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Commons Chamber

Volume 450: debated on Monday 16 October 2006

House of Commons

Monday 16 October 2006

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Jobcentre Plus

1. What assessment he has made of the performance of Jobcentre Plus in dealing with claimants; and if he will make a statement. (93396)

Since 1997, welfare dependency has fallen by 20 per cent. Claimant unemployment is close to its lowest level for 30 years. There are 2.5 million more people in jobs and 800,000 children have escaped the poverty trap. Jobcentre Plus has made a major contribution in achieving that progress and I would like to place on record my appreciation of the dedication and hard work of its staff.

I thank the Minister for that reply—[Interruption.] Please excuse my breathlessness. [Interruption.] It is not that exciting. [Laughter.]

I thank the Minister for his reply to my constituent Mr. Vialva, who was asked to pay back money from 1998 in 2006. It turns out that his was part of a stockpile of unanswered correspondence on this matter. That speaks to me of a Department that is absolutely chaotic. It turns out that papers were lost and few facts were available. We are talking about the massive sum of £175. Will the Minister tell me whether there are other constituents who are also caught up in the system and who are in a similar position to Mr. Vialva, and does the Minister have a figure on the matter?

I have that effect on people.

I am generally not aware of the constituency case that the hon. Lady has drawn to my attention, but I will happily look into it. I hope that she will accept my assurance that cases such as that are very much the exception and not the norm. In her constituency, for example, because of the hard work of Jobcentre Plus staff in her area, unemployment has fallen by 30 per cent.

Does the Minister think that the performance of Jobcentre Plus might be improved if the call centre numbers were changed from 0845 numbers to freephone 0800 numbers?

We are looking carefully at that important point and we have established a number of pilots on establishing 0800 freephone numbers. I would be happy to share the details with my hon. Friend.

Is not one of the problems for Jobcentre Plus staff that they are not able to advise all claimants that they would be significantly better off in work, because of the effects of means-testing? Was the Minister concerned, over the summer, to read the report by the Joseph Rowntree Foundation, which said that some of Labour’s recent reforms

“have weakened financial work incentives”?

Over the next few months, as he prepares his personal manifesto for the Labour leadership, will he focus on policies that will improve work incentives?

We have always made that an important issue for us. If the hon. Gentleman looks at the effect of tax credits—for example, on the minimum wage—he will see that they have undoubtedly provided a clear incentive for the poorest to get off welfare and into employment. That has been a positive thing to do. We have made sure that work pays. The results of that are clear. There are 2.5 million more people exercising the right to work than in 1997.

I thank the Minister for Employment and Welfare Reform, who, at a point when our local Jobcentre Plus was failing to deal with urgent cases efficiently, intervened and made sure that it did. May I be assured that, when there is a local problem—in our case, I think that it was to do with recruitment of Jobcentre Plus staff—and when Members are made aware of it by their constituents, we can continue to have that kind of service? In our case, constituents had to wait an unacceptably long time, but as soon as my hon. Friend the Member for Reading, West (Martin Salter) and I intervened, they were able to get action straight away.

I am grateful to my hon. Friend. The chief executive of Jobcentre Plus acts to deal with these types of concern when they are brought to our attention. In relation to the question asked by the hon. Member for St. Albans (Anne Main), we have recruited something like an extra 70 staff to deal with some of the backlog of cases. It is important that, when someone applies for benefit, that case is processed in a timely and efficient way. We are committed to improving the service to our customers in all parts of the country.

Economically Inactive Teenagers

2. How many economically inactive teenagers aged 16 and 17 not in full-time education there were at the end of (a) 1998 and (b) 2005; and if he will make a statement. (93397)

At the end of 1998, the figure was 46,000. At the end of 2005, there were 122,000 economically inactive people aged 16 and 17 not in full-time education.

Will the Minister explain why the group of teenagers who are not in work, full-time education or training has, according to his figures, tripled to roughly 30 per cent. of the total, despite the enormous number of Government programmes and despite the fact that that group features a high prevalence of crime, drug use and other forms of antisocial activity?

This is an important point. We introduced the education maintenance allowance to encourage young folk to stay on at school because the priority is for them to remain in education. I am pleased to confirm to the House that both the proportion and number of such people who remain in education is up, although there is much more work to do. I think that the hon. Gentleman would accept that the long-term youth claimant count is down by 60 per cent. nationally and by 50 per cent. in his constituency.

My hon. Friend the Minister joined me at a Save the Children fringe meeting at the Labour party conference in which we met a group of young people from an estate in a rural part of Wales. They flagged up the fact that one of the key issues affecting their ability to get into work was the lack of and the cost of transport. Will he join me in welcoming the End Child Poverty month of action that intends to highlight those problems and tell me a little more about what he plans to do following our meeting with Save the Children?

I was pleased to have the opportunity to meet my hon. Friend and young folk from rural Wales. She is correct that the single biggest problem that they all identified was the availability of transport in rural locations. That showed me that the way of overcoming the multi-dimensional way in which poverty arises is through collective action across all Government Departments. I confirm to my hon. Friend that we remain absolutely committed to halving child poverty by 2010 and abolishing it entirely by 2020, which is remarkably different from the situation a short time ago when we had the highest levels of child poverty of any industrialised nation on the planet.

I am confused. A moment ago, I heard the Minister say that the long-term youth claimant count was down by 60 per cent., but on 5 September, the Prime Minister said:

“We have eradicated long-term youth unemployment.”

Additionally, just the other day I read published Office for National Statistics data showing that long-term youth unemployment stands at 181,000, which is its highest level since October 1997. Will the Minister tell us who has got it right—him, the Prime Minister or the ONS—and which two have got it wrong?

I cannot do much about the hon. Gentleman’s state of confusion, but I can confirm that long-term youth unemployment in his constituency stands at 15. Of course, that is 15 too many, and we will do all that we can, working with everyone else, to ensure that we further reduce long-term youth unemployment in his constituency and elsewhere. However, I am sure that he would be the first to acknowledge that remarkable progress has been made on eradicating long-term youth unemployment, partly through the new deal, which, of course, he described only recently as an “expensive flop”.

One Nottingham

3. Whether he has received an expression of interest for a city strategy on welfare to work from One Nottingham; and if he will make a statement. (93398)

I am pleased to say that One Nottingham was successful in its recent bid to become one of the early pathfinders for our new cities strategy, which will help to play a significant role in improving local employment rates. I would like to thank my hon. Friend for the valuable work that he is doing to support this initiative in Nottingham.

