Commons Sitting of 11 December 2003

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

    Small Businesses
    Mr. Mark Prisk: What representations she has received from small businesses about the effect of changes in the taxation of husband and wife enterprises. [143317]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): There have been no changes in the taxation of husband and wife enterprises.
    Mr. Prisk: I think that the Minister is misinformed because the tax changes that small businesses have told me about mean that no one in a family firm now knows what their tax liability is, for this year or for the past six years. I refer, if the Minister is uncertain, to section 660A. This is creating uncertainty for hundreds of thousands of family firms. Will the Minister therefore agree to meet a delegation of small businesses to hear them express their concerns?
    Nigel Griffiths: The hon. Gentleman refers to section 660A, but he is being a bit economical in his description. It is section 660A of the 1988 measure to counter tax avoidance. The treatment of businesses under that has been consistent. I understand that the maximum that a husband and wife can attempt to avoid is about £8,000. However, at the moment the Inland Revenue is dealing with fewer than 100 inquiries on this subject. As I meet small business representatives regularly, if they raise the matter with me they can be sure of a robust response.
    David Taylor: The business sector clearly welcomes the generally benign and encouraging regimes that the Chancellor has introduced since 1997 and there have been great incentives to small businesses to incorporate, but does the Minister agree with the Federation of Small Businesses that an imbalance has grown up between incorporated businesses and the self-employed and partnerships, including husband and wife partnerships, to the extent that the future of some of those self
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    employed and partnership businesses is imperilled? Should not taxation exist to produce revenue, not to shape the form in which business takes place?
    Nigel Griffiths: I greatly respect the Federation of Small Businesses and the campaign that it launched with its members some time ago, but I think that small businesses also appreciate that there are advantages to not being incorporated, as well as to incorporation. Whereas incorporation now allows them to benefit from, I think. the lowest starting rate of corporation tax in the advanced industrial economies and a level of corporation tax among the lowest anywhere, unincorporation does confer advantages on small firms and many choose to retain that status, which is why 100,000 viable small firms have started up in the last six years and continue to trade and prosper.
    Mr. Jonathan Djanogly: If a company pays dividends to its shareholders, why should it matter that they happen to be married? Is not this interpretation an attack on family businesses in this country?
    Nigel Griffiths: The hon. Gentleman should address that question to Lord Lawson who, as Chancellor in 1988, was responsible for this piece of legislation. As I have said, I am informed that there have been fewer than 100 inquiries to the Inland Revenue on this subject. Such conduct may involve, in many cases, trying to ensure that a sleeping partner —a non-active—director can benefit from tax avoidance, which is why Nigel Lawson closed that loophole.

    Manufacturing Industry
    Mr. John MacDougall: What measures she is taking to increase productivity in the UK's manufacturing industry sector; and if she will make a statement. [143318]
    The Minister for Industry and the Regions (Jacqui Smith): We are taking action in all the areas identified in the Government's manufacturing strategy—the first for 30 years—to help the UK's manufacturing sector increase productivity in very difficult global conditions. For example., the manufacturing advisory service has been a real success as a major source of advice and support, adding nearly £30 million total value added benefit to firms helped by that service.
    Mr. MacDougall: I am grateful for my right hon. Friend's response. Does she agree that manufacturing industry is still vital to the UK economy, especially to constituencies such as my own, Central Fife; that productivity is a key factor; that we are going to close the productivity gap with Europe and the United States; and that we will declare that intent?
    Jacqui Smith: I wholeheartedly agree with my hon. Friend. Producing, as it does, a sixth of national output, employing more than 300,000 people—many of whom are dependent on manufacturing industry—and being a driver of productivity improvements and innovation in

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    our economy gives manufacturing an absolutely crucial role. My hon. Friend in his constituency, and I in my west midlands constituency, understand that manufacturing has been a key part of our industrial heritage, and that it is also a key part of our successful economic future.
    Mr. Stephen O'Brien: Given that according to the Office for National Statistics, UK manufacturing growth has halved under Labour, does the right hon. Lady agree with her senior Government colleague, the Leader of the House, who acknowledged at the CBI conference on 17 November that the gold-plating of European regulations by this Labour Government is one of the major difficulties British firms face, thus depressing productivity and competitiveness? Will she give the House the percentage of all regulations that affect UK manufacturers that now emanate from the European Union?
    Jacqui Smith: I welcome the hon. Gentleman to his new job, but I point him towards the ONS information that manufacturing output in this country grew by 1 per cent. between September and October. Nevertheless, he raises an important issue about European regulation and, because of our wish to ensure that we give the very best and most flexible regime to our manufacturers, we are working extremely hard in Europe, pushing forward the better regulation action plan.
    My right hon. Friend the Secretary of State, along with representatives of the future presidencies of the EU, is setting in place action to ensure that what we do in Europe drives competitiveness throughout Europe and in the UK, that we improve the way in which European regulations are assessed for their impact on competitiveness and that we drive that forward to the benefit of our manufacturing industry in this country. But if this question is a Trojan horse for the hon. Gentleman's dislike of Europe, I simply remind him that two thirds of our exports go to Europe. We are in the right position—at the centre of Europe, arguing for reforms that will benefit our manufacturing industry.
    Mr. O'Brien: The right hon. Lady gave no defence of her Cabinet colleague and no direct answer to the question, so perhaps I can help her, not least as I have been a manufacturer in many European countries, by saying that her accusation is not well founded. About 40 per cent. of regulations that are driving down UK businesses' productivity are derived from the EU. Under six and a half years of Labour government, as many major EU directives have been implemented in the UK as in the whole of the preceding quarter of a century of our EU membership. In an effort to reverse the relative decline in the UK's manufacturing productivity, will she now direct her Department, with its hugely expanded staff, to use its burgeoning £8 billion budget to promote British business, and not to carry on being the stifling regulator-in-chief against British business?
    Jacqui Smith: I will excuse the hon. Gentleman, as this is his first time at the Dispatch Box in his new role, for not having listened to my response to his first question, in which I outlined the considerable action that is being
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    taken by this country and the Department of Trade and Industry to ensure that we are at the forefront of better regulation across Europe. We will make a difference. We will ensure that the benefits that we derive from being in Europe, which many Opposition Members clearly do not recognise, come to our manufacturers and that we drive forward competitiveness using the active approach that we are taking with our partners across Europe.
    Chris Ruane: Does my right hon. Friend agree that one of the key ways to improve productivity in the manufacturing sector is to develop techniums—incubation and research centres—such as the Optic project on the St. Asaph business park in my constituency, which is about to open and which will be a world leader in the development of optoelectronic products? What measures can she take to expand techniums in the UK?
    Jacqui Smith: My hon. Friend makes a very important point. Of course those innovative and fast-growing UK businesses are very much part of the future, particularly those that take advantage of the research produced by the Government's increased expenditure on the science budget. He is right: we need to set up that sort of incubation unit and ways in which we can translate scientific research into effective business products and processes. I commend the development of those incubation centres, as I do when I see them across the country during my regional visits.
    Malcolm Bruce: Does the Minister accept that the key to productivity is investment and that it has been falling? Is she aware, for example, of figures from the ONS today that show a collapse in inward investment in this country and a disinvestment from America and, in fact, that 63 per cent. of all investment in this country in 2002 came from Germany? In those circumstances, does she acknowledge that we are not getting the benefit of the special relationship and that we are in danger of undermining the benefit of the relationship with the EU? Will she comment on how the proposed £9.1 billion write-down of bad debt by the Export Credits Guarantee Department helps? Does that not give the impression that that money is being used for either international politics or backhanded subsidies, and not for increasing investment, which is the underlying key to productivity?
    Jacqui Smith: I do not recognise the context of the hon. Gentleman's question. I hope that he is not talking down the success of our manufacturing industry at a time when, as we hear today, the CBI sees confidence in our manufacturing industry improving. I agree, however, that investment is one of the key pillars of our manufacturing success. That is why the type of macroeconomic stability that we have delivered in this country, and some of the specific provisions outlined by my right hon. Friend the Chancellor yesterday, will help to build on the success that our manufacturers already have in investing in the sort of innovative products and skills that will enable them to be successful

    Loans
    Mrs. Betty Williams: What action she has taken to protect vulnerable people from unscrupulous selling of loans. [143319]
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): On Monday 8 December, my right hon. Friend the Secretary of State for Trade and Industry published the White Paper "Fair, Clear and Competitive: The Consumer Credit Market in the 21st Century", which tackles the problem of loan sharks.
    Mrs. Williams: I thank my hon. Friend for that answer on a matter that causes great misery, particularly during the time leading up to Christmas and the new year, for people of all ages and their families. May I ask him to be more specific and tell the House what the Government are doing to protect people from illegal and extortionate door-to-door loan sharks, who prey on the most vulnerable group of people in our society?
    Mr. Sutcliffe: I acknowledge the expertise that my hon. Friend has in this area—I believe that she was involved with citizens advice bureaux before coming into the House. Clearly, attacks by loan sharks on vulnerable people are important to this Government, which is why we have introduced a pilot scheme in Glasgow and Birmingham, whereby the police, local authority trading standards and a variety of other organisations come together to look at ways of tackling loan sharks, because people are always frightened to come forward. We hope that that will determine best practice, and that the scheme will be rolled out to the rest of the country.
    Mrs. Cheryl Gillan: I am interested in what the Minister had to say. Does he agree that the unscrupulous selling of loans and various other "unbeatable" financial offers are now coming from all directions to our citizens? I get five letters a week at my London flat addressed to me or my husband, and we also now receive such offers by e-mail and from call centres abroad. Can he reassure me that even if he does not have the instant answer to this problem, he is planning and thinking about how we can stop this constant bombardment of our innocent citizens by people abroad who are no more than fraudsters?
    Mr. Sutcliffe: I accept what the hon. Lady says. It is right that part of the White Paper focuses on responsible lending—making sure that lenders lend responsibly—and that a number of scams are operating from Canada and outside the European Union. We have signed a memorandum of understanding with the Canadian Government, the Australian Government and others to try to locate the perpetrators of those scams, and we are working together to try to resolve these issues.
    Mr. Barry Gardiner: Does my hon. Friend share the concern of many consumer organisations that door-to-door collection of loans should be separated from the selling of loans? Part of the problem is that the relationship built up by people who
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    go to collect debts each week can lead quickly to an exploitative one in which they sell the next round of debt. Will he: do something to separate that?
    Mr. Sutcliffe: I acknowledge the expertise of my hon. Friend in this field. He is right that we are working closely with the industry and consumer groups to examine the detail of how to separate the problem. What is key is that consumers understand fully what they are letting themselves in for in terms of loans. That is why we are looking for transparency in making sure that a summary box in adverts tells people exactly what they are borrowing, how much they are paying back, and how long it will take them to pay it back.
    Dr. Vincent Cable: Does the Minister accept that the unsolicited, aggressive promotion of debt comes not simply from scams in Canada but from our leading banks and credit card companies? Can he explain the logic by which, this morning, the Government are outlawing unsolicited spam on e-mail but are unwilling to act against unsolicited credit promotion by our leading financial institutions?
    Mr. Sutcliffe: The hon. Gentleman is not correct that we are not prepared to act. He will read with interest, as I shall, the Treasury Committee's report on how lending operates in the UK, which I understand will be out next week. I am confident that UK consumers will be better off because of the White Paper and, I hope, the Treasury Committee's findings.
    Miss Anne Begg: It is not only loan sharks who sell loans unscrupulously. I have a constituent who borrowed £4,000 to buy a car. The APR was 28.5 per cent. and by the time that my constituent included add-ons such as insurance and breakdown cover, he found that he was paying back about £8,000. What are the Government going to do about that?
    Mr. Sutcliffe: Again, I acknowledge my hon. Friend's work on the matter in her constituency, and she is quite right. We are examining ways of calculating APR because there are two ways of doing that at the moment and we want to make the process simpler. We are also examining the problem for people who get small loans because, as she said, administrative and other charges can make the APR look outrageous. We do not want to put those who provide such loans out of the marketplace because they offer a useful service, but we want to ensure that people are protected and that they understand what they let themselves in for.

    US Steel Tariffs
    Dr. Ashok Kumar: What action she has taken to protect British steel workers from the effects of US steel tariffs. [143320]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): As the House knows, we have strongly opposed the unlawful tariffs that the United States imposed on our steel exports. We worked extremely closely with our European partners in the successful

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    challenge under the World Trade Organisation. I am delighted that President Bush has now announced the full removal of those tariffs.
    Dr. Kumar: I thank my right hon. Friend for that reply and praise her hard work on behalf of the steel industry. Everyone welcomed her when she visited Teesside steel works, and she has lobbied President Bush hard on the illegal steel tariffs that he introduced—I am delighted that we have got such an outcome. Does she realise that the steel maker Corus recently admitted that its sales were down by 10 per cent. in America in the past six months, which will obviously have a knock-on effect on its profits? Is my right hon. Friend in a position to say whether the Government are willing to give any help or support to overcome the difficulties that the steel industry has faced?
    Ms Hewitt: I thank my hon. Friend for what he said. We have been working closely with Corus and the Iron and Steel Trades Confederation—the trade union—and its members to help Corus and the wider steel industry. I am glad that we were able to get about 70 per cent. of UK steel exports exempted from the tariffs when they were in force. None the less, the tariffs have hit Corus hard. We all hope that with the growth that is taking place in the United States, steel exports will begin to pick up. I know that my hon. Friend welcomes, as I do, the success that the new management of Corus is beginning to have in putting a new financing package in place, working in much closer partnership with employees and their trade unions, and creating a positive relationship with the Dutch branch of the business to ensure that Corus and its work force will have a strong future.
    Mr. James Arbuthnot: Does the Secretary of State agree that it is welcome that the United States has recognised that steel tariffs have done real damage to its manufacturing industry, as tariffs usually do? What steps is she personally taking to ensure that with its proposed licensing system, the United States will not introduce steel tariffs by the back door?
    Ms Hewitt: I welcome the right hon. Gentleman to his new place on the Front Bench, although I cannot help but observe that it appears to take two Conservative men to do the job of one Labour woman. We have looked closely at the small print of not only consumer credit agreements, but the announcement by the United States on steel tariffs. I do not believe that it intends to introduce new tariffs or import barriers through the back door, but we are examining closely what it means by "monitoring imports" because we want to ensure that what we have succeeded in defeating through our partnership with Europe and work in the WTO will not re-emerge. I will continue to work extremely closely with our steel industry on the issue, but at this point we have no evidence whatsoever to suggest that Washington might do what the right hon. Gentleman fears.
    Mr. Martin O'Neill: I congratulate my right hon. Friend on her efforts in securing that outcome. It is a victory not only for common sense but for the WTO, as a rules-based trading organisation, in enforcing those rules to fulfil its responsibilities. Does
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    she accept, however, that there is a sense of frustration about the fact that the appeals procedure takes so long, and that the rather cynical stroke that President Bush pulled in this instance got him the short-term political advantage that he wanted in those vital states that produce steel? If we could have dealt with the matter more quickly in the WTO, that political advantage, which had nothing to do with economics or industrial policy, would have been denied him.
    Ms Hewitt: My hon. Friend is absolutely right, and as part of strengthening the WTO as we move forward in the development round it would be helpful if we could resolve disputes much more quickly. I return to the point made by the right hon. Member for North-East Hampshire (Mr. Arbuthnot) that the United States manufacturing sector, including its car-building industry, has become increasingly concerned about the impact of those steel tariffs on wider industry in the US. It was able to deploy that argument to good effect, as were we, and that reinforces the case that we consistently make for free and fair trade. Such trade has benefited us enormously in the European Union, and it needs now, within the WTO, to benefit the whole world.
    Mr. Mark Field: I appreciate the Secretary of State's hard work, and she is absolutely right to point out that the promotion of free and fair trade should be the cornerstone of Britain's policy. She will recognise, however, that this country, either as an individual nation or as part of the EU, still has tariffs in place, and they are a hindrance to ensuring that we are able to counter global poverty, particularly in developing countries. I should be interested to hear what she has to say about the efforts that she will be making to try to promote free and fair trade and to cut tariffs that affect the third world.
    Ms Hewitt: I welcome the hon. Gentleman's support for the cause of free and fair trade. One of the most damaging aspects of the EU has been the impact of the common agricultural policy. It is through our commitment to EU membership, the alliances that we have built with other members—in striking contrast, let me say, to the isolation of the UK Government under the hon. Gentleman's party—and our positive approach that we were able to get such a good outcome on CAP reform in June. That will help us as we move forward with the Doha round, so that more developing countries can sell products to us, to their benefit and to the benefit of our consumers.

    Doha Development Agenda
    5. Kali Mountford: What action she has taken to make progress with the Doha development agenda. [143323]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): I have been working closely with colleagues across Government, in the rest of the European Union and in the rest of the World Trade

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    Organisation to get renewed momentum behind the Doha development round following the setback in Cancun. All countries stand to gain from a successful Doha round, but the poorest countries stand to gain the most.
    Kali Mountford: I thank my right hon. Friend for that answer. Following on from the last question and my right hon. Friend's answer, is it not the case that sophisticated, developed western nations have a great deal to gain from good trading relationships that allow poorer nations to develop new wealth? To that end, Europe, being a sophisticated economy, has perhaps the most to gain. Will my right hon. Friend join me in urging Pascal Lamy to reconsider whether to hold talks following Doha, and show the flexibility and leadership that is needed to get the talks back on track?
    Ms Hewitt: I strongly agree with my hon. Friend. Indeed, at the recent informal Council of European Trade Ministers, I strongly made the point that the EU needs to show real leadership if we are to get the Doha talks back on track. For various reasons, the other key members and groupings in the WTO are not in a position to do that. We need to do that in the EU, and I am glad to say that among both existing member states and accession states there was strong support for that position.
    Mr. Andrew Mitchell: Does the Secretary of State accept that many of us believe that the Government deserve credit for their work in promoting free trade, which enriches nations? However, was not an opportunity missed at the Commonwealth Heads of Government meeting to help to revitalise the Doha development agenda? Will she look again at the Conservative proposal for an advocacy fund, which would help developing countries to secure access to quality legal and economic advice on those important issues?
    Ms Hewitt: I welcome the hon. Gentleman to his new post on the Front Bench. No opportunity was missed at the Commonwealth Heads of Government meeting. Indeed, as my right hon. Friend the Prime Minister reported to the House a few days ago, the Commonwealth Heads of Government agreed in strong language on the need to reinject momentum into the Doha round. Given the range of countries and economies that the Commonwealth represents, that was hugely important. I do not agree with the hon. Gentleman, however, about the advocacy fund. The Government have invested very substantially indeed in building the capacity of developing countries to argue their position within the WTO. Indeed, we saw some of the fruits of that investment at the Cancun conference. An advocacy fund would undermine the process of capacity building, which developing countries have made it clear they want.

    Sellafield
    Mr. David Chaytor: If she will make a statement on the discovery of contaminated discharge pipes from Sellafield on beaches in Ulster. [143324]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): I am informed that the report is not accurate, and no such items have been found in Northern Ireland.
    Mr. Chaytor: I am grateful to my hon. Friend for his reply. Regardless of the accuracy of the report, is it not the case that politicians in Northern Ireland, both Irish Governments and the Governments of Iceland, Denmark and Norway continue to complain about the impact of radioactive emissions in the Irish sea and the North sea? Is there any possible argument for continuing with the reprocessing of spent nuclear fuel, and should we not separate the issue of reprocessing from the wider debate about the role of nuclear power in our future energy supply?
    Nigel Griffiths: There certainly is such a case. Our generation has an obligation to ensure the safe disposal of contaminated nuclear material produced by a previous generation. However, my hon. Friend makes a serious point, and as a member of the Environmental Audit Committee he takes a keen and informed interest in the matter. I have no wish to do anything that would spoil good relationships with our neighbours, but reports such as this, which are not founded on a shred of fact about anything reaching the beaches of Northern Ireland, can only fuel distrust between us as they are complete fiction. We take such reports seriously—it is important that perceptions of the treatment of any materials, whether contaminated or not, at Sellafield or elsewhere, are taken with the utmost seriousness and dealt with accordingly. I believe that we are doing so, but we must be ever vigilant.
    Mr. Michael Weir: Notwithstanding the Minister's answer, he will know that emissions from Sellafield are a long-standing worry in Scotland, Ireland and the north of Wales. He will also know that the nuclear industry has recently spent a great deal of money on slick advertising campaigns and lobbying on a future energy mix with the aim of assuring us that it is all safe. Will he tell the nuclear industry that that effort and money would be better spent cleaning up the mess at Sellafield?
    Nigel Griffiths: I visited Sellafield a short time ago, and I can tell the House that there is an impressive amount of work on the site and that responsibilities are taken seriously. Doubtless, BNFL will read the hon. Gentleman's comments in Hansard.

    Small Businesses (Banking Services)
    Mr. David Chidgey: What recent assessment she has made of banking facilities for small businesses. [143325]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The Government have accepted in full the findings and recommendations of the Competition Commission, following its investigation into the supply of banking services to small and medium-sized enterprises.
    Mr. Chidgey: Have not the Government abandoned their promise to establish an independent payments regulator in the banking industry? It is now more than three years since the Cruickshank report revealed that the banks were making excessive profits out of small business. When will the Government keep their word and crack down on the length of time that it takes banks to clear cheques and electronic payments while they line their pockets at the expense of our small businesses?
    Nigel Griffiths: That is a serious matter and the Government have indeed cracked down following the identification of 10 practices that were restrictive or against proper competition. We have ensured that SMEs are entitled to interest on their current accounts or free money transfers, and that money transfers are made more speedily. We now ensure that SMEs have clear advance information on all possible charges, and from 31 December we will make it much easier for SMEs to switch between banks.
    Mr. George Stevenson: My hon. Friend will no doubt accept that banking facilities for small and medium-sized enterprises are important, but are one element of the wider package of support that we give small businesses. Is he satisfied with the package of support that the Department is giving to small businesses, particularly such projects as the Mustard programme in areas like north Staffordshire, where the start-up of small businesses is way below the national average? Will my hon. Friend look into the situation to see what improvements can be made?
    Nigel Griffiths: As my hon. Friend knows, I have personally examined and investigated with my officials the provision of support for small businesses in his area, and I found that that contract was awarded quite legitimately. On the lack of start-ups in any part of the country, including his constituency, by comparison with the national average, the Small Business Service is determined to ensure that more people do start businesses. Yes, I am satisfied that steps have been taken by the Small Business Service and others—the regional development agencies—to ensure that we have an enterprise culture where people are able to start and grow their businesses, and where there are more businesses growing for the prosperity of communities in every part of the country.
    Chris Grayling: Does the Minister accept that more and more smaller businesses are being forced to look to banks and other professional bodies for support in dealing with the routine management of their payroll, entirely as a result of the Government's ill-judged imposition of regulation and changes to the tax credit system that make it impossible for a small business man or woman to manage the
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    payroll themselves? Is that not madness, and does it not impose unwanted and unnecessary extra cost upon them?
    Nigel Griffiths: No.
    Mr. Dennis Skinner: If the banks are cheating small businesses, as suggested by that Liberal, the hon. Member for Eastleigh (Mr. Chidgey), and others, is there not an easier way of putting a stop to that in a decent world—that is, to call upon all Members of Parliament on the Tory Benches who are directors of banks and other companies to stop the cheating?
    Nigel Griffiths: My hon. Friend has mellowed in his time in the House. I was anticipating another more drastic remedy, which I did not think the banks would approve of, but as he did not mention public ownership, I warmly endorse his comments. I know that all Members, on behalf of their constituents, will raise with the heads of the banks any grievance they have about the treatment of small business or constituents, and I am sure those matters will be attended to.

    Ofgem/Oftel
    Mr. Edward Leigh: What steps (a) Ofgem and (b) Oftel are taking in response to the 50th report of the Committee of Public Accounts in Session 2001–02 on pipes and wires (i) to simplify the information requirements they place on companies and (ii) to change the period over which price reviews are conducted. [143326]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Both regulators have taken steps to minimise the information requests that they make, consistent with the need to regulate effectively. Both regulators need to allow time for the conducting of price reviews, so that they can get the necessary information and allow for adequate public consultation and for the possibility of appeal.
    Mr. Leigh: Is the Secretary of State satisfied that Ofgem pays sufficient regard to companies' investment needs when it sets price controls in order to maintain electricity supplies at all times?
    Ms Hewitt: Yes, I am. Indeed, as the hon. Gentleman will be aware, investment in the electricity network has gone up significantly since privatisation, contrary to the allegations that were made on last night's BBC programme. Ensuring that price controls allow for adequate investment is a matter that my hon. Friend the Minister for Energy, E-Commerce and Postal Services and I regularly discuss with Ofgem.

    Trading Bodies (Self-regulation)
    Mr. Mark Hoban: If she will make a statement on steps she has taken to encourage trade bodies to regulate their members. [143328]
    The Minister for Industry and the Regions (Jacqui Smith): We have given the Office of Fair Trading new powers in the Enterprise Act 2002 to approve for trade bodies and others codes of practice that aim to safeguard and promote the interests of consumers.
    Mr. Hoban: A business in my constituency is more stringently regulated by a trade body than by the statutory regulators, and suffers from two lots of inspection and monitoring. Is it possible to cut the cost of regulation by allowing the trade body to take the lead, thus reducing the burden on small businesses?
    Jacqui Smith: The hon. Gentleman raises an interesting point. It is difficult for me to respond today without the details of the particular trade body and regulations. What is important, however, is that through the changes in the Enterprise Act 2002 we are attempting to ensure that trade bodies regulate their members in a way that businesses and consumers can feel confident about. That is the reason for the new two-stage approach to determining the codes introduced in the 2002 Act.
    I agree that we need to deregulate—that is why the raft of regulations introduced during the years of Tory Government are being seriously reconsidered. For example, in the regulatory reform action plan that was published yesterday alongside the Chancellor's pre-Budget report, the Department of Trade and Industry alone identified 60 areas for regulatory reform, many of which will bring considerable benefits to small business.
    Lawrie Quinn: As my right hon. Friend will know from cases in her own constituency work load, constituents who are not satisfied with a particular service often, in their frustration, have recourse to the local trading standards organisation. Will my right hon. Friend give a message to the Office of Fair Trading to the effect that it should take note of the problems that trading standards officers regularly have to deal with, ensure that cowboy operators and people who hide behind trade organisations do not get away with it, and help our constituents to get the service that they want and pay for?
    Jacqui Smith: My hon. Friend is absolutely right. We need to ensure that consumers have confidence in the whole regulatory framework by improving the process of codes underlying regulation by the Office of Fair Trading and ensuring that trading standards organisations discuss with the OFT, as they frequently do, how to secure certainty not only for businesses, but, importantly, for consumers about the regulatory process that protects their interests.

    Foreign Languages
    Mr. Nick Gibb: What assessment she has made of the economic effects of second language capability among employees. [143329]
    Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): Although the DTI has not commissioned any specific research on the issue
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    we continue to monitor the situation—for example, by making a point of asking established inward investors about the issues that concern them.
    Mr. Gibb: I am grateful to the Minister for that answer. He may recall that although nowadays most pupils study for a GCSE in a foreign language, only 30 per cent. did so before it was made compulsory in 1991. Given the CBI's concern about a shortage of employees with a second language, does he accept that the Government's decision to end compulsory language study after the age of 14 will have a seriously damaging effect on Britain's economic prospects?
    Mr. Sutcliffe: I always listen to what the hon. Gentleman says, because he has taken principled positions on many issues in this House. We are considering the study of second languages in earlier years and working with the Department for Education and Skills. Although such training is not compulsory at key stage 4, we are saying that if people want it, they are entitled to it. The hon. Gentleman will have noted the announcement of the Chancellor's new deal for skills in yesterday's pre-Budget report: that creates opportunities for languages in re-skilling the work force.

    Retail Workers (Christmas Day)
    Mr. Ken Purchase: What action she is taking to ensure that retail workers in large stores are not forced to work on Christmas day. [143330]
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): The Government are considering legislation and it is hoped that it can be introduced as soon as parliamentary time permits.
    Mr. Purchase: But does the Under-Secretary understand that the pressures to which workers are subject are often not perceived because they are different from a direct threat? There is an implied threat, especially to junior managers and supervisory staff, that their promotion chances may be diminished unless they continue to supervise and manage at Christmas. When we defended workers from having to work every Sunday, we would say, "Aren't workers entitled to one day a week?" We have now retreated so far on workers' rights that we ask, "Aren't they entitled to one day a year?"
    Mr. Sutcliffe: If my hon. Friend considers the employment rights measures that the Government have introduced since 1997—it would take too long to go through every one—he will recognise the benefits to working people of a Labour Government. For example, there is an entitlement to four weeks paid holiday a year.
    Mr. Purchase: What about Sundays and Christmas day?
    Mr. Sutcliffe: My hon. Friend chides me from a sedentary position and wants me to do all sorts of things. I shall ensure that we work with the industry and

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    trade unions to make sure that a measure is passed as quickly as possible to give people the opportunity to have Christmas day off.

    Electricity Supply
    Mr. Russell Brown: If she will make a statement on the prospects for reliable electricity supplies this winter. [143331]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): We are working closely with Ofgem and the industry to ensure reliable electricity supplies. Indeed, security of supply was one of the four key goals of energy policy that we specified in the energy White Paper, which was published earlier this year.
    Generation plant margin for this winter is now projected at just over 20 per cent. That is enough to meet predicted demand in all but the most exceptional circumstances, thereby reflecting that energy markets are working effectively.
    Mr. Brown: I thank my right hon. Friend for that answer. The issue is important and we all appreciate that weather conditions and engineering or technical difficulties can cause reductions in power and blackouts. However, when looking to the future, I am deeply concerned because although I support renewables, I am worried that the gap or the targets that we have set cannot meet baseload power supply. I encourage my right hon. Friend to think further and more deeply about nuclear energy and the direction of future development.
    Ms Hewitt: My hon. Friend makes an important point about the need to ensure long-term investment in a range of electricity generation sources, including renewables. We clearly spelt out the position on nuclear energy in the White Paper: we will keep the nuclear option open. However, at this stage, the emphasis needs to be on renewables and energy efficiency, which undoubtedly represent the cheaper and the better way of fulfilling all our energy policy goals.
    Bob Spink: To keep the nuclear option open, the Government must accept that they need to recommit to the nuclear industry's longer-term future. Will they do that?
    Ms Hewitt: I have just spelt out our policy conclusions. Electricity generation from the nuclear power sector will continue to play an important role in our country for a long time. However, I hope that the hon. Gentleman accepts that, for the reasons that we set out in the White Paper, had we decided to encourage building a new generation of nuclear power stations, we might as well have given up on energy efficiency and on renewables, for which we need a step change in investment and effort. I am glad to say that our Government will deliver that.
    Mr. Roy Beggs: I welcome the commitment to secure electricity supplies in the years ahead. However, there is a feeling that the Government are paying only lip service to renewables, especially when small and medium-sized companies that try to
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    develop hydro electric projects wait for years for a planning decision. Is there joined-up government and will it address the serious problem, which now affects jobs in my constituency?
    Ms Hewitt: The hon. Gentleman raises an extremely important point. It is precisely because of the need to get planning decisions made much faster on renewable energy projects, and on a range of other investment projects, that my right hon. Friend the Deputy Prime Minister has introduced a new planning Bill to ensure that, even as we balance environmental and economic considerations, we do so without the absurd delays that currently plague the planning system. Let me also remind the hon. Gentleman that the renewables obligation that we have put in place will deliver support for renewables investment worth some £1 billion a year by 2010. We have also recently extended the life of that renewables obligation and the amount of money that will be generated by it, to the great welcome of the renewables industry.

  The Minister for Women was asked—
  MINISTER FOR WOMEN

    Public Appointments
    Sue Doughty: What steps she is taking to encourage more women to apply for public appointments. [143336]
    The Deputy Minister for Women and Equality (Jacqui Smith): We have set a target for every Government Department to increase the numbers of women sitting on the boards of their public bodies. The aim is that by 2005 women should hold 45 to 50 per cent. of all appointments in most Departments. We have also commissioned research to look at the barriers that women face, following a national outreach campaign that we ran in 2002.
    Sue Doughty: I thank the Minister for her reply, but I am rather concerned about this issue. In 2002–03, there were 1,357 female appointments, representing 39 per cent. of the appointments made. That is the same percentage as in the preceding year. Only 3 per cent. of major appointments attracting more than £50,000 a year go to women. Most women take on very low-level appointments. Can the Minister offer me any more optimism than the Government's record gives me?
    Jacqui Smith: The hon. Lady rightly pushes us to take action, but it is precisely because we have identified this problem and are keen to make progress that we have set out the action that I outlined in my previous answer. Only 20 per cent. of jobs come up for replacement each year, so progress will not perhaps be as quick as the hon. Lady and I would like. For the first time, however, there is a significant programme of action, information, training and monitoring within government to ensure that we make progress on getting more women on to national public bodies, not just because that is right but

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    because it will mean that those bodies are better governed and more representative of the people that they serve.
    Julie Morgan: Is my hon. Friend aware of the recommendation of the Wales Women's National Coalition that there should be shadowing, pre-application training, mentoring, and provision for the payment of expenses relating to child care and the care of the elderly? Does she agree that we need to tackle this issue from every angle, and does she agree with any of those recommendations?
    Jacqui Smith: The recommendations that my hon. Friend has outlined involve extremely sensible and practical ways in which we can ensure not only that women get appointed on to public bodies but that they are in a position to be able to put themselves forward for appointment and take up the positions. The proposals are similar to those put forward by the Select Committee on Public Administration report on public appointments, to which the Government will shortly publish their response. Recommendations such as those involving apprenticeships and shadowing and mentoring schemes are very welcome and will ensure that we increase the representation of women on our public bodies.
    Mrs. Cheryl Gillan: The 300 Group has an excellent website that lets women know about the latest public appointments that are coming up, and the dates by which they should apply for them. I was sad to read on that website, however, that the public appointments target set by each of the Departments falls far short of the 50 per cent. target that the Government set in 1999. This includes Departments such as Department for Environment, Food and Rural Affairs and the Ministry of Defence, whose targets are only 20 per cent. and 15 per cent. respectively. Will the Minister reassure me that she will look at those targets, that they will be revised, and that this is not a case of the Government saying one thing and the Departments doing another?
    Jacqui Smith: I hope I can reassure the hon. Lady that it certainly is not. We expect transparency from Departments, and each one has produced an action plan, which can be found in the Library, supporting the targets that I have outlined.
    It is not only the 300 Group that has a website; the Government have one, and in March launched a public appointments site making information about current opportunities available to all. I understand that it is currently registering some 9,000 visits a day. That is another element of our practical action to provide access to both information and opportunities.

