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Westminster Hall

Volume 348: debated on Wednesday 12 April 2000

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Westminster Hall

Wednesday 12 April 2000

[MR. MICHAEL J. MARTIN in the Chair]

Newspaper And Magazine Recycling

Motion made, and Question proposed, That the sitting be now adjourned.—[ Mr. Jamieson.]

9.30 am

The Government will soon publish their waste strategy after much consultation in recent months and, indeed, since the general election. Hon. Members will be aware that the strategy contains seven broad principles, including a greater emphasis on recycling and energy recovery, increased public involvement in the re-use and recycling of household waste, the need for challenging but realistic targets, a strong emphasis on waste minimisation, and a need to change the perception of the waste hierarchy. The final two principles are the more creative use of economic incentives, with which I hope my hon. Friend the Minister will deal, and increased public involvement in the decision-making process. I hope that the targets that will be set for recycling a range of materials will ultimately ensure that our nation becomes one of the best in Europe in that respect.

The Government strategy will include targets for increasing the recycled content of newspapers and magazines. Today's debate is, therefore, opportune. It is opportune for many of us, as politicians, because no group of people in this country is guiltier of producing reams and reams of printed material and because of references to our various doings in the newspapers. In a sense, therefore, we are culpable for some of the problems with which society is trying to grapple.

One of my earliest recollections is of my first proper job as a newspaper boy back in the 1960s. I recall the huge number of newspapers that were delivered in the area for which I was responsible. Nowadays, households probably buy fewer newspapers, but they are much bulkier and there are far more free sheets. The volume and weight of newspapers that drop through the letterboxes of North-West Leicestershire in the early years of this century are probably two to three times greater than when I was a paid employee 40 years ago.

I am sorry that the several key discussions that have taken place about the recycled content of newsprint have been in camera. I will not say that they were in smoke-filled rooms, because I know of the millennium resolution of my hon. Friend the Minister. However, I will press him to throw open the doors to let in some light and air. Are we not now in the brave new world of a nation on the brink of having freedom of information legislation? Let my hon. Friend's actions be the first sign of that advance.

The Government and the Newspaper Publishers Association are discussing appropriate targets for the amount of recycled paper in newspapers. However, I regret to say that those discussions hardly include all the bodies with an interest in such matters. The 300 or so hon. Members who signed early-day motion 17 in support of mandatory newspaper and magazine recycling targets were contacted by the NPA and asked to consider taking their names off the early-day motion—indeed, one or two of them did. However, when other hon. Members asked the NPA for more information, including a copy of the report that was submitted to the Government in June 1999 on targets for recycled content, their requests were declined. I hope to hear from the Minister that discussions will now broaden and that the June 1999 report can, and will, be made public.

The Recycled Content of Newsprint Bill is progressing through the House and is likely soon to be in Committee, which will provide another forum for debate. That Bill stipulates targets for recycled newsprint and for collecting and recycling newspapers and magazines, and it would require newspaper and magazine publishers to meet mandatory targets to collect and recycle 65 per cent. of the volume of paper that they put into the market by 2016. Publishers would have to ensure that the recycled content of newsprint increased to 80 per cent. by 2010 and meet two interim targets within that period. I commend that Bill and those targets.

What is the desirability and achievability of strong targets from the perspective of producer responsibility? The Government are right to support producer responsibility. Making producers responsible for their products from cradle to grave, or in this case printing hall to church hall, ensures that they are made more aware of the need to make goods more durable, repairable and easily recyclable. That also ensures that local authority funding for recycling comes from the product manufacturers, who produce the first form of what is ultimately waste.

Such requirements also comply with the polluter pays principle, which the Government and the two main Opposition parties support. A Conservative Government first introduced producer responsibility legislation with the packaging regulations, on which they deserve warm congratulations. Those regulations provide that 26 per cent. of packaging should be recycled by, I believe, the end of next year. Increasingly, that target means that packaging companies and retailers need to help, support and invest in local authority recycling schemes. The regulations also give an incentive to packaging designers to plan for recycling and to minimise the amount of packaging.

Those regulations implement a European directive that is likely to be reviewed soon, when its recycling targets may be set higher, which is a most welcome development. I am afraid to say that the United Kingdom has an abysmal record of recycling packaging and is far behind its European neighbours. For example, Sweden recycles 84 per cent. of its glass and Germany recycles 81 per cent., but the United Kingdom recycles only 24 per cent. Switzerland recycles 89 per cent. of its aluminium cans and Finland recycles 84 per cent., but we recycle only 38 per cent. The picture is the same for steel cans.

Those figures are not due to the fact that people in other countries care more about the environment than the British people do. We are as green minded as anyone. They are due to the fact that those countries have invested in recycling schemes. The Government backed a recent European initiative to ensure that car producers pay for car recycling, and they continue to tackle the excessive prices charged to consumers in this country. Therefore, the Government are making cars greener and ensuring that consumers are not ripped off by retailers who think that they are too green in the other sense of the word.

Mandatory targets for newspaper and magazine recycling aim to make producers, newspapers and magazines responsible for sharing the cost of increasing the amount of recycling. Targets would also help the United Kingdom to meet its obligations to divert waste from landfill under the landfill directive. They would introduce producer responsibility and help to make the polluter pay, thereby reducing the burden on local authorities and council tax payers.

My constituency is a former mining area, containing wasteland and voids that are attractive to landfill operators. I represent 85,000 people in North-West Leicestershire and I know how vulnerable we are to the requirements of the waste disposal industry. The impact on our environment and the local economy, and the social impact of excessive landfill can be very damaging, so mandatory targets are important. It is particularly important that all newspapers and magazines share such a responsibility, so that no section of the industry is given advantages. We could introduce regulations that set thresholds, so that smaller publishers are protected from excessive costs, as happened with the packaging regulations introduced by the previous Administration.

A producer responsibility for newspaper and magazine publishers to collect and recycle 65 per cent. by 2016 seems reasonable. In fact, that target is precisely in line with the landfill directive that requires the UK to reduce household biodegradable waste, such as paper, going to landfill by 65 per cent. by 2016. Sixty-five per cent. sounds ambitious and it is a laudable target, but it still leaves us far behind our European neighbours. A recent report from the European Commission said that
Recovery rates reach 80 per cent. and even more in Austria, Sweden and Switzerland, but collections in Southern Europe and the UK still clearly lag behind.
That is a source of much regret and an area in which Government action can make a difference. However, 65 per cent. would be a start. I am interested to hear from hon. Members whether they believe that higher targets would be better and achievable. Will my hon. Friend the Minister confirm the Government's position on producer responsibility? Do they think that it is appropriate for newspapers and magazines to be brought under the concept, together with the packaging industry?

What about the targets for the recycled content of newsprint? The regulatory impact assessment for the Recycled Content of Newsprint Bill stated that the newspaper industry is confident that it can reach the target of 65 per cent. recycled paper by 2003. I am encouraged to hear that Ian Broxup, who is the finance director for Aylesford Newsprint—the largest paper reprocessor in the United Kingdom—and a constituent of my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw), recently told the publication Materials Recycling Week that a recycled content target of 80 per cent. by 2010
looks ambitious but might be achievable.
At present, the Aylesford Newsprint mill in Kent is producing 100 per cent. recycled content newsprint, which performs as well as, if not better than, virgin newsprint. The company can do that because about 30 per cent. of its feedstock is magazines, which have a high virgin fibre content. The suggested targets for collection and recycling include magazines as well as newspapers, so the continuing production of 100 per cent. recycled newsprint is rendered possible.

Mandatory recycling would put newspaper and magazine recyling on a stronger footing, guarantee that the necessary investment was made and therefore bring about employment, economic and environmental benefits from improved resource use.

I am interested to hear about what goes on in Aylesford. On a related subject, will the hon. Gentleman confirm that the good environmental practice of recycling paper in Aylesford will be fully subject to the energy tax announced in the Budget?

I think that my hon. Friend the Member for Chatham and Aylesford may wish to comment on that matter. I cannot do so at this stage.

Aylesford Newsprint has a combined heat and power plant and will therefore be exempt.

I thank my hon. Friend for that helpful intervention. Does my hon. Friend the Minister support targets, either in principle or those in the Bill? I believe that he should. Knowing his environmental credentials, I believe that he will fight for them.

The logging of ancient forests is a matter of concern to many environmentalists. The benefits of boosting newspaper and magazine recyling through challenging targets are manifold. Forests and biodiversity would be the first to benefit. The paper industry claims that newsprint comes solely from sustainably managed forests, but I regret that that is not always the case.

The United Kingdom produces 2.35 million tonnes of newsprint per year, which is predicted to increase by at least 1 per cent. per annum. About 60 per cent. of newsprint is imported—it is mainly manufactured from virgin fibre. Imported newsprint comes mainly from Scandinavia and Canada, with a small amount coming from central and southern Europe.

According to the Swedish Society for Nature Conservation, about 1,700 forest species are threatened or even face extinction due to the methods used by the Swedish forest industry. Swedish parliamentary auditors noted that old growth forests, containing threatened species, continue to be logged and stated that there are insufficient resources for forest protection. Species under threat from logging practices in Sweden include the brown bear, the Ural owl, the capercaillie and the golden eagle.

The situation is similar in Finland. Although two thirds of that country is covered in forest, only 5 per cent. of that is old growth or ancient forest, most of which is in the northern provinces of Oulu and Lapland and the eastern province of North Karelia. However, the remaining 5 per cent. continues to be logged. Species at risk there include the flying squirrel and magnificent birds such as the golden eagle. That situation is mirrored in Norway, where an ever-diminishing proportion of ancient forest remains. Its coastal rain forest is one of the most threatened ecosystems in the world.

In Canada, the natural environment is being damaged at an ever-accelerated rate. According to Environment Canada, about 90 per cent. of all logging takes place in previously unlogged primary forest areas. Newfoundland and Labrador, Nova Scotia, Quebec and British Columbia all tell the same tale. New Brunswick, more than any other province, has brought its forest into full industrial production. The cougar and wolf have all but disappeared. The Canadian lynx is on the provincial endangered list, woodland caribou have been exterminated, and the pine marten and the fisher are in decline.

Sometimes, people ask, "Does logging really relate to us?" Interestingly, wood from old growth forests logged in Finland is bought by companies such as UPA-Kymmene, the owner of the Shotton newspaper production plant in Flintshire, Wales. In Norway, the major forest products company is Norske Skog, which produces newsprint for the UK market and has been known to supply The Sun, The Mirror, The Express, The Times, The Guardian and The Observer.

In Canada, Abitibi Price, the owners of Bridgewater newsprint mill in the UK, have considered clear cutting the fragile forests in remote northern Labrador, threatening the livelihood of the Innuit people. Ancient forests are logged—logged for us—and some end up, absurdly and tragically, as part of wholly disposable newspapers and magazines. One of the answers has to be increased recycling, which would reduce the devastating effect on our environment for many generations to come.

In her book, "At the Cutting Edge: The Crisis in Canada's Forests", Elizabeth May states:
One encouraging sign that could lead to reduced pressure on the forests is the move to recycle paper. Driven by consumer demands, primarily from US customers, a number of Quebec mills are installing de-inking facilities in order to process newspapers into paper.
So it is not all doom and gloom; some progress is being made. There are some hopeful signs in Canada and Scandinavia.

Recycling waste paper also leads to fewer greenhouse gas emissions than the alternatives of landfill and incineration, so it helps to combat dangerous climate change. Only last month, the British Newsprint Manufacturers Association said that recycling old newspapers is cheaper and environmentally preferable to incineration, helps to displace newsprint imports and generates more jobs. Expanded newspaper recycling would indeed bring about benefits for jobs and for the wider economy. According to a report commissioned by Friends of the Earth, the targets in the Recycled Content of Newsprint Bill would lead to expansion of the UK paper industry, creating about 2,000 new jobs by 2010 and would reduce our import bill by about £175 million by the same date.

At present, local authorities' recycling targets and achievements are too low. More than 10 years ago, in one of their periodic fits of environmental awareness, the previous Government set a recycling target of a quarter of our rubbish by 2000. However, the average figure for local authorities is 8.9 per cent. North West Leicestershire, my local authority, recycles just 6.7 per cent of its waste. The Minister's borough—the fair borough of Lambeth over the water—recycles only 7.7 per cent. Much more needs to be done at local authority level.

The idea of newspaper and magazine recycling is strongly supported by all readers. My hon. Friend the Member for Bristol, North-West (Dr. Naysmith) received more than 700 letters from individuals and organisations in a matter of weeks persuading him to adopt newspaper and magazine recycling as his ballot Bill at the end of last year. Pressure groups can encourage people to write, but people respond in such substantial numbers only on issues that are close to their hearts.

The mandatory targets for newspaper and magazine recycling are well supported in the House. I referred earlier to the fact that almost 300 hon. Members signed early-day motion 17 in support of stronger targets. The list of supporters grows daily. It already includes well over 60 local authorities and industry bodies such as the Independent Waste Paper Processors Association, Waste Watch, the Community Recycling Network and Friends of the Earth.

I hope that I have given an idea of the importance of this issue. It is important socially, environmentally and economically. I have four questions for the Minister. First, do the Government believe that mandatory targets are important for the recycled content of newsprint and, if so, at what level? Secondly, will they introduce producer responsibility in the newspaper and magazine industry? Thirdly, will they ensure that targets are reviewed periodically and that new and more challenging targets are set when earlier ones have been complied with? Finally, when will the Government open out the discussion with the NPA and make available a copy of the NPA's report to the Government of June 1999?

In his acceptance speech for his second, richly deserved Green Ribbon award earlier this year, my right hon. Friend the Minister for the Environment said that one of his future aims was for
there to be a revolution in the way we handle waste.
Strong targets for newspaper and magazine recycling will herald the start of that revolution. I hope that today's debate will be seen as a key stage in its achievement.

9.53 am

May I begin by congratulating my hon. Friend the Member for North-West Leicestershire (Mr. Taylor) on securing an extremely important debate? As he pointed out, any debate about the paper and newsprint industry is listened to with great interest in my constituency. There are mills employing 1,000 people in the Aylesford and Snodland area of my constituency, producing 1.4 million tonnes of paper and board every year.

Among the four producers in my constituency is Aylesford Print. It boasts one of the most modern plants in Europe, reprocessing some 450,000 tonnes of 100 per cent.—and that is the best—recycled newspaper every year. That is just under half the total United Kingdom production. The UK consumes about 2.5 million tonnes of newsprint every year; it has recently overtaken Germany as the largest European market. Our growing economy is a testimony to its management. Despite there being a wider choice of available media—the internet and more television channels, for example—people remain wedded to buying newspapers and magazines.

I, too, was a newspaper boy; it was one of my first jobs. Some things do not change: my local party asked me to deliver leaflets every month, and that is still part of my job description.

I support the highly desirable aims that my hon. Friend the Member for North-West Leicestershire researched and articulated so well. As Mr. Broxup from Aylesford Newsprint said, those aims are tough, but they can be achieved. However, my hon. Friend did not mention capacity, or say how the 80 per cent. target can be achieved. In considering a sustainable development policy, we must also take account of the social and economic aspects of achieving that 80 per cent. target. Without increased United Kingdom capacity, the only way that we will achieve that tough target will be by importing recycled paper. As my hon. Friend said, most of the newsprint imported to this country is virgin fibre, so the life cycle of the paper is as long as it could possibly be.

Does my hon. Friend accept that about 40 per cent. of the nation's paper requirements are already imported?

Yes, they are. The reason why so much is imported is that the three mills that produce newspaper in this country are full to capacity; they cannot produce more. I shall expand on that issue later in my speech. Aylesford Newsprint's company secretary, Mr. Donald Charlesworth, told me the other day that his order book was full. He could fill another one tomorrow, but the United Kingdom does not have the mills necessary to produce the paper, and until we produce more we will have to import.

If the newspaper industry has to meet the requirement, it will mean more degraded paper imports, which have a damaging effect on the three mills, one of which is in my constituency. The life cycle of degraded paper is shorter and therefore has to go to landfill or incineration far sooner. My hon. Friend the Member for North-West Leicestershire spoke about local people being involved in decisions; if his constituency is anything like mine, incineration is not top of the pops—there is no campaign for an incinerator in my constituency. I regret that we are likely to have one and I am disappointed that my right hon. Friend the Minister for the Environment did not agree to a public inquiry.

The United Kingdom domestic share of the newspaper sector has risen from 6 per cent. in 1982 to 34 per cent., thanks to a massive £2 billion investment. The industry is playing its part. A new machine to reprocess 350,000 tonnes of newsprint costs £300 million. My hon. Friend rightly referred to the number of jobs that will be created. Every 1,000 tonnes of paper recycled creates approximately 12 jobs somewhere down the line, according to the Paper Federation's research. All the mills are now operating at full capacity.

There is only so much room within the European newspaper market. Mills similar to Aylesford have opened in France. We must grasp the opportunity, because the market is shrinking. We can process only what is available. We import majority amounts of newsprint, so why is the climate in the United Kingdom not right, given that we use more newsprint than any other European country? Companies are not investing £300 million in a new mill because we are caught in a vicious circle. For that range of investment, companies require the stream of raw material to be available on day one. They could not operate for a year, a month, a week or even a day unless the raw material was available when they needed it, because losses on their huge investment would be too great.

There has not been a new machine since 1995.

Does my hon. Friend accept that if the newspaper and magazine publishing industry was set challenging targets, as proposed in draft legislation—I commented earlier that this might be desirable—a sufficient, continuous and expanded stream of newsprint for recycling would be produced relatively early on and would justify the high costs of investment?

There certainly does not appear to be support for that from the industry. If so much paper is now available, why are not companies using it? My hon. Friend remarked that many of our European partner countries' recycling rates were considerably higher than ours. The reason is that their collection is better than ours.

All local authorities are under considerable pressures to provide services in education, social services, highways and so on. Recycling is not always at the top of their list. My hon. Friend referred to his local authority and to that of my hon. Friend the Under-Secretary—Lambeth—where recycling services have a low priority. The reason is cost. Local authorities that wish to invest in a recycling scheme—paper is the largest single commodity to be recycled—have to secure long-term contracts to collect the paper. The paper has to be taken somewhere. All the mills operate at full capacity. If local authorities cannot get contracts because all the mills are full, nothing happens. The cycle is complete. Some local authorities have stopped collecting waste paper, because they cannot secure long-term contracts to make the operation viable.

The problem is one of capacity. Companies will not invest unless there is a stream of waste and local authorities will not invest unless there are contracts. That is the conundrum. There has been no investment since 1995 and the Government must consider the options. The quickest and simplest is to invest to provide assistance to companies to cover the crucial risk period while local authorities collect and provide raw materials to mills before they become fully operational.

