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Westminster Hall

Volume 412: debated on Friday 11 April 2003

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Westminster Hall

Tuesday 4 November 2003


Equitable Life

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

9.30 am

I start by declaring a past or latent interest I am a former Equitable Life policyholder.

It is remarkable that, despite repeated calls, this debate is taking place almost a year after the last, and it is profoundly depressing that absolutely nothing seems to have happened during that year. A few well-meaning but narrow inquiries have made constructive remarks, but Lord Penrose plods along at his own speed while millions of policyholders and their dependants remain frustrated, firmly believing that an injustice has been done. The Government sit on the sidelines, saying nothing, suggesting nothing, stalling, and hoping that they can evade responsibility.

The problems of Equitable Life are well documented. In its heyday, it was one of the most respected life assurance companies of the 20th century. It closed to new business in December 2000 after a House of Lords decision in July of that year that criticised decisions made by the regulators and management over the preceding 25 years. We are talking about a scandal on a massive scale. Policyholders from all walks of life who were planning for their retirement put their faith in pension companies like the Equitable for one simple reason: although there is no such thing as a risk-free investment, they believed that they were protected from financial mismanagement because the pension companies were subject to scrutiny, supervision and regulation by the authorities set up by Parliament. It is not acceptable, as has been suggested, to say that policyholders should have been more alert or that their expectations were too high. It is the job of the regulators to monitor the probity of an institution in the financial services sector and to take appropriate action. The people expect that and are entitled to demand it.

The Equitable started to go wrong in 1975, when policyholders were guaranteed annuities at interest rates that subsequently proved unsustainable. Throughout the 80s, that policy continued even though interest rates on the investments that underwrote the policies were falling. The Equitable then made the ultimately disastrous decision in 1988 to continue to issue policies without guaranteed annuities, and to mix the two classes of policy into one financial pot. By 1993, interest rates had fallen to such a level that those with guaranteed annuities were clearly sitting on a far more valuable asset than those without. In response, the board lowered the bonus for those entitled to guaranteed annuities. By not lowering the bonus for other policyholders, all policyholders were, in effect, put in the same financial position. That was a recipe for disaster. In 1998, it was calculated that the liability for those with guaranteed annuity rates was in excess of £1.6 billion.

What on earth were the regulators up to? As long-term interest rates fell, the Equitable should have closed itself to new business involving policies that gave a guaranteed annuity rate, drawn a line under the business contracted on that basis and opened a new fund for policies without guaranteed annuities. That would have made it clear to all which funds were available to meet which liabilities. Why the regulators did not act is a central question for Lord Penrose. After all, if five Law Lords could work that out in a few days, why could the army of civil servants whose sole job it is to monitor such things not do so?

At the same time as the events I have described, the Equitable embarked on a bonus strategy that was deceptive and equally dangerous in its consequences. In simple terms, the Equitable consistently announced bonuses without having the underlying assets available to sustain them. A successful direct marketing campaign, hyped by over-bonusing, attracted a large number of new policyholders and an increasing flow of contributions from existing members. Through the 1990s, that gave the Equitable a level of growth that was without equal, but t was bound to end in tears. Even at the top of the bull market in January 2000, the fund was in deficit by about £2 billion, and it was £3.3 billion below policyholders' reasonable expectations.

Throughout that period, the regulator stood by and did nothing. It was a truly remarkable state of affairs. In the eyes of EMAG—Equitable Members Action Group, which is a most constructive and positive group—Equitable was effectively running a pyramid scheme. That is a point of view with which I have some sympathy. Perhaps the issue was so big that the regulators could not see the wood for the trees.

Equitable Life closed to new business in December 2000. The Government announced the Penrose inquiry in August 2001. It was set up on a non-statutory basis, and its brief was to discover the facts and establish what lessons could be learned. The then Economic Secretary to the Treasury—now the Financial Secretary—announced that Penrose would report as soon as possible. More than two years later, he still has not reported. In October 2001, the Government said that he would report in the second half of 2002. The Minister said in December 2002 that Penrose would report to Ministers in summer 2003; and in March 2003, that the report was expected in June. In May, Lord Penrose said that he could not report in June; in September, the secretary to the inquiry said that the report was nearly finished. In October, there were suggestions that the report could be delayed by litigation among those involved in this sorry saga; last week, Lord Penrose said that that was not the case. Now, there are suggestions that the report might not be published until the new year.

I draw back from demanding an inquiry into the inquiry, but it is incumbent on the Financial Secretary to explain what is going on. I put to her three specific questions of which I have given her prior notice. First, is she satisfied that the inquiry has had sufficient resources to do the job that it was required to do? If she is, will she explain the delay? Secondly, are witnesses refusing to co-operate? If they are, will she undertake to put the inquiry on a statutory basis, so that Lord Penrose has the power to call witnesses? Thirdly, will she confirm that, immediately upon receipt, she will publish the report in full and that she will reject the arguments of those who seek to block publication on the grounds that the report could prejudice the outcome of their legal battles? The significance of the last point will not be lost on those who suspect that the Treasury would be only too happy if it was prevented from publishing a report that pointed to regulatory failure and opened the floodgates to compensation. In his statement last week, Lord Penrose made it clear that his job is to investigate the facts, not to determine fault: he will describe or comment on the role of those involved, but stick to the facts. In the light of that crystal-clear statement will the Financial Secretary confirm that the report will be published in full on receipt?

The Chairman of the Treasury Committee, the hon. Member for Dumbarton (Mr. McFall), has written to me expressing his disappointment that he is unable to attend today—the Treasury Committee is sitting at this moment. However, he confirms that once the Penrose inquiry is published the Treasury Committee will continue its inquiries, which is greatly to be welcomed.

My hon. Friend has followed this story more closely than any other hon. Member. This is his third debate on the subject and many of us are incredibly grateful to him for that. Thousands upon thousands of people await the outcome of the Penrose inquiry to see where their future lies. My hon. Friend described vividly the delay in getting the report ready; does he agree that any delay in publication will be unacceptable?

My hon. Friend has sat through our previous debates on this issue, and he makes a powerful point, which I am sure is not lost on the Financial Secretary. Millions of people await the outcome of the report, so that they will know exactly where they stand.

Before discussing the role of the parliamentary ombudsman, I should like to make one point about the role of the former directors. There is no doubt that extraordinary decisions were made by past board members. Those decisions are now the subject of litigation. Whatever we may think about the actions of those people, I believe that the decision to sue is a diversion from the exposure of the regulatory regime. Bankrupting former board members will raise a few millions, but that is peanuts in the global scale of Equitable's problems. If there is a remedy, it lies in the criminal law. My advice to the current board is to drop the litigation against the former directors and move on to expose the regulatory failures.

The report by the Parliamentary Commissioner for Administration has had a very different voyage. Initially the ombudsman announced that he would not investigate the complaints put before him. However, during the debate held here in Westminster Hall in October 2001—our second debate on the subject—hon. Members on both sides of the House made it clear that the ombudsman should remember that he reports to Parliament, not to the Executive, and that his refusal to investigate smacked very much of the wishes of the Executive. To his credit, the ombudsman recognised the force of this argument, and announced an investigation a few days later. That followed publication of the Baird report, which emerged from the Financial Services Authority's own internal inquiry. Like all good internal inquiries, it found that whoever was to blame, it certainly was not the FSA.

The Baird report demonstrates that the die was cast for Equitable before 1999, and figures available to us show that that die was almost certainly cast before 1997. The hon. Gentleman referred to events as long ago as the 1970s. Where does he think the responsibility ultimately lies?

I suspect that the hon. Lady is verging on making a political point. I wish that the Financial Secretary had made that point. The Labour Government continued precisely the same policy as the previous Government, so if the hon. Lady is suggesting that the previous Government got it wrong, she must acknowledge that the present Government have got it wrong too. Before she makes interventions like that she should come clean about exactly where she is coming from. There is a point to be made about the Baird inquiry, however, which is that it was limited in its scope and it did not look at the earlier problems.

The period covered by the ombudsman's inquiry has gone up and down. He initially announced that he would examine only the period January 1999 to December 2000, as the Baird report did. Then, in March 2003, his successor told the Public Administration Committee that she did not rule out pre-1999 investigations. In July, she published her report in which she ruled out further investigations. Now I read reports that once Lord Penrose has published, the ombudsman will consider further investigations. Perhaps this is all part of life's rich tapestry, but Parliament, to which the ombudsman reports, should have clarification of the matter rather than have to read about it in the press.

There have been many criticisms of the parliamentary ombudsman's report. Many people believe that the FSA's decision to allow the Equitable to continue to write new business despite knowing its parlous financial state was an error. For reasons that I find unconvincing, the parliamentary ombudsman found otherwise. Her view that the Government Actuary's Department is not within her remit is puzzling, and there are questions about her views on the definition of solvency and the test of a prudent regulator. However, the nub of the matter is that the ombudsman spoke in her report of a mismatch between the public's expectations of a regulatory regime and the light-touch approach of the regulators. That is the heart of the matter.

The ombudsman came down on the side of the establishment. The implication was that the policyholders should not have expected the regulators to notice and act on the financial chaos at the Equitable. The regulatory touch was so light that it was almost non-existent. If that is the Government's definition of regulation, their approach needs to be revisited—either that or the ombudsman was wrong. The real problem is whether the ombudsman, with limited resources, is the right person to conduct such an inquiry. It is perfectly legitimate for MPs to put complaints such as those about the Equitable to the ombudsman. However, if the inquiries to be made are so technical, a review of the ombudsman's role in such complaints is justified.

The Financial Secretary must recognise that while the saga continues, hundreds of thousands of policyholders are affected. Billions of pounds have been lost and the elderly suffer; meanwhile the guilty men go free. These matters must be drawn to a head, and the Government must be seen to act decisively. We cannot be fobbed off with excuses and lame explanations.

9.46 am

I congratulate the hon. Member for Croydon, South (Richard Ottaway) on initiating this morning's debate. His introduction provided a clear and concise history of events. People who have been confused by ongoing events, as I have, should read his speech because it provides a clear summary. Many hon. Members, including me, have been applying for a debate since the publication of the ombudsman's report. The Government should have allowed us an opportunity to discuss the report after it was produced, in Government time, before the summer recess. I am glad that hon. Members of all parties agreed with me and signed my early-day motion calling for such a debate; unfortunately, little notice was taken of it.

Today we have our latest opportunity to debate the ongoing quagmire that is the Equitable Life scandal, which has already been described as a "scandal on a massive scale". Many people would agree with that. It is our first chance to debate the matter since Ann Abraham produced her report, and the subject is topical, with stories about Equitable Life again appearing in newspapers as we anxiously await Lord Penrose's report. We should not go over old ground or rehearse old arguments, but it is important to consider what has happened since the last debate, to examine the ombudsman's report, and to look ahead to see what help remains to be given to the millions of people who trusted others with their finances only for that trust to be betrayed.

The ombudsman's report was a major disappointment and left many of my constituents worried and distraught about their remaining options and recourse for action. I found many of the report's conclusions surprising and confusing. I do not say that lightly. MPs and our constituents must be able to trust the ombudsman to root out maladministration. That trust must remain after a report is published, but it has been seriously dented on this occasion. I could not justify to my constituents the decision of the ombudsman not to award compensation, given that the Government in their role as regulator were at best negligent and careless, and at worst downright incompetent almost to the point of recklessness, while Equitable was being so badly mismanaged. Worse still, those of us who question the ombudsman's conclusions have been left further confused by the admission by the ombudsman's lawyers that further investigations by her offices may be necessary following the Penrose report, despite earlier statements that she would take no further role.

Such changing positions only make a complicated and difficult situation worse, leaving policyholders more confused and frustrated. Furthermore, as my hon. Friend the Member for North Norfolk (Norman Lamb) has pointed out, especially in his role as a member of the Treasury Committee, the sheer number of different investigations that are taking or have taken place should in no way mean that those policyholders who had the foresight or even the luck to choose one route have a better outcome than those who followed another. It is clear to me that all policyholders who have suffered at the hands of Equitable Life should be compensated; they deserve nothing less.

Looking to the longer term, perhaps the whole process has given the Government food for thought about the system for complaining about financial services. It is safe to say that there is room for massive improvements—changes that the Treasury would do well to consider. I do not envy Lord Penrose: many people, including many hon. Members, are pinning their hopes on his report, and although I understand the impatience for publication, it is important that haste does not come in place of thoroughness. However, Lord Penrose has had plenty of time. Although I read the recent intriguing news stories about the Penrose inquiry with interest, the resulting speculation has served only to increase people's expectations even more. Such heightened expectations are widespread, but the fact that Lord Penrose has again contacted Treasury and Department of Trade and Industry officials must not encourage people to draw early conclusions, before the report is made public.

I sincerely hope that when the day of publication comes, as much of the original report will be published as possible. We know the arguments that will be advanced for deleting some aspects of the report, but hiding behind the argument of commercial confidentiality will not win over any policyholders, especially with Equitable having been closed to new business for the past three years. The Financial Secretary must be warned that the anger that policyholders are showing now will be nothing to their anger if the report appears in any way to be a cover-up to protect not commercial sensitivity but the credibility and reputation of the Government. The inquiry process and the attempts to obtain justice by the policyholders of Equitable Life are coming to a climax. Much is expected of the Government, who should be trusted to be the defender of their interests. I am not sure that that trust exists now, but the Financial Secretary and the Treasury have a chance to build that trust in the way in which they act over the coming months.

I have a few questions that I hope the Financial Secretary will answer. Why has there been a delay in the Penrose report; will the full report be published; what can we expect next; and what is the time scale for what is about to unfold for the very many disappointed policyholders throughout the country?

9.52 am

I apologise to my hon. Friend the Member for Croydon, South (Richard Ottaway) and to the Financial Secretary for my late arrival.

I shall make a few comments on behalf of the many constituents of mine who have written to me, to the ombudsman and to Lord Penrose to express their great concern about what has happened to them and their pensions, and about the circumstances surrounding this sorry affair. All of us as constituency MPs can judge the strength of feeling on an issue by the number of letters that we receive. Even the most high-profile issue arousing concern in a constituency does not necessarily generate many letters, but I am sure that I am not alone in having received a large number of letters from people in my constituency whose retirement prospects or retirement income have been ripped apart by this sorry affair, and who feel profoundly let, down and rightly seek answers about what has happened.

That is where the Government's key responsibility lies in the weeks and months ahead. Those people's expectations of retirement have been fundamentally changed by the unhappy events at Equitable Life. Their future will be altogether different from the one that they expected, so it is not unreasonable of them to seek absolute and clear answers and a true and open explanation of what has happened from the Government, who are ultimately responsible for setting the frameworks for regulation of the financial services sector, and who have played a central part in the regulation of Equitable Life and the sector as a whole.

My hon. Friend was right to talk about the mismatch that was highlighted by the ombudsman between public expectation of the role of regulation and the light-touch approach. Conservative Members do not want regulation to be imposed on industries that is onerous and that makes it impossible for them to work. None the less, there are public expectations about the way in which the Government will handle the response to the Penrose report and release its findings into the public arena, and the Government must deal with and meet those expectations.

There is no doubt that there was a major management failure at Equitable Life, and that in the eyes of policyholders the regulatory framework—and those responsible for regulating the industry—did not deliver the expected level of supervision. One of the fundamental jobs of Lord Penrose—and of the Government in their response to Lord Penrose's report—is to answer those people's queries, criticisms and unhappiness, and to set out what can sensibly be done to ensure that these events cannot happen again. That, at the very least, is what the Government owe to the pensioners who have lost out.

Every hon. Member present—including, I suspect, the Financial Secretary—will have received letters from pensioners saying that they feel profoundly let down by the company. With hindsight, and with the application of common sense, one can see that some of the actions that the company took—selling guaranteed annuity rate policies and, in effect, looking forward to a future in which nothing could go wrong—were clearly flawed. Those actions should not have been taken, and it is arguable that regulators should have taken a view about them much earlier than they did.

It is not only the circumstances of product development, product selling and the financial position of the company that have aroused so much concern. I am currently receiving letters from people who direct their anger at the Government. Many of my constituents believe that the Government are seeking to cover up the detail of what has happened. It will be for the Government to disprove that. There have been too many stories about the possibility that the Penrose report may not include the full picture of what took place—too many stories of information not being included for commercial reasons, and suggestions that the report may be suppressed in part or in full. I am receiving letters from constituents who now believe that the whole picture will not be revealed. I wanted to participate in this debate so that I could say to Ministers that that must not happen. The people who have lost out must understand the reasons for what has occurred. Lord Penrose must give a full and accurate picture.

I have concerns, expressed by my hon. Friend the Member for Croydon, South, that the Penrose inquiry might not have the power that it needs to get to the bottom of what happened. I hope that, despite the fact that he cannot compel witnesses to attend or give evidence, Lord Penrose will have been able to gain access to all the information that he needs and that he will be able to produce an incisive and accurate report on what took place.

It is important that the report be concluded, published and fully in the open as soon as possible. Many people who come to see Members of Parliament in their surgeries are looking for closure—for answers. They have to deal with their own personal situation, but they want to know that the overall issue that has caused their personal situation has been dealt with. Speed, clarity and openness are therefore of the essence. I hope that at the end of this debate the Financial Secretary will give a clear public commitment to my constituents and those of other hon. Members that when the Penrose report is ready, it will be published quickly and in its entirety, that the Government will set out clearly what lessons need to be learned, and that there will be no attempt to cover up any failings in the Treasury or in the regulatory system. We should have a full and open debate about what went wrong, learn the lessons and change the systems to ensure that such difficulties cannot arise in future.

We need to give a true, open and honest picture to my constituents and those like them around the country who have suffered as a result of this appalling affair. I hope that the Financial Secretary will be able to give those undertakings, and I look forward to the arrival of the Penrose report on the desk of every Member of Parliament in the very near future, so that we can write back to those who have written to us and give them at least a sense that the pressure on the Government appears to have made a difference, and the Government are taking a sensible and responsible attitude and addressing the issues that Lord Penrose has raised. That is my message to the Financial Secretary, and I look forward to her assurances at the end of the debate.

10 am

I congratulate the hon. Member for Croydon, South (Richard Ottaway). I have been involved in all the debates on Equitable Life. He has always been present and actively involved, and he has maintained a consistent support for the policyholders. I congratulate him not only on what he said today but on his consistent interest in this very real problem.

I also congratulate EMAG. The issue is complex and it has dragged on for a long time. It would have been easy for our adversely affected constituents to become demoralised and to lose track of the plot. They and we owe a great deal to EMAG for the way in which it has continued to marshal support and to brief us.

