Skip to main content

Commons Chamber

Volume 455: debated on Thursday 18 January 2007

House of Commons

Thursday 18 January 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Trade and Industry

The Secretary of State was asked—

Oil and Gas Licences

1. When he expects to announce the award of licences under the 24th licensing round for oil and gas exploration; and if he will make a statement. (116319)

I hope to announce the great majority of the awards soon, but in light of concerns we are deferring our decision on a small number of awards to allow for further consideration of the impact that oil and gas could have on the environment.

I thank the Secretary of State for that answer and I am glad that he and his officials are taking time to consider the valid environmental concerns expressed by the Countryside Council for Wales and the delegation of constituents whom I brought to meet his colleague, the Minister for Science and Innovation, in the autumn. Given that concerns have been expressed, and given that Cardigan bay is protected by the precautionary principle in the European Union habitats directive, will he use the opportunity of the coming days and weeks to exclude the Cardigan bay special area of conservation from the 24th licensing round?

I agree with the hon. Gentleman that the environmental considerations are important and I am aware of the concerns about dolphins, not just in Cardigan bay but in the Moray firth. It may help the House if I say that we will go ahead with the award of licences in about 239 blocks. There are four blocks—three in Cardigan bay and one in the Moray firth—for which we are carrying out an appropriate assessment of the risks. I hope that that assessment can be carried out expeditiously so that we can reach a decision one way or another, but I understand the hon. Gentleman’s concern. Under the law, we have to carry out an assessment and I hope that we can do so fairly quickly.

Manufacturing Sector

2. What recent assessment he has made of prospects for the manufacturing sector; and if he will make a statement. (116320)

Manufacturing output experienced a welcome revival in 2006 as the sector began to transform in response to the challenges from globalisation and technological change. The Office for National Statistics data show that manufacturing output grew by 2 per cent. between the end of 2005 and November 2006.

I thank my hon. Friend for those remarks, but I put it to him that one of the problems for manufacturing in this country is that it has been shrinking in relative terms. That may be perfectly natural, but the sector feels that its voice is not heard as strongly as it ought to be heard. In particular, is he satisfied that when it comes to issues such as the setting of interest rates, the voice of manufacturing is properly taken into consideration by the Bank of England?

Of course, that is a matter for the Bank of England committee, and it will have heard what my hon. Friend has said on the subject. We take the manufacturing industry very seriously, and we are all aware of the restructuring that has taken place and the challenge of globalisation. Indeed, my right hon. Friends the Secretary of State for Trade and Industry and the Chancellor have just returned from a trip to India to explore some of those issues. The industry is now about value-added manufacturing. It remains important, as it accounts for some 14 per cent. of gross domestic product—the figure is rather higher, I think, in my hon. Friend’s region of England. Through a range of measures such as financial aid, skills, science and research and development, we are supporting manufacturing industry.

What assessment has the Minister made of the rising price of energy and its impact on manufacturing? Does he agree that the illiberal energy markets inside Europe will have an impact on the costs of energy and on manufacturing?

On the second issue, the UK, not least during our recent presidency of the European Union, has led the charge on liberalisation in the EU. We are very pleased with the way in which Commissioners now produce strong reports. There have been dawn raids on some of the offices of the major bodies in the energy sector, and the hon. Gentleman will have noted the recent statements from the European Commission. The battle is not over, but we are moving in the right direction. Of course, we are concerned about the recent increases—by “recent”, I mean those affecting us over the past year or so—and their impact on businesses. We are in constant discussion with industry, and the Secretary of State and the director general of the Confederation of British Industry chair a committee to explore those issues. However, the hon. Gentleman will have noted that in recent months energy prices have been coming down, and it is the task of Ofgem to keep a careful eye on that to make sure that those decreases are reflected in future prices. I am sure that Ofgem will do its duty.

While manufacturing certainly faces substantial challenges, does my hon. Friend agree that it is important that we play to our strengths in areas such as performance engineering and environmental technologies? Places such as the former MG Rover site in Longbridge offer great potential for those activities. Will he encourage Advantage West Midlands and all other partners to do everything that they can to bring those projects to fruition?

The short answer is yes. Two things are true of manufacturing. First, as I have noted, for reasons that we all understand, the manufacturing sector has declined not just in the UK but in all advanced societies. Secondly, we remain very good at aspects of manufacturing. We are still producing 1.6 million vehicles in this country, which is close to the peak of the early 1970s. Our aerospace industry is important and we are well placed in emerging environmental and energy technologies. It is about adding value, as well as what we are good at. In my judgment, we are good at many things.

The Minister may be aware—I know that the Secretary of State is—of the recently announced loss of 650 manufacturing jobs at NCR in Dundee, West. He may be aware, too, of the loss of 100 jobs in the Michelin tyre factory in my constituency and 50 more proposed losses at the Wood group. In addition, there are non-manufacturing job losses in distribution and food processing, so will the Minister share with us his early reflections on the prospects for rebuilding manufacturing in Dundee, and give the House and the people of the city and, indeed, the wider Tayside area an assurance that the Department will do everything possible to turn that dire situation around?

Of course we regret the loss of those jobs. Much of that, as the hon. Gentleman will know, is for the Scottish Executive, but the Government and the Department will work closely with them. As for finding future work for those people, the Jobcentre Plus network is extremely important. We regret the job losses, but I emphasise that overall the Government are doing a great deal to support the manufacturing sector, with a great deal of success.

The manufacturing sector in the west midlands will be disappointed by yesterday’s defence training review announcement—[Hon. Members: “Yes.”] Will my hon. Friend reassure us that there will be investment in the proposed national skills academy for manufacturing in the west midlands, which is particularly important for RAF Cosford and Telford?

My impression is that some colleagues were pleased by yesterday’s news and some were disappointed. I understand my hon. Friend’s disappointment, but we must see things against the background of a successful United Kingdom economy in which skills have increased and employment is at a record level. My colleagues would be happy to pursue the opportunity to discuss those matters with him.

With more than 1 million jobs lost, including NCR jobs in Dundee, all hon. Members are naturally concerned about the prospects for manufacturing. The key is increased investment. To be fair, the Chancellor has been positively frenetic in this area, as every year he introduces a raft of new initiatives, and every year he and other Ministers spend hundreds of millions of pounds. Can the Minister of State explain why, instead of rising, investment in manufacturing has fallen by 28 per cent.? Where does he think the Chancellor has gone wrong?

The Chancellor has gone right in so many areas, which, for all sorts of reasons, Mr. Speaker, I would like to discuss at length, but your disapproval is the main reason why that is inappropriate. I said that there was a revival in manufacturing in 2006, and we are spending a great deal in selective grants. The skills agenda and science and innovation, for which I am responsible, are crucial. The hon. Gentleman will understand that global factors affect the structure of the economy, but of course I share his concern about job losses. As I told the hon. Member for Dundee, East (Stewart Hosie), job losses are not good news, but there was even poorer news in 1981, when 673,000 jobs were lost in the manufacturing industry.

Wind Energy

The renewables obligation encourages renewable generation and its associated industry. It is supported by about £500 million of spending between 2002 and 2008 in the form of research and development, and capital grants on emerging low-carbon and renewable technologies, including wind energy.

I thank my right hon. Friend for that answer. Yesterday, the East of England Development Agency approved funding for a £9 million offshore renewable business centre in Lowestoft, which will accommodate a cluster of wind energy industries and create new jobs. It is the catalyst that will make Lowestoft the offshore wind energy capital of the UK, as the town is ideally situated in the middle of the East Anglian coastal areas that the Department has designated as suitable for most of the country’s offshore wind energy development. Will he join me in congratulating the EEDA board, and come to Lowestoft to dig the first sod?

The investment is very welcome. I am glad that the East of England Development Agency was able to make that money available, and I look forward to visiting Lowestoft. I know that my hon. Friend played a significant part in getting that decision, and I hope we can build on it. There has been a great deal of offshore development recently. Just before Christmas I announced the go-ahead for the Government’s interest in a very large wind farm, the London Array project. It is a pity that that has been blocked by a Conservative council.

I support the comments of the hon. Member for Waveney (Mr. Blizzard). In theory, we are all in favour of green energy—some more than others. In practice, nobody wants a wind farm with concrete pillars as tall as Lincoln cathedral next door to them. We have all encountered that in our constituencies. Will the Secretary of State use this opportunity to give a forthright commitment on behalf of his Government that we will shift the whole subsidy, the whole ethos and the whole burden on to offshore from onshore? That would be a welcome statement.

The hon. Gentleman has put his finger on the problem. We need to increase the amount of wind energy because that will make a major contribution to cutting the amount of carbon emissions going into the atmosphere. He is right that, in principle, we will get agreement—for example, in the House—that we ought to be building more wind farms, and that there ought to be more offshore wind farms. I tell the hon. Gentleman, in the most non-partisan way possible, that the problem is that up and down the country Conservative, Liberal and nationalist councils are blocking applications for onshore and offshore projects. If we are serious about getting more wind energy, we must realise that at some point we need to build more wind farms, or we will not meet the objectives that we have all set ourselves. It is all very well talking green, but we must also will the means of being green.

My right hon. Friend knows that much microgeneration is focused on wind power, and we are told that the network can deal with distributed electricity, provided it knows how much will be coming on in the future. Does my right hon. Gentleman intend to provide incentives for more microgeneration, and if so, will he share his views with the House?

Last year, when we published the energy review, we said that that area had been neglected in the past and that we could do a lot more for distributed generation, as it is known, whereby people generate electricity for their own use and sell back to the grid any that they do not need. There are technical difficulties, for obvious reasons, and I have always said that there are some limitations. We could not, for example, end up being substantially dependent on the actions of millions of individuals in order to get enough electricity to heat and light our houses and factories. However, small scale generation of electricity is extremely important. We want to encourage it and I hope to have more to say when I publish the White Paper in March.

Is the Secretary of State aware that the amount of wind energy capacity that is tied up in planning is equivalent to 5 per cent. of our national electricity supply? Does he accept that even when planning permission is granted, new capacity is delayed for up to 10 years by the rules on connection to the national grid, which require connections to be made in the order in which they were applied for, regardless of whether or not they have planning permission? In the case of Drummuir in Scotland, its planning consent will have lapsed well before its connectivity date of 2015, so it may never even be built. Will the right hon. Gentleman ensure that these issues are addressed in the White Paper when that comes out in March, and will he consider making it a primary responsibility of Ofgem to encourage renewable sources of energy so that the anomalies can be removed and green energy supply can reach its maximum potential?

The hon. Gentleman is right that there are two obstacles to wind energy. One relates to access to the grid. As we stated in the energy review that we published last year, we need to look into that. We are working with Ofgem to try and sort out the problem. It is nonsense that in dealing with applications, Ofgem has to treat a real prospect behind an application that might be speculative, simply because the speculative one came first. That needs to be addressed.

The second obstacle concerns planning. There is undoubtedly a problem in relation to a number of energy projects, especially in relation to wind energy—not just the farms, but the transmission. In Scotland, transmission lines between the area north of Inverness and the central belt have been blocked. Councils are blocking such applications throughout the country. We need to consider how we can change those procedures. I have always said that our planning system is completely out of date in this regard. We need to streamline the planning process, especially in relation to major projects, and I wait to see whether we will get cross-party support on doing that. The hon. Member for Wealden (Charles Hendry) said that it is all very well to go around the world saying that we are in favour of green energy, but here at home we have councils—the majority of which, I am sorry to say, are Conservative—whose actions mean that we will not get the green energy that we all say that we want.