The investment would not be huge, but recycling would increase almost overnight. We could then move towards the desirable but tough targets to which my hon. Friend the Member for North-West Leicestershire referred. Without investment, the proposition will fall. We need capacity, capacity, capacity, with investment and assistance for companies to produce new mills. We would then achieve the desirable targets for recycling that we all want.

10.6 am

First, I congratulate the hon. Member for North-West Leicestershire (Mr. Taylor) on securing this debate and setting out the impact of our paper-consuming habits here on flora and fauna abroad. It seems that the production of Hansard and Order Papers in the House is leading indirectly to the extinction of the brown bear in Sweden and we should be greatly concerned about that.

I welcome the opportunity to probe the Minister on some key environmental matters this morning. Instead of bemoaning the achievement of local authorities, I congratulate my own authority, the London borough of Sutton, which recycles more than the Government's target of 25 per cent.—and the amount is rising. I support that policy as and when I can.

I want to examine why the Government are taking so long to respond to demands for tough targets for the recycled content of newspapers and recovery of newspapers and magazines. Why are they so reluctant to make public the details of the International Institute for Environment and Development report. If, as has been been suggested in answers to parliamentary questions, it is not theirs to release, why will not the Newspaper Publishers Association release it? What is in the report that must be kept secret, and why have Members of Parliament been provided with only an interim copy of it?

Perhaps the Government do not intend to release the report until they have launched their strategy on waste and perhaps there are stringent targets in the strategy that will satisfy hon. Members in the Chamber this morning. I hope that that is so and that the concerns of the hon. Member for Chatham and Aylesford (Mr. Shaw) will also be addressed in the document.

Perhaps the Government are embarrassed by their performance on paper recycling. The attitude to recycling in the House seems not to be advanced. An answer to a parliamentary question to the Treasury on its paper recycling scheme suggested that it peaked in 1994–95 and then fell. That coincided with the time when prices for recycled paper were very high. However, the most worrying aspect of that answer was that the Treasury was not aware of the proportion of total waste being recycled. The economy is reasonably strong and there is a great deal of activity, so the proportion of total waste that has been recycled has probably fallen in the past two years. The Government must respond to that.

The worst case scenario—I say this only half in jest—is that the Government are back-pedalling on recycled newsprint content because they are about to announce a major expansion of the waste incineration programme. I hope that that is not the case. The Government made a surprising, possibly almost accidental, commitment in the Utilities Bill to generate 10 per cent. of energy from renewable sources by 2010, which is extremely welcome. The only problem with that is that there is nothing in the pipeline to help the Government to deliver the target. There is enormous potential in solar and wind power, but no investment is going into those.

The only quick fix that would enable the Government to deliver on the 10 per cent. renewables target is to use energy from waste as a renewable energy. That would be regrettable because the international definition of renewable waste does not allow the use of energy from waste or incineration, as matter is being burnt that cannot be renewed. Therefore, I hope that the Minister will confirm in his reply that there are no Government plans to rely more heavily on incineration either to get rid of the waste that is being generated or to help to deliver the renewable energy target.

I share the hon. Gentleman's nervousness about and distaste for a substantial expansion of incineration and I echo the comments of my hon. Friend the Member for Chatham and Aylesford. Does the hon. Gentleman agree that, in limited circumstances, incineration can be a marginally better means of waste disposal than landfill?

I agree that there are circumstances in which incineration is probably a better option than landfill, but a better option than either is to minimise, reduce, re-use and recycle.

The secrecy that the Government and the NPA have adopted over the report is matched by some of the newspapers. The Guardian, for instance, which has prominently featured a campaign on waste in the past week, is part of the NPA but is not willing to divulge the information in the report. I wonder why other organisations have not been allowed to participate.

The targets set out in the Recycled Content of Newsprint Bill are that, by 2016, 65 per cent. of newspapers and magazines should be collected and recycled and, by 2010, 80 per cent. of newspapers should be recycled content. The first of those targets is not negotiable, because under European Union law there will be a requirement to reduce household waste by 65 per cent. by 2016, which will include newspapers and magazines. One could argue that the figure should be even higher, because newspapers and magazines are clean and easy to recycle and are user-friendly recyclable materials in a way that other household waste may not be.

If the percentage of recycled material is increased above 65 per cent., is there not a danger that the newspaper will simply fall apart?

I am not sure what point the hon. Gentleman is making but, as other hon. Members have said, other countries already achieve 80 per cent. One of the countries quoted was Sweden. Local authorities in rural areas in this country often cite the fact that their area is rural as a justification for their poor recycling rate. One cannot think of a more rural country than Sweden, which is already achieving very high recycling rates. Authorities that use that excuse for achieving the 6, 7 or 8 per cent. rates quoted earlier must think of a better one.

The figure of 65 per cent. is achievable. It is already being achieved in other countries. The target of 80 per cent. of recycled content for newspapers by 2010 might be harder to achieve, as the present figure is 52.4 per cent., according to a response to an earlier parliamentary question. However, if we set an artificially low target, one can guarantee that no one will endeavour to better it. Setting the target at 80 per cent. and establishing interim steps towards that target is reasonable. If the Government and the NPA believe that it is not, we would like to hear the reasons why.

The preference of Governments and all political parties is to enter into voluntary arrangements, perhaps binding ones, between the industry, the Government and other organisations. That must be the preferred solution. However, no progress appears to have been made on this matter since June—or if it has, hon. Members are unaware of it because we have been unable to obtain any information about it. The time for discussions is over. Either the Government and the NPA must formulate a tough, binding agreement with rising targets, or the Government must legislate.

10.17 am

I want to speak briefly to my Bill, the Recycled Content of Newsprint Bill, which astonished me by getting an unopposed Second Reading a fortnight ago, even though the right hon. Member for Penrith and The Border (Mr. Maclean) shouted "Object." The procedures of this place still mystify me.

I am gratified that the Bill is to be considered in Standing Committee and I hope that in due course it will become the law of the land. It is an important Bill. We consume an immense amount of paper here. It is not only Hansard that is a problem; I discovered yesterday that, over the millennium, the equivalent of 19,000 square miles of wrapping paper was used in the United Kingdom. That is unbelievable.

No, that figure includes Scotland. It is enough to cover Greater London, the entire landmass between Bedfordshire and the Sussex coast and on down to Cornwall—and that is just wrapping paper. If one added the amount of newspaper and card used, we would be engulfed. It is almost impossible to imagine the sheer bulk of those materials: 85 per cent. of all municipal waste goes into landfill sites and 30 per cent. of that waste is paper and card. We must do something about that.

That figure is correct: 85 per cent. of waste goes to landfill. However, does my hon. Friend accept that the landfill sites required are disproportionately scattered throughout the United Kingdom? Some constituencies experience major adverse environmental impacts through the failure of industry, especially the newspaper industry, to recycle appropriately.

Who would disagree with that? We cannot just keep digging holes in the ground and piling our rubbish into them. We have to consider the issue more intelligently, and that means recycling. It is perfectly possible to recycle, as the necessary technology exists. As my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) said, the capacity of mills is a problem, as they are running at full capacity. It is a chicken-and-egg state of affairs. How does one get local authorities to collect more newsprint for recycling if there is not the capacity to turn it into useful new products? We can break that cycle by legislating so as to change people's behaviour. That is why the Recycled Content of Newsprint Bill is so important.

If my hon. Friend's Bill becomes law, newspaper companies will import, which will have a detrimental effect on operations and jobs in the United Kingdom. His proposal is not in line with a sustainable development agenda.

I shall be interested to hear what my hon. Friend the Minister says in response to that. It is no part of my master plan that jobs should be lost in my hon. Friend's constituency. One reason why I proposed the Bill is that it will create additional jobs in the recycling industry, which will have huge economic benefits. For example, many people will be needed by local authorities to collect waste paper, and many more will be needed to manufacture the new products.

Friends of the Earth has calculated that a 65 per cent. recycled content by 2003 would create 5,880 new jobs and reduce the UK's import bill by £106 million; 70 per cent. recycled content by 2006 would create 7,080 new jobs; and, 80 per cent. recycled content would create 9,720 new jobs.

Where will the local authorities that collect newsprint take the raw material if there are not enough mills?

I know that it is an important constituency matter. However, I cannot speak on behalf of the Government. My hon. Friend the Minister is paid to resolve such conundrums; I am not. I merely paint the broad canvas, while he is responsible for the details.

I have a couple more points to make. We have heard about the damaging effect on ecosystems of unrestrained logging. In Norway, Finland and Sweden the amount of remaining primary forest is tiny—5, 6 or 7 per cent. Managed forests are supposedly sustainable and, on their own terms, they are. However, there has been a huge impact on wildlife: many such forests are wildlife deserts. That is another reason why, if we care about the planet and are concerned about conserving rare species, we must progress to recycling.

So, Mr. Cook, I shall leave it there—

Order. I am sure that all hon. Members recall that in Westminster Hall the Chair must be addressed as Mr. Deputy Speaker. This is not a Committee.

Forgive me, Mr. Deputy Speaker. This is the first time that I have spoken in Westminster Hall and I am not familiar with its procedures. I shall not make the same mistake again.

In a couple of weeks, we will hear the Government's definitive view on the matter when the Minister responds to matters raised in Standing Committee—

Does my hon. Friend share my hope that, in reacting to comments made so far, the Minister will say whether the Government have produced an economic model that illustrates the undeniable link between the setting of ambitious targets and the requirement for the NPA and others to work with local authorities to produce the financial resources necessary to deliver the investment that my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) believes is lacking in the industry?

I am sure that the Government will take all these matters into account when I receive a response to my Bill in a fortnight. I hope that we shall soon have sight of the Government's waste strategy. We have a waited a long time for that and I am sure that it will not be delayed much longer.

10.26 am

This has been an interesting debate. It is a shame that more hon. Members were not here to discuss what is a very important subject and I congratulate the hon. Member for North-West Leicestershire (Mr. Taylor) on raising it today. As a former paper boy—that was many moons ago—perhaps I, too, should declare an interest. In the intervening years, the amount of papers delivered to one's door has grown enormously. On receiving my papers on a Sunday morning, I typically spend the first five or 10 minutes extracting the rubbish—

I was referring to rubbish in newspapers that one is obliged to read to discover what the Government are doing, such as The Observer and the Sunday People. I was referring to the dross that one encounters before getting down to the good meat in The Sunday Telegraph.

I further congratulate the hon. Member for North-West Leicestershire on his extensive knowledge of wildlife. Given his comments, one would think that the whole of Canada is denuded of wildlife, but I am sure that that is not the case. I hope that the habitat of the flying squirrel, to which he referred, is not so denuded that they try to fly as far as these shores. I am having quite enough problems with land-based squirrels in my back garden and I do not want to have to cope with flying ones as well.

The hon. Member for Chatham and Aylesford (Mr. Shaw) and I are members of the Select Committee on Environmental Audit, so this important subject is close to our hearts. That Committee debates the sort of problems that have been discussed today. Those problems are also urgent. As the municipal waste survey for England and Wales shows, about 22 million of the 26 million tonnes of municipal waste are disposed of through landfill. That figure is neither acceptable nor sustainable. Between 100 million and 130 million tonnes of waste per annum are produced by households, commerce and industry. In some sectors, that figure is increasing by 3 per cent. per annum, despite hon. Members'efforts to limit waste and encourage recycling.

Targets set in EU directives aim for the recycling of some 35 per cent. of household waste by 2020. If we are to achieve those and match the standards that have already been set in many continental countries, much work remains to be done.

I am grateful to the hon. Member for North-West Leicestershire for mentioning the good work that was begun under the previous Government, although his reference to periodic fits of environmental concern was slightly uncharitable. Our last Secretary of State for the Environment, my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), was one of the most environmentally friendly Secretaries of State, with a great reputation among environmental groups. Not all hon. Members give him credit for that.

I certainly exempt the right hon. Member for Suffolk, Coastal from that broad-brush criticism. It is a pity that his predecessors in the post did not share his interests and priorities.

I am sure that my right hon. Friend will be greatly relieved at that. He was the longest-serving Secretary of State for the Environment in the past century, which says something about the emphasis that the Conservative Government put on environmental matters.

Despite the tough targets that were set by the previous Government—and carried through to the current Government—and despite the progress that has been made, there are still enormous divergences in the records of local authorities throughout the country. The average figure for the recycling of household waste is still low—about 7 per cent. It is, however, worth noting that the records of certain local authorities are much better than those of others. Of the six local authorities that recycle more than 30 per cent. of their waste, no fewer than five are Conservative run—Chichester, Chiltern, Christchurch, Purbeck and South Bucks. Of the 15 authorities that recycle more than 25 per cent. of their waste, eight are Conservative-controlled authorities, namely—in addition to those that I have already mentioned—East Dorset, New Forest and North Dorset. Of the 26 authorities that recycle more than 20 per cent. of their waste, 13—half of them—are Conservative controlled, adding to our list Mid Sussex, St. Edmundsbury, Surrey Heath, Test Valley and Wycombe. Coming just below those authorities are many other Conservative-controlled authorities, not least Worthing, my local authority, which heads that list. That tells us about the priorities of Conservative-controlled authorities and about their effectiveness in not just talking green, but acting green.

I congratulate the authorities on that list, but is their ability to recycle relatively high levels of material not a reflection of the fact that many Labour-controlled authorities suffered capping regimes that prevented them from investing in the services or facilities that they would like to have had? The capping was less damaging and less prevalent in the case of Conservative-run authorities.

That is not true. Many Conservative-run authorities—I am thinking now of Wandsworth during the 1980s—found ways of making money out of recycling. At a time when raw material prices were rather higher, Wandsworth council made a substantial profit from glass recycling and directed it towards other areas of expenditure.

Another point to remember is that the vast majority of the authorities that I mentioned are in rural areas. We are told that recycling in rural areas is less economical because of the large collection areas. The Liberal Democrat spokesman, the hon. Member for Carshalton and Wallington (Mr. Brake), also referred to that claim. We can give the lie to it. The records of the authorities covered by the constituencies of members of the Cabinet leave much to be desired. In Kingston upon Hull, which includes the constituency of the Deputy Prime Minister, the local authority recycles just 7.4 per cent. of its rubbish. In Oldham, which includes the constituency of the Minister for the Environment, the local authority recycles just 2.9 per cent. The worst record for a local authority that includes the constituency of a Cabinet member is to be found in Sedgefield, the Prime Minister's constituency, which recycles only 1.4 per cent. of its rubbish. Best practice should start at home and Cabinet members should set an example. Only two local authorities covering Cabinet members'constituencies reach double figures for recycling. That is a pitiable example.

We have heard much about the consultation document, "A Way with Waste", which was issued in June 1999—a long time ago. A figure of 45 per cent. for the recovery of municipal waste—30 per cent. for household waste—by 2000 was identified then. I would be grateful if the Minister could update hon. Members on when we can expect to see the Government's response to that consultation. It has been expected for some weeks. Perhaps he could also tell us the reasons for the delay. The Conservative party has fears about the place in the hierarchy of waste disposal that is to be occupied by incineration—we favour other methods. We recognise that incineration has a role to play and that landfill should be very low down in the waste disposal hierarchy.

Incinerators are, of course, covered by the euphemism "waste to energy" in the consultation document, but they are still incinerators and they still have all the problems that are connected with incineration. The proposals to build 130 new incinerators by 2015, while recycling only 15 per cent. of our waste during that time, strikes the wrong balance. I would be grateful to hear the Minister's comments on incinerators.

There are problems with incinerators. For example, their existence does not encourage an increase in recycling because they are a soft option and they require a constant minimum flow of raw material to fuel them; otherwise, the fires go out. A problem that I have faced in my constituency is the location of incinerators near densely populated areas. Brighton and Hove, the local authority that borders my constituency, has been threatening to park an incinerator on the doorstep of my constituency, regardless of the consequences to my constituents. That authority has also refused to include my constituents in a consultation exercise—that is not acceptable. It has been said that that incinerator should bring in waste by sea from the continent to provide it with the raw materials that it requires for fuel—that is not acceptable.

We must find means to deal with our waste as locally as possible. If an authority such as Brighton and Hove borough council wants to be grown-up enough to be accorded the status of city, it should be responsible enough to know what to do with its rubbish, rather than dumping it on neighbouring authorities, as it has done for too many years. That authority recycles only 8 per cent. of its rubbish and charges for supplying recycling collection boxes.

I endorse the hon. Gentleman's call for greater openness and more detailed consultation with communities. Would he extend that principle to encouraging the NPA—to which I referred earlier—to publish the submission that it made to the Government in June 1999? That is a crucial document.

I am in favour of greater openness because it allays people's fears about such things as incinerators. I will later touch briefly on the Recycled Content of Newsprint Bill.

I wanted to mention the landfill tax, which was a Conservative achievement. It has, however, been rather diluted by the Government. Under the Conservative landfill tax, the vast majority of the revenue that was raised was recycled back to local environmentally friendly community projects. We now have an accelerated landfill tax that will go up to £11 per tonne in the present financial year. None of the extra revenue that is being raised by the Government is being recycled for local environmental projects—it all goes to the Inland Revenue. That is another example of the way in which the Government use green taxes as an excuse to raise revenue without recycling any of the money to good causes. We should use landfill tax revenue to encourage increased recycling and re-use and to encourage education that will result in the use of less packaging, increased use of biodegradable packaging technology and sustainable sources of raw materials.

The hon. Member for Chatham and Aylesford referred to my query on the energy tax for the recycling plant in his constituency. It is interesting that that plant will pay lower energy taxes by virtue of the fact that it is a combined heat and power plant, not because it is an environmentally friendly business. We should promote such environmental good, but the Government seem in that regard to have set the wrong priorities in the Budget. I wonder whether "capacity, capacity, capacity" will be the Labour party's new war cry at the next election.

There is a problem with the economics of the whole recycling project at the moment, due to the fall in raw material prices. We must find new uses for recycled goods. West Sussex authority is pioneering the recycling of plastic bottles into highly usable traffic signs, at a fraction of the cost of the aluminium versions. They are perfectly sturdy and tend not to get pinched. It is an innovatory project.

We should find uses closer to home. It is crazy that recycled goods in my constituency have to go to Wales or south Yorkshire to be reprocessed, which uses enormous amounts of fuel and the lorries add to road congestion. We must find sustainable alternatives within communities closer to home. We should use paper as a fuel substitute in domestic environments too.