    National Minimum Wage
    20. Hugh Bayley: What contribution the national minimum wage has made to reducing the gap between male and female earnings for low-paid workers. [143337]
    The Minister for Women and Equality (Ms Patricia Hewitt): Around 70 per cent. of those who will benefit from the latest uprating of the national minimum wage are women. There is no doubt that the national minimum wage has contributed significantly to the closing of the pay gap for part-time workers, the vast majority of whom are of course women.
    Hugh Bayley: Given the important role played by the minimum wage in closing that pay gap, especially for lower-paid and part-time female workers, would the Minister consider instructing the Low Pay Commission to consider specifically the impact of its recommendations on future minimum wage rates and on the gap between men's and women's pay?
    Ms Hewitt: My hon. Friend makes an interesting and important point. The Low Pay Commission is well aware of the extent of the problem of the gender pay gap. When advising on upratings, it pays particular attention to the balance that must be struck between helping the low paid by increasing the minimum wage and ensuring that employment levels are maintained. I will, however, reflect further on what my hon. Friend has said, and discuss it with Adair Turner, chair of the commission.
    Mrs. Caroline Spelman: When women take leave to care for their children, the issue of pay on re-entry to the workplace becomes a real problem. According to figures from the British household panel survey, a woman rejoining the work force after taking time off to serve as a full-time carer is paid, on average, 16 per cent. less than her previous wage. Does the Minister agree that such discrimination against female returners must be tackled if we are to see a significant reduction in the pay gap?
    Ms Hewitt: The hon. Lady is absolutely right. The longer women stay out of employment to care for children or elderly relatives, the worse will be the difficulties that they are likely to encounter on their return. We need to think carefully about what we do to strengthen their rights. The extended maternity leave package that we introduced in April—maternity leave of up to 12 months is now possible—ensured that more women would benefit from the right to return to the same job, or a job at the same level. I look forward to receiving help and support from the Conservatives, rather than their usual whingeing about red tape when we discuss proper standards for people at work.
    Sandra Gidley: The national minimum wage has been welcomed and has improved the lot of many women, but 4.7 million women—43 per cent. of female employees—still earn less than £5 an hour. Many work in the care industry, in jobs that are traditionally low-paid. What is the Minister doing to bring about fairer pay levels in industries in which women employees predominate?
    Ms Hewitt: My memory may be faulty, but I do not recall our having the enthusiastic support of Liberal Democrats when it came to legislating for the national minimum wage. Nevertheless, I welcome the hon.

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    Lady's belated conversion.
    On low-paid occupations, the hon. Lady is quite right: 60 per cent. of women work in just 10 occupations, and those are typically much lower paid and account for the bulk of the pay gap. Of course, we are not only ensuring fairer pay for women in public service occupations through our investment in public services;
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    through our skills strategy, we are also making it much easier for women to get better skills, and therefore to get better and higher paid jobs. The hon. Lady should not forget the very important role of the child tax credit and the working tax credit in helping to ensure that, even for people in low-paid jobs, work pays and enables people to support themselves and their families

Business of the House
12.30 pm
Mr. Speaker: I must inform the House that I am of a mind to protect the business of the Select Committees, which is due for debate. The business statement will therefore be shorter, and I ask Back Benchers—and, of course, Front Benchers —to be very brief in their questions.
Mr. Oliver Heald: Will the Leader of the House please give us the business for next week?
The Leader of the House of Commons (Mr. Peter Hain): The business for next week will be as follows:
MONDAY 15 DECEMBER —Proceedings on the Consolidated Fund Bill followed by Second Reading of the Child Trust Funds Bill.
TUESDAY 16 DECEMBER —Remaining stages of the European Parliamentary and Local Elections (Pilots) Bill.
WEDNESDAY 17 DECEMBER —Second Reading of the Asylum and Immigration (Treatment of Claimants Etc) Bill.
THURSDAY 18 DECEMBER —Motion on the Christmas recess Adjournment.
The provisional business for the week after the Christmas recess will be:
MONDAY 5 JANUARY —Second Reading of the Traffic Management Bill.
TUESDAY 6 JANUARY —Second Reading of the National Insurance Contributions and Statutory Payments Bill.
WEDNESDAY 7 JANUARY —Opposition Day [1st allotted day]. There will be a debate on an Opposition motion, subject to be announced.
THURSDAY 8 JANUARY —Second reading of the Horserace Betting and Olympic Lottery Bill.
Mr. Heald: First, Mr. Speaker, you will recall ruling earlier this week that there should have been a statement on the Government's policy on hospital-acquired infection. Is there to be such a statement? Secondly, can the Leader of the House tell us any more about arrangements for publication of the Hutton inquiry report, following my questions to him last week? Thirdly, on the subject of two-day debates, may we please have two: one on the defence White Paper, and another on Second Reading of the higher education funding Bill?
Finally, does the Leader of the House share the widespread concern about cases such as that of Mrs. Cannings, who was released by the Court of Appeal yesterday? It is tragic that she and her family have had this dreadful ordeal, in addition to the loss of two babies. I understand that the Attorney-General has ordered a review of 50 murder or manslaughter convictions involving evidence from particular expert witnesses. Is that correct? If so, may we have statements to the House from the Solicitor-General about the review, and about the prosecution procedures that will
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be followed in future? Is it not time that the Department of Health launched a proper scientific review of the evidence in this area, and told the House about it?
Mr. Hain: I shall draw the issue of a statement on infections in hospitals to the attention of the Secretary of State for Health. On the Hutton inquiry, perhaps I might repeat for the hon. Gentleman's benefit what I told the House on 16 October. He was not a Front Bencher then, so he may not be aware of my comments. I said:
"I thought it would assist the House if I outlined the Government's intentions in relation to Lord Hutton's report. When the Government receive the report, we shall publish it to Parliament, and ministerial statements will be made by the Prime Minister and the Secretary of State for Constitutional Affairs. The Government will also ensure that both Houses have an opportunity to debate the report once Members have considered its content."—[Official Report, 16 October 2003; Vol. 411, c. 259.]
So that deals with the Hutton issue.
On the defence White Paper, the Defence Secretary will make a statement on defence immediately after business questions. The higher education Bill will be dealt with in the normal way, which is by having a Second Reading debate on a single day.
I share the concern expressed by the hon. Gentleman about the appalling case involving Angela Cannings, and I am sure that the whole House is concerned about it. The Attorney-General has established a group to consider whether any cases in which the doctor involved gave evidence require a more in-depth review. Obviously, we want to make sure that justice is done, and done properly. I am sure that the hon. Gentleman will accept that concern about the case is widespread across the House. We must ensure that there are no other cases like it and that there is none in future.
Mr. Paul Tyler: Will the Leader of the House say when he proposes to convene the all-party round table discussion of options for the legislative timetable for this Session? He will recall that the recommendation in the Modernisation Committee's second report of 1999–2000 was put to the House, and accepted. It was then implemented last year, most successfully, by his predecessor, the right hon. Member for Livingston (Mr. Cook). The Leader of the House will acknowledge that such discussions are very useful in establishing a degree of consensus as to which legislative proposals are candidates for pre-legislative scrutiny, which should go to Joint Committees, and which might be candidates for carry-over. The discussions also help to determine the sequence of consideration of legislation.
The need for that degree of consensus is illustrated by the inadequacy of the present take-it-or-leave-it attitude to those matters in the Government Whips Office. For example, the Second Reading of the Asylum and Immigration (Treatment of Claimants Etc) Bill is due to be held next Wednesday. There is a special meeting of the Select Committee on Selection that evening, at which the membership of the Standing Committee considering the Bill will be appointed. The result will be that that Committee will meet for the first time on the second day after our return in January. That leaves very

1197
little time for anyone—that means Labour Back Benchers as much as members of the Opposition parties—to table amendments. That sort of approach is not helpful to the good conduct of business in the House
Mr. Hain: We are adopting absolutely normal procedure in respect of that Bill, as I am sure that the hon. Gentleman will accept. As for the all-party discussions, I shall look at his proposal and see what needs to be done. However, in respect of consultation across the House, I remind him that I wrote only recently to the Chairman of the Liaison Committee, detailing all the draft Bills that will be involved in pre-legislative scrutiny, and the likely timetables. Twelve or more draft Bills will be published in the coming legislative Session. I know that the hon. Gentleman welcomes that, as does the whole House. The degree of open consultation and transparency shown by the Government is unprecedented. We should build on that, and not go down the route that the hon. Gentleman is inviting us to go down.
Mr. Paul Truswell: Does my right hon. Friend accept that there is escalating concern in this House and elsewhere about cold calling by criminals and high-pressure salesmen? I refer him to early-day motion 219.
[That this House is appalled by crimes committed particularly against older people by doorstep callers offering property maintenance and improvement services; condemns high pressure sales tactics employed by some doorstep callers, resulting in vulnerable people parting with extortionate sums of money for unnecessary, shoddy or grossly overpriced work; and calls for legislation to prohibit unsolicited doorstep calls for the purpose of offering property maintenance and improvement and for a national campaign to raise awareness of the dangers.]
The Office of Fair Trading is due to report at any time on the matter of cold calling. Will my right hon. Friend therefore arrange for an early statement to the House, so that we can debate the measures needed to tackle that increasingly nefarious activity?
Mr. Hain: I understand and sympathise with the point raised by my hon. Friend. Indeed, there is an Adjournment debate today on cold calling and, if he catches the Deputy Speaker's eye, he will have an opportunity to make his points even more eloquently. However, I am with him in spirit when it comes to trying to clamp down on that problem.
Mr. Robert Key: The Second Reading of the Asylum and Immigration (Treatment of Claimants Etc) Bill is scheduled for next Wednesday. The explanatory notes state that the regulatory impact assessments have been completed for many of the issues covered by the Bill, and that they will be published. However, they have not been published. That is a crucial matter, and I urge the Leader of the House to use his best endeavours to get the assessments published before Second Reading, as the fees levied under clause 20 could be excessive. The Bill provides that they could exceed the amount incurred in administrative costs when an
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application is determined. That could be a killer blow for language schools in this country. The details of the regulatory assessments have been leaked, and it has been suggested that every language pupil coming to this country might face a visa fee—a surcharge—of up to £600. That is not good enough, and we need to know the facts before we debate the matter.
Mr. Hain: I understand the point that the hon. Gentleman makes, and that language schools are very important in his constituency. I know that my right hon. Friend the Home Secretary will take a close interest in the point that he has raised. Certainly, it is our intention to make regulatory impact assessments available as early as possible, and we will seek to do what the hon. Gentleman asks.
Mr. Andrew Love: My right hon. Friend will be aware of the publication yesterday of the interim report of the Barker review on the supply of housing. That important report addresses the combination of planning constraints on house building and accusations of market manipulation by house builders. Those are critical issues for all those who wish to enter the owner-occupied sector, or indeed to find any sort of housing, and for the future growth and stability of the economy. Will he make time available in the new year for a full and adequate debate on those important issues?
Mr. Hain: I agree with my hon. Friend that Kate Barker's report raises important issues of concern to him and his constituents, as well as to most hon. Members. It is for that reason that the Government initiated and published the report, and we will obviously wish to address the issues that it raises. My hon. Friend has the opportunity to apply for a debate in the normal way, but we will give serious consideration to his point.
Pete Wishart: As the Leader of the House will be aware, the West Lothian question is the one question that will not go away, and it now deserves to be addressed and answered. Will he find Commons time to debate our sensible suggestion that you, Mr. Speaker, should use your good offices to assess legislation that is put before the House? If it is assessed as affecting England only, with no consequences for Scotland, it should be referred to the English Grand Committee. That would be fair to Scotland and to England.
Hon. Members: Hear, hear.
Mr. Hain: I can understand why it would be fair to the hon. Gentleman, because he wants Scotland to break away from the United Kingdom. He wants this to be an English-only Parliament, but that is not the view of Parliament or of the Government. As long as the Labour party remains in power, this Parliament will continue to operate with every Member, whatever part of the United Kingdom they represent, being equal. That is the basis on which we are elected and sent here. Perhaps some of the Conservative Members who approved of his question think that, for example, members of the Ulster Unionist party should not be able to vote on legislation that would not directly affect them

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I do not think that they would agree, and that is certainly an odd position for the Conservative and Unionist party to take. However, it is not an odd position for the Scottish National party, whose members do not want to be here in the first place.
Ms Karen Buck: My right hon. Friend will be aware that, in the context of the discussion of the modernisation of the House, we have recently had a heated debate about the impact on catering services. I understand that catering income has increased, not decreased, since the new hours were introduced, so will he ensure that we have an opportunity to discuss that point and set the record straight?
Mr. Hain: I am happy to set the record straight for my hon. Friend. Although business in various sectors of the catering provision has fallen in the evenings, demand is up overall, showing that more and more use is being made of the excellent catering facilities that are provided for Members and staff. The issue of our hours is entirely separate, and I know that she is concerned to maintain the existing position, although others wish to change it. Either way, it has nothing to do with catering.
Mrs. Cheryl Gillan: Will the Leader of the House give us an opportunity to debate delegated legislation and, in particular, the complete debacle of the Horse Passports (England) Regulations 2003 this morning? Is he aware that we could create thousands of potential criminals among the horse-owning fraternity—the crime being punishable by up to two years imprisonment—without those regulations ever having been discussed on the Floor of the House? When we discuss the West Lothian question, perhaps we could also discuss why six Welsh Members were responsible for voting down our prayer against that statutory instrument, thus imposing the regulations on English horse and pony owners.
Mr. Hain: I understand that we have already produced draft replacement regulations. The hon. Lady's general point is the same as that made by the hon. Member for North Tayside (Pete Wishart), but we are all equal in this House and we should remain so. I acknowledge that she is highly respected in the House, but she should think through the implications of what she says. Should Welsh Members vote only on certain items of legislation, and Ulster Unionists and Members representing other parties in Northern Ireland vote only on others? That is a very slippery slope which, if followed, would break up this Parliament and deny the fact that we are all sovereign Members who represent our constituencies on an equal basis.
Mr. Gordon Prentice: My local authority in Pendle is unhappy about the revenue support grant settlement, which will bear down adversely on the council. Yesterday, the Chancellor of the Exchequer generously told us that an additional £340 million would be allocated to councils in England. When will we be given details of how that money is to be distributed, so that we can find out whether Pendle council will benefit, as I hope it will?
Mr. Hain: The Deputy Prime Minister has that matter closely in mind. I am glad that my hon. Friend welcomes the extra £340 million for English local authorities—the total for local authorities across Britain is £400 million—which will bring in extra resources to ensure that the level of council tax rises is limited and is brought down to a reasonable figure, rather than what it has been in some cases.
In previous business questions, we have heard right hon. and hon. Members on both sides of the House complaining about the council tax situation. The Chancellor has acted, the Government are acting and I should have thought that everybody would welcome that.
Mr. Peter Lilley: I support the call made by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) that Health Ministers should clarify whether they have new policies to cope with the scourge of superbugs in our hospitals, which kill between 5,000 and 20,000 people a year. On Tuesday, when, with your support, Mr. Speaker, I asked for a statement about the policy proposals that had been announced on Friday, the Minister of State, Department of Health, the hon. Member for Doncaster, Central (Ms Winterton), replied that
"if this were new policy it would have been brought to the House. It is not new policy".—[Official Report, 9 December 2003; Vol. 415, c. 910.]
However, the press release published by the Department of Health last Friday stated that the Secretary of State
"today published plans for a crackdown on… so-called 'superbugs'."
It referred to
"wide-ranging proposals…which seek to revolutionise the way potential infections are handled".
It also referred to "new rules", a "new system", a "new drive" and "new plans".
Normally when Ministers say outside the House the exact opposite of what they say inside the House to avoid being held accountable to the House, it is a serious matter and raises fears that they may be deceiving the House. However, my fear is that they are telling the House the truth and that in fact they have no plans to tackle that growing scourge. The UK's record is worse than that of any other country in Europe, and is getting worse faster than anywhere else in Europe.
Mr. Hain: I understand the points that the right hon. Gentleman is making and I am sure that the Secretary of State for Health will listen closely to them. However, the right hon. Gentleman will acknowledge that, as I think my hon. Friend the Minister for Health said the other day, the problem arises from the bodged way in which the Conservative Government introduced compulsory competitive tendering. That is where the problem comes from. However, I agree with the right hon. Gentleman that the issue of superbugs, hospital infections and inadequate cleaning in hospitals has to be addressed. We intend to address it and the Secretary of State for Health will take forward certain measures. He will obviously be accountable to the House for what he is doing and how the matter is developing.
Jim Sheridan: Will my right hon. friend use his good offices to reinforce the genuine concerns of British workers—I stress the word "British"—such as former employees of Hewlett-Packard in my constituency, who were presented with a fait accompli when their jobs were transferred to an agency with no effective or proper consultation? Is that the way things should be in a modern, progressive Britain? Should modern, progressive British workers be treated in such a way?
Mr. Hain: I very much agree with my hon. Friend's statements about the Hewlett-Packard workers in his constituency and others who may be similarly affected. He knows that we are introducing employment legislation to widen the provision of information and consultation for all employees in such a predicament, but the Secretary of State for Trade and industry will certainly want to monitor the situation closely and reflect closely on the points that my hon. Friend made about his constituency.
Richard Younger-Ross: Can the Leader of the House get the Home Secretary to make a statement about presumption of death certificates? The son of Nev Pope, my constituent, disappeared in Angola in 1999 but, under Angolan law, no death certificate will be issued for 10 years. We wrote to the Home Office on 28 October to ask whether British laws on presumption of death certificates could be changed. The reply was that the matter had nothing to do with the Home Office and that the letter had been forwarded to the Foreign Office. The Foreign Office replied that it had nothing to do with the Foreign Office and that we needed to go back to the Home Office; so will the Leader of the House ensure either that the Home Secretary makes a statement about the matter or that I receive a reply to my letter?
Mr. Hain: The hon. Gentleman is entitled to a full reply to his letter and I will ensure that he receives one. I remember that case from when I was in the Foreign Office. It is an appalling case and the family have been left in limbo and in anguish about what happened to their son. I know that both the Foreign Secretary and the Home Secretary will want to give the family every assistance in order to find out what happened as soon as it is possible to do so. The hon. Gentleman will also appreciate that it occurred in the middle of a civil war raging in Angola, which now mercifully is ended, and that it was very difficult to determine the true situation and what Neville Pope's predicament was. I am sorry about that, but the hon. Gentleman will appreciate that the circumstances were incredibly difficult.
Mr. Tony McWalter: Is my right hon. Friend aware that, among the very large number of welcome initiatives yesterday, there was no provision for people such as my constituent, Mr. Humphrey, who has been contributing to a pension for 38 years and was expecting a pension of £18,000 a year, but who, because of the inadequacies of the Pensions Act 1995, is going to end up with £4,000 a year? It is a bleak Christmas for people who were employed by organisations such as Allied Steel and Wire and Dexion, and there is currently no provision in the legislative
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programme for people in that position. Will my right hon. Friend ask the Minister for Pensions to come to the House to explain to pensioners what is happening, preferably before Christmas, so that they can have a less worrying time over the festive season?
Mr. Hain: I know from my experience as Secretary of State for Wales that the plight of the ASW workers in Cardiff has been appalling—people are scandalously and disgracefully being robbed of pensions that they contributed to, as in the case that my hon. Friend cited, for up to 30 years. Therefore, the Government are bringing forward new pensions legislation to introduce a proper pension protection fund to ensure that that never happens again. The Secretary of State and Ministers at the Department for Work and Pensions are looking at all the claims and looking at these issues very closely to see what can be done.
Mr. Douglas Hogg: The Leader of the House will have heard of the report from Amnesty International today to the effect that there are perhaps 14 persons held in British prisons under the terrorist legislation and in respect of whom there has been no trial or conviction. May we have an early statement or debate, so that we may address that matter? The Leader of the House will keep in mind the fact that the House has always protested against the holding of people without trial, whether in the Bastille in pre-revolutionary France, in the gulags, in South Africa, in Zimbabwe, or more recently in Guantanamo Bay. Surely the House should address the matter when it arises in our own country.
Mr. Hain: My own parents were detained without trial in the early 1960s in apartheid South Africa, but I am sure that the right hon. and learned Gentleman is not suggesting that the situation in Britain now is in any way or form comparable to a police state where the rule of law did not apply. The rule of law does apply here. However, the Home Secretary will obviously want to take close account of the points that he has made.
Mr. David Chaytor: My right hon. Friend will know that in this morning's press there is published a form of university league table, which describes among other things the balance of intake to universities of students from state and private schools. Although there is some progress to report among some of our leading universities, and notwithstanding his earlier remarks about the higher education Bill having a Second Reading debate on one day, does he not think that the complexity of the issue and the controversy surrounding the Government's proposal, which I sully support, in respect of higher education funding and the widening access to universities, justifies the argument for a separate debate on the issue? I endorse the comments that were made by the hon. Member for North-East Hertfordshire (Mr. Heald). Will my right hon. Friend look again at he question of a separate debate, specifically on all aspects of widening participation in our universities?
Mr. Hain: I acknowledge the effort that my hon. Friend has put into taking forward policies that improve secondary schools, which improve the chances of

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students from working-class backgrounds and low-income families of getting into university—something that I know he is very concerned about, as we all are on the Labour Benches. That is why the higher education Bill is intended to be brought forward to widen access, increase social justice and give a chance to university students who would never have dreamed of going, and whose families and ancestors have never been before. On the question of the timing and debate surrounding that issue, I will of course consider my hon. Friend's request, but at present the intention is to have the Bill brought through on one day.
Mr. Andrew Mackay: May I take the Leader of the House back to the Hutton inquiry, because his earlier response did not adequately settle matters? The House needs to know, first, whether all the Opposition parties will receive the report well in advance of publication? Secondly, will there be adequate time, preferably a week, between the making of a statement on Hutton and the actual debate? Finally, can the right hon. Gentleman confirm that the Prime Minister will not only, obviously, make a statement on Hutton but lead from that Dispatch Box when the debate takes place?
Mr. Hain: I have already made it clear that the Prime Minister will make a statement on Hutton. The way in which the report is handled is primarily a matter for Lord Hutton, obviously, as are the circumstances surrounding it, but the right hon. Gentleman will equally understand that the Government, having set up the Hutton inquiry and explicitly asked for the report, with its wide-ranging implications for everybody concerned, not least Ministers, will want to handle this in the proper way, with the House properly involved and everybody satisfied that it has been done in the proper way, so obviously his questions will be taken closely into account.
Mr. Harry Barnes: Has my right hon. Friend seen early-day motion 250,
[That this House notes with alarm the raid by the US occupying forces, using armoured cars and soldiers, on the temporary headquarters of the Iraqi Federation of Trade Unions in Baghdad on the morning of Saturday 6th December in which eight leading trade union officials were arrested; is further disturbed to hear that US soldiers ransacked and destroyed the federation's possessions, including banners and posters condemning acts of terror, and smashed windows, without reason or explanation; notes that the new independent trade union movement in Iraq opposed Saddam Hussein regime, and opposes terrorism by remnants of that regime and others; and calls upon the British Government to make urgent representations to the US Administration to discover why this raid took place and seek a swift apology and compensation for this appalling incident.]?
The Foreign Office has always taken a progressive line on trade unions and has encouraged and facilitated their development in Iraq. On 27 November in the House, the Foreign Secretary promised to encourage the Americans to take a similar line, yet on 6 December, United States forces smashed into the offices of the trade unions and arrested eight of their officials—an act that has been condemned by bodies such as the Congress of
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South African Trade Unions. May we have a statement from the Foreign Secretary, saying what responses he got to representations that he made about trade unionism, and what his response is to what the Americans have done?
Mr. Hain: I agree with my hon. Friend that the Foreign and Commonwealth Office always, under a Labour Government, takes a progressive line on trade unions. We have no information about an incident at the temporary headquarters of the Iraqi Federation of Trade Unions, although we understand that United States forces conducted a raid on the morning of 6 December in Baghdad, which resulted in the recovery of a significant quantity of arms and ammunition and the arrest of eight suspected fedayeen, two of whom now face murder charges.
Mr. Patrick McLoughlin: Two weeks ago, I asked the Leader of the House to provide time for a debate on the Post Office, bearing it in mind that, under the Government's reinvention, four out of the five post offices in Belper are due to close early next year. Bearing it in mind that today's debate is important and is being squeezed, inevitably, by a very important statement, to which I do not object, will he consider in future protecting the time when there are Back-Bench debates, so that instead of finishing at 6 o'clock we finish five-and-a-half hours after we start them?
Mr. Hain: I will certainly consider the hon. Gentleman's request. I have just announced that there is an Opposition day early in January and the Opposition are free to choose that subject for debate, but we have responded in exactly the way the hon. Gentleman asked, by bringing forward a debate on post offices, as there is widespread concern among hon. Members on both sides of the House about local post office closures. I should have thought that he was encouraged by that.
Mr. Barry Gardiner: The Leader of the House was a very keen supporter of the Ottawa land mines treaty, whose effects we all commend. He has also a history of opposing the trade in small arms around the world and is no doubt aware of the call that Mary Robinson, the former President of Ireland and United Nations High Commissioner for Refugees, made in the House yesterday at a meeting with Oxfam and Amnesty International, for a treaty on small arms. Will he ensure that the House can debate the need for such a treaty at an early opportunity, to ensure that its benefits, like those of the land mines treaty, are felt throughout the world?
Mr. Hain: I will certainly consider my hon. Friend's point about making time for such a debate. He obviously has the chance to initiate such a debate himself. I certainly agree with him that the land mines treaty, which our Labour Government initiated very soon after winning power in 1997, was a major breakthrough. I have experience of how small arms can completely devastate whole communities and regions of Africa. We need to get that under control, and the Foreign Secretary and the Secretaries of State for Trade and Industry and for Defence will certainly want

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to consider very carefully Mary Robinson's call and that of Amnesty International. This is an international matter, and we have to tackle it. The unscrupulous flow and spread of small arms is killing whole communities, and it needs to be brought under control.
David Burnside: Once again, the Leader of the House confessed his support for the fact that we are all equal in the House, and as an Ulster Unionist I must support that 100 per cent. Is he aware that one of Republican Sinn Fein's demands is that hon. Members should not have to swear or affirm the Oath of loyalty to Her Majesty the Queen, so that members of that party can take their seats in the House? Will he give a commitment that the Government will hold a full debate on that, and that they will not go down the route of ending up with second-class Members of Parliament, that we will retain the same equality and that we will all be obliged to affirm or swear the Oath of loyalty to the Queen when we first enter the House?
Mr. Hain: There was a vote that clearly established the current position, which I am sure the hon. Gentleman welcomed, in the last Parliament. This is ultimately a matter for Members, but I do not feel inclined to give way to a demand from members of Sinn Fein who are not even prepared to take their place in the House.
Mr. Colin Challen: Although I am aware that a debate on post offices will take place this afternoon, I understand that it will be answered by Department of Trade and Industry Ministers. May I draw my right hon. Friend's attention to a recent question that I asked the Secretary of State for Work and Pensions? I asked whether he would withdraw guidance circulating in his Department that is designed to discourage people from taking up Post Office card accounts. Clearly, that is a very important matter, deterring a lot of people from using those services. Will he ask the Secretary of State for Work and Pensions to come to the House to make a statement about that, so that the DWP is not seen to be undermining the work of the DTI?
Mr. Hain: Without knowing the detail of the circular, I am sure that there is no intention, nor could there be, on the part of the DWP or its Secretary of State to undermine the work of the DTI. My hon. Friend obviously has an opportunity to raise that issue very shortly. From my own point of view as a Member of Parliament, I believe that people, especially vulnerable pensioners who depend on their local post offices, must not be intimidated into choosing a course that is against their own choice and free will. They have the right to continue to draw their pensions and other benefits in cash. Obviously, successive Governments have tried to encourage more people to use bank accounts—we all want that to happen—and modern life has been evolving in that direction for many decades, but no vulnerable pensioner or anyone else should be forced to do anything. A free choice is involved.
Bob Spink: May we have a debate on hospices? Adult hospices are 32 per cent. publicly funded, whereas children's hospices are only 4 per cent. publicly funded, which is indefensible. The remainder is raised by private fundraising. The proportion should be raised to 40 per cent. for both children's and adult hospices. We could then acknowledge the tireless work and dedication of all staff and volunteers in hospices and those people ho do the fundraising.
Mr. Hain: I certainly agree that there is a fantastic voluntary spirit in the hospice movement and that the work done is in the best traditions of volunteerism and of this country, but the hon. Gentleman ought to have been a little fairer in acknowledging that, as has been said publicly in the Help the Hospices conference, the hospice movement welcomes the extra money that has come from the Government on an unprecedented scale. No Government have ever provided the level of funds for hospices that we are providing. On whether there is time for such a debate, he has the opportunity to apply for one.
Mr. Nigel Evans: Would it be possible to hold an urgent debate on the meltdown of manufacturing industry in this country? In the north-west of England, we are losing manufacturing jobs at the rate of 700 a month. Sadly, there is news that LG Philips at Simonstone in my constituency will close with the loss of 400 manufacturing jobs. There was a time when this country was a world leader in the export of manufactured goods. Increasingly, under this Government, we are world leaders in the export of manufacturing jobs.
Mr. Hain: Obviously, I am concerned about any loss of jobs in the hon. Gentleman's constituency and for the employees involved—I am sure that he will do his best to assist them—but we knew all about the meltdown of manufacturing in the 1980s, under the last Conservative Government. Of course we did. Manufacturing, mining and heavy industry were virtually wiped out in Wales, which he was the Conservatives spokesman for until recently, but the difference is that, instead of finding themselves on the scrap heap, often for the rest of lives, people now have the opportunity to find new jobs, because of the near full employment that we have generated across Wales through our employment policies.
I also remind the hon. Gentleman that he ought to look at the facts. Manufacturing output is now up. The mood of optimism in the manufacturing sector is now greater than it has been for some time. We are part of a phenomenon that is affecting other European and advanced industrial countries, whereby manufacturing is increasingly under pressure from far more labour cost-competitive countries such as China, India and others in the far east and even eastern Europe. Maintaining the existing manufacturing sector is much tougher, but manufacturing is getting a lot of support from the Government, and it will continue to increase its output, compared with the dismal and miserable record of the Tories in their period of government.

Defence White Paper/Operations in Iraq
Mr. Speaker: I remind the House that, as I have said before, I am keen to protect the time for Back Benchers in Select Committee debates, so I hope to cut the statement in 45 minutes, but I also tell hon. Members that they should ask the Secretary of State only one supplementary question.
1.7 pm
The Secretary of State for Defence (Mr. Geoffrey Hoon): With permission, Mr. Speaker, I should like to make a statement about the defence White Paper, "Delivering Security in a Changing World", and a report entitled "Operations in Iraq: Lessons for the Future".
It has been five years since the strategic defence review was published by my predecessor, Lord Robertson, who steps down at the end of this year as NATO Secretary-General. I am sure that the House will join me in paying tribute to his determined contribution to modernising the alliance at a time of unprecedented challenges.
The strategic defence review concluded that we needed to move our armed forces into an expeditionary era and build greater flexibility to face increasingly diverse threats in both war-fighting and peace-support operations. Its conclusions have served us well in those five years, although it could not have anticipated the appalling events of 11 September 2001, or their strategic impact. That is why we published the new chapter last year.
The ability of our armed forces to conduct the full spectrum of operations has been well demonstrated since 1998. We have conducted operations, often concurrently, across three continents: in Kosovo, Macedonia, Sierra Leone, East Timor, Afghanistan and the Democratic Republic of the Congo. Our armed forces have been successfully engaged in combat operations in Iraq this year and are still heavily engaged in large-scale post-conflict activities.
The Ministry of Defence is today publishing its full report on operations in Iraq: "Operations in Iraq: Lessons for the Future". Hon. Members will recall that an initial report was published in July, which provided an authoritative account of the campaign and reflected on the early conclusions that we could draw from combat operations. Since then, a detailed and comprehensive analysis of the operation has been undertaken within the Ministry of Defence. Evidence has been taken from those involved in the operation at all levels, assessing the effectiveness of the equipment that we used and identifying from that work the lessons that we can draw from the campaign.
"The operation was a significant military success, achieving almost all of its military objectives within only four weeks."
Those are not my words, but the conclusion of the National Audit Office report on the operation, whose publication today I also welcome. Our people performed magnificently, the equipment was highly effective, the logistic support most impressive, and the revolution in strategy and doctrine that we set out in 1998 has again been vindicated.
If we want to maintain the battle-winning capabilities of our armed forces, however, we must learn from the difficulties as well as the successes. There is no benefit in
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a lessons process that is bland or uncritical. I have encouraged an honest, unflinching report that focuses rightly on the future and outlines the area in which we want to continue to improve. Some changes have already been implemented. Other lessons have no quick solution but will form the basis of work in the Ministry of Defence over the coming months.
It is important to emphasise, however, that we have been successful in recent military operations because we have always looked ahead at the capabilities that we need for future challenges. It is therefore appropriate that the detailed analysis of the Iraq operation is published on the same day as the White Paper, whose title captures what it is about: "Delivering Security in a Changing World". It sets out how we expect to adapt to keep ahead of the challenges. It sets out a policy baseline against which we will make decisions to provide the armed forces with the structures and capabilities that they require to carry out the operations that they can expect to undertake in the future.
The shadow of the cold war, which has shaped our armed forces for two generations, may have receded, and the threat of a large-scale conventional military attack on Europe may seem remote as a result. New threats are emerging, however. We must respond to today's strategic environment and prepare for tomorrow's. The proliferation of weapons of mass destruction and the threat posed by international terrorism, coupled with the consequences of failed or failing states, present us with a real and immediate challenge. Our experience of the recent pattern of military operations demonstrates the increasing frequency of the United Kingdom's involvement in small and medium-scale operations. The need for multiple, concurrent small to medium-sized operations will therefore be the most significant factor in force planning. Counter-terrorism and counter-proliferation operations in particular will require rapidly deployable forces that are able to respond swiftly to intelligence and achieve precise effects in a range of environments across the world.
Regional tensions and potential conflicts are likely to create a sustained high demand for enduring peace support commitments, such as the extended deployments that we have seen in the Balkans, but we must also retain the capacity to reconfigure our forces at longer notice to undertake the less frequent but more demanding large-scale operations of the type that we saw in Iraq earlier this year.
Expeditionary operations on that scale can be conducted effectively only if United States forces are engaged. When the United Kingdom chooses to be involved, we would want to be in a position to influence their political and military decision making. That will involve sharing the military risk, and will require an ability for our armed forces to play an effective role alongside those of the United States. We were able to do that in Iraq, for example, by procuring additional communications equipment for our aircraft. More generally, the key to retaining interoperability with the United States, for our European allies as well as for the United Kingdom, is likely to rest in the successful operation of NATO's new Allied Command Transformation.

