With permission, I wish to make a statement on political progress in Northern Ireland.

Between 11 and 13 October in St. Andrews, both the British and Irish Governments engaged intensively, late into the night and from early morning, with the Northern Ireland political parties. That we were able to defy the sceptics and cynics, and secure the St. Andrews agreement, opens the way to a new dawn for democracy in Northern Ireland: a new democracy based—for the very first time in Northern Ireland’s tangled history—on the twin foundations of the rule of law and power sharing. Without question, it may come to be seen as a pivotal moment in Irish history.

Those two foundations stand together or fall together: on the one hand, unequivocal support for the police and unequivocal support for the rule of law; on the other an absolute commitment by all the parties to share power in a restored Northern Ireland Executive. Delivery on both those foundations was absent from the Good Friday agreement; now it is in prospect. That is a measure of what was achieved at St. Andrews—arguably the fulfilment of the hopes expressed on Good Friday eight years ago. The agreement has been placed in the Library and is available in the Vote Office.

All the parties at St. Andrews were crystal clear on one point at least: in May, Parliament had legislated for closure, one way or the other, on the political process. Four years since the Executive and Assembly last sat, there had been set in statute a clear end point— 24 November—by which the political parties would agree to locally accountable government for the people they represent, bringing direct rule to an end. The alternative, as I have made clear, is that the Assembly would dissolve. Incidentally, were the parties to unravel St. Andrews at any stage in the coming weeks and months, dissolution would follow as night follows day, and both Governments would move on to formulate plan B. There is not a choice between St. Andrews and something else; there is a choice only between St. Andrews and dissolution.

Since the House set the 24 November deadline in statute, there have been important indicators that the context within which political development can take place has been changing: changing fundamentally, changing for the better and, I personally believe, changing for good. Northern Ireland had the best parading season for four decades, with not a soldier on the streets on 12 July—something unthinkable just a year ago, when 115 live rounds were fired by loyalist paramilitaries at police and soldiers during the Whiterock parade. This year, Whiterock passed off peacefully, following a cross-community dialogue.

Loyalist leaders have given me assurances that, as the IRA has done, they will now work to ensure an end to their paramilitarism and criminality. Last week, for the first time ever, the leader of the Democratic Unionist party, the right hon. Member for North Antrim (Rev. Ian Paisley), met the Catholic Primate of Ireland, Archbishop Brady. The House will want to congratulate the right hon. Gentleman and Baroness Paisley on their 50th anniversary last Friday.

Over the summer, the preparation for government committee, with all the parties face to face in the room, did important and constructive work on a range of issues central to the good governance of Northern Ireland. Above all, there has been further compelling evidence that IRA violence has indeed ended, a judgment confirmed decisively on 4 October in the report of the Independent Monitoring Commission, which also confirmed in paragraph 2.17:

“The leadership has maintained a firm stance against the involvement of members in criminality, although this does not mean that criminal activity by all members has stopped. The leadership’s stance has included public statements and internal directions; investigating incidents of breach of the policy; the expulsion of some members; and emphasising the importance of ensuring that business affairs are conducted in a legitimate manner”.

The Government firmly believe that the circumstances are now right to see a permanent political settlement in Northern Ireland, with the restoration and the full and effective operation of the political institutions. Anyone with experience of the political process in Northern Ireland will know that it is never easy, that the negotiations are always tortuous and tough, and that there is always a danger of things unravelling. St. Andrews, like Good Friday, was no exception; but the harder the negotiations, the more likely it is that any agreement that comes out of them will stick.

There were two main issues to be resolved at St. Andrews if we were to achieve restoration of the power-sharing Executive: the need for support for policing and the rule of law across the whole community, which would enable, in due course, the safe devolution of policing and justice to the Assembly; and changes to the operation of the Good Friday agreement’s institutions.

On support for policing, I want to spell out to the House what that means by referring to paragraph 6 of the St. Andrews agreement. It means fully endorsing the Police Service of Northern Ireland. It means actively encouraging everyone in the community to co-operate fully with the PSNI in tackling crime in all areas. It means playing a full and active role in all the policing and justice institutions, including the Policing Board.

For many years now, all in this House have joined the Government in demanding support for the PSNI from every part of the community. My hon. Friend the Member for Foyle (Mark Durkan) and his Social Democratic and Labour party colleagues—especially John Hume—have shown courageous leadership in making that a reality. With one in five—rising to one in three—PSNI officers now Catholics, and the service deploying with local consent right across Northern Ireland, including south Armagh, policing has been transformed.

But no one present will now underestimate how significant it will be if the republican movement can accept and endorse the agreement drawn up at St. Andrews. Based on last week’s discussions, I am confident that it will do so, and that that will make for a decisive and irrevocable break from a past of violence and criminality. It will give absolute confidence in an authentically new Northern Ireland of hope and peace and the rule of law. I believe that, when that active support for policing and criminal justice is seen to be delivered, there will be sufficient community confidence for the Assembly, in line with the St. Andrews agreement, to request the devolution of justice and policing from the British Government by May 2008.

It is important to acknowledge, however, that devolution of policing is already very substantially down the road. Following the Patten report, direct rule Ministers relinquished matters of real importance. The PSNI has already been accountable for five years to the Policing Board, comprising local elected and independent representatives, to the Police Ombudsman for Northern Ireland, and to district policing partnerships. The remaining devolution of policing and justice is largely institutional, focusing more on the courts and the administration of justice than on operational policing, which in the past has been so controversial to nationalist and republican communities.

Although nationalists and republicans had major concerns over the primacy of national security being vested in the Security Service, the St. Andrews agreement makes it clear in annexe E that there is full accountability for all domestic operational security matters, because they will be exclusively undertaken, not by MI5, but by the PSNI, which is, of course, fully accountable in Northern Ireland—including those of its officers who may be secondees to MI5. We stand ready, moreover, to develop procedures and establish protocols on MI5’s activities, to provide any reassurances necessary on accountability.

Taking Northern Ireland out of a divided past and into a shared future can be done only on the basis of agreement on fundamental principles: the principle of consent; the commitment exclusively to peaceful and democratic means; the sharing of power within a stable, inclusive partnership government; equality and human rights for all; and mutually beneficial relationships developed between north and south and within these islands. Those are the fundamental principles of the Good Friday agreement, and they will always remain the bedrock and foundation of the political settlement in Northern Ireland.

