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Commons Chamber

Volume 448: debated on Thursday 13 July 2006

House of Commons

Thursday 13 July 2006

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Lisbon Agenda

Britain is at or near the best for employment and enterprise. The report on science that we are publishing today shows the progress that we are making on research and development. Europe accounts for 50 per cent. of British imports and exports. To speed up the pace of economic reform across Europe, we are proposing that Governments and business join together in a Europe-wide business forum.

My right hon. Friend presides over one of the most dynamic economies in the world, with record levels of foreign direct investment, according to the United Nations, and massive levels of employment, according to the G7 nations. In an age of globalisation and cut-throat competition, what is he doing to ensure that our European Union partners go the same way as we have?

I am grateful to my hon. Friend, who has taken a broad interest in these matters. He is absolutely right about our economic performance, given that the shadow Chancellor has congratulated us on establishing economic credibility and on our success in macro-economic policy. On employment, despite the recent difficulties, the claimant count in Britain is 3 per cent. and the labour force survey figure is 5 per cent. Our unemployment rate is about half that of the mainland European economies. I believe that we can continue to expand, even in a situation of massive global competition. Our aim is full employment for this country, and I hope that all parties will subscribe to that.

Will the Chancellor try to speed up progress on the famous Lisbon agenda, particularly deregulation, given that under his stewardship the Scottish economy has grown at only one quarter of the pace of the Irish economy? Can he learn from the Irish economy, which gets less in subsidy from the EU than Scotland gets from England?

I can only tell the right hon. Gentleman what he said in his own report on the British economy:

“What are the most attractive locations today?…The lure of the USA…Of China…Of India…Of the UK”.

We have that allure for investors because we have a low-tax economy, stability, and an open competition policy. When the right hon. Gentleman chairs the Conservative party review on these matters, perhaps he can sort out its policy on Europe, which is in complete disarray according to the e-mails of the Leader of the Opposition’s Parliamentary Private Secretary. Perhaps he can also say that our economic record has brought stability, whereas under the Government in which he served there was instability.

Does the Chancellor intend to continue working with colleagues across Europe to promote employment and stability under the Lisbon agenda, or does he have any plans to isolate us from Europe and common sense by joining up with neo-fascists, weirdos and maniacs from all over the place?

My hon. Friend is right. It was Conservative Members who talked about the cranks, fanatics and extremists that they might have to join if they were part of the opposite grouping to the European People’s party. The choice is between a pro-European and pro-business agenda and an anti-European and anti-business agenda. The tragedy is that the Conservatives are not only anti-European, but are about doing what is damaging to business. If they will not believe what I have said, perhaps the Swayne e-mails—

Is not the Chancellor becoming a little concerned that Britain’s good performance in employment and unemployment is being undermined by the fact that unemployment has risen for 15 of the past 16 months and is at its highest point for six years? Does he have any specific initiative to make in respect of Britain’s mortgage lenders, given that unemployment is translating into rapidly rising repossessions because of the absence of any system of safety nets for people in mortgage arrears?

It is difficult to take lectures from the Liberals when they have just published their tax and spending plans, which show a £20 billion spending hole that would lead to damage to the economy. As for employment, I would have thought that he would give us a balanced account. We have one of the lowest unemployment rates in Europe. At the same time, we have moved closer and faster to full employment under this Government than under any Government for 50 years.

On interest rates, while I recognise that house prices have risen, the hon. Gentleman should recognise that interest rates are among the lowest that they have ever been. In fact, for mortgage holders, interest rates have averaged half under the Labour Government of what they were under the Conservative Government. It is perhaps about time that the Liberals acknowledged that.

The Chancellor will agree that the Lisbon agenda must be founded on the rock of economic stability. The Treasury Committee’s report, “Globalisation: the role of the IMF” suggests that there is significant risk to the UK in Europe if there are global imbalances and disorderly unwinding in the global community. Given that, will my right hon. Friend ensure that when he goes to Singapore in September, he will promote crisis prevention rather than crisis resolution so that economic stability is best served in the UK, Europe and the global community?

I am grateful to my right hon. Friend. The report is an important document, which points to the changing role of the IMF and, indeed, other international institutions. The emphasis must now be on crisis prevention rather than crisis resolution, the transparency that is necessary for countries to report what is happening in their fiscal and monetary policies and, therefore, for programmes of proper surveillance, whereby we can examine at first hand what is happening not only to countries’ fiscal and monetary but their corporate positions. That is why the proposal for extending article IV reports to cover those issues, and for an international form of surveillance as well as national reports, is important. I applaud the report. Perhaps we should also have surveillance of Opposition parties’ proposals.

The Labour Member on the European convention, the hon. Member for Birmingham, Edgbaston (Ms Stuart), said recently that economic policy throughout Europe is moving backwards. She singled out one country for special criticism—Britain. She said:

“The seeds of future stagnation have been sown. We have excessive public spending, rising taxes and excessive micro-management.”

I know that the Chancellor is keen to get on with the parliamentary Labour party at the moment. What does he have to say to his hon. Friend?

I just repeat what the hon. Gentleman says outside the House but not in it. He supported us and congratulated us on our successful macro-economic policy. [Interruption.] What is the country to make of a shadow Chancellor who, inside the House, criticises us for our economic policy but outside, when talking to business, to try to show that he has learned from his mistakes under a previous Conservative Government, refers to

“Labour’s success on macroeconomic policy”

and says that Labour has been successful in “establishing economic credibility.” He also said:

“Labour have improved the macro-economic management of the UK economy.”

If he is not prepared to say those things in the House but says them outside, the country will have to draw its own conclusions.

As for European issues, perhaps he should read the e-mails of the Leader of the Opposition’s parliamentary private secretary. [Hon. Members: “Oh!] Oh yes—they are precisely about the Conservative party’s European policy, which, according to the e-mails, is the subject of dismay, depression, “frustration and impotence.”

Before the Chancellor talks about friends in Europe, he should read the comments of the President of the European Commission, who says that, every time the Chancellor turns up in Brussels, it is like a vegetarian visiting a beef eaters’ club.

If the Chancellor does not agree with the hon. Member for Birmingham, Edgbaston, perhaps he will agree with the Prime Minister’s former chief economic adviser, who wrote recently in the Financial Times that

“higher taxes and intrusive micro-management are gradually taking their toll.”

Or perhaps the right hon. Gentleman is simply no longer interested in the mundane issues of the economy because his whole attitude is, as the right hon. Member for Birmingham, Ladywood (Clare Short) put it recently, “Please, please, let me take over. I’ll do anything you say.”

I can only quote back his own words to the shadow Chancellor and cite what has happened in his constituency, where unemployment has fallen by 54 per cent. under a Labour Government. Only a few days ago, he said:

“I worked for John Major when we lost the 1997 election, was William Hague’s political adviser when we lost the election after that. That doesn’t say much for the quality of my advice.”

Does my right hon. Friend agree that the Lisbon agenda is about real issues such as inflation, employment and getting money for public services? Will he scour the agenda next time to see whether it has any references to saying no to chocolate oranges and padded bras, or hugging a hoodie selling dodgy goods? I do not think that he will find them because they are all part of the Tories’ agenda.

The issue is whether one believes in stunts or substance in policy. The substance in policy is the lowest unemployment for 30 years, the lowest interest rates for 40 years and the lowest inflation rate in a generation. No Conservative Government have been able to boast of such a record. The shadow Chancellor would do better to go back to the drawing board with the right hon. Member for Wokingham (Mr. Redwood) and examine the Conservatives’ economic policy.

G8 Summit

2. What progress he expects to be made at the forthcoming G8 meeting in St. Petersburg towards agreement on education provision for every child; and if he will make a statement. (84763)

We call on all G8 and other countries to join us, and the fast-track initiative of the World Bank, in 10-year plans to expand education so that, instead of the situation today in which 100 million children are denied schooling, all children throughout the world will have the right to education.

I thank my right hon. Friend for that answer. Yesterday, 10 children from St. Joseph’s primary school, in my constituency, met the Prime Minister and pressed him on this very issue. One read a poem, which included the following words:

“Education is the key,

Look how it’s helped you and me,

Help them to feel safe and secure,

Knowledge unlocks the door for the poor.”

How can my right hon. Friend help to ensure that those children’s words and efforts are not in vain, especially if other countries renege on their commitments?

I am grateful to my hon. Friend. He has led a campaign in his constituency, and I hope that there are many Members in all parts of the House who are able work with schoolchildren and teachers in their constituencies, so that the “education for all” initiative gains support throughout the country, and schools in Britain can link up with schools in Africa. Two thirds of the 100 million children who do not receive education are girls. Many are at school, but the pupil:teacher ratios are anything from 100:1 to 150:1. Britain has set aside £8.5 billion over the next 10 years—the Secretary of State for International Development will make a statement later today on future plans—so that we can lead the way in providing education for all. That is the most cost-effective and beneficial investment that the world could ever make, and I hope that all Members can join together to support it.

This is clearly an ambitious and bold project that we Liberal Democrats would wish to support, but it will clearly also be very expensive. In light of that, and of the views of the Office of Government Commerce, will the Chancellor of the Exchequer consider redirecting the savings made by not proceeding with the identity card scheme into this area?

One of the benefits of running a successful economy, which the Liberal party might not understand, is that it is possible to spend money on both international development and domestic policy. We have proved over the past nine years that it is possible to expand public expenditure on policing and the Home Office, education and health and social services generally, and still to double the amount of money in real terms going into international development. I hope that the Liberal party will review its own spending plans, so that it can prove to the public that it, too, could be trusted with the spending of money.

Would my right hon. Friend care to develop his thinking on the education for all programmes and the strategies of African countries, particularly in view of the need for them to be fully funded and consistent with paragraph 18(a) of the Gleneagles communiqué?

I am not—I do not have it to hand—aware of what the (a) part of paragraph 18 says, but the whole House will thank my right hon. Friend for his work on the International Development (Reporting and Transparency) Bill, which will require the Government to report regularly to Parliament on the successes in, and the challenges of, meeting the international development aid targets. His work has been welcomed by all non-governmental organisations and pressure groups not only in this country, but around the world.

Yes, we will keep to the Gleneagles agreement on these issues, and at the same time we will continue to expand spending not only on education, but on health. The vaccination initiative introduced in the past few months, providing £5 billion extra for vaccination, will ensure that over the next 20 years millions of children will be able to survive, where previously they would have died. This initiative involves both education and health, and we are showing that this Government are properly funding it.

For education programmes to be worth while, we also need a decent environment for children. Can the Chancellor explain why he was unable to address the G8-plus-five legislators’ dialogue last weekend, which was very disappointed not to hear from him? Can he also tell us of any progress that has been made with the climate change fund, which he announced with many headlines at the time of World Bank’s spring meetings in Washington?

I am glad that the hon. Gentleman agrees about the need for action on climate change, and I hope that he will support not only our UK climate change levy but our public investment programme, so that the World Bank will set up, as he knows, a fund providing loans and grants to enable developing countries to move into alternative sources of energy and to make more efficient use of existing energy.

If media reports are to be believed—not always the case—Vladimir Putin was successful in keeping Africa off the core agenda of the G8 meeting in his country at St. Petersburg. Can the Chancellor reassure the House that education has the greatest potential to transform the lives of people on the continent of Africa? Will he try to ensure that the subject of education provides a means of broadening the debate so that Africa is not forgotten? It played a central part in Gleneagles, but it seems to be less central in St. Petersburg this week.

I suspect that middle east issues will form a big part of the G8 agenda in St. Petersburg, but I can assure my hon. Friend that African issues will be discussed. I can also assure him that the Germany presidency of the G8 next year fully intends to make development a central part of what it does. The IMF and World Bank meetings in September are focusing heavily on issues of development and providing finance for it. There is also a UN reform commission that is looking into how the UN can play a far more effective role in development in future. Far from those issues being off the agenda after Gleneagles, they are definitively on the agenda, and I believe that the public action by non-governmental organisations, Churches and faith groups, which have kept it on the agenda over the past year, will also keep it on the agenda in future years. I hope that MPs on both sides of the House can join Churches and faith groups in making sure that in every country there is a full knowledge of our responsibilities to the developing countries.

At the forthcoming meeting, will the Chancellor urge his G8 colleagues to live up to their promises on programmes for dealing with HIV/AIDS, particularly programmes relating to children? Will he take steps to ensure that UK Government programmes that are administered multilaterally alongside G8 partners or the EU give HIV/AIDS a much higher priority than they have in the past?

I will not be attending the meeting at St. Petersburg on Saturday, but I was at the meeting of Finance Ministers there only a few days ago. What was decided there was that we would push the development agenda forward. We discussed health issues and promised that HIV/AIDS sufferers would get some form of treatment and help by 2010. We know that 25 million people have died as a result of AIDS, we know that there are 12 million AIDS orphans and we know what our responsibilities are. Instead of promoting what I believe are divisive ideas about education vouchers, I wish the Conservative party would unite around the necessary funding that should go through Governments and civil society to deal with problems of health and education.

Tax Credits

I made a statement to the House on Tuesday on the operation of tax credits. Her Majesty’s Revenue and Customs published on its website its estimates of error and fraud for tax credits relating to 2003-04.