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Whatever the strategic planning and equipment, it is ultimately people who deliver success. Our people will need to possess exceptional skills to deal with the complexity of modern operations. We must continue to invest in their recruitment and training and reward them properly for the difficult tasks that we ask them to undertake. The excellent contribution of our reserve forces in Iraq shows that they are an essential part of our defence capability and will remain so.
Resources must be directed at those capabilities that are best able to deliver the range of military effects required, while dispensing with those elements that are less flexible. It has historically been the fashion to measure military capability in terms of the weight of numbers of units or platforms—of ships, tanks and aircraft. That might have been appropriate for the attritional warfare of the past, but in today's environment success will be achieved through an ability to act quickly, accurately and decisively, so as to deliver military effect at the right time.
What are the critical elements, however, in delivering this military effect? The answer is threefold: sensors to gather information; an effective network to consolidate, communicate and exploit that information; and strike assets to deliver the decisive action. Technology will be a key driver for change and will present us with new opportunities: for example, the means by which to link "sensor to shooter" through network-enabled capabilities. By thinking about capability jointly rather than as a collection of separate platforms, the effects that can be delivered can far exceed the sum of the individual parts. That will provide significant opportunities when we consider the requirements for future force structures and will place a premium on flexible and adaptable network-enabled capabilities.
It follows that we no longer need to retain a redundancy of capability against the re-emergence of a direct, conventional strategic threat to the United Kingdom. Our priority must now be to provide the capabilities to meet a much wider range of expeditionary tasks, at a greater distance from the UK, and at an ever increasing tempo. The heaviest burden in those circumstances will fall on those key enablers and force multipliers that deliver more rapid deployment, better intelligence and target acquisition, with ever greater accuracy.
The structure of each of the services will also need to evolve to optimise joint operations and provide greater flexibility and capability to project power to counter the threats that we face. In the maritime environment, our emphasis is increasingly on delivering effect from sea on to land, supporting forces ashore and securing access to the theatre of operation. The new amphibious ships coming into service over the next two years, together with our existing aircraft carriers, offer a versatile capability for projecting land and air power ashore. The introduction of the two new aircraft carriers and the joint strike fighter early in the next decade will offer a step change in our ability to project air power from the sea, while the Type 45 destroyer will enhance protection of joint and maritime forces and assist force projection. Some of the older ships can contribute less well to the
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pattern of operations that we envisage, and some adjustments will therefore be necessary.
In the case of the Army, experience shows that the current mix of heavy and light capabilities was relevant to the battles of the past rather than the battles of the future. We need to move to a more appropriately balanced structure of light, medium and heavy forces, and place a greater emphasis on enabling capabilities such as logistics, engineers and intelligence. The future rapid effects system family of vehicles that we are currently developing will help meet the much-needed requirement for medium-weight forces. Over time, that will inevitably reduce our requirement for heavy armoured fighting vehicles and heavy artillery.
The work in this area is continuing, but we judge that we can start this rebalancing by reducing the size of our heavy armoured forces. We therefore intend to establish a new light brigade, reducing the number of armoured brigades from three to two. This will be achieved by re-roling 4 Armoured Brigade in Germany as a mechanised brigade, and 19 Mechanised Brigade in Catterick as a light brigade. We will announce further plans for future Army force structures next year.
We want to be able to project more air power from both land and sea, offering enhanced capabilities across the range of air operations. Storm Shadow missiles will provide a long-range precision-strike capability, and the increasing availability of "smart" bombs, such as Paveway IV, will ensure a higher degree of accuracy in our offensive capability than ever before. Around 85 per cent. of RAF munitions used in Iraq in 2003 were precision-guided, compared with only 25 per cent. in Kosovo as recently as 1999. Additionally, Typhoon and the joint strike fighter will offer much greater flexibility and balance in the air component of the future, reducing the need for single-role fast jets. Multi-role capability will also allow us to deploy fewer aircraft than previously thought necessary. We are therefore considering what those developments mean for the number of combat aircraft that we require.
The rapid deployment of land and air combat power is, of course, dependent on having a sufficient strategic lift capability. The core of the airlift capability will continue to centre on the C130 fleet, and the A400M when it replaces older C130s from 2011. We are considering the options for retaining a small force of C-17s after A400M enters service, to carry the largest air deployable items. We now also have a fleet of six roll-on/roll-off vessels that proved their worth in moving our forces to the Gulf and are crucial in achieving a rapid build-up for medium-scale operations.
When military action is required, it will be most effective when it comes in the form of partnerships, alliances and coalitions. For the United Kingdom, the key organisations through which we act will be NATO and the European Union.
NATO remains the basis for the collective defence of its members, and continues to play a vital role in crisis management. It is the transatlantic organisation through which the US engages with its allies in planning and conducting military operations. The European Union's European security and defence policy is complementary and provides a means to act where

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NATO as a whole is not engaged. The forthcoming intergovernmental conference will be an opportunity to strengthen the European security and defence policy and European military capabilities. As a result we will strengthen NATO, without any unnecessary duplication.
The security and stability of Europe and the maintenance of the transatlantic relationship are fundamental to our defence. More widely, our security and national prosperity depend on global stability, freedom and economic development. Our armed forces will continue to act as a force for good in the international community. We know that, ultimately, security cannot be delivered by military might alone. It is a matter of changing attitudes and bringing security to those regions where there is a risk of instability. That is a challenge for not only those of us in defence but all of us in Government. The White Paper should therefore be read in conjunction with the White Paper on UK international priorities that my right hon. Friend the Foreign Secretary published last week.
Everything that I have set out involves change. The White Paper, by dealing with the policy context, will ultimately determine the shape of our armed forces. Within that overall shape, we will need to develop the details of individual systems and structures. However, before we can do that, we need to be certain that we have the right procurement and development projects, which is why the Ministry of Defence is undertaking a significant examination of our capabilities and overheads. This is not a new defence review, nor does it need to be, but it is a final check on our planning, to ensure that we have the right capabilities that are needed for the challenges ahead and that we are spending our finite funds in the most effective way. I shall make further announcements on the results of that work next year.
This is a changing world, and we must adapt if our armed forces are to stay ahead of potential adversaries. We must exploit new and emerging technologies and be prepared to make tough decisions to ensure that our armed forces are able to carry out the difficult tasks that we ask of them. It is only through the process of continuous change and improvement that we can ensure that our armed forces are equipped and structured to meet the challenges of the future.
Mr. Nicholas Soames: First, I thank the Secretary of State for his courtesy in allowing us sight of the White Paper earlier. I join him in the tribute that he paid to the remarkable and distinguished work of Lord Robertson at NATO. Together with Lord Robertson, Conservative Members remain extremely anxious about the Government's plans for European defence and look forward, after the conclusion of the negotiations this weekend, to hearing a rational and sensible plan that will continue to anchor America to Europe.
Despite the lack of detail, we agree with the fundamental thrust of the White Paper. It does, indeed, foretell considerable change for the conduct of the armed forces business across the board. The House must not forget that the strategic defence review—its predecessor—was never properly costed or funded, and
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the same must not be allowed to happen this time. For our part, we generally accept the Secretary of State's assessment of the strategic environment and the difficulties that flow from it. Indeed, it is clear that we have come to a decisive moment in history when a new and diverse constellation of threats have appeared that are not nearly as obvious as were their relatively certain predecessors. We assert that since the end of the cold war, the world has never been as dangerous and unpredictable, nor the threats so serious. An era of invulnerability is over and our adversary has changed.
Terrorism is not a technique, an ideology or a political philosophy, let alone an enemy state, but a fiendishly difficult threat with which to deal. The proliferation of weapons of mass destruction and the means to deliver them represents a major threat. We welcome the Government's decision to continue to examine missile defence. We are in a position, as the Secretary of State rightly said, in which we must be prepared for the wholly unexpected as well as being able to deal with conventional military tasks.
We have learned, and continue to learn, from the recent experiences of our forces in Afghanistan and Iraq. There are most profound lessons for us on preparedness, logistics, deployability, jointness, precision, speed and agility, but there are also clearly situations in which light forces are not the best solution. We look forward to studying in more detail today's Ministry of Defence publication, "Operations in Iraq: Lessons for the Future". While we welcome the National Audit Office report on Operation Telic, it rightly makes the point that although it is clear that British troops performed quite brilliantly, there were some serious shortcomings in the supply of nuclear, biological and chemical protection and other vital lifesaving kit, as well as more mundane yet important kit such as combat clothing. That cannot be allowed to happen again, and we look forward to hearing a detailed response to that from the Secretary of State and the Ministry.
Unlike the Secretary of State and what is said in the White Paper, we believe that measuring the capability of our armed forces by the number of units and platforms and the extent of manpower remains significant, because the same unit or platform obviously cannot be in two places at the same time. A combination of capabilities and numbers will thus continue to be critical in any assessment of the potential effectiveness of our armed forces. Infantry and armour on the ground can be augmented by technological wizardry but cannot be replaced by it. The peace in Basra today is being kept by some 10,000 soldiers on the ground. We underestimate at our peril the importance of the foot soldier and all that he can do in both combat and, equally importantly, humanitarian terms.
We welcome the intention to enhance the strategic enablers of communication, logistics and intelligence, but as a former Chief of the Defence Staff, Lord Guthrie, pointed out last week,
"it is important that we do not concentrate our efforts to too great an extent on one emerging threat—a knee jerk reaction—forgetting that there are other threats which have not gone away for which we should still be prepared."
We believe that such principles are of the first importance. Indeed, the histories furnish the most

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excellent lessons in that respect and we should, and must, learn from them.
We welcome the acknowledgement of the absolute need to continue robust and collective military training at all levels. We consider that it is vital to underpin the new doctrines with the single-service ethos and the remarkable fighting spirit that have done our forces so well over the years, to move to improve arrangements for families and general harmony, and to rebalance key support elements toward brigades from the divisional level.
Current events provide a sombre background to this important White Paper, for today there is a crisis in the Government's Defence budget. Frankly, Conservative Members and many serving and retired military have the gravest reservations about the Government's ability to sustain their current ambitions and equipment programmes. It is reported that the Defence budget is deeply in the red. Is it not a fact that the equipment budget is overspent in excess of £1 billion per annum and that this year's personnel budget is overspent by £600 million? Is it true that the Secretary of State has ordered cuts of £1 billion a year for four years? An internal MOD memo on the White Paper and departmental finances has warned that much of the so-called new money from last year's spending review —£3.5 billion—has already been earmarked for the new weapons programmes.
The reality is that even to balance today's books, let alone fund the new equipment, the MOD will have to defer or cancel elements of major equipment programmes and possibly even freeze recruiting. Is it correct that the programmes earmarked for cuts include Eurofighter, Nimrod, nuclear submarines, Type 42 frigates and heavy armour, in addition to existing assets? Given that there are so few hard facts in the White Paper, however, we are concerned that a whole raft of decisions on cuts in both manpower and equipment will start to leach out later, and we look to the Secretary of State to report back to the House in detail on the substance of his proposals.
May I ask the Secretary of State to answer the following questions? First, the new battlefield technologies will have to be paid for. Where is the funding for that to come from? Secondly, is he aware that the defence research budget has been cut by 10 per cent.? How can the Government be serious about the digitised battlespace and all the other associated technologies, and yet continue with defence research cuts? Indeed, it seems astonishing that, at a time of extraordinary pace in technological advance, military research and development has been so drastically reduced.
While paying the warmest tribute to the remarkable achievements of our Territorial Army and other reserve forces in Iraq and elsewhere, we welcome the chapter on developing the reserves and the acknowledgement in the White Paper of the urgent need to improve support for reservists and their families and employers. Will the Secretary of State give the House some idea of the future manning levels of the TA and other reserves?
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In the light of the reference to home capability, will the Secretary of State comment on his thinking on the present timing in respect of future force levels in Northern Ireland, and the possible consequences for manpower of the rumoured peace dividend?
Although Conservative Members recognise the demands for the new technologies and the need wholeheartedly to embrace them, we remain deeply concerned about the consequences that flow from the financial crisis in the Ministry of Defence at a time of severe overstretch. We look forward to the Secretary of State announcing his detailed intentions to the House and thus, we hope, removing the understandable anxieties of many of our loyal servicemen and women and their families.
The British armed forces have a reputation for excellence and skill at arms that is unrivalled throughout the world; indeed, they are the benchmark by which all other armed forces are judged. I am not in the least bit afraid for their ability to cope with change. Indeed, of all the great institutions in this country they have proved time and again at all levels to be the most adaptable and flexible, and certainly the most successful. But it is of the first importance that the Government and Parliament recognise, when addressing these profound changes, that whatever the technological advances, the fundamental character and nature of war will remain unchanged.
For the soldier of today and tomorrow, as it was for his ancestors, warfare will continue to represent the ultimate physical and moral challenge, where these young men and women will encounter extreme danger in rapidly changing circumstances amid conditions of chaos and great uncertainty. They have never let us down, and the Secretary of State must see to it that nothing is done that compromises the astonishing success of our armed forces. The fact is that they are too small for the tasks already laid on them. There is a great deal of work to be done, and the greatest possible thought and care needs to be taken in implementing these future programmes and the profound changes that they foretell if we are not to unbalance something that is truly excellent.
Mr. Hoon: I thank the hon. Member for Mid-Sussex (Mr. Soames) for the general tone of his observations and congratulate him on his rapid reabsorption of some of the more difficult issues that he faces when coming to grips with the profound changes that have happened since he served with such distinction as Minister of State for the Armed Forces. His observations today demonstrate that he has already reached a long way round that steep learning curve. I am particularly grateful to him for recognising the importance of the need for change.
If I can echo the hon. Gentleman's observations about the armed forces, I cannot imagine that there is a single organisation in the country that has had to face so much change in recent times. The profound point that we all need to recognise is that unless those changes continue, our armed forces will not be equipped to deal, or be capable of dealing, with the threats that they face in a modern world. Since we cannot anticipate each and every one of those threats and the crises that they may

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produce, the key to those changes will be flexibility—a flexibility that, as I indicated, requires us to be able to conduct not only large-scale operations of the kind that we have seen this year in Iraq but a number of smaller operations.
That is the answer that I would give to Lord Guthrie. I read his observations carefully. We are not concentrating our efforts in one particular area; we are not making the mistake of fighting the last conflict, albeit one against terrorism. We are ensuring that we have the flexibility to be able to take on a number of different kinds of operations whenever they present themselves, as inevitably they must.
There is no crisis in the defence budget. What we have is more than £3 billion of extra resources to spend over and above what was previously available. That is the largest sustained increase in defence spending in more than 20 years—not something that, with the greatest respect to the hon. Member for Mid-Sussex, he was ever able to say when he occupied a position in the Ministry of Defence. That money will have to be spent on ensuring that our armed forces have the right capabilities and equipment for the future.
I shall attempt to deal with the specific points that the hon. Gentleman raised. Certainly, new technology will have to be paid for, but right hon. and hon. Members need to recognise that it will deliver ever greater effect. I cited a statistic drawn from the "lessons learned" report about the number of smart weapons used. The more our weapons are smart—the more accurate those weapons—the fewer we require. That is a simple statement of fact. If we can deliver, as was done in Iraq, 85 per cent. smart weapons, all hitting their targets, as far as I am aware, that obviously means that the effect is far more dramatic and significant, in military terms, than 25 per cent. smart weapons, which we had as recently as 1999. That is a huge change in our ability to be successful in high-intensity warfare.
I accept the comment about the defence research budget. We certainly need to consider improvements in that area, but we also need to ensure that we maintain our existing equipment programme and our running costs from month to month and year to year. Inevitably, I have to take some difficult decisions, and unfortunately that is one of them.
Turning to reserves, who, like our regular forces, are volunteers, I anticipate and hope that we will maintain the present numbers. If there are more willing to volunteer, I am confident that we can absorb them into our existing organisations.
There has been a good deal of misplaced speculation about the consequences of a peace settlement in Northern Ireland. We all look forward to a peace settlement and to the prospect of reducing the presence of our armed forces back to the level that existed before 1969—to a normal peacetime situation for the Province. I look forward to that as a means of using those soldiers currently engaged in operations in Northern Ireland elsewhere in the tasks undertaken by Britain's armed forces. I want to make that clear. I want to emphasise the opportunity that that will give to relieve some of the current pressures on the men and women of the Britain's armed services.
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That probably deals with all the points that have been raised. I am grateful to the hon. Gentleman for his remarks, and I look forward to responding to other questions.
Mr. Paul Keetch: I, too, thank the Secretary of State for advance sight of the statement. I join him and the hon. Member for Mid-Sussex (Mr. Soames) in congratulating the members of our armed forces, who continue to perform their work in Iraq and elsewhere with great distinction. The House also pays tribute to their families.
Liberal Democrat Members welcome the strategic rebalancing that the Government have announced today. However, that investment must never come at the expense of the number of regular and reservist personnel. Yes, our forces need to be able to fight high-intensity wars, but they also need to have the troop numbers to keep peacekeeping operations going and to give support at home. The message today from the Government appears to be that they can manage both—that they can maintain that balance—and we sincerely hope that they are right. However, the evidence so far does not always suggest that that is the case.
Today's National Audit Office report on Operation Telic highlights significant difficulties with supplying large numbers of troops in the desert, all of which were identified as problems after Saif Sareea 2. We warned of those difficulties at the time; indeed, members of one unit even returned to the UK to try to find NBC—nuclear, biological and chemical—equipment, without success. Either in Iraq there was no threat from chemical or biological weapons, or the MOD sent troops into theatre without proper protection. Will the Secretary of State tell us which it is?
Then there is overstretch. This morning, the Secretary of State said on the "Today" programme that the average tour interval is now 10 months, but the MOD's target is 24 months. Is that interval still 10 months, and how many troops would be required to meet the 24-month target? If he cannot tell us now, perhaps he will write to me. He said that reservist numbers will not be cut, but can he assure us that the overall establishment strength of all three armed forces will not be reduced further as a result of today's announcement?
The right hon. Gentleman rightly paid tribute to his predecessor, Lord Robertson, and mentioned the strategic defence review. One benefit of the SDR was that there was the widest possible consultation across the House and, indeed, the armed forces—in effect, the SDR belonged to Parliament, not just the Government. Does he agree that that consultation was helpful to the SDR, and will his future plans include a similar level of consultation? If they do, in the end our troops will be the winners.
Mr. Hoon: I am grateful to the hon. Gentleman for his observations. It is important to look at the NAO report in context. It highlights the remarkable success achieved by our armed forces and the personnel who supported and equipped them while they were engaged in high-intensity warfare. At the same time, it recognises, as the Ministry of Defence and I have always done, that that was not perfect and that there were difficulties. I have made that point on a number of occasions to him and

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other right hon. and hon. Members in the House, so it is not new to say that there were difficulties. Overall, however, there was a remarkably successful operation to deliver in a short period large numbers of people and large amounts of materiel into theatre in time to conduct very effective military operations.
There are certainly lessons that we can learn. The "lessons learned" report that I have published today is a tough document. I did not want to put before the House a bland assertion that everything would be resolved. We have to learn the lessons and make improvements, but I am confident that, with the contribution of the armed forces and civil servants in the Ministry of Defence, we will be able to do so.
Rachel Squire: Does my right hon. Friend agree that a key reason why the United Kingdom Government can act as an influential global player is the high standards and professionalism of our armed forces? What assurances can he give us that the proposals in the White Paper and the detailed proposals that will follow will not in any way lead to a decline in the ability of our armed forces to maintain those high standards and their international reputation?
Mr. Hoon: I agree with my hon. Friend that we need to maintain those high standards, and we have to do so in the face of the changing strategic environment. I have come to envy my predecessors who were in office during the stability of the cold war, when force structures essentially remained constant from year to year. That has not been the case during the time in which I have had the privilege of holding this position, nor indeed was it the case for my predecessor. Consequently, we have to face up to the difficult decisions required to achieve precisely what my hon. Friend set out.
Mr. Peter Viggers: Service personnel at all levels carry a heavy burden of responsibility, and their conditions of service should reflect that. If under the pensions review large new categories of dependants, including unmarried partners, are given rights, and if the Treasury has insisted that the pensions review is carried out on a cost-neutral basis, does it not follow as night follows day that there will be significant reductions in pension entitlement? Is that fair?
Mr. Hoon: In fact, that is not the case. Obviously, in the course of considering both pensions and compensation arrangements, adjustments will be made to reflect the modern world in which we live. I gathered from the tone of the hon. Gentleman's observations that he is concerned about providing benefits for unmarried partners. The Ministry of Defence could be criticised for the fact that members of the armed forces have been rather tardy in recognising such relationships. Nevertheless, I anticipate that the change will be broadly welcomed, given the society in which we all now live.
Jim Knight: I welcome my right hon. Friend's statement, particularly the commitment to sustaining interoperability with the United States and the commitment to Europe and NATO. However, will
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he give my constituents and me some reassurance about Bovington and Lulworth, which are based on tank training, given his comments about reducing the number of heavy brigades? Will the Ministry of Defence maintain its commitment to that important part of our armed forces' training?
Mr. Hoon: Training will continue to be essential as, indeed, will our reliance on heavy armour, which, as the hon. Member for Mid-Sussex implied, performed magnificently in operations in Iraq. It is important, however, to emphasise the need for flexibility. We need to develop, as the Army has recommended, not only light and heavyweight forces but medium-weight forces that can be deployed with greater protection than light forces currently enjoy. I will set out in more detail the precise implications of the proposals, and I apologise for not saying so to the House before. For my hon. Friend and other right hon. and hon. Members who believe that there may be implications for their constituencies, I should be delighted to discuss those implications with them.
Mr. Desmond Swayne: I draw the attention of the House to my entry in the Register of Members' Interests. I should like to ask the Secretary of State about supporting essay No. 3, which anticipates a policy of reserves being mobilised on any type or scale of operation. Does the Secretary of State accept that if reserves are repeatedly mobilised on low-intensity, medium-sized operations there will not be any reserves, because employers will not run the risk of engaging them—and I include in that my own constituents?
Mr. Hoon: I am delighted to welcome the hon. Gentleman back. If he will forgive me for making a personal observation, his period of volunteering in Iraq seems to have been good for him, given his general demeanour, colour, health and, dare I say, weight. I apologise for the fact that I was unable to see him during my visits to Iraq. I saw his colleague, the hon. Member for Westbury (Dr. Murrison), and I know that he was conducting valuable liaison work with the Italian forces, which was particularly important in the light of the losses recently sustained by Italy.
I do not entirely agree with the hon. Gentleman's observations about reservists. There have been efforts across the country to discuss with employers the way in which reservists were deployed, and we need to learn lessons about that. I participated in a number of those meetings and heard nothing but praise from employers for the role of reservists. They certainly want more information and want to be consulted earlier, and I have taken that on board. However, they are proud of their employees and the fact that they went into action as reservists. I saw no sign at all that they want to prevent that in future, although I cannot say the same about the hon. Gentleman's constituents.
Mrs. Alice Mahon: I should like to ask about the future of our armed forces in Iraq. My right hon. Friend will be aware that the CIA has conceded that Iraqi resistance is getting stronger every day. Because the Iraqi governing council has proved useless, the United States has changed its policy and said that it

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would speed up the handover to the Iraqis. If that happens and an Islamic government is elected, will our troops come home? Will that be acceptable to the coalition?
Mr. Hoon: The number of incidents has been reducing recently. I am not certain whether that trend will continue or whether it denotes a reorganisation of those who continue to support Saddam Hussein. In any event, we will remain vigilant. The number of incidents in the south, Britain's area of operation, is low. Most of the incidents still involve part of Iraq to the north and west of Baghdad, where the regime had its heartland and was at its strongest. It is vital—I agree with my hon. Friend to this extent—that before there is any kind of transition we must tackle the security situation so that a new government can take responsibility and, ultimately, so that there can be free and fair elections. Obviously, that can only occur once the security situation is resolved. As for the future Government of Iraq, that is entirely a matter for the Iraqis themselves. Our job is to create the conditions in which such a Government can be chosen.
Mr. A. J. Beith: Is the Secretary of State aware that he would not achieve his objective of spending money in the most effective way if he were to accept a proposal to throw away the multimillion pound investment that has just been completed at RAF Boulmer in order to move it all to Coningsby and provide it all over again? Will he note also that in Berwick and the borders, we feel strongly that the King's Own Scottish Borderers should have a role in the strategy that he describes?
Mr. Hoon: I indicated only a few moments ago that I would be happy to see the right hon. Gentleman. I emphasise to all hon. Members that such specific decisions have not been taken. I accept that there will need to be further consultation with right hon. and hon. Members, but I do not want to alarm anyone. None of these decisions has been taken.
Mike Gapes: The Secretary of State rightly referred to the importance of intelligence. He also mentioned the reserve forces. Is he aware that there are a great number of British Asians who could play an important role because of their linguistic skills and understanding of some of the societies from which terrorism is coming? Can he make a renewed effort to increase the number of ethnic minority members in our armed forces?
Mr. Hoon: My hon. Friend is right. There have been steady successes in our recruiting, but he is right that we need to redouble our efforts, partly for the reason that he mentioned, and also to ensure that our armed forces reflect the ethnic diversity of our society—a society that must be properly reflected in the composition of our armed forces. I agree that there are certain advantages in having a range of linguistic skills. He may be aware that Gurkha soldiers deployed in Afghanistan, for example, have been able to understand and communicate with a number of the local people, which has added enormously to their ability to help improve the situation there.
Patrick Mercer: I am grateful to the Secretary of State for outlining new and clear thinking about how our armed forces will be used. I was particularly interested to hear him speaking about expeditionary warfare and dealing with threats at a distance. What about the threats at home? Where is the clear, innovative thinking about how our regular and reserve forces, beyond the rapidly failing civil contingencies reaction force, will be adapted for the new style of warfare?
Mr. Hoon: I realise the difficulties that the hon. Gentleman faces in his particular position. As he well knows, the Minister for homeland security in the United Kingdom is my right hon. Friend the Home Secretary. Having set out in the new chapter a detailed response to the kind of threats that we witnessed so tragically in the United States on 11 September 2001, I have not specifically dealt with the homeland implications today. However, I emphasise that they are constantly under review as far as the Ministry of Defence is concerned, and I believe that we make an effective contribution to the efforts made across Government, but specifically by my right hon. Friend the Home Secretary, to deal with those threats and challenges.
Harry Cohen: Should not the emphasis be on unmanned aerial vehicles, better situational awareness, forces-wide communications, asset tracking to improve logistics, and more appropriate armoured wheeled vehicles with suitable protection to back up foot patrols? Would not the money be better spent on those things than on cluster bombs or the unwanted occupation of Iraq?
Mr. Hoon: I was about to congratulate my hon. Friend on his excellent command of the jargon, which I confess still sometimes eludes me. I agree with nine tenths of what he said and reiterate what I have said to him on previous occasions about the use of cluster bombs.
Miss Anne McIntosh: I warmly welcome the Secretary of State's reference to the Eurofighter. Will he give a commitment that the use and deployment of the Eurofighter to RAF Leeming will be on the target date and in the same numbers that he confirmed? The Ministry of Defence is aware that there is a problem at RAF Linton. I pay tribute to the flying school at RAF Linton and the tremendous contribution that it makes, but the reduction of the number of flying schools used by the RAF and the Navy puts enormous pressure on the remaining schools. Can he give some indication of how that can be resolved?
Mr. Hoon: I am as keen as the hon. Lady to get what I think that we had better call Typhoon nowadays into service. I recognise that her experience in the European Parliament means that she likes to call things Euro-something or other. I hope, by the way, that that does not interfere with her well-deserved promotion. It is important that we concentrate on getting Typhoon into service, working with the RAF, and as I said, ensuring that it has a multi-role capability to deal with the kinds of operations that we currently conduct. I am as keen as anyone to achieve that.
Mr. George Foulkes: Will my right hon. Friend take this opportunity to scotch the myth being put around by Opposition scaremongers in Scotland that the review represents some threat to the Scottish infantry regiments? Does he agree that the real threat to our defence installations and personnel in Scotland is from those who would break up the United Kingdom?
Mr. Hoon: My right hon. Friend is right. As I have made clear, it is important that we see through the implications of the policy baseline that I set out today in more specific decisions. None of those decisions has been taken in relation to Scotland or any other part of the United Kingdom.
Hugh Robertson: The Secretary of State rightly drew attention to the fact that a National Audit Office report praised the speed of deployment of heavy armoured forces to the Gulf, and also picked up the fact that many commanders feel that our heavy assets—the Challenger 2, the Warrior, the AS 90—were the battle-winning assets. Bearing it in mind that the right hon. Gentleman is proposing a move to lighter forces, and that the threats that we face are rarely the ones for which we are configured, is there not a serious danger that the review may leave us less ready to face the unexpected?
Mr. Hoon: It is vital that that does not happen. I am grateful to the hon. Gentleman for his observation. Challenger was used extremely effectively in and around Basra, for example, and I expect that tacticians would suggest that that was in a way not originally thought likely. That is why I place so much emphasis on flexibility. If ingenious commanders can use their equipment in a way that achieves the desired effect, and undoubtedly that was the case with the way in which Challenger was used, I for one will be delighted.
Mr. Michael Clapham: Did my right hon. Friend see the report in The Guardian yesterday that the second largest contingent in Iraq is made up of employees of large corporations? Does he share my concern that that illustrates the growing power of the military industrial complex? What steps will he take to ensure that Britain's defence programme is based on the needs of the country, not the wants of the corporations?
Mr. Hoon: My hon. Friend used jargon that I have not heard in some time. It was never a phrase that tripped lightly from my tongue, but I congratulate him on his sophisticated vocabulary. I do not really agree with him. Clearly, we must ensure that the civilians who support our deployed operations are properly protected and capable of doing their job effectively. Those
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civilians have done a tremendous job in providing timely assistance to the armed forces and relieving highly trained members of those armed forces from tasks that we do not want them to engage in. That is the point. If we recruit people into our armed forces, we want them to be trained to a level that means that they are no longer engaged on the kind of tasks that civilian contractors can fulfil extremely effectively.
Sir Patrick Cormack: If the Secretary of State follows the policy outlined in the White Paper—which is very short on detail, I might say—is he confident that, in 10 years, this country would be able to cope with a crisis in the Falkland Islands or mount another Iraq-style operation?
Mr. Hoon: I am confident. I know that the hon. Gentleman is far too sophisticated an observer of military matters to suggest that, if there were a new Falklands crisis, we would conduct the campaign in precisely the same way. The point of the developments and changes is to allow us to conduct the campaign in quite a different way and, I would argue, a more effective way. I would be more concerned about the implied criticism that he makes if we had had real reverses in military campaigns in recent times. That is not true. It is important that we go on developing such flexibility, both to conduct the kinds of campaigns that have been conducted so successfully in the past, and to give us the ability to conduct the kinds of campaigns, as the hon. Member for Mid-Sussex said, of which we do not know and which we cannot imagine today.
Miss Anne Begg: The best museum in my constituency—in fact, it is the only museum there—is that of the Gordon Highlanders, a regiment that no longer exists, not because they were called the Gay Gordons, but because they were the victims of a previous reorganisation. There is obviously concern in north and north-east Scotland that the Highlanders and Black Watch may suffer a similar fate. Will the Secretary of State assure us that he will listen to all representations from that area, because it is very important that the locality features in any recruitment and to ensure that the kilted regiments will not be consigned to the museum of history?
Mr. Hoon: I know that the Gordon Highlanders ceased to exist as a fighting force on 17 September 1994. That is still a cause of great concern to those who are strong supporters of the regiment, but it is an indication of the sort of changes that have occurred over the long history of Britain's armed forces. I cannot rule out such changes in the future, but I can tell my hon. Friend that no decisions whatever have been taken about such matters. I shall certainly consult her and any other hon. Member who is interested.

Points of Order
2.1 pm
Mr. Paul Tyler: On a point of order, Madam Deputy Speaker. We very much appreciate the efforts of the Chair to try to protect the interests of Back Benchers, and we understand the rationale for what Mr. Speaker mentioned earlier, but a large number of hon. Members are still seeking to question the Secretary of State. The exchanges between him and the Conservative Front-Bench spokesman took more than 30 minutes of the time available. In such circumstances, surely it is possible for the Chair to extend the time a little so as to include Members from all parts of the House in the discussions.
Mr. Nick Hawkins: Further to that point of order, Madam Deputy Speaker. In considering the remarks of the hon. Member for North Cornwall (Mr. Tyler), will you bear it in mind that many of us represent substantial military constituencies and have many thousands of constituents who are directly employed by the armed forces or by defence contractors? Those of us who sat through all the exchanges and wish to question the Secretary of State will not be reassured by his invitation to discuss those matters with him directly. These are matters that should be raised in the Chamber of the House of Commons on behalf of our constituents.
Sir Patrick Cormack: Further to that point of order, Madam Deputy Speaker. Could consideration be given to ensuring that when a statement of such importance is made on a Thursday in future, a further hour is allowed so that we can sit until 7 o'clock? Had that been done, all of my colleagues—I am conscious that you kindly called me to speak—could have got in.
Madam Deputy Speaker (Sylvia Heal): Order. I call Mr. Barnes on a point of order.
Mr. Harry Barnes: On a point of order, Madam Deputy Speaker. During business questions, I raised the matter of the attack by the United States—
Madam Deputy Speaker: Order. If I may respond to the three related points of order that have been made, I shall come back to the hon. Gentleman.
I am aware that there is a great deal of interest in the House on defence matters. That was evident today among the hon. Members who were present to hear the statement. Mr. Speaker has a great responsibility, as he
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has indicated, to preserve time for the work of the Select Committees. I have noted what has been said, and Mr. Speaker himself will be aware of it. Of course, there will be other opportunities for hon. Members to discuss the content of the White Paper later in the parliamentary calendar. As to the point made about the timing for debates on Thursdays, that is a matter for the Leader of the House.
Mr. Barnes: On a point of order, Madam Deputy Speaker. During business questions, I raised the issue of the attack by United States forces on the offices of the Iraqi Federation of Trade Unions. In response, the Leader of the House, making use of information that has come from the Americans, indicated that that body might have been hiding fedayeen and arms. That is an incredible response, given the nature of the free trade union movement in Iraq, which stood up against those activities and operated in a clandestine way in order to establish a free Iraq. What opportunities can be given to the Leader of the House so that he can correct his statement if he receives further information from the Americans saying that the situation is different or to check out that the claim does not relate to the military-industrial complex that was mentioned earlier?
Madam Deputy Speaker: The Leader of the House is not present, but he will have heard or will read the hon. Gentleman's comments and may well choose to respond directly. Indeed, the hon. Gentleman himself may decide to pursue the matter through other parliamentary means.