Goods and Services

4. What steps he is taking to ensure that suppliers of goods and services provide sufficient information to enable customers to trace them. (116322)

The vast majority of consumer products are already required to carry the name and address of the producer or importer in the European Community. There are specific requirements for e-commerce and distance selling and for traders who use names other than their own. When the unfair commercial practices directive is implemented later this year, it will require that consumers are always provided with certain information, including identity and geographical address, where there is an invitation to purchase a good or a service.

I thank my right hon. Friend for his answer. It is not unusual nowadays to see fliers distributed through the door with merely a mobile phone number on them. Those who purchase by that route and are dissatisfied with the service offered often find that it is a pay-as-you-go number or one that cannot be traced later. Will the steps that he has outlined address that problem?

My hon. Friend asks a good question. That is exactly what the unfair commercial practices directive will do. If he has a case or cases that have prompted that question, I am happy to meet him with my officials and with his local trading standards officer to see whether there is any evidence in the marketplace in relation to a specific trading area that we can deal with immediately.

Despite the right hon. Gentleman’s reassurances, if he went into a supermarket he might find a product called Suffolk Choice bacon, which comes from nowhere near Suffolk. Dealing specifically with pork and pigmeat products, is he aware that products can be imported into this country that are completely unacceptable on welfare grounds when selling to consumers? What will he do to help to inform consumers about the abuse of labelling that is taking place, particularly as regards such products?

I can assure the hon. Gentleman that I have that matter under active consideration, although I have no specific knowledge of Suffolk bacon. In the past year I have lost 5 stone in weight, so I have eaten no form of bacon whatsoever—not even Scottish bacon from Ayrshire—but if he can convince me that Suffolk bacon is one of the best I may well break that taboo and start eating it again. It is a complex issue, but I will write to him with a substantive answer.

On the subject of things lost, can my right hon. Friend give us an update on where his Department stands as regards the Farepak inquiry and when it expects the report to be published?

I thank my hon. Friend. Arrangements are being made to close the fund that was set up and to audit the accounts. I repeat my commitment to place those accounts in the Library when they have been audited. The administrator is carrying on with his or her report and will be going back to the court to seek additional powers in respect of those investigations. The companies investigation branch is continuing its investigations and receiving co-operation. The Office of Fair Trading has sent Ministers a scoping paper, which we are considering. Next week, there will be a meeting with officials to consider the next steps forward. I reiterate the commitment that I gave to hon. Members on both sides of the House—when I have more substantive information I will bring it into the public domain. In addition, I will consult those Members with the closest interest in the matter, including Opposition spokespersons.

Post Office

The Government have worked closely with Royal Mail and Post Office Ltd to ensure that they can deliver high quality services that customers want. That includes the £500 million investment in Horizon, thus enabling the Post Office to develop its financial service businesses by opening its counters to 20 million bank customers and becoming the UK’s leading provider, for example, of foreign exchange services. The vast majority of post offices are private businesses that can also pursue commercial interests.

I thank the Minister for that reply and, for the record, his help over the summer. I also thank Labour party activists in Shrewsbury. We all campaigned to try to save our main post office in Shrewsbury but, regrettably, it closed and has been subsumed by WH Smith. What help will he give rural post offices in my constituency to ensure that they can continue to prosper? They provide an important service to the people in my rural community.

Notwithstanding my discussion with the hon. Gentleman and his constituents about Shrewsbury, I take a different view. The post office is still open. It has moved to different premises, but the services are available. Most customers’ experience of franchise arrangements for main post offices and directly managed branches moving to other premises has been positive. We are trying to maintain the largest national network that we can, including large branches in towns and cities. Although the example of Shrewsbury caused initial concern, I hope that it will prove beneficial to the hon. Gentleman’s community.

I can confirm that discussions have taken place between the Post Office and the credit unions national body on greater scope for working together. Regular dialogue will continue. Although working together would have a social role, it is not clear that it would generate much revenue for the Post Office. However, it would obviously increase footfall and ensure that the Post Office was further rooted in most vulnerable communities. Credit unions are on the up and expanding. I hope that they have a positive future with the Post Office.

When the gas, electricity and telecommunications industries were opened up to competition, it was vital that transmission and distribution networks were made available to competitors. The sub-post office network could and should be the distribution network for the competitors to Royal Mail for packets and parcels. However, I expect that Royal Mail Group would fight hard against that. Will the Minister assure me that he will do all in his power to ensure that that valuable new additional source of revenue is opened up to sub-post offices?

The hon. Gentleman makes a fair point and several people have raised the matter. However, it is not clear that such action would generate additional revenue. Royal Mail might well be replaced by competitors so the business would remain the same. The matter is constantly under review. Competitors can apply to Postcomm for a licence to operate. It is Postcomm’s decision under the universal service obligation.

Will my hon. Friend ask the Post Office to consider entering into partnerships with catalogue businesses such as Littlewoods or Argos? Low-income families depend on those businesses, but there is a growing gap between families who are e-enabled and those who are not. Perhaps there could be an internet point in post offices and links with those businesses so that the Post Office can survive.

In his statement on 14 December, my right hon. Friend the Secretary of State announced a three month consultation period until 8 March for representations about spending the £1.7 billion additional money that we will use to support the Post Office’s sustainable network. There are several innovative and new ways in which we can improve the protection arrangements for the Post Office. New ways of doing business are an example of that and we welcome representations from colleagues, as well as outside organisations, about how best to expand the business.

As the Minister knows from our previous questions and discussions, suburban areas such as mine need the post offices as much as rural areas in order to be sustainable communities. Will he consider how he could expand the role of sub-postmasters to provide more products and services, perhaps using private mail services and new markets, to allow post offices to continue as profitable businesses?

As I mentioned a moment ago, the vast majority of the 13,800 post office outlets across the country are privately owned businesses. It is a matter for those business people to determine for themselves whether, for example, they apply for lottery or PayPoint terminals or engage in local partnerships with other franchises. These are opportunities for them to expand their businesses, and many people take advantage of them. Notwithstanding that, because of the nature of the business and the fact that it is not commercially viable at its present size, we are saying that there should be at least 12,000 outlets, and another 500 mobile outlets, and there has to be public subsidy to maintain that.

The Minister said that his Government are committing an additional £1.7 billion to invest in the post office network over three years. Surely, however, that sum includes money for the social network payments—that is, “ticking over” money—and compensation for redundancies and for the cost of closing post offices. Will he now tell us what sum will be left over to invest in new business and in training, equipment and marketing? Or is that amount so token that it has no hope of reinvigorating the post office network?

I would be happy to write to the hon. Lady to give her a complete breakdown of the figures, although I think that we have already given that information in answer to several parliamentary questions over the past few weeks. I must point out, however, that regardless of whether the money is going into compensation payments or social network payments, it is money that the Government are committing to protecting the post office network to ensure that we get it on to a sound financial footing by 2011, and to ensure that we have a national network. It is Government money, regardless of how it is being spent.

This week, it has been reported that several major companies and one major Government Department have switched hundreds of millions of pounds of business away from Royal Mail. Is it not the case that the Government are opening up Royal Mail to greater competition—and demanding that it behave like a private business—while denying it the freedom that it needs to compete effectively? How does the Minister expect it to do well when its competitors are free to compete with it, yet it is not free to compete with them?

We do not accept the hon. Gentleman’s point. Royal Mail has the freedom to compete. We have liberalised the markets to ensure that it is a competitive service industry. It is not consistent for Opposition Members to say that there should be freedom within the market, but then to tell us that the restrictions on Royal Mail are making the business less profitable. Royal Mail has the opportunity and freedom to compete.

Perhaps the Minister will write to me to explain how Royal Mail is free to raise capital in the same way as a private sector company. I look forward to hearing his reply. The management of Royal Mail has been pushing the Government to allow it to introduce an employee share ownership scheme. The Government have been considering that proposition for more than a year, but they seem incapable of deciding anything. Will the Minister tell us by what date he will have made a decision on that proposal?

On the hon. Gentleman’s last point, discussions are continuing and I am sorry that I am unable to give him a date at the moment. On his first two points—I apologise, but I think that two different issues are being raised—the freedom to compete is one issue, and Royal Mail has that freedom. The freedom to invest is a matter for the shareholder, in which capacity the Government clearly act on behalf of the taxpayer. My right hon. Friend the Secretary of State made a statement late last year on the freedoms that we have given to Royal Mail to use money from its reserves and to raise money to ensure that it can invest in the business.

The Minister will be aware of the great uncertainty and fear felt by many proprietors of sub-post offices. The cry that I hear is that they are not getting the information that they ought to be getting from the Post Office, and they are certainly not getting advance information about any problems that might affect them. Will the Minister be kind enough to look into those matters and try to speed up the process and make it more efficient? Those people are important to the industry, but they are beginning to think that there is no future for them.

I fairly regularly get letters from right hon. and hon. Members about particular causes for concern in their own local directly managed branch or post office. If the hon. Gentleman would like to write to me about the concerns being expressed by his local sub-postmasters and mistresses, I would be happy to look into the matter and get an answer from Post Office Ltd for him as soon as possible.

Post Office Closures

7. What representations he has received following his statement announcing post office closures in England. (116325)

We have received a large number of responses from a wide range of people. There was a debate in the House on the post office network earlier this month.

I thank the Secretary of State both for that answer and for the statement that he made in December. Does he appreciate, however, that North Yorkshire is probably the most rural, as well as the largest, county in England? About 84 per cent. of its population live within a mile of a post office. Will he guarantee that that will still be the case in five years’ time? Will he free sub-post offices from the constraints of their current contract so that they can offer new services and not be so dependent on the subsidy in future?

I appreciate the point that the hon. Lady makes about North Yorkshire, but it is not the only rural part of the country. The objective that I set last December was to ensure that there is a national network of about 12,000 offices, and we are prepared to make the money available to support such a network between now and 2011. There will never be a network of anything like that size without public subsidy. About 4,000 branches could be supported on a commercial basis—perhaps 1,000 or so more—but I believe that the Government have an obligation to ensure that there is a national network. That is why we believe that the size of the present network needs to be reduced; otherwise, it will become more and more expensive. We should remember that the Post Office lost £2 million a week last year; this year, it will lose £4 million a week. That is why we had to take action. I set out the access criteria in the consultation document published just before Christmas.

Back in 1996, the main Crown post office in my constituency closed when the Co-op took over the franchise. In late 2005, the Co-op terminated that franchise early, leaving us without a main post office for two months. The new post office, 12 months after moving to a new building, is still a building site. Given such experiences, may I urge my right hon. Friend to strengthen the franchising arrangements to ensure that such a sorry tale does not happen again?

If the Post Office decides on a pattern of post offices, it is important that it remains in place. If a difficulty arises from a franchisee giving up the business—my hon. Friend alludes to the fact that the vast bulk of such franchisees are individuals in private business and are not part of the Post Office, except in transacting its business—we need to sort that out. Following on from the point about WH Smith made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who is no longer in his place, it is important to realise that sharing of businesses offers the best future for many post offices, as that increases the number of people who come through their doors. That is the main problem that confronts the Post Office at present.

