Commons Sitting of 29 January 2004

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

PRIVATE BUSINESS
MEDWAY COUNCIL BILL
IPSWICH MARKET BILL
Read a Second time, and committed.

Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    World Debt
    Rob Marris: If he will raise measures to address world debt at the G7 meeting next month. [151542]
    Mr. Mark Lazarowicz: When he will next discuss the proposed international finance facility with his counterparts in the other G8 countries. [151551]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I am pleased to say that next week in America the G7 group of Ministers will consider the issues of debt sustainability and the British proposal to tackle ill health, illiteracy and poverty, and to raise the necessary finance for aid and debt relief through the international finance facility. We will hold a conference on these issues with the Churches and non-governmental organisations on 16 February in London, and a Paris conference to heighten support for the facility, with more than 60 countries invited, will be held in April.
    With your permission, Mr. Speaker, I can also inform the House that the date of the Budget statement will be 17 March.
    Rob Marris: I thank my right hon. Friend for that answer and for the steps that he is taking to tackle world debt, particularly as I know that he has been very busy in recent days.
    The HIV/AIDS epidemic is a human catastrophe worldwide, especially in Africa; it retards economic and social development and so contributes to world debt
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    problems. Will my right hon. Friend outline what steps the United Kingdom Government are taking to support the global fund to fight AIDS, tuberculosis and malaria?
    Mr. Brown: I am grateful to my hon. Friend; I know that he has taken a long-term interest in these matters. Twenty million people have already died from HIV/AIDS and 40 million people are infected with it. We are the second-biggest contributor to the global fund, which is investing not only in the prevention of AIDS, but also in tackling tuberculosis and malaria. We spent £270 million last year directly on fighting AIDS around the world. At the same time, we are a contributor to GAVI—the Global Alliance for Vaccines and Immunisation—which is a private-public partnership, with Bill Gates and the Gates Foundation in particular. I talked to him in London only this week about these matters. We shall continue to do more to tackle a scourge that requires extra resources, treatments at cheaper prices and the build-up of capacity in health care systems. We have spent £1.5 billion in all those areas since we came to power.
    Mr. Lazarowicz: I welcome the steps that the Chancellor is taking to take the international financing facility further forward, but will he assure the House that that will not detract from the UK's continuing efforts to increase the percentage of our gross domestic product that we allocate to international aid? In the spending review this year, will he consider taking further steps to increase the percentage of UK GDP allocated in that way up to the 0.7 per cent. target called for by the United Nations?
    Mr. Brown: This could be a very expensive Question Time indeed. I shall look into my hon. Friend's representations. He knows that we shall have increased the percentage of aid from 0.27 per cent., which is what we inherited, to 0.4 per cent. by 2006. He knows, too, that we are part of the Monterrey consensus, where the European Union has agreed that collectively the amounts of aid would be 0.39 per cent. by 2006 and where America has pledged an extra $5 billion to $7 billion to raise the amount of aid.
    Because the issue of AIDS demands something in the order of £10 billion and because to get every child into education and meet the millennium development goals requires another £10 billion, there can be no solution to the problem purely as a result of a few countries raising the amount of development aid. In my view, the only way forward is for us, collectively, to bring our resources together in the international finance facility, as we have proposed, and I am pleased to say that we have received support from all parties in the House for that. We have support from the Churches in this country and, only a few days ago, the Vatican made a statement supporting our facility. The conference in Paris will bring together 60 countries.
    Sir Peter Tapsell: What will be the likely cost to British banks of the proposal to write off Iraqi debt, consequent on our invasion of that country?
    Mr. Brown: This relates to question 4, which deals with the issue of Iraqi debt and I shall come to that when

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    that question is called. I can tell the hon. Gentleman, however, that Iraqi debt is in the order of $120 billion and only about $1 billion of that is owed to Britain. Under the Paris Club terms, much of that would be written off. Iraq owes money mainly to Russia, Germany and France, not to Britain.
    Mr. John Redwood: In view of the great importance of this work to many sections of the House, would the Chancellor like to express his pleasure at the remarkable change in fortune this week of the Prime Minister, which means that, in all probability, the Chancellor will be able to stay in his present post for the rest of this Government in order to see it through?
    Hon. Members: Silly question.
    Mr. Brown: Absolutely. But is it not typical of the Opposition that when we are discussing world debt and the international finance facility, the right hon. Gentleman, who knows better, should reduce it purely to matters of personalities?
    Mr. Peter Pike: My right hon. Friend knows that I believe that the Labour Government's record on world debt has been excellent during his period as Chancellor of the Exchequer. Does he believe that we can now make real progress with the G7 in not only continuing what this country has been doing so positively, but tackling the issues of fair trade? It is very important indeed that we not only relieve debt but give those countries an opportunity to participate in fair trade in the world.
    Mr. Brown: I am grateful to my hon. Friend. He, too, has taken a great interest in these matters in recent years. At the G7 meeting next week in Florida in America—where I understand the weather is a bit warmer—we shall be discussing not only debt and the international finance facility, but trade. It is imperative that the main developed countries relaunch the world trade talks. That is in the interests of Europe and America, and of the developing countries. It is imperative also that we clear away the difficulties that arose from what were called the Singapore clauses. It is imperative too that steps are taken to deal with agricultural protectionism. I shall press my G7 colleagues and propose that we take an initiative to show that we are serious in persuading people that these trade talks, which have been stalled for too long, should get going quickly; and I believe that I shall have all-party support for that.
    Mr. Laurence Robertson: I understand that to qualify for debt relief under the initiative it is necessary for third world countries to increase the amount that they spend on poverty reduction, so there is a bit of a paradox there. I understand that they get quite a bit of that money from donor countries, but I further understand from a written answer that the Chancellor gave me a few days ago that there is a shortage of supply in the money coming from those donor countries. What can he do to increase that supply?
    Mr. Brown: For the heavily indebted poor countries initiative conditions to work, the debt that has to be paid
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    must be reduced substantially. I believe that the average payment of debt by those countries was 27 per cent. before the HIPC initiative and it is now 11 per cent., so there is a huge reduction in the amount of debt interest payments that those countries have to pay, and obviously it is a result of $70 billion of debt being wiped out under the initiative. It is not a requirement but it is morally, economically and socially right that those countries direct the resources to education and health. Sixty-five per cent. of the money that is obtained as a result of reduced interest payments goes to education and health—the vast majority to education. Uganda, for example, can now say that every young child will get primary education and that there will be schools for them to go to.
    I would therefore say to the hon. Gentleman that it is right that the amount of debt interest payments is reduced, but it is also morally, economically and socially right that the money does go to education and health, and to anti-poverty programmes that are part of the key to those countries' recovery.

    Myners and Sandler Reports
    Mr. Nigel Beard: If he will make a statement on progress towards implementing the recommendations of the Myners and Sandler reports. [151544]
    The Financial Secretary to the Treasury (Ruth Kelly): The Government are currently reviewing the progress that the occupational pension industry has made in implementing the recommendations of the Myners report. We are continuing to implement the recommendations that Ron Sandler proposed.
    Mr. Beard: I thank my hon. Friend for that reply. I recognise the Government's policy to encourage saving, and both the Myners and the Sandler reports contained proposals for reducing obstacles to saving and making it easier. Cash individual savings accounts have proved to be very popular, especially with low-income savers who are reluctant to part company with their savings in case of emergencies. Why, therefore, does the pre-Budget report reduce the annual ceiling on ISAs from £3,000 to £1,000? Is that not inconsistent with general policy?
    Ruth Kelly: I am glad that my hon. Friend draws attention to the success that ISAs have been, both in widening access and in encouraging low-income groups to hold savings in that form. I can confirm to him, however, that the Government announce in the pre-Budget report that we intend to review the treatment of ISAs so that all Sandler's stakeholder medium-term products and life insurance products will be brought into the stocks and shares component of ISAs from 2005. My hon. Friend makes a representation on the limits, and of course my right hon. Friend the Chancellor will have heard what he says and I am sure will reflect on it.
    Angela Eagle: Will my hon. Friend reflect on the recent evidence by both Myners and Sandler to the Treasury Select Committee about the current structure of the financial services industry? They

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    both characterised it as having excessively weak consumer power, because of the lack of transparency in the products and the fact that there are too many complex products, so that it is almost impossible for anyone to discern any meaning from the information about them. Moreover, those who make the products are far too concerned about distribution mechanisms and sales, and therefore leave consumers no power. That is a form of market failure. Will my hon. Friend look at that and see what the Treasury could do to restructure the market, in order to make it much simpler and easier for people to put their money into some of those products and make the products more trustworthy?
    Ruth Kelly: My hon. Friend makes an extremely important point. We asked Ron Sandler to look at the structure of the retail savings industry to see how it could be made more efficient and transparent. He concluded that the current structure of the market was far too opaque and complex for consumers to be properly served. That is why we are now working with the Financial Services Authority to introduce the suite of Sandler stakeholder products, which would shift the burden away from the sales process and protect the consumer by building that protection into the product itself. I believe that the consumer will be much better served once those products are introduced.

    Iraq
    Mr. David Stewart: What discussions are being held with European Union Finance Ministers about providing debt relief to Iraq. [151545]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Iraq's debt to the international community stands at approximately $120 billion. In a country that is oil rich, with approximately 100 billion barrels of oil, the population has an average income per head of less than $2 a day. The United Kingdom view is that creditors will have to write off the vast majority of Iraq's debt to restore economic sustainability, and we are in discussion with many of our international partners, who share that view.
    Mr. Stewart: Does my right hon. Friend share my view that debt relief is a vital ingredient in rebuilding the Iraqi economy? The loans to Saddam financed his wars, his palaces and the oppression of ordinary Iraqis. Is not Iraq's reconstruction crucial, and must we not get rid of the millstone of Iraqi debt?
    Mr. Brown: I am grateful to my hon. Friend, who I know has taken an interest in the matter of Iraqi debt. Iraq has the second largest reserves of oil in the world, so it is potentially very rich. It is also true, however, that the population's average income is less than $500 a year, which is less than $2 a day. Because of that, we need to take action to correct the position of Iraq. Not only does Iraq have $120 billion of outstanding debt, but it also has compensation claims to honour in relation to Kuwait approaching $80 billion. That is why we propose that, through the Paris Club, debt be written off, and why we have also said that it should be the vast majority of Iraq's debt.
    Mr. Tam Dalyell: My right hon. Friend the Chancellor rightly said a few minutes ago
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    that there is a huge Russian debt. In the circumstance that much of the Iraqi oil industry is out of date and has Russian equipment—as indeed is true of the water facilities—if the oil industry is to be modernised, what discussions are going on with the Russians as to how we can co-operate to get it moving again?
    Mr. Brown: I believe that when the G7 meets next week in Florida and becomes the G8, with Russia present, we shall have a discussion on issues related to Iraq and reconstruction. More partners are being drawn in to try to help with reconstruction. I shall write to my hon. Friend after the G8 summit in Florida. It is also true that the backlog of repairs—whether in health, education or water, or generally in infrastructure—is, as my hon. Friend suggested, massive. That is why we cannot wait, and the Government have already set aside some $800 million as our contribution to reconstruction.

    Financial Services Authority
    Mr. Alex Salmond: What representations he has received on the performance of the Financial Services Authority; and if he will make a statement. [151546]
    The Financial Secretary to the Treasury (Ruth Kelly): Treasury Ministers have received a large number of representations, particularly in the context of the two-year review of the Financial Services and Markets Act 2000, on the performance of the FSA.
    Mr. Salmond: Is the hon. Lady fully satisfied with the performance of the Financial Services Authority in terms of its recent and ongoing discussions with Standard Life? First, is any credence at all to be given to suggestions that information about those discussions was briefed to the press by sources within the FSA? Secondly, has she considered whether there is anything inherently anti-mutual in the new liquidity requirements that are part of those discussions? Do the Government have a position on whether companies should be in mutual ownership or be plcs?
    Ruth Kelly: The hon. Gentleman makes a number of detailed points. As I set out in my written answer to Parliament, the FSA has total operational responsibility for regulatory decisions and independence under the Financial Services and Markets Act 2000. However, the FSA has kept the Treasury regularly informed of developments at Standard Life, under the terms of the memorandum of understanding between the Treasury, the FSA and the Bank of England. Of course I cannot comment on press speculation, but I can confirm to the hon. Gentleman that the Treasury has consistently supported the development of the mutuals sector by supporting private Member's Bills, which updated the legislation for industrial and provident societies. The new realistic accounting rules have been widely welcomed by the industry—by mutuals and non-mutuals alike.
    Mr. Barry Sheerman: Does my hon. Friend agree that the FSA should take a lead on personal finance education and that even the

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    increased amount, £120,000—out of a budget of £200 million£is not very much? As it is a priority identified by the FSA, surely the industry and the FSA should be putting serious money into educating the people of this country about personal finance.
    Ruth Kelly: My hon. Friend makes an important point. Indeed, that was one of the issues raised by Ron Sandler when he looked at the functioning of the long-term retail savings market. The FSA has taken his recommendation seriously. It has set up a financial capability steering group, of which I am a member, to look at such issues from first principles. I am sure that the FSA will now take forward a proactive agenda on those issues.
    Dr. Vincent Cable: Did the Minister see the comments last week by Callum McCarthy, the chairman of the FSA, who talked about what he called dangerous levels of household debt? Can the Minister say precisely who is responsible for determining sustainable levels of household debt and new flows of credit? Is it the FSA, which has identified the problem but disclaims responsibility? Is it the Bank of England, which meets next week and has also disclaimed responsibility for asset markets and debt? Who is responsible for the problem?
    Ruth Kelly: The Treasury and the Government have responsibility for the macro-economic environment in which consumers and the industry operate. The FSA has a specific responsibility for financial stability, but the Government's record on economic matters is one of which I am proud.

    Climate Change Levy
    Mr. Bill Tynan: What the revenues to the Exchequer were from the climate change levy in (a) 2002 and (b) 2003. [151547]
    The Economic Secretary to the Treasury (John Healey): The climate change levy raised £863 million for the Exchequer in 2002. Provisional receipts for the whole of 2003 will be published by the Office for National Statistics in February's "Financial Statistics".
    Mr. Tynan: I thank my hon. Friend for that response. In 1999, the reason that we introduced the climate change levy was to meet the obligations under the Kyoto agreement. Will he explain to the House why we apply the climate change levy to the nuclear power industry, which does not produce CO2? Will he consider removing that unfair burden from the nuclear industry, because it is a major problem for that industry at the present time?
    John Healey: I pay tribute to my hon. Friend, particularly for his role as chairman of the all-party parliamentary group on nuclear energy, but I have to disappoint him. He is right to say that we announced the introduction of the climate change levy in 1999, but we made it clear that nuclear generation would not be exempt from the levy, and we have no plans to change that position now. The reason is that the levy is not a carbon tax; it is a tax on energy use, designed to encourage not only greater energy efficiency, but the
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    development of new renewable forms of energy generation, such as solar, wind and wave power, which is why those are exempt from the levy and why the nuclear industry is not.
    Mr. Henry Bellingham: When the Government introduced the levy, they said that it would almost certainly be fiscally neutral. Why is the CBI now saying that the net annual cost to manufacturing is running at £142 million? That is hitting smaller firms particularly hard, and with offshoring growing apace, can the Minister do anything to make the levy fiscally neutral?
    John Healey: From the start, the levy was designed to be fiscally neutral to the Exchequer, but it is not possible to make it fiscally neutral for each and every sector. Let me make it clear that there is no financial gain to the Exchequer from the climate change levy. All revenues are recycled back: first, through the 0.3 per cent. cut in national insurance contributions that benefited all employers; and, secondly, through a series of energy efficiency programmes and support, ranging from enhanced capital allowances to the work of the Carbon Trust. The hon. Gentleman is concerned about the position of businesses in competition with those in other countries. There is an 80 per cent. discount on the levy for those that are exposed to international competition and that are intensive energy users in sectors that are willing to negotiate with the Government to improve energy efficiency.
    Dr. Alan Whitehead: In line with the principles of green taxation that my hon. Friend's Department set out in last year's publication, does he intend to review further the operation of the climate change levy to ensure that its proceeds add positive leverage to the reduction of industrial CO2 emissions by supporting more directly the development of lower-emission and renewable industrial energy practices?
    John Healey: I can tell my hon. Friend that we keep all taxes constantly monitored and under review. Above that, we are undertaking a full review of the first couple of years of the operation and impact of the climate change levy. That review is being led by Customs and it will indeed take account of the kind of factors about which he is concerned.