Does the Secretary of State accept that in a place such as Nottingham there is a massive disparity in unemployment rates and attempts to get people back to work that requires incredible flexibility? He and the Prime Minister are already committed to that flexibility. Will the Secretary of State tell us whether it will extend to things such as the 16-hour rule and the earnings rule? Will he consider whether the pathways to work project might in some instances cut across what city strategies are trying to do? Has he thought about ensuring that there is no confusion, not only among Conservative Front Benchers, which occurs a lot, but in a city strategy about the responsibilities between it and pathways?

My hon. Friend, who knows Nottingham much better than I do, will be aware that although Nottingham is one of the richest cities in the United Kingdom, it has some of the greatest pockets of deprivation. The whole purpose of the cities strategy is to unite the public, private and voluntary sectors in a new war on tackling economic inactivity and to mobilise resources across the public sector and into the private sector. As part of that, we will certainly consider any request for flexibility when we think that that can make a difference. Whether it is on the 16-hour rule or elsewhere, we are prepared to work with local city strategies to develop a good response. There has to be proper ownership of pathways in city strategy areas, and I am sure that the local consortium in Nottingham is well placed to take charge of that.

Order. The hon. Gentleman’s constituency is too far away from Nottingham for me to call him.

Child Support Agency

In July, and in response to Sir David Henshaw’s report, I set out the broad direction of reform to the child support system. We intend to publish a White Paper with final, detailed proposals later this autumn.

The Secretary of State will be well aware that many of my constituents have been badly let down by the CSA through its sheer delay, incompetence and constant change of caseworkers, and that many constituents are still caught in the system, trying to seek justice. Given that the Government’s reforms plan to exclude the families at present in the old system, what assurance can the right hon. Gentleman give that those excluded families will not be abandoned or forgotten by the Government?

The hon. Gentleman might need to look at the White Paper again and refresh his memory. We will not exclude old scheme cases from the reforms. We will set out the detailed transitional arrangements in the White Paper, but I have already told the chief executive of the agency that he must prioritise enforcement and debt collection. We are making an additional investment in the CSA to make sure that we improve performance in all these areas, and it is an important part of our plans. I agree—this is why we have set out our plans to replace the Child Support Agency—that it is impossible to make the current system work in the way that we want it to, and to provide the hon. Gentleman’s constituents with the level of service that they are entitled to expect. When we publish our detailed proposals, I hope that he will be the first to support them.

Will my right hon. Friend look into the unfairness caused by a non-resident parent in receipt of child tax credit having that taken into account as income when calculating the maintenance requirement, thus returning that parent to low income, whereas the recipient may also be on child tax credit and therefore may effectively benefit twice?

One aspect of the reform of the agency was the introduction of a means whereby parents could agree maintenance between themselves. Under the pre-CSA arrangements, as the Minister may know, at least in Scotland, such an agreement, if registered, could be enforceable in the same way as a formal court decree. Can he say whether it is envisaged that the new arrangements will act in the same way, and if so, will he consider measures to enforce them in an overseas jurisdiction where there are reciprocal arrangements relating to court orders?

On the latter point, that is an important issue that we need to explore in relation to how we recover debt from people who are outside the jurisdiction, whether that is in Scotland or in England. That can often be a way round the legislation that the House has enacted, and we cannot tolerate such a situation. On the jurisdiction of a court, the hon. Gentleman will have to wait until the detailed proposals are set out in the White Paper. Sir David Henshaw highlighted that as an issue and we are giving careful consideration to it.

Is the Minister aware that many of us on the Labour Benches are pleased that he is taking steps to get rid of the Child Support Agency as it currently exists? Is he also aware that I am astonished that a Conservative Member of Parliament can voice opposition in the manner that he does, taking into account that in 1992 when the agency was introduced by John Major—the man responsible for the cones on the highways and all the rest of it—some of us voted to scrap it within 12 months of it being passed by the House? If only the Tories had joined us, we would never have had such a calamity.

May I ask the Secretary of State about information technology? He will be aware that many of my constituents, and no doubt many of his, who are parents with care wish to apply for a variation on absent parents who are in receipt of working tax credit. The Government believe that they should be able to do that, but I am told by one of his ministerial colleagues that they cannot do so at present because the computer system cannot be adapted to allow them to do so. That has now been the case for three years. How much longer will they have to wait?

It is not an ideal situation, as I would be the first to acknowledge. The Child Support Agency has a number of routes—not satisfactory in all cases, I agree—to try and find manual overrides and work-arounds for such problems. The difficulties with the IT system have been pretty well documented and I do not want to add to that. In relation to the new agency, the problem will have to be examined carefully because we do not want such problems to continue in the new agency. My hon. Friend the Member for Bolsover (Mr. Skinner) is usually right on all these matters.

We frequently have discussions here about failings of the CSA. However, first, is it not right to emphasise that the starting point in child maintenance is personal responsibility, usually that of absent fathers; and secondly, that in any such discussion the focus must be towards the elimination of child poverty, as it is children who suffer when maintenance is not paid?

I am grateful to my hon. Friend for making those two points, both of which have to be centre stage in the architecture of the new system. We have to promote personal responsibility, which we will be able to do by encouraging more parents to reach voluntary agreements. We also have to be able to say convincingly to the public that in cases where the absent parent does not discharge their financial responsibilities to the child, there will be a better—a more efficient and effective—system for recovering that maintenance. I am afraid that that has been sadly missing from the current arrangements, but Sir David Henshaw, the chief executive of the CSA, and the Department for Work and Pensions are determined to get it right.

Is the Secretary of State in a position to confirm that Sir David Henshaw has reported on the implications of his first report? Is he able to give us a date when he expects to publish his White Paper and when he expects to publish on the internet the responses to his consultation?

As regards applications under the new system by those already claiming child support, has the Secretary of State estimated what the cost to the state will be, as experts have told us that it will be considerable?

On the hon. Lady’s latter point, that would very much depend on the decisions that we make about the length of time over which that process will take place. We will set out all the details in the near future when we publish our White Paper. I am afraid that I do not have a date for its publication because, as she will know, that is not entirely in my hands—it is to do with the business managers and others—but it will certainly be before Christmas.