I am grateful for that reply, but it is a shame that it did not come from the Chancellor, who has not answered an oral question on tax credits for 791 days. One cause of the extraordinary level of fraud and error in tax credits—now the worst in the welfare system—was payments made to people subject to immigration controls. Why were the verification procedures that would have prevented such mistakes, specifically rule 12, suspended for 18 months from April 2003? Did the Paymaster General approve that decision?

I can tell the hon. Gentleman that at no point were officials instructed to overlook irregularities where claimants had failed the UK residential rule. I also say to the hon. Gentleman that I am the Minister for the Department, I am accountable to the House and I accept responsibility for what happens in the Department.

Tax credits are the Chancellor’s flagship scheme, but the level of fraud and error reported to the House earlier this week is running at nearly £2 billion for just one year. Does that not add the Treasury to the growing list of Government Departments, such as the Department for Environment, Food and Rural Affairs and the Home Office, that are not fit for purpose? How can the Treasury hope to control the rest of Whitehall when it cannot even run its own schemes properly?

If the right hon. Gentleman looks at the figures for 2005-06, as reported to the House, he will see that the Department stopped the overwhelming number of attempts to defraud it, thus demonstrating clearly that the anti-fraud measures are working. But of course he is right, and it is true for any Department that fraud must be tackled and reduced and that claimant error must also be tackled, by ensuring that claimants have clearer information and a clear understanding of their responsibilities and that the Department responds accurately and in a timely way to those submissions.

May I ask my right hon. Friend to focus on the outcome of the tax credits system, which in my constituency is providing new chances for single parents to work and therefore look after their own families, giving new opportunities to people who did not have them before and tackling child poverty, which was an absolute scourge when the Labour party came to power?

My hon. Friend works very hard in her constituency to ensure that her constituents receive all their entitlements, including tax credits, and she will know that the take-up of tax credits in their first year of operation, particularly for lower income families, was about 93 per cent., so we now have 10 million children—6 million families—benefiting. Tax credits have made a huge contribution in helping people to return to work, in paying for child care and, most importantly, in eradicating child poverty and lifting children out of poverty. That is the situation that needs to be tackled, because child poverty doubled under the previous Government, and the difference between the Labour party and the Conservative party is that we are dedicated to eradicating child poverty; they do not even want to understand it.

Is the Paymaster General aware that, only five weeks ago, the Treasury Sub-Committee—chaired so well by the hon. Member for Sevenoaks (Mr. Fallon), who is sitting on the Opposition Benches—found that the policy of using tax credits as a method of taking people out of poverty was laudable and that the programme had considerable success? Encouraged by such all-party support, will she assure us that she will continue her efforts to help the poorest people in our communities?

My hon. Friend is right to refer to the Treasury Sub-Committee report, which I welcomed when it was presented to the House, because it made it absolutely clear that both the Sub-Committee and the overwhelming number of people who gave evidence to it said that tax credits had widespread support, that they made an important contribution to tackling child poverty, and that they should be supported.

We have learned that, in 2003-04, nearly £1 in every £10 paid in tax credits was paid either in error or because of fraud. Specifically with regard to fraud, does the Paymaster General believe that that figure will fall as a proportion of tax credits paid, and if not, why not?

If the hon. Gentleman looks at the figures for 2003-04, he will see that they are divided between claimant error and fraud, which amounts to £70 million. As I explained to the House earlier in the week, the difference between error and fraud is that the investigating officer must be certain that there was an attempt to defraud, as opposed to a genuine error. The hon. Gentleman is quite right to suggest that strategies need to be developed—they have been announced to the House—to ensure that claimant error is reduced, that the information given to the Department is correct, and that officials act on it speedily and correctly. I have already answered the question on fraud in response to the right hon. Member for Wells (Mr. Heathcoat-Amory), by pointing out that the strategies in place in the Department are ensuring that the majority of fraud attempts made against it are not succeeding.

Does the Paymaster General agree that tax credits have been absolutely central in helping to reduce the tax burden on low-to-middle income families and that Opposition Members should welcome that?

One would expect both the Opposition parties to welcome tax credits on the basis that, according to the latest figures from the Organisation for Economic Co-operation and Development, the tax paid by an average family on £21,000 a year has gone down from between 18 and 19 per cent. to 9 per cent. That has to be welcomed. In addition, the number of families paying no tax on their income has risen since 1997 from fewer than 2.5 million to more than 3 million, when tax credits and benefit reform are taken together. One would have thought that the Opposition parties would welcome this, but they do not, because they do not want to tackle poverty. That is the dividing line between us. They decry the experience of poverty but, unlike this party, they will do nothing to eradicate it.

The Paymaster General is making a spirited attempt to defend the indefensible, but the real culprit is not the Paymaster General—I will pay her that compliment—but the Chancellor. He invented the system, which is riddled with error and fraud. The Treasury itself concedes that nearly half of all payments are wrong. Week after week, the Chancellor answers questions about world poverty, which is not his responsibility, but he will not answer questions about tax credits, which are. Will he now get to his feet, come to the Dispatch Box and take responsibility for this mess, instead of using the Paymaster General as a human shield?

I fear that the hon. Gentleman has made a terrible mistake here. He has just described tax credits as “indefensible”. What is indefensible is his party’s record of doubling child poverty. When he reflects on his contribution in the Chamber today, he will deeply regret the fact that, for the first time, he has made it abundantly clear that the Conservatives are not prepared to defend tax credits. They do not support them because they are not prepared to tackle child poverty.

Cocaine Smuggling

6. How many drugs liaison officers within Her Majesty’s Revenue and Customs are employed in tackling cocaine smuggling. (84767)

From April this year, the Serious Organised Crime Agency—SOCA—took over responsibility for the network of overseas drugs liaison officers. Her Majesty’s Revenue and Customs retains responsibility for anti-smuggling controls at the UK borders, and continues to seize drugs as part of its frontier work.

Unlike drugs such as heroin, cocaine is incredibly price-sensitive. Can the Minister give us an assurance that the expertise that has been built up in Customs and Excise will be made fully available to SOCA to ensure that the unsung successes in intercepting cocaine that have taken place in areas such as the Caribbean, giving great value for money, are not only continued but expanded by the Government?

I pay tribute to my hon. Friend’s work in the House, his constituency and elsewhere on the serious menace that drugs cause in our communities. I can give him the assurance that he seeks. When SOCA was set up, more than 1,100 drugs officers and their expertise were transferred from HMRC, and they now play an integral part in the work that SOCA is undertaking. I can also assure him that HMRC and SOCA continue to work closely together, including at the frontiers, so that we can continue to play a part in the battle against drugs.

A very high proportion of the 8,000 foreign prisoners in British jails are drug smugglers from Jamaica and other Caribbean countries. Will the Minister liaise with the Home Secretary to ensure that those people are sent back to secure detention in their own countries, thus saving the British taxpayer a small fortune?

The hon. Gentleman refers to a groundbreaking, innovative and highly effective programme called Operation Airbridge. This involved UK Customs and Excise—later HMRC—linking up with the Jamaican constabulary to prevent would-be cocaine smugglers and swallowers from getting on to the planes in the first place. That operation has resulted in an increase in the number of smugglers being intercepted in Jamaica, a reduction in the number of seizures and smugglers from the Caribbean being intercepted here, and a consequent reduction in the number of smugglers from those parts of the world having to be dealt with by our criminal justice system.

Until April there were two drug liaison officers in Peru, and then SOCA moved them to Colombia. Peru is the second largest cocaine-producing country in the world, cocaine production is on the increase and crop eradication and substitution programmes are not working. Intelligence-led intervention in trafficking will make the biggest difference to this country. Will my hon. Friend increase SOCA’s resources for that work, so that our drug liaison officers, who are very successful, can be in both Peru and Colombia?

My hon. Friend is right to say that the role played by drug liaison officers overseas is pivotal. As I have explained, they have now been transferred to SOCA. He is right to stress the importance of being able to intercept drugs at every stage of the supply chain. He may be interested to know that in the first 10 months of last year, the agencies combined intercepted more than 30 tonnes of cocaine destined for European markets, which we would otherwise have had to try to intercept either at our borders or on our streets. That important international work is helping to keep some of our local communities freer of drugs than they would otherwise be.

Monetary Policy Committee

7. What plans he has to review the appointments procedure of the Monetary Policy Committee of the Bank of England. (84768)

Today I am appointing to the Monetary Policy Committee Mr. Andrew Sentance, chief economist at British Airways and previously chief economist of the CBI, and Professor Tim Besley of the London School of Economics. The whole House will also want to pay tribute to the work of the former MPC members—Richard Lambert, who is now director general of the CBI, and particularly David Walton, a brilliant economist who tragically passed away at the young age of just 43. Recognising the issues of market sensitivity, the procedure is that all appointments are made strictly in accordance with the legislation.

I start by echoing the Chancellor’s deep regret at the tragic early death of the brilliant David Walton, which is a great loss to this country. But does the Chancellor regard his answer as an adequate response to the growing criticism in the City, in which even the Governor of the Bank of England has partially joined, of what is perceived as his dilatory and over-secretive approach to the filling of vacancies as they occur on the Monetary Policy Committee? Why can the procedure not be more open and transparent? Is it appropriate, in a Bank of England that the Chancellor claims he has made independent, that those appointments should be made by him in such a personal way?

Let us remind the House that the hon. Gentleman was a vicious opponent of the independence of the Bank of England. He said that it would lead to deflationary policies and higher unemployment, and that the Bank of England’s reputation would be damaged. All those things proved to be untrue. On the appointments system for the Bank of England’s Monetary Policy Committee, the legislation requires that we seek people with experience and expertise. That has been achieved, and the proof is in the record. It would be wrong, when there is market sensitivity—which, unfortunately, the shadow Chancellor denies—if a rumour about a Monetary Policy Committee appointment meant that there was movement of the pound and the stock exchange. There is market sensitivity, so such appointments must be handled with care.

Well, if we had followed the Opposition’s policy, the Bank of England would not have been independent, we would not have had stability, we would not have had low inflation, and we would not have had the lowest interest rates for 30 years.

The effect of independence for the Bank of England and the accompany monetary and fiscal policy is that inflation, interest rates and mortgage rates have been half what they were in the previous 18 years. I have considered all kinds of proposals that have been put forward for reform of the Bank of England Monetary Policy Committee. I have considered the shadow Chancellor’s proposal that the House of Commons vote every year on the inflation target, which would be a recipe for the very instability that the Conservatives created in government. I have also considered his proposals for appointment to the Monetary Policy Committee—and it is remarkable that those proposals are intended to increase the external accountability of the Monetary Policy Committee. Even the Governor of the Bank of England would disagree with a proposal for the Governor to choose the two deputy Governors, the Governor to choose the other two internal members and the Governor also to have a role in the appointment of the remaining four members. That would mean the Governor having either a direct or an indirect role in the appointment of all eight members except himself. How would that secure accountability? The shadow Chancellor should go back to the drawing board and think again—about this and other issues.

I echo the sympathy expressed by the Chancellor over the sad death of David Walton. The independence of the Bank of England was called for and welcomed by the Liberal Democrats, but does the Chancellor agree that it is compromised by the direct control that he exercises in appointments? Is he prepared to give up that control and fall into line with the code relating to ministerial appointments? If not, why not?

I remind the hon. Lady that the Conservative party opposed the legislation for independence of the Bank of England. She says that she supported that legislation—

But the hon. Lady’s party supported it. The legislation that she supported provided for five internal members of the Bank of England and four external members. That was in the legislation. The Chancellor of the Exchequer was obliged to propose the appointment of people with experience and expertise to the Monetary Policy Committee. I ask the House whether the record of the Bank of England as a result of our decisions has been good or bad. In my view, the only answer that the House can give is that we have achieved a degree of stability that the Conservatives could never dream of.

I echo the Chancellor’s comments about the late David Walton, and the work that he and Richard Lambert did on the MPC—but Richard Lambert was appointed to the MPC by means of a telephone call, as was Andrew Large. The Governor said before the Treasury Committee that the current process was

“something that is very informal and seems to result in appointments being made very much at the last minute.”

Is it not time for a proper, open and robust process for MPC appointments, rather than their being made furtively behind closed doors, on the whim of the Chancellor?

The policy of the hon. Gentleman’s party favours greater accountability of the MPC to Parliament and the public, but the detail of the shadow Chancellor’s proposal is that the two deputy Governors should be chosen by the Governor, the two internal members should be chosen by the Governor, and the Governor should have a direct role in the choice of the four external members. That is not extending external accountability. The Conservatives are making a laughing stock of their own policies.

Inheritance Tax

8. If he will assess the merits of linking inheritance tax thresholds to median house prices in each council area. (84769)

This year’s Budget announced above-inflation increases in the inheritance tax threshold, with the threshold rising to £325,000 by the end of the current Parliament. Even given rising house prices, most homes are below the threshold. A link to house prices in each area would be very difficult and complex to administer, and I think that it would also be unfair.

What should I tell my constituent, who lives in a terraced house in Battersea and fears that her daughter, who is also her full-time carer, would face a bill for more than £100,000? Average house prices in my borough are still £80,000 above the threshold, and even given the increases—enormously welcome though they are—they will still be some £35,000 above it. Does not my hon. Friend, as a London Member, share my fear that families will no longer be able to live in the family home when their parents die, and that families will disperse and communities break up?