On the Recycled Content of Newsprint Bill, proposed by the hon. Member for Pendle (Mr. Prentice), it is probably due to the cock-up theory that it has passed through to Standing Committee. I wish him well with the Committee's deliberations. At first glance, the Bill appears to be a well-meaning attempt to spur the newspaper industry on to greater efforts in recycling. However, the newspaper recycling working group report, which has been supplied to the Department of the Environment, Transport and the Regions, shows that there are limits to the level of recycling that can be achieved with the current UK capacity. It also demonstrates that the industry has a firm and practical voluntary commitment to achieving the highest percentage as possible within that capacity.

In 1991, the recycled content of newspapers stood at 28 per cent. That content had risen to more than 52 per cent. on the basis of voluntary measures. We use all the UK-produced recycled newsprint available to us. If more were available we would use it, but we cannot use what does not exist?

May I finish?

The aggregates tax in the Budget is another problem. The Government do not seem to realise that aggregates are a finite commodity for recycling. Aggregates can be recycled only if buildings are knocked down. Unless the Government are recommending a mass knocking-down programme, they will not secure the amount of aggregates that they require.

To conclude, many questions have been posed and responding to them may take the Minister above his pay scale, in terms of what he is paid to do. Nevertheless, the Government must do more through their "Are you doing your bit?" campaign. They must work more closely with local authorities to develop innovative approaches, and with industry to encourage a more environmentally sustainable ethos in technologies. For all the talk in the Budget about research and development tax credits and help for industry, none is linked to green credentials in green technology for businesses. The Government claim that they are putting the environment at the heart of taxation, but they have woefully failed in that respect.

As Friends of the Earth said, if the Prime Minister and the Chancellor do not do more, the Government's new way strategy will be rubbished. We need targets for recycling that are comparable to best practice in the rest of Europe and funds provided for decent recycling services through money raised by the landfill tax, in particular.

I congratulate the hon. Member for North-West Leicestershire on securing the debate, but it has raised many questions, which the Minister must now answer.

10.43 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions
(Mr. Keith Hill)

I begin by congratulating my hon. Friend the Member for North-West Leicestershire (Mr. Taylor) on securing the debate. I am grateful for his useful and constructive comments on this complex subject. We have had an interesting and thoughtful debate, and I am grateful for the contributions of all the other former newspaper boys—my hon. Friends the Members for Pendle (Mr. Prentice) and for Chatham and Aylesford (Mr. Shaw) and the hon. Members for East Worthing and Shoreham (Mr. Loughton) and for Carshalton and Wallington (Mr. Brake). I hope to deal with most of the issues that they raised, but I hope that they will forgive me if I dwell more particularly on the questions asked by my hon. Friend the Member for North-West Leicestershire.

Before commenting on newspaper and magazine recycling, I should like to place the issue in the context of the Government's wider objectives, reflecting my hon. Friend's wide-ranging speech and the broad canvas depicted by my hon. Friend the Member for Pendle, tainted only by the underhand reference to filthy lucre.

The Government firmly believe that tackling waste must be a key priority for the future if we are to continue to make progress towards sustainable development. Last year, we published our draft strategy for waste, "A way with waste" and we expect shortly to publish our final waste strategy in the light of responses to the draft. Both documents are built on the support that we have already received for the vision described in our earlier consultation paper, "Less Waste More Value". The key element of that vision is an integrated approach to waste management. That means that we recognise that every step in the waste management process is part of a whole and should form part of the decision-making process. It means ensuring that all key players are involved, using a mixture of waste management options. Other elements of our overall vision support that approach. We aim to achieve a reduction in the quantity and hazard of waste arising, with higher levels of re-use and the recovery options for waste, including recycling, composting and energy recovery.

As part of the objective of involving all stakeholders, we especially wish to encourage and facilitate greater public participation in the decision-making process. Underpinning all those objectives is our commitment to effective protection of human health and the environment.

Tackling the growth in waste must be at the heart of our waste strategy. On average, each household produces more than a tonne of waste every year. Each year, industry and commerce produce between 70 million and 100 million tonnes of waste in providing goods and services. That quantity is increasing—in some sectors by as much as 3 per cent. a year. A step change is needed in how we think about and manage our waste if we are to make a full contribution to sustainable development. In particular, we need to gain more value from the waste that we produce, while managing it in an environmentally responsible way.

A fundamental element in initiatives to help us to achieve those objectives will be substantially increased levels of recycling. The Government are determined to play their part in ensuring that recycling in the United Kingdom is in line with the best practice in other countries.

Our draft waste strategy sets out several goals for waste management in the future. Principally, by 2005, we aim to reduce the amount of industrial and commercial waste landfilled to 85 per cent. of 1998 levels, while focusing on recovering value and reducing environmental impacts. By 2010, we aim to recover 45 per cent. of municipal waste and recycle or compost 30 per cent. of household waste. Achieving the shift to sustainable waste management reflected in those targets will not be easy and will require the involvement of all stakeholders: Government, business, local authorities and consumers.

The Government have already made a start, in partnership with business. The landfill tax escalator provides a strong incentive for waste managers to seek ways of recovering their waste. It may have led one third of companies to introduce or step up efforts to minimise, re-use or recycle waste. We are also taking steps to ensure that those seeking to avoid waste management controls by abuse of exemptions from the licensing system can no longer do so.

Building on the report of the Market Development Group last year, we are developing proposals for a joint programme involving my Department and the Department of Trade and Industry to promote a more sustainable and integrated approach to waste management, and to introduce many of the group's recommendations. We are starting to increase the recycling and recovery of packaging waste as a result of the implementation of the European directive on packaging and packaging waste. Further directives are at various stages of development, covering producer responsibility for end-of-life vehicles, batteries and electrical and electronic equipment.

There is much more that we can and will do. We will produce guidance for businesses on how to measure and report on their waste and to facilitate benchmarking. We are already seeking comments on a draft of the guidance. The "Are you doing your bit?" campaign is an example of how we are already stimulating public awareness and encouraging individuals to get involved by recycling their waste and buying recycled products. We will continue to work with the national waste awareness initiative to that end.

We will press local authorities to complete their waste management strategies and, if necessary, take powers to require them to do so. We will also work with them to develop innovative approaches to stem the growth in household waste, which has been much referred to during the debate. We will also monitor progress towards the achievement of our goals and keep them under review. We will assess progress with all those who have a part to play, including business, local government, community groups and the waste management industry.

It will be obvious from what I have said that we do not think that the Government working alone can achieve the significant changes we envisage. All the key players need to be involved and to make a contribution. The list of those with the potential to assist in meeting our goals is a long one and could include waste producers and managers, waste reprocessors, waste regulators, waste management planners, community groups, individuals and households. In the context of newspapers and magazines, it is perhaps best to focus for a moment on two overall groups: consumers and business.

As consumers, whether businesses or individuals and households, each of us can help by thinking about what we buy, what we throw away and how we influence others. Purchasing decisions can help to stimulate the market for more sustainable goods and services. In particular, we can choose products made from recycled materials, which in many cases perform just as well those that are not. Where recycled products are not available, we can ask the retailer or other supplier why not. Such action can help to establish markets for recycled goods. Without those markets, increases in recycling activity are difficult to achieve and sustain.

Consumers can also contribute by reducing the quantity of waste that they produce, separating recyclable material and composting. Individuals and households can also influence the planning process, particularly during the development of local waste plans. That can lead to a better understanding of the type and quantity of waste to be disposed of and help in making informed choices about how local waste services should be organised.

I have already mentioned the contribution that businesses can make to the development of markets for recycled materials through their purchasing choices. There are several other ways in which businesses can help. Many are already choosing to report on their environmental performance. We are currently consulting on guidance to help businesses do that and identify priorities for improvement. Some business sectors are already developing strategies aimed at tackling the economic, environmental and social aspects of their work. We are also encouraging businesses to widen the scope of their management systems to embrace a number of other aspects, including energy and water consumption, emissions, raw material use and product stewardship, which can all help to provide further opportunities to secure savings and reduce the environmental impacts of business.

The Government believe that the initiatives already in place in many companies to label products to provide environmental information can have an important role, particularly when used in conjunction with other market measures. Providing information to consumers about, for instance, whether a product contains recycled material, can allow that consumer to take that information into account in deciding whether to buy. Ultimately, that information could act as a marketing tool.

Finally, businesses can develop producer responsibility initiatives to increase recycling activity in their sectors. Such initiatives involve businesses that manufacture, distribute or sell products or materials taking a greater share of the responsibility for what happens when those materials become waste. As I mentioned, European legislation has proved to be the driver for initiatives covering packaging, end-of-life vehicles, batteries and electrical and electronic equipment. Legislation is already in place for packaging and the other directives may also need to be implemented by regulatory means. Where possible, we are keen to encourage the voluntary approach, as that can yield benefits in flexibility and the ability to respond quickly to changing circumstances. That is the approach that we have sought to follow in the case of newspapers and magazines.

My hon. Friend the Member for North-West Leicestershire asked me four questions that I will attempt to answer. First, he asked about the Government's attitude towards mandatory targets. We certainly support the principle of targets. However, we—and, I was interested to learn, the Liberal Democrats—would prefer a voluntary approach that allows technical issues to have a bearing on targets.

Secondly, my hon. Friend asked about producer responsibility. Targets, whether voluntary or not, will place responsibility on producers to achieve high levels of recycled content in newspapers.

Thirdly, my hon. Friend asked about the Government's attitude towards reviewing targets and setting more challenging targets. We expect any targets to be subject to review in the light of changing circumstances and, not least, in the light of recycling capacity, to which my hon. Friend the Member for Chatham and Aylesford referred.

Fourthly, my hon. Friend the Member for North-West Leicestershire and others asked about the publication of the Newspaper Publishers Association report. However, I fear that it is not for the Government to publish it. As the hon. Member for Carshalton and Wallington said, it is the property of the NPA.

A general request was made for an indication of the timetable for the announcement of the Government's decisions on the recycling of newsprint. As with issues such as incinerators, which the hon. Member for East Worthing and Shoreham mentioned, we will make our position clear as part of the announcement that we will shortly make on our waste strategy.

Let me deal in more detail with the issue of newspapers and magazine recycling. Some 1.4 million tonnes of waste newspapers continue to be landfilled each year, and newspapers and magazines form a significant proportion of total household waste. That means that increases in the recycling of newspapers and magazines could have a considerable impact not only on the amount of waste landfilled each year, but on the viability of local collection infrastructure. With that in mind, the Government have been working with the newspaper industries through the Newspaper Publishers Association to achieve an increase in the level of recycled material in newspapers. We have worked with the NPA on the basis of a voluntary agreement. Given the gains that that approach has produced, that is still our preference.

In 1991, the recycled content of newspapers was 28 per cent.; in 1998, the last year for which we have confirmed figures, it had almost doubled to 52.4 per cent., which is a significant and welcome increase. My Department has been in discussion with the NPA to secure further increases in the recycled content of newspapers through a voluntary agreement. However, those discussions have taken place in the context of the practical constraints within which the industry must operate. The most important of those is the need to take into account the likely mill capacity that is available in the UK to deliver increased recycling.

Our experience of working with the NPA has shown how we can make progress in partnership with businesses and other stakeholders to achieve significant gains in waste management. I hope that our waste strategy will provide a framework for similar partnerships elsewhere—

I am afraid that I do not have time to give way.

Without those partnerships, we shall find it much more difficult to achieve the vision that I have outlined for our waste strategy.

Sub-Post Offices

10.58 am

I am grateful for the opportunity to raise this important issue on this particular day. This is my third speech in defence of the sub-post office network in just a few months, and it will not be the last. The issue will not go away, and nor will I. More important, public concern expressed in one of the largest-ever petitions to be presented to No. 10—it was signed by 3 million people—will not go away. The fears of sub-postmasters and sub-postmistresses who are lobbying Parliament today will not go away and the growing rebellion among Labour Members who are afraid for their marginal seats will not go away unless the Government drop their plans to force pensioners, disabled people, young mothers and other vulnerable groups to have their benefits paid into a bank account.

Since we last debated this issue, such concerns and fears have grown enormously. The Government have been unlucky, because no sooner had they announced that benefits would be paid automatically into banks—putting rural post offices at risk—than the banks announced massive closures in their rural branch networks. However, the Government's main problem has been self-inflicted. It is increasingly apparent that the initial decision was the opposite of an example of joined-up government. The Treasury, the Department of Trade and Industry and the Department of Social Security had not reconciled their conflicting interests or thought through how ordinary people would be affected, and they had not recognised how the knock-on effects would cancel out any benefits.

I have had the advantage—some would say the disadvantage—of being a Minister at the Treasury, the DTI and the DSS, which may make it easier for me to examine the issue from all sides. However, I have always approached the matter first and foremost as a constituency Member, aware of the invaluable role that sub-post offices play in our constituencies. They are important in towns and suburbs, as well as in rural areas, and they are central to the vitality of rural areas and local communities. They provide essential services to the most vulnerable members of society.

At the DTI, I was responsible for the Post Office. I recognised the national importance of post offices, so I committed my party to maintaining a comprehensive national network. At the DSS. I realised even more clearly how essential the network of sub-post offices is—to distribute social security payments to millions of pensioners, young mothers, disabled people and others who cannot be expected to travel far to obtain cash. If the network did not exist, we would have to invent it.

I was a Treasury Minister before that, so I yield to no one in my enthusiasm for saving taxpayers' money—but I wanted only to make genuine savings. I was at the Treasury for long enough as a Parliamentary Private Secretary and then a Minister—seven years man and boy. I observed that the Treasury had a tendency to make savings in one Department's budget even though that resulted only in offsetting cost increases in another Department. That rather perverse practice is enshrined in a doctrine enunciated by the Treasury mandarin, Nick Monk, who said:
Take any cut wherever you can get it.
That rather myopic doctrine has brought about the current actions by the DSS.

The Treasury has always considered the £400 million annual cost of distributing benefits via post offices to be a tempting target. When I was Secretary of State for Social Security, I was advised that trying to save that money by requiring the payment of benefits into bank accounts would lead to the collapse of the sub-post office network. The only way to prevent that would be for the DTI to subsidise the network, and that would eat up the bulk of the savings. Therefore, the action would bankrupt many sub-post offices, undermine communities, inconvenience the most vulnerable people in our society, and yet produce little or no overall saving. Twice I have asked Ministers whether they have received similar advice from their officials, and twice I have received no reply. We shall see whether the Minister replies today.

The Government's policy is even more perverse than that analysis suggests. They claim that delivering benefits costs far less via banks than via post offices. They say that automated credit transfer costs the DSS only 1p per transaction, whereas payments by order books cost an average of 49p. It is true that the banks charge the Benefits Agency only 1p per transaction. However, that is the cost only of transferring money from the agency to each bank account; it does not include the cost of operating a bank account or the cost of withdrawing money from accounts.

By happy chance, the Government have just published "Competition in UK Banking" by Don Cruickshank. Hon. Members who have reached annexe D4—I am sure that they all have—will have discovered that the average cost of withdrawing cash from a bank by cheque is more than £1 per transaction. The average cost of withdrawing cash from a hole in the wall—an automatic teller machine—is about 30p per transaction. Of course, those costs will not be borne by the Benefits Agency, but nor will they be borne by banks. They get their money from customers, so the costs will ultimately be borne by them, through one charge or another.

Those customers will include the claimants who are forced to have bank accounts. By forcing people to receive benefits via banks, the Government are transferring from taxpayers to bank customers—including claimants themselves—the costs of getting money into claimants' pockets. That is why Ministers are not giving any guarantee that pensioners and others who are forced to receive payments through a bank account will not pay charges or face costs every time that they withdraw cash from a hole in the wall.

Does my right hon. Friend agree that Ministers have sometimes mentioned at least the possibility of their subsidising the banks?

Yes, that is a wonderfully perverse prospect. The Government have announced an inquiry, saying that banks are a force of evil incarnate, but simultaneously raise the prospect of their subsidising them, at taxpayers' expense, to undertake a task that will, in some ways, be more expensive than the original order book system.

Ministers have not given an assurance that the charges and costs will not fall ultimately on claimants. They have used words such as "we intend" that pensioners will not incur bank charges—but the road to hell is paved with good intentions. They have said "we do not want" banks to take money out of the pensions of people who are a bit overdrawn—but wanting is a long way from guaranteeing.

The second, hidden consequence of the Government's policy is the loss of trade, which they call "footfall", for post offices—additional to the loss of contract revenues from the Benefits Agency. At present, pensioners and others who pick up their money in post offices spend some of it in the shop. If they receive the money via their bank accounts or a hole in the wall, they probably will not spend it in the sub-post office. Even if the DTI returned to post offices all the savings made by the DSS as a result of not paying out benefits via post offices, the post office network would still suffer a net loss through loss of trade. Many sub-post offices would still have to close.

The Government's proposed remedy is that pensioners and others be given the right to draw their money at sub-post offices, so benefits will be channelled via a bank account to the post office. Clearly, fewer pensioners will do that than currently have their money paid through the post office. Moreover, if they do so, their bank will have to pay the post office for the service to the banks' customers. It may have escaped Ministers' notice, but banks are not philanthropic organisations. They will want to recoup their costs from customers. If banks are unable or forbidden to do so, they will be reluctant to accept benefit claimants as customers.

Ministers hold out a vision of post offices undertaking banking services, not only for benefit claimants, but for the whole local community, particularly in rural areas where banks have withdrawn. I hope that sub-post offices will undertake that role, and I wish them well. I hope that they can make a profit where Barclays, Lloyds, HSBC and others have retired hurt—but that is just a hope. As yet, the Horizon project has no software to handle banking.

I do not disagree with the right hon. Gentleman, but he is being slightly historical. Surely the answer is the smartcard. My understanding is that smartcard technology is up and running—although not fully—and available. How should that be funded?

I am certainly happy to get on to that subject because I attempted to introduce such a solution but the Government aborted it. It is important to recognise that the truncated Horizon project handles only the internal accounting and management services of post offices. As yet, it does not function sufficiently to take on additional business. Post Office Counters Ltd. intends to seek tenders later this year from companies that are willing to write the software to make such additional business possible. In short, having amputated from the original Horizon project the ability to transmit money from the Benefits Agency direct to post offices, the Govt now propose an ambitious new scheme to graft on to the Horizon project the ability to transmit money between post offices and every bank in the country.

When I was at the DSS, I concluded that compulsory ACT—forcing people to have their benefits paid into bank accounts—was a non-runner. It would either destroy the post office network or make hardly any overall saving if the network had to be subsidised by other means. However, I recognised that the process of distributing benefits by order books was one of the most costly, inefficient and fraud-prone ways of delivering money.