It has been announced that the Royal Mail sorting office in my constituency will close, with the loss of hundreds of jobs. Is the Secretary of State aware that Government policy and the Communication Workers Union are directly responsible for that, as they have blocked attempts by management to modernise and reform operations? As my hon. Friend the Member for Rutland and Melton (Alan Duncan) has said, hundreds of millions of pounds of business have been lost in the past few months alone. Will the Secretary of State now meet the Royal Mail’s senior management and deliver the changes that they need to compete in the private sector and save jobs in my constituency?

The hon. Gentleman has already arranged to meet the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), to discuss the specific difficulties at Reading. In relation to his wider point, the Royal Mail is now in competition with a number of other major operators. It will face stiff competition and have to undergo substantial changes. The Royal Mail board is committed to that, and it is important to recognise that change is essential if the Royal Mail is to survive.

From discussions with senior Royal Mail executives earlier this week, I understand that about half the projected 2,500 closures will be in urban areas with populations of greater than 10,000, which were reinvented by the earlier urban programme. Under that programme, volunteers were sought, and there were no compulsory redundancies, as it were, on any scale; on this occasion, that will happen. Does not that lead to problems, especially if a thriving business is given compulsory redundancy because there are other post offices nearby, whereas a struggling one is allowed to continue? Would not that be perverse?

I think that redundancy is unlikely, because most people are not actually employed by the Post Office. We expect about 2,500 branches to close, but as I said in my statement in December, we need to ensure that in each area the Post Office satisfies itself that there is a network that meets the access criteria I have set out. If that means that in some areas there are three post offices and there is business for two, it makes sense to review the position.

As I have said, losses have risen from £2 million every week last year to £4 million this week, and if we do not do anything the figure will go up and up and up. No Government will be in a position to go on supporting those losses. Everyone believes that given the huge changes in the nature of its business, and for all the reasons that we have discussed when we have debated the issue, the Post Office must take the necessary action. We are prepared to support it—we are willing to provide £1.7 billion over the next few years, in addition to other support that we are giving Royal Mail Group—but to say that there must be no change, or that business should not adapt to what its customers want, does not strike me as terribly sensible.

Bingley post office in my constituency closed before Christmas and a temporary post office was put in its place. According to a parliamentary answer, 99 per cent. of towns the size of Bingley have full post offices. Will the Secretary of State assure my constituents that his announcement before Christmas about post office closures will not stop the Government and Royal Mail doing everything possible to keep a permanent post office in Bingley, in view of the important part that it plays for local people and the support that it gives local businesses with the footfall that it generates?

My hon. Friend the Under-Secretary of State tells me that the hon. Gentleman is corresponding with him about the matter. I hope the Post Office can produce a solution that is satisfactory to him and to his constituents.

Bank Holidays

The Government have no plans to change the present arrangements. However, because some employers currently include the existing eight bank holidays as part of workers’ statutory 20-day annual leave entitlement, we are committed to making time off for bank holidays additional to that entitlement, which would give about 6 million people an increase in their holiday entitlement from 20 days per year to 28. We are currently consulting on draft legislation.

I welcome that, but the Minister ought to be a little more generous and increase the number of public holidays. May I suggest that Veterans day could be one of them? More important, given that St Patrick’s day is rightly treated as a big day, why should not St George’s day be treated in the same way? Why should we allow the extreme right to think that it is their day? St George’s day belongs to all people and all political sides, and it is a day for England to celebrate. Will the Minister consider that, as a good will gesture?

I know that my hon. Friend is a vigorous campaigner for St George’s day, and as a Londoner—note my classic cockney accent—I can assure him that I always celebrate it. However, I must disappoint him by saying that we have no plans to increase the number of bank holidays.

Much as I agree with the hon. Member for Chorley (Mr. Hoyle), who is my colleague on the Catering Committee, about the appropriateness of making St George’s day a bank holiday—it is my brother’s birthday, so he would be especially happy about it—is not part of the problem with the present regime the fact that bank holidays happen in the spring? There are two in May. Would it not appeal to the tourism industry if we moved one of them to the autumn, so that it could extend its “shoulder” season in both directions and make more money as a result?

The hon. Lady should not really support the idea of a bank holiday on her brother’s birthday as that, too, would fall in the spring. What she says about the calendar is accurate, but, as I told my hon. Friend the Member for Chorley (Mr. Hoyle), we have no plans to change the current arrangements.

I entirely agree with my hon. Friend the Minister about unscrupulous employers who deny people their full holiday entitlement. I have received many complaints about that from residents of my constituency. What action can they take now, before legislation is introduced, to try to put the matter right?

My hon. Friend makes a valid point: we are now in the early 21st century and many of us found it scandalous when we realised that, having legislated for 20 days of paid annual leave in 1998, some companies were incorporating the existing eight statutory bank holidays into those 20 days. I do not think that there is any support for those companies in any part of the House, and I hope that they will put their house in order before they are forced to do so by legislation. We are consulting on the introduction of those holidays, and we expect to introduce four later this year and four next year. However, that is a matter for consultation, but we look forward to the legislation being introduced in due course.

Small Businesses

The House is lucky this morning, as we are now hearing from another classic cockney.

On the latest available figures—those for 2005—there are 4.3 million small and medium-sized enterprises in the UK, a rise of 8.5 per cent. since 2003. They employ 13 million people and have a combined turnover of £1.2 billion. We estimate that government—national, local and the regional development agencies—spend £2.5 billion per year on about 3,000 schemes to support business in England, many aimed at SMEs. The Department of Trade and Industry is leading a pan-government programme to promote shared schemes and to rationalise them so that there are 100 by 2010, having also rationalised its own support.

I thank the Minister for that reply, but does he agree that the current system for small business support is incoherent, ineffective and hinders the development of the entrepreneurial economy? What assurances can he give that there will be genuine root-and-branch reform of Government business support schemes and quangos?

I do not agree at all. Yes, we need to rationalise, but let us be absolutely clear about what lies behind the hon. Gentleman’ question. At the last general election, his party wanted to cut £500 million from the core business support budget and to close down entirely the Small Business Service, whereas Labour is committed to investing in the small business sector and we will continue to do so. However, we also want to rationalise that to make it more effective; that is entirely different from the cut-and-run strategy that the hon. Gentleman supports.

As I put my house at risk in the dark days of high interest rates and mass unemployment to establish a small family business, I ask the Minister whether he agrees that the key thing that small businesses need in order to establish and prosper is a stable economy and low interest rates.

It was a beautiful house to put at risk; I have been in it on a number of occasions. My hon. Friend is right. We have had the longest period of a stable economy, and that is why under this Government small businesses are being created every day, whereas under the previous Government small businesses closed down in their hundreds every day.

Following on from the question of the hon. Member for Bassetlaw (John Mann), does the Minister accept that energy prices are one of the major costs for smaller businesses? Energy prices have risen dramatically in recent times, but the price at which the distributors and energy companies sell energy to smaller businesses does not drop in accordance with different market conditions. Will the Minister take an interest in that and ensure that those companies not only experience rapid rises in their profits and offer attractive packages to their executives, but offer competitive prices to small businesses?

That is a fair point. Wholesale prices will fall dramatically and that decrease should be passed on. We have taken action to build capacity in the North sea; my right hon. Friend the Secretary of State made an announcement on that some time ago, and we have also taken action in the European Commission. We very much agree that such savings should be directly passed on to small businesses.

Gas Production (Shetland)

The lack of gas infrastructure west of Shetland is a key constraint on development. We have established a group from industry and Government to work together on that. In addition, we changed the licensing scheme to encourage development; about 60 blocks have been licensed and activity is under way.

With news this week of further discussions on the decommissioning of the Brent field, it is becoming ever more important that we find new production to keep the North sea industry going. Does the Secretary of State recognise that if fields were brought together with an imaginative solution, that would provide 6 per cent. of the UK’s needs by 2016? Will he emphasise to the Treasury the importance of coming up with a regime that encourages a gas-gathering pipeline to make sure that we unlock that potential, because any gas left in the ground will pay no tax, provide no jobs and not contribute to this country’s energy needs?

The hon. Gentleman is right—it is believed that there is very substantial potential in that regard, if we can commercially extract oil from the west of Shetland. The difficulty is that it is some 600 km away from the nearest pipe that could take that oil ashore, and the other difficultly is that no one single field would be big enough on its own to act as a collecting point for smaller satellite fields. We are discussing with the industry the possibility of pooling resources in order to get a network to bring that oil ashore. The hon. Gentleman is also right in saying that, if we can get to the oil west of Shetland, that will make a very substantial difference by enabling us to get more oil. At this time, especially when North sea oil is in a long but inevitable decline, it would be an extremely useful addition to this country’s oil stocks.


12. What recent discussions he has had with the Office of Fair Trading on the practices of supermarkets. (116330)

Neither I nor my officials have discussed the practices of supermarkets with the Office of Fair Trading. The OFT has asked the Competition Commission to investigate whether any features of this market prevent, restrict or distort competition, and, if so, what action might be taken to remedy them. The commission is required to publish its final report by 8 May 2008, but it is aiming to do so by October 2007. It expects to publish its emerging thinking for further consultation on 23 January.

I thank the Minister for that reply and for the action that has been taken, but does he accept that the supermarkets have managed to corral the market in an anti-competitive way? The price that they are paying farmers for milk, for example, is going down, which is in stark contrast with the price that consumers are being charged, which is going up. Under those circumstances, we need some action from the Government and from the Competition Commission to rein in the supermarkets, which, frankly, are out of control.

That is a nice try by the hon. Gentleman, but that is precisely why the Competition Commission is making its inquiry. Let us await its outcome on 23 January and then take part in the consultation. At that point, if the hon. Gentleman wants to discuss the matter further, I am happy to do so.

Minister for Women

The Minister for Women and Equality was asked—

Private Sports Clubs

I am aware that sex discrimination persists in some private sports clubs, where women members are treated less favourably in accessing facilities and services, or regarding their right to play a part in club management. We are considering how to address such discrimination through the discrimination law review.

The glorious game of golf is a 15th-century gift from Scotland to the modern world, but there are still some clubs in our land whose attitudes to women members are stuck in the social bunker of that bygone era, in that they discriminate on the ground of sex so far as playing and voting rights and access to facilities are concerned. Will the Minister be up for the tussle with the antediluvian tendency in this sport when she drafts the regulations necessary to eradicate discrimination on the greens and in the clubhouse, so that, at last, women and men can be on a par?

I entirely agree with the sentiment expressed by my hon. Friend. Where clubs have members of both genders, they should be treated equally, and we will seek to address that matter.

The Minister specifically says that where clubs have members of both sexes, they should be treated equally. Does she have any plans under the review that she mentioned to look at clubs of which women are not allowed to be members, such as the Royal & Ancient golf club, which is actually golf’s governing body?

The Government’s position on single-sex organisations is that they should be allowed to exist. There are situations in which both men and women choose to have an organisation that is for just one gender, and we will not seek to change that. However, where both men and women are members of a given club, they should be treated equally.

Sex Industry (Drugs)

21. What estimate the Government have made of the percentage of women involved in the sex industry who are addicted to class A drugs. (116355)

A 2004 Home Office study profiled 228 women involved in street-based prostitution and found that 87 per cent. used heroin and 64 per cent. used crack cocaine. Anecdotal evidence from a subsequent Government consultation paper suggested that a high proportion—in many areas, practically all—of those involved in street prostitution used class A drugs.