I know that my hon. Friend will agree that it is right for the estates of better-off people to contribute to wider welfare—and only 6 per cent. of estates paid inheritance tax last year. I think that he will also accept my point about the complexity that would arise if the threshold varied constantly, depending on what had happened to house prices, and if it were different in every area. In cases such as the one that he has described, equity release might help. I think that there would be a real problem if estates with no residential properties but otherwise identical paid different amounts of tax in different parts of the country.

The Minister may have dealt with the main point made by his hon. Friend, but he has not dealt with the supplementary point. What happens if a 90-year-old mother living with two 60-year-old retired daughters has a house whose value is above the threshold? How can she pass it on, without the benefits of civil partnership?

The hon. Gentleman is one of those who would agree that it is right that the estates of wealthy people should contribute to the wider wealth; I know of his interest in addressing poverty. In the situation that he describes, perhaps equity release could help. It is right that larger estates should contribute to the wider welfare, and that is what inheritance tax allows to happen.

Will my hon. Friend review the threshold annually? Rising house prices mean that it is Mr. and Mrs. Average who are now being caught by inheritance tax, whereas the wealthiest have the best advisers, set up trust funds, hold their money abroad and do not pay.

I can reassure my hon. Friend that the situation is reviewed annually, and we have committed to above-inflation indexing up to £325,000 by 2009-10. Where there are loopholes, we will continue to take steps to close them, and further progress was made on that front in the Finance Bill this year.

Economic Growth

10. What recent discussions he has had with his G8 colleagues regarding prospects for global economic growth. (84771)

My right hon. Friend the Chancellor met his G8 colleagues in June. At that time, Finance Ministers judged that prospects for global growth remained strong, although downside risks from high and volatile energy prices, global imbalances and the lack of progress on the Doha trade round remain.

I thank the Economic Secretary for that reply, but—as I think he knows—the UK’s recent economic growth looks good only when set against some poor comparators. Will he explain specifically why he thinks that the UK’s GDP growth over the past year has been less than the US’s, less than Canada’s, less than Japan’s, and less than the G7 average, and why we are forecast to grow less strongly than the Organisation for Economic Co-operation and Development average this year? Has the Treasury given up on the idea of the UK being able to compete in the top division for GDP growth in industrialised countries?

The growth rate for the UK was revised up by the Office for National Statistics a week ago for 2001, 2002, 2003, 2004 and 2005. Since 1997 growth in output has been 26 per cent., compared with only 15 per cent. in the previous nine years. We have also had the lowest unemployment. In the hon. Gentleman’s constituency, for example, unemployment has fallen by two thirds and long-term unemployment by 90 per cent. At the same time as achieving growth and low unemployment, we have had stability and low inflation. That is because of our successful reform of the Bank of England, which would be put at risk by proposals to change the inflation target annually and remove the majority of internal members on the Monetary Policy Committee. We were told a few months ago that there had been detailed discussions on those matters, and the Governor was forced to issue—

Order. If those are Opposition proposals, it is not for the Minister to tell the House about them.

When discussions take place with G8 colleagues, will the Economic Secretary explain to other members of the G8 why unemployment in this country has risen faster than in any other advanced country in the past 12 months?

Unemployment in the euro area is 7.9 per cent., in Germany it is 8.3 per cent and in Britain it is 5.2 per cent. That is the lowest level for 30 years. In the past four years there have been recessions in Japan, Germany, France and the US, but not in Britain. We all remember what happened when the Conservatives were running the economy. We remember what it was like to have unemployment at 3 million and interest rates at 15 per cent., and we are not going to go back to those days. It is about time we had a grown-up debate on the economy, instead of this triviality.

My hon. Friend is right: the high oil prices were discussed at the G8 meeting a few weeks ago. We have the highest oil prices for 25 years, and the geopolitical situation has meant that we have had high oil prices and falling stock markets since the beginning of the decade. Despite those pressures, we have still managed to combine rising employment, low inflation and rising growth. The last time such issues arose in the global economy, we had recession rather than growth, high inflation rather than low inflation and high unemployment rather than low unemployment. We have no intention of going back to those days.

Tax Credits

11. How many non-pensioner families in the Ashton-under-Lyne constituency were recipients of tax credits in each of the last three years; how many have been identified as having received overpayments; and if he will make a statement. (84772)

The estimated number of child and working tax credits awards in the Ashton-under-Lyne constituency in 2003-04 was 11,600. In 2004-05 there were 13,300 awards to families in Ashton-under-Lyne, of which 4,100 were overpaid.

I thank my right hon. Friend for that reply. It is clear that many families in my constituency have been lifted out of poverty by tax credits, and she is to be commended for her role in that. However, she will know that the continuing delays in resolving disputes about overpayments still cause hardship and distress for some people. One of my constituents has been told repeatedly that she is invisible to the computer, even though she can produce reams of correspondence that the computer has generated. Other eligible constituents have simply abandoned their claims in despair. Will my right hon. Friend redouble her efforts to get to grips with such problems?

As my hon. Friend acknowledged, some 13,300 families in his constituency benefit from tax credits. He will be aware that I have announced to the House that the Department must deal with disputed overpayments within four weeks, and that it must continue to pay claimants while disputes are being resolved. That is precisely what is happening. I hear what my hon. Friend says about specific cases in his area. I cannot deal with them now, but if he raises them with me in writing, I shall do my best to get him a sensible answer.

Order. I can tell the hon. Gentleman that Tunbridge Wells is a bit too far away for him to get involved in this question. While I am on my feet, I must advise you, Mr. Stuart, that you must be quiet. You have had your say in the House, and it is unfair to barrack Ministers every time they speak.

Digital Inclusion

12. If he will make a statement on his fiscal policies to support the Government’s digital inclusion strategy. (84773)

Competition is helping to boost digital inclusion through falling prices for equipment and communications services. The Government are helping by making targeted fiscal interventions, such as supporting the network of 6,000 UK Online centres. We are also investing in information and communications technology in schools and funding ICT at home for school students.

I have had some harsh words with members of the Treasury Bench about how the home computing initiative was abolished, but I have since received conciliatory letters acknowledging that there is a hole in the digital inclusion strategy in respect of low-income employees. Will Ministers acknowledge the efforts made by the industry to address those problems and to deliver a compliant and self-regulatory framework for schemes that enable employers to purchase computers? In that way, the industry is helping to plug that very important hole in the Government’s strategy.

I am not sure that the hole to which the hon. Gentleman refers exists. Home computer penetration has risen from one in four in 1997 to two thirds today, which shows that very welcome progress has been made, largely because of falling prices. I know that the hon. Gentleman has submitted some proposals on behalf of the industry, and I assure him that Ministers in the Department of Trade and Industry are looking at them. When he submitted them, he said that they looked rather complicated, and I think that he was probably right. However, the large price falls in PC equipment and much higher home take-up mean that the case for Government intervention looks much less strong today than it did in 1999, when the incentive was introduced.

Analogue switch-off is looming for many people, so will my hon. Friend consider funding the move from analogue to digital out of future income from the sale of the spectrum? Would that not be preferable to letting the cost fall on BBC licence fee payers?

My hon. Friend will know that my right hon. Friend the Secretary of State for Culture, Media and Sport is looking at those issues, and at ways of helping people make the transition in the future. Certainly, the switchover holds out a lot of promise for promoting digital inclusion, and I am sure that he and the whole House will welcome that.

Financial Capability

13. What steps his Department is taking to improve financial capability among the general public; and if he will make a statement. (84774)

The Financial Services Authority has a statutory objective to increase consumer understanding of the financial system, and works in partnership with the Government, the industry and the voluntary sector on those matters. I can tell the House that in the autumn my Department will publish a 10-year strategy on financial capability and inclusion, setting out the Government’s plans for action in that important area.

I thank the Minister for that answer and welcome his announcement. I know that the FSA is doing all it can to increase knowledge and literacy in financial matters for schools, young adults and workplaces and by providing money advice for new parents. Could the FSA extend its remit to pensioners and others who have to deal with instruments and other matters because of the increasing capital wealth among that age group?

My hon. Friend is right. In implementing the pensions White Paper, we will need to focus on such capability issues for future pensioners as well as current pensioners. Some things have been done, and we have announced that financial education will be embedded in the GCSE maths curriculum over the new few years. But there is much more to be done, and I shall give the House two facts. On the one hand, we know from our recent benchmark survey that more than 70 per cent. of schools provide personal financial education only occasionally—once or twice a month. We need to do much better than that, which is what the survey is about. However, our survey also shows that the cash management skills of many people on low incomes are very good—considerably better than the cash management skills of many people in the House.

When it comes to financial accountability, how many times in a row should a set of accounts be qualified by the auditors before the finance director gets the sack?

If the hon. Gentleman is referring to the European budget, I can tell him that I am going to Brussels this afternoon to meet Commissioners, and I shall be at the budget Council of ECOFIN tomorrow. It is of great concern to us that the budget has been qualified for 11 or 12 years. That is exactly why, last autumn, we agreed in ECOFIN a plan to sort it out by 2009. We ought to have support from Opposition Members in trying to sort out the European budget, rather than the continual triviality of their attempting to leave the mainstream of Europe and join the extremist fringes.

Has my hon. Friend considered funding courses in financial capability for MPs who believe that it is possible to increase spending in areas such as housing, child care, youth services and social enterprises at the same time as introducing a proceeds of growth rule that would result in cutting public expenditure by £17 billion?

My hon. Friend is right. Perhaps we could arrange such classes, where we might explain to people that it is not possible to invest in education, tackle child poverty, clean up the environment and at the same time cut £17 billion from public spending, as the shadow Chancellor proposes.

Does the Minister accept that too many financial institutions—such as banks, building societies and credit card companies—encourage people of all ages to borrow beyond their ability to repay? Is that responsible? Should not something be done about it? The citizens advice bureau in my area wrote to me recently about growing debt among the elderly, because they are encouraged to borrow. What can the Government do about it?

I understand the hon. Gentleman’s concerns, and join him in praising the work of citizens advice bureaux. I met them a week or so ago, and they are in the process of hiring 350 personal finance advisers, precisely to give that kind of advice. It is often the case, however, that people fall into debt because they suddenly and unexpectedly face unemployment, family break-up or ill health. In those circumstances, going into debt would be the wrong thing, and we need to give people proper advice and support. In general, I do not think it right to say that banks should discourage people from taking out loans or credit cards, which in fact play an important part in our economy. The fact that so many more people in our society have mortgages and are home owners is a good thing, but we need to make sure that people have proper advice and support, especially at times of crisis, and I commend the CAB for all its work.

Non-EU European Banks

15. What steps he is taking to improve the regulation of the London-based operations of non-EU European banks. (84776)

The Financial Services Authority regulates all non-EU banks operating in the UK under the Financial Services and Markets Act 2000. That includes the regulation of prudential standards, conduct of business, liquidity and financial crime. The Government and the FSA work closely together to ensure that the regulation of the banking sector is effective, well focused and up to date with current market practice.

Will my hon. Friend stop dodging and diving on this one? I have been trying to get some protection for constituents of mine, who believed that when they allowed assets to be managed by a Swiss bank that had opened a London office, they had the same protection as customers of other banks, and that European directives would apply. Pictet Asset Management does not conform to those rules. Is it not about time that Swiss banks were regulated properly in this country?

The Financial Services Authority regulates all banks operating in the UK in relation to financial crime and all other matters, including Swiss subsidiaries and branches, under existing legislation. I would say to my hon. Friend that I have been in this job for eight weeks, and this is the first time that we have had a conversation on this subject. I am happy to look into it in detail, but as I said, this is the first time that we have had the opportunity to discuss it. If he would like to meet, I will be happy to do so and provide him with all the reassurance he needs that the FSA is doing a good job, including with Swiss banks and subsidiaries.

The Speaker: Order. We now return to Questions 4 and 14.

Fundamental Savings Review

4. What recent assessment he has made of the impact of the level of funding for public services on the economy. (84765)

To ensure that, in the coming spending round, even more resources will go direct to front-line services, I am requiring asset sales in excess of £30 billion by 2010; and as we complete a zero-based and fundamental review of each Department’s baseline spending, with further announcements in the pre-Budget report, I can also confirm that all Departments will have to achieve efficiency savings of at least 2.5 per cent. annually, on top of the £21 billion administrative savings being implemented from the Gershon review. Administrative budgets which have already been frozen will now be cut not only in real terms but in cash terms, releasing extra resources for front-line services. These administrative savings make possible improvements in service within a Home Office budget which, as agreed, will have a flat real settlement, and settlements for the Treasury, Department for Work and Pensions, Her Majesty’s Revenue and Customs and the Cabinet Office, which have agreed a 20 per cent. real-terms decrease over five years. [Interruption.]

I am also today publishing the terms of reference for the six policy reviews on children and young people, the third sector, economic development and regeneration, supporting housing growth, mental health outcomes and counter-terrorism and security. These will inform cross-Government priorities for the comprehensive spending review. I can confirm that Sir David Varney, chairman of HMRC, will report to me at the pre-Budget report on further administrative savings—[Hon. Members: “This is a statement”.]—and I am also publishing my letter to the public sector pay review bodies, proposing that public sector pay settlements should be founded on a 2 per cent. target. [Interruption.]

Order. Mr. Pritchard, the last thing you should do is shout. If you are unhappy, you may raise a point of order after Question Time.