Then I discovered that half the £400 million annual cost of Post Office Counters' contract with the Benefits Agency—I believe that that was the amount, but I am open to correction—did not end up in the hands of sub-postmasters, but was absorbed by the cost of printing, warehousing and storing order books and other central costs of Post Office Counters Ltd.

We concluded that, by automating the process of transmitting money from the Benefits Agency to sub-post offices and introducing a benefits payment, we could achieve substantial savings, eliminate fraud and still leave sub-post office revenues largely intact—and that, as a by-product, the computer programme would enable post offices to expand into other areas of business. I still believe that that is the only realistic route. I urge the Govt to introduce it under a different name. They can pretend that they are not doing it; I shall not expose them. I urge them to bring the process back.

Sadly, when the scheme allegedly ran into problems, as all large computer projects across the world do at some stage, the Treasury scuppered the scheme and imposed its pet idea—a compulsory ACT that forced payment to be made by the banking system. All I will say about that now is that, for almost two years, Ministers repeatedly assured the House that the Horizon project would be complete by the end of 2001. They have subsequently claimed that that it was three years behind schedule when they took over.

The Minister for Competitiveness, who will reply to today's debate and who has considerably more integrity than many of his colleagues, was obliged to retract that allegation and admit that the delay had built up only by the time that they cancelled it, two years later. The Govt refused to tell us why the contract did not work and whether there was anything wrong with it, other than to say that there were no technical problems and that it was some managerial quagmire.

I remind the House that the project was based on the up-and-running Irish system for delivering benefits. The new Labour Government have failed where the Irish succeeded. I shall let that be their epitaph. I imagine that in Ireland they will be getting their own back for generations of jokes about the alleged incompetence of the Irish by telling Alistair Darling jokes about the Government's inability to run a system that runs perfectly well in Ireland.

The Government defend the problems that they have got themselves into by using four main arguments. First, they say that sub-post offices have been closing anyway. Over the previous Parliament, they closed at an average of fewer than 100 a year. Under this Government, they have closed at double that rate. Indeed, over the past year, the rate of closures has been five times higher—more than 500 have closed in the past 12 months. That is simply the effect of announcing the prospect of moving to ACT. If the proposal is implemented, closures will run into thousands. To pretend otherwise is simply dishonest.

Secondly, the Government argue that an increasing proportion of claimants opt voluntarily for payment via their bank account, which in the long run is bound to undermine the post office network. That is scarcely justification for compelling people to move to payments via ACT, thereby destroying the network in the short run. Given time, post offices would be able to develop other revenue sources, but the Government will deprive them of that time and put the whole network at risk.

Thirdly, the Government argue that extra revenue sources will arise from the truncated Horizon project, which will make good the loss of the DSS contract. That would require DSS revenues to grow at about 17 per cent. a year compound between now and the end of the contract. At present, the project has no functionality for additional business. It may get it in due course—I hope that it does—but it will be quite a long time before it can handle new revenue streams. Those other revenue streams were originally intended to be a by-product of the development of the benefits card system; now they are the only feature. Therefore, the revenues that this £800 million project will generate will have to repay that £800 million before there is a single extra penny to compensate for the loss of the contract between the Benefits Agency and Post Office Counters Ltd. Can the Minister seriously suggest that that is realistic?

Surely it is not even 2003 and beyond that should concern us. Owing to concern about what will happen to sub-post offices, sub-postmasters are pulling out now—and finding it impossible to find someone else to take on the business.

My right hon. Friend is absolutely right. That is why the rate of closures has accelerated. Ministers say that it is just because some elderly sub-postmasters and mistresses cannot cope with the new computers. That might explain why a few elderly people retire, but it does not explain why post offices close and are not filled by young, computer-literate sub-postmasters and mistresses. Sub-postmasters and mistresses are leaving the business because they fear that it is not a viable enterprise.

Does my right hon. Friend agree that closures affect not simply the post office but the whole pattern of shopping in small villages? Fifty people turned up to my surgery in Watton-at-Stone this week concerned about this issue. They say that, if benefits are not paid at the post office, other little shops will die too, because people will no longer go into the post office, collect their money, buy a few things there and then move round the town. They will all go to Hertford or Stevenage.

My hon. Friend is absolutely right. I have a neighbouring constituency to his, and exactly the same is being said by my constituents—both those who receive benefits and those who run related businesses. They see the sub-post office as performing a vital role in keeping the community going.

The Government's fourth argument is to say, "We are installing 3,000 ATMs"—hole-in-the-wall machines. Of course, they are not installing them; that will be carried out on a commercial basis and in the most commercial locations between Post Office Counters Ltd. and the banks. It will still leave 15,000 sub-post offices without a hole-in-the-wall machine. Costs are highest where usage is lowest, so very few machines will be in rural areas. Even if they are installed there, they will reduce the footfall through the shops, as people withdraw money out of hours.

There is also a practical implication relating to cashpoint machines, in that many sub-post offices are too small to house them. For security reasons, a large area is needed at the back of the machine: 9 sq m is required to house them. Physically, therefore, many sub-post offices will be unable to accommodate them.

That is a very good point. I was unaware of that fact, and I am grateful to my hon. Friend for pointing it out. The more one examines the Government's arguments, the more flaws one finds.

Following the Government's announcement that they are to make the payment of benefits into bank accounts compulsory, the important issue is not the administrative consequences for the Department of Social Security, the Benefits Agency and Post Office Counters Ltd., but the impact that the proposal will have on pensioners, young mothers, disabled people and other vulnerable groups in our constituencies. However, far from being the first people to be considered, they are the last and, 10 months later, the Government have still not explained how they intend to cope with the problems that those people will face.

Will the Minister set those people's minds at rest by answering the following questions? Will the shift to compulsory payments through the banks mean that pensioners will receive their pensions four weeks in arrears instead of weekly and on time? That would represent a huge one-off saving for the Treasury, but it would be an enormous blow to pensioners, who would have a four-week gap in their finances. Their heirs could pick up the outstanding pension four weeks after they had died, but I hope that the Minister will not use that argument to justify such a move.

How will the Government cope with people who do not have bank accounts, or who do not want bank accounts? Will they compel banks to accept such people as customers? How will the question of those who are legally forbidden to have a bank account be handled? How will the Government cope with the 1 million emergency payments made every year, mostly to people who have no bank account and who would probably be unable to obtain one in normal circumstances? Those people will need that money urgently, and they obtain it at present by cashing a giro in the local post office.

What will happen to young mothers who have always had the option of receiving their money from a post office and spending it on their children? That is why the money was given in the form of child benefit—as a result of a campaign originally waged, I believe, by the right hon. Member for Birkenhead (Mr. Field). In future, that money will be paid into the family bank account, unless, presumably, they open a second account and pay all the charges that may be incurred as a result.

Is there any guarantee that no bank charges will be levied on those who take out bank accounts for such purposes? What will be the interaction between an overdraft and any money paid into the account? Will there be withdrawal charges levied on people withdrawing money from ATMs?

If the Minister has no answers to those questions after 10 months of thinking, it is because there are no satisfactory answers. Only one answer will be acceptable to the 3 million signatories to the petition handed in at Downing street today, to the 18,000 sub-postmasters and mistresses lobbying Parliament today, and to the increasingly worried Members of Parliament, including Labour Members. That answer is that the Government will think again, and reconsider the proposed system of automating the delivery of benefits direct from the BA into post office accounts so that we can preserve a viable network of sub-post offices in order to serve the most vulnerable people in the community.

11.24 am

I congratulate my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) on surviving in this place, and I hope that he continues to survive for much longer. He stretched himself by trying to bring to the debate a degree of partisanship that is not necessarily present, and which is not in the long-term interests of our constituents, including those who operate sub-post offices. I am proud to represent an urban constituency, and sub-post offices are as important to inner-city areas as they are to the countryside. To ensure that Parliament and the Government think carefully about this subject, an all-party group of Members of Parliament has been formed, of which I am pleased to be chairman. Although it properly raises people's concerns, it does not unnecessarily scare people about events that may not happen. It also keeps its eye on the long term.

My right hon. Friend the Member for Hitchin and Harpenden—as I shall refer to him in today's debate—did not seem to address the long-term future of our sub-post offices. At the end of his speech, he hinted that, if we were to return to his proposed scheme, all would somehow be well. I wish that it were as easy as that. He has a great deal more ministerial experience than me—my responsibility for the benefits card, like for so many aspects of the Department of Social Security, lasted only 14 weeks.

However, I have a tale to tell about the state of the project that I inherited. I did not merely talk to colleagues and read the papers; I visited the project partners. Had it been my responsibility to do so, I would have sacked the members of the Post Office board, who were appalling people. They were short-sighted and partisan. They were genuinely unwilling to enter into a discussion that I was trying to have on how to secure the long-term future of sub-post offices. They thought themselves smart; they thought themselves clever. They doubtless accepted their fine salaries, but I doubt whether they served post offices or sub-post offices well, and I am disappointed that many of them are still in post today. Perhaps someone else will deal with them.

I also visited the project in west London, in part to see how matters were progressing, but also to meet the benefits staff. I was appalled at the state of play. For some reason, they thought that I wanted to be told that, when someone goes into a Birkenhead sub-post office to post a small parcel to, say, Hong Kong, the postage for that transaction will immediately appear on-screen. Instead, I asked, "How will benefits be paid through this system? Given that only a minuscule number of post offices deal with two of the simplest benefits, why has there been no roll-out?" Answers were not forthcoming. My right hon. Friend looks favourably on the development of the project in retrospect, but I would not invest my own money in it. Nor should taxpayers' money continue to be invested in it.

In the knowledge that my right hon. Friend does not want the necessary and proper campaign to degenerate into scare tactics and speculation, I consulted the Labour party resource centre, which I have never used before. I gather that, if one has a bleeper, one is informed when the resource centre has a message waiting. I received one message automatically, even though I did not ask for it and do not own a bleeper. I was jolly pleased that I did receive it, and I shall read it for the record because that is what the Government want. They will want to be judged by it.

The message states that the
government has made it clear that benefit recipients will continue to have a choice: they will be able to draw their full benefits in cash, without charge, over a post office counter after 2005. No one will be forced to open an account with a bank and for those who do not in the end wish to, we will set up a simple electronic money transfer system to help them.
There will be no compulsion. The operative phrase is that recipients will receive their benefits over a post office counter. We are not talking about a machine from which people might draw their benefits; we are assuming that, if the transaction takes place over a counter, there will be a human being on the other side who will hand over the money.

I am listening to the right hon. Gentleman with fascination, but I wonder why the Minister seems to have omitted in his note to all Members of Parliament, dated yesterday, that there would be no deduction of any charge from the benefit being paid.

As I confessed, I do not have a pager—so no new message is coming through to explain that. One great advantage of this debate is that hon. Members do not have to rely on frail human beings such as me because the Minister will reply. If the hon. Member for South-West Hertfordshire (Mr. Page) catches your eye, Mr. Deputy Speaker, I hope that he will make good use of the letter. I do not want to spend too much time on it, but many important statements in it will reassure people.

The guarantee that the right hon. Gentleman has just read out that people will receive their pensions in full without reduction is reassuring, but if no income accrues to sub-post offices, there will be no counters left. Is he equally confident that the Post Office network will survive to deliver money?

I am grateful for the hon. Gentleman's intervention. The world is divided roughly into two groups. One consists of those who, when they see an idea, want to know whether it can fly. The other consists of slightly miserable people who, if they can find some fault, however small, will try to magnify it beyond all recognition. When I suggest ideas, it is, sadly, usually the Opposition who are supportive and want to know if the ideas can fly, but there has just been a reversal of roles.

I turn to the longer term, which is what we should be debating. I am immensely pleased about today's big and important lobby. For many Labour Members, it will be the first one to begin to frighten the Government about such things as tomorrow and an election in the not too distant future at which we shall be accountable to our electorate. I hope that the campaign will not be negative and that it will look to the future and how we may best serve our constituents, protect the communities that make up our constituencies—whether urban or rural—and provide the best future for sub-post offices.

The letter to which the hon. Member for South-West Hertfordshire referred—I know that he will make good use of it-refers to Government investment, but there is no such thing; there is only taxpayers' investment. The letter draws attention to the fact that taxpayers are supporting the information technology programme in sub-post offices to the tune of £480 million. Whether that is the correct level, whether it should be changed, whether it will deliver and whether 300 sub-post offices a week will be able to deal with the programme takes us into the realm of trust and hope. I hope that the programme will roll out on that timetable. The sub-post offices in Birkenhead certainly deal with the age group that could benefit from that, but one wonders whether all post offices will fall into such a category.

As has already been hinted in the debate, there is a real possibility that, as our banking system changes beyond recognition, the system that most of us want will be operated through our post offices and sub-post offices, which would be most welcome. One of our concerns about the future must be whether the Government are doing all that they can with support, knowledge and taxpayers' money to ensure a viable future for sub-post offices.

I hope that, from this day forward, we shall think in the longer term about the extent to which other functions undertaken by post offices and sub-post offices in Europe and beyond could be offered as services through our sub-post office network. I shall make one or two suggestions on that at the rally later today. We must look forward rather than back to find a range of services that we can introduce locally.

I hope that, as a party in government, we will seriously consider putting social inclusion at the top of the agenda. There is no point in doing so if the sub-post office system collapses. Although there is necessarily talk about rural sub-post offices, the proposed changes are more likely to affect sub-post offices in towns, because a larger proportion of their revenue comes from benefits work. Therefore, it is an issue for town and country alike. While we are developing the business strategy that we want sub-post offices to adopt, and in order to give them the ability and the chance to do so, we might consider in the longer run giving them a more open, but time-limited, subsidy because of their role in social inclusion. We do not want another handout that people can rest on, without making changes; we want to use subsidies in a way that ensures a prosperous, long-term future for the network.

Turning the clock back is not an option for the survival of our sub-post offices. I wish it were as simple as that; I wish that I could say that and believe it. The future is more difficult than that, and is fraught with dangers. I hope that I have hinted at some of the things that, if there is to be a thriving sub-post office system, rather than one which, as now, is dying on the vine, we hope that the Government, post offices and their leadership—both the unions and the Post Office board—will encourage.

Today, we must take note of the feeling outside the House. I hope that it scares a lot of people. It is the first time that the Government will be on the receiving end of a serious lobby. We must not let that feeling dissipate; we must channel it into a positive, long-term future for our sub-post offices. Putting the clock back is not a viable option.

It may be for the benefit of the Chamber if I recall that hitherto it has been a convention to call the Front-Bench spokespeople 30 minutes before the end of a 90-minute Adjournment debate. There are only 21 minutes left. I shall do my utmost to fit everyone in, but in order to do that I appeal to all hon. Members to be as brief, concise and pertinent as possible.

11.39 am

I shall indeed be brief.

I want to ensure that we get on the record today a response from the Minister to the issue of payment in arrears when payment is made by automated credit transfer, raised by the right hon. Member for Hitchin and Harpenden (Mr. Lilley) in his very effective speech.

When we recently moved an amendment to the Child Support, Pensions and Social Security Bill, the Minister made a passing reference to four weeks in arrears being something of a red herring, and said that, if all pensions were paid by ACT, they would not be four weeks in arrears.

I hope that the Minister can reassure us on the matter, because many pensioners need to budget. They may be able to cope with payments a week in arrears, but for them suddenly to be four weeks in arrears would be untenable. It might ease the transition to ACT if the Govt said that anyone using ACT would receive payments two weeks in advance, or two weeks in arrears, and so on. I hope that the Minister will give clear answers to my questions.

People are not choosing to use ACT on the scale that the Govt suggest. It is true that new pensioners are slightly more likely to opt for ACT, but the Minister forgets that, at the age of 65, nipping to the bank in the car might be viable, but at the age of 80 or 85, perhaps disabled and no longer able to drive, that would not be the preferred option. Older pensioners will suffer if the Minister assumes that they will want to receive benefits on the basis of an option that they chose when they were fit and healthy. They will also suffer if they are not allowed to return to the system of collecting benefits at a post office, or if the post office is undermined. Pensioners should not have to suffer the cash-flow problems of four-weekly payments in arrears.

I received a note through my letterbox on Saturday morning from someone living in a neighbouring village who had decided to switch her benefit payment from the bank to the post office because she valued its service. I hope that many more people will do the same as a result of today's lobby.

11.41 am

I am pleased to be called to speak in this short debate. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) emphasised that he, and the issue, would not go away. I dreaded that being true, as his speech continued for some time. However, we must accept that automated payments in one form or another are going to come; King Canute is regarded as a fool but historical analysis shows that he was a wise man, as one cannot resist the inevitable. None the less, steps must be taken to ensure that what is inevitable is not devastating.

I discussed the problems connected with the increase in automated payments on two occasions with my hon. Friend the Minister for Competitiveness and was reassured by his reply to my crucial question about cash. I was also greatly reassured by my right hon. Friend the Member for Birkenhead (Mr. Field) in citing the new authority in our proceedings, the parliamentary Labour party resource centre. That was more reassuring to me than some of the quotations from Hansard, which are less clear cut.

The right hon. Member for Hitchin and Harpenden expressed concern for those in receipt of benefit. Banks will not permit everyone who applies to open a bank account; some people are too poor to have bank accounts, which are expensive to run, except for those who are wealthy in the first place. Some elderly people will never be in the electronic age; the notion of e-commerce, whatever that might mean even to us, is beyond their comprehension. They would probably find a course in Mandarin Chinese easier to understand. Hole-in-the-wall machines, for example, require the use of a PIN—personal identification number. Many people in our society will not acquire PINs and will not fiddle around looking at holes in the wall as though they were followers of some eastern religion. It is something that they just will not do.

Cash machines pay only in units of £10, and that will cause problems if the benefit to be paid is £44.44. Then, of course, there is the matter of the overdraft. It has been well said that banks are not benevolent institutions, and they are certainly not mutual institutions. They would ensure that an overdraft was paid back before any payment was made to the recipient of benefit, thus increasing the spiral of debt.

Finally, there is the point about joint accounts. As the right hon. Member for Hitchin and Harpenden pointed out, the payment may be intended for the mother, but the father may think that there are better things on which he should spend that money. It is easy to say that that can be resolved by separate accounts, but that in itself might produce domestic disharmony, which might not be good for the children of the family.

The other question relates to post offices themselves. The point has already been made that the follow-on trade is important. People need to go through the doors to spend their money, not just on direct post office facilities, but on all the other items that the post office sells. It might be asked why a post office does not reestablish itself as a village or suburban shop, but another great monopoly makes that difficult: supermarkets. It is difficult for post offices to compete on merchandise and groceries with such large corporations.