    Equitable Life
    Ann Winterton: If he will compensate Equitable Life policy holders. [151548]
    The Financial Secretary to the Treasury (Ruth Kelly): As I said in my written answer of 26 January, the Treasury intends to publish Lord Penrose's report in full as soon as possible. I shall make a full statement to the House at that time.
    Ann Winterton: Does the Minister recall the Chancellor, when he was in opposition, criticising the then Government for delaying payments to elderly, distressed savers following the failure of financial regulators in the Barlow Clowes case? If Lord Penrose

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    reports that regulators failed investors in Equitable Life, will the Chancellor take the very same action that he advocated so vociferously when he was shadow Chancellor?
    Ruth Kelly: The hon. Lady may choose to prejudge Lord Penrose's report, but I will not. I am afraid that she must be patient and wait until it is published.
    Mr. Adrian Bailey: Does the Minister agree that the problems with Equitable Life stem from bad management and a loose regulatory regime under the previous Conservative Government? Would she care to outline what steps this Government have taken to avoid any repetition of the situation?
    Ruth Kelly: My hon. Friend will know that the Government took action to set up the Financial Services Authority, the financial services compensation scheme and the financial services ombudsman. On the detailed matter of Equitable Life, I am afraid that he, too, will have to await Lord Penrose's report.
    Mr. Andrew Tyrie: Lord Penrose's report will deal with whether the Treasury has fallen down in its job as regulator of the industry. However, we have the extraordinary situation in which the Treasury has the power to edit the report before it is published. The Financial Secretary says that it will be published in full, but she has also made it clear that it will be edited for legal reasons—as she puts it. I do not think that that will do. The situation is worrying hundreds of thousands of Equitable Life policyholders and annuitants, for whom the report is the only hope of justice. Some of them have told me that what is going on is like handing the man in the dock an advance copy of the judge's summing up for him to edit. A fortnight ago, I told the Financial Secretary that she could allay those concerns easily by handing the full report to the Chairman of the Select Committee on the Treasury—he is in the Chamber now—who could check whether the editing would be reasonable. I ask her once again: why will she not hand the full report to the Chairman of the Treasury Committee?
    Ruth Kelly: I am afraid that the hon. Gentleman is making allegations that he cannot sustain; he is also prejudging the content of the report. I have informed the House on several occasions that we intend to publish the report in full at the earliest opportunity. He must await the publication of the report.
    Miss Anne Begg: It is perhaps a reflection on my constituency that I have many constituents who have been caught up in the whole Equitable Life debacle. They, too, are awaiting the publication of the Penrose report. I hope that the Minister will accept that my constituents are concerned because they are not especially well off and several have lost a great deal of money. Could the whole process be speeded up so that they can get a resolution to the difficulties that they face?
    Ruth Kelly: I understand the point that my hon. Friend makes, and of course I sympathise with the distress suffered by many Equitable Life policyholders. Naturally, we will publish the report as soon as possible.

    Public Sector Deficit
    Brian Cotter: Whether he expects to meet his public sector deficit forecast this fiscal year; and if he will make a statement. [151549]
    The Chief Secretary to the Treasury (Mr. Paul Boateng): An updated assessment of public finance projections will be available as usual in the forthcoming Budget on 17 March.
    Brian Cotter: Does the right hon. Gentleman agree with yesterday's statement by the Institute for Fiscal Studies that, because of current deficits, the Government must increase taxation or reduce growth by 2006–07?
    Mr. Boateng: No, I do not agree, and I do not believe that the hon. Gentleman has studied fully the IFS green budget. Had he done so, he would have seen that it confirms the sustainability of UK public finances when underpinned by low levels of debt. We would never be able to enjoy those low debt levels if we had adopted the tax-and-spend policies espoused by the Liberal Democrats.
    Hugh Bayley: What assessment have Treasury officials made of Liberal Democrat proposals for tax commitments on the one hand and spending commitments on the other? What effect would they have on the deficit? If the deficit increased, what reduction in public expenditure on health and education would be necessary, given the amount of public expenditure that would go on debt repayment?
    Mr. Speaker: Order. The hon. Gentleman should not ask the Minister questions about Liberal Democrat policy—[Interruption.] Well, perhaps it would be better for him to write to the Liberal Democrats to find out.
    Mr. Oliver Letwin: I certainly would not want to ask any hon. Member to wait that long.
    I begin by thanking the Chancellor for his courtesy in letting us know the date of the Budget. Does the Chief Secretary acknowledge that the hon. Member for Weston-super-Mare (Brian Cotter) asked a sensible question? The IFS has produced a series of calculations that suggest that, in the next cycle, the Government will need to raise taxes to meet their own rules. Is that not true?
    Mr. Boateng: The right hon. Gentleman really ought to reflect on his own party's record in government. Under the stewardship of a Tory Chancellor of the Exchequer, net debt was about 44 per cent. of GDP. The reality is that the Government remain on track to meet their fiscal rules over the economic cycle on the basis of our cautious assumptions, which were clearly stated in the pre-Budget report. IFS projections confirm that the golden rule will be met in the current economic cycle.
    Mr. Letwin: That was a wonderful assembly of unanswers to my question. Let me put it to the Chief Secretary another way. He will have noticed, as we have, that it is not just the IFS that is on to this. The

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    International Monetary Fund and the Organisation for Economic Co-operation and Development, which are not employees of the Conservative party, the Liberal Democrats or anyone else in the House, have also come to the conclusion that the Chancellor's present level of borrowing and his present path of spending will mean—not in this cycle, to which the Chief Secretary referred, but in the next cycle—that he will need to raise taxes if the Government are re-elected. Is the Chief Secretary arguing that that is not the case?
    Mr. Boateng: I am glad that the right hon. Gentleman now admits that we will meet the golden rule in this cycle. That is a new departure for him—he has urged us to introduce policies that would involve a cut in our current spending plans and that would move us towards 35 per cent. of GDP, which would be disastrous for the economy and the country at a time when we are investing in the very public services that were grossly run down when his party had stewardship of the economy.
    Mr. Letwin: I do not know whether I will be able to persuade the Chief Secretary to engage in a genuine discussion of an important matter; he is so attached to policy-based evidence making that he is reluctant to engage in evidence-based policy making. Would it not be simpler for the Government to admit that the IMF, the OECD and the IFS have all concluded that in the next cycle—that is, after the election—the Government, if they are re-elected, will have to raise taxes? That is a serious problem that needs to be debated. Does he accept that it would be better if he admitted it, so that the public out there, who want us to have a serious and rational debate, could see us having a debate about whether it is in the interests of this country to raise taxes?
    Mr. Boateng: I shall resist the right hon. Gentleman's blandishments, but I urge him to have a serious and rational debate posited on the fact that we will meet our fiscal rules—fiscal rules to which he was never prepared to submit his party when it was in government. If he had done so, his party would never have met them, but if it had tried, at least we would not have had the net debt of about 44 per cent. of GDP that we inherited. We were paying back the debt that the Conservative Government had accumulated. They were paying more on interest than on health, education and transport, and we have had to deal with all that they abysmally failed to do.
    Mr. Russell Brown: Will my right hon. Friend confirm that the largest number of public sector jobs involve nursery staff, doctors, teachers and teaching assistants, and that the real route to dealing with the matter is by cutting the share of administration costs?
    Mr. Boateng: My hon. Friend makes a good point. He will welcome the steps taken by my right hon. Friend the Secretary of State for Health to cut administration costs and headquarters costs. My hon. Friend will also welcome the steps that we are taking as a Government, using the good offices of Sir Peter Gershon, to make sure we build that into the up-coming efficiency review.

    Stamp Duty Land Tax
    Mr. Tim Boswell: What recent discussions he has had with business representatives regarding the potential for reform of stamp duty land tax on leases. [151550]
    Mr. Julian Brazier: What steps he is taking to alleviate the effect of the new stamp duty land tax on leases on businesses. [151554]
    The Paymaster General (Dawn Primarolo): Following consultation with representatives of interested parties, substantial changes were made to the stamp duty land tax charge on the rental element of new leases, which will be of special benefit to small and medium-sized businesses. This means that all commercial leases, which would have been liable to stamp duty land tax under the original proposals, have now benefited from a £1,500 reduction.
    Mr. Boswell: Yes, but independent evidence suggests that the average pub licensee will face a tenfold increase in their tax bill, from £600 to £6,000. How on earth can that be justified?
    Dawn Primarolo: I do not accept that. In the commercial sector 60 per cent. of all leases will be exempt from stamp duty land tax. That compares with only 9 per cent. of leases that were exempt under the previous stamp duty regime.
    Mr. Brazier: The professional association suggests that independent children's homes are facing a fourfold increase in stamp duty. When the original provisions were introduced, was it the Minister's intention that a sector so important to the most vulnerable members of our community should be hit in that way?
    Dawn Primarolo: I know that the hon. Gentleman follows these matters closely, and he has demonstrated his interest in them a number of times in the House. All homes under the threshold are exempt. That has been clearly laid out in the House by my right hon. Friend the Chief Secretary and my hon. Friend the Financial Secretary.
    Mr. James Gray: What effect will the charge have on farmers on annual leases?
    Dawn Primarolo: The Treasury has been discussing with the Department for Environment, Food and Rural Affairs the extent of the changes with regard to the stamp duty land tax. DEFRA is fully aware of the requirements under the proposals in the legislation, and the matter will be taken forward.

    Employment
    Mr. John McFall: If he will make a statement on employment levels and the effect of unemployment on the economy. [151552]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Some 1.7 million new jobs have been created since 1997,

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    helping to create growth on target of 2.1 per cent. last year. The latest figures show that the claimant count is now just 3 per cent., that the labour force survey rate is 4.9 per cent., and that we have the lowest unemployment since the 1970s. For the first time in 50 years, unemployment in Britain is lower than in the euro area, Japan and America together.
    Mr. McFall: Since 1997, where have the majority of new jobs been created—in the public sector or in the private sector? In the public sector, where I hope that the Chancellor will continue the drive to cut waste, where exactly have the new jobs been created?
    Mr. Brown: I can tell my hon. Friend that 1.7 million jobs have been created, and that 1.2 million jobs have been created in the private sector. Of the jobs created in the public sector, 90,000 are classroom assistants, 20,000 are teachers, 50,000 are nurses, and there are nearly 20,000 more doctors and 10,000 more policemen. Before we made that investment, the lack of nurses, doctors, policemen, teachers and classroom assistants was holding back our public services and our country.
    As for administration costs, it is true that the Gershon inquiry mentioned by the Chief Secretary is examining how we can cut the costs of administration in the public sector. I have to tell the House, how ever, that the most appropriate measure of comparison between this year and 1996–97 is planned expenditure on central administration as a percentage of total Government spending, using the measures available at the time. That yields a figure of 4.4 per cent., falling in future years, against a plan of 4.9 per cent. in 1996–97. We do not yet have final out-turns because figures are not available for this year, but based on previous years' experience we would expect this year's out-turn to be lower than the 4.6 per cent. of total Government spending out-turn figure for 1996–97. So we will take no lectures from the Conservative party about administrative costs—that is the party that gave us the worst administrative burden with the waste of the poll tax.
    Mr. Roy Beggs: I congratulate the Chancellor on the policies that have been pursued, which have created so much opportunity and employment across the United Kingdom. We in Northern Ireland are enjoying the lowest levels of unemployment and the highest levels of employment in my lifetime. However, I plead with him to take account of the high costs of public liability insurance, which is crippling small businesses in Northern Ireland. Will he bear in mind the fact that success in creating employment in Northern Ireland is largely in the hands of small employers, many of whom cannot afford to pay the huge insurance costs that have been asked for and have simply sold off their businesses, making many people unemployed?
    Mr. Brown: I am grateful to the hon. Gentleman. We are concerned about employers liability insurance. It has been raised with the Treasury, and the Financial Secretary has had discussions with business. If the hon. Gentleman wishes to lead a delegation to the Treasury to go through the issues again, we are prepared to listen to his representations.
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    I thank the hon. Gentleman for welcoming the recent employment figures in Northern Ireland. In every part of this country, particularly in Northern Ireland, employment has been growing and unemployment has been falling. As is acknowledged on both sides of the House, that is a success story for the whole of the United Kingdom. The only people who are not prepared to acknowledge it are the Conservatives.
    Ms Sally Keeble: Is my right hon. Friend aware that in some parts of the country, particularly mine, the historically high levels of employment have created something of a problem of success—a skills shortage? What is he doing to increase skill levels, especially for those who have been excluded from jobs previously, and for women who are returning to work and want to become teachers and nurses, but face difficulties because the student finance and benefits systems do not work well together, or they find it hard to get child care?
    Mr. Brown: I know that my hon. Friend has taken an interest in the development of the new deal. There are 1 million more people in training now than in 1997 and we are endeavouring, through the university for industry—now called Learning Direct—employer training pilots, modern apprenticeships and the new deal, to give young people a guarantee of training, and every adult who does not have the skills that are necessary for a modern economy the chance to get them. We are making that investment, especially through the new deal. It is a tragedy for the country that the Conservatives oppose and would abolish the most successful employment programme in our history.
    Mr. Mark Prisk: The rising tax burden is, as we have heard, hitting jobs in shops, clubs, bars and hotels, especially through stamp duty land tax. Yet Treasury Ministers seem unaware of what is happening. In a written answer last week, the Financial Secretary told me that stamp duty land tax would
    "prevent the avoidance of stamp duty that was formerly common in commercial transactions".— [Official Report, 19 January 2004; Vol. 416, c. 1030W.]
    Yet— [Interruption.]
    Mr. Speaker: Order. Front-Bench Members get some elbow room.
    Mr. Prisk: Yet—[Interruption.] This question is important—it is about jobs—so I hope that the Chancellor will listen. Despite the Financial Secretary's statement, we learn that business representatives have been told completely the opposite by the leading civil servant in this area—the director of the Stamp Office. He told business representatives that
    "avoidance of duty on leases"
    is
    "not currently a problem."
    Given the impact of the tax on jobs, who is right—the Chancellor's Financial Secretary or his officials?
    Mr. Brown: First, that was the subject of the previous question. Secondly, all hon. Members who consider the matter objectively know that there must be a level

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    playing field between leases and purchases, and that we must take action on distortions, especially avoidance that loses revenue that should not be lost to the Treasury. As for the hon. Gentleman's claims that jobs are being lost in record numbers in a series of sectors, he should examine the figures, not least those for the constituency of the shadow Chancellor, where unemployment is 0.9 per cent. The Conservative party should go back to the drawing board, support the new deal and scrap the vicious right-wing policy to abolish it.
    Jon Trickett: Is not it a matter of great pride that in former coalfield areas such as my constituency, where in 1997 there were 500 long-term unemployed adult males, the figure is now 60? The Chancellor should be congratulated on that. However, is he aware of the number of people in former coalfield areas who suffer from long-term limiting illnesses, that exclude them from the labour market? In Featherstone, Hemsworth, South Kirkby and South Elmsall in my constituency, 28 per cent. of the adult population are excluded from the labour market through the legacy of the coal mining industry. Can the Chancellor help those people who want to return to work to do so, and offer care to those who cannot?
    Mr. Brown: I am grateful to my hon. Friend for his work to help redundant miners back to work. Work is being done in many constituencies in the area through the reconstruction plans and coalfield regeneration plans to get many people who would otherwise be long-term unemployed into jobs. That is happening throughout the country. Hon. Members will be interested to know that long-term unemployment has fallen by more than 70 per cent. and that long-term youth unemployment has also fallen by more than 70 per cent. In the mid-1980s, there were 350,000 young people in that category, but now there are fewer than 5,000—that means that an average of eight people per constituency are unemployed for more than a year. In the shadow Chancellor's constituency, there are 10 long-term unemployed people over 25.

    Investment in Residential Property
    Hywel Williams: What assessment he has made of the likely change in investment in residential property as a consequence of his proposed changes to (a) self-investment and (b) self-arranged personal pension schemes. [151553]
    The Financial Secretary to the Treasury (Ruth Kelly): The Government's technical paper, "Simplifying the taxation of pensions: the Government's proposals", proposes allowing pension funds to invest in all types of investments, including residential property. The impact of this change, if introduced, will depend on the extent to which trustees and administrators decide that residential property is a suitable pension scheme investment.
    Hywel Williams: Will not any conscientious tax adviser advise investment that yields greater returns—for example, in areas such as my constituency, where house price inflation was 30 per cent. last year? Does the Financial Secretary believe that there will be any
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    regional variation in the rate of investment in housing? What would be the impact of that new money on local housing markets and the ability of first-time buyers to participate?
    Ruth Kelly:Clearly, the overall impact of the changes will depend on how attractive an investment property is seen to be. Concerns have already been expressed that property will not hold its value over the longer term or perform as well as the equity markets. I know that the hon. Gentleman has a particular concern about second homes being bought in Wales, and I understand that. I have checked this point, and a tax charge would apply if second homes were used for private purposes, so there would be no new incentives to buy second homes in Wales through that channel.

