Skip to main content

Commons Chamber

Volume 468: debated on Wednesday 28 November 2007

House of Commons

Wednesday 28 November 2007

The House met at half-past Eleven o’clock


[Mr. Speaker in the Chair]



That an Humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report from the Right Honourable Sir David Hirst, Chairman of the Spoliation Advisory Panel, in respect of three Rubens paintings now in the possession of the Courtauld Institute of Art, London.—[Mr. Roy.]

Oral Answers to Questions


The Secretary of State was asked—

Gould Report

8. What recent discussions he has had with ministerial colleagues on the Gould report on the Scottish elections. (167463)

On 23 October, I made a full statement on the Gould report in the House, in which I committed to taking forward five important recommendations. Recently, when my hon. Friend the Minister of State, Scotland Office, gave evidence to the Scottish Affairs Committee, he set out our intention to consult very soon on other issues that Mr. Gould raised. I shall have discussions with colleagues before finalising the Government’s response.

Gould particularly found that

“the voter was treated as an afterthought”

in the planning and organisation of the May 2007 elections in Scotland. The Government introduced incomprehensible ballot papers in Scotland, e-counting—particularly discredited by Gould—and postal voting throughout the United Kingdom, which has led to numerous cases of corruption, and which the Electoral Commission warned against. The Government are also introducing pilots on e-voting. This country used to have an enviable reputation for its democratic electoral processes, which have been reduced to the status of those of a banana republic. Is the Secretary of State proud of being associated with that?

The hon. Gentleman is right to base his question on the words of Mr. Gould. The problem, of course, is that he edited them. Not only did he select just one sentence out of Mr. Gould’s report, subsequent letter, press release and evidence to a Scottish Committee, but he edited the sentence. The words that he missed out are:

“by…all the other stakeholders.”

Those stakeholders included the Conservative party—[Hon. Members: “No.”] Mr. Gould has made it perfectly clear that, in his view, all those in the political classes share responsibility for the situation in Scotland; we all ought to be big enough to take that responsibility and to start to address the issues through the processes that I have just announced.

Having listened to the Secretary of State’s answer, I think that he and the Labour party have absolutely no idea of the damage that the situation did to the integrity of the democratic process in this country. He said that consultation would start soon. Will he tell the House what exactly he means by “soon”?

Does my right hon. Friend agree that it really is time to move beyond the allocation of blame and party political point-scoring? Surely it behoves everyone, from all the political parties, to get together constructively and put in place arrangements to ensure that we never have a repeat of what happened last May.

That exactly summarises Mr. Gould’s position when he recently gave evidence to a Committee in the Scottish Parliament. He expressed significant disappointment about what politicians had sought to do by picking on his report— [Hon. Members: “Oh!”] Those are his words, not mine. Given that my right hon. Friend has in the past been unstinting in his criticism when it was appropriate, we ought to listen to the lesson that he sets out for all of us in the House and in the political classes.

My right hon. Friend will be aware that the Gould report suggests that we move away from overnight counts. Does he agree that there is no evidence to suggest that counting overnight caused the problem in May, and that we should stick with the tradition where practicable?

My personal view is that the overnight count is part of the recognised tradition of the electoral system in this country. Many people, whether or not they are otherwise engaged or interested in politics, expect to wake the morning after a general election able to know who their Government are to be. That is a big prize to give away. That having been said, in his report Mr. Gould sets out arguments on why asking people to take responsibility for such an important process after they have done a day’s work may not be the best way to deal with things. That is exactly why we decided that it is one of the recommendations that ought to be consulted on, so that the difference of views across the country can inform the eventual decision on whether we make that significant change.

The Gould report focused on the organisational issues raised by the Scottish Parliament elections rather than on financial matters, but since the publication of the report, it has emerged that £326,955 of illegal donations were made by David Abrahams between the 2003 and 2007 Scottish Parliament campaigns. Can the Secretary of State give the House an assurance that none of those illegal laundered donations funded the Labour campaign in Scotland—yes or no?

The hon. Gentleman knows that that issue is not part of my responsibility as the Secretary of State for Scotland, but I can give him a categorical assurance that, in terms of my state of knowledge, none of the donations to the Labour party that have figured in the media over the past couple of days went to fund any part of the Scottish election campaign.

I am sure that the Secretary of State agrees that the Gould report is extremely important and demands the closest possible consideration. How much time has the Secretary of State been able to devote to it?

My hon. Friend the Minister of State, Scotland Office, has devoted a significant amount of his time to it. As the hon. Gentleman would expect, I have provided strategic supervision. He and the House can be satisfied that I have sufficient knowledge of the report and the matters relating to it to be able to carry out my responsibilities, which is partly why I am answering questions about it. I am sure that he will not be disappointed.

I am pleased that the right hon. Gentleman could give a categorical assurance to the House that there were no unlawful or completely unacceptable donations to the Scottish Labour party campaign for the Scottish elections—but does not this very issue highlight the reason why his predecessor the right hon. Member for Paisley and Renfrewshire, South (Mr. Alexander), who is now Secretary of State for International Development, should not have administered the elections and at the same time run the Labour party campaign?

I do not think that there was any conflict of interest in the role that my right hon. Friend the Secretary of State for International Development played as the Secretary of State for Scotland. Everything that he did was completely transparent and above board; none of it was done in party interests, nor was the subsequent role that he played as a politician in the conduct of Scottish parliamentary elections.

But does the Secretary of State not agree that his predecessor, who was also Transport Secretary, has a lot of explaining to do to the House, not least about the Scottish election debacle? Does he not agree that rather than hide behind pre-recorded television interviews, his right hon. Friend should face scrutiny in the House and appear before the Scottish Affairs Committee?

Who appears before the Scottish Affair Committee is a matter for the Committee, not for me—or, indeed, for the hon. Gentleman, other than in his capacity as a member of that Committee.

Commonwealth Games

2. What recent discussions he has had with the First Minister of Scotland on the award to Glasgow of the Commonwealth games in 2014. (167457)

My hon. Friend the Minister of State wrote to the First Minister on 21 September offering our full support for the bid, and I was delighted to hear that Glasgow had won the 2014 Commonwealth games. Officials in the Scotland Office are continuing to work closely with the Scottish Executive on a number of issues relating to the games.

I thank the Secretary of State for that reply. I am sure that the whole House will want to join me in congratulating the people of Glasgow and the bid team. The bid received support from all political sides, and now that the games have been secured for Glasgow they will provide a fabulous opportunity to inspire young athletes, such as 16-year-old Matthew Graham in my constituency, the Scottish 1,500 m steeplechase champion. As lottery funding has halved since 1997, and there is uncertainty about grass-roots sports funding because of the lottery and the Olympics, what has the Secretary of State done to ensure that Scotland receives increased funding both for elite and grass-roots sport in the run-up to 2014, so that we can spot the talents of athletes such as Matthew?

Given the hon. Lady’s obvious interest in the issue and her specific constituency interest—I congratulate the young person in her constituency who has that talent, which I am sure will be nurtured to allow the best to be made of it—she will know that in the time that we have been responsible for this area of policy, the amount invested in the development of athletics and elite athletes has more than doubled. She asked what I would do. I will ensure that we in Government continue to invest at world-record levels in nurturing and supporting our athletes.

Will my right hon. Friend congratulate the leader of Glasgow city council, Steven Purcell, and the city councillors on all the work that they did? Will he also thank and pass on our good wishes to Jack McConnell, who did a great deal of work to make sure that Glasgow won the 2014 bid and did not, like some people, jump on the bandwagon at the end of the day?