I introduced an Adjournment debate on Equitable Life a year ago. I was prompted to do so by two considerations. First, Equitable Life cut payments to 50,000 annuitants last autumn—nominally by 20 per cent., although in practice for many it amounted to 29 per cent. The hardship was particularly difficult for those annuitants, because they had no flexibility whatever. Their anger—like that of the other policyholders—is just as live and real now as it was then. That has been communicated by my hon. Friend the Member for Edinburgh, West (John Barrett) and by the hon. Member for Epsom and Ewell (Chris Grayling). My other purpose in introducing the debate a year ago was to prod the Government into giving some suggestion of when the Penrose report would appear. It is eloquent testimony that a year later we are still waiting and there is no expectation that the report will appear within weeks, let alone days.

The ombudsman's report has been the major development during the past year. I agree with the hon. Member for Croydon, South that it was unsatisfactory. I hesitate to criticise the ombudsman, because constitutionally we need a back-stop organisation. We all have constituents who complain bitterly about real, or sometimes imagined, failures of Government. They must have an objective, impartial body to appeal to, and they must have confidence in that body. Constituents sometimes come to our surgeries carrying an unfavourable ombudsman's report, shaking with anger, wanting the ombudsman to be investigated, and we have the job of explaining that the report is the end of the story: the appeal process has finished, they have had their say and a reputable body has given a definitive view on the matter. However, if we are to be able to say that, we must have confidence in the office.

My confidence in the ombudsman has been shaken by the way in which this particular inquiry was conducted and concluded. As the hon. Member for Croydon, South said, there were fundamental failings in the report. It dealt with precisely that period in which the Government were not involved in regulation. It was narrow in scope, and consideration of the role of a key player in the story—the Government Actuary—was ruled out. The ombudsman adopted a definition of regulatory responsibility that was, frankly, bizarre, narrow and limited, and assumed that the regulators are purely concerned with solvency. She did not appreciate the philosophy of "twin peaks" regulation, which has run through the creation of the FSA. The report reflected the belief that it is the FSA's responsibility solely to maintain light-touch regulation and, above all, it concluded that there was no case for reopening the issue, even if Penrose were to find substantially against the Government's role in regulation. I understand from the press that that judgment has changed, and that the ombudsman will reopen the case, but I have not been informed of it in writing. Our constituents and we are owed an explanation as to where the ombudsman resides on the matter, as none of us is clear about it.

The trouble is that when one complains about the ombudsman it can sound like a whinge; however, it is worth our examining the speech made last week by Sir Gordon Downey, whose role as Parliamentary Commissioner for Standards, which is a parliamentary institution, cannot be questioned or bettered, and who gave in three short pages a brilliantly concise description of the problem and the failings of the ombudsman's report and the structure of the Penrose inquiry.

Sir Gordon, in his eloquent summary, defined five precise ways in which there was clearly a failure of regulation. He made the point, first, that the Government allowed unguaranteed policies to be sold as low-risk investment, with the fact concealed from the people taking out those policies that there were obligations to the guaranteed policy holders; secondly, there was a period of over-bonusing the guaranteed policies at the expense of new investors; thirdly, an attempt was then made to correct the balance by introducing differential bonuses, which were subsequently found to be illegal; fourthly, there was a period in which Equitable Life was clearly being allowed to trade with insufficient reserves; and, finally, Equitable Life was allowed for a long time to publish misleading accounts. Sir Gordon, a highly experienced public official with experience as a regulator, commented:
"If this does not amount to maladministration, I really do not know what does."
That summarises the whole case.

There were investigations of the position of the FSA in the Baird report, and before discussing the Penrose report—and while we are waiting for its publication—I ask the Financial Secretary to explain what the FSA's role is now. It appears to be acting as a kind of shadow director: it has regulatory responsibility for the rump company and things are happening that are of great concern to policyholders and to our constituents. As I understand the present position, there is an assumption—indeed, an agreement—that something in the order of £900 million will be paid out in compensation to various aggrieved groups, including several thousand people who were mis-sold managed pensions, many of whom were effectively cheated out of their GAR policies. There is an understanding that they will be compensated, but they have not been paid yet; the potential beneficiaries do not expect to be paid at least until the end of next year.

What is the FSA's role in all that? Is it encouraging Equitable Life to achieve a prompt settlement? Is it doing nothing? How does it define its current responsibilities? How does the Financial Secretary, who has oversight of the FSA, see her role in this matter?

The hon. Gentleman, whose industrial manufacturing background I share, has raised an interesting and crucial point about the possibility of the FSA in its current role being seen to be a shadow director. He, too, knows the grave issues that that raises about potential responsibility and liability. Has he had any advice that has helped him to establish a causal link between being a shadow director taking decisions now, and the likelihood of that leading either to future liability or to compensation?

I have not had any such advice. The hon. Gentleman puts a proper question, but it takes us into legal terrain with which I am not qualified to deal. However, I believe that the FSA is turning a blind eye to what is happening and leaving Equitable Life to make the decisions itself, even though there is a public policy interest involved.

When the Penrose inquiry was established, many of us argued that its foundations were weak. The Government defined the terms of reference of the inquiry even though it was to examine Government behaviour, and they decided that it should report to Government, not to Parliament, even though it was to examine the failings of Government. No time limit was set, and we have seen the elasticity of the timetable stretched to breaking point in the past few years. Moreover, there is potential for key information to be suppressed in the name of confidentiality, even though, as my hon. Friend the Member for Edinburgh, West made clear, there is no justification for information to be suppressed on grounds of commercial confidentiality.

I have written a letter to the Financial Secretary to the Treasury, to which I hope she will respond today, asking precisely what can and cannot be excluded from the report, in the context of "maxwellisation"—the process whereby officials are given prior notice of references against them and an opportunity to respond to them. I asked the Financial Secretary whether that would lead to the deletion of material about which we should know, and what sort of safeguards operate to ensure that the maxwellisation process is not used as a cover for censorship. We need reassurances on those matters, if the Penrose inquiry is to form a meaningful conclusion to this sorry episode.

Currently, there are two major inquiries examining the failures of the Government, both of which are being conducted by High Court judges. The fact that those inquiries are taking place under High Court judges is a sorry reflection on Parliament, because Parliament has the power to conduct such inquiries itself. The contrast between the two inquiries is striking: the Hutton inquiry has been a model inquiry in terms of speed and transparency, standing in gross contrast to the sluggishness and opacity of the Penrose inquiry. I hope that, even at this very late stage, the Government will try to conduct themselves with decorum and improve the sorry reputation that they have earned as a result of the way in which they have the conducted the process.

10.12 am

For the sake of good order, I declare a tangential interest, in that I have a life assurance policy with Equitable Life. I hope that I shall not have to cash it in.

I warmly congratulate my hon. Friend the Member for Croydon, South (Richard Ottaway) on having secured the debate. I know that he would wish to join me in thanking all our colleagues who sought en masse to have a debate on this subject. I also take the opportunity to pay tribute to my hon. Friends the Members for Christchurch (Mr. Chope) and for Hertsmere (Mr. Clappison), who worked so diligently in the early period of this tragic saga to ensure that the role of the Parliamentary Commissioner for Administration was well understood and utilised.

As has been said, we last debated Equitable Life on 27 November last year. If it was timely then to have a debate on this serious matter, it is a scandal that the Financial Secretary and her boss have presided over such a protracted and delayed process that we are here again today. About 1 million of our fellow citizens, many of advanced years, who did the right thing in their earning lifetime to provide for their non-earning time and not to be a burden on the state, have suffered and continue to suffer grievous financial damage through no fault of their own. Their security has been irreparably harmed. That is a grave matter, as the debate has already shown, and it affects all Members of Parliament, all of whom have constituents blighted by the appalling debacle of Equitable Life.

We heard from my hon. Friend the Member for Croydon, South about the catalogue of delays. He raised the interesting notion that the situation warrants an inquiry into the inquiry. I hope that the Treasury Committee can perform a useful function in examining the process and ensuring that we do not again have to endure the appalling length of time that it has taken to reach even this pre-report stage. As the hon. Member for Twickenham (Dr. Cable) pointed out, the process stands in stark contrast to the conduct of the Hutton inquiry.

My hon. Friend also mentioned the need to consider putting the inquiry on a statutory footing, even at this late stage, if the inability to compel witnesses to attend causes any difficulty. Like others, he noted that it would be unacceptable if there were any attempt not to publish the Penrose report in full on receipt by the Treasury. The hon. Member for Edinburgh, West (John Barrett) also made that point ably, as well as the good point that the Government should have made time for a debate on the Floor of the House when the parliamentary ombudsman's report was received just before the summer recess.

I will not even dignify the intervention by the only Labour Back Bencher present, the hon. Member for Reading, East (Jane Griffiths), on the basis that it was totally unworthy and tried to make party political points out of a tragic and difficult situation that affects all Members of Parliament. Although sadly few MPs are present today, it is interesting that both the Financial Secretary and I represent a north-west England constituency, as does her Parliamentary Private Secretary, the hon. Member for Stalybridge and Hyde (James Purnell), and there are three London MPs and one Member representing a Scottish constituency present, so it is fair to say that the whole country is represented.

My hon. Friend the Member for Epsom and Ewell (Chris Grayling) spoke passionately and with great force on behalf of his constituents, showing the strength of feeling that underlies the debate. There is a crying need for resolution and for consideration to be given to the compensatory opportunities for those who have suffered. I pay tribute to the hon. Member for Twickenham for his continuing diligence, and he was right to raise the important issue of the FSA's role, which needs further explanation. He made further points, which I will try to reinforce.

It is with no apology that I rely on what Sir Gordon Downey said at the recent annual general meeting of EMAG. I pay an enormous tribute to EMAG for its commitment, energy, diligence and fairness in pursuing the issue over many long years. I also pay tribute to the other six Equitable members' representative groups. All have worked hard on behalf of the various interests who are suffering from the Equitable Life saga.

Sir Gordon Downey is an authority not only because he is a non-GAR annuitant of Equitable Life but because he was head of the home finance division of the Treasury in the 1970s and is therefore a former regulator. He became the chairman of FIMBRA—the Financial Intermediaries, Managers and Brokers Regulatory Association—in the 1990s and, briefly, chairman of the Personal Investment Authority, before becoming an Officer of the House of Commons, first as Comptroller and Auditor General, and then as Parliamentary Commissioner for Standards. It is appropriate that we hear his measured, serious and authoritative comments on the issue.

Sir Gordon says, rightly, that the debate that we had a year ago continues to be relevant, which is part of the problem. However, there have been several significant developments, and for the sake of the record it is important to bring us up to date. Policy values and annuities have been further cut, prospects remain bleak, and time is running out for many annuitants. It is now more than three years since the House of Lords decision undermined the society's stability, and more than two years since the Penrose inquiry was established. The new Equitable Life board's actions against the auditors and former directors are progressing in the courts, but one must assume that they will be long drawn out and costly and the outcomes uncertain.

The parliamentary ombudsman produced a report exonerating the FSA from the charge of maladministration in its role as regulator in the period after 1 January 1999. That is now the subject of an application for judicial review.

Under the self-denying ordinance that we have in our rules, I cannot stray into the territory of the court actions in respect of the former directors and auditors and the merits of those actions. However, on checking with the House of Commons Library, I was interested to note that "Erskine May" makes an exception of anything said in respect of a judicial review of Executive action. While I do not intend to stray too far down that path, it is important to recognise that we have the opportunity to examine the application for judicial review, not least because EMAG and some of the individuals involved in it have put together a document of enormous authority and force that details the whole sorry saga. I hope that all Members of Parliament, especially Ministers, will read it with great care and recognise that they need to read it in conjunction with the Penrose report, which we hope—although we have expressed the hope before—will emerge in the not too distant future.

What issues remain unresolved? In matters of regulation, prudential supervision of the Equitable was exercised until 1999 by the DTI and the Treasury, after which responsibility was passed to the FSA. Throughout, much of the detail was delegated to the Government Actuary's Department, a subordinate body of the Treasury. Given the current dispute over the recent report by the parliamentary ombudsman, to pursue the role of the FSA too far at this stage does not seem the most profitable route to take. Suffice it to say that the FSA seems to have played a passive role when dealing with the crisis thrown up by the House of Lords decision. The authority defended its role on the ground that, with all the information and expertise at its disposal, it was "99.9 per cent. certain" that the Equitable could be sold on terms that would safeguard the interests of policyholders—yet, within three months of putting itself up for sale, the Equitable was rejected by 16 or 17 suitors, who had rapidly reached the conclusion that it was not viable.

What of the other regulators? It is generally agreed that most of the damage done to the Equitable took place before the FSA took responsibility in 1999. The die was indeed cast before then, yet, on the basis of her limited inquiry into the FSA, the parliamentary ombudsman concluded that she saw no case for inquiring into the actions of the DTI and the Treasury and that she had no powers to inquire into the Government Actuary's Department. Surely Parliament cannot condone such a position. It must find a way of expressing what it expects from prudential supervision and know whether those expectations were realised. It has been suggested that prudential supervision is essentially a matter of ensuring that solvency requirements for life assurance companies are observed. That is not true. An equally important purpose is to exercise supervision to protect policyholders from unreasonable risks and to safeguard their reasonable expectations. The concept of reasonable expectations is specifically provided for in legislation, which also gives regulators ample powers to intervene to ensure prudent and responsible management.

Against that yardstick, the regulators have failed dramatically. They allowed the Equitable to sell unguaranteed policies as low-risk products without disclosing the existence of guaranteed policies representing huge contingent liabilities on the common fund. They permitted the publication of accounts that obscured the real position of the society, and endorsed its attempts to redress the balance by paying differential bonuses, which were later ruled illegal. The regulators allowed the society to pay unjustifiably high bonuses for several years and, in effect, to use the funds of new investors without their knowledge for the benefit of those enjoying prior guarantees. They also allowed it to trade with totally inadequate reserves.

I turn to the role of the parliamentary ombudsman, and in particular the fact that she cleared the FSA of failing in its regulatory duties. As my hon. Friend the Member for Croydon, South said, she warned investors of a fundamental mismatch between what the public expect from the financial regulator and the degree of protection that can be offered. EMAG has been extremely critical of the parliamentary ombudsman's report and considers it deeply flawed. I commend the extensive, comprehensive and responsible approach EMAG has taken to detailing its criticisms on its website, and I hope that they will be read in some detail.

I have sympathy with the approach taken by the hon. Member for Twickenham. It is important that we do not condemn the parliamentary ombudsman out of hand. There is an important process that we should defend with regard to her role in examining possible maladministration. Of course, the ombudsman's role is terribly important to us because of the potential for her to make recommendations on compensation: at the end of the day, compensation is what policyholders and annuitants are seeking, because they feel that they have been done an injustice. However, we must recognise that, unfortunately, there is a serious mismatch in what successive parliamentary ombudsmen have done.

I do not want to condemn the office of parliamentary ombudsman, and I recognise that it is the last place of appeal. However, although the current parliamentary ombudsman's predecessor gave a pretty clear assurance that his office should consider whether it was appropriate to extend the inquiry into the pre-1 January 1999 position once Penrose had reported, that was categorically denied by the current parliamentary ombudsman. That is what has caused such outrage, and I have said on record that I think it an unnecessarily brutal finding. It seems that it has been made known to certain elements of the press—I cannot tell whether that is simply because this debate had been secured, so there was a stronger focus on the issue—that perhaps the issue could be considered again. I very much hope so, but I agree with what has been said: the commitment to do so should be put on a more formal basis, so that we can understand its essence.

It is important to say that this is not simply an argument for argument's sake. The proposal has been supported in a number of recent early-day motions by Members of all parties, all of whom call on the parliamentary ombudsman to extend her inquiry. I hope that, as a result of this debate, she will acknowledge the strong sense, in terms of the route provided by her office, that that is the only way in which justice will be satisfied. There is good cause and it would be in the interests of fairness to take forward her investigation.

In its most recent press release, EMAG lighted on what it calls "an astonishing 'U turn''' by the parliamentary ombudsman, saying that she has come full circle. It welcomes the fact that she has apparently rescinded the decision to preclude consideration of the pre-1999 period. EMAG says that it regards that as important because it is the parliamentary ombudsman's function
"to focus on maladministration by Government departments".
It says that it is worth recalling that,
"as in Barlow Clowes, she can recommend Government compensation. EMAG therefore welcomes"
the parliamentary ombudsman's
"change of heart as an encouraging step".
We need rapid clarification of that point.

It may be that Lord Penrose will tackle all the issues that we have discussed relating to the parliamentary ombudsman and to the broad understanding of those of us who have followed the matter closely and advocate the position of aggrieved policyholders and annuitants. None the less, it is worth looking at the constraints within which he has to work. The Government—the Treasury—set the terms of reference for the inquiry; they are very broad and relate largely to the future of the life assurance industry as a whole. Lord Penrose reports to the Treasury—that is, to one of the regulators under scrutiny. He cannot compel witnesses to give evidence, and the Treasury can accept or reject his recommendations, which cannot deal with compensation. There is no guarantee that the report will be published.

What is Parliament's responsibility? I said in the debate a year ago that I thought that the Government intended to kick the subject into the long grass until after the next general election. My fear is that I was right, but I hope that my fear will be assuaged today. If only Parliament had the ability to prevent the Government seizing the initiative as they have done, but the Government like to believe that, given the current composition of the House, they can plough their own furrow regardless of the wider interests.

There is still no comfort to offer policyholders and annuitants. They have suffered injustice, and we have not yet found the machinery to deal with it. The damage to the savings industry in the broadest sense has been enormous. All MPs should be deeply concerned about the effect that that is having on the savings culture and about the yawning savings gap that has grown over the last few years. Sir Gordon Downey has written to me in the following words, which help to sum up the serious position in which we find ourselves:
"Of course, we shall now need to await the outcome of the Penrose Inquiry. But it is essential that it should be published as fully as possible and that Government should give a rapid response. Failing a satisfactory outcome, it must be a matter for the House to devise its own machinery for taking things forward. If the Parliamentary Ombudsman is, as she says, unable to cover much of the ground, we shall need to find another way."
In case the Financial Secretary is in any doubt, I put her on notice that my colleagues and I in Her Majesty's official Opposition will be relentless in pressing the case for justice for Equitable Life policyholders and annuitants. I know that that case is supported by hon. Members of all parties, including Labour Back Benchers.