    World Debt
    Mr. Desmond Swayne: What progress has been made with respect to debt relief for the poorest countries. [151556]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Twenty-seven countries are already receiving more than $70 billion of debt relief, of which 10 have completed the process. Seven others have not yet received debt relief because they are in conflict; a further three have not done so due to internal instability and governance issues; one other has not applied. A number of other countries, including Sudan, Liberia and Congo, should enter the debt relief process soon.
    Mr. Swayne: Does the Chancellor agree that the greatest leverage that we could have on the problems faced by the poorest countries would be provided by giving them greater opportunities to trade with us? What prospect is there of driving forward such an agenda with our principal allies?
    Mr. Brown: I am grateful to the hon. Gentleman for raising the issue of trade in the context of debt relief, because we all know that what is needed for countries, especially those in Africa, to move forward is a combination of debt relief, the necessary aid and, most importantly, the development of their economies. That requires them to be able to trade with the developed countries, which is why there is a premium on reopening the world trade talks; that is in everyone's interest. There was an American initiative only a few days ago, and we are hoping for a positive response in greater detail from the European Union. The matter will also be discussed at the G7 in Florida, and there was a meeting of Trade Ministers just before Christmas to consider some of the issues. I hope that we can move forward very quickly, and I believe that once the Singapore issues are cleared from the deck and there has been movement on agriculture, it will be possible that this will genuinely become what was originally called the Doha development round. That means development helping developing countries.
    Mr. Torn Clarke: Will my right hon. Friend the Chancellor build on his truly remarkable achievements on debt by bearing in mind in his discussions with the G7 and G8 countries,

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    the World Bank, the International Monetary Fund and so on, the problems of the countries that experience genocide, such as the Democratic Republic of the Congo, which he mentioned? If those countries can make the most of their mineral wealth and share it widely, we shall achieve not only poverty reduction but the millennium goals, to which he is absolutely committed.
    Mr. Brown: I am grateful to my right hon. Friend. He has spoken on these issues over many years and visited many of the countries that he is asking us to consider. I have added Congo to my list, although it was previously not regarded as a country that would ever qualify for the heavily indebted poor countries process. However, conflicts are being ended in Congo, Sudan and Liberia. Because of that, although it will cost the international community substantial amounts of money—running into billions of dollars for those three countries—to give the debt relief, it is right that they should be offered the chance to be part of the process. It is also right that we should help them to reconstruct their economies after conflict, and, in particular, that we help them to get their health, education and other social services systems moving so that their people can genuinely see that out of conflict, there is a way forward.
    Mr. Alistair Carmichael: Has the Chancellor of the Exchequer considered the terms of the report produced by IMF researchers towards the end of last year, which suggested that the heavily indebted poor countries initiative could be running into difficulties? The report concluded:
    "Unless HIPCs improve their primary fiscal positions or grant financing is sustained at current, or possibly higher, levels, debt sustainability in HIPCs may prove elusive"
    in the long term. Does the Chancellor concur with that assessment of the initiative, and if so, which course would he like to see the HIPCs following: raising taxes or a higher level of aid coming from developed countries?
    Mr. Brown: I am grateful to the hon. Gentleman for raising the issue of what will happen now in the IMF and the World Bank. The issue of debt relief will not and must not be forgotten. That is why, when I chair the IMF committee that will meet in Washington in April, and when the World Bank development committee meets, we shall consider that very issue raised by the IMF report. We shall discuss whether we can reach agreement on what is called topping up—that is, getting more money for the poorest countries at the point at which their debts are being written off—and on taking into account some of the changes that have taken place. For example, in some cases commodity prices have collapsed, and in others there have been problems in relation to trade.
    Equally, we will have to look specifically at country-by-country solutions for many of those people, which is why the poverty reduction plans that have been produced by the World Bank are very important. In the long run, the way forward, in my view, is the international finance mechanism that we propose. That allows us to do exactly as happened when the World Bank was formed in 1945: to provide a mechanism for financing that involves both the public and private
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    sector but guarantees the up-front money that is necessary if we are to meet the millennium development targets for each country.

    NHS Funding
    Mrs. Ann Cryer: If he will make a statement on funding the NHS through general taxation. [151557]
    The Chief Secretary to the Treasury (Mr. Paul Boateng): This Government are firmly of the view that the most efficient and equitable way of funding the NHS is through general taxation—an NHS that is free at the point of use.
    Mrs. Cryer: I thank my right hon. Friend for that very pleasing reply. Is he aware that Airedale general hospital is not only an excellent facility but is the biggest employer in my constituency? The vast majority of those employees are doctors, nurses and those giving essential support such as cleaners, maintenance workers and medical secretaries, without whom the medical care so much appreciated by my constituents could not be given.
    Mr. Boateng: I am grateful to my hon. Friend for the care and attention that she pays to health care services in her constituency, whether that means a magnetic resonance scanner or mental health services. The whole NHS team, including the ancillary and support workers whom she mentioned, have enabled us to deliver 450,000 more operations a year than took place in 1997, 15,000 of which were heart operations and 90,000 of which were cataract operations, as well as 8,000 more hip replacements and 12,000 more knee replacements. Each of those numbers is higher than in 1997. That is good news, and it is achieved only by the sort of team working of which my hon. Friend is so supportive in her constituency.
    Miss Anne McIntosh: I should perhaps declare an interest in that my brother is a GP in north Yorkshire. Will the right hon. Gentleman tell the House what the additional cost to the taxpayer will be of the out-of-hours service for GPs in north Yorkshire from 1 April, and of the additional costs under the working time directive of training and recruiting more doctors, particularly in the mental health sector of the NHS?
    Mr. Boateng: Certainly, I will write to the hon. Lady on the specific costs in relation to north Yorkshire. I am sure that she will fairly appreciate and give credence to the fact that none of those improvements could be achieved were we to adopt the spending policies advocated by Conservative Members.
    Mr. Stephen McCabe: Does my right hon. Friend agree that any attempt to suck general taxation funds out of the NHS and use them to subsidise the private health sector would be disastrous for the NHS? Is that not a classic example of a cynical ploy that would attack the health of the nation and mean that the many would end up funding the privileges of the few?
    Mr. Boateng:My hon. Friend makes a fair point. That is precisely the policy that Conservative Members

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    seem to be suggesting. It would involve a dead-weight cost of some £1 billion, which could be met only by cutting back on the gains that we have made for the NHS since 1997. That would be an absolute disaster, and would add still further to the inequalities in health that we inherited from the stewardship of the Conservative party.

    Financial Forecasts
    Sir Michael Spicer: When he will publish revised forecasts for the public finances. [151561]
    The Chancellor of the Exchequer (Mr. Gordon Brown): An updated assessment of public finance projections will be available as usual in the forthcoming Budget on 17 March.
    Sir Michael Spicer: May I repeat the question that I asked the Prime Minister yesterday, to which I got a hopeless non-answer? Why are the balance of payments deficits and fiscal deficits now totally out of control?
    Mr. Brown: The current account deficit in 2002 stood at 1.8 per cent. of GDP, well below past peaks. In 1989, under the hon. Gentleman's Government, the current
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    account deficit reached more than 5 per cent. of GDP. As far as the public finances are concerned—the second deficit—he may know that the deficit in America is between 5 and 6 per cent., in Japan it is 7 per cent., in Germany and France it is 4 per cent. or more, and in Britain it is 3.2 per cent. I ask him to recall that the deficit in the early 1990s under the Conservative Government was not 3.2 per cent.; it was more than 8 per cent.
    Roger Casale: Is it not the case that while many countries continue to suffer from the global recession—France and Germany cannot even stay within the European Union stability pact—this country is investing more in public services against a background of economic growth? We have our public finances under control, and recent reports by the OECD, the IMF and the World Bank demonstrate that the British economy and public finances stand up well to any international comparison, despite the attempts by Conservative Members to talk down not only the British economy but the achievements of this Government.
    Mr. Brown: We meet our fiscal rules, which would never have happened under the previous Government, and we will not engage in public spending cuts. If the shadow Chancellor persists in saying that he will announce public spending cuts because people say that our spending is horrifically too much. I know what the people of this country will say to him.

Business of the House
12.31 pm
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 2 FEBRUARY—Remaining stages of the Horserace Betting and Olympic Lottery Bill.
TUESDAY 3 FEBRUARY—Remaining stages of the Child Trust Funds Bill.
WEDNESDAY 4 FEBRUARY—Debate on Lord Hutton's Report on a motion for the Adjournment of the House, which will be opened by right hon. Friend the Prime Minister and closed by my right hon. Friend the Secretary of State for Defence.
THURSDAY 5 FEBRUARY—Motions On the Police Grant Report (England and Wales) 2004–05, followed by a motion on the Local Government Finance Report (England) 2004–05.
FRIDAY 6 FEBRUARY—Private Members' Bills.
The provisional business for the following week will be:
MONDAY 9 FEBRUARY—Second Reading of the Scottish Parliament (Constituencies) Bill.
TUESDAY 10 FEBRUARY—Opposition Day [4th Allotted Day]. There will be a debate on a motion in the name of the Liberal Democrats, subject to be announced.
WEDNESDAY 11 FEBRUARY—Motion to approve the Northern Ireland Arms Decommissioning Act 1997 (Amnesty Period) Order 2004 followed by Opposition half-day [5th Allotted Day] (1st Part). There will be half-day debate on an Opposition motion. Subject to be announced.
THURSDAY 12 FEBRUARY—Motion to take note of the outstanding reports of the Public Accounts Committee to which the Government has replied. Details will be given in the Official Report.
I should also like to inform the House that the business in Westminster Hall for February will be:
THURSDAY 5 FEBRUARY—A debate on the report from the Broadcasting Committee on the rules of coverage.
THURSDAY 12 FEBRUARY—A cross-cutting question session on "healthy living", followed by a debate on the report from the Science and Technology Committee on light pollution and astronomy.
THURSDAY 26 FEBRUARY—A debate on the Report from the Public Administration Committee entitled "On Target? Government by Measurement".
The House will wish to be reminded that, subject to the progress of business, we will rise for the half-term week on Thursday 12 February and return on Monday 23 February. The House may also wish to be reminded that my right hon. Friend the Chancellor of the Exchequer has announced that the Budget will take place on Wednesday 17 March.
Mr. Heald: I thank the Leader of the House for giving us the business. The local authority and police grant
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debate will be one of the most important next week for all Members. Why has it been placed on the shortest day, given that the business on Monday and Tuesday looks somewhat light?
Can we have a proper debate in Government time on the deplorable decision, which has been implemented today, to downgrade cannabis and skunk and reduce enforcement in cases involving them? Does the right hon. Gentleman agree that that decision will lead to many more people experiencing the miseries of mental ill health and send out a message that the Government do not mind if our young people mix with hardened criminal pushers or join the first rung of the ladder that leads them to hard drugs use?
Why is it that this country cannot handle snowfalls, and everything just grinds to a halt? Has no one in the Government noticed that it seems to be an annual occurrence? Are Ministers aware that traffic is gridlocked; roads have not been gritted; schools are closed; flights have been cancelled; and cities such as Norwich have been cut off, leading the Salvation Army to open its hostels for the stranded? It is sheer blooming misery for commuters. Can we have a statement from the Minister in charge of our response to snow? And by the way, just who is that?
The Government suffered a narrow victory, by five votes, on the top-up fees issue on Tuesday. Should not the Standing Committee on the Bill reflect not only the party political composition of the House but the strength of opinion as expressed in the Division on Tuesday? The arrangements are set out clearly on page 693 of "Erskine May". Will the Government follow precedent and ensure that the Labour rebels are fairly represented on the Committee? Does the Leader of the House agree that the Committee should not have a Government majority of more than one?
The Leader of the House will have heard the calls from both sides of the House for a full inquiry into how this country went to war in Iraq. He will know that the Franks report followed the far less controversial Falklands war. The public want to know why the Government said that there were weapons of mass destruction, yet none were found. Can we expect an early statement—[Interruption] Hearing the noise from the Liberal Democrats reminds me that one hon. Member asked me to call for a debate on the plague of wild boars on the Kent-Sussex border. It may be that that plague has spread a little closer to this place than we had realised.
Mr. Hain: On the hon. Gentleman's last point, I was interested to note that the ritual demand that we have heard from him in the past few weeks for a two-day debate on the Hutton report was not repeated. Why is that? Well, he has double standards. The report did not say what the Tories wanted it to say and that is why he is no longer interested in a two-day debate on the Hutton report. The truth is that the Conservatives should have the good grace to admit that they were wrong to accuse the Prime Minister of lying, wrong to impugn my right hon. Friend the Secretary of State for Defence, and wrong to accuse the whole Government machine—including civil servants—of falsifying evidence and manipulating procedures. The Leader of the Opposition should have the good grace to make a full-blooded apology, in the Opposition's time.

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On the question of a wider inquiry, the Iraq survey group has been completing its work—
Michael Fabricant: When will it finish?
Mr. Hain: As the hon. Gentleman reminds us. it has no date for completion of that work. Iraq is a big country, and the results will not fit into a Conservative timetable for a debate in the House of Commons. The group will complete its work, and I remind hon. Members that it has uncovered considerable evidence of Saddam Hussein's weapons of mass destruction programmes. I would be happy to quote the evidence from Dr. Kay, if the House wishes me to do so. Let us have no more hypocrisy. Instead, let us have some apologies from the Leader of the Opposition and the chairman of the Conservative party, who have criticised the Government for lying—they have been at it again in the past few days. They should come to the House and apologise because, according to Lord Hutton, their accusations are unfounded.
The hon. Gentleman raised some specific issues. On the local authority finance and police grant reports debate, the issues will not be cleared until the Joint Committee on Statutory Instruments a few days before. There will be plenty of time to discuss the reports, so that is a bogus point, if I may say so.
On cannabis, I want to be clear about what the hon. Gentleman is saying.
Mr. Heald: We want a debate.
Mr. Hain: The hon. Gentleman has an Opposition day coming up soon and there was a debate on the issue in Westminster Hall only recently. The truth is that this is another example of Conservative opportunism.
The declassifying of cannabis will be done in order to ensure that we do not devalue and discredit the message on hard drugs. It is very important that we persuade people, especially youngsters, to concentrate on avoiding the really hard drugs that they might be dragged into supporting if they were put in the same bracket as cannabis.
I thought the hon. Gentleman's question about snowfalls particularly impressive. As he knows, snow has been a periodic problem. We are continually trying to improve our rate of response to it, and will go on doing so.
Let me say something about a wider question. I know the hon. Gentleman will take it seriously, because he is concerned about these matters as well. I think it important that we respect each other's integrity in the whole conduct of politics, as we do in the House. Public and political debate, in the BBC and other broadcasting outlets or elsewhere in the media, must once more involve an honest clash of policies and politics rather than constant attempts to challenge each other's integrity.
Mr. Paul Tyler: I agree with that, but may I return the Leader of the House to
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arrangements for next week? Can he confirm information given yesterday by the right hon. Member for Dewsbury (Ann Taylor), who chairs the Intelligence and Security Committee, that the Government's response to the Committee's report "Iraqi Weapons of Mass Destruction—Intelligence and Assessment" will be published early next week? That would enable Members to consider the information and recommendations before the Adjournment debate on the Hutton report. The right hon. Lady also said that the debate would be wide-ranging and need not confine itself to the narrow remit of Lord Hutton's inquiry, and I hope that the Leader of the House will agree to that.
Does the right hon. Gentleman accept that the point at issue is not just whether the so-called dodgy dossier was "sexed up", but the location of those threatening weapons of mass destruction on which the Government relied so much? Does he also accept that, as I said on behalf of my colleagues last week, the circumstances surrounding that wide-ranging debate are exceptional and it should therefore continue until at least 10 pm? He may now regret telling me last week that the only exceptional circumstances that he could envisage that might necessitate such an extension were those in which Members needed to go on holiday.
Mr. Hain indicated dissent.
Mr. Tyler: Well, he can put that right now. I hope that he will now say that the circumstances are exceptional, because this is an extremely important issue.
The right hon. Gentleman mentioned David Kay and the evidence that he has given in Washington. In the light of the undoubted failures of United States and United Kingdom intelligence—no one can deny that now—on the real nature of the threat that faced us from Saddam, does the right hon. Gentleman not accept that there is a case for a wider inquiry? The fact that Conservative Members swallowed those spurious threats and that dodgy dossier does not mean that the whole House should.
Mr. Hain: I am afraid that I cannot help the hon. Gentleman on whether the report will be published next week. That is in the hands of the Committee.
Mr. Tyler: I was asking about the Government's response.
Mr. Hain: I am sorry. Obviously it is in everyone's interest to have the Government's response before the debate. I will let the hon. Gentleman know whether that will be possible. I agree that it is important for us to have all the background.
How wide or narrow the debate is will be a matter for you, Mr. Speaker, but I can tell the hon. Gentleman that we as a Government are very confident—not just confident because we have come out of the detailed inquiry by Lord Hutton as we have, but confident about our whole policy on Iraq and weapons of mass destruction. Let me remind him of what David Kay actually told Congress recently, as opposed to some of the spin that has been put on it:
"We have discovered dozens of WMD-related program activities and significant amounts of equipment that Iraq concealed from the United Nations during the inspections that