Occupational Pensions

5. What further consideration he has given to the recommendations of the parliamentary ombudsman on occupational pensions. (93400)

We have been considering the ombudsman’s report in the light of the Public Administration Committee’s report on this issue and will publish the Government’s response shortly.

That is a very encouraging reply. Members will recall that the parliamentary ombudsman found that information provided by the Government to those taking out occupational pensions was

“inaccurate, incomplete, unclear and inconsistent”,

yet to date the Government have refused to take any responsibility. People outside and inside the Chamber will take great encouragement from my friend’s saying that the Government are now prepared to look at the matter again.

I thank my hon. Friend for that. I am sure that he, along with other Back Benchers, will welcome the fact that the Government have found £2 billion for this. It is in no way fair to say that we have done nothing about it. We recognised the plight of people in this situation and we are helping 40,000 of those affected by it.

Can the Minister confirm that although the 00 series for longevity has recently been published, most actuaries of occupational pension schemes still rely on the 92 series, which is based on statistics gathered between 1989 and 1992? Does he agree that that means that actuaries are very much out of date on longevity and underestimate the amount of pension fund deficits?

The hon. Gentleman is right to say that longevity statistics have traditionally underestimated what the change would be. We said that as part of our state pension reforms we will have regular reviews of longevity trends to ensure that we get the right figures as we move forward to raising the state pension age. However, that is not an issue that goes to the heart of our discussion about the ombudsman.

In a written question on 25 July, I invited the Minister to give an estimate of what partial restoration would involve and the cost incurred in response to the ombudsman’s report. The Minister replied that that could not be done because it was unclear what partial restoration meant. In responding to the ombudsman’s report, will the Government make some attempt at a gradation of what partial restoration may mean and the costs associated with that?

If I understand my hon. Friend’s question correctly, it depends on the number of years and the proportion of core pensions that we would expect to restore. However, we will not prejudge today our response to the Select Committee—we obviously have great respect for it and the ombudsman. We have set out in the past why we disagree with her findings, but the key point for all hon. Members is that £2 billion is in place to help 40,000 people.

The Minister knows that pensioners of British United Shoe Machinery in my constituency and elsewhere in Leicestershire are some of the worst affected by the collapse of the occupational pensions system. Dr. Ros Altmann has described it as one of the worst cases. I hope that the Minister can reassure me that the Government’s response will be relevant to my constituents who have been affected by the collapse and not simply brush off the ombudsman’s findings as some inconvenient piece of bad news.

We disagree that it is one of the worst cases of maladministration. Which bit does the hon. and learned Gentleman say is maladministration—the Conservatives’ implementation of the 1981 insolvency directive, the Pensions Act 1995, which the shadow Foreign Secretary took though the House, or the leaflets and the statements that the ombudsman criticises? We do not believe that it was maladministration. If the hon. and learned Gentleman does, is he saying that the Conservative Government got it wrong?

My hon. Friend knows that the substance of many of the issues that the ombudsman’s report covers could end up involved in some legal action. Although it would be inappropriate for us to discuss the substance of that, is he aware that some of the affected pensioners, who have already lost a great deal of money, would feel it to be unfair if, in the event of a court case that they lost, the Government sought to recover costs from them? Those people have already lost a lot. At least recovering costs should be taken off the agenda.

That is not what we have said. We have held a dialogue with lawyers, which was conducted on terms that were agreed across Government. All we said was that if those affected want to claim that their case fits the principles whereby the Government have agreed to waive costs in the past, they need to present that case. They have not yet done so.


Given the large number of women who will reach basic state pension age by 2010, does the Minister share my concern that women in the same generation will not all be entitled to the same basic pension rights as the rest of their peer group?

I will answer the question. There is a popular Labour policy and Conservatives want to jump on the back of it—of course, we welcome their support. The Conservative party does not have a policy of introducing changes before 2010. Our policy will increase the proportion of women who get a full state pension from 30 per cent. to 70 per cent. by 2010. If the hon. Gentleman continues to ask about the issue, we will point out to people outside the House that, before 1997, the last thing that had been done to increase coverage for women was Barbara Castle’s introduction of home responsibilities protection in 1978. The policy has been welcomed by the Equal Opportunities Commission and the Fawcett Society. It is a major move forward in coverage for women and the hon. Gentleman should welcome it.

Will the Minister confirm that up to 250,000 people, mostly women, currently pay additional voluntary contributions towards their pensions, but that, under the Government’s proposals, they will receive no benefit by doing that? Should not the Government come clean with those women now and tell them the true position as soon as possible or is the Minister prepared to risk another misinformation scandal and demands for compensation by those affected?

The hon. Gentleman is right to raise that point. When we issue forecasts, we make it clear to people that the policy is changing. On Second Reading of the measure, we want to work with his party on exactly how the information can be made clear to people. However, I do not believe that his party’s policy is to return those contributions to those who made them. It is a traditional principle in the social security system that one makes payments under the rules. If the rules change, people are not reimbursed for that.

Post Office Card Account

7. What progress has been made in developing a replacement for the Post Office card account for the payment of benefits after 2010. (93404)

Instead of a single replacement for the Post Office card account, there will be a range of alternative banking products. Post Office Ltd has already launched one new product and is developing others, likely to be launched in the near future.

The objective remains to migrate customers onto accounts which will do more for them than the POCA. But for those who, for whatever reason, cannot do that, there will be a new Government-supported product. Discussions are already taking place with a view to tendering for that product.

I am grateful for that answer, and I am sure that Ministers at the Department of Trade and Industry will be grateful for it too, given their frustration—expressed in today’s Financial Times—at the Department for Work and Pensions’ resistance on this issue. Will the Minister assure the House that, whatever products follow the Post Office card account, procedures will be put in place for people to be migrated automatically to those new products, so that they do not have to face Government-induced hurdles to collecting their benefits and pensions at the post office when the change takes place?

Of course we are going to make the migration as smooth as possible. The migration process is the joint responsibility of ourselves and the Post Office, as the hon. Gentleman will know, having seen the preamble to the contract for the Post Office card account. We have done some piloting on the migration, and I have placed the results in the Library. The Post Office will also begin a migration exercise shortly, and it will be a very smooth exercise, just as the hon. Gentleman requests.

