different sectors of society. That is why the consultation paper is so important. I believe that it will inform Government policy for years to come.

Bali
3.30 pm
The Prime Minister (Mr. Tony Blair): With permission, Mr. Speaker, I should like to make a statement on the bombings in Bali, Indonesia.
Two bombs went off near the Sari club in Kuta, Bali, just after 11 pm Indonesian time on the night of 12 October. At the same time, a bomb exploded in Denpasar, capital of Bali, near the United States consulate, and another at the Philippines consulate in Sulawesi. The Sari club was packed with people, mainly young, enjoying themselves on a Saturday night. The attacks appear to have been timed deliberately to cause the maximum possible injury and loss of life.
First, I would like to express my deep sympathies and condolences to the families who have lost loved ones in this appalling terrorist outrage. The final toll of the dead and injured is unlikely to be confirmed for several weeks, but as of this morning more than 180 people are confirmed dead, with hundreds more injured. Many of those who died were young Australians. Up to 30 British people may have died: nine Britons are confirmed dead, with a further eight bodies yet to be identified and 13 people still missing. Eight have been medically evacuated from Bali; many more received hospital treatment at the scene. We are providing assistance, as we did after 11 September, to the relatives of British victims. That will enable those who wish to travel to Bali to do so, and we will provide help and support to them while they are there.
This was an act of pure wickedness—horrific and brutal attacks that have left hundreds of families here and all around the world in shock and grieving. Last night, the United Nations Security Council condemned the bombings in the strongest terms, calling them a threat to international peace and security. At the weekend, I spoke to Prime Minister Howard and to the Premier of Western Australia to express my condolences to them, and I will speak to President Megawati later. I have also spoken to President Bush. My right hon. Friend the Foreign Secretary spoke at the weekend to his Australian and Indonesian counterparts, and he is discussing the issues with Secretary of State Colin Powell in Washington today. A team of specialist officers from the Metropolitan police service antiterrorist branch has already flown to Bali, and more are on their way. US and Australian experts are also on the scene.
I should like to place on record the Government's gratitude for the help extended by both the Indonesian and Australian authorities to all those from the United Kingdom who have been caught up in these dreadful events.
We had no specific intelligence relating to the attack in Bali. We do not yet know for certain who carried it out, but we do know that there are groups of extremists active in the region, some of which have strong links to al-Qaeda. Those groups have worked with al-Qaeda on attack plans in the past. We know that they have tried before to carry out major terrorist atrocities in the region—for example, in Singapore last December, when a massive attack planned against targets, including the British high commission, was thwarted by the
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Singaporean authorities. I discussed that with the Prime Minister of Singapore when he visited London in April this year. He told me that had the authorities not discovered these plans, hundreds of people could have died.
The Indonesian authorities have been conscious for some time of the growing threat from extremists in the region. Indonesia is a secular country with a tradition of tolerance and moderate Islam of which Indonesians are rightly proud, but prior to 11 September, and especially afterwards, we identified the south-east Asian region, including Indonesia, as an area with a real and present threat from groups linked to al-Qaeda. The most prominent is Jemaah Islamiyah, which has a network stretching across a number of countries in the region, and which has to be one of the groups under most suspicion for this atrocity. We are urgently considering proscribing it under the Terrorism Act 2000.
Earlier this year, we put in place an enhanced package of counter-terrorism assistance for Indonesia, including specific programmes on intelligence, crisis management and aviation security. We also offered assistance with bomb disposal and bomb scene management training.
In June, I met President Megawati in London to discuss how we could fight terrorism in Indonesia more effectively, and we agreed to expand our existing programme further, drawing on the wide range of expertise in counter-terrorism that Britain can offer. We will do so in close co-operation with the US and Australia, as well as with the Indonesian authorities. We have also set up programmes to help other Governments in the region. In the Philippines, we are training in counter-terrorism, hostage negotiation and police investigations. In Malaysia, we are setting up training by Scotland Yard's anti-terrorism branch and in bomb disposal. We fully support the tripartite counterterrorism agreement signed by Malaysia, Indonesia and the Philippines earlier this year, designed to combat money laundering, illegal border crossing and the illegal trade in arms.
Of course, since 11 September, here in Britain we have enhanced our intelligence efforts, strengthened protection against rogue aircraft and shipping, and clamped down on sources of terrorist financing. We have passed new anti-terrorist legislation. Internationally, we have put a new UN framework in place, under UK chairmanship, to ensure more effective national and international action against terrorism, and we have increased intelligence co-operation, strengthening existing partnerships and putting in place new ones across the world.
So we have had a fresh reminder, if we needed one, that the war against terrorism is not over. In the past 10 days, there have been attacks in Kuwait and in Yemen. The threat to all people at any time, at any place in the world, is real. In the end, it is not just the families now grieving for their loved ones who suffer, but the people of Indonesia, many of whom already live in poverty, who will have to face the devastating economic consequences of this attack for their country, as those bombs, and the fanatics who use them, do not discriminate between young and old, east and west, black and white, Christian and Muslim. They will kill anyone of any race, creed or colour. They respect no frontiers. They have no inhibitions in murdering the innocent—indeed they rejoice in it. Because of the way

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they work, in small cells of fanatics, and because their victims are the most vulnerable—people in a pub or a cafe, on a street or on holiday—discovering where and how they might strike next is hard. But the message we send out, and should send out, is once again the same—one of total defiance, of determination in the face of this evil to prosecute the fight against them the world over, until in time they are defeated: defeated, of course by intelligence, by police and even military action, but defeated also in the triumph of our values of tolerance, freedom and the rule of law over those of terror designed to produce bloodshed, fear and hatred.
Some say that we should fight terrorism alone, and that issues to do with weapons of mass destruction are a distraction. I reject that entirely. Both, though different in means, are the same in nature. Both are the new threats facing the post- cold war world. Both are threats from people or states who do not care about human life, who have no compunction about killing the innocent. Both represent the extreme replacing the rational, the fanatic driving out moderation. Both are intent not on letting people live in peace with each other, celebrate our diversity, and work out our differences in an orderly way, but on producing such chaos and disorder that out of it comes a world in which religions and nations and peoples fight each other for supremacy. That is the true measure of what is at stake. The war on terrorism is indeed a war, but of a different sort to the ones we are used to. Its outcome, however, is as important as any we have fought before.
Mr. lain Duncan Smith: May I start by thanking the Prime Minister for his statement? I should like to join him in welcoming the swift action and help given by the Foreign Office to support the many British families who have lost loved ones in Bali over the weekend. Our thoughts and prayers are with them, as they are with all the victims' families.
If 11 September was a nightmare, the atrocity in Bali marks the moment when the world woke up to the fact that that nightmare had become a living reality. Today, more than 180 people lie dead—up to 30 Britons among them—and hundreds more are injured. They were backpackers and holidaymakers, couples on honeymoon and tourist workers—innocents in a self-styled tropical paradise who were killed by an unspeakable evil that we must face up to. Terrorism is a cancer and it must be rooted out wherever and whenever we find it. So I welcome the assistance that the United Kingdom is lending to the Australian and Indonesian authorities in their search for those responsible for the Kuta beach bombing and in their efforts to bring those people to justice.
I hope that everybody will remember that this is the second largest terrorist atrocity committed against British people—the first being the World Trade Centre. In a little over a year, more than 150 British citizens have died in those two incidents—so this is our struggle too, wherever the incidents, at home or beyond our shores. I am therefore pleased that the Prime Minister has confirmed that this latest attack has stiffened our resolve to tackle terrorism around the world.
A great deal has been done since 11 September to deal with global terrorism, even though some claim otherwise. Much of it—I hope that people will
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understand—necessarily has been behind the scenes. We know the benefits of international co-operation from working with countries such as Singapore and Malaysia, where recent planned terrorist attacks have been foiled with the help of UK and American intelligence. It is also worth noting that, as I understand it, the Saudi authorities have in the past couple of hours thwarted yet another attempt to hijack an airliner. So there have been successes; the events of the past weekend, however, show just how much work there is still left to do.
For some time, Indonesia has been warned by its neighbours and by the United States about the activities of terrorist cells on its soil. There were 30 bombings in Indonesia last year and an attempted attack on the US embassy in Jakarta last month. I therefore ask the Prime Minister why Jemaah Islamiyah—the group implicated in that attack—was not placed on any list of foreign terrorist organisations published by the US State Department, the European Union or the UK Government. He talked about dealing with that group, so why is he using the phrase that he is "only considering" proscribing it? Does he still lack the evidence? What links, if any, are there between that group and any organisations in the UK? Are there any provable links or any suspicion of which he is aware?
The Prime Minister has held talks with President Megawati. What steps are we taking to ensure that Indonesia deals with militant Islamic groups as effectively as its neighbours such as Singapore and Malaysia? He said that he had received no specific information about an attack in Bali, but I am aware that on Thursday the US State Department issued a general warning that all American citizens should stay away from venues such as nightclubs in certain countries. Was the intelligence that was available to the State Department when it issued that warning also available to us?
The need to root out terrorist groups is as urgent as the need to confront Saddam Hussein. I agree with the Prime Minister that there should be no doubt that it cannot be a question of either/or. I agree with him that those who say—there have been some—that we must choose between terrorism and weapons of mass destruction are offering a false choice. Bali cannot be used as a pretext for letting Saddam off the hook. Surely the duty of any British Government is to protect British citizens against all threats—not merely to give them a false choice and present them with one threat. On the contrary. just as 11 September did, this attack shows what happens when the world fails to respond to threats as they arise, giving clear signals about further and future attacks.
The war against terrorism and our determination to disarm Iraq must surely proceed in parallel. However, the British people need complete reassurance that we are capable now of doing both. Will the Prime Minister let us all know that we will make the necessary intelligence capability, manpower and equipment available, and that nothing will stand in the way of that, regardless of implications for future financial resources?
Saturday's tragic events have shown that we must be able to fight a long-term conventional war against global terrorism, even as we prepare for another form of war against Iraq. Resources must be matched to meet the threats that we face. Without that resolve, there can

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be no true and lasting peace for Britain. In our defence, we must surely steel ourselves for the fact that this is now a struggle not just for a few people in distant lands, but for all of us to defend our civilised values against those who would tear them down and return us to a new dark age.
The Prime Minister: I shall respond reasonably briefly, as I obviously agree with much of what the right hon. Gentleman said. On some of the specific points, of course it is right that many attempted terrorist acts have been foiled, which is to the great credit of those who succeeded in doing so. The trouble is that the terrorists need succeed only once; that is the problem that we face.
The reason there has been hesitation in proscribing the particular organisation is indeed a lack of proof of whether it has been involved, but it is the most obvious suspect for the latest atrocity. We are considering it precisely for that reason, and we need to assess the evidence carefully. It is right to say, however, that we are aware of no connection with any group in this country.
In relation to warnings that have been given, there are two difficulties. The first is that there were no specific warnings of which I am aware in relation to the attack in Bali. What there have been, of course, are specific warnings about the potential for attacks in Indonesia. Indeed, last month the Americans and ourselves acted to protect our high commissions in Jakarta precisely because of worries about potential terrorist threats.
The difficulty—this is the second point—is that intelligence of an unspecific nature flows across our desks all the time. It is very difficult to work out what we must focus on and deal with, and what is so broad that we cannot deal with it. That is why we must take action not just on the intelligence front, but in trying to work out those groups' sources of weapons and bombs, how they are financed, the types of covert activity that give them the means to carry out such attacks, and where their sympathisers are in various parts of the world. All that must be part of how we act.
I emphasise, as I said right after 11 September and have said constantly since then, that that will take a significant time. We have dealt to a large extent with the al-Qaeda terrorist network in Afghanistan, but their cells remain in different parts of the world and we must go after them in each part of the world. We have discussed the matter a great deal with Indonesia, we have offered what help we can, and I know that the Americans and the Australians have done the same. The reason I had the meeting with President Megawati in London in June was to see what more we can do. We will now be looking further at what we can do.
Finally, in relation to intelligence capability, I can assure the right hon. Gentleman and the House that the intelligence services will have the resources that they need to do the job that we need them to do.
Mr. Charles Kennedy: I entirely associate myself and my right hon. and hon. Friends with the proper expressions of sympathy in the House this afternoon. All of us watching those awful television pictures over the past few days, particularly of the relatives making their way to Bali and trying desperately to find some information about their missing loved ones, will not have failed to realise the utter horror of what has taken place and its global unacceptability.
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Does the Prime Minister agree that, in the wake of the tragedy, the international community must take stock of the campaign against terrorism? The new intelligence co-operation to which he referred this afternoon is obviously welcome, as is the deployment of forces to Indonesia and to the region. Will the Prime Minister acknowledge that in giving support to Indonesia, it is probably worth bearing in mind the fact that we want to keep the focus of that support on civilian forces and the police, rather than on the military, because there is at least the possibility of links between the army and other Islamic terrorists?
Are the Government addressing that issue in the course of their dealings with the Indonesian authorities? Obviously, they must be given every encouragement to deter future acts of terrorism, but is not one of the lessons of this outrage that we are not facing a single threat from a single enemy in a single place, and that the complex roots of terrorism mean, as the American writer, Flannery O'Connor, once put it, that
"The terrorist seeks to wash an impure world clean with the blood of innocent victims"?
Do not we need, therefore, to tackle not only the war on terrorism, as the President and the Prime Minister call it, but the other global factors that give rise to the causes of terrorism—not least, for example, poverty? Should not we again take this opportunity to reassure the law-abiding, peace-loving Muslim community both in our country and abroad that our campaign is not against them, but against the extremists who pervert their religion and principles?
Does the Prime Minister agree with former President Clinton that
"our most pressing security challenge is to finish the job against al-Qaeda"?
Does he share the anxiety expressed by European Union Commissioner Chris Patten, who said that he hopes that the efforts against Iraq do not distract us from the need for further efforts in Afghanistan and Pakistan and against al-Qaeda itself?
Finally, is it the Prime Minister's assessment that, if there were a war against Iraq, it would increase or decrease the likelihood of further international terrorist incidents of the type that we have just seen?
The Prime Minister: Let me emphasise that we will offer the relatives of those who have died in this terrorist outrage all the help that we can. When they are facing a very difficult and uncertain time and are travelling to a faraway country, we must ensure that we provide absolutely every form of assistance that we can, and we will do so. Essentially, we are providing exactly the same help as we provided for relatives in the aftermath of 11 September.
In respect of Indonesia, we will work with whatever part of the Government we can and whatever forces there are in Indonesia to try to help them combat this terrorism. The right hon. Gentleman will know that I have argued long and hard—and I continue to do so—for a broader international agenda that deals with some of the issues of poverty and development in the world. However, it is important at this point and on this day in particular to make one thing clear: the terrorists carrying out these appalling acts are doing terrible damage to Muslims the world over and are killing many

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innocent Muslims. As for poverty, quite apart from the terrible loss of life in Indonesia, we can only reflect on how much poverty will be caused by the destruction of the tourism industry, certainly for the near future in Bali and possibly beyond. The situation is therefore very serious for the poorest people in Indonesia. We know from the way in which al-Qaeda operates that the people involved are not necessarily poor at all; they are often extremely well funded, but have a particular type of fanaticism that I think we must confront.
As for the issue of weapons of mass destruction or Iraq, I shall not repeat what I have already said, but I refer the right hon. Gentleman to what the Danish Prime Minister, the President of the European Union, said a moment ago in our press conference. He said that both the issues were threats and had to be tackled, and that we should show the same firmness of will in respect of both.
Mr. Kevan Jones: Will my right hon. Friend share in the sympathy for the family and friends of Mr. Ian Findley of my constituency? He was one of those who tragically lost their lives in Bali. I want to put on record my thanks and those of the family for the support that they have received from the Foreign Office. At such a difficult time for them, will my right hon. Friend give them at least the comfort that should they need financial support to return Ian's body to the United Kingdom, it will be forthcoming?
The Prime Minister: I join my hon. Friend in sending deep sympathy and condolences to Mr. Findley's family. I assure him and them that we shall give every assistance in returning his body to this country for a proper funeral. Mr. Findley's family are among many who, unfortunately, are grieving, and we shall do everything that we can to help them, as we did after 11 September.
Mr. Robert Key: Will the Prime Minister suggest to the Chancellor of the Exchequer that he should hold discussions with the insurance industry, for which he has overall responsibility, about holiday insurance? Many people take out no insurance; more take out insurance that is almost useless, and some take out expensive insurance and find that the exclusions are burdensome. That will have a huge impact on not only the British insurance industry but tourism, on which so many poor people in the world depend.
The Prime Minister: I am not sure whether there is an easy answer to such questions, but I shall raise with the Chancellor the issues that the hon. Gentleman mentions.
Mr. Win Griffiths: At the beginning of August, I led an inter-faith delegation from Parliament to Indonesia under the auspices of the Foreign Office. We specifically examined some of the problems that relate to Muslim-Christian conflict, but we also considered the wider scene. We must remember that Indonesia is a three-year-old, fledgling democracy. It is throwing off a corrupt and repressive regime and trying to establish a tolerant and just society while also dealing
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with unorthodox Islamic extremists. In addition to any help in finding the barbaric perpetrators of the bomb massacre in Bali, will my right hon. Friend ensure that our Government continue with the much-appreciated programmes of help and support to develop good governance, justice and inter-faith harmony, especially in places such as central Sulawesi and Maluku, where serious violence has occurred? The Bali massacre has tragically thrown all that into the spotlight.
The Prime Minister: My hon. Friend is right. Indonesia has escaped military rule and, as he said, is a fledgling democracy. It is tragic if its democratic stability faces another threat. We shall continue with our programmes to develop good governance. We specifically discussed inter-faith dialogue when I met the President of Indonesia in June. It is an important, long-term part of the solution.
Mr. Michael Portillo: My right hon. Friend the Leader of the Opposition made a powerful point when he drew attention to the number of Britons who have been killed in the incident and others. However, the specific incident that we are discussing constituted a day of infamy especially for Australia; it is Australia's equivalent of 11 September. Will the Prime Minister be as supportive of Australia in the coming months as he rightly was of the United States after 11 September?
I have heard some people in this country argue that if Britain remained apart from the war against terrorism and from that against weapons of mass destruction, we might somehow be spared the aggression of terrorists. Does not the incident underline what many of us knew: no one will be spared in the war of aggression by terrorists, and the only answer is therefore for the world community to join the fight against terrorism?
The Prime Minister: I agree entirely. On the first point, I phoned Prime Minister John Howard immediately after the incident and we not only expressed our condolences but discussed what we could to do to help. I also spoke to the Premier of Western Australia because many victims came from there. I can assure the right hon. Gentleman and the House that we will do all that we can to support Australia at this very difficult time. Australians realise, as do the British, that, in the end, there is no secure sanctuary from international terrorism, and that the only option available to us that we can possibly take with our heads held high is to be part of the coalition against international terrorism. Australia has played a magnificent part in that over the past year or so, and we must continue to be with them in that fight.
Mrs. Alice Mahon: May I join the Prime Minister in condemning the outrageous and barbaric act perpetrated against the young people in Bali and offer my sympathy to those left behind? In the light of this latest outrage, however, should we not be targeting all our resources and energies on fighting terrorism, rather than starting another war in the middle east? Surely the Prime Minister will agree that to start such a war would fan the flames of fundamentalism across the whole area and make matters much worse. Our priorities must be to

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get the weapons inspectors back and to concentrate on getting rid of al-Qaeda. That is the way in which to protect all our citizens.
The Prime Minister: Obviously, my hon. Friend and I will not agree on all aspects of the Iraq issue, but I do agree with what she said a moment ago about our priority being to ensure that we root out terrorism wherever it is, and, through the United Nations, to achieve the disarmament of Iraq's weapons of mass destruction through a proper inspections regime. That is what we are working towards. As I said in my statement, however, this is not an either/or, and we really need to tackle both these issues, as both are threats to the stability and order of the world.
Sir Peter Tapsell: While everybody utterly deplores this wicked, cruel act of terrorism, I would like to pursue a point made by the Leader of the Liberal Democratic party, which is that it will not be sufficient for us to continue to denounce terrorism in general terms. If we are really going to grapple with the problem, we must of course use military and intelligence means, but we must also tackle its sources. They are not simply religious ones, and these acts are not organised solely by one small terrorist group. After the 1997 Asian financial crisis, Indonesia was left to wallow in chaos without the international financial organisations making any serious attempt to help, while the rest of the world humiliated Indonesia in East Timor. In those circumstances—in a country of 200 million people with a Government who are not in effective control—it is not surprising that chaos is breaking out all over that vast archipelago, and this may be only the first of many disasters.
The Prime Minister: I am afraid that I do not agree with the hon. Gentleman on East Timor; I think that the Government took a brave and correct decision in what they did there. I do not disagree that we need a broad agenda at an international level; indeed,. I have often argued for that. At this moment, however, we must be careful of saying, in effect, that these people are carrying out these attacks because of the real problems of poverty or underdevelopment in Indonesia. They are not. They are fanatics and extremists whose very acts will have brought more poverty and more underdevelopment to Indonesia. I do not disagree that it is important for the international community to give Indonesia the chance to get on its feet economically. Indeed, this country has been trying to do so; that was another thing that we discussed with the Indonesian President in June. At this moment, however, we should not mix our messages about what has happened. It is wrong and wicked, and has nothing to do with advancing any cause that any of us recognise as justified.
Mr. Derek Foster: Does my right hon. Friend agree that the horrific events of the past few days underline the fact that the fight against international terrorism must be our topmost priority? That fight depends on the broad-based coalition that he and President Bush put together after 11 September. Is it not, therefore, all the more important that my right hon. Friend get it across to President Bush that any military
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conflict outside the authority of the United Nations would fracture that coalition and undermine the fight against terrorism?
The Prime Minister: We do want to ensure that we have the broadest possible coalition, not just in the fight against terrorism but in dealing with weapons of mass destruction. That is what we are working for and, as my right hon. Friend rightly implies, it is important that we maximise international support. I have always said, however, that it is important that the coalition addresses both issues. As President Bush's speech the other day in Cincinnati indicated, the United States has a real desire to ensure that we have the broadest possible coalition to deal with those issues, because they are both threats to the world. Weapons of mass destruction are a real threat. In my first statement to the House on the events of 11 September, on 14 September, I specifically linked the two issues together, and I continue to do so. They are both threats of the same nature, although different in means. I agree that the best way to deal with them is on the basis of the broadest possible international support.
Mr. Alex Salmond: I associate the Scottish National Party and Plaid Cymru with the sympathy and condolences expressed to those who have been injured and bereaved in this atrocity. I have listened carefully to the Prime Minister, but I wonder how it could be sensible to fight a war on two fronts if any preoccupation with a military campaign in Iraq were to detract, disrupt, deflect or in any way undermine the solidarity of the international coalition against terrorism.
The Prime Minister: We have to tackle the danger, whatever its source. If the danger comes from more than one source, we have to tackle it in more than one way. It is important to recognise that both issues are threats, and I shall explain why they are linked. They are linked because the same type of fanaticism and extremism is driving both threats. They may not be directly linked at this moment, in the sense that weapons of mass destruction are in the hands of the terrorists, but I ask the House to consider whether if we allow unstable states—with oppressive and dictatorial regimes—to develop weapons of mass destruction and also allow the terrorist groups to operate, we can be confident that the two threats will not at some point come together. I think that that is a real possibility, which is why it is false and—I say this respectfully—dangerous to suggest that we somehow have a choice between dealing with the threat of chemical, biological or nuclear weapons in the hands of unstable countries and dealing with international terrorism. They are of the same nature and, unless we tackle both, they could come together at some point in a horrific way.
Mr. Chris Smith: Does not this tragedy all too graphically remind us of the absolute importance of the international coalition against terrorism, especially the need to sustain and enhance that coalition across the countries and Governments of the Muslim world? Therefore, is it not important that we do nothing by unilateral decision or

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action, outside the institutions of the international community, that might diminish or damage that central purpose of combating terrorism?
The Prime Minister: Yes, it is important that we do not do anything that damages the international coalition against terrorism. As my right hon. Friend will accept, in many ways it is Muslim countries that have most to fear from this terrorism, but it is also important to deal with the issue of weapons of mass destruction. I have been trying to get us to deal with that also on a broad basis of international support, and I am confident that in the end we will get that support. Our use of the international coalition must allow us to tackle and deal with those problems, not be a means to avoid dealing with them.
Mr. Julian Brazier: The Prime Minister knows the support that exists among Conservative Members for his sentiments and for the difficult course that he has set. However, will he deal with the very real deficiencies hampering our armed forces in the challenge that they face? The regular Army shrank again last year, there are 7,000 personnel unfit for military duty, reserves are at an all-time low and another RAF squadron has closed because of a lack of pilots. I urge the Prime Minister to accept that, in the difficult time ahead, we owe it to our armed forces to tackle those problems.
The Prime Minister: There are, and always will be, matters that need to be addressed in respect of our armed forces. However, let me point out that defence spending is now rising, after falling in real terms for many years. We take very seriously matters that arise in connection with our armed forces' equipment or capability, but their commitment and capability are renowned and well regarded the world over.
Ross Cranston: As someone with one foot in this country and the other in Australia, may I associate myself especially with the remarks that my right hon. Friend the Prime Minister made about the victims of the tragedy, and their relatives and friends?
I am concerned about the moneys flowing to terrorists. Earlier this year, the UN convention on the suppression of the financing of terrorism came into force. All countries are obliged to take action, as this country has done. What assessment has my right hon. Friend made of the actions taken by other countries?
The Prime Minister: The truthful answer is that those actions have been mixed. There have been real successes in the action taken against money laundering, and there is real evidence that that activity is being disrupted. However, it is worth pointing out that there is always a tremendous will to take action in the immediate aftermath of very serious incidents. We in this country have introduced legislation but, surprising as it may seem, people's memories fade in a short space of time. Subsequently, there are many arguments about whether action should be taken against money laundering or against terrorist groups, and so on. Once again, we have been reminded that we need to take action at a national and an international level.
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The honest answer to my hon. and learned Friend is that real progress is being made. However, I agree, as his question implied, that a lot more could be done.
Mr. Edward Garnier: Clearly, I do not know whether the estates of any of those who met untimely deaths in Bali this week or in the United States last year are liable to inheritance tax, but will the Prime Minister and the Chancellor consider exempting any estate that is so liable?
The Prime Minister: I simply do not know the answer to that. I shall look into the matter and write to the hon. and learned Gentleman.
Mr. Robert N. Wareing: The outrageous atrocity against innocent people carried out on Saturday night should help to concentrate our minds. Two things are essential: we must maintain the coalition that involves the US, the UK, Russia and the Muslim countries in an alliance against international terrorism, and we must not give any comfort to al-Qaeda and the international terrorists. If we were to take military action in the light of recent events involving Iraq, does my right hon. Friend agree that we would be acting as a recruiting sergeant for the international terrorists whom we must defeat?
The Prime Minister: Again, let me say that it is important that we maintain the international coalition, but we should not underestimate the knowledge among Arab and Muslim countries of the dangers posed by weapons of mass destruction. After all, the two countries that have suffered most from Saddam are Iran and Kuwait. However, I agree with what my hon. Friend said. I make the point again that it is important that we have the broadest possible international coalition, but I think that we can, and should, deal with both issues.
Mr. Edward Leigh: In recent years, I have spoken in the House about the often very violent attacks suffered by minority communities in Indonesia, to which the military appears to have turned a blind eye. Those attacks have received very little publicity because local people rather than Europeans were involved. Is the Prime Minister worried about the profound sense of alienation from western values that exists in many Muslim societies? That alienation often reaches right to the top of society.
Given the Prime Minister's experience with Northern Ireland, does he agree that we must root out, through military and intelligence means, both terrorism and its causes? In other words, will he be—to coin a phrase—tough on terrorism, and tough on the causes of terrorism?
The Prime Minister: I agree, certainly, that we should not simply try to deal with this by means of intelligence. I also agree that there is a lot of anti-west feeling in many parts of the Arab and Muslim world—there is no point in denying that. Our response must surely be twofold. First, we must deal with issues where a reasonable point is being made. Many people feel, and have felt on many occasions, that it is important to show the same rigorous concern for dealing with all the issues of conflict around

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the world as we have shown, for example, in the coalition against terrorism. However, we must also confront extremism and fundamentalism where they effectively mean that people are, as they were in Afghanistan, forced to live in a state of abject repression or where they try to justify terrorism. I do not believe that those things genuinely have anything to do with the true voice of Islam, and I think that the majority of Muslims feel the same.
Mr. Stuart Bell: Is not the price of freedom eternal vigilance, and is not the fact that so many young lives have been lost a reminder of that dire statement?
The House will welcome my right hon. Friend's statement that the United Nations Security Council has passed a further resolution condemning the bombings and also that there is co-operation with in the framework of the United Nations to attack global outreach terrorism. However, will he confirm that in the association with Australia, the United States and the United Kingdom in Bali, there can be co-operation outside the United Nations as well as within it? Finally, will he tell the House where we are with the United Nations resolution on Iraq?
The Prime Minister: On my hon. Friend's latter point, we are pursuing it and I hope and believe that we can achieve a consensus on it. On his first point, he is right that we must work with the authorities in Indonesia as well as the Australians and Americans to do everything that we can to counter the terrorist threat. I can assure him that we are doing that.
Rev. Martin Smyth: On behalf of the Unionist Members and the great majority of the people of Northern Ireland, may I express sympathy to those in Australia and in other parts of the world who have suffered in this appalling tragedy? Regrettably, there has been a sense of denial at various levels. In May this year, I asked in the House about links with al-Qaeda. At the time, there was no knowledge of any, but some of us were aware of them. When we were in Indonesia, we discovered that that was the name that they dared not speak. In other words, they were aware of the issue but not prepared to face it.
Dropping the word "international" from terrorism is a blessing, because we must realise that terrorism is homespun as well as international. Therefore, we join the Prime Minister in his leadership to deal with terrorism whence it comes. Regrettably, for example, in Northern Ireland, in the fight against organised crime, there seem to be delays between the Home Office and the Northern Ireland Office in putting into action some of the things that are needed and were agreed to earlier.
The statement from the Security Council on terrorism is to be welcomed. I trust that it will be equally united not only in putting forward a statement but in recommending action to deal with terrorism, whether it is in the form of weapons of mass destruction or the car bombs that plague our communities. We will back it.
The Prime Minister: I thank the hon. Gentleman for his support on the statement. What he says is right: we must deal with this issue whatever its source and origin. I know that my right hon. Friend the Secretary of State for Northern Ireland will make a statement on Northern Ireland shortly.