There should be great caution about the strength of communities. The local post office performs the functions of the lost marketplace. People come and go and talk to each other. They may not have that social intercourse on other occasions, particularly with the closure of banks in rural areas and small towns. It was unwise for the right hon. Member for Hitchin and Harpenden to say that the "banks retired hurt". Few of us have seen a bank either retired or hurt. They hurt small businesses and customers from whom they so often choose to take every ounce of profit. At present, 65 per cent. of rural parishes have a post office and 5 per cent. a bank—"and falling fast", as the song goes.

I know that there are regulators. There is to be a bank regulator and a post office regulator. If it were not for shortness of time, I would quote my hon. Friend the Minister for Competitiveness on the purpose of the post office regulator, who will monitor and investigate. I am a great believer in monitoring and investigating, but sometimes we also want some doing. There may be a case—I merely float it at this stage—before a bank is permitted to close a village branch, for asking whether it has made arrangements to transfer its business to the local post office. The regulator should have powers to stop the closure until it has done so.

My hon. Friend the Minister said that one issue that the Postal Services Commission and the regulator will consider is the social question. Nothing could be more relevant to the social question than the consequences of the closures of sub-post offices

11.48 am

I want to say a small number of things very briefly. Almost the entire terrain has been covered by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and the right hon. Member for Birkenhead (Mr. Field), who chairs the all-party group of which I am a member.

There has been much discussion about money this morning, and there will doubtless be more during the rest of the day, but the single commodity that we most need at present is not money but time. When I say "we", I include the Government. Over the past few months, it has become evident that a phenomenon well known to any Whitehall-watcher has set in. There has been a series of scrambled attempts to deal with a problem that is slowly beginning to be recognised. There is no coherent approach to solving it because of lack of time. If the Government committed themselves to delaying the introduction of automated credit transfer until they had come up with a workable alternative—under whatever name—to the system that my right hon. Friend the Member for Hitchin and Harpenden was in the course of introducing, there would be a realistic prospect of achieving what we all want to achieve, which is to save the post office network, to serve communities and to deliver, in cash and only a week in arrears, benefits and pensions to millions of the most vulnerable people in our society.

Time is the commodity that we most need and the Government should be willing to give it. A delay by two years will, as hon. Members pointed out, save an uncertain quantity. It could be a negative saving, but even if the saving were considerable it would not have a great effect on a Chancellor who has sufficient cash to be going on with.

As the right hon. Member for Birkenhead said, the present lobby is probably the first mass lobby that the Government have encountered. Behind it stand 3 million people who have signed the petition; and behind those 3 million stand an incalculable number of millions of others who agree with them. They come from all parts of the kingdom and from all political persuasions and none. It is a genuinely felt lobby. It is not just an effort by a small group of people to peddle a vested interest. It represents a genuine mood in the country. If parliamentary democracy is about anything, it is about responding to such moods.

I hope that Ministers will take away from these proceedings the knowledge that they must do something, but that they should not do anything too radical too fast. They need only to withdraw and reconsider. That would answer the loud complaints and allay the great fears of many millions.

It is remarkable that, thus far, every argument made in defence of going ahead with the present programme turns out, on inspection, to be either intellectually or practically deficient, or both. Not a single argument in favour can be seen to work. That suggests not a deficiency of intellect on the part of Ministers, but that vast armies of bureaucrats in various conflicting Departments around Whitehall are producing to order pieces of paper to defend propositions that are increasingly implausible, which is an inappropriate way to make public policy.

Quite apart from the lobby, Ministers should recognise that something is wrong with the policy process. The Minister for Competitiveness understands, perhaps more than any other, the subject that he has unfortunately been landed with defending. He should be persuaded of the case against the policy process. There is no need to admit that he and his colleagues are capitulating to the lobby. He needs only to stand up and say a few words, which could lead to the erection of statues in his name across the length and breadth of the kingdom. It would be the first time that a politician from any party had stood up and said, "This is the most frightful Whitehall farce, and we are not going to make public policy on this basis any more. We are going to withdraw, reconsider and produce a proper scheme on which we can all agree". If the Minister were to do so, I would personally erect a statue to his memory in west Dorset.

11.53 am

I offer my congratulations to my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) on securing the debate on a topical day on such an important subject. It is close to my heart because Shoreham houses the headquarters of the National Federation of Sub-Postmasters, which organised today's lobby. It has existed since 1897 and has been based in my constituency since 1947. I am proud to welcome the double-decker bus bringing people here today along with a petition of more than 3 million signatures. When I visited a shopping centre recently with some of my local councillors, I never found it easier to gain signatures. Within an hour and a half, more than 1,000 people literally fell over themselves in the queue to sign that petition—a refreshingly odd experience for me.

We must recognise that post offices are not just shops; they are the hearts of communities, on which many other shops rely. For pensioners in particular, they are a lifeline. They are convenient. Many sub-postmasters and mistresses know pensioners by their first names. They help them with form filling and so forth. They watch out for them if they do not appear on pension day. They are an effective early warning system. Post offices also perform a vital service in reducing benefit fraud. Out of about £9.3 billion of fraud detected, only 0.65 per cent. went through post offices. That is in no small part due to the vigilance of sub-postmasters, who participate in a scheme through which they can claim a £10 award for spotting a fraudulent claim.

When I went on a routine visit to a post office in my constituency recently, I was greeted by 80 pensioners who were standing outside. We had an impromptu rally on the pavement. They were there passionately to support their local post office. It was a great community and the sub-postmistress was on first-name terms with them.

This is not solely a rural issue. Worthing, which forms part of my constituency, has 100,000 people and is a town made up of village communities. Let us not confuse this as a rural matter. Many sub-post offices in towns and urban areas will be affected. Worthing has the highest number of pensioners in the country, so it will be particularly affected. Many pensioners do not use cashpoints. If they are forced to go to banks, they will not receive the sort of personal service to which they are accustomed. They will not have people looking out for them. Cashpoints are not terribly good early warning systems if pensioners fail to collect their pensions. Similarly, the people who sit behind bank counters are not especially good at eyeballing potentially fraudulent benefit claimants.

If the stories are true, there will be serious household budgeting problems as well as security implications for pensioners, who will be forced to take their pensions monthly in arrears rather than weekly in advance, as now. We are already seeing the effect of monthly child benefit payments that are made through banks. About 1.2 million people are not allowed bank accounts. My right hon. Friend the Member for Hitchin and Harpenden asked whether, under the system, banks will be compelled to offer loss-making accounts to people. If a person with an overdraft is claiming benefit that is paid through the bank, the benefit will be swallowed up in the overdraft, so people in the most desperate circumstances will have no cash on which to live. The Benefits Agency will not offer to pay bank charges if they are imposed.

We were told—this was not included in the note that the right hon. Member for Birkenhead (Mr. Field) received—that if pensioners retain the right to have their pensions paid through post offices, the credit going back to the post offices will fall from 12p per pension transaction to 1p. However, the overheads of sub-post offices are not falling at the same time. That offers no basis on which they can survive, as my hon. Friend the Member for Rutland and Melton (Mr. Duncan) said. Post offices will cease to exist even though people may not be compelled to use banks.

Post offices are losing a great deal of revenue. Soon they will lose the revenue from television licences for people aged over 75—they are paid 17p a licence for providing the service. They are losing work to Paypoint, which the Post Office will not allow them to operate. I mentioned the physical problems of cashpoints in smaller post offices, where they are simply not an option.

Many post offices are in a bad way. The Post Office nationally expects to go into the red this year, largely because of the scrapping of the Pathway scheme. Sub-post offices are private businesses, many of which are just scraping along. It is estimated that 8,000 of the 19,000 post offices could go out of business if the changes go ahead. Many rely on benefit payments for at least 40 per cent. of their income. I got together all the sub-postmasters in my constituency recently, and more than 85 per cent. claimed that they would not be able to carry on if the proposals went ahead. I do not believe that that is untypical of other constituencies.

These are tragic real-life stories. One of my sub-postmasters wrote to the Prime Minister, saying:
I … am a senior postmaster of 12 years standing. I have survived the last 9 years of recession, and general boat rocking from the governments of the day, through my own endeavours. From the laws and the media publicity in the last few years, my business has become, from a very viable concern, a now worthless millstone, that no-one would be interested to buy from me at anytime, due to your plans and my hopes for a reasonable retirement has now been lost…I am 55 years old and I have worked hard for my family for 30 years and the country for 39 years in total. I do not fiddle the state, I keep my VAT payments up to date and correct each quarter and now I am assessed for future Income Tax, even before I have earned it. There is no logic in what you are doing. Why should I be loyal to any Government, which does not support an essential Community Business like mine? What incentive do I have now to continue? … If you carry out your plans, then what I have tried to achieve for later life is for nothing. If that is so, you are reading a letter of a future dole queue member. Due to no fault of my own, a Senior Post Master will be unemployed … You may have the power, but you do not have the right.
That attitude is typical of many postmasters, who now feel threatened.

To add insult to injury, the loss of business tax relief will mean that businesses will diminish greatly in value for people who are retiring. Alas, sub-post offices have become a disaster. From being a community asset that we all cherished, they have become a "millstone" as my constituent says in his letter. They are a diminishing asset with falling turnover and they suffer from rising business rates on the latest rate revaluation.

My right hon. Friend the Member for Hitchin and Harpenden was right to say that there has been a distinct silence as regards practical answers from the Government. I have received hundreds of letters from constituents on this matter. In particular, there is genuine fear among pensioners and disabled people. There is fear for the future viability of shops and communities that rely on sub-post offices. Three million signatures cannot be wrong. As my hon. Friend the Member for West Dorset (Mr. Letwin) said, it would be sheer arrogance if the Government did not simply withdraw and reconsider. They should respond to today's lobby to show that democracy listens. We need a Post-Office-based solution of the type that my right hon. Friend the Member for Hitchin and Harpenden tried to introduce under the previous Government. That is not on offer and I hope that the Minister will reconsider.

12.2 pm

First, I endorse what was said about the Minister. If he comes up with the right answer today, I will be the first in line to contribute towards a statue—I have a fiver in my pocket and I might, indeed, go to 10 quid. However, I await the answers—as the hon. Member for East Worthing and Shoreham (Mr. Loughton) rightly said, we must have answers.

I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on securing the debate, although I am reminded of people who say, slightly light-heartedly, "I did not get where I am today by doing nothing." The previous Government had many years to deal with the Post Office, but they hummed and hawed and changed their minds.

I am short of time and I should get on.

We are talking about community and those who have spoken have clearly highlighted it in all its aspects. Community—in towns and villages—is what this country is all about. The closure of sub-post offices and, more recently, of bank branches and the need for transport, when those post offices and bank branches close and people have to go elsewhere, are the issues. We are looking for linked-up government on transport and the other issues that need to be tackled. More important, we need answers from the Government about sub-post offices.

The automation of the system is important. As has been said, automation is a good thing in terms of saving money, but a problem in terms of social exclusion and people being unable to cope with personal identification numbers. Those problems must be tackled. The Minister must explain what will happen in 2003 and how people who cannot or do not wish to have bank accounts will be able to obtain cash.

The National Federation of Sub-Postmasters has stated that benefits that go into a bank account could go to the husband although that might not be appropriate. That issue has been raised before. Today, I received a letter from the federation dated 5 April, which stated that it has not yet been shown how sub-post offices will continue to be allowed to administer benefit payments under the Government's reforms. Its vision is of post offices being at the centre of community life in countryside and towns alike, not of a network shutting down. It states that many will close even before 2003 if the outlook remains so bleak. Hon. Members mentioned that earlier.

It is a matter of great concern that sub-postmasters and mistresses have invested £1 billion of their own money in sub-post offices. The Govt could be guilty of misrepresentation, in that one, two or three years ago, people went into sub-post offices in good faith, but they will suddenly find the ground being taken from under them. That is serious. Many who were encouraged to invest money in post offices are now extremely worried.

Of course, post offices in urban areas also face difficulties. A parcel was not delivered to John, a constituent of mine, because he was not at home. The postman went to the sub-post office in the town and was told that John walks his dog and would be passing by in five minutes. As he walked past, the sub-postmaster nipped out and gave John his parcel. That is a fantastic example of people knowing what happens in a community. The sub-post office service is uniquely a community service in that respect, and it is uniquely respected for it.

Along with other hon. Members, I expect a number of people from my part of the country to come to the House. The Western Daily Press, along with many other newspapers, has notably conducted a fantastic campaign to represent community interests and concerns. We need an answer from the Minister because we are looking for something entirely new from sub-post offices that will embrace all sorts of services.

The internet has been mentioned. We are disappointed not to have had the report from the Cabinet Office performance and innovation unit by today because it would at least have given us something to go on. The Government promised us a wonderful utopia, but we are now struggling to come up with it ourselves. I am waiting for a great idea, because ideas there must be. We must be told soon what the Government have in mind.

I was told at a meeting of Post Office directors last week that the Post Office is having discussions with 12 banks. It hopes to make arrangements with them for a banking service in sub-post offices. As we have heard, however, the Horizon project will not in itself cover the scheme. Extra software will be required to conduct a full banking service. The Minister will deal with that. We are concerned that the details have not so far been worked out. Even if the banking system transfers to sub-post offices in places where banks have been closed, I am told that that will account for only half the revenue that sub-post offices expect to lose. I hope that the Minister will say something about that.

Small businesses are anxious because they use sub-post offices a great deal. If there is nowhere for people in a village or community to lodge money overnight, it will put them at risk. The absence of banks is another topical issue. Sub-post offices provide a secure area for placing money—without them, small businesses might suffer.

So much else could be said, but I will say no more for now. We have debated the issues well and we should provide the Minister with a long time to answer our questions. I might even put in £20 for the Minister's statue. I want really good answers today; if I get them, up will come the money. I now look forward to hearing tangible, clear answers from the Minister.

12.10 pm

The suggestion of the hon. Member for Weston-super-Mare (Mr. Cotter) is a clear case of statues for answers. We look forward to the results.

My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) could not have been better qualified to initiate the debate today. With his experience in the Treasury, the Department of Trade and Industry and the Department of Social Security, he probably knows more about this issue than anyone else in the House. Far from doing nothing, as the hon. Member for Weston-super-Mare implied, my right hon. Friend chose to spend more money than many of his previous colleagues in the Treasury might have wished in order to preserve the post office network.

The heart of the matter is simple. A post office network has to be paid for somehow, and my right hon. Friend brilliantly dissected the way in which the Government are avoiding that question. The Government refuse to accept that one cannot remove the income of sub-post offices and protect the current network. That is why today's lobby is here en masse: 2,000 or more people carrying a petition of 3 million signatures. Those people, like us, appreciate the value of the post office network to the community in rural areas and, as the right hon. Member for Birkenhead (Mr. Field) said earlier, in urban areas too. The value of the network is especially appreciated by those in greatest need—people with no bank account, people who cannot get a bank account, the least bankable people with little money and people who need emergency payments but cannot afford charges.

The right hon. Member for Birkenhead expressed little confidence in Post Office managers. Does he believe that the commercial freedom that will supposedly be conferred by the Postal Services Bill will solve that problem? He read out a guarantee of full payment without deduction. That is important, but it represents only one side of the equation. Although the recipient might receive his money in full, the post office network also needs an income flow in order to survive as the agent for delivery.

The hon. Member for Braintree (Mr. Hurst) made the important point that automated telling machines give out money only in units of £10. The people who are reliant on such machines may want and need every penny to which they are entitled, down to the last single one. Units of £10 can cruelly alter the way in which such people have to manage their household budget from week to week or day to day.

My hon. Friend the Member for West Dorset (Mr. Letwin) made a telling point when he said that we should delay until a workable alternative is available. Similarly, my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) defined the social and practical value of the sub-post office network and read out a powerful letter from one of his constituents.

In my remaining two or three minutes, I should like to deal with the Minister's letter, which he has circulated to all Members of the House of Commons. Unfortunately, it is less than clear about the Government's intentions and it covers more than it explains. I have little sympathy with the first paragraph, where the Minister states that recent coverage has been less than balanced. The Prime Minister was most guilty in that regard, when he told the House that he inherited the ACT switch, which is not true because it was announced only last May by the very Government of which he is Prime Minister. He may wish to return to the House and correct that. Some hope!

The hon. Member for Weston-super-Mare mentioned the performance and innovation unit. The Minister's letter states that the PIU was instructed in October but still we have heard nothing. The Postal Services Bill has completed its Committee stage, and it is high time that the PIU stopped resting in the long grass and made its views clear. The proposal has sat on the Prime Minister's desk for some time. If the Prime Minister is concerned about the matter, he should pay some attention to it, tick the relevant box and let us know what the PIU recommends.

The Minister's letter raised a red herring about the installation of 3,000 cash machines. That will not help the people who are most in need—the cash machines will probably be installed in areas that have the most use and where there is therefore the least need. We should protect the post office network. The proposal is a red herring, and the Prime Minister and the Minister are wrong to argue that it will solve many of the problems that we have discussed this morning.

The Minister's letter states that:
benefits … recipients are already opting for ACT.
They may have opted for it because their arm was being severely twisted behind their back. Many people are being pushed into using ACT against their better instincts and wishes. The hon. Member for Northavon (Mr. Webb) said that some of his constituents were reverting to the old system and had said that they did not want to receive payment by ACT. They resent the way in which they were forced to use it. Opted? My elbow!

The Minister's letter goes on to say that:
pension or benefit in cash at a Post Office will—
continue to be available in cash. As we said earlier, if money is coming one's way, one can of course get it in cash somewhere, but at what cost to oneself? The Minister says that he wants to protect the network, but what loss of income will it suffer? This matter involves the availability of cash and the source of the income or charges flow for the recipient or the agent who gives the money. In his letter, the Minister did not mention the income flow that will accrue to the post office network. He said:
The amount that sub-postmasters will receive will depend on the contracts that the Post Office Groups strike with banks … These are commercial matters and it would not be appropriate for the Government to become involved.
The Minister washed his hands of the key issue that could serve to protect rural and urban post offices. Will they enjoy much of an income for doing the Government's bidding?

The Minister condemned himself in the conclusion of his letter. He stated:
it is sheer irresponsibility to write off the network, thus devaluing the properties of sub-postmasters who have invested—
billions in their business. That is exactly what he and the Government are doing. People cannot pass on their business as a going concern because its value has collapsed—they have to put up the shutters and close down. The Minister must respond to the problems that his letter contains.