BILL PRESENTED
  TRAFFIC MANAGEMENT
  Mr. Secretary Darling, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Blunkett, Secretary Margaret Beckett, Ms Secretary Hewitt, Secretary Tessa Jowell, Mr. Peter Hain, Mr. David Jamieson and Mr. Tony McNulty, presented a Bill to make provision for and in connection with the designation of traffic officers and their duties; to make provision in relation to the management of road networks; to make new provision for regulating the carrying out of works and other activities in the street; to amend Part 3 of the New Roads and Street Works Act 1991 and Parts 9 and 14 of the Highways Act 1980; to make new provision in relation to the civil enforcement of traffic contraventions; to amend section 55 of the Road Traffic Regulation Act 1984; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Monday 15 December, and to be printed. Explanatory notes to be printed. [Bill 13].
  ESTIMATES DAY
  [1ST ALLOTTED DAY, 1ST PART]
  ESTIMATES DAY
    Department for Work and Pensions

      Child Care for Working Parents
      [ Relevant documents: The Fifth Report from the Work and Pensions Committee, Session 2002–03, on Childcare for Working Parents, HC 564–I, and the Government's response thereto, HC 1184; and the Department for Work and Pensions Departmental Report 2003, Cm 5921.]
      Motion made, and Question proposed,
      That resources, not exceeding £22,505,326,000, be authorised, on account, for use during the year ending on 31st March 2005, and that a sum, not exceeding £22,418,785,000, be granted to Her Majesty out of the Consolidated Fund, on account, for the year ending on 31st March 2005, for expenditure by the Department for Work and Pensions.—[Ms Bridget Prentice.]
      [This Vote on Account is to be considered in so far as it relates to childcare for working parents (Resolution of 2 December).]
      2.5 pm
      Sir Archy Kirkwood: It is a very great pleasure to have the opportunity open this short debate. I perfectly well understand that there are pressures on time, as has just been demonstrated, and that an important debate on people, pensions and post offices will follow this debate, so I shall seek to make a few brief introductory remarks, after which I shall allow colleagues to make some comments on this important subject.
      Estimates days are big parliamentary occasions. The vote on account that we are discussing allows the Minister a mere £22.5 billion on account. I hope that he spends it wisely and that he might think of spending some more of it on child care to allow parents to get into education. I am pleased that my hon. Friend—if I may so call the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond)—is manning the Treasury Bench. He is a friend in many senses, but in particular he was a distinguished member of the Select Committee in his time and has an important professional track record on this subject. We are pleased to see him in his place.
      I should like to say a brief word of thanks to all those who contributed to the Select Committee report, and not only the Committee members themselves, who were assiduous as always. I like to think that the valuable work that we did had at least something to do with the little Christmas bonus that the Chancellor of the Exchequer gave us yesterday, for which I give much thanks. I shall return to that point later. Perhaps he should have more children more often, because it concentrates his mind. It is almost Christmas, and all these things help.
      The Committee had a very interesting time in the course of its inquiry. We received 44 high-quality written submissions and had four very good oral sessions. In particular, I pay tribute to Baroness Ashton of Upholland, who was kind enough to come before us and help us to understand the departmental view of things. We always get very good help from the Department and the ministerial team.
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      I should like to describe the report, in terms of the totality of the work of the Select Committee on Work and Pensions, as a clear and earnest declaration of interest in what we believe to be a very important subject. In the fifth report of this year, that subject is limited to the part of child care that relates directly to employment, as that aspect is closely tied to our departmental duties and responsibilities as a Committee monitoring the work of the Department for Work and Pensions.
      If we had had time to do so, we would have explored some of the more philosophical and far-reaching elements of child care as a policy, which I think is an intrinsically important part of Government policy, and not only in the sphere of employment and work. Indeed, the evidence that Professor Peter Moss gave us in seeking to establish child care almost as a public good and a human right, and therefore something that should be made available on a universal basis, was compelling. It was not directly in tune with the more restricted remit of the Committee, but I would like to explore it in further detail at a later stage. In particular, the hon. Member for South-West Bedfordshire (Andrew Selous), if I may refer to him as a member of the Committee, argued a very cogent case, which I found illuminating, about the need to focus on how child care affects families and on whether we should ensure that parents who want to stay at home and foster and nurture people are not left out of the Government's drive—I do not use that word pejoratively—to get people back into the labour market. It was an interesting and useful inquiry and report that demonstrated the fact that since the last election, when the Committee acquired the world of employment—we used to be the Social Security Committee; we are now the Work and Pensions Committee—it has been clear that the subject of work has had a whole new dimension. Wherever one looks in considering the pursuit of employment policy and how better to refine the facilities and provisions offered by central Government, the issue of child care is not far round the corner as an integral and essential part of Government policy in terms of meeting people's problems in their everyday lives.
      I do not read newspapers much at the weekend, but last weekend I stumbled across an article in the weekend supplement of The Guardian that told the heart-rending story of a lady called Charlotte Armstrong, who lives in Basildon. She is doing everything right by trying to study for a university degree, but everywhere she turns she fails against a barrier of child care or housing benefit. The tragedy is that that is not unusual. No matter how much support Governments try to give, it is difficult to get all the bits of the jigsaw right. People try to help themselves, as we all want them to, but they still manage to fail. The lady I mentioned is not a constituent of mine, but I would like to try to find her and send her a note, because I was captured by her dilemma. It is not unusual—we see similar examples in our constituencies nearly every week. For me, her story sums up the difficulties of people who are trying their hardest to help their families: we need to do everything that we can to make life easier for her and for people like her.
      Before I turn to the report's specific recommendations, I want to remind the House of the background against which this debate takes place. In

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      1997, when we really began to tackle the problem, the United Kingdom started from a very low base—we were a long way behind our sister European nations—and there is still a long way to go. The debate is timely because it allows us to review progress to date and to see where we stand in the Government's scheme of things. The provenance of the policy dates back to the May 1998 national child care strategy—the Green Paper. That was a worthwhile and sensible document in its day, but it was not until the pre-Budget review of October 2001, which included the significant announcement of the child care review, that practical things started to happen on the ground. In July 2002, that was followed by the comprehensive spending review that directed the first significant resources—£1.5 billion—into the policy area. Yesterday, of course, we had this year's pre-Budget review.
      We began to see the policy build up, followed by resources—a welcome recognition of the high priority attached to the policy at a high level of Government. I am sure that the Minister was clever enough to contrive the PBR announcement being made the day before this debate to make matters easy for him. We all know that his decision really made the difference, but it was good to hear from the lips of the Chancellor of the Exchequer that the issue is a priority for him, too. He did not say much in the way of new announcements, apart from on the increased element of the child tax credit, but his comments were welcome as a kind of payment on account.
      We have in prospect the Treasury interdepartmental review of the subject—an essential piece of work that will, I hope, inform the comprehensive spending review programme for the three years following July 2004. I hope that the Committee's report and this debate will strengthen the hand of Ministers at the Treasury and the Department for Work and Pensions—indeed, the Government as a whole, as it is an interdepartmental problem—in making the difficult choices required in finding the resources to maintain momentum.
      Having been a Member in a rural area for 20 years, I encounter pressures that are difficult when they bear down on individual families, but I do not have the volume and weight of casework of some of my colleagues—especially London Members such as the hon. Member for Regent's Park and Kensington, North (Ms Buck). I admire and acknowledge her work—she is an expert on the subject and was largely responsible for the Committee's inquiry. She persuaded me that child care is far from being a second-order issue, but is in fact a core issue. Until 1997, I thought that dealing with poverty was about getting more benefits to families, but it is not as simple as that. She, more than anyone else, led me to conclude that the Government cannot abide by their own targets—I accept that they are ambitious, as is right and proper—unless they deal seriously and meaningfully with child care. That is axiomatic and central to the Government's anti-poverty programme. The targets on child poverty—to cut it by a quarter by 2004, to cut it further by 2010 and, most ambitiously of all, to abolish it by 2020—cannot be achieved without more extensive child care provision. Indeed, to abolish child poverty, provision would need to be almost universal.
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      The Government also have ambitious targets on reducing children in workless households as a percentage of the population and getting 70 per cent. of lone parents back into the labour market. Those are all important aims that cannot be properly achieved without child care being central to everything that the Government do across Departments.
      The debate is not just about targets, however. Ambitious and welcome as they are, and I hope that the Government meet them, the more intractable and indefinable problems of persistent long-term poverty—chronic, grinding, deep-seated poverty—can be addressed only if families have access to quality, affordable child care. I know the Chancellor of the Exchequer well enough to be aware that he is focused on dealing with intergenerational poverty, which will not be eradicated by a target or an objective alone, but which requires a consistent, long-term policy.
      Chronic health problems can be addressed by children's centres that provide a package of support for families. Obesity is becoming a much bigger problem in all our constituencies. Consistent, accessible, timely child care, with back-up support, is essential. That also applies to illiteracy.
      I attend international social security conferences where experts say that we should be encouraging more people—not only the Chancellor of the Exchequer—to have children. I had better be careful—a safer way of putting it might be to say that the country needs a population policy. People of child-bearing age should be encouraged to become involved in parenthood, because the demographic trends are against us as a nation. If we do not have enough high-skilled, well-educated members of the population in 2050 and beyond, the country will have all sorts of other problems.
      We need to move to a position whereby children are healthy and confident and go to school ready to learn. The frightening fact is that children learn to be poor by the time they are raised, so early years education and the child care provision that supports it is quintessentially important to a successful Government policy in future. The remedy is at hand, and we quote it in our report. It is a piece of evidence from the Department for Education and Skills, which found that 63 per cent., or two in three, of non-working mothers and 78 per cent., or three in four, of non-working lone mothers said that they would prefer to go to work or to study if they had access to good-quality, convenient, reliable and affordable child care.
      So there is a willingness to liberate a cohort of the work force not only to work but to study. Work is important but so is studying. In the article in The Guardian, which I shall send to the Minister, the young woman wanted a university degree, not just any job. That caught my imagination. One could perhaps accuse the Government of wanting to get people into work, but being indifferent about their doing anything beyond that. Some American states are much more ambitious and talk of "A B C—any job, better job, career." There are young women who wish to get university degrees, which will enhance their labour market value, but whose attempts founder on the obstacle of absence of access to proper child care.
      Hywel Williams: Does the hon. Gentleman agree that there are specific structural problems in providing child care in rural areas? As a rural Member of Parliament, can he suggest some remedies?
      Sir Archy Kirkwood: That is absolutely right. There is a problem, and the Government's response to that aspect of the report was a little weak. They mentioned trying to give local authorities a little more flexibility but I agree with the hon. Gentleman. In rural areas, there is often no critical mass to get child-care providers or run groups such as pre-school playgroups or after-school clubs. There are often not enough children in a geographically discrete area to make that easy.
      It is hard to fault the Government on their overall application. However, as part of the inquiry and report, we visited a couple of nurseries in north Kensington on the recommendation of my hon. Friend the Member for Regent's Park and Kensington, North. I remember that clearly because, although we knew about the policy and the Government's direction, which we supported, we found much confusion about funding operations. The difficulties and uncertainty that the nurseries encountered about the security of the funding were worrying. Above all, an acute shortage of places remains. The Daycare Trust estimates that there is only one place for every five children who are under eight. That is a genuine supply problem.
      During the visit, it was also driven home to us that families in the United Kingdom pay a much higher proportion of the cost of places than our European counterparts do. The Daycare Trust estimates that UK parents pay 75 per cent. of costs whereas parents on the continent pay some 30 per cent. That information was reinforced last week when the Committee visited Denmark and France, where we were told about the importance of the provision and its extent in sister European countries.
      Let me briefly consider targeting resources. Focusing 20 per cent. on the most disadvantaged postcode areas is probably inevitable because one cannot do everything at once. However, I hope that, between now and the next comprehensive spending review next July, the Government will consider expanding the provision not only from 20 per cent. to the 30 per cent. that the Committee recommended, but to deal with the point that the hon. Member for Caernarfon (Hywel Williams) made about rural areas. More flexibility is needed so that people in rural areas can tackle the issues more thoroughly.
      I want to underscore the question of pay for child minders. It is a worrying trend that they are not being paid enough and that there is insufficient career development to keep them in the service of the families for whom they provide child care.
      The Government's record is hard to criticise but many problems remain. The Committee made some guarded comments about using employers in the way in which the Chancellor implied yesterday. I hope that the Government will reconsider the matter carefully. If I had the money for tax breaks for employers, I should put it into child centres. I would not have chosen an open-ended commitment for employers because that entails problems, which the report tackles in more
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      depth. As I said earlier. other Ministers mentioned the pledge of 1,000 centres by 2008, but it was useful to hear the Chancellor put it on the record.
      I hope that the report and the debate will support and encourage the work of the Treasury interdepartmental review. We need approximately another £1 billion or £2 billion. That sounds an enormous sum, but it would be for three years. The Daycare Trust estimates that £2.5 billion over 10 years would yield almost universal child centre provision, although some problems in rural areas would probably remain. There is much work to do but the Government's direction is generally right. Opposition parties, Select Committees and those outside the Treasury will always want to move further faster, and I recommend that we do that.
      I hope that hon. Members understand that the subject is important and that the Committee has made the best fist of what is for us a short report. We reserve the right to return to the subject, but we want to leave Treasury Ministers with the message that, by their own lights, they cannot succeed unless they do more to develop child care provision in the middle to long term. It is in their interests to put in more resources and establish more child care centres as soon as they can.
      Madam Deputy Speaker (Sylvia Heal): I remind hon. Members that Mr. Speaker has imposed a 10-minute limit on contributions from Back Benchers.
      2.26 pm
      Ms Karen Buck: I am delighted that we are conducting a debate on child care. I thank the Chairman of the Select Committee on Work and Pensions, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) for his warm words. I congratulate him on his leadership and his commitment to the subject, which, as he rightly says, is a passion of mine.
      Let me begin by citing two figures that provide some context for our debate. According to the Department's research, 1.3 million households are currently looking for child care that they cannot provide. That gives a human aspect to the Daycare Trust's figures of a place for only one in five children. PricewaterhouseCoopers conducted an analysis of the economic benefits of child care. It found that, in the long term—admittedly, in the long term, we are all dead and figures are subject to all sorts of different pressures—provision of comprehensive, affordable child care would lead to a £40 billion benefit to the economy. There is therefore a lot to play for.
      Although the report rightly deals with child care for working parents, it can be viewed only in the larger context of child poverty. The provision of high quality child care for young children is essential to any effort to create a fairer and more equitable society and to close the appalling gap in all sorts of achievements between economically disadvantaged families and others. The chief inspector of schools, David Bell, recently flagged that up when he drew attention to growing inequalities in primary school children's abilities. He said:
      "The gap between children arriving at school who do well, and those who do badly, is increasing, and that is very worrying".
      Economic and social disadvantage and the variations in access to a quality early-years experience is part of that problem.

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      As the Chairman of the Select Committee said, from a standing start in 1997, the achievement has been awesome. The Chancellor added to that yesterday, especially for London, where costs are particularly high. I welcome the achievements and my comments must be viewed in that context. They constitute not criticism, but a desire to close some of the gaps and drive forward.
      Our report considered the fact that the emphasis so far has been on the significant and welcome investment in increasing early-years education placements and part-time provision. Again, this is not a criticism; we have to start somewhere, and there are supply-side constraints, particularly in relation to carers and teachers. We are talking here about part-time places, mainly for three and four-year-olds and provision through the Sure Start programmes and the neighbourhood nurseries initiative—NNI—for people living in the 20 per cent. of wards that are the most deprived. Our report makes it clear that, even in the most disadvantaged areas, the Sure Start programmes and NNI do not add up to comprehensive, affordable child care. The provision is, however, concentrated on those areas; we have to start somewhere.
      That means that the gap between what is required and what is available is still very large. One point that flows from the Chancellor's statement yesterday is that we must remember the importance of assisting low-income working parents who are not among the most acutely disadvantaged or living in the most acutely disadvantaged areas, because of the phenomenal cost of providing care. A family with an income of between £20,000 and £25,000 who are outside the range of financial support for child care and outside the 20 per cent. of areas that are the most disadvantaged could easily find themselves paying £200 a week for one childcare place. It is right and proper that something should be done to assist them with those costs, both to allow the lone parent or two-parent family to participate in the labour market—part time or full time—and to give the child some experience of early-years education, assuming that the quality is good, as that is usually a positive experience for them.
      In driving forward the expansion of child care, to which there is a commitment, and in tackling the huge task of eliminating child poverty by 2020, we must recognise the fundamental limitation in the approach that has so far served us well, which is to use the market mechanism of providing individual subsidies to parents to purchase child care. I believe that this method has several weaknesses. First, it has not been able to drive forward the supply of child care, particularly in isolated rural communities and high-cost urban communities. We can place subsidies in parents' hands, but if the child care is not available, they will not serve their purpose. Although there is a logical argument that the subsidy itself will make the care available, in practice that is extremely hard to achieve when dealing with the very high capital costs involved in developing nurseries, for example.
      Smilarly, the financial support given through the child care tax credit does not meet the whole cost of child care, particularly in high-cost areas, wherever they might be. Child care costs in London regularly exceed £11,000 a year, for example. Because of the relatively low threshold for families to qualify for the child care
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      tax credit, it reaches only a relatively small number of parents. According to the most recent figures, only 285,000 households in the UK, and only 30,000 families in the whole of London, receive the tax credit, involving an average of £63 a week, and a n average cost of £7,000 a year. This is not a churlish criticism. That help was not there before, and it is very welcome. It is helping some people a great deal, but in terms of what has to be achieved, it is severely constrained.
      When the provision of child care is so dependent on individual purchasing, whether subsidised by the tax credit or not, it becomes very vulnerable to changes in economic circumstances. Speaking as a parent, I must tell the House that I would not want my child to be in child care in a way that was vulnerable to changes in my working circumstances. That is the big weakness of too much dependence on a labour-market-related subsidy or of being too closely connected to employer-based child care.
      This brings us back to the evidence of Professor Moss and to the case for children's centres. There will continue to be a case for individual subsidy, because the child minder service needs to be provided for and some people need financial assistance for their home-based care. There is not a case for doing away with the child care tax credit, for precisely that reason, but the next big steps that have to be taken must involve investment in the supply side. We must provide services that will allow non-working parents access to crèches and drop-in facilities as well as early-years education and child care, and that cannot be achieved through the tax credit system. That is the next move forward. I hope that the comprehensive spending review and the manifesto process will pick it up, because I see it as the big idea to help not only working parents, but those on very low incomes and the most disadvantaged, along with middle-income Britain. We must bring children together so as to provide an opportunity for people to enter the workplace and, possibly more importantly, to provide a high-quality early-years experience for our children.
      2.35 pm
      Andrew Selous: It is a pleasure to follow the hon. Member for Regent's Park and Kensington, North (M s Buck). I acknowledge her great interest in and knowledge of these issues, and it has been a pleasure to serve with her on the Select Committee.
      My party and I support the principle that work is the best way for people to come out and stay out of poverty, and the best route to ending child poverty, on which the Government are particularly focused. There is no disagreement on that. I approach this subject with the belief that we should provide working parents—indeed, all parents—with a real choice when it comes to looking after their children. We know from several polls undertaken by a popular magazine, Top Santé, that when young parents are asked what they would ideally like in their children's very early years, large numbers of them say that they would like to be able to afford to look after them themselves, at least up to the age of three. We should try to provide that choice.
      High-quality child care has been mentioned several times in this debate, and no one would disagree with the need for that. We all want the very best child care for our

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      children. I am particularly interested in recent research from a number of different groups of researchers in north America, the United Kingdom, Denmark and Finland—the Select Committee visited Denmark only last week—which clearly suggests that certain types of group child care, especially for children under two, but sometimes up to the age of three, if not established in the right setting, is not in the best interests of the children and can have detrimental effects. That is not my research; as I have said, it comes from a number of organisations. Indeed, the Government's own study into the subject, the effective provision of pre-school education—EPPE—research project, refers to those findings.
      I drafted an amendment—it was not accepted—which can be found on page 48 of the Select Committee report, asking that, before the Government provide large amounts of public money for early years child care, they take note of the findings of the EPPE report in this regard. I was surprised that the amendment was not passed, as I felt that it was quite mild in nature and merely asked the Government to take note of that matter. However, for those who are interested, it can be found in the Select Committee report.
      When we were in Denmark last week, we spoke to the chairman of our sister committee. I learned from her that an important study had just been undertaken, analysing the performances of Danish and Finnish schoolchildren. In Finland, as in Norway, a Government scheme has allowed parents—mainly women—receiving 40 per cent. of the average national wage to look after their own children until they are three years old, if they wish to do so. Women did not have to take advantage of the experiment—they could have gone straight into the labour market if they wished—but 75 per cent. of Finnish women have done so, and the scheme has proved similarly popular in Norway.
      The study also found that Finnish schoolchildren scored better than their Danish counterparts in a number of respects. The researchers concluded that that was because Finnish children were involved with just one adult—a parent or a child minder—in their early years, whereas in Denmark the emphasis was on group nursery provision rather than one-to-one contact. When we asked about the ratio of staff to children in Danish nurseries, we learned that they were worsening—that just one adult might be dealing with eight or 10 children. There is evidence that that is not the best kind of care for very young children, aged 18 months or so.
      Ms Buck: There are a number of variables in comparisons such as this. In a country where parents with very young children do not participate much in the labour market, they are likely to be providing one-to-one care for their children at home. Why does that not happen here?
      Andrew Selous: I agree that more child-care options should be available, but I also think that all this research should be made available to parents. They should be able to choose whether to send their children to nurseries, to employ child minders or, if they can afford it, to look after the children themselves.
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      The study also told us that after 18 months or so many working parents who had initially chosen a nursery setting for their children decided to employ child minders instead. As the hon. Lady knows, the problem in this country is that the supply of child minders has fallen considerably.
      I recently received a letter from a constituent, which I thought so significant that I drew it to the attention of the Under Secretary of State for Education and Skills, Lady Ashton, who appeared before the Select Committee—as can be seen on page 132 of volume 2 of the report. My constituent wrote out of extreme frustration: she was about to lose her job because she was about to lose her child minder. She was an intelligent, educated woman, working at a further education centre near my constituency. The thrust of her letter was that "quality" child care did not necessarily mean "qualified" child care. After all, the state does not prevent us from having children because we do not have certain qualifications, but most children are looked after by their parents. Surely it is a parent's right to choose who looks after his or her child, and surely it is acceptable for any state subsidies that are available to be spent on those whom parents consider most suitable to perform that task.
      My constituent wrote:
      "It is interesting to note that both my child and I were happier with the service provided by the unregistered child minder…Unregistered minders have more time to actually give to the children as compared to registered, who have to devote copious amounts of time building an NVQ portfolio, running around the house to check no toys are lying about"
      and so on. Much of her frustration arose from the fact that those who had been doing the child minding in her village did not want to devote the necessary time and effort to the courses that were required for them to gain the qualifications that would lead to registration.
      I realise that the Government often adopt a cautious approach because of alarming things that sometimes happen, but they should be aware of the problem when the supply of child minders is being adversely affected.
      2.46 pm
      Mr. John Battle: As one who is not a member of the Select Committee, I thank its Chairman and members for their excellent report, which focuses on a vital issue. I also support the Government's spending of public funds on child care.
      I want to make two points. First, child care provision makes a positive contribution to the establishment of a dynamic economy. The hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) said that it should be seen as a public good, and I agree, but it should also be seen as an economic good.
      Secondly, while local initiatives are welcome, they will bed down better at local level if there is a better relationship between top-down and base-up developments. Investment in child care constitutes investment in the future, and that means that we must have a long-term, sustainable structure.
      I am delighted to see the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Gravesham (Mr. Pond), who is a friend of mine, on the Front Bench. We go back a number of years, to when he was the champion of the Low Pay Unit and I worked for

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      Church Action on Poverty. At that time, our shared aim was to tackle poverty generated by lack of work, low pay and grossly inadequate benefits for the poor and their families. I am proud to have been, since 1997, a member of a governing party that has introduced a minimum wage and improved supportive benefits, and has made real inroads in the reduction of child poverty. Given that 3.1 million children are still in poverty, much remains to be done, but I welcome the Government's commitment of resources to child care in particular.
      Yesterday, the Chancellor announced an increase in resources dedicated to helping mothers and low earners. That will go a long way. The £50 a week tax incentive for employers to provide back-up child care will help many mothers who are in work, and many others too. It will mean more dynamism and more opportunities, rather than a contraction of the economy. The provision of help with approved child care at home is another useful innovation.
      In 1997, only 47,000 parents received help with child care costs; the figure is now more than 300,000. The report spells out what we are up against if we are to provide child care for the 1.3 million people who currently want it. There is massive need in that regard. Helping parents to balance work and family life, rather than leaving them alone to struggle, is key to supporting their role in the work force, and to ensuring that they enjoy work and are productive. It is also key to ensuring that they can enhance their training and skills, and their capacity to contribute throughout their lives.
      It is sometimes said that this is the age of globalisation. Such globalisation is characterised by increasing urbanisation, and by the increasing reality of personal mobility, which in turn stretches extended family back-up systems well beyond the clusters of local communities. In other words, in practice, grandparents, aunts, uncles, brothers and sisters do not now live alongside each other in local neighbourhoods; they are not there to provide personal family back-up. That is why care of the young, sick and elderly at home ought now to be regarded as part of a positive economic shift on the part of a progressive society that blends social justice and economic efficiency.
      The provision of personal services—the often unacknowledged and unpaid work that is usually done by mothers, grandmothers and daughters—ought now to be recognised as part of the growth of our overall economy. It is an economic function, and we should emphasise it more. Such care contributes jobs in new and expanding services. Moreover, serving each other will be the source of new jobs, new training, new income and economic growth. In other words, providing child care contributes to economic growth, and we should see it in that context.
      Let me cite the example of a young mother who grew up in and went to school in an area in my constituency that had more than 8,000 unemployed people in the 1980s; thankfully, that figure is now down to 1,500. She left school and, through the Government's new deal, got a place at the council-supported West Leeds Family Learning Centre, which specialises in training adults for work. She trained in basic qualifications, and then took a course in specialist child care training. She passed the test, got the qualifications, applied for a job with our new local Sure Start nursery project, and got it. She now works as a trained nursery nurse, providing child care
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      back-up for other young mothers who are themselves on training courses or already in work. That is a tremendous success story, which should not be denigrated or sneered at. Some commentators suggest that such jobs are just public sector jobs that are not really worth while, yet they themselves are often paid directly from public funds. The opposite is true: such jobs contribute to the growth of the economy, and that shift to services provision should be recognised as an economic asset.
      Andrew Selous: I accept the economic point that the hon. Gentleman is making, but does he agree that it is important that we have some form of dialogue about the effect on children and the differences between various settings, so that, in terms of the environment in which they are cared for, we can ensure that they have the best start?
      Mr. Battle: Yes, and I hope to say a word or two about Sure Start, which is precisely the context in which some of that work can be done.
      At the moment, 14 people are participating in this term's child care course at the West Leeds Family Learning Centre, eight of whom have already got job places. Anyone who wants to work in nursery child care and is prepared to train will get a job; indeed, that is an indication of the level of demand. The Economic Secretary visited the centre last year, and he discovered that when we say to employers such as the Elite Group, "These women are training to work in your company. Will you look at your shift patterns to see whether they fit their child care needs and school hours?", the answer is yes. Therefore, we can achieve a better, more progressive and practical working arrangement. That is exactly the template that other employers could use.
      Currently, some 750 people are enrolled on 50 courses at the centre. Some go on to get university degrees, but we need to provide proper child care back-up. There is a nursery with reserved places, but it is over-subscribed and needs to be expanded.
      Another beacon project is the Sure Start programme. The programme in Bramley, which was one of the first in the country, employs 16 people, including qualified midwives, nursery nurses and speech therapists. They provide one-on-one family support, and the kind of context in the locality that the hon. Member for South-West Bedfordshire (Andrew Selous) referred to in his intervention. Such support helps to rebuild communities and neighbourhoods, and the networks that extended families can no longer provide.
      I must stress that such work needs to be long term. The excellent work of the Bramley Sure Start—and, indeed, of the new project in Burley—needs to be put on a long-term footing to ensure that it is consistent, and that people can have confidence in it. A brand new nursery and children's centre, run by the early years service, provides 52 new nursery places. That is welcome, but we need much more, and I hope that we can get assistance through the Chancellor's initiatives to extend provision nationally, as well as locally.
      I want to make one practical point about health. The Bramley Sure Start organised a birthday party for all local two-year-olds, but they used that occasion discreetly and sensitively as a means to check for early

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      signs of delayed development in those children. Such an approach enables it to give practical support, and to intervene during the early years—the kind of idea that the hon. Member for South-West Bedfordshire referred to. Similarly, the Burley Sure Start has begun home visiting. Improving family support, and providing early health and learning checks and good quality child care will be absolutely vital in tack ling poverty. That is what we have learned in the past few years, and it is the route to go down.
      I hope that the Government learn from the experience on the ground, in order to make sure that the local experience can be knitted in with the top-down money and initiatives. There are new ideas and experiences in the localities that can be shared and exchanged, and which the Government can also learn from. Doing so will enable us thoroughly to eradicate poverty, in ways that we perhaps had not thought of when the Minister and I were campaigning in the 1970s and 1980.
      2.56 pm
      Mr. Peter LuffLike the hon. Member for Leeds, West (Mr. Battle), I am not a member of the Committee. I congratulate it on this report, and I congratulate its Chairman on the way in which he opened today's debate.
      I agree with a great deal of what the hon. Member for Leeds, West has just said, but I was slightly uncomfortable with his emphasis on the economic impact of child care. For me, raising children is more about love, nurture and education than about crude economics. I felt that that aspect was rather lacking from his contribution; it was also perhaps lacking from the debate in general.
      Mr. Battle: Will the hon. Gentleman give way?
      Mr. Luff: If the hon. Gentleman wishes to intervene, I shall happily allow him to correct the record.
      Mr. Battle: I do not want to diminish the role of nurture. However, I should point out that, although current commentary often says that all new jobs created are public sector jobs, some of them are damn good quality jobs in precisely the right areas, such as child care. Consideration of the economic impact ought therefore to be taken more seriously, not least by some of the hon. Gentleman's Front-Bench colleagues.
      Mr. Luff: I rather regret having given way, as the hon. Gentleman seems to have compounded my concern, rather than seizing the opportunity to say that mothers who work full-time caring for their children are performing a very valuable service, even if it does not feature in the nation's gross national product. But never mind—I do not want to get too confrontational in a debate that has been characterised by its good nature so far.
      Like the hon. Gentleman, I am an amateur in this debate, as I am not a member of the Committee. However, I am a father with a working wife, and I was brought up in a one-parent family, because my father
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      died when I was only eight. I therefore have some experience of the issues relating to child care, and of the challenges posed to children.
      In addition to the need for love and nurture to which I have just referred, I want to inject three elements into this debate: the need for choice for parents, the need for opportunity for children, and the need for play. Technically speaking, the issue of play is not closely related to the work of the Work and Pensions Committee, but I am concerned that much pre-school provision is being driven in an increasingly academic direction. As a result, it is providing a different kind of environment for children from the one that they enjoy at home. Children do need to play before they go to school. My concern is that child care provision for the children of working parents should enable such play to develop. It is through play that children learn. [Interruption] I sense that the House is with me on this point, and I am glad to see nods around the Chamber; indeed, this is not the first time that we have agreed today. Such support is welcome, because Ofsted in particular is pursuing a rather worrying agenda through the creation of an increasingly academic pre-school experience.
      I am delighted that my own constituents are to get more choice. In paragraph 46 of the report, the Committee expressed its concern that
      "pockets of deprivation in towns and cities outside the 20 per cent. most deprived wards are not benefiting sufficiently from expanded child care provision."
      I am sure that it is right to express that concern. Tomorrow, I shall open a Pre-School Learning Alliance neighbourhood nursery in a very deprived ward in my constituency. I am privileged and delighted to do so. It will give children a chance to learn through play, on which the alliance puts great value. Also, it will provide a facility where parents can get to know each other and drop in for advice and social opportunities. That is hugely important, as it provides the network to which the hon. Member for Leeds, West referred.
      The ward about which I am speaking suffers from severe economic and social need. The new neighbourhood nursery will provide a safe, warm place where parents can meet, and where children—from six weeks to school age—can be cared for. It is an ambitious new programme.
      The Pre-School Learning Alliance is seeking to involve parents very much in the care of their children. It is running a campaign called "Changing Lives, Changing Life". The alliance has stated:
      "The Campaign is seeking, via its Charter for Parents and the Early Years, to obtain a childcare or nursery place for every child that needs one. The Campaign is also calling for the involvement and full consultation of parents in their child's early education; continuation of care for children; and a commitment to ensure a better deal for the voluntary sector as a major contributor to universal childcare."
      Two expressions in that quotation are worth picking out—
      "every child that needs one"
      and "voluntary". It is really important that we fully embrace the voluntary sector in the provision of child care. We want diversity of choice, and that means having a wide range of different facilities on offer. The voluntary sector has a big contribution to make. I hope that we do not over-professionalise the sector, and allow