This success, which is a success for Glasgow, for Scotland and for the United Kingdom, ought to be distinguished by our ability across all political parties not to turn it into some sort of partisan Olympic competition, as it were. Because of that, and because the city of Glasgow was the bidder, I contacted the leader of Glasgow city council immediately after the award and expressed my congratulations to him and my support for all those who had been involved in securing the award—those who were present when the bidding process and the voting took place, and those who had been involved in the past. Everybody who has been involved is entitled to credit—[Interruption]—including the present Scottish Executive, and the previous Scottish Executive under the leadership of Jack McConnell.

Electricity Generation

3. What recent discussions he has had with Scottish Ministers on electricity generation in Scotland. (167458)

There have been no such recent discussions, but my right hon. Friend the Secretary of State recently met Ofgem to discuss a range of issues.

I note with interest that the Secretary of State recently met Ofgem. The Minister will know that there has been a great deal of concern in Scotland about the discriminatory transmission regime that Ofgem imposed on generators. It is now proposing a double whammy for Scottish generators by also proposing a locational distribution charge for energy generated in Scotland by whatever means it is generated. Will he urge his colleagues at the Department for Business, Enterprise and Regulatory Reform and other Cabinet colleagues to reject this latest bout of madness from Ofgem?

The current transmission arrangements ensure that Scottish consumers are paying lower utility bills than they were paying previously, but of course transmission charges are irrelevant if the generating capacity is not being built. The Scottish Executive had four planning decisions to make about onshore renewable wind farms, and they rejected three of them. If they turn down three wind farms, they will not have the capacity to transmit energy. Until they can come up with an explanation of how they will plug the gap that will be left when they do away with nuclear power, they have no credibility whatever on the issue.

Does my hon. Friend agree that a huge percentage of electricity generated in Scotland at present is nuclear? Does he agree that it is naive and populist for the Scottish Executive to rule out nuclear as part of the energy mix?

My hon. Friend is right. Across the UK as a whole about 20 per cent. of electricity is generated from nuclear. In Scotland the figure is nearer 40 per cent., so it is incumbent on those who think that there will be no nuclear in future to explain how we will get the base load, how we will keep the lights on, and how we will make sure that Scotland has a sufficient supply of electricity. Only this week a new proposal for a wind farm is being made in my constituency. Guess who is leading the campaign against it? The local Scottish National party.

The Minister will be aware of the immense potential for renewable energy in the Pentland firth. He will also be aware, because I have told him about it, of the work—[Interruption.]

The Minister will be aware of the work being done by the project team. The Minister will also know that the responsibilities to enable that to happen fall between the Department for Business, Enterprise and Regulatory Reform and the Scottish Government. How can he use his best offices to ensure the best outcome for renewable energy in the Pentland firth?

The hon. Gentleman is right to say that there is tremendous potential in the Pentland firth, as I saw for myself not once but twice during the past few months. Here at Westminster, the Government are advancing on three fronts at once with the Planning Bill, an energy Bill and the Climate Change Bill to ensure that we can supply the energy that our country needs without wrecking the planet in the process. Many planning issues are the responsibility of the Scottish Executive. We will work closely with them to guarantee that the best advances can be made in ensuring that the potential of the Pentland firth comes on stream, although onshore wind capacity is far more advanced. They have turned down three out of four planning applications in that area, so how on earth do they hope to plug the gap?

Yesterday, British Energy announced an interest in two sites in Scotland for the next generation of nuclear power stations. Why should both the United Kingdom’s energy policy and its ambition to reduce carbon emissions be held hostage by Scottish nationalists using planning technicalities in a Scottish Parliament? What will the Secretary of State and his colleague do to ensure that the First Minister does not gamble with Britain’s environment on constitutional politics?

The Government are entirely clear that it is for the private sector to come forward with proposals for nuclear power stations and to decide where it would like them located. In terms of consents under the Electricity Act 1989 and planning, these matters have been devolved. The Scottish National party is turning down three quarters of applications for new wind farms, but the Conservative party wants a moratorium on all new wind farms, so it would not be able to plug the gap either.

Pensioners (Heating Costs)

4. What recent discussions he has had with the Secretary of State for Work and Pensions on the provision of assistance to pensioners in Scotland with the cost of heating. (167459)

I speak regularly to my right hon. Friend the Secretary of State for Work and Pensions. I am pleased to report that more than 1 million winter fuel payments are made in Scotland, and that the payments represent about 34 per cent. of a pensioner’s average annual fuel bill.

I am grateful to my right hon. Friend for that answer. Is he aware that some pensioners in my constituency will not be able to spend that money? They are like the more than 10,000 pensioners in Scotland whose heating systems have been condemned and will not be sorted until next April at the earliest. Although it is easy to condemn the Scottish National party’s Government for complacency, we should not play politics with pensioners’ lives. Will he convene a meeting to ensure that we get the problem sorted so that our pensioners can have a warm Christmas?

The central heating programme has made a very significant contribution to combating fuel poverty in Scotland. Since it started in 2001, more than 89,000 installations have been done. It is singularly inappropriate that people who qualify for inclusion in the programme, pensioners in particular, should be left waiting over the winter for the installation of a new heating system. There has recently been an increase in the number of people coming to my constituency surgeries complaining about this matter, and I would be happy to meet my hon. Friend to discuss it—but as he points out, this is a devolved responsibility.

The Secretary of State is right to point out the significant achievements of the central heating scheme promoted by the previous Scottish Executive. Is it not ironic that many Scottish pensioners will not be able to use the central heating systems that were installed because of exceptionally high fuel prices this winter, particularly oil prices? Does he not accept that historically high oil prices present a particular threat to Scottish pensioners, and that his Treasury colleagues should try to find a solution this year?

I think that we all agree that when fuel prices go up, the least well-off are the most challenged by them. We have an agreed definition of what constitutes fuel poverty. The hon. Gentleman cannot suggest with a straight face that this Government have not been alive to that issue across the United Kingdom. He will recall that winter fuel payments were £20 when they were introduced in 1997 for the first time, but they have now risen to £200, and to £300 for households containing someone who is more than 80 years old. They represent more than a third of an average pensioner household’s winter fuel bill. He should congratulate the Government on what they have achieved.

Digital Switchover

5. When he last met Ofcom to discuss digital switchover in Scotland; and if he will make a statement. (167460)

I speak regularly to Digital UK’s national manager for Scotland about switchover, and I also speak to Ofcom in relation to a number of issues, including switchover. Preparatory work is proceeding apace.

I thank the Minister for his answer. However, 20 per cent. of my constituents do not, and will not, receive digital transmissions, and we will not get the digital changeover until 2010. Surely, as the BBC offers a universal service, we are entitled to a rebate until that changeover takes place.

I have some sympathy with my hon. Friend’s point, but he must consider this: if we were to take money out of the BBC’s budget as he suggests, it would be difficult for it to meet the challenging timetable that we have for digital switchover. I cannot therefore offer him any comfort in that regard. What matters is that we proceed as quickly as we can with switchover, as is happening throughout the rest of the world. We need particularly to ensure that older and more vulnerable people are given the help and support that they need—I know that he has been campaigning on this issue—and that remains the Government’s top priority.

My constituents in the Girvan area are in the first tranche for digital switchover in Scotland, but are currently subject to a postcode lottery for both analogue and digital, whereby some people get Ulster TV, some people get Border, and others get access to STV. Now that the digital switchover is happening, can the Minister guarantee that everyone will be able to access STV as their default ITV channel?

I congratulate my hon. Friend on the work that she has been doing on this issue. I know that she is due to meet Ivan Kennedy, the community liaison executive from Digital UK, in the coming week. I have alerted Digital UK to the fact that that is the issue that she wants resolved, so I hope that when she has that meeting it will be able to provide her with the answer. In the meantime, I understand that there is a website that people can visit, and if they put in their postcode they will be able to find out exactly which channels they will receive.