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began in late 2002…A clandestine network of laboratories…A prison laboratory complex, possibly used in human testing of BW agents…Reference strains of biological organisms concealed in a scientist's home…BW-applicable agents…work on ricin"
and other toxic agents,
"plans and advanced design work for long-range missiles"
and a
"systematic sanitisation of documentary and computer evidence in a wide range of offices, laboratories, and companies suspected of WMD work."
Far from there being a massive failure of intelligence, as the hon. Gentleman asserts, I believe that the work of the survey group will confirm David Kay's statement to Congress:
"I think the world is far safer with the disappearance and removal of Saddam Hussein. I have said I actually think this may be one of those cases where it was even more dangerous than we thought."
And he was the person who led the investigating team.
As to the handling of the debate, I have always said that we needed to await the report before announcing who would open and close the debate and the time allowed—which I have now announced. I do not think that a longer debate is necessary, but the Liberal Democrats will have an Adjournment debate soon and could choose that subject if they wish.
Mr. Dennis Skinner: Instead of bothering with a day on the Hutton report, because it has all been said—the Tories do not like the report because it comes down in favour of the Government and against the BBC—will the Leader of the House use that day instead for a debate on the few pits remaining in Britain? Most of them—about 300 or 400—were closed between 1979 and 1997 but the few left need money. Does he accept that if it is possible for the Government to step in—as they did with Railtrack, Connex and the Jarvis contracts—to save lines, it would make sense to do the same for pits in danger, such as Hatfield and Selby? If private entrepreneurs such as Budge and others refuse to do anything to save jobs, the Government should do what they have done for the railways, take the pits over and make sure those jobs are saved.
Mr. Hain: I understand my hon. Friend's passion, being myself a Member of Parliament who represents a coalfield community—which my hon. Friend was kind enough to visit some years ago. I share many of his sentiments and we will continue to do what we can to help a viable coal industry succeed. He will also understand, however, that tens of millions of pounds have recently been given in aid to pits across the country, including in constituencies in South Wales. Over the years, billions of pounds have been given to the coal industry. We must judge any further support against that background.
Mr. Douglas Hogg: May I take the Leader of the House back to the question asked by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), to which the right hon. Gentleman did not respond, concerning the composition of the Standing Committee on the Higher Education Bill? The right hon. Gentleman will remember the point of order that I raised with Mr. Speaker on the night of the Second Reading debate and
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will have in mind page 693 of the 22nd edition of "Erskine May", which makes it plain that in nominating Standing Committee members, the Committee of Selection shall always ensure
"in the case of bills which divide the House on cross-party lines, that the strength of opinion as expressed in any division at second reading is properly reflected".
Does the Leader of the House agree that that in effect means that as the Government had a majority of five on Second Reading, they are only entitled to a majority of about one on the Standing Committee? If the Committee of Selection does not observe the precedent and rule fully set out in "Erskine May", will the right hon. Gentleman make a statement to the House next week as to why not?
Mr. Hain: The right hon. and learned Gentleman rightly raises that point again, as I overlooked it when replying to the shadow Leader of the House. The Committee of Selection will want to consider that matter carefully but the rules are clear. I remind the right hon. and learned Gentleman that the Division was principally if not exclusively on party grounds, but his point will be borne in mind.
Mr. Harry Barnes: I offer to help the Government out on the Committee considering the top-up fees, so I hope that will be taken into account.
Has my right hon. Friend seen early-day motion 445?
[That this House believes that the supreme sacrifice of British servicemen and women who are killed in the line of duty, in war, peacekeeping or as a result of terrorism, should be acknowledged through a posthumous medal similar to the United States Purple Heart or the Memorial Cross of Canada and New Zealand, which can be presented to the next of kin and worn with pride on Remembrance Day; accepts that suitable criteria for such a medal need to he carefully defined and that this is best done by the Ministry of Defence in consultation with The Royal British Legion and forces' associations; and urges the Ministry of Defence to accept the policy and instigate such discussions.]
It deals with posthumous medals for British servicemen and women who have been killed in the line of duty during wars or peace-making activities or as a result of terrorism and asks that such medals should be in line with the US purple heart and the memorial cross in Canada and New Zealand. It has cross-party—and left, right and centre—support, so could we have a statement, which would compensate for the fact that I had to pull a question on the matter for Monday's Defence questions because I had duties on the British-Irish Inter-Parliamentary Body?
Mr. Hain: I am not sure that we would want to take up my hon. Friend's. offer of help because I am not sure what kind of help that might be for the Government, but his generosity will be noted.
On the serious issue that he raised, there was the recent case of my constituent, Private Ryan Thomas, who was killed in action in Iraq. I know that individuals in the area pressed that case. There is no tradition in this country of awarding medals for which a prerequisite is the prior death of the recipient. This is a difficult issue and I know that the Secretary of State for Defence will

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keep it under constant review because I know of the strong feelings on this matter, about which my hon. Friend rightly reminded the House.
Mr. Hugo Swire: In the last few days, letters have gone out from the Minister for Local Government, Regional Governance and Fire to fire authorities up and down the country. In respect of my own fire authority, the letter announced that next year's funding would be capped at 5 per cent.—and that at a time when it has to meet pay increases of 23 per cent. That could well lead to cuts in personnel, closure of fire stations and a reduction in coverage throughout the country. Given that next week's business is fairly light, would the Leader of the House consider granting Government time to debate that serious issue as a matter of priority?
Mr. Hain: We have no plans to grant Government time to debate that matter. I am doubtful about the hon. Gentleman's 23 per cent. pay increase—I do not recognise that figure—but he can apply for a debate in the usual way if he wishes.
Mr. Martin Salter: Will the Leader of the House consider holding a debate on the use and abuse of parliamentary privilege, particularly in view of Conservative Members' disgraceful allegations about the Prime Minister, accusing him of lying to the House and the country? Those are allegations that Lord Hutton has proved to be unfounded, allegations that should never have been made and allegations that should now be withdrawn and apologised for.
Mr. Hain: I would be very enthusiastic about finding time for a debate on those matters and I will certainly look into it. To add to my earlier point, some of the attacks made by the Leader of the Opposition have been despicable and contemptible and ought to be withdrawn. It is one thing to put tough questions and make strong points to the Prime Minister across the Dispatch Box—that is the Opposition's role—but quite another to challenge his integrity and accuse him of lying. I think that the Leader of the Opposition should withdraw those allegations forthwith and, if that does not happen, perhaps there is a case for a sensible debate about the way in which we conduct politics in this country.
Mr. Nigel Dodds: May we have an early debate on education in Northern Ireland? The Leader of the House will be aware that the Minister responsible for education in Northern Ireland announced earlier this week the abolition of academic selection and the 11-plus exam from 2008. That runs contrary to the wishes of the population at large and, in the absence of the Northern Ireland Assembly, can the Leader of the House ensure that time is made available for a debate on that very important issue, which affects everyone in Northern Ireland?
Mr. Hain:If the hon. Gentleman is so certain that it runs contrary to the wishes of the population of Northern Ireland, why does he not support going back
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to devolution and the establishment of the Northern Ireland Assembly, which the Government are seeking to bring about? I understand that the decision was taken in consultation with the now, as it were, in abeyance education Minister, so it does reflect what the Assembly would have decided to do in any case.
John Cryer: In common with the Leader of the House, I cannot imagine why the Tories have abandoned their call for a two-day debate on the Hutton inquiry—something must have changed. I would like to help Conservative Members by saying that I have some sympathy with the idea of having a two-day debate, which would allow them to tell the House why this morning Conservative Back Benchers were being pushed around the studios to smear Hutton, to attack the Government and to argue—after months of saying that we had to rely on Lord Hutton's integrity—that we can no longer rely on the integrity and judgment of Lord Hutton. It would also allow us to hear why Conservative Members, who were all gung-ho for war, ran in the opposite direction as soon as they spotted the first problem.
Mr. Hain: I agree with my hon. Friend. Having failed to undermine the integrity of the Prime Minister, some Conservatives, with support in the media, are trying to undermine the integrity of the judge, Lord Hutton. That is wholly contemptible. It is extraordinary that while I was on "The World Tonight" on Radio 4 last night, the presenter asked me the question whether the Government had fixed the judge. That was on BBC Radio 4—on a serious programme. I believe that some questions really should be asked in the BBC and in the media about the level of debate if it has reached such a dreadful state. We need a regrouping and a reconsideration to discuss issues properly instead of trying to pretend that everyone in politics, whether in the Opposition or the Government, is a liar. Down that route lies the destruction of democratic debate and, ultimately, of democracy.
Sir Nicholas Winterton: Will the Leader of the House tell me and the House when the Government intend to respond to the Procedure Committee's report on "Sessional Orders and Resolutions"? The recommendations are strongly pressed by Mr. Speaker—if he is able to express a view—and by hon. Members on both sides of the House. Similarly, what of another report, which is particularly important to Back-Bench Members—the report on "Procedures for Debates, Private Members' Bills and the Powers of the Speaker"?
Mr. Hain: To be fair, I acknowledge that the hon. Gentleman has raised this matter with me across the Floor before and he has not had the response that he wishes. We are consulting with the Home Office as regards matters affecting the palace and the House. We will try to have a debate and bring a resolution of the matter to the House as soon as we can. There are complex issues at stake, but the hon. Gentleman is entitled to keep pressing me on the matter.
Jon Trickett: I remind the Leader of the House that I spoke against the war on many

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occasions and voted against it, and that I am an equally passionate defender of the BBC. However, does my right hon. Friend agree that the prevailing ethos in certain BBC programmes is very undermining of democracy in the sense that there is massive scepticism about the nature of politics and politicians? Is that not profoundly dangerous for democracy and something that is turning off vast numbers of citizens from politicians? The BBC appears to have a culture of distaste and disdain for politicians and politics.
Mr. Speaker: Order. I take it that the hon. Gentleman wants a debate on that matter.
Mr. Hain: I am not sure that I can promise my hon. Friend a debate on that matter but, for the reasons he gave, I think the House should consider it. It is not a problem that is exclusive to the BBC, though it is at fault. All broadcasters, the whole coverage of politics, the Westminster bubble that we as politicians of the Government and Opposition occupy together with the Westminster lobby—together we are all conducting politics in a way that is turning off voters, listeners, readers and watchers by the million. It is time that we got back to a position in which issues are clearly discussed and differences debated—toughly, yes, but we must get out of the spin that is endemic in the media—
Mr. Eric Forth: Oh!
Mr. Hain: Absolutely. We must get away from treating every issue as a gaffe, a split or a personality clash. There are tiny nuances of words and the media go chasing off on a new story in their 24-hour news agenda. That is demeaning of politics and, ultimately, it is not in the best interests of the media either.
Mr. Andrew Mackay: Let me bring the Leader of the House back from his Westminster bubble to an issue that worries people up and down the land—the Higher Education Bill. Let us think about the Committee stage of the Bill, which will take place shortly. I put it to the Leader of the House that with a majority of only five, it would be right and proper for the views of the House to be fully reflected on that Committee and for the Government to have a majority of only one. If that did not happen, it would bring the Government and Parliament into disrepute and would look like a fix. We would then be going back down the road that the Leader of the House just said he did not want to go down.
Mr. Hain: I take the right hon. Gentleman's point, and the Committee of Selection will wish to bear it in mind, as his colleague the hon. Member for Macclesfield (Sir Nicholas Winterton) said earlier.
Mr. David Chaytor: My constituent Michael Connell, a young man of 19 with learning difficulties, is in jail in Thailand facing charges of smuggling a small quantity of ecstasy tablets, thereby facing the possibility of a life sentence in a Bangkok jail. Leaving aside the interesting question of why Michael was arrested immediately on arriving in Bangkok—and which authorities provided the information to the Thai police that formed the basis of that arrest—does my
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right hon. Friend agree that given the growing numbers of young people from the United Kingdom travelling the world to countries such as Thailand, where the judicial system is different from ours, we need a debate on the implications of foreign criminal justice systems for UK nationals? I pay tribute to the work of the embassy in Bangkok in assisting Michael Connell, but this issue potentially affects every parent in the United Kingdom with a son or daughter travelling internationally. Will my right hon. Friend find time for a debate on this matter?
Mr. Hain: I am grateful to my hon. Friend for praising our embassy in Bangkok. All our embassies and posts overseas do extraordinarily important work on our behalf, often to incredibly high standards. The specific plight of his constituent, Michael Connell, will be of continuing concern, as the Foreign Office is involved. I know that the Foreign Office and the Home Secretary will want to look closely at the issue that my hon. Friend has quite properly brought to the attention of the House.
Richard Younger-Ross: Will the Leader of the House persuade the Secretary of State for Health to make a statement on dentistry? In Teignbridge, six practices have deregistered or closed. Patients wishing to register with the NHS are now given the option of going to Plymouth or to Cullompton—32 miles away in either direction. Does the Leader of the House think that that is acceptable, particularly for people on benefits who, effectively, have been denied any NHS dental treatment?
Mr. Hain: I am not aware of the detail of the situation; obviously the hon. Gentleman, as the local MP, is. Those distances sound large to me. I know that the Secretary of State for Health will want to look closely at the matter, which the hon. Gentleman might like to follow up with an Adjournment debate or by lobbying the Department of Health.
Joan Ruddock: This week, senior members of the Government—including my right hon. Friend the Leader of the House—have acknowledged the need for greater dialogue before controversial matters reach the decision stage. Why has there been no debate in this House on genetically modified crops grown in this country? It is thought that the Government will take a decision on licensing GM maize within a month. Will he guarantee to the House that no decision will be taken until there has been a debate on the Floor of the House?
Mr. Hain: I congratulate my hon. Friend on her persistence in raising this matter, quite properly, in the House. Her concern about the future of genetic modification is shared widely across the House and the country. For that reason, as soon as we are in a position to do so we are committed to having a debate. I am sure that there will be no question of proceeding with any decision until the debate has occurred.
Mr. Nick Gibb: May I say how much I agree with the Leader of the House about the conduct of politics in this country?