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      local education authorities, in particular, to take over too much responsibility. Voluntary organisations such as the Pre-School Learning Alliance have a huge role to play.
      My other point refers to the phrase
      "every child that needs one".
      Not every child needs child care. Neither women nor men should be defined by their working existence. Sometimes. I get a sense that the Government think that full-time mothers are bad and not to be encouraged. I am sure that that is not what they mean, but that is the sense that one gets from the Chancellor's pronouncements on the matter. Strangely, however, the impression is that the Government consider that working mothers who look after other people's children are good.
      That worries me. Parents should be free to decide, on the basis of well-informed choice, how to raise their children, but that is not the impression that I get. I get a sense of compelling urgency on the Government's part to force every woman out to work. I do not share that agenda. The amendments that were tabled to the report—all of them sadly rejected—reflect some of those concerns. I recommend that people read the amendments, as well as the report itself.
      The 2001 Rowntree report found evidence that children of full-time working mothers do less well academically. That is a difficult and worrying finding, but it has to be taken into account. We must not sweep what is a rather awkward thought under the carpet.
      The hon. Member for Leeds, West seemed to celebrate the world of work, and I agree that work can be very fulfilling. However, the House should celebrate those mothers—and fathers—who choose to make a full-time commitment to their children.
      For many children, though, child care is not only inevitable but the best option. It is crucial that children have access to the appropriate level of care. Children need to learn to learn. They also need to learn to respect others, such as their teachers and peers, and to communicate. Those skills can be learned in appropriate child care, before children go to school. I welcome the great success of many nurseries and pre school experiences in my constituency.
      My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) highlighted the problem of the decline in the number of child minders. That is a matter of great concern. Child minders provide very valuable and useful experience, but their numbers have fallen by about 20,000 over the past three years. Like my hon. Friend, I suspect that it is the red tape and bureaucracy with which they are confronted that has led to that decline. However, I do not think that we should be complacent about that. We need to find ways to boost the numbers of child minders; we must not force everyone into nurseries or formal institutions. A home is often the best place to care for a child.
      I worry very much that we are moving towards a cult of the professional in child care. Amateurs and natural parents are being squeezed out of the process. It is right that alarm bells should be sounded. There is room for diversity in this sector, as opposed to uniformity of state provision of nursery facilities.
      In addition, I sometimes think that we get wrong the balance of risks in relation to child care. It is true that there have been instances in which children have been
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      abused or have suffered, but how many more children are suffering from the decline in child minder numbers? The work of the Criminal Records Bureau has posed many challenges to voluntary organisations in my constituency. Resolving the small problems that they encounter has imposed huge costs and burdens on them.
      I return to my basic theme, which is that there are three crucial propositions that we need to think about: choice for the parent, opportunity for the children, and play.
      3.4 pm
      Sandra Gidley: I welcome the opportunity to debate this subject. My only regret is that the Chamber is not fuller today, as I think that the Select Committee has chosen a very important subject.
      As someone who has had to wrestle with the problems of securing child care when I wanted to return to work—part-time at first, then full-time—I am all too aware of the hurdles that can be encountered. However, I want to say right at the outset that this is not an easy problem to solve, as no single solution will fit all working women's lives. Although I do not feel quite as strongly about this matter as the previous speaker, the hon. Member for Mid-Worcestershire (Mr. Luff)., I also wonder whether the Government are just a little too keen to encourage women to work.
      Not so long ago, child care was incredibly difficult to come by, and it was difficult for women to work outside the home. However, I think that we are now in danger of allowing the pendulum to swing too far in the other direction. We must not make women feel guilty if they make a positive decision to stay at home and raise their children. Many women choose to make that very positive contribution to society, and we belittle it at our peril.
      I hesitate to disagree with my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), but he welcomed the target of having 70 per cent. of lone parents in work by 2010, which I have some reservations about. The target appears to take no consideration of whether those parents want to be in work. It sends the damaging signal that only paid work is important. Choice does not appear to enter the equation.
      We have heard some statistics about women who want to go back to work, but a couple of recent surveys are worth noting. The first was compiled in May 2002 by the magazine Pregnancy and Birth. It found that 75 per cent. of mothers-to-be would not return to employment if finances allowed. In October 2002, the national birth and motherhood survey found that 85 per cent. of women would choose to be stay-at-home mothers.
      I suspect that the difference between the figures arises from the fact that some relate to new mothers, who very much want to be with their babies. They may feel almost forced back into the workplace by financial considerations. As families get older, women feel more able to return to the workplace.
      However, I have already fallen into the first elephant trap in this debate, as I keep referring to "parents" as "women". To get real for a moment, it may be politically correct to refer to "parents", but the reality is that it is predominantly the women who take over responsibility

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      for arranging child care. There are many exceptions to that, and once the arrangements are in place, couples very often work as a team and co-ordinate child care arrangements. Therefore, it is right that we should regard child care as the responsibility of a couple. Although for many of us females it may go slightly against the grain to be lumped in with a spouse for taxation purposes, I suggest that there are great advantages in treating the family as a unit when it comes to children.
      The most obvious reason for that is the simple fact that child care is hard to come by, especially work-based child care. We should not assume that the child will be placed in a nursery at the mother's workplace. The reality may be that there is no provision there, while there may be at the father's place of work. However, the most likely scenario is that neither workplace will have a nursery, as only 5 per cent. of employers offer such facilities. Child care is especially difficult to find for people who live in rural areas. It may be that a work-based option is the most convenient solution, but it simply is not available.
      In many rural areas, the planning system actively blocks new provision. There are often very strong countryside policies on change of use. Also, neighbours in more urban areas will vehemently oppose the provision of nurseries. Those are matters to which the Office of the Deputy Prime Minister should pay greater attention.
      The Minister for Women has stated previously that child care provision in the workplace is not the favoured option. However, we need a variety of provision, as for some people the workplace option is the best.
      When I first started work, it was very difficult to find a nursery that was open outside the hours of 9 am to 5.30 pm, and it was impossible to find nannies willing to work a part-time week, so I had to use a child minder. She was absolutely great, and it is worrying that the number of child minders should be falling.
      Making and rearranging such arrangements is always a nightmare. A whole new set of problems emerges when children start school, as different arrangements have to be made for term time and the holidays. It was then that I nearly gave up work completely, as the whole thing had become a logistical nightmare. I thought that I was alone in that, but I was struck by the Department for Work and Pensions report that found that
      "in the majority of two parent families one or both parents frequently worked before 8.30 am, after 5.30 pm or at weekends. Just over half of employed lone parents also fell into this category. The issue of the school holidays is also a thorny issue for working parents who may also be juggling several sources of childcare."
      Things are a little better now, with nurseries being available for longer hours, but much child care provision does not reflect working lives. Many people have to rely on a combination of formal and informal child care.
      I mentioned the fall in the number of child minders, which may be a feature of regulation, but we should not forget that many of the women who used to be child minders were probably professional women in their own right who did not seek to go back to work 10, 15 or 20 years ago, because it was not as acceptable. Those women have now returned to work and diminished the pool of women who are willing to become child minders.
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      When people find child care provision, it has to be affordable. Too many women carry on working only to find that practically all their wages are eaten up in child care costs. The Daycare Trust has shown that for a child under two the typical cost of a nursery place is now £128 a week, or £118 for a child minder. More worryingly, the trust has also highlighted the fact that British parents pay three quarters of the cost of child care, compared with 30 per cent. for parents in most other European countries. We need a fairy godmother, and I thought that one had arrived yesterday in the unlikely shape of the Chancellor of the Exchequer. I do not know whether the number of Labour women Members have had an effect or the motivation was pure self-interest, but the pre-Budget report contained a very welcome announcement.
      However, the picture is not entirely clear and I seek some clarification. The Chancellor said:
      "I can announce as a first step that for every employee, whatever their income level, employers will be able—as long as the offer is made to every employee—to provide free of both employee national insurance and income tax and free of employer national insurance £50 a week for approved childcare.
      I can also announce that we will respond to two other long-standing concerns: help with child care costs will now be available when approved child care is provided in the child's own home; and, after consultation, we will widen the definition and therefore the number of approved child carers for whom the £50 a week or tax credits can be offered."—[Official Report, 10 December 2003; Vol. 415, c. 1069.]
      That sounds like good news, and I congratulate the Chancellor, but there is a tiny cloud hanging over those proposals in the form of the word "approved".
      I am in favour of a certain amount of regulation in the child care industry, but the House needs a definition of the word "approved".It is important to know whether some child care arrangements will instantly fall into that category or whether some bureaucratic assault course will have to be tackled prior to the doling out of the £50 per week. Will existing child minders be covered? Nannies are currently not registered, so will they be covered? How will more informal family arrangements be covered, if at all? It is also not clear whether the £50 is an amount from existing wages that will effectively become tax-free or whether employers will have to effectively make a top-up offer to all employees that will mean that employees with children are £50 a week better off. Neither is it clear whether there is an age cut-off. Child minding costs do not stop when children go to school, but child care for the under-fives is more expensive. Support may be needed for over-fives and during school holidays, and perhaps we will receive further enlightenment when the Minister winds up.
      I welcome the Government's ambition to create more child care places, but the demand for provision continues to outstrip supply. The study for the Department for Education and Skills, carried out by Woodland, showed that a quarter of all families—some 1.3 million—had reported not being able to find a child care place when they needed it. That was a particular problem for lone parents.

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      One of the adverse effects of that problem is that an increasing number of families are turning to the au pair sector for help with child care. That sector was completely ignored by the report, much to my surprise. Strictly speaking, the au pair scheme is aimed at young people, male or female, who are single and aged between 17 and 27. They can stay for a maximum of two years and should expect to help in the home for five hours a day with at least two full days off a week. That is in return for a reasonable allowance—the suggested amount is £45—and their own room. However, the term "au pair plus" is now often used and that sets out a different range of working conditions for the au pair, which merge with those of a mother's help. The allowance for an au pair plus is expected to be in the range of £65, but the individual is likely to have full-time care of the children throughout the day in addition to other duties.
      Currently, beyond visa requirements, no regulations govern the checks and training requirements for a potential au pair who will have child care responsibilities. The au pair does not even have to sign a contract because the arrangement is an informal one. The au pair is supposed to be treated as a family member and not an employee, which is increasingly not the case. Of course, there are no police checks either.
      The au pair industry in the UK is virtually unregulated, despite the fact that families increasingly rely on that child care option. There has been an increase in the number of rogue agencies that exist simply to cash in on the system. In most cases, the agencies are not members of any professional body, have little or no knowledge of the rules that govern the industry and demonstrate no interest in the au pair when they arrive in this country. Often, there is no further contact.
      I contend that a disaster is waiting to happen, and the challenge that faces us is to ensure that the host family, the au pair and the agency are protected by mechanisms that prevent unmet expectations and demands and minimise the likelihood, for both the au pair and the family, of any potentially damaging situations. The Home Office is strict about which countries participate in the scheme but, alarmingly, Britain refused to sign a European agreement on au pairs placements that was drawn up in 1979. So the current situation remains and unknown young people can arrive in a family home, without police checks, relevant child care training or knowledge of legislation governing care of children and be given sole responsibility of care for young children while parents work.
      Perhaps we should consider the example of the United States, which developed an au pair programme under the control of the US Information Agency. Unlike the system here, their system allows young men and women, with child care experience and who are proficient in English, to stay and work with an American family for a year. The system is not cheap but it is regulated. In the US, an au pair can work for up to 45 hours a week, with no more than 10 hours in any one day, and they must take accredited educational classes and also attend monthly meetings with a co-ordinator so that any problems can be ironed out. The au pairs are not allowed to take care of children under the age of two unless they have 200 hours of documented infant experience, and must not take care of a child under the age of three months unless a parent or other responsible
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      adult is present. Before being allowed to enter the family home, au pairs must also receive at least eight hours of child safety instruction and 24 hours of child development instruction. Sadly, it took a high-profile tragedy before the Americans decided on that system and we must ensure that it will not take a similar event to prompt action in the UK.
      The report contains some excellent recommendations. I endorse the recommendations on flexibility of early years education places, expanding out-of-school care and tackling the huge regional variations in provision, which are a real problem. I especially welcome recommendation 7, that sub-ward data be analysed to target pockets of deprivation within wards. I represent an affluent and leafy area, but it contains pockets that, if they were part of a larger similar area, would qualify for all sorts of benefits. Those areas are deprived of those benefits because they are not part of a Sure Start area or any sort of action zone, and it is time that we started to tackle those problems.
      Much has been said about the benefit to families and the workplace, but we must not lose sight of the most important question—whether children are benefiting from the system. We must increase the number of places, but not through a low-cost option, provided by women in low-paid jobs. It cannot be done on the cheap. It must be properly funded and properly respected.
      3.19 pm
      Mr. Paul Goodman: I signed the report that we are debating wearing my hat as a member of the Select Committee. If I may wear that hat for a moment longer, I congratulate the Chairman of the Committee, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), on his skilled chairmanship. Like him, I found the subject more and more intriguing as the Committee proceedings continued.
      I speak today from the Front Bench, wearing another hat. I am sure that all hon. Members will agree that this has been a good debate and I want to pick up some points. I congratulate the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond), who has recently taken over some new ministerial responsibilities for child care. As the Chairman of the Select Committee said, the Minister, as a former member of the Select Committee, knows the territory well and I am sure that he will find child care as challenging and enthralling as we all did when we undertook our inquiry.
      I am sure that the Minister agrees that, as the report emphasised, decisions about child care are deeply emotionally charged for any working parent of young children. The hon. Member for Regent's Park and Kensington, North (Ms Buck) was keen to emphasise that point in her strong contribution to the compilation of the report. There are few more emotionally charged decisions for any parent—especially perhaps for lone mothers, who are, by definition., without a partner—than the decision to trust their child to someone else, particularly a stranger or strangers. That emotional charge is intensified by the pressure of modern life on the work-life balance of women and families. In that

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      context, I shall quote the evidence of a nurse, which the GMB quoted to the Committee. The nurse said:
      "Child care is a hideous stressful nightmare. My daughter is exhausted as she is up at 5.30 some days. She is woken early (I have no transport), walked to a childminder which takes half an hour. She's been up for 3 hours before she's at school. Some days it is awful, it really is."
      I cite that evidence to remind the House, if it needed reminding, of the stressful nature of the decisions that parents have to make about child care.
      In a very fine speech, my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) picked up the key point: the degree to which parents love and care for their children and to which they have to make some difficult decisions. Those pressures on parents are exacerbated by the inevitable debate about the effects on the development of children of child care outside the home. In a very good speech, my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) developed, as I expected him to do, some of the points that he made to the Select Committee. Those points were also made by other Members during the debate.
      Members of the Committee will remember that there was some discussion about the degree to which our report should flag up the debate about the effects of formal child care on very young children. I have no intention of revisiting that discussion in depth today, not least because of the time constraints, but the report is extremely circumspect about those effects. It says of pre-school children that
      "there is strong evidence that pre-school provision—between 3 and 5 years results in higher educational attainment, both at primary school and long-term."
      However, the report comes to no conclusion about the effects of formal child care on the development of children younger than three and the House may care to take note of that.
      I must confess that I believe that the debate about the effects of child care on very young children, although important, may be beside the main point: given the emotionally charged nature of child care and despite the extremely complex ways in which it is provided, the key principle for working and non-working parents should surely be choice. The Select Committee report broadly reflects that view. Perhaps inevitably, the Committee found that there were different views about the choices that working parents want to make. Although working parents may sometimes disagree about the choices that they want, the House will agree that child care choice is what they want. That choice may be to stay at home when their children are very young—a point made by some of my hon. Friends. It may be informal care by relatives, friends or neighbours, more formal care, such as a child minder or high-quality formal care outside the home at a day nursery or children's centre. The key question raised by the report and the Government's response is whether the Government's child care strategy is firmly based on the principle of choice.
      The official Opposition want to study with care the announcements made yesterday, because we have learned from experience that when spending announcements are made it is vital to study not just the
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      big headlines but also the small print. For example, the Chancellor said that
      "over the next five years there will be 1,000 children's centres."—[Official Report, 10 December 2003; Vol. 415, c. 1069.]
      When the Minister replies to the debate, will he confirm whether that figure represents an increase compared with the number that has already been announced? Will he also tell us what estimate, if any, has been made of the number of employers who will no longer provide child care vouchers as a result of the capping announced yesterday both of the present national insurance contribution exemption for vouchers and of the new tax exemption? He might also care to comment on the assessment made by Deloitte Touche:
      "The introduction of a NIC charge of amounts above the proposed limit…may not encourage employers to provide vouchers".
      I shall comment later on some of the other announcements made yesterday, but first I pay tribute to the commitment of Ministers in general and the Chancellor in particular to child care. There can be no doubt of the Government's commitment—
      Mr. George Osborne: Steady on.
      Mr. Goodman: I am sure that my hon. Friend agrees that it does politicians no good to be too adversarial, even if we necessarily have to be adversarial sometimes. He will also share my fear that despite yesterday's announcements, the evident good will of Ministers and the ever-rolling stream of initiatives and announcements, the answer to the question, "Do the Government have a coherent child care strategy based on choice?" is, sadly, "No". I shall explain why.
      As the Select Committee's report makes clear, the Government's child care policy for working parents is inextricably linked to their anti-poverty strategy. There was some discussion in Committee about whether the anti-poverty strategy was the foundation of their policy. The Government have set themselves two main targets and the hon. Member for Romsey (Sandra Gidley), in a very good speech, picked up one: reducing the number of children in workless households by 2006. The second target is that 70 per cent. of lone parents should be in paid work by 2010.
      Like the Chairman of the Select Committee, I was extremely impressed by the oral evidence that we heard from Professor Moss, on which I shall read out part of the Committee's conclusions. The report states:
      "Childcare should not just be about freeing parents so that they are able to work. In his view"—
      that is, Professor Moss
      "childcare is a public good which is the right of all children, regardless of whether their parents work or not."
      That point was alluded to by other speakers in the debate. The report continued:
      "The questions raised by Professor Moss suggested that the Government may be placing too much emphasis on a labour market-driven strategy as the basis for childcare policy. His evidence opened up an alternative vision of childcare, based upon the choices made by parents and families themselves."

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      It seems that not only Government Back Benchers, but Front Benchers and indeed Cabinet Ministers agree. Let me cite the comments of one of them:
      "If I look back over the last six years I do think that we have given the impression that we think all mothers should be out to work, preferably full-time as soon as their children are a few months old…It's not our job to preach to people one way or the other, it's about providing choices."
      Those are the words of no less a person than the Minister for Women, published in The Daily Telegraph under the lurid headline,
      "We've failed mothers who stay at home admits Hewitt".
      The Opposition agree. However, as the hon. Member for Romsey acutely observed, it is hard for the Government to say that they want to provide choice for all parents while setting targets that would put 70 per cent. of a group of those parents in the labour market. There is certainly a tension, if not a contradiction, between those aims. That is why the report is critical of the main instrument of that labour market-driven strategy: the child care tax credit. It makes a series of suggestions for improving the credit, but it also says that the credit, though valuable to many parents,
      "poses complex and interlocking problems about take-up, eligibility, qualifying hours, the proportion of costs which should be covered, regional disparities and the funding of informal as well as formal care…The CCTC is certainly not consistent…with a childcare vision based on the choices made by parents and families themselves, since it is only available to some of them."
      It concludes:
      "We therefore believe that in the longer term, the CCTC may have a less central role"
      It is significant that most, although I grant not all, of yesterday's child care announcements will assist parents who work in the labour market only. A parent who does not work in the labour market will not be able, obviously, to take advantage of the new tax exemption for workplace nurseries announced yesterday. That point was picked up by the Chairman of the Committee and the hon. Member for Regent's Park and Kensington, North. Nor can it be claimed that this announcement was a response to the Select Committee recommending an enhanced role for employers—which is, in the words of the report, "small but useful". Moreover, a parent who does not work in the labour market would not, I think, be able to take advantage of any extension of the CCTC to cover informal carers—a possible consequence of the consultation announced yesterday to
      "streamline this process and widen home caring".
      It cannot be claimed that this announcement was a response to the Select Committee recommending such an extension, because the report fairly bluntly said:
      "We do not believe that funding informal care through the CCTC is the best way forward".
      The Government may want to take note of that. A lone parent who is not about to work in the labour market will not be able to take advantage of the help with child care costs for lone parents announced yesterday in the week before starting work.
      The House may now begin to appreciate why the Government do not seem to have a clear and coherent strategy for child care based on parental choice. That lack of clarity, combined with the bewildering proliferation of funding streams and the administrative burdens that some
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      providers report—my hon. Friend the Member for Mid-Worcestershire mentioned this in the context of playgroups, in his reference to the difference between quality and qualified staff—may help to explain why demand for child care continues to outstrip supply. The number of day nurseries is certainly up. But the number of child minders is, as the report puts it, "decreasing in number". In 1997, there were almost 100,000. By this year, that figure had fallen to almost 72,000 and the number of places in playgroups—my hon. Friend will have noticed this in his perusal of the report—has fallen from more than 350,000 in 1997 to roughly 300,000.
      Ms Buck: On that point, perhaps the hon. Gentleman would like to comment on the fact that the principal driver for the closure of playgroups across Britain from 1996 onwards was the introduction of the nursery voucher.
      Mr. Goodman: I am extremely concerned, in picking up the hon. Lady's point, to point to the administrative burden that my hon. Friend the Member for Mid-Worcestershire mentioned. As the hon. Lady raised the point, I note that it is a weakness of the Committee's report—I blame no one but myself, in retrospect—that it does not concentrate more on precisely those burdens, not all of which by any means came about before 1997.
      On the proliferation of the funding streams, I want to quote Anne Longfield of Kids' Clubs Network, who complained to the Committee:
      "At the moment you have got crime prevention strategies running up against regeneration strategies running up against child care strategies and the like…locally, too, but frankly, there are so many different initiatives that it is a full-time job for people in partnerships to even know those things exist…never mind join them up."
      If someone trying to make sense of the system stood back from what the report calls the funding jigsaw, he or she might also find a ministerial jigsaw, because there is, by my count: the Minister; the Minister for Children, who is in charge of the national child care strategy; the Minister for Women, who does not seem to have full confidence in the Government's strategy to date; the Minister for Social Exclusion; and a Minister for tax credits, as well as the Chancellor. All of them presumably have some claim to ownership of the Government's policy on child care for working parents. I will not inquire how often the Minister has bilateral meetings about child care with the Minister for Children, or how often they both have trilateral meetings with the Minister for Women, or how often they all meet with the Minister for Social Exclusion and the Minister for tax credits—
      Mr. George Osborne: And the Chancellor.
      Mr. Goodman: Not forgetting the Chancellor. I am not sure that we can have complete confidence that this is joined-up government. The key word here is mainstreaming. We need a child care strategy that mainstreams child care for working parents with child care for all, based on choice for all, as the Secretary of State for Trade and Industry has said. On the supply side, that involves combining services directly provided by the state or by the state in partnership with the private and voluntary sectors, such as children's centres and Sure Start, with reviewing the administrative

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      burdens on playgroups and child minders. On the demand side, it involves a less central role for the CCTC and a more central role for benefits and tax credits that permit choice for parents, such as child benefit and the child tax credit.
      I visited France and Denmark with the Select Committee on Work and Pensions last week, and I was struck, as every other member of the Committee will have been, by the thought that one reason why child poverty may be lower in France and Denmark is that families may be stronger there. That may be because for some 50 years those countries have put more money into families than we have. That is why the hon. Member for Leeds, West (Mr. Battle) was correct in saying that he wanted to consider all this in the context of child poverty.
      In summary, the key word is choice. All parents—including, of course, working parents—must be allowed to make the child care choices that they want for their children, who are our future.
      3.35 pm
      The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): I congratulate the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) on securing this debate on the Select Committee on Work and Pensions report, "Childcare for Working Parents". I thank him for the kind comments that he made in his opening remarks. It was an honour to serve as a member of the Committee under his chairmanship some years ago, and I am pleased to have the opportunity to respond to the report and the issues raised in the debate. This has been perhaps an unusually good and good-natured debate on an important subject, and the debate has done justice to an important report.
      The Select Committee is right in emphasising the importance of child care to the Government's anti-poverty strategy. Ensuring that people of working age who want to work can do so is key to our meeting our targets of reducing child poverty by a quarter by 2004, reducing the number of children in workless households by 2006, and getting 70 per cent. of lone parents into paid work by 2010.
      The hon. Members for Romsey (Sandra Gidley) and for Wycombe (Mr. Goodman) suggested that the 70 per cent. target for lone parents was established irrespective of whether lone parents wanted to work. The target is based on the aspirations of lone parents themselves, 70 per cent. of whom say that they would like to work if they had the opportunity and support to do so, as well as on the needs of the whole economy.
      Andrew Selous: In the inquiry to which the Minister refers, was any reference made to what age children should be when lone parents would like to start work? That could make quite a big difference.
      Mr. Pond: I thank the hon. Gentleman for that intervention because he makes an important point about choice to which I shall return because it runs throughout the contributions made by a number of hon. Members.
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      For the reasons that I have outlined, the Chancellor highlighted in presenting the pre-Budget report yesterday the Government's belief that
      "Nothing is more important to the future of our whole country than the best schooling, services and financial support, ensuring for every child the chance to develop their potential to the full."—[Official Report, 10 December 2003; Vol. 415, c. 1068.]
      That is why he announced the package of measures to provide increased support for children and families to which many hon. Members have referred: the tax and national insurance incentives to employers to provide extra support with employees' child care—I confirm to the hon. Member for Romsey that that is available for all registered child care, including out-of-school child care—and the target of new child care places for 2.2 million children by 2006, as well as free child care for all those on the new deal for lone parents in the week before they start work and for those lone parents who undertake work-search activity in 12 pilot areas. Perhaps most importantly, the extra £3.50 a week for each of 7 million children through increased child tax credits is a major contribution to meeting our targets on child poverty.
      The Government's commitment to do everything that we can to improve the quality and quantity of child care for working parents was underlined forcefully in the statements by my right hon. Friends the Chancellor and the Secretary of State for Work and Pensions yesterday, which was generously acknowledged by the hon. Member for Wycombe, who has spoken in two roles this afternoon. He has spoken from the Front Bench—if I have not already congratulated him on that position, I do so happily now—and as a member of the Select Committee. I noted from the body language of his colleagues on the Front Bench, many of whom have now left him, that the Opposition Whips may speak to him later about that generous acknowledgement of our commitment, and we trust that his shaky voice in his presentation was no indication of a previous attempt to stop him saying such things.
      The Government considered the 21 recommendations in the Select Committee's report carefully, and responded to them on 12 September. I am pleased that the report acknowledged the substantial growth in child care provision since we introduced the national child care strategy in 1998, and that the report welcomed our commitment to further child care expansion even before yesterday's announcements. It is also encouraging that the Committee agreed that the Government were heading in the right direction with children's centres. Members have this afternoon welcomed the commitment to 1,000 children's centres by 2008 announced by the Chancellor yesterday, with the longterm aim of a children's centre in every community. I confirm to the hon. Member for Wycombe that that figure has not been announced previously—it is a new figure.
      We readily accept, as many Members rightly pointed out, that we have not yet reached the position that we want: accessible, affordable, good-quality child care in every locality. We understand fully the Committee's desire, and that of Members who have contributed to this afternoon's debate, to see us go further and more quickly. Our response to the report sets out some of the steps that we are taking towards making a reality of our

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      vision. It is worth spending a few moments reviewing how far we have come in the past five years.
      By April next year, every three and four-year-old child will have access to a free part-time place in an early years setting, thanks to our investment of £2.6 billion a year in free universal nursery education. By 2004, we will have created new child care places for 1.6 million children. By 2006, that will have risen to 2.2 million children. When we came into government, there was one child care place for every nine children. Now we have one place for every five children. All but two of our 524 Sure Start local programmes are up and running, including, I am pleased to say, one in my community in Gravesham. I know from working with that programme the impact that it can have on children and families, in my constituency as around the country. That new Sure Start service is now touching the lives of 400,000 children under the age of four, and reaching about a third of the children under four living in poverty. By the end of this spending review period we will be investing around £1.5 billion a year in the services that we provide under the Sure Start umbrella.
      From April 2004, we will also introduce an extended school child care pilot in Bradford and the London boroughs of Haringey and Lewisham. The pilot is designed to maximise the use of existing local child care vacancies to identify quickly any areas where child care supply does not meet demand, and to create new school-based child care where that is necessary. The object is to ensure that lack of appropriate child care is not a barrier to the return to work of those within workless households. That will entail close working in particular between local authorities and Jobcentre Plus, which will be facilitated by the recently introduced Jobcentre Plus child care partnership managers.
      The Government have taken a number of steps to help working parents with their child care. My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), who has long been an energetic campaigner on child care issues, reminded us that the costs of child care can be a barrier to work for lower and middle-income parents. That is why we have provided substantial financial help towards the costs of approved child care through tax credits. She will be pleased that yesterday the Chancellor announced extra help with child care costs for those parents receiving both housing benefit and working tax credit. She will also be pleased with the announcement made by my right hon. Friend the Secretary of State for Work and Pensions that acknowledged the additional costs that parents in London face for such things as child care and gave a commitment to try to address the issue.
      More than 286,000 families receive help with child care costs through the working tax credit, and we are spending 90 per cent. more on child care through tax credits than before—almost £2 million a day. Since April, we have extended the tax credit to cover approved child care in the home, which is intended especially to help parents with child care needs who work unsocial hours or shifts and those with disabled children. The credit is now paid to the main carer. I can tell the hon. Member for Romsey that we are consulting on the proposed extension of such care early in 2004, and we would welcome her comments and those of other hon.
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      Members on the appropriate form for that. Her point about au pairs is principally a matter for the Home Office, but I am sure that my colleagues in the Home Office are listening to the debate—[Laughter.] As, indeed, is much of the rest of the nation. I am sure that my colleagues in the Home Office will respond to the hon. Lady's point.
      I must emphasise that working tax credit is a targeted work-incentive measure that is intended to help to make work pay for low and middle-income parents. The child care element is designed to help to remove the child care barrier that often prevents people from taking up, or returning to, work. It is not designed to be a universal child care subsidy for all families. However, some universal support is provided by means of free nursery education and Government funding for child care places. In addition to the undoubted direct benefit to children of free nursery education, its provision has the effect of substantially reducing the cost of full-time day care for the parents of three and four-year-olds. Since August, young parents aged 16 to 19 have been able to receive free child care up to the value of £5,000 per child per year so that they may continue their education or take part in work-based learning through our care to learn scheme.
      Since April, we have provided a network of child care partnership managers in Jobcentre Plus districts to help advisers to assist parents seeking work. We have introduced support child-minding pathfinders in six key inner-city areas where child care is most needed to enable unemployed people to work. The aim is to engage existing child minders to attract new people into the profession and help them to set up in business. Funding will be provided to all local authorities for similar schemes from next April.
      The hon. Members for Wycombe and for South-West Bedfordshire (Andrew Selous) referred to the decline in the number of child minders, which shows the importance of the scheme. I reassure them that we have managed to stem that decline and I am advised that since last April the number has increased by 9,000, so we are going in the right direction. We need to ensure that we continue to encourage more people to enter child care as a professional and, hopefully, well rewarded form of employment. I take on board the point made by the hon. Member for Roxburgh and Berwickshire about the need to ensure that such people are properly rewarded. He might remember that when I was at the Low Pay Unit, it published a report entitled "Who Minds About the Minders?", which pointed out that child minders need to be properly rewarded.
      As was announced in the 2003 Budget, pilots of child care taster sessions will be available in specific locations for up to one week to help people on the new deal for lone parents to find out whether formal child care suits their needs. I know that the Select Committee was especially anxious for that to happen, so I hope that it welcomes the fact that we are moving forward with the scheme. Our intention is to establish the feasibility of the mechanism of taster sessions and to get a qualitative sense of their impact on parents' movement into work. The pilots will operate in the six metropolitan areas of London, Birmingham, Glasgow, Leeds, Liverpool and Manchester until March 2006 and will start in the first areas by April next year.