As the Minister will be aware, these are tense times for the new Gaelic television channel. The political expectation from me—and from him, I hope—is that it will come into existence in the springtime. When does he hope that it will be available on digital terrestrial television?

The hon. Gentleman is correct. The Government have been firmly supporting that service. He will know from the article that I wrote—in Gaelic—in Scotland on Sunday how committed we are to it. It is our expectation that the service will be up and running this financial year. I understand that it cannot go on Freeview until the switchover, but will be available on other platforms in the meantime. We are committed to ensuring that it happens.

Whisky Industry

6. What recent estimate he has made of the value of the Scottish whisky industry to the economy of Scotland. (167461)

The Scotch whisky industry is of massive importance to the Scottish economy, and that is why the Government have announced steps to enhance the protection of Scotch whisky. Exports of Scotch whisky are worth £2.5 billion annually to the Scottish and UK economy.

My right hon. Friend will be aware that the Government are soon to bring forward new legislation to protect the Scotch whisky industry, especially in the important overseas market. Can he assure me, and the House, that that legislation will be relevant solely to the Scotch whisky industry, rather than being part of wider regulation, so that the industry can be better protected in the vital overseas market?

I recently had the pleasure of visiting my hon. Friend’s constituency to see the importance of the whisky and related industries to the economy of his area. While I was doing that, my hon. Friend the Minister of State was engaged in continuing discussions with the Department for Environment, Food and Rural Affairs about the issue that he raises—the translation into legislation of a European directive to protect the intellectual property rights of Scotch whisky. We had already announced that we as a Government would consult on the legislation, and we are determined that it will be in the best interests of the Scotch whisky industry. Like everyone else, my hon. Friend will have to wait until we announce and publish the legislation that will be consulted upon, but I suggest that all of those who share the best interests of the Scotch whisky industry are unlikely to be disappointed by the legislation.

The Secretary of State will be aware that the duty the Chancellor charges on whisky is far higher per unit of alcohol than on wine. Will the Secretary of State lobby the Chancellor to equalise rates of duty in the next budget to create a level playing field for the Scotch whisky industry?

I suppose I should declare an interest in this matter, because I have one of the biggest Scotch whisky bottling plants in my constituency—the world-famous Johnnie Walker plant in Kilmarnock. I have a long-standing interest in ensuring a level playing field for Scotch whisky in the United Kingdom and throughout the world. I am pleased to remind the hon. Gentleman of what he already knows, which is that since we came to power, the Chancellor of the Exchequer has frozen the duty on Scotch whisky year on year in order to achieve that very competitiveness.


This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Veterans in my constituency welcomed last week’s news that priority health care is to be extended to them. However, many of the scars of war are mental and psychological, and I would like my right hon. Friend to tell me what he proposes to do to extend treatment to the soldiers, sailors and air force men affected by them.

I thank my hon. Friend for taking up the cause of veterans in her constituency. She is absolutely right; last week the Health Secretary announced that veterans would be accorded priority treatment in the national health service, as they should be. He also announced that there will be a new community-based veterans’ mental health care service, which will run for the next two years with independent evaluation. There are 150 mental health professionals working throughout defence, employed by the Ministry of Defence, and we are determined to do what we can to support not only our veterans but all those in our armed forces who do an outstanding job and to whom we owe a debt of gratitude and a duty of care.

The Prime Minister told us that he would deliver honest government, that he would be open, that he would end spin and restore trust, and that he would deliver competence. After the events of the last few days, can he honestly stand there and say that all over again?

That is why I have acted immediately to set up two inquiries. All of us on all sides of this House have an interest in integrity in the funding of political parties, and we should do everything in our power to ensure that political party finances are transparent and that everything is above board. That is why what happened was completely unjustifiable. It has got to be investigated as a matter of urgency. Two internal inquiries have been set up within the Labour party, and the Electoral Commission will investigate. I am determined to make sure that political party finances are above board.

The Prime Minister says he must do everything in his power, and he said yesterday that unlawful acts have taken place, so has he asked the police to come in to investigate?

That is a matter, as the right hon. Gentleman should know, for the Electoral Commission. The commission has announced an inquiry into this matter. We reported the matter to the Electoral Commission; we have told it that we are setting up two separate inquiries. The commission will run an inquiry and it is its decision as to whether the police are brought in. We are happy to co-operate in any way because, in my view, this is something that has to be cleaned up in the interest of the whole of public life, and I am determined to take that action.

The Prime Minister is wrong—it is not the exclusive competence of the Electoral Commission. I am asking him a simple question: if he thinks that something unlawful has happened, does he not have a duty to call in the police himself?

Under every convention, we report the matter to the Electoral Commission, which was set up under a law that we passed with the support of the other parties in the House. The Electoral Commission will decide whether the matter is for the police and we will co-operate in any way possible with it, the police or both. I say to the right hon. Gentleman that it is in everybody’s interests for action to be taken against something unjustifiable. The procedures that were followed were not acceptable and any necessary changes in the law will be made. I believe that all parties have an interest in sorting that out.

Mr. Skinner, be quiet, you know better. [Interruption.] Order. The hon. Gentleman is out of order and he knows it.

We learned this morning that Jon Mendelsohn, whom the Prime Minister appointed, knew for a month about a situation that the Prime Minister called unlawful and unacceptable. How can that person possibly still be in post?

Mr. Mendelsohn has issued a statement clarifying what happened. On 3 September, he started employment in the Labour party. He has had no involvement in the donations that have been made. Those donations were happening for four years before he took office. That is why the investigation that should take place is the one that I have set up internally in the Labour party. The inquiry will be led by Lord Harries and Lord McCluskey, a senior High Court judge and a retired Bishop of Oxford. [Interruption.] We will do everything in our power, as the terms of reference have said, to show that the standards that will be followed in future are acceptable in every area of public life.

So is the Prime Minister telling us that Mr. Mendelsohn knew and did not tell either the Prime Minister or the police? Is that acceptable?

If I can put the right hon. Gentleman right, Mr. Mendelsohn says in his statement, which has just been issued, that he was led to understand by the general secretary of the party that this had been cleared with the Electoral Commission. That was the issue before him. He also says that he was unhappy in principle with those arrangements, and that he had approached one of the people involved and was seeking a meeting to sort matters out.

Mr. Mendelsohn started on 3 September. He was involved in none of the donations that were made. He is not the registration officer reporting to the Electoral Commission, but of course, if anything untoward has happened in that respect, it will be a matter for the inquiry and we will take whatever action is necessary to sort the matter out.

I have to say that the Prime Minister’s explanation beggars belief. It takes us to questions about the Prime Minister’s own integrity. Does he expect us to believe that someone whom even Labour Members believe to be a control freak was preparing for an election, sorting out the finances, sitting around the table with everyone who is caught up in the scandal, yet did not have the first idea about what was going on?

We have had 155 days of this Government: disaster after disaster, a run on a bank, half the country’s details lost in the post and now this. The Prime Minister’s excuses go from incompetence to complacency and there are questions about his integrity. Are not people rightly asking, “Is this man simply not cut out for the job?” [Interruption.]

Our party introduced legislation in 2000 to restrict foreign donors, register donors, have a comprehensive framework for elections and have an Electoral Commission, and we are ready to take any further measures. I hope that there will be all-party support so that everything in party politics is above board, including the use of third-party sources for donations.

As for competence, I remind the right hon. Gentleman that in 1992, he sat there when interest rates reached 15 per cent. Competence is the lowest interest rates for a generation, the lowest inflation for a generation, the highest employment for a generation, doubling investment in the health service, a minimum wage and properly financing education. We will continue to do our best by the country. [Interruption.]