The Penrose inquiry is a creature of the Treasury: it will report to the Treasury, the Treasury will determine what is published, and it is for the Treasury to decide how long to sit on the report before publication and whether to accept liability and award compensation where criticisms are made of the DTI and the Treasury. Does the Financial Secretary regard the Penrose inquiry as determinative or merely advisory? That is important, because many people witnessing today's proceedings will want to know whether, when the Penrose inquiry eventually reports and is published—and we demand that it be published in full—they will have to consider what it contains and then charge off to the courts or use some other process to prove the facts all over again. Can we have a copper-bottomed guarantee that if they are criticised and there is found to be regulatory failure, the Government will say, "Fair cop."?

We cannot continue to protract the misery of the policyholders and annuitants who have suffered. The Government must step up and look at the compensation that should be paid. All those witnessing today's proceedings, will be listening out for that in the Financial Secretary's response.

There has been a recent announcement from the Penrose inquiry that put on the record some corrections of what it regards as wrong information in the public domain. It said:
"The inquiry cannot, and will not seek to adjudicate on liability, including determination of a professional duty."
However, Lord Penrose has made it clear that he will make adverse findings about any institutions or individuals involved if the evidence justifies it. Because those two views sit somewhat uneasily together, we need an answer today, which I have just demanded from the Financial Secretary; otherwise, there will be genuine concern about whether we can trust the process to deliver for the policyholders and annuitants if there is found to be regulatory failure at the hands of Departments.

On the issue of publication, if the Minister's refrain a year ago that the Penrose inquiry is independent and that it is up to Lord Penrose to decide how long the inquiry will take and when he will be able to report—[Interruption.]

Order. May we have that piece of equipment silenced, please?

Thank you, Mr. Stephenson.

In addition to my request to the Minister to do everything that she can to speed up the Penrose report, while recognising that maxwellisation is a genuine process that must be gone through, I want the Government to realise that they cannot have it both ways. If maxwellisation is taking place, we are going through a process whereby one of the restraints on future publication relating to confidentiality or potential prejudice is removed, because the process gives people the chance to comment. It must be clear that Lord Penrose has the liberty to make all the relevant findings that have been the subject of his inquiry and to adjudicate on them, notwithstanding the fact that he has said that he himself will not be finding fault. I urge the Minister to give a commitment once and for all. The maxwellisation process has engaged us in further delay, and the price of that delay, which has caused further misery for policyholders and annuitants, should be securing full publication of the report.

There is an important point about what might happen with regard to maxwellisation. There might be no finding of fault in the Penrose report—despite the fact that we will all pore over it, searching for findings and facts and seeing whether there has been any attempt to point the finger. We demand full publication, which should be coupled with an assurance that there will be no opportunity for a further protracted process. If the Government want to show that the Penrose inquiry is genuinely independent, they should accept that there is no need for a further process to determine and prove the independently gained facts of the case. If they have to be re-proved and the evidence marshalled again, and there is a move from Lord Penrose's investigative process to an adversarial court process, many policyholders and annuitants will rightly say that they are losing faith in the processes that the Government put in place and that the inquiry should have been put on a statutory basis from the very outset—as my hon. Friend the Member for Croydon, South mentioned.

Policyholders and annuitants will rightly want to be satisfied on a further point, which was somewhat ungraciously introduced in the intervention of the hon. Member for Reading, East. It might be said that the fault entirely lies with a previous Government. My hon. Friend the Member for Croydon, South answered that well by demonstrating that there has been a continuum. If Government as an institution—irrespective of which political party happens to hold power at any given time—are found to be at fault in their regulatory duties, subsequent Governments must step up and stand behind Government liabilities. That is one aspect of the nature of Government. Therefore, I can give a commitment that if a finding of regulatory fault or failure is laid at the door of one or more Departments, and if compensation therefore flows, an incoming Conservative Government would not seek to renege on that responsibility. The Government should make the commitment that, if the Treasury and the DTI are criticised, they will not necessarily seek simply to defend them, but they will acknowledge that this whole episode must be brought to a swift resolution. It is difficult to see how it can be resolved when, by any test, there is a need for compensation for people who have suffered an injustice.

I hope that the Government will carefully look at following the precedents of Barlow Clowes and other lifeboat operations. Sir Gordon Downey has brought weight and authority to this whole sorry process. He understood what happened during the 1974 banking crisis: that crisis was potentially even more serious than the Equitable Life saga facing us now, but a solution was found and mutual responsibility was accepted by Government and the private sector.

I look forward to hearing the Financial Secretary's remarks, and I hope that she will be able to give full answers to the questions that have been raised.

10.38 am

I congratulate the hon. Member for Croydon, South (Richard Ottaway) on securing another debate on this important topic. I pay tribute to his long-standing interest in this subject and his championing of his constituents' cause. I also pay tribute to the work of the Equitable Life members' representative groups who have made their concerns known in a loud and clear manner.

I will try to respond now to as many as possible of the points that have been raised, but I first wish to make clear the sympathy that I feel for the many people who have been affected by the events at Equitable Life. It was in order to meet the concerns raised by hon. Members and the wider public that the Government set up the independent inquiry under Lord Penrose in August 2001. In making that decision we carefully considered the concerns of policyholders and a range of other bodies, including the Treasury Committee.

It is worth reminding hon. Members of Lord Penrose's terms of reference, which are:
"To enquire into the circumstances leading to the current situation of the Equitable Life Assurance Society, taking account of relevant life market background; to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers."
The terms of reference have deliberately been drawn wide to ensure thorough consideration of the root causes of the problem. Some commentators and hon. Members have argued that the terms of reference do not allow Lord Penrose to lay blame, and that the inquiry is just a fact-finding exercise. The inquiry has made it clear to us that Lord Penrose will make adverse findings about any institutions or individuals if the evidence justifies that. He can interpret his terms of reference as he sees fit, and I stress that he is working independently of the Government and the Treasury, but with our full co-operation.

Many people are disappointed that Lord Penrose has not reported sooner. The undertaking has been considerably more complex than any of us appreciated when the inquiry was set up. It is important to stress that no deadline was set for Lord Penrose to report by. I understand the frustration of hon. Members and policyholders at the time needed to complete the work, but the inquiry's scope is broad and the issues are complex and important. It is in all our interests that the inquiry is thorough. The parliamentary ombudsman took more than 18 months to complete her report, which examined a period of just two years during which the FSA had stewardship. That report considered neither the regulation of business conduct nor Equitable's actions.

The inquiry spent most of its first year examining the substantial body of material held by Equitable Life and its regulators, as well as obtaining evidence from other sources such as the auditors and policyholders. On the basis of that work, the inquiry began a major programme of taking evidence directly from witnesses in autumn 2002. That continued until after Easter this year. The inquiry is currently maxwellising the draft report, a process that I will explain later. Once maxwellisation is complete, Lord Penrose will be in a position to finalise his report and present it to Treasury Ministers. It is a matter for Lord Penrose to determine when his report is complete and the timing for presenting it to Ministers, and we look forward to receiving it as soon as he completes it.

The hon. Members for Twickenham (Dr. Cable) and for Eddisbury (Mr. O'Brien) raised a point about maxwellisation. Maxwellisation is the process whereby those who might be criticised in a report are given an opportunity to comment on the accuracy and completeness of the relevant facts and the reasoning process behind them. That is to ensure that any errors or misunderstandings can be corrected before the report is finalised. The term arose from cases following a DTI investigation into Robert Maxwell in the 1970s. Persons or institutions being maxwellised are not given access to the full draft or even to any complete part of the draft. They are informed of the substance of the proposed comments made about them and given access to the supporting material that Lord Penrose, in this case, considers it absolutely necessary that they see. Lord Penrose could change his view in the light of the representations made. Maxwellisation is intended to ensure that the report is fair to those individuals or institutions that may be criticised. The process also helps to ensure that the report is accurate and comprehensive. The chairman of the inquiry determines how and to what extent maxwellisation is carried out.

The Treasury is taking part in the maxwellisation process, but as I have already said, by no means does that mean that we have received the draft report. It may be worth explaining the arrangements that the Treasury has put in place internally to deal with the maxwellisation process, so that it cannot be subject to misinterpretation. A small team of dedicated staff is preparing the Treasury's response to Lord Penrose's material, commenting factually where appropriate. There is a Chinese wall between this team and those who have been liaising with the inquiry, and those who will receive the report when it is completed, including Treasury Ministers. That means that only those officials who are in the maxwellisation team have seen any draft material sent by Lord Penrose. We decided to adopt that procedure given the Treasury's position as both the commissioner of the report and one of the parties with a direct interest in its contents. It is up to Lord Penrose to decide on any changes that he may make to his report following receipt of the comments. We have no influence over how he handles that process. In addition, once we receive the report, it will not be possible to take on board any other comments on the factual content or any other content of substance.

All hon. Members spoke about publication and asked how we intend to deal with the publication procedure. We will publish as much of Lord Penrose's report as we can—as much as is practicable—as soon as is practicable, following receipt of the report. However, I must emphasise, so that people do not have unrealistic expectations, that it will take time legally to examine the contents of the report. We must ensure that it is lawful for us to publish the report in full. Parts of it could be subject to legal confidentiality restrictions: for example, it is a criminal offence to reveal to a third party information received by the regulator in the course of their duties, except in narrowly specified conditions. Our lawyers will have to go through the report to ensure that none of those restrictions is breached. In fact, when Lord Penrose accepted the commission from us and undertook the inquiry, we had to go through a similar process to ensure that he could see the regulatory information relating to some of the decisions made. It would be completely negligent of the Department not to undertake that process.

I am grateful to the Financial Secretary for her explanation, but I am sure that anyone listening to her in the last minute or so will be dismayed, because she has implied that there will not be full disclosure if the Treasury considers that appropriate. Given that last week Lord Penrose made it crystal clear that all he was reporting on was facts, what can she be concerned about that might fall foul of what she has just said?

Clearly, we will not be in a position to know that until we have seen the contents of the report. The other point is that Lord Penrose has made it clear to us that, in drawing up the report, he is aware of the legal confidentiality restrictions and is attempting to draw up the report so as not to breach those restrictions, so that we can publish it in full. It is our complete desire to put the full contents of the report in the public domain. The only reason why we may not be able to do so is the legal confidentiality restrictions. We hope that we can publish the report in full and that Lord Penrose has taken full account of those restrictions in drawing up the report.

Further to the question posed by my hon. Friend what strikes me and, I think, most people listening to the debate is that the Government cannot have it both ways. Either the report has been drafted so as to avoid legal difficulties—indeed, because it will not be finding fault, it cannot be seen as prejudicial to someone's interests—or this is a case of having to look for the legal protection of commercial confidentiality. The Government seem to be hedging their bets. Above all, the Treasury owns the process, and one assumes that because the Treasury commissioned the report, once it is delivered to the Treasury, the Treasury owns it—

(in the Chair)

We do. That is why we want to publish the report in full. However, were we to publish it and breach any confidentiality restrictions by so doing, it would be open to third parties to sue the Government for infraction of those restrictions. Therefore, under a duty of care, we must subject the report to the scrutiny of our lawyers before putting it in the public domain. We intend to publish the report in full, but because of those technical confidentiality arguments, we must take legal advice before publishing it.

Is it the Treasury's intention to seek the advice of the Attorney-General about its legal obligations in respect of confidentiality?

I cannot comment on that here. As far as I am aware, the Treasury lawyers will examine the content of the report. However, if the hon. Gentleman wishes to pursue that point, I can respond to him later.

The hon. Member for Croydon, South and others asked whether we were satisfied that Lord Penrose had sufficient resources to carry out his inquiry and whether it should be put on a statutory footing. The inquiry is fully independent, so it is not up to us to determine what sort of resources or powers he needs, or how he carries out his investigation. However, I shall read an extract from a letter that Lord Penrose has put in the public domain—a letter that he wrote to the Treasury Committee in February this year.

On resources, he says:
"I was assured at the outset by the then permanent secretary to the Treasury that I would have access to all the resources that I could reasonably require. It took some time to establish what resources I needed, and the demands of the inquiry have fluctuated from time to time, but I would like to assure the committee that I have not been denied any resources that I have sought."
On whether we should have put the inquiry on a statutory footing, he says:
"I am grateful to all those who have co-operated so far with my inquiry, which includes Equitable, Ernst & Young, the Treasury and the FSA, as well as a great many policyholders."
He continues:
"I am far from convinced that statutory powers would have made as much difference to the rate of progress as some commentators have assumed. Parties involved in litigation and other proceedings would have been just as likely to want to review the evidence being made available and to assess the implications for them, in the context of those processes, of disclosing material to the inquiry and allowing the inquiry to form and express views on that evidence. And it is likely that, with a view to protecting those parties' wider interests, the exercise of those powers would have been challenged and the inquiry might well have spent time debating the extent of those powers, and their exercise, very possibly in court. In short, powers have disadvantages as well as advantages as compared with the informal approach I have been able to adopt."
Lord Penrose has made it clear to us that he prefers the non-statutory approach, and has received full co-operation from the Treasury and the FSA in carrying out his inquiry.

Can the Financial Secretary confirm that all witnesses are co-operating? I asked whether Lord Penrose needed statutory powers, not whether he wanted them.

It is up to Lord Penrose to decide whether he should put information in the public domain. To the extent that he has commented on that in public, he has indicated that he is receiving sufficient co-operation from witnesses. To suggest that, at this stage, we should put the inquiry on a statutory footing would be to suggest that the inquiry be held up for months while the process is sorted out. In effect, that would be to reopen the inquiry from scratch. I do not believe that anyone—certainly not the policyholders—would think that desirable.

Many hon. Members have commented on the parliamentary ombudsman's report. The publication of that report is one of the main developments that has taken place since we last debated Equitable Life in Westminster Hall. The parliamentary ombudsman published her report on the regulation of Equitable Life by the FSA on 1 July. The investigation examined the period from 1 January 1999, when the FSA became responsible on a day-to-day basis for prudential supervision of insurers, to 8 December 2000, when Equitable Life closed to new business. The Treasury and the FSA co-operated fully with the ombudsman at all stages of her investigation.

As hon. Members will be aware, the ombudsman is an Officer of the House and is entirely independent of the Government. She has wide discretion to determine the matters within her jurisdiction to investigate and the procedures that she adopts for doing so. The conclusions she reaches are a matter for her alone. Therefore, it would be inappropriate for me to comment on how she has carried out her investigation, and I urge hon. Members to make their comments directly to the ombudsman's office.

Let me give a wider perspective on the role of Government and regulators—

Before the Financial Secretary moves on, does she have an answer to my question about whether she sees the Penrose inquiry as determinative or advisory, and whether there will be any further process to establish compensation as a result of receiving the report?

I found the hon. Gentleman's comments a little difficult to interpret, but I presume that he is referring mainly to compensation. On that, our terms of reference are in the public domain, and it is up to Lord Penrose to judge as he sees fit. It would not be wise to pre-empt or speculate about his findings, and he can comment on anything that he sees fit to comment on, but what is important is that we learn the lessons from this episode and minimise the prospect of it happening again.

The proper role of the Government is to ensure that a proper legislative and regulatory framework is in place for financial services. The FSA operates within that framework as the independent regulator. The hon. Member for Epsom and Ewell (Chris Grayling) seemed to suggest that we should have a regime in which companies never have the opportunity of failing. That should not be the case. Regulation must balance the safety of policyholders against the freedom for firms to seek out the best return. It is not the regulator's role to prevent all business failure, as a no-failure approach would mean lower returns for investors and would stifle innovation and competition. In a well-regulated market, the consumer can be sure that he or she understands the risks when buying a product. In a well-regulated market, it is also true, as we all recognise, that some firms must fail—or might fail. That is why the Government have set up a safety net, in the form of the financial services compensation scheme, to compensate investors in those firms.

The Financial Secretary is putting words into my mouth—that is not what I said. Does she agree that the regulator's role is to sound an alarm bell when a situation has the potential to go wrong?

Of course it is the regulator's role to monitor firms closely, which is one of the things that Lord Penrose is examining in his report, and with hon. Members and others, I await that report with interest.

I know that the hon. Member for Twickenham is interested in the role of the FSA in relation to policyholders. The FSA continues to monitor the situation at Equitable Life closely, and it has been working with the society to ensure that clear and appropriate information is available to policyholders as developments occur, and that they continue to receive appropriate support. We expect the FSA, as the independent regulator of financial services, to continue to monitor the regulatory solvency of Equitable Life and to ensure that the company acts in a way that is consistent with its responsibilities to its remaining policyholders. I am talking about Equitable Life, but that is the FSA's role in relation to any regulated firm for which it has responsibility.

To deal with the hon. Member for Croydon, South and the question of whether there has been a continuum of process, I draw hon. Members' attention to the fact that the regulation of the life assurance industry has been overhauled since the Labour Government came to power. We have established in the form of the FSA an independent regulatory body that brings together eight different sectoral regulators. It is wrong to suggest that there has been a continuum throughout a period spanning 30 or 40 years.

The Government's main concern regarding the Equitable Life affair is to ensure that the lessons are learned. That will allow both regulators and the industry to develop the tools that they need to prevent similar incidents in future.

Seal Hunting

11 am

I am delighted to have the opportunity to raise a very important issue, which has been somewhat forgotten in recent years. That is not for want of trying by people such as Brigitte Bardot to bring it to other people's attention. I emailed her office to tell her that this debate would be taking place, but I am not sure whether she will be joining us. It was she who, many years ago, first brought this issue to the attention of the general public. She went out to Canada and posed with some seals to demonstrate in graphic detail exactly what goes on.

There are some who would say, "For goodness' sake, why waste Parliament's time discussing animal welfare matters?" However, like many colleagues of all parties, I feel strongly about animal welfare issues. We feel that a civilisation is judged in certain respects by how it treats animals. None of us can get inside an animal to understand it. Are animals less intelligent than women and men? Are they more intelligent? None of us knows. But Parliament should spend at least some of its time discussing animal welfare issues.

I will certainly not use the debate as an opportunity to have a go at the Government. I am using the procedure in the hope that the Minister can send some sort of message to our Canadian friends. I pay tribute to an organisation called Respect for Animals. It is not perhaps widely known. It is run by four individuals and depends on the general public to sustain it financially. It runs campaigns sensibly and constructively and is entirely responsible for bringing this issue to the attention of myself and other hon. Members. As a result, an early-day motion has been tabled on our concerns about the slaughter of seals.

Together with two other Members I had a meeting on 11 September with the Canadian high commissioner. Canada is one of our greatest allies. Our meeting was conducted in a warm atmosphere. The high commissioner brought with him a number of his colleagues and officials who had great expertise in this area. It was time well spent. Although I will go into greater detail, the bottom line for me and the other 159 signatories to the early-day motion is that baby seals, lying on the ice, are not entirely delighted when a human being comes along and clubs them on the head.