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      We have also taken account of the needs of parents who are already in work through new laws that were introduced in April to provide them with more choice about how to balance child care with work. Those include the new duty on employers to consider seriously requests to work flexibly from parents of young and disabled children. The Government believe that there is more that employers can do to help people to balance their home and work responsibilities. Not only is that the right thing for employers to do; it also makes business sense, bringing benefits through improved recruitment and retention, staff morale and organisational performance.
      We consulted earlier in the year on proposals to encourage more employers to help their staff with the cost of good, safe child care. Yesterday, as hon. Members know, the Chancellor announced proposals to widen the tax and national insurance contribution exemptions for employer-supported child care.
      My hon. Friend the Member for Regent's Park and Kensington, North expressed her anxiety about whether we were doing enough about the supply of child care. She will acknowledge, I think, that we are doing a considerable amount, particularly on children's centres and on the support, which I mentioned, to encourage more people to enter the child-minding profession. We have also made a substantial investment in the creation of new child care places.
      We provide start-up funding for a wide range of child care settings: day-care nurseries, child minders and out-of-school child care clubs. In areas of disadvantage, that support can extend to up to three years, acknowledging that businesses can take longer to establish themselves at viable levels in such areas. We also plan next year to introduce short-term sustainability funding to protect good child care in disadvantaged areas, where those child care businesses are experiencing temporary viability problems.
      A number of hon. Members have spoken about quality. I have referred to our vision of having good, affordable child care in every area and community. We need to be clear about what we are trying to achieve for the quality of child care provision. We have introduced a new national framework of standards for child care for children under eight, which will be regulated by Ofsted, because we know that children's behaviour, socialisation and later life are crucially influenced by their early experiences. Those standards allow parents to work, train or study, confident that their children are in a safe and stimulating environment.
      The hon. Member for South-West Bedfordshire expressed concern about quality. The Government are clear that we are not in the business of saying that child care needs to be just "good enough" so that the parent can work. We know from our research that it is the quality of the early years experience that makes the difference to the child's outcomes. We know from much American research that poor child care for parents in low-paid jobs can damage the child's outcomes. That means that although we want to expand child care provision as fast as possible, we will not sacrifice standards to numbers. It means investing in creating a strong and well-qualified work force that is rigorously
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      inspected. We are committed to the concept of registration, which is important as a foundation not only for quality but for child safety.
      The Select Committee welcomed the fact that we were targeting resources, which are inevitably limited, to achieve the greatest impact. We understand the point made by a number of hon. Members that they would like us to extend provision further, especially, as the hon. Member for Caernarfon (Hywel Williams) said, into rural areas. I point out to hon. Members, however, that there is considerable flexibility for local authorities to seek to extend provision in that way. We note the slight scepticism of the Select Committee and its Chairman about whether that goes far enough, and the child care review will consider that and a number of other issues.
      The review will consider whether the long-term projection for child care and early years education is sufficient to meet the Government's aim for employment and educational attainment; whether the expansion is proceeding quickly enough; and whether there are areas where more remains to be done. The review will also look in detail at how we can ensure better integration between early years education and child care for pre-school children, because we know that, while working parents welcome the nursery education entitlement, they also need child care that wraps around it.
      We also recognise that working parents need to know that their children are safe and cared for during non-school hours, so the review will look at child care provision both before and after normal school hours. We want to see more extended schools providing more services to their local communities. In conclusion, the child care review findings will in form the next spending review settlement for the Sure Start unit, as well as the allocation of resources for child care for the three years from 2005–06. I cannot, of course, anticipate the results, but it is fair to say that child care and children's issues generally are at the centre of the political agenda to an extent that would have seemed impossible 10 years ago. I can reassure the hon. Member for Wycombe that we have a structure in place to ensure that child care initiatives that emanate from different Departments are properly joined up. The child care review is led by a ministerial team representing my own Department—the Department for Work and Pensions—as well as the Department for Education and Skills, the Office of the Deputy Prime Minister, the Department of Trade and Industry, the Treasury and the Department of Health. The Sure Start unit, as Members will know, is jointly responsible to the Department for Work and Pensions and the Department for Education and Skills. The Minister with day-to-day responsibility for the work of the unit, Baroness Ashton of Upholland, is a Minister in both Departments. I am sure that she will be pleased to read about the well-deserved recognition of its work in the opening remarks of the Chairman of the Select Committee.
      We have had a valuable debate, a theme of which has been the question of choice. The hon. Member for Roxburgh and Berwickshire made a point that was reiterated by the hon. Members for South-West Bedfordshire, for Mid-Worcestershire (Mr. Luff), for Romsey and for Wycombe: that choice for parents is an essential ingredient of child care. They should have

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      choice about the type of child care that they use and the balance between work and family. They should have choice about whether their child is cared for in a voluntary, private or public setting. Some parents, especially those with very young children, may choose to care for them without using other forms of child care provision that are available. To provide that choice, we have given a great deal of extra support for families with children. The amount of support for the first child in child benefit and child tax credit has increased from £27 a week in 1997 to £58 following the Chancellor's announcements yesterday.
      We want to give genuine choices to parents who want to work so that they have the opportunity to build on their achievements and fulfil their ambitions. As my hon. Friend the Member for Leeds, West (Mr. Battle) made clear, the issue is about not just social justice but economic prosperity. Investment in child care makes good sense—not only do we want to ensure that we give choices to parents and children that enhance children's life chances but we want to make sure that we build on the strong economic foundations that the Chancellor of the Exchequer outlined yesterday. I thank the Committee for its report and hon. Members for their contributions to a good and, indeed, good-natured debate, which I am sure will enhance our determination that parents continue to have choice and that we continue to build a nation based on social justice and economic prosperity.
      Debate concluded, pursuant to Resolution [2 December].
      Question deferred, pursuant to Standing Order No. 54(4) and (5) and Order [29 October 2002] until 6 pm

  ESTIMATES DAY
  [1ST ALLOTED DAY, 2ND PART]
  ESTIMATES DAY
    Department of Trade and Industry

      People, Post Offices and Pensions
      [Relevant documents: Eleventh Report from the Trade and Industry Committee, Session 2002–03, on People, Pensions and Post Offices, HC 718, and the Government's response thereto, HC 1102; and the Department for Trade and Industry Departmental Report 2003, Cm 5916.]
      Motion made, and Question proposed,
      That resources, not exceeding £2,101,186,000, be authorised, on account, for use during the year ending on 31st March 2005, and that a sum, not exceeding £3,749,956,000, be granted to Her Majesty out of the Consolidated Fund, on account, for the year ending on 31st March 2005, for expenditure by the Department of Trade and Industry.—[Mr. Heppell]
      [This Vote on Account is to be considered in so far as it relates to the modernisation of the post office network, with particular reference to the impact on post offices of the direct payment of pensions (Resolution of 2 December)]
      Mr. Deputy Speaker (Sir Alan Haselhurst): Before I call the hon. Member for Ochil (Mr. O'Neill), may I say that a great many hon. Members are seeking to catch my eye in a limited time? The 10-minute rule does not apply to the hon. Gentleman whom I am about to call and Front Bench spokesmen. Hon. Members will understand what a difficult situation that creates, so I hope that they will be tolerant and sympathetic to their colleagues' needs.
      3.58 pm
      Mr. Martin O'Neill: I hope that I shall speak for less than 23 minutes, Mr. Deputy Speaker.
      When preparing for our debate, I went through my files and discovered that the Trade and Industry Committee, which I have chaired for eight years, has been looking at this issue since the mid-1990s. On about seven occasions we have taken evidence and reports have been produced, and we shall doubtless revisit the issue in the coming weeks and months. Our 11th report for the Session 2002–03, HC 718, was published on 17 July and the response from the Secretary of State appeared on 23 September. That response identified our two main areas of concern. For the purposes of debate, it may be better to focus on the concerns that the Government identified rather than on those that we identified, but I am sure that other Members will seek to widen our discussion.
      The Government identified two main areas of concern—the unnecessarily complicated procedure for opening a post office account, and the character of the customer information provided by the Department for Work and Pensions, which was considered insufficient for people who were applying for a card account.
      I recognise that in some respects, therefore, the responsibility for answering these charges lies at the door of the Department for Work and Pensions, as much as with the Department of Trade and Industry. I entirely understand the reason for the absence abroad of my hon. Friend the Minister for Energy, E-Commerce and Postal Services, and I welcome the Under-Secretary

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      of State for Trade and Industry, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), to the minefield that is this topic.
      There is a degree of consensus about offering the option of direct payment of welfare benefits. It is technically possible to pay salaries and private pensions into people's bank accounts, so why not extend that to state pensions and a range of social security benefits? Since the proposal was first mooted in the past decade, the practice has become more common as more recipients have come to recognise the advantages of automatic teller machines and the like.
      The Government have long felt that the cost of providing benefit books is excessive, and as theft, forgery and general fraud have increased, the need to counter them has become ever more expensive. It has been suggested that that represents a cost to the taxpayer of some £80 million. It should be stressed, however, that there is no ministerial statement, and no consensus, on how much will be saved by the introduction of swipe cards, direct payments and so on.
      A sizeable number of people find it convenient to take their books to the post office and receive their benefit in cash over the counter. They include mothers who receive child benefit and who, although they may have a bank account of their own or have joint arrangements with their spouse or partner, may prefer to have access—for example, on a Saturday morning—to money that they have earmarked for specific purposes, such as children's clothing.
      The late Barbara Castle, as the Minister introducing the measure in the 1970s, stressed that the nature of the payment was important, as it would go exclusively to the mum. and would be spent independently of the rest of the family income. As I know from experience in my constituency, there are still men who do not tell their wives how much they earn, and who have a bank account of their own and hand out the money with a teaspoon at irregular intervals. Child benefit is important because it gives young mothers financial independence.
      There are others who just like going to the post office. It is an outing. Pensioners meet their friends and contemporaries there, and they can buy post office goods, such as stamps for their TV licence, and make utility payments.
      Mr. Nigel Watersonrose—
      Mr. O'Neill: I do not have much time, but I shall take the hon. Gentleman's intervention.
      Mr. Waterson: Does the hon. Gentleman agree that it is a matter not just of wanting to go to the post office but of finding one that is still open? Five post offices have closed in my constituency. Does he agree that we should examine the consultation process involved in such closures, which in my experience has been wholly inadequate?
      Mr. O'Neill: The hon. Gentleman may have the chance to catch the Deputy Speaker's eye. Such interventions are helpful, but their helpfulness is limited.
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      There is a more important group covering the entire range of benefit recipients, including pensioners and mothers, who are dependent on the post office as the source of their family or individual income. Anyone who passes a post office at 8.30 on a Monday morning will see those who need their benefits to buy the day's food, to heat their home, to pay their debt collectors or to get money to get to work. I have no problem with the Government's programmes to end child poverty, which we discussed in the previous debate, or to improve social inclusion. A number of people still live on the economic margins, however, and have no cushion of savings. Such people do not have money in an envelope behind the clock and do not have bank accounts or credit cards. For them, a hole in the wall is merely a hole in the wall, and they do not have access to ATMs and the like. I make that point because we contend that, for many people, the processes of securing alternative means of payment are at best daunting and at worst unhelpful. The agenda of the DWP-instructed call centre staff is unduly biased towards securing maximum take-up of direct payment.
      Ms Joan Walley: Will my hon. Friend give way?
      Mr. O'Neill: I am sorry, but I want to make progress.
      Internal memos provided to me by the National Federation of Sub-Postmasters and the Communication Workers Union make it clear that the attitude is hardening. In respect of a Jobcentre Plus pay modernisation project, I have a document from a Mr. Alan Linton dated 7 October in which he states:
      "This letter is to inform you how we are aiming to issue robust and consistent messages on the importance of Direct Payment as due to commercial and political constraints, previous material issued has contained many 'soft' messages."
      I do not think that one has to be a textual expert or some sort of Noam Chomsky to get the feeling that there has been a step change in attitude. The document in question was issued in October, after the Secretary of State had given us his response, and it was produced within the confines of the DWP. There is a change in attitude, and it serves to underline the malign motives of the DWP in this matter. Some issues repeatedly arise:
      "Paying by order book costs 30 times as much as paying into standard or basic bank accounts. Paying into a Post Office card account costs even more and was designed to meet the needs of those who cannot gain access to standard or basic accounts."
      The last bit of information is:
      "Order books will start to be phased out from October 2004."
      The tone of those instructions does not suggest that they are an attempt to instruct people about how to help the disadvantaged. That serves to underline the fact that, in the seven months or so since we took evidence, things have not become better but have got worse—a view that is reinforced by the sub-postmasters and postal workers themselves. The objective is not to give an informed choice so much as to direct people to use existing bank accounts where appropriate, to say that they should acquire Post Office cards through a complicated procedure, or, last and least, to seek to discourage refuseniks by saying "It's going to go through anyway, so you had better get your act together and sharpen up."

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      The Post Office card account is probably the best compromise, and I think that the DTI and Post Office Counters have sought to introduce it with reasonably good intentions. The DWP, however, has made applying for the account more difficult and complicated and has been able to load the choice system with active discouragement. Postwatch, the postal consumer watchdog, put it succinctly, saying that
      "the POCA application process requires the customer to retain and assimilate documents they receive at different stages in the process. Duration between receiving these different documents is often quite long. It can be confusing and is potentially off putting."
      Postwatch makes several suggestions. People can apply to the Post Office, avoiding any contact with the call centre, or they can take the migration letter from the DWP agency and go to their post office with identification such as a benefit book, which seems as good a means of identification as any, after which the form would be completed at the post office and sent on by post. Another option is to issue the Post Office card account instead of a new order book, so that once the customer tells—I had better get the name right—the customer conversion centre that they want a card, it can be issued at a nominated post office. Alternatively, it would be possible simply to use the existing bureaucracy, so that once the customer receives the POCA information she has to give the relevant DWP agency her details, and the Post Office can inform the DWP agency of the account details. That would streamline the existing application process by removing one stage.
      The DWP's response to those suggestions by the consumer watchdog for postal services has been somewhat slow, or tardy—the vulgar among us might suggest other expressions—but suffice to say that it was, simply, "Get lost." A proposal by the body that is charged with protecting consumers at post offices is dismissed because it would probably result in too many people taking it up and undermine the cost-effectiveness of the grand design.
      Mr. Nick Hawkins: Will the hon. Gentleman give way?
      Mr. O'Neill: I am sorry, but I am under time constraints. I do not want to be awkward, but I have a wee bit more to get through.
      The statistics suggest that a lot of people are making applications—some get to the first stage and drop out, while others carry on. If the situation continues, the findings of Postwatch suggest that by the appropriate time next year several million people will be in considerable difficulty: without an exceptions arrangement, a card or a bank account, they will be left in a distressing limbo. The Minister must deal with that problem, because it is becoming more evident as time goes on.
      I have to say, however, that progress has been made on exceptions. Some of those who cannot get to post offices, do not have accounts, or simply cannot cope will get something along the lines of the old giro cheque. We must give credit for the fact that there has been movement there, but I wish that there was more movement on the non-exceptionals—those who are doing it for other purposes.
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      We must recognise that many people are dependent on the post office network as a source of income and employment. A great deal of disquiet has been expressed about the programme of network reinvention and the medium to long-term protection of rural post offices. Other hon. Members will want to raise those issues: all I will say is that anecdotal evidence provided by Members on both sides of the House questions the approach taken by Post Office Counters—the pursuit of soft options involving voluntarism, whereby taxpayers' money is available for closure, rather than the more attractive option of a clearly defined programme of reorganisation where customer need is pre-eminent.
      Mr. Hawkins: Will the hon. Gentleman give way?
      Mr. O'Neill: I am sorry, but I do not have time.
      There is suspicion that several closures could be announced just before the forthcoming holiday period, thus reducing the time available for consultation, disquiet that insufficient consultation is being carried out with local authorities to ascertain further development, especially in areas of urban regeneration where social housing programmes are to be carried out on brownfield sites, and great worry about the future of Post Office Counters—the Crown post office network itself.
      My colleagues on the Select Committee and I have stuck with this issue for the best part of a decade—through three Parliaments under Tory and Labour Governments, but the anxieties that we have repeatedly expressed have not all been addressed. There are better ways of paying benefits than using a book—that is not in dispute—but we have moved on from the days when social security benefit distribution could be regarded as a privilege for which the recipient is answerable to the terms laid down by a generous donor. In a modern welfare state run by what I would like to think is a modern, social democratic Government, the poor and disadvantaged—and, frankly, the cussed and determined—are entitled to have their views heard on how their benefits should be paid and how they can be advised on their rights. Sadly, on the issue of direct payment the Government are paying attention neither to the many nor the few.
      4.14 pm
      Mr. Patrick McLoughlin: I am grateful to the hon. Member for Ochil (Mr. O'Neill) for the way in which he introduced the debate. I say to hon. Members who have not yet been afflicted by the reinvention programme that "reinvention" would qualify as the most misused word from a Government to whose misuse of words we have become accustomed.
      In my constituency, several post offices have closed in the past few years. Indeed, since 1997, those at Cubley, Longford, Roston, Flagg, Lea Bridge, Kniveton, Fenny Bentley, Clifton and Taddington have closed. Some closed because people wanted to retire and no one could be found to replace them. I accept that there will always be some post office closures. It was almost inevitable when nearly 20,000 post offices covered the United Kingdom.
      However, I was shocked and horrified to receive a letter from the Post Office a few weeks ago to inform me that in Belper, which has five post offices, four are set to

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      close. That is a reduction of some 80 per cent. in the service. Belper is a large town with a population that exceeds 20,000. Even the Post Office's consultation document describes the terrain as hilly. That is a good description; we are not considering a flat part of the United Kingdom. It is just to the south of the start of the Peak district.
      The Chairman of the Select Committee on Trade and Industry commented on the brevity of the timetable for consultation and for people to make representations. That is felt strongly in Belper. The consultation period ends on 23 December. Most people would accept that other things are on people's minds in December.
      Mr. Harry Barnes: Has the hon. Gentleman experienced the specific problems with consultation that I shall describe? When he and his constituents make their objections, they receive a reply from the Post Office, 80 per cent. of which argues the general case for the closure programme. That happens in the middle of the consultation. When a post office's closure is confirmed, it is found that a document to that effect has been published months previously, even before the consultation. In a case in my constituency, the document was published in March but the decision was made on 28 September.
      Mr. McLoughlin: I do not know the exact case to which the hon. Gentleman refers, but I say to the Under-Secretary that he must get a grip on the issue because it affects many constituents. He should note, from the attendance at the debate and the fact that the Speaker has had to impose a time limit on speeches, the growing anxiety in all parties.
      The position is unacceptable. Earlier, the Leader of the House assured us that if people still want to collect benefits from post offices, they should be able to do that and obstacles should not be put in their way. It is all very well making that point from the Dispatch Box, but if, as is suggested in Belper, four out of five post offices close, the Government are forcing people not to take the option of going to the post office.
      Mr. Hawkins: Will my hon. Friend give way?
      Mr. McLoughlin: I would rather not because many hon. Members want to speak and I shall not take 10 minutes. I want to be short and specific.
      The Government must reconsider the matter. Recommendation 20 of the Select Committee report states that is far too early to reach a view on the reinvention programme. I suggest that the Committee conduct an urgent review of it. When the reinvention programme—what a name—hits other constituencies, other hon. Members will experience the same anxiety about it as me.
      Ms Walley: Does the hon. Gentleman agree that the urban reinvention programme is flawed because it does not provide the kind of safeguards that we need in deprived urban areas?
      Mr. McLoughlin: The hon. Lady is absolutely right. I know that many people wish to participate in this
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      debate, so I shall attempt by other means in the House to secure another debate, in which I can talk at greater length about the problems that I face in my constituency. I must warn the Minister that he will find himself answering a lot of Adjournment debates unless he changes this policy, because one thing that we are not seeing is reinvention. I see none at all; I see a closure programme. That is what it is, and the British people are now seeing that. They are not seeing a reinvention programme or a saving of the post office network; they are seeing its closure. I do not believe that that is what the Government intended, but that is what the Post Office is achieving for them. The Government need to be aware of the dangers that they face in this regard.
      4.20 pm
      Rachel Squire: I welcome the Select Committee report and the speech made by my hon. Friend the Member for Ochil (Mr. O'Neill). I would particularly like to express my opposition and that of many of my constituents to the closure of three sub-post offices in the Dunfermline area as part of the so-called reinvention and modernisation proposals. They are at Baldridgeburn, Townhill road and Netherton.
      Dunfermline is a town with many hills, some of which are very steep. It is clear from a letter from Post Office Ltd. that, during its survey, its representatives failed to walk along those hills or to go along the routes that it was suggesting that people should take if those sub-post offices closed. Given the difficulty that I have in walking up those hills without pushing a wheelchair or a buggy or carrying heavy shopping, I dread to think what the impact will be on many of my constituents if the closures go ahead. To pick up on a point made by the hon. Member for West Derbyshire (Mr. McLoughlin), the Post Office's survey says in respect of the alternative post offices that it proposes people use in the event of the closures:
      "This office is on a hill.
      There is a continuous and steep hill.
      The route is hilly.
      There is a steep climb up the New Row
      While the sub-post office at Townhill road is itself on a hill, it is very well located to reduce the climb that people have to make to reach it.
      I should also like to mention the timing of these proposals. I find it unacceptable that the consultation period includes both Christmas week and the week of the new year, when almost no community organisations meet and when many people have other things on their mind, especially their own families. I shall urge Post Office Ltd. to show that there is some meaning to its commitment to consult by extending the consultation period by at least two weeks.
      Mr. Hawkins: The hon. Lady is clearly facing the same kind of issues that I face in my constituency. I am battling to save Mytchett post office. The alternative post office is situated beyond a bridge that floods regularly. The consultation period was so short that there was no time, following the recent heavy rain, to take photographs showing the flooding on the road under the bridge, which elderly people and mothers with children could not have got through. I got a letter

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      yesterday, within a week of the consultation period finishing, saying that Mytchett post office was to close. It was quite apparent that the consultation had been a sham. Does the hon. Lady agree that in her constituency, as in mine, it is a sham?
      Rachel Squire: I suppose I live with a glimmer of hope that it is not a sham, but I fear that the hon. Gentleman may be right.
      I worry about just what pressure has been put on sub-postmasters and sub-postmistresses to agree to closures. There may have been at least the implied threat that if they did not co-operate, they might forfeit the compensation that was being offered.
      Judging by what Post Office Ltd. says about the community role and urban regeneration, it takes little account of the fact that Dunfermline is one of the fastest-growing areas in the country—in Scotland, certainly—with hundreds of new homes and with existing businesses expanding or relocating. While it notes that Netherton sub-post office is near a large office development housing a work force of 600, it seems to consider that irrelevant.
      Finally, let me echo what my hon. Friend the Member for Ochil said about pensions. Evidence from my constituents suggests that they were never really encouraged to open Post Office card accounts, as opposed to being pushed in the direction of bank accounts.
      When debating a subject connected with a Select Committee report and under the overall heading of "Estimates", we should bear in mind not just the financial but the human costs of policies. I hope that, along with other Members, I shall be able to campaign effectively against proposals that demand such a heavy price from the communities that will be affected by them.
      4.26 pm
      Mr. Roger Gale: I want, briefly, to raise three issues. I want to return to the issue of card accounts, to say something about the way in which the Post Office defines the difference between rural and urban sub-post offices, and to discuss the way in which the Post Office measures distances between the old offices and those to which business will be transferred. I make no apology for being parochial, as the parochial examples illustrate the wider problem.
      We all have evidence from the National Federation of Sub-Postmasters to suggest that while the Government say, "We will be even-handed, open and honest, and will promote all kinds of account", the Department for Work and Pensions is making it as difficult as possible for elderly people in particular to obtain Post Office card accounts. It is sending the message that that is not the best kind of account, and should not be encouraged. Postwatch resents its interference, as do the National Federation of Sub-Postmasters and individual sub-postmasters who, as private business people, are trying to promote what they regard as their product rather than anyone else's.
      As it is so difficult to obtain a Post Office card account, many people are being driven away from post offices and into banks, as the Department wishes them to be. That is damaging the business of sub-post offices,
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      and making it easier for the Post Office to say "These outlets are not viable, so we must close them". It is hardly surprising that, faced with such a situation, sub-postmasters are taking the money—a lot, in some cases—and running. They have no business left, and when they see a financial way out, they go for it. When we say to the Post Office "If you want to shut that outlet, there is another just down the road that is prepared to take on the business", the answer is "No. We are not looking for alternatives in the vicinity; we are looking for closure". That is what letters from the Post Office now say. Forget reinvention; that is out of the window. This is about closure and nothing else. It is a sham, and the Post Office card account is a charade. The Minister must take that on board, and do something about it.
      Let me now deal with the definitions of rural and urban post offices. Let me cite Greenhill post office in Herne bay, in my constituency. Greenhill is a village in its own right. It is separated from the rest of Herne bay by a very major road, the same road that separates the oldest part of the area—the original village of Herne—from the rest of the town. The two communities are almost identical in terms of demographics. Each has a church, pubs, schools, shops and roughly the same population. Herne is regarded, quite properly, as rural; Greenhill, the Post Office says, is urban. I asked the Post Office to take a look at Greenhill, and it sent a senior manager. Greenhill post office has been shut. I wanted it to be reopened, and to be offered to another outlet that wanted it.
      To give the Post Office its due, it confronted me face to face. It said, "We understand why you feel, and why the people of Greenhill feel, that this is a village community, but our book—the Ordnance Survey book—says that Greenhill is part of the town. So that's all right then: the post office stays shut." It is not all right: it is all wrong, bad and doctrinaire. I said to the Post Office, "Aren't you prepared to apply common sense?" The answer, in effect, was, "No, because if we do that in one case, we will open the floodgates." As a result, Members on both sides of this House would say, "Me too!" The Post Office knows that it cannot afford that. There is also the small matter of managers being paid bonuses for shutting post offices.
      Another issue is distance. Studd hill, in my constituency, is another community that is almost a village in its own right. The distance to Sea street post office, the nearest suitable post office, is measured—miraculously—as just under a mile. That mile is post office to post office in a straight line: as the crow flies. The pensioners in my constituency do not travel by crow; they travel on foot. They will have to travel—as the hon. Member for Dunfermline, West (Rachel Squire) said of her constituency—literally up hill and down dale. The hills in question are very steep, and the real distance is well over a mile. It is quite dishonest of the Post Office to behave in this way—to pretend that the straightest route on a map between A and B is the relevant route.
      The Ramsgate road post office—which is at the other end of my constituency, in Margate—serves a very large area on one side of a major road, on one side of the town. The distance measured to the main town post office is under a mile, but again the journey is up hill and down dale. What we are dealing with is not the real world in which our constituents live—the elderly,

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      mothers with prams, people who actually want to get to a post office—but a bureaucratic world that understands straight lines on a map, bonuses for closure, and reinvention, which actually means closure.
      I finish with an aside. So cavalier is this process that I am told that, in the case of Margate's Ramsgate road post office, alternative methods of transport include a train and an underground. Although I have represented North Thanet for 20 years and would agree that I may have missed certain things, I have yet to travel on a Margate metro. This policy is nonsense. I ask the Minister, on behalf of all those whom we represent, to rethink this issue. I ask him to get the Department for Work and Pensions to rethink its own attitude, and to compel the Post Office to understand that we have to maintain a service that meets the needs of the elderly, the sick, young mothers and single parents—the most disadvantaged in our society. Those are the people in my constituency who are missing out as a result of this policy.
      4.33 pm
      Mr. Mark Todd: I do not want to dwell for the most part on the closure programme. In my area, much of which is rural, some post offices—at Egginton and Walton-on-Trent, for example—have actually re-opened through the efforts of villagers. That is commendable, although I hold my breath in respect of how the urban programme may work in the small part of my constituency that is urban; however, I shall not comment on that now.
      Although the Select Committee report is excellent, I want to begin by touching on a point that it missed: having done so, I shall discuss some of the points that it did touch on. It missed the fact that the Government are participating with the banks in the promotion of financial products that, admittedly, all of us in this Chamber have taken for granted throughout our lives. Nevertheless, those products are being promoted to people who—through choice or denial—have not had them before. They are often pensioners, and elderly ones at that.
      I do not believe that the banks are entirely benevolent in this respect. It is clear that they see some business advantage in widening access to their products. I looked at the Select Committee's questioning of the Minister on the matter, and that showed that he believes that, too.
      The products are basic, by and large, but they carry some risks. I asked the Department for Work and Pensions about the advice available to people to ensure that they knew about the products that they were buying into, and I was told that people with concerns should go to the citizens advice bureau. There is only one CAB office in my constituency, and getting there can involve a long journey. People seeking help have to queue for a long time to get it, despite the best endeavours of the people who work there.
      The large-scale promotion of financial products to people who are unfamiliar with them carries some risks. We need to provide access to advice, so that people can know exactly what they are signing up to. That is especially important, given that some more advanced
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      banking products are being promoted as part of the range of available options.
      My next point has to do with the promotion of the Post Office card account. The promotion is not equivalent to that available for the banking options. One has to read the literature very carefully to understand that it is possible to continue to receive money through the post office. In addition, the timings are out of synchronisation. A constituent who wanted to make use of the Post Office card account was told that it was not available and that the choice was either to sign up to one of the options, or to stick with the existing arrangement. However, many people do not understand that it is possible to stick with the existing arrangement until the card account becomes available. The clear inequity there was not accidental but entirely preconceived.
      The process is also woefully complex. I was startled when one of my sub-postmasters showed me the form that had to be filled in if one wanted even an absolutely basic financial product. It required a lot of effort, and that is wrong.
      Mr. Paul Truswell: The position is even worse than my hon. Friend describes. A constituent of mine had to fill in four application forms before receiving the card, and another, who completed all the procedures punctiliously, was then subjected to the usual catechism of hard sell about the alternatives.
      Mr. Todd: My hon. Friend is right. That seems to be many people's experience.
      The Select Committee report touches on another matter, although it does not bring out all the relevant aspects. The problem has to do with the collection by a nominated person of another person's pension. At the moment, people can obtain an extra card, which can be given to a trustee of some kind who can collect the benefit on their behalf.
      The difficulty is that pension or benefits recipients cannot rely on only one person in those circumstances. For instance, the nominated person involved may not always be available to obtain the money when the recipient cannot do it personally. That is a real risk for any such arrangement.
      I have already debated the development of an exceptions service in correspondence with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Gravesham (Mr. Pond), who has left the Front-Bench firing line for a moment. My hon. Friend the Member for Ochil (Mr. O'Neill), the Chairman of the Select Committee, has given that service a hesitant commendation for the progress that has been made, but I think that the Government response on the matter has been poor. They have said that they did not want to design an exceptions service before seeing the whole system in operation, but that they would set something up based on that experience. Of course, I would expect some flexibility, based on experience, in any service, but I would not expect no design to be in place to deal with entirely predictable exceptions before the scheme was launched. That stems from an attempt to introduce the scheme without

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      dealing with, as my hon. Friend put it, the cussed and those in genuine difficulty, of whom there are many. I am indebted to one of my constituents, Mrs. Smedley from Aston-on-Trent, who described the experience of someone who collects pensions on behalf of other people and the difficulties that might arise.
      I also wish to comment on the change programme for the Post Office, and on that point I am indebted to Mrs. Mason, the sub-postmistress in Hilton. As an enterprising lady, she wishes to develop the service she provides further, but she was appalled by the standard of training offered to sub-postmasters and mistresses on the introduction of the programme. She wanted some training on how to offer the full range of financial services available through the alliances that the Post Office has with various banks, but that was not on offer in the training programme that her husband attended. That is appalling. If we are not training the key participants properly to take full advantage of the freedoms that will be available, we will be making a big mistake.
      It is also unacceptable that sub-postmasters and mistresses are unable to take up the option of setting up a PayPoint in their post offices. It is obvious to most of us that paying bills through the post office has become harder and harder as organisations claim that it costs too much to accept that means of payment. PayPoint provides an alternative method, but the Post Office—by contract—says that no sub-post office may set one up. That restriction of business enterprise and opportunity is unacceptable. The Minister has many points to respond to, from my contribution and others, and I shall listen with interest when he winds up.
      4.42 pm
      Pete Wishart: I congratulate the Select Committee on an excellent report. As for the Government's response to it, I have rarely read such self-congratulatory, irrelevant nonsense. Like other hon. Members, I have spent an inordinate amount of time in post offices in the past few months in pursuit of my save the pension book campaign. In the process, I have spoken to many people who use post offices regularly and several sub-postmasters who run them. I have not found overwhelming support for the plans, as the Government's response suggests, but overwhelming hostility.
      People do not like the plans. They do not like the fact that the pension book will no longer be an option for pensioners. They do not like the fact that pensioners have been corralled into opening bank accounts at the expense of the Post Office card account, which is what is happening— regardless of what the response says. The most compelling evidence was given by Postwatch, which told the Committee that
      "it is appearing to be much more difficult to open a card account at the post office than to open a basic bank account. Consumers have to go through eight steps".
      The Government's response contests the number of steps, but it concedes that customers have to go through three steps for a Post Office card account, as opposed to two steps for an ordinary bank account. That is a slight concession by the Government that it is more difficult to open a Post Office card account, and I hope that the Minister will confirm that when he winds up the debate.
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      Direct payment suits many people; it may suit most people; it may even suit the vast majority of people; but it does not suit everybody. Even those who now receive their pension through direct payment acknowledge that, and agree that those who do not want a bank account should still have the option of receiving their pension through their pension book.
      Mr. Hawkins: In the hon. Gentleman's experience of this issue, has he come across pensioners who believe that they have been conned by the system? Pensioners using post offices such as Mytchett in my constituency have discovered that the minute that they fill in a form that gives their bank details, it is treated as a request to have their pension paid into a bank account, even though the form did not say that that would be the result. Pensioners are asked to give their details and, when they do so, it is treated as a request. It is then impossible to return to using the traditional system that they prefer. That procedure, and the way in which the leaflets are written, is dishonest and is another aspect of what is making pensioners in my constituency—and, doubtless, in his—very angry.
      Pete Wishart: I am grateful to the hon. Gentleman for that intervention; he makes the point very well and I agree with him on that issue.
      After the debate, I shall, on behalf of my constituents, be presenting a petition of thousands of names. The petition insists that the pension book remain an option and asks the Government to think again about their plans.
      Many of the pensioners who signed the petition probably have their pension paid directly to their bank, but they believe that pensioners without a bank account and who do not want a bank account should be left with the option of receiving their pension through a pension book as they have always done. Many pensioners simply do not understand why they can no longer use their pension book. For them, if it ain't broke, why bother trying to fix it? Many pensioners have an attachment to their pension book that the Government have either failed to understand or have chosen wilfully to ignore. That attachment goes back to post-war times when the old age pension was introduced.
      Of course the Government will call their plans modernisation. They are determined to foist that modernisation on the group in our society who are the most resistant to it. Pensioners want to be left alone; they do not want to be modernized—if they want to be anything-iced, it is to be traditionalised.
      For many pensioners, collecting their pension at the post office in the normal way is a social activity, as the hon. Member for Ochil (Mr. O'Neill) mentioned. For many, it is an opportunity to meet friends and to organise social engagements, but it is more than that. The post office can act as an early warning system for some of the most frail and vulnerable members of our society. I have observed sub-postmasters acting in an almost pastoral way. They look out for their frail and vulnerable customers. If those pensioners fail to turn up at their usual time, the postmaster raises the alarm. A lot happens in the post office and it is central to much of the life of our communities.
      I do not believe that the Government really know about the role that post offices play, especially in our rural communities where the post office is so often the

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      centre of community life. We are witnessing the erosion and degradation of community infrastructure in rural villages and settings, and that threatens the viability of the Post Office card account.
      I represent the fifth-largest constituency in the United Kingdom, an area of small towns and villages with no obvious urban centre. We are witnessing the disappearance of banks and post offices throughout the constituency. In Scotland, most people bank with one of the three big banks—the Royal Bank of Scotland, the Bank of Scotland or the Clydesdale—none of which has an arrangement with the Post Office, so people in my constituency are denied access to the Post Office card account. That means that 90 per cent. of the people of Scotland will no longer have that option.
      There are big problems in Scotland, not only in our rural areas but in our urban areas where there are also serious threats to post offices because of the Government's plans to have benefits paid directly into bank accounts. Sub-postmasters do not deserve that. I have spoken to many of them and find them a modest bunch. Sub-postmasters take their community responsibilities and social obligations very seriously. Most of them went into the business thinking it would be their own pension book—their little nest egg. However, the nest egg will not take care of their future; they have found a cuckoo in the nest and it is devouring their whole livelihood.
      Postmasters are being encouraged to diversify and to take on "extras". Indeed, any hon. Member visiting a marginal post office in their constituency would hardly be able to move for greeting cards or ready-made meals, but if sub-postmasters lose their core trade from pensioners and benefit claimants they will lose that extra business, too.
      Many post offices have been put up for sale recently. In my constituency, there are post offices that have been on the market for three years, and they can no longer be sold as a going concern. To buy a post office nowadays would be financial suicide.
      Under the Government's plans, more closures are inevitable. This is no reinvention: we are witnessing a closure programme. I hope that the Government will think again about what they are doing and that perhaps they will put the interests of our post offices and those who operate them closer to the top of their agenda.
      4.49 pm
      Linda Perham: My starting point in this debate is that there is a threat to four of the 13 post offices in my constituency—plus one just along the road from my home, which was closed a few months ago, because of a dispute between the postmaster and the council over the lease, which means that five out of 13 may go. However, I am working with Postwatch to see what support there is for keeping those post offices open—Claybury Broadway, Great Gearies, Tring Close and Woodford Bridge.
      On 29 November, I met large numbers of residents at each of those post offices—mainly elderly or disabled people or young parents, all concerned about the alternative facilities available. Some of these alternative branches are more than a mile from the closing post
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      offices—this in Greater London, in a London borough with nearly a quarter of a million residents. One of the main alternative post offices, in Barkingside high street, already has queues stretching out of the door, so that is not really much of an alternative. Many residents have now signed petitions and flooded my office with responses and reasons why they want to retain their local branch.
      Of course no one wants to see the loss of a community resource. I prefer to call local post offices "shops in a social setting", because that is what they have become. However, it is all too easy to blame the Government of the day for failing to prevent post office closures and in particular at present to point the finger at the introduction of the direct payment of benefits. The debate on the Committee report is therefore timely; as a member of the Committee, I have taken a great interest in this issue.
      One conclusion of our report commended the assurances of Post Office Ltd. that it would make decisions about the future of individual post offices by reference to strategies for communities and areas, rather than in isolation; but I am not convinced that the programme of closures can be termed strategic if the postmasters or mistresses are volunteering to go, because it could lead to under-used post offices staying open while well sited, better-supported post offices are shut—such as Woodford Bridge in my constituency, which is in quite a large shopping parade.
      The Committee voiced concern at the reduction in customer choice with the phasing out of order books, which my hon. Friend the Member for Ochil (Mr. O'Neill) mentioned. It questioned the savings expected for using the increase of direct payment to combat fraud. It questioned the failure to have in place "exceptions" procedures for blind or other disabled people, and—the point that my hon. Friend emphasised at the beginning of his remarks—criticised the accuracy of information on the options and the unnecessary complications involved in opening a Post Office card account.
      A couple of days ago I received a letter from a constituent about the fact that he had filled in no fewer than six forms for such an account, only to be rejected by the Post Office. He wrote that
      "the post office say they can't fill in the form for me, despite my being poor sighted. I have today filled in yet another form and await the reply…Please can you help?"
      Our report was very well received, especially by the Communication Workers Union and the National Federation of Sub-Postmasters. My constituent, Iain Stanford, the counters sectional secretary of the CWU in Romford, wrote to me on 21 November, saying that
      "the main conclusions and recommendations of the report have provided a strong platform to support and save our Post Offices".
      However, both organisations expressed their disappointment in the Government's response to the report, published on 16 September, and both are critical of the DWP's approach on direct payments. The CWU claims that the DWP intends to move nine out of 10 new claimants to direct payment as quickly as possible. Indeed, in a written answer to the hon. Member for Vale of York (Miss McIntosh) on 8 December 2003, at column 321–22W, the Minister, my hon. Friend the Member for Gravesham (Chris Pond), said that the