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To that end, can we have a full debate on the future of the BBC? From the Hutton report, it is clear that Andrew Gilligan was wrong in the allegations that he made on the "Today" programme; the BBC management was wrong in not investigating the Government's claims properly; and the board of governors of the BBC was wrong in not making its own investigations into those complaints. In my view, the BBC is handling its response to the Hutton report in a defensive and arrogant way. In the face of the criticisms in the Hutton report, all of the BBC governors—not just the chairman—should resign, and so should the director-general and the head of news. Can we have an urgent debate to discuss these important issues facing the BBC?
Mr. Hain: I am not sure when and where there might be an opportunity for such a debate, but the hon. Gentleman raises some serious points. Essentially, I take his point to be about the standard of journalism in the BBC as identified by the Hutton report, particularly the Andrew Gilligan episode. His wider point is about the standard of journalism in the media and its interaction with politics. We are not innocents; Ministers and Opposition politicians are caught up in the 24-hour news agenda swirl. Instead of seeking to report, challenge and question what is going on, journalism now seems to be trying to set its own agenda. That is the heart of the problem that the BBC has got itself into and from which it must escape.
Mr. Clive Betts: I refer my right hon. Friend to the decision that the House took on tuition fees on Tuesday, which, for many of us, was the culmination of a highly unsatisfactory process. Will he find time for a debate—and will he consult widely—on how we can involve Back Benchers more fully in the production of policy, particularly in complicated areas such as higher education funding? In particular, will he give thought to the greater use of Green Papers by the Government, the regular use of draft Bills and the fuller involvement of Select Committees in considering such matters?
Mr. Hain: I very much agree with my hon. Friend. The Government are reflecting on the lessons of the Higher Education Bill, and we discussed the matter in Cabinet this morning. The policy was absolutely right, but the process that led to the Second Reading debate this week could have been improved. My hon. Friend makes suggestions about pre-legislative scrutiny—which would involve all hon. Members—and, in a Labour party context, using the policy-making processes of the parliamentary party and the national policy forum. Through that process, hard choices can be made and not ducked. It is important that we bear that in mind, as the Prime Minister is emphasising in his speech today. Better understanding and consent can be created and improvements can be made, as occurred in a rather haphazard and frantic way in the last few days leading up to the Second Reading debate. That could have been done far more effectively. The short answer is that lessons have been learned and are being learned.
Mr. Eric Forth: If there is any truth in what the Leader of the House says,
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and following his bizarre lectures to us today about integrity in politics, will he use all his influence to ensure that the Standing Committee considering on the Higher Education Bill contains a proper proportion of Members of Parliament—particularly Government Back Benchers—to cover the point that the hon. Member for Sheffield, Attercliffe (Mr. Betts) has just made? Surely at the very least Labour Members should be able to scrutinise the Bill to ensure that the undertakings made at the last minute to get the Government's narrow majority are held to by the Government right through the scrutiny of the Bill. May we have a simple undertaking from the Leader of the House that the Standing Committee considering the Bill will reflect the requests being made by his own Back Benchers, to say nothing of Opposition Members?
Mr. Hain: The point has been made before and I have answered it. The Committee of Selection will consider the matter seriously. During the Standing Committee's detailed consideration of the Bill, we might find out the Conservative party's policy on the future of higher education. So far, we have had some clear signals—[interruption.] Presumably, any amendments tabled by Conservative Members in Committee will project a different policy. So far, all we have had is a policy for cutting the number of students by up to 400,000, a policy for removing the grants that the Bill will bring in and a policy, briefed to The Guardian, of privatising universities in the future. If that is the alternative debated in Committee, I am confident that the Government will win the argument.
Mr. Gordon Prentice: We are promised referendums on regional assemblies in October. Would it not be a disgrace if they were carried on a tiny turnout? Will my right hon. Friend give a commitment on my two-clause private Member's Bill, which sets a 50 per cent. threshold on turnouts for the result of a referendum to be validated, not to try to derail it when it comes to the House on 27 February?
Mr. Hain: I am not impressed by devices such as that. A vote takes place democratically, people choose whether to vote and we must respect the outcome. What we have done and are doing, including in the north-west of England, which covers my hon. Friend's constituency, is to hold all-postal vote ballots, which will give electors the opportunity to vote in comfort and at their convenience and I hope that it will boost turnout. To the extent, that I agree with his points: the greater the turnout, the more legitimate the outcome, whether at a general election or a referendum. However, it should not be done by imposing an artificial threshold.
Mr. Roy Beggs: May I draw the attention of the Leader of the House to my early-day motion 268?
[That this House notes that with the exception of Denmark and Germany, the UK is the only country within the EU that does not apply a reduced level of VAT for tourism; recognises that the UK's tourist industry is therefore disadvantaged vis-à-vis European countries; further notes that there is a clear correlation between VAT levels and consumer demand; believes that a reduced

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level of VAT on tourism services could create thousands of new jobs, increase the UK's tourism revenue and strengthen the UK tourist industry's international competitiveness; and therefore calls on the Chancellor of the Exchequer to reduce VAT on tourism services, commencing with a reduction of VAT on tourist accommodation.]
The motion enjoys cross-party support and calls for a reduction in VAT on tourism, as I understand that only the UK, Denmark and Germany do not apply such a reduction. Research indicates that thousands of new jobs could be created in England, Wales, Scotland and Northern Ireland, and we could help our industry to overcome the disadvantage it suffers at present. May we have a debate before 17 March, in the hope of influencing the Chancellor's Budget decisions?
Mr. Hain: The hon. Gentleman can apply for a debate in the usual way. On the specifics of the policy, however, I think that he will find that the most likely beneficiaries of a reduced rate would be major hotel chains and luxury hotels. For example, a 5 per cent. reduced rate for hotel accommodation would cost more than £600 million, so it would not really be well targeted. Our high registration threshold means that a substantial number of hotels are not actually registered for VAT, as they come under the ceiling. We can look into supporting hotels and bed-and-breakfast accommodation in other ways, because they are crucial. Tourism is a vital part of our economy, but we can target our support in other ways. I think that he will find that the general approach does not actually assist those whom he wants, quite properly, to help.
Dr. Alan Whitehead: On the concern expressed about the way that policy proposals have come before the House as Bills, does my right hon. Friend think that the present haphazard method of examining draft legislation should be replaced by a system whereby all Bills come to the House as draft Bills and all are subject to pre-legislative scrutiny? Will he consider holding a debate on methods whereby that change might be achieved?
Mr. Hain: As my hon. Friend knows, I am very sympathetic to increasing the number of Bills that are subject to pre-legislative scrutiny. Indeed, over the past few years the Government have increased the number of such Bills and they are better as a result of that scrutiny. Whether all Bills can be put under that regime is rather doubtful; for example, sometimes we have to bring in emergency legislation on Northern Ireland. I give that as an extreme example, and I know that my hon. Friend will acknowledge it, but I endorse the general principle that Bills are better if they are subject to pre-legislative scrutiny and I hope that we can continue to take it forward.
Mr. Michael Jack: In evidence to the Select Committee on Environment, Food and Rural Affairs, the retiring president of the National Farmers Union indicated that he anticipated a Government announcement on the implementation programme for the revised common agricultural policy on or before 17 February. To date, the House has not had an opportunity to debate any of those proposals and to
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inform the Secretary of State's decision-making process on that matter, so will the Leader of the House look into giving the House an opportunity to discuss it? It is the biggest single change in the CAP since the MacSharry changes of 1992 and so far Parliament has remained silent on the matter.
Mr. Hain: I shall certainly look into that, as Parliament's view on the matter is important. As the right hon. Gentleman says, it is a crucial change and I know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will take careful note of the points that he made, especially as they come from him.
Shona McIsaac: Thank you for calling me, Mr. Speaker. I had an inkling that I might be the next Labour Member to be called.
I appreciate that there will be a debate on Lord Hutton's report next week, but given that the report stated that
"false accusations of fact impugning the integrity of others, including politicians, should not be made",
could my right hon. Friend find some time for a debate on standards and ethics in public life, especially given the proclivity of the Leader of the Opposition to accuse the Prime Minister and others of being liars?
Mr. Hain: I addressed that matter earlier, but I know that my hon. Friend's feelings are shared elsewhere in the House. The point should also apply to the chairman of the Conservative party who, when The Sun leak took place, said that it had
"all the fingerprints of a Government which is willing to say or do anything to save its own skin"—
and that we
"now have a morally bankrupt Government which is as corrupt as it is corrupting."
Hon. Members: Hear, hear.
Mr. Hain: Conservative Members say "Hear, hear"—they are at it again. All the evidence was that the leaking of the report was nothing to do with the Government. This morning, Sky news reported that the information may actually have come into the hands of The Sun over the weekend, even before anyone in the Government had seen the report. It is time that we had from the leaders of the Conservative party —whether the Leader of the Opposition himself or the party chairman—a proper approach to these matters and a proper apology for their despicable behaviour.
Pete Wishart: A week on Monday, we have the Second Reading of the Scottish Parliament (Constituencies) Bill, which, as the Leader of the House knows, decouples the reduction of the number of Scottish Members in this House from the 129 Members of the Scottish Parliament. The only problem is that we have not had a definite announcement from the Secretary of State for Scotland that that reduction will take place in advance of the next election. Can we, therefore, expect a statement from the Secretary of State next week? If not, the Second Reading debate will be purely hypothetical and based solely on an assumption.
Mr. Hain: Obviously, we do not know when the next general election will be and that is clearly a factor. I

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know, however, that my right hon. Friend the Secretary of State will want to take careful note of the point that the hon. Gentleman has raised.
Michael Fabricant: May we have a debate on the question of—as I call them—animal rights terrorists? The Leader of the House will be aware that, recently, investment in Cambridge did not go ahead, but he may not be aware that other investment companies—biotechnological companies from Japan—have chosen to invest in Europe instead of in the United Kingdom because of the threat from animal rights terrorists. One of my constituents runs a guinea pig farm—which is controlled by the Home Office to ensure the protection of the guinea pigs—for medical research. He wrote to me saying:
"Before New Years Eve"—
[Interruption.] I do not know why hon. Members find that funny. My constituent wrote:
"Before New Years Eve the activists smashed all the downstairs windows of my 86 year old father's home whilst he was in the house, and then threw red paint bombs through the smashed windows…he was petrified…between Christmas and New Year they were also at my niece's house…and they turned off all her water and then concreted the stop cock so she could not get it back on."
The whole House will agree that those animal rights terrorists need some sort of control, so may we have a debate on the issue? Perhaps the Home Secretary could designate those people as terrorists, so that organisations for which I have the greatest respect, such as the Security Service, can be utilised to try to control their activities.
Mr. Hain:The hon. Gentleman raises a very important point. It is certainly extremely serious that the construction and opening of that laboratory was prevented due to the threat of what, as he rightly says, cannot be described other than as terrorism. Many of us have a lot of sympathy with animal rights movements and support them. We want proper protection for animals and an end to cruelty, but to take things to such an extent and to terrorise scientists, doctors and others involved is wholly unacceptable. The hon. Gentleman is right and I know that the House will share his sympathies.
Mrs. Annette L. Brooke: Is the Leader of the House aware that yesterday two groups of primary schoolchildren were sitting on the extremely cold floor of Westminster Hall eating their sandwiches? Will he set up a process to improve facilities for school visits to the House? We should be promoting all forms of education.
Mr. Hain: I very much agree with the hon. Lady. When I first entered the House in 1991, I found myself in similar circumstances—that was before even the Jubilee café was available to visitors. We do not treat visitors with the respect that they deserve. After all, most of them are citizens of this country and, in the case of school students, future citizens, so we ought to give them a proper welcome. They should be entitled to the kind of facilities that they would expect when visiting any other
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important building in the country. We are looking into improving reception facilities and I hope to bring a motion to the House in due course, which will address some of those points.
It is also a question of the whole attitude of the House. We treat our visitors as strangers—the title we give them, in our anachronistic fashion—rather than as visitors, many of whom are electors. They are entitled to be here and they should not be seen as being here on sufferance.
Mr. Graham Brady: The Leader of the House is very keen to provide opportunities for the Government to defend their integrity. In that context, will he find time for an early debate on the Government's abuse of taxpayers' money to fund politically motivated advertising campaigns, particularly in the light of the finding by Ofcom on Tuesday that the aim higher campaign to promote the Government's policy on tuition fees had "undue partiality" in a matter of political or industrial controversy or relating to current public policy, and to be contrary therefore to section 2, rule 15 of the Radio Authority advertising and sponsorship code? Given that the Government have broken the code, and given that about £600,000 of taxpayers' money has been used to promote a very contentious Government policy, should we not have a debate or a statement from the Government apologising for that?
Mr. Hain: As I understand it, although I am not aware of all the detail, the aim of the campaign was to encourage teenagers especially young teenagers, to go to university. It had nothing to do with a particular aspect of the Higher Education Bill. However, if the Ofcom report has made a recommendation that censures or criticises the Government in the way that the hon. Gentleman describes, it is obviously an important matter and the Secretary of State will want to take that on board and be accountable to the House for it.
Sir Robert Smith: In his reply to the Chairman of the Procedure Committee, the Leader of the House explained that the Home Office had to be consulted in connection with the response to the Sessional Orders report. However, he did not deal with the second half of the question, on how he intends to respond to the report on the procedures for debating private Members' Bills and the role of the Speaker, and in particular the innovative ideas in the report on ways to involve more Back Benchers in debates.
Mr. Hain: I am sorry that I did not pick up that point from the question asked by the hon. Member for Macclesfield (Sir Nicholas Winterton) earlier, but I am happy to respond to the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) now. It is an interesting report, which has raised many issues. We will respond in due course, and I hope that he will be satisfied with that.
Dr. Vincent Cable: Does the Leader of the House expect an oral statement next week on the release of the Penrose report on Equitable Life? As it has now been available to the Government, and

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selectively to those criticised in it, for over five weeks, at what point does he intervene to protect the House of Commons from continuing to be denied it?
Mr. Hain: Again, the hon. Gentleman has properly raised an issue of concern to all Members, as well as to many hundreds, if not thousands, of our voters. This issue must be addressed and I am sure that an opportunity will be found to do so.

PERSONAL STATEMENT
1.22 pm
Ms Diane Abbott: The Standards and Privileges Committee published its second report of this Session yesterday, and it directed that I should apologise to the House for my failure to register my work for the BBC television programme "This Week". I accept that I should have registered my work for the programme. I take full responsibility for the failure to register. I have co-operated fully with the Parliamentary Commissioner for Standards in his investigation and I have apologised to him for my oversight. I am glad to take this early opportunity to apologise to the House.
As the commissioner notes in his memorandum, my involvement in the programme could hardly have been concealed given its nature, and most people aware of it might have assumed that I was being paid for it. But the House of Commons quite correctly has a strict code of conduct in these matters, and the Standards and Privileges Committee is rightly vigilant on this. I well remember the debates about the conduct of MPs in the 1990s, and for the House of Commons to retain the confidence of the public it is right that there should be the utmost transparency. Once again, I apologise to the House.

House of Commons Members Estimate
1.24 pm
The Leader of the House (Mr. Peter Hain): I beg to move,
That—
(1) There shall be a committee of this House, called the House of Commons Members Estimate Committee.
(2) The members of the committee shall be those Members who are at any time members of the House of Commons Commission pursuant to section 1 of the House of Commons (Administration) Act 1978; the Speaker shall be chairman of the committee; and three shall be the quorum of the committee.
(3) The functions of the committee shall be—
(a) to codify and keep under review the provisions of the Resolutions of this House relating to expenditure charged to the Estimate for House of Commons: Members;
(b) to modify those provisions from time to time as the committee may think necessary or desirable in the interests of clarity, consistency, accountability and effective administration, and conformity with current circumstances;
(c) to provide advice, when requested by the Speaker, on the application of those provisions in individual cases;
(d) to carry out the responsibilities conferred on the Speaker by the Resolution of the House of 5th July 2001 relating to Members' Allowances, Insurance, & except the responsibility of appointing the Advisory Panel provided for in paragraph (5)(1) of that Resolution.
(4) Paragraph (3)(b) above does not empower the committee—
(a) to create a new form of charge on the Estimate for House of Commons: Members; or
(b) to increase any rate of charge or payment determined by Resolution of this House.
(5) The committee shall report to the House from time to time, and in any case not less than once a year, the provisions of the Resolutions of this House relating to expenditure charged to the Estimate for House of Commons: Members, as codified and modified pursuant to paragraph (3) of this Order.
(6) The committee shall have power to sit notwithstanding any adjournment of the House.
That this Order be a standing order of the House.
Mr. Speaker: With this we will also consider motion 2,
That the Resolution of the House of 20th March 1998 on the bicycle allowance be rescinded and the following provision be made in its place:
(1) That, in the opinion of this House, provision should be made as from 1st April 2004 with respect to the rates of mileage allowance payable to Members in respect of journeys by motorcycle, scooter or bicycle for which if undertaken by car, the car mileage allowance would be payable,
(a) by Members, or
(b) by spouses, children or employees paid from the staffing allowance;
(2) In respect of journeys by motorcycle or scooter, a motorcycle mileage allowance shall be payable at the same rate as the motorcycle mileage rate approved by the Inland Revenue and then in force;
(3) In respect of journeys by bicycle, a bicycle mileage allowance shall be payable at the same rate as the bicycle mileage rate approved by the Inland Revenue and then in force.
Mr. Hain: We have before us two motions. The first would set up a new Committee to oversee Members' estimate matters; the second relates to bicycle and motor cycle mileage allowances.

