To ask the Defence Secretary what the implications of recent events are for British policy towards Iraq.

I have always said that lasting progress in Iraq cannot be achieved by military means alone, but will depend on a combination of security, politics and economics. Our security strategy is clear and has not changed. It is not driven by the American political calendar, nor will it be thrown off course by those who use violence and terrorism to provoke sectarian reaction and to stop progress in Iraq.

Our strategy has three main elements. First, we are helping the Iraqis to build up their own security forces—still with a long way to develop, but already with more than 300,000 recruited, trained and equipped. Secondly, as these forces develop we are handing them control, province by province, city by city, moving to the point where they have complete responsibility. Thirdly, we are underwriting that handover process by leaving in place quick-response forces not to do front-line security work, but ready to support the Iraqis if the situation gets out of control. We remain convinced that that remains the right strategy—indeed, the only one that could possibly work.

I welcome the constructive approach of the Iraq Study Group. As I made clear yesterday, its assessment of the security situation is largely in tune with our own. We recognise the gravity of that situation, but I also note the group’s conclusion that there is no magic formula to solve the problems. People should not confuse a difficult situation with a problem of strategy. Our strategy has long included many of the elements that the group has highlighted.

What is changing is the pace at which this strategy unfolds. Prime Minister Maliki and his Government want it to go faster. That is a natural response and, indeed, a welcome sign of increasing confidence, but it also crystallises the great challenge that Maliki faces. On the one hand, to keep up momentum—to reinforce a sense of progress and nationhood—he must show that Iraq is regaining control of its own destiny. At the same time, he must not ask too much too quickly of its developing security forces.

The Prime Minister made it clear during his visit to Washington last week that we have always been open to engagement with Iran and Syria, but it is absolutely vital that the basis for their engagement must be support for the democratically elected Government of Iraq, not support for sectarian or terrorist agendas. Those countries know what they have to do, and they must decide which path they want to follow.

There are some parts of Iraq, especially Baghdad, where the reality on the ground clearly is a long way from the point where the coalition can hand over. This morning’s suicide bombs were another reminder. Part of their motive, of course, is precisely to provoke an escalating sectarian reaction, but Baghdad is not Iraq, and I make no apology for reminding people that 14 of the 18 provinces are relatively peaceful. The security situation, and therefore progress along the security strategy, is different in each of these provinces.

In the area under British lead in the south, two provinces have been handed over to the Iraqis, and a third is soon to follow. The fourth, Basra, remains the most difficult challenge, but again, the security situation is a symptom: the underlying cause is rival Shi’a power blocs vying for power. Right now, this is too much for the Iraqi security forces to deal with on their own, and there are real weaknesses in the local police, so unlike in the other three provinces, British forces are still doing front-line work in the main city.

Operation Sinbad is working through Basra city area by area, re-establishing security, building confidence, rooting out corrupt and failing police, and putting Iraqi soldiers on street corners as a sign that the Government are determined to govern. Friday’s Operation Pisa—an impressive operation involving a number of bold “strikes” across the north of Basra city—shows that when we need to act, we do so and we do so decisively. But of course, the key is that these improvements in security are followed, quickly, by progress in governance and by economic regeneration, building momentum and winning over local people to a positive view of the future.

This is our strategy. We will continue to support the Iraqis in overcoming the violence and intimidation that disfigure their country. We will work with them to build a long-term relationship, including training and mentoring to help the security of both the country and the region, and to deal with the ongoing challenge of international terrorism. Both in security and in the parallel strands of politics and economic development we have to accept that how quickly things move will depend on many factors, not all of them directly under our control. In fact, it is a measure of success if the path of progress becomes increasingly an Iraqi one. As I said in a speech last month, we must get used to thinking in terms not just of our strategy but of our role in their strategy.

We continue to insist that we will not cut and run. This is not about political gestures or a trial of wills, but about recognising the challenges we face and also the commitment we have made. We will hand over when it is right so to do, driven not by arbitrary deadlines but by the reality on the ground. I have made clear several times why we will not be drawn into laying out a prescriptive timetable for draw-down, and I note that the hon. Member for Woodspring (Dr. Fox) supported that position yesterday. Our strategy will and must remain conditions-based. We will work to ensure that our plans remain clear and realistic, but we will also work to resist cynicism and defeatism as long as we still believe that we are making a difference—as long as we still believe that the presence of our forces is increasing the chance of a positive legacy for their work and their sacrifice in Iraq in the past three years.

I thank the Defence Secretary for that response. While we accept much of what he said, does he accept that as the Iraq Study Group described the situation in Iraq as “grave and deteriorating” and as 7,000 British troops are deployed there, the Government should not hesitate to report to the House when major developments arise? Was not the publication last week of the Iraq Study Group’s report one such event? As it was important enough for the Prime Minister to fly to Washington immediately, was it not also important enough to warrant a ministerial statement to Parliament in recent days?

To seek to question the Government on that is in no way to lack sympathy with the difficulty of the choices they face, but will the Secretary of State say how the Government were thinking of gauging parliamentary reaction to that major reassessment of American and coalition strategy while the decisions on it were being made? We appreciate that talks between the United Kingdom and the United States are going on, but in that case can the Secretary of State tell us when the Government will be in a position to describe definitively the response of the coalition Governments to the Iraq Study Group?

In the meantime, can the right hon. Gentleman give details about some matters about which it is not premature to ask, in the light of that report? For instance, did the Prime Minister reach an agreed view with the President in their talks on the ISG proposals last week? In particular, did he obtain a bankable assurance that the United States will now make a firm and sustained effort to revive the Israel-Palestinian peace process? Did the President agree to develop the “whole middle east strategy” of which the Prime Minister has spoken?

In addition, in Washington, the Prime Minister described the ISG report as “a strong way forward” and said that

“it is important now we concentrate on the elements that are necessary to make sure that we succeed”.

To which elements was he referring when he said that? What will be the objectives of the Prime Minister’s forthcoming visit to the middle east? Can the Defence Secretary tell us what was the result of sending an envoy to Syria a few weeks ago, and have any parallel exploratory talks taken place with Iran?

Is it not the case that the need for internal reconciliation in Iraq, the building up of the Iraqi army and the creation of an international support group—all proposed by the ISG—have already been proposed by many of us in the House? What has been the reaction of the Iraqi Government to the proposal to withdraw the bulk of American forces by early 2008? What assessment have the Government made of the reaction of the Iraqi Government to the report’s conclusions? Do they agree that any international contact group formed must have Iraqi involvement throughout?