Why has the Chancellor chosen to put that information out with a whimper, not a fanfare, at the end of Treasury questions? Surely the House deserves a proper statement. And why is it so at variance with his press release of 19 July 2005, which promised a thorough review of demographic change, innovation, global issues and terrorism? What has happened to his pledge to look at spending over 10 years? If we just look at health spending, 73 per cent. has gone on increased costs. When will Government get a grip of these issues and ensure that money is spent more effectively?

The hon. Gentleman should read what I have said previously. We published a document on globalisation and its challenges. We shall publish a further document on that in the pre-Budget report. As for administrative savings based on a zero-based review, I am announcing today—and I thought there was some all-party support for it—that we are finding savings in administration, we are imposing efficiency savings and we are imposing asset sales. The purpose of that is to release resources for front-line services. I should have thought that hon. Gentlemen would support that, but perhaps the Conservative party is still the party under which, when additional public spending was announced in the 1990s, 80 per cent. of it went to debt and unemployment; whereas now 80 per cent. of new spending goes to health, education and vital public services.

I thank my right hon. Friend for that answer. Will he ensure that the spending review does not follow the rule whereby public expenditure grows less than the growth in the economy?

I reject the rule that has been put forward called the third fiscal rule. The third fiscal rule would require, no matter what the circumstances, that public spending should fall as a share of national income. [Interruption.] It was excellent I hear a Conservative Member say. It was exactly the policy on which the Conservatives fought the last election and the previous election. The electorate knew that and voted on the basis that they wanted to see improvements in health and education investment, money spent to relieve child and pensioner poverty, and this country properly defended and secure. I suggest that to impose a rigid rule on public expenditure would mean cuts of £17 billion this year and £18 billion next year. That would mean that hospitals, schools and public services generally would not have the resources that they need.

Is this empty document really what the Prime Minister called the vital foundation stone of his spending review and announced at the Labour party conference last year? This is not a fundamental savings review. A fundamental look at Government spending would have asked this simple question: how can Labour have taxed so much, spent so much and achieved so little? How can Labour have spent £4 trillion over nine years and have an NHS that is sacking doctors and nurses and a Home Office that is not fit for purpose? Surely a serious attempt to find savings would have addressed soaring public sector construction costs and falling public sector productivity, but the document does none of those things. Surely a review of that kind would have concluded that the real reason why the Chancellor has been a big spender rather than a wise spender is because he blocked proper public service reform.

I am amazed at the shadow Chancellor. He does not support my announcement that we get efficiency savings of 2½ per cent. He does not seem to acknowledge my announcement that the administration budgets of Departments will be cut. He does not seem to recognise that £30 billion of asset sales are being asked for. He does not seem to recognise that the administrative budgets of Departments, which were 6 per cent. in the early ’90s, will fall below 4 per cent. now. When it comes to the reason why he does not recognise that, I have a copy of a speech that he gave at the fringes of the Conservative party conference. He said that he would not compete with us at the next general election on efficiency savings. What he would do is promise that there would be very specific cuts in particular areas of the Budget, such as child tax credits and the new deal. He said:

“It’s a hard choice which we will put to voters in an election.”

He should tell us which hospitals, which schools, which teachers and which nurses will—[Interruption.]

I thank the Chancellor for sending us his 66-page report before the statement, but he did not give us the opportunity to respond fully to it. The Prime Minister himself set out the criteria at his party conference, when he stated that the report would describe

“where we can save, and where we need to spend more”.

Since the Chancellor has already indicated where he intends to spend more—partly on admirable objectives such as reducing child poverty, but also on massive overruns on the NHS IT scheme, on an ID card scheme costing £15 billion, on acquiring sites for new nuclear power stations, and on advance spending on the Trident missile—can he point us to those paragraphs in the report that show the Departments that will be cut in order to accommodate that? As his savings appear to depend largely on efficiency, which, of course we entirely welcome—the Gershon savings—can he point us to independent reviews that have shown where those efficiency savings have so far been materialised and how they will be monitored thoroughly in future?

We have had the work of the National Audit Office, the announcement in this document in relation to the first step—40,000 jobs in the Department for Work and Pensions and Her Majesty’s Revenue and Customs that were referred to in the Gershon report have gone—and the announcement in this document that DWP, HMRC and the Treasury, as well as the Cabinet Office, will have 5 per cent. real-terms cuts in their budgets over the spending round. The hon. Gentleman has therefore got the answer that he sought. I also said that this is part of a process whereby, in the pre-Budget report, we will have the Varney report and further detail on departmental settlements. Next week, we will have the capability reviews of individual departments. That is a continuing process that will lead to the spending round next year. I thought that he would have welcomed that, particularly as he has a special problem to solve: he has to find £20 billion to plug the gap.

When the leader of the hon. Gentleman’s party was asked a few days ago how he would do that—[Interruption.]

Order. I know how to tell the Chancellor to sit down. I do not need help from anyone else. I say to the Chancellor that the policies of the Liberal and Conservative parties are really nothing to do with the Chancellor in the House.

My constituents have benefited massively from the extraordinary increases in public expenditure for front-line services. They also value greatly their own public assets, which they have worked and paid for and which they control through public policies. Will the Chancellor give us some idea, an overview, of what kind of assets he intends to dispose of in order to give a further boost to public services?

Surplus land is a very good example—land that has been held by public authorities for a long period is now being released for housing. We have achieved £6 billion of asset sales in the last two years, and there will be £30 billion of asset sales by 2010. It would be wrong for the Government to hold on to assets that they did not need; it would be right for the Government to keep assets that they do need. My hon. Friend will see that that £30 billion makes possible investment in other areas of vital importance to the economy and to public services. He would be the first to acknowledge—indeed he did so—that in the past nine years we have doubled expenditure on health, and on education, and on policing and on transport, and the results are that not only do we now have more doctors, nurses, teachers and teaching assistants but standards in health, education and policing are rising, not falling.

The huge and mounting private finance initiative debt with which the Chancellor has saddled the public sector is now beginning to lead to cutbacks in the very front-line services that he is trumpeting. In advance of any internal Labour party election, is this one Tory policy that he regrets adopting?

The Tory policy was to cut public expenditure. Our policy is to increase public expenditure. The problem with the hon. Gentleman’s policies is that they are so economically illiterate that they would lead to the same results of cuts in public expenditure, and he should go back to the drawing board and think again.

Last week I visited Brislington enterprise college in my constituency to look at the architect’s plans for investment in new school buildings under the building schools for the future programme. Last week also saw the announcement of £750 million for investment in community hospitals, and in Bristol £42 million for the Greater Bristol bus network. Will the Chancellor assure me that that investment in front-line public services will continue under a Labour Government? What would be the implications for such investment if he were to give in to calls for spending to grow at a lower rate than economic growth?

I am pleased about those developments in my hon. Friend’s constituency. That is happening in all constituencies, and Conservative and Liberal Members are also getting benefits from that investment. When we came into power net public investment was £7 billion. It is now £27 billion a year; it is rising, and because of the announcements today it will continue to rise every year right through to the end of the next spending round in 2011. I should have thought that in a country that desperately needs expenditure on infrastructure, as well as investment in health and education, there ought to be all-party support for that increase in investment, rather than the cuts programme of the Conservative party.

Nothing could more vividly demonstrate the contempt that the Chancellor has for the House than the way he sought to make what is in effect and should have been a statement in this underhand way, and all because of his childish desire to avoid giving my hon. Friend the Member for Tatton (Mr. Osborne) and the other party spokesmen advance sight of what he was going to say. Why has not the Chancellor given the House, from that Dispatch Box, a progress report on the implementation of the Gershon review? Is it not because, like so much of what comes from him and the rest of this Government, that review amounted simply to warm words and the Government have fallen far behind in its implementation?

What was unimplementable were the James proposals that the right hon. and learned Gentleman put forward at the last election. Our Gershon proposals have already achieved £9½ billion out of the £21 billion of savings to be made by 2008. We have already reduced employment by the 40,000 net that we promised out of the 80,000 to come by 2008. We have already relocated 8,000 civil service jobs out of the 20,000 planned. We have reduced the share of administration in the Budget as proposed: compared with the 6 per cent. under the right hon. and learned Gentleman’s Government, it is less than 4 per cent. under ours. I am not going to take any lectures about administration from the former Leader of the Opposition who was the poll tax Minister who caused the worst administrative mess in taxation this country has ever seen.

Does the Chancellor not understand the damage done by the stop-go nature of his public spending planning? Public spending was first constrained, then expanded massively, and today there are panic cuts outside the priority areas. Can he confirm that the Treasury has asked some public bodies to prepare illustrative plans on the basis of budget cuts of 5, 10 and 15 per cent.?

That question shows the difference between the Front Benchers and the Back Benchers. The Front Benchers say that the proposal is a damp squib, but the hon. Gentleman says that it cuts beyond anything that has ever been seen before. The truth, however, is that we are making administrative savings so that we can get more money to front-line services. Every person in the country will welcome the cuts that will be made to administrative budgets, the sale of unnecessary resources, which will release money for further investment, and of course the efficiency savings being achieved in different Departments. Once the hon. Gentleman looks at the details of the proposals, I should expect him to welcome them, and perhaps he might give a lecture to those on his Front Bench. These are serious proposals, and they should not be dealt with in the immature way that the shadow Chancellor has done.

May I welcome the tough announcement that the Chancellor has made? The 2.5 per cent. cut that he announced will free up resources for our priorities of health and education, and I look forward to that. I welcome strongly the announcement on housing, but is the Chancellor selling off assets to ensure that the proceeds are made available for additional housing, and in particular affordable housing?

I can tell my hon. Friend that the budget for social housing is being doubled, which is a major advance. [Interruption.] The party of the hon. Member for Tatton (Mr. Osborne) set interest rates at 15 per cent. and prevented people from buying houses when they were in government. We have just announced £900 million for equity sharing to allow more people, particularly young couples, to buy their first home. I believe that we will be able to make further announcements about the extension of equity sharing, which should be supported on an all-party basis. My hon. Friend the Member for Edmonton (Mr. Love) is right that in addition to health, education, policing, security, and our defence responsibilities, housing has a priority in the future spending round.

Can the Chancellor explain why, in the Home Office section of the report, identity cards are not even mentioned as one of the Home Office spending priorities? Is that because the Treasury was responsible for the leak by David Foord of the Office of Government Commerce, who talked about the unaffordability of the ID card project and a “lack of clear benefits”? He said:

“Just because ministers say do something does not mean we ignore reality”.

Has the Chancellor finally accepted the reality, which is that the scheme will not wash?

Sometimes I think that the hon. Gentleman lives in a completely unreal world. Identity cards are the policy of this Government. I should have thought that the more that people see the chances of their identity being stolen by organised crime, the more they would support identity cards. The Opposition parties have made a very big mistake in opposing identity cards, which are part of the spending settlement for the Home Office.

As someone who has never wanted cuts in hospitals and schools, but wants to reduce waste and inefficiency, I obviously welcome the Chancellor’s latter-day conversion to the idea that we can achieve efficiency gains in the public sector. This time, has he consulted with the staff in advance and how many posts will have to go to meet these new, interesting targets?

The right hon. Gentleman is chairman of the Conservative party’s economic competitiveness policy group, so there will be an interesting debate in that group between those who believe that we are doing something serious, as he does, and those who do not take seriously the fact that a major change is taking place in administrative budgets. As for the numbers, 80,000 civil servants, particularly at the DWP and the HMRC, will be replaced. As a net figure it is nearly 40,000, and as a gross figure it is over 40,000 now. We will reach the 80,000 figure by 2008, and we will introduce further proposals for the next spending round, so that we can ensure that we provide the most resources for the front-line caring services, which are the priority for the Government and, I know, are the first priority for the people of Britain. I welcome the right hon. Gentleman’s support in this case, but can he inform and educate the shadow Chancellor on these matters?

Business of the House

The business for next week will be as follows:

Monday 17 July—Remaining stages of the Compensation Bill [Lords].

Tuesday 18 July—Consideration of Lords amendments to the Health Bill, followed by consideration of Lords amendments to the Government of Wales Bill, followed by a motion to take note of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the Official Report.

Wednesday 19 July—Opposition half-day [unallotted day]. There will be a debate on home information packs on an Opposition motion, followed by remaining stages of the Commissioner for Older People (Wales) Bill [Lords].

Thursday 20 July—A motion to approve the Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2006, followed by a debate on international development on a motion for the Adjournment of the House.

Friday 21 July—The House will not be sitting.

The provisional business for the following week will be:

Monday 24 July—Second Reading of the Welfare Reform Bill.

Tuesday 25 July—Motion on the retirement of the Clerk of the House, followed by consideration of Lords amendments to the Northern Ireland (Miscellaneous Provisions) Bill, followed by a motion on the summer recess Adjournment.