It is quite clear that the 4.5 million people who use the Post Office card account thought that they had an agreement with the Government when we introduced the account, at the time when it was first threatened to take away all forms of post office benefit payments. If anything happens to the account and people are not migrated to new accounts, this will cause great problems not only for the elderly who do not have bank accounts but for the small businesses that are our local post offices, run by postmasters and postmistresses throughout the country. Is the Minister willing to give those small businesses a guarantee that their livelihoods and futures are not threatened by the withdrawal of the Post Office card account?

First, it is not a withdrawal of the account. We are simply honouring the contract that was signed in 2003 and which runs until 2010, and we will continue to do so. There is no change whatever on that. My hon. Friend would be right, if it were the case that there was to be no alternative to the existing Post Office card account. However, there will be a range of alternatives. Some are already in place, and some are being brought in by the Post Office. As I have said throughout, there will also be a successor Government-backed account for those who do not take up any of the other, better options that are available now and that will become available in the near future.

I think that the Minister is saying that the 4.5 million people who thought that they had the ability to get their benefits from their post office will still have that ability. Will he make that clear: yes or no? Will he also make it clear that his and other Departments have a commitment to the future of our post office network? One third of the post offices in Ryedale have closed since 1997. If we lose any more, the Post Office will not be able to provide a proper service to a great many people, especially the elderly.

I recall about 3,500 post offices closing under the last Conservative Government, by the way. However, I entirely understand the hon. Gentleman’s point about the importance of being able to collect pensions and benefits from the post office, and we have repeatedly said that we shall continue to honour our undertaking on that. At the moment, one vehicle for achieving that is the Post Office card account, but it is a very limited type of account—the Post Office itself says that. It does nothing to promote financial inclusion, for example. So if we can replace it, as we are now beginning to do, with alternative accounts that are post office-based and that are better and offer greater functionality, that will provide a better deal for our customers receiving their benefits and pensions, and potentially a better deal for the Post Office as well.

My hon. Friend will be aware that, in the poorest communities in many parts of the country, the only way in which people can access cash without paying a fee is through the Post Office card account. I understand what he is saying about successor accounts, but will he give the House an assurance that those accounts will be operated through the existing network? It is okay for someone to have an account, but without a post office, it would be useless.

Yes, I can give my hon. Friend the same answer that I have given to previous questions. The objective is to ensure that those who wish to receive their benefits and pensions at the post office can continue to do so. Even today, 25 bank accounts—with a potential 20 million account holders—have post office accessibility. At the moment, however, only 2 million of those account holders choose to exercise the right to use their local post office as a bank branch. I am having discussions with the Post Office about ways in which we might be able to promote this facility and encourage more people to use their local post office to access their bank account.

People in Bingley in my constituency are at risk of losing their post office altogether, not because the Post Office wants it to close but because it is difficult to find someone to take on the franchise that has just been given up. Is the Minister aware that the dismantling of and uncertainty about the Post Office card account is one of the main reasons preventing someone from taking on the franchise? Can he therefore pull his finger out and sort this out so that people in Bingley can retain the post office that is crucial to them and to the businesses that it supports?

I am sorry if the hon. Gentleman is in doubt, but I assure him that the Post Office is not, and nor is the National Federation of SubPostmasters. Recently, I met its general secretary, Colin Baker, and since then he has published an article commenting on the meeting, which I shall quote for the benefit of the hon. Gentleman and his constituents:

“There is an understanding on behalf of Government to work with both Post Office Limited and ourselves to put together a range of products to offer customers a greater choice.”

It is understood by the Post Office and postmasters, and I hope that it is now understood by the hon. Gentleman.

In Rhondda, 16,300 people draw their benefits through the Post Office card account system every week, and they are bewildered about what will happen in future. If, over the next three years, we are to migrate 16,300 people on to some other system, is it not vital that that system should be simple, easy to transfer to and well publicised? Would it not make a lot of sense if post offices were fully able to advertise all the financial services that they can offer, rather than just some of them?

I agree with my hon. Friend that the process needs to be simple and that transfer needs to be easy. I think that he will find that the migration exercise that the Post Office is about to undertake will confirm that all of that is possible to achieve.

On 8 May, when I asked the Minister what replacement account the Government would offer to POCA holders, he said:

“It is not for me to say what accounts it”—

the Post Office—

“will come up with; that is a matter for the Post Office.”—[Official Report, 8 May 2006; Vol. 446, c. 10.]

The Opposition therefore welcome the Minister’s apparent change of heart today. Can he guarantee, however, that the more vulnerable, unbanked, Post Office card account holders who want to keep their existing POCA will be able to do so?

The problem with the hon. Gentleman is not his volume but his vertical hold.

We have always made it clear that Post Office card accounts will have a range of replacements. The hon. Gentleman suggested that I had somehow changed position on the Post Office introducing its own accounts. I have not. The accounts that it has already introduced, and those that it plans to introduce, are its accounts, its design and not a matter for me. Of course, however, we remain in discussion with the Post Office about that. I have also said throughout, as I have repeated today, that a successor product to the Post Office card accounts will be available to those who do not transfer to any of the existing alternatives or other options that will come into being between now and 2010.

Disability Discrimination Acts (Departmental Policy)

8. What assessment he has made of the compatibility of his Department’s communications and computer policy with the Disability Discrimination Acts. (93405)

The Department’s public information policy contains accessibility guidelines to ensure that the Department meets its obligations under disability discrimination legislation. It produces written information in a number of accessible formats such as Braille, audio and large print.

I thank my hon. Friend for that reply, but will she take a close look at what is happening with the jobcentre in Stoke-on-Trent? People with dyslexia are asking to be kept in touch with the Department either by e-mail or phone, but they are still getting the same letters churned out by the central computer. When the disability equality scheme comes into effect on 4 December, will she make sure that those concerns are fully addressed by Government?

I thank my hon. Friend for her supplementary question. I know that she does a lot of hard work in her constituency on disability issues. The Department is fully committed to being an exemplar, both in the provision of online and telephony services to our disabled customers and as an employer. When we publish our diversity and equality action plans later this year, we will highlight where there is a requirement for review and improvement of our systems.

Pension Credit

In May, more than 2.7 million households—3.3 million individuals—in Great Britain were receiving pension credit. That is nearly 1 million more than received the minimum income guarantee that preceded it.

Because pension credit rises each year in line with average earnings, more and more people are becoming eligible for it. What I find locally is that people do not complain about being caught in a web of means-testing; they are just very pleased to be receiving extra pension. Some previously unsuccessful applicants, however, are not aware that they may now be eligible. What is my hon. Friend doing about that?