However, the Good Friday agreement allowed for changes to be made to the operation of the institutions to make them more responsive and effective, and, following discussion with all the parties, we have made an assessment of them in annexe A. The Government will introduce legislation to enact appropriate changes and other aspects of the St. Andrews agreement before the statutory November deadline, once the parties have formally endorsed the terms of the agreement and agreed on that basis to restore the power-sharing institutions.

We have now set out a clear timetable for restoration. Tomorrow, a new programme for government committee will begin regular meetings at Stormont to agree priorities for the new Executive. Crucially, parties will, for the first time, together be represented at leadership level on that Committee, as on the existing preparation for government committee.

We have asked the parties to consult on the St. Andrews agreement, and to respond by 10 November to allow time for final drafting of the Bill to be taken through the House. Once that happens, and on the basis that the St. Andrews agreement is endorsed, the Assembly will meet to nominate the First Minister and Deputy First Minister on November 24, the deadline for a deal.

I do not have to spell out to the House the great significance of these nominations, the more so given those who are likely to be nominated: the leader of the DUP and Sinn Fein’s chief negotiator. I pay tribute to the right hon. Member for North Antrim; like anyone who understands something of the history of Northern Ireland, I realise that this is not an easy step for him or for his party.

In January, there will be a report from the Independent Monitoring Commission. In March, the electorate will have the opportunity to endorse the St. Andrews agreement either through an election in Northern Ireland or through a referendum. We will listen to the views of all the parties before making a decision on the most appropriate way of consulting the electorate and legislating accordingly. Either way, the people will speak.

On 14 March, prospective members of the Executive will be named by their party leaders. On 26 March, power will be devolved and d’Hondt will be run. This is an ambitious programme and there is still work to be done, but I do not think that Northern Ireland has been at this point before. It is a tribute to my right hon. Friend the Prime Minister, the Taoiseach and both British and Irish officials, who have worked tirelessly over so many years, that we are at this point. Their energy, time and patient attention to the detail of this issue has been unprecedented. But above all, it is a tribute to all the political parties in Northern Ireland—all of them—which have shown courage and leadership and taken risks for peace and political progress. They have shown that there can be accommodation and agreement without sacrificing either principle or integrity.

Friday 13 October was a good day for Northern Ireland. It has the potential to be greater still—to be the foundation stone of a new Northern Ireland based exclusively on the principles of peace, justice, democracy and equality. Whatever the difficulties that lie ahead, I trust that none of those who took part in the talks at St. Andrews last week will lose sight of that great prize.

I am grateful, as always, to the Secretary of State for his courtesy in giving us early sight of his statement. I welcome the progress made in the negotiations at St. Andrews and the positive approach adopted by each of the parties. Let me be clear that I congratulate the Prime Minister, the Secretary of State and the leaders of all the Northern Ireland parties on what is clearly a major step forward, but we are absolutely clear that, for this initiative to succeed, it is essential for Sinn Fein finally to deliver on policing.

Power sharing in Northern Ireland will not work unless every Minister in the Executive fully supports the police, the courts and the rule of law. In that context, I welcome the press reports over the weekend that the Government are now planning to amend the ministerial pledge of office to make such support a requirement of taking office. May I gently remind the Secretary of State that, when the Opposition sought to do that earlier in the year through amendments to the Northern Ireland (Miscellaneous Provisions) Bill, we were told that it was unnecessary? I am glad that Ministers have changed their minds, and I ask the Secretary of State whether he is able this afternoon to be more specific about the changes that he would like to see.

Of course, the one element of the jigsaw missing from the timetable set out in the St. Andrews document is a date for the special Sinn Fein ard fheis required to change that party’s position on policing. Can the Secretary of State give the House any indication of when that meeting is likely to take place? Will he also agree that it is crucial to the entire process that there be clear movement on the issue of policing before 10 November, when the parties have to give their responses to the St. Andrews document? Will he further agree that support for policing has to be more than just simply taking up places on the Policing Board? It has to include encouraging people in republican communities to report crimes to the police, to co-operate fully with police investigations, and to provide evidence to the police and to the courts that will lead to the conviction of criminals. It also has to involve, as the Secretary of State acknowledged, republicans urging people from their communities to join the police force as a career.

Will the right hon. Gentleman confirm that there will be no toleration whatever of either individuals or parties seeking to use community-based restorative justice schemes as a form of private justice, or as an alternative to the legitimate authority of the Police Service of Northern Ireland? Can he give a specific assurance that the words in the St. Andrews documents about reintegrating ex-prisoners into employment do not mean that the Government have any intention of relaxing the current safeguards against people who have terrorist convictions or who have been involved with paramilitary groups joining the police as officers, or becoming police community support officers?

The Secretary of State spoke about the possible routes for electoral endorsement of the St. Andrews proposals. Does he agree that, whatever route the Republic of Ireland intends to follow in that respect, it would be constitutionally wrong if citizens of the Republic were to vote in a referendum on matters that related solely to the internal governance of the United Kingdom and that a referendum in the Irish Republic should surely be confined to changes in that country’s constitution or system of government?

The Opposition support the institutional changes set out in the St. Andrews document, in particular those relating to ministerial accountability and collective responsibility. Subject, of course, to seeing the text of the new legislation, we hope to be able to offer the Government our support when they introduce the Bill. We also welcome the Government’s changes of policy on capping and additional relief for pensioners when the new rates system is introduced, and their change of heart on the retention of academic selection. Will the Secretary of State introduce a new Order in Council to repeal the complete ban on all academic selection that the Government imposed earlier this year?

I wish the Government well in the course that they have set. The ultimate prize on offer is indeed great: a peaceful, stable and prosperous Northern Ireland, with a shared future for people from all traditions, based on democracy and the rule of law rather than on terrorism and the gun. It is an objective that I believe unites all of us in this House, and success in that endeavour is in the interests of us all.

I thank the hon. Gentleman for his support for what we achieved at St. Andrews. Despite the questions that he is entitled to put to me and the answers that he is entitled to get, cross-party consensus on these matters is important at this critical moment. I also thank him for in-principle support for the Bill when we introduce it—probably in the week starting 20 November, to get it in before the deadline of 24 November. I have discussed with him the fact that the Bill will have to be taken through using emergency procedures and the Opposition’s support will be critical to deliver what we intend.