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      DWP had published a public service agreement that by 2005, 85 per cent. of customers would have their benefits paid by direct payment.
      There is no doubt that in recent years the Post Office, even though it is a monopoly, has managed to lose millions of pounds, including £194 million last year. It has had and is having considerable problems. There is equally no dispute that hundreds of post office branches have closed in each of the past 20 years, the worst so far being 1991–92, when 478 shut. Since DP was introduced in the early 1980s, increasing numbers of people are opting for it.
      I should like hon. Members to take note of something that the Select Committee said in the summary at the beginning of the report:
      "The change in policy on benefits payment presents Post Office Ltd with a serious challenge as it tries to bring its business back into profit, but it cannot be seen as a root cause of the problems faced by the business. The trend away from the use of the post office network for benefit collection started a long time before the introduction of Direct Payment."
      We as a country must face up to the consequences of changes in lifestyle and habits, which have led to those with the best transport options expressing their choice to range further afield to gain access to consumer goods and services, so that we make the best provision that we can for those with restricted transport availability.
      I welcome the Government's assistance to the Post Office, including investment grants to improve post offices and other substantial financial support running into hundreds of millions of pounds, as the Prime Minister pointed out a couple of weeks ago. I strongly reinforce the Select Committee's recommendation that urges the Post Office to make progress on introducing new business activities and flexible working to open new possibilities to maintain a healthy local post office network. I note that when the Minister replied to the debate on post office closures in Wales on 9 December, he said the company had been slow to develop new income streams and offices had become over-dependent on making benefit payments.
      As has been requested, the Select Committee promised to return to the impact of DP on the post office network's income and on individual sub-postmasters and mistresses, and to monitor the progress of the urban reinvention programme and the effect of Government support for rural post offices in the near future. On those extremely important matters, which have caused so much interest in the House and throughout the country, our constituents—certainly mine—would expect no less of us.
      4.57 pm
      Sir Robert Smith: This debate is welcome as we are trying to focus the Government's mind on some of the key issues that the Chairman of the Select Committee on Trade and Industry raised in opening the debate. This is about a fair choice for the customers. Fort-our rural post offices are left in my constituency, and I am pleased to say that I have been able to attend the reopening of some that had closed. I recognise how vital they are to many communities, but the people who want to use those post offices have grown up with different lifestyles, different ways of working and different ways of
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      operating their money. It is arrogant of the Government to assume that they know best about how people should operate and that they must have hank accounts and run their weekly budgets using them. It is the Government's desire to force people down the road faster than they wish to move.
      The move to direct payment was an option; it was part of the fair choice. No one can deny people the right to use their banks to manage their benefits, but if they wish to separate their savings in a bank account from their weekly cash budget by taking that through post offices, they should be entitled to do so as easily and simply as though they were doing so through a bank, and they should not have to go through hoops to open a Post Office card account. The submission from Postwatch suggests three ways to make that simpler, so the Government need to reconsider the current options and recognise that, even if they have written to people with an invitation to migrate to direct payment, that should be the only trigger that they need to go to the post office and start the process, as though they were opening a bank account. Why do people have to go through hoops if it is not to put barriers in their way? There is no explanation from the Government.
      As the hon. Member for South Derbyshire (Mr. Todd) made clear, the Government need to recognise the danger of the kind of advice that they are giving to people, given the pace at which they want them to transfer their way of operating. If people move their weekly traditional cash budgeting even to a basic bank account they may be told that they cannot go overdrawn, but there is a great danger that they will lose control of their budgeting if they switch to systems that allow automated payments to come out of their accounts. If people are living on the basic minimum that the Government provide to protect them from poverty, the last thing that they want is a £30 letter from the bank saying that they are overdrawn.
      Clearly, the Government are in danger of going too fast down that road and, by accelerating the process, they have accelerated the challenge for the Post Office. If they had allowed things to move at the pace at which customers were adapting naturally, the Post Office could have adapted its services to the way in which the market was moving. Because the Government have accelerated the pressure on our sub-post offices, the Department of Trade and Industry must now pick up the pieces at the other end of the scale and try to sort out the mess facing post offices to keep them open. The Government have promised people that they will still be able to collect their benefit at the post office, but that is a hollow promise if there is no post office from which to collect it. I hope that the Government, who promised on page 6 of their reply to send the Committee follow-up research on the cost-benefit analysis in October, will deliver that research eventually. It would be helpful to know when they plan to do so.
      If the Government are so confident about the way in which they are handling this matter, they should also respond more positively to Postwatch's request to send out research material, the production and postage cost of which Postwatch will pay for. The Government's excuse for not allowing Postwatch direct access to consumers is data protection, but they could do more to work with Postwatch to facilitate its research, which

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      could reassure us and the wider public about how the system is being processed.
      I repeat that the key is to operate a fair choice. The National Federation of Sub-Postmasters has pointed out that, in reality, there are eight steps to opening a Post Office card account. That is a long-drawn-out process, and the Government need to look at that again if their reassurance is genuine that people who are entitled to a Post Office card account, and who want one, should have an easy option.
      The final point that the wider public need to understand from this debate and the information provided by the Government is that if they want to stick with their pension book, for the moment, they can do so, and they are entitled to do so. They are entitled to say, "Don't rush me, I want to carry on using my pension book." We need to reassure people that the pension book is still there for the moment. I welcome the movements being made on the exceptions service, and reassurance is also necessary in that regard. Above all, a fair, level playing field is required—for those people who want to stick with their post office and the card account, opening a card account should be as easy as if it were a bank account.
      5.2 pm
      Mr. Brian Jenkins: I am grateful for the opportunity to join this interesting debate. It is always a pleasure to follow the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith). I welcome the opening comments of the Chairman of the Select Committee and was pleased that he restricted the area of debate this afternoon in so far as he did not want to talk about the past failures of the Post Office and its management.
      There is no doubt that we all recognise that post offices have been suffering from falling business, with many more people using bank accounts. We recognised that, so we went out promoting the Post Office card account system, using the local media to try to attract as many people as possible to take it up. We promised them that they could go to their post office and draw out cash. We said that they did not have to draw it out all at once—they could draw it out on a daily basis if they wanted, which would leave them less open to the difficulties in our society, such as being mugged on their way back home.
      Members can therefore imagine my surprise when last Thursday a pamphlet from the Post Office dropped on my desk that said that it was investigating the 24 post offices in the town of Tamworth, and that, by the time that it had finished, the investigation could lead to the closure of one or more branches. The one or more turned out to be nine out of the 24. But that is the not the best part of the Post Office plan. That plan is a very cunning plan—the only very cunning plan that I have seen to match it was Baldrick's in "Blackadder".
      I doubt whether any Member can beat my record today—please try—because it is either the worst or the best option imaginable. Let us imagine a town of 77,000 people, which, around the periphery, has a river on one side and a bypass on the other, which forms a wedge. Within that wedge are nearly 20,000 people, and at
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      present six sub-post offices. How many of those is the Post Office going to close? Surprise, surprise, it is going to close six. It will open one in a petrol station shop. The consultation document says that people will be able to get to the petrol station by public transport but, unfortunately, no buses go across there from one part of town because the bus routes go into the centre of town rather than around it—as happens in any town with a radial pattern.
      Let us consider the situation for a disabled person with his account card who used to go to Hockley post office. He will trundle down there only to find it shut. He will think, "I know, I'll go to Wilnecote post office", so he will trundle down the road for nearly three quarters a mile to find it shut. He will think, "I know, I'll go to Belgrave post office", but he will go down the road to find it shut. He will think, "I'll go to Kettlebrook post office", only to find it shut. He would have to travel 2.5 miles into the centre of town to access a Post Office outlet.
      The Post Office says that the alternative option is to use Dosthill post office, but there is no public transport between Hockley and Dosthill. Dosthill has got one thing: a big hill. People might be able to come down the hill but I am certain that a less able pensioner will be unable to walk up it. A person would have to be built like Arnold Schwarzenegger to get a pushchair up the hill—it is a difficult and hard route.
      When I received the consultation document, I thought that I would telephone the Post Office because a report about it appeared in my local paper on the very morning I received it—my local paper had got the information before me. I asked it what it was playing at and why it had not told me about the plan upfront so that I could have made preparations and got my act together. I got a surprising answer: "Who are you?" I was told, "We don't even recognise MPs. We just treat them the same as everyone else. We talk to the press first." I was treated with total disdain by Post Office management.
      When I think about the set-up with 20,000 people being served by one outlet, I start to ask myself questions. Has Postwatch been consulted on the document? It told me that when it asked to hold discussions and consultation, the Post Office said, "Go away. We're not interested." However, the documents that the Post Office sent out recommend that people get in touch with Postwatch, despite the fact that it will not hold local meetings with that body.
      I now know that the sub-postmasters have taken the money. The generous handout that the Government have given has not been to maintain the post office system but to shut it down. I do not blame the sub-postmasters for taking the money because life is tough out there and if they have been read the riot act by the Post Office itself, they should probably cut and run. However, we have been offered no extra outlets, so how does the Secretary of State for Work and Pensions intend to get benefits to pensioners and others who have a right to receive them? Does he intend to send Securicor round with money every Thursday? How will he make arrangements for individuals to go to a post office?
      People have to pay a bus fare to go to the post office, and if there are no buses they must pay for a taxi. Do we intend to reimburse those people for the cost of picking

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      up their benefit? One can imagine a different situation. My town contains dozens of people who ride around on little electric buggies. Every Tuesday, they should collect together at a starting point in Hockley with policemen at the front and back of the group. They could then trundle down the town for 2.5 miles picking up new passengers as they went along while other buggies could continue to join what would become a modern wagon train. People would be able to get to the post office, pick up their cash and trundle all the way back.
      Did the Office of the Deputy Prime Minister consider what would happen as a result of the proposal? If six outlets are shut, meaning that 20,000 people must use one post office that is not served by public transport, they will all have to drive there. Hundreds of extra car journeys will be generated in a town in which I am trying to encourage fewer car journeys. I am trying to encourage parents to walk their children to school by using school walking buses. The Post Office is undermining such activities.
      David Taylor: A town that will be very familiar to my hon. Friend, Ashby-de-la-Zouch, about 12 miles east of Tamworth, may have a similar problem now that Westfield post office has closed. There is now just one post office serving a population of about 13,000, and the capacity of that post office was inadequate before Westfield was flagged up for closure. Is that similar to the position in Tamworth?
      Mr. Jenkins: Very similar. My hon. Friend reinforces my point. The Post Office is not providing a service.
      The Post Office has enjoyed a unique relationship with the Government. It delivered benefits through its network; it provided a service; and it enjoyed a monopoly position. It now sees itself as a business, not a service provider. Unfortunately, regulators have forced the Post Office to become more and more competitive. I have seen regulators operating in different service areas, and I would like to tell the Secretary of State and the Minister—I feel sorry for my hon. Friend; I realise that everyone has run away and left him to be the whipping boy—that we may now have a regulator who knows the price of everything and the value of nothing. Will the Minister assure the House that the golden shareholder does not hold that principle?
      5.10 pm
      Mr. Owen Paterson: It is a great pleasure to follow the hon. Member for Tamworth (Mr. Jenkins), who described the difficulties of getting about his constituency. I have direct knowledge of mine because, with huge incompetence, I chose the hottest day of the year, 6 August, to drive 150 miles around it, visiting 28 post offices. I apologise to the four that I did not get to.
      The consistent message that I got on that journey was striking. First, I would like to stress the clear link between the village post office and the village shop, and the way in which they hold the community together. Apart from providing postal products, almost every post office that I went to doubled as a supplier of fresh and frozen food and stationery and household goods, and many were off-licences. The two services are inextricably linked.
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      Colin Doyle, of Knockin post office, has worked seven days a week as a postmaster for 22 years. He said bluntly, "If the post office goes, the shop goes, and if the shop goes, the village goes." It is critical that the Government understand that post offices are the centre of village life; they have the village notice board, and everything revolves around them.
      Last week, I went to see the Minister for Energy, E-Commerce and Postal Services, the hon. Member for East Ham (Mr. Timms). Perhaps it was after that meeting that he decided to go to an urgent meeting today and leave the wretched junior Minister to face the flak from all sides. I took Colin Doyle along to that meeting, but, sadly, other postmasters could not attend because of travel problems. I was pleased that the hon. Member for East Ham agreed that post offices are vital in rural areas, and he confirmed that it is the Government's intention to place a requirement on the Post Office to make "no avoidable closures".
      We agreed on that, but the hon. Gentleman did not agree on the root problem, which is of the Government's making and which numerous hon. Members on both sides of the House have mentioned—that of brutally forcing customers to take their benefits direct. I was struck by the number of post offices that take a high proportion of their turnover from benefits payments. In my constituency the figures are as follows: Gobowen, 60 per cent.; Willow street, Oswestry, 75 per cent.; Treflach, 80 per cent., Pant, 70 per cent.; West Felton, 60 per cent.; Baschurch, 50 per cent.; Wem, 75 per cent.; Prees, 50 per cent.; and Cheswardine, 40 per cent. Even one postmaster with only 30 per cent. of his turnover from benefits said:
      "We cannot afford to stay if we lose the benefits."
      Nearly all those post offices have already lost child benefits, but time and again I was told that the Department for Work and Pensions has made it as difficult as possible to acquire a card. We have heard that numerous times this afternoon. That is despite the fact that, as one postmaster said:
      "the majority of those taking cash do not want a change."
      Another said:
      "The Benefits Agency is bullying people to change. The Government has not been fair."
      Another said:
      "The Benefits Agency has been very difficult. The forms are designed not to help."
      Yet another said:
      "The initial letters give a clear idea that customers must go direct. They are misleading. The bank section is deliberately put before the card section."
      To give an idea of the anger that I encountered, I have one final quote from my tour:
      "The Government have no idea of what they are doing. They are totally clueless. They are destroying the infrastructure of country life. The procedure for applying for cards is deliberately hugely complex."
      The National Federation of Sub-Postmasters has described 22 steps to acquire a card, yet the Government claim that there are only three. Last week, Mr. Doyle explained to the Energy Minister that people who struggle through the system and finally acquire a card do so with a huge amount of help from the local postmaster. Benefits represent £400 million of income

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      for post offices, which will close in ever increasing numbers if a substantial proportion of that income is removed.
      Having created a hideous problem for themselves, the Government have put their hand in the taxpayer's pocket and promised £450 million to tide rural post offices over until banking services are in place. Last week, the Energy Minister stressed time and again that everyday banking should eventually replace benefits. I hope that he is right, because I want post offices to prosper. A senior analyst, however, dismissed the card as the
      "amoeba of banking—the most basic form of banking life available in the UK."
      That is not a great start. Three major banking groups—HSBC, Halifax and Bank of Scotland, and the Royal Bank of Scotland—do not offer access to their accounts through the post office network, and 80 per cent. of basic bank accounts are not accessible at post offices. As Mr. Doyle told the Energy Minister, banking would only be the "icing on the cake". I am afraid that I share my postmasters' scepticism about the chances of banking replacing benefits income.
      The £450 million intended to tide rural post offices over until 2006 is vital, and I am grateful for the letter that the Energy Minister sent me, as promised, on 8 December, in which he outlined the totals available for Post Office Ltd. I should be grateful if the Under-Secretary of State for Trade and Industry, the hon. Member for Bradford, South (Mr. Sutcliffe) provided a follow-up letter that I could send to my postmasters telling them what steps they have to take and what hoops they have to jump through to get their hands on some of that money before 2006. Not one of the postmasters whom I have talked to knows anything about that money.
      I am afraid that we are on the brink of a rural catastrophe. In the past two years, 80 per cent. of all closures have been in rural areas. The Government have got it badly wrong. The benefits changes are extraordinarily unpopular and penalise many of the oldest and most vulnerable people in isolated rural communities. The Government should suspend the current programme, redesign the forms and make it easier for my constituents to receive benefits through their local post offices as they have done for years, and as they wish to continue doing.
      5.17 pm
      Richard Burden: I, too, should like to make a few remarks about the consultation associated with the urban reinvention programme. In particular, I draw hon. Members' attention to early-day motion 236, which I tabled on that very issue.
      We were assured by Post Office Ltd., both in the Select Committee and elsewhere, that the urban reinvention programme was not simply a closure programme. We were told that it was aimed at creating a sustainable urban post office network. Some post offices would close, but others would remain open and new business opportunities would be explored. The needs and circumstances of different areas would be taken into
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      account. However, that was not what was happening on the ground. In my own area, the Shenley lane post office was slated for closure. It was having difficulties and the sub-postmistress wanted to get out. However, when the Post Office was looking at the area's needs and assessing the viability of that sub-post office, it either missed or did not take into account the fact that there was a multi-million pound regeneration programme for the community. I pay tribute to the Bournville Village trust, which is involved in that programme, and to Postwatch, local councillors, the local church and, most of all, the local community, for banding together and winning a reprieve for that post office.
      I was pleased when I learned that Post Office Ltd. was adopting a new approach. We were told that instead of looking at post offices branch by branch, it would develop area plans at constituency level so that everybody would be aware of what was happening. A letter to MPs from Royal Mail dated 14 August said that
      "this will bring greater certainty for everyone, should improve the consultation process, making it more meaningful for our customers and MPs, and will settle the future shape of our urban sub-post office network much more quickly".
      That is all very well, but, reading on, I found that the only people whom the Post Office was going to consult about that plan were itself and sub-postmasters and mistresses. Only after the plan is drawn up will local communities, MPs and other people be consulted. Where in that is there any attempt to identify the opportunities, not just the threats, or to engage local communities? If I read that letter right, we will all, as hon. Members have said, simultaneously be trying to shut a number of stable doors after the horses have bolted.
      I have been trying to get some straight answers from the Post Office, and it has taken a while. I did, however, get a straight answer from my hon. Friend the Minister for Energy, E-Commerce and Postal Services on 18 September when I put the matter to him. I was encouraged by his reply. He said that he agreed with me
      "both about the benefits of the changed arrangements and about the importance of thorough and careful consultation throughout"—
      I emphasise "throughout"—
      "particularly involving local communities, on the plans for an area. I will certainly ensure that the points that he makes"
      that is a reference to me
      "are passed on to Post Office Ltd."—[Official Report, 18 September 2003; Vol. 410, c. 1060.]
      I hope my hon. Friend did so.
      This week I received a definitive response to my letter from Post Office Ltd., which says that it is not practical to consult people at the strategic stage, as that would take too long. However, Post Office Ltd. reassures me by stating that Postwatch is involved in drawing up the plans. Let me tell the House how Postwatch is involved: it is given two weeks to comment before publication, on condition that it does not tell anyone else about the plans. Postwatch must make its comments in confidence. We are told not to worry—Post Office Ltd. will take everything into account. That reassurance comes from the people who did not notice the regeneration programme at the Shenley lane post office.
      We are told that there is a sophisticated modelling system for the needs and opportunities in an area. That

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      is good news. The Select Committee was encouraged by that. One of the things our report requested was to allow us to see the sophisticated modelling system. The answer contained in the Government's response is no. We cannot see the sophisticated modelling procedure because it is commercially confidential, so we do not even know how the Post Office is going about its activities.
      That is not good enough. If the urban reinvention programme is to command confidence, people need to have a say in it—not just a say in the closure of post offices, but a say in the strategy for those closure programmes. Consultation will not take longer, because the programmes are being prepared anyway. Consultation will take place as they go along. But if it does take a little longer and the plans are improved as a result of the expertise of local people, what is the Post Office scared of?
      In conclusion, I again draw the attention of my hon. Friend to the assurance that I received in the Chamber from my hon. Friend the Minister for Energy, E-Commerce and Postal Services on 18 September and ask him to ensure that Post Office Ltd. abides by the assurances that he gave me about that consultation, and that it changes course and agrees to consult hon. Members and the local community on the strategy for the area plans, not just on their effects. If Post Office Ltd. fails to do that, we must draw a simple conclusion: the Post Office may be interested in stamps, but if this is the way it goes about its affairs, the only stamps it is interested in are rubber ones.
      5.22 pm
      Mr. Mark Francois: I am pleased to have been called to contribute to this important debate. It is a pleasure to follow the hon. Member for Birmingham, Northfield (Richard Burden). We may not agree on much, but, curiously, this evening he and I are largely in agreement. I shall focus my remarks on the unfortunate effects of Government policy on the closure of post offices, particularly as it affects people in my constituency.
      There are some 17,500 local post offices across the United Kingdom, 97 per cent. of which are operated by sub-postmasters, under contract to Post Office Ltd. Collectively, those offices comprise the largest retail network in the whole of Europe, receiving some 45 million visits a week. Despite that, the so-called urban post office reinvention programme is scheduled to close about one third of the current 9,000 offices designated as being in urban areas.
      We have faced several closures in my constituency in recent years. For example, two years ago the Post Office announced the closure of the village post office in Rettendon, which was then part of the rural network. A few months ago, it went on to close the urban network post office at Eastwood road in the town of Rayleigh. Now two further urban network closures are proposed, at Golden Cross in Ashingdon and at Apex corner at Plumberow avenue in Hockley. The two latest proposed closures, particularly the last one, have led to considerable anxiety in my constituency, which I take the opportunity to highlight directly to the Minister this evening.
      I am concerned about the way in which the Post Office has gone about announcing the programme of closures. The pattern appears to be one of trickling them out over
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      a period of time, which only creates further uncertainty about what further closures, if any, may be in the pipeline. Frankly, it is also difficult for the associated consultation system to retain much credibility. A closure will often already have been agreed with the sub-postmaster in question before it is even announced to the general public, and, crucially, little emphasis is then placed on attempting to find a replacement. There is an understandable degree of cynicism and a perception that the Post Office is merely going through the motions in many instances when it initiates a consultation exercise on a proposed closure. Even the highly standardised consultation letters that are sent out to MPs tend to lend themselves to that conclusion.
      Those are my criticisms of the way in which the process is being carried out, but I should like now to consider the two individual cases to which I have referred. The proposed closure at Golden Cross in Ashingdon worries me. The alternative office proposed in the consultation document is at Ashingdon road and is 0.8 miles away—only slightly less than the Post Office's recommended maximum distance for an alternative office, which is one mile. Ashingdon road itself, with which I do not expect the Minister is personally familiar, is very busy. That could be a hazard to pedestrians, and especially those such as women with young children, who will have to keep their children under close supervision if they are attempting to walk as much as a mile to use the proposed alternative office.
      I am also very concerned about the proposed closure of the post office at Apex corner, Plumberow avenue, in Hockley. Again, the alternative post office, this time in the centre of Hockley, is cited as being 0.8 miles away from the office earmarked for closure. However, I reiterate a point that has been made by a number of hon. Members: that is the distance as measured on the map, but the ground in question is undulating, which means that the journey travelled is much nearer to the full mile in practice.
      The Plumberow avenue office is located in an area that has a high proportion of senior citizens. A range of bungalows is situated nearby, and there are several local care homes. That happens to be an unfortunate coincidence in the context of the proposed closure. Most of those people will now have to walk to a busy main road, under a railway bridge and into the centre of Hockley to go to the post office. That could be a hazardous journey, especially in the wet, because of the nature of the ground, and especially for someone whose mobility is impaired, perhaps by their age. Moreover, the nearest bus stop to Apex corner is half a mile away. Even if people get to that bus stop, there is no direct bus link to the proposed alternative office in the centre of Hockley. For a range of reasons, the proposed closure is particularly unsuitable. If it goes ahead, it will cause considerable anxiety and inconvenience to my constituents, and not only senior citizens, although it will affect them in particular.
      What has upset my constituents is the feeling that nobody is listening to them. They have been denied even a little conversation, let alone a big one. They believe that the matter is effectively a fait accompli and that a large organisation, which is ultimately owned by the Government and over which they have little or no influence, is taking decisions in its interests without

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      regard for their interests. I seek sincerely to drive that point home to the Minister this evening.
      I shall summarise, as I am conscious that other hon. Members wish to speak, and I want to facilitate that. It must be apparent to the Minister from this debate that we are not discussing a purely partisan issue. He has been in his bunker taking artillery fire from all parts of the House, and I think that some artillery fire is yet to come. I genuinely ask him to appreciate that there is serious concern in all quarters. The programme has obviously started to go seriously wrong, and this should be exactly the point at which Ministers, if they are listening, should step in to take a grip on the situation and try to do something to put it right.
      I am responding to the consultation exercise, so I hope that my points will be taken seriously. Is there anything that the Minister can do, or any advice that he can offer, that would be of benefit to my constituents in Ashingdon and Hockley and to those of other hon. Members who are in the same boat?
      The important social role that post offices play was stressed by many Members, from the Chairman of the Trade and Industry Committee downwards. For the sake of brevity, I do not intend to rehearse the argument, but it would be a great shame if the Minister did not take that particularly important point on board.
      5.30 pm
      Malcolm Bruce: The Minister should be aware that destroying the post office network and the services that people rely on is unlikely to prove a vote winner, either in this House or outside it. Indeed, he has been under attack from all sides. He needs to recognise that our network of dedicated, but extremely demoralised sub-postmasters and sub-postmistresses, as well as millions of customers, are confused and angry about what is happening in their local post office, which they thought was there to provide a service to them and which is a Government agency in their own community that is behaving inconsistently and incomprehensibly.
      On a personal basis, I may have been an early victim of urban reinvention in my constituency when a member of the Post Office's national management sidled up to me and said, "I have just written a letter to you to designate Inverurie as an urban area", to which I replied, "How is it up to the Post Office to decide whether it is an urban area?". He said, "We have decided that it is an urban area because we have to close one of the post offices." I asked, "What is the purpose of all this?" He replied, "To close the post office." The phrase "urban reinvention" had not been touted around at that stage, but I can assure the Minister that no reinvention took place: I simply have one fewer post office.
      People are worried that these products were developed not to meet the needs of customers and claimants, but to buy off the anger and confusion that they feel about not being able to carry on using the products that they want. I entirely accept that the move towards bank transfer has been carrying on and will continue to carry on, and that the Post Office would have to respond to that. However, the reality is that many people knowingly rejected that option for the purpose of their benefit, even if they wanted to make
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      other transactions through their banks, and others did not want it because they preferred, for good reasons, to do their business in cash. Not only is it difficult to get a card, but it is such a basic product that many people ask why they could not have kept using the book, because the only difference seems to be that the card is a plastic version, but one that involves a great deal of difficulty.
      Mr. Alan Reid: My hon. Friend makes an important point. I have received many phone calls from elderly people, some of whom are disabled or blind, and who are very frightened by the letters that they get from the DWP because they think that if they do not move to a bank, they will lose their pension. Their freedom of choice is vital, and the Government should make that clear.
      Malcolm Bruce: That is right. It is particularly true in the case of elderly people who feel confused and uncertain about the future, but it even applies to people who collect child benefit, many of whom believed after the first round of letters that they had to transfer the payment to the bank, only to discover afterwards that that was not necessarily so. Moreover, they were not told—because sub-postmasters and sub-postmistresses were not allowed to intervene to explain it to them—that the probable consequence of their making that transfer was that the post office would close within the foreseeable future, particularly if it was in a rural area. Several people have told me that if they had appreciated that the consequences would be that severe, and that there was no real guarantee of a long-term future for those post offices, they would not have taken the decision that they did.
      I turn to the consequences for the network. It has been stated that when the transfer programme is complete, it will result in a loss of about £435 million to £440 million a year in revenue to the Post Office, and that that gap has to be filled by people using the post office for bank transfers and bank transactions. I am not at all sure that the effect will be as major as the Post Office and the Government argue.
      I make the next point not just because I represent a Scottish constituency, although that makes the position more acute. The Scottish banks' refusal to sign up is bad for the United Kingdom because they are UK banks and it diminishes the choice in every branch. However, in Scotland, it means that the option of using cash does not exist for the majority of customers because the banks on which they most depend have not been prepared to cooperate with the Post Office. Bank transactions and the new proposal for financial services, welcome as it may be, are unlikely even to approach making up sub-post offices' income deficit.
      If there were a genuine programme of rural and urban reinvention, one would like to believe that one of its actions would be a review of the services that post offices can provide over and above benefit transactions. It is a constant source of frustration to many hon. Members, who are often asked why different branches cannot provide passport forms or issue vehicle excise duty licences. One is passed from pillar to post. First, one is told that one has to approach the appropriate vehicle licensing agency or the Passport and Records Agency. Those agencies say that they have contracted with the Post Office and it has told them that "x" number of

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      branches deal with licences and passports but that they do not know which ones; they simply pay them. We thus get passed backwards and forwards. However, we cannot get a single review of a post office that states that there is willingness to extend the service.
      Let me give a specific constituency example. Keith, a town of 4,000 people, has a post office that provides an excellent service and is run by the owner of another post office in a different part of the county that has a passport service. The person who runs the Keith post office is therefore fully trained and capable of providing a passport service. There are many demands for such a service in Keith. However, for the reasons that I have described, the sub-postmaster has been told that there is no possibility of that. The nearest post office with such a service is in Banff, 14 miles away. That is absurd and unrealistic. Reinvention should mean that if we change circumstances, we meet people's needs, give them the products that they want and recognise that they want services.
      I should like the Under-Secretary to comment on the updated information from Postwatch about uptake and the gaps that appear. As of 14 November, the uptake of card accounts was 33.8 per cent. That constitutes just over half the people who were contacted. There may be 5 million or 6 million cardholders at the end of the process. However, in spite of all the frustrations, 2.5 million people have put up two fingers to the process and not responded. Perhaps that is wise, given the frustrations, and many more people should have done that.
      The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): Let me emphasise that, so far, 1.5 million people have taken up card accounts and the business target was 3 million.
      Malcolm Bruce: If people do not respond, how will the process conclude? What will happen if millions of people say, "I haven't talked to you about a card account or a transfer. I'm still a benefit claimant and I've still got a book." I presume that at some point, they will be told that their book is not valid. We could have a huge crisis, whereby millions of people suddenly need to take up card accounts or opt for banked transfers. How will that be tackled?
      If the result is that those people, for whatever reason, do not wish to opt for a banked transfer or a card account, what is the solution? Millions currently say that they cannot or will not go for that. Let us consider those who cannot—those who are blind or confused, those who cannot use PINs and those who do not find a new system appropriate—as opposed to those who will not. The Chairman of the Select Committee suggested that people might get something like a giro at the end of the process. Could it be a book of giros? Will it resemble the book that people currently get? If, at the end of the long drawn-out process people get a benefit book to enable them to claim, millions of people, who wanted to keep the book in the first place, will be furious because they had been denied that right and forced to accept a second-best option.
      What is happening is the exact opposite of what a public service from a public agency should achieve in
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      recognising consumers' rights to deliver a service in a way that is appropriate to them. It has been echoed on all sides of this debate that nobody wants us to be where we are at the moment. There has been much valid criticism of the management of the Post Office, particularly on the closure issue, but on the issue of payments and of the survival of the post office network, the Post Office has been presented with a fait accompli by the Department for Work and Pensions and forced to come up with solutions, many of which are less than adequate to meet the needs of its customers.
      5.40 pm
      Michael Fabricant: There was considerable cross-party agreement in the debate on child care, and there seems to be agreement in this debate, too, on the question of choice. We debated choice in regard to child care, and we are now debating choice with regard to post offices. That involves choices about how benefits might be paid, and about which post office it is convenient to visit. As we have heard, those choices have been stripped away.
      I should like to take this opportunity to congratulate the Trade and Industry Committee on its excellent report. The hon. Member for Ochil (Mr. O'Neill) said to me a few days ago that he suspected that I might agree with its conclusions, and he was right: I do agree with the conclusions of his very hard-working Select Committee. In the few minutes allotted to me, I want to talk about direct payment and the future of urban and rural post offices. Those issues have all been raised by hon. Members today, and they all affect people and pensioners.
      The hon. Member for Ochil opened the debate, and quite rightly said that there had been no consensus or ministerial statement on how much would be saved by direct payment. Perhaps the Minister will take this opportunity to outline to us what is being saved by this rather unpopular measure. The hon. Member for Ochil also rightly said—as did other hon. Members; this has been echoed on both sides of the Chamber—that people like going to the post office, and that it was an outing for them, a part of village life. That should not be taken away from them.
      My hon. Friend the Member for West Derbyshire (Mr. McLoughlin) spoke of the closure of four fifths of the post offices in Belper in his constituency, and pointed out quite rightly that the measure of one mile can be quite arbitrary. We hear time and again from our constituents—as we heard from my near-neighbour, the hon. Member for Tamworth (Mr. Jenkins) today—how one mile is an arbitrary figure, in that it might be measured as the crow flies, but people do not fly like crows. Indeed, they do not fly at all. If only they did, perhaps the Post Office's mysterious model might make sense. However, it does not, and it is of course a great secret as to what the model is, because the Post Office will not show it to us.
      Mr. Andrew Turner: Will my hon. Friend give way?
      Michael Fabricant: I will not give way, because I have only a short time to speak.
      The hon. Member for Dunfermline, West (Rachel Squire) talked about how impractical it was that the consultation was being carried out over Christmas and