I understand the historical reasons for the pursuit of seals, and I understand all the arguments that the Canadian Government advance. I said at the end of the meeting that I had not been convinced that killing the baby seals was anything other than cruel.

Early-day motion 135, tabled by the hon. Member for Broxtowe (Dr. Palmer), called on the Government to take action over the seal hunt, and has been signed by about 160 Members of all parties. The hon. Members for Lewes (Mr. Baker) and for Brighton, Pavilion (Mr. Lepper) and I saw the Canadian high commissioner, His Excellency Mel Cappe, to raise the concerns detailed in the early-day motion.

I do not want to be too emotional, but the Canadian Government have effectively declared war on seals. Last winter they announced that they would allow nearly 1 million harp and hooded seals to be killed over the next three years. That is a huge number. In 2003, according to figures from the Canadian Department of Fisheries and Oceans, some 289,512 harp seals, 151 hooded seals and 1,870 seals of four other species were killed; those are horrifying statistics. I hope that hon. Members will accept that they do not include the many seals that are shot in the water and die later but are never retrieved.

I am delighted that this debate is being held today, as the 2003–04 seal hunt officially opens in 11 days' time on 15 November, and lasts for six months. However, most of the seals will be killed in March next year, so there is time to take action. I shall later describe precisely what happens to the seals, as it is right that hon. Members should know. They are usually clubbed to death, and the vast majority are killed when they are less than three months old.

An independent veterinary survey established in 2001 by the International Fund for Animal Welfare included a number of eminent vets: Joanne Fielder, John Gripper and Ian Robinson from the United Kingdom, Rosemary Burden from the United States of America, Alan Longair from Canada, and Debbie Ruehlmann, a neurologist specialist from the United States. They showed that 42 per cent. of the seals observed were skinned while they were still alive and conscious. That is unbelievable in this day and age.

Stephen Harris, professor of environmental science at the university of Bristol, witnessed the hunt in 2002 and described in an excellent article—I am prepared to believe him, because obviously it suits me to do so—the complete indifference to cruelty of some of the sealers. He found that the hunt suffered from a lack of monitoring. The Canadian high commissioner reassured my parliamentary colleagues and me that monitoring took place, but Stephen Harris believes that there was a lack of monitoring, unacceptable cruelty and definitely the potential for over-exploitation.

Most of us, including the general public, think that the clubbing of baby seals no longer goes on, but it does. A million have been killed over three years, and it is an important issue—I shall not be sidetracked by hunting with hounds—as the level of killing is almost twice as bad as it was during the late 1970s and early 1980s, when Brigitte Bardot first brought it to the attention of the world.

As a result of public pressure and political will, the European Union banned the import of products from whitecoats, which are harp seals up to their first moult and approximately 10 days old, and from bluebacks, which are hooded seals up to their first moult and approximately 18 months old. That was wonderful, and all animal welfare groups welcomed it. However, although it stopped or at least severely curtailed the hunt for a few years, it has since continued. Those products are now exported to countries in the EU.

The Canadian Government have worked hard to find a way round the ban, and even subsidise the hunt. Thanks to a marketing effort, the skins from slightly older seals—in the case of harp seals, they are literally a few days older—are now being imported into the EU. That circumvents Council directive 83/129/EEC of 28 March 1983, which relates to the importation into member states of skins of certain seal pups and products derived therefrom, and which is aimed at stopping this cruel slaughter. The innocent seal is being used as a scapegoat by the Canadian Department for Fisheries and Oceans, which is the very Department that oversaw the collapse through over-fishing of fish populations, including cod, in Canadian waters.

The Department also created the myth that seals are to blame for the demise in fish stocks, which is just not true. Harp seals spend most of their lives in the north Atlantic, where they eat a variety of species including arctic cod, a species that itself eats cod. If anything, seals maintain cod populations. The ecosystem is much more complicated than the Department for Fisheries and Oceans suggests, and if seals were not around other species would increase in number to fill the niche.

Seals and fish have been around for tens of millions of years. It is only human over-fishing, which the Department for Fisheries and Oceans has overseen, that has caused the problem of depleting fish stocks. Seal hunting is not the answer for restoring fish stocks, as the Canadians would have us believe. The answer is effective policing of fishermen and their respective catches, and the implementation of fishing quotas in Canada's waters.

Opinion poll research commissioned by the Canadian Government showed that 71 per cent. of Canadians are not familiar with the issues surrounding the seal hunt, and a majority of 54 per cent. of Canadians oppose the seal hunt. So why does it continue?

Last year, 46,463 raw and tanned seal skins were imported into the EU directly from Canada, and they were valued at €1.545 million—my primary source for that is EUROSTAT. Furthermore, the EU imports large numbers of skins of Canadian origin from Norway. The Minister might already be aware that the animal welfare organisation, Respect for Animals, has initiated a boycott of Canadian tourism—as many of us know, Canada is a wonderful and beautiful country to visit. The organisation will continue the boycott while the hunt continues, which concerns the Canadian high commissioner, and that type of protest is likely to increase.

Perhaps the Minister could remind the Canadian Government that tourism is worth far more to Canada than the seal hunt could ever be, and that the Government's reputation is being damaged by this bloody slaughter. I urge the Minster to persuade his European counterparts to consider extending the European regulations that were brought into force in 1983 to all seal products. Considering that the EU is the main importer of seal products, the Canadian Government might become resigned to the fact that the seal hunt, even when subsidised, is not worth continuing.

Danny Penman, a journalist, went to watch the slaughter of seals this March. He said he met his first Canadian harp seal, and added:
"At first she was frightened but curiosity soon got the better of her.
Within five minutes she was padding slowly across the ice. Moments later she was trying to snuggle up to me. The next day, she was almost certainly dead.
Canadian sealers landed on her ice sheet shortly after dawn. They then proceeded to batter, kill and skin every living thing. Within half an hour the ice and snow was drenched with blood."
This is not an emotive opportunity to exaggerate; that actually happened. The journalist said:
"We watched in horror as a man we called 'Conan the Barbarian' slaughtered everything that came within range.
In the space of thirty seconds he clubbed five baby seals. The first four were hit over the head with his hakaapik. The fifth was stroked on the head before being bolted with the club. He then flipped the seal over on her back and began to slice open her throat and stomach.
She then began to scream"—
so would we if we were treated like that—
"and wriggle furiously as Conan peeled off her skin. Within thirty seconds the baby seal's carcass was cooling on the ice, eyes staring blankly at the sky. Her skin was dragged across the ice and dumped on a pile of steaming pelts. Conan was a few dollars richer."
Later, the mother of that seal and others came on to the ice to look for it.

That cannot be allowed to continue, and I hope that the Minister agrees.

11.16 am

Like many of us, I am recovering my voice after the flu; I hope that it holds out for this debate.

I congratulate the hon. Member for Southend, West (Mr. Amess) on securing this debate on Canadian seal hunting. I know how many hon. Members have a view on the subject; it has been a matter of public interest for some time. I welcome this opportunity to give the Government's view on the issue.

As the hon. Gentleman said, seals are bright, inquisitive, sensitive creatures. The slightly amusing but sad story in today's newspapers about Hoover the talking seal demonstrates that. However, Canada and Britain have close links, including links of family, and a similarity in attitude—Canada is a liberal country with values similar to ours. In many ways, although we talk about our special relationship with the United States, our closest relationship in north America is really with Canada. As the hon. Gentleman said, it is a warm relationship.

When I was young, the Daily Mirror ran a series of articles showing pictures of seal clubbing. I can remember a picture on the front page of a seal clubber hitting a white seal cub. For many years after that, every time I heard the word "Canada", I recollected that image. I now know a lot more; I know that Canada is a beautiful country, that its people are wonderful, and that its attitude on most things is similar to ours. However, that association between Canada and seal clubbing is not something that does the reputation of Canadians any good at all. For a period, it certainly did not do so in my eyes—nor, I suspect, in the eyes of many others. The way in which seal clubbing and seal hunting are carried out does Canada's reputation a great deal of damage.

We closely follow developments in the Canadian seal hunt. It focuses on two main species—the harp seal and the hooded seal. Neither of them is listed in the appendices to the Convention on International Trade in Endangered Species of Wild Fauna and Flora—CITES. Their current populations are considered to be relatively healthy, so they do not meet the relevant listing criteria. Harp seals are the most populous of the seal species on the Atlantic coast, and are the major species hunted for commercial purposes.

The Canadian seal hunt has been regulated by means of quotas for some time. Earlier this year, the Canadian Government announced a new seal management plan for 2003–05. Under that plan, the total allowable catch—TAC—for hooded seals is 10,000 a year: for harp seals, the figure has been set at 975,000 for the 2003–05 seasons, with a maximum annual TAC of 350,000. That TAC will be instrumental in meeting the Canadian Government's plan to reduce the current population of harp seals from 5.5 million to 4.7 million by 2006.

The Canadian Government maintain that their seal-hunting practices are not a danger to the sustainability of the seal population, but some authorities consider the quotas for 2003–05 to be at the limit of what may be sustainable. The Canadians have also expressed concern that the current seal population is having a negative impact on fish stocks, and especially cod stocks. However, the relationship between predator and prey may not be quite as simple as is imagined. For example, seals feed mainly on squid, which in turn eat juvenile cod, so a major reduction in seal numbers might, perversely, lead to an increase in squid and a decline in cod stocks. Seals are also a major source of prey for killer whales and polar bears, and any major decline in the seal populations is likely to hurt their major predators.

We do not accept the need for any seal cull, but if one does take place it should be sustainable and based on a precautionary principle—on an approach that takes into account the importance of the species in maintaining local biodiversity in its role as both predator and prey. Although we have made no formal representations to the Canadian Government since 1999, the Canadian authorities are aware of our views on this matter. We have expressed our concern that the seal cull should not exceed numbers that are required to maintain the sustainability of the species. We have also asked that the Canadians consider a total ban on the hunting of seals for commercial purposes. In this context, we welcome the Canadian Government's prohibition of the harvest of whitecoat and blueback seals. A whitecoat is a harp seal up to two and a half weeks old, and a blueback is a hooded seal up to about 15 to 18 months of age. The Canadian Government continue to enforce that prohibition.

The importation of the skins of harp and hooded seal pups has been prohibited in this country and throughout the European Union for 20 years. However, imports of adult skins are not prohibited. The trade in the skins of harp and hooded pup seals was prohibited on the ground that it was felt that the level of trade at that time was unsustainable. The European Commission is keeping the current status of adult populations of those seals under review, but there are insufficient grounds to intervene on the basis of sustainability at present.

I turn to the methods that are used to kill the seals, and clubbing in particular. The Canadians say that not the majority, but only about 3 per cent., of seals are killed in that way. It is an especially disgusting way of killing seals. The Canadian Government are aware of the concerns about it. They have regulations to ensure that seals are killed in a safe and humane manner. Some say that it is both safe and humane to club a seal. I do not accept that. One of the issues considered by the Canadian royal commission on seals and sealing was how far the killing of seals was carried out in a safe and humane manner. It claimed that the methods used were designed to kill the animal quickly. I suppose that clubbing a seal over the head does kill it fairly quickly, but that does not make it particularly humane or safe, certainly not for the seal. The commission claimed that the methods used were designed to protect the animal from undue cruelty—we do not accept that clubbing is acceptable. It claimed also that the methods used in hunting seals were no less humane than those used in hunting other wild animals.

The Canadians say that most seals are now shot on the ice with high-powered rifles by sealers operating from the bow of small boats. We have heard evidence suggesting that that might not be the case. However, I do not have evidence that would lead to a firm conclusion either way. Certainly, there is a great deal of concern about clubbing, and I hope that the Canadian Government will take the view that it needs to be prohibited.

There is conflicting veterinary opinion on the cruelty of seal hunts. A recent survey showed that many seals were skinned while still conscious—a disgusting practice. However, a recent Canadian Veterinary Medical Association report concluded that 98 per cent. of seals were killed in what it described as a humane manner. Even if 2 per cent. are killed cruelly, that still represents thousands of seals. I hope that the Canadian Government will work to ensure that if seal hunts are carried out, 100 per cent. of seals are killed in a way that does not involve clubbing or inhumane and improper treatment.

The Government will continue to work to raise animal welfare standards internationally through continuing engagement and dialogue with our EU and other trading partners. I assure the hon. Member for Southend, West that we are maintaining an active interest in the Canadian seal hunt. We would prefer that there were no commercial hunting at all, and we have told the Canadian Government that. However, it is important to note that the seal-hunting programme does not contravene any international agreement and that it is ultimately for the Canadian authorities to regulate the practice. As long as the hunting of seals is permitted, we hope that the killing methods will be monitored effectively and that the clubbing of seals will be stopped. We hope that the Canadian Government will monitor the operation of their regulations, and ensure that they are implemented in practice and do not just lie on the statute book. The Canadian Government do monitor and I hope that they will ensure that that monitoring is done as effectively as possible.

The hon. Gentleman raised the question of the EU and whether we should have a complete ban on the import of all seal products. We recognise those concerns and concerns about wider animal welfare issues; that is why we are pressing for animal welfare concerns to be recognised as legitimate grounds for action against goods under World Trade Organisation rules. Those rules govern our trade with other countries. The view of the WTO, which has to make a decision unanimously, is that it is not prepared to allow animal welfare issues to be a criterion for stopping trade in particular kinds of products. Some countries have said that the EU is attempting to impose its ethical views on other countries. It is our intention to convince, not to impose, and we will continue to seek to convince those other countries.

At present, WTO rules do not explicitly allow for trade restrictions on the basis of animal welfare concerns, and any proposal to restrict or ban the import of seal products from Canada or in general would have to be considered carefully to ensure that it would be justifiable and proportionate under WTO rules. Past experience with leghole traps has demonstrated that some trading partners will react strongly to EU attempts to impose trade measures on animal welfare grounds. There is no point in the EU or the UK making laws or implementing regulations that would be found to be in breach of WTO rules and would have to be repealed if successfully challenged. The UK's approach has been to seek discussion with Canada, which we hope will result in its ensuring that any hunting is done properly—and that, hopefully, all commercial seal hunting is ended.

11.30 am

Sitting suspended until Two o'clock.

Children's Play

2 pm

Children's play is important, and I am delighted to introduce a debate that I hope will raise the profile of play and contribute towards a national strategy for children's play. Let me begin with a confession. It was 20 years this summer since I organised and ran my last summer play scheme, and slightly longer than that since I was involved in after-school clubs. However, the issues surrounding children's play have not changed substantially, and I shall highlight some of them.

Children's play is hard to define. It covers a wide spectrum, from intensive adult activity with small children to more informal, open approaches to play, both inside and outside. I shall concentrate this afternoon on the latter. However we define children's play, it is important to recognise that it involves much more than swings and roundabouts; it is an avenue for self-exploration, growth and development.

Although I generally welcome the Green Paper "Every Child Matters", which was published last month, it refers only in passing to children's play. One of my aims today is to make it clear that that document is out for consultation. I hope that our debate can contribute to a firmer children's Green Paper and a set of policies that recognise children's play.

Children's play is important to youngsters themselves. There is a tendency these days to try to make children grow up far too quickly. One has only to look at advertisements and television to see that. In a consumer society, all the emphasis is on making youngsters grow up quickly and reach adulthood. I want children's play and childhood to allow children time and space to relax, find freedom and enjoy the moment. We all know the old adage about all work and no play. Play is important in letting children just take stock as well as in their development. It can be exciting and imaginative. I have watched children go deep-sea diving, climb Everest and make the most dramatic space journeys—all in their own living rooms. Playing—that excitement—is a journey, a preparation for life.

Children's play is important for parents, too. In fact, I do not think that we understand just how important parents see children's play as being. There has been a great deal of public polling on it, and when parents were asked what would most improve their area, 43 per cent. cited better facilities for children as their top priority. When they were asked to place children's play facilities among 20 priorities for young people, they put them fifth, which, interestingly, was well above both health and education. Parents see play as important.

As I look into my crystal ball, which is notoriously cloudy, I think that the notions of space and of owning and being part of one's neighbourhood will be growing political themes in the future. Children have a right to expect part of that space. Parents also believe strongly that in a pressured world, in which they are stressed, in which life can be difficult, and in which there are many demands on families, it is important to have time when children can have their own space. Children's play is important to both children and their parents.

Children's play does not have the profile that it deserves. One argument is that that is because local and national structures of government are fragmented when it comes to children's play. People are interested, but nobody has sole responsibility. In Whitehall, for example, the Department for Culture, Media and Sport has the top interest in children's play, but officials in the Department for Education and Skills are also involved, as are those in the Office of the Deputy Prime Minister through planning issues and work with local authorities. The Home Office also has an interest, so four big Departments of state have an interest in children's play.

That situation is mirrored in local authorities, although in many ways things are more fragmented there, because different authorities handle children's play in different ways. In some authorities, the social services department is the lead department, while in others it is the education, recreation or leisure departments. There is no clear local authority blueprint for children's play. Such fragmentation does not matter if structures are made to work, and it is essential that all parties, nationally and locally, should talk about children's play.

The voluntary sector is an important stakeholder. In Nottinghamshire and nationally, voluntary organisations—ordinary parents, residents groups and groups with special interests—are making provision for children to play. The voluntary sector has an important voice and must contribute widely to the debate.

In my county, Nottinghamshire, a framework for children's play has been in place for some years. It is not perfect, but it is evolving to meet needs. I am delighted to say that the county council, working with partners in the voluntary sector, has established play centres in each of the districts. There is also a play forum in each district, where partners come together to discuss a local strategy to meet local needs. I am pleased that 174 after-school clubs are running in Nottinghamshire and that more than 5,000 places are available. That is an important leap forward from what happened when I was involved in the system.

What impresses me most about Nottinghamshire is the training that takes place. The play centres have acted as vehicles for getting out and talking to parents and community groups, particularly in disadvantaged areas, and are making training available from an introductory level up to NVQ3 level. Adult skills in children's play and the facilities to encourage and excite children are also important. The Nottinghamshire model shows us what can be done.

I want us to go further by building on the Nottinghamshire base to form a national strategy. One tool available is the soon-to-be-published work coordinated by my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), whom the Department for Culture, Media and Sport asked to look at how new opportunities for funding for children's play—about £200 million is involved—should be spent. I have not yet seen the final product, but I have witnessed his work. What impressed me was that the team involved had regional meetings across the country and talked to people about the children's play facilities that they need.