Northern Ireland
4.19 pm
The Secretary of State for Northern Ireland (Dr. John Reid): With permission, Mr. Speaker, I would like to make a statement about Northern Ireland.
As the House knows, over the past weeks and months the political process in Northern Ireland has encountered increasing difficulties. I do not need to remind the House of the magnitude of the project on which we are embarked in Northern Ireland, nor that in any great historic process of this kind, there will inevitably be setbacks and difficulties.
My sincere hope, therefore, was that we would be able to overcome those latest challenges in the short term. That is why the Prime Minister and I have had intensive discussions in recent days with the Northern Ireland political parties and the Irish Government. However, it became clear that an impasse had been reached and that decisive action was needed to safeguard the progress made and tackle the remaining challenges. Because of the difficulties that we have encountered, yesterday I made an order under the Northern Ireland Act 2000 suspending devolved government in Northern Ireland. It came into effect at midnight yesterday. I said yesterday that I regretted that that had become inevitable. The real losers here are the ordinary people of Northern Ireland—those who appreciate and deserve 1ocal decisions being made by local politicians to improve the lives of local people, not least because the devolved Administration have achieved so much on their behalf and in their interest.
I take this opportunity to pay warm tribute to the First Minister, the Deputy First Minister and his predecessor, their ministerial colleagues and the Assembly Members themselves for all that they have done in a relatively short period to improve the lives of people in Northern Ireland and to express the hope—I do very much hope this—that the devolved institution can be restored quickly.
I stress that that impasse affects only one aspect of the Belfast agreement, albeit an important one. As the joint statement by the Prime Minister made clear, this Government remain totally committed to the full implementation of the agreement. It has already brought great benefits to the people of Northern Ireland.
In their statement yesterday, the Prime Minister and the Taoiseach also recognised that the recent difficulties in Northern Ireland stemmed from a loss of trust on both sides of the community. There has been much apportioning of blame already and there is no doubt that there is a lack of confidence on both sides of the community. At the heart of the recent political difficulties, however, have been concerns about the commitment to exclusively democratic and non-violent means.
Let us be clear, lest anyone should think that we do not take a balanced view, that we have seen violence from all sides of the community, including a campaign, sometimes murderous in its intent and effect, from the so-called loyalist paramilitaries. Let it be equally clear that the Chief Constable and I are combating and will
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combat that violence with all the means at our disposal, wherever it happens and whoever is behind it. We will go where the evidence leads. That is why I recently redoubled our efforts by setting up, in addition to the organised crime taskforce, the law and order action group, which brings together the key agencies to strengthen our drive against all forms of racketeering and violence from wherever they may come. In that context, I have to tell the House that an arrest was made this morning in connection with the shooting of Danny McBrearty in Londonderry on 29 September. Police inquiries are continuing and will continue into that violent act as well.
I have absolutely no doubt that episodes such as the trial of republicans in Colombia and the break-in at Castlereagh have seriously damaged confidence in the power-sharing arrangements. It would, of course, be entirely improper for any of us, not least a Minister of the Crown, to prejudge the outcomes of any cases involving outstanding criminal charges. However, it would be naïve of any of us to ignore the impact on political and public opinion of the recent charges brought against republicans, including members of Sinn Fein, as a result of the police operation on 4 October.
Like me, the House will be particularly concerned about the position of prison officers and others and their families, for whose assistance the police have now established a special unit. The Prison Service is working closely with the police and has established a helpline to that end.
Let me say to the House that there can be no authority, no legitimacy, no morality and no political basis for anyone, in today's Northern Ireland, to have recourse to violence or paramilitary activity. Whatever may have happened 30 years ago, or 300 years ago, in today's Northern Ireland the path to power through democracy is open to everyone and the path of violence is illegitimate for anyone. It is also essential, as the Prime Minister and the Taoiseach noted, that each community has confidence in the commitment of the other to the agreement.
That is now the challenge that faces us. Yesterday was, perhaps not surprisingly, filled with recrimination. Today and the days beyond that should be about rebuilding: but that rebuilding has to be on foundations that are firm, sound and lasting. It is against this background that the Prime Minister and Taoiseach said yesterday that
"it must be clear that the transition from violence to exclusively peaceful and democratic means, which has been ongoing since the Agreement, and indeed before, is being brought to an unambiguous and definitive conclusion".
In their statement, they also said:
"It is now essential that the concerns around the commitment to exclusively democratic and non-violent means are removed. The time has come for people to clearly choose one track or the other"—
in Northern Ireland.
We face some difficult and challenging weeks ahead. Our task is threefold. First, we need to move rapidly and decisively from the recent weeks of political uncertainty. I have no doubt that the people of Northern Ireland—who should always be at the front of our minds in all that we are doing—welcome, appreciate and deserve devolved government. Like them, I would have much

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preferred devolved government continuing, with local Ministers making local decisions. But until it can be restored, my colleagues and I will dedicate ourselves to working for the good of all the people of Northern Ireland to the best—the very best—of our abilities.
In the meantime, we shall carry on the process of government in Northern Ireland proactively, in the interest of all its people. This cannot be a matter of mere care and maintenance. We owe it to the people of Northern Ireland that effective government should be moved forward. We shall not duck the difficult issues. We shall be able to build on the progress made by the devolved Administration in many areas, taking careful account of the "Programme for Government" and the principles of reinvestment and reform on which it is based and which the First Minister and the Deputy First Minister have supported. I met both of them yesterday to begin to discuss some of those matters.
The Policing Board is widely agreed to have been one of the finest achievements of the agreement. I want its work to continue. The House will recall that it was the first time in our history that there was a cross-community, elected policing board. I have invited all the existing board members to continue providing their excellent service to the community. I sincerely hope—as I know the House will, too—that they will all accept reappointment.
In this context, I also welcome two new members of the ministerial team. I am making available separately the details of ministerial appointments under suspension. In broad terms, the Minister of State's additional responsibilities will focus on education and those of the Under-Secretary of State on social issues, including health. The portfolios of the new Ministers, my hon. Friends the Members for Dudley, South (Mr. Pearson) and for Basildon (Angela Smith), will centre respectively on economic affairs and environmental issues. Our first task is the good governance of Northern Ireland.
Secondly, under the terms of the agreement, we need to embark on a process of review. I shall be in touch with the parties and the Irish Government as to how that should be taken forward. I want to stress that this is an impasse—hopefully short-lived—in only one aspect of the agreement. It is not the whole agreement and it is not the whole peace process. We will continue, in cooperation with the parties and our colleagues in the Irish Government, to carry forward that process and the implementation of the agreement.
Thirdly, with reference to the problems underlying the present suspension that I mentioned earlier, we will bend every effort to find a basis on which to bring back the devolved institutions, and as quickly as possible. The role and the responsibility of the political parties in achieving that are vital. It is our aim to find a basis on which all the institutions of the agreement can be brought back into operation as soon as possible. The election date scheduled for 1 May stands and is not altered by yesterday's decision.
These, then, are the three priorities: the good governance of Northern Ireland, carrying forward the agreement and addressing the present impasse. They will inform the approach of the Government over the coming weeks and months. In those tasks, we will call upon the co-operation and support of the House, of the
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parties, our colleagues in the Irish Government and those far beyond our shores, such as the President and people of the United States, who have been unstinting in their support for this historic project.
I can promise the House that, for our part, we will bear ourselves with determination and endurance, because we recognise that the magnitude of the prize that we seek is commensurate with the challenges that we face.
We have come an enormous distance in recent years. The peace process and the agreement have increased prosperity, revitalised society, safeguarded rights and, above all, saved numerous lives. I am determined that those benefits should not be lost, but should increase. The agreement will remain the template for political progress in Northern Ireland. I hope that the decision that I took yesterday and I have explained to the House today creates a breathing space—a chance to gather strength—before that progress moves forward once again.
Mr. Quentin Davies: I should like to thank the right hon. Gentleman for his courtesy in giving me an advance copy of his statement. I should also like to congratulate, on behalf of the Opposition, the two new Ministers who have joined his team—the hon. Members for Dudley, South (Mr. Pearson) and for Basildon (Angela Smith). I should also like to endorse his appreciation, which we strongly share, of the great efforts that have been made by so many people in Northern Ireland to make a success of devolution: the First Minister and the Members of the Executive—except for the Sinn Fein Members who are responsible for today's setback—and the Members of the Assembly and so many people throughout Northern Ireland. It is a very disappointing day for all of us—for us in the House, but for the people in Northern Ireland in particular.
We can only hope that this setback—the Secretary of State was right to use the word "setback"—is only temporary, and I hope that the political process and devolution can be restored as soon as possible. I should also like to extend our congratulations to the Chief Constable on the prompt and effective actions of the police over the past few weeks, and it is very good news—I strongly support what the Secretary of State has decided in this matter—that the police board has been asked to continue. I also share the right hon. Gentleman's relief that an arrest has been made in connection with the shooting of Mr. McBrearty in Londonderry a few weeks ago.
Will the right hon. Gentleman acknowledge, however, that we have made it clear—I to him in private and several of us in public—that we do not share the Government's view that suspension of the institutions is the right response to this crisis? Suspension amounts to penalising the innocent—indeed, the whole peace process—because of the misbehaviour of one party. That seems perverse, and to take risks with the whole process, which we find unnecessary and undesirable. Our strong preference was to exclude the guilty party, which is—although I notice that the Secretary of State still does not quite want to use the words—Sinn Fein-IRA, by taking powers in the House to enable the Secretary of State to exclude any party in breach of its obligations, and we argued very forcefully for that in the

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debate that we had in this Chamber in July. Is it not very regrettable that the Government took no notice of those arguments and that when the latest crisis broke that power was not in the Government's armoury at all?
The Secretary of State, of course, took the line in July that the mechanism of an exclusion motion in the Assembly, not his taking the power in the House to exclude, was quite adequate for the purpose, and he promised to introduce such a motion in the event of another Sinn Fein-IRA breach. Let me quote the right hon. Gentleman's words precisely:
"In circumstances in which I decided that the IRA had broken the ceasefire, I would be ready to use that power, and to place such a motion before the Assembly to require it to address the matter."—[Official Report, 24 July 2002; Vol. 389, c. 992.]
Why did he not fulfil that promise yesterday instead of suspending? Is it not rather destructive of confidence on the part of all concerned, particularly those who have to deal with the Secretary of State, that he should promise to adopt a particular course in a given eventuality in July and do something quite different when that eventuality duly presented itself in October?
Our responsibility is now to make the best of the situation, to contribute to ensuring that the governance of Northern Ireland from Whitehall and Westminster is as effective as it can be and to bring back devolution as soon as possible. We are absolutely committed to that objective, and I shall ask a number of practical questions on that in a moment. But does the Secretary of State not agree that it would be quite remiss of Parliament to brush over this dramatic reversal without asking some of the essential questions that arise and trying to draw the appropriate lessons for the future?
Does the right hon. Gentleman not agree that the great moral blame for what has happened must lie with Sinn Fein-IRA and with no one else? They have persistently and blatantly breached their obligations under the ceasefire and the agreement. Why does the Secretary of State find it so difficult to say so unambiguously and explicitly?
Will the right hon. Gentleman and the Prime Minister, who is sitting beside him, not accept that the Government cannot escape their share of responsibility for allowing the situation to deteriorate in the way that it has? Was is not a very serious error of judgment not to respond at all to the successive Sinn Fein-IRA breaches of the agreement and the ceasefire, such as those in Florida, Colombia and Castlereagh—we all know what they were—as we urged the Government to do at the time? How can anyone seriously have supposed that failing to respond at all to blatant breaches of that kind could do other than encourage Sinn Fein-IRA to go for worse breaches in the future? 'Was not that fundamental error compounded by the extraordinary decision during precisely that period to offer Sinn Fein-IRA new concessions going right beyond the Belfast agreement, such as the promise of an amnesty for on-the-run terrorists or a special status in the House? Since Sinn Fein-IRA have so clearly breached the good faith on which the Government were counting when they offered that concession, is it not now time to review it?
We can all hope that however much the Government want to wriggle away from this and however much they want simply to sweep all those issues under the carpet
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and say, "Well, this is a new beginning; let us not talk about the past", they are inwardly contrite about those mistakes because it is very important indeed that, as and when we get back to devolution, mistakes of that kind are not made again.
Now let me turn to the immediate practical issues that arise. Will the Secretary of State clarify what he just said about elections in Northern Ireland remaining on schedule for May? Does he mean that those elections will still take place even if there is no Assembly at the time for those elected to sit in? If that is not what he means, will he just elucidate the position to the House? Of course, if he tells us that he is certain that we can return to devolution by that time, we shall be the first to be delighted. [HON. MEMBERS: "Oh."] Oh yes, indeed. Labour Members do not like that, but I have to tell them that they will not be able to shout down the history books. When the history of the peace process is written, it will show that our judgment was vindicated by events and that our judgment would have enabled the process set up by the Belfast agreement to continue.
How do the Government propose to legislate from now on for Northern Ireland? Does the Secretary of State accept that Orders in Council, which cannot be amended here, are a thoroughly unsatisfactory method of legislation? Does he also agree that Parliament will now need more time to consider Northern Ireland because of the much wider range of responsibilities for which Ministers here are directly accountable? Does he therefore agree that Northern Ireland Question Time will need to be longer than it has been in recent years? What role does he envisage for the Northern Ireland Grand Committee? Does he agree that, above all, in present circumstances, we must not repeat the bad example of last year, when there was not a single policy debate on Northern Ireland in Government time in the whole of the year? We had to use Opposition time for such a debate before the House rose in July. Will the Secretary of State agree to meet with the Opposition and the Northern Ireland parties to discuss how scrutiny can best be applied in these new circumstances and how Parliament can do its job?
Finally, and very importantly, will the Secretary of State be frank with the House on any understandings or undertakings—I include informal understandings—that may have been reached with the Government of the Irish Republic on consultation or co-ordination with them under the new direct rule regime?
Dr. Reid: First, may I thank the hon. Gentleman for his congratulations to my colleagues, and for his kind remarks, which were well deserved, about the Chief Constable.
In terms of what arrangements have been made with the Irish Government or the other parties, my priorities in the first few days and the first week have been to attend to the governance of Northern Ireland. I shall therefore meet the First Minister and Deputy First Minister, as they were yesterday, along with other Ministers, to achieve the handover. At that stage, I shall discuss matters with the Irish Government and the other parties to consider how to carry forward the other aspects of the process. That will probably be done, as I think I said in my statement, through the British-Irish intergovernmental conference provided for in the agreement.

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As for blame, I think that the hon. Gentleman was not listening to what I said, as he claimed that I was reticent to blame republicans or Sinn Fein for what happened. I mentioned Colombia and Castlereagh, and, having said that it was improper to prejudge things—I think that it is—it would be naïve to underestimate the political effect and the effect on public opinion of those events. I went on to refer to the impact of the opinion of the charges brought against republicans, including members of Sinn Fein—I said that specifically—as a result of the police operation of 4 October. It is therefore beyond rhetoric to suggest that I neither alluded to nor referred to Sinn Fein; I specifically mentioned it.
As for the exclusion option that was available to us, we were presented with various options ranging from doing nothing—which was urged on us by some parties—to suspension of the Executive, suspension of the whole body, exclusion of Sinn Fein and exclusion from the process. As I said earlier, the option on which we decided was the least worst one; there were no good options in terms of balancing the magnitude of what we were trying to achieve against the problems that we face at present.
As for the elections, my comments stand. The election date remains unaffected by anything that I said yesterday. The election date was 1 May; it still is 1 May. We will obviously have to keep the date in mind in view of the real world, real politics and real circumstances, but there is no reason at the moment for anyone to feel that anything has changed about the election date. If, before or after it, we are faced with an impasse of the nature that we have at the moment, it is an issue that we shall have to consider at that time or, indeed, before it.
The hon. Gentleman referred to parliamentary procedures, and they will have to be discussed through the usual channels. It is not a matter for me how those procedures are finally decided upon but, if he wishes to speak to us about them, I am more than happy to make sure that Parliament carries out the appropriate scrutiny as it sees fit, given the portfolios that have been added and the extension of powers that I have now found thrust upon me.
I merely wish to make a final comment. Although the hon. Gentleman tries hard on these occasions to show a veneer of bipartisanship, he does not rise to the extent of the project that we are attempting to grapple with. I well remember the Anglo-Irish agreement, the Downing street declaration and the secret talks with the IRA, all of which took place when he was on the Conservative Front Bench and when the IRA was still committing acts of atrocity and was still visibly in the middle of a terrorist war. Because of the magnitude of the prize that was before us, we managed to give support to the then Government—his own party—when they were conducting such talks with the people conducting a murderous and terrible campaign, so a little more grace and support from him would rise to the occasion.
Mr. Harry Barnes: Is my right hon. Friend aware that, while 3,000 people were killed in Northern Ireland during the troubles, as many people have been forced into exile over that period and still remain in exile? Is it not therefore welcome that last week Gerry Adams met in the House Joseph McCloskey, the nephew of Danny McBrearty, to discuss the problem of Mr. McCloskey's exile and to
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talk about the possibilities of his returning to Derry? Such developments are welcome and Sinn Fein must realise that, if it acts in that way and puts pressure on the Provisional IRA to see that those whom it had placed into exile could return, it will help tremendously towards creating the confidence in Northern Ireland that will allow the process, the Assembly and the Executive to be re-established.
Dr. Reid: I agree with every word of that. I know how active my hon. Friend has been on this issue, and it is nothing less than terrible and a tragedy that, because of the threat of violence against them, people should feel that they cannot return to the place where they want to stay and where, in many cases, they were born and brought up. I also think that, although much of the recent commentary in the press has concentrated on the so-called spy ring that centres around the charges that have been brought, the most distasteful aspect of the issue is the fact that prison officers and their families, who have every right to think that the threats that they used to think were held over them had long disappeared, once again found themselves in a position of trauma and fear.
Dr. Julian Lewis: And what does the Secretary of State deduce from that?
Dr. Reid: Will the hon. Gentleman let me continue? For the first time in many years, some people came out in the morning and had to remember to check under their car. It is that type of trauma. I am trying to face up to the problems that the process is facing at present while maintaining the process, which, in my view, gives me and Members of the House the best chance that we have had for decades—indeed, for centuries—to solve this problem. To those who find those obstacles too difficult to overcome and who want to get back to the old ways, I merely say that we tried it the old way for more than eight centuries. If that did not work then, it is not likely to work now.
Lembit Öpik: I thank the Minister for early sight of his statement and welcome the two new Ministers to a portfolio that, among other things, is never dull.
The Minister hopes for a short suspension. What does short mean to him? How might the arrangements change if the suspension is still in place in, let us say, January 2003? He talks of both communities, but will he consider altering the Government's terminology? There are many communities in Northern Ireland. He knows that I often have cause to think that using the concept of two communities simply serves to divide. In that context, can he assure us that all parties will be involved in any talks given the central contribution of the Alliance party of Northern Ireland and the Women's Coalition in particular to breaking past deadlocks?
Will the Minister confirm that the date of the elections will not change even if Ministers are concerned that the consequence of holding them on 1 May will be a less desirable, perhaps a more hardline, outcome, because no one should attempt to gerrymander a particular outcome by changing the date? What specific arrangements will be in place between Westminster and

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Dublin to ensure that business continues? What are the Minister's plans for Assembly salaries if the suspension is long term?
Finally, does the Minister agree that the best thing that United Kingdom parties can do is to support political solutions rather than to win party political points at a time when Northern Ireland needs our support rather than our rhetoric? In that context, does he hope, as the Liberal Democrats do, that the suspension works and, once the process is back on track, that those who have sounded rather opportunistic this afternoon will not only accept their error of judgment but, more to the point, be willing to alter their strategies to be more supportive of what is clearly a sincere effort by the Government to do the right thing?
Dr. Reid: I thank the hon. Gentleman and his party for their continuing support throughout this process. He raises a number of points. On consultation, I will consult all parties, including the Alliance and all parties represented in the House, because that is the basis on which a review has to be carried out. I apologise for referring to two communities. I should, of course, refer to the two traditions in the one community in Northern Ireland. Language is sometimes difficult in the context of Northern Ireland politics.
There is no change to the elections. No one is, or should be, frightened of the elections. I do not believe that anyone is frightened. To paraphrase Bertolt Brecht, it is not up to us to dismiss the electorate and choose another; it is the electorate who have the right to choose their representatives. However, elections do not happen in a vacuum. We had elections, we had an Executive and we had an Assembly. The reality is that despite the fact that we had elections and a democratically elected Assembly and Executive, they could not work because of the lack of confidence and trust between the partners in power sharing. If that continues indefinitely up to I May, it is not easy to see what can be resolved by having another set of elections.
Although that is all I have to say on that subject, it brings us to the crux of the matter: we cannot go on expecting people to share power with partners who appear to be riding two horses, of violence and democracy. A choice has to be made. Eight years after the beginning of the ceasefire and four years after the agreement, there needs to be a definitive step change in that position so that that ambiguity is removed. Even if that were the case, there would of course be a continual residue of problems with which to deal. No one thinks that we can wave a magic wand and by decree stop all lawbreaking or violence overnight, but we are at a crossroads and I do not believe that it is possible to sustain the power-sharing element of the agreement unless there is some substantial and definitive move in that direction.
Mr. David Trimble: Of course the Secretary of State is right not to pass judgment on individuals, but we know certain facts. The Secretary of State may like to confirm the estimates in the press that. as a result of the security breach at Castlereagh, £30 million has been spent on relocating police officers at threat and it is likely to cost twice as much to relocate
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prison officers who are at threat. Will he confirm also whether the press is accurate in saying that more than 1,000 documents were stolen, most of them from his office? That fact indicates a massive breach of security in the Northern Ireland Office and points to the possibility of gross incompetence in that office. Surely in that situation there must be an arrangement for an effective inquiry to see whether, and in what ways, security has been breached.
The Secretary of State refers to a lack of confidence and trust. Will he bear it mind that in each of the last three years my party went into an Administration on an inclusive basis and on the basis of promises and undertakings given to us, and each time those promises were broken and Sinn Fein and the republican movement failed to deliver? Will he also reflect on his curious use of the term "power sharing", in which he thinks only of Sinn Fein? There are others, and in this matter it is wrong of him to overlook the moderate nationalist Social Democratic and Labour party.
The Secretary of State had options, and the demand for, or suggestion of exclusion, which would have been fair, did not come from Unionists alone. As he knows, it was supported by the Alliance party, which has links with the Liberal Democrats, and we are glad that the Alliance party displayed that courage. The Secretary of State is aware that support for exclusion would have extended beyond that point.
There is a point at which confidence is needed elsewhere too. In July, the Secretary of State said that he was showing republicans the yellow card. People noticed that the red card did not appear in circumstances in which the man in the street thought that it would have been appropriate. The Secretary of State has to explain why he funked it, because in the view of the man in the street that is precisely what happened: the Secretary of State decided that he would sacrifice the political process for fear of what might happen to the cessation of military operations declared by the IRA.
Dr. Reid: On the first point, I cannot confirm the press speculation about the costs, but I can tell the right hon. Gentleman that they are considerable—they are huge. Measures have to be taken to protect the police and, perhaps, prison officers who may be vulnerable after the events at Castlereagh. Apart from the anguish that it causes those families, that is a huge diversion of resources from the priorities of the people of Northern Ireland. It is tens of millions of pounds that could be devoted to the regeneration of inner-city or outer-city areas, to the health service and so on.
The right hon. Gentleman asked me about the number of documents that were stolen. From what the police have told me, I understand that his estimate is not far off. He said that we have to examine what is being done at Castlereagh, among other things. I can tell him that the security service has already agreed to send a team to conduct an independent and authoritative review of security in the Department. The team will make recommendations for the future when all is known about the events that led to the criminal charges. It will also audit security practice generally.
I do not want to go into further detail because I do not want in any way to impinge on judicial proceedings, but I can tell the House that, before these events, certain

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steps had been taken on the advice of security authorities. They were obviously ineffective in this case, whoever is guilty, and I do not prejudge that question.
This is a serious blow, and as I said earlier, although the matter that has made the headlines is the retrieval of documents for use by others and whether that may have put them at an advantage in the political process—I do not prejudge that question either—I find the fact that prison officers may be under threat more disturbing than anything else.
The right hon. Gentleman mentions the exclusion motion. I hear what he says, and it is not a matter that leaves me unmoved, precisely because I know the courage and, above all, endurance that he has shown by staying in the Assembly for the benefit of the people of Northern Ireland. I understand that fully. I say only that that these are not easy judgments to make.
The right hon. Gentleman is right about the Alliance party. I understand that it would have been prepared to support an exclusion motion had I put one before the Assembly—although I do not think that such a motion would have passed; the SDLP made it clear that it would not support it. Nevertheless, the fact that the Alliance party was prepared to support it shows that a significant change is taking place. The Women's Coalition would not support exclusion, but was apparently prepared to support suspension of the Executive rather than of the Assembly as a whole. No one should think that no change of opinion is occurring within the Assembly on these matters.
There is lack of confidence on both sides. People ask me, "Are the Unionists really committed to this?", but the evidence of the endurance shown over the years by the right hon. Gentleman and his colleagues in the Assembly gives the lie to any claim that there are no Unionists who are prepared to put the whole of Northern Ireland first, rather than their party. Their commitment should be a sign of confidence to the whole community.
Mr. Seamus Mallon: I welcome the two new Ministers on what is, for me, an especially sad day. In another place at another time, more than 30 years ago, I saw a power sharing arrangement dissolved in the same way. It took more than 30 years to re-establish such an arrangement, yet this is the fourth suspension in four years.
I welcome and agree entirely with the Secretary of State's statement that the full implementation of the Good Friday agreement, in all its aspects, is the only way forward. I agree also that if devolution is to be workable and durable, there must be trust—but let us not enter a state of denial when looking at where the lack of trust lies. Of course Sinn Fein has broken faith with everybody, not least with those of us in the nationalist community who have insisted and will continue to insist on inclusivity. Sinn Fein has to rid itself of the discredited dual strategy and commit itself to democratic, peaceful means.
Another example of lack of trust is the view in the nationalist community that not all Ulster Unionists are in favour of inclusive government and partnership politics. That is not a criticism of those in the Ulster Unionist party who are in favour of those things, but if we are to solve the problem it is right to specify that lack
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of trust. A third example of lack of trust is that many in the Unionist and nationalist communities wonder in what type of an arrangement two Ministers can have as their policy the destruction of the very agreement from which they derive their ministerial office—[Interruption.] DUP members are abusing it.
Those three elements will have to be addressed if we are to re-establish devolution. Unless we find answers, we will not be able to reinstate devolution in the way that is necessary to make the full agreement work.
Dr. Reid: The hon. Gentleman points to the complexity of addressing even that limited question of trust within the limited area of power sharing. I merely say that many things undermine trust—for example, the ongoing murderous campaign of loyalists, which will be combated. However, because they are not partners in power sharing, their campaign does not necessarily undermine power sharing. Many Unionists are sceptical, but because other Unionists are involved in the partnership, that scepticism does not, in itself, undermine power sharing.
The problem is the element of concern about the partners in the power sharing from the republican movement—Sinn Fein. If Sinn Fein is thought to be involved in an ambiguous dual-track strategy, its involvement in power sharing makes that far more important in undermining power sharing. That is why I have emphasised that, among all the issues that affect confidence, we have to address that one perhaps more keenly than any of the others.
Mr. Peter Robinson: May I join other Members in welcoming the two new members of the Northern Ireland Office ministerial team? I assure the Secretary of State that my hon. Friend the Member for Belfast, North (Mr. Dodds) and I are happy to meet our successors in office to talk over the issues that affect those Departments.
I also join the Secretary of State in his condemnation of terrorism. Members on this Bench, at whichever end they sit, will not soften that criticism one iota for loyalist terrorists. We consider their activities despicable, murderous and foul, and will take every opportunity to say so. May I disabuse the Secretary of State of the notion that the problems that affect the process are confined to a narrow area? Wide-ranging opposition within the Unionist community is affecting Unionist trust in the whole process. Rather than the Secretary of State undertaking an idle review with yesterday's men, who cannot deliver, is it not time for him to go to the people and allow the electorate to speak? Let politicians get a fresh mandate and enter negotiations for stable political structures in Northern Ireland.
Dr. Reid: I thank the hon. Gentleman. I do not question at all—indeed, I am well aware of—his condemnation of all violence and murder wherever it originates, including on the loyalist side. I also thank him for saying that his ministerial colleagues are willing to discuss matters with Ministers in the Northern Ireland Office. I do not disagree that if trust is badly affected in one area it is liable to affect a range of areas. These things develop; we get an understanding—an increasing or decreasing trust—as time goes on, just as the hon. Gentleman's own policies and awareness of

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Realpolitik have developed. I was glad that he shared a table, if not words, with Martin McGuinness the other night. I noticed that he said clearly that if Sinn Fein has the mandate that we expect it to have after an election, that is a reality that has to be taken into account. I always welcome pragmatism, however late it is, and will engage with him.
As for the report of the political death of the First Minister, I am afraid that not only is it greatly exaggerated, but I have read about it so often that I never take it for granted, even when it is posted in the newspapers in Northern Ireland.
Helen Jackson: Does my right hon. Friend agree that now is the time to be honest and recognise the breakdown of trust that has led the Government to take action, not least since one party believes, or says it does, in a political way forward, but does not recognise the need to engage with a civil police service? Does he also accept that we must pick up the pieces and consider how that trust can be rebuilt? Will he say how he and his team will involve in that process many people both elected representatives in Northern Ireland and those who have played their part in the Northern Ireland Policing Board and other commissions that have been set up following the Good Friday agreement—so that elements of trust that have been lost can start to be regained?
Dr. Reid: I entirely agree with my hon. Friend that, in the new Northern Ireland, the efforts that we are making—which involve considerable pain for those who were previously associated with the RUC—to create a new, reformed, revitalised, community-based, effective police service that has cross-community support deserve to be rewarded by the participation of those who have been demanding precisely that for eight decades. I do not think that one can demand rights but not face up to one's responsibilities. Sinn Fein will eventually have to face up to that.
It is not for me to tell Gerry Adams how to lead Sinn Fein, but since he continually tells me how to do my job, it might be worth saying that what has happened has handicapped not only this process and power sharing but Sinn Fein itself. Its alleged association with violence in these cases is a ball and chain around the feet of a political party that has received further and further support precisely because it was moving into the political arena and away from violence. For that reason, as well as the reason that we shall not be able to sustain the future of power sharing in Northern Ireland unless Sinn Fein shifts, it would be as well to do so.
I agree that we need to revitalise support for the agreement across the community, beyond the political parties. We have let that slip. It is not easy to rejuvenate it. It is common to all peace processes of this nature that, after the initial euphoria, it is the aficionados who tend to become involved. I will gladly consider any ideas in that direction.
Sir Patrick Cormack: In the light of the remarks that the Secretary of State has just made about Sinn Fein, what possible justification is there for continuing the special facilities that its
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members have in this House? Given that they will not play a proper part as Members of Parliament, should not their privileged access to this place be suspended, at least during the suspension of the Assembly?
Dr. Reid: First, that is a matter for the House. Secondly, my hon. Friend the Member for Newry and Armagh (Mr. Mallon) certainly feels that it has already offered some advantages—Mr. McCloskey met Gerry Adams here the other day. I sincerely hope that they manage to resolve the problem.
Sometimes, the apparently small things move the process forward. We have spent a lot of time, quite correctly, on the big issues such as Castlereagh, Colombia, and so on, but it should not go unnoticed, for instance, that Martin McGuinness said on Remembrance day that we should all respect the right of the British to remember the dead—[Interruption.] Hon. Gentlemen can throw that back in his face if they like, but I welcome that as a recognition of our failings on these matters. I welcome the fact that Alex Maskey, the Sinn Fein Mayor of Belfast, laid a wreath at the Somme. I welcome the fact that an alleged leading member of the Provisional IRA, Martin Meehan, said this morning that, in his opinion, the war had been over for some time. I just wish that mixed messages were not sent out and that there was no ambiguity in telling us that violence was in the past. If that were done and done definitively with clarity and backed by action, we would find power sharing a bit easier in the future than it has been in the past.
Mr. Clive Soley: I welcome my right hon. Friend's calm and reasoned approach. Can we reiterate very strongly the message that exclusion in Northern Ireland has always been easy and that it is inclusion that has been so difficult? Despite the sad and unnecessary rise in violence perpetrated by both Unionists and republicans in recent months, we need to remember that long-term progress has been rather good and that the atrocities that we used to experience weekly no longer disfigure that society. It would be very nice if all the paramilitary groups could wind themselves up and go away over the next few months—we must never lose sight of that message—but we need to take a long-term view and recognise where we have come from, that we are making progress and that inclusion is vital.
Dr. Reid: My hon. Friend is right that we need to keep a sense of perspective about where we are in Northern Ireland, even on such sensitive issues as law and order. In some areas, there has been a considerable increase over the past two years in disorder on the streets, for instance, as against what went on in the two years previously. However, there has also been a continual reduction over the years—in some ways a dramatic one—in the number of murders in Northern Ireland.
On drugs, I want to see those on the streets dealing in drugs lifted and put where they should be—behind bars. I know that that is an ambition shared by the Chief Constable. Although it is a problem of great concern in Northern Ireland, the rate of drugs misuse in Northern Ireland is estimated, in terms of arrests and convictions, at one eighth the rate in Scotland. A sense of perspective is necessary. Similarly, when we consider the resources

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that we put into dealing with the matter, yes, they are overstretched, but there are three times as many police per head in Northern Ireland as there are in other parts of the United Kingdom, and the position is about the same as regards resources.
We do combat the problems. It is not always easy to suffer the minutes and to watch the hours, but my hon. Friend is right: when we look at the hours, the years and the decades, there has been a significant move forward for people in Northern Ireland.
Mr. Andrew MacKay: Was it really wise to suspend? Does not the Secretary of State understand that for very many people it is deeply offensive that the constitutional parties, whether nationalist or Unionist, in Northern Ireland were penalised through no fault of their own? Is it not solely and exclusively the fault of Sinn Fein-IRA because of their violent activity? Will the Secretary of State now say unequivocally that the reason the power-sharing Executive and the Assembly have been suspended and are at breaking point is Sinn Fein-IRA's activities, and theirs alone?
Dr. Reid: I have already made known my position on suspension. Yes, I do realise the burden, annoyance and frustrations of those who feel that they have done very little and yet are having their commitment and capacity to improve the lives of people in Northern Ireland taken away by suspension. I have also made it plain, as somebody who has supported devolution all my life—unlike most of the hon. Gentlemen on the Opposition Benches, I might say—that I would have preferred not to suspend, but I have given my reasons for that. The right hon. Gentleman will not have missed the fact that some of people who he says were so pained at being suspended had actually resigned last week, so that was slightly out of my hands.
As regards the future, I am making judgments on these cases. I do not claim that they are infallible judgments or that they are necessarily right. They are my political judgments. They are made in an attempt to sustain the whole process on an inclusive basis, with the potential to resolve decades-long, generations-long and in some cases centuries-long problems, violence and conflict. If we look over the past five or 10 years, there is enough evidence there that up to this point that judgment has proved correct. What we need now is a substantive indication, as the right hon. Gentleman said, from Sinn Fein that that judgment has been correct—that the trust that we placed in the republican movement and its willingness to move to the democratic resolution of problems and away from violence, as long
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as we provided democracy, justice and opportunity for them, was right. That is the challenge facing us over the next few months.
David Winnick: I recognise that my right hon. Friend had little alternative but to do what he has done. Is it not a fact that the present situation will only cause pleasure to those who opposed and undermined the Good Friday agreement from the very start? Will my right hon. Friend give an assurance that he will work closely with the Irish Government during the time the Assembly is suspended, and that it is extremely important that the two Governments should work together? Is it not a fact that Sinn Fein must take some responsibility for playing right into the hands of those who opposed the agreement from the beginning?
Dr. Reid: I can certainly assure my hon. Friend that I will be working closely with the Irish Government on the matter. May I say how much I welcome the statement yesterday making it clear that there had been no ambiguity in the choice between violence and democracy? It was a statement not just from the Prime Minister of this country, but from the Taoiseach—the Prime Minister of Ireland. It was an indication of how strongly he and the Irish Government feel about the position. I look forward to working with them, and I greatly welcome their support and their efforts.
Dr. Julian Lewis: What exactly does the Secretary of State think that IRA-Sinn Fein intended to do with lists of the home addresses of prison officers and police officers, together with lists of which of them had and had not been issued with firearms for their personal protection? Why does he think that the IRA-Sinn Fein cell responsible for this latest disgraceful episode described the Prime Minister with two words, one of which was "naïve"?
Dr. Reid: As someone who always closely considers the evidence, the hon. Gentleman should not believe everything that he reads in the newspaper, although since I am not allowed to reveal any secrets, I cannot contradict anything that he said. On the intentions of the perpetrators of the incident, I cannot prejudge whether the IRA or somebody else was responsible. I can only refer him to the statements that I have been making publicly as well as privately for a considerable time, saying that a ceasefire, even when I judge it in the round to be intact, is not the point. The point is that, if people are on ceasefire but are maintaining a capability in terrorist terms that could be used to break a ceasefire in the long run, they will destroy the confidence that is necessary for power sharing. I think that that answers his question.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Michael Lord): Order. We must now move on to the next business.