Finally, on a defence matter, while those decisions are pending—as they clearly are—are contingency plans being made to provide for British forces to assist in the more rapid training of the Iraqi army called for by the ISG?

Given the myriad questions that legitimately arise from the situation and the apparent imminence before Christmas of an announcement by the President of the United States on the reassessment going on there, will the Secretary of State and his colleagues ensure that the House receives a further full report from the Government before the Christmas recess, so that a full debate on Iraq—the lessons and the prospects—can be held early in the new year?

I make no criticism of the right hon. Gentleman’s desire to have the issue addressed at the Dispatch Box and I cast no aspersions on his motives. I welcome his positive contribution to the debate in respect of these challenging issues. There is, however, a degree of prematurity about his questions, given that the US Administration are still deliberating on the report’s recommendations. It was, after all, a report to the US Administration. As I understand it, the President will respond some time in the near future.

We are considering the recommendations ourselves, as the right hon. Gentleman pointed out, in so far as they are directly relevant to the area for which we have responsibility and to the issues that I addressed in my remarks this afternoon. There has to be space to discuss the recommendations, as the Prime Minister did when he went to Washington with the principal ally in our coalition—the United States. We must also recognise that the Iraqi Government are, as the right hon. Gentleman said, important contributors to those discussions.

To deal with the specific question about the Iraqi Government’s response, the right hon. Gentleman knows as well as everyone else that President Talabani specifically referred to some of the report’s recommendations in his observation that they are inconsistent with the sovereign position of the Iraqi Government. He has specific concerns—I understand them—about interference with the sovereignty of the Iraqi Government, particularly if the strict letter of some of the recommendations on an international convention or the embedding of forces inside sovereign Iraqi forces were to be misunderstood. Discussions with the Iraqi Government will continue, and in the fullness of time they will come to a considered response, as we are duty bound to do with them.

We agree with the right hon. Gentleman that the approach to Iraq needs to be set firmly in the context of a broader middle east strategy that has to take account of the Palestinian-Israeli situation, which is at the heart of the motives for violence apparent in the region.

The right hon. Gentleman asks about the focus of the Prime Minister’s visit to the middle east. It will be a follow-up to his earlier visit, when he focused on energising the necessary momentum for talks that will hopefully lead to a stable peace in that part of the world. The Prime Minister has indicated his commitment to that and he is taking it forward.

As far as Syria is concerned, we said exactly what I reported—that it must make a constructive contribution to Iraq and must accept its responsibilities as a country that borders Iraq and as a country from which some of the violence and those who perpetrate it travel into Iraq. I have said nothing to the House that I have not said to Syria. To my knowledge, there have been no talks with Iran.

As far as our commitment to the training of Iraqi security forces is concerned, we are very pleased with the progress of the 10th division of the Iraqi army. One indication of how successful our training has been can be seen in the contribution of that division to Operation Sinbad.

My right hon. Friend will be aware that this morning one of the most important politicians in Iraq visited this House. His visit was advertised on the web and five Members of Parliament turned up, together with a large number of peers. If my colleagues are so interested in Iraq, I would have thought that they could have come to listen to al-Hakim, the leader of the Shi’a group in the Iraqi Parliament—the largest political group, representing the largest population group. He answered questions with great dignity and knowledge.

My right hon. Friend should not feel reluctant to come to the House, or guilty in any way, as he has been one of the most transparent Secretaries of State on the subject of Iraq since he took the job, and he is to be commended for that.

I pay tribute to my right hon. Friend for her contribution over many years—predating 2003, I might say—of fighting and campaigning for freedom for the Iraqi people, sometimes at significant personal risk. They have had no better champion for decades. She is right to point out the importance of talking to Iraqi politicians. Few of them get the opportunity to visit us in London and as parliamentarians we should take the opportunity to hear their views on the future of their country. His Eminence Abdul Aziz al-Hakim, whom I will meet later today, is the head of the United Iraqi Alliance and a very significant player in Iraqi politics. He personally has made a significant contribution to freedom in his country and his family suffered extensive violence at the hands of Saddam Hussein. He has lost more than 20 members of his immediate family to that violence, including his brother, who was also a leader of the same organisation. It would behove us to pay some respect to such people, who have views to which we should listen.

The House will be immensely grateful to the Secretary of State for coming here today, but as the shadow Foreign Secretary has said, most folk will find it extraordinary that nearly a week after the publication of the Iraq Study Group report in the United States the Prime Minister has still not come to the House to make a full statement. That is particularly true given—as has been pointed out—that he was quick enough to fly across the Atlantic to address the American media. I understand that he has also done a presentation for the British media this afternoon.

Like the Secretary of State, I pay tribute to our armed forces who have suffered a great deal in Iraq in the past few years. However, surely Secretary Baker’s report has stripped any remaining grounds for complacency about the situation in Iraq. We could ask why no similar exercise has been carried out on behalf of this country. As the report states, violence is increasing and the situation is worsening. The report states explicitly:

“Making no changes in policy would simply delay the day of reckoning at high cost”.

In the light of that report and the Prime Minister’s discussions, is the Secretary of State saying that there has been no change at all in the British strategy for Iraq?

Given President Bush’s obvious doubts about the need for a broader middle east peace process, in what ways are the Americans supporting the Prime Minister’s solo efforts in the region? When President Bush says that there will be a new statement on Iraq policy before Christmas, I—like the shadow Foreign Secretary—urge that we have a similar statement in the UK and a debate as early as possible. It is surely the case now that Britain has to have its own strategy for dealing with Iraq that will lead to a phased withdrawal of British armed forces sooner rather than later.

My right hon. Friend the Prime Minister will, of course, be here tomorrow to answer questions at the Dispatch Box. It will be interesting to see just how many questions relate to this pressing issue. The complexity of the Iraq Study Group report will no doubt emerge in the questions that I will be asked. The report makes more than 79 recommendations.

Many of the recommendations relating to the area in which we have particular security responsibility are entirely in line with the strategic approach that we have adopted for some years. The report recommends to the US Administration that there ought to be a change of policy, and the hon. Gentleman suggests that that means that it is recommending the same thing to the British Government. I have gone to some lengths, both here in the House and outside it, to set out our strategy and policy in Iraq. The hon. Gentleman thinks that policy changes need to be made because of the ISG report: I should be grateful if, in the questions that he puts to me as I stand at the Dispatch Box, he would outline what he thinks that they should be.

The hon. Gentleman asked about a debate on this matter. I understand that my right hon. Friend the Leader of the House will make an announcement about that on Thursday.