Does not that suggest that the key intervention in relation to prostitution, especially street prostitution, is the provision by the NHS of effective drug treatment across the country?

I entirely agree with my hon. Friend. The prostitution strategy that was produced by the Government recognises the enormous importance of providing appropriate drug treatment and he will be aware that we have invested £600 million in drug treatment provision in the recent past.

I am sure that the whole House will join me in wishing my hon. Friend the Member for Epping Forest (Mrs. Laing) a speedy recovery to full mobility.

The Minister will know that many of those involved in prostitution are the victims of trafficking. Can she enlighten us as to when the Government will come to the end of their period of reflection on the UN convention on trafficking and sign up to it?

I welcome the hon. Lady to women’s questions, although I hope that her participation will be temporary because we would like to see the hon. Member for Epping Forest back in her place as soon as possible. She raises an enormously important issue. Significant numbers of women are trafficked into prostitution in this country. The Government are committed to all the aims of the European Union convention and we are looking carefully at when we will be able to sign up to it.

A few years ago, Wigan and Bolton health authority carried out a survey of the sex industry, which showed that 98 per cent. of the women on-street were addicted to heroin, whereas very few of the women off-street were addicted to any drug at all. Therefore, would it not make sense to protect the safety of those on-street prostitutes by prescribing heroin in clinics, at least for a limited period while they are weaned off the drug?

I thank my hon. Friend for his question. On-street prostitution is the main focus of the prostitution strategy, because of the many different concerns that it provokes. However, decisions about the treatment of the women need to be taken on the basis of careful consideration of their individual circumstances. We have also stressed the importance of considering not only drug treatment, but every other circumstance that affects them, so that we can deal with the issues that have driven them into prostitution and not just one aspect of their situation.

The Minister referred to the co-ordinated prostitution strategy, which was a watered-down response to a consultation document called “Paying the Price”. That involved a change of rules to allow prostitutes to work together, a crackdown on kerb crawlers and, vitally, new ways of helping women addicted to class A drugs. Why have even those mild measures not been enacted nearly a year later? When will the Government bite the bullet, risk unpopularity and some tabloid press, and do the right thing by those women?

I do not agree with the hon. Lady’s characterisation of what the Government are doing. Significant amounts of money are being invested in drug treatment and the issue of street prostitution is being given priority in many areas. We are taking forward co-ordinated activity on prevention and developing routes out of prostitution. Importantly, we are also tackling demand.

Both Front Benchers might like to know that the treaty is neither a UN nor an EU convention, but a Council of Europe treaty. If nine out of 10 prostitutes are slaves to drug dealers as well as their pimps, are we not talking about victims, not sex workers or the sex industry, let alone the ludicrous idea from the Liberal Democrats of increasing such activity by legalising it? Is it not men who have to be put in the spotlight? They create the demand and until we cut off the demand, the supply will unfortunately continue.

I entirely agree with my right hon. Friend. The women are victims and we need to take that seriously. I am pleased that he raises the issue of demand and I would like to see more hon. Members taking on that issue and raising that important matter.

Gender Pay Gap

22. What steps the Government are taking to close the gender pay gap in the public and private sectors. (116356)

The Government action plan implementing the women and work commission’s recommendations includes measures ranging from the exemplar employer initiative to the forthcoming public sector duty on gender equality. I will be hosting an event with the CBI later this month to share best practice with both public and private sector employers.

According to last week’s report by the Equal Opportunities Commission, women are still painfully under-represented in so-called “power jobs” across the country. Thirty years on from the Sex Discrimination Act 1975, does the right hon. Lady agree that many of the largest institutions in both the public and private sectors need to make a renewed effort to remove the hidden barriers to women’s career advancement that distort the work place?

The hon. Gentleman makes an excellent point. The gender pay gap has been closing over the past 10 years or so, but we need to make further progress. As part of the exemplar initiative, we work with private sector employers to overcome the barriers to promotion that women face and to open up part-time work opportunities, not just at the lower-paid end of the market, but in respect of higher-quality and higher-paid jobs. That initiative is a really important element in taking the matter forward.

How does the right hon. Lady explain the disturbing fact that the gender pay gap among part-time employees is higher in the public sector than in the private? What does she intend to do about it?

The hon. Gentleman is very well informed, but he must know that the total pay gap in the public sector is lower than in the private sector, partly because wage differentials are compressed. Local authorities, Government Departments and other public sector bodies are taking action on this matter. The gender duty to be introduced in April will require public sector organisations to take further steps towards closing the gender pay gap.

Electoral Politics

23. What steps she is taking to encourage greater participation in electoral politics among those groups of people with lower than average levels of participation. (116357)

The Sex Discrimination (Election Candidates) Act 2002 allowed positive measures to be taken to increase women’s participation. For instance, it enabled the use of quotas in local elections to increase the level of female representation. Currently, women make up 29 per cent. of councillors in England, and 19.5 per cent. of MPs. Additionally, the local government White Paper set out a commitment to review the barriers and incentives to becoming a councillor. That review will also consider the challenges facing under-represented groups.

The introduction of the 2002 Act was a major step forward, but the Labour party is the only major political party to use it to allow positive discrimination in favour of women candidates. Does my hon. Friend believe that the voluntary mechanism preferred by other parties is successful, given the composition of the Opposition Benches?

I have been a member of the Labour party for many years, and have always been interested in this matter. The Labour party tried the voluntary route for a number of years, but it did not work. Now, 28 per cent. of members of the parliamentary Labour party are female. Parties that are serious about getting more female members must be prepared to take the difficult measures necessary to secure all-women shortlists.

Business of the House

The business of the House for next week is as follows:

Monday 22 January—Second Reading of the Local Government and Public Involvement in Health Bill.

Tuesday 23 January—Opposition Day [3rd Allotted Day] there will be a debate on health-care-acquired infections, followed by a debate on life chances of disabled children.

Both debates arise on an Opposition motion.

Wednesday 24 January—A debate on Iraq and the middle east on a motion for the Adjournment of the House.

Thursday 25 January—Remaining stages of the Fraud (Trials without a Jury) Bill.

Friday 26 January—Private Members’ Bills.

The provisional business for the following week will be:

Monday 29 January—Remaining stages of the Digital Switchover (Disclosure of Information) Bill.

Tuesday 30 January—Opposition Day [4th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.

Wednesday 31 January—Motions relating to the police grant and local government finance reports.

Thursday 1 February—A debate on “Defence in the World” on a motion for the Adjournment of the House.

Friday 2 February—Private Members’ Bills.

I thank the Leader of the House for giving us the forthcoming business.

In September 2005, the Chancellor of the Exchequer announced that he had commissioned a report into opportunities to support economic development in Israel and Palestine. I am sure that the Leader of the House was party to that decision as he was Foreign Secretary at the time. More than one year on, the report has still not been published. Will it be published before the debate on Iraq and the middle east next week, and if not, why not?

Talking of the Chancellor’s promises, in his 2004 Budget he announced the Building Schools for the Future programme. The plans showed that 300 new schools would be open by the end of 2008. Now we know that there will be only 70. I am sure that when the Leader of the House replies, he will give us the usual spending list, but I ask a specific question: why is the programme so behind schedule and will the Chancellor come to the House to explain his failure to deliver on yet another of his promises?

Last year, the House agreed new procedures for the Committee stage of Bills. The new Public Bill Committees can take oral and written evidence, and the Leader of the House made it clear that that would not apply to Bills introduced in the House before Christmas, but the decision as to which Bills are covered appears to be at the whim of the Government. The Local Government and Public Involvement in Health Bill received its First Reading before Christmas and will take oral evidence. On the other hand, the Pensions Bill, which also had its First Reading before Christmas, cannot take oral evidence, yet the Minister for Pensions Reform tabled an amendment on the written evidence for the Committee yesterday—so it is subject to some of the new procedures but not all of them. Surely, the decision as to the powers of Bill Committees is a matter for the House and not for the Government. Will the Leader of the House confirm that under Standing Order 83C decisions about the number of evidence sessions should be taken by the relevant Public Bill Committee through its Programming Sub-Committee? Will he also confirm that a Public Bill Committee can decide to take evidence notwithstanding a decision to the contrary by the Government? To aid clarity, will he make a statement to the House setting out how the new arrangement should operate, the responsibilities of the various parties and the criteria that have been used by the Government to decide which Committees could take oral evidence?

I am sure that the Leader of the House is concerned to ensure proper access to information for Members. On Monday, the Government published research described as

“an important new insight into the public’s thinking”.

Yesterday, it was shown that the Government had deleted nearly 90 pages of damaging results from that report, which showed, for example, that 46 per cent. of the public think that the NHS will get worse over the next few years and concerns about the political culture of spin and deceit. Why did the Cabinet Office doctor that research, and will the Leader of the House ensure that a full, unadulterated copy of the report is placed in the Library?

Poor train services along the First Great Western line are causing major problems for many Members’ constituents, including mine. A key issue is overcrowding. Health and safety on the railways is the responsibility of the Office of Rail Regulation, yet nothing is being done. Indeed, the Department for Transport says that people can stand for up to half an hour. May we have a statement from the Secretary of State for Transport on the responsibilities of the ORR and the role of independent railway regulation?

Finally, may we have a debate on the operation of health and safety rules? There are regulations to stop the overcrowding of chickens on trains, but not of people. Meanwhile, health and safety rules mean that firemen in Humberside have been stopped going up ladders to fit smoke alarms because

“a firefighter on a stepladder not much more than 6ft from the floor may be contravening the Health and Safety Executive Work at Height Regulations 2005”.

Chickens are protected but not people, firemen are stopped from going up ladders—we could not make it up if we tried, so may we have a debate to expose the utter stupidity of many health and safety regulations that are seriously damaging our way of life?

Let me seek to answer those questions in turn. The first was on my right hon. Friend the Chancellor’s report, or investigations—which were in fact handled by the Economic Secretary—into economic development in Israel and Palestine. I shall certainly talk to my right hon. Friend about whether the information is in sufficient form to be published. Of course, the situation between Israel and the occupied territories has become much more serious, I am afraid, not least because of the Lebanon war.

The right hon. Lady’s first point was not bad, but she then made a terrible one, by drawing a contrast between our record on school building and her own. I advise her not to pursue that, because our record on school building is astonishing when compared with hers. I remember when I was shadow Education Secretary that, year after year, I had to publish a dossier on crumbling schools because of the terrible state of the buildings. That is illustrated by the fact that in 1997, just £700 million was being spent on school buildings, and that figure has now risen to £6.4 thousand million. I say to the right hon. Lady that on this, as on NHS spending, she voted against such increases in public spending, and everyone knows that the unquestionable improvements that have taken place in every school across the country under our Government would not have taken place under her Government. The Building Schools for the Future programme, from which thousands of children will benefit, is simply a further stage in the brilliant programme that we have followed—[Interruption.] One or two Conservative Members may well—

I just have. Some Conservative Members may be laughing about this, but all they have to do is look at the state of school buildings in their constituencies and compare what they are like now with what they were like before 1997. They should remember that they voted against the increases in spending.