I agree with what the hon. Gentleman said about full support for the police and all the different elements of that that he described, including co-operating with investigations. That is vital. Any party that aspires to hold ministerial office, let alone any democratically elected party, ought to support the police, full stop, and the policing situation that they are being asked to support has been completely transformed, as I described.

On the pledge of office, the hon. Gentleman will see in annexe A, paragraph 8, that the preparation for government committee is being asked to consider that matter. It is important for at least four of the parties that the issue be addressed. We shall have to see what emerges from that consideration and where we can take it.

The hon. Gentleman asked when an ard fheis will be called. That is a matter for Sinn Fein’s internal procedures, but the agreement contains a reference to the Sinn Fein executive, the ard comhairle, which needs to meet sooner rather than later. He is right to say that we will need to know by 10 November whether we are in business—whether we are in a position to proceed with the emergency Bill with all-party support, or not. That will be crucial.

On community restorative justice, I can give the hon. Gentleman an absolute guarantee that there is no question of it being an alternative to the rule of law or policing. Indeed, any CRJ schemes that are supported and officially recognised—we are consulting further on that—will have to comply with the rule of law and have to have the police almost embedded within them, as happens in a number of cases now. I give the House the pledge that I gave the Policing Board last week: if we do not get the arrangements for community restorative justice schemes right and if we do not satisfy everybody, broadly speaking, we will not do them. It would be better not to have them than to create a climate of uncertainty or ambiguity about what is involved.

On recruitment standards to the PSNI, the Patten report was clear that people with serious paramilitary backgrounds should not join the PSNI, and we have no plans to move away from that. Recruits to the PSNI, whether regular officers or community support officers, will have to have the same rigorous standards of entry applied to them. There is no intention of changing that.

On an election or a referendum, the different parties are thinking about that matter and plan to come back to us. We await the outcome of their deliberations. On academic selection and rate capping, as of now the Government’s policy remains as it was prior to St. Andrews. We need to see the implementation of the agreement and delivery of the legislation in the week beginning 20 November, with all-party support for that, as well as the nomination for the First and Deputy First Minister on 24 November. That being the case, included in the legislation will be the removal of the ban on academic selection. Quite separately, if the agreement is implemented—if not, we will proceed with our policy, as was our original intention, based on long consultation—and signed up to, including those crucial steps to legislation about which the parties need to tell us by 10 November and the nomination of the First and Deputy First Minister on 24 November, we will impose a cap.

I welcome the statement and my early sight of it. Good progress has been made and it can work, particularly because the most recent Independent Monitoring Commission report suggests that the IRA’s activities have been massively reduced, although not to zero, and that many of its structures have been dismantled.

I was also pleased to see annexe B, which shows true progress on a Bill of Rights for Northern Ireland and on a single equality Bill, both of which will be essential if we are to see a truly shared future for the people of Northern Ireland.

My first question relates to the apparent removal of a cross-party vote to confirm the election of the First and Deputy First Ministers. That was a fundamental principle of the Good Friday agreement, under paragraph 5 of strand 1. Why has it been removed?

It seems that some work will be done on generating structures for a department of justice. We fully agree with that intention, but it is not clear whether the matter will be determined by the Executive or by the Assembly as a whole. Will the Secretary of State say whether the department will be established by the Assembly or by the Executive?

It seems that, when a decision is to be taken, the options are an election or a referendum. If the Government choose an election, they need to explain why they proposed in the Northern Ireland Act 2006 to postpone the election from May 2007 to May 2008, specifically to give the Assembly time to bed down and govern Northern Ireland for a year. I am not sure why there is a debate on this matter, given the Government’s robust arguments on the issue at the time. Can we have clarification, given the enormous interference in election dates that we have had?

In the interim period from now until March, there is a danger that the Government will continue using Orders in Council, which cannot be amended, with regard to legislation affecting Northern Ireland. May I have an assurance that, during that period, there will be a moratorium on any significant legislation in order to allow the Assembly to pick up the reins on such decisions?

In the spirit of celebration that may have broken out, my hon. Friend the Member for Argyll and Bute (Mr. Reid) asks for an assurance that the Campbeltown to Ballycastle ferry, which unquestionably would be in greater demand as tourists flock from Scotland to Northern Ireland, will be reinstated.

The Secretary of State will know that the promise of funding was held out and was rudely grabbed away. It is a serious issue, so may we have an assurance that that strategically important service will be revisited and will get the funding that it needs?

Finally, I want to make an observation about deadlines. I predicted that the 24 November deadline would slip. On many occasions, I sought an assurance from the Secretary of State that it would not and he said that it would not, but in reality there has been some slippage. I understand the right hon. Gentleman’s strong rationale for that slippage, but, given that it is very likely—it is obvious, in fact—that he will seek to lift the condition of having a fully established Executive on 24 November and that that decision will slip to March, what assurance can we have that, if there are further roadblocks and difficulties between now and March, the March deadline itself will not slip? The right hon. Gentleman was very robust and has been clear in the documents that have been shared with me that March is an absolute deadline, but, once again, we have seen those deadlines slip. He knows my concern. If deadlines are seen to slip, we could carry on living with slippage and deadlines for the foreseeable future and that will not lead to the lasting peace and the effective devolution that we seek.

I welcome the hon. Gentleman’s support. I am grateful for it, because we need to move forward together.

To take up his last point on slippage, we never expected that implementation would take place on 24 November. What we insisted on was that there had to be a deal, and that we have. There had to be a deal and we have a deal. Indeed, we have the nomination of the First Minister and Deputy First Minister on 24 November, so we have carried out our promise to the House in that respect.

The 26 March deadline—that incorporates the 14 March deadline for the nomination of Ministers by the parties and the 26 March deadline for the running of the d’Hondt system and the restoration of self-government—will not slip. As I said in my statement, if anything unravels, the Assembly will be dissolved and Stormont will be shut down, as it would have been and still could be. If something unravels between now and 24 November, Stormont will shut down—that would mean the end of costs, salaries and the rest of it. That is what we have committed ourselves to, with the hon. Gentleman’s support.

The hon. Gentleman is right about the IRA’s huge change. In particular, I draw his attention to paragraph 2.17 in the Independent Monitoring Commission report of 4 October, which referred in terms to the disbanding of the IRA’s structures that were responsible for the “procurement, engineering and training” of its military operation—in other words, the disbandment of its military capacity.