I also welcome today’s opportunity to discuss this report, and add my voice to the call for a full debate in this House in the near future. My right hon. Friend the Secretary of State was right to say that the situation in Iraq is difficult, but does he agree that it would be ridiculous of the British Government to change their policy just because a US study group has made certain recommendations? The US Government have not even given their response to those recommendations yet. In any case, surely it is this Government—and this Parliament—who should determine the policy of the British people in respect of Iraq. It should not be determined by people in any other country, however eminent they are.

We continue to study the report, which is complex and substantial. It is a welcome piece of work, because it adds to the debate and to our consideration of these matters at an important period. We had discussions with the study group before the report was published, and found that its members’ thinking was broadly in line with our own. Clearly, we need to read and digest the report’s formal recommendations, and we are doing so. However, as I said earlier, it is not obvious to me, in so far as they relate to the area for which we have specific responsibility, that those recommendations demand a change in strategy or policy on our part.

Does the Secretary of State agree with Secretary of State James Baker, who said that his report’s conclusions could not be cherry-picked?

It is not for me to agree or disagree with assertions made by the author of the report. However, the report was not written by policy makers: it was written by people who make policy recommendations to the policy makers. The group must hold consultations and discussions with the US Administration and their advisers to determine what policy changes, if any, there need to be as a result of the ISG’s fresh look at the situation in Iraq.

Does my right hon. Friend accept that public support for the policy on Iraq is draining away simply because the elected Government there—and there is no question but that they are elected—seem totally impotent to stop the daily mass slaughter of totally innocent people? It is clear that the occupation troops in Baghdad cannot prevent that slaughter either, so does he agree that, in those circumstances, the loss of public support is hardly surprising?

If my hon. Friend is correct in what he says about the perception of what is happening in Iraq, the loss of public support is not surprising. An earlier question referred to the visit to the UK of a prominent Iraqi politician. That visit has given people here an opportunity to gauge the views of people in that country and to see whether the assessment given by my hon. Friend is correct. However, I remind him that the Iraqi Government have been in power for a few months only, in circumstances that are as difficult and demanding for a new Government as anyone could imagine. It is therefore very unfair to judge them against standards that we impose from many hundreds if not thousands of miles away.

There is compelling evidence in Iraq that, through central and local government, the country can run its own affairs. In 14 out of the 18 provinces, where 60 per cent. of the people live, there is relative stability and comparatively little violence. The murder rates in some of those areas are lower than those in many European countries.

We have to recognise that there is appalling violence in Baghdad and other parts of the country and that it has to be addressed, but rather than blaming the people who have to deal with that in a very difficult political situation, sometimes some people in this country should put the blame where it lies: on the internal insurgency and on the interference from other countries to stir up that insurgency.

Baghdad may not be the whole of Iraq, but 25 per cent. of the population live there. In the other four provinces, 40 per cent. of the population are in the area of the highest insurgency. Does the Secretary of State accept that there is something improper and insensitive about the Prime Minister’s enthusiasm to give evidence to an all-party congressional body appointed to make recommendations on the future of Iraq and his unwillingness to appoint any similar all-party group to advise the British Government or to seek any advice from outwith his own ranks on what is a disaster for British foreign policy?

The right hon. and learned Gentleman knows that I respect his forensic analysis. I do not think that the two points that he makes are connected in the way that he says they are. He is correct to point out that 40 per cent. of the people of Iraq live in the areas of the worst violence. However, he also has to recognise that there is another part to that equation: 60 per cent. of the people of Iraq do not live in those areas. They enjoy substantially the freedoms that we have won for them and are released from the tyranny of Saddam Hussein. That is a very important positive.

So far as my right hon. Friend the Prime Minister’s position is concerned, he stands at the Dispatch Box every week, and sometimes more frequently than that, and is able to be questioned by hon. Members. The fact that another Administration appointed a committee to advise them in relation to their policy does not necessarily mean that we have to do exactly the same, particularly when there is no evidence that our strategic approach or our policy in relation to Iraq—particularly the part that we have responsibility for—is failing.

Did I understand my right hon. Friend correctly? Does he regard the Iraq Study Group as having absolutely no recommendations that could apply to the areas of British responsibility in Iraq? If the President of the United States accepts those recommendations in total, does that mean that the British Government will oppose that change in the strategy in Iraq? Is it not infinitely easier for a leading Iraqi politician to travel half way across the world to speak to British politicians than it is for him or her to travel in their own country to speak to their own constituents?

I do not necessarily accept my hon. Friend’s last point, because I know of a number of Iraqi politicians who travel extensively—some of them, I accept, bravely—in their own country, consulting and discussing matters with their constituents so that they can properly represent them in the Parliament or house of representatives that they sit in. The meat of her contribution suggested that I was saying that there was nothing in the Iraq Study Group report for the British. That is entirely the opposite of what I was saying. I welcomed the report. Clearly, to the extent that it is consistent with the policy and the strategy that we already have, I welcome it even more. It makes some welcome recommendations and sets in the context of the broader middle east, in particular, the importance of the resolution of the challenges that we face in Iraq. When the US Administration get to the end of their process of considering the recommendations, I do not envisage being in a position where I think that their position has to be disowned or condemned. We will do this together, because we are both members of the same coalition, and we will also do it with the Iraqi Government.

In view of what the Secretary of State said about the contribution of the Iraqi 10th Division to Operation Sinbad, what does he think about the proposal to transfer control of the Iraqi police to the Ministry of Defence?

I greatly respect the right hon. Gentleman’s views on these matters because I know that he has studied them, not only in his capacity as Chair of the Select Committee but otherwise—and I have to say to him that that is superficially attractive because it appears to be a practical solution. However, transferring the police to the control of the Ministry of Defence, against the background of the repression that there has been in Iraq, might, in the long term, be the wrong thing to do. I would have to consider long and hard whether doing such a thing would serve the long-term interests of the Iraqi people’s democratic future.

In his response to the urgent question, the Secretary of State mentioned the region. Has he considered the impact that there would be on neighbouring friendly states such as Kuwait, Qatar, Saudi Arabia and the United Arab Emirates if there were an untimely withdrawal from southern Iraq before the four provinces and the cities had been handed over to a democratically elected Iraqi Government?

We keep in close touch with the Governments of all those countries, who are consistently a moderating influence on policy in the middle east. As my hon. Friend points out, they face their own challenges and have fears about the possible disintegration of Iraq and the effect that that would have on their security. Because we keep in touch with those Governments, we will ensure that when the broader middle east strategic approach to the resolution of Iraqi issues is determined, we will take their views into account.