The Pension Service is undertaking a thorough exercise. We visit more than 1 million people a year to try to ensure that they are claiming the benefits to which they are entitled. I believe we have written to all pensioner households to ensure that they are aware of their entitlements, and there are significant examples of people receiving, in some cases, thousands of pounds as a result. It is definitely worth while for people to ring the Pension Service, or ask for a home visit, so that they can discuss their benefits and obtain that extra help.

The problem with pension credit is that hundreds of thousands of pensioners are simply not claiming the benefit. To what extent is that hindering the Government’s attempts to take 1.8 million pensioners out of poverty?

Far from hindering our attempts, it has helped us to lift 2 million people out of poverty. I remind the hon. Gentleman that whereas when we came to power pensioners were having to survive on £69 a week, they now have £114 a week. For the first time, pensioners are no more likely to be poor than any other section of the population, which is a remarkable achievement during a period of economic prosperity.

Unemployment Figures

There are more people in work than ever before. The United Kingdom has the highest employment rates and the best combination of employment and unemployment in the G7, according to the assessment of the Organisation for Economic Co-operation and Development.

The Minister will be aware of a report in The Business in August which showed that 5.29 million people were receiving out-of-work benefits. The real unemployment rate stands at 16 per cent. Does the Minister not recognise that, despite the Government’s promise in 1997 to tackle the spiral of escalating welfare costs, we have had nine and a half wasted years from the Prime Minister and the Chancellor of the Exchequer?

The hon. Gentleman would do better to reflect on the fact that in his constituency, long-term employment is down by two thirds.

It is one thing for the Conservatives, while in government, to have fiddled the figures when unemployment hit 3 million twice and incapacity benefit trebled, but it is quite another for them to fix and fiddle the figures while in opposition. What the Conservatives have sought to do today, in the Chamber and elsewhere, is say that everyone—every single person—on incapacity benefit is unemployed, regardless of disability or mental capacity. To lump all those folk together, regardless of their complicated needs and the support that they require, is nothing short of a disgrace, and the Conservatives should be embarrassed by themselves.

I welcome the stunningly successful figures that the Minister has given us, but may I voice my concern about the continued decline in jobs in the textile industry, particularly in the Leicester and east midlands area? While employment is falling everywhere else, in those sectors it continues to rise. What steps can the Minister and his Department take—along with the Department of Trade and Industry—to reverse that decline?

My right hon. Friend is right to observe that, despite the remarkable progress that has been made, there are continuing pockets of difficulty. He will know of the work being done by Sandy Leitch on the skills strategy. He will also know that in a global economy we cannot compete with China, India and others on the basis of low cost, but must compete on the basis of high skills. I will of course happily meet my right hon. Friend to discuss any specific further action that he thinks we could take in Leicester, or in Leicestershire generally.

Despite the Minister’s worrying complacency, is not unemployment currently at a six-year high? In Shropshire, we have seen it rise by 36 per cent. over the past year. What would the Minister say to the 600 people who have lost their jobs at Celestica in the past week, and to the 600 defence workers who have been transferred to Bristol against their will? What message has he for my constituents?

Since Labour came to power, unemployment has fallen in every nation and region of the UK. In terms of specifics, we are happy for Jobcentre Plus and other Government agencies to provide the sort of support that has been so effective in other examples of constituency redundancies. The hon. Gentleman would strengthen his case if he were accurate in his assessment. The truth is that, according to the OECD, there are now more people at work in this country than ever before. That contrasts enormously with the period when unemployment hit 3 million—not once, but twice under the Conservatives.

I join my hon. Friend in reminding Conservative Members of what it was like in my constituency under the Conservative Government when unemployment stood in excess of 20 per cent. High unemployment was not an accident of their policies, but the central plank of them. I worked in primary care psychiatry at that time and I saw doctors prescribing anti-depressants and Valium, but if they could have prescribed a job, people would not have been seen anywhere near the health centre. I am proud to be here today to say that unemployment at 2.5 per cent.—

My hon. Friend is right that there were indeed periods in that dark time when 1 million people went on to incapacity benefit in an individual year. He is also right to make the connection between unemployment, poverty and generational poverty. One in three kids were growing up in poverty; one in five kids were born into a house with no one in work. Yes, we still have further to go, but there has been a remarkable change and improvement as the cycle of disadvantage, previously passed from generation to generation, has been broken.

Disability Living Allowance

11. What assessment he has made of the operation of the computer system that administers disability living allowance; and if he will make a statement. (93408)

The disability living allowance computer system is a modern, efficient and up-to-date system that ensures correct, timely and accurate payments to our customers. The Department continually assesses and makes improvements to its computer system and will continue to seek ways to enhance its systems to support changing business needs into the future.

What measures are the Government taking to improve the computer-based medical form, which is highly complex and has denied many deserving people access to the benefits to which they are entitled? The latest figures suggest that 80,000 people are waiting to have their forms assessed for disability living allowance.

The disability living allowance form is constantly reviewed and updated. As the hon. Gentleman is aware, we are looking into ways of further improving the form and seeking to find different ways to encourage customers to provide us with the information required at the point of decision making. It is vital to secure as much information as possible. Yes, we are reviewing the position; and yes, we are looking to find any way—every way, in fact—to connect with those applying for DLA. As many hon. Members appreciate, it is a sensitive benefit, often applied for at a traumatic time in an individual’s life.

The last constituent I saw at my advice session on Saturday was a mother of six children, one of whom is seriously disabled. The family depends heavily on disability living allowance. On three separate occasions since April the file has been lost and the application form to renew has been lost, so the family has lost much needed income that is crucial for a family teetering on the financial brink. Will the Minister reassure us—she tells us that the computer systems are fine, modern and working—that the systems for handling paperwork and forms can be reviewed and improved as soon as possible?

I am pleased that my hon. Friend has raised that constituency matter and I reassure him that, if he will provide me with further details, I will certainly investigate what happened. It is unacceptable that families under pressure, in the circumstances that my hon. Friend has highlighted, should find that our system is not responsive. If he gives me the details, I will ensure that he receives a suitable and appropriate reply. I continue to underline the fact that our disability living allowance systems are in place and effective. They turn round benefit claims very quickly—not just mainstream claims within a 35-day target. In the case of people with terminal conditions, claims are turned round within four to five days.