We have reconsidered the question of a cross-party vote and the appointment of the Executive as a result of inter-party negotiations. It was important for the right hon. Member for North Antrim (Rev. Ian Paisley) and his party to get the Good Friday agreement amended in that respect, and the way in which we have reframed it has been accepted by the Social Democratic and Labour party. We can take that matter forward.

On the department of justice, clearly the provisions are laid out for how that will be decided in terms of the Executive making recommendations and the involvement of the Assembly.

On postponing elections to May 2008, which was in the Northern Ireland Act 2006, which we carried through in May, there is a change in circumstances, because we now have the St. Andrews agreement. Most of the parties felt that there ought to be a fresh mandate for that. There is a new circumstance. The Democratic Unionist party, especially, was elected on a different manifesto and the right hon. Gentleman, its leader, explained to me that he needed a fresh mandate and the endorsement of the people, by whatever route.

On Orders in Council, there are some vital matters still to take forward. Water charges is one. If we do not make progress on that, not only will constituents in Northern Ireland continue to be in a unique situation compared with my constituents, those of the hon. Member for Montgomeryshire (Lembit Öpik) and those in the rest of Great Britain, there will be a great big hole in the budget—which will not do any favours to an incoming Executive—because of the money that would have been raised for investment in water and sewerage and the release of money for extra investment in public services. However, we will certainly look at the controversial orders and, as was promised to all the parties—a promise given in the House of Lords—we will undoubtedly look at how we can seek to consider amendments to them, perhaps at pre-legislative stage.

The Minister of State, my hon. Friend the Member for Delyn (Mr. Hanson), is considering the ferry service from Ballycastle to Scotland, after which no doubt his views will be clear. However, I just say this: it is very expensive.

May I commend my right hon. Friend and the political parties in Northern Ireland on the progress made so far, especially with regard to the fact that all parties in Northern Ireland will have to accept the new policing arrangements? However, I am sure that he agrees that the sooner that direct rule ends, the better for democracy in Northern Ireland. It is entirely incongruous that we have an Assembly in Wales and a Parliament in Scotland, but direct rule in Northern Ireland. Controversial measures might have to be considered between now and—if things go well—March. Does my right hon. Friend agree that new controversial measures should not be introduced, but should be a matter for consultation on a consensual basis with all parties in Northern Ireland?

First, I thank my right hon. Friend for what he says and pay tribute to his distinguished role over three years in getting us to this point. I happened to have occupied the job when things came round in the way in which they did, but he did fantastic work to move Northern Ireland forward. I agree that the sooner that direct rule ends, the better. We want locally established self-government and devolution, and in that respect, I must be the only member of the Cabinet who wants to do himself out of a job.

You are going for another one: Deputy Prime Minister.

I will not rise to that bait.

I understand the points made by my right hon. Friend the Member for Torfaen (Mr. Murphy) about controversial orders, but we need to proceed with much-needed reforms to make savings and change layers of bureaucracy through the review of public administration. We would be doing the incoming Executive a favour by reforming water charges because we would release money that they would otherwise have to find. If we did the job, they could come in and get on with other matters with which they would need to deal.

I thank the Secretary of State for his statement. I accept wholeheartedly that he has given us the categorical assurance that one of the foundation stones on which the future government of Northern Ireland must rest is the full recognition and fullest support of the Police Service of Northern Ireland and the structure of law and order enforcement. Those matters must be kept. We have the promise, but not the delivery. As I have said to him face to face, if they were not delivered, we could not go forward with this matter. I do not accept that for years people have been saying just that, because I have sat in the House and heard arguments against.

I believe that throughout this United Kingdom, there will be relief among all people, who will say, “At long last, in any Government in any part of this United Kingdom, those who are in it must support the police in a way that satisfies the people.” That is crucial, as the Secretary of State very well knows, to what we are speaking about today. I look forward in anticipation that—without ifs, buts, or trying to water things down—that is done. That is the solid foundation on which real democracy can exist in Northern Ireland, but if that foundation stone is dislodged, all the work is over—it will crumble and decay.

I am sorry that I am perhaps not so excited, but I have been through these periods over and over again. I pray, Almighty God, that our country—our little province of this country—will come to a place of peace. I do not want to visit any more homes of bereavement. I do not want to take little orphans on my knee, look at them and say that they will never see their father or mother again. I want that all to finish, but it must be built on that solid foundation.

I have one thing to ask the Secretary of State. If he proceeds with the water charges, will he please consult the parties in Northern Ireland, so that he does not introduce a contentious measure and so that there is some sort of agreement about it? The best thing for Northern Ireland would be for the new Assembly to settle all these little matters. Then the people could say, “We can approach our elected representatives and they can tell us what has happened.” I make that plea to the Secretary of State. Thank you.

I agree with everything the right hon. Gentleman said about policing, and acknowledge to the House his own steadfast role in moving the situation on so that all parties are now within sight of signing up to what he believes in. I agree that promises are not sufficient and that delivery is important. It is significant that no party disagreed with paragraph 6 of the St. Andrews agreement, which expressed those principles.

On water charges, I give the right hon. Gentleman an undertaking to consult all parties, including his own, on their detail. There is no question about that. Perhaps that is the sort of issue that we can consider in the programme for government committee, of which he will be a member. The incoming Executive will have to take the matter forward. There will be a big hole in the budget amounting to some £200 million to £300 million of investment over the years that the water charges are phased in. Until they are fully phased in, there will be an investment gap of between £200 million and £300 million in the water and sewerage system if we do not raise the money as suggested. In addition, the phasing in of water charges would allow about £200 million to be released to fund extra public services, including health, education and housing. It is a difficult decision, but it is necessary if we are to square the budget gap. I hope all the parties, including the right hon. Gentleman’s, will approach the matter in the spirit of getting it right, rather than rejecting it outright. In the meantime, we need to take it forward in the House.

I welcome the statement from the Secretary of State and, most importantly, the progress that it related to the House. Does he recognise that those of us who have always believed in power-sharing in Northern Ireland always believed in a ministerial council north and south in Ireland, and always believed in a new beginning for policing? That belief is vindicated as we see the DUP move to the threshold of accepting the inclusion of power-sharing, and Sinn Fein move to the threshold of accepting policing.