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I will deal first with the motion establishing a new House of Commons Estimate Committee, which I have tabled with the full support of the House of Commons Commission. The motion provides for a new Committee, of the same membership as the House of Commons Commission, to be established by Standing Order to oversee Members' allowances matters in much the same way as the Commission oversees matters relating to the House administration.
The motivation for the motion is threefold. First, the intention is to improve the governance of the House. Interestingly, we find that there is a crossover between the two House of Commons estimates—between the House of Commons administration estimate, for which the House of Commons Commission has statutory responsibility, and the House of Commons Members' estimate, which does not fall within the responsibility of the Commission. For example, an increase in Members' IT provision, which falls to the Members' estimate, has implications for the back-up IT services provided by the House administration. It makes sense to bring oversight of the two estimates closer together.
Secondly, the rules on Members' allowances are governed by a large number of complex resolutions, dating as far back as 1945. They are not readily accessible, and are very hard to understand and reconcile one with another. There would be considerable benefit in consolidating and updating these resolutions and in presenting them in an accessible form that we can all understand.
Mr. Eric Forth: Can the Leader of the House tell me whether his proposals have any implications for the role of the Audit Committee in monitoring and auditing those areas of expenses that he is now touching on?
Mr. Hain: To be honest, I am not sure, but if I can answer the right hon. Gentleman's question before the end of my speech, I will be happy to do so.
As the Standards and Privileges Committee had cause to emphasise last year, it is essential that Members be provided with clear, unambiguous information on what the rules on claiming allowances are. The new Committee would provide a vehicle for doing this. The motion provides that it should be its function to codify and keep under review the provisions of the resolutions of the House relating to the Members' estimate, modifying those provisions where necessary, and it provides for the Committee to report to the House at least once a year with a consolidated and up-to-date statement of the decisions on allowances that the House and the Committee have taken.
Thirdly, establishing the new Committee would reduce the need for minor administrative changes to be taken on the Floor of the House. I am ready to admit that this has advantages for the Government's business managers, but I believe that it also has advantages for the House as a whole.
Some Members may question whether it is right to give the Committee power to vary resolutions of the House. I agree that we should give careful thought before we do this. I point out that the proposed Standing Order contains safeguards. The Committee may modify the rules set by earlier resolutions only in so far as this is
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"in the interests of clarity, consistency, accountability and effective administration, and conformity with current circumstances".
Mr. Patrick McLoughlin: The Leader of the House has said that this allows certain resolutions to be changed. But is it not the case that at the moment we are working under dual plans? The new allowances that were introduced after the last general election can be changed by recommendations to the Speaker. What the motion does is to put all the things claimed on the same basis, as opposed to confusing the two claims. I very much welcome it.
Mr. Hain: I very much agree with the point that the hon. Gentleman has made, very eloquently. I consider that this arrangement gives extra protection to the Speaker, and is a common-sense approach.
Paragraph 4 explicitly excludes the creation of a new form of charge or an increase to any rate of charge or payment. I emphasise that the Committee would not be empowered to create a new form of charge—such as a new expense allowance—on the Members' estimate, or to increase any rate of charge or payment determined by resolution of the House. For example, the Committee could not increase Members' pay. Such matters would have to be a matter for the House, debated on the Floor as we are debating now.
A further safeguard lies in the membership of the Committee. The Committee, like the Commission, will be chaired by the Speaker, and will contain very senior and independent-minded Back Benchers as well as the Leader of the House and shadow Leader of the House. I have no doubt that the Committee would decline to decide on a matter that it thought should properly be decided by the House. It may assist the House if I give some examples of changes that might in future be decided by the Committee.
At present the incidental expenses provision and the additional costs allowance for the allowances year beginning in April are determined by reference to the retail prices index figure for the 12 months ending in March, which is actually published in April-May. That means that we open the allowances year in April not knowing, as Members, the cash limits for the various allowances at our disposal. It would be more sensible to use the retail prices index figure for the previous December, but at present that would require a motion amending an earlier resolution of the House. This would seem to me to be an appropriate matter for the Committee to consider, rather than for the House to be detained by it.
Similarly, it has been proposed that Members who have money left in their incidental expenses provision or staffing allowance at the end of one allowances year should be able to carry some of it forward to the next, and that Members who want, for example, to move office in one allowances year should be able to draw down up to 10 per cent. of the next year's incidental expense provision early. This, too, would seem an appropriate matter for the Committee to consider, and again not a matter to detain us on the Floor of the House.
Mr. Forth: The right hon. Gentleman has said—and I very much approve of it—that the new Committee will

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not be able to vary the rates of allowances, but can he give us an assurance that some of the flexibilities that he is mentioning will not involve a higher charge on the taxpayer as a result? I ask that because, although the rates may not be increased, it is possible that carry-overs of the kind that he is describing would increase the overall cost to the taxpayer.
Mr. Hain: That may well be the case, but some of it may be marginal. It happens at the moment—for example, decisions on the allocation of IT equipment. Being very experienced—more experienced than I am in these matters—the right hon. Gentleman will know that many decisions that enlarge the expenditure of the House are not put to the Floor of the House. We are talking about a sensible balance between such decisions and matters of real principle, including Members' pay, which I would agree with the right hon. Gentleman would have an impact on taxpayers' costs and contributions, and which should be fully open to scrutiny and decision on the Floor of the House.
As a further example, while most of us get in our claims within two months of the end of the allowances year, the resolutions allow Members to take up to six months, and this can impede the prompt publication of accounts. The Committee could decide whether the deadline should be brought forward.
On the other hand, a proposal to create a new allowance or increase the rate of an existing allowance would continue to need a resolution of the House. The proposal on the bicycle and mileage allowances falls into this category.
Members may wonder what will be the role of the Speaker's advisory panel under the new arrangements. The panel has proved itself very useful in providing the Speaker with advice on allowances matters, and we all owe thanks to the panel and its chair, my hon. Friend the Member for Cambridge (Mrs. Campbell), for its hard work and good sense. In future, I see it continuing in much the same way, with its valuable advice going primarily to the Members Estimate Committee, rather than directly to the Speaker. I will suggest to the Committee that it invite the Chair of the panel to attend its meetings where appropriate.
I come now to the bicycle and motor cycle mileage allowances. As I have said, this is a matter that would not fall within the competence of the Members Estimate Committee. Those Members who use a bicycle can currently claim just over 7p per mile This motion would bring the allowance into line with the figure permitted by the Inland Revenue at the relevant time. The figure is currently 20p per mile for bicycle users. It also introduces for the first time a rate for motor cycle users, again tied to the Inland Revenue rate, which is currently 24p per mile.
These changes will apply to Members' mileage, and also to staff and family travel. I can assure hon. Members that, as long as the journey concerned satisfies our own rules and meets the Inland Revenue's criteria for business mileage, these rates will not incur a tax charge.
I hope that the House will agree to tie bicycle and motor cycle mileage allowances to the Inland Revenue rate. I hope also that the House will accept the arguments for a Members Estimate Committee, since I
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believe that that would be in the interests of the good governance of the House. This is not a party matter, or a matter for the Government; it is a matter for the House to decide.
I have received a note, which may help the right hon. Member for Bromley and Chislehurst (Mr. Forth), and may help me as I read it out. On the question of the implications for the role of the Audit Committee, I am advised by the accounting officer that the proposal might have implications for its role in future, but that this is not an immediate consequence of the motion. I shall be happy to discuss this further to ensure that any concerns that the right hon. Gentleman may have are assuaged.
I commend the motions to the House.
1.35 pm
Mr. Oliver Heald: I start by associating myself with the remarks of the Leader of the House about the hon. Member for Cambridge (Mrs. Campbell) and her work, and by mentioning my hon. Friend the Member for West Derbyshire (Mr. McLoughlin), who plays a very important role on her panel—the Speaker's advisory panel.
As the Leader of the House said, the purpose of the motion is that the change to the Members' estimate provisions should introduce new efficiency, improved governance and enhanced accessibility to the Members' estimate.
One of the more important features of the motion is paragraph (3), which talks about codifying and keeping under review the provisions of the resolutions of the House relating to expenditure on the Members' estimate. The problem at present is that many of the resolutions go back to 1945 and that, as my hon. Friend the Member for West Derbyshire said, we have a new system for the more modern resolutions. Therefore, it would be extremely helpful to have one Committee to go through the process of codifying, so that we all have the same system for modest updating of the resolutions. Clearly, issues of importance affecting the rate of charge or payment, or creating new forms of charging, should be brought to the Floor of the House, and I am pleased that the agreement on the motion reflects that in paragraph (4).
It is also more efficient for the House if House of Commons Commission members have the role of deciding these issues, because the commission already deals with the administration estimate, and quite a few of the issues overlap—for example, on information technology. To have the two kinds of governance separate, as they are now, as well as being unfair to Mr. Speaker, makes it difficult for some of the governance and oversight of the administration estimate to take place. Therefore, to bring the two more closely together is a good thing.
I chair the Audit Committee. It certainly seems to be the case at present that the Committee's role is not changed by this. Even now, the Audit Committee looks at some of the work of the internal review service that we have here, which overlaps between the administration estimate and the Members' estimate. Clearly, that is a good thing.
Mr. McLoughlin:The truth is, though, that the way in which allowances are reported will change very

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dramatically within the next 12 months. Mr. Speaker has written to us all saying that allowances and the claiming of allowances will be put in the public domain and published. Therefore, the oversight will be not only by an audit committee but, should it be so decided, also by the electorate. That is no bad thing.
Mr. Heald:As my hon. Friend says, the amount of transparency is being increased dramatically.
The measure also improves governance, as did the Speaker's panel itself, and I believe that the new Green Book is an extremely effective and useful step forward. It will help a great deal with the Members' estimate. It will be more accessible to Members as well.
Looked at overall, the package should be supported. It will give us a codified set of rules, a better system for minor changes, stronger governance and an ability to oversee the two estimates and bring their governance closer together.
Finally, the bicycle and motor cycle allowance changes are in line with levels set by the Inland Revenue. The motion making those changes provides a mechanism for uprating in line with Inland Revenue levels, and is useful in terms of transparency, simplicity and efficiency—all the points that the first motion is aimed at.
1.39 pm
Mrs Anne Campbell: I thank my right hon. Friend the Leader of the House and the hon. Member for North-East Hertfordshire (Mr. Heald) for their kind remarks about the work of the Speaker's advisory panel. The panel plays a valuable role in providing a route for hon. Members who are perhaps dissatisfied or feel that the current allowances do not cover their needs sufficiently well. It provides a forum in which Members can voice their complaints, and all members of the panel do their very best to be accessible to other Members and to receive comments, complaints and, occasionally, compliments in the most accessible way possible.
I want to put on record my support for the motions, although I want to voice some concern. I feel that the present arrangements have worked very well over the past two years—as long as I have chaired the Speaker's advisory panel. The panel works extremely well and there is a very high attendance among its members, because they feel that they have real influence and can determine something that is terribly important to most of us in the way that we run our constituency offices and our Westminster offices. I hope that that will not change with the new arrangements because I feel that, if there were perhaps undue interference by the Members Estimate Committee, it could have the effect of making members of the Speaker's advisory panel feel that their work was not quite so valuable as it was hitherto.
Mr. Hain:May I assure my hon. Friend as categorically as I can that that is certainly not the objective? It would not be possible for the newly constituted Members Estimate Committee—especially as it will be comprised of members of the House of Commons Commission—to cover the scope of work
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that the panel does so well in consulting and providing an excellent sounding board for opinion in the House. With that assurance, I hope that she will accept the proposals.
May I take this opportunity to pay tribute to the work of the officials in the Department of Finance and Administration and elsewhere who have given very valuable advice and continue to work extremely hard on behalf of all of us?
Mrs. Campbell: I find those reassurances very welcome. Of course, I am sure that the Speaker's advisory panel will want to monitor the way in which its recommendations are accepted by the new Committee. I should like to endorse the remarks made by my right hon. Friend in thanking members of the Department of Finance and Administration for their hard work in administering the allowances and in ensuring that they are applied fairly.
Mr. Heald: May I associate myself with the remarks about the staff? They do a fantastic job, which we all appreciate greatly. Does the hon. Lady agree that, in fact, the Committees that report to the House of Commons Commission, by and large, have a very amicable, constructive and co-operative relationship with the Commission? I am sure that that will be the same with the panel.
Mrs. Campbell: I thank the hon. Gentleman for his remarks. I certainly hope that that will be the case; but, as I say, we will monitor the situation.
I should like to take the opportunity to say a few words about bicycle allowances, as I was the Member who, in 1997, urged the then Leader of the House to try to implement them. For many years, I cycled around my constituency with no allowance whatsoever. I always felt that it was desperately unfair that Members who were prepared to drive from one end of their constituencies to the other got very generous allowances—in those days, they were even more generous than they are currently—whereas I was not recognised for contributing to the environment in a different way. So I was very pleased when the House approved the bicycle allowance, which has gone up by inflation over the past few years and is currently—I am sorry that I have not had time to check this—about 7p a mile.
Given my schedule, I cycle about 1,000 miles a year on my bike.
Martin Linton: That is impressive.
Mrs. Campbell:My hon. Friend is kind., but it is easy to clock up 1,000 miles a year. It is only about 20 or 25 miles a week. In a small constituency such as mine, it is easy to cycle from one end to the other.
I have one of those little electronic gadgets that sits at the front of my bike and tells me how fast I am travelling, how far I have gone and how long it has taken me—all very useful information that helps me to put in an accurate claim at the end of the year. Members will be aware that 7p a mile and 1,000 miles a year will produce £70, if I claim it all. However, buying a new lock

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and new lights and paying for a couple of maintenance services a year comes to a great deal more than £70, which does not allow me to put anything aside towards a new bicycle, and as my bicycle is now more than 20 years old, that is getting long overdue. So I very much welcome the raising of the allowance to the Inland Revenue recommended rate, which is 24p a mile, and with £240, my constituents may see me cycling around on a brand-new bicycle in the near future.
1.46 pm
Mr. Paul Tyler: I am very pleased to follow the hon. Member for Cambridge (Mrs. Campbell) and I want to come back to the role of her important advisory panel in due course, but perhaps I should put on record the fact that I cannot cycle much around my constituency. Not only is it 80 or 90 miles long, but the hills of Cornwall do not lend themselves to that form of exercise.
Sir Archy Kirkwood: Chicken.
Mr. Tyler: My hon. Friend is kind.
Before I come back to the advisory panel, I want to reflect for a moment on something that the Leader of the House said in business questions about the need for the House to be as accessible as possible to the public in every sense. Our work should be as visible and as easy to follow for the public—the people who send us here—as it is for hon. Members who have been here sometime. The right hon. Gentleman and I spent some time on Monday meeting a group of people from Birmingham who had been brought to the House. Even with some explanation about how the place works, they found it an extraordinarily alien situation. They felt like Martians coming into a different world. I think that he would agree that the way in which we conduct our business does not lend itself terribly well to making what we do here explicable to the general public. I suspect that anyone looking at this afternoon's debate might think that there was more mumbo-jumbo than clarity.
I very much endorse what hon. Members on both sides of the House have said about trying to make our work here more transparent and accessible to the general public. In that sense, I understand the logic and rationale that the Leader of the House has expressed for the motions. The phrase "an improvement in governance for the House" always sounds good. The hon. Member for North-East Hertfordshire (Mr. Heald) referred particularly to paragraph (3), which states that one function will be
"to codify and keep under review"
the new rules. However, I have some anxieties—some apprehension—not least of which is that when any Leader of the House comes to us, even at this stage on a Thursday afternoon, and says that there is an advantage to the Government's business managers, a few bells start to ring in my head.
My particular concern is that anything that brings back into the parliamentary discussion and decision-making process, or appears to do so, an issue about Members' allowances and remuneration that to a large extent has been seen to be taken out of the parliamentary arena and given to the Senior Salaries
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Review Body is a retrograde step. I hope that whoever responds to the debate will be able to say absolutely explicitly that nothing that at present is considered by the SSRB will be brought back into the purview of the proposed Committee. That is my first anxiety. I am sure that there will be a reassurance on that point.
Mr. McLoughlin: I am pretty sure that the Leader of the House said that we are basically talking about the rules that relate to allowances, not about the level of allowances. That is the clear distinction. As the hon. Gentleman will know, there is a reference to the SSRB, to which a number of people have been asked to submit evidence. I stand to be corrected, but we are talking solely about the rules that relate to allowances.
Mr. Tyler: The hon. Gentleman will also agree, from his long experience in the House, that the devil is in the detail. There might be some devilish detail that might not now come under the purview of the SSRB, or that might be perceived not to. Let us remember that these sensitive issues are matters of perception, so I would like to be explicitly reassured that the SSRB will continue to consider matters objectively and independently outwith the Westminster bubble and that we will not find things drifting back.
Mr. Hain: I can give the hon. Gentleman a categorical assurance that matters such as Members' pay that are currently referred to the SSRB will properly remain as such—the public should see that they will remain as such. As the hon. Member for West Derbyshire (Mr. McLoughlin) pointed out, the motion is about rules relating to allowances. Given the nature of the business of the House, I am sure that the hon. Member for North Cornwall (Mr. Tyler) would not want to take up valuable time that could be used to discuss the Hutton report by debating whether the retail prices index figure for triggering an increase in allowances should be that as recorded on 1 April or 1 January. We should be serious and use common sense, which is what the motions are about.
Mr. Tyler: I entirely agree. The Leader of the House gives us an innocent and obviously common-sense example. I just want to be reassured that it will not be possible for things, over the years, to start to drift off to the Members Estimate Committee that frankly should be out there in the light of day. I accept his assurance, but I am putting down a marker. I hope that we will find that there will be a mechanism for the Committee to report back regularly to the House on such issues because that is extremely important.
Mr. Heald: Just to reassure the hon. Gentleman, I think that subsection (5) covers that because it requires the Committee to report to the House.
Mr. Tyler: The hon. Gentleman might misunderstand me—I am trying to be as speedy as possible. I am concerned that if there were any drift such as that that I am describing, we would have to consider not only the matters that the Committee was examining, but whether the boundaries between its work and that of the SSRB seemed to be moving. If there were a moving target, the House would wish to be informed.