A-level Grading
5.21 pm
The Secretary of State for Education and Skills (Estelle Morris): With permission, Mr. Deputy Speaker, I should like to make a statement on A-level grading.
As the House will know, following the publication of examination results in summer this year, there have been concerns about the grading of A-level and AS-level examinations and about the way in which exam standards are set and maintained. I recognise the anxiety and uncertainty that that has caused. Students have been left unsure whether their grades in A-levels and AS-levels this year accurately reflect the standard of their work. On behalf of the education service, I repeat my apology to all the students who have been affected. My responsibility throughout has been to ensure that the concerns are carefully and thoroughly investigated, that the recommendations are acted on as rapidly as possible and that clear action is taken to avoid this situation ever arising again.
Early last month, headteachers' representatives and some examiners expressed concerns about the grading of the work of some students in this year's A-level and AS-level examinations. The complaints focused in particular on changes that had been made to grade boundaries in some of the papers. Given the seriousness of the allegations, on 19 September I set up an independent inquiry under Mike Tomlinson, the former chief inspector of schools. His interim report, which was published on 27 September, identified weaknesses in the way in which the exams had been assessed this year, and recommended a process of regrading. That work has now been completed. Letters went last night from the Universities and Colleges Admissions Service to all students on its records whose grades had been revised. Since 10 o'clock this morning, a UCAS helpline has been in operation.
Mike Tomlinson announced this morning that a total of 9,800 candidate entries have had unit grades raised. All the adjustments relate to the Oxford, Cambridge and RSA Examinations Board. In the majority of cases, they have not resulted in a change to overall grades, but 1,945 candidates have had their overall grades raised—733 for AS-levels and 1,212 for A2 results.
UCAS holds a record on 1,089 of those students, of whom 689 are already in their first-choice university, although a small number are not on their first-choice course. A further 232 had no offer from their first or second-choice universities and are therefore unlikely to be affected by a grade change. On current UCAS estimates, that leaves about 168 students who may be eligible to transfer university. UCAS has told us today that there are no more than eight possible new students for any single university.
May I briefly outline the action that the 168 students need to take? Students who think that they may be eligible to move institution are being advised to contact their preferred university or college. Universities have been advised by their representative body, Universities UK, to honour all offers made to students before the publication of A-level results in August, and I am confident that they will do that. As I said on 27 September, the fact that institutions have already
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admitted their full quota of students for this year may mean that students who wish to transfer will be offered places for next year rather than this year. Clearly, the fact that the numbers are much lower than some speculated will make matters much more manageable. Universities and colleges have agreed to make final decisions no later than 31 October. Universities and students will not be disadvantaged financially if the latter move university due to regrading.
In his report of 27 September, Mike Tomlinson also gave his preliminary views on what had gone wrong. In particular, the QCA had not issued guidance on the attainment expected for a specific grade in individual papers. It had not provided a clear, consistent view of the standard required to ensure the maintenance of the overall GCE A-level standard. In addition, although AS units were piloted, A2 units were not.
I also asked Mike Tomlinson to investigate allegations that external pressure had been put on examining boards to lower the number of passes to protect against the allegation of lowering standards. Mike Tomlinson concluded that Ministers and the Department had applied no such pressure. He further concluded that officers at QCA had acted within their guidelines, but went on to say that
"on the evidence available, the actions of the boards during the grading exercise arose from the pressure they perceived that they were under from the QCA both to maintain the standard and achieve an outcome which was more or less in line with the results in 2001".
On 27 September, I decided that the confidence of the examining boards and the headteacher representatives in the QCA's leadership was damaged and that its future would be best served by a new chairman. We shall shortly announce the name of a new interim chair.
I recognise that a major task for the QCA and my Department is rebuilding confidence in the QCA and our examination system. Ken Boston. the new chief executive of the QCA, has announced a timetable for implementing the recommendations in Mike Tomlinson's report. By the end of October, there will be additional guidance on AS and A2 standards. By mid-November, further work on the statistical issues that underlie assessment and a revised code of practice for the conduct of the process will be completed. The QCA will also put in place improved communications with all partners. Current students on AS and A2 courses can be reassured by those actions that marking and grading standards in 2003 will be robust.
Ken Boston has also announced that he will set up an examinations taskforce. Its job will be to oversee the effective delivery of the AS and A2 exams in January and July 2003. It meets for the first time on Friday and will comprise representatives of headteachers as well as the exam boards. I welcome that decisive action.
Mike Tomlinson's report also provided wider lessons for the way in which the Government plan and implement such major changes. The Department will act on those lessons. Mike Tomlinson will now tackle the second part of his remit: to review more generally the arrangements for setting, maintaining and judging A-level standards. He will report to me and the QCA in November.

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Today's announcements are supported by the headteacher and teacher organisations, including those who raised the original concerns. All students who took examinations this year can be confident that the regrading process has been independent and fair.
I recognise the importance of exams as a means of measuring achievement and giving young people a currency for higher education and the world of work. It is therefore especially important that our assessment system is fair, transparent and efficient.
Although it is important to acknowledge this year's difficulties, it is also important to remember that the principles behind Curriculum 2000 were wholeheartedly endorsed. That must not be lost.
Mike Tomlinson has given us a clear way forward for re-establishing confidence in the A-level system, and for ensuring that standards are clear. I hope that this will enable us to avoid the sterile annual debate about exam standards, when better results should be a cause of celebration for young people and their teachers.
I want to put on record my thanks to all those in the education service who brought the original concerns to our attention. Their co-operation in and approval of the process that we have undergone have been crucial. I am also grateful to UCAS and Universities UK for their helpful and constructive approach. Finally, I would like to thank Mike Tomlinson and his team for the speed of their actions, their thoroughness and their integrity.
Mr. Damian Green: I thank the Secretary of State for giving me advance sight of her statement, and I add my thanks to Mike Tomlinson for the work that he has had to do.
Today's announcement of the A-level regradings represents one more step in what has been the worst crisis ever to affect the exam system in this country—a crisis made worse by the staggeringly inept way in which it has been handled by the Secretary of State and her Department. Tens of thousands of students have had months of not knowing whether their grades were mis-marked. Two thousand families now know that they were fiddled out of the proper marks, and 88,000 others have been severely disappointed today, all because Ministers insisted, against the advice of their officials, on introducing the new A-level system too fast and too soon. Mike Tomlinson described that system as an "accident waiting to happen". The accident happened, and the Secretary of State is still trying to evade responsibility.
The root of this fiasco has been political interference in the exam system. I am afraid that nothing in the Secretary of State's statement suggests that she is prepared to reduce the degree of political meddling in the details of education, which are best left to heads, teachers and examiners. In her statement, she confirms that officers at the QCA had acted within their guidelines. If she believes that, why did she sack the QCA's chairman, Sir William Stubbs? Will she admit to the House now that he was a convenient scapegoat, used to take the pressure off Ministers? Will she also tell us why Sir William would have put pressure on exam boards to downgrade the marks if he did not believe that he was serving the interests of his political masters? It is not in the interests of the exam boards or of the QCA to
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depress the grades. It might, however, be in the interests of Ministers to do so, if they were worried about accusations of dumbing down.
So let us have the Secretary of State's explanation of why Sir William acted as she has accused him of doing. Interestingly, the Secretary of State said in her statement that she had sacked Sir William not because he had put pressure on the exam boards, but because the boards perceived that they were under pressure from the QCA. Might it have been possible that Sir William perceived that he was under pressure from Ministers?
While we are on the subject of the QCA, will the Secretary of State finally commit to making it fully independent of the Government? The main job for her, or her successor, is to restore confidence in the exam system. That will not be achieved until it is completely taken away from political interference. If the Government were to introduce legislation in the next Session to achieve that, we would give it a fair wind.
On the exam boards, why does the Secretary of State think that only one board has been implicated in this problem? What did OCR do, under this perceived pressure from the QCA, that the other boards failed to do? How does she propose to deal with the 2,000 students who have suffered? She says that students will not be financially disadvantaged. Will she tell the House what the compensation package will cover? Will she also make it clear what she will do for the other 88,000 students who will be feeling angry and disappointed today because they have not been regraded? [Interruption.] Ministers say that those students got the right grades. I would recommend that they find the time later to visit the BBC website and read the comments of some of the students who have been affected. The words "whitewash" and "sham" appear frequently. Many of those students may want their papers re-marked, not regraded, but their schools will be put off by the cost. Will the Government do the decent thing and pay for any re-marking that is demanded by those students?
Can the Secretary of State now clear up why an AS-level is worth 50 per cent of the marks when the exam board says that it constitutes less than half the work? The authorities said that the schools misunderstood the situation, which is a real insult to thousands of heads and teachers. Can she understand why two exams, each of which received 50 per cent. of the marks, might be regarded by reasonable people as being of equal weight?
The Secretary of State said that she has asked Mike Tomlinson to produce another report by next month. Will she now agree to a fuller review, completely independent of the Government, to look into the whole future of A-levels? Without that, the system will continue to fall under suspicion. The QCA's own task force will not be enough because by her actions the QCA has been proved to be simply an arm of Government.
The Secretary of State eventually apologised for the damage that the scandal has caused. For 50 years, A-levels served young people well, with all concerned regarding them as the gold standard for exams. Her place in history is secure as the Minister who destroyed that gold standard. No one doubts her integrity, her decency and her good intentions—but with that integrity and decency she has set up a system that has not worked, she has obstinately ignored advice that it would not work, she has tried to evade personal

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responsibility for the fiasco and she has failed to take the first step towards restoring confidence in the exam system, which is for her to resign.
Estelle Morris: I cannot believe that the hon. Member for Ashford (Mr. Green) has just said that he wished that more students had received incorrect results. [Interruption.] That is essentially what he said. All those students who now know that the results they received in August were accurate should be pleased by that. The hon. Gentleman said that he wished that more had found out today that they had been given inaccurate results in August. That is not my view. The hon. Gentleman has spent so much time jumping on every passing bandwagon in the past few weeks that he has forgotten to read the reports that Mike Tomlinson has produced.
Let us be clear about what Mike Tomlinson said. Political interference in the exam system is a serious allegation. I said when I gave my first statement on the issue that not only had no political interference ever taken place under Labour Ministers but that I believed that it had never taken place under any Conservative Minister. Even if the Liberal Democrats were ever to get to be Education Ministers—[Interruption.] That is going too far and I withdraw that comment. Seriously, I believe that politicians are unanimous on the issue and not one of us—we are all committed to the education of our children—would dream of instructing the chief executive or the chairman of the QCA to fiddle the results. We did not. I had the decency to say that the hon. Gentleman and his party would not have done that, but he did not have the decency to say that we did not. Mike Tomlinson, who is impartial, has said that. Nobody accused us of doing so—not the Headmasters and Mistresses Conference, the Secondary Heads Association, or any of the other head teachers associations. Bill Stubbs said that there was no political interference. The allegations came from elsewhere, but Mike Tomlinson said, in any form of words that he could find, that there was no evidence, written or verbal, and no allegation that Ministers interfered. He concluded that there was no interference.
The problem now is not that you do not believe us or the integrity of our profession, but that you do not believe Mike Tomlinson, the former chief inspector of schools. On that you rest, and it is up to you to justify it—
Mr. Deputy Speaker (Sir Michael Lord): Order. The Secretary of State has forgotten herself for a moment. She must use the correct parliamentary language.
Hon. Members: Regrade her.
Estelle Morris: Only from A up to A*.
The hon. Member for Ashford spoke of an accident waiting to happen. Mike Tomlinson did say that in the press conference on 27 September. The position was that there were no subject-specific grade criteria and no clear, consistent view about the standard required. The statistical and practical issues had not been fully worked through. All those are responsibilities of the QCA.
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Because that infrastructure was not in place, it was, as Mike Tomlinson said, an accident waiting to happen. He also said that the chief executives of the three examining bodies believed that they were being put under further pressure. The three inadequacies in the infrastructure and the perceived pressure that I have described account for what went wrong this year.
I come now to the matter of timing. Mike Tomlinson said that the structure had been introduced too quickly, and I have said all along that I accept every one of his recommendations. I shall act on them, but I want to clarify the record in respect of the timing.
When this Government were elected in 1997, A and AS examinations had been consulted on already by the previous Administration. Those examinations derived from a report by Ron Dearing—an excellent man, and the report was not bad either. In those days, the Tories were committed to AS-levels. They want to withdraw them now, but that is a different matter.
We decided in 1997 to consult further on the matter. The previous Conservative Government might have introduced their proposals in 1997, but we delayed until 1999. We then consulted further. After that further consultation, we postponed the implementation of A and AS-level exams for a further year, to 2000. By that time, four years had passed since the publication of Ron Dearing's report on the wider curriculum for 16 to 18-year-olds.
I accept Mike Tomlinson's contention that a delay of three years rather than two might have prevented some problems. We intend to learn from that, but I want to say two things in that regard. We delayed introduction for two years after 1997 because of the results of consultation. No plea to delay introduction by another year was made to us, either in papers or correspondence from the QCA or as part of the consultation, and neither was any such plea made to us by any organisation representing head teachers. However, I accept Mike Tomlinson's report and, as I said in my statement, I believe that it is something of which Government should take note.
I come now to the important questions of compensation for students, and the QCA. Some students have been inconvenienced financially and made poorer by the extra accommodation, tuition and travel costs incurred when they chose to change universities. They will be reimbursed by a special fund being set up by my Department.
As for the QCA, the House should recall that it was set up by the previous Administration. Its impartiality has served the country well, but I accept that the time may have come when the public—and, more importantly, teachers, parents and students—want added safeguards to ensure that impartiality. That is why I welcome the decision by Ken Boston, in whom I have the greatest confidence, to establish what I might call a stakeholder body, involving head teachers and their representatives, to oversee the examinations to be held next January and June. Mike Tomlinson will monitor that body's work overall, and it will provide an added safeguard for next year's results.
However, Mike Tomlinson may say in November that further safeguards are needed, and he might make proposals to that effect. If so, we will adopt them. The Government have no interest in doing anything

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other than ensuring that the increased standards achieved by pupils, students and teachers over the past five years are supported by a robust examination system.
Mrs. Anne Campbell: I congratulate my right hon. Friend on the way in which she has responded to a problem that has been very difficult for the Government. However, will she confirm that the staff at OCR has been completely absolved from any blame? That is important for me, as many of them are my constituents, and OCR is based in my constituency.
Estelle Morris: I appreciate my hon. Friend's constituency interest in that. Of course, OCR is an independent body, and it is for its members to read and absorb Mike Tomlinson's report. However, that report went no further than to examine the actions of OCR's chief executive and senior examiners. I hope that my hon. Friend can take some assurance from that, although I leave that to her sound judgment.
Mr. Phil Willis: I, too, thank the Secretary of State for advance sighting of her statement and for her courage in coming to the House to deliver it.
Liberal Democrats remain committed to the A and AS process, although we accept Mike Tomlinson's comment that it was rushed and that the extra year would have made a significant difference. We also believe that it is essential that the QCA is not simply reformed but abolished in its current form and that we have an examination watchdog that is totally independent of the Department for Education and Skills. Without that, everything else will be considered a fudge.
We have had two months of sheer hell affecting tens of thousands of young people who were subjected to experimentation at every level of their school life, their teachers, their further education college lecturers and their parents. In that time, our examination system has become the laughing stock of Europe and, indeed, the world. Yet now it appears that nothing happened and that all is well. It appears that either the shy and retiring Sir William Stubbs panicked when he discovered that this year's results were 0.3 per cent. out of line with his predictions and forced the exam boards to redraw the grade boundaries or that this year's students at AS and A2-level had a universal dip in performance, not when they sat their exams, handed in their course work or when their work was marked, but when their papers were graded. That is the sum comment of the Secretary of State today.
Far from restoring confidence, today's statement merely adds to the belief that the dead hand of Government was behind this déâcle. We are delighted that 1,953 students have received positive regradings today, but tens of thousands have been left wondering "what if?" Is the Secretary of State prepared to publish the numbers of students who would have gained different grades on the original grade boundaries? That set of statistics is crucial in determining where the fiddling went on.
At the heart of this fiasco is the question of standards, particularly that of maintaining the gold standard at A-level. Does the Secretary of State accept that simply
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using the word "standards" again and again without defining what it means has contributed in large part to the chaos? Does she agree with the QCA, which clearly thought that it meant limiting the number of students achieving certain grades, or does she agree with the Minister for School Standards, the hon. Member for South Shields (Mr. Miliband), who told the QCA last week that this definition
"places a block on talent and ambition"?
The Government are right to maintain standards vigorously but they have no right whatever to determine how many students meet those standards. However, that is the impression that is abroad this year.
This statement speaks volumes. It speaks of a Secretary of State who panics every time bad news arrives and does not have the guts to say to No. 10 that running scared of criticism is no way to run a Government. Does she accept that No. 10 would not sanction charges of grade inflation, and that is what really lies behind this sorry saga? Will she confirm that in her Department's media plan, agreed with No. 10, deflecting accusations of grade inflation came near the top of the list of priorities for July and August? Will she confirm that the press releases issued on 14 August by QCA and 15 August by the Under-Secretary of State for Education and Skills, the hon. Member for Enfield, Southgate (Mr. Twigg), along with numerous articles about gold standards, were all planned in advance to head off criticism of grade inflation? Will she admit that her Department created such a climate of paranoia over maintaining the gold standard that this year's fiasco became inevitable?
In short, the Secretary of State is responsible for this year's A-level fiasco and she must apologise to the 90,000 students who feel that they have cheated.
Estelle Morris: I suppose that one of the advantages, or disadvantages, of being in perpetual opposition is that one can change one's mind about six times a day. To be honest, in the past few weeks, the hon. Gentleman has been changing his mind between the "Today" programme and "World at One", but so be it.
On the grading question, I am a mite cross with the hon. Gentleman at this point in time. Let us just think about it. In August, we were accused of grade inflation. The hon. Member for Ashford (Mr. Green), who speaks for the Conservatives, went on the "Today" programme followed by "World at One" to say the same thing, unlike the Liberal Democrats, and I grant him that—that given that A-level grades had improved, we must immediately have a thorough inquiry into the exam system. He did not congratulate the students and teachers on working harder and learning more effectively; he said that there must be something wrong with the system because the results had improved. Mike Tomlinson actually reports that at the root of the problem, at every level of society, is an unwillingness to believe that, year on year, our children can learn more effectively, students can get better and teachers can teach more effectively. Having heard that in August, in September the Government were accused of grade deflation. All of a sudden, rather than making the exams easier, to get better results, we had made the exams more difficult to get the grades lower. That is the complexity of the situation.

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The hon. Member for Harrogate and Knaresborough (Mr. Willis) is usually generous of spirit and, with Labour Members, he usually gives due recognition to the achievements of youngsters in August when the results are announced. He always does so. He will know, therefore, that maintaining that their grades are due to the fact that they had worked harder and achieved more is a pretty difficult task. That is why we are prepared to assure the nation that there has been no political interference in the setting of grade boundaries or anything else; it is no more and no less than the result of the hard work of our teachers and pupils.
What is sad about what the Opposition spokesman and the hon. Gentleman have been saying today is that we set up an independent inquiry and, in effect, they have both said that they do not trust its results. They must think about the message that that gives to head teachers, parents and students. Both the hon. Gentlemen are still saying that there has been political interference in the setting of exam grades this year. There has not been—no evidence of that has been found—and while the Labour party is in power, there never will be. I also repeat that I do not believe that there ever would be were any other party in power.
Opposition Members have a choice. They can continue to play politics with that accusation or they can think carefully about the implications that it has for teachers and the students who are now studying for next year's examinations. No matter whether hon. Members believe us or Mike Tomlinson, the key thing about the report today is that every single organisation of head teachers that brought the original complaint, both from the maintained and the independent sectors, has signed up to say that the process undergone during the past few weeks has been robust, that they trust it, that it is fair, that they think that students now have the right grades and that they want to get on with teaching and learning. I back them. I certainly do not back the hon. Member for Ashford.
Several hon. Members rose—
Mr. Deputy Speaker: Order. Before I call the next speaker, I must inform the House that many hon. Members are seeking to catch my eye. Could we please have shorter questions and, hopefully, shorter answers too? I call the hon. Member for Ellesmere Port and Neston (Mr. Miller).
Mr. Andrew Miller: Does my right hon. Friend yet have enough information at her disposal to determine whether the papers that were wrongly marked were in one geographical area, or were spread about? Has she been able to draw any conclusions from that data yet?
Estelle Morris: No, I have not. The list of units—we must remember that they are units and not full subjects—were published and have again been published today for anyone who wishes to look at them. It would depend on which schools in which geographical areas tended to choose OCR as an examining body. I
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cannot give my hon. Friend a geographical make-up, but all the units that were regraded were from OCR, not from the other two examining bodies.
Mr. Kenneth Clarke: Does the Secretary of State now accept with the benefit of hindsight that, despite the delay and the consultation, this problem had its origins in the way in which AS-levels were introduced, when the first warnings of grading problems were issued? Obviously, she has only a few weeks to ensure the credibility of next year's system, but when she considers her longer term duty of restoring the reputation and status of A-levels will she no longer rule out abandoning the AS experiment, which has contributed to this problem and caused endless other problems inside schools too?
Estelle Morris: The right hon. and learned Gentleman is clearly well versed in the matter given his former post. For the record, AS-levels, which used to be a 40:60 not a 50:50 split, emanated from the discussion document published by the Conservative Government and Ron Dearing. When we took power, we consulted. At the time, it was a 40:60 split, but it was to count for 50 per cent. of the marks. During the consultation, people thought that that system was too complicated and we came up with a 50:50 split. Interestingly, that was widely accepted by schools.
I accept that the technical implementation of that 50:50 split has caused difficulties. One thing that Mike Tomlinson said was that he would have expected the QCA to study a number of different ways to ensure that the statistical processes for getting that split were robust. He did not say—I specifically asked him this because of course, I would want to consider it—that inherent in a 50:50 split is an inability to get it right. He said that more statistical modelling needed to take place. The new chief executive of the QCA has agreed to undertake that.
What schools need now is certainty. Whatever is for the long term, I want to give them an assurance that no further changes will be made to the syllabuses—to what pupils learn and what they teach—without timely consideration and due warning—that is, not in the foreseeable future.
Mr. George Howarth: Does my right hon. Friend accept that parents, teachers and students will contrast the dignified, decisive and, today, feisty way in which she has responded with the squalid and childish response of those on the Opposition Front Bench? When she is considering these matters further, will she give some thought to whether the introduction of an international baccalaureate, or something similar, might in the long term help to overcome some of the problems?
Estelle Morris: I am grateful to my hon. Friend for his comments. An interesting debate has been going on in education circles for as long as I can remember about the baccalaureate and it has now been put in the public domain, and rightly so. It is important to give assurances, as I told the right hon. and learned Member for Rushcliffe (Mr. Clarke). I do not want schools or teachers to go away from any debate in the House thinking that the system is about to change again. If my hon. Friend means by a baccalaureate some sort of

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overarching qualification in which we can recognise both the study of some subjects in depths, which are A-levels, and that broader curriculum, that is something in which I personally and the Government have been interested. I put on the record that that is for the long term, not the immediate term. What schools want to know most of all now is that there will be no immediate changes. I welcome my hon. Friend's contribution, however. That is a debate that the education service and this House should continue.
Mr. Andrew Turner: Is an AS-level half an A-level or not?
Estelle Morris: There are six modules in an A-level: three at AS-level and three at A2. AS-levels count for half an A-level. They are recorded in the performance tables as such. Due to the linear nature of some subjects, it was deemed that the first year six, usually the AS-levels, would be marginally easier than the old A-level standard. To maintain that standard, therefore, the second year had to be marginally more difficult than the A-level standard. That is where the difficulty lies. What is clear is that the overall standard of AS and A2 is the same as previous A-level standards.
Kali Mountford: I thank my right hon. Friend for the apology that she has issued to students this evening—a refreshing change, to which Opposition Members are obviously not used. I have had inquiries from only two students in my constituency. Given the hype raised by the battle cry of "political interference" and "interfering" from the Opposition parties, I would have expected more. Is it not the case that those battle cries do not undermine the Government in the way that Opposition parties clearly intend, but undermine those students who are now facing difficulties? Should we not now focus on how to ensure that the students affected get the help that they need quickly and how to announce a robust system to the House in the next eight weeks, so that we can have clarity for next year's exam results?
Estelle Morris: My hon. Friend is right. I hope that the details that I have been able to give the House today about the students—just under 200—who are eligible to change university, the procedures for this year's examinations, the changes we shall make and the support we shall give reassure her.
Criticisms were made today about acting precipitately—acting too quickly or too slowly are both accusations that have been made over the past few weeks. What I have tried to do during the past few weeks was actually to deal with the problem that arose at the start of September. This is the first occasion on which I have made any political comment, either party or otherwise, or attacked anybody. While others have been doing that over the past few weeks, I have been busy getting on with solving the problem that arose. I hope that today I have been able to lay it to rest.
Mr. Andrew Lansley: I am surprised that the Secretary of State should conspicuously have failed to recognise the work of many individual staff at the OCR, many of whom may be my constituents who work in Cambridge, or those of the hon. Member for Cambridge (Mrs. Campbell). If the
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Secretary of State persists in scapegoating the QCA and the OCR, they will recollect that she and Ministers were responsible for insisting that 40 per cent. of the work at AS-level should be counted as half an A-level, for the botched implementation of the AS-level in the first level and for the ill-advised assessment review in 2001.
Estelle Morris: I think that I have already answered the latter points. I am certain that, as regards the hon. Gentleman's constituency, he misheard, rather than deliberately misunderstood; none of the comments that I made to my hon. Friend the Member for Cambridge (Mrs. Campbell) were meant to imply any criticism of staff at OCR. I said, and I say again, that OCR will read the report. I reassured my hon. Friend that Mike Tomlinson's comments had been at chief executive and senior adviser level. To reassure the hon. Gentleman about his constituents who work at OCR in whatever capacity, I have made no comments about what they have done; 1 have referred them to Mike Tomlinson's report and I am happy to say that again.
Tony Cunningham: Perhaps one of the saddest aspects is the cloud that has hung over all A-level results, so will my right hon. Friend join me in congratulating the tens of thousands of successful A-level students and pay tribute to the work of their teachers and schools?
Estelle Morris: Of course.
The hon. Member for Harrogate and Knaresborough (Mr. Willis) talked about the generation that had been experimented on, but they have also achieved more than any previous generation at each of their examination stages. I congratulate them and their teachers, parents and families for supporting them. Like my hon. Friend, I am delighted that the number of students who were today notified of changes in their results was lower than we might have expected.
Mr. Peter Luff: Does the Minister understand that one of the reasons why her whitewash today will not wash is that too many of us have direct personal experience of this fiasco? My daughter, whose AS-level grades were affected, rang me today from her school to express the anger felt by her teachers and friends about the totally inadequate response comprised by the report and the Minister's statement today. It ducks the major issue. Does she not understand that only comprehensive re-marking of the relevant papers will suffice? Will she go back to her office and immediately order that re-marking, and offer to pay for it as well?
Estelle Morris: I am sorry that the hon. Gentleman should distrust Mike Tomlinson's report and the word of the HMC, the Secondary Heads Association, the National Association of Head Teachers and all the teacher representatives. It is a good report, with good work over the past three to four weeks, and I am sorry that so far not one Opposition Member has chosen to support Mike Tomlinson and his recommendations.
As regards marking, the exercise undertaken by Mike Tomlinson has been wholly unusual. Never before has anyone had to look at the way in which grade boundaries were set. There is a well-established process

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for any school that wants remarking to take place. By the time the inquiry was set up the number of schools that had asked for re-marking rather than regrading was roughly the same as in previous years, except at OCR where the number was significantly higher. That led me to say that it looked on the face of things as if there was a problem at OCR. I am sure that the hon. Gentleman will know that when any school which applies for remarking—the boards have extended the period during which that can take place—and re-marking takes place, the fee is sent back to the school.
Mr. Paul Truswell: What will my right hon. Friend say to the 17 pupils at Horsforth school in my constituency where English literature marks were changed to the extent that some of those pupils received 91 out of 120, rather than 21 out of 120, and others received 102 out of 120? Would it surprise her to learn that the examination board involved offered no apology for its mistakes and all the trauma that was caused? What reassurance will she give pupils, parents and the school not only that we shall learn the lessons from this fiasco but that in future examination boards will have a much more human face?
Estelle Morris: I know that my hon. Friend will take back the comments that I have made to the House today, expressing our understanding of the distress that the students must have gone through. His comments only serve to remind us that we were absolutely right to act as we did in setting up an independent inquiry, letting it do its work and reporting to the House when it had completed its tasks.
As regards any points that hon. Members raise on the future of examination boards or the impartiality or robustness of the examination system, it is good to have the debate, but I am determined to wait for part two of Mike Tomlinson's report. At that point we shall no doubt have the opportunity to discuss and debate it further.
Mr. Michael Fallon: Given that Ministers introduced the AS-level, given that Ministers approved the increase in repeatable coursework and given that Ministers had sight of the draft QCA guidance on grading, how does it follow that Ministers had no responsibility at all for the accident about to happen? Discuss.
Estelle Morris: Grade E, bordering on U.
Given the hon. Gentleman's previous post, I should have thought that he would understand that the setting of grades, sending out subject specifications or anything to do with the marking assessment system is hands off for politicians. I do not question for a minute that the situation was not the same in his day. It is hands off for politicians and it is important that that remain the case. The QCA is responsible for setting out subject-specific guidance and for all the implementation and mechanics of the system.
I am responsible for the policy. I am responsible for making sure that when something goes wrong it is put right. I am responsible for Curriculum 2000 and I am
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happy to be held accountable for that. I cannot be held responsible—nor can any politician—for interfering in the exam system because politicians should not do so. We did not do that and I am sure that the hon. Gentleman did not either.
James Purnell: Does my right hon. Friend agree that the root cause of the problem is that some people just will not believe that A-level results are improving? They do not believe that more than a minority of people should be allowed to take A-levels and go to university. Should those people not be pointed in the direction of the Organisation for Economic Cooperation and Development research that found that we now have the eighth best education system in the world? We should be complimenting pupils rather than running them down the whole time.
Estelle Morris: My hon. Friend is, of course, exactly right. We have an excellent education system in which standards have increased at every key stage, at seven, 11, 14, 16 and 18. We should be proud of it.
I say again that we cannot be proud of the events that led to the statement. I acknowledge that. No one would want to pretend otherwise. However, each Member of the House, from all parties, has to make a personal decision: whether to accept what has come from the report, to learn from it and move on and to congratulate our students and teachers on their achievements, or whether to continue to make political capital over it—I think some have already made that decision.
I have dealt with the problems that arose during the past few weeks. We shall now move on and that will include recognising the achievements of the generation of children who are in our schools at present.
Mrs. Patsy Calton: The grading problems came to light through the starkly contrasting results of children who had been awarded previous A grades but final U grades in their modules. Anyone who has been a teacher knows that that is almost impossible and very unlikely in large numbers. However, C and D grades followed by mistaken U grades may be more difficult to identify. Has the Secretary of State satisfied herself that young people across the grading system—not merely those with As and Bs initially—have been treated fairly?
Estelle Morris: Absolutely. I did not know this two months ago, but I can now tell the hon. Lady that in order to set the grade boundaries, what first happens is that the A pass rate is set and the E pass grade is set, and then the grades in between are calibrated, presumably, within that framework. When that process was gone through again, every single grade would have been affected, so I want to offer the assurance that the process that has just been undergone has not just been about whether people who got an A or an E or a U got the correct grade; it has been about every single grade. Indeed, some of the young people who have been notified of grade changes today will find, for example, that they have a C that goes up to a B. It has been done effectively.
I again give the hon. Lady an assurance, because I do understand the seriousness of the matter; many Members of the House, not only as constituency MPs

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but as parents, as the hon. Member for Mid-Worcestershire (Mr. Luff) said, know the importance of this and I note his concerns. But every single person who complained about the grading of this year's examination results has signed up today and said that they think that the process has been fair, that they are happy with the results and that they want to move on. I hope that we can do so as well.
Mr. John Wilkinson: Does the Secretary of State realise that the stridency of her statement and the brazen lack of contrition that she has displayed this afternoon make us all comprehend why she so regularly gets the bird at teachers' conferences? She keeps on citing the judgment of Mr. Tomlinson. Are not parents, teachers, the universities and, not least, students entitled to have a Secretary of State in whose judgment they can trust?
Estelle Morris: I think that, as I said before, the role of the Secretary of State in this is, on hearing of concerns, to look at the evidence, take action and ensure that the matter is put right. I set up this inquiry some three-and-a-half to four weeks ago. Within a relatively short period, a great deal has happened. I have been responsible for ensuring that the inquiry has been carried out effectively. I have been responsible for ensuring that it has been brought to a timely conclusion. I have been responsible for ensuring that at every single stage of that inquiry, those whose concerns brought the matter to our attention in the first place, were satisfied with the procedures that were being used. I believe that that is the sort of Secretary of State that teachers and the nation want.