The work done directly with young people is particularly impressive. For example, a workshop was held in Birmingham and young people were asked to discuss their views on the provision of children's play. In a debate on children's play, we should hear the voice of the children. One article states:
"In Birmingham the children tended to favour smaller local provision with comments mainly about ease of access and variety. They included, 'Big play spaces cost too much money to get to', 'You can go to different ones to see what different things they do' and 'Lots of small ones means lots of different things to do'."
Concerns were also expressed that big playgrounds might lead to bullying. There is a view that, since big playgrounds might entail the presence of adult staff, smaller provision directed at local neighbourhood need is probably the best way forward.

Children also discussed better school playgrounds and more out-of-school and holiday clubs. Holiday and homework clubs are important, but there are dangers in provisions. There is a lot of pressure on schools and teachers to perform. There is a danger that homework clubs may be used to reinforce learning and schooling. That should happen to some extent, but out-of-school clubs should be more exciting, and different from school. They should be a chance for children to recover and explore after school.

Children had a say in the Dobson review. Perhaps my right hon. Friend the Minister for the Arts will be able to tell us when it will be published, as I understand that it is imminent. It is important to recognise that it is not a Government report, but a report to the Government. It is a set of ideas to put to the Government, to which they must respond. Clarity on the timetable of the discussion would be helpful.

I do not know what will be in the review, but I can imagine what some of the themes will be. We must examine children's play across the country, but we must consider in particular how to meet children's needs in the most disadvantaged areas. It is also important to consider the play needs of children with special and exceptional needs. They also have a right to play, and the facilities available to them are limited. I am grateful to the National Autistic Society for telling me, in a letter, that a recent survey of play facilities found that
"more than two thirds of disabled children do not use leisure facilities because they are made to feel uncomfortable while doing so. This highlights the need to challenge negative public perceptions if inclusion is to become anything but an aspiration. Over half of the families (55 per cent.) had to travel outside the area to find accessible facilities, with opportunities to access play and leisure limited by financial constraints and difficulties with transport."
It is important to include all children in any national strategy.

It is also important to examine how funding reaches children. It is fairly easy for voluntary groups to find capital for projects, but it is sometimes difficult for them to find the day-to-day resources to sustain projects in the long term. I am concerned that the Dobson review should not reinforce the impression that lottery money should fund children's play, although lottery money can make an important difference. The children's Green Paper and the Dobson report should provoke a stocktake of how much we currently spend on children's play. No one knows the answer, and if we are to develop new facilities and a national strategy, we need to start at base one. We need to know and to cost what we are doing before we move into the future.

It is also important for local authorities to examine what they are doing for children's play. I note that none of the targets set for local government concerns children's play. We should reflect on whether there is a lesson to be learned from that. Should we be talking more clearly to local authorities about the targets that are set?

The important thing is to try to include funding for children's play in mainstream funding—it should not all be lottery money. For example, in big regeneration projects we should examine how some of the project money could be directed towards children's play. We should also use the planning process more sensitively and sensibly, to introduce appropriate provision for children in new developments. That should, but does not always, happen.

There is also the question of how we use schools. Budgets are tight, and the priority is children's education, but we should try to develop schools as community resources—as centres that can reach out to the wider community. That process has already begun, and I am confident that projects such as sure start will enable it to proceed.

We should examine our old Victorian parks. There is an increasing interest in how urban Victorian parks can be revitalised and regenerated. Children's needs should be considered when we are examine ways of developing those parks.

Those are some of the questions that I hope the review will answer. However, the essential requisite for good children's play is good training for the people who are involved in it. In fairness to the Green Paper, "Every Child Matters", I may say that it refers specifically to the need to encourage play training. People who work and play with children are not devoid of skills—they are highly skilled people who can pass their skills on to other child care professionals. I have seen children's lives radically changed through good-quality, thoughtful and structured play. However, for structured play to be done well, both training and resources are needed.

There are signs of progress. I am delighted that the Department for Education and Skills has recently recognised SkillsActive as the sector skills council for active leisure and learning training. Having a body with sole responsibility for certifying and promoting quality children's play training is a welcome and significant step forward.

The funding now available from the Department for Education and Skills for regional play centres reinforces that approach. In the last year, new regional training centres have been developed in Yorkshire and Humberside, the east midlands, the north-west, the east and the south-east regions, taking the total regional centres to nine; those are encouraging signs.

I want to continue to work with people within and without Parliament to build on important progress—the Dobson report, SkillsActive and the Green paper—to create a framework for children's play. Some high-quality work is being done, but there are big gaps where there is no appropriate provision, and we must look closely at that. The time has come to take stock of what we are doing about children's play, and to try to move forward and make a difference. It is 20 years since I ran a play scheme, but what impressed me then, and still impresses me, was that investment in children and their play is not just for the present, but for the future, too.

2.21 pm

It is a pleasure to take part in this debate and to follow the excellent speech made by my hon. Friend the Member for Sherwood (Paddy Tipping), whom I heartily congratulate on choosing the subject for discussion.

It is delightful to have this opportunity to discuss children's play, and also surprising, because it is taken for granted in the world we inhabit that play is peripheral and less important than other vital matters in people's lives. That view is wholly wrong, and I am disappointed that more hon. Members are not present for this debate.

Members of Parliament are extremely skilful people, adept at communication, building relationships, cooperating and forming—and sometimes breaking—alliances, but those essential social and people skills are not taught at school at any level or in higher education. They may result from the general experience of living, but most importantly they come fromthe profound learning experience of play. I learned lessons in our back lane that I use every day of my life.

A month or so ago, we held a day in Lancaster called, "What's life like for children in Lancaster," assisted by the great national expert, Professor Al Aynsley-Green, the national clinical director for children's services. About 150 adults and 30 or so children and young people were present, all of whom participated extremely well. One of my community campaigns followed from a suggestion made that day: a young chap from a local primary school stood up at the beginning of the meeting, in front of a large number of adults, and said that what was needed to improve life in Lancaster was a community telescope. That was such a wonderful idea. We are all in the gutter looking at the stars, and that was a fantastic insight into community need.

Many other young people contributed that day. They concentrated on the important aspects of their lives and the issues that seemed fundamental to them. They said that they needed more parks and more space. They suggested that the old bus garage down the road could be converted into an ice rink and a centre for a whole range of children's activities, saying, "We could run that centre". The children and young people had some strong messages. They want ownership of part of our communities. They want somewhere that is definitely theirs. They want somewhere over which they can exert control. Above all, they have good and solid ideas about their community, what it should provide and what they want to see in it.

I look forward to the report from my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). I welcome the investment that the Government have made. It has come from a variety of sources. It shows its face in our communities. After long struggles and in the face of rampant scepticism from adults, skate parks are being developed in my constituency. That is what young people want. No, it is not a fad. It is the sort of sporting development that they want. Better youth and community facilities are being developed and there are more spaces for people to meet.

Meanwhile, begrudging little spaces are allowed on new housing estates. Planners force developers to include what is laughably described as a play space on estates over a certain size. The developers put them in the most obscure corner of the estate and the people whose houses are built next to them lobby their MP to get the local authority to remove the planning condition. That has been one of my most depressing experiences as an MP. So often we give the message to young people that we do not like them very much and we do not want them around.

We are very critical of young people. We do not like it that they watch too much television and get fat, but we also criticise them when they go out. We are all concerned, rightly, about antisocial behaviour, but we can become obsessed by it and we can see it in situations where young people are simply being themselves.

Does my hon. Friend accept that there is a world of difference between behaviour that is rightly described as antisocial, and that plagues communities and mostly makes victims of young people, and the behaviour of the vast majority of young people who are bored and looking for something to do? We must stop criminalising children and realise that we must provide something constructive for them to do. We cannot rely on old, Victorian England values under which it was thought that children did not exist unless they were asked to contribute. If we do, we will force them further into problems that it will be costly to sort out.

There is a great deal in what my hon. Friend said. We are discussing a continuum. In certain situations, it is possible to misinterpret the behaviour of young people. When they congregate and become a little boisterous, that is not necessarily a sign that they pose a great threat to our communities. We need to respond to the views of children and young people. A wider range of resources must be made available to them. Above all, they need space. As young people from Lancaster said, they need a meeting place and to be allowed to do their own thing. They should be allowed to run things and be in control of their environment.

The debate gives us a good opportunity to look back at our own childhood. When my hon. Friend the Member for Sherwood was talking, it struck me that he would have been a darn good member of our gang. We had an amazing time. We dammed streams, built wooden houses and climbed trees. Sometimes, we cut down trees. We had the huge advantage of being near a beach, on which we played all sorts of dangerous games. We also spent an enormous amount of time in our back lane where there was a lot of space because there were not many cars.

I recently made a nostalgic visit to the house where I lived 25 years ago. The area was full of cars. Children could not play cricket or cowboys and Indians there now. They could not be involved in grand construction projects. We always had a few nails and scrap wood. Such items seem to be missing now. We built things out of all sorts of junk. There is not the same tolerance for young people these days. As well as really good, well-organised activities of the sort mentioned by my hon. Friend, we need to provide children with opportunities for adventures. A load of constructive material must be put at their disposal. Children must be able to play games and let their imaginations roam around the possibility of using such material.

We need more co-ordination in the way in which we offer play projects. I do not understand where the different elements of funding come from. In our area, the county council provides opportunities for play, as does the district council. A community safety budget funds excellent projects. The lottery has funded various projects, but because it is so diverse and diffuse, play does not receive the attention that it deserves.

My hon. Friend the Member for Sherwood was absolutely right to refer to the Green Paper, "Every Child Matters". If every child does matter, we must ensure that play is a central part of every organisation's work. There are children's trusts, and local authorities, which will have a lead officer—a lead politician—for children's services. We must ensure that those people give play the prominence that it deserves and requires.

We need to recognise that play work is a thoroughly respectable and vital profession. As part of that, we need to recognise that there are huge skills in our communities. Across the whole range of work with children, there are opportunities for community regeneration. In some of the most allegedly run-down parts of my constituency—certainly the parts with poorer reputations—there are people who have great experience with children: many of them have been parents, grandparents, brothers or sisters, and have taken part in a wide variety of voluntary activity on the estates where they live. We must recognise the talents of people from some of the most deprived communities in our land: we need to nurture those talents—and support and employ them.

If we really want to get to the nub of the problem of children's health and antisocial behaviour, and if we really want to engage children in our communities and the future of our society, we must give them opportunities to learn, grow and socialise, and to be part of their communities, and to take control. The first step towards that is to listen to children and young people. We have a great opportunity to make the changes that are required.

In a sense, a cultural change is required. We need to understand the importance of play and the significance of childhood. We must ensure that we enjoy children's childhoods, and that children enjoy them, too. If we get that right, we will do a great deal better by our society in the future.

2.37 pm

I am, I think, quite well qualified to speak on the subject of children's play. I am the mother of three children, who will soon have presented me with five grandchildren, and I am becoming quite an expert on childhood, as they all live near me in my constituency.

The long title of the debate, "Government strategy for children's play", made me wonder whether we were going a little bit mad. Do we need a strategy for play? Do we need a programme for it? Will the right hon. Member for Holborn and St. Pancras (Mr. Dobson) set targets for play? Would that not be the very opposite of what play means? Play means doing something that you like doing—or doing nothing. What is wrong with doing nothing occasionally? If we are to have targets for doing nothing and doing things that we like doing, I dread to think what direction the Government are taking us in.

However, I will take this matter seriously. I congratulate the hon. Member for Sherwood (Paddy Tipping) on securing the debate, because play is important. Why have we suddenly—maybe it happened gradually—realised that we need a strategy? One reason is that successive Governments have been very unjoined-up in their Departments. People have not actually thought out the consequences of particular policies, and we must start addressing that seriously.

Take the example of school playing fields. I do not blame the present Government for the non-existence of school playing fields, but an awful lot of them have been sold off over the past few decades. When little children, such as my toddler grandchildren, are taken into an open space or empty field, they run and run. The appeal of big empty spaces to a child is great, but, as the hon. Member for Lancaster and Wyre (Mr. Dawson) said, where can they be found? He had his beach when he was a child, but the vast majority of our children are brought up in towns and urban environments where they have no space. They cannot run around and get away from everything. The school playing fields policy was a sad move that meant many schools lost their fields.

The national curriculum is so prescriptive that it does not leave enough time in the day for extra activities. The wetland centre in Barnes, which is part of the Slimbridge Wildfowl and Wetlands Trust is a beautiful facility of reclaimed reservoirs with water birds, geese, ducks and all sorts of things for children as well as adults, and it is sad that so few schools visit it. Schools say that the school day is too crowded: they have no time any more to do trips, and teachers are overwhelmed by all the things that they have to do. There is no time and no space. All the targets that teachers must meet daily, weekly, monthly and term by term leave little time or energy to take the children out on an extra spree or trip. They have no time to ensure that the children are doing something constructive or playing happily in the playground rather than drifting around or thumping one another.

Dare I mention standard assessment tests for seven-year-olds? One of the saddest things that we have done to little children in this country is to make them prepare for tests at the age of seven. The hon. Member for Sherwood said that children are losing their childhood. They start taking tests at seven, and I know that the mentality of teachers who want their schools to do well means that they teach for that exam instead of letting children learn through play. Children do learn through play, and it is terribly important that they should, and not just learn in order to pass tests.

Parents are also at fault to some extent. In middle-class areas such as my constituency, I see the poor little souls being picked up from school, the girls being whisked off to ballet and their brothers off to judo. Then they go to piano lessons, and then they must have their extra tutoring at age nine or 10 for the independent school tests. Those children must fall into bed absolutely knackered. They are given so many extra opportunities for acquiring skills that they have no space for themselves. They are not allowed simply to do nothing. My eldest child loved doing nothing. He is a successful person who has done very well, which is partly, I hope, because I sometimes realised that he needed to do nothing and left him alone.

We all know that television and computers are turning us into a nation of couch potatoes, and that children are becoming anaemic and obese, and developing rickets—there all sorts of horror stories about how unhealthy our children have become. However, a lot of that results from parents being too afraid to let their children out, and that is because successive Governments have failed to realise the importance of community safety and the village bobby who knows all the children in the local schools and who can be referred to and relied on.

Yesterday, during discussions on the Sexual Offences Bill in the Chamber, I was thinking about today's debate. A law was passed—although my party tried to amend it—that made it a criminal offence for children under 16 to touch each other sexually. That means that they cannot play doctors and nurses or kiss-chase; they cannot even play postman's knock any more, as I did and as my children did. That is a bit more legislation saying, "You mustn't do that; you must do your reading instead." We do not think enough about the consequences on our children of legislation on other issues.

There have been some tremendous measures recently. I congratulate the Government on sure start. It is magnificent that that is being rolled out even in my constituency, which is not a deprived area. Sure start is coming, and it involves superb schemes.

Could we please pay tribute to the play group leaders and after-school club organisers who for decades have provided all those things that our children would otherwise have lacked? I applaud and praise them. They have done a magnificent job, and I hope that a lot of support for play groups and their leaders will come out of the strategy.

Equipment in municipal and school playgrounds is much better than it was. I sometimes worry a little that putting nice, soft, bouncy surfaces under every climbing frame must make children think that every tree that they want to climb will also have a nice, soft, bouncy surface underneath it. Sometimes, we must remember that children have to learn by taking little risks—supervised, I hope, by their parents. They need to know that there are safe and unsafe things to do.

The hon. Member for Lancaster and Wyre, on his trip down memory lane—my handkerchief was at the ready, and I bemoaned the childhood of our past—and the hon. Member for Sherwood both mentioned town planning. Where is the waste ground? In my childhood—if I may take a trip down memory lane—it was bomb sites. I was brought up in the west midlands in the years just after the war. We played mothers and fathers in bombed-out buildings. We finished off the job that Hitler started, by throwing stones at windows that were almost but not quite broken. We had a great time on bomb sites; they were wonderful places.

My two boys now have children of their own. Despite their being brought up in leafy, wonderful Kew with lovely playgrounds and open spaces, including Kew green and parks, the boys' favourite playground—I hope that my daughter did not go there—was a derelict public building down by the river that was desperately dangerous. I have only just heard about it. It was right on the riverbank. What has happened to that most favoured place? Developers have built a block of luxury flats on it. That wonderful play space for young people in my constituency has gone.

There is no longer anywhere in our communities that does not belong to somebody. As soon as children start playing anywhere, someone complains about them making a noise or kicking balls. Everyone owns everything now; we are all very proprietorial, and children have no chance to let rip. Perhaps they do so in the country or on the beach, but most children do not have that facility.

Let me go back to the subject of SATs at age seven. A recent study compared our country with Sweden. Swedish children do not start formal school until they are going on seven. Until then, they go to pre-school and nursery. They are away from home, but learn through play, communication and interacting with their peer group. Our children are preparing for SATs in those years. What happens? Our children at seven are much better than Swedish children at reading, writing and arithmetic. They gain very good results at seven in comparison. At 14, however—oh dear! There is such a turnaround. The children in Sweden have learned to communicate and have caught up very fast, even though their formal schooling started a little later.

So many parents have to work that we need an expansion of before-school and after-school clubs. They are invaluable. In many areas, the old informal process of "You have the kids on Mondays, I have them on Tuesdays and Mrs. So-and-so has them on Wednesdays" meant that we all had after-school periods and one day off a week and that five mums shared the load. I am not sure that that happens as much as it did. I hope that it does, but in many urban areas perhaps it does not, because people do not make the same contact with one another.

I agree with the hon. Member for Lancaster and Wyre that we should ask the children what they went, whether it is to do nothing or whether they want skate parks, for example. Requests for skateboard parks in my constituency were pooh-poohed many times as a fad, and as something that the children would grow out of and move on from. However, they did not, and skateboarding is an excellent way of letting out energy.

Finally, let us not forget grandparents. My family has a play strategy for children called Grandpa—actually, they call him Poppy. He was the carver of pumpkins last weekend and is the controller of the railway network that is set up in our sitting room on Saturday mornings and not dismantled until Monday. He is a hard-working consultant in the national health service but he is also a magnificent play leader for the children. The gap between generations is an extremely useful one, which we do not exploit enough. Grandparents are very good at entertaining grandchildren, because they can send them home in the evenings; they do not have to keep them all night as well. So in our strategy let us not forget grandparents and particularly not the grandparent in my family—I commend him to the Chamber.

2.52 pm

I congratulate the hon. Member for Sherwood (Paddy Tipping) on his success in the ballot and on introducing the debate. Judging by the number of interested people in the Public Gallery, it is long overdue and very important to many people. I commend him on his excellent speech, which covered all the key points. I have been wondering what I can add to it, but if I left the Minister 45 minutes to reply, she might not thank me, so I will say a few words.