The information regarding business on Tuesday 18 July is as follows:—

The following reports fall within the scope of the motion:


Fourth Report

Fraud and error in benefit expenditure

HC 411 (Cm 6728)

Seventh Report

The use of operating theatres in the Northern Ireland Health and Personal Social Services

HC 414 (Cm 6699)

Eighth Report

Navan Centre

HC 415 (Cm 6699)

Ninth Report

Foot and Mouth Disease: applying the lessons

HC 563 (Cm 6728)

Twelfth Report

Helping those in financial hardship: the running of the Social Fund

HC 601 (Cm 6728)

Thirteenth Report

The Office of the Deputy Prime Minister: Tackling homelessness

HC 653 (Cm 6743)

Fourteenth Report

Energywatch and Postwatch

HC 654 (Cm 6743)

Fifteenth Report

HM Customs and Excise Standard Report 2003–04

HC 695 (Cm 6743)

Sixteenth Report

Home Office: Reducing vehicle crime

HC 696 (Cm 6743)

Seventeenth Report

Achieving value for money in the delivery of public services

HC 742 (Cm 6743)

Eighteenth Report

Department for Education and Skills: Improving school attendance in England

HC 789 (Cm 6766)

Nineteenth Report

Department of Health: Tackling cancer: improving the patient journey

HC 790 (Cm 6766)

Twentieth Report

The NHS Cancer Plan: a progress report

HC 791 (Cm 6766)

Twenty-first Report

Skills for Life: Improving adult literacy and numeracy

HC 792 (Cm 6766)

Twenty-second Report

Maintaining and improving Britain’s railway stations

HC 535 (Cm 6775)

Twenty-third Report

Filing of income tax self assessment returns

HC 681 (Cm 6775)

Twenty-fourth Report

The BBC’s White City 2 development

HC 652 (Second Special Report, HC 1139, 2005-06)

Twenty-fifth Report

Securing strategic leadership in the learning and skills sector

HC 602 (Cm 6775)

Twenty-sixth Report

Assessing and reporting military readiness

HC 667 (Cm 6775)

Twenty-seventh Report

Lost in translation? Responding to the challenges of European law

HC 590 (Cm 6775)

Twenty-eighth Report

Extending access to learning through technology: Ufi and the learndirect service

HC 706 (Cm 6775)

Twenty-ninth Report

Excess Votes 2004–05

HC 916 (N/A)

Thirtieth Report

Excess Votes (Northern Ireland) 2004–05

HC 917 (N/A)

Thirty-first Report

Northern Ireland’s Waste Management Strategy

HC 741 (Cm 6843)

Thirty-second Report

Working with the voluntary sector

HC 717 (Cm 6789)

Thirty-third Report

The Royal Parks and the Diana, Princess of Wales Memorial Fountain

HC 644 (Cm 6789)

Thirty-fourth Report

Returning failed asylum applicants

HC 620 (Cm 6863)

Thirty-fifth Report

The refinancing of the Norfolk and Norwich PFI Hospital

HC 694 (Cm ????)

Thirty-sixth Report

Tackling the complexity of the benefits system

HC 765 (Cm 6863)

Thirty-seventh Report

Inland Revenue Standard Report: New Tax Credits

HC 782 (Cm 6863)

Thirty-eighth Report

Channel Tunnel Rail Link

HC 727 (Cm 6863)

Thirty-ninth Report

Consular services to British nationals

HC 813 (Cm 6863)

Fortieth Report

Environment Agency: Efficiency in water resource management

HC 749

Forty-first Report

The South Eastern Passenger Rail Franchise

HC 770

Forty-second Report

Enforcing competition in markets

HC 841

The reference number of the Treasury minute to each report is printed in brackets after the HC printing number

I thank the Leader of the House for giving us the business up till the recess.

There have been a number of oral statements in recent days, but, sadly, that has not included the Chancellor’s announcement about the fundamental savings review, and it was only because of your willingness, Mr. Speaker, to extend the time for Treasury questions that Members could question the Chancellor on that review. If the Chancellor has a statement to make, he should come to the House and make a proper oral statement, which would give a proper opportunity for all Members to question him on it. Perhaps his unwillingness to do so has more to do with the fact that the fundamental savings review was an idea announced by the Prime Minister at the Labour party conference, not by the Chancellor. Will the Leader of the House arrange for the Chancellor to come back to the House to make a proper oral statement on that review to allow more than just 20 minutes of questions from Members to the Chancellor?

Oral statements enable Members to put questions direct to Ministers, whereas written statements do not give that opportunity to raise matters in the House, particularly if they are published on the day the House goes into recess. On the day the House went into recess at Easter, there were 39 written ministerial statements. Last year, on the day the House went into summer recess, there were 63 written ministerial statements. What steps is the right hon. Gentleman taking to ensure that we do not have a repeat performance, with a large number of written statements coming out too late for Members to question Ministers?

It has been shown that there has been a hidden waiting list in the NHS for diagnostic tests, with patients waiting up to an average of 17 weeks for some tests. Some patients have to wait up to two years, but we do not know what the maximum wait is. Will the Leader of the House ensure that the Secretary of State for Health places full figures in the Library so that Members can see the true state of waiting lists, rather than the partial figures that the Government quote? Before the right hon. Gentleman prepares his standard response to me, which is about how many more nurses there are in my area, perhaps he will let me know instead why respite care at St. Mark’s hospital, Maidenhead is under threat, Townlands hospital is under threat of closure and maternity services have been cut at Wycombe hospital—all affecting my constituents.

It was shocking to read this week that the Department of Health has been sitting on a report on patient safety in mental health services that refers to a number of rape cases. May we have a debate on mental health services when we return in the autumn, and will the Leader of the House ensure that the Secretary of State for Health publishes that report well before the debate?

Yesterday, my right hon. Friend the Leader of the Opposition challenged the Prime Minister on reports that the ID card scheme had been delayed. The Prime Minister’s response was:

“It is a huge programme and there are bound to be changes along the way.”—[Official Report, 12 July 2006; Vol. 448, c. 1384.]

So when will the Home Secretary come to the House to make a statement about those changes?

The Home Secretary announced on 21 June that there were plans for a major shake-up of the Home Office and that his task force would produce firm proposals by July. Will the Leader of the House arrange also for the Home Secretary to come to the House before the recess to make a statement on the changes proposed for the Home Office, so that we can know what on earth is going on there? The Home Secretary gave himself 100 days to sort out the Home Office. He is more than two thirds of the way through, and with the visa scam at foreign language schools, failure to deport foreign criminals, the ID card project being delayed and confusion over police mergers, he is not doing very well.

This summer the Office for National Statistics will bring in changes to place all private finance initiative deals on the Government’s balance sheet. That is bad news for the Chancellor, as it could blow a hole through his sustainable investment rule. May we have a debate on the production and use of Government statistics? Does the Leader of the House stand by his comments made in a speech to the Royal Statistical Society in 1995 that there should be a national statistical service that should be

“placed at arm’s length to Ministers, on a similar basis to that of the National Audit Office, and should report principally to a powerful Committee of the Commons”,

and that the new arrangements

“would be placed on a statutory basis within a ‘Governance of Britain Act’”?

Whatever happened to the governance of Britain Act?

Finally, yesterday, when asked who would be in charge of the country in the Prime Minister’s absence, the Prime Minister said that

“the arrangements are exactly the same as they have been in previous years.”—[Official Report, 12 July 2006; Vol. 448, c. 1385.]

Either that means that the Deputy Prime Minister will be in charge or it means that, unbeknown to him, he has never actually been in charge in the past. It was reported at one stage that the Leader of the House was being put on stand-by to take over in the Prime Minister’s absence. May I tell him that the country would breathe a collective sigh of relief if that happened? After all, he has a job, he owns his houses and he has never been seen wearing a Stetson. What are his holiday plans?

It’s the way she says it, Mr. Speaker. The right hon. Lady asks for a statement on the spending review. It is standard procedure provided for in “Erskine May” for Secretaries of State answering questions that may generate much more interest than would be taken account of by the normal time allowance for questions to delay them till the end of the Question Time. That, in my experience, has generally been to the approbation of the House, so I am surprised that the right hon. Lady and other Opposition Members are being so churlish about it. Questions 4 and 14 were drawn down by my right hon. Friend the Chancellor of the Exchequer precisely because he recognised the interest in the matter, and there were then well over 20 minutes to discuss it.

The right hon. Lady spoke about oral statements. I entirely accept that, wherever possible, it is better for oral statements rather than written statements to be made to the House, and we will not keep her unsatisfied in that respect this week, next week or the week after. However, many statements have to be made by way of written ministerial statements. It is a characteristic of all Governments at all times that many announcements tend to be delayed until the last minute before recesses. Written ministerial statements were an innovation that we introduced because they are better than planted parliamentary questions, but I am encouraging my colleagues to ensure that, whenever possible, written ministerial statements are published before the last day. We are all aware of the issue, but with the best will in the world, there will be some on the last day.

The right hon. Lady asked about hidden waiting lists and the true state of those lists. I am only too happy to tell her about the true state of the waiting lists. I will not mention the increase of 85,000 in the number of nurses since 1997, nor the increase of many thousands in the number of doctors. Nor will I mention the fact that between 1997 and 2005 the number of doctors in the health area that covers the right hon. Lady’s constituency increased by 1,400. I will mention, however, that overall waiting lists have fallen by 370,000 over the past nine years. The average wait for in-patient treatment is now 7.7 weeks, and waits of more than nine months are down by more than 118,000 since 1997. I am grateful to the right hon. Lady for asking that question.

I understand the point that the right hon. Lady makes about mental health services. My right hon. Friend the Secretary of State for Health is ready to publish the National Patient Safety Agency’s report, which is being finalised, as soon as it is complete. I cannot promise that there will be a debate on mental health services in the spillover session, but I can promise that there should be such a debate in the autumn.

The right hon. Lady asked about statements by my right hon. Friend the Home Secretary. There will indeed be statements if he has to make any significant changes before the recess.

The right hon. Lady referred to a fine speech that I made in 1995 about reorganisation of the Office for National Statistics. I am flattered that she has such a stock of my speeches. That led to a manifesto commitment in 1997, which my right hon. Friend the Chancellor of the Exchequer has taken forward. Progressively, we have strengthened the independence of the ONS—I am glad to see agreement from Conservative Members on this—and we will continue to do so. That is in sharp contrast to the scandal under the Conservatives, who undermined the integrity of national statistics by manipulating them.

I am surprised that the right hon. Lady did not give me the usual list of demands for additional debates. I assume that she did not do so because of the most extraordinary own goal that she and Opposition Front Benchers committed yesterday. I have been in this House for 27 years, and I cannot think of a single occasion when the Opposition have gone into the Lobby five minutes before an Opposition day debate to vote to silence the House on that day. However, if they want to carry on in that way, that is absolutely fine.

Has my right hon. Friend seen early-day motion 2483 on the death of Zahid Mubarek?

[That this House welcomes the report of Mr. Justice Keith into the death of Zahid Mubarek at Feltham Young Offenders' Institution; condemns without exception the litany of systemic and individual failures that led to the death of this young man; calls on authorities to consider what action they are able to take against those individuals specified by Mr. Justice Keith as having direct responsibility in some way for the death of Zahid Mubarek; and hopes that in light of this tragedy action is taken to improve the conditions in which young offenders are detained and to safeguard young offenders in detention.]

I am sure that my right hon. Friend will have seen the report by Mr. Justice Keith, which sets out a systematic set of failures by the Prison Service, particularly at Feltham young offenders institution, where this young man died on the day before he was due to be released. As yet, no one has been held responsible. May we please have a debate on this important issue to ensure that the circumstances surrounding Zahid’s death are not repeated?

I fully understand the deep concern of my right hon. Friend, the family of Zahid Mubarek, and many others. I was Home Secretary at the time of this terrible murder, and I take my share of the responsibility for the Prison Service’s failure at that time. Many positive changes have been introduced in the Prison Service since 2000, not least following the important judicial inquiry that was conducted. I believe that the Prison Service is now absolutely seized of the need to ensure that something like that never happens again.

We shall try very hard not to interfere with the Conservative Opposition day next week.

The Leader of the House suggested that what we just witnessed from the Chancellor of the Exchequer was normal procedure. It is not. I defy him to find in “Erskine May” any example of a 66-page document—a White Paper with enormous ramifications for public spending—being released under such circumstances and without the opportunity for proper debate. I ask him seriously to consider whether it should have been a matter for a proper statement to the House, as I believe that it still should be next week.

I hear what the Leader of the House says about trying to avoid last-minute written ministerial statements. I hope that he achieves that. Perhaps he should tell Departments that the House goes into recess next Thursday—then we will have all the written statements on Thursday and at least two days to consider what they say before the event.

We should have a debate or a statement on the health service. I was struck, as was the right hon. Member for Maidenhead (Mrs. May), by the delays in diagnostic testing. It is not good enough that people have to wait for six months after seeing their GP for an essential diagnostic test. Irrespective of the investment that is going into the health service, that is a critical period for patients. This needs to be addressed, as it is an area where the Government are failing.

When we are debating the health service, perhaps we could consider the position of foundation hospitals and the fact that the heads of the companies that lend more than £500 million a year to the NHS are worried that they are going bankrupt. Are not the Government worried that foundation hospitals, which are now the flagship of the NHS, are going bankrupt?

I hope that I am not breaching any sub judice rules following recent events, but when we come back we need to have a serious and sober debate on party funding to enable us to exchange views, because all parties need to have a clear view of what will happen in future.

Before the recess, may we have a statement from the Leader of the House on the pressing matter of whether the Scrutiny Committee will have oversight of the Prime Minister’s resignation honours?