The right hon. Lady asked about new procedures for Bills. If she looks at what I said when the matter was debated—I was very grateful for her support for this important change, both on the Modernisation Committee and on the Floor of the House—she will see that I said that the new procedures would be introduced for all Bills that were introduced into this House after Christmas. I made it clear that the number of Bills to which the procedure would apply in this Session would be limited. The reason for that is to ensure that this change—unlike, for example, the change to Special Standing Committees, which was a good idea, but never properly bedded down—is properly bedded down.

On the powers of the House, I regret that I cannot recall every detail of Standing Order No. 83C and it is a matter for the Chair, not for me. We are very committed—I include in this my right hon. Friends the Chief Whip and the Deputy Chief Whip—to making this system effective. If the Standing Orders say that not only the Programming Sub-Committee but the Public Bill Committee can decide on whether to have evidence sessions, that is correct. It depends on what the Standing Order says.

The right hon. Lady asked me about the national health service and I have to say that I have not seen the document to which she refers—either in expurgated or unexpurgated form—but I will make inquiries about it. I also remind her that she has voted against all the increases in spending on health care. My Blackburn constituency is one of 650 examples of where increases in spending have made a great difference to health care. When I visited a friend in the Royal Blackburn hospital on Saturday, people came up to me—they did not know that I was going to be there—to say, “Mr. Straw, the service that we are now getting in this new hospital is fantastic”.

The right hon. Lady then asked about train services. I would be delighted to invite my right hon. Friend the Secretary of State for Transport to talk about responsibilities for that service, because the principal responsibility for current train services—[Interruption.] Oh no, Conservative Members voted for railway privatisation back in 1994. Yes, we are responsible now and we have brought back Network Rail into public ownership—and a very good thing, too, as it has transformed the quality of the infrastructure. The decision by First Great Western, which I do not understand, to take out good carriages and replace them with fewer bad carriages, comes directly from the sort of financial regime that the right hon. Lady’s Government established for the rolling stock companies.

I was also asked about the operation of health and safety rules. I suspect that we all agree about this. I heard on the radio this morning the story about the Humberside fire service. If it is correct, it is barmy. I go up ladders quite frequently—

And down. [Interruption.] I dare say many do. This is certainly a ludicrous interpretation of health and safety rules.

On the right hon. Lady’s final point, I have been waiting patiently for her to return to the report, which she published with such a fanfare just before Christmas, saying that the Government had failed to answer 1,000 questions. At the time, on 16 December, I mentioned two questions that had already been answered; actually the number is 260. I will give her a report later today that sets out the details of what has happened to the others as well.

Will my right hon. Friend find time to debate the entry clearance system in Islamabad, with particular reference to the appeals system? I have constituents whose spouses have won appeals and the delay is interminable. I refer, for example, to my constituent, Mr. Mohammed Waheed, whose wife won her appeal on 31 October 2005. She is still waiting for entry clearance. My constituent Mrs. Shamim Akhtar won her appeal in April 2006 and is still waiting for entry clearance. I have lots of examples of such cases. A judge has made a determination in these cases. It should be more or less automatic for those visas to be issued. These shameful delays are causing problems between husbands and wives and the wider family network. The delays are indefensible and—

Order. It sounds as though the hon. Gentleman might want to apply for an Adjournment debate. He seems to have plenty of material.

I am,sadly, familiar with the situation. It is unacceptable. The Home Office and the entry clearance service have a limited period once an appeal has been found in favour of the applicant of, I think, 28 days to decide whether they will enter a further appeal. After that, the visas ought to be issued. I pursued this matter when I was Foreign Secretary. I know that my right hon. Friend the current Foreign Secretary is very concerned about it and I will take it up with her.

It would not be entirely true if I said that I did not want to make the Home Secretary’s life more difficult, but will he come to the House to make a statement not on prisoners escaping, but on prisoners being locked out of jail? The Prison Service has asked the police, yet again, to house 450 convicts. Only 264 police cells are available. This week, 330 prisoners were locked out of jail. We have an overcrowding problem yet again. The first thing that we need to do is provide more secure accommodation for those with mental illness, who are quite wrongly in our jails.

The right hon. Member for Maidenhead (Mrs. May) raised a point about rail services—another form of overcrowding. I entirely endorse what she said, particularly with reference to First Great Western. Rail users have all sorts of things to contend with. Only this week, two swans held up a train for half an hour in Worle in Somerset. However, they should not have to put up with having to pay £5,000 a year for a season ticket, only to be told by an official from the Department for Transport that they have no entitlement to a seat. That is not the way to run a rail service and we should have a debate on that.

Touching on the issue of firemen who are not allowed to walk up ladders, may we have a debate on the Better Regulation Commission report, “Risk, Responsibility, Regulation: Whose Risk Is It Anyway?”? It seems to have some sensible things to say about nonsense such as that. Two of its key recommendations are:

“reducing knee jerk regulation by educating ministers and civil servants about risk management”


“a campaign against inconsistencies and absurdities”.

Those things seem long overdue. The report was issued last October and I believe that the Government have yet to respond.

Lastly, will the Leader of the House examine carefully his reply to me last week? I raised the issue of the BAE Systems Saudi Arabia case. He said to me:

“If he bothered to read the statement made by the director general of the Serious Fraud Office…he would see that the whole point of the decision was a judgment that there would be insufficient evidence to justify a prosecution even if there were another year and a half’s inquiry.”—[Official Report, 11 January 2007; Vol. 455, c. 438.]

In fact, what Robert Wardle, the director of the Serious Fraud Office, said was that his team found significant evidence in the Saudi arms inquiry and hoped to find more from Swiss banks. I invite the Leader of the House to correct the record and perhaps to deprecate the use of spin by the Attorney-General in what is becoming an increasingly sordid episode.

The hon. Gentleman says that he does not want to make the Home Secretary’s life difficult, but the record of the Liberal Democrats has been one of making public protection and the responsibilities of the Home Secretary much more difficult. There is no point in the Liberal Democrats complaining about a shortage of prison places when they have campaigned against an increase in those places. I can bet my life that if there were proposals to increase the amount of secure accommodation, they would be campaigning against them as well.

I am also concerned about rail services. I occasionally use First Great Western, and its service is poor and among the worst in the country. However, although the House is responsible for the total investment in the railways, which has increased considerably, and for investment in, and the ultimate control of, Network Rail, which is effectively a publicly owned company, it is not responsible for the private companies. I do not think that the Liberals voted for the idea, but the Conservatives certainly did. The responsibility for the ludicrous decision to take good, new stock out of commission and to replace it with fewer carriages of old stock must rest not with the Government, but with those who run First Great Western.

The hon. Gentleman asks about the Better Regulation Executive. We would be happy to see the matter debated. I have often heard Bill Callaghan, the head of the Health and Safety Commission, say that he wants a common-sense approach to health and safety. He deprecates just as much as the House such ludicrous over-interpretation of the regulations.

Of course I will look at what I said last week about the BAE Systems-Saudi decision. I do not have the record with me, but if it needs correcting I will of course do so. I certainly recall that the combination of what the head of the Serious Fraud Office and the Attorney-General said was that a judgment had been made that continuing the prosecution would not be in the national interest and that a continuation of the process, even for a further 18 months, would be very unlikely to produce evidence that could secure a prosecution. The Liberal Democrats claim to be the first to defend the civil liberties of others. They need to be very careful before they continue to spray around allegations of culpability by anyone, including BAES and the Saudi Government.

May we find time to debate early-day motion 67, which I tabled and which has been signed by 100 Members?

[That this House believes that all ex-servicemen and women should be treated equally in the payment of pensions, regardless of when they served in Her Majesty's armed forces.]

The early-day motion calls for an end to the injustice suffered by servicemen and women who retired from the armed forces before 1 April 1975 and who, if they had served fewer than 22 years, got no service pension at all. The situation changed in 1975, thanks to a Labour Government. It is now time to return to the issue, debate it and consider how we can properly reward the brave men and women who served in the second world war, the Korean war and Suez.

I congratulate my hon. Friend on raising this important matter. I hope that he will have an opportunity to debate it on the Adjournment or in Westminster Hall. I will follow up what he says with my right hon. Friends the Defence Secretary and the Secretary of State for Work and Pensions.

Unfortunately, there was no commitment in this year’s Queen’s speech to review or even look at the Abortion Act 1967, which reaches its 40th anniversary this year. I have received representations from women, medical professionals and organisations over the past few weeks informing me that because of deficits and other problems in the NHS, women who have decided to have an abortion are being made to wait until the next month or even the next financial year. Does not the Leader of the House think that that is highly inappropriate behaviour by primary care trusts and in terms of what is happening with abortion in the UK anyway, given that public opinion has changed? Is it not time for us to have a debate in the House?

If there is evidence to that effect, it needs to be examined carefully by the health authorities. I am sure that my right hon. Friend the Secretary of State for Health would be interested in such evidence, if it is there. The hon. Lady asks about the Queen’s speech, but the 1967 Act arose from a private Member’s Bill, as, to my recollection, did subsequent efforts to change it. I think that that is the appropriate procedure.

When can we have a debate on the problems of the policy that prevents Iraqis who possess the existing S series passports from entering this country? I know that my right hon. Friend is aware of the huge difficulties associated with acquiring the new Iraqi G series passports. Several of my constituents have experienced major problems, including one person who was unable to get back into the country, although he had leave to remain here.

I am aware of the problem, which, as my hon. Friend knows, is to do with the security of the earlier series. However, I will certainly pass on her concerns to both the Foreign Secretary and the Home Secretary.

In this week in which we are celebrating the 300th anniversary of the Act of Union, will the Leader of the House find time for a debate to mark the occasion that would give us the opportunity to discuss not only the success of the Union so far, but the need for further powers to be given to the Scottish Parliament and for a solution to be found to the English question by devolving powers to England?

I was delighted to take part, with my right hon. Friend the Secretary of State for Scotland, in the celebrations at Dover House on Tuesday and to commend the wonderful £2 coin that has been produced. The Liberal Democrats have an Opposition day in the week after next, so if the hon. Lady thinks that the matter is important, I suggest that she raises it on that Supply day.

In the light of the interesting statements by Angela Merkel and the recent press comments by Commissioner Mandelson, is it not about time that we had a debate on Europe?

We always have a debate on Europe before each European Council. I would be delighted to have a debate on Europe and the practical European approach that the Government have adopted since 1997. I read the article by Commissioner Mandelson in The Guardian this morning with interest, although I am afraid that I did not regard myself as any more informed about the case that he was making by the time that I finished it than I was when I started.

Will the Leader of the House consider holding a debate on lock-outs from prisons that occur due to the fact that insufficient spaces are available? On Tuesday night, 17 prisoners spent the entire night at either Croydon magistrates court, which is in my constituency, or in Worthing and Maidstone courts. An internal memo from the boss of the court staff said:

“The impact on all our staff is obvious and unacceptable, with many staff having been on duty for 24 hours.”

Everyone regards the use of police cells for such purposes as unsatisfactory. However, the Opposition cannot have it both ways. It has not been easy to increase the number of prison places, although we have increased the number by getting on for 20,000. However, the Conservatives consistently voted against the public spending that enabled us to increase the number by even that amount. If they had been in power, the crisis would have been much worse.

The Leader of the House might be aware that the number of people who have complained to Ofcom about the racist language used against Shilpa Shetty on “Big Brother” has reached 20,000. The situation is damaging our reputation abroad, especially in India. Later this afternoon, the chief executive of Channel 4, Andy Duncan, is making a plea in Oxford for more public subsidy. May we have an urgent debate on the remit and financing of Channel 4 and the responsibility of broadcasters not to broadcast racial prejudices?