Points of Order
6.12 pm
Mr. Eric Pickles: On a point of order, Madam Deputy Speaker. You will recall that "Erskine May", on page 266, addresses a problem of sufficient time to deal with business. We have before us an important debate on post offices and other matters, but we also have the matter of local government finance, which represents 25 per cent. of public expenditure. Even with good will, I cannot imagine that we shall get on to that before 8 o'clock or maybe even later. That does not allow sufficient time to debate this important issue. Have you had an indication from the Leader of the House or from the Deputy Prime Minister that one of them will be coming to the House to make a statement on change of business so that we can have additional time to discuss this matter, which is vital to all our constituents?
Madam Deputy Speaker (sylvia Heal): I do understand and sympathise with the point that the hon. Gentleman makes, and indeed with other hon. Members in the House who hope to contribute to the debates. The timing of debates and the order of business are in the hands of the Government and I have had no notice of a statement of the type in which the hon. Gentleman is interested.
Mr. Tam Dalyell: On a point of order, Madam Deputy Speaker. May I raise a point of order concerning the treatment of the House of Commons by the Executive, for the consideration and reflection of Mr. Speaker? On 7 February 1996—
Mr. Henry Bellingham: 1896.
Mr. Dalyell:—1996. My right hon. Friend the Member for Dewsbury (Ann Taylor), then the shadow Leader of the House, said in relation to the Scott report:
"I ask you, Madam Speaker, what you can do to ensure that Members of the House, and in particular the official Opposition, are not deliberately disadvantaged by the procedures being adopted by the Government."—[Official Report, 7 February 1996; Vol. 271, c. 331.]
My right hon. Friend returned to the subject the following day, saying:
"Does the right hon. Gentleman think that it is in the spirit of Madam Speaker's statement yesterday that Ministers should have eight days to consider the report while the Opposition have only six hours?"—[Official Report, 8 February 1996; Vol. 271, c. 472.]
Indeed, the present Leader of the House, a week later on 15 February, at column 1146, complained bitterly that the then Government had had eight days and Members of Parliament had had eight minutes.
It is in the recollection of Members that on 24 September, a dossier of 55 pages on a rather complex subject was published at 8 o'clock. It was subsequently described, rightly or wrongly, by President Putin as little more than propaganda. My question is this: if reports are published for the consideration of the House, should not they be published—as they perfectly easily could have been—two, three or four days before, so that they can be considered not only by Members, but on the anvil of informed opinion? Quite bluntly, I think that it was a

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calculated, cynical attempt to give a rather different gloss on a report than that which was actually contained in the report. These things should be subject to argument, because otherwise it will be seen as a deceiving the House.
Madam Deputy Speaker: I thank the hon. Member for giving notice to Mr. Speaker of his point of order. The House can reasonably expect notice of important Government documents before they are the subject of debate, and Mr. Speaker attaches importance to this principle. The exact timing of the issue or publication of Government documents, however, remains a matter for Ministers, and the Speaker has no power to direct when papers will be provided.
Mr. Gary Streeter: On a point of order, Madam Deputy Speaker. I seek your advice. Hundreds of schoolteachers in Devon this evening are looking to tonight's debate on local government finance to give them hope in tackling the underfunding of children in Devon and to help them campaign for fair funding for Devon schoolchildren. Now that the Government have squeezed that debate into two hours, how can these issues properly be dealt with by the House? What message can I take back to the people of Devon about the way that this Government have once again sought to sideline the importance of the House?
Madam Deputy Speaker: I have already answered that point of order, I think, which was raised by a Member on the Front Bench.
Mrs. Angela Browning: Further to that point of order, Madam Deputy Speaker. I heard your decision and your ruling about the timetabling of business being in the hands of the Government, but I hope that you will bear it in mind, given the representations being made to you about the limited time to debate three very important issues tonight, that we are shortly to consider changing the
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Standing Orders of the House in order that Members can, apparently, swan off to cinema clubs in the evenings. I hope that you will convey to—[Interruption.]
Madam Deputy Speaker: Order. I repeat what I said earlier. We are now discussing the merits. I have already given a ruling on the point of order.
Mr. David Curry:On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker: Is this on the same topic?
Mr. Curry: Yes, and it is absolutely relevant, Madam Deputy Speaker. Would it be in order for you to inform the House of how many hon. and right hon. colleagues are seeking to catch your eye in the debate on local government finance, so that the Government may form a view as to how much additional time would be necessary to accommodate those very important views?
Madam Deputy Speaker: May I suggest to the right hon. Gentleman, who is very well experienced in the running of the House, that he approach that through the usual channels?
Mr. Patrick McLoughlin: On a point of order, Madam Deputy Speaker. I take it from the fact that Mr. Speaker has set a 10-minute limit on all speeches that there is considerable demand to take part in the local government debate. Can you confirm that, as the Order Paper stands at the moment, it is likely that there will be debate on a ten-minute rule Bill and then the hour and a half for the Post Office, and if we then come on to the Public Trustee (Liability and Fees) Bill and there is concern about that Bill, it could well be that we have no time to debate local government at all, and the only people we shall listen to will be Ministers? Surely that cannot be part of the way in which the Speaker would condone a debate's taking place in the House on such an important issue, which represents 25 per cent. of public expenditure?
Madam Deputy Speaker: I refer the hon. Gentleman to the point that I made earlier, but say too that the business of the House today is due to finish at 10 pm. It is to some extent in the hands of Members how the remaining time that we have is spent.

Corporate Responsibility (Environmental, Social and Financial Reporting)
6.20 pm
Linda Perham: I beg to move,
That leave be given to bring in a Bill to establish and provide for the functions of the Corporate Responsibility Board; to require certain companies to publish reports on environmental, social and economic matters; to require those companies to consult on certain proposed operations; to specify certain duties and liabilities of directors; to provide for remedies for aggrieved persons; and for connected purposes
In recent years—[Interruption.]
Madam Deputy Speaker (sylvia Heal): Order. Will the hon. Members who are leaving the Chamber please do so quickly and quietly?
Linda Perham: Thank you, Madam Deputy Speaker.
In recent years, many people have come to understand the implications of the size, influence and power of major corporations. Fifty-one of the 100 largest economies in the world are now corporations, rather than countries, and the largest 500 companies in the world control two thirds of world trade. Clearly, business is a large and powerful player on the world stage. We also know of the major problems that companies have caused environmentally, socially and economically in many countries around the world, of which Shell's well-publicised disputes with the Ogoni people in Nigeria and Nestlé's continuing marketing of breast milk substitutes are well-known examples.
At home, too, I should be surprised if any Member has not had to deal with problems, brought to them by local people, caused by the activities of companies in their constituencies, such as shock job losses when production is suddenly moved overseas, pollution incidents, planning issues or the latest scandal in many constituencies—hidden mobile phone masts.
To argue that everything done by big corporations is bad would, of course, be ridiculous. Companies are creating jobs, developing products, providing services that we all need and investing in communities, but we need to be sure that they are serving the needs of society at large, not just their shareholders, and many people now feel that that requires changes in the law.
An important point must be made. When companies behave badly in ways that affect the richest and most powerful in society, there is a clamour for new rules and regulations. One has only to look at the readiness of the American Government to strengthen laws on financial processes after the collapse of WorldCom and Enron to see how fast we act to protect wealthy investors. That response is not wrong, but we should be equally determined to act when company activities affect the least well off, bearing in mind that the environmental and social impacts of companies' activities usually hit the poorest hardest.
When I introduced a similar Bill earlier this year, it had the backing of Amnesty International, CAFOD, Friends of the Earth, the New Economics Foundation and Save the Children. Since then, support has grown enormously. Major unions have come on board—including, I am pleased to say, my own union, Unison. More development agencies have joined, such as
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Christian Aid, and Traidcraft—a business that has led the way in trading ethically and has taken care over the environmental and social impacts of its activities—also now supports the Bill.
The Bill that I hope to introduce today has four key principles. Its first requirement is for mandatory reporting on social and environmental impacts. Experience has clearly shown that a voluntary approach to reporting is ineffective. Three quarters of the FTSE 350 companies that were challenged by the Prime Minister to produce environmental reports in October 2000 completely ignored the call. There is a business case for mandatory reporting. The few companies that have responded to the Prime Minister's challenge would like the playing field to be levelled, as their competitors, who can currently undermine the better standards for which the best companies strive, would come under the same pressure from investors.
Embracing the corporate social responsibility agenda is likely to have a positive effect on staff recruitment, productivity, costs, innovation, quality, brand and reputation. It also protects the integrity of the free market, which is only possible when information is freely available to investors, customers and suppliers. The Bill would also change the basic duties of company directors, requiring them to minimise the environmental and social impacts of their activities.
Another major strand of the Bill is the requirement that companies must consult affected people on major projects, and all the best companies already do so. Indeed, many Government supported schemes already require such consultation, before export credit guarantees are given, for example. The Bill would spread what is currently best practice and make it common practice.
Finally, the Bill would allow stakeholders to challenge companies on the content and accuracy of their reports and on any impacts a company might have on its environment or its community. The Bill includes measures to prevent malicious complaints, but it is right that it should be possible to challenge companies' claims of environmental righteousness if they are clearly false—greenwash, as it is often known.
To protect reporting standards further, the Bill would require greater transparency and the setting up of a standards hoard. The board would include representatives of business and experts on the impacts of companies' activities, and would be charged with drawing up a framework of standards, ensuring that it provides appropriate information without being burdensome. The board could also carry out occasional checks on performance—perhaps examining a handful of reports each year—and assist with complaints about companies' reports.
The Government have accepted many of those principles in the White Paper on company law. The draft clauses already require an operating and financial review, which would have to include some environmental and social reporting, and would also widen the duties of company directors. Although the principle of those changes is right, the detailed wording currently leaves too many loopholes. For example, the proposals apply only to economically significant companies, leaving most businesses untouched.

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The White Paper estimates that about 1,000 companies will be required to produce an operating and financial review, with a total turnover of around £1 trillion—roughly a third of the total turnover of United Kingdom business. My Bill, with its £5 million turnover threshold, would capture about 85 per cent. of economic activity by requiring just 2.5 per cent. of companies to report.
The Government's proposals also require reports on the environmental and social impacts that are relevant to the company, not necessarily those that are relevant to society—a crucial difference. I am also troubled that the proposed law requires reporting only on the company's policies on environmental and social issues, so a bad company with no policies need not report at all. Although a future companies Bill will recognise and include important points and accept the principle of mandatory reporting, it is unlikely to achieve significant environmental and social benefits. By winning the arguments for corporate social responsibility, we will secure the changes needed to protect the environment, defend human rights and safeguard the interests of shareholders, investors, workers and consumers across the world.
A wise man said recently that we are at our best when we are at our boldest. The Bill is bold; it would deliver measurable improvements to people's lives in Britain and abroad, and it would challenge other nations to follow our lead.
I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Linda Perham, Mr. Barry Sheerman, Mr. Martin O'Neil, Dr. Vincent Cable, Sir Teddy Taylor, Ms Glenda Jackson, Mrs. Jackie Lawrence, Mr. John Horam, Mr. Frank Field, Mr. Tony Colman, Sue Doughty, Mr. Simon Thomas.
CORPORATE RESPONSIBILITY (ENVIRONMENTAL, SOCIAL AND FINANCIAL REPORTING)
Linda Perham accordingly presented a Bill to establish and provide for the functions of the Corporate Responsibility Board; to require certain companies to publish reports on environmental, social and economic matters; to require those companies to consult on certain proposed operations; to specify certain duties and liabilities of directors; to provide for remedies for aggrieved persons; and for connected purpose: And the same was read the First time; and ordered to be read a Second time on Thursday 14 November, and to be printed [Bill 193].
Madam Deputy Speaker (sylvia Heal): Order. Members should be aware that the digital clocks on each side of the Chamber were re-programmed during the summer recess in order to give a longer warning period. The warning lights will now start to flash one minute before a time limit is due to expire, rather than 30 seconds, as previously. That applies to the end of time-limited speeches and to the end of time-limited debates. The next item of business will be the debate on urban post offices, which has a time limit of an hour and a half. I must also announce that there is a 10-minute limit on Back-Bench speeches in all debates for the rest of the evening.

Urban Post Office Reinvention Programme
6.30 pm
The Minister for E-Commerce and Competitiveness (Mr. Stephen Timms): I beg to move,
That this House authorises the Secretary of State to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, in respect of the urban post office reinvention programme, a sum exceeding £10 million to Post Office Ltd.
The report of the performance and innovation unit on modernising the post office network was published in June 2000. It was widely welcomed in this House and outside. It included 24 recommendations, all of which the Government accepted.
A key recommendation was that if the Post Office decided that fewer offices were needed in some urban areas, the Government should consider providing financial assistance to the Post Office to ensure that sub-postmasters were adequately compensated for the loss of value of their business. Post Office Ltd. is now planning a three-year urban network reinvention programme. Following discussions between Post Office Ltd. and the National Federation of Sub-Postmasters, the Government announced on 3 January their agreement in principle to fund the compensation package.
In March, the Government applied to the European Commission for its approval of funding for the programme, and approval was announced on 18 September. The House is being asked today to agree the funding for that programme.
The House will want to understand why the urban post office network needsrestructuring and why the income of the post office network has declined. Thereasons date back more than 20 years, and past under-investment has been an important factor. Greater mobility and changes in shopping habits have alsosharply reduced customer numbers. The Post Office is not alone in having had to deal with these changes. Other networks, such as those of the retail banks, have been scaled back too. Post office networks in other countries have been through similar changes. I recently met Monika Wulf-Mathies, a board member of Deutsche Post and a former European Commissioner, who told me that in Germany consistent profitability has been achieved by reducing the number of post office branches from 30,000 to 13,000. Other countries have also embarked on a similar process.
Some factors have had a particularly big impact in the UK.
Mr. Tony Lloyd: There is clearly a rational case for a change in the structure of post offices. The Government have accepted it, as most people do, but the Post Office is pre-empting the process. In my area, five post offices have either been closed, temporarily closed with no signs of reopening, or their future is open to consultation with a view to closure. That is not the rational process that my hon. Friend and other Ministers promised us. It is a culling of inner-city post offices, and it is not fair to people who are less mobile or who have less access to transport, public or private, and who therefore depend on the post office.
Mr. Timms: I am aware, as my hon. Friend says, that there have been closures. Indeed, closures have been

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happening for years. The case that I want to put is for a properly planned, properly managed process, which will protect access to the post office network in every urban area. I hope that I will be able to persuade him that that is about to commence.
Linda Gilroy: Will my hon. Friend assure the House that Postwatch and hon. Members will be properly consulted on what happens to our constituents and post office customers?
Mr. Timms: I am very happy to give my hon. Friend exactly that assurance about the role of Postwatch.
Several factors have had a big impact on the post office network. Post office income has been heavily dependent on benefit payments. More than 42 per cent. of benefit recipients now access their benefit payments via bank accounts, compared with only 26 per cent. in 1996. If we compare the last financial year with five years previously, we see that the number of retirement pensions and widows benefits paid by order books and giros dropped by more than 1 million—from just over 6 million to less than 5 million—even though the total number of pension recipients rose by more than 1 million. The number of child benefits paid through giros dropped from just under 5 million to less than 4 million, and payments at a post office of incapacity benefit fell even more dramatically—from more than 2.5 million to less than 1 million.
Mr. Paul Tyler: Will the hon. Gentleman give way?
Mr. Timms: I shall finish the point if I may.
The drop in benefit transactions at post offices, however, has not been due only to people switching to bank accounts. The number of people receiving working age benefits has fallen in total. In February 1997, 1.6 million people were claiming jobseeker's allowance. By February this year, the number had fallen to 890,000. Clearly, that is a very welcome development, but it has reduced post office income. Benefit payment has accounted for up to 40 per cent. of post office branch income in some cases.
Mr. Tyler: I accept the Minister's point that this is a longer progress, and that it goes back to the time when Conservative Governments were pursuing this course. Will he give an explicit assurance, however, that the consultation process will consider the implications not just for post office business but for other businesses alongside, which are often in the same building? If one draws a pension or a benefit at one counter, one is likely to use that money at the other counter. The viability of a great many businesses is therefore at stake, not just that of post offices.
Mr. Timms: In a moment, I shall set out exactly how the process will work, and I think that the hon. Gentleman will receive the assurance that he seeks.
Other post office transactions have also declined.
Mr. Nigel Waterson: Until I launched my post office petition in Eastbourne, many people were blissfully unaware of the changes in payments that will
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take place next April. Does the Minister share the concerns of, for instance, the National Federation of Sub-Postmasters, that arrangements for the so-called universal bank simply cannot be in place by April 2003?
Mr. Timms: No. Those arrangements will be in place by April 2003. There will, of course, be a process of transition—not everybody will switch in April next year—and it will be properly planned and phased.
In the five years from March 1997 to March this year, Girobank transactions at post offices fell by 37 per cent. and postal order transactions fell by 13 per cent. There have been areas of increase, such as motor vehicle licences, lottery sales and bureau de change services, but they have only modestly offset the reductions. As a consequence, in many urban areas, there is now too little business for the number of post offices. The Post Office has the largest retail network of any organisation in Europe. It has half as many branches again as all the UK banks put together. More than 1,000 of the 9,000 urban sub-post offices have at least 10 other post offices within a mile. The volume of business through the network is simply no longer sufficient to support such a dense network. The restructuring proposed by the Post Office is intended to restore the urban network to commercial viability, restoring the confidence of sub-postmasters and making it possible to attract much-needed new investment into their post offices. The briefing circulated for this debate by the National Federation of Sub-Postmasters states:
"There is an urgent need for re-structuring … Tough decisions must be made in order to ensure a viable network for the future to create bigger, better and brighter post offices."
I agree with it on that point.
Mr. Colin Challen: Does my hon. Friend recognise that it is not simply a question of commercial viability, given the need for that number of post offices in urban areas? The Government's social exclusion policy would take a great knock if too many post offices were closed. Will he assure me that it will not just be a few of the usual professionally engaged people who will be consulted in this process? When a local community demands that a post office stay open and other people agree that it should stay open will he assure us that the Government and the scheme will support its staying open?
Mr. Timms: My hon. Friend makes an important point. I can assure him that there will be a very thorough process of consultation around every proposed closure and that the Post Office will take seriously the results of that consultation.
The programme that is the subject of the debate relates only to restructuring the urban network—offices located in communities of more than 10,000 inhabitants. Our stated commitment to ending avoidable closures in the rural network remains in place, and it has led to very sharp reductions in the numbers of rural post office closures. However, for each urban area, the Post Office has received indications from sub-postmasters who would like to accept the compensation and close their business. Post Office officials will visit and walk around every area and make a careful study of the configuration of the offices and of local factors, such as public transport, demographics, geography and where the hills

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are, to decide whether a particular office that a postmaster wishes to close can be allowed to do so. The aim will be to ensure that it is as easy and convenient as possible for customers to use other offices nearby and to maximise the amount of business from a closing office that can be captured by other offices. The programme will start with the smaller urban offices where the sub-postmasters are under the greatest pressure.
Mrs. Cheryl Gillan: The Minister should know that there are 15 so-called classified urban post offices in my constituency and that I can expect at least five of them to close under the new provisions. What will he say to my constituents in Chesham Bois who have seen the headline, "Last chance to save your post office" in their local newspaper? They are desperate and they have seen no sign that their representations and letters have been taken into consideration at all. What does he say to the elderly and infirm in my constituency who want to go not to a post office one mile down the road but to their local post office? I am sorry, but what he has said so far will not satisfy them.
Mr. Timms: I hope that the hon. Lady will pass on to her constituents the assurances that I am giving to the House. The programme—it has not started yet and it cannot start until the House has given its approval tonight—will not have the characteristics that she describes.
Where a sub-post office closes under the programme, the Government will meet the compensation costs—up to a total of £180 million over the next three years. An additional £30 million will be provided for modernising and adapting those offices that remain. Everyone recognises that many urban sub-post offices are much too dowdy, but the key to improving standards in them will be the increased volume of business that they can expect. However, the grants of between £5,000 and £10,000 for each office expecting to take on a significant number of additional customers—to be matched by the same sum from the sub-postmaster—will be an important boost, too. With the £30 million, this is the first time ever that a Government have undertaken a programme of investment in urban sub-post offices. It is an additional measure on top of the PIU report recommendations that we have accepted.
Several hon. Members: rose—
Mr. Timms: I give way to my hon. Friend the Member for Stroud (Mr. Drew).
Mr. David Drew: As usual, my hon. Friend has been very generous with his time. May I clarify the position? I know that we are talking about the urban network, but there is some confusion between an urban and a rural sub-post office, and some of the designations have not helped. The problem in my area is that, until we can get the rural subsidy sorted out, the urban programme will appear to run into it. Will he clarify when the money is likely to be forthcoming to ensure that the rural network is properly funded in the short term?
Mr. Timms: My hon. Friend will know that we shall fund the commitment that we have given to ending
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avoidable rural closures. I anticipate that, in just a few weeks, we shall be able to set out exactly what the commitment will entail.
In the process of urban changes that I have described, the Post Office will generally require the receiving offices to improve their facilities and to increase their opening hours. Increasingly, we can expect sub-offices to maintain the same hours as the associated retail business that is alongside, thus greatly improving the service to customers.
Mr. Michael Weir: Does the Minister not accept that part of the problem is that the Government have adopted a piecemeal approach? Has he read the briefing from the National Federation of Sub-Postmasters? Does he realise that there is great concern about the salary that sub-postmasters will be paid in the future, the whole mail system and the universal bank? Until those concerns are dealt with all at once, we will not resolve the problem properly. Does this programme not come too soon in the process?
Mr. Timms: I do not know whether the hon. Gentleman has read the briefing paper from the National Federation of Sub-Postmasters, but one of the points that it stresses is the urgency of getting on with things. I do not agree that there should be longer delay.
The properly managed programme that the Post Office proposes is far preferable to the alternative of unmanaged closures resulting from falling income. At the end of the programme, more than 95 per cent. of people in urban areas will still be within a mile of a post office, and the majority within half a mile. Without the programme to which the House is being asked to agree, more and more urban sub-postmasters would simply shut down, even without any prospect of compensation, causing much greater disruption to customers.
Mrs. Louise Ellman: What assurance can my hon. Friend give to the people in severely deprived areas in my constituency who are served by 23 post offices and sub-post offices? Does he consider that the balance of funding in the programme is reasonable between compensating sub-postmasters for closing post offices and supporting post offices to remain open?
Mr. Timms: Yes, I do. One of the points that I shall come on to make is that my right hon. Friend the Deputy Prime Minister is developing a separate scheme—we shall announce the details shortly—to support specifically post offices in the most disadvantaged areas, the 10 per cent. most deprived urban wards. I assure my hon. Friend that I shall say more about that in a moment.
Mr. Mark Field: Will the Minister give way?
Mr. Timms: I need to make progress.
The programme will follow the code of practice that was agreed last year between Consignia and the consumer watchdog, Postwatch. For every proposed closure, merger or relocation, there will be an independent consultation process lasting at least a

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calendar month and extended to allow for bank holidays. The consultation will be conducted by Post Office Ltd., closely involving Postwatch, and it will include writing on day one to the local Member of Parliament. To ensure that the needs of all customers have been properly considered—the elderly, disabled people, those on low incomes and others—Post Office Ltd. will, in developing its proposals, take account of factors such as the accessibility and viability of the remaining post offices, transport links, opening hours and numbers of counter positions.
At the start of the programme, all the closures will be in response to requests from postmasters who have said that they wish their businesses to close. However, it is possible that, towards the end of the three-year programme, there may need to be a small number of involuntary, but compensated, closures to finalise the shape of the urban network.
To come to the specific point raised by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman), there are more than 1,800 urban sub-post offices in the United Kingdom in the 10 per cent. most disadvantaged wards in the Indices of Deprivation 2000. I want to make it clear that, other than in the most exceptional circumstances, the scope of the programme will not extend to any post offices in urban deprived areas that are more than half a mile from the next post office. Very often, they are the last retail outlet of any kind in the area. The Government intend to improve and support post offices in those areas by means of a separate scheme to provide funding for investment and improvement to post office branches that would otherwise risk closure. My right hon. Friend the Deputy Prime Minister will shortly announce full details of that. The devolved Administrations in Scotland and Wales are developing equivalent schemes. The merits of such a scheme are also being considered in Northern Ireland.
Mr. David Lepper: Can my hon. Friend confirm whether the scheme that he describes for post offices in the most deprived areas will be funded separately from the package that we are considering? Will it extend to re-establishing post offices in those deprived areas from which they have vanished?
Mr. Timms: That scheme will be in addition to the programme that I am describing and its funding will be separate. As I said, my right hon. Friend will set out the details shortly, but I understand that the intention is to focus on existing businesses, especially if a sub-post office has a linked retail business, and to improve the viability of the whole business.
Mr. Christopher Chope: Will the Minister give way?
Mr. Timms: I want to make a little progress.
Let me emphasise that there is no predetermined list of post offices that will close. No arithmetical formula is being applied to determine the number of closures in an area. Closures will be determined by the present density of offices in close proximity to each other, by current and future business volumes, by the preferences of individual proprietors—a critical consideration—and by the public consultation process that will take on every proposal.
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In some cases it might be concluded that, although a sub-postmaster has said that he wants to close a post office, that is not the best option given the position and prospects of neighbouring offices. If he still wants to close the business, it will need to be on the basis of a commercial sale of the business. One consequence of the programme should be a revival of the commercial market for sub-post offices, which has declined over the past few years.
Mr. Chope: Does that mean that the Government are reneging on their promise positively to support the role of post offices as Government general practitioners?
Mr. Timms: No, certainly not. As I said, we accepted all 24 recommendations in the PIU report and I am making an announcement today on the "Your Guide" project. Perhaps that is what the hon. Gentleman has in mind. He may know that the project was piloted in Leicestershire and that an evaluation of it was published at the end of the summer. It concluded that "Your Guide" was popular but did not have a big impact on either increasing the number of customers using sub-post offices or generating additional income for post offices. As the cost of rolling out the initiative across the country did not represent good value for money for the Departments that would use the service, we have decided not to proceed with national implementation of "Your Guide".
The pilot highlighted the potential for Departments to deliver services through post offices in future. There is also significant commercial interest in placing kiosks in post offices. For example, a commercial service based on kiosks in retail outlets, including in some sub-post offices, is expected to be piloted in Cornwall from next year. So we can expect kiosks to appear in sub-post offices.
Mr. Andrew Robathan: The Minister may not know that "Your Guide" was piloted in my constituency among others. The big complaint was that there was no publicity. People went into the post office and there it was, which was great, but there was no publicity elsewhere. People will go to the job centre down the road rather than to "Your Guide" unless they are pointed in that direction.
Mr. Timms: It is my impression that the project was well known in the areas of Leicestershire where the pilot was carried out. It was certainly well liked by those who were asked about it. Unfortunately, it did not meet the criteria in terms of increasing the number of people using post offices and providing good value for money for Departments. However, there will be commercial developments in the near future along the lines that I described.
Mrs. Betty Williams: I recognise the case that my hon. Friend makes, but can he assure me that he will look into the complaints that sub-postmasters in my constituency have made to me about the complicated process and the long time that it takes to open a post office card account?
Mr. Timms: I am aware of concerns about that. Card accounts will be available from the beginning of the new

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financial year when automated credit transfer is introduced. We have made it clear all along that people will be able to obtain their money in cash at a post office through universal banking services. They will be able to do that either with a basic bank account provided by one of the high street banks, which allows their money to be accessible at a post office, or with the post office card account. There are a number of advantages to the basic accounts operated by the banks. For example, cash can be obtained from an automated teller machine as well as at a post office. In addition, basic bank accounts will support standing orders and direct debits. However, despite the advantages of a basic bank account, those people who have decided that they want a post office card account will be able to obtain one, which I think is what concerns my hon. Friend. There will be no barrier to that. People will simply need to ring the helpline and the process will begin.
I understand sub-postmasters' assertion that the post office card account is a more attractive proposition for them because it ties people into the post office. Many people will wish to be in that position. For others, however, there will be advantages in having a basic bank account as well, and we want people to be aware of those benefits—
Several hon. Members: rose—
Mr. Timms: I think I need to make a little more progress.
The compensation payable will be based on terms agreed between the Post Office and the National Federation of Sub-Postmasters. Outgoing sub-postmasters will receive a payment equivalent to 28 months of their remuneration, based on the best annual remuneration for a financial year since 1999. The scheme is based on longstanding arrangements through the joint discretionary fund. Payments are subject to certain conditions, such as a requirement that sub-postmasters at closing branches offer active support for the migration of customers to surrounding branches that remain open.
As a result of declining profitability, there has been a lack of investment in a large proportion of urban sub-post offices for many years. In parallel with the closures, the standards of facilities and service will need to be improved at many of the remaining post offices. Urban sub-postmasters who expect significantly more customers as a result of closures elsewhere will have the opportunity to apply for a grant on the basis of matched funding provided by the sub-postmaster. So the £30 million grant that the Government are making available should be matched by a broadly equivalent level of private sector investment.
Mr. Jim Cunningham: Can my hon. Friend clarify how the post office card will work? Will it be passed across the counter or put into a hole in the wall?
Mr. Timms: I am happy to explain that to my hon. Friend. Personal identification number pads—PIN pads—are appearing at post office counters all over the country. People will place their card in the reader, type in their PIN and have access to their cash.
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Grants of up to £10,000 will be available on a matched-funding basis for new counter positions and equipment, to support open-plan or combined post office and retail positions and to provide new fascias, adaptations for disabled customers and other refurbishments to improve the branch.
Mr. Alan Meale: The Minister mentioned earlier a mechanism for consultation. Will he ask Consignia to guarantee that local authorities will be fully consulted before any closure?
Mr. Timms: My hon. Friend makes an important point, and I can give him that assurance.
The PIU report concluded that our network of post offices had not kept pace with change or, until now, exploited its highly trusted status as a provider of financial services. It was losing business. Sub-postmasters are business people, and they have found it increasingly difficult to make a living. They have been leaving the network in increasing numbers. If we do nothing, very damaging gaps will open up in the network.
The programme is therefore vital to ensure that the Post Office can maintain an effective network, offer attractive prospects to sub-postmasters and improve the service for customers. We need to take this opportunity to set urban post offices firmly on the path towards sustained viability, which is the key to enabling them to offer improved services for their customers from better, more convenient and more accessible locations.
I commend the order to the House.
Madam Deputy Speaker (sylvia Heal): I am very conscious of the time limit on this debate and of the number of Members who hope to catch my eye. May I remind hon. Members that this debate is about urban post offices and the level of compensation available to them?
7.1 pm
Mr. Andrew Robathan: May I say how sorry I am that the Secretary of State is not here to support her Minister? This is a very important measure, and many people are concerned about it. The right hon. Lady's absence displays a certain discourtesy to her Minister and to the House. By contrast, the Minister was typically courteous and generous in giving way to so many Members during the debate. I hope that he will not think me unkind because I have some remarks about Government policy on the Post Office that he may not welcome.
The supposed main thrust of the Government's policy and the urban post office reinvention programme is to give the Post Office a sustainable future, as the Minister has just said, and it will be judged on that. Everybody in the House wants the network to survive and prosper. We all know the special place that post offices have in urban and rural communities. In villages throughout the country, in constituencies such as mine in Leicestershire and in deprived urban areas, the post office is often the only centre for meeting people and is valued as much for its community service as for its commercial activities.