Does the Minister accept that as there is no British equivalent of the Iraq Study Group, that the—[Hon. Members: “Prompt!”] Does he accept that his use of the word “premature” in reply to earlier questions, suggesting that it would be premature to consider this before the American Government have made their decision, rather reinforces the idea that it is not just the Prime Minister who looks like a glove puppet of President Bush, but the entire Cabinet?

It might have been better for the hon. Gentleman if he had continued to forget the question that he was about to ask—[Interruption.] My right hon. Friend the Leader of the House reminds me that the Iraq Study Group was commissioned in the first place by two independent non-governmental organisations, or think-tanks. If the House now thinks that that is the way in which policy ought to be developed in this country, one must wonder to whom accountability would be handed. I got lost in the hon. Gentleman’s question to some degree, as he did himself—but instinctively, I do not agree with him.

Will the Secretary of State explain quite simply to an increasingly sceptical public why he is opposed to the establishment of a parliamentary inquiry that could take wide-ranging evidence on the policies relating to Iraq, the aftermath of the invasion and what we are going to do about getting the troops out?

The view that I took when that request was made initially was reinforced by the decision of the House not to hold such an inquiry. I share the view of the House of Commons that there should not be such an inquiry. In my view, the House was persuaded that a retrospective inquiry would undermine our troops who are deployed at present—those in south-east Iraq, especially, and also those in other parts of Iraq, who are doing very good work. It would be entirely inappropriate to give instructions that there should be such an inquiry at this stage. There might be a time for inquiries, and we will cross that bridge when we come to it.

Does the right hon. Gentleman understand that those of us who opposed the war from the outset on the grounds that it was illegal, unnecessary, dangerous and contrary to our national interests find it deplorable that the Prime Minister has not yet come to the House to answer the searing indictment of his policies that is contained in the report of the Iraq Study Group? Will the Secretary of State tell his right hon. Friends the Prime Minister and the Chancellor of the Exchequer that they are responsible for having got us into this mess, and that it is their business to account to the House for that?

The right hon. and learned Gentleman makes himself clear. I do not agree with him, but I am sure that his consistent observations on the issue have been heard by the very people by whom he wishes them to be heard. In my view there is no searing indictment of our policy on Iraq, and certainly not in the ISG report, which does not come into that category.

Is the Secretary of State aware that I do not need any so-called parliamentary experts to tell me over and over again what my position is? I did not support the war at the beginning, and I do not support it now—and I do not need any high and mighty politicians to tell me that. Get the troops out as quickly as you can.

My hon. Friend has, on this issue, the merit of consistency—and not all people who comment on it can claim that. I have said on more than one occasion—I repeat it now at the Dispatch Box—that it is not my intention to keep one British serviceman in Iraq any longer than is necessary. However, we have a commitment not only to the Government of Iraq but to the people of Iraq. We will not keep our troops in Iraq any longer than is absolutely necessary, and we would not keep them there one moment longer if we believed that they were no longer making a positive contribution to a democratic Iraq, in which people have the opportunity to enjoy economic prospects, in a way that was denied to them by the tyranny of the regime that previously ran the country.

A principal conclusion of the Iraq Study Group is that

“If the Iraqi government does not make substantial progress toward the achievement of milestones on national reconciliation, security, and governance, the United States should reduce its political, military, or economic support for the Iraqi government.”

What is the British Government’s view of that recommendation?

The British Government’s view of that recommendation, at present, is that we should look at and consider it, together with a number of the other recommendations. I should just say to the hon. Gentleman that when we assess the performance of the Iraqi Government, we have to take into account the circumstances in which they currently operate, other countries’ interference in Iraq’s internal affairs—interference that is particularly designed to destabilise that Government—and the challenges that that Government face. We should also take into account the fact that in many aspects, the Iraqi Government are working well. There are Ministries that are working well; an example is the Ministry of Water Resources, which has made a massive contribution to improving the conditions for the people in Iraq. The recommendation is much more complex than would appear from a simple reading of two or three lines of it, but it is one that we will take into account.

My right hon. Friend mentioned that other countries were stirring up the insurgency. I do not know which countries he had in mind, but at a meeting this morning, Mr. al-Hakim said, if I understood him correctly, that the Iranian Government were helping the Iraqi Government in chasing the terrorists. He also said that the terrorists had better equipment than the Iraqi army, implying that something ought to be done to equip that army better. Would my right hon. Friend care to comment on those views?

I shall see Abdul Aziz al-Hakim later today, and no doubt I shall have the opportunity to explore those issues with him. I shall do that, rather than comment on an edited version of what he may have said, although I accept that my hon. Friend reports him accurately. I do not agree with his view that Iran is making a positive contribution in Iraq. I believe that Iran poses a strategic threat to the whole region, that it is interfering in the internal affairs of a number of countries in the region, including Lebanon, Palestine and Iraq, and that it is doing so in a way that is destructive and dangerous. That is a view, I have to say, that is shared by many of the moderate countries of the region.

Given the Minister’s extremely robust response to his hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), and given that Iran has threatened to wipe another country from the face of the earth, will the Government rule out any deal with Iran that, in return for Iran helping to stop the violence in Iraq, would involve some sort of acceptance of the Iranian nuclear enrichment programme?

One of the observations or conclusions of the Iraq Study Group with which I agree is that those two issues are quite separate, and should not be traded, as the hon. Gentleman accepted—indeed, he suggested that that should be ruled out. Hon. Members will accept, however, that whatever our view of Iran, it will not go away. Iran and Iraq will be neighbours for ever, as they are locked together by geography and history, and that must be accommodated. At the end of the day, the ability of a sovereign Iraqi Government to reach an agreement with Iran will mean that Iran will not interfere and can play a positive role in the future of Iraq. That will ensure that Iran does what it needs to do in the region, and that is what we will focus on.

My right hon. Friend should be commended on his measured approach to this complex and difficult issue. He stated that the Israeli-Palestinian conflict was the motive for those perpetuating violence, but does he not agree that those very groups have been implacably opposed to a two-state solution to that conflict, and that those perpetuators of violence remain opposed to a solution of that difficulty?

I thank my hon. Friend for her support. I knew that there was a “but” coming, but it is not too difficult to deal with, as I agree with her analysis that the two-state solution is the way forward. It is only by accepting such a solution that we will achieve productive and progressive talks. That view is shared by both the United Kingdom and the US Government.

May I return to the role of the Prime Minister? The situation in Iraq is deteriorating, violence is increasing, the ISG is at odds with the Iraqi Government, and our own generals appear to contradict certain aspects of Government policy on Iraq. Given that the last time the House had a full proper debate on the future of Iraq was in 2004—although the Prime Minister appears willing to talk to everyone else—will the Minister explain precisely why his right hon. Friend seems unwilling to come to the Chamber and lead such a debate? It was the Prime Minister who led us to war, so why is he hiding?