Does the Secretary of State recognise that we are on the right side of the mountain? Yes, there is some way to go and we need to make sure that we optimise the possibilities and minimise the problems, and some problems remain. With reference to what he told us about MI5, we still have a complaints system under which Osama can complain about being got at by MI5, but the Omagh victims cannot complain about being let down by MI5. We need to improve that. In the interests of taking the wider issues forward, will the Secretary of State agree to think again about issues such as water reform and the review of public administration, at least on hearing from the programme for government committee?

On the issues that we still need to cover in the preparation for government committee relating to rule changes and procedures in the Assembly, does the right hon. Gentleman recognise that some of us have concerns about proposals that would invite bad politics and guarantee bad government? If we work through those problems in the spirit that we showed during the summer, we can soon move from a situation where politics has been about counting the casualties of the past to one where politics is about setting the priorities of a shared future.

I greatly welcome my hon. Friend’s comments and acknowledge his own dedicated role in bringing us to this point. He will have seen in great detail—he has been through it with us—annexe E of the St. Andrews agreement, which deals with national security and MI5.

On water charges, I have said what I have to say. There is no way of ducking that issue for the future of Northern Ireland and the health of public finances and investment in the water system.

On the review of public administration, the House has already set the boundaries for seven councils by primary legislation. I remind my hon. Friend that those are coterminous with the basic policing commands. They are also coterminous with health and with the area planning that will be delivered by the new education and skills council. That provides a unique opportunity for joined-up local administration. I agree that we must get the institutional changes absolutely right, because there is a real danger of governmental paralysis if we do not. We need to pay attention to the detail.

The Secretary of State deserves the support of everybody in this House. He was clearly right to say that all political parties in Northern Ireland must unequivocally support the Police Service. He went on to say that he is absolutely confident that Sinn Fein will do so, which is optimistic and welcome. Can he give us the reasons why?

I am grateful to the right hon. Gentleman, who has adopted a particularly critical position, for reasons that I understand, and has given a lot of attention and energy to this matter. I think that Sinn Fein will deliver what its leaders have promised in recent days. It did not disagree at St. Andrews but instead said that it had to consult its members—as, to be fair, the DUP said that it had to consult its members about how a popular mandate is obtained and other issues. I believe that it will deliver. Delivery is important—as the right hon. Member for North Antrim (Rev. Ian Paisley) said, it is not just promises we need.

I welcome the progress made at St. Andrews based on the fundamental principle of all parties accepting the rule of law. I also welcome the ancillary agreements to do with academic selection and rates. On rate capping, exactly what would happen if for some, perhaps technical, reason the ard fheis was not able to be held by 24 November, the date passed, and there was no First Minister or Deputy Minister? Is the Secretary of State really saying that the pensioners of Northern Ireland, who would be helped by his proposed change, would no longer be helped and the rating system would stay as it is?

There is already considerable protection—unique protection compared with Great Britain—for pensioners and others on low incomes. The capping affects no more than several thousand people who have seen their bills go through the roof under the current proposals. If the agreement unravels by 24 November, the Government will proceed with what we think are the best policies—whether on academic selection, rate capping or any other matter—because we will have to dissolve the Assembly. We have declared our support for those best policies. The changes that I announced came out of tough negotiations at St. Andrews. It is a case of stand or fall on several matters in relation to securing and implementing agreement by 24 November.

Will the Secretary of State accept from me that while enormous progress was made at St. Andrews, there is still a considerable workload to be got through, but my party is willing to work through the remaining issues with him?

I have two questions for the Secretary of State. First, in relation to the devolution of policing and justice, can he confirm that it is not an automatic process but entirely the case, under the Northern Ireland (Miscellaneous Provisions) Act 2006 passed by this House, that before such devolution can take place the First Minister has to give his approval and approval is required on a cross-community vote of the Assembly?

Secondly, while I know that the Secretary of State is planning for a smoothly operating Executive, the St. Andrews agreement touches on the possibility of a breach of the terms of the agreement. Can he confirm that the party that defaults will be penalised, not every party as has been the case in the past? Can he also confirm that the Government will not act out of kilter with any recommendation from the IMC in sanctioning defaulting parties?

I can certainly give the hon. Gentleman an assurance on the latter point in line with established practice in legislation and I am grateful for his offer of support.

Devolution of policing and justice is not automatic. All the parties, including Sinn Fein, supported the Northern Ireland (Miscellaneous Provisions) Act, for which the House voted and which received Royal Assent in July. It provides for the nomination of a First Minister, Deputy First Minister and then a cross-community vote for the timing of implementing devolution. However, I hope that people will consider the practicalities, too. As I said in the statement, huge parts of operational policing have already been devolved in practical terms. What remains is important but has more to do with the administration of justice.

First, may I thank the Secretary of State and all the parties for the tremendous advances that they have made, not only at St. Andrews, but in all the years that I have been a Member of Parliament and travelling backwards and forwards to Northern Ireland? Hearing people from Northern Ireland parties arguing about matters such as water and rates would hearten the many trade union members I met when I gathered a trade union meeting in Northern Ireland a few months ago because those issues concern them.

However, as the leader of the DUP said, all must be based on a 100 per cent., unfailing commitment to the rule of the law. When does my right hon. Friend anticipate that the Police Service of Northern Ireland will not fly in and out of south Armagh, as it did when I previously visited that part of the Province, but operate normally by driving in and out of that southern part, in safety and security, knowing that all the communities and parties in the area support it?

Again, I am grateful to my hon. Friend, who takes a keen interest in Northern Ireland affairs and whose advice is valuable. The Police Service of Northern Ireland is increasingly deploying southwards towards the border, across Armagh and south Armagh. Bobby Hunniford, the local commander, is experiencing considerable community support, and so it is simply a matter of continuing that until every square inch of Northern Ireland is covered.

Given the importance that the Secretary of State rightly attached in his statement to the principles of equality and human rights for all, will he take the opportunity to confirm that the Equality Act 2006, together with any associated regulations flowing therefrom, will be applied in the same way in Northern Ireland as in every other part of the United Kingdom?

The answer is yes. Perhaps I could clarify, in response to the hon. Member for Belfast, East (Mr. Robinson), that the commitment of the two Prime Ministers in paragraph 11 of the agreement makes it clear that I do not envisage any circumstances in which the Government would exercise the power to implement Independent Monitoring Commission recommendations in a manner that was inconsistent with those recommendations.