First, I do not think that any of us should have a casual approach to racism. We have managed to change the climate of opinion in this country by being tough on, and unequivocal about, racism both in public and in private. It is important that we maintain that approach.

On the specific point that my right hon. Friend raises, I understand that Ofcom has the power to open investigations while the programme is being broadcast, instead of having to wait until it has finished, which would be risible. I understand his concern that there should be a debate and I will do what I can to assist him.

In case I am not fortunate enough to catch your eye during the next statement, Mr. Speaker, may I ask for a full debate on the implications of the speech made by the head of BBC News last year, in which he spoke of replacing due impartiality in broadcasting with radical impartiality? That would result in the views of people associated with the Taliban and the British National party being given much more air time. That is a serious implication, and it requires a full debate because it sets aside the tradition that public service broadcasting should not be neutral as between the arsonist and the fire brigade.

I can save the hon. Gentleman the job of intervening on my right hon. Friend the Secretary of State for Culture, Media and Sport, because she has just given me the answer, and I am grateful to her for that. The new charter has been published, and that charter is a matter for the BBC Trust, which is responsible to licence fee payers. Of course, the head of BBC News is not by any means the most senior executive of the BBC, and all the executives are responsible to the trust. My right hon. Friend and I, and the whole House, are clear about the need for the BBC to have appropriate and due impartiality, rather than the kind of impartiality that the hon. Gentleman mentioned.

Stockport is considered to be a wealthy borough under most indices, but the two Stockport wards in my constituency share the same socio-economic characteristics as neighbouring Tameside, where I have five wards, and Manchester. That social polarisation means that my constituents in Stockport miss out on the extra funding that is needed. For example, it is at the back of the queue for the Building Schools for the Future programme. Will my right hon. Friend find the time for a debate on social polarisation and funding streams, so that those issues of social justice can be aired with Ministers?

I am pleased to tell my hon. Friend that in the week after next, there will indeed be a debate on the police grant and the local government grant. That will give him the opportunity to air those important issues—and I understand his point—with my hon. Friend the Minister for Local Government.

There are still five convicted murderers on the run from Sudbury prison, as was the case last week. May we have a statement or a debate on the prison governor’s suggestion that when people are recaptured after absconding, they should be taken back to court to face a punishment for their disappearing act? He says that at the moment it is likely that they will simply be returned to the nearest prison, and a few weeks, rather than a longer period, will possibly be added to their sentence. A greater deterrent might prevent them from absconding.

The right hon. Gentleman raises an important point. My recollection is that when I was Home Secretary, those who absconded were properly punished, because, particularly in the case of open prisons, there has to be pressure on the individual not to walk out of the gates, as that is an obvious temptation. I shall certainly follow up his point and his suggestion with my right hon. Friend the Home Secretary.

I thank my right hon. Friend for his written response to my concerns about Braille transcribing. A constituent wrote to me in Braille and I needed to have the letter transcribed. However, will my right hon. Friend consider again whether that should be a mainstream duty of the House, so that it is not left to individual MPs to use their incidental expenses provision allowance for that purpose, as transcribing costs for Braille and audio services could amount to a large sum?

I will look into the issue, and I could certainly envisage that certain Members of Parliament, such as those who had a home for the blind in their constituency, would have much more contact with people who are blind than other Members. I shall certainly follow up the matter.

Turning to next Thursday’s debate on Afghanistan and Iraq, would it not be appropriate for the Secretary of State for Wales to speak from the Dispatch Box? Do not his views, as set out in today’s New Statesman, more accurately reflect those of Labour Members than the Foreign Secretary’s views do?

That is a nice one. I should just say that next week, the debate is on the middle east and Iraq; the week following that is a good opportunity for a debate on defence in the world. One of the things that one learns as Foreign Secretary—indeed, it is perfectly obvious even before one reaches that august office—is that one cannot pick and choose whom people elect to foreign Governments. We have to accept foreign Governments as they are and work with them constructively. As my right hon. Friend the Prime Minister made clear—it is a position backed by the whole Labour party—our alliance with the United States and our union with Europe are the twin pillars of our successful foreign policy and relationships abroad.

My right hon. Friend rightly mentioned the quality of care provided by hospitals—NHS hospitals, I must stress—in Lancashire. He said before Christmas that he would allow a debate on the transfer of work from the public sector to the private sector, which puts those good hospitals at risk. May I point out to him that a consultation is taking place, but that the only people who will be consulted are those in Lancashire county council? That is unacceptable. Surely district councils, MPs, GPs, the public who use the hospital and, more importantly, all the staff in those hospitals should be consulted, too.

I take my hon. Friend’s point. Obviously, I am more familiar with the arrangements for east Lancashire, but I speak not only for myself but for all my colleagues representing east Lancashire constituencies when I say that there has indeed been consultation with Members of Parliament and, to my certain knowledge, with the district councils. However, I shall certainly pass on my hon. Friend’s point.

Last week, I reminded the Leader of the House that, on 25 October, the Prime Minister said at the Dispatch Box that he would be happy to debate Iraq any time, yet six days later he failed to turn up and show his face at a Scottish National party and Plaid Cyrmu debate on Iraq. Has the Leader of the House convinced the Prime Minister to be here on 24 January, as I asked him to do last week? I cannot help but think that if this was four years ago, and the debate was on going to war, the Prime Minister would be here, spinning and misleading from the front. Now, with 650,000 dead—

Order. That must be withdrawn. There is a way of putting it—a Member may be said to inadvertently mislead, but they cannot be said to mislead. The hon. Gentleman cannot use that word.

I would have thought that, if one were drawing up a charge sheet against the Government, including my right hon. Friend the Prime Minister, one could do better than the charge that my right hon. Friend was absent from a debate organised by Plaid Cymru and the Scottish National party. Everybody else was absent, too, and they were probably wise. It is completely untrue that next week’s debate will be the first occasion in four years when Iraq has been debated. It has been debated in Government time, as well as in Opposition time, on a number of occasions, the last of which was the Queen’s Speech.

Will my right hon. Friend set aside time to debate the obscene bonuses paid to 4,000 staff who work in the City of London? The payments ranged from £1 million to £50 million, and this week it was reported that another individual received a payment of £58 million as a bonus. Most of that money, it is alleged, goes into offshore trusts, so not even the Treasury benefits from the payments. Those bonuses distort not only the housing market, but society, and surely something needs to be done.

I understand my hon. Friend’s concern. I think that everybody in the House believes that people’s rewards should be proportionate to their effort and achievement, and where payments are very high, those making the awards have to be very clear that they are justified.

May we have what I think would be the first ever debate on the Floor of the House on Burma, given that the brutal military dictatorship there is guilty of some of the most egregious human rights abuses practised by any regime in the world, and that a very modestly worded United Nations Security Council resolution last Friday was opposed by South Africa and vetoed by both Russia and China? Is it not time that right hon. and hon. Members debated how, through the use of concerted international pressure, we can force that despotic regime to stop subjugating its citizens and to start liberating them?

I share the hon. Gentleman’s concern, which is House-wide. Like my right hon. Friend the Foreign Secretary, I deeply regretted the unusual decision by China and Russia to use their veto, but I shall certainly bear in mind the hon. Gentleman’s request.

Further to the point made by the hon. Member for East Dunbartonshire (Jo Swinson), in the week when we have rightly and warmly celebrated the 300th anniversary of the Union, a raft of research and a slew of polls surveying opinion in England have consistently shown a very clear majority indeed in favour of an English Parliament, which rates more highly as a constitutional issue than Scottish independence or House of Lords reform. As those are the people’s priorities and this is the people’s Parliament, should we not have a full, proper debate on the merits and demerits of an English Parliament?

I am always happy for those issues to be debated, and I remember a Front-Bench request not very long ago that resulted in such a debate in the House. It easy to proclaim the idea of an English Parliament, but it is much more difficult to achieve. In my judgment, we have a Parliament that represents the direct interests of our constituents in England as well as those of constituents in Scotland, Wales and Northern Ireland on reserved matters. The House of Commons has worked effectively for centuries, and long may it continue to do so.

While I accept that a debate on defence in the world will be held in a fortnight, does the Leader of the House accept that a debate on housing and accommodation for the armed forces is long overdue? Three or four years ago, I took part in the armed forces parliamentary scheme, when I visited many barracks in the UK and operations overseas. The accommodation that we provide for our armed forces is in a desperately bad state, and does not compare with that provided by our allies. May we have a debate in the House in Government time or in Westminster Hall on that very subject?

I shall bear in mind the hon. Gentleman’s mention of Westminster Hall, but it is indeed an important issue. The standard of armed forces’ accommodation varies. In many cases, it is very good, but in a limited number of cases it is unacceptable. He is an ingenious parliamentarian—

Indeed. I am sure that in the debate on defence in the world the hon. Member for Macclesfield (Sir Nicholas Winterton) can remain in order if he raises the issue of accommodation needed for British troops if we are to play our part in defence in the world.

As my right hon. Friend the Member for Maidenhead (Mrs. May) pointed out, health and safety regulations have had a disastrous impact on all aspects of national life. The House authorities have failed to fly the flag of our country from Portcullis House for the past 10 years, so will the Leader of the House make arrangements to investigate why the Union flag is never flown there; and will he follow the example of our sovereign, who flies the Union flag every day from Buckingham palace?

I shall look into the issue of flag flying from Portcullis House and write to the hon. Gentleman.

Last week, the Leader of the House promised to speak to the House about the publishing of letters between Home Office Ministers and the Association of Chief Police Officers. Yesterday, the Prime Minister singularly failed to answer any requests for publication, so will the Leader of the House update us on his discussions with the Home Secretary? If the answer is no, will he explain what possible reason there is not to publish those letters?

The Prime Minister made the position very clear, as he said that those letters and any other relevant documents would be published at the same time as the report of the inquiry undertaken by Sir David Normington. That is an appropriate and well settled way in which to proceed.

The Department for Employment and Learning in Northern Ireland is about to implement proposals in “Further Education Means Business”, the implications of which are wide ranging. It is feared that they will decimate many community education projects, exclude people on low incomes from adult education and lead to massive redundancies for lecturers in further education. Will the Leader of the House provide time for a debate on those implications before the proposals are introduced?

I accept the importance of the matter raised by the hon. Gentleman, and I shall follow it up with my right hon. Friend the Secretary of State for Northern Ireland. The quicker we get the Assembly going, however, the sooner there will be a full opportunity for those issues to be debated where they should be debated, which, in our judgment, is on the ground in Northern Ireland.

May we have an early debate entitled, “Threats to the Union”, as many of us believe that one of the greatest threats is the perceived injustice created by Members of Parliament who do not represent English constituencies voting on English-only business? We want that matter to be resolved, and if that is uncomfortable for the Chancellor of the Exchequer, may I suggest that that is simply a result of the democratic principle that in the absence of accountability there can be no democratic legitimacy?