My right hon. Friend the Prime Minister cannot be accused of hiding, as he has been willing to answer questions at the Dispatch Box on a range of policies more often than any of his predecessors. The issue on which the hon. Gentleman seeks a debate was recently debated in the context of the Queen’s Speech. In his preamble, he suggested why it may not be convenient to hold a debate at the drop of a hat every time something happens. Sometimes, mature reflection on developments rather than reacting to those developments leads to better debate. The hon. Gentleman said that the ISG was at odds with the Iraqi Government, but I do not think that that is the case. I entirely respect the observations of the Iraqi President, which were understandable, but the process of discussing recommendations and policy has not yet been gone through.

I welcome my right hon. Friend’s comments on the activities of the military forces in Iraq and the plans that affect their future, but will he briefly explain what the Government intend to do to support the Iraqi Government in the execution of their civic duty and those democratic initiatives that will require substantial support if they are to be maintained?

As I said at the beginning of my statement, I have always said that we can provide an important military component in the security of Iraq, but military means will not solve Iraq’s problems. We need to develop governance and exploit economic opportunities on the basis of the security that we can provide. I speak at the Dispatch Box on behalf of the Government, but principally as the Secretary of State for Defence. The Foreign Office, the Department for International Development, and, indeed, other Government Departments, have worked appropriately with elements of the Iraqi Government, at both national and regional level, to ensure that their capacity and capability are developed to do exactly what my hon. Friend knows is necessary to build up democratic and Government institutions.

To those who think that that country is disintegrating, may I say that its democratic institutions and its Government departments may not be perfect—they are working in very difficult circumstances—but they are all functioning. Some of them are not functioning very well and some are severely challenged, but they are all functioning. That is a long way away from, for example, challenges that we have faced in other areas where we have tried to bring countries out of conflict and have succeeded.

Many would argue that disbanding the Iraqi army and the police was one of the biggest mistakes of the post-Iraqi conflict and has led to sectarian violence and so many deaths, yet this weekend we learned that the former Defence Secretary tried to persuade the Americans to do exactly the opposite. Will the Secretary of State comment on that decision? Does he agree that it illustrates why we need a review of what happened in the Iraq war so that we can learn from what happened, both good and bad?

The hon. Gentleman knows that the disbanding of the Iraqi police was principally a function of the de-Ba’athification of Iraq. That was at the heart of the repression of the Iraqi people and is an issue that they will have to address because, like the geography of the area, the people who live in that country will not go away, and they will have to learn to co-exist. As for the Iraqi army, my recollection is that it disbanded itself.

Given the horrific situation in some parts of Iraq, is it not vital that we send out a clear message that we will not suddenly give up on the people of Iraq? In the light of that, is it not important not only to provide training in Iraq for Iraqi forces now, but to make a long-term British commitment to train a large number of Iraqi officers in the UK at Sandhurst or at Shrivenham, alongside British troops, so that there is a long-term investment in that country into the future?

At the end of the day, as the House will accept, we will respond appropriately to requests for such support, but those requests need to come from the Iraqis. Interestingly, there are at present Iraqi officers doing just what my hon. Friend suggests—training in our defence colleges and with our troops, here in the United Kingdom. He is right to suggest that there is a desire in the Iraqi army and among its senior officers for that training for their army. I can tell him that we are well placed to give them that support if they want it.

With permission, Mr. Speaker, I should like to make a statement on the Government’s proposals to make it easier for more people to save for their retirement.

Despite the welcome fact that people are living longer, millions of employees are either not saving at all or not saving enough for their retirement. As the Pensions Commission noted in its second report, we must take steps now to tackle the problem of under-saving or face serious problems in the future. We have already acted to make sure that the state pension provides a solid platform on which people can save. The Pensions Bill published last month will create a simpler and more generous state pension. The restoration of the link to earnings will result in a basic state pension that by 2050 will be worth twice as much in real terms as it is today.

More generous qualifying conditions will, for the first time, properly treat social contributions on an equal footing with cash contributions, delivering fairer outcomes, especially for women and carers. These and other changes will reduce the extent of means-testing in the future, making sure that pension credit continues to be targeted at the people who would otherwise have been poor in retirement or who have only small savings. But we must build on this foundation by giving more people greater incentives and opportunities to save for their retirement.

Overall participation in occupational schemes has been falling since the late 1960s, and disproportionately high charges are making the personal pensions market uneconomical for those on moderate to low incomes, who often stop contributing to private schemes after a short time. We will therefore be bringing forward legislation to create new low-cost personal accounts as the catalyst for a new savings culture in our country.

This White Paper sets out proposals to give every employee in Britain earning over £5,000 the statutory right for the first time to receive a contribution from their employer towards an occupational pension. Provided that they take responsibility in turn by contributing to their pension from their own wages, employees will be entitled to an employer contribution of 3 per cent. of their salary in a band between approximately £5,000 and £33,500. We will fix the level of employer contributions in primary legislation.

From 2012, employers will automatically enrol their employees into personal accounts or into their own existing occupational pension scheme, as long at it meets the specified minimum standards. That simple but radical step will affect around 10 million employees in Britain, and it will be vital in overcoming the barriers that prevent many people from making the decision to save. There will be a compliance regime to protect the right of employees to be automatically enrolled and to receive an employer contribution. We will consult on the detail of this approach, but expect it to build on the light-touch model of the national minimum wage.

We intend to establish personal accounts along the lines proposed by the Pensions Commission. The current Pensions Bill provides for the creation of a personal accounts delivery authority—an independent body with financial sector expertise that will, in the first instance, advise Government on the design of the operational structure of the accounts and prepare to get the necessary contractual arrangements with the private sector in place. It will then be responsible for commissioning the infrastructure to deliver the scheme from the private sector. The authority will eventually be replaced by a new personal accounts board, which will be responsible for the live running of the accounts. Its decisions will be independent of Government.

Evidence suggests that moderate to low earners prefer not to make a choice of pension scheme administrator. Our approach will offer greater simplicity for savers and maximise participation levels. There will be a choice of funds for those who want it, which we expect to include the option of social, environmental and ethical investments and branded products. For those who do not want a choice, there will be a default fund.

Low charges are critical to ensuring that people build up the maximum pension fund from their savings. The Government estimate that the long-term costs for personal accounts will be in line with those set out by the Pensions Commission of around 0.3 per cent. of funds under management, or even lower. Together with reduced marketing costs, this approach is expected to be 20 to 25 per cent. cheaper than a system based on direct competition between firms for individuals.