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Today Age Concern wrote to me and, I suspect, to everybody else, saying that
"for many older people the local Post Office is an important lifeline—providing a point of access to pensions and benefits as well as other financial services, a local general store, and a source of information and advice."
Each week there are still more than 15 million benefit transactions in post offices, which account for 40 per cent. of Post Office Ltd.'s income, although in many deprived urban areas the proportion is much greater.
Post Office Ltd., however, is trading at a loss; it is insolvent. The Minister failed to mention that. Consignia lost £1.1 billion last year, which is certainly an unsustainable position.
Mr. Timms: I am sorry to interrupt the hon. Gentleman so early in his speech, but I need to correct the point that he just made. The Post Office is not insolvent. It is losing money, but being insolvent is a quite different matter.
Mr. Robathan: If the Post Office were a private company it would be insolvent.
Mr. Timms: indicated dissent.
Mr. Robathan: I think that it would. We could argue the toss at length.
This is a very real crisis, and if Post Office Ltd. and Consignia were not supported by the Government, they would be in danger of going bankrupt. In the Minister's judgment, is it likely that the Post Office, in part or in whole, would call in the receivers if it were not backed by Government money? Could the Government allow that? What is their attitude to the current situation?
Why have Consignia and the post office network reached a position where we have to authorise the spending of £210 million of taxpayers' money today? The Government used to take a dividend from Post Office activities and the Post Office used to make a profit. Of course there were growing problems, and we sympathise with the Government about that. The previous Conservative Government recognised the problems nearly 10 years ago, but the Post Office still made a profit for the taxpayer.
Some 28 months ago the PIU reported, and we are implementing part of that report today, but why has it taken the Government so long to get their act together? The website of the Office of the Deputy Prime Minister says, under the heading "Fund for Deprived Urban Post Offices", that the Government announced in the urban White Paper in November 2000 that they would establish a £5 million a year fund to sustain and improve post offices in deprived urban areas. It continues:
"It is expected that the fund will become operational in Summer 2002."
Nearly two years on, the Minister tells us that part of the money that we are talking about today is that fund for deprived urban post offices, but when will it become operational? The temperature this morning told us all that summer is long past. Why has there been a delay?
The Minister has pointed out that the Office of the Deputy Prime Minister will have responsibility for introducing the fund. The website says:
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"Further details when available will be posted on this page."
I printed off that quote just over an hour ago. Obviously the Office of the Deputy Prime Minister needs to update its website, especially as I understand that it is meant to be about modernising e-Government. It would be funny if it were not so sad. I suggest that we may judge the likely success of the Deputy Prime Minister's measures by that out-of-date website. Page 5 of the PIU report says:
"Now is the time to modernise",
but that was 28 months ago.
Mr. John Redwood: Does my hon. Friend think, as I do, that the decision to expend an awful lot of money on converting the Post Office, a profitable, successful and much-loved public service, into Consignia, with all the costs that that entailed, showed that third way economics do not work? Only third way economics could turn a successful, profitable public service into a loss-making corporation in need of subsidy, and which is about to close many of its main outlets.
Mr. Robathan: I am grateful to my right hon. Friend. We all recognise that Consignia is a totally ludicrous name. Allan Leighton must recognise that because I believe that the name will he changed back to Royal Mail on 4 November. This is one thing for which Labour Members cannot blame us.
The problem is not just endless delay and prevarication. Let us look at the PIU report's proposals for a sustainable future for the post office network. Some £30 million of today's money is being set aside for additional investment, which is only one sixth of the amount being spent on closures. One proposal in the report was for access to e-Government. That is a good idea, applauded by all, and for that reason, a year ago, as the Minister said, "Your Guide" was piloted in Leicestershire and elsewhere. It was welcomed and seemed to be a success, although it was insufficiently publicised. Now, however, the Minister tells us that "Your Guide" has been put in the bin. I understand that other Departments, in a classic example of Labour's joined-up government, refused to sign up to the scheme because they think that it would cost too much. That is a great pity, and I think that postmasters who saw "Your Guide" will agree.
What about the proposal for e-commerce? Has there been any action to encourage post offices to become distribution centres or pick-up points for goods purchased over the internet? The PIU report commented:
"The Post Office has been slow to react to this new opportunity".
Has there been an improvement?
What about the famed universal bank and, in particular, the card account? That is to be in place by April 2003. The clock is ticking, with six months to go. Everyone I talk to says that the Government are unhappy about allowing post office customers to apply for a card account, yet some 15 per cent. of benefit claimants currently do not have a bank account. The Government's unhappiness is caused by the fact that not enough money will be saved by introducing the account. That fact lies behind the card account customer journey,

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a copy of which I have here. After stage 1, a customer who has a bank account supplies the details and no further customer action is required. In an effort to browbeat claimants who do not have an account into opening one, there are 20 steps before the journey says:
"Customer starts to use account—withdrawing money on a regular basis."
Nothing could be much more complicated than that.
Moreover, I understand that the chief executive of the Post Office has been told by the Department for Work and Pensions that postmasters are not allowed to put up posters telling claimants that they can still get benefits in cash from the post office—all because the DWP does not want to pay the small extra cost. For that reason, too, there is a presumed limit of 3 million card accounts. In today's letter, Age Concern told us that
"many older people expressed a desire to continue to collect pensions and benefits over Post Office counters."
Mr. Mark Francois: May I amplify my hon. Friend's remarks by reporting that quite a few senior citizens in my constituency have made representations to me, both in writing and during my surgeries, saying that they are very anxious about the new arrangements, which they feel have not been properly explained? They are not at all keen to have to use them—they want to be able to collect their pension as they always have, and they bitterly resent the Government's preventing them from doing so.
Mr. Robathan: I agree entirely. That is an example of Government bullying: they are forcing people to do something they do not want to do in a typically nanny state way. At the heart of the issue of the card account is the conflict between the DWP, backed by the Treasury, and the DTI. Sadly for the post office network, the DTI is proving to be much the weaker Department.
Plenty of postmasters want to get out of the network, as the Minister said. Some 3,000 postmasters want to take the compensation package under the urban reinvention programme, which says something about morale. Last May, Allan Leighton said:
"People want to know, they want to know if they are in or they are out—what is my future".
There are plenty of takers, but the appalling uncertainty and prevarication surrounding the issue needs to be ended as soon as possible. Postwatch's annual report said:
"The slow progress is very disappointing. The sub-postmasters this year have become increasingly desperate as rumour fed rumour".
At last, we have today's debate, but it was on 3 January that a DTI announcement said:
"Post Office Ltd. will be embarking on a restructuring programme in the new year and where appropriate compensation will be made available for the sub-postmasters affected".
However, that referred to the new year past—not to the coming new year. How far has the restructuring programme gone? We heard no details from the Minister.
Mr. Peter Viggers: Does my hon. Friend recall the Prime Minister's welcome for the PIU report in June 2000:
"I welcome this report which the Government fully accepts."?
Does my hon. Friend share my anger about the fact that only during this debate, in response to a question, have we learned that the Government have reneged on one of the commitments in that report? Does he agree that the best way for the Government to proceed now would be to restate what they intend to do as a result of the PIU report, and to announce a timetable?
Mr. Robathan: I agree entirely. I do not remember the Prime Minister saying that, but it does not surprise me at all, given that he says so many things on which he reneges the following month—but we will not go into such matters.
Postwatch does not know how far the restructuring programme has gone and it is extremely concerned that, far from a sensible restructuring, it, customers and everyone else will be presented with a fait accompli—earlier, the hon. Members for Manchester, Central (Mr. Lloyd) and for Ilford, North (Linda Perham) expressed their concern about that. Postwatch will be told that a post office is to close and that it can comment, but it suspects that the Post Office will not listen to its comments, which are made on behalf of the public.
Postcomm's annual report is more concerned about lack of investment to achieve
"bigger, brighter, better offices on the scale envisaged by the PIU report".
Remaining sub-postmasters in the urban network believe that they will need to improve earnings by between 25 and 33 per cent. a year; otherwise, they will not be able to stay and make that matching investment in their businesses that the Minister talked about.
Mrs. Browning: Will my hon. Friend give way?
Mr. Robathan: Yes, but the Minister spoke for half an hour and I want others to have a chance to participate in the debate.
Mrs. Browning: There is a problem for the remaining sub-postmasters in urban areas who want to invest a large amount of capital. Is my hon. Friend as concerned as I am that the Government have yet to tell us their intentions regarding the Crown office network, which is centrally funded? When the Labour Government first entered office, their declared policy was to increase the number of Crown offices. Given that they are starting to close private businesses, is it not about time that they put the Crown offices into the private sector as well?
Mr. Robathan: My hon. Friend reveals the lack of coherence in the Government's approach towards the Post Office.
Postwatch has also highlighted the fear that urban reinvention will benefit only the multiples and that it will serve to squeeze out small business men. If so, what guarantee can the Government give that multiples, such as supermarkets, will not then reorganise and close the post office branch in the multiple—as happened in the

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Ripon Co-op in March? Last week, the National Federation of Sub-Postmasters conference passed a motion stating:
"This conference demands Her Majesty's Government take immediate action to avert the collapse of the nationwide network of post offices".
Is the federation scaremongering, or is a collapse likely?
I recall how, as a Parliamentary Private Secretary, one could sit in on meetings and know what Ministers' genuine thoughts were, even if one's own contributions were not always listened to. It was therefore with some concern that I learned that on 4 September, at a meeting of Cheddleton parish council, the hon. Member for Staffordshire, Moorlands (Charlotte Atkins), who was until recently a PPS at the DTI, said that
"The decision as to any individual post office staying open or closing was purely a commercial decision by the owner of the business",
and that
"Government money would not be used to support uneconomic offices".
If true, that tends to undermine everything the Government are saying about post offices in urban deprived areas—and, indeed, the rural network. Furthermore, it seriously undermines any lingering faith that people involved in the Post Office might have in anything connected with Government policy.
Mr. Roy Beggs: Does the hon. Gentleman accept that the National Federation of Sub-Postmasters in Northern Ireland is extremely concerned about what they regard as unfair competition being created by Government agencies promoting high street bank accounts? Does he agree that the time has come for a review of the way in which Government agencies and Departments in Northern Ireland and elsewhere have promoted universal banking to benefit claimants?
Mr. Robathan: I agree entirely. That illustrates the lack of a coherent approach and an absence of understanding of what—in so-called joined-up government—all Departments could do to help the Post Office, if they wanted to.
Postcomm, the regulator, Postwatch, the protector of consumers and customers of the Post Office, the Post Office and Consignia themselves, the National Federation of Sub-Postmasters and the British public are all deeply concerned about Government policy for the Post Office. The order is about shrinking the urban network, but the crisis will remain because of the lack of a serious and coherent Government policy that would make the network sustainable. There is a crisis in the Post Office which deepens with each day that passes. Allan Leighton understands that, and it strikes me that he might be the best chance for the future of the Post Office, but if the crisis becomes a disaster, there is no doubt where the fault lies—at the feet of the Government.
We condemn the Government's delay and dithering for the past five years. It has led to uncertainty, confusion and distress among employees and sub-postmasters. The DTI has not persuaded other parts of the Government of the merits of its plans. The inadequate package before the House today does not
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include the measures necessary to give the Post Office a sustainable future, and for that reason we will oppose the motion.
7.18 pm
Mr. David Lepper: Unlike the hon. Member for Blaby (Mr. Robathan) I shall support the package before us this evening, even though I have some concerns about it.
Everyone present in the Chamber tonight values the sub-post offices. They are, as the Post Office's slogan says,
"An Essential Part of Everyday Life".
They are a service as well as a business. I recently spent a morning in one of my local sub-post offices. The experience convinced me of the extent to which the success of those businesses is based on sub-postmasters' knowledge of their customers, which they build up over the years. Sub-post offices are a focal point of community life, especially after the wholesale closure of so many branch banks in urban areas. I think that we would all endorse the description given by Commissioner Monti in his letter to the Government about the package. He writes:
"Besides being more physically accessible by those living in deprived and remote areas, Post Office Limited—unlike most banks—is widely trusted by those un-banked benefit recipients targeted by"
the universal banking system.
The network of sub-post offices is a national asset, and we should value it properly. But it has been dogged, for months and years, even before 1997. by rumour and uncertainty, which affects sub-postmasters—our constituents—and their customers, who are also our constituents. The questions have come thick and fast. "Will I still be able to get cash over the counter?" We have dealt with that issue at last, quite rightly, by guaranteeing that people will get cash over the counter, but I have some questions about the method by which that will be done. Sub-postmasters are asking about the way in which the Post Office has approached consultation with them in the past few months. I am not sure how helpful the Post Office's approach has been. For instance, sub-postmasters have been asked to accept compensation and go or, if they prefer, invest in their businesses or consider taking over a business that may be closing. However, sub-postmasters in my constituency have recently asked me, for instance, how the compensation package will operate in relation to tax. There has been no clarity on that question whatever.
Will the sums available to invest take local factors into account, as £10,000 will probably go a lot further in some parts of the country than in Brighton and Hove, part of which I represent? Many of those sub-post offices are in small buildings, which are constrained because they are of Victorian or Edwardian design and are in the city centre—modernisation may need a lot more investment than £10,000, even when matched by the sub-postmaster. What will happen if someone transfers from one sub-post office to another? Will they be able, for instance, to take their lottery point with them if they move from one premises to another? There is a lack of

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clarity about many basic business questions that the sub-postmasters must consider when responding to the Post Office consultation that began in April.
There is public uncertainty as well. People want to know the future of their own sub-post office. Tonight's package will at least move us out of that uncertainty because we now have agreement on the funding that is needed. I am glad that the decisions to be made when consultation is completed will take into account issues such as the social make-up of the area, its age profile, geography, the availability of public transport and so on. However, I wonder whether the proposed one-month period of consultation will be long enough, and I am seeking guarantees about the way in which it will be publicised in the locality. It is not enough just to know who will be written to formally—we need to know about publicity on consultation as well.
A vital part of the Post Office's role will be the universal banking system. There is genuine concern about the failure to realise the full potential of the post office card scheme, which is a way of ensuring that cash can be provided over the counter and, as Age Concern says, could be a great budgeting aid, as people will not need to draw out all their pension or benefit in one go. Why, however, are many obstacles being placed in the way of sub-postmasters? Yes, it is good business for them, if they can attract customers, but why are obstacles preventing them from publicising and encouraging the take-up of the post card scheme? They have been told in the document issued by the Post Office that they must not advise their customers on what method of banking to use. There is also a complicated system in which customers must phone a helpline for a telephone consultation, then receive a personal introduction document or whatever before they can open an account. We are talking about many elderly customers who may be hard of hearing or may not be good at detailed telephone conservations of that type. Why cannot sub-postmasters undertake the business of signing people up to an account over the counter?
Most sub-postmasters are franchisees. At the weekend, one of my sub-postmasters asked me to imagine McDonald's, a franchised business, launching a new range, then forbidding people in their franchises to publicise it. There is some justice in that description of the way in which the Post Office is tying the hands of sub-postmasters, preventing them from fully realising a system which, as I have said, could be of real benefit to many customers in deprived parts of the country who, for whatever reason, do not have bank accounts. It will help them in their budgeting and, indeed, ensure the security of their money.
The PIU report argued that the Post Office should develop a role for post offices as Government general practitioners. We have heard tonight that the "Your Guide" scheme is not to be pursued in its piloted form, but I believe that the Minister said that the Government still pay allegiance to the notion of the Post Office as their general practitioner. I am pleased about that and look forward to hearing more about the way in which that role will develop; by developing that role we will continue to ensure that the Post Office remains an essential part of our everyday life.
7.26 pm
Dr. Vincent Cable: The Minister got off to a good start by opening with the issue on which there is broad consensus—the PIU report, which includes the urban reinvention programme and the restructuring to which we have all, in different ways, signed up. He then rather recklessly called in aid the National Federation of Sub-Postmasters, citing the paper that it distributed to us all for this evening's debate. At the risk of detaining the House, I remind him that the NFSP said in its introductory sentences that over the past two years
"sub post offices have continued to close at an alarming rate, morale throughout the network is at an all-time low and pay negotiations have been suspended over a serious dispute with the proposed new contract from Post Office Limited."
It says specifically of the Government's role:
"Of the 24 recommendations made by the … PIU, very few have been implemented: funding has not been delivered despite being promised; the timescales for implementation of recommendations have slipped further; the development of new roles for subpostmasters has ground to a halt; and there is widespread stagnation and inactivity across a wide range of the recommendations."
This afternoon's written answer, which the Minister confirmed, showed that the NFSP was being rather optimistic, as we have now lost the rollout of "Your Guide", which was an essential part of the process recommended by the PIU. The hon. Member for Brighton, Pavilion (Mr. Lepper) held out some hope that the GP concept has survived, but it is difficult to see how it can do so, as "Your Guide" was at its heart.
The Government said that "Your Guide" is not cost-effective or delivering services, but I do not know whether the Minister knows that the Post Office itself has produced a pamphlet which says on the front,
"Your Guide: Something for everyone … it's brilliant".
It goes on to say that it is "a life saver" which
"opens up a whole new world",
and says—
"You don't know what you're missing"
in
"a chest of hidden treasures".
Clearly, that is a promotional document, but the chairman of the Post Office, no less, claimed that the success of the project
"is vital to the future of the network of Post Office branches".
He went on to describe how, in relation to Government services, the pilot project was producing new jobs—people were finding jobs and receiving benefit entitlements. I appreciate that a former Treasury Minister may not regard helping people to get benefit entitlements as an achievement but, none the less, the Post Office's evidence suggests that the scheme was highly successful on its own terms. Someone's head should therefore roll; the Minister responsible has gone off to the Cabinet Office. The Secretary of State, who was so committed to the project that the pilot took place in her own constituency, has not turned up, and the Minister for E-Commerce and Competitiveness is being asked to take the rap. It is a fiasco.
I come specifically to the sums of money on which we have been asked to vote. Let us remind ourselves that, of the £210 million specifically for urban reinvention, £180

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million is specifically for compensation and redundancy. Only £30 million is for new investment, and there is a maximum of £10,000 per post office. If one wants to go further, there is no funding to do so. More importantly—the Minister carefully avoided mentioning this—the sub-postmaster must come up with match funding. How will any sub-postmaster raise a loan against a falling revenue stream in order to match the fund's £10,000 commitment? That simply will not happen. This urban reinvention will not take place. Will the Minister tell us in his reply what has already happened to the—I think—£30 million that has been pledged to inner-city deprived areas? As I understand it, very little of that money—if any—has yet been spent. That is the track record of urban reinvention in inner-city areas.
In many ways, the problem is even worse because the assumption on which the calculations are made is that a third of urban post offices will close. I have a letter from a sub-postmaster who speaks on behalf of Manchester sub-postmasters telling me that 60 per cent. of Manchester sub-post offices are planning to close. We are therefore facing a third closing with the Government's compensation package, a third continuing without compensation but not making money, and a third carrying the weight of the business.
Mr. Michael Connarty: I share the hon. Gentleman's general concern about people being able to reinvest, but I know of an enterprising sub-postmaster who has linked up with one of the minor supermarket chains and reinvented his store. It has now become a major focus for the community in which I live. He has either found the money from the bank, with the backing of the chain, or has found it directly from the chain with which he is partnered.
Dr. Cable: The hon. Gentleman describes an interesting trend, which I have seen. He is talking about post offices housed in Londis seven-11 stores. It is an interesting idea and if it works I shall be delighted for the people concerned, but he may not be aware that the National Association of Convenience Stores has said that the arrangement is very unsatisfactory. Many such stores are trying out the idea, but they have no commitment to the customers as postmasters did, and there have already been several examples in both convenience stores and supermarkets of post offices closing with little consultation. The idea is interesting, but the evidence so far is that it is not a solution to the problem.
The reason that that is not a solution to the problem—this goes to the heart of the business and answers the question that we have been asking ever since the Government announced automated credit transfer—is that we do not know where the £400 million income that post offices will lose as a result of ACT will come from. We now know that it will not be from "Your Guide". It was hoped that they would at least get something from the universal banking provisions and particularly the post office card accounts.
The Conservative spokesman correctly touched on the mounting evidence that Departments other than the Department of Trade and Industry, especially the Department for Work and Pensions, are, with Treasury backing, actively discouraging applicants from using the
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post office card accounts. They are actively sabotaging the work of the Minister's Department. This is a very serious matter.
I have here a pack that is being issued to people who want tax credits. It is very complicated; I honestly do not know how people who have problems of financial exclusion can cope with this plastic pack which contains many documents. On the page on which it deals with payments, it says that if somebody wants their credit to be paid into a bank, they must simply supply their sort code and account number. However, if they want a Post Office payment, they are advised to go to page 36 of the explanatory notes. I eventually found the explanatory notes and page 36 where it next instructed claimants to ring the helpline. We tried to do so but could not get an answer. That is the kind of maze of bureaucratic instruction that people are beginning to encounter if they try to use a post office card account.
If one wants a bank account, one just fills in a form. If one wants a post office card account, one has to be interviewed.
Matthew Green: Have my hon. Friend's constituents raised similar concerns to those raised with me about how during such interviews they feel pressurised not to take up the card account?
Dr. Cable: I have indeed; I have spoken to some people about the pressure that is being exerted. Hon. Members should prepare themselves to encounter this in their constituency surgeries. People are being told that if they go for a post office card account, the cash will arrive a month late. They lose a month's liquidity. I have discussed the matter with young women who have been split from their partners—this is even more disreputable—when talking to them about arrangements for the working families tax credit. They have been told that they are best to go through a bank otherwise the tax credit will be paid to their partners—losing all the benefits of the enfranchisement of women that the tax credits were supposed to create. Those are the kind of tricks that Department for Work and Pensions officials are getting up to—bullying people into giving up their opportunities to use the Post Office.
Mr. David Laws: Has my hon. Friend heard the complaints from sub-postmasters that I have heard in my constituency that it is staggering that even at this stage no information is being made available in accessible form either by the Government or the Post Office about how the card account will work? That reinforces the pressures that he is discussing.
Dr. Cable: Indeed; there is no proper explanation. The people who are promoting the migration are well informed of the benefits of using banks because they set them out. Draft material from the Department for Work and Pensions sets out in argued form why people should enjoy advantages by using a bank, but does not explain—the Minister did not either—that people on low incomes are subject to extremely high charges if, for example, they fall foul of standing order provisions. The presentation is entirely one-sided. All that the postmasters have been asking for is even-handed treatment. They are not asking for preference or protection. All they are saying is that the relative merits

247
of a post office account and a bank account should be dealt with even-handedly and that people should be given an equal opportunity to use one or the other.
On top of that—the Minister knows about this although he did not refer to it—there are serious problems concerning both groups of sub-post offices. First, there are the modified sub-post offices—larger units that are often staffed by ex-Post Office employees. Many are in an appalling financial position as a result of the type of contracts under which they operate, which often do not even cover their staff. I met a group of people representing modified sub-post offices in Yorkshire a couple of months ago. Their position is parlous. As the smaller units close with urban reinvention, such post offices are expected to carry the burden, but they are not in a position to do so.
The other group of sub-post offices, as the Minister should have acknowledged, is currently in the middle of a serious dispute over the terms of their contracts. The federation representing them has said that the entire reinvention programme is "hanging by a thread" owing to the lack of certainty over their contractual future. The position is very serious.
My final point concerns the mechanism used when post office closures occur. Several Labour Members have asked with an open mind for assurances. They have said that they accept that closures must occur but that they want to be assured that there is a proper appeal procedure and that local councillors and Members of Parliament will be consulted. That is fine, but let us look at the evidence put forward by the consumer protection body Postwatch. It has been clear from the beginning that it did not see a justification for 3,000 closures and that that was way in excess of what was required. It has however said that it will help with individual cases, judging the viability of particular post offices. It can only deal with three or four such cases at any time, not 3,000. It will be overwhelmed by the sheer volume of closures.
When such matters are dealt with properly and carefully, sensible decisions can be made. In the past few weeks, the Post Office has gone back on a closure at Child's Hill in London as a result of Postwatch intervention. If a closure programme is carried out gradually, carefully and slowly, it can be managed, and restructuring can take place, but the Government's scheme will bring about a disorderly collapse and cause a great deal of harm.
David Taylor: May I tell the hon. Gentleman how much I agree that the present Post Office management is highly unlikely to be able to handle efficiently the 3,000 closures envisaged? In the largest town in North-West Leicestershire, the largest post office, which was part of a superstore, collapsed about nine months ago, and has still not been reopened, despite its importance to the largest town in the
248
constituency. I do not know how the Post Office will be able to handle 3,000 closures, and I very much doubt that that will happen.
Dr. Cable: That is a helpful intervention. Within six to nine months, every hon. Member will have such anecdotes.
Dr. Rudi Vis: The hon. Gentleman referred to the sub-post office in Child's Hill, which is to be reopened, mainly because 1,000 letters were sent by residents to Postwatch, and Postwatch has been extremely helpful. However, 12 post offices in London are under threat, and they are all run by temporary sub-postmasters, none of whom will get a penny in compensation.
Dr. Cable: The hon. Gentleman has exposed a new type of problem, which I had not anticipated. Large numbers of post offices—those that fall outside the 3,000—will not be compensated, and many of them are in financial distress already.
To summarise, the Minister's initial commitment to the performance and innovation unit report was right, but what is happening is disastrously far from it. The central weakness in the Government's approach is their inability to give the postmasters any hope of finding alternative income streams. What is so utterly disreputable about it is that postmasters are in the middle of a battle between two Government Departments, one of which is simply concerned with saving money in the short term, without any regard to the wider financial or social implications, and the other, the hapless Department of Trade and Industry, which is carrying the can for it.
7.42 pm
Rachel Squire: I shall keep my remarks brief, as this is such a short debate and so many hon. Members want to come in. Many good points have been made so far, particularly by my hon. Friends.
Like many, I welcome additional money for local post offices, and efforts to improve the services available and increase the customer base, but I have two concerns. First, I have 25 local post offices in the hilly town of Dunfermline and my overall constituency of west Fife. Nine have been classified as urban; one of those nine is a main branch in the town centre, and of the remaining eight, a number are within a mile of that main branch office, yet they are vital centres in their communities—for instance, the branches in Abbeyview and Brucefield.
On the point made by my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper), will the Minister give a commitment that we will be able to have longer than a month for consultation, if that is desired and necessary to involve all members of the community, and that full consultation will take place, the level of local deprivation will be taken into account, and the community role of the local post office branch will be carefully considered, along with the circumstances of each locality?
The second issue, which I raise in connection with urban post offices, although it also affects rural ones, is the decline in counter payments. There are various reasons. One which particularly angers me is that those

249
who seek to pay their bills promptly and in cash at their local post office often pay more than they would if they paid through direct debit. I have raised with the Secretary of State the fact that private utility companies and others give discounts to those who pay by direct debit, but charge more to those who decide to keep paying in cash. I recently found out that Girobank has failed to reach an agreement with Fife council in respect of council tax payments, so people who pay their council tax at local post offices end up paying £1.15 more than the figure on their council tax bill.
Such charges, combined with the Government's drive to persuade people to open bank accounts, hits local post offices hard. Many of my constituents have managed on a budget all their lives by having cash in one hand, paying their bills straight away and seeing in the other hand what they have left to spend. Will the Minister take action to tackle the disadvantages experienced by those who still prefer to pay their bills in cash? Will he think again about replacing order books with complex procedures, unfamiliar smart cards and PIN numbers, which are not welcomed by many of my older constituents, who have never had and never wanted a bank account or a smart card?
Like many, I look forward to having detailed discussions with my local sub-postmasters and postmistresses in the months ahead. I take this opportunity to pay tribute to them for the vital service that they provide to our communities.
7.46 pm
Mr. Peter Lilley: As time for the debate is disgracefully short, I shall try to make just three points about this strangely named and very costly measure.
First, when the Government announced that it would be compulsory for pensioners and other vulnerable people to have their pensions and benefits paid into the bank rather than through the Post Office, they pretended that they could save taxpayers' money and still maintain a comprehensive network of sub-post offices. The measure demonstrates that they were wrong. They should have known that they would be wrong. As Secretary of State, I was advised that if we moved in the direction of making compulsory payments through the banks, that would lead to the collapse of the sub-post office network, unless we decided to subsidise it, in which case the subsidies would absorb most, if not all, of the savings that we hoped to make.
Although I have given them the opportunity, the Government have never denied that they received similar advice from their officials. They should have realised that they were faced with that dilemma, because post offices benefit in two ways from their contract to deliver benefits from the Department for Work and Pensions. They receive £400 million as payment, and they receive many millions of pounds of extra trade from people who enter their post offices and spend their benefits in them. The Government can therefore make good the loss of revenue from cancelling the contract only by paying out more than they are saving by withdrawing the £400 million.
My second point is that if the Government are reluctant to do that, as they clearly are, they are faced with the collapse of the sub-post office network. They
250
are trying to conceal that collapse not by reinventing the network, but by reinventing the English language. They have replaced the word "closure" with "reinvention". They propose to reinvent 3,000 post offices as fast food chains or estate agents' offices or by returning them to residential use. They intend to reinvent 3,000 sub-postmasters and sub-postmistresses into early retirement by paying them to give up their franchises. They are going to reinvent many thousands of people who work in those post offices by taking away their jobs and reinventing them into unemployment. That is what the Government's strange wording means, and we should have no truck with it.
Meanwhile, as well as closing 3,000 of the 8,000 urban post offices, according to the Postcomm survey, over the past 12 months rural post offices have been closing at three times the rate of urban post offices, and 74 per cent. of post offices which have closed over the past 12 months have been rural post offices.
The third point is that the Government are still a long, long way from closing the financial gap that they have opened up in the viability of the post office network. The Consignia document that was sent to us a year or so ago states that the gap is £500million. Consignia said that it could make good £100 million of that money by closing stores and reducing operating costs. Presumably, the Government's way of helping Consignia to achieve that £100 million saving is the paying out of up to £210 million in the early years. I do not understand their arithmetic; they talk about a figure of £10,000 for each post office, but the closure of 3,000 stores at a cost of £210 million is a cost of £70,000 each. If the amount is spread evenly among all 8,000 post offices, the total is £26,000 each. Will the Minister explain the bizarre arithmetic of the proposal? Anyway, at the end of the day, there is an ongoing saving of £100 million.
The Post Office said that the Government gateway, which has since been rechristened several times in Blairite fashion, was going to raise £80 million a year. We are now told that it does not raise anything and costs more than it saves or generates in income, and it has disappeared. We were told in press releases that the universal bank would cost the banks £180 million, so we hoped that the money would go into the sub-post office network. On closer inspection, it turns out that there is a five-year period and that the amount is £36 million a year. As the National Consumer Council points out, that is effectively a cost to bank users and a form of taxation without legislation. Anyway, £36 million a year is a small amount. The only other sum that the Post Office quantifies relates to its conversion into a total distribution system, whatever that means. That will generate all of £6 million a year in extra revenue.
Whence will the extra money come to fill the £500 million gap? Newspaper reports over the weekend or yesterday said that the Government were going to put £450 million into rural post offices. We are not discussing that issue today, but if the Minister has leaked the information to the press, we would at least expect him to tell the House whether there is any truth in the assertions and whether, as the newspapers reported, £150 million a year for three years is to come from the Government in taxpayers' money. Perhaps he no longer holds himself accountable to the House and we are to be informed of such issues only through nods and winks to the newspapers.