Let me deal first with the hon. Gentleman’s point about the drawing down of Questions 4 and 14 by my right hon. Friend the Chancellor of the Exchequer. There is nothing unusual about this procedure. [Interruption.] There is not—it is set out on page 399 of “Erskine May”, and it is usually for the convenience of the House. I used the procedure as Foreign Secretary in respect of an issue that was of profound importance to Members of this House, as well as internationally, and excited just as much interest—the necessary withdrawal of our monitors from the jail in Jericho that then led to the arrest of the prisoners. For the life of me, I cannot see why Opposition Members are complaining about this, because it was to the benefit of the House, not its disadvantage.

I cannot guarantee that there will be no written ministerial statements on the Tuesday that we get up, but I hope that there will be fewer. As we all know, when written ministerial statements are put down on the Tuesday rather than the Monday there is, among other things, a cry that we are trying to avoid scrutiny. Generally speaking, we are not—it is merely that there has been a great logjam in getting them agreed.

There will be a debate on aspects of the health service when the Compensation Bill is before the House on Monday. There are plenty of opportunities to debate health services, and we are always delighted to do so, because despite the difficulties that will arise at any time, there is not a single constituency in which health care and spending has not improved, and the satisfaction of our constituents has not gone up, in the past nine years. Yes, it is the duty of Oppositions to criticise the Government, but in doing so they should not continually imply criticism of the additional thousands of doctors, nurses and other health care workers who are delivering that additional health care.

The hon. Gentleman will be aware that Sir Hayden Phillips is conducting an inquiry into party funding to which all parties are giving evidence. Sir Hayden has said that he intends to report by the end of the year, and he may give some interim indications in the middle of the autumn. It would be premature to have a debate until we have at least an interim report from him.

On the Scrutiny Committee, I hope that the hon. Gentleman will allow me to write to him.

May I remind my right hon. Friend that today—13 July—is the birth date of John Clare, one of our greatest English poets? Many regard Clare as one of the greatest English poets of the countryside and the environment. Would not it be appropriate to hold an early debate after the recess about the Education and Skills Committee report on the value of out-of-school education? We expect an imminent response from the Government on a manifesto for education outside the classroom. Is not it time that we ensured that all children in this country, wherever they live, have the opportunity to visit, enjoy and fall in love with the English countryside?

I agree with my hon. Friend’s sentiments and I commend his work on commemorating John Clare, including setting up a trust, about which I recently read an interesting interview with him in a magazine.

On the back of the most peaceful July parade for many years, will the Leader of the House arrange for a debate so that we can examine areas where there were glitches, consider changes that can be made to the procedures and structures surrounding parades and perhaps discuss the Northern Ireland Office’s initiative to fund the Orange Institution to broaden the event’s appeal and make it more of a tourist attraction?

My right hon. Friend the Secretary of State for Northern Ireland reported to Cabinet this morning that yesterday was the first occasion since 1970 when the Army did not need to take part in policing the parades—an extraordinary achievement by all the communities in Northern Ireland and the security forces. I offer our congratulations.

I cannot promise an immediate debate, but I take note of the comments of the hon. Member for Belfast, East (Mr. Robinson) and I am sure that discussions will take place between him and my right hon. Friend the Secretary of State for Northern Ireland.

Will my right hon. Friend agree to an annual debate on the Welsh block—the billions of pounds that the House provides for public services in Wales? Secondary school heads in my constituency tell me that there is a growing disparity between what they receive and what schools in others parts of the United Kingdom receive. Given that the Assembly Minister for Education, Lifelong Learning and Skills refused to meet them, refuses to meet me and even refuses to meet the Assembly Member for Islwyn, Irene James, an annual debate will mean that those of us in the United Kingdom Parliament can scrutinise what is being done with the generous settlement that we provide.

Such a debate would be a good idea. My hon. Friend emphasises that the House controls the amount of money available to the devolved Welsh Assembly and the devolved Scottish Parliament. We did not make a one-off decision to devolve power to the Welsh Assembly and the Scottish Parliament. Although we devolved power to them, we continue to exercise a great deal of control over what they can do through the block grant. For that and many other reasons, any suggestion that there should be two tiers of Members of Parliament in the House, with Scottish and Welsh Members denied an opportunity to vote on issues that directly or indirectly affect their constituents, is an outrage and would undermine the Union of the United Kingdom.

I fully support the request of my right hon. Friend the shadow Leader of the House for a debate on mental health services and facilities, not least because I have received information that Cheshire and Wirral Partnership NHS Trust is trying to remove all in-patient mental health facilities from Macclesfield district general hospital.

Will the Leader of the House give an assurance that the Greater Manchester PCTs forum will not make decisions about in-patient paediatric, maternity and obstetric services that affect my district general hospital and the people of west Derbyshire and north-west Staffordshire as well as east Cheshire before the House comes back? It would be wrong for Members of Parliament not to have an opportunity to raise those matters on the Floor of the House. We are considering essential NHS services.

I shall pass on the hon. Gentleman’s comments to my right hon. Friend the Secretary of State for Health and ask her to respond to his obviously genuine concerns. He is an experienced advocate for his constituents and I know that he will be skilled in making his points to the PCTs forum and the PCTs in his area as well as the mental health trust. There is no way in which the health service in England can be run through the Secretary of State and the Department of Health making every decision. Local trusts or bodies will always make decisions locally, and that is appropriate. They are given the responsibility and have to make the decisions.

In response to questions from me at a sitting of the Environment, Food and Rural Affairs Committee yesterday, the Secretary of State was unable to reassure the Committee that, as a result of failures in the Rural Payments Agency, the Department is not contemplating severe cuts in current and future budgets of the agencies and organisations that it funds. Will the Leader of the House give an assurance that if DEFRA is contemplating cuts to bodies such as the Environment Agency and British Waterways, he will ask the Secretary of State to come to the House to make a statement before the recess so that hon. Members have the opportunity to question him about why those bodies, their customers and those who rely on their services should suffer cuts because of unconnected failures in the Rural Payments Agency?

All Departments have to live within their budgets—that is life. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has been assiduous in coming to the House to make statements. I am sure that he will do so again if it is judged appropriate.

The Leader of the House appeared to fail to understand the strength of feeling on the Opposition Benches about extradition arrangements with the United States and the lack of reciprocity. He failed to understand that we felt so strongly yesterday that we were prepared to delay our debate on home information packs until next week by voting with the Liberal Democrats to draw attention to the fact that something disgraceful is happening. He could put the matter right. The Police and Justice Bill will return from the Lords soon. The Government suffered a major defeat when their lordships rightly decided that there should be reciprocity. May we have ample time to debate the relevant amendment and a free vote, so that Labour Members who share our concerns are allowed to do that without the interference of the Whips?

I can take such criticism from the Liberal Democrats, who have consistently expressed their concerns about the Extradition Act 2003. It was known from the start that there would not be complete symmetry. We debated the matter at great length, not only yesterday but during the passage of the 2003 Act and when the matter was debated Upstairs under affirmative resolution procedure, which designated the United States as a part 2 country, notwithstanding the fact that it had not ratified the treaty. The Liberal Democrats voted against the order when it was presented on the Floor of the House on 15 December 2003. We voted in favour of it. The right hon. Member for Bracknell (Mr. Mackay) and all his hon. Friends abstained. They had no view about it then. That shows how little concerned they were about the matter at that stage. I am sorry but it is not a matter for Johnny-come-latelys.

Given the rapidly deteriorating situation in the middle east, will the Leader of the House assure us that the Foreign Secretary will discuss the matter with colleagues at the G8 over the weekend? As well as the report back from that meeting, will my right hon. Friend please reconsider whether there is time for a full debate?

I understand the desire for a full debate, and so does my right hon. Friend the Foreign Secretary. My right hon. Friend the Prime Minister will go to St. Petersburg for the G8. As he told the Cabinet today, it is clear that the deteriorating situation, which now affects the whole of the middle east, will be at the top of the agenda for all G8 countries. In Cabinet, my right hon. Friends the Foreign Secretary and the Prime Minister expressed profound concern, and the Foreign Secretary reminded Cabinet of her condemnation of what is regarded as a disproportionate response by Israel as well as deep concern about the activities of Hamas and Hezbollah.

My right hon. Friend the Prime Minister will make a statement about that on Tuesday, following his return from the G8. The statement will be about the whole issue of the G8, but this matter can be covered by him in that statement, and it will be. There are also Foreign and Commonwealth Office questions in the following week, and meanwhile my right hon. Friend the Foreign Secretary will be at the General Affairs and External Relations Council of the European Union on Monday, where this matter will be top of the agenda—and, if possible, she or one of her Foreign Office Ministers will make a statement later in the week, if necessary.

I am a bit perplexed by references already made this morning to public funding, but in the light of increasing public concern, and given the conclusions in the recommendation of the Public Administration Committee, which was published this morning, can Government time be found to debate the issues addressed in my Honours (Prevention of Corruption) Bill, and will the Prime Minister make a statement?

The progress of Bills in this House is a well-known procedure and the Government will, of course, respond to the Public Administration Committee in due course.

I draw my right hon. Friend’s attention to early-day motion 2519:

[That this House believes plans by the right hon. Member for Witney to ban hon. Members representing constituencies in Scotland from voting on matters relating exclusively to England would precipitate a constitutional crisis which would threaten the future of the United Kingdom; and further believes that everyone elected to this House should have the same rights of participation, irrespective of which part of the United Kingdom they represent.]

I tabled it in anticipation of the expected Opposition day debate by the Conservative party on the West Lothian question that was due to take place yesterday, but which did not do so, presumably because wiser counsel from the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind), the hon. Member for Woodspring (Dr. Fox) and—God help us—the Daily Mail prevailed. Therefore, may we have a debate in Government time on the West Lothian question, so that the Conservative party’s incredibly cynical position on that issue can be properly exposed?

I cannot promise that, but I will do my best. My hon. Friend raises an important issue. It is extraordinary that the shadow Secretary of State for Constitutional Affairs, the hon. Member for North-East Hertfordshire (Mr. Heald), told us through the organ of The Observer that he was hoping to use an Opposition day debate before the House broke for the summer to highlight the “English votes” Bill. Somehow or other, the Conservatives had a touch of nerves; the fact that they have been so worried and concerned to avoid this issue being discussed is another reason they voted down their own half-day yesterday. I would be delighted for this matter to be discussed. Meanwhile, I should like to draw to the attention of a wider audience a speech that I made on Tuesday to the Hansard Society on precisely this issue.

I asked the following question of the previous incumbent of the right hon. Gentleman’s post, and I make no apologies for asking it again. I spent last Friday on the wards at Bedford hospital, where I witnessed nurse managers, nursing sisters and departmental managers leaving meetings in tears because they are going to lose their jobs. Nurses are the drivers of, and the most important people in, the NHS. They deserve to have a day and a debate of their own in this place, when we can discuss the future role of nursing in the UK, the fact that so many of them have lost their jobs, and where exactly nursing is going. I hope that the Leader of the House will make time for such a debate. Will he do so?

I understand the concern of the hon. Lady’s constituents, and of nurses in her area, about what are temporary difficulties in health services in some parts of the country. Of course I commend such nurses’ work, but I hope that the hon. Lady will take account of the fact that, between 1997 and 2005, there was an increase of 2,500 in the number of nurses in the area that covers her constituency.

No, 2,500 nurses have not lost their jobs in that area. There has been some reduction in the number of nurses, but that has been from a much higher level than ever was achieved under the Conservatives.

My right hon. Friend will be aware that, last week, Kate Barker published her interim report on the impact of the planning process on business. Does my right hon. Friend agree that community involvement in the planning process is a vital part of our local democracy, and that it would be appropriate for us to have a debate in this House to ensure that that aspect of the planning system receives equal treatment, so that not only the interests of one sector of the community are addressed?

I certainly agree with what my hon. Friend says about the importance of involving communities. Like him, I receive many complaints about, and representations on, planning issues; they come from both sides—they are both in favour of development and against. I will ensure that my hon. Friend’s concerns are drawn to the attention of our right hon. Friend the Secretary of State for Communities and Local Government.

Please will the Leader of the House find time for a debate on human rights abuses in China, and specifically the persecution of Falun Gong practitioners? The right hon. Gentleman might be aware of the forthcoming publication of a report, co-authored by a former Cabinet Minister from Canada, on the horrific practice of organ harvesting, and the shocking details of human rights abuses contained in that report surely demand the attention of this House and wider debate.

I refer the hon. Gentleman to the human rights report published by the Foreign Office, which gives details of the representations that the British Government are making on human rights in China. Meanwhile, I urge him, if he wishes to do so, to table a question on this issue for Foreign Office questions on Tuesday week.

I am sure that the Leader of the House appreciates the importance of schoolchildren being able to visit this House, and that he will be delighted to know that a group from Morecambe high school are here today, seeing the workings of Parliament. Will he join me in thanking the education unit for all its help and, indeed, Virgin Trains for making it possible for schoolchildren from the north-west to come here? However, can he also tell me what we can do to improve facilities—and, indeed, when the visitors’ centre will be ready—so that we can make the public most welcome in this House?