It depends on whether I can find the time, but I should be delighted to hold a debate on perceived threats to the Union, one of which is the unacceptable proposal for an English Parliament, with the implication that it is all very simple to deliver. As for the issue of injustice, as the right hon. and learned Gentleman very well knows, the Scots, the Welsh and the Northern Irish could equally say that a perceived injustice results from the fact that 85 per cent. of Members of Parliament represent English constituencies. It is we, therefore, who determine the funding that goes to Scotland, Wales and Northern Ireland. The arrangements for governance in this country are not symmetrical, precisely because of England’s huge dominance, both in gross domestic product and representation. They are not symmetrical, but they are fair, and as many wiser Conservatives have recognised, to challenge those arrangements and disturb the balance would be very dangerous indeed for the Union.

BBC Licence Fee

With permission, Mr. Speaker, I should like to make a statement on the BBC licence fee.

Over the past three years, the public, industry and Parliament have all contributed to a national debate about the BBC, its future shape and its funding in an unprecedented exercise in public involvement. I am now in a position to announce what the funding will be over the first part of the new 10-year charter period. The settlement will be for six years, with annual nominal increases in the licence fee of 3 per cent. for the first two years, and 2 per cent. in years 3, 4 and 5 of the settlement. There will be an increase in the sixth year—2012-13—of up to 2 per cent., depending on a further review nearer the time. I have written to the BBC Trust today setting that out. Those are cash increases.

The price of a colour TV licence will rise from its current level of £131.50 to £135.50 from 1 April this year, reaching a figure of up to £151.50 in 2012. Based on the Treasury forecast of the consumer price index—the Bank of England’s inflation measure—that will either be above or in line with inflation for each year of the settlement. That will enable the BBC to deliver its new public purposes, which we set out in the new charter. As digital technology transforms the media world, it will enable the BBC to take a leading role in making the most of such technology. Investment in high-quality content—the driver of creative industry and what audiences value most of all—will remain high. The settlement will enable the BBC to do that. It will also allow the BBC to move key departments, including children’s programmes, sport, new media and learning, to Salford in the north-west of England. I, like hon. Members in all parts of the House, will welcome the trust’s confirmation, due later today, that that will happen.

This is a vital opportunity for the BBC to widen its geographical spread and relevance, and make better use of the creativity and talent that exist right across the United Kingdom, bringing huge benefits to the regional economy, estimated at £1.5 billion and 15,500 jobs. Through greater efficiency, the settlement will allow the BBC to maintain all its current services and provide up to £1.2bn for investment in new activities.

The people of the United Kingdom spend more of their money on the BBC than any other country in the world spends on public service broadcasting, except Germany. So the new BBC Trust must ensure that licence fee payers get the best possible value for that investment. We expect the trust to ensure efficiency in the BBC. On the basis of independent evidence from the consultants PKF and others, we believe that the BBC can realise up to 3 per cent. cash-releasing savings annually from 2008. A separate report published today by the National Audit Office confirms that our judgment is based on adequate evidence. It will be the trust’s responsibility to set specific targets and hold the management of the BBC responsible for meeting them.

On digital switchover, the BBC has been given a leading role in the delivery of this revolution. In particular, the licence fee settlement will fund the £600 million scheme that we are putting in place to help elderly and disabled people make the switch to digital, as part of our commitment to universal broadcasting and to ensure that no one is left behind. The Government’s expectation is that the BBC will lead the delivery of the scheme. We respect the independent status of the trust, and clearly there are details of the implementation of the scheme still to be discussed. The Government will retain responsibility for the policy, including helping with procurement and determining eligibility for the scheme.

The BBC will also pay for the £200 million public communications campaign being run by Digital UK to ensure that people are properly prepared and properly informed about switchover. Those sums will be ring-fenced within the settlement and so will not form part of the BBC’s baseline at the end of the settlement. We have made it clear that carrying out these responsibilities will not impact on the BBC’s core services and budgets. We are giving the BBC a 12.5 per cent. increase in its borrowing capacity to help deliver this commitment. We will ensure that the BBC’s services are protected from any cost increases in the help scheme, above our existing estimates.

In last year’s White Paper on the BBC, we noted that Channel 4 was likely to face major financial challenges from digital switchover. Ofcom is assessing the potential scale of those challenges. We said at the time that we would consider potential forms of help, including asking the BBC to help towards meeting Channel 4’s capital switchover costs, and possible access for Channel 4 to some of the BBC’s digital TV capacity. As I said, Ofcom’s review of Channel 4 is looking in detail at its financial prospects and is expected to report towards the summer. I am therefore keeping open, within the licence fee settlement, the possibility that we may require the BBC to contribute to the first six years of Channel 4’s switchover costs. This will be no more that £14 million in total.

I welcome the BBC’s conclusion that, in principle, it can make available some spare digital terrestrial capacity, amounting to a TV slot in England and three radio slots, at switchover. Under the BBC agreement, I can direct the BBC to make capacity available to another public service broadcaster, where it is in the interests of public service broadcasting in the UK. I shall decide whether and how to use that power in the light of the Ofcom review.

The settlement that I have set out for the BBC provides stability and certainty over the crucial period of digital switchover. The sixth year will, in effect, also form the first year of the following settlement. It will allow us to undertake a further review of the licence fee level in the run-up to the mid-charter point, taking account of the wider review of public service broadcasting, consistent with our commitment in the White Paper.

A strong, independent BBC, accountable to its licence payers—its paymasters—and providing the highest public value: that has been our fundamental goal throughout this long process. It is now complete, and the BBC, along with other broadcasters, can plan and prepare for digital switchover, the next great revolution in television, ensuring that the most vulnerable are protected and that the founding principle of public service broadcasting in this country, universal access, is secured. I therefore commend the settlement to the House.

I thank the Secretary of State for her statement and for allowing me prior sight of the text.

As is so often the case with the Government, the House is the last to know the details. The licence fee settlement was not announced in today’s statement by the Secretary of State. It was leaked by Treasury officials to Channel 4 News two days after Parliament rose for Christmas, and in a series of subsequent leaks to the media. Will the Secretary of State therefore apologise to the House for the shameful way in which it has been treated over the announcement?

Is not the real point that the statement is the Chancellor’s announcement, not the Secretary of State’s, and that it is as much a defeat for the right hon. Lady as for the director-general of the BBC? Not for the first time, the Secretary of State has had an unfortunate collision with the great, clunking fist.

None the less, we are grateful that the process of negotiating the licence fee has at last drawn to a close. There have been three years of what the Secretary of State would call consultation, which has in fact been dithering and indecisiveness on her part and the part of the Government. Time and again, the Secretary of State let it be known that an announcement was imminent, and time and again she was forced to postpone it—first, last summer, then the autumn, then Christmas. Finally, a decision has been reached, and months of damaging uncertainty may at last be coming to an end.

The Opposition fully support the important contribution that the BBC makes to the lives of the British people. The BBC is clearly one of our greatest organisations, and one of the most effective global ambassadors that we have. Of course we wish to see it appropriately resourced.

The Secretary of State was originally convinced by the BBC’s inflation-busting argument. We were not. We argued that, at a time of falling advertising revenue, no other media business could expect such a substantial guaranteed income stream over the next seven years. We believe it is right that the BBC should be asked to live within the realities of today’s rapidly changing media environment. This is a more realistic settlement.

The settlement, combined with greater income from household growth, means that the BBC will receive substantially more money than it does today—something that none of its competitors can hope for. However, no other media organisation has been asked to take on the huge new responsibilities that the Secretary of State has foisted on the BBC. The BBC is now responsible for digital switchover. At least the right hon. Lady said in her statement that the Government’s expectation remains that the BBC will lead the delivery of the scheme. Perhaps she could take the opportunity to clarify whether the BBC Trust has agreed to deliver on targeted assistance on the terms that she articulated.

Not only that, the BBC is expected to move a large part of its organisation to Salford—a move that will cost at least £400 million. Those two new obligations will cost the BBC about £1.5 billion over the next four years—money that will have to be taken out of the licence fee. According to the Library, the cost of targeted help for digital switchover— £600 million—would, on its own, add £7.20 to the cost of the licence fee. Does the Secretary of State believe that those new obligations can still be met under this settlement? Can she assure us that programme quality will not be jeopardised? That is certainly not what the director-general, Mark Thompson, is on record as saying this afternoon.

On digital switchover, given that the Secretary of State has said that the money will be ring-fenced, will it appear as a separate item on the licence fee so that viewers know that they are meeting that cost? Where will any extra money come from if the cost of switchover exceeds the Department’s estimates? Will it come from the licence fee or from the Treasury? Once switchover has been accomplished, will the level of the licence fee be reduced accordingly?

Even after today’s announcements, there is still a huge degree of uncertainty. The reason is clear. The Chancellor, who cannot resist interfering with anything and everything, could not resist the chance to meddle with the licence fee. He has loaded it with a stealth tax and forced obligations onto the BBC that it did not want. Future licence fee settlements must not be negotiated in that way. Under the next Conservative Government, it will be for Parliament to debate the role of the BBC in a rapidly changing, technologically driven media world.

The Secretary of State cites the National Audit Office, yet the NAO has not seen the books. As an organisation in receipt of more than £3 billion of public money, it is surely right and proper that the BBC should be subject to independent scrutiny and that the results should be debated properly here in Parliament. Will she at least allow the NAO full access to the figures outlining how the BBC spends £3 billion of public money?

This licence fee settlement has been subject to superficial consultation and grubby, behind-closed-doors negotiations. The right and proper place to debate the future role of the BBC, the future of public service broadcasting, and the right level of the settlement is here in this Chamber, and we will make sure that that is the case in future.

As usual, we have had a diatribe from the Opposition about process, but we are none the wiser about what their policy on the BBC would be. It is extraordinary that they are so contemptuous of the three-year consultation process, a process that recognises the fundamental point that the BBC does not belong to Government—it belongs to, and is paid for by, the people of this country, and it is therefore to them that the BBC should ultimately be accountable. I make no apology whatsoever for inviting people of this country to participate, for the first time, in the consultation on the charter review and the future of the BBC. The unprecedented level of participation was a measure of the importance that the public attach to the BBC—an importance that the Opposition ride over in a rather arrogant and slipshod way.

This is a timely settlement. The last licence fee settlement was not reached until the middle of the February before the new licence fee level came into effect at the beginning of the following April. That is an important lesson. I hope that when the next Labour Government negotiate the licence fee, time will be allowed for consultation with the licence fee payer.

Let me deal with the couple of specific points that the hon. Gentleman made. I have underlined in the statement, and to the BBC, the ring-fenced nature of the moneys that will be raised from the licence fee to pay for targeted help and the costs of switchover. That money is ring-fenced subject, on the Government’s decision, to very clear protection of the BBC’s major function, which is to put high-quality programming on to people’s screens. That ring-fenced sum will ensure that the BBC’s role in running the targeted help scheme and leading on the digital switchover will not be detrimentally affected by other considerations.

Those costs will be levied on the licence fee payer specifically for the period of switchover. If the hon. Gentleman had listened to the statement—he continues not to listen to my answer to his question—he would know that they will not form part of the BBC’s baseline. That means that at the end of the switchover period the BBC Trust will be able to return those moneys to the licence fee payer or, in consultation with licence fee payers, to make judgments about how else they might be used.

I welcome my right hon. Friend’s statement. Does she agree that the strongest case for the licence fee is that it helps to maintain standards across British broadcasting and ensures that the BBC acts as a bulwark against the descent into junk journalism that we are witnessing in other parts of the televised media?