251
The truth is that the Government have foolishly entered into a policy that is not compatible with the objectives that they have set themselves. There will be either minimal savings or maximal closures, and certainly great distress and inconvenience to pensioners and vulnerable people in all our constituencies. That is why many thousands of people in my constituency have signed petitions urging the Government to reconsider this daft and damaging policy.
7.52 pm
Mrs. Louise Ellman: I want to express a number of concerns about the programme and to seek some reassurances from the Minister.
We are being asked to support a package that appears to involve spending about £210 million on what is, in effect, a closure programme. I am extremely concerned that the whole programme appears to be led by the aim of compensating those running sub-post offices for loss of business rather than that of supporting the business of the sub-post offices in continuing to meet the needs of mainly excluded communities.
In my constituency, a large number of sub-post offices—some 23 of them—are at risk. I was reassured by the Minister's answer to my earlier question, in which he stated that an additional £15 million would be available to support those post offices. Before voting in support of the motion, however, I should like to have more information about that £15 million and about the £30 million that has already been mentioned.
I accept that something must be done and that the situation that we face has not arisen in the past few years but is the product of years of neglect by those who were in control in the past. Nevertheless, those of us who represent deprived communities are acutely aware of the impact that the closure of post offices and sub-post offices would have on our already suffering populations. Post offices in deprived urban areas are as important as those in rural areas. They are often a lifeline to the poor and excluded, and provide services not only in terms of essential benefits, but by assisting people in paying bills, getting information, obtaining important forms, securing licences, conducting money transfers and many other important activities. The importance of post offices in deprived urban areas goes beyond that and often relates to the businesses alongside them. Such businesses will not necessarily be located in the same building. The livelihood of essential retail businesses that are situated near post offices often depends on people going to post offices and spending their money nearby.
I hope that the Government will ensure that the future of our sub-post offices is seen in the context of dealing with social exclusion. Will the Minister again give me a clear assurance that the future of our post offices and sub-post offices will be seen in terms of providing essential services and important issues of social exclusion?
I am also concerned about the consultation process and the role of Postwatch, which covers extremely wide areas. I was extremely concerned to discover that Postwatch's northern sector includes areas as diverse as Carlisle, Newcastle, Sheffield, Lincoln, Preston,
252
Liverpool and Manchester. Many millions of consumers are represented in that area, and I should like an assurance that Postwatch will be able to conduct itself so as to take heed of the views of people in those areas. I should also like an assurance that, when the future of individual post offices and sub-post offices is considered, the Government will ensure that a proper consultation is carried out and that no given number of offices will be set down for closure irrespective of circumstances.
In short, I recognise that the Government face a very difficult problem and that something has to be done, but I want assurances that the issue of deprived communities such as mine in central Liverpool will be given full attention and that the programme will be led not by compensating people who wish to leave the business, but by the need to ensure continuation of services for those who are in need.
7.56 pm
Mr. Richard Page: In this world of Labour spin, it will surprise neither the House nor the Minister to find that the current Department of Trade and Industry website makes the remarkable claim that the Government aim to ensure that the
"nationwide network of post office counters can continue to flourish".
Why is that network not flourishing and why are record closures occurring? The answer is the Government's staggeringly inept performance in introducing automated credit transfers without a parallel programme to provide revenue and support to our sub-post offices. After the consequences have finally sunk in for the Government and the Department, they have been running around like headless chickens trying to find means to prop up the sub-post office network. The answer is there in the shape of the universal bank, but it is still not up and running and I grave doubts about whether it will be in time, before the guillotine of the ACT falls.
The Government calculated that there would be 3 million post office card accounts, but 16 million people go into post offices every week. That implies that there will be a reduction of 13 million people, but what will happen as a result? The revenue of sub-post offices will fall and they will pack up. No wonder half of them want to get out of the business—and it is this Government's fault.
7.58 pm
Mr. Timms: With the leave of the House, Madam Deputy Speaker. We have had an interesting debate. I am grateful to the hon. Member for Blaby (Mr. Robathan) for his kind words at the beginning of his speech and for his apology about disagreeing with some of the points that I made. I was puzzled by his conclusion, however, as he said that he regretted that there had been delay and he wanted uncertainty to end,

253
but he also told us that he would lead Opposition Members in voting against the measure that will ensure precisely the certainty for which he called. If he reconsiders the briefing of the National Federation of Sub-Postmasters, he will see that the last thing it wants is the blocking of the compensation that he urged his hon. Friends to support.
Mr. Robathan: rose—
Mr. Timms: Given the short time available, I should like to continue.
The hon. Gentleman complained about inadequate publicity for "Your Guide". I am grateful to the hon. Member for Twickenham (Dr. Cable) for drawing hon. Members' attention to the good publicity for "Your Guide" that the Post Office used. The post office in Leicestershire used in-store marketing, articles in the local press and leafleting. The matter was also well covered on local radio. However, the conclusions were those that I set out.
The hon. Member for Blaby made a point that it is important to correct. He suggested that there would be a limit of 3 million post office card accounts. That is not the case; I assure him that there is no such limit. However, I share his confidence in Allan Leighton as chairman of the Post Office and in the vigour with which the organisation is pursuing its bid to return to profitability.
My hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) made some important points. I want to stress that I agree with him and with my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) about the important social role of urban sub-post offices. That is why we are supporting a careful, planned programme of change.
My hon. Friend the Member for Brighton, Pavilion, however, asked why it could not be left to sub-postmasters to persuade people to take up post office card accounts. Many people who do not currently have bank accounts, for the reasons that my hon. Friend the Member for Dunfermline, West (Rachel Squire) outlined, would be better off if they did, so that, for example, they could pay bills by direct debit. That may not be the sub-postmaster's calculation. It is therefore important that people have access to advice about their options—
It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 16.
The House divided: Ayes 271, Noes 170.

Division No. 320]

[8:01 pm

AYES

Abbott, Ms Diane

Barnes, Harry

Adams, Irene (Paisley N)

Beard, Nigel

Ainsworth, Bob (Cov'try NE)

Beckett, rh Margaret

Allen, Graham

Begg, Miss Anne

Anderson, Janet (Rossendale & Darwen)

Beggs, Roy (E Antrim)

Benn, Hilary

Armstrong, rh Ms Hilary

Bennett, Andrew

Atherton, Ms Candy

Benton, Joe (Bootle)

Atkins, Charlotte

Berry, Roger

Austin, John

Blackman, Liz

Bailey, Adrian

Blears, Ms Hazel

Banks, Tony

Boateng, rh Paul

254

Bradley, Peter (The Wrekin)

Francis, Dr. Hywel

Bradley, rh Keith (Withington)

Galloway, George

Brennan, Kevin

Gapes, Mike (Ilford S)

Brown, rh Nicholas (Newcastle E Wallsend)

George, rh Bruce (Walsall S)

Gerrard, Neil

Brown, Russell (Dumfries)

Gibson, Dr. Ian

Browne, Desmond

Gilroy, Linda

Bryant, Chris

Goggins, Paul

Buck, Ms Karen

Griffiths, Win (Bridgend)

Burgon, Colin

Griffiths, Nigel (Edinburgh S)

Burnham, Andy

Grogan, John

Burnside, David

Hall, Mike (Weaver Vale)

Cairns, David

Hamilton, David (Midlothian)

Campbell, Ronnie (Blyth V)

Hanson, David

Campbell, Mrs Anne (C'bridge)

Harris, Tom (Glasgow Cathcart)

Campbell, Alan (Tynemouth)

Healey, John

Caplin, Ivor

Henderson, Ivan (Harwich)

Casale, Roger

Henderson, Doug (Newcastle N)

Caton, Martin

Hendrick, Mark

Cawsey, Ian (Brigg)

Hepburn, Stephen

Challen, Colin

Heppell, John

Chapman, Ben (Wirral S)

Hermon, Lady

Clapham, Michael

Hesford, Stephen

Clark, Paul (Gillingham)

Heyes, David

Clark, Mrs Helen (Peterborough)

Hill, Keith (Streatham)

Clarke, Tony (Northampton S)

Hodge, Margaret

Clelland, David

Hood, Jimmy (Clydesdale)

Coaker, Vernon

Hope, Phil (Corby)

Coffey, Ms Ann

Hopkins, Kelvin

Coleman, lain

Howarth, George (Knowsley N & Sefton E)

Connarty, Michael

Cook, rh Robin (Livingston)

Howells, Dr. Kim

Cox, Tom (Tooting)

Hoyle, Lindsay

Cranston, Ross

Hughes, Kevin (Doncaster N)

Crausby, David

Hughes, Beverley (Stretford & Urmston)

Cruddas, Jon

Cryer, Mrs Ann (Keighley)

Humble, Mrs Joan

Cryer, John (Hornchurch)

Hurst, Alan (Braintree)

Cummings, John

Iddon, Dr. Brian

Cunningham, rh Dr. Jack (Copeland)

Ingram, rh Adam

Jackson, Glenda (Hampstead & Highgate)

Cunningham, Jim (Cov'try S)

Cunningham, Tony (Workington)

Jenkins, Brian

Dalyell, Tam

Johnson, Miss Melanie (Welwyn Hatfield)

David, Wayne

Davies, rh Denzil (Llanelli)

Jones, Lynne (Selly Oak)

Dawson, Hilton

Jones, Martyn (Clwyd S)

Dean, Mrs Janet

Jones, Kevan (N Durham)

Denham, rh John

Keen, Alan (Feltham)

Dhanda, Parmjit

Keen, Ann (Brentford)

Dobbin, Jim (Heywood)

Kemp, Fraser

Dobson, rh Frank

Kidney, David

Donaldson, Jeffrey M.

Knight, Jim (S Dorset)

Donohoe, Brian H.

Ladyman, Dr. Stephen

Doran, Frank

Laxton, Bob (Derby N)

Dowd, Jim (Lewisham W)

Lazarowicz, Mark

Drew, David (Stroud)

Lepper, David

Drown, Ms Julia

Leslie, Christopher

Dunwoody, Gwyneth

Lewis, Ivan (Bury S)

Eagle, Angela (Wallasey)

Lewis, Terry (Worsley)

Eagle, Maria (L'pool Garston)

Lloyd, Tony (Manchester C)

Efford, Clive

Love, Andrew

Ellman, Mrs Louise

Lucas, Ian (Wrexham)

Etherington, Bill

Luke, lain (Dundee E)

Farrelly, Paul

MacDonald, Calum

Field, rh Frank (Birkenhead)

MacDougall, John

Fisher, Mark

MacShane, Denis

Fitzpatrick, Jim

Mahon, Mrs Alice

Flint Caroline

Mallaber, Judy

Flynn, Paul (Newport W)

Marris, Rob (Wolverh'ton SW)

Follett, Barbara

Marsden, Gordon (Blackpool S)

Foster, rh Derek

Marshall, Jim (Leicester S)

Foster, Michael (Worcester)

Martlew, Eric

Foster, Michael Jabez (Hastings & Rye)

McAvoy, Thomas

McCartney, rh Ian

Foulkes, rh George

McDonagh, Siobhain

255

McFall, John

Sutcliffe, Gerry

McGuire, Mrs Anne

Tami, Mark (Alyn)

McIsaac, Shona

Taylor, David (NW Leics)

McKenna, Rosemary

Thomas, Gareth (Clwyd W)

McWalter, Tony

Timms, Stephen

McWilliam, John

Tipping, Paddy

Meacher, rh Michael

Todd, Mark (S Derbyshire)

Meale, Alan (Mansfield)

Touhig, Don (Islwyn)

Michael, rh Alun

Trickett, Jon

Miliband, David

Truswell, Paul

Miller, Andrew

Turner, Dr. Desmond (Brighton & Kemptown)

Moffatt, Laura

Mole, Chris

Turner, Neil (Wigan)

Moonie, Dr. Lewis

Twigg, Stephen (Enfield)

Morgan, Julie

Twigg, Derek (Halton)

Morris, rh Estelle

Tynan, Bill (Hamilton S)

Mountford, Kali

Vaz, Keith (Leicester E)

Mudie, George

Vis, Dr. Rudi

Mullin, Chris

Walley, Ms Joan

Murphy, Denis (Wansbeck)

Ward, Claire

Murphy, rh Paul (Torfaen)

Wareing, Robert N.

Naysmith, Dr. Doug

Watson, Tom (W Bromwich E)

Norris, Dan (Wansdyke)

Watts, David

O'Brien, Bill (Normanton)

White, Brian

O'Hara, Edward

Whitehead, Dr. Alan

O'Neill, Martin

Williams, Betty (Conwy)

Osborne, Sandra (Ayr)

Winnick, David

Palmer, Dr. Nick

Winterton, Ms Rosie (Doncaster C)

Perham, Linda

Picking, Anne

Woolas, Phil

Pickthall, Colin

Wright, Anthony D. (Gt Yarmouth)

Pike, Peter (Burnley)

Plaskitt, James

Wright, David (Telford)

Pound, Stephen

Wyatt, Derek

Prescott, rh John

Primarolo, rh Dawn

Tellers for the Ayes:

Prosser, Gwyn

Mr. Nick Ainger and

Purchase, Ken

Mr. Jim Murphy

Purnell, James

Qninn Lawrie

NOES

Rammell, Bill

Ainsworth, Peter (E Surrey)

Rapson, Syd (Portsmouth N)

Allan, Richard

Raynsford, rh Nick

Amess, David

Reid, rh Dr. John (Hamilton N & Bellshill)

Atkinson, Peter (Hexham)

Atkinson, David (Bour'mth E)

Roche, Mrs Barbara

Bacon, Richard

Rooney, Terry

Barker, Gregory

Ross, Ernie (Dundee W)

Baron, John (Billericay)

Roy, Frank (Motherwell)

Bellingham, Henry

Ruane, Chris

Bercow, John

Ruddock, Joan

Beresford, Sir Paul

Russell, Ms Christine (City of Chester)

Blunt, Crispin

Boswell, Tim

Ryan, Joan (Enfield N)

Bottomley, Peter (Worthing W)

Salter, Martin

Sarwar, Mohammad

Bottomley, rh Virginia (SW Surrey)

Savidge, Malcolm

Sawford, Phil

Brady, Graham

Sheridan, Jim

Brazier, Julian

Simpson, Alan (Nottingham S)

Breed, Colin

Skinner, Dennis

Brooke, Mrs Annette L.

Smith, Llew (Blaenau Gwent)

Browning, Mrs Angela

Smith, Jacqui (Redditch)

Bruce, Malcolm

Smith, Geraldine (Morecambe Lunesdale)

Burnett, John

Burns, Simon

Smith, rh Andrew (Oxford E)

Burstow, Paul

Smyth, Rev. Martin (Belfast S)

Burt, Alistair

Southworth, Helen

Butterfill, John

Spellar, rh John

Cable, Dr. Vincent

Squire, Rachel

Calton, Mrs Patsy

Starkey, Dr. Phyllis

Cameron, David

Steinberg, Gerry

Campbell, rh Menzies (NE Fife)

Stewart, David (Inverness E Lochaber)

Cash, William

Stoate, Dr. Howard

Chapman, Sir Sydney (Chipping Barnet)

Stuart, Ms Gisela

256

Chope, Christopher

Mitchell, Andrew (Sutton Coldfield)

Clappison, James

Clifton-Brown, Geoffrey

Moore, Michael

Collins, Tim

Moss, Malcolm

Conway, Derek

Murrison, Dr. Andrew

Cormack, Sir Patrick

O'Brien, Stephen (Eddisbury)

Cotter, Brian

Oaten, Mark (Winchester)

Curry, rh David

Öpik, Lembit

Davies, Quentin (Grantham & Stamford)

Osborne, George (Tatton)

Ottaway, Richard

Davis, rh David (Haltemprice & Howden)

Page, Richard

Paterson, Owen

Djanogly, Jonathan

Pickles, Eric

Dodds, Nigel

Portillo, rh Michael

Doughty, Sue

Pugh, Dr. John

Duncan, Peter (Galloway)

Randall, John

Duncan Smith, rh lain

Redwood, rh John

Evans, Nigel

Rendel, David

Fabricant, Michael

Robathan, Andrew

Fallon, Michael

Robertson, Angus (Moray)

Field, Mark (Cities of London & Westminster)

Robertson, Hugh (Faversham & M-Kent)

Flight, Howard

Robinson, Iris (Strangford)

Forth, rh Eric

Robinson, Peter (Belfast E)

Foster, Don (Bath)

Rosindell, Andrew

Francois, Mark

Ruffley, David

Gale, Roger (N Thanet)

Russell, Bob (Colchester)

Garnier, Edward

Salmond, Alex

George, Andrew (St. Ives)

Sanders, Adrian

Gibb, Nick (Bognor Regis)

Selous, Andrew

Gidley, Sandra

Simmonds, Mark

Goodman, Paul

Simpson, Keith (M-Norfolk)

Gray, James (N Wilts)

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

Green, Matthew (Ludlow)

Green, Damian (Ashford)

Spicer, Sir Michael

Greenway, John

Spink, Bob (Castle Point)

Grieve, Dominic

Spring, Richard

Gummer, rh John

Steen, Anthony

Hague, rh William

Streeter, Gary

Hammond, Philip

Stunell, Andrew

Harvey, Nick

Swayne, Desmond

Hawkins, Nick

Swire, Hugo (E Devon)

Hayes, John (S Holland)

Tapsell, Sir Peter

Heald, Oliver

Taylor, John (Solihull)

Heathcoat-Amory, rh David

Taylor, Ian (Esher)

Hendry, Charles

Taylor, Dr. Richard (Wyre F)

Horam, John (Orpington)

Taylor, Sir Teddy

Howard, rh Michael

Taylor, Matthew (Truro)

Howarth, Gerald (Aldershot)

Thomas, Simon (Ceredigion)

Hughes, Simon (Southwark N)

Thurso, John

Tredinnick, David

Jack, rh Michael

Trend, Michael

Jenkin, Bernard

Turner, Andrew (Isle of Wight)

Key, Robert (Salisbury)

Tyler, Paul (N Cornwall)

Kirkbride, Miss Julie

Tyrie, Andrew

Laing, Mrs Eleanor

Viggers, Peter

Lamb, Norman

Waterson, Nigel

Lansley, Andrew

Watkinson, Angela

Laws, David (Yeovil)

Weir, Michael

Letwin, rh Oliver

Whittingdale, John

Lewis, Dr. Julian (New Forest E)

Wiggin, Bill

Wilkinson, John

Liddell-Grainger, Ian

Williams, Roger (Brecon)

Lidington, David

Williams, Hywel (Caernarfon)

Lilley, rh Peter

Willis, Phil

Llwyd, Elfyn

Wilshire, David

Loughton, Tim

Winterton, Sir Nicholas (Macclesfield)

Luff, Peter (M-Worcs)

MacKay, rh Andrew

Wishart, Pete

Maclean, rh David

Yeo, Tim (S Suffolk)

Malins, Humfrey

Young, rh Sir George

Marsden, Paul (Shrewsbury & Atcham)

Younger-Ross, Richard

Maude, rh Francis

Tellers for the Noes:

McIntosh, Miss Anne

Mr. Mark Hoban and

McLoughlin, Patrick

Mrs. Cheryl Gillan

Question accordingly agreed to.
Resolved,
That this House authorises the Secretary of State to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982 in respect of the urban post office reinvention programme, a sum exceeding £10 million to Post Office Limited.
Sir Patrick Cormack: On a point of order, Mr. Deputy Speaker. I wonder whether you are in a position to advise, guide or help us. We have had an extraordinary day, in which we have, quite rightly, had three important statements from the Government, which took a great deal of time. Mr. Speaker and your colleagues were correct to allow Members to take part in the questioning until 6 o'clock or thereafter. We have had subsequent business, and we are about to discuss a relatively uncontroversial but important measure and to give it its Third Reading. Then, we shall come to what we all supposed to be the main business of the day. It is quite clear that, because Mr. Speaker has imposed a 10-minute limit on all speeches in all debates, a great many Members want to take part in that debate. The matter affects all our constituencies in the greater part of the United Kingdom and rumour has it that about 60 Members have applied to Mr. Speaker to be called to speak. It does not take a mathematician of genius to work out that 10 minutes multiplied by 60 will be significantly longer than the hour or so that Back Benchers will have to speak in that debate. As this is such a crucial issue, affecting so many Members in all parts of England, and as it could equally well be debated on another day, would you, Sir, be in a position to invite the Leader of the House or his deputy to make a business statement so that we can defer consideration of the local government finance formula grant distribution until another day?
Mr. Peter Viggers: Further to that point of order, Mr. Deputy Speaker. A number of hon. Members on the Government side seem to find some cause for amusement in the point that my hon. Friend has raised. Many people outside the House will not understand our procedures, but it is right that they should understand them and their implications. The Order Paper reads:
"Public Trustee (Liability and Fees) Bill [Lords]: As amended in the Standing Committee, to be considered. Third Reading may also be taken. Debate may continue until 10.00 p.m."
It goes on to describe the Adjournment debate:
"Local Government Finance Formula Grant Distribution. Debate may continue until 10.00 p.m."
Those outside the House may not realise that the Report stage is the only opportunity that the House will have to consider the matters in the Public Trustee (Liability and Fees) Bill that were considered in Committee, apart from the Third Reading, which is also scheduled for today's Sitting. Those matters may well, therefore, take us until about 10 o'clock, and the very important Adjournment debate on local government finance could get no time at all. This is a serious matter, and I strongly urge you, Mr. Deputy Speaker, to support the point put to you by my hon. Friend.
Hon. Members: Hear, hear!
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Let me try to answer the points that have been raised. I
258
should point out that a ruling has already been given from the Chair earlier this afternoon in the light of these same considerations. The Chair has absolutely no power to require any Minister to come to the House; nor has it any power or control over the business that is put down for consideration this day. The Chair is aware of the difficulties that have arisen because a number of important matters came up earlier in the day. It is, however, a matter for the Government or the usual channels if there is to be any reconsideration of the order of business for the day.
Mr. Eric Forth: Further to that point of order, Mr. Deputy Speaker. You have a unique position in the House in your capacity as Chairman of Ways and Means, and you therefore have a unique influence on matters financial. You will, therefore, be aware that we are now in a doubly paradoxical position. Not only was it originally intended that this important matter of local government finance be dealt with on a debate for the Adjournment, which might have been bad enough, but we now see the prospect of that debate shrinking by the minute before our very eyes and, as my hon. Friend the Member for Gosport (Mr. Viggers) suggested, there is a danger that it might disappear altogether.
My appeal to you, Mr. Deputy Speaker is this. Bearing in mind what you have just said, would you be prepared, together with Mr. Speaker, to give serious consideration to having discussions with the Leader of the House to see whether you can reassure the House that you will protect us from this diminution of the ability of the House properly to discharge its responsibilities in the important matter of local government finance? Otherwise, where do we turn? Are we now completely at the mercy of the Government, who are manipulating the business so that this important matter cannot properly be considered? We appeal to you for your protection, Mr. Deputy Speaker.
Mr. Deputy Speaker: There is nothing that the Chair can do immediately about the situation with which we are faced as a result of the amount of business that is down for consideration by the House this day. Mr. Speaker is, of course, the protector of Back-Bench interests, and he will have observed what has happened today. Obviously, I cannot speak directly for him, but I imagine that, with his traditional concern for these matters, this issue might form part of the routine discussions in which he is frequently involved.
The President of the Council and Leader of the House of Commons (Mr. Robin Cook): Further to that point of order, Mr. Deputy Speaker. It may be for the convenience of the House if I say that we fully understand the importance that many hon. Members attach to the business that is to be taken later tonight. I also understand entirely that many Members from both sides of the House wish to contribute to the debate. It was necessary for the House to hear the statements that we heard this afternoon, and I do not think that any reasonable Member would object to those statements, which, necessarily, have taken time. We will look for another opportunity to extend the debate that will start tonight so that more Members may contribute to it.

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[HON. MEMBERS: "In the Chamber?"] Whether it will be in the Chamber or in Westminster Hall is a matter that we will have to consider.
Mr. Forth: Oh!
Mr. Cook: It is interesting that the right hon. Gentleman objects to that. Half of all the next 10 days are Opposition days. If the Opposition wish to substitute the debate for one of those days, I will consider that request sympathetically.
Mr. Forth: Further to that point of order, Mr. Deputy Speaker. I am not sure whether that was a point of order or a business statement. It sounded very like the latter to me, in which case it is subject to the usual procedures of the House.
Mr. Deputy Speaker: Order. I must make it plain that I took the Leader of the House's comments as being further to the point of order that is being considered.
Mr. Forth: I do genuinely appreciate what the Leader of the House has said and his sensitive appreciation of the difficulties that we face, but it would be helpful to Mr. Speaker and to you, Mr. Deputy Speaker—and you have generously indicated that you will take a lively interest in the issue—and to all of us if we could tease out of the Leader of the House whether he is prepared to consider proper time for a proper debate on this important financial matter on the Floor of the House and not to set a precedent by shoving the matter off to Westminster Hall where, with the best will in the world, it cannot be properly considered and given the weight that it would be given in the Chamber. I hope that the Leader of the House will not start using—I might even say abusing—Westminster Hall as some sort of cheap overflow for important business that has been squeezed by the Government.
Mr. Deputy Speaker: The continuing discussion of the matter is, of course, taking away from the time that will be available. There may still be an opportunity for the usual channels to have some communication while the House proceeds with the next item of business. The Chair is not able to do anything other than proceed with the business that is set down for discussion. I suggest that it would be as well to move on to that.
Mr. John Gummer: Further to that point of order, Mr. Deputy Speaker. I do not want to
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prolong this discussion, but when you consider this matter—as you have kindly said that you will—you might remember that in all the time that I was the Secretary of State dealing with these matters we always had a full day's debate on what was the annual discussion of them, not the fundamental change that we have before us tonight. I hope that you will not underestimate the importance of this debate.
Mr. Deputy Speaker: I cannot continue the discussion by means of points of order, especially as they are getting slightly wide of the issue. I understand the right hon. Gentleman's concern. Indeed, I understand the concern of the House, but I cannot unilaterally alter the business of the House in any way. I am a servant of the House and ensure simply that the business is conducted. Those points having been made—I am sure that Mr. Speaker has taken note of them—it would be best to proceed with the day's business.
Sir Nicholas Winterton: On a point of order, Mr. Deputy Speaker. It is a different point of order, although it is linked to the previous one. Can you help me and, I hope, the House? If the next item of business runs until 10 o'clock, the debate on local government finance will have no time at all. Does that mean that the House will have no opportunity to debate a matter of considerable importance to almost every hon. Member? I say that in the presence of the Leader of the House, for whom I have the utmost respect. He has sought to make the procedures of the House more relevant and transparent.
Mr. Deputy Speaker: I hope that I would always go out of my way to assist the hon. Gentleman, but I cannot comment on a hypothesis.
Mr. Adrian Sanders: Further to that point of order, Mr. Deputy Speaker. I wished to thank the Leader of the House on behalf of the Liberal Democrats for his comments. We have this debate every time that local government expenditure is discussed on the Floor of the House. We never have enough time to debate it. It comprises a quarter of all Government expenditure, so I hope that the Leader of the House will accept that this debate needs more time than it is given, as does the local government settlement every year.
Mr. Deputy Speaker: The hon. Gentleman has made his point, but it is not one on which I can rule.

Orders of the Day

  Public Trustee (Liability and Fees) Bill
  [Lords]
  Not amended in the Standing Committee, considered. Order for Third Reading read.
  8.25 pm
  The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton): I beg to move, That the Bill be now read the Third time.
  Right hon. and hon. Members will know that this is a short but important Bill affecting the work of the Public Trustee and his office. I am pleased to say that the Bill has received support from both sides of the House. In essence, the Bill makes changes to the Public Trustee Act 1906 in two areas. It removes the requirement for full cost recovery for trust work in order to prevent the large increase in fees that the current provisions would necessitate. The Bill also amends the 1906 Act to make the Lord Chancellor responsible for fees in respect of the Public Trustee's work, rather than the current formula which places that responsibility with the Treasury—[Interruption.]
  Mr. Graham Allen: On a point of order, Mr. Deputy Speaker. Would it be in order for the House to come to order so that those of us who are interested in the Bill can hear what the Minister is saying?
  Mr. Deputy Speaker(Sir Alan Haselhurst): I am ever grateful to the hon. Gentleman. I am sure that the House has heard his words.
  Ms Winterton: Thank you, Mr. Deputy Speaker.
  Keith Vaz: Will the Minister tell the House how many representations she has received from individuals, organisations or trustees about the Government's proposals?
  Ms Winterton: As far as I am aware, we have received no representations other than the thoughtful and considered responses from hon. Members.
  The Bill also repeals section 7 of the 1906 Act, which relates to the liability of the consolidated fund for liabilities arising from the activities of the Public Trustee and provides that for the future, were such liabilities to arise, they should be met from the Lord Chancellor's Department's estimate. The Bill also tidies up provisions on the Public Trustee's liability to beneficiaries. In preparing the Bill, we found that the purported exception to the Public Trustee's liability to beneficiaries in section 7 of the Public Trustee Act 1906 had no legal effect and thus serves no purpose. We have taken this opportunity to remove it.
  Throughout the passage of the Bill, both sides of the House have acknowledged its importance and, in Committee, we had a constructive debate that did justice to the issues and the context in which they arise.
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  Following that discussion, I wrote to all members of the Committee to clarify the role of the Official Solicitor and the Public Trustee.
  Mr. Allen: I congratulate my hon. Friend on the way in which she handled the Committee stage. She made a complicated matter clear, even to a non-lawyer such as myself. She made several points about a case of great concern in my constituency—that of the Strelley social club and the amount of money that needs to be disbursed to former members. She was very sympathetic, which was much appreciated in my constituency. Will she take this opportunity to briefly update the House on the position in the case at the moment?
  Mr. Deputy Speaker: Order. Before the hon. Lady replies to that point, it might be helpful if I inform the House that a large firework display will take place across the river at any moment. It might cause loud noises and I would not wish the House to be confused about the cause of any disturbance.
  Ms Rosie Winterton: I should expect nothing less during the course of my speech.
  My hon. Friend the Member for Nottingham, North (Mr. Allen) is as assiduous as ever in raising his constituents' concerns. I believe that 1,800 former members of the Strelley social club have been written to, and that about 1,000 have replied. Staff will look at the replies to sort out who will benefit from the residue of that fund.
  I should also like to pay tribute to all those hon. Members who served on the Standing Committee and spoke on Second Reading. They drew attention to the work of the Public Trustee in dealing with the affairs of very vulnerable people, and in ensuring that the fee regime does not bear unduly harshly on them because of outdated legislative arrangements. I have appreciated the interest and good humour with which our proceedings have been conducted.
  On Second Reading, the hon. Member for Stone (Mr. Cash) noted the speed at which the Bill had passed through the other place. He has been replaced by the hon. Member for Surrey Heath (Mr. Hawkins). We in this House have, rightly, spent a little more time on the Bill than was the case in the other place, but I hope that we can all agree that this modest Bill is worthwhile. I am happy to commend it to the House.
  8.31 pm
  Mr. Nick Hawkins: I can certainly welcome what the Minister has said about the Bill's importance. I thank her for her welcome to me, although I am returning to old haunts in reassuming my present role, as I have previously been Opposition spokesman for Lord Chancellor's Department matters. After a year's absence, I have that responsibility again, and I am delighted to be associated with the latter stages of this important Bill.
  However, the Minister will know that some concerns have been expressed about the Bill. The hon. Member for Nottingham, North (Mr. Allen) intervened earlier to ask about constituency issues, and my hon. Friend the

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  Member for Tatton (Mr. Osborne) has inquired about matters arising from reports from the Select Committee on Public Accounts compiled under various Chairmen, among them my right hon. Friend the Member for Haltemprice and Howden (David Davis).
  I have also encountered a case in my constituency that is not dissimilar to the one mentioned earlier in the Bill's passage through the House by the hon. Member for Hornchurch (John Cryer). On behalf of those of my constituents who have been affected, I have expressed to one of the Minister's predecessors my concerns about the hugely long time it has taken the Office of the Public Trustee to respond to inquiries. I therefore take a particular interest in the changes that the Bill will make.
  The Minister rightly said that there has been no dispute between the parties with regard to the Bill. The hon. Member for Torridge and West Devon (Mr. Burnett) will speak for the Liberal Democrats on this matter this evening, and I am sure that he will confirm the statement by the hon. Member for Somerton and Frome (Mr. Heath) at an earlier stage of the Bill's passage through the House. That hon. Gentleman said that his party, both in this House and in another place, welcomed the Bill.
  However, I want to raise a couple of further concerns. One is the confusion that may be caused to constituents by the renaming of the office. Those who have followed the passage of the Bill will know that, on 1 April this year, the office was relaunched as the Public Guardianship Office. As it turns out, however, the same person will occupy the twin roles of Official Solicitor and Public Trustee.
  The Minister rightly said that the Bill transfers financial responsibility from the Chancellor of the Exchequer to the Lord Chancellor. I do not have much confidence that the change will improve the efficiency with which matters will be handled in the future. My experience, as both a Front-Bench spokesman and a constituency MP, has been that the Lord Chancellor's Department does not respond as quickly as the Treasury when questions are asked of it. It would be useful if the Minister were to give a binding guarantee that constituents will not have to wait for months and months for correspondence even to be acknowledged by the new Public Guardianship Office and by the individual who will be both the Public Trustee and the Official Solicitor.
  Also, if there are concerns in future about the operation of the Public Guardianship Office, I hope that the Minister's Department will respond with dispatch when hon. Members write on behalf of constituents. That was a huge concern under the old regime, before this Bill was introduced.
  The hon. Member for Nottingham, North asked a question in relation to the Strelley social club. I do not think that it would help the debate if I were to take that further, but the Public Trustee has a responsibility to look after people who are often severely disabled as a result of the effects of pharmaceutical drugs. They are among the most vulnerable people in our society. The case in my constituency to which I referred earlier involved people trying to look after seriously disabled relatives whose financial assets were under the control of
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  the Public Trustee. When dealing with such cases, it is vital to be able to get quick answers. Some of the cases can be complex, but there should at least be a rapid acknowledgement of any matters that are raised.
  Ms Rosie Winterton: indicated assent.
  Mr. Hawkins: The Minister nods and I am grateful to her for acknowledging the problem.
  I am also concerned about the size of the assets under the Public Trustee's control. We are talking about a very large amount of money. On Second Reading and in Standing Committee, the Minister gave general figures regarding the amount of money under the Public Trustee's management, but I hope that she will be able to give us in this debate the exact, up-to-date numbers. That will enable hon. Members who are not familiar with the Bill to see that we are talking about very considerable sums of money.
  Mr. John Burnett: Would not the hon. Gentleman be interested in knowing the size of the office's work load, the number of cases that it has to deal with and the number of people available to deal with them? Knowledge of those figures would help to keep this debate brief.
  Mr. Hawkins: The only figures that I have available were given to the House in the debate on 1 July this year, and they can be found in the Hansard report for that date. However, I agree that that is the sort of detail that the Minister should give the House this evening.
  The PAC has reported on the various problems encountered by the Office of the Public Trustee in the past. In the debate on 1 July, my hon. Friend the Member for Tatton referred to the Department's quinquennial review. The review stated:
  "Corporate development, business modernisation, high quality client service and comprehensive, reliable financial management information services have not materialised."
  My hon. Friend remarked that that was
  "Sir Humphrey-speak for a complete mess."—[Official Report, 1 July 2002; Vol. 388, c. 49.]
  I want the Minister to tell us that as a result of the changes that the Government are introducing in the Bill, that mess will be sorted out. There is a sorry history of poor management and lack of financial accountability. In its various reviews of this office, the Public Accounts Committee concluded that this was the worst aspect of Government that it had ever come across. As my hon. Friend the Member for Tatton rightly said, there is no mileage to be had from making vulnerable people pay for the mistakes of Whitehall.
  In another place, Baroness Scotland said on 27 May:
  "the accommodation and other overhead costs attributed to trust work increased significantly from 1st April 2001, while the income from trusts work has reduced".—[Official Report, House of Lords, 27 May 2002; Vol. 635, c. 1050.]
  I would like the Minister's reassurance that the estates of vulnerable people, which are supposed to be looked after by the Public Trustee, will not, as a result of huge increases in charges from the Lord Chancellor's Department, be responsible for these overhead costs. I am always wary about seeing other people's money under the control of Whitehall bureaucrats. When the