In his statement, the Secretary of State said that the Catholic content of the PSNI is rising to one in three—the House will welcome that. Are we now close to the removal of the discriminatory 50:50 recruitment rule?

I am grateful for the hon. Lady’s welcome for the progress that we have made—it is in everybody’s interests that Catholics are encouraged to join the PSNI and represented in the regular officer ranks and, indeed, in those of community support officers. If we make the progress that we expect, the 50:50 recruitment procedure can be lifted before the date in the Patten recommendations, which is 2011. I expect that to happen.

May I put it to the Secretary of State that his suggestion that legislation will be introduced and enacted in four days—that was the implication of what he said—is a matter of considerable concern? Given that, will he please find a way to outline the Bill’s principal proposals and put them in writing to the House before 20 November? Secondly, will he consider discussions with Mr. Speaker’s Office to ensure that amendments can be tabled in time?

Certainly, I want to consider the matter carefully. Like me, the right hon. and learned Gentleman is keen on parliamentary scrutiny. We must discuss those issues with the Opposition spokesman for Northern Ireland—we want to act by consent. However, we are up against a deadline.

As has previously been the case in Northern Ireland, we will need the co-operation of the House—including, I hope, that of the right hon. and learned Gentleman. If I am able to publish that information early, I will do so, by all means, but that rather depends on the parties sticking to their side of the bargain and telling us where they stand, by 10 November at the latest.

On the important issue of delivery, what timetable has the Secretary of State in mind for the dismantling of terrorist structures, not least the IRA’s security department and intelligence committee? Would 10 November be a good starting point for the IRA to show its good will towards this agreement?

The IMC report of 4 October makes it crystal clear that the IRA is delivering on what it promised. I repeat that it has disbanded the structures that were responsible for procurement, engineering and training in its military capacity. On intelligence, the previous IMC report stated that that was no longer directed at military activity.

On a point of order, Mr. Speaker. You will be aware of the extensive coverage in the newspapers over the weekend and this morning of the new chair of Sport England and his links with senior members of the Government. With the onset of 2012, the chairmanship of Sport England is more important than ever before. Have you received any indication from the Department for Culture, Media and Sport that it wishes to make a statement on this matter to set the record straight?

Order. That is not a matter for me.

I inform the House that I have selected the amendment tabled in the name of the Prime Minister.

I beg to move,

That this House believes the Government is putting the future of the Post Office network and of Royal Mail at risk by their continued failure to take the tough and overdue decisions needed; further believes that many local post offices have closed or are under threat because of the uncertainty over the future of the subsidy to rural post offices after 2008 and the withdrawal of public sector business from the network, including the pension book, the television licence, passports and the decision to withdraw the Post Office card account when the existing contract expires in 2010; shares Postcomm’s concern that over 6,500 remaining rural post office branches are vulnerable and could close over the next few years; further believes that the Post Office network provides significant social and economic benefits and can play a key role in tackling financial exclusion and helping rural and deprived urban communities to survive and thrive; further believes the delays in finalising the investment package for Royal Mail is undermining Royal Mail’s ability to compete in the postal market following liberalisation last January threatening jobs and Royal Mail’s market share; and therefore calls on the Government to end this paralysis in decision-making at the heart of Government so that the Post Office network and Royal Mail can make the investments they need with greater certainty about a sustainable and stable commercial future.

Royal Mail and the Post Office are in crisis. If anyone should doubt that, or ask why we are holding this debate today, they need only read page 2 of today’s Financial Times and last week’s report from Postcomm. The report backs up the warnings that Liberal Democrat Members of Parliament have been giving for at least the past year and, unfortunately, confirms our worst fears. For those hon. Members who have not read the Financial Times today, it contains a piece headed

“Thousands more post offices face axe”.

The article was written following an interview with the Secretary of State for Trade and Industry, so we believe that it is well sourced. It suggests that the Government intend to make a statement before the Christmas recess about that cull.

The Postcomm report was equally alarming. It shows that decisions by the Government, as well as their lack of decision making, have caused the current chaos. In other words, the Government have been getting it wrong and have failed subsequently to put it right. I do not think that I have ever read a report from an independent regulator that contains such stinging criticism; it is probably unprecedented. It talks about the Government’s failure to deliver on tough and overdue decisions, and about the possible cutting of nearly 6,500 post offices in the rural network that are making a loss.

The Liberal Democrats’ argument today is that the problem has been caused by the Government’s decisions over the past few years on pension books, television licences, passports and the Driver and Vehicle Licensing Agency, and by their indecision on the social network payment, the Post Office card account and the future of Royal Mail. These are the factors that have brought this crisis to a head.

Will the hon. Gentleman remind the House how much income the Government have withdrawn from post offices, and how many post offices have already closed? Does he not agree that a lot of this has already happened?

I will deal with those detailed points in a moment. The right hon. Gentleman is absolutely right; the Government have withdrawn hundreds of millions of pounds of business from post offices, which has caused many of the closures.

Does the hon. Gentleman believe that there is still an opportunity for the Government to reverse their short-sighted policy to withdraw public business from post offices? Such a reversal would receive all-party support and benefit all post offices, particularly the new one that I opened in Canvey Island high street this summer.

The hon. Gentleman makes his point well, and I think I can agree with him.

Does the hon. Gentleman think, as his party does, that the solution is to privatise Royal Mail, the most profitable part of the Post Office that, in effect, is a cross-subsidy that helps to keep the rural network going? Surely that is a crazy idea. Will he make clear the Liberal Democrats’ intentions to privatise Royal Mail?

I am grateful for the hon. Lady’s intervention. I shall provide detailed analysis of our policy and advocate it to the House tonight. We do envisage a partial privatisation of the Royal Mail, with 49 per cent. of the shares being sold to the private sector. Her Government, however, are privatising Royal Mail by stealth. They are under-investing in Royal Mail and are not backing it, and as a result private competitors are winning market share and undermining the Royal Mail, its employees’ jobs and services to our constituents. She is therefore backing privatisation by stealth, and she ought to be aware of that.

Will the hon. Gentleman give way?

No, I shall make some progress.