As regards Channel 4, may I put it to her that the case for public subsidy of any sort is rapidly diminishing with every day that passes, and that the vulgarity currently arising from the “Big Brother” programme is a classic example of the case against any kind of public subsidy to Channel 4?

I thank my hon. Friend for his comments. I entirely agree with his observation about the importance of the BBC’s role in maintaining standards of journalism. That is not something that the BBC merely discharges—it has an absolute responsibility to honour its obligations in terms of accuracy and impartiality. The people of this country have a very clear understanding—much clearer than they are sometimes given credit for—of the difference between opinion and the vociferous comment of newspapers. That is partly because when they turn on BBC television, they know that they can expect the news and information that they receive to be accurate and impartial. It is a heavy responsibility and one that licence fee payers expect it to discharge.

On Channel 4, the decision about whether to provide assistance will be heavily informed by Ofcom’s regulatory assessment of the justification for doing so. Of course, every public service broadcaster has a particular obligation to maintain the trust and confidence of the public who pay for them.

For more than 80 years, the BBC has been the envy of the world and has had the reputation of setting the gold standard for TV and radio. Does the Secretary of State acknowledge that based on realistic, not Treasury, estimates, this is a below-inflation rise in the licence fee, and that that will put the BBC’s reputation at risk? Surely the only person who will cheer her statement is Mr. Rupert Murdoch.

The Secretary of State accused the hon. Member for East Devon (Mr. Swire) of being contemptuous of consultation. Does she not recall a survey that she commissioned that demonstrated that the vast majority of licence fee payers are willing to see a modest real-terms increase in the licence fee in return for improved quality? Why is she ignoring her own research?

Surely it is the case that for the equivalent of buying only five copies a year of Radio Times, licence fee payers could have what they wanted—a modest increase in the licence fee in return for improved quality and more services. Perhaps the hon. Member for East Devon put his finger on the problem in that the Secretary of State should not be entirely blamed because the statement has “Treasury” stamped all over it. It means that, for the period of the settlement, the BBC will have £2 billion less than it said that it needed to deliver the Government’s White Paper vision. Even if the BBC estimated its costs wrongly and underestimated the amount of income that it can make, the shortfall means that it will have to slash its plans for new services and investment in new programming.

The settlement confirms that the licence fee payer will pay for the Government’s policy of targeted assistance to help vulnerable people switch to digital. Surely the Government should pay for that. Will the Secretary of State answer the question that she has still not answered and say whether she has confirmed such a scheme with the BBC? What will happen if the cost is higher than the £600 million that the Government predict? Will she pay the extra or will the BBC have to cut its programme budget?

The Secretary of State offered warm words about the BBC’s future, but they are not backed by the reality of her announcement. Against the wishes of listeners and viewers, and in response to Treasury demands, the BBC has to face a real-terms cut in its income, bear the risk of inflation and fund the cost of the Government’s policy of digital switchover out of its programming budget. The Prime Minister tried to bully the BBC over Iraq, but his likely successor appears to want to destroy it.

I thank the hon. Gentleman very much. It is a great pity that he did not listen more closely to what I said.

No, the hon. Gentleman did not. Had he listened, he would have realised that many of his points were clearly answered in my opening remarks. A good decision has been taken across Government and the Opposition are trying to create a story that is a travesty of the truth. The decision will not put the BBC at risk.

The hon. Gentleman misrepresents the research about the public’s willingness to pay the licence fee. A third of those surveyed wanted to pay less; a third were content with the current licence fee, and a third were willing to pay more. However, the class and ethnic make-up of those willing to pay more was marked. Seventy-five per cent. of those surveyed said that any new services that the BBC offered should be funded not by the licence fee but by subscription. The hon. Gentleman—unusually for him—misrepresents the facts of the case.

The cost of digital switchover is a broadcasting cost and that is why the licence fee should cover it. The only alternative is raising the money through taxes. We know that the Liberal Democrats bravely play fast and loose with public finances and unfunded tax commitments, but it is right that the licence fee payer should meet a broadcasting cost.

Does my right hon. Friend agree that when the BBC made its declaration for an increase of 2.3 per cent. above the rate of inflation, many of us—including me—thought that that was outrageous? I am pleased that the Jowell-Brown combination has come up with something much more reasonable. If the BBC finds difficulty in managing its books, it should consider some of its programmes. I do not fall for the nonsense about the wonderful journalism—the starry-eyed views that I had when I first came here have changed over the past many years. I would sack Andrew Neil and all his cronies on “The Daily Politics” programme and fire Nick Robinson—another Tory who works for the BBC. If any more savings are needed, what about telling Jonathan Ross that he gets too much money? Finally, the BBC should be told that if it is going to help Channel 4 with its switchover costs, that station had better drop crap programmes like “Big Brother”.

Well, I take that as a contribution to debate. I am sure that they are quaking in White City.

The BBC’s original bid was an opening bid in what became a negotiation. The outcome that we have reached is considerably more sober and realistic. The licence fee payer has to fund that fee. In the House and—arguably more important—among the wider public, there was much adverse comment in the summer about the salaries that the BBC paid for talent.

Let us remember that we expect the BBC to run the scheme that will ensure that the poorest and most vulnerable in our country are supported, helped and guided in switching to digital. That is an important function and an important public role for our major public service broadcaster to play.

Order. Brief, single questions would be helpful. I also remind hon. Members about the careful use of parliamentary language in posing those questions.

Will the Secretary of State confirm that although the licence fee may not be increasing in real terms, the total amount of money available to the BBC is likely to do so because of household growth? Will she give the House any estimates that she has of the BBC’s future total income? Will she also answer the question that my hon. Friend the Member for East Devon (Mr. Swire) asked about whether the money that licence fee payers have to contribute towards the non-BBC costs of digital switchover will be separately identified on the licence fee bill?

I thank the hon. Gentleman, who, as Chairman of the Select Committee on Culture, Media and Sport, has followed the matter closely. He is right that household growth means that increasing numbers of people are paying the licence fee. That has been factored into the settlement. We estimate that, over the period of the settlement, the money available will be £600 million.

As I have made clear, we have ring-fenced the costs of digital switchover and we shall consider whether they should be explicitly and separately identified in the licence fee bill. I believe that that is in the spirit of transparency, which is important.

I welcome my right hon. Friend’s statement on the BBC settlement. I especially welcome this afternoon’s statement by the BBC Trust that it remains committed to the move to Salford. However, I am slightly surprised that the increase in the borrowing powers is only 12.5 per cent. My back-of-an-envelope calculation suggests that that increases the borrowing powers to £225 million. The original borrowing powers were set at £200 million in 1990.

Most of the cost of the move to Salford will be up front, although that transfer will save money in the long term. Is my right hon. Friend satisfied that the level of borrowing is high enough? Will she consider increasing it to help the move? Those of us in Manchester and Salford do not want be left in same position as people in Edinburgh in the early 1980s. They were promised a move to Edinburgh by the BBC in 1976, but the signs promising it were taken down in the early 1980s.

I thank my hon. Friend for that point, and for his advocacy and that of my right hon. Friend the Member for Salford (Hazel Blears). They have given enormous support to the decision to move part of BBC operations to the north-west.

The estimated cost of the move to Salford over the relevant period is approximately £190 million. We have obviously looked closely at the BBC’s capacity to fund both the move and the targeted help scheme. The additional borrowing provision that I announced will be specifically linked to the scheme, to provide additional flexibility over the period when demand for the scheme—and, therefore, the cash flow to meet the cost of the scheme—will be at its greatest. We have also agreed that we will be prepared to keep the matter under review, should significant difficulties arise. In answer to my hon. Friend’s question, yes I am satisfied that the cost of the move to Salford—which will, as he rightly says, save money in the long run—can be met within the existing borrowing limit for the BBC’s main operation.

If the Government are serious about asking the BBC to drive down its costs, why have we not seen a proposal for a salary review board such as the House has? Is it not the case that regional journalists such as those working for BBC Radio Shropshire or on the BBC’s “Midlands Today” have to live on pretty low five-figure salaries, while those working in different parts of the United Kingdom—particularly here in the capital—have six or sometimes seven-figure salaries? Is it not time for the Government to take a closer look at the salaries that senior broadcasters earn in London?

That issue periodically gives rise to public concern and media headlines, and information on it deserves to be made publicly available. However, it is extremely important at a time like this to recognise that the licence fee settlement is setting the financial framework for the BBC. I do not think that anyone in the House would support the idea of a BBC with reduced independence or reduced freedom to operate within that broad framework.

Salaries are a matter for the BBC, but it is a matter that is much more publicly accountable and subject to a much greater level of required transparency than has ever been the case in the past.

How long can the licence fee continue in its present form? My friend floated the idea of a computer tax a couple of years ago. With technological change, people will be able to receive television programmes through their broadband internet—indeed, that is happening at the moment. How long will the licence fee be with us?

This is the million dollar question.[Hon. Members:” Three billion.”] The three billion pound question. This is an issue that we have addressed during the charter review period. We have made it absolutely clear that, as a matter of policy, the licence fee will continue throughout the period of this charter, for another 10 years. However, we have allowed for a financial review at some point around the mid-point of this charter. Undoubtedly, from the public’s point of view, the licence fee is the least best option—

Well, it is the least best or the least worst. Nobody necessarily loves the licence fee, but they do not love any of the alternatives any better. We have to take this issue back to the underlying principle of broadcasting, which is universal access. The great strength of the licence fee has always been that it guarantees universal access to those who pay it.

I wonder whether the Secretary of State will answer the clear question put by my hon. Friend the Member for Bath (Mr. Foster) earlier. If the cost of digital switchover is greater than £600 million, who will pick up the cost? Will it be the Government or the BBC? If it is to be the BBC, what would she have it cut: “Doctor Who” or Paxman?

We have made it clear that we will not allow the cost of running the targeted help scheme to impact on the employment of any BBC presenter or on any programming. If the costs exceed the estimates that we have set out, they will not be met by the BBC. They will be met by the public purse in different ways.

The BBC does not provide local radio services in Wales. Given that the only opportunity for communities to listen to local radio in Wales is through community radio stations such as Calon FM in Wrexham, will my right hon. Friend consider allowing access to the licence fee to supplement the community radio fund, which is very small indeed compared with the sums that she has been discussing in relation to the licence fee?

Community radio is widely supported, as is the development of local news. However, those decisions are not for me but for the BBC, and I am sure that my hon. Friend will make his representation through the trust.

Given that licence fee payers are contributing more than £800 million to the cost of digital switchover, will they get their money back when the Government sell off the surplus analogue spectrum?

Brian Redhead would have turned in his grave this morning to hear the move to Salford being described on Radio 4 as a move to an “outpost”. Does my right hon. Friend agree that this move involves a mainstream part of the BBC that will become part of an important world-class media centre, which will benefit not only the BBC and the licence fee payer but private sector broadcasters and programmers?

I absolutely agree. I shall be generous and say that to describe a move that will attract £1.5 billion of investment and create 15,500 new jobs in one of our great cities as a move to an outpost is no more than a slip of the tongue. Anyone who goes to Seoul or Dubai will see that such investment in new media and modern broadcasting facilities is where the future lies, and I am delighted that the BBC has recognised that in Britain.

Will the Secretary of State confirm that the BBC Trust has agreed unreservedly to deliver targeted assistance for the switchover, or is the matter the subject of continuing negotiation?