12.18 pm

The future of sub-post offices will be debated in the House this afternoon. We might say that the Chamber is the sub-office and that the House is the Crown Office, and that I am making the first delivery and that another delivery will follow this afternoon. Someone suggested to me that this debate was the hors d'oeuvres before the main course, but I believe that it is the main course and that this afternoon's debate is the dessert.

The hon. Members for Rutland and Melton (Mr. Duncan) and for East Worthing and Shoreham (Mr. Loughton) tried to turn this debate into a Punch and Judy show, but the right note was struck by my right hon. Friend the Member for Birkenhead (Mr. Field) and by the hon. Members for Northavon (Mr. Webb) and for West Dorset (Mr. Letwin).

I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on initiating the debate. He is a talented and able politician, which means that he is no longer qualified to sit on the Conservative Front Bench. He brought to this debate a knowledge of the history of ACT and the Post Office. I am pleased that many friends from the National Federation of Sub-Postmasters are coming to London today. I worked alongside the NFSP on the Post Office Users National Council, and still do not see myself as sitting on the opposite side of the table from it. Its members have real problems and are giving voice to the difficulties in their communities. We must resolve those problems in a more effective way than mere point scoring across the Chamber. The whole point of debates in Westminster Hall is that they should be less confrontational, and I shall try to approach the debate in that spirit—although I cannot promise to keep it up throughout the afternoon.

As my right hon. Friend the Member for Birkenhead said, this is the first time many Members of Parliament have encountered a rally by the NFSP. They take place about once every 10 years, and are formidable events. There was one in the early 1980s and one in the early 1990s. On both occasions, the Conservative party was in government. Like today's rally, the previous rallies concerned automated credit transfer.

In the early 1980s, the Conservative Government commissioned the Rayner report. I am not criticising them for that; it was the right thing to do. The report recommended that, for the first time, pensions should be paid through ACT. It also recommended that pensions should be paid fortnightly and that child benefit should be paid monthly. An enormous rally took place in the early 1980s, in which I took part as an official of the Union of Post Office Workers, as it then was. The letters that were sent then were just as heartfelt as those to which the hon. Member for East Worthing and Shoreham referred. The aim of the rally was to stop all payments through ACT. The then Government—rightly—backed down in respect of fortnightly pension payments, but retained monthly child benefit payments and introduced ACT.

In the early 1990s, the then Government extended ACT to cover unemployment benefit, income support for the unemployed, sickness and invalidity benefit and severe disability allowance. Another enormous rally took place because, as the right hon. Member for Hitchin and Harpenden knows, the Government had taken a decision—which was later rescinded—to encourage people to move into ACT.

The NFSP has been forced into a position in which every pensioner who opts for a bank account—perhaps because he or she is progressing from social exclusion to social inclusion—is seen as a threat to its members' livelihoods. This is the third time that we have had this debate about ACT. The issue will not be resolved until we find a consensus that meets the needs of Government, the Post Office and communities. As my hon. Friend the Member for Braintree (Mr. Hurst) said, there is no going back on the decision.

The right hon. Member for Hitchin and Harpenden introduced a well-intentioned benefit payments card, which, as general secretary of the Communication Workers Union, I applauded. I saw him go to Eastbourne to speak to delegates at the NFSP conference. If they had intended to build a statue while they were there, it would have been of the right hon. Gentleman. However, as he knows, the card was only an interim measure based on an eight-year contract. It was a swipe card, although the view of the Post Office was that we should ultimately opt for smartcard technology, and it ran into difficulties. The right hon. Gentleman asked what was wrong with the PFI benefit payments scheme. It would be quicker for me to say what was right with it. I could compare it with ANPOST in Ireland.

The best thing that we can do to inform the debate is to look at the Trade and Industry Committee report. As my right hon. Friend the Member for Birkenhead knows, we tried to make the private finance initiative project work. I am not blaming the previous Government. The PFI was horrendously complicated—the developer was also the financier. The Public Accounts Committee will soon receive a report from the National Audit Office, which we will study with great interest. The Trade and Industry Committee said:
We appreciate that in such issues, involving large sums of money—
it was talking about whether the Government had been open in 1997 and 1998 about the progress of the scheme—
some discretion was necessary. Ministers were indeed intent over many months—perhaps too many months—on rescuing the project, until their cumulative loss of confidence at the turn of 1998–1999.
Unfortunately, the benefits payment card failed. The Government had to find a way forward that did not involve the complexity of the Benefits Agency and Post Office Counters Ltd. I should say to my right hon. Friend the Member for Birkenhead, who has escaped the regime of the pager, that it is unfair to blame Post Office management alone for what happened. Blame has been cast more widely than that. It is clear that the Government had to pull the fat from the fire. In terms of a private finance initiative, this well-intentioned scheme was a turkey. Computerisation had to progress in the most difficult of circumstances, and we had to think through how to crack the problem of ACT.

The right hon. Member for Hitchin and Harpenden is undoubtedly an able politician. Had he been in government at that time, he would have taken the same route. The Horizon project—involving the conversion of 300 offices a week, and the creation of 40,000 serving positions in 18,500 offices—is an enormous task, but it is progressing well. Clearly, we must ensure that the project does not go belly-up in the manner of the benefits payment card. Nearly 5,000 offices have already been converted, and there is every prospect that the project will be completed by spring 2001.

As a result, we will be able to focus on the inevitable move towards ACT in 2003–05. People such as the hon. Members for Northavon and for West Dorset have qualms about the timing, but in 32 years of association with the Post Office it has been argued that the network is under-used and under-promoted. In this financial year, 383 post offices will have closed, but that is not the record. The record was set in 1986, when 393 post offices closed. Since 1990, 10 per cent. of the network has disappeared. In a 20-year period, 25 per cent. of the network has disappeared. We had to argue for the sale of fishing licences across post office counters, and the previous Government eventually conceded the point. People are waking up to the existence of this under-used, under-promoted network. As the poem has it:
But at my back I always hear
Time's winged chariot hurrying near.
Similarly, the move to ACT is concentrating people's minds wonderfully.

I agree that some post office managers are not the sharpest knives in the drawer. As the NFSP knows, some sub-postmasters close for lunch and take half-days off, and they should perhaps consider a different approach to promoting the network. In the past, some Ministers and hon. Members did not appreciate the role of the network, but they will certainly appreciate it now.

In the time remaining, I shall deal with the points raised by the hon. Member for Northavon. The shift to ACT and the payment of pensions four weeks in arrears are crucial issues for pensioners, but I cannot give an answer on that. We must work with the Department of Social Security to put in place by 2003–05 a system that will meet the needs of benefit recipients. It is almost inconceivable that the final decision will make matters more difficult for pensioners who, by and large, budget from week to week. Indeed, the point that was made by the hon. Member for Northavon and others is well taken.

We were asked whether the 1 million emergency payments will continue to be made across post office counters. The answer, as my right hon. Friend the Secretary of State has pointed out, is yes. We were asked whether pensions and benefits will be paid in full, and whether they will be paid across post office counters. The answer to both questions is yes. Either we will find a Post Office solution involving smartcards and existing technology—thereby solving a number of issues, not least, social exclusion—or we will die in the attempt.

The debate this morning has been about reaching consensus; this afternoon's may be different. However, we can move forward together, for we all appreciate the value of the network and the need to preserve it. We do not need statues—I shall be happy with a pillar box outside every post office.

Holiday Insurance

12.30 pm

I am grateful for the opportunity to debate a subject that was brought to my attention by a constituent, Mr. Carter, who came to see me a few weeks ago. Mr. Carter is 79 years old. His wife was gravely ill for several months, before having surgery that was, thankfully, successful, and Mr. Carter thought that it would be sensible for them to recuperate on holiday in Malta. Mr. Carter surfed the internet—people are quite advanced in such matters on the Isle of Wight—and booked a holiday over the telephone. The holiday company, Mercury Holidays, advised him to take out insurance, in case he and his wife were, for some medical reason, unable to go. The people on the telephone mentioned no exclusions, and Mr. Carter took out insurance with Chase Parkinson.

Unfortunately, Mr. Carter had underestimated the stress that he had suffered during the previous months, when he acted as sole carer for his wife. As often happens in such cases, he developed an acute depressive illness, to the extent that his general practitioner said that he could not possibly travel and that he should cancel, or at least postpone, his holiday. At that point, the insurance company was informed and, to his surprise, Mr. Carter received, along with his insurance policy, a letter from Chase Parkinson telling him that he was not covered, because the exclusions contained in the document included all forms of mental illness.

Clearly, that upset Mr. Carter. He examined the policy, but, because it was in such small print, he was unable to read it until he got hold of a magnifying glass. He was then able to pick out some of the issues. He came to see me about the problem because he was very disappointed and felt that something had to be done.

We identified three issues. First, Mr. Carter was not, at the time of taking out the policy, given detailed information about exclusion clauses. The Association of British Insurers produces a document, "Travel Insurance: Important Notice", which is set in the sort of print that I can read without my glasses. It reads as follows:
Health: your policy contains restrictions regarding pre-existing medical problems concerning the health of the people travelling.
That is a reasonable exclusion. In my other job—as a general practitioner—I frequently receive requests from insurance companies to confirm that people have not suffered previously from an illness that would make their insurance invalid.

Mr. Carter received Chase Parkinson's contract of insurance with that document. I cannot read the policy, so I have had it enlarged. My hon. Friend the Member for Somerton and Frome (Mr. Heath), who is a trained oculist, tells me that the policy is set in five or six point, and that it would not generally be readable by anyone over 60 without some form of visual aid. The "General Exclusions" section states that the following claims are excluded:
Any claim (a) sustained whilst suffering from alcoholism or drug addiction; (b) attributable to the influence of alcohol or drugs not prescribed by a qualified medical practitioner.
Both provisions strike me as fair. However, it also excludes claims
(c) due to or arising out of (i) stress, anxiety or depressive conditions, suicide or attempt thereat, psychiatric illness, terminal illness, AIDS, HIV…sexually transmitted disease, any deliberate exposure to danger.
In short, that insurance policy makes value judgments on what is a worthy illness and what is not; it is grossly discriminatory. However, when I wrote to the ABI, I was told that that is not an unusual form in which to frame such insurance policies.

Mental health sometimes receives a poor press. I understand why travel insurance companies do not want to meet claims from people who suddenly decide that they do not want to fly, or whose anxiety about going on holiday makes them cancel, but that is not what we are discussing. My constituent suffered an acute depressive illness, which is as identifiable and diagnostically specific as breaking a leg. Like a broken leg, it gets better with the appropriate treatment. To exclude mental illness in such a broad form cannot be reasonable.

When I wrote to the ABI, I expected to receive an answer stating that the circumstances were surprising and unusual and that the association would speak to the member that had framed the policy; instead, the ABI letter confirmed that that was common practice. Having spoken to the research department of the Financial Research Centre, I am now aware that a significant minority of policies exclude claims for psychiatric, mental and nervous conditions. I have been told that representations have been made to the Department of Trade and Industry. I received a fax from Direct Line stating that it
has consistently lobbied the OFT, DTI and ABI on this matter and we have discussed it with the Consumers'Association who share our concerns. You may not be aware that we have also discussed the matter with one of your European colleagues, Chris Huhne MEP—
the Liberal Democrat MEP for the South East—
who then raised a question in the European Parliament.
The occurrence that we are discussing is not unusual and we cannot allow an industry as important as insurance to get away with what appears to be sloppy self-regulation.

I contacted the insurance ombudsman, who was not prepared to examine the general issues raised in my letter, but offered to take up the case of my constituent in the event of his appeal to Chase Parkinson not succeeding. I am glad to say that as a result of our representations, the insurance company paid out—albeit as an exceptional measure. I am even more pleased that Mr Carter made a generous and substantial contribution from the repayment to the Isle of Wight hospice.

I am grateful for this debate, because I want the Government to address three issues. First, information should be made available at the time of a contract being issued; that will become more important with the increase in the number of people who use electronic means to book holidays and buy holiday insurance. Secondly, when information is given, it must be given in a readable form: five or six point is not acceptable; at least 10 or 12 point is necessary for text to be comfortably readable. Explanatory notes that inform people of exclusions do not reflect the policy if they are set in microdot format—that cannot be right.

The last issue that I would like the Minister to address is whether insurance policies should pass a test of reasonableness. It is totally unacceptable for people to be excluded from holiday insurance, for example, if they are faced with a diagnosis not previously made of HIV-AIDS or a sexually transmitted disease. Why should they be treated differently? I do not believe that people set out to behave irresponsibly and contract a social disease in order to cancel their holiday. This is an unreasonable exclusion on behalf of the insurance companies.

Similarly, it is mind boggling that insurers should exclude all forms of mental illness. I can appreciate that insurance companies might not cover people who merely feel distressed. However, they are entitled, under the terms of the contract, to seek a medical opinion on an insured person's claim for cancellation of a holiday, and most of us in the medical profession can differentiate between someone who is a bit anxious and someone who is disabled by mental illness. The contract that was offered to my constituent was not reasonable. It should, therefore, fall foul of consumer protection legislation.

12.41 pm

I congratulate the hon. Member for Isle of Wight (Dr. Brand) on raising the issue of holiday insurance on behalf of his constituent, Mr. Carter. He explained the matter well, and it is an important subject. The hon. Gentleman is right to highlight the apparent anomalies in the ways in which insurance companies determine what is insurable—not least the way in which they differentiate between one illness and another, the hon. Gentleman's description of which I found extraordinary.

I recall applying for an insurance policy and an agent coming round. He had a huge list—as there always is—of boxes to tick. He checked a list of things that I did not do: he asked, "Do you go sky diving?" to which I replied, "No." He asked, "Are you a paraglider?" and I said, "No." He then asked me whether I was a mountaineer, to which I replied, "Yes." I knew that, as he looked at me, he could see his commission falling away like an avalanche down a mountain. He asked, "How big are these mountains?" and I told him that they were the Alps. "So they're not as big as Mount Everest?" he asked. I said, "No, they're not." "That's all right then," he replied and he ticked the box. The process is, at best, haphazard; at worst, it stacks the odds against the person trying to obtain insurance.

The Department of Trade and Industry takes a great deal of interest in the matter. I was a little perplexed when the hon. Gentleman quoted an agency or a gentleman—I am not sure which—on the subject of lobbying the DTI on this issue. I have checked with sources who inform me that we have not, to our knowledge, been lobbied on this issue. That might be because insurance matters were transferred to the Treasury in 1998. However, we still lead on policy on unfair contract terms in circumstances such as those the hon. Gentleman describes, and I shall come to such matters shortly. The Office of Fair Trading enforces fair contract terms generally.

Holidays, especially for a whole family, are one of the most expensive items that we buy. The hon. Member for Isle of Wight did not mention that, but then, he had enough to go on with. When booking a holiday, consumers should feel confident that they are adequately protected. That is all the more important, given that a mind-boggling 28 million holiday packages are sold in this country every year.

With so many of our citizens taking holidays, it is vital that they should have access to adequate insurance cover against accidents, sudden illness, loss of personal possessions while travelling and enforced cancellation because of their own or a relative's illness. My advice to those considering going on holiday is that, if they do not already have a comprehensive insurance policy, they should take one out before they leave. Even then, as the hon. Member for Isle of Wight has warned, policies can sometimes be useless because of the small print.

One must also be sure that one is buying the right insurance. Mr. Carter believed that he was buying the right insurance, but it turned out that he was not. One wonders why it is not easier to make the right choice. The consumer White Paper we published last year stressed the importance of information, which gives consumers more choices and so drives up standards. I am sure that the case put by the hon. Gentleman will help that cause.

Clearly it is not the Government's job to tell industry what to offer consumers: that will come from consumer demand and competition. Industry must answer to consumers, not to the Government. The legislation that covers insurance providers—the Insurance Companies Act 1982—does not extend to the regulation of terms, conditions or prices in insurance policies, which define the type of insurance product that is being made available. Such decisions are best left to the market. However, insurers are expected to base their risk assessment of a client on information on which it is reasonable to rely. In that way they will not fall foul of legislation designed to prevent unfair discrimination.

There is keen competition in the insurance sector: if the policy that someone wants cannot be obtained from one source, it can be obtained from another. Too many consumers assume that they must buy the policy offered to them by the travel agent or the company selling the holiday. They should realise that they have the right to shop around. It is the Government's job to ensure that there is adequate protection for consumers and that companies trade fairly with consumers and with each other. That includes protecting consumers from being misled about the products that they are buying and from unfair competition. It may help if I say a little about the measures that exist to protect consumers purchasing holiday insurance.

The Package Travel, Package Holidays and Package Tours Regulations 1992 require anyone selling a package—defined as a prearranged combination of any two of the elements of transport, accommodation or other significant tourist services—to provide certain minimum information, including information about insurance. They also give consumers rights to compensation for misdescription of any part of the overall package, which could include misdescription of the scope of an insurance policy sold as part of it.

There is legislation that specifically governs insurance, but it is more concerned with the fitness and solvency of insurance companies than with the nature of their products. It does not tackle as precisely as the hon. Gentleman would like the problem that he has highlighted. However, that does not mean that insurers are not answerable for mis-selling general insurance policies. Indeed, 96 per cent. of the insurance market is accounted for by members of the Association of British Insurers, to which the hon. Gentleman referred, and ABI members operate a code of practice on general insurance; therefore, there is non-statutory regulation. The code applies to member companies and to those who sell their products. It gives the customer the right to see both the policy document and a copy of the schedule, and requires key features of a policy to be explained. In short, important information must be given up front.

The case made by the hon. Member for Isle of Wight this morning should be thrown down as a challenge to the insurance companies. The most relevant points in a policy such as Mr. Carter's should be stated up front, so that people can see them clearly. They should not be hidden somewhere in the microdot format paragraphs at the back of the insurance policy.

The insurance ombudsman adjudicates on complaints and examines each case individually. He requires evidence that important information was made available to the consumer when the policy was sold. However, the regulation of most general insurance intermediaries is expected to pass to the General Insurance Standards Council later this year. The GISC will have a wide-ranging remit, covering the activities of insurers, advisers, agents and brokers. In due course, a GISC code will replace the ABI code. I understand that the GISC is already talking to the Association of British Travel Agents about how travel agents who sell insurance will be brought within the council's scope.

I appreciate the difficulty of understanding exclusions that are buried in a body of small print, especially when that print is very small indeed and the customer's sight is no longer perfect, which is the case with most elderly people. I was interested in the hon. Gentleman's remark about sight deteriorating after the age of 60; I fear that mine started to deteriorate much earlier than that. Although many insurance companies aim for a plain English standard, insurance documents are inevitably complex, and to provide consumers with full information about important matters that affect the scope of a policy it is necessary to state many terms and conditions. In addition, a provision that is important to one customer may be relatively unimportant to another. Many insurance companies provide back-up through telephone helplines that offer customers advice, including advice on terms and conditions of insurance cover.