Until the intervention of the hon. Member for Morecambe and Lunesdale (Geraldine Smith), I sensed a consensus in the House. We tabled this motion, which we believe is pretty uncontroversial, to try to create a consensus. We omitted some of our policies that, I think, she does not like. We want the whole House to send a clear message to the Government. There is a huge campaign in this country against what the Government are doing—a groundswell of opposition to their policies. I am looking forward to the lobby, this Wednesday, with the National Federation of SubPostmasters, which will present to Ministers a petition from nearly 4 million citizens, arguing that the Government need to change tack. Hon. Members will have been in their constituencies over the summer, they will have heard the anger from sub-postmasters and sub-postmistresses, and they will want to back us tonight so that we can send a real message to the Government.

Is the hon. Gentleman aware of the latest change in the network of post offices in my constituency, in the neighbourhood of Broadfield, where the post office has just been reopened by a successful businessman, Mr. Limbachia, who sees an opportunity to serve his community and is delighted to offer that service?

I am always delighted to welcome the reopening of a hospital, post office or school that has closed under this Government. However, the hon. Lady ought to talk to her right hon. Friend the Secretary of State for Trade and Industry, who was interviewed by the Financial Times today and is predicting thousands of closures.

The hon. Gentleman has talked about the anger among sub-postmasters. Is not he also aware of the anger among the public? When he talks about reports, has he seen the report from Postwatch Scotland on the importance of rural post offices in Scotland, which shows that 67 per cent. of respondents rate the post office as either “very important” or “important”. Significantly, the percentage rose substantially among the unemployed and those on low incomes. Post offices are vital to that group, and if the Government do not make decisions on funding for the future, it will be a disaster for the unemployed and those on low incomes in rural areas.

The hon. Gentleman is absolutely right. It is our most vulnerable constituents who are most at threat when post offices close. The Government say that they care about social inclusion and that they want to deal with financial exclusion, but, on post offices, they do exactly the reverse.

Does my hon. Friend agree that the problems only just begin when a post office closes. It is not just those using such post offices who find themselves excluded but the many others using neighbouring post offices who find that the queues become so excessive that they also have problems accessing a local service.

My hon. Friend is absolutely right. In my constituency, Post Office Ltd railroaded the closure of six post offices in the borough of Kingston. Queues at Surbiton post office have now lengthened, reducing the quality of service.

Is my hon. Friend aware that this is not just a rural issue? It applies very much to suburban communities. My most deprived ward, Ham, contains a large estate where many elderly people live. It now has not one sub-post office, and the nearest post office—which necessitates a mile-long walk for some 90-year-old people, because it is the only one they can get to—is very likely to close as other services, notably the provision of television licences and Post Office card accounts, are removed. That is genuine deprivation.

My hon. Friend is absolutely right. I think the comments that we have just heard demonstrate the anger of our constituents. Interestingly, a recent poll of sub-postmasters and sub-postmistresses by the national federation showed that 72 per cent. were no longer confident about the long-term future of their businesses. There is real anger out there in our communities.

Although we have tabled a fairly consensual motion, I cannot promise that my comments tonight will produce a consensual alternative. There are some tough decisions to be made, along with some difficult choices. There is no easy solution, whether for Royal Mail or for the post office network.

Our party has looked at the policy in detail and debated it democratically, and we have reached a tough decision. We believe that Royal Mail must be reformed if it is to compete in the liberalised market. We know that if we face up to that harsh decision, we shall be able to secure the cash to invest in the public sector post office network. That proposal will not meet with approval on all sides—it is a tough decision—but we believe that it is a serious and credible proposition, and that if Members want to save the post office network in their constituencies, it is the only option.

Nearly three years ago, when the urban regeneration programme hit Aberdeen and a number of post offices consequently closed, the then Liberal Democrat-controlled council promised to put council services into post offices so that they remained viable. To date, not a single council service has gone into a post office in Aberdeen. I wonder whether this is in fact a tough choice, or just the Liberal Democrats promising what they cannot deliver.

That was a good try, but I am afraid it failed. In many constituencies where local authorities have tried to work with post offices, Post Office Ltd—thanks to restrictions imposed by Royal Mail Group—has got in the way of such partnership deals. I am afraid the hon. Lady has scored an own goal against her own Government.

The post office network faces huge problems. Members throughout the House will know the history. Over the past 20 years 7,500 sub-post offices have closed; last year nearly 150 closed. Even that does not tell the whole story. Many full-time post offices have become part-time as their hours of service have been cut. That is due to years of lack of investment and lack of imagination on the part of successive Governments.

I referred to some of the bad decisions earlier. That is why we are here today, facing—if we listen to the chief executive of Post Office Ltd, Alan Cook—a potential reduction in the post office network to just 4,000 following cuts of 10,000, or—if we listen to Postcomm—a potential cut in the rural network from 8,000 to 1,500. Then there are the leaks from the Secretary of State.

No doubt the Government will say that it is nothing to do with them. They will say that it is all to do with the customers who are not using post offices any more: they are using new technology, and it is all too expensive. The Government have tried terribly hard and invested lots of money, but it is just not working, so they have to cut post offices. That will be the Government’s line, and of course it is absolute tosh.

The Government have been following completely contradictory policies. They are trying to say that they want to save the post office network, while taking business away. Last year they were subsidising, through the social network payment, to the tune of £150 million. In the same year, they took business worth £168 million out of the post office network. According to Adam Crozier, five years ago 60 per cent. of the revenue of the average post office came from Government business; in two years’ time, it will be down to just 10 per cent. That is the size of the cut in post office revenue. It is not the fault of the customers or of technology; it is the fault of those people over there who are making the decisions.

Building on the consensual basis that the hon. Gentleman mentioned, I was accompanied by an Assembly Member when I carried out a tour of all the post offices in my constituency last week. When we called, 25 were open. Surely we would all agree that one of the worst decisions taken in recent months was on television licences. It was a bad decision for two reasons. First, as the hon. Gentleman said, it withdraws business from post offices, but, secondly and even more importantly, it means that an awful lot of people will not get their TV licences and will have to go to court over the next few months. What does the hon. Gentleman suggest the BBC should do about that?

When the hon. Gentleman carries out his next tour, I hope that there are no fewer than 25 post offices open, but if he continues to support his Government I suspect that there are likely to be a lot fewer.

If the hon. Gentleman spoke to BBC managers, he would hear from them that the Government were unable to guarantee the future size of the network, so they were not able to ensure that a network would be in place for TV licence payers to use. That was one of the main reasons the BBC refused to go ahead with a contract with Post Office Ltd. Once again, it was the Government’s failure that led to the problem.

rose—

I am not giving way, as I want to make some progress.