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My next point is equally specific, although I am sure that reassurance will be given. As the hon. Member for West Derbyshire (Mr. McLoughlin) and other hon. Members said, there is worry about long-established issues that go right back to 1945. I am quite clear that when a motion comes before the House in future, perhaps on the basis of the SSRB's present review of these matters, direct reference could be built into it regarding the Committee's role in dealing with the detail. However, there would be a different situation if a retrospective attitude were taken—if we were looking backwards. Something that the House agrees that the Committee should consider is different in degree to something that the House has considered previously that would then be considered retrospectively by the Committee. I understand the need for that to occur, but I want it to be absolutely clear that in such circumstances there might need to be a reference back to the whole House, although that would depend on the scale of the identified problem.
Finally, I return to the role of the Speaker's advisory panel. I entirely endorse the comments made about the panel and, indeed, the work done for the panel by Officers of the House. However, I did not entirely accept the assurances given by the Leader of the House to the chairman of the panel. I do not fully understand—I hope that somebody will spell this out—why the panel cannot take on some or all of the responsibilities that are now identified as necessitating the construction of a completely new Committee.
I respect all members of the Commission enormously, but they are already heavily loaded with work. The fact that they will have to sit as a shadow Commission on the Committee raises concerns. The great advantage of the advisory panel of which the hon. Member for Cambridge is a distinguished chair—I think that it has operated effectively—is that it is a Back-Bench committee. It responds to the concerns, anxieties, objectives and aspirations of all hon. Members. The Commission, by definition, is the establishment personified, and its members are very distinguished.
I would like to think that someone considered whether the panel could have taken on the responsibilities because it reports to the Speaker, who is the Chairman of the Commission. We may be inventing yet another bit of what the Leader of the House described as the governance of the House, but duplication should always be questioned to determine whether someone else could do a job equally well. I am unconvinced by the explanation of the respective roles. I entirely understand a point made by the Leader of the House because the last thing that I would want would be for the new Committee to take on the panel's responsibilities, but no one has explained why that could not happen the other way round.
I am seeking reassurance. Nothing is more unnecessarily controversial than matters that affect the way in which we do our job. I endorse entirely what the hon. Member for Cambridge said. When I first came to this place, I was lucky if I could find a desk. I did not have a phone and I could not pay a secretary—the whole thing was absurd. I could not do my duty by my constituents. We are now better funded, which is
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excellent, but I want to be reassured that we are not hiding in a corner some changes to our arrangements that the public might feel were going too far.
1.55 pm
Sir Stuart Bell: I feel a bit like Winston Churchill when he was Prime Minister and he used to wander the gardens of No. 10 Downing street saying, "I had not intended to intervene in this debate, Mr. Speaker", while dictating his speech to his secretary. I genuinely had no intention of participating in the debate. As a member of the Commission, I am grateful to the hon. Member for North Cornwall (Mr. Tyler) for his gentle and generous comments about the members of the Commission who are with us today. However, I wish to make one point in response to his question asking why we should not form an independent panel rather than have the Commission shadow itself on these matters. I am sure that the hon. Gentleman will take the simple answer from me and that he would have taken it from the Leader of the House.
At this moment in time, House of Commons services are funded from the House of Commons administration estimate, for which the House of Commons Commission has statutory responsibility. Hon. Members' pay and allowances, including Members' staff matters and Members' information technology provision, are funded separately from the Members' estimate, which is governed by a range of resolutions of the House dating back to 1945, and administered under the authority of the Speaker of the House. The Speaker is advised on allowance matters by the Speaker's advisory panel, under the able chairmanship of my hon. Friend the Member for Cambridge (Mrs. Campbell). Given the statutory responsibility of the Commission and the fact that the advisory panel reports to the Speaker, the new arrangement is logical—we welcome the fact that the hon. Member for West Derbyshire (Mr. McLoughlin) suggested it. I hope that that answers the question asked by the hon. Member for North Cornwall.
1.57 pm
Mr. Patrick McLoughlin: I welcome the motion moved by the Leader of the House. I do not think that it will change the role of the Speaker's advisory panel because it will remain as an advisory panel. In effect, the measure will create a greater stopgap because it will bring more people into the decision-making process. Although the panel, under the chairmanship of the hon. Member for Cambridge (Mrs. Campbell) will, I hope, continue to make detailed recommendations, it is right for another body, rather than the Speaker alone, to oversee such matters. The Leader of the House has responsibilities to the whole House and he will be here every week to answer questions if one thinks that something is going wrong.
The proposal will not reduce accountability but broaden it. Given the way in which the allowances have changed over they ears, it is important for us to enable the measure to go forward. It is nonsense that some changes can be made to allowances via the Speaker's advisory panel with no reference to the Floor of the House, yet for other changes to require such a reference. I would much prefer to be spending this afternoon

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talking about my constituents' wider concerns than having a debate—okay, it will not be a long debate— that has had to be scheduled in parliamentary time and has thus taken away the House's chance to discuss other measures.
1.59 pm
The Deputy Leader of the House of Commons (Mr. Phil Woolas): This has been a short and useful debate and I am grateful to hon. Members who have spoken and intervened. I am especially grateful to the hon. Member for North-East Hertfordshire (Mr. Heald) for his support for the motions. Perhaps I should put on record our thanks to the members of the House of Commons Commission and the members of the Speaker's advisory panel. I confess that when I assumed my duties I was not aware of the intricacies of the Speaker's advisory panel. I reiterate our thanks to the chairman, my hon. Friend the Member for Cambridge (Mrs. Campbell), and the Members who serve alongside her. The discussions of the Speaker's advisory panel are extremely useful in helping us to make better decisions precisely because it is an advisory panel and not a final decision-making body. That is an important distinction.
As my right hon. Friend the Leader of the House emphasised, the motion includes a number of safeguards. Proposals to create new forms of charge or increase any rate of charge or payment will still have to come to the Floor of the House. The circumstances in which the Members Estimate Committee may amend a resolution are tightly defined, and by linking membership to that of the House of Commons Commission, the House can be assured that the new Committee will take an impartial and considered view of what matters it should properly deal with. The motions under consideration have received support from Members on both sides on the House, and my right hon. Friend wishes to put on record his thanks to the hon. Member for West Derbyshire (Mr. McLoughlin) for the considered role that he played in the proposals.
On the bicycle allowance, some reports this week suggested that some hon. Members believe that the proposed increase in the bicycle allowance is excessive. We heard from my hon. Friend the Member for Cambridge, who takes advantage of the allowance. I can assure the House that there are very few Members—not enough, some would say—who do. However, my hon. Friend rebutted those arguments about an excessive increase. The cost of the increase to the public will be minimal.
As I have said, very few Members claim the bicycle allowance, and they are a minority of those of us who do, in fact, use a bicycle to get to work. Using a bicycle is not without cost, as has been said We wish to link the allowances to the Inland Revenue rates as that is a sensible principle. The hon. Member for North Cornwall (Mr. Tyler) expressed concerns about the appearance and the reality of Members' allowances. It is justifiable to link them to other bodies' rates, which is why the Government increased the bicycle allowance in line with Inland Revenue rates. The 20p allowance has been introduced as part of the move away from car journeys, and it is right that we should encourage, and be seen to encourage, environmentally friendly forms of transport. There is a strong case for linking the allowance to the Inland Revenue rate, as that will mean
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that we will not have to debate similar motions—to reassure the hon. Member for North Cornwall, the allowances motion is separate from the estimate motion and will introduce an increase in the rate—annually on the Floor of the House.
On the motor cycle allowance, I would have liked to declare an interest, but my motor scooter was nicked the other day, so I fear that I will not be able to take advantage of the allowance for some time. Before Opposition Members start to blame the Government for the theft of my trusty scooter, I can reassure them that the police have acted swiftly and successfully to investigate the crime—[HON. MEMBERS: "Successfully?".] Not yet, I believe, although I hope that that will be the case.
In conclusion, the proposal for a Members Estimate Committee is a sensible and innovative measure, which should enhance the good governance of the House. The proposal on bicycle and motor-cycle mileage allowances is also sensible, and I hope that the House will support the motions.
Question put and agreed to.

BICYCLE AND MOTORCYCLE MILEAGE ALLOWANCES
Motion made, and Question proposed,
That the Resolution of the House of 20th March 1998 on the bicycle allowance be rescinded and the following provision be made in its place:
(1) That, in the opinion of this House, provision should be made as from 1st April 2004 with respect to the rates of mileage allowance payable to Members in respect of journeys by motorcycle, scooter or bicycle for which if undertaken by car, the car mileage allowance would be payable,
by Members, or
by spouses, children or employees paid from the staffing allowance;
(2) In respect of journeys by motorcycle or scooter, a motorcycle mileage allowance shall be payable at the same rate as the motorcycle mileage rate approved by the Inland Revenue and then in force;
(3) In respect of journeys by bicycle, a bicycle mileage allowance shall be payable at the same rate as the bicycle mileage rate approved by the Inland Revenue and then in force.—[Vernon Coaker.]
Question put and agreed to.
Mr. Alex Salmond: On a point of order, Mr. Deputy Speaker. Have you had any indication that the Government will make a statement about, first, the resignation of Mr. Greg Dyke as director-general of the BBC, especially concerning the procedures that will be employed with regard to the appointment of a new chairman and director-general of the corporation to ensure the independence of the BBC, which many of us value and over which there is a question mark at present? Secondly, have you heard, Mr. Deputy Speaker, whether there will be a statement on whether the honourable culture of resignation after mistakes are made in bodies for which people are responsible will extend to the higher echelons of Government if it transpires that no weapons of mass destruction are found in Iraq?
Mr. Deputy Speaker: I have no knowledge that any such statement is proposed to be made to the House.

Scottish Banks and the Post Office
Motion made, and Question proposed, That this House do now adjourn.—[Vernon Coaker.]
2.5 pm
Mr. Calum MacDonald: I had hoped that the hon. Member for Banff and Buchan (Mr. Salmond) was going to participate in this debate, and I invite him to stay.
Mr. Alex Salmond indicated assent.
Mr. MacDonald: I am delighted that the hon. Gentleman will because, as I am sure that he acknowledges, both as a Scottish MP and as a former employee of the Scottish banks, this important issue affects hundreds of thousands of loyal bank customers across Scotland. Many of those customers have been loyal to Scottish banks throughout their entire lives. I opened my first bank account on my first day at university when I was 18, and continued to maintain an account with a Scottish bank while I lived abroad for eight years on the west coast of the United States. Today, although I spend at least half of the year in London, I bank only with a Scottish bank.
Mr. Salmond:I am delighted to assure the hon. Gentleman that I have signed both early-day motions on this important matter. Moreover, I am happy to support his initiative in this Adjournment debate, and I congratulate him on securing it.
Mr. MacDonald: I am grateful for the hon. Gentleman's support and for the support of Scottish colleagues from all parties who signed the two early-day motions.
The Scottish banks rely on the loyalty of customers throughout Scotland who bank with them because they are, first and foremost, Scottish banks. Although those customers are unfailingly loyal to the Scottish banks, I am afraid that those same banks are grossly disloyal to their Scottish customers. The Government have invested huge sums in installing in every post office, however remote or small, technology that enables anyone to go into any post office branch—I am sure that the Minister for Energy, E-Commerce and Postal Services will give us further details—and access their bank accounts, check their statements, make deposits or withdraw money. That is a huge step forward in post office customer service provision, and it is also a huge step forward for customers of the various banks.
For the first time ever, people are within easy reach of ordinary banking services, which are just a short walk from their homes. For pensioners, people in remote and rural areas, small businesses, hard-pressed mothers looking after children at home, and people trying to juggle their finances and lives, the change has the potential to make their life a great deal easier. One would have thought that the banks would leap at this opportunity to provide a useful and welcome service to their customers, and some have done so. Currently, the Post Office has agreements with the Alliance and Leicester, Barclays, Lloyds TSB and the Co-operative bank, as well as well as new internet banks such as
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Cahoot, Smile arid First Direct in Scotland. Already some 20 million customers in Britain have access to an automated service through their local post offices. Those banks are to be congratulated on putting the needs and the convenience of their customers first.
Sadly, however, although the Post Office has sought to reach similar agreements with the Royal Bank of Scotland, the Halifax Bank of Scotland and the Clydesdale group. those three Scottish banks have each refused so far to make any kind of similar arrangement. Their customers continue to get a second-class service. If the Post Office had been unable to reach agreement with any banks whatsoever, there would be a case for saying that perhaps the shortcomings were on the Post Office side of the negotiations, and that it was trying to achieve too lucrative a deal for itself. But when so many other banks have signed up and are already co-operating with the Post Office, the only conclusion that can be drawn is that the Scottish banks are putting their profits before service to their customers and leaving their customers short-changed.
There can be no question that the post office network can provide a vastly superior service to that provided even by the banks that try to maintain a wide network of local branches. We know that banks find it harder and harder to maintain a network, but the Post Office has more than 16,500 branches throughout Britain. Not only is that more than any other postal service in Europe, but it is more than the combined total of the six biggest banks in Britain. Even if one added to that the combined total of the four biggest building societies, the total number of branches would still be well short—by some 2,000 branches—of the size of the post office network.
The superiority of the post office network is most apparent in scattered rural communities, such as in the constituency that I represent, where we have a small handful of bank branches scattered throughout the islands, but they are concentrated in local population centres that are very many miles, and long, expensive driving distances, apart. By contrast, in my constituency the Post Office has a branch in every rural district. Across Britain, the vast majority of people—85 per cent.—who live in rural areas live within 1 mile of the local post office. That is a network second to none in Britain or in Europe, and it is intolerable that the Scottish banks are refusing to take advantage of it at a time when they are making very healthy profits.
A great deal of patience has been shown during the lengthy discussions that have taken place between the Post Office and the Scottish banks. Customers have been waiting patiently for an agreement to be reached, sub-postmasters have been waiting patiently for an agreement to be reached, and politicians such as ourselves have been happy, so far, to let the banks get on with their negotiations without undue intervention. However, I know that I speak for the great majority of my Scottish colleagues from all parties when I say that that patience has run out. When even the Bank of Ireland has struck a deal with the Post Office to provide a full range of banking services, including throughout Scotland, there is simply no excuse for the Scottish banks still to be dragging their feet.
The banks should be warned. When people see tourists from England and Ireland coming to Scotland this summer and being able to withdraw their cash from the village post office, while Scottish customers living in

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the same villages have to get into their cars or make long bus journeys to access the same services, there will be an angry backlash against this disparity and inequality of treatment.
Earlier today I received a fax from the National Federation of Sub-Postmasters, informing me that they are commencing a campaign to alert their post office customers to the present state of affairs. Colin Baker, the general secretary, stated in the fax:
"The National Federation of Sub-Postmasters has launched a campaign to harness the power of customer pressure to persuade banks that there is a strong customer demand for access to all types of account via the Post Office pin-pad technology."
He continues:
"We are targeting, in particular, Royal Bank of Scotland Group and HSBC."
The National Federation of Sub-Postmasters has sent a pack to every postmaster, including envelopes addressed to the chief executives of both those companies and pre-printed cards that customers will be invited to complete and sign. That is the start of a campaign that will be well supported throughout Scotland, and to which the banks would be well advised to pay attention.
As the hon. Member for Banff and Buchan (Mr. Salmond) said, there are two early-day motions on the subject before the House, signed, at the latest count, by 44 Scottish Members of Parliament, as well as by a good number of sympathetic, Union-minded English colleagues. Excluding Scottish Members on the payroll vote who obviously cannot sign because of that, practically every Scottish Member has signed one or the other of the motions. I know that a number of colleagues from Scottish constituencies will participate in the debate, and I am delighted that the early start of the debate did not catch them short, although their presence may have something to do with the fact that all the flights from Heathrow have been cancelled.
I know that there will be calls from colleagues in the Chamber and from my Scottish Labour colleagues for the banks to come down to Westminster to explain themselves to us. I encourage the Scottish Affairs Committee to take an interest in the issue, and I am confident that it will. The banks cannot be allowed to carry on abusing the loyalty of their Scottish customers in this way. I therefore ask my hon. Friend the Minister to say what steps he is taking to assist the Post Office to reach agreement with the Scottish banks. Will he undertake to convey to the banks the sentiments of the House, as expressed today?
2.17 pm
Sir Robert Smith: I congratulate the hon. Member for Western Isles (Mr. MacDonald) on presenting the subject for debate. It is topical and timely that we put pressure on the banks to recognise the needs of their customers. Although there is a market out there, inertia among customers gives the banks a great opportunity to make considerable profits out of their customers.
The quality of service to the community from which the banks make their money depends, in part, on the public perception of the banks and the climate in which they operate. They have a golden opportunity to step in at a vital time for the Post Office, which is the last
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remaining focus for many communities—the last remaining source of a service in that community. The banks have an opportunity to provide a service to rural communities that they are at present unable to provide.
Last Friday I visited Strathdon in the constituency, where there is a shop and post office, and right next door is a Clydesdale bank, which is open one day a week. The customers of that bank could access their money five days a week if it had a deal with the Post Office. The Clydesdale bank should think carefully. It has quite a large rural network, which it is looking to rationalise. The public relations advantage and the benefit of the message that it would send about its commitment to rural areas if it maintained a deal with the Post Office would be vital.
These issues arise at a time when the Department for Work and Pensions is seeking to migrate pension and benefit claimants into receiving their payments by direct payment, rather than through the giro book at the post office, as they have traditionally done. Many people who have a bank account that they traditionally use only for savings purposes are being pressurised or persuaded to give the account details to the customer migration centre, and then finding that their payments are going via their bank. At the moment, they are not clear whether they can still get their money through the post office. They are led to believe that they can, but that would be the case only if they opened a basic bank account.
Most of our constituents' bank accounts are not basic bank accounts, so there is no access through the post office. Ministers and the banks sometimes tell us that constituents who want to access their money through a post office can do so if they have a basic bank account. However, that is an illusory account that exists only on paper—anybody who tries to open one will find themselves rapidly steered towards opening a standard traditional bank account. People who tend to use their bank account only for savings use their benefit book to collect the money from the post office for their day-to-day living expenses—they need ready access to that cash—and will be in for quite a shock when they find that cannot do that any more. So there is a timely and significant pressure on the banks to provide this transfer service and to do the necessary deal with the post office.
Although these are Scottish banks, they are also major banks throughout the United Kingdom, and I think that colleagues south of the border will be behind us because if we are successful it will make a big difference.
I should like the Minister to address two matters. First, although many hon. Members approach the issue from a rural angle, from the point of view of the future of the Post Office the deal would be most effective if it applied across the whole post office network. Is there any technology that would enable those in areas not served by the banking network to deal with the post office? I suspect that that would not be possible, given the way in which the banking system works, but perhaps the Minister could consider it.
Secondly, the banks often use the defence that they have made their public service commitment by investing in setting up the basic bank account. However, if that exists only on paper, so that if customers try to open one they find themselves steered towards another kind of