These reforms are designed to fill a gap in the existing market, and we want them to complement the existing market, not compete with it. So, alongside the creation of the new personal accounts, we will take action to support existing pension provision. There will be no transfers into or out of personal accounts from or to existing pension schemes, and an annual limit will restrict the level of contributions an individual can put into their account. The limit will be £10,000 in the first year, to allow individuals currently without access to a good-quality occupational pension to save in other non-pension products before 2012 and then to move them to personal accounts. We propose a limit of £5,000 for subsequent years, but we will consult on that.

There will be a simple and self-certifying exemption test for employers who operate schemes of broadly equal value to personal accounts. Additionally, we are consulting on whether companies that offer higher value schemes should be allowed to have a reasonable waiting period before employees join the schemes. We are also interested to learn more about the National Association of Pension Funds’ proposal of a “good pensions scheme” quality mark to help employees identify companies that offer such pensions.

The Government are committed to minimising the burden of personal accounts on employers. Mandatory employer contributions will be phased in over at least three years. The reforms have to be simple to run for a small employer. The central clearing house will mean that employers need only have one point of contact for transferring contributions, and the Government will make minimising the administrative burden on employers a key task for the delivery authority and subsequent personal accounts board.

The vast majority of people can expect to benefit in retirement from saving in personal accounts or an equivalent scheme. Of course, all forms of saving have some uncertainty, but thanks to our reforms those who work or care throughout their working lives can expect to be better off from having saved. Indeed, now someone need only work or care for 24 years to avoid pound-for-pound withdrawal; and under existing rules, even the tiny minority of pensioners who receive the guarantee credit only could still see a return from their saving by taking a lump sum.

Simple, low-cost, flexible and portable as people move between jobs, personal accounts may generate an additional £4 billion to £5 billion of net new saving each year, equivalent to around half a percentage point of gross domestic product. They will help millions of people take greater responsibility for building their retirement savings and embed a new pensions savings culture at the heart of a comprehensive and balanced pensions settlement.

I hope that these reforms set a sustainable and sensible course. They are in the long-term interests not only of this generation but of generations to come. I commend the White Paper to the House.

I thank the Secretary of State for his statement. We have already indicated our support for the state pension reform package and for the objective of providing workplace savings targeted at those who are least well served by the pensions industry—largely lower-paid people outside employer schemes. We have made it clear that we will support the auto-enrolment proposals and the compulsory employer contributions. There is a large measure of consensus around the state pension reform proposals, but there are still important issues to be resolved as regards personal accounts. I hope that the Secretary of State will be able to confirm that the White Paper is a further step in the process and that he is willing to engage in further constructive dialogue. We are broadly comfortable with his proposed structure of a low-cost default fund with the option, for the more adventurous, of opting into branded funds that are more actively managed.

However, I want to draw three major areas of concern to the Secretary of State’s attention. First, there is considerable concern in the industry and among commentators about the risk of levelling down, which he did not mention. Employers faced with the requirement to enrol the whole of their work force may seek to control increasing costs by reducing the level of contributions that they make. The right hon. Gentleman may say that that is a price worth paying for wider coverage, but that would be scant comfort to those who are already in more generous schemes.

Secondly, there is concern that with relatively high levels of residual means-testing, which is projected by the Pensions Policy Institute to affect up to 50 per cent. of pensioners by 2050, it may be difficult for many people who are on lower earnings and are likely to have broken work records to determine whether saving will pay for them. The last thing any of us want is to be here, or for our successors to be here, in 30 years’ time facing the equivalent of a pensions mis-selling scandal, with hundreds of thousands of people having saved but finding that they do not benefit from having done so.

Thirdly, the right hon. Gentleman spoke of personal accounts complementing rather than competing with the existing market. We support that targeted approach. However, in turning his back on Lord Turner’s recommendation of a £3,000 cap on contributions to personal accounts and setting it at £5,000, as he said today—or at least £5,000, as it says in the White Paper—he is hugely expanding the scope of personal accounts and reducing the focus on those who are being most failed by the existing marketplace. He will make it much more difficult to assess the extent to which he has succeeded in his principal objective of getting people on lower earnings into long-term savings, and he is running the risk of undermining the already battered private pension saving sector.

Will the right hon. Gentleman assure the House that he is alert to, and willing to address, all those issues? In particular, will he commit the Government to focusing over the next couple of years on the deregulatory review of occupational pensions, to ensure that the occupational pensions sector is as robust as possible before personal accounts are introduced so that the temptation for employers to level down is minimised? Will he look again at the need to focus the scheme on the lower paid and therefore review the proposed cap of at least £5,000?

When the Government damage pension provision or confidence in our pension system—for example, through their continuing £5 billion a year raid on pension funds, U-turns on the tax treatment of pension schemes and the continued unresolved suffering of the victims of pension scheme failures—we will continue to hold them to account.

Similarly, when the Government have got it right, as in the state pension reforms, we will say so and actively support their proposals. When the general direction is right, but problems remain, as with personal accounts, so long as the Government are genuinely willing to engage in a continuing dialogue, we will try to work with them to build an agreed model because we believe that, on a long-term issue such as savings, seeking that cross-party consensus is in the interests of Britain and the British people. I hope that the Secretary of State will confirm that he intends to continue to try to reach that consensus in the next nine months.

I welcome what I believe to be the overall support that the hon. Gentleman continues to signal for the proposals. A consensus behind them here and elsewhere is important because a sense that politicians say one thing here and another outside would undermine public confidence. I was therefore worried to read what the hon. Gentleman wrote inthe Financial Times about the proposals somehow being an attempt to nationalise Britain’s pensions savings industry. What a load of nonsense that criticism was.

That is the effect of the higher cap.

I shall come to the cap shortly. We are not nationalising the occupational pensions savings scheme. No reasonable, fair-minded critic, who considered the proposals and Lord Turner’s recommendations, on which they are largely based, could reach that conclusion. The hon. Gentleman cited Lord Turner’s report earlier. He might like to know that, today, Lord Turner said of the proposals that he hoped that there would be widespread support for the way forward that the Government propose. If the hon. Gentleman wants to escape from the big tent that Lord Turner has been carefully constructing, he will find it difficult, given Lord Turner’s support for the proposals.

The hon. Gentleman has raised several important points and I shall try to deal with each of them. I hope that the White Paper will help sustain the consensus to which he has been a party because we want that to continue. The White Paper clearly signals that further consultation is required on several matters—the hon. Gentleman referred to one or two of them. One is determining the personal contributions cap, and we are consulting about that. If people believe that £5,000 is too high, they can present their arguments, to which we will listen.