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      the new year. My hon. Friend the Member for North Thanet (Mr. Gale) said that it was dishonest of the Post Office to maintain that the shortest route between two points was the distance that people actually had to travel, because that is not the case. The hon. Member for South Derbyshire (Mr. Todd) made some interesting points about the woefully complex process required to get a card account. He pointed out that a card account is a very basic financial product, so why does it require seven steps to obtain one, when it is far simpler to obtain more complex products from a bank?
      I could go through the long list of other hon. Members who have spoken, including my hon. Friend the Member for North Shropshire (Mr. Paterson), who talked about the link between the village post office and the shop. He said that if the post office goes, the shop goes, and that if the shop goes, the village goes. He is absolutely right; the post office is an intrinsic part of village life and it needs to be protected.
      The Trade and Industry Committee report on the impact of direct payment highlights the many concerns expressed by people who are in receipt of benefits. It referred to complicated bank accounts, complicated application forms for Post Office card accounts, and a lack of information on other ways to collect benefits. It also referred to closures in the post office network. The Government have justified the change to direct payment as necessary, maintaining that it is more modern, efficient and reliable. However, 83 per cent. of claimants who collect benefit from post offices already have bank accounts and 79 per cent. of them said they wanted to keep their benefits separate from those accounts. How can the Government say that by removing payment books they are increasing consumer choice? They are not. It appears to me, and to the Committee, that however modern direct payment is some customers simply do not want it. Their choice is being reduced rat her than increased.
      The performance and innovation unit supported the creation of a universal bank, and the National Federation of Sub-Postmasters has found little evidence that the claimants have an unmet need for a simple, trusted, secure means of gaining access to their benefit income. The Government have made it very difficult for a claimant to opt for a Post Office account, as we have already heard. Postwatch discovered that the DWP stopped the Post Office advertising the fact that cash would still be available after the introduction of direct payments. Again, how does that increase customer choice?
      The hon. Member for Ochil cited much evidence provided by the National Federation of Sub-Postmasters. I have here a memorandum issued by Jobcentre Plus, which makes it clear that paying into a Post Office current account costs even more than paying into a bank account, and that the system
      "was designed to meet the needs of those who cannot gain access to standard or basic bank accounts".
      Time and again, Jobcentre Plus tries to discourage people from opening Post Office accounts. That must be wrong.
      Postwatch wanted to undertake a survey of public awareness of direct payment, but the Government,
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      objected, hiding behind customer confidentiality legislation. It is clear that they do not want to encourage any independent regulatory bodies. We have already seen the abolition of independent community health councils. We now have a Government quango for them, and if it were possible we would have one to control post offices.
      If it were allowed to do so, Postwatch could regulate levels of awareness and produce a response free of any kind of party-political interference. Why are the Government so keen to obstruct that? Will the Minister tell us in his reply?
      What of the difficult process of acquiring a Post Office card account? The Government say that they do not accept that it is a "particularly onerous process". The National Federation of Sub-Postmasters disagrees, along with—as we have heard today—many other bodies. There are seven steps involved in getting a card account running. Even the National Consumer Council thinks that far too much bureaucracy and complexity are involved in opening one.
      Why should that be so? Could it be because the DWP originally anticipated that only 2 million card accounts would be needed? We now know that 5 million will eventually be needed. Where will the Government's much-heralded choice be then? Where will the money come from? Will it come from the prudent Chancellor? I think not. That is another question that the Minister must answer.
      As we have heard, the Post Office is closing 3,000 of the 9,000 urban post offices. As we have heard, its decisions are arbitrary. Many people have described the closure programme as a complete sham. Let me give an example of that. The Post Office announced on 26 August that it proposed to close the City Way branch in Rochester, Kent: it was, it said, "considering closing this branch". When the branch was eventually closed, a leaflet entitled "Getting the most from the Post Office" was made available. It was dated March 2003, six or seven months before the sham consultation process had even begun.
      What of rural post offices? They are supposed to be protected. There are some 9,000 of them, yet we do not know whether funds will be available after 2006 to protect them. I hope that the Minister can reveal today whether there will be a rural postal network after 2006. To be somewhat cynical for a moment, I should point out that the next general election might well occur before 2006. Perhaps that is why that date was chosen for the provision of such a service.
      I have asked the Minister a whole series of questions about direct payment, the closure of urban post offices and the future of rural post offices. But in reality, these are questions about the future of our community and our nation's duty of care to the vulnerable. The question is: has the Minister got any answers? As my hon. Friend the Member for West Derbyshire said, in respect of post offices choice is being diminished. It has now become clear that the urban reinvention programme is in fact a closure programme.
      Today, we have had the big conversation that the Prime Minister boasted about. That conversation has given rise to a very clear message from both sides of this House. I hope that the Minister will listen.
      5.50 pm
      The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): I welcome the opportunity to respond to the issues raised today. An incredible level of interest has been shown in the Select Committee's report, and I congratulate the Committee's Chairman, my hon. Friend the Member for Ochil (Mr. O'Neill). I will not be able to respond to all the issues raised in the nine minutes available to me, but I will try to respond to the common themes. I shall write to Members to ensure that the other issues raised are dealt with.
      Mr. Andrew Turner: The Minister for Energy, E-Commerce and Postal Services told the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang):
      "Other than in exceptional circumstances",
      the network reinvention programme
      "will not extend to post offices in the 10 per cent. most deprived urban wards".— [Official Report, Westminster Hall, 21 May 2003; Vol. 405, c. 312WH.]
      When the Minister writes to us, perhaps he could say who defines "exceptional circumstances".
      Mr. Anthony D. Wright rose—
      Mr. Sutcliffe: I shall try to respond to that point, but first I shall give to my hon. Friend the Member for Great Yarmouth (Mr. Wright), who was unable to speak in the debate.
      Mr. Wright: Two of the post offices that closed in my constituency were in wards that number among the 50 most deprived wards. The consultation process certainly took into account many issues, but they were never dealt with. Will my hon. Friend assure us that he will look into the way in which the Post Office has consulted, and has acted on that consultation process?
      Mr. Sutcliffe: I will respond in a manner in keeping with the genuine spirit of constituency involvement that Members on both sides of the House have shown. I am grateful to the House and to the Chairman for accepting the reasons why the Minister for Pensions has been unable to attend today; I am really pleased to be here in his place. [Laughter.]
      Some serious issues have been raised, and I refer Members to the Government's response to the Select Committee report. It is in no way arrogant, and it genuinely addresses the question of direct payments. However, today's debate was about the urban reinvention programme, rather than direct payments, so I shall concentrate my remarks on that issue.
      Kate Hoey: I am grateful to my hon. Friend for giving way, as I, too, was not called to speak. In the light of the document leaked by the Department for Work and Pensions, it is a pity that the relevant Minister cannot respond. Can the Minister confirm that that document actually reflects Government policy?
      Mr. Sutcliffe: Governments of all persuasions do not respond to leaked documents, but I will refer to the general issues raised—if I have time left in the seven minutes now available to me.
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      I want to show my hon. Friend, the Chairman of the Select Committee, the appropriate courtesy by pointing out that we value the Committee's work, the evidence it has taken and the views that it has expressed. I recognise that Members have deeply held views about the problems in their constituencies. When I attended a recent debate in Westminster Hall on post office closures in Wales, I experienced at first hand some of the concerns about the consultation process—a point to which I shall perhaps return. I accept the individual constituency cases that hon. Members have described, but I do not accept the partisan political points that have been made. It is rather sad that that happened, given what the Government have tried to achieve with the Post Office. A viable post office network is important to all hon. Members.
      The performance and innovation unit report of June 2000 on the post office network concluded that the business had not kept pace with change and was not exploiting its very highly trusted status as a provider of financial services. It was losing business. As the hon. Member for North Thanet (Mr. Gale) said, sub-postmasters are business people. They have found it increasingly difficult to make a living and have left the network in increasing numbers. Doing nothing was not an option; that would have led, simply, to the uncontrolled collapse of the network, and left deeply damaging gaps in it.
      The problems date back more than 20 years. Under-investment has been a factor, but the real drivers have been greater mobility, changes in shopping habits and increased choice—including through new technology. People have simply decided not to use the Post Office. The business must face up to the challenge and make itself more relevant to modern customer needs, or it will not survive.
      The Government accepted all 24 recommendations in the PIU report. The change has to be managed properly. As many as 3,500 post offices closed before 1997. Opposition Members champion the post offices' cause, but they should remember the lack of investment in that period. However, important matters must be taken into consideration as we move to direct payment.
      In the past, Post Office income was heavily dependent on benefit payments, but that business has been dwindling. As the hon. Member for Gordon (Malcolm Bruce) said, direct payment is not new: it is something that increasing numbers of benefit recipients have been choosing.
      Ahead of the Government's decision to switch to making all payments by direct payment, it should be noted that more than 43 per cent. of benefit recipients already received their cash paid directly into their bank accounts. In addition, 62 per cent. of all new child benefit recipients and 68 per cent. of all new pensioners already get their benefit money paid directly into their bank accounts.
      The current order book system is outdated. It is inefficient, open to fraud and abuse and costly to administer. It needs to be modernised to keep in step with changing customer needs, and to reflect the fact that owning and using a bank account is now the norm. More than 87 per cent. of benefit recipients and around 90 per cent. of pensioners have access to a bank account.

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      However, given that there has been some scaremongering, I want to make it clear that people can still get their pensions across the counter at the post office. The development of any future system will be based, as in the past, on work with the full range of representative groups. As Minister with responsibility for consumer affairs, I can tell the House that I am deeply involved in making sure that consumers are protected, and that I will make sure that I have that input. I hope that that will put an end to the scaremongering that has been noted, and which has been aimed especially at vulnerable elderly people.
      The Government remain absolutely committed to ensuring that those who wish to can continue to collect their benefits at post offices, in full and free of charge. That will remain the case even after the move to direct payment. The launch of universal banking services on 1 April this year is delivering that promise. We have provided £480 million to automate every post office branch. That investment has enabled the establishment of the technical infrastructure to support electronic banking services. That not only provides the means for the Post Office to continue to make benefits and pensions payments in cash, but it also gives the Post Office the vital opportunity to widen its customer base by increasing its offering of banking products.
      Under the new arrangements for benefits payments, customers have three account choices when deciding how they want to be paid. They can use a standard bank or building society account, some of which can be accessed at post offices; they can use a bank or building society basic account, many of which can be accessed at post offices; and, finally, they can opt for the Post Office card account.
      Customers choose the account that they want. If post office access is important to them, I do not doubt that they will choose accordingly. We want people to use post offices because they want to, not because they are forced to do so.
      There is some concern that the Government are steering people away from opening Post Office card accounts, or making it difficult for them to do so. Such concerns are misplaced.
      The Department for Work and Pensions is running a national and comprehensive information campaign to give customers the facts that they need to choose which account option is most appropriate for them. The campaign, which is costing £25 million, has been produced in consultation with the Post Office, with the aim of ensuring an unbiased and balanced message.
      The Government do not accept that the process for opening a Post Office card account is particularly onerous, and there is no evidence that it is putting off customers from applying for card accounts. The Post Office card account is proving popular with customers. More than 1.6 million people have chosen this account to have their benefits paid into. Take-up to date means that the eventual number of card accounts is now expected to exceed significantly the operating assumption of 3 million, but there remains no cap on numbers or eligibility criteria. It is clear that we will have to return to the subject, and I look forward to the many
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      Adjournment debates that we will have. Consultation is vital and it has to be meaningful—
      It being Six o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the deferred Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates etc.) and Order [29 October 2002].

    ESTIMATES

      Department for Work and Pensions
      Resolved,
      That resources, not exceeding £22,505,326,000, be authorised, on account, for use during the year ending on 31st March 2005, and that a sum, not exceeding £22,418,785,000, be granted to Her Majesty out of the Consolidated Fund, on account, for the year ending on 31st March 2005, for expenditure by the Department for Work and Pensions.

      Department of Trade and Industry
      Resolved,
      That resources, not exceeding £2,101,186,000, be authorised, on account, for use during the year ending on 31st March 2005, and that a sum, not exceeding £3,749,956,000, be granted to Her Majesty out of the Consolidated Fund, on account, for the year ending on 31st March 2005, for expenditure by the Department of Trade and Industry.

      SUPPLEMENTARY ESTIMATES, 200–4
      Resolved,
      That further resources, not exceeding £6,616,861,000, be authorised for use for defence and civil services for the year ending on 31st March 2004, and that a further sum, not exceeding £7,324,511,000, be granted to Her Majesty out of the Consolidated Fund to meet the costs of defence and civil services for the year ending on 31st March 2004, as set out in HC 15.

      ESTIMATES, 2004–05 (VOTE ON ACCOUNT)
      Resolved,
      That resources, not exceeding £122,627,365,000, be authorised, on account, for use for defence and civil services for the year ending on 31st March 2005, and that a sum, not exceeding £117,444,070,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs of defence and civil services for the year ending on 31st March 2005, as set out in HC 16, 17, 18 and 19.
      Ordered,
      That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Paul Boateng, Dawn Primarolo, Ruth Kelly and John Healey do prepare and bring it in.

      CONSOLIDATED FUND BILL
      Mr. John Healey accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31st March 2004 and 2005 and to apply certain sums out of the Consolidated Fund to the service of the years ending with 31st March 2004 and 2005: And the same was read the First time; and ordered to be read a second time on Monday next, and to be printed [Bill 12].

      DELEGATED LEGISLATION
      Mr. Deputy Speaker (Sir Michael Lord): With permission, I will put together the Questions on the three motions.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

      ELECTRONIC COMMUNICATIONS
      That the draft Telephone Number Exclusion (Domain Names and Internet Addresses) Order 2003, which was laid before this House on 3rd November, in the last Session of Parliament, be approved.
      LOCAL GOVERNMENT
      That the draft Local Government Best Value (Exemption) (England) Order 2003, which was laid before this House on 17th November, in the last Session of Parliament, be approved.

      ENVIRONMENTAL PROTECTION
      That the draft Producer Responsibility Obligations (Packaging Waste) (Amendment) (England) Regulations 2003, which were laid before this House on 1st December, be approved.—[Charlotte Atkins.
      Question agreed to.

      Ordered,
      That Mr Simon Thomas be added to the Committee on Standards and Privileges.—[Charlotte Atkins.]

      REGULATORY REFORM
      Ordered,
      That Mr Paul Goodman be discharged from the Regulatory Reform Committee and Mr Archie Norman be added,—[Charlotte Atkins.]

      PUBLIC ACCOUNTS
      Ordered,
      That Mr Nick Gibb be discharged from the Committee of Public Accounts and Mrs Cheryl Gillan be added.—[Charlotte Atkins.]

    PETITION

      Pensioners
      6.2 pm
      Pete Wishart: I am grateful for the opportunity to introduce my petition this evening. It reads:
      The petition of the concerned citizens of North Tayside,
      Declares that we believe that pensioners have the right to choose how they receive their pension.
      The petitioners therefore request that the House of Commons passes legislation to ensure the survival of the Pension Book as a means of collecting pensions from local post offices.
      And the Petitioners remain, etc.
      To lie upon the Table.

      Cold Calling (Elderly People)
      Motion made, and Question proposed, That this House do now adjourn.—[Charlotte Atkins.]
      6.3 pm
      Dr. Julian Lewis: When it first became known that I had been fortunate enough to secure this short debate on cold calling and vulnerable elderly people, I began to realise that I was addressing only the tip of an iceberg of cruelty that is happening in our society today. I am pleased to have the support of the hon. Member for Pudsey (Mr. Truswell) from the Government Back Benches, who has done important work on the issue. I hope to finish my contribution in time to give him the opportunity to explain the wider context of the debate.
      I could not have been more delighted to find that the Minister who will reply to the debate is the Minister for Crime Reduction, Policing and Community Safety, for whom my admiration has been undimmed since the days when we served together as officers of the all-party group on motorcycling. To see the hon. Lady bowling along on a motorcycle, in the full knowledge that if ever she came to a halt her feet would barely reach the ground on either side, is an object lesson in fortitude, courage and bravery. I hope that she will be equally robust in her response to the debate.
      Since the subject of the debate became known, I have received information on concerns about cold calling from Hampshire county council, CORGI—the arrangement whereby British Gas attempts to prevent bogus callers masquerading as gas representatives—and from BBC South, which is carrying out important investigative work on cold calling. What struck me most was the number of individual cases that were brought to my attention. I shall refer briefly to four, two of which came to my attention by indirect means and two of which I have extensive direct knowledge about, and I shall make a declaration of interest at the appropriate point in my remarks.
      The first case is that of Muriel, an 80-year-old artist living in SW 14. She was persuaded to give £900 in cash to three cold callers who had tidied her garden. Only timely action by her friends, the police and the bank, in turn, prevented her from being defrauded of even more money.
      Then there is the case of Stephen, an 84-year-old retired civil servant living in Blackheath, who made as many as nine cashback withdrawals in a single day for cold callers and who is believed to have withdrawn more than £20,000 in cash from his bank for them over a three-month period.
      Those two cases were brought to my attention by immediate friends in my close circle. I am sure that other hon. Members could replicate those stories indefinitely. However, the two stories that I shall address in detail relate to Pat, an 80-year-old retired railway worker, and Sam, a 90-year-old retired tailor. Both lived alone in Swansea. south Wales, and both had the misfortune to be targeted by a man called Paul Grey. In that connection, I record my personal thanks for the support that I have received—as will become clear—from several sources. The first is the right hon. Member for Swansea, West (Mr. Williams), my old adversary in the

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      1983 general election. The right hon. Gentleman would have been in the Chamber this evening, but he is attending the funeral of his predecessor, Hugh Rees, who served as Conservative Member of Parliament for that constituency between periods of—let us say—rather intense Labour representation in Swansea. The second is Detective Constable Ian Griffiths of Swansea CID. The third is Mr. Ray Potter of Swansea trading standards department, and the fourth is the investigative reporter, Mr. Chris Segar, and his team on the programme, "The Ferret". I have been most impressed by the way in which they addressed those cases.
      The first case is that of Pat Meehan who, as I said, is 80. He lives on a state pension and a small railway pension. Paul Grey knocked at his door one day and offered to replace his hedge with a wall. The idea was that the job would cost £600 and Mr. Grey was given £200 for materials. Before the job was not even nearly complete, Pat was cajoled into parting with the other £400 and Mr. Grey never went back to finish the job.
      Pat Meehan is no ordinary retired railwayman. Like so many of his generation he is a tough character. He may be a hit deaf, a bit shaky and quite elderly, but he landed on the beaches on D-day plus 6. He went to Paul Grey's home and tried to confront him. Mr. Grey saw Pat coming, wound down the window of his van, called out to him, made a V-sign and drove off. As Pat's sister-in-law, Christine Meehan, said to me only this afternoon, "It's disgusting, isn't it?"
      We now come to the question of Sam. Sam is Sam Lewis. Sam is 90. Sam is my father. He was Mr. Grey's other recent victim. He is now safely in a residential home in London, which is why I can share this story with the House.
      Back in November 2002, I was due to send in some builders to Sam's home to deal with an outbreak of dry rot. I rang my father the week before 25 November, which was the date they were due to start. To my surprise he told me, "Oh, but the builders are already here, Julian." He said he was unhappy about what was happening—it was turning into a very big job and they were making a terrible mess. I asked him whether he had paid them any money. The problem with Sam was and is that, although he is perfectly lucid, and although he is perfectly intelligent and not confused, he has virtually no short-term memory. So he went and recovered his cheque book and he looked up what he had paid, because he is also very meticulous. He told me that he had given Paul Grey a cheque for £800 on 14 November and one for £1,000 on 18 November. I was not very happy about that but eventually I managed to speak to Mr. Grey, who assured me that the £1,800 would be for the total job. I also spoke to Lloyds bank in the Uplands in Swansea, two doors from where my father lived at the time and where he had his account, and I asked it please to alert me if anything suspicious happened with regard to withdrawals of money from my father's account.
      In the second part of December 2002, I heard again from Mr. Grey, after the other builders—the ones I had put into the premises to do a much bigger job than Mr. Grey was supposed to be doing—had finished their work and departed. Mr. Grey said that he had almost finished his work but asked whether I would like to have
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      some guttering and pipe work renewed while he was doing it. He indicated that that needed to be done, so I agreed to pay him £400 for what should have been two to three days' work. That cheque was cashed on Christmas eve.
      When I went back to the house—this is the problem with dealing with elderly relatives a couple of hundred miles away—on 26 January, I found that the work was nowhere near completed. On 27 January, in the morning, I managed to speak to Mr. Grey. He was terribly sorry; he would give it his personal attention. His roofer, a man called Joe Edwards, had assured him that the work had been finished. One of Mr. Grey's techniques is that he gets other people to do what passes for the work that he inflicts on his victims.
      However, later that Monday morning, just before we were about to come in for Defence questions, I received a call from Lloyds bank. An alert cashier, Hazel Matthews, had become concerned that my father was withdrawing large sums of cash. She then looked into it further, saw that I had asked to be informed, and duly contacted me.
      Unfortunately, this was rather late in the day. That evening, I rang my father, and I found that as well as the £800 cheque on 14 November and the £1,000 cheque on 18 November, to Paul Grey, the following cash withdrawals had been made: £500 on 4 December, £400 on 6 December, £1,200 on 16 December, £1,000 on 20 December, £800 on 7 January, £1,000 on 9 January, £1,200 on 24 January and £1,400 on 27 January. Interestingly, when I finally managed to obtain my father's cheque book, I was able to see that after the two cheques to Mr. Grey, where all these cash withdrawals started, the first of those withdrawals, for £500, had originally been made out to P. Grey, crossed out and altered to "self"—that is, cash.
      I decided to see whether I could get some evidence together to nail this man, and I decided to do something that I was not entirely happy about, which was to ring up my own father, ask him to go over the story again and tape record what he said. I tried to do this on 29 January but found that Mr. Grey was in the house. I obviously did not want to let on that I was suspicious about what was going on, because my father was quite frail and I did not like the idea of a confrontation while my father was still in the house, but I succeeded the next day in talking to my father again, and tape recorded his answers, which were identical in every respect to what he had told me on the Monday. He spoke with total lucidity. He explained again and again that every bit of this money had been given by him to Paul Grey.
      At the end of the conversation, my father collapsed and I had to dial the emergency services. He went to hospital. After a week of 24-hour care, he went into an assessment unit on 7 February, and the happy ending to this story is that, as I said at the outset, he is now safely resident in a good residential home in London.
      On 14 February, I visited the house and found that Mr. Paul Grey's work was still incomplete. On 23 February, I managed to confront Grey over the telephone. He denied that he had taken any of that money, but he refused to give me any detail that would enable me to track down the only other person who had been regularly on the site: his alleged roofer, Mr. Joe Edwards, allegedly of Manselton. When I insisted on

      1295
      having those details, he concluded the conversation with the words, "You effing find him"—he did not actually say "effing"—and slammed down the phone.
      Subsequently, with the help of "The Ferret"—the programme that I mentioned earlier—I discovered that there was no roofer of the name of Joe Edwards in Manselton; only a milkman, a well-known character in the community, who died recently. Mr. Grey refused to respond to letters, to list the people on the site and to name a solicitor with whom I could correspond. I later discovered that he has 10 criminal convictions, dating back over 25 years until 1999. Those convictions included theft, deception, criminal damage and shoplifting. I discovered that he had a habit of calling on my father every November. In November 2000, he was trading as Enterprise Roofing and Building; in November 2001, as St. James's Building Services; and, in November 2002, Paul Grey Building Services. He has been interviewed by the police, and the Crown Prosecution Service has yet to decide what to do, but I am the first to concede that it is not easy for them. The only way in which they might be able to proceed would be to put my elderly father through the ordeal of giving evidence and facing cross-examination, and at his age I doubt whether that is something that ought to be inflicted upon him.
      I have no doubt that Paul Grey spun out a two-to three-day job over two months, during which he ruthlessly exploited Sam's frailty fraudulently to obtain thousands of pounds in cash. What is to be done about people like Grey? Before I hand over to the hon. Member for Pudsey (Mr. Truswell), who has great experience of this problem—I thank the Minister for allowing me to make that arrangement—I should like to give my single idea: it may be too draconian to ban cold calling altogether, although I would have sympathy with that view, but, as a first step, may I suggest that it ought to be made a criminal offence for anyone with a criminal record to engage in cold calling? That would nail the likes of the lowest of the low, like Mr. Paul Grey.
      6.17 pm
      Mr. Paul Truswell: It is a pleasure to follow the hon. Member for New Forest, East (Dr. Lewis), and I thank him for the opportunity to contribute to the debate. Similarly, I thank you, Mr. Deputy Speaker, and the Minister. The hon. Gentleman describes classic cases of abusing cold calling. They are bad, but they are far from being the worst. I came to the issue of doorstep crime and unscrupulous selling five years ago, when a number of my constituents were stung by a home improvement outfit called Midland Coatings. Thanks to an excellent campaign by the Yorkshire Evening Post, in which I was closely involved, we drove that cowboy outfit out of town. Unfortunately, it is only one of many.
      That campaign brought me into contact with a phenomenal individual called Brian Steele. Brian is a retired detective chief superintendent, who has made combating doorstep crime his life's work ever since he investigated a particularly harrowing case. A lady in her 80s, Isabel Grey, was murdered by burglars who tortured her and broke her back. It was later discovered that she had been a serial victim of bogus builders of the type that the hon. Gentleman describes, and that they had carried out a series of botched jobs on her property.
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      Brian subsequently studied the activities of distraction burglars. His interviews with them in prison revealed a picture of cynical leeches who said that they could smell the money in an old person's home, who bought and sold the names of their victims and who showed not the slightest contrition about their crimes. I helped Brian to lobby the Home Office for a £500,000 grant to set up the Leeds distraction burglary initiative, which has proved highly successful in tackling a range of doorstep crime and pressure selling. Brian acted as co-ordinator for the first three years, and now works for trading standards authorities in the north of England. It is my privilege to work with him, with colleagues such as Stuart Pudney, head of trading standards for North Yorkshire, and with numerous organisations, in campaigning for a law to prohibit cold calling at someone's home for the purpose of offering property improvement, maintenance or repair. It is a measure that those experienced people, who include police officers, have decided is perhaps the only way forward in combating such activity. It is not a panacea but it will help to paint thosevillains further into a corner and to restrict their areas of operation. My hon. Friend the Minister may be aware of early-day motion 219, which refers to that campaign.
      The campaign is targeted specifically at those who call for the purpose of offering property maintenance, repair and improvement services. There are two reasons for that. First, that is the principal modus operandi of criminals and the sort of character who fleeced the father of the hon. Member for New Forest, East (Dr. Lewis). Such people are criminal in every respect apart from, unfortunately, sometimes, the narrow legal sense. Secondly, although we may not like it, many people have a legitimate and sometimes altruistic reason for knocking on our doors, and it would be a pity to have a blanket ban and rule them all out.
      My hon. Friend will be aware that the Office of Fair Trading will report shortly to my right hon. Friend the Secretary of State for Trade and Industry regarding cold calling. I hope that one of the recommendations will be on the need for such legislation as well as other measures. In the interests of joined-up government, I trust that my hon. Friend's Department will have some input into the discussion on this matter. It is crucial that it does not fall between the two stools of crime prevention and consumer protection. There is often a fine line—even a grey area—between those two aspects. Prohibiting cold calling for property repair, improvement and maintenance would help to tackle that range of crime and sharp practice.
      I also urge my hon. Friend to ensure that her Department takes more effective steps to record such doorstep crime, which, as I say, falls between two stools, which makes it more difficult to demonstrate the incidence of such crime even though experience shows that it is widespread.
      6.21 pm
      The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears): I am delighted to have the opportunity to respond to the hon. Member for New Forest, East (Dr. Lewis) in what is an extremely important debate. I also welcome the comments of my hon. Friend the Member for Pudsey (Mr. Truswell). It is fair to say that the cases that both have highlighted this

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      evening are shocking, and illustrate the despicable behaviour of some people in these circumstances. It is excellent that these issues have been raised in the House.
      I am responding as a Home Office Minister, but both Members have made the point that bogus callers, distraction burglary and people being deceived into parting with their money cross over the boundaries between the Home Office, in terms of crime reduction and crime prevention and, inextricably, the Department of Trade and Industry, in terms of consumer protection and the important role played by trading standards officers in seeking to regulate this area. I will do my best to reply across the piece, because I accept entirely the point of my hon. Friend the Member for Pudsey that we must ensure that these issues do not fall through the gap, whether in terms of regulation, the OFT's response to the National Association of Citizens Advice Bureaux super-complaint, or gathering intelligence, which is absolutely key in such matters.
      I am delighted to tell the hon. Member for New Forest, East that a very good operation in the south-west, Operation Litotes, now brings together all the agencies and the five forces across the south-west to share intelligence about the kind of people who conduct the terrible acts highlighted this evening, whether bogus callers, people seeking to extort money for the kind of home improvements that have been highlighted, or those attempting distraction burglary. It is important that once we share that information, we can track such people across a wide geographic area, as it is clear that they are prepared in a cynical way to travel hundreds of miles to find their victims.
      As I said, both distraction burglary and cold calling are covered, but I would not want elderly people to be unduly alarmed—distraction burglary represents a small proportion of burglary as a whole, and elderly people are only a quarter as likely to be victims as young people. I would not want this matter to be taken out of perspective. It should also be taken in the context of burglary being reduced by about 39 per cent. over the past few years. In relation to relatively small numbers of burglaries, therefore, bogus calling is difficult to record. I acknowledge that a huge amount of work is already going on.
      The issue is especially important to me because I recently had cause to knock on people's doors during the Brent by-election. I knocked on the door of an elderly lady aged 82 four minutes after she had been burgled and deceived. A man had come along purporting to want to get into her bathroom because repairs were being carried out three doors down the road. She opened her door perfectly innocently, but he pushed past her to break into her home. He stole not only her money, but money that she had been collecting for her church. I have no doubt that she was traumatised by the event and that it affected her independent way of living. The incident showed me the depths to which people are prepared to sink in such circumstances.
      A great deal of work has been done on distraction burglary, such as establishing projects and a taskforce. The taskforce has been extremely successful in the area of my hon. Friend the Member for Pudsey. However, I shall talk about consumer protection, because that was the main issue that was raised in the debate.
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      Hon. Members will know that the National Association of Citizens Advice Bureaux published its report on doorstep selling in September 2002. The report was based on 1,500 case studies that were submitted by citizens advice bureaux over two years. The case studies were analysed and recommendations for improvements were made. During national consumer week last year, the Office of Fair Trading announced that it would accept the details from NACAB as a super-complaint under the Enterprise Act 2002. The OFT has been considering the issue since then and I understand that it is due to report early in the new year. Legislation on the matter exists in the form of the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987, which are commonly known as the doorstep selling regulations.
      Additionally, the Supply of Goods and Services Act 1982 contains provisions on cooling-off periods so that people who have bought goods from people selling door-to-door have a chance to get out of onerous contracts into which they have entered. Although legislation is in place, it is right for the OFT to consider whether further legislation is required and whether there should be closer work with the police service to tackle the problems.
      Dr. Lewis: I appreciate the Minister's comments. What is her view of the specific idea of criminalising cold calling by people with criminal records?
      Ms Blears: That issue was raised by the Trading Standards Institute, which produced a report on cold calling this year that especially examined property repair and maintenance, which the hon. Gentleman mentioned. The institute said that the statutory control of such cold calling was long overdue, and recommended criminalising people in such circumstances, and the OFT is considering those recommendations and taking them fully into account. I should tell the hon. Gentleman that it might be difficult to define the offences that would lead to a person being prohibited from doorstep selling. For example, offences such as a driving offence might not be relevant to a person's subsequent activities. However, it is legitimate for the OFT to consider the matter.
      The hon. Member for New Forest, East said that outlawing the whole business of doorstep selling would be perhaps a step too far. Doorstep selling represents a substantial business and there is only a small proportion of rogue traders, but the OFT will consider whether such action would be appropriate.
      Mr. Truswell: Does the Minister accept, nevertheless, that no reputable tradesperson really needs to use cold calling? I am heartened by the fact that the Federation of Master Builders takes no exception to the idea of outlawing cold calling for the specific purpose of property repair, maintenance and improvement.
      Ms Blears: I am sure that my hon. Friend will forgive me if I do not trespass on the domain of the Department of Trade and Industry in that respect. He has made his representations extremely robustly for a long time, and I am sure that the DTI will take on board his extensive personal experience, knowledge and expertise on the matter, as will the OFT when it considers its final report.

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      I want quickly to make a point about action being taken to protect the bank accounts of vulnerable people. The hon. Member for New Forest, East made a compelling point about significant, high-value transactions taking place in a short period, and I am delighted to be able to tell him that representatives of the Trading Standards Institute and the British Bankers Association, who are on the distraction burglary taskforce, are working together on that very issue. They have a pilot scheme in Kent that asks bank and building society staff to be on the lookout for requests for unusually large cash withdrawals for building work, and to take action to safeguard their clients.
      The institute is producing videos and other training materials for use with banking, call centre and enforcement staff—everybody who deals with victims of such crime. That is an important pilot project, and we will be learning lessons from that about how we might implement it across the piece. Increasingly, banks and financial institutions are carrying out fraud checks when significant numbers of payments are made in a short period. That is an excellent way to help to protect elderly people who are particularly vulnerable.
      I want to say a little about how Departments are working together to try to tackle distraction burglary and bogus callers. It is increasingly obvious that many elderly people are in touch with social services, and they can get valuable information from their carers, home helps and other people with whom they are in contact. Many elderly people are influenced by their family, so we must get the message out to families that much of this burglary and deception can be prevented if people take simple precautions, such as checking callers and asking for proof of their identity.
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      There is now a national crime protocol, which has been signed by many energy companies and those who have traditionally needed access. It requires callers to submit their identity and to provide a telephone number so that the resident can confirm it. Simple, practical steps such as those can help to reduce distraction burglary, which causes people huge distress and trauma. Through crime and disorder reduction partnerships we are trying to engage everybody in these issues as part of their mainstream business. Then, when people are going about their daily work, they are thinking about how they can help to protect elderly people.
      This is a difficult issue, because we are asking many elderly people to change the habits of a lifetime. They grew up in times when it was, perhaps, safer to be more open, friendly and welcoming and to keep the door open. These days, sadly, that is not the case, so we have to ask people to put the chain on the door, stop and check the identity of callers, and think very carefully about what is happening. It is not about being unfriendly; it is about being in control. We want to empower people so that they can rebuff approaches from rogue traders.
      I am delighted that this issue has been highlighted in the House. There is a great deal of work going on throughout the country to ensure that we protect people from such despicable activity. The more we can do to work together on crime prevention in the Home Office and the Department of Trade and Industry, the better for everybody. I certainly undertake to ensure that we have an input and work closely with the DTI before the OFT report comes out early next year.
      Question put and agreed to.
      Adjourned accordingly at twenty-seven minutes to Seven o'clock.