Youth Unemployment

12. What assessment he has made of recent trends in youth unemployment; and if he will make a statement. (93409)

Long-term youth unemployment has fallen by almost two thirds. Independent research has found that long-term youth unemployment would have been twice as high without the new deal for young people, which is another reason why we should continue to invest in it, rather than abolishing it.

I have listened with interest to the mutual back-slapping club on the Labour Benches this afternoon. Would Ministers care to explain how it is that almost half of all young people aged between 18 and 24 who go on the new deal are, within 12 months, back on benefits? Is that an example of joined-up government?

Independent research has shown the new deal for young people to be highly effective not only in the hon. Gentleman's constituency but throughout the country. In his constituency, unemployment is down by a third and long-term unemployment is down by two thirds. In Peterborough, the number of people who have been helped by the new deal is greater than his constituency majority.

Leader of the House

The Leader of the House was asked—

Parliamentary Questions

18. What recent analysis he has carried out of the quality of ministerial answers to written parliamentary questions. (93388)

The quality of answers is generally of a high order and my right hon. Friend the Leader of the House receives few complaints. He has raised those with ministerial colleagues and emphasised the need for proper answers to be given at all times

I agree with the second part of that answer, if not the first. Will the Minister recognise honestly that the quality of answers has diminished significantly in the past three or four years? Obfuscations and withholding of information are now regular occurrences. Spurious reasons for exemptions are now far more common. I hope that the Leader of the House, who has a fine record of answering questions straight, deplores that and will look at what can be done about it. When a Member is given a clearly useless and inappropriate answer where information is withheld inappropriately, should not that Member be allowed to ask Mr. Speaker to have the Minister brought here to answer the question orally?

The first half of the hon. Member's question contained a terminological inexactitude. As for the second part, we are always prepared to look at mechanisms for reviewing the position. I see and speak to colleagues from all sides of the House who may from time to time have a complaint about the way a question has been answered. I think that people will acknowledge that I am very willing to listen and to intervene, but very few of them have raised points with me or with the Leader of the House. If they put points now, I think that I would be able to tell whether they are Johnny-come-latelies or have raised that matter in the past.

Does my friend have any idea how many Members are putting in requests under the freedom of information legislation because they are so dissatisfied with the quality of information from Government Departments?

In the light of the Minister's first answer, I would like him to look at the answers from the Deputy Prime Minister. I know that the right hon. Gentleman is very important, at least in his own mind, but trying to scrutinise his Department is well nigh impossible. Does not the Deputy Leader of the House agree that a Select Committee should be able to scrutinise the Deputy Prime Minister's Department and any reports from it?

I do not recall the hon. Gentleman’s contacting us about the failure to answer questions. He knows that there is a Select Committee that is able to look at issues regarding answers to questions, and of course departmental Committees can take up the matter as well if they feel that they are not getting information from Ministers, but so far that has not been the case.

House of Commons Commission

The hon. Member for North Devon, representing the House of Commons Commission was asked—

Voters Packs

Since the launch of Voting Times in July, 95,756 copies have been distributed across the UK to new voters, including those in Stoke-on-Trent, North, as they have reached their 18th birthday. Figures are not yet kept on a constituency basis, but if the hon. Lady mails constituents on their 18th birthday she will get some feel for the numbers.

I thank you, Mr. Speaker, and the Commission for looking at ways of engaging with young people. Perhaps we will be looking forward next to your blog. Parliament is now trying to engage with young people, given the fact that it is estimated that, at the general election in 2005, only 37 per cent. of 18 to 24-year-olds who were eligible to vote did so. We have to pay great regard to what we do to ensure that people understand our parliamentary system. I ask each and every hon. Member to engage with the Commission to see how we can flag up this matter even further.

I thank the hon. Lady for her positive remarks, and I agree entirely about the importance of Parliament connecting with young voters. However, the packs are only part of the work that the House is doing. Our parliamentary education unit is expanding its programme of visits to Parliament, which will more than double in the coming year and double again in the year after that. In addition, we have an outreach strategy across the UK involving local education authorities, teachers and schools, and work is under way to build material into the national curriculum. I agree with the hon. Lady that the subject is important, but we are doing a great deal as well providing the packs.

Leader of the House

The Leader of the House was asked—

Political Parties (Funding)

20. If he will make a statement on progress on his plans to reform the funding of political parties. (93390)

Sir Hayden Phillips is undertaking an independent review of the funding of political parties. He has been asked to produce recommendations that, as far as possible, are agreed between the parties. Sir Hayden will publish an interim assessment on Thursday this week. He has been asked to report to the Prime Minister with his final conclusions before the end of December this year. Once we receive those conclusions we will consult, and we will make decisions in due course.

I thank the Leader of the House for that reply. Does he agree that, if any of the recommendations suggest that funding should be capped, such capping should apply equally to all who donate to political parties, including trade unions, private individuals and businesses, and that there should not be discrimination against individuals or the private sector? The trade unions have to play their full, open and transparent part.

May I point out to the hon. Gentleman that, as the Neill Committee on Standards in Public Life said in 1998, the trade unions are the most regulated of all donors? During the 18 years of the Conservative Government, the trade unions suffered one adverse change after another in their financing regimes, while nothing whatever was done in respect of companies. I am surprised that the hon. Gentleman is leading with his chin on the issue, because there is one unquestionable improvement that we must make in regulation, which is to ensure that the unregulated funding of local parties by unincorporated associations such as the midlands industrial council is brought to an end. I note that although he spent just £11,000 during the four-week election period in 2005, he received a total of £55,000 in the eight months before the election was called from Lord Leonard Steinberg and the midlands industrial council, and I assume that he spent that, too. That shows that there is a glaring loophole continuously exploited by the Conservative party, enabling them to spend large sums of money and not account for them before the election period kicks in.

Does my right hon. Friend agree that there is scope for political parties to spend less before there is any question of further funding, particularly from the state? In addition, is there not a strong case for an immediate inquiry into the midlands industrial council? It is a sinister organisation—it is not accountable in any way, and it makes a mockery of the reforms that the Government have brought about.