I begin with a quotation from a psychologist:
"When we play games with other children we learn how to compete, organise groups, be creative and develop socially. It also helps to relate to others and to form relationships."
That encapsulates everything that we all believe about play and its importance in all its multifarious facets. We have touched on only some of those facets today, and they range enormously—from doing nothing, as the hon. Member for Richmond Park (Dr. Tonge) said, to the structured, formalised play that takes place at certain locations. However, I think that we would all agree that there are problems with the notion and practice of play in this country at the moment. Playgrounds, once a Mecca for children, are in decline, often because councils no longer wish to maintain them because of to pressures on their revenue account, or perhaps because they no longer want to face up to the increasing claims for injury as our society becomes more litigious.

There is also a decline in the extended family. It is encouraging and heartwarming to know that there are tremendous granddads around who will look after their grandchildren, but today, unlike in the case of the hon. Member for Richmond Park, many grandparents do not live conveniently close to their grandchildren, which causes difficulties. In the past, the extended family brought on the younger children, but that option is no longer readily open to us, although I heartily agree with the hon. Lady's comment that the age gap between grandparents and grandchildren—between the generations—is often most productive, in that grandparents know how best to use time and have the patience to bring on young children.

I look back not with embarrassment, but with recognition that I did not spend anything like the time—or had the same patience—with my own two children that I spend with my one grandchild. I cannot claim to have more than one—Oh wait, I have two. [Laughter.] One was born two days ago; I had forgotten. He has not impinged on my life yet, but he is there. There is an eight-year gap between them.

As hon. Members have mentioned, we can no longer go out on the streets because of the sheer volume of traffic, and it is not only parents who are anxious about traffic and safety; children themselves are terrified. They say that they do not like going out and being near heavy traffic, and that affects the situation, too.

When it comes to safety, we are not talking only about surfaces in playgrounds. If we attempt to keep children in an ultra-safe environment, we run the risk of losing a key element of constructive play—a sense of adventure. Until I was about 10 or 11, I used to spend my holidays in north Wales, on the sand dunes near Prestatyn, in what we used to call a bungalow; it is a shack now. I went there for about a month every year, accompanied by my brother and my cousins. There were no playgrounds and no facilities—not even a cricket pitch—but every day after breakfast we went out with a sense of adventure and we created things. We must not think that as a Government or as a society we must always produce something tangible for play. We need to think more widely and create the conditions in which children can grow and develop through their own play.

Of course, children do not get out as much today as they used to. I have covered some of the ground, but there are other issues. There is a feeling that they do not get out any more, but today's children are damned if they stay at home watching TV or playing video games—they risk being labelled couch potatoes—and damned if they go out, risking the wrath of their parents, who are worried about traffic and other safety issues. The hon. Members for Lancaster and Wyre (Mr. Dawson) and for Richmond Park also mentioned the intolerance of members of the local community, such as neighbours or other people living nearby, who, as we MPs know, regularly complain about the activities of young people in their neighbourhood.

According to the latest research, most children now opt to stay indoors—a sedentary lifestyle that fuels the growing obesity epidemic. One survey of parents found that seven out of 10 children spend more time playing on computers and watching TV during the summer holidays than doing anything else, and 40 per cent. spend seven or more hours a day on such activities. Those statistics show that at least some play is taking place. One might call it domiciliary play, but it is important. Computers and the facility that children have with information technology bring them on much earlier than was the case with our generation. However, underlying the debate and the Government's so-called strategy on play is the feeling that although that type of play is okay in its place, play outdoors or in more structured areas, supervised or unsupervised, is suffering because children are not getting out of the home. The impetus seems to be towards restoring the conditions that would allow it to happen more.

There is growing concern about obesity, which is costing the health service £2.6 billion to tackle its direct and indirect effects, according to National Audit Office figures from 1998. We understand that that cost is still rising alarmingly. Given that evidence, the Government are right to consider how to develop more activity among our children, whether through play or sport or a combination of both.

We have spoken about structured facilities, and different costs are involved, such as capital costs to put the facility in place and the ongoing revenue cost, which is often the killer punch when local councils are considering whether to go ahead with various projects. However, we have facilities that are under-used in this country, such as those in our schools, particularly our primary schools. At this stage, like the hon. Member for Richmond Park, I pay tribute to all those involved in play groups and after-school clubs, who do a fantastic job with our children. A report by Learning through Landscapes, a national charity, has found that schools fail to make maximum use of their land and get only about 30 per cent. of the potential benefit from their outdoor facilities. There is the widespread problem of the sell-off of playing fields, which I will come to later, but too much existing land is being under-used.

Social, educational and play benefits are deemed to accrue from outdoor play facilities, and one example that I have obtained from the Library is that of Ravenstone primary school in Balham, south London. It put improved facilities into the school and saw dramatic changes in bullying, social inclusion, structured play and children's work in the classroom. That did not take a lot of money—about £30,000 was spent—but the effects were dramatic. That could be replicated in existing facilities throughout the country, through the Department for Education and Skills rather than the Department for Culture, Media and Sport. Rather than reinvent the wheel, we should make the most of under-used facilities on our doorstep.

Because of pressure on resources, heads and governing bodies cannot spend the money that they should on their playing fields. Fields are not cared for properly, as they are not drained or the grass is not cut, so they end up as no-go areas during wet winters. They are under-used because they are not maintained properly. As the heads and governing bodies do not then have the money to bring them back into full use, it is easy for them to take the option of selling the fields. If we gave those schools some ring-fenced money, we could perhaps encourage them to put in facilities that would allow their children to play in a more structured way.

Improvements can range from art, technology and architecture projects to sensory gardens. I opened such a garden at Eye Church of England primary school in my constituency a few months ago. The children had been involved in designing the garden; they related to it and it was theirs. That kind of thing can help children's play activities.

Land use and planning issues have already been covered, but I will mention them briefly. As 200,000 or 300,000 houses are to be built, particularly in south-east England, safe outdoor spaces should be planned as part of the infrastructure.

A recent survey by the Children's Play Council and the Children's Society found that, on average, fewer than one playground is provided for every 500 children under 12, and fewer than 40 per cent. of local authorities have either outdoor play policies or strategies for the public realm. At present, 56 per cent. of local authorities do not have an urban green space strategy, and 64 per cent. of those have no immediate plans to introduce one. The hon. Member for Sherwood made an important point when he said that public parks should be brought back into public use, as too many are run down—the same point that I made about revenue funding for the maintenance of school playing fields, which are tremendous facilities that can be brought back into greater public use, to the benefit of our children. The fear of crime, or of being accosted or bullied, drives children and adults out of those areas. We must address the crime and disorder dimension to the problem in parallel with the other considerations.

The hon. Gentleman is right to say that the fear of crime dissuades people from going to open spaces, but is not that fear of crime completely out of proportion to reality?

Yes, I accept that fear of crime colours people's judgment in a perverse way, but it is a real fear and it should be addressed. My constituency in rural Cambridgeshire is not supposed to have huge crime problems, and the local chief constable told me last week that recorded crime was going down. That may well be so, but I told him that to judge from my postbag, crime is going up. People no longer bother to report it because they do not expect the system to deal with it. Small-beer crime such as antisocial behaviour—youngsters banging on doors and causing problems—frightens elderly people and contributes to their fears.

As the hon. Member for Sherwood said, improving the quality of public space is high on the list of issues that people think important to improvements in the quality of their lives. My statistics are slightly different from his: mine put that ahead of education, in the top three or four priorities, along with reducing crime and improving the health service. In spite of that, public space has been overlooked for many years, by this and previous Governments.

I have already mentioned the problems associated with school playing fields. Under a previous Sports Minister, the Government seemed determined to tackle the matter, but little improvement has been made and the problems still exist. There has been a steady rise in applications to build on playing fields; there were about 1,325 in 2002–03. Since the Secretary of State for Education took direct control of the disposal of school fields in October 1998, some 213 applications have been approved and only six refused. An alarming trend is developing. Most applications go through and few are turned down. The Government may argue that not all playing fields are lost and that sometimes an indoor facility is built on part of a playing field. I accept that, but neither the local authorities nor the Government have any clear statistics about what is happening out there.

Rather than piecemeal and ad hoc developments that are used by the education service to raise money to prop up education budgets, we need a cohesive view of what playing fields and facilities are needed. The Department for Culture, Media and Sport should lead on that, and we need to plan systematically. If we do not know exactly what is going on, a time will come when we say, "Whoops, we have gone too far. How do we go back?" Once playing fields are gone, they are irreplaceable. Unless we knock down huge swathes of housing to create new playing fields, they are lost and gone for ever. The Government must do more to secure the future of playing fields.

As the hon. Member for Sherwood pointed out, a review was carried out under the chairmanship of the right hon. Member for Holborn and St. Pancras (Mr. Dobson). It was set up last October to look at ways in which the £200 million allocated from the New Opportunities Fund would be spent on children's play. I understand that that review was completed in March. We were promised the Government's response in the summer. It is eight months since the right hon. Gentleman submitted his report. Like the hon. Member for Sherwood, I hope that the Minister has some good news. Does he think she has some good news? I see him nodding; perhaps that was what prompted the debate, which may be another launch pad for good Government news. I hope that the Minister has some good news and that the report will be published very soon.

I see the Minister looking at the clock, so I shall be very brief. It is funny how time goes. One thinks one has two minutes' worth of stuff to say and it lasts for 12.

I take the line taken by the hon. Member for Richmond Park on strategy for play. It is not the play that is at issue, but facilities and opportunities. Any strategy needs to be inclusive and to cross Departments. I do not mind whether it is DCMS that leads it, but someone needs to. It needs to be more co-ordinated, both nationally and locally. Local authorities seem to do their own thing without any requirement to supply even basic provision.

As the hon. Member for Sherwood said, provision is fragmented. Local authorities and planning departments need a clearer role to ensure that land use planning goes hand in hand with our need to provide facilities. All in all, the Government are doing some good things with their positive activities for young people, sure start and various other schemes, but it would be interesting to hear what they intend to do about the New Opportunities Fund money.

3.13 pm

I congratulate my hon. Friend the Member for Sherwood (Paddy Tipping) on securing this debate. I had a word with him before it started and reminded him that, although it might be 20 years since he led a play group, within months of being elected in 1992 he was asking questions about play and play areas. It is not just in response to the publication of the Green Paper on children that he has shown an interest in play; his is a long-standing involvement. I congratulate him on his tenacity and have every confidence that that tenacity will extend through the months and years ahead.

We hope to publish the report prepared by my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) by the end of the year. Having joined the Department belatedly, I had not realised how long ago the report was commissioned; I agree with the hon. Member for North-East Cambridgeshire (Mr. Moss) that it is an inordinate length of time. That is my commitment and I hope that nothing happens to make me apologise for the non-appearance of the report.

I congratulate the hon. Member for North-East Cambridgeshire on the birth of his second grandchild. In time, I hope that he becomes as good a play leader as the husband of the hon. Member for Richmond Park (Dr. Tonge). I have no doubt that the hon. Gentleman's grandson will be imprinted on his mind in a week, not least by the noise, and he will never again forget that he has two grandchildren.

It has been a good and helpful debate, devoid of party arguments or political party points, and I join hon. Members in stressing the importance of play. I was beginning to think that my hon. Friend the Member for Sherwood was giving us an opportunity to reminisce about our own play, and there is nothing wrong with making that comparison, which reminds us of the importance of play in our lives. Whether we used spare time in our youth legitimately or illegitimately, nobody would deny that it had formative influences on us.

However, I warn against thinking that everything in the old days was rosy, and that there were long summer days when it never rained, no child was at risk, and no neighbour shouted at a child for putting a ball in their garden. That is not my memory of childhood. I was shouted at for kicking the ball in the neighbours' garden and that will always be part of the essential relationship between adults and children. They were not all glory days, but we were children and did not have much to worry about except whether the ball was kicked into the neighbours' garden.

The social context in which children now grow up is very different. It impacts on all areas of their lives, including play. I got out of the neighbours' way by going to the park, but that was at a time when my parents were not worried that I would not come back, and the newspapers were not so full of stories about risks to children. I do not know whether children are at more risk now from traffic and dangers from adults, but parents think that children are more at risk than a generation ago. It is not for the Government or MPs to talk to parents about the risk they take with their children; that has to be up to the parents, because the consequences of ill coming to children will be borne by them and no one else.

Everyone—the Government, the media, parents or MPs—has a social responsibility to ensure that when we discuss antisocial behaviour, which I suspect has increased since I was a child, and the risks to children, we do so in an open, honest and robust way to warn parents, but do not go over the top and scare them into altering how they deal with their children.

Whatever we think about antisocial behaviour and crime, it is clear that the risk to children from traffic has increased markedly and continues to do so exponentially every year with more vehicles on the road. It is essential that local authorities address the issues of safe streets for children, safe routes to school and safe places for children to play where they can be fully protected and insulated from traffic.

I do not disagree with my hon. Friend, but frankly, that choice has been made. Members of Parliament and our constituents may have two cars, whereas a generation ago families might not have had any. We the public are responsible for the increase in the number of cars and untidy parking on streets. Children used to play in the streets but cannot do so any more; looking around the Chamber, I see that most hon. Members are of a similar age and probably did play in the street. That has changed but it is not controllable; it is the position that we are in. To summarise that debate, there is no going back to the days when back alleys were always safe, when streets did not have cars on them and open spaces were fit and safe for children.

I know that the hon. Member for Richmond Park did not mean her remarks to be so interpreted, but thank heaven that the bomb sites have been cleared. If they had not been, there would have been an Adjournment debate on why successive Governments had not dealt with them. There is a danger in dealing with life as it is and wanting to make play safe in the social context in which we live. Parents want more designated areas for safe play, unless children find their own areas and we deem that they are safe for them.

I agree with my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson). Responsibility must be put on the relevant agencies, whether local or national. They must ensure that in each area there are open spaces not only where children feel safe, but which parents consider safe. I could not agree more that the right balance must be struck between organised and disorganised play—an exceptionally good description. One of the exciting things about play is that it is an incredible learning process without children knowing that they are learning; it is about role play; it is about children learning how to deal with emotions; and it is certainly about the transition from childhood to adulthood, which takes 20 or more years. If children cannot play, imagine, be inspired and exaggerate, they will not go through the necessary transition to adulthood. They will instead become adults without the necessary adult skills.

I have no problem with the general thrust of our debate, which is about the importance of play, of doing nothing and children deciding what is play, not adults deciding it for them. We must acknowledge that all social changes—even ballet lessons, piano lessons, the choir, the orchestra, the scouts and the football club—are what parents want for their children. The Government's response must be to acknowledge that such projects comprise the social environment, and allow people to make their own choices.

I feel obliged to answer two politically contentious points, otherwise they will be recorded as unanswered in Hansard. On standard assessment tests, parents want their children to read and write. It is as simple as that. It cannot be either/or. How much adults worry about children taking tests is certainly an issue, not how much seven-year-olds worry. There is a huge difference in that. The SATs for seven-year-olds are tests that teachers undertake with the children at any point during a week in the school year. As a former teacher—although not a primary school teacher—I think that the best teachers have classes where the children do not even know that they have undertaken those SATs. I accept that the SATS for 11-year-olds are different, but there is absolutely no rhyme or reason for seven-year-olds to go to bed the night before worried about them.

Most children of the constituents of the hon. Member for Richmond Park can read and write. They have a damn good chance of going to university. Many of my constituents and those of other hon. Members were left out. They could not read or write and did not have life chances. I do not want a play strategy that takes away from the children the ability to learn to read and write. The challenge must be to do both. The hon. Member for North-East Cambridgeshire knows that I will refer to school playing fields. I have not got it at my finger tips, but if he wants a list of each playing field that has been disposed of since the legislation came into force in 1999, I shall make sure that he receives it. He will also receive an explanation of why the disposal took place and what use was made of the funds.

The hon. Gentleman was right to say that I cannot give him such information for the years in which his party was in government, because the statistics were not collected then. It is worth his considering such matters, because I believe that he cares about them. The reason why 213 applications were approved and six were opposed is that people know the rules of the game. They do not choose to apply to dispose of playing fields if they know that their application will go against the rules. Selling playing fields to build safe spaces has been mentioned: many designated playing fields were swamps or marshes that were not fit for children to play on.

I will use the remaining time to discuss the play strategy. I thank the hon. Members of all parties who acknowledged the contribution that the Government have made, through many funding streams, to play initiatives. The relevant list includes sure start, increasing the amount of green spaces, sports grounds and playgrounds, and living spaces, the work that has gone into toy libraries, and funds for training and education.

In particular, I wish to mention SkillsActive, which will run as a sector skills council. Training will be covered for the entire sector. I join all hon. Members in recognising the contribution of the voluntary sector: the fact that people are volunteers does not mean that they do not need training. The important thing about the skills training that will be given is that it will be inclusive: people will not have to get paid, or take on a job or be full-time to get training. It is very important that we do not lose the skills and experience that exist in the voluntary sector. I am delighted that SkillsActive is now in place, and I look forward to its working with the Government—the Department for Education and Skills—in the months and years ahead to create a skills strategy that is led by the sector and supported by the Government, so that it is a strategy that the sector wants. Despite all the initiatives, this is not universal.

For all the play areas that I can say have been regenerated and that are now in good order, hon. Members will be able to tell me of an area in their constituency that is not like that. I accept that: the job is not done. There must be more resources. Despite all the money that has been put in, nobody can say that play is now adequately funded. This is only the beginning: there is more to be done.

My hon. Friend the Member for Sherwood said he did not want the play strategy to be funded by the New Opportunities Fund. I understand why he said that, but I disagree. There is an army of people queueing up for NOF funding if play does not want it. We should not turn our noses up at NOF funding. It is real pounds, shillings and pence that bring about real improvement in play, and that is hard won: it is not easily given by NOF.

I know where my hon. Friend is coming from when he says that he wishes the funding to be mainstreamed. He said that there is more assurance with regard to continuity if funding becomes mainstreamed from local authorities than if there are three-year, time-ended funding streams. I remind him of the days when local authorities had their funding cut. Nothing is forever in public spending. To move funding to local authority expenditure would mean that it competed with other services, and it might be more at risk from future Governments seeking to cut revenue to local authorities than it would be if it were NOF-funded. At this stage in the development of play, we should say yes to any funding stream that comes along—yes, yes, yes, if it's money, money, money.