I agree with what the hon. Gentleman said about print that is too small for most people to read and about the way in which some documents are written, which adds another layer of denseness to the text. It is very difficult to get into a text of that sort, but it becomes almost impossible when it is couched in language that might as well be Mongolian as far as most people are concerned. It is very difficult for elderly customers to get into that.

The hon. Gentleman spoke about "named illnesses". Insurers design products against a background of previous claims and ask themselves whether there will be a greater number of claims from sufferers of a particular illness. If so, the insurer has every right to exclude it.

Is it reasonable to exclude influenza, because there is a lot of it about? My concern is that, although the "Travel Insurance: Important Notice" document issued by the Association of British Insurers talks quite sensibly about pre-existing medical problems, the schedule to the insurance policy introduces a host of other conditions that do not have to exist previously to be excluded from the insurance. That is misleading.

The hon. Gentleman raises an important issue. I was taken by his description of some illnesses as worthy and others as unworthy, as if people go out on purpose to catch an unworthy illnesses. Life is not like that. Clearly, insurance companies have to make money; that is what they are there for—

Yes, they have to make money decently. Most insurance companies would probably endorse that statement. However, there is a legitimate question to be asked about why some illnesses are on the worthy list and others are on the unworthy list. If statistics are to be believed and the incidence of mental illnesses and the number of people associated with those who suffer from mental conditions are as high as companies suggest, one wonders how people—especially Members of Parliament—manage to obtain decent holiday insurance cover.

Extra premiums are requested for certain conditions. As a mountaineer, I pay through the nose for insurance cover when, once a year, I manage to escape to the mountains. That rankles, but I can understand it. However, it strikes me as extremely strange that an actuary sits down and decides that influenza is a more worthy illness than HIV, even though there is a far greater chance of influenza preventing someone from going on holiday, especially a weekend break. It poses all sorts of ethical questions, as well questions of medical definition.

In the short time left, I should like to deal with unfair contract terms. Regulations on unfair terms in consumer contracts give legal backing to those principles. They apply to contractual terms that have not been individually negotiated, such as terms in standard form contracts. The regulations state that a term is unfair if it creates a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. In other words, is the term one-sided in favour of the business and against the consumer?

The hon. Member for Isle of Wight has reminded us this morning of the broad definition of an unfair contract. If a germane part of the contract is so deep in the microprint that it can affect the holiday of someone such as Mr. Carter, one must ask whether there should not be more transparency, so that the contract is fairer for the consumer.

Controlled Drugs (Law Enforcement)

1 pm

There are three ways in which the enforcement laws on drug abuse can be improved to reduce the harm and deaths caused by drugs. The first way is to allow natural cannabis to be prescribed to the seriously ill. The second is to take the soft drugs market out of the hands of irresponsible criminals and give it to legal businesses that can be licensed, controlled, policed and regulated. The third is to treat hard drugs addicts as patients, not criminals.

I have been greatly encouraged by my right hon. Friend the Prime Minister's announcement this week that his judgment had been wrong and that he had changed his mind on an issue affecting devolution in Wales. I cherish the thought that that was the result of reading my book on the subject. It took 18 months to convince the Prime Minister that he was wrong. I hope that in 18 minutes, and with the help of my hon. Friend the Member for Norwich, North (Dr. Gibson), who hopes to catch your eye, Mr. Deputy Speaker, I can convince the Minister of State, Home Office, my hon. Friend the Member for Norwich, South (Mr. Clarke), that British drugs laws are doing more harm than drugs themselves.

Even though the message that our drugs laws are not working has been clear for many years, Governments have refused to fix them. They have based their views not on evidence but on bigotry and mythology. Governments cannot always do good, but we can ask them at least to avoid doing harm. By inflicting avoidable pain and anxiety on the seriously ill, the Government are now doing harm. Thousands of otherwise law-abiding citizens use medicinal cannabis to relieve chronic pain and distress caused by multiple sclerosis, AIDS or the side effects of chemotherapy. A simple change in the law, recommended by the House of Lords Select Committee on Science and Technology and the Runciman report, would allow doctors to prescribe cannabis in the same way as heroin is prescribed, in rare instances.

The law is in disrepute. Last year in Wales, two seriously ill patients were imprisoned for using natural cannabis. In the past 18 months in England, six juries have—rightly—refused to implement the law. In one case, a man was carried shoulder high from the court after being charged with supplying cannabis to up to 100 people. The juries are doing the job that the Government have dodged. Judge Devlin said:
A jury is the insurance that the criminal law will conform to the ordinary man's idea of what is fair and just. If the law is cruel, juries will not enforce it.
Parliament, too, will not enforce a law that prevents juries from acting in that way. I hope that the oppressive measure currently going through the House will be thrown out, because it will deny juries the chance to act as the conscience of the country and refuse to act oppressively against seriously ill people.

Yesterday, the Government acted courageously against damaging prejudices in another place, so why do they become pale shivering wrecks when they consider the drugs laws? There is an unanswerable case for drugs law reform. Where is the courage that the Home Secretary showed on Monday, when he introduced a Bill about the hardest of all hard drugs, containing measures to make that drug, not less, but more available? He was implementing a pragmatic measure in the White Paper, to reduce the harm caused by our most addictive and poisonous drug: alcohol. Does the Minister of State not blush in shame at the fact that The Daily Telegraph has taken a progressive line against the forces of conservatism represented by the Government?

As rapporteur for the Council of Europe health committee on drugs misuse, I have examined drugs policies in 41 countries and accumulated a great encyclopaedia of evidence. Two incontrovertible conclusions can be drawn from the experiences of those 41 countries: harsh drugs laws based on prohibition do not reduce drug harm, but may increase it; and pragmatic, intelligent laws based on decriminalisation do not increase drug use, but often reduce it.

The Runciman report exposed the repeated misrepresentation by the British Government, the drugs tsar and the popular press of what has happened in the Netherlands. The report said that the committee was "impressed" by the results of 20 years of decriminalisation in Holland. Cannabis use in that country did not increase as a result of decriminalisation; in fact, it followed the trends in all other countries. Holland now has much lower use of cannabis, especially among 16 to 19-year-olds, and it is used in safer ways and in milder forms than are used in this country. The population of problem drugs users has remained stable, with a rising average age, and almost all are in touch with treatment.

Holland's is a success story: decriminalisation has proved to be the best way to block the gateway from the use of soft drugs to hard drugs. The best way of doing that is to ensure that there is not only one market, as we have in this country. British drug experimenters—the majority of our young people—have to cross the line between legality and illegality to use soft drugs, and they have to frequent areas in which they are likely to be exposed to the pushing of hard drugs as well. The results are self-evident: prohibition increases drugs harm, whereas decriminalisation decreases it.

Lessons can be learned from countries further afield than Holland: we can take into account the experience throughout the rest of the world. In 1987, south Australia introduced a policy of non-prosecution for cannabis use. Civilisation did not collapse. As the Runciman report says, there is now no difference in cannabis use between south Australia and the rest of Australia. During the 1970s, several states in the United States of America reduced to a small fine the penalty for possession for personal use. The rate of increase in cannabis use was lower in the states that depenalised than in those states that did not change the penalties: the states with the harshest penalties had the greatest drug use.

Can we have an intelligent and serious response from the Government on that point? Of the 41 countries of the Council of Europe, the two that have suffered the greatest increase in heroin use in the past 18 months are Sweden and the UK. They happen to be the countries with the severest penalties and the harshest laws. Prohibition increases drugs harm; decriminalisation reduces it.

One member of the Runciman committee went to Holland and his experiences in that country changed his mind entirely. I urge Ministers to visit Holland, where they might learn that our present laws to control the international trade in drugs have as much chance of success as Canute had when he commanded the tide outside this building to go back. The international drugs trade is the second biggest industry in the world. If we cut off one head of that great beast, two others will grow in its place. The only chance we have of reducing the problem is to adopt a pragmatic line of reducing harm.

The current position in Britain is dreadful. What we have—and the legacy that will be left by the Labour Government when they leave office—is greatly increased use of heroin and cocaine. Decriminalisation is occurring on a completely chaotic and irrational basis. Ninety per cent. of drug arrests in the UK are for simple possession; 80 per cent. of those arrests are for possession of cannabis. Sixty-two per cent. of drugs spending goes on enforcement, whereas only 13 per cent. is spent on worthwhile forms of treatment. In 1974, 3 per cent. of offenders were cautioned; now the proportion is 50 per cent.

Decriminalisation is happening according to postcode. You are eight times more likely to be apprehended in Dorset than in Northampton—

Order. As I am not going to either Dorset or Northampton, I am not likely to be apprehended at all. When the hon. Gentleman says "you", he is referring to me.

I am sorry. It is unlikely to be you, Mr. Deputy Speaker, who is arrested, but there are 500 people in prison for cannabis possession alone. This country does not have a single prison that is free of drug use. Cannabis offenders go into prison as cannabis users and often come out as drug addicts.

I have been present in most of the debates in the House on the subject in the past 20 years. They all follow the same pattern: the Government boast of the success of their new schemes; they say that their policies are working and they are about to turn the corner. British drugs policy has turned the corner so often that we have been round the block a dozen times. In 1989, David Mellor said that we could be certain of one thing: that the use of heroin had peaked in Britain; but every year since then, heroin use has soared. Ministers from both parties use the same self-deluding, self-congratulatory line; meanwhile, children are dying in greater numbers in this country than in any other country in Europe. The mantra is that drug remedies are not working, but we refuse to see the truth.

The Minister of State recently said on television that he could not accept the Runciman report because Ecstasy kills seven people a year. That is tragic—the untimely death of a young person is always dreadful. However, there have been fewer deaths in Holland in 10 years than in any one year in Britain. No deaths in that country have been caused by inhalants, and the number of deaths caused by other drugs has fallen. We should put the policy in Holland into perspective. We should also consider the fact that, each year, between 500 and 600 people are killed by the simple drug paracetamol, which can be found in most people's home. If we want to reduce drug deaths, we must look at the bigger picture, which shows that children and the elderly are being drugged in an irresponsible and dangerous way.

The 10-year strategy is a cop-out—an excuse for not debating the issues, not acting and not thinking. In 10 years' time the drugs tsar will have retired, the Prime Minister will be Lord Sedgefield, and there will have been 1,000 more avoidable heroin deaths. A thousand families need not be bereaved if we consider now what is happening throughout the world, amend our policies and introduce the necessary reforms. Prohibition kills; decriminalisation saves.

In the past, Ministers of both parties have found it convenient to blame the drugs trade and the wicked pushers; we do not lay the blame on ourselves. However, the drugs trade does not cause deaths. It consists of greedy people who are out to make money irresponsibly. If the trade can be turned into a responsible, licensed business, drug crime will be reduced and people will feel able to enter rehabilitation. Harm can be reduced quite spectacularly, as it has been in Switzerland, where experiments have been conducted in respect of injectable heroin.

In future, whatever the political colour of the Government, Ministers will not be able to get away with the excuse that people outside Parliament are responsible for deaths caused by drugs. Politicians decide drug policy. Responsibility for the deaths caused by drugs should be laid firmly at the door of Governments'drugs policies for the past 20 years, not on those outside the House.

1.13 pm

I congratulate my hon. Friend the Member for Newport, West (Mr. Flynn) on the passion with which he spoke and on introducing the subject of drugs policy within these portals. I thank him for allowing me to speak for a few minutes. My hon. Friend the Minister of State and I have an issue in common: we fought side by side in the streets and on the platforms of Norwich against a common opponent, Howard Marks, the high priest of the pro-cannabis party, who suffered a severe defeat at our hands.

We are debating a serious subject and I intend to speak about the medicinal value of cannabis and other drugs. For centuries, cannabis has been for used for medicinal purposes all over the world. Drugs can be beneficial or harmful according to the context of their use. Cannabis may be harmful when someone is driving a motor car, but it is beneficial to a multiple sclerosis sufferer. Sadly, legislation is not context-sensitive.

Beneficial effects are being rediscovered because, although illegal, cannabis is widely available. There is no legal commercial interest in cannabis, so little research is carried out into identifying new medical applications. With no commercial interest, it is difficult to secure funding for proper trials. To some extent, charities are being asked to fulfil that role. It is likely that other recreational drugs have effects that could be exploited for therapeutic purposes, although the discovery of such effects is unlikely because most drug research in this country is impossible without commercial backing. The law is a blunt instrument and, at present, it is incapable of taking into account the context of drug use when defining criminality.

The medicinal uses of cannabis include alleviation of tremor and spasticity and a variety of neurological conditions—especially MS; increasing weight and improving appetite and mood in cancer patients; reducing nausea associated with chemotherapy in cancer patients; and reducing intra-ocular pressure in glaucomas. Those are but a few of the medicinal uses of the drug. Though cannabis may not be the best drug to treat those conditions, without proper trials and experimentation, we shall never know. Medicinal trials on patients would provide a welcome a way forward in establishing the beneficial effects of cannabis. After such trials, the knowledge would be extended into the wider public sphere.

1.16 pm

I, too, welcome the debate. I congratulate the hon. Member for Newport, West (Mr. Flynn) on securing it, although I felt that his speech was uncharacteristically offensive.

I do not speak, as did David Mellor or previous Governments, by going round the block. I shall deal directly with the points raised in the debate. My hon. Friend the Member for Norwich, North (Dr. Gibson), who is also a personal friend, was characteristically constructive in advocating a scientific approach to deal properly with the issues. Some people argue that there is no need for a debate on these matters, but I disagree: there should be a debate and it is right for it to continue. In that context, I thank the Runciman committee and the Police Foundation for their work in producing a serious and well-considered report.

The hon. Member for Newport, West mentioned The Daily Telegraph. In the past, I have not responded to that point, but, on this occasion, I should like to draw to his and the House's attention the fact that the ultra-libertarian wing of the Conservative party is now running that newspaper, which explains the editorial position on these matters, as on others.

Let me return to the more serious aspects of the debate. First, I shall set out the statutory framework, which is provided in the Misuse of Drugs Act 1971. It places all controlled drugs into three categories—A, B or C—according to their relative harmfulness. Class A includes heroin and cocaine; class B, amphetamines and cannabis; and class C, benzodiazepines and anabolic steroids.

No, I will not. I intend to conclude my speech within the time available to me.

That classification determines penalties for offences under the Act. For example, the maximum penalty for possession of a controlled drug ranges from two years' imprisonment for possession of class C drugs to seven years for possession of class A substances. Assessments on classification include a judgment on the substance's toxic effect, the prevalence of misuse, and the effects on society. For expert advice on the classification of controlled drugs, the Government rely on the Advisory Council on the Misuse of Drugs, which was established by the 1971 Act. It must comprise no fewer than 20 members and the disciplines represented within the council include medical practitioners, pharmacists, chemists and experts on the social effects of drug abuse.

It is important to set out the current assessment of the medical and social effects. A 1997 World Health Organisation report confirmed that cannabis has both acute and chronic health effects. The acute effects include damage to people's ability to learn and to carry out many tasks, including operating machinery and driving vehicles. The chronic effects include damage to mental functioning, especially learning abilities, which may not be reversible for prolonged and heavy users. A cannabis dependence syndrome has been identified in heavy users, and the drug can exacerbate schizophrenia in people who are already affected by that illness. There are also the obvious health risks associated with smoking the drug. That is why the British Medical Association has concluded that cannabis in its plant form is unsuitable for medical use.

I turn now to the points made by my hon. Friend the Member for Norwich, North about the need for research. The Multiple Sclerosis Society agrees that cannabis should not be prescribed in advance of proper trials, but, rightly, it argues for the types of trial that my hon. Friend advocates. The Government want research brought to a satisfactory conclusion as soon as possible, which is why we have licensed several laboratory and research projects over the past few years. The Medical Research Council recently awarded a grant of more than £1 million to enable another major research project to get under way, and the Medicines Control Agency has recently given permission to GW Pharmaceuticals Ltd. to proceed to clinical trials.

Those are important milestones in the development of a potential medicine for multiple sclerosis, and they are to be warmly welcomed. I hope that that goes some way towards meeting my hon. Friend's point about the need for more research. He and I received a delegation from the Multiple Sclerosis Society in Norwich. We discussed the benefits that the society's members felt proper medicinal use might bring. It is important to research and develop such a use, and that is what the Government are doing.

Why should there be controls on drugs? The Government have a clear and consistent view of the damage that drugs can cause to individuals, their families and the wider community, and of the link between drugs and crime and the corresponding need to maintain firm controls. I am familiar with the views of the hon. Member for Newport, West on the 1971 Act, and I concede absolutely and in public that he has a long-standing and sincere desire to see the misuse of drugs eradicated. He made that clear again in his speech, and I cast no aspersion on his motives in that regard. There is a difference in analysis, which I hope to explore in this debate, but I am not suggesting that he wants anything other than a reduction the misuse of drugs and their harmful effects. Ours is simply a discussion about how best to achieve that.

Some people have suggested that decriminalising or legalising currently controlled drugs would reduce both the harm they cause and the market for them, but successive Governments in this country and throughout the world have taken the view that that cannot possibly happen. I will not follow the hon. Member for Newport, West in discussing complacent statements about the drugs problem having been solved, because that is not the Government's view; on the contrary, we believe that we have much to do to tackle drugs issues. Today's debate about the legalisation or decriminalisation of certain drugs is only one part of the wider debate.

Most of those who favour legalisation recognise that the balance of the argument would be tipped against them if consumption significantly increased as a consequence of the legalisation of drugs. Common sense and the lessons of history suggest that that would be the case, and it might help if I outline the current levels of drugs use. According to surveys, 1.25 million people in this country used cannabis in the past month. In contrast, between 10 million and 11 million people have smoked tobacco, and 42 million people have consumed alcohol in the past month. However, the illegality of some of the drugs that I have described limits use and deters many other people from using them. Furthermore, the main effect of decriminalisation or legalisation would be an increase in the consumption of drugs, which would be a bad thing for various reasons. The Government's policy on all legal and illegal drugs should be motivated by a desire to reduce use, whether we are talking about tobacco, alcohol or other drugs.

Can the Minister explain why the Runciman report concluded that the decriminalisation of cannabis in Holland, Australia and certain states of America did not increase its use?