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  matter was debated just before the summer recess, the Minister was asked specifically why the accommodation and overhead costs had increased dramatically. Having looked at the Official Report, I do not think that my hon. Friend the Member for Tatton and others who raised that concern received a good enough answer.
  Finally, although this is a welcome Bill that has received all-party support, I hope that the Minister will answer these important questions before we allow the measure to pass into law.
  8.41 pm
  Mr. John Burnett: I should declare that I am a lawyer, although I do not practise as such—[Interruption.] I am trying to get into everybody's good books right from the start. I welcome back the hon. Member for Surrey Heath (Mr. Hawkins)—it is a pleasure to see him with us.
  This is an uncontroversial Bill, which has been welcomed on both sides of the House and in the other place. Nevertheless, there are further points to be made arising out of it.
  In the explanatory notes to the Bill, clause 8 appears to conflict with the note that the Minister sent to the hon. Member for Nottingham, North (Mr. Allen) on 20 July 2002 which was circulated to all members of the Committee. The Minister's note makes it clear that the Public Trustee will continue to do trust work but that the trust work that it had been involved in on behalf of people with a mental incapacity was to be transferred to the Public Guardianship Office on 1 April 2001. That is a particularly inauspicious day for the clients of the Public Guardianship Office, and I shall refer to that in a moment. The Public Guardianship Office, it appears, operates under the aegis of the Official Solicitor.
  The Minister will recall the debate that we had on 27 June 2002 when I and other hon. Members prayed against two statutory instruments. IF opened the debate and set out, among other things, the complaints of a number of individuals, constituents and others, as to the inefficiency, delays and expense in dealing with the Public Guardianship Office. I have checked with some of my constituents and am told that unfortunately the performance of the Public Guardianship Office, far from improving, is still appalling.
  My second point is about accountability. The Official Solicitor and the Public Trustee are two distinct legal bodies, although the same person, a Mr. Laurence Oates, is appointed to both statutory posts. The Minister has assured us that he receives just one salary and that it is paid at the appropriate civil service rates. In other words, he does not get two dollops. The two statutory offices continue to exist separately but are currently held by the same person. I should like the Minister outline to the House—or, better still, write to me—[Interruption.] She can circulate the letter to other Members who are interested in this riveting matter. Will she let me know why a new single statutory post should not be created, combining both that of the Official Solicitor and the Public Trustee? What are the advantages of having the two posts, especially as both are held by the same person?
  It would assist the House if the Minister were to explain in her letter exactly what cost savings would result from creating a new single statutory post. In that
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  letter, would she also outline what personnel are currently employed in management posts in the two offices and the approximate savings that would be achieved if they were combined?
  As I said earlier, the Bill is welcome as far as it goes, and we shall not oppose it tonight.
  8.46 pm
  Ms Rosie Winterton: First, I apologise to the hon. Member for Surrey Heath (Mr. Hawkins). I thought that he was standing in just for this evening, but as that is not the case, let me extend a very warm welcome to him in his return to the position that he previously occupied.
  A certain amount of confusion has been expressed about the difference between the various officers and the changes that took place following the quinquennial review and the report of the Public Accounts Committee. The hon. Member for Surrey Heath referred to the Public Guardianship Office, which is completely separate from the Public Trustee. The Public Trustee and the Official Solicitor are the same person.
  Mr. Burnett: Will the Minister make it clear that the Public Trustee still acts in trusts, although not in trusts for those who are mentally incapacitated?
  Ms Winterton: Yes, following the review, much of the trust work that dealt with very vulnerable people in particular, for example those who had been involved in road traffic accidents and so forth, was transferred to the Public Trustee. The Public Guardianship Office continues to look after people who are suffering from mental incapacity.
  In addition, there has been some confusion about fees. The fee-setting powers have been transferred from the Treasury to the Lord Chancellor. In modern practice, the Minister with responsibility for the policy holds those powers. However, the powers to set fees for trust work as set out in section 9(1) of the Public Trustee Act 1906 provide for the Treasury to set fees with the sanction of the Lord Chancellor. We are regularising the position.
  The hon. Member for Surrey Heath (Mr. Hawkins) made some particular points about a constituent. I will be happy to explain some of the differences between the offices and where his constituent's problems may lie—he may be talking about a constituent who is having difficulties with the Public Guardianship Office, as opposed to the Public Trustee. I would be happy to deal with that if he would like to write to me or come to see me about those problems.
  The amount of money under management is in the region of £250 million. I cannot give details of the exact number of cases at the moment, but I would be happy to write to the hon. Gentleman. I will also be happy to write to him about his detailed questions about the number of staff at the Official Solicitor's Office and the Public Trustees Office. He will know that I have written to explain that we did not think that it would be appropriate to separate the two posts at present. Indeed, that might well lead to increased, rather than decreased, costs. I will certainly write to him about the detailed matters that he discussed.

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  On beneficiaries making up money, we are trying to make it possible for a proper remissions policy to be introduced so that full cost recovery under the Act is not necessary—a public subsidy is allowed. Of course, the Public Trustee will work within the general Treasury rules. We wanted to ensure that these very vulnerable people would have the possibility of remissions in fees and, if necessary, therefore, there would be a public subsidy. I hope that that answers some of the questions.
  Mr. Hawkins: I understand that the Minister is going to write to the hon. Member for Torridge and West Devon (Mr. Burnett) with various details on the number of staff and so forth. She answered my question about funding, but she has not given the undertaking that I requested that people will no longer suffer inordinate delays in getting a simple acknowledgement of correspondence and papers, as some of my constituents have done, from the Office of the Public Trustee. That is the sort of problem that was highlighted by the Public Accounts Committee in successive reports on the manifold sins and wickednesses of the Public Trustee. I want an assurance that correspondence will be answered promptly.
  Ms Winterton: Of course, we will do everything within our power to ensure that that happens. I agree with the hon. Gentleman that we do not want those vulnerable people, or those who care for them, to suffer any inordinate delays. I hope that the changes that we have put in place following the criticisms from the Public Accounts Committee and the quinquennial review will lead to that result.
  I commend the Bill to be read a Third time.
  Question put and agreed to.
  Bill accordingly read the Third time, and passed, without amendment.

  Local Government Finance
  Motion made, and Question proposed, That this House do now adjourn.—[Jim Fitzpatrick.]
  8.52 pm
  The Minister for Local Government and the Regions (Mr. Nick Raynsford): First, we very much regret the late start for this important debate; it could not be predicted when the time was originally allocated. As my right hon. Friend the Leader of the House stated earlier, we will explore options for a further debate to give the many hon. Members who want to speak on this important subject the opportunity to do so.
  Sir Paul Beresford: On a point of order, Mr. Deputy Speaker. In the light of the Minister's statement, those hon. Members who may be called to speak briefly this evening may want to participate in the continuation debate. Would that be in order?
  Mr. Deputy Speaker (Sir Alan Haselhurst): Obviously, an hon. Member can speak only once in a debate, so the hon. Gentleman should make no such assumption.
  Mr. Raynsford: rose—
  Mr. Eric Pickles: I appreciate that it is not the Minister's fault and we are looking forward to hearing what he has to say, but his advice will no doubt be sought, so I hope that when it is he will say that, because of the number of hon. Members who want to speak and the importance of the subject, the debate should be held on the Floor of the House, not in Westminster Hall.
  Mr. Raynsford: I understand the hon. Gentleman's concern and I can give him the assurances that he requests because I have spoken to my right hon. Friend the Leader of the House about the importance of having an early opportunity for a further debate. How that can be arranged will obviously depend on discussions between the usual channels. There are constraints, but it is important that we should have that debate and I was certainly very reassured by the view taken by my right hon. Friend.
  Mr. Don Foster: rose—
  Mr. Raynsford: Before I take any more interventions, may I point out to hon. Members that, given the short time available, I have deliberately chosen to limit my speech? We will make swifter progress and Back Benchers will have a greater opportunity to speak if Members limit their points of order or interruptions. I give way to the hon. Gentleman.
  Mr. Foster: I apologise for taking up some of the Minister's time, but I for one want to hear in some detail what he has to say.
  Further to the question put by the hon. Member for Brentwood and Ongar (Mr. Pickles), is the Minister prepared to say whether he believes that a further debate should be held on the Floor of the House?
  Mr. Raynsford: The hon. Gentleman has been a Member of the House for some time, so he ought to

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  know that it is not the role of Ministers to determine the business of the House. I have already given a perfectly clear undertaking. I can only say to the hon. Gentleman that he is wasting the time of the House, which should rightly be focused on the issues.
  Despite the extremely technical nature of many of the issues involved and the difficulty of making sense of all of them, the grant distribution system is one of the most important things done by the Government. Local government accounts for about 25 per cent. of all public expenditure—about £60 billion in total. More than £40 billion of that comes in the form of grant direct from the Government. Until now, the grant has mainly been distributed using standard spending assessments, which cover money for key services such as education, social services, waste management, sports, arts, libraries, police and many others. The spending review has confirmed further increases in substantial investment in those services. This debate is about how we channel that money through to councils.
  Mrs. Anne Campbell: I am interested in my right hon. Friend's criteria for the success of that proposal. Will one of them be that he will reduce the disparity between authorities, thereby making the system fairer?
  Mr. Raynsford: I shall explore in some detail some of the key principles behind the consultation but I hope that my hon. Friend will recognise that there are many definitions of fairness and that it would be wrong for me to give a particular commitment when there are also many others to consider. After all, we are engaged in a consultation exercise and no decisions have yet been taken on the final formula.
  Michael Fabricant: Will the right hon. Gentleman give way on that point?
  Mr. Raynsford: Although I am happy to give way—hon. Members know that I am usually happy to do so—it will limit the amount of time available for Back Benchers if I have to take too many interventions.
  Michael Fabricant: In that case, Mr. Deputy Speaker, I shall not try to catch your eye later on.
  In a spirit of helpfulness, the Minister raised questions about fairness. Will he give an assurance that counties such as Staffordshire will be no worse off than they are at present—and, believe me, they are pretty badly off at present?
  Mr. Raynsford: If the hon. Gentleman will contain himself, I shall cover that specific point later in my speech. I have given undertakings that will have been heard by many Members who attended the seminars held yesterday and a week ago.
  It is important to emphasise one significant change that we are going to make from the old SSA principles. The original idea behind SSAs was to deliver a standard level of service for a standard level of council tax. If that ever worked in the past, which frankly I doubt, we certainly do not believe that it works at present. Furthermore, we are also clear that such an approach is fundamentally incompatible with our objective of giving
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  greater freedom and discretion to local authorities. Rather than pretending that we can say how much every council should spend, we are, under our new framework, focusing on how we distribute grant to councils.
  When we began to consider how to improve the system, we examined the range of options. Some authorities told us that formulae did not take their circumstances into account, so we offered local government the choice of using assessments of their own plans as the basis for distribution rather than formulae. We consulted on that in a Green Paper two years ago. In response, a large majority of councils said that they would prefer to keep the system based on formulae that look at their circumstances and their ability to raise council tax. If people ask why we are sticking with a system that is not fundamentally different from current arrangements, the answer is because that is what local government asked us to do.
  If the underlying approach is not fundamentally different, the detailed formulae will change. That is because everyone—Government, Opposition, councils, shools, individuals—had lost faith in the old formulae. They had been in place for over a decade. Some of them were based on very old information. Some were perverse. Many did not adequately reflect the conditions and circumstances that we face today. So while we are not abandoning the use of formulae, we are taking a fresh look at the formulae; and it is those formulae that determine how the money is divided between councils.
  In looking afresh at the formulae, we have fully engaged with local government. Technical work has been discussed in detail with representatives of local authorities, including, of course, the Local Government Association.
  We have also had a number of discussions with councillors and MPs, and we have tried as far as possible to involve those who are concerned about the process in evolving options for change. We have also conducted all this work as openly as possible, sharing options, evidence and ideas as we have gone along. I and my ministerial colleagues—I am very grateful that many of them are present tonight—have also seen many delegations on the issue. We have held several seminars for Members of Parliament, the most recent one yesterday. I am delighted to say that some 90 Members attended, which shows the interest in this important subject.
  Inevitably, many of the representations that we have received, and much of the evidence submitted to us, have been contradictory. That is understandable, since people come at this with different priorities and different ideas about what would constitute a fair system. We recognise that we shall not be able to agree with everyone, or address all the issues, or give everyone a bigger share of the cake. But we have tried to give everyone the opportunity to be heard and we are trying to ensure that the outcome does reflect, as far as possible, the many good proposals and suggestions that have been put to us.
  Let me at this point make one thing crystal clear. Contrary to what some people have suggested—indeed, contrary to what some hon. Members may hope—we have not approached this review with any predetermined outcome in mind. There is no agenda to shift

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  resources from one part of the country to another. Of course, in any major change such as the one that we are undertaking there will be distributional consequences.
  Mr. Desmond Swayne: rose—
  Mr. Raynsford: But the consequences are not pre-determined; they will be decided by full, careful and thorough evaluation of all the evidence and of the logic and force of the arguments. That is perhaps an unfortunate moment to give way to the hon. Gentleman.
  Mr. Swayne: The Minister is most kind. What estimate have the Government made of the likely increase in total Government expenditure that will be consequent upon redistributing grant to local authorities, which will then spend their additional allocation, which will have to be replaced by additional council taxes from those who lose that grant? What will the total increase in public expenditure be?
  Mr. Raynsford: If the hon. Gentleman had been following what I said earlier, he would know that I have made it clear that there is a substantial further increase implicit in the spending review, which will ensure a good increase for local government in the settlement. If he will bear with me, I will come to guarantees for all councils.
  Richard Younger-Ross: I thank the Minister for giving way on that point. I am very concerned. He talked about fairness and said that all the formulae have been looked at and there has been no predetermination. The south-west could lose out by £152 million under the formula. It currently has an SSA of £876 per head, compared with an average of £995. I cannot see how any fairness or justice under any formula could end up with the south-west losing out at all.
  Mr. Raynsford: If the hon. Gentleman had borne with me for a moment, he would have avoided making a rather foolish allegation that there will be losses, when we have on so many occasions made it quite clear that no authority will suffer a loss. I shall come to that in a moment.
  Mr. David Watts rose—
  Mr. Raynsford: I shall give way to my hon. Friend and then I shall try to make some progress, because I know that many Back Benchers want to speak.
  Mr. Watts: Will the Minister assure many of us that not only will the system not seek to shift money from one area to another but that it will not seek to maintain the present position? Many of us believe that the present position is unfair.
  Mr. Raynsford: As my hon. Friend will have heard from what I have said, we are committed to significant changes in the formulae, which will have distributional consequences.
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  One of the original goals of the review was to try to simplify and streamline the mass of complications that surround the system. This has proved one of the most difficult of the big questions that we have had to resolve. Local government has consistently said that it favours transparency, but not at the expense of oversimplification. There are benefits in achieving greater simplicity, not least in terms of the people affected having a chance of understanding the system, but simplicity leads inexorably to rough justice and, if taken too far, undermines confidence that the system takes full account of the appropriate indicators.
  Although no decisions have yet been taken, we recognise that the desire for a radically simpler system will need to be balanced against concerns that that would lead to unfairness. Having said that, we believe that it is possible to create a clearer and more consistent framework with the new formulae based around four principal components. There should be a basic allocation for each recipient of the service, such as the number of elderly people receiving care from social services or each mile of road requiring maintenance. On top of that, there should be three top-ups respectively for deprivation, pay costs and other costs, such as the additional costs of delivering services in sparsely populated areas.
  We have discussed the issue with local government and others, and there has been general support for that framework. Of course that does not mean that there is agreement about the weighting given to each component. Indeed, some of the fiercest arguments have raged over those issues. One authority will say that deprivation should be made more important; another will say that pay costs are what matter most, while others will focus on the per head allocation or sparsity.
  I have no doubt that those arguments will continue to rage during the weeks ahead. However, there has been another very important strand to the representations that local government has made to us: the calls for increased predictability and stability in the system. We have gone some way towards that in recent years with the introduction of floors and ceilings to limit year-on-year grant changes. That has been generally welcomed, although, of course, views tend to differ depending on whether an authority expects to be in the floor or the ceiling zone. As that can change from year to year, consistency is not always evident in the representations that we receive on this subject. However, we recognise that the review has inevitably created additional uncertainty, in particular with worries about authorities facing a cut in funding.
  Dr. Howard Stoate: Will my right hon. Friend give way?
  Mr. Raynsford: I ask my hon. Friend to bear with me a moment.
  That is why I have given a clear guarantee—I repeat it now—that, regardless of the answers that the new formulae produce, no authority will face a cut in grant next year on a like-for-like basis. For the avoidance of doubt, I should say that that does not include inflation, but it will cushion authorities against the immediate impact not just of the new formulae but of other changes, such as the new population figures from the

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  2001 census. Of course, when announcing the floors for next year, we certainly hope to do better than that simple no-cash-loss guarantee, but we cannot go further on the general grant at this point because we do not yet have the final data or know what distribution the formulae will give.
  If we were to set a high floor now, we would risk having to reduce it later if it turned out to be unaffordable. Alternatively, we would risk having to set a ceiling only just above, or equal to, the level of the floor. The latter would make nonsense of the whole review; the former would have a dire impact on authorities' budget planning processes. So I hope that hon. Members will understand why we are giving a clear guarantee of no losses. We will go further, but we cannot yet announce the floor and ceilings.
  Mr. Geoffrey Clifton-Brown: The right hon. Gentleman has confirmed that the no-cut guarantee is only in cash terms, not in real terms. Can he give a similar guarantee—if that is what it will be—for the other two years in the plan period? Will the same guarantee apply next year and the year after?
  Mr. Raynsford: The hon. Gentleman ought to remember that I answered that question when he asked it at yesterday's seminar, so rather than detain the House now—[Interruption.] I am sorry that he seems to have a bout of amnesia and cannot remember the answer.
  Sir Patrick Cormack: On a point of order, Mr. Deputy Speaker. This is clearly the sort of debate in which we all benefit from many interventions and the Minister answering questions clearly and unhurriedly. The Leader of the House promised—while you were in the Chair, sir—that this debate will be continued another day, so would it not be sensible for the Minister to take as long as he wants and as many interventions as he wishes? Several of his colleagues are nodding as I speak. We could just hear the Minister's speech tonight and have a chance to intervene, as the debate will continue another day.
  Mr. Deputy Speaker: That is not a matter on which the occupant of the Chair can advise.
  Mr. Michael Portillo: On a point of order, Mr. Deputy Speaker. Is it in order for a Minister to withhold information from the House on the basis that he gave the information yesterday in a seminar, which was not part of the official proceedings of the House?
  Mr. Deputy Speaker: Order. The Chair is not responsible for the answers that Ministers give from the Front Bench.
  Mr. Raynsford: May I say in the nicest possible way to the right hon. Member for Kensington and Chelsea (Mr. Portillo) that as he, too, was present at the seminar, he might have spared the time of the House by speaking personally to his hon. Friend?
  Michael Fabricant: This is ridiculous. I, and other Members, may not have been present at the seminar for
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  perfectly legitimate reasons. The House was not recalled until today. It is completely improper for a Minister to say that some people in the House might have heard an answer at an informal seminar, while other Members such as me could not be present, as the House was not in Session. The Minister is being asked a question on the Floor of the House. Will he now answer it?
  Mr. Deputy Speaker: Order. I assume that that is a point of order to the Chair. All that I would say to the hon. Gentleman is that I am sure that hon. Members—and not least the hon. Gentleman—have means of prising information from Ministers.
  Mr. Raynsford: As I was saying, I was delighted at the very large numbers of Members who attended yesterday's seminar and at a similarly large number who attended the other seminar that we held the week before. I am very sorry that the hon. Gentleman was unable to attend either of those events. For his benefit and that of others who were not able to attend the seminar, the answer is that I made it clear that we will continue floors and ceilings in future years.
  Several hon. Members: rose—
  Mr. Raynsford: I shall give way to my hon. Friend the Member for Don Valley (Caroline Flint).
  Caroline Flint: My right hon. Friend said that the allowance per mile of local roads would be considered. May I bring to his attention the dilemma that faces many coalmining communities, which has been raised by the Coalfield Communities Campaign—namely, the number of unadopted roads in those communities and the problems of finding finance to work with residents to bring them back into council ownership? Will he consider including, at least for a few years, unadopted roads in target areas in the allowance per mile?
  Mr. Raynsford: My hon. Friend presciently anticipates exactly what I was about to say. Local authorities rightly feel passionately about changes to the formulae that would better reflect their local needs and circumstances. Equally, Members on both sides of the House want their area to get a fair share of the cake. We will listen carefully to all that is said tonight and on any future occasion when such a debate may be held. Within the bounds of feasibility—as I suspect that some of the demands will be mutually contradictory—we will endeavour to reflect in our final decisions the concerns that have been voiced. We do not expect to please everyone.
  Sir Paul Beresford: If I may take the Minister back a couple of paragraphs in his speech, he was talking about protection of local authorities and using floors. In the assessment of the floor, is he taking into account grant or grant plus discretionary grant?
  Mr. Raynsford: The hon. Gentleman asks a technical question about the way in which floors are constructed. To explain the matter briefly, without going into too much detail, as I do not want to take too much time, the purpose of the floor is to ensure that no authority gets

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  less than a prescribed sum determined in a particular year. That refers to general grant distributed currently through the SSA system and grant that will be distributed through the formula grant distribution framework in future. It applies to general grant.
  We do not expect to please everyone—we would be very foolish if we thought that we could do so. In fact, we will have done rather well if we do not disappoint everyone. What we are determined to do, however, is to replace the old, discredited SSA system with a new grant distribution formula that is fairer, that better reflects today's needs and circumstances, that is less complex, less confusing and less perverse, and that enables local authorities to plan with greater certainty and to deliver the high-quality services that people rightly expect from their local council.
  9.14 pm
  Mr. Eric Pickles: I regret what has happened. Despite any reservations that we may have about the formulae, it is clear that the right hon. Gentleman has put in an enormous amount of effort and work. The two seminars were very good and well attended, and he went out of his way to answer the points made, so it is a shame that such effort has been rewarded by this debate. The subject deserves a full day's debate. I am pleased to understand that we will have a further debate on the matter—a continuation of this debate—on the Floor of the House. I am sure that all the Members who have constituency cases to make will not be disappointed to learn that.
  Sir Patrick Cormack: Does my hon. Friend agree that if there is to be a continuation of this debate, as the Leader of the House has promised, it must take place on the Floor of the House? We cannot continue somewhere else a debate that was started here.
  Mr. Pickles: I entirely agree with my hon. Friend. The working of the usual channels are a complete mystery to me, but a bearer of tidings passed down a whisper that the debate might well take place on the Floor of the House. If that is so, we can be a little easier on the Government. However, we look forward to continuing with the debate.
  While I am in a mood to hand bouquets to the Minister, let me present him with another sweet-smelling rose. I congratulate the Government on achieving what many thought was impossible. They have taken a complex formula, added their special magic and made it even more complex. The once impenetrable labyrinth of local government grant is now firmly shrouded in mist.
  More seriously, the Government have taken a system that relied heavily on formulae and that ensured minimum interference from the Government and added a strong element of discretion. The County Councils Network referred to such discretion in its advice to all Members of the House. It said:
  "These top-ups are more susceptible to manipulation, the basic entitlement is therefore a far more equitable means of funding local authority services."
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  That is right. One of the most remarkable features of local government finance and involvement from the centre is how little manipulation took place in the past. [Laughter.] I am sorry to be greeted by such laughter of disbelief, because I do not believe—
  Mr. Watts: rose—
  Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way and he should be heard with the same quiet as the Minister for Local Government and the Regions.
  Mr. Pickles: In fairness, I may have slightly provoked the hon. Member for St. Helens, North (Mr. Watts).
  Mr. Nigel Waterson: Will my hon. Friend give way?
  Mr. Pickles: Of course. I shall then give way to the hon. Member for St. Helens, North.
  Mr. Waterson: My hon. Friend speaks about manipulation, but is he aware that, under the Government's proposals, my county of East Sussex could lose up to £44 million, which equates to 900 teachers or care for more than 2,000 vulnerable elderly people?
  Mr. Pickles: I am aware of that. I had the opportunity to visit my hon. Friend's county council a couple of weeks ago and was most struck by the need that exists there. I was also struck by the time—87 hours a week—that its excellent chief executive had spent on dealing with Government forms and the like. My hon. Friend makes an excellent point.
  Mr. Watts: If the hon. Gentleman believes that the previous Government did not manipulate the present system, will he explain why, when the changes took place, they transferred millions of pounds from Labour authorities to Tory authorities? My authority lost £10 million overnight.
  Mr. Pickles: I thank the hon. Gentleman for that question, but I have as good a memory as his. I recall the time that Bradford was Labour controlled and was on a similar band to Wandsworth. When Wandsworth did very well, Bradford did very well. In fact, we went and became Conservative controlled.
  The Minister is right to say that there is a strong element of rough justice in the system, but instead of providing greater equality, the Government have instead increased the rough justice. A change of such magnitude should be based on consensus. The Minister referred to the seminars organised by his Department. I attended only one of them, but I suspect that the others were as good tempered. Members from both sides of the House offered sound advice and there is a willingness to find a fair formula. However, it is impossible to build a consensus on the basis of transferring and losing £304 million to the metropolitan authorities, as estimated by the County Councils Network. The figure could even be as high as £800 million, based on some calculations.

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  The way in which the calculation has been put together and the various options available make it difficult, even for someone who is as keen as mustard on local government finance, to work out a precise picture for each authority.
  Judy Mallaber: If the hon. Gentleman is concerned about disparity and losing money, does he think it right that his authority gets £200 more per primary school pupil than my county council, which is not a metropolitan area? Is that fair? Is there anything to justify why his area's needs are greater than mine, which is a far more deprived area?
  Mr. Pickles: There are many different reasons for that, which is why the formula has been so difficult to agree. For example, there are levels of deprivation and staffing costs to consider. The hon. Lady misunderstands and she is not helping the debate if she thinks that I am defending the existing scheme. One reason why the Government have spent such a long time producing an alternative is that it is a difficult thing to do. I was hoping that we might arrive at a consensus and believe that that is still possible. Local government deserves a system that is transparent and understandable. It deserves a system that we can all support.
  Paddy Tipping: rose—
  David Taylor rose—
  Mr. Pickles: I shall give way to the hon. Member for Sherwood (Paddy Tipping) first.
  Paddy Tipping: The hon. Gentleman talks about the need for consensus and fairness. Will he set down the principles that he and his party would use to distribute grant?
  Mr. Pickles: I am happy to do so. However, as the old saying goes, I do not think that I would have started from here. We need a thorough review of the functions of local government and to get agreement on the criteria that determine how grant is distributed. On that basis, I would certainly be willing to build a consensus.
  David Taylor: Will the hon. Gentleman give way?
  Mr. Pickles: In a moment.
  However, it is impossible to build a consensus when individual high-performing authorities are penalised with the removal of grants worth tens of millions of pounds. It is impossible to build a consensus while low-performing authorities are rewarded with a cash
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  windfall. It is impossible to build a consensus when, as The Times asserted in a July headline, "Labour will tax Tory voters to fund heartland".
  Gregory Barker: Does my hon. Friend see anything fair in the fact that East Sussex, which is the poorest shire county in England, is also the worst affected? [Interruption.]
  Mr. Pickles: I am sorry to hear Labour Members laugh. My hon. Friend speaks the truth, certainly in terms of average income and of the size of the cuts in relation to the budget.
  Several hon. Members: rose—
  Mr. Pickles: If hon. Members bear with me, I want to make some progress and then I will happily give way—
  Mr. Michael Jabez Foster rose—
  Mr. Pickles: I mean exactly what I say: I will give way in a moment.
  Decisions will be made known in December. That will be about the same time as the Audit Commission gives its verdict on larger councils, through the comprehensive performance assessment. Is the Minister prepared to give a guarantee that the top 10 local authorities will not have grant taken away from them and that the incompetence of the bottom 10 will not be rewarded with extra grant?
  Mr. Raynsford: I am happy to respond to that. Before I do so, I take the opportunity to say that I have been informed that, following discussions held by my right hon. Friend the Leader of the House, we now feel hopeful that it will be possible to extend this debate on the Floor of the House next week. In response to the hon. Gentleman's question, I have already given a guarantee that no authority will receive less grant, so there is no question of any high-performing authority suffering a loss. That gives the hon. Gentleman the assurance that he seeks.
  Mr. Pickles: I have to tell the right hon. Gentleman that on 12 December that will not spare his blushes.
  Several hon. Members rose—
  Mr. Pickles: I shall give way in a moment.
  The Government have ignored this issue for six years. It is clear from the consultation that they have not used that period to gather information. After six years, we are nowhere near agreement on the heads of need. We have moved from a position in which the Government were acting like a sleeping dormouse to a new phase in which they are like a bat out of hell. Their determination to push through these reforms by May will do untold harm to fragile local government. As a result, in the words of the Rural Services Partnership,
  "the work that has been carried out has been compressed into a short timescale and some of it appears to be lacking in rigour".
  Jim Knight: Having heard the Minister's reassurance, will the hon. Gentleman

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  reassure us that if his party were in office it would match the Government's plans to increase local government spending by 5 per cent. next year?
  Mr. Pickles: The hon. Gentleman may have misheard his right hon. Friend. He gave an undertaking that in cash terms there will be no difference in grant, but as people will readily understand, that will in no way compensate local authorities for their cost base and wage bill.
  Mr. Michael Jabez Foster rose—
  Mr. Pickles: Of course I will give way to the hon. Gentleman, who is so patient.
  Mr. Foster: Several Conservative Members have mentioned East Sussex. Is it not the case that East Sussex took a reduction of 7 per cent. in real terms in the last three years of the previous Conservative Government? Would the hon. Gentleman be prepared to match the amount that this Government are at least guaranteeing?
  Mr. Pickles: I hope that Hansard is available in the hon. Gentleman's constituency, because those words require wide circulation. [HON. MEMBERS: "What does that mean?"] It means that the hon. Gentleman will have a bit of a problem.
  The Minister's guarantee that no authority will receive less cash next year is not sufficient to meet councils' existing needs. We know from rising pay settlements and a growing cost base that those moneys will not meet next year's costs and will lead to council tax increases and service cuts. Even the real-terms guarantee on education is so full of escape clauses that its effectiveness should be doubted. The Association of Secondary Heads in Essex told the Department on 13 September:
  "Our experiences of 'real term guarantees' in recent years have meant that our budgets have lost out. This happened in the 2002–2003 budget round when the Learning Skills Council became involved in budget calculations for the first time. In 2002–2003 many Essex secondary schools suffered a 'real terms' cut in their budgets, despite the fact that they had been promised growth."
  Given that Essex could lose about £80 million, Kent rising £90 million and East Sussex £43 million, no cash guarantee will be effective. The removal of sums of those proportions cannot be achieved by painless cuts or salami-slicing in line with the Government's gradual withdrawal of grant by placing a floor on the loss. Whole sections of public services will be abandoned or rationed. Even if the Government announce a floor of 3, 4, 5 or even 6 per cent., local authorities will have to make decisions about the wholesale abandonment of important public services.
  Sir Paul Beresford: Does my hon. Friend take into account the fact that some local authorities rely to a large extent on discretionary grants? If they are at the floor, such authorities will lose out dramatically, because the discretionary grant element will not be taken into account.
  Mr. Pickles: My hon. Friend has extensive experience of these matters and he is absolutely right. Furthermore,
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  local authorities want to return to the levels of specific grants seen in the Tory years, because far less discretion is available to them now than they had under the Conservatives. The Minister looks surprised, but that is what the county councils said in a letter to him; I advise him to pay more attention to his mail.
  David Taylor: The hon. Gentleman is moving on from the distribution of rate support grant to specific grants. Perhaps he will take a further step and consider how the national non-domestic rate is currently distributed. The system is extremely simple: every authority receives the same sum per person. Does he endorse the Government's proposals to merge NNDR into RSG, creating a formula-based system, which will not contribute to the transparency and intelligibility that are probably major planks in the consensus that he seeks?
  Mr. Pickles: I do indeed seek consensus, and I believe that consensus is possible on this issue, because I got the distinct impression from the Minister that the Government were having a rethink. I see the Minister smile, so perhaps it will be possible to build consensus. There is no sense in merging NNDR and RSG: there are several disadvantages to doing so, particularly for local authorities that currently receive no RSG. In addition, there is the importance of co-operation between business and local authorities and the need for transparency, and the current system is better in those respects than the Government's proposed changes.
  Mr. David Drew: Neither the Government nor the official Opposition have mentioned what I regard as the nub of the problem: the area cost adjustment. Many of us feel that there was a fiddle. It is understandable in the light of the notion that teachers, social workers and others in the south-east face additional costs, but it creates a blatant unfairness that must, if possible, be removed. I am interested in hearing whether the official Opposition will seek to remove the area cost adjustment.
  Mr. Pickles: I do not agree with the hon. Gentleman—I do not think that the area cost adjustment was a fiddle. There is a case for examining it, but some of the proposals regarding the number of people who fall off the different steps would merely replace one perversity with another. The Government appear to have got hold of the idea of zones within counties for the purposes of the area cost adjustment, but the Minister will be aware of the huge variations that occur, for example, in the counties around London and the different parts of those counties.
  Let me return briefly to the real-terms guarantee. Taking out sums of such proportions will result in public services having to be reduced. The Minister's refusal to provide even a working assumption as to the level of the floor of the withdrawal is harming local authorities' plans. Despite pleas from Sir Jeremy Beecham, the chairman of the Local Government Association, the Minister has refused to go beyond a zero per cent. floor, suggesting in a letter that 3 per cent. might be too high. However, at this time of year, councils are at an advanced stage of their budgetary cycle, and Government's silence makes them fear the worst. Council budgets are not going to be put together in the