I strongly agree with my hon. Friend’s latter comments. I recall that when the Political Parties, Elections and Referendums Act 2000 was considered in the House, there were high-sounding comments from the Opposition, who said that they wished for as much transparency as we and the Liberal Democrats wished for. Such comments have been repeated, but I note, too, that the Conservative party exploited a loophole in the law that allowed unincorporated associations, such as the midlands industrial council, to give thousands and thousands of pounds to local constituency associations without the latter accounting for that or providing any details about who was behind those shady organisations until it was forced out of them.

I do not expect the Leader of the House to pre-empt the report from Sir Hayden Phillips, which is due later in the week, but if we are to achieve consensus, there are three essential ingredients, and he has already touched on some of them. First, there must be proper capping of individual contributions. Secondly, there should be a firm regime to prevent the abuse of enormous spending in constituencies outside the election period particularly, as often happens in marginal constituencies. Thirdly, there should be proper transparency about the way in which all parties are funded, and no more secret clubs and cabals.

I agree strongly with the hon. Gentleman’s second and third points. As far as his first point is concerned, when the Neill Committee on Standards in Public Life reported in 1998, it recited all the changes that had been made in respect of the trade union donations to the Labour party and concluded:

“We have received no evidence to suggest that the legislation is not working satisfactorily, and no case has been made out for any reform…No change should be made in the law”.

There has been no evidence since of any case for change.

The idea of caps on donations sounds interesting, but in the United States it has spawned a vast evasion and avoidance industry. We are more likely to get true transparency if we have controls on spending that apply at all levels of political parties’ spending and in respect of all kinds of donors, including shady organisations such as the midlands industrial council.

My right hon. Friend has touched on the point that I wish to make very strongly. There is a strong body of opinion in our party that there should be much lower limits on spending, which should be much better policed, so that no party becomes the hireling of big business, rich people or, indeed, the state. We should retain our independence by having much lower levels of spending and, therefore, much lower levels of donations.

The truth is that there is effective, or relatively effective, control during the short election period defined in the 2000 Act, but there is no control during the much longer period before elections, notwithstanding the fact that because elections take place almost every year, campaigning is now almost continuous. I hope that we can achieve a consensus between the parties that the issue of control of campaign spending at all times is what most needs to be properly addressed.

I have listened with care to what the Leader of the House has said, and he will know that in the spirit of consensus we have put forward a series of serious proposals for party political funding, prepared by my hon. Friend the Member for Chichester (Mr. Tyrie). Unfortunately, the Leader of the House has already set his face against elements of those proposals. Does he not accept that whatever else the Government might do about the funding of political parties, if they do nothing about the significant contribution to the Labour party by the trade unions, the public will remain rightly sceptical about the influence that continues to be wielded by the unions on this and every other Labour Government?

The Conservative party has always dined out on the fact that the Labour party and the trade union movement are in close association. It can continue to do so for as long as it wishes; that is entirely its right. What is not its right is to seek partisan advantage by forcing through changes in the financing regime, which would have the effect of wholly disadvantaging one political party and forcing changes in our constitution, when no such changes have been forced on the Conservative party—[Interruption.] The right hon. Lady says from a sedentary position that there would be a cap on business donations, too, but she knows very well that her party decided to focus on the trade unions continuously during the 18 years of Conservative government from 1979 to 1997. They changed the law and they changed the law and they changed the law again, but they did nothing whatever in respect of companies, so much so that in 1998 the Neill Committee on Standards in Public Life said that it had received no evidence of any case for further changing the law. I have challenged the right hon. Lady and the hon. Member for Chichester (Mr. Tyrie) as to whether there is a scintilla of evidence of any mischief in the way in which the regime for trade union funding of political parties has altered since then. The answer is that there is absolutely none. What we have had, however—

Northern Ireland

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.

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.

Point of Order

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?

Opposition Day

[19th allotted day]

Post Office

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.

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.

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.

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.

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.

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.

No, I will not.

One of my problems with the Deputy Prime Minister is that he has often put forward 10-year plans, including the 10-year plan on transport and the 10-year plan on housing, and none has produced any of the things that were promised, so it does not fill me with confidence to know that the Deputy Prime Minister is now in charge of the future of the post office network.

I am delighted that, in the past year or two, Royal Mail’s performance has improved, but it faces three major challenges, of which the Minister will be aware. First, there is the challenge from competition; secondly, there is the challenge posed by 20 years of under-investment; and, thirdly, there are problems caused by the pension deficit, which mean that it is competing with one arm tied behind its back.

As 17 licensed operators compete with Royal Mail, the competition is fierce and very real. Companies such as Deutsche Post, TNT Post, DHL and Business Post are taking market share from Royal Mail. At the moment, they are taking only 3 to 4 per cent., but most commentators believe that that figure may be set to explode. The 500 big business mailers alone represent 50 per cent. of Royal Mail’s turnover of £6 billion, so those private sector competitors could take a big slice of the cake relatively quickly. That would seriously hit Royal Mail’s finances. There are already some early signs of that, in terms of Royal Mail cutting back services. We are experiencing earlier collections and later deliveries. In some parts of the country, if people do not post their mail before 9 o’clock, it is not collected until the next day. However, their delivery does not come until 3, 4 or 5 o’clock in the afternoon, and that makes a complete mockery of next-day delivery promises. That is a cut in service.

There will be another cut in service, too, because the junk mail that Royal Mail now promises to deliver is set to increase in volume many times over. That is a real concern, and Royal Mail has gone to the ridiculous extent of punishing a postman for explaining to ordinary citizens how they can get the mailing preference service. That is a complete disgrace, but it shows the desperate measures that Royal Mail is taking because of competition. However, if we consider the lack of investment, we can see what is at the root of Royal Mail’s problems.

I have to make a confession: before I came to the House, I was a management consultant, and the industry in which I consulted most of all was the postal services industry. I had the privilege of going to 40 countries and looking at their postal administrations, so I am afraid that I know an optical character reading machine and a remote video encoding unit from my elbow. The automation in Royal Mail is pretty poor compared to that of our competitors. The Germans and the Dutch, for example, can sort 95 per cent. or more of their mail by machine, but in the UK the figure is about 50 per cent. That is how far behind we are. Just imagine the impact that that has on a firm’s cost structure. The estimates of how much investment is needed vary; some people say that £2 billion or more is needed, but the Government have offered less than £1 billion, so the investment crisis in the Royal Mail is very real.