While we let the hot air settle, may I tell my right hon. Friend that wind farms are enormously popular in my constituency, with 80 per cent. of people responding to a survey saying that they think they are attractive, produce clean energy and tackle global warming? Will they have to continue to wait for the planning process to produce the wind farm that they want? Will we have to wait and listen to the windbags—[Hon. Members: “Hoorah!]—or will we get a wind farm?

I hope that all parties in this House will support the development of wind turbines, both offshore and onshore. That is the only way to meet our target for renewable resources, if it is going to be as high as the European Commission proposes it to be. I believe that there is a duty on all parties in all areas of the country to consider the development of wind turbines.

The House has noticed the Prime Minister’s remarkable transformation in the past few weeks from Stalin to Mr. Bean [Laughter] creating chaos out of order, rather than order out of chaos. But amidst the administrative bungling and even the sleaze, does he not accept that the most damaging remark over the past week came from the services chiefs, when they accused him of wilfully neglecting the safety and welfare of the young men and women who serve in our armed forces?

At every point in the job that I am in, I will do everything in my power to defend and protect the security of our armed forces. I have to tell the hon. Gentleman that the defence budget is rising every year and will continue to rise, and that when we came into power the defence budget in Britain was the fifth largest in the world. It is now the second largest in the world. As for housing, we are spending £5 billion over the next 10 years on armed services accommodation, more than at any point in the history of the armed forces—[Interruption.]

We know about the defence budget, because the Prime Minister signed £5 billion-worth of cheques for the Iraq war, but is not the truth at the end of it that the troops lack adequate equipment, adequate medical care and adequate accommodation? Is not the underlying truth that where the armed forces are concerned, fundamentally, the Prime Minister is not interested and does not care?

The chief of the armed services gave a briefing last week, saying that we were better equipped than ever before. That is why we have not only invested the money from the defence budget but, in order to meet the urgent operational requirements of our armed forces, particularly in Iraq and Afghanistan, invested an additional £6.6 billion above the defence budgets that have been announced. Whether it be for tanks, helicopters, night vision equipment, specific help for individual members of the armed forces in contacting their relatives or accommodation at home, we will continue to do everything in our power to help our armed forces do their duty.

Q2. In my local authority, the £300 million plus Building Schools for the Future programme is considered vital to accelerate the improvement of educational standards in the borough. Can my right hon. Friend reassure me that none of the money earmarked for that programme will be diverted to pay for schools providing surplus places in areas where they are not needed? (168572)

I think that my hon. Friend is referring to the debate that is now being held in the House between those who want to spend the £4.5 billion that has been allocated on Building Schools for the Future, which would renovate existing secondary schools and then primary schools, and those who want to divert the money from promises already made to secondary schools into building additional academies beyond the 400 that have been provided for. I believe that existing schools, to which commitments have been made, should have the investment made within them. This affects almost every constituency in the country, and perhaps the Conservative party should think again.

Q3. How were the public moneys lent to Northern Rock funded? Where in particular did the Bank of England suddenly find a spare £25 billion? (168573)

As the right hon. Gentleman—[Hon. Members: “He is not.”] As he will know, the Bank of England will make funds available in certain circumstances at the behest of the Treasury, by its agreement. That is what happened in relation to Northern Rock. I again ask Opposition Members to think again. They said at the beginning that they were overwhelmingly in favour of putting the money into Northern Rock. Last week, they said that they were against it. I believe that the weight of opinion in the country is that it was the right decision to save that company.

My right hon. Friend will be aware that there have been allegations from Members on this side of the House that a lot of the problems relating to binge drinking stem from supermarkets selling alcohol at too cheap a rate. The Licensed Victuallers Association now has documentary proof that certain supermarkets are selling alcohol at the cost of production. Will my right hon. Friend join me in condemning our supermarkets for selling alcohol so cheaply?

My hon. Friend might know that, last Wednesday, we held a seminar with members of the retail industry and also with people from the production industry—the brewing industry and the drinks industry—and people who are concerned about what is happening as a result of binge drinking. One of the concerns that was raised was the price of alcohol. Another was the special promotions that were being done by the supermarkets. Another was the intensive advertising by supermarkets, which is encouraging young people in particular to buy substantial quantities of drink. We also looked at whether the drinks industry could run promotion campaigns to educate young people about the dangers of binge drinking. We will be publishing a paper suggesting changes in the next few weeks.

Q4. In the face of the recent crises that have beset the Prime Minister, particularly this last one, he has told us that he learned about them only at the last possible moment. Why does he think that members of his Government—and, indeed, of the party that he purports to lead—are apparently so intent on keeping him in the dark? (168574)

When we have acted, whether it be on terrorism, on foot and mouth or on floods, we have acted when it has been necessary to do so and never refused to act. On party political issues, I will tell the House what I said yesterday: I first knew about this on Saturday evening, and I acted immediately.

Q5. North-East Derbyshire has seen a massive rise in youth employment and training since 1997. What is my right hon. Friend doing to ensure that all young people, especially those who have dropped out of all formal education, are given exactly the same opportunities? (168575)

I believe that it is right that every teenager should have some training so that they can get jobs for which they are employable. That is why, when we bring forward our measures to expand apprenticeships, to raise the education leaving age for people in part-time or full-time training or education to 18, and to increase the amount of funding for the new deal to enable it to help young people, I hope that there will be all-party support for those measures.

As he wanted so much, and for so long, to be Prime Minister, has the right hon. Gentleman been reflecting on the advice of an earlier, more successful, dealer in gold, King Midas, who warned that we should be careful what we wished for, as we might receive it in a poisoned chalice? Or is he planning to pass the chalice to his charming deputy?

I have had debates across the House with the hon. Gentleman over the years, and he has always been very generous in his comments to me until now. I hope that we can continue to agree that this job is an important job, and I will do it to the best of my ability.

Q6. Will the Prime Minister congratulate the UK world skills team, including Jonathan Bourne, who achieved the medallion of excellence and works for a building company in my constituency? Does that success in the skills Olympics and the Government’s massive expansion of apprenticeships and quality training indicate that in future young people will be able to fill the 600,000 vacancies in our economy and also improve not only their skills, but their job prospects as well? (168576)

My hon. Friend is absolutely right and I congratulate the company in her constituency and its workers who have done so well. The skills Olympics will be held in Britain. We are determined that, at that point, we will have increased the number of apprenticeships, as my hon. Friend says, so that we can meet the vacancies that exist in our economy. There are 600,000 vacancies at the moment and I want young British apprentices to get the chance to fill them.

The Prime Minister may be aware of the recently launched Take Tourism Seriously campaign, but do the Government take tourism seriously? If so, why have they further cut the budget of VisitBritain by £17 million over the next three years?

I think that the hon. Gentleman will know that over the past few years, particularly when there have been difficulties, we have put more money into tourism to help the tourist industry flourish. I think that he can see that the numbers of people coming to this country—despite some of the difficulties we have had with terrorism and foot and mouth—reflect the intensity of the advertising, and we will continue to do that.

Q7. Will the Prime Minister congratulate Kevin Rudd, the new Labour Prime Minister in Australia, on his recent sweeping election victory and particularly on his speedy decision to ratify the Kyoto protocol? In view of this week’s UN report calling for an 80 per cent. cut in CO2 emissions, will Britain and Australia now stand shoulder to shoulder in the war against climate change? (168577)

I have had the privilege of being able to congratulate Mr. Rudd on his election as the Prime Minister of Australia and I have also phoned the outgoing Prime Minister, Mr. Howard, to thank him for his work in the international community over the past 12 years. Mr. Rudd has announced that he is going to sign the Kyoto treaty immediately, which is in line with what we have done, and he has said that he will lead the way with us in seeking a post-2012 Kyoto agreement. I look forward to working with him against Conservative policies.