There is further consultation to conduct about governance of the national pensions savings scheme. We shall do that in the open way in which we have set about the matter so far.

The hon. Gentleman raised three or four more specific points. On levelling down, personal accounts are designed to complement, not compete with, existing employer provision. We can do four simple things to try to ring-fence and ensure that personal accounts work as we intend. One is to prohibit transfers—I have dealt with that. The annual cap and contributions will help, too. The simple and straightforward employer exemption test will be helpful, and that also applies to the new quality mark proposal from the National Association of Pension Funds.

It was widely argued when we introduced the national minimum wage that it would level down wages. That did not happen and I do not believe that it will happen to occupational pensions. It is important to understand that employers are levelling down contributions now—there is currently no floor to the contributions that they offer. Personal accounts will, for the first time, set a minimum below which contributions cannot fall. Personal accounts will increase, not undermine, total levels of pension saving.

The hon. Gentleman asked whether it was safe to auto-enrol and prayed in aid the Pensions Policy Institute. The Department and the institute basically draw the same overall conclusions about personal accounts. The Pensions Policy Institute says that they will help most people and are a big improvement. We agree. Our figures are similar. We have different assumptions about annuity rates from the PPI, and its analysis does not take into account the fact that some people may choose to take some or all of their pension pot as a lump sum, but we both agree that auto-enrolment is a good idea and that most will gain from it. Some might have low returns but the vast majority will need good information and we have work to do to put together the generic information that will go out with personal accounts. However, people can decide to opt out. That is the ultimate safety mechanism to ensure that people gain when they are enrolled—it is a conscious choice.

In relation to the £5,000, the hon. Gentleman said that we were extending the scope of NPSS. We are not doing so.

Yes, you are.

Don’t be ridiculous. We are trying to have a serious debate. The scope of NPSS remains exactly as proposed by Lord Turner: on a band of earnings between £5,000 and £33,000. There is no suggestion of extending the scope of personal accounts.

I will make an announcement on the deregulatory review tomorrow; it is important that we make progress on that.

The hon. Gentleman’s final point was the cheekiest of all. He complained about the so-called tax raid on pensions and the £2.5 billion that we have put into the financial assistance scheme to help those who lost out when their schemes went into insolvency. My understanding of his proposals is that he will not spend a penny more on the financial assistance scheme, and that he will not reverse on tax cuts. The less that we hear from him about that, the better.

Will my right hon. Friend confirm that people cannot plan their retirement pension savings from the age of 65, and that they need to do that at the start of their working life, for which NPSS is the best thing that has happened post-war? In the light of that, will he comment further on what he will do to provide high-quality generic advice to prospective entrants into NPSS? Where will the consumer voice be in the delivery authority that he is establishing?

On my hon. Friend’s last point, the Government have more work to do on establishing the arrangements, on which the White Paper proposes a series of consultations. We must make sure that the voice and interests of scheme members are heard loud and clear on the personal accounts board. That will be important.

We will have to provide good information to all the groups covered by personal accounts, so that they can decide whether they need to opt out. Clearly, that does not mean that auto-enrolment as a principle is not appropriate; it definitely is. One of the striking features of the consensus generated by the Turner commission is the now universal support for the principle of auto-enrolment. I hope that no one in the House or outside would seek to undermine that.

I also thank the Secretary of State for advance sight of his statement. He knows that the Liberal Democrats agree with most of the details of his announcement today. He is also aware of our concern, however, that the proposals and the consensus that he has been trying to lock together might be undermined by the scheme’s fatal flaw: the extent of means testing. Is not there a real risk that, at best, many people will not opt into and stay in personal accounts, and that, at worst, there will be accusations of Government-sponsored mis-selling?

Will the Secretary of State respond to three points? First, will he indicate what proportion of the target market for personal accounts will be subject to means testing? Would I be right that the proportion is likely to be about 50 per cent., especially as those in the target audience for personal accounts are most likely to be on low incomes?

Secondly, when Lord Turner announced the proposals, he talked about a deal whereby for every £1 that people put in, they got £2 out. How much of the target audience does the Secretary of State estimate will get £2 out for every £1 put in? Does he agree that because of the extent of means testing, not just in the pensions system but in relation to housing benefit and council tax benefit, many people will not get that kind of return?

Thirdly, will the Secretary of State confirm that he has now had to abandon his original ambition that nobody should be worse off through personal accounts? Will he confirm that he acknowledges in paragraph 79 of the executive summary that a small group of people—probably about 10 per cent.—will not see any benefit at all from saving? Does not he agree with the PPI analysis that that group might be bigger than 10 per cent., and that women with caring responsibilities, older people, the self-employed and those on housing benefit might find that they lose money—in some cases, 85 per cent. of their savings—in personal accounts?

Is not there an enormous price to be paid for the consensus that the Government have secured, and the deal that the Secretary of State has done with the Chancellor of the Exchequer? Was the Secretary of State incorrect to say, in the early part of his statement, that he is building on a firm foundation in the basic state pension? Is not the flaw in all the proposals that he is building on too low a basic state pension with too much means testing and that, as a consequence, he might find it difficult to persuade many people on low incomes to save in personal accounts, and he or his successors might even be accused of state-sponsored mis-selling in future?

I was rather surprised by the hon. Gentleman’s final flourish. He began by saying that he supported our approach; by the end of his remarks, sadly, that did not seem to be the case.

The hon. Gentleman’s party clearly has a different view of how we should finance and structure the state pension system. I understand that he still supports the call for a universal state pension.

indicated assent.

He confirms that. As Lord Turner himself said that that was unaffordable and not a sensible policy, I do not think we should adopt it.

The hon. Gentleman made some wider observations. Our reforms to the state pension will, for the first time, provide a genuinely robust platform on which people can save with confidence for the future. As for means testing, many people on income-related benefits in retirement can still expect to receive more than they contributed on the basis of personal accounts. As I made clear in my statement, even the very small minority of pensioners who could face a greater withdrawal of benefits during retirement might receive a positive payback from their saving by taking a lump sum, potentially reducing interaction with benefit entitlement. Certainly the large majority of people can expect to benefit from saving in personal accounts.

The majority?

Yes, the vast majority can expect to benefit from that or an equivalent scheme. Even people on savings credit can expect to get back more than they contribute, even when account has been taken of any pension credit offsets—twice as much, in the case of long-term savers.