The report explains that itself. That is the view to which it came. However, the hon. Gentleman mentioned Ecstasy in connection with Holland a moment ago, and I have the figure for the lifetime prevalence of the use of different illegal drugs among 15 to 16-year-old students contained in recent nationwide school surveys from some EU countries: 8.1 per cent. of those students in the Netherlands had consumed Ecstasy, compared with 3 per cent. in the UK. That is a significant difference, and the implication of consumption is real.

It is argued that the black market would disappear with decriminalisation, but I believe that the criminals would attempt to undercut the legal producers, and that the United Kingdom would provide an attractive base for organised crime. The Dutch police have told us that the semi-legal trade in cannabis in the Netherlands has helped to make the country a safer place for big-time crooks.

The hon. Gentleman suggested that the law is enforced inconsistently across this country. It is the duty of the police to enforce the law as it stands. Although the statistics show that the majority of those arrested for the possession of cannabis receive a caution, cautioning rates vary from force to force, as he said. The Government agree that as much consistency as possible is desirable, but discretion is necessary to allow the police to take account of individual circumstances. To achieve greater consistency, the Association of Chief Police Officers last February issued guidelines to its members on case disposal options, including cautions, for drugs offenders. It is still too early to assess the impact of the guidance on that objective. The guidelines emphasise that one way in which the police service can demonstrate its fairness in its dealings with those it comes into contact with is by being as consistent as possible in case disposal, as I believe it is.

On the point made by my hon. Friend the Member for Norwich, North about the context of drug use, the guidelines recognise that even an apparently straightforward case can involve a multitude of human, social and situational factors that can influence police judgment on the best way to proceed. It properly emphasises that the people best placed to make such judgments will be those who are most directly concerned and have first-hand access to all available information.

For example, under the final warning scheme, a first offence results in a reprimand, warning or charge, depending on the seriousness of the offence. A young offender cannot be given more than one reprimand: any further offending leads to a warning or a charge. No young person can receive more than two warnings. The final warning scheme has been piloted in five areas for 18 months since 30 September 1998, and it will be rolled out nationally from 1 June this year. Experience of the way in which the scheme works nationally will provide useful information if, in future, it is felt necessary to put adult cautioning on a statutory basis.

The hon. Member for Newport, West mentioned the courts. The balance must be drawn between achieving consistency and providing the courts with the discretion to carry out their job properly. The Court of Appeal issues sentencing guidelines where they appear to be necessary, and such guidelines have been in existence in respect of drugs since 1982. In addition, and as part of the provisions of the Crime and Disorder Act 1998, a new statutory body, the Sentencing Advisory Panel, has been established to provide advice to the Court of Appeal on sentencing. Hon. Members may be interested to know that that panel is currently considering drawing up sentencing guidelines in respect of opium.

The Government are determined to break the drugs-crime cycle. Contrary to what the hon. Member for Newport, West said in his uncharacteristically offensive speech, we are not complacent, nor do we believe that the problems have been solved. There is a long way to go and we are committed to finding the right ways in which to proceed. The hon. Gentleman appears to believe that former Conservative Ministers in the Department have appeared complacent, but I doubt that they were complacent in the way that he suggests.

Our objective is to use each stage of the criminal justice system to identify drug-misusing offenders, to get them into treatment where appropriate and to monitor their progress through drugs testing. I pay tribute to the way in which the hon. Member for Newport, West paid a great deal of attention to drug rehabilitation. I concede that the Government must do much more work to ensure that proper facilities are made available. We acknowledge that there is a failing that needs to be remedied, and I am glad that the hon. Gentleman has highlighted it.

The link between drugs and crime is now clearly established by research. Our research programme to drug test arrestees shows that nearly 80 per cent. test positive for an illegal drug. The same research suggests that property crime provides about 75 per cent. of the total illegal income of arrestees, of which about one third is spent on buying heroin and/or crack cocaine.

The Government want to create a healthy and confident society that is increasingly free of the harm caused by the misuse of drugs. A complex set of issues is associated with drugs misuse, which we are fully committed to tackling. We have set out a strategy and we believe that law enforcement agencies have a key role to play. I am glad that we have debated this matter today. It will continue to be actively debated by hon. Members in the House and by others.

Developing Country Debt

1.30 pm

I am grateful for the opportunity to discuss the progress that has been made in writing off the debts of the world's poorest countries. The subject brought me into politics—I was concerned about national and global poverty and inequality.

For a long time, I have found it offensive that we generally enjoy such an affluent life style when there is so much unmet need in the world. I welcome the initiatives of groups such as Jubilee 2000, on whose briefing paper I shall draw heavily. A year or two ago, I helped to launch the parliamentary element of Jubilee 2000, and I spoke from a platform in this Chamber, although it then had a different layout.

I welcome the Government's efforts in this context. I am glad that they have reversed the long-standing fall in the percentage of national income that is spent on aid—the change is entirely laudable. I also welcome the lead that the Chancellor of the Exchequer has taken.

I want to discuss the disjunction between perception and reality, and to outline where we should go from here. I support much that has been done. My concern about the disjunction between perception and reality is that in the public's mind debt is virtually off the agenda in the United Kingdom. People have heard the announcement that we are writing off 100 per cent. of debt, and they might have heard President Clinton say a few months ago that the Americans will do the same. They might assume that the issue is largely solved, but the Economic Secretary well knows that that is not the case. Neither the public nor the Government should be complacent about debt.

We have rightly focused on debt during this millennium year, but that should not distract us from the broader problems. Someone said to me the other day that many of the world's poorest people live in countries that are not significantly indebted. We urgently need to tackle the debt issue, but when we have done so we should remember that that effort was part of a larger agenda.

I want to respond to criticisms of the progress that has been made. The phrase, "faster, deeper, broader" stems from the idea that debt relief should move faster, that there should be more of it and that it should be applied to more countries. I received an interesting letter from the Economic Secretary, which I imagine was prepared in response to Christian Aid's "one third, two thirds" postcard campaign. She used the phrase, "faster, wider, deeper", which suggests that she sympathises with the associated goals. I hope that she will expand on her comments.

Although we have heard announcements about the speed of change, the reality is a long way behind. I recognise that that is not wholly or even largely the fault of the UK Government. I urge the Economic Secretary to use her influence and that of the Government in international organisations to speed up the process. Last September, when the Chancellor of the Exchequer was wearing his hat as the chairman of the International Monetary Fund's monetary and financial committee, he said:
If we are successful, it will be a matter not of years or months but weeks before the first country will benefit from debt relief.
That upbeat and optimistic statement was qualified by another statement in March 2000. The Secretary-General of the United Nations said:
The deeper, faster and broader relief promised last year has yet to materialise.
There is a disjunction between people's perceptions and aspirations and reality.

Does the hon. Gentleman agree that a good reason for the delay is the need to give heavily indebted poor countries a chance to comment on the poverty reduction programme that is connected with debt write-off? I should be concerned if such conditionality were lost—debt relief should be fast-tracked.

I understand the hon. Gentleman's point. The Secretary of State for International Development spoke of the dangers of searching for a perfect poverty-reduction scheme. We need a balance. We must ensure that debt that is written off and that service payments saved are spent on poverty reduction. I am sure that the hon. Gentleman and I agree that we should not drag out that process.

Currently, only five countries appear to benefit from the enhanced HIPC initiative, which is even fewer than was thought likely at Christmas. I want to touch briefly on some reasons for the delays. The role of the International Monetary Fund is important. If Britain's influence is relatively powerful, I hope that pressure can be brought to bear on the IMF. Jubilee 2000 has suggested that the IMF's handling of the situation in Guyana has been neither consistent nor helpful, and I hope that Guyana will shortly receive assistance.

In the context of writing off debts, international organisations such as the World Bank are apparently worried about their triple-A credit ratings. That fear seems unnecessary, and I hope that pressure will be brought to bear in that regard. As the hon. Member for Putney (Mr. Colman) noted, there are delays associated with the preparation of poverty reduction strategy papers. One hopes that that process will not be too protracted.

The role of Japan, which is a major creditor nation, has been called into question, particularly in the context of Ghana, Malawi and Benin. In respect of Japan's role and the pressure that is being brought to bear, a rather different message is being given in private than in public. If the Japanese Government are trying to prevent countries from participating in the HIPC process, I hope that the Prime Minister will tell them that such behaviour is inappropriate when he travels to Japan later this year.

No. The hon. Gentleman did not make clear his intention to intervene, and I cannot give way twice.

Japan has expressed concern about the moral hazard associated with writing off debts, yet it supported its banks to the tune of billions. I hope that the Government will make it clear to the Japanese Government that that is unacceptable. The United States Congress seems unwilling to back President Clinton's aspirations with hard cash. The European Union seems to be saying, "If the Americans won't play ball, perhaps we won't do our bit." At the bottom of the pile are the people of the world's poorest countries, who have to wait while this virtual merry-go-round continues. I hope that the Minister agrees that those delays are unacceptable, and will reassure us that the Government will do all that they can to break the logjam.

Speed is important, but so is the extent of debt write-off. The perception exists that 100 per cent. of debt has been written off, but, as the Minister well knows, that is far from the case. Indeed, in respect of the five countries that have reached decision point, the average stock of debt has been cut by only 40 per cent. Debt service costs have been cut by only 35 per cent. The 100 per cent. write-offs to which reference has been made are, typically, bilateral, aid-related debt. As far as I am aware, there are at present no pledges for 100 per cent. write-offs from the IMF, the World Bank or regional development banks. Given that one third of HIPCs' long-term debt is multilateral, it is clear that we are a long way from the Jubilee 2000 goal of full write-off during this year.

To give a feel for the inadequacy of the current situation, I shall quote from the Jubilee 2000 coalition briefing. It states:
After full implementation of the Cologne deal, its first five recipients will still be paying more than half a billion dollars every year to foreign creditors—almost as much as they spend on health care.
I shall give a flavour of what that means for those five countries. HIV, which leaves 1 million children orphaned, is a big problem in Uganda, and we are not doing enough for that country. In Bolivia, basic sanitation is a fundamental problem. In Mauritania, nearly two thirds of the adult population are illiterate. The problems in Mozambique have been well documented in recent months. In Tanzania, one third of children are malnourished. On average, those countries continue to pay out substantial sums, even though they are participating in the scheme, and the call for deeper action has been noted.

A slightly alarming development is the suggestion that Overseas Development Administration cancellations—aid write-offs—might be taken into account in considering HIPC initiatives. In other words, as in my field of social security, it will resemble a 100 per cent. taper: every pound that goes to one area is taken from another. Clearly, that was not what the United Kingdom Government intended when they said that they would write off bilateral debt. I hope that pressure will be put on the Paris Club creditors and the IMF to ensure that that does not happen and that there is genuine additionality.

We have discussed speed and depth. Which countries should be covered by debt write-off initiatives? Jubilee 2000 has cited some very needy and deserving countries that have a strong case but are not covered. I should like to refer to two of them. Nigeria has huge debts. Due to its political history, money that it has been given has sometimes ended up in the wrong pockets. One reason why Nigeria was not in the original HIPC initiative was that it had access to borrowing from the International Bank for Reconstruction and Development. I gather that under the agreement that Nigeria is reaching with the IMF, it will not have access to any further borrowing from the International Bank for Reconstruction and Development, and only $360 million will go towards poverty alleviation—10 times less than it is due to pay in debt service. That gives an idea of the scale of Nigeria's problem, and I hope that it can be brought into the HIPC scheme.

I should briefly mention Haiti, which has been described as one of the poorest countries in the western hemisphere and is in urgent of debt cancellation. Again, it has a troubled political history.

These are not simple issues. The countries involved clearly have a responsibility to channel the money that is used from debt write-offs into poverty alleviation. However, I get the impression that creditor nations and international organisations are not seized of the urgency of the matter. Some of them—the UK Government may be exempt from this criticism—are continuing at far too pedestrian a pace, not appreciating that as every day goes by another child is missing out on schooling or another mother is missing out on primary health care. The matter is therefore terribly urgent.

I urge the Economic Secretary, the Chancellor of the Exchequer and the Secretary of State for International Development to use all the influence that they can bring to bear on the multilateral organisations and creditor nations to follow the British lead and to ensure that Britain's promises are borne out by actions.

I often raise the concerns of South Gloucestershire, my local authority, in Adjournment debates, yet the matter that I have discussed today is as important to my constituents as their local traffic or schools. Many of them feel passionately about it. I hope that the Economic Secretary shares my, and their, concerns and will offer us some encouragement.

1.43 pm

As a girl raised in South Gloucestershire, I am sad that the hon. Member for Northavon (Mr. Webb) did not say anything further about it. However, he has raised a very important topic, and I shall endeavour to cover as quickly as I can the points that he made.

No one can doubt the Government's commitment to reducing the debts of the poorest countries. It is clear from the hon. Gentleman's remarks that he shares that view, and I am grateful for his recognition of the Government's achievements, especially the work of my right hon. Friend the Chancellor of the Exchequer. The Government called for, and secured, a review of the original heavily indebted poor countries initiative and pressured our G7 and international colleagues to adopt challenging standards on debt reduction and the number of countries that receive debt relief. We are committed to giving 100 per cent. debt relief to every country that qualifies under the HIPC initiative.

Many Members of Parliament, of all parties, recognise that our duties to the poorest countries are wider than debt relief for relief's sake. The Government start from a more fundamental principle—our dependence on each other and the fact that we are part of a wider community with mutual responsibilities and linked destinies. In today's global market, that interdependence is further accentuated and our fates and interests are bound together. We must look beyond our front doors and national boundaries, as the hon. Gentleman did, and accept that our responsibilities extend beyond traditional national boundaries.

If it is to be sustained, prosperity must be shared and the people of this country well understand that moral imperative. I have seen at first hand the British public's response to the call for debt relief in developing countries. I have seen the thousands of letters and postcards that have been written and I have responded to many of them.

Without doubt, last year's achievements and the agreement reached at Cologne to cancel ․100 billion of developing countries' debt would not have been possible without the actions of ordinary citizens throughout the world. They forced their Governments to listen to the call for faster, wider and deeper debt relief. The challenge now is to implement the enhanced HIPC initiative.

The United Kingdom has been at the forefront of efforts to persuade our international partners to meet the agreed targets under the HIPC initiative and to go beyond the agreed level of debt relief by providing 100 per cent. relief on the commercial debts of HIPCs.

At the beginning of this week, the Japanese Government announced that Japan will provide up to 100 per cent. relief on HIPC debt. The United Kingdom welcomes that announcement and acknowledges that it as an important step along the road to faster, wider and deeper debt relief. We shall continue to remind Japan and others of the importance of delivering on those commitments.

Following the announcement by Germany at the EU-Africa summit earlier this month, the G7 is now acting as one to relieve the debts that have, for too long, burdened those countries. The United Kingdom acknowledges the fact that other countries, such as Norway and Sweden, have made similar commitments and urges other creditors to join us in making 2000 the year in which we make a commitment to debt forgiveness on a global scale.

The challenge of debt reduction goes wider than that. The new HIPC framework acknowledges that we need debt relief not just for its own sake, but to break the vicious circle of debt, poverty and economic decline and to create a virtuous circle of debt relief, poverty reduction and economic development. Debt reduction and aid alone are not enough. That could lead to millions of pounds flowing into prestige projects that do nothing to relieve poverty, or to corrupt regimes and military excesses that destroy rather than build for the future. Only if debt relief is combined with the economic and social policies that are essential for economic development can it be the catalyst that releases countries from poverty. The Government place great emphasis on the implementation of countries' poverty reduction strategies, to which the hon. Member for Northavon referred.

Poverty reduction strategies are vital to the new approach that recognises the links that form the virtuous circle. First, we must deliver enhanced debt relief. Secondly, we must build a link between debt relief and poverty reduction strategies. Thirdly, we must create the new conditions for economic development that will allow all poor countries to participate in the global economy. Fourthly, we must recognise that education for all and the recognition of human capital is central to the whole project.

The hon. Gentleman asked whether we are making fast enough progress. The United Kingdom's main messages at the spring meetings will be that the process is important because it integrates macro-economics and structural and social policies in a new and powerful tool that will help developing countries in their efforts to reduce poverty and promote growth. It is important to expand participation in national policy making and the general building of a civic society that promotes openness and transparency. If Governments have sound poverty reduction strategies and an effective budgetary and institutional framework in place, donor focus should increasingly shift from projects to programme assistance. A good poverty reduction strategy will be based on a country-specific analysis of the processes that lead to and maintain poverty and of the impact that particular policies and spending will have on that.

The United Kingdom argues that a country need not have a full poverty reduction strategy paper in place when a decision is made. That addresses the question about how perfect we must be to make progress. We want poverty reduction strategy papers to be in place by completion and we want countries to take as long as they need to achieve a good PRSP that has broad support. However, we want countries to make decisions quickly and we have argued only for countries' IMF programmes to be broadly on track with a plausible road map for producing a PRSP. We are trying to meet the points made by the hon. Member for Northavon about the pace and the way in which the matter should be handled.

The Government's approach to developing countries' debt involves more than just cancelling the debt. Our strategy is to achieve sustainable development. We must be able to work with international organisations, other Governments and non-governmental organisations to develop a momentum towards development. The world's richest nations must accept their obligations towards the world's poorest people, so that those people can be empowered to play their full role in the global system.

The hon. Member for Northavon asked what other pressure we might bring to bear. Last week, the Chancellor and the Secretary of State for International Development wrote to the acting managing director of the IMF and the chairman of the World Bank about slippage in the timetable and suggested that the fund and the bank set up a HIPC initiative implementation unit to oversee the HIPC timetable. As a result of their letter, the bank and the fund have now told their respective boards that they will set up a joint committee to manage the HIPC process. The United Kingdom welcomes that development and will propose that the fund and the bank go further and mirror those changes at staff level by setting up a joint committee of the boards to be responsible for managing the HIPC timetable.

The contribution of the United States will be crucial in funding debt relief for the early Latin American cases. There was a setback when Congress failed to deliver last October, but we are reassured by the noises coming from the US Administration that they remain committed to securing the money to meet their pledge.

The hon. Gentleman asked about Guyana, which is off track with its economic reform programme, but we are confident that it is working closely with the IMF to resolve the remaining obstacles.

We have led international efforts to support the Nigerian Government but, with its history, it needs to demonstrate a track record to make progress.

As we embark on another wave of technological revolution, we must be sure that we include the people and places that the world has forgotten for too long. I applaud the hon. Member for Northavon for raising this important subject. We have made great progress and I am confident that we shall continue to make further progress. We are at the forefront of the international community in leading the pressure for effective strategies without losing sight of the fact they must be pursued vigorously at all times to achieve poverty reduction for so many of the world's population.

Question put and agreed to.

Adjourned accordingly at eight minutes to Two o'clock.