Q8. Given that there are many constituencies like my own, which incorporates west Cornwall and the Isles of Scilly, where last year five times as many properties were sold to second-home buyers as to first-time buyers, does the Prime Minister really think that it helps to give further millions in capital gains tax cuts to the wealthy to buy and have their second homes when many thousands of local families are desperate for and cannot afford their first? (168578)

But surely the answer is to build more homes, so I hope that the hon. Gentleman will support the plans that we have set down to raise the amount of house building in this country to 240,000 houses a year and to build 3 million homes by 2020. I know that building more homes is not a popular policy in the Conservative party, but to get affordable housing in every constituency, we need to build more homes. That is what we will do.

Q9. Will my right hon. Friend join me in congratulating the Secretary of State for Innovation, Universities and Skills and the Department for Work and Pensions on changes to the 16-hour rule that will allow young people on jobseeker’s allowance into full-time training? That will allow institutions such as the South Birmingham college construction centre, which has a waiting list of 2,000, to get people on to training and then into employment. (168579)

We are trying to remove every barrier to young people getting the chance of both training and jobs. Given the creation of educational maintenance allowances in addition to the removal of that aspect of the 16-hour rule, I still hope that all parties in the House will support our belief that every young person should have the chance to get at least some education until 18. The difference between us is that we believe in opportunity for all until 18 while the Opposition believe in opportunity just for some.

The Prime Minister told us that his decision not to call an election had nothing to do with the polls. He also told us that his change of policy on death duties had nothing to do with Conservative party policy, so why should we believe his account of the dodgy donors?

Because I do what is in the best interests of the country, and am prepared, with my colleagues, to make difficult decisions even when it is uncomfortable to do so. I think the right hon. Gentleman will recognise that during the year we have made difficult decisions, such as those on public sector pay, to get the rate of inflation down. That is why we, unlike many other countries, can look forward to stability and growth.

Q10. An increase in the number of apprenticeships is a key component of increasing the competitiveness of the United Kingdom economy, but some young people may be deterred from taking them up because of the very low rates paid by some employers. Will my right hon. Friend ask the Low Pay Commission to investigate whether there is any evidence that young people are being deterred, and if there is, will he extend the minimum wage regulations to cover all apprenticeships? (168580)

I will certainly ask the Low Pay Commission to examine the matter. Although it is independent, it will examine matters relating to the employment of young people as well as the elderly. I believe that our decision to create a minimum wage in this country is one of the biggest decisions by the Labour Government over the past 10 years.

Since we came to power we have increased the number of apprenticeships from 50,000 to 250,000. [Interruption.] The Conservative party does not like hearing about the successes with apprenticeships. The number will rise to 500,000 over 10 years. That is what the future of our country is based on. We will look at the remuneration and the education and training of young people, so that we can have the best training in the world.

Q11. After the fire on the Thistle Alpha offshore platform on Sunday, the Scottish First Minister said that health and safety should be devolved to the Scottish Parliament. Well, there’s a surprise. Would it not be better to concentrate on increasing the prosecution rate and the penalties for those in breach of health and safety legislation for the whole United Kingdom than to pick political fights? (168581)

As an Aberdeen Member, my hon. Friend has taken a big interest in the matter, and as she knows, a private Member’s Bill concerned with those very issues has been before the House during the past year.

With the expansion of the oil industry over the past 30 years, we have taken health and safety issues very seriously. I believe that whenever incidents have raised questions we have acted immediately—and that is true of all Governments. I understand that proposals are on the table for an extension of the health and safety legislation in this area and for more intensive and higher standards, and I believe that the proper place in which to consider such matters is this United Kingdom Parliament.

It would appear that Baroness Jay was aware of the illegal nature of Mr. Abrahams’s donations to the Labour party long before the Prime Minister himself. Can the Prime Minister tell us which of his Cabinet colleagues shared her knowledge at the relevant time, or is it sub judice?

That is not, I believe, what Baroness Jay said, but the hon. Gentleman’s question will be a matter for the inquiry, which will examine all issues relating to this matter. Surely the right thing to do when a problem arises is to investigate it in detail, deal with it, change the procedures if necessary and, if necessary, reform political party funding—which we are prepared to do.

Q12. The whole country, apart from the Opposition, will be pleased with what the Prime Minister has told us today about the inquiries that he intends to bring about. [Interruption.] (168583)

Equally, the whole country would wish the terms of that inquiry to be widened, and perhaps to fill four or five “Panorama” programmes with the audit trail of the Ashcroft money. Will the Prime Minister do that?

We agreed the Political Parties, Elections and Referendums Act 2000 as a matter of consensus. There was a consensus in 2000 about the things that needed to be done. I hope that we can proceed to make reforms—including reforms relating to donations from third-party agencies and the timing of donations involving local political finance—by agreement, and I hope that the right hon. Member for Witney (Mr. Cameron) will change his mind about running away from the party talks that were involved in solving this problem.

Precisely when did the Prime Minister’s Leader of the House first learn of the illegal donations to the Labour party?

The Leader of the House has made it absolutely clear that the criteria on which she judged donations—[Hon. Members: “When?”] I am explaining this. The criteria were whether the people giving donations were known to her campaign team or were registered with the Labour party. There is not an iota of evidence to suggest that at any time until Saturday the Leader of the House knew that the donation was being given by a third party.

Q13. Does my right hon. Friend agree that although the Government have done a great deal for pupils with special educational needs up to the age of 16, there is still a real challenge post-16, and particularly post-18, for young people with severe special educational needs, mental health problems and disability? When will we do more for that group, their carers and their families? (168584)

We have set up a review into exactly that matter—the special needs of young people and particularly children at school. I believe, again, that there should be all-party consensus about what needs to be done. Let me repeat: our policy is educational opportunity for everyone until 18, not just for some.

Order. A deferred Division is under way in the No Lobby. The pink voting papers were not circulated in the usual way with the Order Paper, but they have been made available to Members in the Vote Office. They are also available in the Lobby.

Prime Minister

The Prime Minister was asked—

Middle East

With permission, Mr Speaker, I will make a statement on the middle east peace process, following the Annapolis conference, which I attended yesterday at the US naval academy in Maryland.

For several years there has been neither peace nor a peace process in the middle east. Insecurity for Israelis and the suffering of Palestinians have fed off each other, deepening divides and fomenting mutual distrust. The conference represents a determined attempt by both sides, and by the United States, to break the cycle of violence and discord. Its significance comes as much from the attendance list as its immediate results; representation from nearly 50 countries showed the degree of concern about the current situation as well as the consensus for action.

As I pointed out in my contribution yesterday, in 1993 at the signing of the Oslo accords the late Prime Minister Rabin talked of an atmosphere of hope tinged with apprehension; today in the region there is an atmosphere of apprehension tinged with occasional hope. Yesterday represented one such ray of hope, but the context of extremism, terrorism and the dangers of nuclear proliferation provides a spur to action. All present understood that the Annapolis conference could be a success only if it was the start, not the end, of a new drive for peace based on the vision of two states, Israel and Palestine, living side by side.

There is now for the first time a clear and shared goal. To quote from the joint understanding read out at the beginning of the meeting by President Bush, it is

“to immediately launch good faith bilateral negotiations in order to conclude a peace treaty resolving all outstanding issues, including all core issues without exception, as specified in previous agreements.”

UN resolutions 242 and 338 provide the agreed foundation for progress.

There is also a timetable. Today, the parties will meet at the White House; a joint steering committee will meet continuously from 12 December; President Abbas and Prime Minister Olmert will continue their bi-weekly meetings; there will be an international donors conference in Paris on 17 December; the Russian Foreign Minister has offered Moscow as the venue for a review conference by the end of the first quarter of 2008; and I offered London as the venue for a meeting after that. Crucially, there is an end date. All agreed that these negotiations should seek to conclude by the end of 2008.