I hope the hon. Gentleman will want to reflect on what he has said today, and will not go about trying to undermine the personal accounts scheme as he has today. I think he is wrong in his basic analysis of the level and extent of means testing in the system. I have tried to respond to his points today, and I dare say I shall continue to do so; but I consider his proposed reform—the universal state pension, which I think he believes would deal with all those points—to be simply unaffordable. It would run up massive and unsustainable tax burdens for future generations, and that alone undermines his fundamental analysis.

I congratulate the Secretary of State on his scheme for low income earners who have been excluded from the savings market. He will recall the Treasury Committee report on the subject, which highlighted the need for low charges. The evidence that I have received from private companies to date suggests that they are thinking of management charges of 0.6 per cent. and above.

Low charges are critical. Turner’s comments are salutary. If we take the figure of 1.3 per cent. for stakeholder products, individuals’ income over the lifetime of a pension is 20 per cent. less. I want to hear a robust statement from the Secretary of State to indicate that the 0.3 per cent. management charges envisaged by Lord Turner and his colleagues will stick, for the sake of low income earners and their pension pot at the end of the day.

I am grateful to my right hon. Friend for the work that he and his Select Committee have done. They have been strong supporters of our approach.

Two things will make it possible for any Minister at the Dispatch Box to say with confidence in the future that the vast majority of people will gain from the new personal accounts system. One is the employer contribution, and the other is the low charges that will be associated with it. As I have said today, we believe that in the long term it will be possible to get down to 30 basis points for the delivery of personal accounts. It will, however, be the job and responsibility of, first, the delivery authority and then the personal accounts board to negotiate with pension providers and the industry to establish the right basis on which charges will be handled in the scheme. We are consulting on that, but let me repeat what we said when we responded to my noble Friend’s report, and what I have said today. We believe that this system can be run within the funding band that Turner set out, and if we can achieve that it will be a huge boost to the pension incomes of many middle and low earners in this country.

I welcome some of the changes in the White Paper. As the Secretary of State probably knows, I represent a number of Albert Fisher pension scheme victims, most of whom are in their fifties, and have lost 22 years’ worth of occupational scheme benefits. Is the Secretary of State aware that as matters stand, my constituents will receive some assistance from the financial assistance scheme, but that will give them only 50 per cent. of their original pension at retirement date? Is there anything in the White Paper that will help the Albert Fisher Group scheme victims, who feel very let down?

As the hon. Gentleman knows, we have put £2.5 billion into the financial assistance scheme to provide support for those closest to retirement. I also repeat what I pointed out earlier: his Front-Bench colleagues have no plans to increase investment in the FAS. Therefore, his principal concern is with his Front-Bench colleagues, rather than with Ministers.

I welcome the announcement, but may I press my right hon. Friend a little further on who will gain and whether anybody will ultimately lose out? As he knows, one of the commonest complaints among people on modest incomes with modest occupational pensions is that when they retire they find that they are worse off, or not much better off, than people on benefits. How will this new personal account address that problem?

The account is part of a suite of reforms that include significant changes to the state pension system. The reforms will make it more generous and extend its coverage, taking most people who have a lifetime’s worth of contributions and work well clear of the means-tested threshold, so they will be able to keep what they save in the national pension saving scheme. It is for that reason, and for others, that we are confident that the vast majority of savers will benefit from being a part of the personal account scheme.

I generally welcome the proposals in this paper—which are a step forward—not least because my party proposed something similar three years ago, but we do have some concerns. Given the recent problems with pension schemes and endowments—and even Farepak—there is widespread suspicion of private savings schemes, especially among the lower paid, and I was concerned about what the Secretary of State said about private involvement. Will he tell us a little more about how this scheme will be presented to the general public? Will they receive a personal account from the delivery authority or a private provider? For many people, the idea that the scheme has state backing will do much to establish it.

I also noted what the Secretary of State said about auto-enrolment and I support that principle, but will he be a bit more specific? Is there an opt out from auto-enrolment, and, if there is, is it restricted to those who opt out of the scheme into an equivalent scheme with an employer, or is there to be a general opt out?

Finally, although the scheme would be welcomed, does the Secretary of State not agree that it would work much better if—to borrow his own words—there was a firm foundation for pensions through the introduction of a citizens pension?

It was very generous of the hon. Gentleman to claim ownership of the idea behind the reforms, although I am unsure whether history will bear him out on that. I welcome his general support for the reforms; I thought that we were creating a big tent, but I did not think it would be that big. I cannot say with any confidence, however, that the hon. Gentleman’s proposals for Scottish independence—as I understand them—will help smooth the introduction of these reforms.

Answer the question.

I think the hon. Gentleman says that that is irrelevant, but it is highly relevant to the future of personal accounts. It is impossible to imagine how Scottish independence will in any way advance the cause of introducing a proper, sensible and sustainable pension settlement in the United Kingdom.

The Secretary of State rightly talks about restoring confidence in the future, which started to be eroded about 20 years ago when the Conservatives introduced personal pensions, which were mis-sold. Although the proposals are welcome in helping to restore confidence in the future, two things are needed. We do not need financial advice alone; we also need far better financial education, because many people do not understand the advice that they are given. Secondly, I say in the friendliest of terms that we would further our cause more if we were seen to be accepting the ombudsman’s report as well.

I was going to say that I was grateful to my hon. Friend, and I very nearly was. In relation to pension schemes that have failed, we have introduced the financial assistance scheme, and we also have the Pension Protection Fund, looking at schemes that might run into difficulties in the future. Those two reforms are a major advance, and I hope that they will be seen as putting in place strong and effective protection.

I strongly agree with what my hon. Friend says about the need for financial literacy and education. Having, I hope, secured the general agreement of this House—although the details have still to be discussed—we now face a challenge. We must consider how we spend the next three or four years educating the public about these reforms and explaining them, so that, when they take effect in 2012, the public are aware of the product and understand the benefits to them of saving. It is of vital long-term interest to the pension system that millions of people who are not saving start to do so. They will not be able to do that successfully unless we, the personal accounts board and the delivery board put considerable time and effort into communicating the benefits of these reforms and of pension saving.

Given that the White Paper accepts that as many as one in 10 people will lose out as a result of membership of the scheme—according to the Pensions Policy Institute, the figure is one in five—will the Secretary of State guarantee that, from the outset, there will be a fully independent and generic system of financial advice to prevent such errors from being made?

Yes, that is our intention, and it is absolutely essential that proper education and information be available for people at the beginning. It is clear that some will not gain from being in personal accounts, which is precisely why we are not compelling people to join them. There is the opportunity to opt out, which is the ultimate safety mechanism, but the hon. Gentleman and his colleagues must not conclude that, because some will not get a sufficiently significant return to make it worth while, no one will. That would be a huge mistake.