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account, it is not delivering the public service commitment that it was supposed to. The Government should make it clear to the banks that far more effective would be a straightforward, effective connection with the Post Office so that the conventional accounts that people are using, and being persuaded to get their pensions paid into, can be accessed through the post office.
That would benefit not only customers, who would get a better service, but the banks, which would maintain their customer network for the other products that they want to offer. It would also provide a vital lifeline to the Post Office at this crucial time when it is losing income from conventional pension books and there are only a few years left of the guarantee provided by the Government to try to keep rural post offices open. New forms of business are required that will bring income into those sub-post offices and help to sustain the range of services that they provide, such as shops.
I urge the banks to listen carefully to the growing concern and to pre-empt the need for this campaigning by getting on with negotiating with the Post Office to come up with a sensible deal whereby our constituents, especially in rural areas, can have ready access to bank accounts on the same terms as those in urban areas.
2.24 pm
Mr. Alex Salmond: The hon. Member for Western Isles (Mr. MacDonald) rather alarmed me by saying that all flights from Heathrow are cancelled, as I am booked on to the 5.40 pm to Aberdeen. I booked that flight when I realised that the Adjournment debate was going to take place slightly earlier. If we use up the full time until 6.30 pm, that flight will go by the board as far as I am concerned, whether it flies or not.
As the hon. Gentleman said, I was formerly an economist at the Royal Bank of Scotland. I do not know whether that constitutes declaring an interest as a Royal Bank pensioner—if so, I willingly do so. My former colleagues are fond of telling me that the bank, which is now the fifth or sixth largest bank in world, depending on how it is measured, has grown rapidly since I left its employment. I like to think that the foundations were well laid before that date.
This is an important debate. We should understand more about the misgivings of all three Scottish banks, who argue that in seeking to maintain and develop local post offices, we might be jeopardising rural banks. However, as the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) sensibly points out, those banks often open only for one or two days a week. The priority should be to ensure proper banking services, particularly in rural communities. I hope that the matter can be resolved, because for the life of me I cannot see why an element of good will in negotiations could not bring about a satisfactory settlement.
As regards bank closures in rural communities, the Bank of Scotland and Clydesdale bank have been particularly innovative in looking closely at the provision of services such as cashline machines, or other money dispensers, in community centres, but it has to be said that those initiatives have been quite limited. When
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I worked at the Royal Bank of Scotland, all the Scottish banks had portable rural banking services; I seem to remember that the service in the Western Isles was operated by plane. Those services were well advertised by the banks as part of their community facilities. Now, they are not provided at all, or certainly not to anything like the same extent. As a result, many rural communities throughout Scotland have a post office that offers only basic financial transactions and some rural communities have no banking or money transaction services available to them.
The initiative to set up money dispensers in post offices is somewhat limited by the continuing confusion about the charges that are made depending on the type of account that one has. Although a warning is displayed on most machines, it is certainly not clear to me whether I am being charged, and I suspect that many people are in the same position. Money dispensing machines are therefore very limited for that purpose.
It would be ideal if an arrangement could be reached between the Scottish banks and the Post Office. That would consolidate the position of the Post Office and make a right for rural customers much more widely available than it is at present. It is strange, in a new century in which technology is widely available in so many forms, that a basic banking facility that many of our constituents still wish to conduct on a person-to-person basis is being denied to so many of them. I wish the hon. Member for Western Isles, and other hon. Members who are pushing this issue, well in forcing it to a satisfactory settlement that could be in the interests of the Post Office and the Scottish banks, and which would certainly be in the interests of our constituents.
2.28 pm
Mr. Alistair Carmichael: I, too, congratulate the hon. Member for Western Isles (Mr. MacDonald) on securing the debate. I apologise to him, and to you, Mr. Deputy Speaker, for not being in the Chamber for the first couple of minutes. I had anticipated that the Adjournment debate might start earlier than is normally the case, but I had not realised just how much earlier. Those of our number who are responsible for ordering the business of the House may wish to reflect that, not for the first time, it will be rather more substantial than the main business of the day.
Sir Robert Smith: We have more time.
Mr. Carmichael: Indeed: on this occasion, it is a happy circumstance, but that is not always the case.
It will surprise nobody that I agree with almost everything that the hon. Member for Western Isles and others said. The provision of banking facilities in remote communities, especially island communities, is not new. Over the years, the number of branches in remote and rural communities has declined. However, as my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) said, several banks maintain a facility in smaller communities that is available on a restricted basis. I know from flying round my constituency that one can find oneself on a plane to Westray on the same day as someone from the Royal Bank of Scotland travels to open the branch for one day.

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I have sympathy for the difficulties that the clearing banks experienced in maintaining facilities in smaller communities. Those facilities are not big earners for banks and there is a considerable cost in maintaining them. It is therefore all the more puzzling that the clearing banks in Scotland have adopted such a difficult attitude in the negotiations with the Post Office. I do not know whether that is brinkmanship or some sort of hard-ball negotiating technique, but it is regrettable. Any pressure that the Minister can bring to bear so that the negotiations reach a swift and satisfactory conclusion would be welcome.
As other hon. Members said, the banks have taken different approaches over the years. When I worked for a firm of solicitors in the constituency of the hon. Member for Banff and Buchan (Mr. Salmond), it operated an agency for the Woolwich building society and the Trustee Savings bank. That was a common setup at the time. Indeed, the arrangement ended only in the 1990s, but by the time I experienced it, it was becoming exceptional rather than common. It appears logical to develop a sort of agency status for something as substantial as the Post Office, given the technology that exists for providing access for people to their money through post offices. The Post Office appears to be the sensible successor to the agency arrangements.
I want to emphasise the point of my hon. Friend the Member for West Aberdeenshire and Kincardine about the difficulties that post offices anticipate as a result of the migration of benefits and pension payments to bank accounts. The fears that that engenders are genuine. If the facility of getting money from the Post Office were available to the public, many of the fears of Post Office employees, sub-postmasters, pensioners and benefit claimants in our constituencies could largely be allayed.
I commend the hon. Member for Western Isles for raising this matter. I was pleased to sign his early-day motion and I invite the Minister to make every effort to engage his Department in bringing negotiations to a swift and satisfactory conclusion.
2.33 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): I welcome the opportunity to air the issues in the House. I warmly congratulate my hon. Friend the Member for Western Isles (Mr. MacDonald) on his important initiative. I also welcome the support that the hon. Members for Banff and Buchan (Mr. Salmond), for West Aberdeenshire and Kincardine (Sir Robert Smith) and for Orkney and Shetland (Mr. Carmichael) expressed. My hon. Friend made a telling point about the almost unanimous support of Scottish Members for his case through the early-day motions.
I listened with great interest to all the speakers. I was especially interested by the point that the hon. Members for West Aberdeenshire and Kincardine and for Orkney and Shetland made about the potential benefits for the Scottish banks in replacing costly one-day-a-week operations with six-day-a-week Post Office access to accounts. Indeed, I had discussions about the matter with sub-postmasters in Inverness last year. They were keen, for obvious reasons. My hon. Friend referred to his correspondence with the National Federation of Sub-Postmasters, and the group that I met in Inverness
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was greatly looking forward to the opportunity to serve a much larger group of local residents and potential customers through access to other bank accounts.
In opening the debate. my hon. Friend referred to his first account with a Scottish bank that he maintains to this day. I used the post office regularly to obtain cash when I was a student and when I first started work. I looked at my Post Office book the other day and I noticed that the last transaction in it was conducted in 1983, which was when I switched to using a bank card. I had not used the post office to obtain cash for 20 years until my bank opened its current accounts to Post Office access. I can now obtain cash in the Members' post office and I often use the post office on the High street in East Ham near where I live. I hope that it will not be long before every current account can be accessed in that way.
Let me outline some of the background to the debate. In June 2000, the performance and innovation unit report on the post office network concluded that the business had not kept pace with change and was not exploiting the highly trusted status that the Post Office enjoys as a provider of financial services. All sub-postmasters are business people. They have found it increasingly difficult to make a living and they have been leaving the network in increasing numbers. It was clear from the PIU's work that doing nothing was not an option and that that would lead to the unmanaged decline of the network, leaving deeply damaging gaps.
The network's problems are apparent to many of us. They include past under-investment, but people's increased mobility, changes in shopping habits, more choice—including through new technology—have all played a part. The business needs to face up to those challenges and make itself more relevant to modern customer needs, or it will not survive. The task that faces the post office network is to continue to serve its existing customers with excellence but to attract new customers and have access to expanding banking markets, not simply dwindling markets, as in the past. That is the key to success.
My hon. Friend rightly made the point that the Government are investing substantial sums in supporting the transformation of the entire network. We are spending £2 billion in total, including £500 million on implementing a network that links every branch in the country. We have established a strong management team at the Post Office and given it the task of turning the business round. It continues to develop and introduce new products and services. Recently, as my hon. Friend mentioned, plans for a range of financial products, available in all post offices through a joint venture with the Bank of Ireland, have been announced. That can only be good news for the network, for sub-postmasters and their customers. A major advertising campaign for travel insurance and bureaux de change services features ants. That contributes to making the Post Office the sort of service that customers want to use.
Banking is central to the Post Office's future strategy. It has the Government's full backing. We all want the post office to become the sort of place where people do their banking so that they get access to cash in a familiar and convenient place. All the high street banks and the Nationwide building society are already making a positive contribution to universal banking services because they provide customers with free access to basic

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bank accounts at post offices as well as making a significant financial contribution of £180 million between them to the cost of running the Post Office card account.
I want to put on record that all those institutions, including the three Scottish banks that my hon. Friend mentioned—the Royal Bank of Scotland, the Bank of Scotland and the Clydesdale group—have worked with us in a positive and constructive way, including making financial contributions to ensure that universal banking was delivered on time, on 1 April last year, despite what some people had predicted in the lead-up to that date. Without a doubt, the initiative has technically been very successful. It has worked successfully right from day one, and I want to acknowledge the support that those three Scottish banks have provided by offering basic bank accounts that can be accessed at post offices and by providing financial support for the initiative.
In addition to basic bank accounts, the Post Office provides access to a range of other bank accounts and is seeking to expand these with all the major institutions. It is already providing electronic access to their accounts for all current account holders at the Alliance and Leicester, Barclays and Lloyds TSB—some 20 million ordinary current accounts in total. The Post Office wants to expand that number, and rightly so. I would like to add my voice to what has already been said in this debate by making it clear that I would like the customers of the Scottish banks to be able to access their accounts at the post office. However, I believe that that decision properly rests with the individual institutions, particularly in view of the support that the banks have already given to the introduction of universal banking. Nevertheless, I hope that all those banks will move in the direction that my hon. Friend and the other hon. Members who have spoken in this debate have called for.
I have had discussions with the Scottish banks on this issue. I have spoken to representatives of Halifax Bank of Scotland and the Royal Bank of Scotland. Yesterday, I received a letter from the Royal Bank of Scotland setting out its position, and it might be useful if I quote from it. The letter states:
"We recently looked again at our policy on this issue, and decided to make no change. This took into account a number of factors. We have detected no significant demand among our customers."
It goes on to talk about the size of the bank's network, and finishes by saying:
"While we have no plans at present to extend this particular facility to all our customers, we keep the question under regular review."
I hope that all account holders at the Scottish banks will be able to access them through the post office, but it is right, as that letter suggests, that the key should be whether there is a demand for that from the banks' customers. The Royal Bank of Scotland says at the moment that it has detected no significant demand, although my hon. Friend suggested in his speech that that might be about to change. If that is the case, we could well see a change of heart from the bank. That will depend on the impression that the banks form of the level of demand for this facility from their customers.
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The Government remain absolutely committed to ensuring that those who wish to continue to do so can collect their benefits at post offices, in full and free of charge, after the move to direct payment. We have provided nearly £500 million to automate every post office branch. That has provided the technical infrastructure to support electronic banking, which gives the Post Office the opportunity to widen its customer base by increasing its offering of banking products. I welcome the fact that this debate helps to draw attention to the substantial benefits to Post Office customers that will result from the investment that the Government have made, and I am grateful to my hon. Friend for drawing attention to that point.
Under the new arrangements for benefits payments, customers have three account choices when deciding how they want to be paid. The first is a standard bank or building society account, some of which—although not yet all—can be accessed at post offices. The second is a bank or building society basic account, many of which can be accessed at post offices. All the Scottish banks offer such an account. The third is the Post Office card account. The customer chooses the account that they want.
Sir Robert Smith: The Minister has mentioned the various bank accounts available. What monitoring are the Government carrying out as part of this social contract with the banks to ascertain how easy people are finding it to open a basic bank account, and how many are being opened? Is there any monitoring of those statistics?
Mr. Timms: I do not have those figures with me this afternoon. There is certainly monitoring of the number of basic bank accounts that are being used. I am not sure that we have data on the number of accounts, but there is certainly information on the number of transactions. There are also data on the number of Post Office card accounts being applied for and opened. It is fair to say that the number of basic bank accounts opened so far remains quite modest, and that strengthens the case for opening up access to other current accounts. We are keeping a close eye on how that is developing.
In the past, Post Office income has been heavily dependent on benefit payments, but that business has been dwindling. It is worth making the point that, before the Government made the decision to switch to making all payments through direct payment, more than 43 per cent. of benefit recipients already received their cash directly into their bank account, compared with only about a quarter in 1997. Sixty-two per cent. of all new child benefit recipients and 68 per cent. of all new pensioners already have their benefits paid directly into their bank account by choice. So the direction in which things were moving was already clear, even before the transition to direct payment commenced.
The old order bock system 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. About 90 per cent. of pensioners now have access to one, for example. A business built on serving people who do not use bank accounts will clearly be serving a shrinking market. Instead, we all want the Post Office to serve an expanding market, and banking provides that opportunity.

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I welcome the initiative that my hon. Friend has taken, and the support that he has attracted in this debate and through the early-day motions. I also welcome the keen interest that Members on both sides of the House and people across the country have in the future of the Post Office. The hon. Member for West Aberdeenshire and Kincardine pointed out to me a number of post offices in his constituency when I visited it last week. I want to make it clear that the Government share the commitment to the Post Office that hon. Members have expressed. We want to help to ensure that it can move forward with confidence and that sub-postmasters and sub-postmistresses can look forward with confidence to the prospects for their business.
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It is clear that the business could not prosper if it stood still. The challenge is to adapt and to meet the changing demands of customers and society. The status quo is not an option; the future lies in banking and the Government hope that all banks will provide their customers with access to their accounts through post offices. The critical issue, however, will be whether customers demand post office access. I certainly hope that they will.
Question put and agreed to.
Adjourned accordingly at twelve minutes to Three o'clock.