I agree with my hon. Friend about something else. This joins up with the points made by the hon. Members for Richmond Park and for North-East Cambridgeshire. I would have worries about a national play strategy. Because of the way that Governments do things, it could end up being prescriptive and full of targets, and it could make all those voluntary workers we have been talking about, and our constituencies with all their different needs, feel that they do not have as much ownership of play as they do at present.

There is something that needs to happen. I had not fully realised until I started to prepare for this debate that the funding streams come from so many different Departments. I offer to reflect on something, and to comment on it when we comment on the Dobson report. We must make sure that the guidance that goes out with the funding streams is not contradictory, and that it enables people to have a cohesive provision of play at ground-floor level, while still getting those funding pots.

This is an important topic, and I congratulate my hon. Friend the Member for Sherwood on bringing it before us, and also on the work that he has done so far to ensure that it will not fall from the Government's agenda. I want to assure him that it will not, and we look forward to the Government's response to the reports by the end of the year.

Israeli Security Wall

3.30 pm

Some three weeks ago I spent three days travelling around the Palestinian territories. If I had not been in United Nations vehicles or, when I was in Hebron, in a Temporary International Presence in the City of Hebron vehicle, I would not have got very far. There are 482 Israeli military checkpoints in lands that are supposed to be administered by the Palestinian Authority. The land is now divided into 300 small clusters. In addition, there are "flying checkpoints", which can be set up anywhere at any time. I saw thousands of Palestinians herded at gunpoint by Israeli soldiers, waiting to get through checkpoints to go to schools, universities, their farmlands or hospitals.

The regime of military tyranny is bad enough, but worse still is the wall that the Israelis are building in large tracts of Palestinian land. The Israelis call it a fence, and claim that only a tiny percentage of its length is a wall. They could have fooled me. Parts of it are indeed a tall and ugly fence with electrified protection, scarring the landscape that the Israelis claim to love. However, large parts of it are composed of a hideous and menacing high wall in concrete sections, interspersed with concrete, fortress-like watchtowers.

The town of Qalqilya will be almost completely surrounded by such a wall. An Israeli military order of 2 October lays down conditions between the ceasefire line of 1949, which until June 1967 was Israel's international border, and the wall, 100 miles of whose 400-mile length has already been built, and which sweeps far into Palestinian territory. It is therefore an illegal structure.

I quote from a summary of the Israeli military order to which I referred:
"The Order states that 'No person will enter the Closed Zone'"—
the space between the wall and the border—
"and no one will remain there. (Section 3a) Free access to the Closed Zone will only be granted to Israelis (defined as Israeli citizens, Israeli residents, and anyone who is Jewish.) The Order requires Palestinian residents of the Closed Zone to obtain permits to live in their houses, farm their land and to travel. Palestinians not residing in the Closed Zone but whose agricultural lands are within the Closed Zone will also be required to apply for a permit to farm their land. The order effectively grants any Jew in the world the right to freely travel throughout the Closed Zone, while denying the same rights to the Christians and Muslims who live on, farm and own the land."
In addition, many Palestinian villages—I have seen it for myself—have had their entrance roads ploughed up, so that they are inaccessible from outside and are turned into prisons for those living in them. Sewage fills the ditches that have been dug across the roads.

The Israeli Government have now decided to build a wall that will divide the city of Bethlehem and siphon access to the city through narrow access points, totally controlled by the Israeli army. That will severely hinder access to the Church of the Nativity and to the Church of Christmas and will almost completely prevent access to all but Jewish visitors to Rachel's tomb and to the Bilal bin Rabah mosque and the adjoining Muslim cemetery.

I was in Bethlehem last month, and it was explained to me what was going to happen. I was shown a map drawn up by the Israeli army. The wall is intended to be constructed in the middle of the main road at the entrance to Bethlehem. It will isolate the whole of the northern part of Bethlehem, inhabited by 4,000 people, representing 15 per cent. of the master plan, including it within separation walls and barbed wire, tightening the ring around it and stripping it off from Bethlehem. Thousands of additional acres of Bethlehem's valuable agriculture land north of the wall will accordingly not be accessible to its owners.

The wall will close the single bottleneck entrance to Bethlehem used by visitors and pilgrims. Tourism constitutes 65 per cent. of the citizens' revenue, and the construction of the wall will choke the town. It will deprive Bethlehem of the sole remaining zone for the town's future expansion. It will close the major historical, traditional and religious entrance of Bethlehem, violating the status quo arrangements abided by for centuries, and deny freedom of movement on the main road as stated in article 7 of the Oslo accords.

The wall will eliminate citizens' movements to and from their own homes and business locations, which will be encircled by walls and barbed wire. It will cut kinship relations and commercial activities between the afflicted area and the rest of the Palestinian territories. It will uproot Roman olive trees and demolish walls. In the closed areas, the wall will prevent essential municipal services, such as electricity, sewerage, water, cleaning, garbage removal and road maintenance. All of this is happening allegedly to increase Israeli security. However, not only will holy sites be desecrated, but Bethlehem's tourist trade and its agriculture, on which the city depends almost entirely for its livelihood, will be destroyed.

Not surprisingly, the wall has caused deep concerns among Christians and Muslims. I contacted the Cardinal Archbishop of Westminster, and received a reply on behalf of the Archbishop of Liverpool, who leads the Bishops' Conference on this issue. Father Frank Turner SJ wrote to me and said that, after discussing the matter with the Archbishop of Liverpool, he was aware of the gravity of the issues that I had raised. He said that
"the Bishops' Conference, and the Church in the Holy Land, fully share your profound concern about this structure and its effects."
He said that the Catholic bishops of several countries will meet their brother bishops of the Holy Land in Bethlehem and Jerusalem in January 2004 when the focus of the meeting will be the social situation of the Palestinian people and the Church's humanitarian efforts to meet their needs by both advocacy and practical support. He sent me a copy of a letter from the Archbishop of Liverpool to the Israeli ambassador, which expressed the Archbishop's
"great concern about the government of Israel's plans for the construction of a wall separating Israel itself from the West Bank."
He continued:
"I do not see how this construction will not have the most serious consequences for the inhabitants of Bethlehem or the Israeli side of this wall."
It is not only non-Israelis who have expressed concern. Only last week, Lieutenant-General Moshe Ya'alon, the Israeli chief of staff, expressed concern about the wall. He said that Israel's policies in the occupied territories were
"operating contrary to our strategic interests".
He also said that the restrictions were increasing hatred of Israel and encouraging terrorism. He went on:
"There is no hope, no expectations for the Palestinians in the Gaza Strip, nor in Bethlehem and Jericho".
As for Bethlehem, the Israeli chief of staff said not that the wall should be built, but that restrictions in Bethlehem—as well as in Jericho, the economy of which is also being ruined—should be lifted. He is not the only leading Israeli who has criticised the situation. A member of the Israeli Government, Yosef Paritzky, the Infrastructure Minister, said a few days ago:
"The failure to differentiate between civilians and terrorists turns all the Palestinians into potential suicide bombers."
What both baffles and appals me is that the history of the Jews is a history of being herded by Russians into a pale of settlement in the Russian territories. From Venice onwards, it is a history of being herded into ghettos, penned in, and treated as inferior to the rest of the citizens of the country. Yet now Israelis are creating hundreds of ghettos for the Palestinians and—as I saw when travelling around for several days—turning Israel into one large ghetto. The wall that is penning Palestinians into their towns and villages is penning Israelis into a ghetto, too.

Nor is that activity in any way increasing Israeli security. I went to Qalqilya and saw the huge wall and the vast gate that is the only way out—except that it was not manned, so that people going to the gate could not get through—and on my way back to Jerusalem I drove past the town of Tulkarem. The very next day, a suicide bomber struck at an Israeli administrative point at Tulkarem. The wall is not even achieving what Israelis claim to be its justification.

We all know that what the Israelis are doing is illegal. There is a growing resistance movement in Israel, as was shown at the wonderful rally of 100,000 people held a few days ago to commemorate the assassination of Yitzhak Rabin, the Israeli Prime Minister, by a fanatical Israeli Jew.

What I am looking for from the Government today is not simply condemnation of the illegal construction of an illegal wall preventing Palestinians from getting to their schools and universities. Let us be clear about this: if young people do not get to school or university, they have a day on their hands and have to find things to do, and can well be prey to people who preach that the way out for them is through terrorist activity.

I do not look to my hon. Friend the Minister simply to restate the Government's admirable position on the building of the wall; I am asking him to give us some idea of what can be done to stop the extension of this abomination—an abomination built to protect not Israelis, but the Israeli illegal settlements that are being constructed like so much jerry-built garbage on practically every hilltop that can be seen in the Palestinian territories. I ask him to say what practical measures the Government can take to stop the Israelis continuing on a path that is not only damaging for the Palestinian people, but deeply damaging for the Israeli people.

3.43 pm

I visited the occupied territories in July with a small delegation of Members, and what I saw appalled me. The so-called security wall was being constructed exclusively within occupied Palestinian territory, in many instances several kilometres within the 1967 border known as the green line, and in one instance entirely encircling the town of Qalqilya, mentioned by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman).

There is reinforced concrete, cement, barbed wire and electrified fences, trenches, electronic surveillance and monitoring equipment, guard towers and security roads. That is not a security wall but an effective prison wall that is encircling Palestinian communities, who are now captives in their own towns and villages. It is also a land-grab, taking anything between 10 and 40 per cent. of Palestinian territory into Israel, and further undermines attempts to create a two-state solution to the conflict. Any attempts by Israel to impose a one-state solution against international law will lead to guaranteed future insecurity for Israel, as it will alienate both the Muslim states in the region and the wider world. The wall is a step in that direction.

I call on my right hon. Friend the Foreign Secretary to make strong representations to Israel to cease the construction of the wall, and to ask the US to make similar representations.

3.44 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs
(Mr. Bill Rammell)

I start by congratulating my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) on raising what is an issue of concern throughout the House. We could have a long debate about whether we are talking about a wall or a fence, but it is clear that although it could be called a fence, a significant proportion of it is a wall, as was described. The effect of that wall or fence is an issue that we should discuss in the House.

Bethlehem has a unique and historical status, and it stands as an example of how Palestinian towns in the west bank will be affected by the building of the structure. Although my right hon. Friend referred to the Government's position, it is worth restating it. My right hon. Friend the Foreign Secretary said in the House of Commons as recently as 14 October that we consider the building of the wall on Palestinian land to be illegal, and we need to underline that point.

We are not alone in holding that view. The United Nations General Assembly and leaders of all the European Union member states at the European Council clarified their opposition to the route of the fence. President Bush and Secretary of State Colin Powell also consider the route of the fence to be a problem and have urged the Israeli Government not to build it on Palestinian land, but along the green line between Israel and the Palestinian territories. There is significant international consensus, and cross-party consensus in the House, on the issue.

I want to make it clear that the Government understand that the Israel Government must take precautionary measures within international law to protect their citizens. That is undoubtedly the duty of all Governments. However, although the wall may give some immediate relief from the relentless series of terrorist attacks inflicted on the state and people of Israel, building the fence on Palestinian territory will inflame tensions in the region and do nothing to solve the crisis. As my hon. Friend the Member for Preston (Mr. Hendrick) said, in common with many other Members, it will give only an illusion of security to the people of Israel in the longer term.

The proponents of the wall claim that it will separate the Israeli people from the Palestinians, and my hon. and right hon. Friends attested to that from their direct experience of the situation. However, on completion of the next section, agreed by the Israeli Cabinet on 1 October, an estimated 79,000 Palestinians will be left to the west of the wall—in other words, on the Israeli side of the barrier. Those people will not be able to enter Israel freely and will have severely limited access to essential services, such as schools and hospitals, in the west bank. A powerful point was made about the situation that will arise if young people cannot go to school and are left to their own devices and the temptations that exist.

I have also been to Qalqilya and seen the wall. I am concerned about the second wall that is being built around Jerusalem, which, according to estimates, will leave 100,000 Palestinians outside but without giving them the same rights as Israelis or other residents of Jerusalem. How long does my hon. Friend think that the right-wing Israeli Government can persist with a policy that makes a mockery of the concept of universal human rights?

I understand the argument, and we have to restate that the wall built on the occupied territories is illegal under international law. We must make that point forcefully to the Israeli Government, and we are taking every opportunity to do so.

I am sure that we all agree that building an apartheid wall will cause misery and economic ruin for thousands of Palestinians. I am pleased that the Government position is very clear: we are opposed to the wall. However, why are the Israeli Government treating the international community with contempt? Rather than stopping Israel building the wall, the United States of America—the only superpower—is giving billions of dollars in grants.

As I said earlier, the United States shares our concern on the issue. It is critical that we keep it engaged on the issue, because only with active US participation can we get the movement necessary to resolve the matter.

To continue, I think that the fence will further damage the already desperate humanitarian and economic situation of the Palestinian people. Already, closures, curfews and demolitions have led to the virtual collapse of the Palestinian economy—60 per cent. of Palestinians now live on less than $2.10 a day. To put it bluntly, the fence is making that situation worse.

It is estimated that more than 100,000 olive and citrus trees have already been destroyed along the route of the wall; that damages a major part of the Palestinian agricultural economy and makes the situation worse. The regulations imposed by the Israeli Government prevent farmers from getting labourers and machinery to their fields. There are also too few access gates in some areas. Where they do exist, as my right hon. Friend the Member for Manchester, Gorton said, they are often not open at the right time of day. On some occasions, they may be shut for days on end.

In addition to limiting the Palestinian people's access to their land, the fence also restricts some Palestinian access to the west bank's water resources. Without ready access to that water, it will become more and more difficult for the Palestinian people to live independently. From a political perspective, the wall also threatens to establish new facts on the ground that will make it ever more difficult to achieve the two-state solution set out in the road map, to which the Israeli Government are committed and which the international community is pushing as strongly as it can.

It is claimed that the wall could be removed when there is a political solution and that the route has no long-term political significance. Yet the estimated $1 billion cost of the wall will be a powerful disincentive to removing it once it is built—that is a strong argument. It will become more and more difficult to remove the settlements that will continue to grow on Palestinian occupied territory behind the wall unless and until the Israeli Government put a freeze on their development—something that we have been calling for strongly.

As my hon. Friend the Member for Bethnal Green and Bow (Ms King) said, the fence being built around east Jerusalem will cause particular problems for the residents there and for those of the surrounding towns, including Bethlehem. As my right hon. Friend the Member for Manchester, Gorton said in opening the debate, the wall around east Jerusalem may separate it from some of the holiest places in the Christian faith.

Will the Minister give an assessment of claims purportedly made by the Israelis that they are only leasing the land and that they are giving adequate compensation for its temporary use?

I simply restate the view that I have already expressed. The building of the wall or the fence on the occupied territories is illegal. That issue needs to be addressed if we are to make progress and get the peaceful solution that we are all calling for.

I have already mentioned the serious negative effect that the fence will have on the Palestinian economy throughout the west bank, but I particularly recognise the concerns expressed by my right hon. Friend the Member for Manchester, Gorton about the effect on the residents of Bethlehem. Bethlehem is likely to encounter greater difficulties in getting its agricultural produce to large markets in Jerusalem. Certainly those residents of Bethlehem employed in Jerusalem will find it more difficult to get to work. That will have an impact on tourism and pilgrimages.

The Minister is generous in giving way, and has been good at giving a detailed account of the effects of the security wall. However, what will the Government do practically to put the right amount of pressure on Israel to stop this atrocity?

I could stand here giving hon. Members chapter and verse and all the fine words in the world. However, we need movement from the parties in the dispute. Yes, we are using the diplomatic mechanisms available to us, to the European Union, and to the American Administration on a regular basis, but to resolve the problem, movement is needed from the Israeli Government on building the wall and on settlement. Similarly, the Palestinian authorities need to take significant action to tackle terrorism. Both sides need to act if the issue is to be resolved, as I shall discuss.

The fence is not being built in a vacuum. As I said earlier, the Government understand the Israeli Government's need to seek security for their citizens. Right-thinking people on both sides of the argument condemn the regular and devastating suicide attacks to which the Israeli people have been subjected. The Government's goal in working with the rest of the international community is a peaceful resolution of the conflict in the middle east, once and for all, which delivers a secure Israel within internationally recognised borders, and a viable Palestinian state.

The achievement of that goal, far more than a wall, fence or barrier, will provide real and long-term security to people in the region. People across the divide seek that objective, and an end to the violence. With commitment and courage, the parties can overcome the difficulties together and realise that vision.

The only long-term, credible way to achieve the objective remains the Quartet's road map. If such a process did not exist, we would have to establish a similar process. It is the only mechanism available, and I urge every Member connected with the debate to put the force of their argument behind it.

The Government's commitment to the road map is on the record and unparalleled; we want the process to be published, and up and running, and we are pressing for it to be implemented.

I fail to understand how the Minister can promote the road map when Israel is clearly flouting it every day and not obeying its conditions. Perhaps the Palestinians are not doing so, but is not the road map being discredited all the time? The Minister has not mentioned the Geneva accord, to which even Yasser Arafat subscribed. Could we not have a fresh look at the issue and start again?

I think that to have a fresh look at the issue and start again would set the peace process back significantly. It is all well and good to stand up and make such a statement in this Chamber, but it does not serve the cause that the hon. Lady rightly advances. If she is asking me whether I have significant anxieties about how the road map is being progressed at the moment. the answer is yes, I acknowledge that that is the case. These are grave times and we need to impress on both sides the need to respect the road map. They have signed up to the process; they must recognise that it is the only way forward and carry out the commitments to which they have already committed themselves. That means significant action by the Palestinian authorities to carry through their commitments to tackle terrorism and security issues within the occupied territories. Similarly, the Israeli Government should recognise that what they are doing in terms of building the fence or the wall in the occupied territories is contrary to international law. That issue needs to be revisited and reconsidered.

I simply do not see another mechanism for making progress apart from the road map. As I said, if such a mechanism did not exist, we would have to invent it. I take the point that since the publication of the road map, the Israeli Government have issued tenders for more than 1,500 housing units, 900 in the past month alone. Israeli action to remove settlement outposts has ground to a halt. There needs to be further action by the Palestinian authorities to further the process to which they have committed themselves.

It was extraordinarily helpful for my right hon. Friend the Member for Manchester, Gorton to raise the issue and allow it to be aired. Hon. Members who have observed the situation on the ground and described in detail some of the problems created by the fence and the wall have made an important contribution to the process. I pay tribute to my right hon. Friend for publicising the issue; I recall the television programme that he undertook last year, which brought some information and clarity to these issues.