A number of reasons can be cited for the failings of the post office network and the lack of confidence among sub-postmasters. The first is the Post Office card account, which represents more than 10 per cent. of annual income for the average post office. For many months, uncertainty about the future has been evident, but we observed at parliamentary questions today—probably thanks to the Liberal Democrat Opposition day—that Department for Work and Pensions Ministers went further than usual to say that there might be a future for the Post Office card account. If that proves to be the case, it will be very welcome, but we want to see more details before we can believe the weasel words of Ministers. We also want to be sure that individuals are able to choose the Government account rather than be pressurised to move their business to a bank.

Does my hon. Friend agree that it is not just the revenue lost to post offices by the withdrawal of the Post Office card account, as the footfall is relevant, too? In common with the hon. Member for Rhondda (Chris Bryant), I toured sub-post offices in my constituency this year and some estimated that 40 per cent. of their footfall came from benefits and POCA. There is the further point that other services within the post office will also be lost if POCA is withdrawn.

My hon. Friend is absolutely right: that is precisely why it is so damaging for the Government to keep withdrawing all these services. It creates uncertainty. Sub-postmasters or sub-postmistresses want to invest in their businesses, but in order to do so they must know that there is a future. They want to know that the contracts will stay with them and that they will be able to secure some return on the investment, but the Government have created a climate of huge uncertainty.

Social network payments are the next issue. We know that they are due to run out in 2008, yet the Government have given no indication whether they will continue or at what level. Sub-postmasters and sub-postmistresses simply will not invest beyond 2008 because they do not know what income they will receive. It might all be to do with the spending review, or perhaps the Secretary of State has been told to find a lot of savings for the Chancellor. If so, our fears are magnified. Failing to support post offices in rural or deprived urban areas creates real problems.

Will the hon. Gentleman give way?

No, I will not.

Another problem with the Government’s handling of post offices is the lack of imagination. Only last year did they establish a set of pilots, looking at new services such as home delivery, mobile post offices, partnerships with pubs, local authorities, police stations, pharmacies and others, and host services with satellite post offices. All those pilots are welcome, but they have come very late. We have been arguing for more innovative approaches for a long time, but the Government have left it late without putting the investment behind the pilots to ensure that they work.

There have been other problems with the Government’s thinking on post offices. A particular concern for the Liberal Democrats are the restrictions that Royal Mail Group forces on Post Office Ltd, which force restrictions on postmasters.

On the restrictions forced on postmasters in respect of the business they can take from other postal providers, is my hon. Friend not concerned that Royal Mail, facing competition, is beginning to get its own employees to look for new business for Royal Mail? In one of its videos, it appears that it is encouraging people to look at who goes into the post office and to steer them away from the post office so that they go direct to Royal Mail. If these people are to have their hands tied behind their back by Royal Mail, it seems a complete betrayal by Royal Mail to take away the business that they can get only from Royal Mail.

My hon. Friend is right. The position is particularly disturbing. Since 1 January, post offices could have been working with 17 other licensed operators to bring in more letters or parcels business, but Post Office Ltd has prevented that from happening. As he suggested, it is working the other way; it is a negative because Royal Mail is trying to take that business away. Therefore, those restrictions need to be removed and we need to have freedom for our sub-post offices.

May I seek clarification about which measures the hon. Gentleman thinks are a solution to which problems? I am following his logic and, by and large, I agree with him. His party’s policy of the part-sale of Royal Mail will address the problems of the lack of investment in Royal Mail and stand to replenish a large part of the pension fund, but does not he accept that we need to segregate that from the problems of the network? That policy is not a solution to its problems and, if his argument is to hold together today, as I think so far it is doing, we need to explore other solutions to those problems.

I cannot agree with the hon. Gentleman. Part of our policy is to have significant new investment in the network and to create an investment fund from the sale of 49 per cent. of the shares in Royal Mail. We believe that that will produce £2 billion that could be invested in the network. Royal Mail would then be free to borrow on the capital markets to invest in the automation that it needs. Our solution will provide money for the Post Office network and freedom to borrow on a commercial basis for the Royal Mail.

This is a grown-up, sensible debate, but the ability of the Royal Mail to borrow or to act like that does not necessarily help all those tiny rural or urban post offices that are privately owned and perhaps linked to a shop. Therefore, the investment that the hon. Gentleman is talking about will not necessarily benefit them one penny.

Of course it will because the investment can come through in terms of extra training, and extra support for business development, marketing, ICT and all the things that are needed for those private entrepreneurs. Moreover, the proposals that I have mentioned to remove restrictions will enable them to develop their business far more with mail operators. I am sure that the hon. Gentleman is aware that the mail business is the most profitable and the biggest business of the average sub-post office. Therefore, allowing that to expand is the best way to ensure the viability of the network.

The Government should have been pressing the banks to enable the Post Office network to join the Link network. If that could be accessed through every sub-post office around the country, so that every sub-post office could be used as an ATM, that would be a great way not only to end financial exclusion but to ensure the footfall that my hon. Friend the Member for East Dunbartonshire (Jo Swinson) mentioned, so that business went into every post office. Therefore, we have made some very attractive proposals for reform and investment that we believe will deal with the problem.

The hon. Gentleman criticised the Government for taking Government work from the Post Office, which he said undermined the network. How much do the Liberal Democrats think needs to be spent, and how much are they pledging to spend, to prop up the network?

I mentioned the figure of £2 billion just a minute ago. I am sorry if I was not clear enough. To be precise, the £2 billion will come from the proceeds of the sale of 49 per cent. of the shares in Royal Mail.

Will the hon. Gentleman give way?

I will not give way because I wish to make some progress.

The post office network has all the problems that I mentioned—the replacement of the Post Office card account, uncertainty over the social network payment, and the Government’s lack of imagination—but what is the solution? The solution that the Government have come up with is to set up a Cabinet Committee chaired by the Deputy Prime Minister. That does not fill me with a great deal of confidence. When we have asked how many times the Committee has met, we have not had any answer, so I wonder whether we will hear—either in the Minister’s summing-up or in his speech—whether the Committee has met, what it is considering, and what proposals it has for dealing with the problem.

Will the hon. Gentleman give way?