There is also a follow-up: the parties have committed themselves to implementing their respective obligations under the road map and have agreed to a US, Palestinian and Israeli mechanism, led by the US, to follow this up. The US has committed itself to monitoring and judging the fulfilment of these conditions. That means an end to settlement construction, the removal of outposts constructed after March 2001 and renewed efforts on security in the occupied territories.

The rest of the international community will have a vital role to play. We know that peace and prosperity depend on each other. We need a massive upgrade in our collective effort. I am pleased to report that the UK is in the lead. First, we have committed up to $500 million to the Paris donor conference, the first country to do so. That will stand alongside European and American commitments. We look forward to working with Arab colleagues on an Arab economic initiative side by side with the important Arab peace initiative.

Secondly, our priority is to help to build effective national Palestinian security forces. We have been involved in that effort for several years now. We commit our people, resources and experience to making a difference on the ground. In Nablus, in Bethlehem and in Jericho—where I saw raw recruits for myself 10 days ago—the fight for security is the fight for legitimacy and hope for the Palestinian people. It is often unglamorous, it is always hard and it is absolutely necessary. President Abbas and Prime Minister Fayyad are committed to the task, and we will support them.

Thirdly, we need to support the parties as they strive for success. Prosperity driven by the private sector needs reform driven by the public sector. That is why the reform and development plan prepared by Prime Minister Fayyad is so important as a statement of intent—about clean government, about responsible budgeting, and about politics based on promises that are made to be kept. That will bear fruit only if Palestinians are given the freedom to work, to trade and to reap the benefits of commerce. The efforts of Tony Blair are vital in that regard, and the announcement last Monday of four projects, with Defence Minister Barak and Prime Minister Fayyad in support, is an important step forward.

Fourthly, we must not lose sight of Gaza, an integral part of a future Palestinian state. Continuing rocket fire into Israel by extremist groups within Gaza is a reminder of the dangers Israel faces. However, the deteriorating humanitarian situation is a real cause for concern. The UN Secretary-General spoke forcefully to that issue yesterday and we support his efforts to ensure that the interests of the civilian population are not forgotten.

Fifthly, our immediate focus must be on Israel and Palestine. But any peace must be comprehensive. The current situation in Lebanon vividly illustrates the need for a wider settlement. The prize is full normalisation of relations between Israel and the Arab world. I encouraged the Syrian Foreign Minister to attend the conference when I met him in New York in September, and the presence and speech of the Deputy Foreign Minister was a welcome sign of Syrian engagement.

There are, of course, plenty of reasons for people to be sceptical about the latest stage in the search for peace. Given the experience of the 16 years since the Madrid conference, we should indeed all be cautious. The road from Annapolis will be hard, but there is a real basis for engagement.

The unmatched injuries of the Jewish people and the stateless tragedy of the Palestinians make both sides fearful of compromise; but without compromise there is only fear. Thirty years ago, the late President Sadat said of his bid for peace:

“It is a chance that, if lost or wasted, the plotter against it will bear the curse of humanity and the curse of history.”

We all have a duty to do what we can to challenge the sceptics, to prove them wrong, and to help Palestinians and Israelis live out their common humanity.

I thank the Secretary of State for his statement and express strong support for his words and for what he and his counterparts did in Annapolis. The hope that he expressed that the conference will give new impetus to the hope for a final settlement between Israelis and Palestinians is shared across all parties in this country and, indeed, most of the world.

We welcome the fact that the conference reaffirmed the vision of a negotiated, two-state solution based on the road map. The priority now is, obviously, to build on what momentum has been created and to address some formidable obstacles that remain. Among the greatest threats to the negotiations must be the continued refusal of Hamas to recognise Israel and renounce violence, its rejection of the conference outcome and its complete unwillingness to prevent rocket attacks against Israel. What discussions did the Foreign Secretary have about those issues, and can he explain how Gaza, which he rightly describes as an integral part of the future Palestinian state, will be approached within the negotiations?

On Israel’s part, alongside the freeze on settlement activity to which the Foreign Secretary referred, does he agree that speedy progress on movement and access would make a considerable difference in improving the quality of life for Palestinians and demonstrating that the path of peace brings tangible benefits and the promise of a better life?

I have a few questions about the process going forward. The Foreign Secretary referred to a timetable for follow-up on the negotiations, including review conferences. However, little has yet been said about the timetable of the negotiations themselves, and even before Hamas came to power neither the Palestinians nor the Israelis had been able to adhere to the previous timetable. At what stage of the road map will those negotiations pick up the thread? How confident is the Foreign Secretary that a realistic timetable for negotiations will emerge, given the expressed intention of concluding a peace treaty by the end of next year?

Secondly, is the Foreign Secretary confident that there is the sustained commitment needed to push both sides towards the necessary compromises? Did he form the impression at Annapolis that President Bush and his Administration will invest the immense amount of time and political commitment necessary to move this initiative forward?

What specific role will the Quartet play in the coming months, given that the joint understanding refers only to an

“American, Palestinian and Israeli mechanism”

to monitor the implementation of the road map? Does the right hon. Gentleman also see a role for the so-called “Arab Quartet”, who have been crucial in marshalling Arab support for the peace process and proposing a basis for wider Arab-Israeli peace?

The joint understanding issued after Annapolis made no mention of the Syrian-Israeli track, although I understand that that was on the conference’s formal agenda. What is the Foreign Secretary’s understanding about when that track will be addressed? He referred to Lebanon, which once again is on a knife edge. What steps is Britain taking to try to ensure that the situation does not deteriorate, and that Lebanon does not spiral afresh into violence?

Finally, Iran is emerging as one of the primary causes of instability in the region. Does the Foreign Secretary share our concern that the nexus between Iran, Hezbollah and Hamas has the potential to derail the peace process? Is it not vital to intensify the peaceful and multilateral pressure on Iran, including effective financial sanctions across the EU?

Given how many tensions and potential conflicts that there now are in the middle east, is not working to resolve the difference between Israelis and Palestinians one of the highest possible priorities for the international community? Is it not the duty of us all—Governments, Oppositions and nations of every continent—to do our utmost to support that?

I am grateful for the right hon. Gentleman’s approach to this matter, and I shall try to deal in detail with all the questions that he asked.

When I spoke yesterday at the Annapolis conference, I made the point that, although I was obviously speaking on behalf of the British Government, I believed that I was speaking on behalf of all shades of political opinion in the UK. I think that that had a resonance, and it has certainly been backed up by what the right hon. Gentleman has said today.

At the beginning of his response to my statement, the right hon. Gentleman said that there were formidable obstacles, and at the end he said that the middle east peace process must be one of the highest possible priorities. He is right on both counts.

Hamas took control of Gaza in June, and it is striking that since then there have been about 1,000 Qassam rocket and mortar shell attacks on Israel. That is a very serious security concern for the Israeli Government, but it should be a serious concern for us all. Equally, I spoke yesterday to the UN Secretary-General about the humanitarian situation in Gaza, and I have also spoken about that to various members of the Israeli delegation. From my visit to the middle east last week, I know that there are ongoing discussions between the Palestinian Authority and the Israeli Government about what is happening in Gaza. President Abbas is the elected leader of all Palestinian people and he was speaking in that role yesterday. That is why it is right that the responsibility for negotiations lies with him, as does the responsibility for deciding when and how to approach the issue of reconciliation among the Palestinian people.

Three or four months on from Hamas’s takeover, and not least in light of the killing two weeks ago of six innocent civilians who were demonstrating peacefully, it is my impression that Hamas’s rule in Gaza is doing nothing for its popularity among its own people. However, we should not underestimate the force of Hamas’s organisation in Gaza or the strength of its structures there, and it is for President Abbas to lead that process.