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  spring—we have moved far beyond that. Most of them are put together in the autumn. The refusal to offer anything other than a zero floor is to the detriment of local government.
  Mr. Portillo: I noted that the Minister was extremely careful in his use of language this evening. Not only is there a zero guarantee for the first year, but in subsequent years floors and ceilings, he said, would continue. He did not say which floor would continue—he did not say that it would be the same floor—and did not specify the years. Does my hon. Friend agree that his reluctance to repeat what he said yesterday in a private meeting in the Chamber, where it can go on public record, may reflect the fact that floors and ceilings in future years will not be the floors and ceilings of the first year?
  Mr. Pickles: My right hon. Friend is correct—the Minister is not in a position to say that there will be no pain or to say, "Don't worry, the amount of money will be reduced." Even on a cash basis, there will be a substantial cut for local authorities of 5 or 6 per cent. We must remember that the total sums being discussed are tens of millions of pounds.
  Resource equalisation, whereby a council's tax-raising potential is taken into account, was introduced relatively late and offers a perverse incentive to embrace higher levels of expenditure. It also penalises lower-income families in areas with high house prices. Labour Members laughed and scoffed at the mention of East Sussex, which has high local house prices but low incomes. It has almost the lowest average income in England, comparable to that of Tyne and Wear. The system, however, which is supposedly designed to deal with deprivation and sparsity, takes £43 million from the county.
  Sir Nicholas Winterton: The hon. Member for Sherwood (Paddy Tipping) asked my hon. Friend what the Conservative party would do in government about local government finance. Will he fill out his reply and say whether he has followed the excellent work conducted for more than two years by the F40 group of local authorities, led in the House with great distinction by the hon. Member for Stafford (Mr. Kidney), who has highlighted many inadequacies and made sound proposals on the way in which injustices in the present system could be put right? I speak for Cheshire, a county that features extremely badly in the formula, and has done so under successive Governments.
  Mr. Pickles: The hon. Member for Stafford (Mr. Kidney) is blushing, and so am I at my hon. Friend's question. I believe that I elaborated my thoughts in considerable detail and shall happily go to greater lengths, but I hope that my hon. Friend will allow me to do so in private.
  Mr. Adrian Sanders: Will the hon. Gentleman clear up something that was not obvious in his speech? Fourteen per cent. of the pot of money that goes into local government is taken out and given to local authorities, which bid for it in special grants. Is the
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  hon. Gentleman's policy to restore that 14 per cent. or is it to get back to the 4 per cent. that applied when the Conservatives were last in power?
  Mr. Pickles: It was not 4 per cent., but nearer 6 per cent. It depends on how one counts.
  Mr. Don Foster: It was just over 4 per cent.
  Mr. Pickles: I shall not haggle over a couple of percentage figures, but I do not believe that the hon. Gentleman is right. On the general point, however, the level of discretion is about 17 per cent. Given that most local authorities spend three quarters of their budget on staffing, that leaves them little discretion on how the rest is spent. Both I and my right hon. Friend the Member for Haltemprice and Howden (David Davis) are firmly committed to increasing the amount of local authorities' discretion so that they do not have to go cap in hand to the Government. If the Liberal Democrats want to join us in defending local government, they will be more than welcome to do so.
  As we have discovered, we can talk for hours about the area cost adjustment, the relevant merits of different recruitment costs, zone integrity and various different steps. We can talk about the desirability of lowering the top-up for additional educational needs, but at a time when rural communities are desperate for reassurance that their concerns have been heard in this Chamber, the Government have kicked away the ladder. This is a mess masquerading as a solution; a blind rush without purpose or principle. The proposals do not have the confidence of local government and should not have the confidence of the House.
  9.40 pm
  Mr. Bill O'Brien: I am amused by the comments of the Opposition spokesman, the hon. Member for Brentwood and Ongar (Mr. Pickles). In response to an intervention he referred to defending local government. I remember clearly that when he was leader of Bradford council for a short period he sold off old people's homes with old people in them. Therefore, defending local government was far from his mind then.
  Mr. Pickles: I am glad that the hon. Gentleman has given way because it gives me a chance to say this: under my leadership of Bradford council, we sold not one single old persons' home. The party that sold an old persons' home—to a Labour councillor—formed the incoming Labour Administration. Hypocrites!
  Mr. O'Brien: The hon. Gentleman set in motion the sale of the homes and was then removed from the leadership of Bradford council because people in the community said that that was not what they wanted. In fact, they are saying to the Tories now that they do not want their policies. The hon. Gentleman's speech showed clearly that the Tories have no proposals for the future of local government.
  Mr. Colin Challen: My hon. Friend has hit the nail on the head. The Opposition did

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  not have a word to say about cities or urban areas; they are trying to divide the country. They do not want a fair system; it is all about East Sussex.
  Mr. O'Brien: I am sure that my hon. Friend has identified the real point.
  Local government finance and the distribution formula will be of paramount importance to local authorities if we are to provide the world class services that we talk about. As chairman in the House of Commons of the Special Interest Group of Municipal Authorities outside London—SIGOMA—I join my colleagues who represent those 48 major authorities in pleading with the Minister to ensure that we get a fair, transparent, simpler and more stable system of resource distribution for local government. People expect a great deal from government. They want well-run schools for their children, crime-free streets and good quality care for older people and the vulnerable in our communities. Little or no change to the system of local government funding will not provide those services and the better environment that we all expect. SIGOMA's case is for a more robust system of resource distribution. That is well known to the Ministers and all Departments.
  To make our case, I must compare the authorities in SIGOMA and those that will be affected by the resource distribution with London authorities, as there are some similarities between the two groups. Our communities suffer from generally higher deprivation than that suffered in London's urban areas. A major consequence of that is lower attainment, particularly in education. Despite the deprivation and lower attainment, our communities pay on average £125 more in band D properties than people in band D properties in London communities.
  Ms Karen Buck: Will my hon. Friend give way?
  Mr. O'Brien: I am sorry, but I have only a few moments.
  Even after the assumed higher cost of providing services in London is taken into account, our communities still receive on average £140 per head less than the London boroughs. My own authority, Wakefield, has one of the lowest education SSAs in the country. To bring this element of Wakefield's SSA up to the metropolitan average would entail an increase in SSA or its replacement by £11 million. The children in the Normanton constituency are entitled to the same standard and quality of education as children elsewhere in the country. Not to change the financial formula for local government services is to deny my constituents fairness and justice.
  In April this year, the Secretary of State for Health announced his intention to create a radically different relationship between health and social services, particularly in the provision of care for older people. Local government shares central Government's aim to improve care for the elderly, but the NHS plan will fail if social care is not properly funded. The way to address the problems of social care is not by penalising local councils. That has happened in areas where the Audit
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  Commission has been compiling reports. My area suffered because of such a report. Penalising local authorities will not solve the problem of caring for the elderly and the vulnerable.
  Mr. Tony McWalter: Will my hon. Friend give way briefly?
  Mr. O'Brien: I am sorry—I have only three minutes left.
  Councils' total contribution to supporting social care amounts to more than £1 billion over and above the SSAs on which the Government base the grant that they give to local authorities. That is a further reason for the current system to be reviewed.
  The area cost adjustment is always mentioned in debates such as this. It was raised at the seminar, and I am sure that it will be raised repeatedly until some fairness is introduced into it. Members of SIGOMA are not against any adjustment in the distribution system to recognise some of the problems that London boroughs may have. What we ask is that any adjustment should be made on the basis of actual, rather than assumed, needs. I appeal to my right hon. Friend to give that serious consideration.
  This morning, in a meeting of the Select Committee taking evidence on social housing, we were told that local authorities in London have different problems, and that what applies in one borough does not necessarily apply in others. The area cost adjustment must therefore be based on actual costs, not on assumed costs, as that is demonstrably unfair.
  Finally, I refer to the EPCS—environmental, protective and cultural services—block, which is a further concern to local authorities. Provision of services under this block is almost always the lowest funded and most under-resourced. A review of the services covered by the EPCS block is essential. The EPCS block is usually a passport to other services, and it is those other services that lose out.
  On the consequences of the decline in population, a fall in population might be seen as a blessing. We in SIGOMA refute that. Those who are most able to move from an area are those most likely to have transferable skills and a better education and to be more economically active. Those left in the area are less able to pay higher council taxes, yet are more in need of quality public services to guarantee a decent standard of living. On the EPCS block, such increases and the transfer of resources mean that there will be underinvestment and a lack of support for the delivery of world class services if we do not recognise the importance of services in that block, including playing areas, roads, open spaces and street lighting. The services take the brunt of the cuts, so I ask my right hon. Friend to give us a formula that will be transparent and robust, and which we can understand and explain to the people whom we represent.
  9.50 pm
  Mr. Don Foster: In these rather bizarre circumstances, and in what may, I hope, be seen as part one of my contribution, I intend to say a little bit about why I am concerned about what is currently happening

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  and mention what I think should happen next. In what I hope will be part two of my speech, at an unspecified later date, I shall speak in more detail on my thoughts about the way forward.
  The hon. Member for Brentwood and Ongar (Mr. Pickles) rightly tried to see whether it was possible to build some consensus in the House. I suspect that there is consensus in all parts of the House at least about the view that local government needs a different and fairer funding system. I hope that I can also build consensus in respect of the bouquets that he gave to the Minister. Indeed, I suspect that nobody in the House would deny the Minister's clear commitment to local government. I give him credit for his willingness to take on a challenge that almost everybody else has failed to tackle—in fairness, even the Local Government Association has failed to tackle it—and make some proposals about an alternative to the current discredited system.
  The fact that I shall be critical of some of the Minister's proposals does not mean that I am critical of his energy in that direction. His commitment to local government has been demonstrated by the fact that it has felt the effects of a number of improvements in the past five years. We have seen a number of significant changes. For instance, capping is now more or less out of the window. Of course, there have also been some improvements in overall funding, but sadly, those increases have often been linked to increases in ring-fenced funding.
  Mr. McWalter: Does the hon. Gentleman also agree that there should be consensus throughout the House about the fact that social services receive woefully inadequate funding throughout the country, whether in area cost adjustment areas or elsewhere? It is a vital function of this debate that that historic misery be corrected.
  Mr. Foster: The hon. Gentleman is absolutely correct. The Minister might even leap to his feet to suggest that, in recognising that deficiency, the Government have put additional money into that block in the SSA formula. Were he to do so, however, he would also have to go a little further and acknowledge that, even with the additional moneys that have been put in, local authorities throughout the country are still reporting that their expenditure is well in excess of the amount that has been given and that many needs are not being met. The hon. Gentleman makes an important point.
  Unfortunately, we have waited in vain for five long years for a new formula to replace the current discredited one. After two wasted years spent on the abortive attempt to introduce the plan-led approach, I believe that we are now in danger of rushing the current review through to full completion for the coming financial year in a way that could lead to the same disaster that resulted from rushing through changes to the A-level system. Hasty action now could create problems in future. The Government have left themselves a short time of only a few weeks to consider the many and varied responses to the consultation before they make their final settlement announcement.
  I hope that the Minister will acknowledge that, last year, the Government could not get their sums right for even the minimal changes—not the huge swathes that
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  are now proposed—to the system as district councils with incorrectly calculated floors found to their cost. As the Minister said, a change in one part of the system led to unpredicted consequences elsewhere. The Government missed those consequences. How can we have genuine confidence that last year's mistakes will not be repeated and multiplied many times in the numerous changes that are proposed to floors and ceilings, let alone all the other changes, in the approaching financial year?
  Richard Younger-Ross: My hon. Friend referred to floors and ceilings. Will he comment on the Minister's response to my earlier intervention about the long-term impact of formulae on potential? It is fair to say that if the floors exist and there is no impact in the first year, there may be no impact in the second or third year. However, what happens when the floors no longer exist? Will local authorities be worse off?
  Mr. Foster: I fear that my hon. Friend's analysis is not correct because it is not necessarily the case that there will be no impact. As the Minister rightly pointed out, the floor refers only to a cash figure, not an inflation-related figure. I am sorry that I was unable to attend his seminars, which, I understand, were extremely good. However, in the seminars and in the Chamber tonight, he failed to state clearly what would happen after the first year. We understand that floors will continue to exist for several years, but the Minister has told us neither the number nor whether they will continue at the same level. For my hon. Friend's council and many others that fear losing out under any new arrangements, there is no certainty for the future.
  I hope that my hon. Friend accepts that if the current formula is unfair and changes are required, the distribution mechanism needs to change. As the Minister said, there will always be those who will not get much more compared with others who will.
  Mr. Chris Mole: I was worried that, in supporting his colleague's comments, the hon. Gentleman was suggesting that there should be transitional arrangements that last for ever.
  Mr. Foster: I believe that I was able to point out before the hon. Gentleman intervened that I did not advocate such a proposal. I acknowledge that if we want to change a system, there will be changes for many councils.
  Sir Paul Beresford: The point that was made in the earlier intervention puts the Minister in an interesting position, because if his formula is so fair, the floors and ceilings will have to disappear.
  Mr. Foster: I accept that that is likely. If the Minister was prepared to respond to our question about the length of time that floors will continue and their operation, we might get a clearer view.
  Sir Patrick Cormack: Will the hon. Gentleman give way?
  Mr. Foster: Perhaps the hon. Gentleman knows the answer better than the rest of the House.
  Sir Patrick Cormack: This hon. Gentleman finds the subject so incomprehensible that it would be difficult for

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  him to explain it to his constituents. That is a genuine problem. Does not the hon. Gentleman agree that the hon. Member for Normanton (Mr. O'Brien) made the most important, simple point: whatever the result, it must be comprehensible, unlike the Schleswig-Holstein question? The hon. Member for Bath (Mr. Foster) will know that only three people knew it: one was dead, the other was mad and the third had forgotten it.
  Mr. Foster: I have come across no hon. Member, including the Minister, who is capable of fully explaining current local government finance settlement arrangements. The new system that purports to be fairer will involve a complex mechanism. We must all get used to the fact that whatever we do will be relatively complex. That complexity and the need to review the matter in greater detail suggests that although some changes could be introduced in the next financial year, it would be better if the Government postponed them for a year. I shall explain the reasons for that in more detail in part two of my speech next week.
  It is worth reflecting on the fact that earlier today on the Floor of the House—
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

PETITION

  ASW Sheerness
  10 pm
  Mr. Derek Wyatt: The petition of current and former employees of ASW Sheerness—previously known as Co-steel Sheerness—and their partners
  Declares that ASW Sheerness Steel is in the process of being wound up, causing a major shortfall in the pensions that will be received, thereby resulting in considerable hardship to its members. It is believed that this situation has arisen because of pensions legislation put in place by successive Governments.
  The petitioners therefore request that the House of Commons urgently pass legislation both to ensure the restoration of the ASW Sheerness pension fund and to ensure that pensions legislation is more equitable in its treatment of members of company pension schemes.
  And the petitioners remain, etc. Peter Holsten, 19 Princess Avenue, Minster. Sheerness.
  To lie upon the Table.

  Autistic Children
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Caplin.]
  10.1 pm
  Mr. John Bercow: Interest in the House in autism has been reflected since 1 May 1997 in 154 written parliamentary questions, eight oral parliamentary questions, nine early-day motions and, on my reckoning, at least three Adjournment debates. Those important Adjournment debates on the subject of autism have respectively been initiated by the distinguished chairman of the all-party group on autism, the hon. Member for South Thanet (Dr. Ladyman), by my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) on the specific subject of Asperger's syndrome, and. finally, by the hon. Member for Ilford, North (Linda Perham), whose debate took place, fittingly, on 9 January this year, very close to the start of autism awareness year.
  Right hon. and hon. Members who take an interest in this subject will doubtless also be conscious that next month will see a further initiative from Autism in Mind, another important campaigning organisation in this field, which will stage a lobby of Parliament. I am, therefore, especially gratified—on this, our first day back after our lengthy parliamentary recess—to have the chance to raise with hon. Members this important issue. I do so conscious of the assistance of the National Autistic Society in general, and of its policy and campaigns manager, Steve Broach, and its parliamentary officer, Senay Camgoz, in particular. They have briefed me. I am not an expert, but I am doing my best to highlight issues of great importance to many of my constituents and to many constituents of Members on both sides of the Chamber.
  I begin with a brief consideration of the definition and prevalence of the condition of autism. It is a lifelong developmental disorder that affects the way in which a person communicates with and relates to the people around him or her. It is important to understand that there are many different variants on the theme of autism. We are, after all, dealing with individuals. Some conditions involve learning disabilities, others do not. So there is a great variety. It is, therefore, fitting that the professional experts in the field have come up with the term "autistic spectrum disorder" to embrace the various different forms of the condition which people experience.
  It is estimated that about 520,000 people in this country are autistic. To put it another way, 60 per 10,000 children under the age of eight are involved. That is a substantial number of people. Whatever the differences in their condition and needs, one thing that they have in common is, as one distinguished commentator on this subject has observed, that they suffer from a triad of impairments: an impairment of social interaction; an impairment of social communication; and an impairment of imagination.
  Inevitably, we are all influenced in our thinking and pronouncements on this subject by constituency cases—local examples that have inspired us to think further about a subject about which we perhaps knew little. I have been approached by the mothers of Luke Bennion

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  and Ethan King in the Vale of Aylesbury, and they have told me of the harrowing ordeals that they and their children have undergone in pursuit of equity and service. Equally inevitably, as the House will understand, the case with which I am most familiar and about which I am most immediately concerned is that of my constituents, Pamela Keszei and her son, Christian.
  Their story is instructive and I am sure that it will have many parallels in the constituencies of other hon. Members. When Christian was three and a half years old, a health visitor suspected that he might be autistic. The suspicion was not confirmed and no diagnosis was given. The family moved from Ruislip in Middlesex to Stone in my Buckingham constituency. It was fully five years later, when Christian was eight and a half years old, that he was diagnosed as autistic. That was after no fewer than three requests for a statement of his special educational needs. He went to a mainstream primary school in Stone. He had one hour a week of speech therapy and, I am horrified to reveal, only one hour per half term of specialist teaching.
  Christian has now moved on, temporarily, to a mainstream secondary school, Mandeville upper school. At that institution, he has one hour a week of speech or language therapy and one hour a fortnight of specialist teaching. His overall package of assistance amounts to only half a day's education each day of the week. He is at the school for three hours a day with the support of a dedicated, but non-specialist, teacher and one helper.
  In trying to form a picture of what Christian has suffered, it is important to retrace a step. When he was at primary school, he suffered bullying so regular and severe as to cause him to try to commit suicide on no fewer than three occasions. I have conversed and corresponded with Pamela Keszei. She is a remarkable and courageous lady. Her family has undergone the most appalling ordeal. Under the strain, she and her husband are now divorced. She faces childminding costs of £100 a week on average and will shortly have to resign her job as a manager for Age Concern in Aylesbury. She will almost certainly be condemned to live, against her will, on benefits. She may ultimately lose her home. She has focused, almost to the exclusion of everything else in her life and as she has had to do, on the needs and interests of her child.
  I salute the indomitable will of that lady and those who support her, but I am horrified that she and her son have been failed by the system at every turn. People who know about the subject will readily testify that autistic children find it especially difficult to deal with change. However, Christian has been obliged to face change in the form of an interrupted education. He will have the chance in May to go to a special school in Princes Risborough that focuses more on education than life skills, although his mother and others would prefer a service that focused more on life skills than education. Remember how much ground has to be made up. That is the experience that that young lad has suffered, but it should not have been necessary.
  We ought to take account of the testimony of Dr. Ann Rowland, Christian's clinical psychologist. Underlining the point about change, she says that Christian is a boy who finds change
  "extremely difficult and anxiety provoking".
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  His mother continues to wage a relentless battle for due entitlement in the form of a tailored package of personal care for her child.
  I want to put a series of legitimate challenges to the Minister in a non-partisan spirit. I shall raise three issues. The first concerns diagnosis, and the reality is that we face a postcode lottery. In 1999, the National Autistic Society discovered that 40 per cent. of parents had waited at least three years for a diagnosis, and that 65 per cent. of them had to see at least three professionals before a diagnosis was given. I know of cases in which as many as 10 professionals have offered a miscellany of different and sometimes hostile opinions to each other. Other hon. Members may be familiar with similar cases.
  All too often, it has appeared that the determining factor in what has been on offer has been the availability of services rather than the needs of the child. That has to change. The system has to be flexible enough to adapt to the needs of the individual child because, manifestly, in cases of this kind the child cannot be expected to be flexible enough to adapt to the needs of the system.
  We now have the national initiative on autism: screening and assessment. It is designed to provide an assessment of the current situation, to develop a template of good practice, to encourage multidisciplinary assessment teams, and to propose a framework for training that would facilitate the earliest possible introduction of the new guidelines.
  My first challenge to the Minister concerns the NIASA guidelines, which are due to be published in early 2003. Will the Government pledge to support those guidelines and to enable their national roll-out, thereby tackling the postcode lottery and ensuring consistency of diagnostic practice across the country?
  The second problem is the gap between diagnosis and access to services. The Minister and other hon. Members will know that Early Bird and Help! are two National Autistic Society schemes that inform parents and others of their entitlements. Will the Government support the development of information and advice systems that effectively empower parents? A related and no less important point has to do with the gap that exists for many children between the expertises of professional agencies. Children do not always fall neatly into categories. Will the Government undertake to issue guidance to social services departments across the country to enable each autistic child to undergo an assessment under the National Health Service and Community Care Act 1990, and to ensure that local authorities create pathways for effective support for families with children who experience autism?
  The third real challenge relates to education and training. I referred earlier to the possibility that 60 children in 10,000 were involved, but the most recent research from the National Autistic Society suggests that as many as one child in 86 in schools is affected by autism. Whatever the numbers involved, it is essential that the school environment be responsive to the needs of those children, but 72 per cent. of schools have told the National Autistic Society that their teachers are unsatisfactorily trained in that respect.
  My request to the Minister is that she tell the House whether the Government will instruct local education authorities to train teachers, assistants and all specialist

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  professionals in awareness and understanding of autism, as part of their responsibilities under the Special Educational Needs and Disability Act 2001.
  In making this request—and I have made all these requests, as the hon. Member for Dumfries (Mr. Brown) and others will be aware, on behalf and with the support of the National Autistic Society—I simply remind the Minister of the campaigning involvement of the Parents Autism Campaign for Education, yet another key body in the field. It highlights in its literature the work of the Mental Health Foundation whose research suggests that even moderate increases in educational provision could result in major savings in later living costs.
  This issue is not the subject of cross-party wrangling; it is, thankfully, the subject of cross-party co-operation, and I welcome that. I acknowledge that the Government are concerned about the issue and are taking a number of steps to improve provision which, despite all I have said—legitimately and with sincerity on behalf of my constituents—is much better than at one time it was. The numbers of people that we know to be experiencing autism are not necessarily that much greater, but reflect improved diagnosis. However, much still remains to be done.
  I am sure that the Minister will make a constructive, helpful and informative speech. I wish to hear that speech, so I shall therefore sit down.
  10.16 pm
  The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): I congratulate the hon. Member for Buckingham (Mr. Bercow) on raising this extremely important issue on the first day back after the summer recess. That is an indication of how important the matter is to increasing numbers of families throughout the country who have to cope with the severe problems experienced by children with a whole range of autism spectrum disorders.
  As the hon. Gentleman said, autism is a complex and distressing condition for those directly affected by it and for their families and carers. The pressures can be immense. Children with autism often lead isolated lives; their social and communication difficulties place great stress on their families. I acknowledge the tremendous contribution made by families and carers in these difficult situations. It is clearly the responsibility of Government, nationally and locally, to put in place good, effective support services. Without their carers and families, the lives of these children would be much worse.
  The hon. Gentleman acknowledged that there have been difficulties in this area for many years. The number of children who have been diagnosed with autism has increased recently, but it is primarily a result of better diagnosis and assessment that we are beginning to see the extent and scale of the problem. In years gone by, autistic children were almost the forgotten children with the hidden problem. We are beginning to uncover how great the problem is for communities.
  The hon. Gentleman is right that the Government have taken a number of positive and practical steps. I accept that although much has been done in this area,
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  there is a great deal more to do by all Government agencies—social services, education, local authorities and the voluntary sector. They need to pull together and put in place a package of support on which families, carers and children can rely.
  The main issues that parents have raised concern early diagnosis, early intervention and early support. The evidence is that the earlier these matters are addressed, the better the long-term outcome is for the children and their families. Parents want quick and easy access to statutory and voluntary services. No one party has a monopoly on the provision of these services. It is important to ensure that a variety of diverse providers can meet the needs of these children. Parents also want straightforward, readily available information. They sometimes find themselves in a maze of different assessment, processes and organisations and do not know where to turn.
  The overarching issue is about multi-agency planning and assessments. We talk, perhaps a little glibly, about joined-up thinking and services, but I can think of no better example of an area in which lack of integration means poor services for the families concerned.
  I will deal with the three specific issues that the hon. Gentleman raised, but I should like to set out the way in which the Government are trying to introduce quality and rigour into the area. It is necessary to have a decent legislative framework, which has not been in place in the past. The Special Educational Needs and Disability Act 2001 strengthens the support given to parents of children with special educational needs. In the past, finding a way through the legal process has often been a minefield for parents. I speak as a former local authority education lawyer, so I know the difficulties that parents have struggled with there.
  We also introduced the Carers and Disabled Children Act 2000, which gives people greater flexibility. The introduction of direct payments starts to give people more choice about the sort of services that they want provided. The inspection and regulatory standards of the Care Standards Act 2000 are very rigorous, enabling us to get some quality into the system. The Children (Leaving Care) Act 2000 supports all children with disabilities, including those with autism and deals with some very vulnerable children indeed.
  We have a legislative framework, but that will work only if it is underpinned by practical action for families on the ground in local communities. Therefore, we have the quality protects programme, which is a major programme to help children in general, but is also targeted on children with disabilities. I am pleased to be able to say that the grant directed at children with disabilities was £15 million last year, it is £15 million this year, and next year it will double to £30 million, so it is a significant investment for such children.
  This is about trying to get greater integration of family support services—trying to integrate children with disabilities, including autism, into mainstream leisure and cultural activities. The hon. Gentleman mentioned children having life skills as well as education and having a chance to participate in the things that other children take for granted, which is extremely important. This is also about trying to ensure that people have key workers—one person to whom they can go, who can give them a gateway into the whole range of services that are available.

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  I have some practical examples of things that are happening under the quality protects programme, which are very encouraging. I will highlight a couple. In Cornwall, £1 million has been set aside to develop autism and Asperger's children's services. There is a five-bedded bungalow to provide respite care and transitional support and to ensure that parents can get a break from a tremendously stressful situation.
  In Windsor and Maidenhead, a one-stop shop has been set up for children with disabilities, with a particular focus on children with autism. Again, it is trying to bring the agencies together so that parents are not pushed from pillar to post, trying to seek the most appropriate service. There are also early diagnosis, speech and language therapy, physiotherapy and occupational therapy, which are all designed to give children the extra step up that they need so that they can try to participate.
  Slough has a new in-borough autism service, which is situated in the early years centre, so it is very connected with education, ensuring that children can be diagnosed and get access to services early, which is what parents want. So, the quality protects service is a practical programme that is actually making a difference.

  The hon. Gentleman mentioned diagnosis and having multi-agency assessments. He is aware of the NIASA—national initiative on autism: screening and assessment—guidelines. I am pleased to be able to tell him that Dr. Gillian Baird, the secretary of NIASA, has been appointed as a member of the disabled children's external working group, which is working on the children's national service framework. Clearly, her views and the work that she is doing will be fed into that NSF, which is very practical. Rather than having guidelines in isolation, they will form part of an extensive programme under the NSF and there is a clear focus on that.
  Secondly, the hon. Gentleman raised multi-agency assessments. He asked whether we would issue guidance to local authorities to say that all the agencies should come together to undertake the assessment. There must be nothing more frustrating for families than having to tell their story time and again to a multiplicity of individuals. I am delighted to be able to say that we have already issued statutory guidance under the quality protects programme. This is about moving from service-led assessments to looking at the child—putting the child at the centre of the assessment and asking what he or she needs, rather than what is the boundary of our agency, and what contribution we can make. That is quite a culture shift for some services—saying that this is the child's pathway or journey. It is similar to what we are trying to do in the national health service by asking what is the patient's journey. We are working out how to configure services to meet the needs of the child.
  Mr. Bercow: The Minister is dealing very thoroughly with my questions. Does she agree that it is important that a child should have an alternative between, on the one hand, education in a mainstream school but in social isolation, which is what Christian currently endures, and inclusion in a special school in an atmosphere that may not be suitable? Surely there should be a spectrum of choice and opportunity, just as there is a spectrum of disorder.
  Ms Blears: That is exactly the situation that we are trying to work towards. We want to provide services that are more flexible and responsive, which look and feel different and actually are different from those that we have been used to. We have embarked on that journey—we have to get from where we are now to where we want to be. Multi-agency assessments that ask what the child needs and trying to challenge services to configure themselves so that they meet the needs of that child will take some time, but that is very much the direction of travel. Those services will be valued and will make a difference to the long-term outcomes for children.
  The third issue that the hon. Gentleman raised related to education and training, which are absolutely central. If we are to have early diagnosis and intervention, we must ensure that such issues do not go unnoticed for years and years. I am delighted to be able to tell him that in July the Department of Health and the Department for Education and Skills published some good practice guidance—exactly what he highlighted. It was produced by the autism working group, so we are very much in tune with our partners. The group was made up of experts and practitioners on the whole spectrum of autism disorders.
  The document provides guidance on raising awareness and improving understanding of the disorders and draws on good practice throughout the country. It asks local education authorities and schools to keep their provision under review and to audit it, to provide monitoring and quality evaluation. If the provision available is not of the right quality, it will not have the impact wanted by parents and families. That guidance has been issued, so I am pleased to give the hon. Gentleman those reassurances.
  In addition to the legislative framework that we have set up and the practical measures on the ground, a third important aspect is the children's national service framework. Whenever we talk about a specific service, it is crucial that we try to connect it to the rest of the machinery and the existing organisations; otherwise we end up with specific programmes for specific parts of the community. That is not the way to obtain sustainable mainstream provision that meets the needs of a whole range of people in our community. Sometimes, it is necessary for projects to pump-prime and kick-start things, to get innovation going and to set up pilots. However, the needs of children with autism are increasingly and equally important in the general thrust of the children's national service framework. They are very special children but they should be included in our mainstream thinking rather than being on the outside as "special" children.
  Under the national service framework, there will be a series of exemplars for the design of optimum service. I am pleased to tell hon. Members that one of the exemplars will focus on children with autism, so there should be some good work arising from that to show what a good service for those children should look like.
  The hon. Gentleman is right to say that in the past services for children with autism have been extremely poor and that families have often been left in isolation to cope on their own. We all acknowledge that.
  Mr. Russell Brown: I congratulate the hon. Member for Buckingham (Mr. Bercow) on

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  securing the debate. I appreciate both that it concerns autistic children and that my hon. Friend the Minister is winding up her remarks. However, may I draw one point to her attention? It has been raised by some of the families with whom I have been in contact during the past couple of weeks. I realise that the hon. Member for Buckingham was talking about only one young man, but will my hon. Friend to consider the point that children grow up—even if she cannot address it this evening? There is a problem in my area, and possibly elsewhere: children have support and services but as they go through the transition to adulthood they fall between two stools and the support and service back-up which was available when they were children suddenly disappears. There is a large gulf as they move into adulthood and we need to address that.
  Ms Blears: My hon. Friend is right. The transition to adolescence is difficult in the best of circumstances, but
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  for children with autism the difficulties are multiplied. It is crucial that there are good, high quality support services for young people.
  We do not always turn our minds to young people as a group. We do things for children and for adults, but young people are sometimes extremely vulnerable and I shall certainly take my hon. Friend's point on board.
  We have taken a number of positive steps forward. There is a good legislative framework and some excellent practical projects are under way. We have put in more investment; as I pointed out, the grant next year is about to double to £30 million a year. Together with that investment, we need reform to find new ways of working, especially with our partners in the voluntary sector organisations, but I hope that in future the experience of the constituent of the hon. Member for Buckingham will not be replicated and that more flexible and responsive services will be in place to support families and children.
  Question put and agreed to.
  Adjourned accordingly at half-past Ten o'clock.