It is important that we urge it on both sides that we face a very grave situation. We need to see movement by the Palestinian Authority on security, but at the same time we need the Israeli Government to tackle the issue of the settlements, the wall and the fence. At one level, one might be able to understand where the Israeli Government are coming from, but with regard to the long-term security of the Israeli people, I do not think—


4 pm

Being a parent is probably the most important job in the world, and parents, almost without exception, want to do their best at that job. Although those of us who are parents—like me, the Minister is a parent—recognise that we will never be perfect parents, we all, at the very least, want to be good enough parents. However, many things stand in the way of parents doing the job to the best of their abilities. That is a huge agenda, and we have only a short time, so I shall focus on only one issue that makes it difficult to be a good parent, which is simply the difficulty of finding time to spend with children.

I fully agree with what the Minister said in a debate on work-life balance:
"Strong families help children to flourish, which means that parents need time to spend with their children."—[Official Report, Westminster Hall, 9 March 2000; Vol. 345, c. 231WH.]
That has to be right.

The author of the book entitled "The 60 Minute Father"—I occasionally think of the 60-second father, but then I realise that one has to spend a whole hour—said that children spell love t-i-m-e. In practice, however, growing numbers of parents spend less time with their children than ever before. I was shocked to read about a learning and skills council project in Norfolk that arose from a survey suggesting that the pressures of work meant that fathers spent less than 15 minutes a day with their children. In other words, they might spend more time shaving and cleaning their teeth than playing with their children.

I stress that I am not attacking parents who do not spend time with their children or stigmatising failing parents, but saying that we can do much more to encourage and enable parents. That is why I wanted to hold the debate. It is about Government policy supporting parents. It is about not condemning those who fail to spend time with their children, but helping those who want to spend more time with them, because there is plenty of evidence that parents who do not spend time with their children often have to be away from them; it is not that they want to be away from them. I maintain that there are plenty of things that Governments can do to try to put that right.

First, I shall consider whether it is true that parents spend less time with their children. One senses that anecdotally, but is there evidence for it? Is it a free choice? Are parents saying, "That is what we have decided. That is our priority, and the Government should not get involved"? If it is not a free choice and parents are, perhaps to some extent against their will, spending less time with their children, does that matter? Are there consequences? Are there respects in which Government policy in a raft of areas may exacerbate the problem, often as an unintended by-product of well-intentioned policies? What might be done? That is a long agenda for a short debate, but I shall try to scratch the surface of it.

As I said, my first question is whether parents are spending less time with their children. The clear answer is yes. Just in the last decade, over the 1990s, the proportion of working mothers with children under five increased by about a quarter, from 43 per cent. to 54 per cent. Again, I stress that I am not attacking working mums, dads who do not spend time with their children or single parents. I am simply asking what is happening to the time that we spend with our children. What are the pressures causing this situation and can we do anything about it? Parents with young children, including mothers with young children, are more likely to be in work.

There is not only the issue of work as we traditionally understand it, but what is known as atypical work. I will draw on some statistics from work by Ivana La Valle, commissioned by the Joseph Rowntree Foundation, with which I am sure the Minister is familiar, on atypical work done by parents. It is work that is done outside the typical working day of 8.30 am to 5.30 pm. The evidence is that half of mothers and four fifths of fathers sometimes work atypical hours—those are huge numbers. Parents are having to work when the children are not at school but at home, in the evening and on the weekend. A quarter of mothers and a third of fathers work one or more Sundays a month. As I examined the figures I was shocked at the scale of what Ivana La Valle says is increasingly not atypical but the norm.

People are not working only on evenings or weekends, but they are working long hours. Almost a third of fathers, and 6 per cent. of mothers regularly work more than the 48-hour limit set in the working time directive, although that is not an absolute ceiling. Those proportions are higher among the self-employed, who tend to be more driven and are trying to make ends meet. A high proportion of parents are working long hours.

A survey last month by the Chartered Institute of Personnel and Development found that between 1998 and now, the proportion of those in work doing 48 hours or more had risen from one in 10 to one in four. When I first saw that figure I asked for it to be checked because I did not believe it. Those trends are no longer atypical; one in four works more than 48 hours a week. The press release from the institute included the comment that
"the Government's campaign on work-life balance has had little or no effect to date."
That conclusion was based on trends, some of them recent.

There is clear evidence that parents are working longer hours, on weekends and evenings, and that parents with young children are more likely to be at work. Those are the trends. Is that of their free choice? Are parents choosing to do that and should we therefore poke our noses out? The evidence is that parents would not choose that for themselves. Of those who frequently work atypical hours, a quarter of mothers with a husband or partner and a third of lone mothers said that they were dissatisfied with the time that they could spend with their children. In cases where both partners worked atypical hours, two fifths of them said that they were dissatisfied with the time spent with each other. The research has shown us that the welfare of children is greatly enhanced by a healthy relationship between the parents. That is not rocket science. If they do not see each other, it is hard to build a meaningful relationship. Although parenting is the subject on today's agenda, part of Government policy should be to encourage strong relationships between parents as well as between parents and children.

The survey showed that half of working mothers in two-earner couples—the combination of full-time and part-time two-earner couples is now the norm—would prefer to stop work and be at home with their children if they could afford to do so. People are driven by a range of factors, of which financial pressure is a strong influence, into spending less time with their children. According to Professor Shirley Dex, who studied a range of the research, "many mothers' preferences" to spend time with their children
"run counter to the direction Government policy is trying to encourage, since they would prefer to work less rather than more while their children are young".
There is a raft of surveys and reams of statistics that hack up the view that many parents want to spend more time with their children. Seventy five per cent. of mothers-to-be surveyed by Pregnancy & Birth said that they would not return to employment if finances allowed. The fact that parents spend less time with their children is often not through choice but is forced on them.

As well as going out to work when children are young, working at weekends, especially Sundays, was
"the most unpopular working arrangement among parents".
Is this choice? Are people choosing to work at weekends because it suits them? No, often they do not want to do it, but parents in lower socio-economic groups and in low-status jobs do not have the negotiating power with an employer to refuse to work at weekends. The bargaining power of such parents is often very weak. They often feel that they have no choice but to work at atypical times.

The hon. Gentleman is known as an innovative and creative thinker. He has not disappointed us today by choosing this important subject. I ask him to consider that inadequate parenting skills often lead to antisocial behaviour. Social behaviour and its development are tied inextricably to better parenting. I hope that he will join me in urging the new Minister for Children, whom we welcome here today, to redouble her efforts to ensure that we invest in parenting skills so that we can improve social behaviour and reduce antisocial behaviour.

I am grateful to the hon. Gentleman for that intervention. Although his eyesight is probably not that good, he leads me naturally to the theme that I was about to take up in my notes, which is the consequences of lack of parental contact with children on children's behaviour. So often in the House of Commons we pick up the pieces where things have gone wrong. Investment in encouraging and helping parents would yield rewards in children's behaviour, welfare and education, which, as the Minister said, is a win-win agenda.

Does the lack of parental contact produce adverse outcomes? Many of us will have heard the startling comments of the head of Ofsted, who said that
"if you talk to a lot of primary head teachers, as I do, they will say that youngsters appear less well prepared for school than have ever been before. For many young people school is the most stable part of what can be quite disrupted and dishevelled lives."
That struck a chord with me. When I have visited schools in my constituency, heads have told me how children arrive at school lacking social skills and appearing in some cases to have been neglected. Their parents have not given them time, listened to them, talked to them or played with them. Schools have to pick up the pieces.

The head of Ofsted said:
"There is evidence that children's verbal skills are lacking. We should encourage parents to talk to their children and give them a whole range of stimulating things to do and not just assume that the television … will do all that for them."

I am grateful to the hon. Gentleman for bringing this matter to the fore. Would one way to get parents better educated be through the voluntary sector rather than the Government? There are organisations such as the community family trusts, for example.

I support the work of the network of community family trusts that are being set up throughout the country. They have sometimes struggled for funding. They were dealing with the Lord Chancellor's Department in the past. I hope that the Minister will clarify that for me, because I am slightly hazy about where the area of relationship education and support for couples now falls within Government. I see that the Minister points to herself. I am pleased that we have the right person with us.

Returning to the theme of lack of parental contact and the consequences, in 1997 Feinstein and Symons, researchers at the London School of Economics, found some astonishing results about educational outcomes in secondary school. One might assume that outcomes depend on how bright one's parents were or how posh an area one grew up in, but they said that the critical factor was parental involvement. Academics do not often say things as clear as this, and as a former academic I can say that this is strong stuff. They say:
"Variables indicating parental interest in the education of their children generally drive out the family background indicators of social class, family size and parental education."
The thing that matters is whether the parents are involved. That is an astonishing and powerful result.

Research shows that long working hours, particularly Sunday working, disrupt family life. I was astonished to see that the Department of Health has commissioned the National Institute for Clinical Excellence and the Social Care Institute for Excellence to carry out an appraisal. Parenting courses will be appraised in the same way as drugs. They will appraise parent-training programmes to tackle conduct disorder of the sort described by the hon. Member for Taunton (Mr. Flook). The scope of the appraisal is set out in a document, which states:
"Associated factors for conduct disorders include: homelessness, overcrowding, maternal depression, paternal criminality, violence and abuse. Aspects of parenting have also been associated with conduct disorders and include: poor supervision … and low parental involvement in the child's activities."

Is not one of the problems that as soon as we talk about parenting courses or skills, we tend to think as parents that we have it right and that such matters are someone else's problem? However, as the hon. Gentleman knows, as youngish parents we know only too well the difficulties that are involved. I have not been taught how to parent. I have learned from a wife who has a professional job and child development skills that I would never have thought of. Perhaps we must work out a way in which to overcome the stigma of parenting courses and lead the way as Members of Parliament, given the atypical working hours that we work for a start.

Having met the hon. Gentleman's children, I know that he is an excellent parent. I accept that we must make sure that we are not talking about a marginal stigmatised provision for people when things go horribly wrong. Accepting that parenting is difficult and that we all need some help should be a natural approach. I apologise for going on a bit, but the fact that several hon. Members have said that they are interested in the subject shows that we are scratching at something that crosses the party divide. I hope that the Minister will be involved in such an agenda and take it on across the Government.

At the risk of wrecking the chance of such action, I must ask whether the Government's policy is making matters worse. Much policy is drafted with the best of intentions, but the spin-offs are quite worrying. The Government often talk positively about the 24/7 society, urban renaissance, the evening economy, making cities nice places to visit, and having places to visit other than pubs in the evening. However, who will staff such places? Who will work the late-night shifts? The Government talk a lot about flexible working, too, but people have to work in such places, and often they are on low incomes. They do not have a strong negotiating position and work in the service industries, such as McDonald's. They do not have the power to say that they will not work evenings or weekends. I worry about the 24-hour society and the Government's sometimes positive rhetoric about it, and what it means for family life.

Recently, the Secretary of State for Trade and Industry said that, on reflection, perhaps the Government's rhetoric about work was wrong. She said:
"If I look back over the last 6 years … we have given the impression that we think all mothers should be out to work, preferably full time as soon as their children are a few months old … We have got to move to a position where as a society … we recognise and we value the unpaid work that people do within their families."
That is right. Five or six years ago, I was saying much the same thing, but the Government were saying, "No. Work for those who can. Security for those who can't", by which they meant paid work. The rhetoric has been wrong, and there is a beginning of a realisation of that, but much more needs to be done. The Government still have goals for 70 per cent. of lone parents to be in work. No one will say that it is wrong for a lone parent to work, but is it right for the Government to set an arbitrary target for lone parents, rather than to say to them, "You judge what is in the welfare interests of yourself and your child, and we will support you; we will give you choices"?

If I have a core message, it is about choices. It is about parents who often want to spend time with their children not having free choices because financial necessity and lack of employment status put pressure on them to work when they do not want to. What can be done? There is a huge agenda, but I wish to flag up a couple of matters. I hope that the Minister will talk to her colleagues in the Office of the Deputy Prime Minister about the 24-hour society and the agenda that that Department is pursuing. What does it mean for families? Will she talk to the Department for Work and Pensions about the poor pension rights of part-time workers? Even now, women—especially women—who try to spend time with their children and who earn less than the lower earnings limit, perhaps in two separate part-time jobs that both pay less than the lower earnings limit, do not build up pension rights. What signal does that send out?

Will the Minister talk to the Department for Work and Pensions? Will she talk within the Department for Education and Skills about women, in particular, and parents who are forced to work weekends, when no child care is available and when the children are left in situations that are not ideal for their welfare? Is it right that women and mothers suffer lack of employment rights in such circumstances? Will she talk to the Department of Trade and Industry about the need for employment rights and the need for parents to say no to being forced to work at weekends? Will she examine the working time directive to see whether it is stopping some of the long-hour working as effectively as possible? Will she essentially never sleep? I shall allow her to spend time with her children.

Will the right hon. Lady say to every colleague in the Government, "When you bring in a Bill in the next Queen's Speech, will you report to me and tell me what it will do for parents? Tell me whether it will mean that parents can spend more time with their children—which many of them want to—rather than less."

The House supports the Minister. We are glad that her reach extends beyond her own Department, and we urge her to talk to as many of her colleagues as she can, and to recognise that if we can get this right so many of the other problems that the Government are trying to tackle might mysteriously disappear.

4.19 pm

I congratulate the hon. Member for Northavon (Mr. Webb) on securing this important debate. We have only a bare half an hour to discuss the matter, but other hon. Members might seek to ignite the debate in another forum.

I reassure the hon. Gentleman that the Government's commitment to support parenting and families is a central part of our vision. Parenting is not probably the most important job that we do on this earth; it is the most important, and the most rewarding and difficult. I agree with my hon. Friend the Member for Loughborough (Mr. Reed) that we are too often ill prepared to do it.

I hope that the hon. Member for Northavon accepts that the Government's commitment to parenting and families is underlined by the creation of the post that I currently have the privilege to hold. With the machinery of Government changes, we are trying to bring together in one place responsibility for all the policy and services for children, parents and families, so that we can respond more easily to their needs and make it easier for individuals and organisations to do business with us.

Much has come together under the remit of my Department—the Department for Education and Skills—but there are still boundaries in Government. We must make sure that they do not become barriers. We must work together throughout Government. That is central to many of my concerns, and to the way in which I have been working—the hon. Gentleman will be pleased to hear that I have very regular meetings with Ministers from other Departments.

I am conscious of the shortage of time, so I will try to respond to some of the issues that the hon. Gentleman raised. He said that parents are spending less time with their children. If we look at the history of parenting, it may be that in the past the tradition was for the woman to be in the home for longer, but it is questionable whether she spent more time in the home focused on the children than she does now.

I would not make the easy assertion, which the hon. Gentleman talked about, that more time means better quality of parenting. One of the changes that I have seen in my adult life is that fathers are now much more readily engaged in parenting. My oldest child is now in his early 30s: when I used to pick him up at the school gates, it was rare to see a dad there, but that is no longer atypical. I often visit parents and toddlers groups in my present role, and it is apparent that fathers are much more strongly engaged in the parenting of their children than they used to be. Both parents matter, and that equality of engagement is a change for the better.

Things have not become worse. What has happened is that more women are in the workplace. Is that a good or a bad thing? Do we give parents a choice? Choice underpins our policy. It underpinned it before my right hon. Friend the Minister for Women and Equality made the statement that she made, but it helped to underline what has been a consistent policy throughout the term of the Government.

We are attempting to provide choice. The amount of choice that parents have is influenced by whether they have trust in the quality and safety of the child care that is available to them. That is why we are proud of being the first Government to launch a national child care strategy, of the progress we have made in that, and of introducing free early years education for children aged three and four.

I often meet lone parents who have been helped back into the workplace by our welfare to work programme. That often works for the most disadvantaged parents: it is a terrific route out of poverty, because of the income that they get from it, and we help them with their child care costs through the child care tax credits system; it is also terrific because of the confidence and self-esteem that they gain from fulfilling a role in both the home and the workplace. When parents, particularly lone parents, have that confidence and self-esteem, they make better parents, and I have received some very warming letters from children about their mums going back to work. There is no right or wrong answer. There must be choice, as the answer depends on the individual circumstances. However, for many lone parents, work is a route back to self-esteem, confidence and better parenting, and out of poverty.

I have only five minutes to respond, and I want to talk about atypical hours. From talking to families and parents, I have found that women in work want their supermarket open and to be able to access their health service, GP or dentist at atypical hours. They also want to be able to talk to their children's teachers and school staff at atypical hours, so we are moving into a different world. Many parents who work atypical hours do so out of choice, because in two-parent households it often fits in well with parents' lifestyles and how they care for their children. They also want to enjoy the additional wealth that it brings. We should not see atypical hours working as a retrograde step; it can be positive for many people.

I agree with some of the points made about the long-working-hours culture, but statistics show that it is higher-level, better-off men who tend to work the longest hours and are more disengaged from their families, children and partners than those in lower income families. That is a terrible part of British culture, which we have taken from America more than Europe, and we should try to encourage greater engagement in the home.

I have spoken a lot to my hon. Friend the Member for Nottingham, North (Mr. Allen) about the importance of parenting skills, which was raised by both him and my hon. Friend the Member for Loughborough. Some research in my Department mirrors what was referred to. It demonstrates that good parenting in the home is more important for the child's outcome than the best teacher in the most excellent school. Armed with that knowledge, we need to do all that we can to support parents in developing their skills, and although I recognise that we have a long way to go, I am proud of what we have done so far. There is our sure start programme and its work on parenting, and we give support to voluntary projects such as home-start throughout the country. We want to spread that to make it a more universal service, as is detailed in our Green Paper "Every Child Matters". Those are important early interventions.

Parenting classes can also be appropriate, but I worry a lot about transition. As new mothers come home from hospital, and as children move from home to nursery, primary and then secondary school, support for parents is important, and we are trying to focus our energy on those transition stages. Our Green Paper includes many propositions to extend services, for example with a parenting phone line not dissimilar to NHS Direct that parents could ring up during a crisis with their three-year-old or 15-year-old to seek some support. We are taking many different steps.

The hon. Member for Northavon talked about choice, and that is what we are about. We are trying to provide an infrastructure that gives parents both choice and the opportunity to engage. Choices are often different if the children are under five, and we have done much to support people who stay at home as long as possible with our reforms of maternity pay and benefits. We could perhaps do more, but we have taken the agenda further. Choice is important, as is joint working throughout Government, and I assure the hon. Gentleman that I am firmly engaged in that.

We must ensure that high-quality child care supports good parenting in the home to give children the maximum opportunity to develop their potential and ensures that no child falls through the net. I congratulate the hon. Gentleman on having successfully secured this short debate.

Question put and agreed to.

Adjourned accordingly at half-past Four o'clock.