I commend my hon. Friend for her initiative in organising the Morecambe high school trip, and Members from all parts of the House. This kind of involvement by young people in the workings of Parliament and of politics is of profound importance if we are to maintain and develop interest in our democracy. Such trips are not just about having a day out; they are about something much more profound. A good experience in this House can live with people for the rest of their lives. The education unit and Virgin Trains deserve great approval. Following decisions made by this House on recommendations of the late Robin Cook and my right hon. Friend the Member for Neath (Mr. Hain), who is now Secretary of State for Northern Ireland, big changes and improvements in the way in which visitors are treated in this House are under way, and the visitors’ centre—which will be a huge improvement—will be opened later in the year.

What does the Leader of the House think of the proposal of the Hansard Society in its document, “The Fiscal Maze: Parliament, Government and Public Money”—of which he was sent a copy—for experimental financial audit sub-committees to be set up for some of the main Departmental Select Committees, so that there can be greater scrutiny of estimates and public expenditure?

It is a very interesting report—I have read it—and, as with all other Hansard Society proposals, it will be taken seriously. I will consider this recommendation with Government colleagues and will reach a considered view. Of course, because this is all-party, and it is the Hansard Society, we take it seriously.

May I tell the Leader of the House how important I think it is that we have an urgent debate on the utterly disgraceful, anti-British, unpatriotic proposal to ban MPs from some parts of this country from voting in this House?

I agree. The Conservatives might have decided not to use one of their Opposition days on this matter because of real concern among many of their wiser right hon. and hon. Members about the implications of this two-tier system, which would lead inexorably to the break-up of the United Kingdom. Let me say as an Englishman that, yes, the United Kingdom has benefited all the four nations of the United Kingdom, but it was basically an English idea and it is England that would suffer the most if the Union were to break up.

Will the Leader of the House urgently set aside Government time to discuss the plight of the families of the disappeared who were murdered by Sinn Fein-IRA and how best we can assist them in real and practical terms, as well as putting pressure on Sinn Fein-IRA to give the Police Service of Northern Ireland the locations of the murdered missing people so that they can have a proper burial and this nightmare can be brought to an end once and for all?

I will certainly pass on to my right hon. Friend the Secretary of State for Northern Ireland the hon. Lady’s very great concern, which we all share, about the plight of the disappeared and the need for a continuing spotlight to be put on Sinn Fein-IRA for their responsibility for what happened to these people.

Will the Leader of the House reflect on the fact that today, Sir Richard Thomas, the Information Commissioner, published his annual report, in which he expresses dismay at the volume and mishandling of a great deal of personal data? I suffered from the unlawful disclosure of so-called personal data about me, which were subsequently acknowledged to be wholly untrue. That underlined the need for this House to examine the workings of the Data Protection Act 1998 to see whether it should be improved, particularly so that people who are wrongly traduced can know who the authors of that calumny are.

I understand my hon. Friend’s concern and I am, of course, very familiar with the case that he mentions. We always need to improve procedures where we can, but I should point out that, had it not been for the 1998 Act, which was one of the very first that I introduced in this House as Home Secretary, none of us would have any right to know what data are held about us.

May I return to the question of party funding? I have already highlighted how various constituency Labour parties are breaking the law, specifically section 5 of the Political Parties, Elections and Referendums Act 2000, which requires that constituency parties declare income of more than £25,000. According to written answers, 308 Conservative and 76 Liberal Democrat associations declare their accounts, but only 24 constituency Labour parties do. I was intrigued by the advertisement in today’s edition of The Times, which purports to be from 28 individuals who say that they are

“proud to help fund the Labour Party.”

They may be proud but, according to the Electoral Commission’s website, fewer than half of them have declared their donations to the commission.

That might be because of the size of the donation. I would not advise the hon. Gentleman to mix it on this matter. If he has any complaints, he should refer them to the Electoral Commission; meanwhile, he should not judge the Labour party by the standards of the Tory party. I think that there is probably a reason why not many Labour party constituency associations are declaring that they have an income of more than £25,000—it is because they do not have an income of more than £25,000.

International Development

With permission, Mr. Speaker, I wish to make a statement about the White Paper on International Development that I am publishing today. Copies of it, and of this statement, have been placed in the Vote Office.

At a time when the world has never been richer in wealth and knowledge, pregnancy and child birth claim the life of a woman every minute. Every day, dirty water and bad sanitation claim the lives of 5,000 children. Every year, malaria kills 1 million people, tuberculosis 2 million people, and AIDS 3 million people. Each death is a death caused by poverty.

Last year, the world came together and agreed to do something to change that. The G8 summit at Gleneagles promised more aid and debt cancellation, support for free education and health care, treatment for all with HIV/AIDS, and better ways of dealing with conflict. We have made progress in the past 12 months, but we have not yet made poverty history. There is still much to do, and this White Paper sets out our plans for the next five years. In preparing it, we received more than 600 submissions from around the world, and I would like to thank Members and their constituents, as well as many others, for their contributions.

How countries progress and improve the lives of their citizens is a complex process, but we know that governance is fundamental to it. Development does not happen without effective states that are capable of delivering services to their citizens and helping economies to grow—states that respond to people’s needs and which, in turn, can be held to account. For all those reasons, good governance is at the heart of this White Paper.

While we will continue to help build public institutions’ capacity for good governance in developing countries, we will now do more at the grass roots to reinforce the demand for good governance. To do this, we will set up a new £100 million governance and transparency fund, which will support civil society, a free media, parliamentarians and trade unions in improving accountability. To ensure that our aid is used to best effect, we will in future regularly assess the quality of governance and transparency and the commitment to reducing poverty in the countries in which we work. We will publish these assessments and use them to help make decisions about our aid.

Recognising that bad governance and corruption are international problems, too, we will: publish an annual UK action plan to tackle corruption affecting developing countries, and report on progress every six months; set up a new unit to investigate money laundering and allegations of bribery affecting UK firms; help developing countries to track assets and to carry out investigations; seek to expand—including through a resolution in the United Nations General Assembly—the successful extractive industries transparency initiative to other sectors such as construction, procurement and health; and work with others to set international standards to tackle the trade in conflict resources that fuels so much destruction. We will also strengthen implementation of the Organisation for Economic Co-operation and Development’s guidelines with new arrangements for the UK contact point, involving independent experts.

People cannot escape poverty if there is war and insecurity. We will therefore increase our efforts in fragile states and invest more in at least 10 countries where security is a major issue. That will mean help with reintegrating ex-combatants, supporting access to justice, monitoring human rights and reducing the spread of small arms, including through an international arms trade treaty.

Peace and good governance are also essential for the economic growth needed to create jobs and raise incomes. We will support the Infrastructure Consortium for Africa—which has already helped to secure investment of £1.4 billion in a range of projects—and the investment climate facility. We will double our funding for research in science and technology, agriculture, adapting to climate change and new drugs and vaccines. We will help poor people to get better access to markets to sell their goods, and to finance to support their livelihoods. We will also continue to press for a trade round that enables developing countries to earn their way out of poverty, while meeting our pledge to provide £100 million a year in aid for trade by 2010.

Everyone should have decent health care, education, water and sanitation, and social security when times are hard, and UK aid is already helping Governments to bring those to more of their citizens. With our aid rising to meet the UN 0.7 per cent. target by 2013, we will increase our spending on these public services to at least half of our bilateral aid budget. We will make long-term-commitments through 10-year plans, so that countries can make long-term decisions to hire staff, build schools and clinics and abolish user fees.

We will increase spending on education to £1 billion a year by 2010 and, having doubled our spending on water and sanitation in Africa to £95 million a year by 2007, we will double it again by 2010, because clean water saves lives and helps more girls to go to school. We will also significantly increase our spending on social security in at least 10 countries in Asia and Africa over the next three years, because we know that one of the most effective ways to break the cycle of destitution that affects the poorest and most vulnerable is to give them a hand up to get them back on their feet.

All that will need to be done in a world that is changing—in which there is population growth, rapid urbanisation, the depletion of natural resources and climate change. That will be the ultimate test of global good governance, so we will work to secure international agreement on a long-term stabilisation goal; seek to ensure that developing countries are able fully to participate in any international negotiations; and support countries in adapting to climate change while generating the investment needed for clean energy.

We will also need an international development system fit for this century, not the last. We will push for reform of the United Nations, so that there is centrally pooled funding and a single plan in each country; an integrated UN humanitarian system that responds faster when crisis strikes; further reform of European aid, so that the European Union can play its full part in international development; and a better system for holding all of us—developed and developing countries alike—to account for the promises that we have made.

Finally, because this is a task for all of us, but particularly for the next generation, we will double our investment in development education so that every child in the UK has a chance to learn about the issues that shape their world. We will set up a new scheme to help UK groups to build links with developing countries and expand opportunities for our young people and diaspora communities to volunteer in those countries and to undertake internships with development charities.

Madam Deputy Speaker, there is much for all of us to do. We have listened to the voices of people in developing countries, who have told us all what they want. We listened to the British people as they campaigned to make poverty history and, with their and the House’s support and the proposals I am setting out today, the UK will play its part in helping people to eliminate poverty and to change their lives, and thus our world, for the better.

I thank the Secretary of State for his customary courtesy in giving us advance sight of his White Paper this morning and of his statement on it. The whole House will understand that it is a White Paper of more than usual importance—not only to the hundreds of thousands, indeed millions, of our fellow citizens in Britain who care very deeply about these matters, but also to those living in a dangerous world where poverty and conflict breed anger and deep disaffection. We must demonstrate that Britain has the determination and the leadership to make the contribution that both our self-interest and our moral duty demand.

I very much hope that the Secretary of State will feel that he draws strength from the fact that this is not a Labour or a Conservative agenda, but rather a British agenda. All mainstream parties in Britain are committed to the 0.7 per cent. target by 2013. On this side of the House, we are as determined as the Government to ensure that the British contribution to lifting the living standards of the poorest, combating disease and illiteracy, promoting good governance and improving multi-national institutions is effective and successful. We may have differences of opinion about how best to deliver some of the noble aims and objectives set out in the White Paper, but those aims and objectives have our wholehearted support.

We look forward now to studying the White Paper and note that the House will have an opportunity to debate it next Thursday. At this early stage, I should like to ask the Secretary of State a number of questions. First, he has said that good governance is at the heart of his White Paper. We acknowledge the steps that the Government have already taken, building as they have on the foundations laid by Chris Patten, Lynda Chalker and the last Conservative Government, but more needs to be done. I am pleased that the Secretary of State has said today that he will in future regularly assess the quality and transparency of government. I would like to ask him, though, what form that monitoring will take, who will do it and, most importantly, whether it will be independent of his Department?

Secondly, the Secretary of State mentioned in respect of good governance a new unit to investigate money laundering. That is of interest to other Departments and agencies of the Government, so what discussions has he had with colleagues to ensure that the process is properly joined up and co-ordinated?

Thirdly, the Secretary of State has rightly spoken up for an international arms trade treaty, but he will be aware of the deeply disappointing conclusion and lack of progress at the recent international conference. What is he doing to re-energise this important effort ahead of the UN General Assembly later this year?

Fourthly, the Secretary of State set out his plans to spend more in fragile states, but how does he intend to ensure that such help gets through to the most needy on the ground? What steps will he take to work through deeply committed and effective non-governmental organisations such as Oxfam, working, for example, in Darfur? The shadow Foreign Secretary and I recently saw the work it does there.

Fifthly, the Secretary of State spoke of the importance of securing a successful trade round that enables countries to earn their way out of poverty. He will know that the next few days are critical in persuading the key parties to the talks to give a little more to avoid the calamity of failure. What steps are the Secretary of State and, in particular, the Prime Minister taking to reinvigorate the negotiations in the margins of the G8 and beyond? Do not recent developments in China and India, where millions have been lifted out of extreme poverty, demonstrate that access to markets and trade are a vital component of prosperity?

Sixthly, the Secretary of State rightly spoke of the need to update and reform the international institutions on which international development depends. In particular, he mentioned the United Nations. In my experience, it is an organisation that attracts people of the highest calibre and idealism—people like Mark Malloch Brown, the Deputy Secretary-General—but it is floundering because of an outdated organisational structure. What ideas does the Secretary of State have to make the much-vaunted “responsibility to protect”, enthusiastically embraced by all nations at the UN summit last year, meaningful to people suffering in Darfur, Burma or Zimbabwe? How far should it impose on the international community a responsibility to intervene?

In his statement, the Secretary of State mentioned future reform of EU aid. As he knows, we have reservations about the fact that aid channelled through the EU does not always reach the poorest or those who most need our support. What can he tell the House about his plans for leading such reform within the EU, which would bring EU aid closer to the ideal that we both share?

The Secretary of State has made clear the potentially disastrous effects of climate change, particularly for the developing world, whether in the deserts of Africa or the flood plains of Bangladesh, which I am visiting on Monday. Will he tell us what structural changes his Department is making to address that problem and the interface between development and climate change?

Finally, although we will want in due course to discuss in detail whether the Department is giving adequate and rigorous attention to the independent evaluation of aid effectiveness, particularly to outputs and outcomes, we welcome what the Secretary of State has said and applaud the emphasis that he has placed today on the importance of good governance.

I am grateful to the hon. Gentleman for supporting the White Paper. It is indeed, in the broadest sense, the product of politics and of our own form of good governance. As the hon. Gentleman mentioned two of my predecessors from the Conservative party, who occupied the position that I now have the privilege to hold, let me say that part of the reason why I am able to announce increased spending on education and on a doubling again of investment in water and sanitation is that we have a rising aid budget. While I welcome the spirit in which the hon. Gentleman approaches his job and what he has said today, it has to be said that, in the end, we should all be judged by what we do when we have the chance to do it, rather than by what we say when we are not in power. People will have memories about what has happened in the past.