The right hon. Gentleman was right in what he said about movement and access. It makes sense to deal with the security of economic projects one by one. At present, there are some 530 checks on, and other interruptions to, the movement of Palestinian people in the west bank. One approach is to try to tick them off one by one, but another is to build economic growth and tackle each of the security impediments or checkpoints around those poles of economic activity. I think that that second approach lends itself to progress.

The right hon. Gentleman asked about the timetable for the negotiations. The first meeting on 12 December will be key to setting a forward plan, and I shall be happy to keep him and the House informed about that.

In respect of the US commitment, the deep freeze of the last six or seven years has been ended by the conference. The strong words of President Bush and Secretary of State Rice, formally and informally, suggest that they realise the depth of commitment that is needed.

I look forward to my hon. Friend’s turning his statement into a question.

There is recognition in the United States, and in the Arab world, that the window of opportunity for a two-state solution is closing for a number of reasons. Unless the opportunity is seized now, the consequences will be very grave indeed, which is why there is not a moment to lose.

The Quartet will continue to have an important role, but the right hon. Gentleman is right to notice that the structures are being moulded to fit the new circumstances of the negotiations. The approach forged from the Quartet on to the road map required that phase 1 of the road map be completed before phase 3—the final status negotiations—started. One of the big changes at Annapolis is that that distinction has been ended and the parties will start the final status negotiations, but the Quartet has a continuing role, not least in the donors conference next week.

My hon. Friend the Minister for the Middle East will be in Lebanon in two weeks’ time, and we are all waiting day by day, even hour by hour, to see the next step forward, but I agree with the right hon. Gentleman that compromise is essential if Lebanon is to avoid descent into another bloody civil war.

Many players have the capacity to disrupt the process, but I can assure the right hon. Gentleman that discussions about financial and other sanctions against Iran are ongoing at ministerial and official level among the E3 plus 3 and across the European Union to make sure that we make it absolutely clear to Iran that it has a clear choice—full engagement with the international community, including access to civilian nuclear power, or confrontation and a nuclear arms race in the middle east. The latter is not an option that the rest of the world wants Iran to take and is something it is prepared to do everything in its power to prevent.

I, too, welcome the modest beginning of this new start. The Foreign Secretary referred several times to the situation in Gaza, and to the division of Gaza from the rest of the Palestinian Authority. What can the Quartet and our Government do to bring about the reconciliation of the Palestinian people and ensure that there is a viable two-state solution, with one Palestinian Authority governing both parts of the Palestinian territories for the benefit of the people of Gaza?

My hon. Friend may have noticed that on Monday the spokesman of the President of the United States said he was determined to support a two-state solution in the middle east, not a three-state solution. That certainly remains our view.

On what we can do to promote reconciliation, we have to recognise that President Abbas is the key player. One hundred and twenty-nine people—innocent Palestinians, many of them—were killed in the attempted coup in June. It is for President Abbas, as the elected leader of all the Palestinian people, to lead his people and seek the reconciliation of which my hon. Friend spoke. I am convinced that the moderate majority, in Gaza as well as the west bank, wants a clean, effective administration that can govern in the interests of all the people. That is the best way forward. The political horizon that has been established can give credibility to President Abbas, and that is the best way we can support him.

I, too, thank the Foreign Secretary for his statement and for coming to the House so soon after the conference concluded. All of us in the Chamber recognise that it was no small achievement to get everybody to Annapolis in the first place and to reach any kind of agreement as a result, so we do not want to downplay the importance of what has been achieved, but does the Foreign Secretary recognise that the brief reference in his statement to the crisis in Gaza was more than was managed in the official communiqué, and that without serious attention to the problems there no deal over the next 12 months will get anywhere? Does he agree that there is not enough in the agreement to offer any prospect of an end to the choking of Gaza’s economy, which exacerbates the humanitarian crisis? Does he accept that although we all demand that Hamas satisfy the Quartet principles, not least the end of the deadly missile fire into Israel, there must be diplomacy and engagement through neighbouring Arab countries to work towards fulfilment of those criteria, not simply continuing to offer the people of Gaza international sanctions and the threat of indefinite isolation?

The hon. Gentleman is right to distinguish between what was agreed yesterday and the process that has been set up. He is right that the cautious promise that comes out of yesterday’s meeting is about the process, and the shared goal, rather than what was agreed. The intention was not to produce a comprehensive blueprint; it was to produce a structure that could deliver a serious process that would enable us to reach the goal that we share.

In respect of Gaza—I have addressed this issue a couple of times already—there is a political leadership of all the Palestinian people. It is up to them to lead the process of reconciliation. I agree that we must be attentive to the economic, as well as the humanitarian, situation. There is hardly an economy left in Gaza. Some 60 or 70 per cent. of the people are completely dependent on UN aid. The situation with power supplies, which the Secretary of State for International Development and I addressed in our statement on 30 October, is a cause of deep concern.

It is relevant to look at the history of the period between 1988 and 1993. The Palestine Liberation Organisation went through the same debate that is going on in Gaza at the moment, about whether it was worth engaging in a peaceful process. After 1993, when the PLO decided to recognise Israel and to engage in peaceful and productive relations, we had the most intense period of peacemaking that had been seen since 1967. So, of course we must not turn our eyes away from the humanitarian situation, but equally we have to be clear about the real basis on which the humanitarian situation can be addressed.

When my right hon. Friend refers to an end to settlement construction, does that include huge settlements such as Ma’ale Adumim on the outskirts of Jerusalem? What is being done about an end to the building of the illegal wall and an end to the 500 checkpoints? When he talks about Gaza, will he remember that—as I was told at a UN conference in New York, which I participated in last week—80 per cent. of the inhabitants of Gaza subsist solely on UN funds? Does he accept that, however odious Hamas is, there will be no peace until Hamas is involved?

My right hon. Friend speaks with real experience and authority on this issue. I am grateful for his correction. I said that 60 or 70 per cent. of Gazans were dependent on UN aid; he said that it was 80 per cent. I understand the depth of his feeling on the matter. On his last point, I certainly believe that we can get a solution only if we engage the hearts and minds of the people who voted for Hamas in the election in June. It is vital that a new Palestinian state carries legitimacy and support from all the Palestinian people.

On borders, and the settlements, which I saw when I drove from Jerusalem to Jericho, there is a critical issue about the so-called E1 part of the settlement plan. It is clear that expansion there would deal a very deep blow to the prospects of a viable Palestinian state. I believe that the basis of a deal will be around the 1967 borders and will include land swaps to deal with small items around the edge. The deal will have to be on that basis; otherwise the Palestinian state is not going to be the viable entity that we all want to see. That raises profound questions for settlement activity and for the outposts that have been have constructed since March 2001, as I said in my statement. The announcements from the Government of Israel are an important step forward in that respect. There was the statement from Prime Minister Olmert that he was determined to fulfil all the obligations under the road map. However, it is important that that is followed through.

The concession by both the Israelis and the Palestinians at Annapolis that the United States, not themselves, would in future be the judge of the implementation of the road map on security and settlements could be a historic breakthrough. However, that will obviously depend on whether President Abbas of the Palestinian Authority can deliver the security requirements in Gaza, which at the moment he cannot. Will the Foreign Secretary therefore accept that the single most important contribution that the international community—and perhaps, in particular, the Arab states of the region—could make over the next few months would be to show unambiguous support for President Abbas and to put pressure on Hamas in order to deliver the ability for progress to be made?