On top of that, there is the pensions deficit. I agree with the Minister that there has been progress on that issue. He has allowed Royal Mail to make good its deficit over 17 years. That is a long time, and it is not the time-line given to private companies, but at least it will enable Royal Mail to make good its deficit. The Government have underwritten that by £850 million, but that still leaves Royal Mail with annual contributions of around £750 million per annum to make. That is a dead-weight cost that Royal Mail has to meet before it can make profits and invest in its business—and when it is fighting competitors, it is a real dead-weight cost.

I do not disagree with much of what the hon. Gentleman has said, but I am confused. If it is his policy to privatise the mail delivery service, given the problems of competition and cost, how would a privatised Royal Mail compete while continuing to fulfil its universal service obligation, which is important to rural areas? Would that obligation not come under pressure from privatisation?

Let me spell it out for the hon. Gentleman. In the public sector—the Government want Royal Mail to remain in the public sector, as does the Conservative party, unless it has changed its policy recently—the Royal Mail cannot go to the private market to obtain the money required to invest for the automation that I have discussed. It relies on Treasury handouts, and the record over many decades shows that the Treasury has not given it the money it requires to invest, so it cannot compete or become efficient. Our proposal enables it to borrow on capital markets, so it can obtain the funds and thus achieve the automation that it requires. It can compete, so we will bring new life to the Royal Mail.

I am concerned that the Government, faced with those three challenges, have not done more. We are waiting with bated breath to hear when they will make an announcement about the future of Royal Mail. Royal Mail management have submitted a modest proposal to the Government, in which they suggest keeping Royal Mail in the public sector, while allowing 20 per cent. of shares to be held by employees. Management agree with us that that will give employees an incentive to perform well and improve productivity, as their future will be tied to that of Royal Mail. The Government balked at that modest proposal, and we must ask why. I think that that is to do with the Communication Workers Union, and the 213 Labour Back Benchers who signed the early-day motion saying that they should not accept the proposal—[Interruption.] Ministers are not prepared to make tough decisions, because they are still in hock to the unions and to their Back Benchers. The Secretary of State is not prepared to make decisions that would put Royal Mail back on its feet, and secure the investment that our post office network needs.

Our party has taken tough decisions. We have submitted proposals that work for Royal Mail and for post offices. That is the way to ensure that we revitalise the Post Office and Royal Mail. I would like to end by asking the Minister some specific questions. First, when will the Government end the uncertainty for Royal Mail and the post office network?

When the hon. Gentleman said that the Government’s policy is determined by Members who signed the early-day motion, did he not hear, as the rest of the House did, the hon. Member for Stroud (Mr. Drew) shout, “Yes”?

Absolutely. I am pleased that I allowed the hon. Member for Rutland and Melton (Mr. Duncan) to intervene, because he has made my point for me. I hope that the Minister will tell us when the uncertainty will end, because the National Federation of Sub-Postmasters needs to know the answer when it comes to the House on Wednesday. Will he pledge to stop his colleagues in the Department for Work and Pensions undermining the Post Office card account, even before the contract is renewed? Will he pledge to stop taking Government business from the network? Will the Government stand up to the CWU, and give Royal Mail employees shares in their future? Will he give post offices freedom from the restrictive practices imposed by the Royal Mail Group? If can give us positive answers to those questions tonight, it will be a real step forward in the debate. I fear, however, that he will not do so, because although we have tabled a reasonable motion, it is clear that he will oppose it. We hope that colleagues on both sides of the House will join Liberal Democrat Members to send a message, because we believe that it is time to save our post office network and Royal Mail. The House should speak for the country, and for 4 million petitioners, and back our motion.

I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

“acknowledges the important role that post offices play in local communities, particularly in rural and deprived urban areas; recognises that the business environment in which Royal Mail and the Post Office network are operating is undergoing radical change with more and more people choosing new electronic ways to communicate, pay bills and access government services; applauds the Government’s record of working closely with Royal Mail, Post Office Ltd and sub-postmasters to help them meet these challenges with an unprecedented investment of more than £2 billion made by the Government in supporting the network; acknowledges the important role post offices can play in tackling financial exclusion while recognising that the Government must also take due account of the need to deliver services efficiently; and acknowledges that the Government is committed to bringing forward proposals to help put Royal Mail and the Post Office network onto a sustainable footing.”

As the Minister with responsibility for postal services, I am delighted to join the hon. Member for Kingston and Surbiton (Mr. Davey) and other colleagues and participate in today’s debate on the future of the post office network and of Royal Mail.

Clearly, this is post office week. We have today’s debate, and on Wednesday we have the National Federation of Sub-Postmasters’ rally and lobby of Parliament, together with the presentation of a petition of nearly 4 million signatures to No. 10. Of course, the week began with the publication of Postcomm’s sixth annual report on the post office network, which comprehensively set the scene for many of the issues that I am sure we will cover in the course of today’s debate. On Thursday, of course, we will also have Trade and Industry questions.

The future of the post office network and of Royal Mail is an issue of great relevance to every Member of this House. The hon. Member for Kingston and Surbiton has initiated the debate with some highly emotive remarks and claims, mirroring his recent press release, which referred to

“do-nothing Labour Ministers”


“their acts of vandalism against the network”.

I hope to challenge those assertions. As my hon. Friend the Member for Rhondda (Chris Bryant) pointed out, there is certainly a contradiction between them and the hon. Gentleman’s claim that he intended to introduce the debate in a consensual tone.

We need to centre the debate on such important matters in reality rather than in political point scoring, and in the proper context of the problems and challenges that we face. The hon. Gentleman claimed that the Secretary of State said in the Financial Times article that there would be thousands of closures. In fact, my right hon. Friend said that we were determined to provide certainty for the Post Office and put it on a long-term stable footing. He also said that we needed to ensure that we maintained a national network, which was not what the hon. Gentleman reported that he said.

We need to distinguish between myth and reality. This was recently given very clear focus by Sandi Brocklehurst, the sub-postmistress at Crewkerne in Somerset, writing in the Western Daily Press in August when she said:

“People think they need and want a post office but this just is not true these days. Many people now pay their bills by direct debit, do their car tax on the internet or by phone, have their benefits paid into bank accounts—these people do not use the post office, they only think they need one!”

I expect that that view is shared by many of her colleagues.

Only this Government could decide to thin down, instead of fatten up, their asset by taking away much of the money that sustained it. Will the Minister now promise that postal workers will have an opportunity to own shares in their own business, because surely that would be the way to raise morale and provide real incentives?