To deal with the hon. Gentleman’s specific questions, we will undertake the assessment ourselves, but we will draw on a wide range of sources. It will include others who are looking at the quality of governance and we will obviously talk to the Governments of the countries concerned. The fact that we will publish that will mean that there is transparency, and if others have a different view of our assessment they will no doubt be able to speak up.

On the new unit to fight corruption and money laundering, I have, of course, discussed it with my right hon. Friends. I believe that it is absolutely right and proper that, in addition to the contribution of officers from the Met police and City of London police, DFID should contribute. As the hon. Gentleman knows, if we can be more effective in fighting corruption, the development benefits will be enormous.

On the arms trade treaty, the short answer is that we will continue our efforts to persuade others in the international community that that is the right approach to take. If my memory serves me correctly, about 50 countries in the world support the principle of an arms trade treaty, and the consequences of the unfettered flow of arms are always to be seen in conflict, death and destruction. We are making the case and we are working hard to encourage other countries to support it.

It is, of course, important to do more work in fragile states and the answer to the hon. Gentleman’s question is that we will work with a variety of partners. Where it is possible to work with a country’s Government, we will do so in the right circumstances, and we will also work with NGOs and other international partners.

On the trade talks, the hon. Gentleman will be aware that the Prime Minister has been working very hard since the failure of last year’s Hong Kong talks to try to get the discussions back on track. He is doing so as we speak in the run-up to the G8 summit this weekend. The question is how the logjam between the three big blocs can be broken. The Prime Minister has done as much, if not more, than anyone else in the world to try to break that logjam, but it requires all parties to recognise the need to move.

On UN reform, the principal change that we need is that the UN development system should be more effective, which is why we have been very strong advocates both of the “four ones” in-country and of a central pool of funding, so that the UN system—which ought to have lead responsibility, particularly in fragile states and in setting standards—can be more effective.

On the responsibility to protect, we need a combination of political will and the Government have demonstrated that—as the hon. Gentleman referred to Darfur—in pressing very strongly in the UN Security Council for sanctions, for the UN force to be allowed to come in and for referring what happened in Darfur to the International Criminal Court. That is one aspect of the responsibility to protect. The other thing that we need to do is to build the capacity to act. That is why we have been such a strong support of both AMIS—the African Union Mission in Sudan—in Darfur and building an Africa stand-by capacity.

On EU aid, it is a question of both European Community aid—which has undoubtedly improved in recent years, but still has some way to go, particularly in ensuring that the EC has the right skills in-country—and the quality of aid of other EU members states, because almost all the growth in aid over the next five years will come from Europe. Therefore, part of what we will do is to talk to our partners about ways in which we can work more effectively together.

On climate change, the permanent secretary is undertaking a skills review in DFID precisely to do what the hon. Gentleman referred to, namely, to ensure that we have the right skills to take on that increasingly important work.

I hope that the hon. Gentleman can rest assured that I will continue to be determined to ensure that we keep an eye on aid effectiveness, because in the end all that work and all the policies laid out in the White Paper are for a purpose, which is to demonstrate to people that our international development effort makes a difference—and to do that, we must show results.

I strongly commend my right hon. Friend’s statement, as well as the White Paper that underlies it. He will have widespread support for the whole concept of capacity building, which is absolutely vital not simply in the fight against corruption, but in building strong societies. In that context, we as the United Kingdom have a special role in increasing the capacity of the legal and courts systems, which are absolutely fundamental to the whole concept of good governance, precisely because the English legal system is still the dominant system in large parts of the world. Will he tell the House how exactly we can enhance our role to ensure that the courts and the general legal framework are central to his own capacity building for good governance?

I agree completely with my hon. Friend, because an effective, functioning legal system is fundamental to good governance and, in particular, to giving people the confidence that if they have a dispute—whether between two neighbours or in trying to enforce a legal contract—their court case will be dealt with fairly. With a good, functioning and effective legal system, people are more likely to invest their money in those countries and therefore create jobs and generate the wealth that they need to pay for improvements in health and education.

We already do a great deal of such work, as my hon. Friend knows, but what has been most striking in the past year is the keenness with which my Cabinet colleagues have said that they would like to do more of this work together. That is why we are now moving to the next stage of the Africa capacity-building initiative, which is to find a mechanism to match the desire to help with the demand for assistance from developing countries, so that we can draw on the great well of expertise and good will in the UK to work with legal professionals and others in developing countries to share skills—indeed, to learn from one another—because that is absolutely fundamental to making progress.

I, too, thank the Secretary of State for presenting the White Paper and for the courtesy of supplying me with an advance copy of both the White Paper and his statement. The White Paper deals with issues that are literally matters of life and death for many of the most vulnerable people on the planet, many of whom are not only suffering from poverty, but from hunger and thirst, in some of the most dangerous parts of the world—with natural and man-made disasters combining to add to their misery. These are complex issues and the detailed response set out today in the White Paper is a good milestone on the journey towards the end of that misery.

Only a year ago, we witnessed not only the Make Poverty History march through my home city of Edinburgh and the Gleneagles summit, but the claims that, if only the G8 leaders would act on aid, trade and debt, we could make poverty history. However, I believe that such claims alone are simply not true, because other important issues, which are set out in today’s White Paper, must also be tackled fully to make poverty history. Conflict is detailed on page 46 of the report, and the crisis that often follows the availability of natural resources in many of those fragile states is dealt with on page 35. Corruption is highlighted, as is global warming and the problems of disease—AIDS, malaria and tuberculosis—and access to clean drinking water supplies.

The title of the report highlights the importance of good governance, and corruption dramatically affects many of the fragile states that we have talked about. Corruption is not just an issue at the lowest level, where people on starvation wages might take a bribe as a way to feed their children; some people at the top are skimming millions of dollars into overseas bank accounts, and action on that both in DFID and in the City of London is absolutely vital. I look forward to hearing what the Secretary of State can do in conjunction with the banks and other institutions in the City to tackle that issue.

Democracy is also highlighted in the report, but we must remember that elections are simply not enough on their own if they give legitimacy to corrupt regimes. I should like to hear from the Secretary of State what he will do to empower citizens to hold their own Governments to account and to work with other Departments, such as the Foreign Office and the Department of Trade and Industry, and parliamentarians here and abroad to ensure that that problem is tackled at all levels.

We have also heard that aid must be effective. It is good that DFID’s aid budget is increasing, but the Secretary of State is under pressure to reduce staffing levels. It is more important than ever for his Department to monitor the effectiveness of the spending to ensure that it is effectively delivered. Where DFID has taken action—for instance, in Malawi, where the World Food Programme was charging more than $240 a tonne to deliver food aid, when DFID could deliver it for $100 a tonne—much more aid was delivered, and I hope that reducing staffing levels will not reduce the ability to monitor where the money is effectively spent.

Does the Secretary of State agree that DFID will be judged not on how much it spends, but on how effectively that money is spent? The Department has a good record on delivering humanitarian assistance following disasters. I recently witnessed its excellent response following the earthquake in Pakistan, but one interesting issue that cropped up on the ground there and stimulated debate is that of flag flying and the awareness of exactly what aid DFID is funding and delivering. An example was that the temporary shelters provided to help some of the 2 million to 3 million homeless in Pakistan had the Norwegian Government’s brand on them, but they were more than 50 per cent. funded by DFID. Although I do not say that the flag should be waved in a colonial manner, we must ensure that two things happen. First, people must not be misled into not being aware of what DFID is funding. Secondly, when we are trying to build bridges with the Islamic community here at home, it is key that we make clear exactly what is happening in areas such as Pakistan and in other communities throughout the world, where good work is being done that is sometimes not fully recognised.

I have not had time to read all the report, but I should also like to hear from the Secretary of State whether more will be done on remittances. He will know that massive sums of money are flowing into the poorest countries of the world, but some of them have significant transaction costs, which reduce the money’s impact at its final destination.

Page 7 of the report refers to the number of people living in the poorest countries of the world. Although we know that the poorest of the poor live in Africa, most of the world’s poorest live elsewhere. I should like to know what the Secretary of State will do to reconsider how best to focus DFID’s attack on poverty to catch those missing millions who live on less than $1 a day in Asia and Latin America.

The Secretary of State rightly highlighted—again, there are details on page 93 of the report—the more erratic weather conditions that are affecting more of the poorest of the poor in places such as the horn of Africa. Never before have we seen a clearer example of how the actions of the developed world, which is producing carbon emissions and eating up natural resources as if there were no tomorrow, and the impact that we in the west are having on the future of the poorest of the poor in sub-Saharan Africa and other parts of the world—

Order. I would be grateful if the hon. Gentleman could bring his remarks to a close. There is pressure on the business of the House because of the further statement.

I am grateful to the hon. Gentleman for his support. He made an important point about the two types of corruption—grand and petty corruption. The action plan that I shall publish will give the House an opportunity to see the progress that we want to make. The governance and transparency fund will be the main vehicle for supporting people in their communities in improving the demand for good governance, and I will consult about the best way of setting that up.

We will indeed monitor the effectiveness of our spending. It is good to see my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) in the Chamber. I hope that his Bill will get on to the statute book, because it will provide us with a very effective means of doing precisely what the hon. Member for Edinburgh, West (John Barrett) asked for in that regard.

On disasters, we are considering putting in place some branding of the help that we give. There was, however, little doubt in the minds of those in the UK Kashmiri and Pakistani communities about the effectiveness of Britain’s aid in response to the earthquake, not least because we sent the first search and rescue teams to the area. We are already doing work on remittances, particularly to bring down the costs involved, and we will continue with that work. In relation to the larger countries in Asia, I remind the hon. Gentleman that our biggest programme of all is in India, which is now making real progress. However, all those countries are going to be affected by climate change, and we have set out proposals on how we intend to respond to that.

I add my congratulations to my right hon. Friend on the excellent White Paper. He may be aware that the World Bank and the International Energy Agency have estimated that it will take $300 billion every year for 25 years to meet the energy needs of developing countries and emerging economies. Will he work with the World Bank on its energy investment framework to ensure that, as far as possible, we donor countries no longer support polluting old energy technologies in developing countries, and that instead we provide them with the new technologies that deliver clean energy so as not to add further to the problem of climate change?

We will indeed support the World Bank in developing the energy investment framework. We will have a progress report on that at the World Bank’s annual meetings in the autumn. My hon. Friend is right. There is a great thirst for energy in developing countries, because that is literally how they are going to be able to fuel economic development and fight poverty. It is vital that, as they invest in that new generating capacity, they do so in a way that does not add to the problem of climate change.

I welcome the White Paper and commend the right hon. Gentleman’s Department for the leadership that it gives in setting standards for how aid should be delivered. I also welcome the fact that he is concentrating on good governance, which is essential if the money is to get to the poor rather than to corrupt elites. How effectively will he be able to deliver his objectives in the light of his recent cuts in budget support, particularly in Ethiopia and Uganda? Despite the fact that $200 million of international aid is going to northern Uganda, the Ugandan Government are failing adequately to deliver health care, education and policing. How will the Secretary of State ensure that they deliver those services and that we get an international settlement that will allow people to return to the region? Does he believe that he can deliver his budget with reduced staffing levels? If he has to go down the multilateral route, how will he use his role as the British member of the World Bank to make it more effective and follow DFID’s world-class example in delivering aid more effectively? Is he aware that the International Development Committee will publish its report on private sector development before the recess? Will he explain what he proposes to do, through his Department, to unlock foreign investment and, in particular, domestic indigenous investment from entrepreneurs in poor countries? That is an essential means of expanding the private sector and delivering growth, which will bring down the levels of poverty.

I am grateful to the hon. Gentleman for his work in chairing the International Development Committee and for his kind words. In the case of Ethiopia, we have found another route for our aid, through the basic services grant, so that poor people are not punished because of the problems of governance there. In Uganda, a political settlement is needed. In my view, that requires the five indicted leaders of the Lord’s Resistance Army to be hauled off to the International Criminal Court where they belong, because that would unlock an end to the terrible crisis that has affected so many people there.

The head count restrictions will have an impact on the way in which we work. The permanent secretary is also looking at how we are going to make that happen. I know that he gave evidence to the Select Committee the other day. On the multilateral system we will become more selective about where we put our money. The question that I will increasingly ask—as the House would wish—is, “What effect will we get from putting our money into this route, as opposed to that one?”

I look forward with great interest to the private sector development report. Good governance is fundamental to unlocking the investment that the hon. Gentleman and I want to see. If there is peace, security, stability and good governance, people are much more likely to invest their own money and that of other people.

Order. I remind hon. Members that there is a further statement to follow, as well as the main business. I therefore request that Members ask just one supplementary question, and that the Minister gives just a brief reply. In that way, as many people as possible will be able to catch my eye.

I welcome the White Paper. My right hon. Friend rightly emphasises the need for good governance and transparency, but I am sure that he will appreciate that this is a two-way process. Will he outline how our Government will increase their accountability to the beneficiaries of our aid? How will the accountability of multilateral institutions such as the World Bank and the International Monetary Fund be increased?