The right hon. and learned Gentleman alights on a very significant point in the statement yesterday. It is a point that I think was still being discussed late into the day and night before the Annapolis conference. It is a significant position: the United States will be the honest broker in terms of road map commitments. He is right that there is a chicken-and-egg quality to the debate. Security is the basis for progress, but political progress can enhance the efforts towards security. I completely agree that the Arab states have a critical role to play. That is why the Arab peace initiative is important. I do not know, but my impression is that, in the year 2000, when the then President Arafat was trying to decide whether to support the plan that had been brokered by President Clinton, the lack of wholehearted support from the Arab world certainly weighed in his decision—let me put it no stronger than that. If the Arab world—the 22 states from the Arab League—is now determined to recognise that a two-state solution is the best bulwark against extremism, and getting that state and building it up is the best way forward, that would be a significant change. I can assure the right hon. and learned Gentleman that, in all my discussions with Arab partners, I am trying to emphasise not just the goal, but the political strategy that is needed to get there.

I accept entirely the genuine commitment of my right hon. Friend, but does he accept that, time and again in recent years, the Palestinians have been promised the sort of outline programme that he has described today, and yet there has been no real improvement in the lives of Palestinians, let alone a sovereign independent Palestinian state? If we were Palestinians and had suffered as they have suffered over the last nearly 60 years, would we really believe that what happened at a conference would make any difference?

I would go further than my hon. Friend: things have got worse for the Palestinian people. The Palestinian suffering and Israeli insecurity are two sides of the same coin. Things are worse now than they were seven years ago. If one looks back to 1967, one can see that the divides are deep and growing—not least because of the bloodshed that has happened since then. I do not know whether my hon. Friend has had a chance to look at yesterday’s speech by Prime Minister Olmert, in which he graphically described the suffering of the Palestinians. That was a striking part of the discussions.

Do I understand the scepticism that people around the world will have about this process? Yes. Do I share the caution that is important in this process? Absolutely. The worst thing we can do is to say that one conference, and the agreement to a follow-up mechanism, is going to bring peace tomorrow. It is not. We have a long road ahead, and caution is the only way in which we can approach this. However, engagement is the only way in which we are going to make this work. Although our role is not as central as those of the main players—the decisions are going to have to be made by Israel and the leaders of the Palestinian Authority and the future Palestinian state—we can try to support the process, without illusions and certainly without making false promises to people who feel that they have been betrayed for too long.

On behalf of my party and the SNP, I commend the right hon. Gentleman for the work that he has been doing in the past few weeks and wish him well in this arduous process. To be credible, the Annapolis process will have to overcome two remaining taboos: first, that the Palestinians can deliver ongoing security to Israeli under conditions of occupation, and, secondly, that a divided Palestine can bring forth a sustainable peace. I welcome what Prime Minister Olmert said the other day about no further building, but does that mean no further settlements, or no further extension of the current 149 settlements? When will the 500 road blocks start to be removed from the west bank? I congratulate the right hon. Gentleman on his work thus far and I hope that he keeps up the pressure, because, despite the scepticism, there is a glimmer of hope, and we all hope it will come through.

I am genuinely grateful to the hon. Gentleman for his support. On the 500 checkpoints, a shift in relation to the first 21 was announced by Defence Minister Barak last week. That was associated with the four economic projects that Tony Blair is taking forward.

In respect of the freeze on settlements, the hon. Gentleman is absolutely right to point out that one person’s freeze is another person’s continuation of the settlements that have already been given planning permission. There is considerable detailed work to be done. Given the great percentages—96 or 97 per cent.—that will decide on the future of a Palestinian state, the matter may seem small, but for the people concerned, it is a big thing whether they are on the Palestinian or Israeli side. That is exactly what the detailed negotiations will have to address.

I thank the Foreign Secretary for his constructive efforts to try to bring justice to both Israelis and Palestinians. Does he feel confident that enough measures can be put in place to prevent a renewal of the terrorism that sabotaged previous attempts to find a negotiated two-state solution?

My hon. Friend has a distinguished record of highlighting such issues. The precise answer to her question of whether measures can be taken to provide security is yes; as to whether they will be taken, that is what we have to work towards. I am in no doubt about the commitment of President Abbas and Prime Minister Fayyad to leading the development of a Palestinian security infrastructure in which people have confidence, but we are engaged in a race against time.

May I join in the welcome extended to the Foreign Secretary for his remarks today, including his remark that Hamas must face up to responsibility for the rocket attacks on Israel? Nothing should prevent humanitarian aid from going to those who need it in Gaza, but is it not absolutely clear that rocket attacks do absolutely nothing to assist the people there in their suffering? Is it not time that people stopped making excuses for Hamas, and that it faced up to its responsibilities?

The hon. Gentleman is absolutely right: the rocket attacks do nothing for the interests of the Palestinian people. In fact, they undermine those interests. It is urgent that the whole international community, including in the Arab world, does as much as possible to prevent that. The discussions that I had in Egypt last week about the smuggling through its crossings is obviously an important part of the solution.

Is the Foreign Secretary confident that the talks have shown sufficient respect for the democratic process in Palestine? Apparently, Hamas is not represented at the talks, and there have not been any direct representations from or to it. Whatever one thinks of Hamas, clearly it is a factor. It also has a large number of elected parliamentarians, many of whom are currently in prison in Israel. Is it acceptable for an occupying power—that is, Israel—to imprison a large number of elected parliamentarians and then pretend that it is undertaking negotiations to bring about peace? Is he confident that the parliamentarians will be released soon?

In respect of the arrested parliamentarians, I am happy to say that I agree with my hon. Friend that the situation is not acceptable. As I made clear in the House in July, we have serious concerns about the issue. The parliamentarians need to be either charged or released—and some of them have been. I will get the precise figures on what has happened to the 44 who were originally arrested. I do not have in my head the precise number who have been released or charged, but I will certainly write to my hon. Friend about the matter. On whether I am confident that President Abbas represents the aspirations of the Palestinian people, the answer is yes. On whether I recognise that there is deep division within the Palestinian community, the answer is yes. On whether it is the job of political leadership to overcome that division, the answer is also yes.

The Foreign Secretary spoke hopefully about the weakening of Hamas in Gaza, following the isolation of Hamas and the blockade of Gaza, and about conditions there. Is it not an irony that although there is a significant difference between Hamas and Salafist movements such as al-Qaeda, recent polls indicate that the ambition of 71 per cent. of Palestinian children in Gaza is to become a martyr, so we are in danger of driving people from supporting Hamas to supporting something a whole lot worse?

The hon. Gentleman is right that there are grave dangers. One of the important points that I discussed with Israeli counterparts in the past 10 days is the fact that the alternative to President Abbas and Prime Minister Fayyad is a very dangerous one. That is why we need to make progress with the current Palestinian leadership. The hon. Gentleman is right to say that the battle for the hearts and minds of young Palestinians—Palestine has a very young population, along with many other Muslim countries—is key. First, the way forward on the issue has got to be through addressing conditions on the ground. An immiseration strategy is no strategy for winning hearts and minds. That is why the humanitarian concerns are important. Secondly, the political horizon is important, too. There has to be a combination of change on the ground and a political horizon in which people can believe, with leaders who can deliver; that, in the end, is the way to win them back.

The Foreign Secretary has re-expressed the British Government’s view that all the settlements—not just those that Israel regards as illegal under its law—are an obstacle to peace, in that they preclude the two-state solution. Thus far, in its agreements with Israel, the European Union has always maintained its position on which parts of the territory are Israel, and which are not. Can the Foreign Secretary assure me that that line will be maintained until there is an agreement between the Israelis and the Palestinians, which may slightly alter the position?

I am happy to confirm that there is no change in our positions. The key is detailed negotiations between the parties. There are dangers in saying that it is up to the parties to take the issue forward on a bilateral basis, but in the end the compromises and the leadership will have to come from the leaders of Israel and the leaders of a future Palestinian state. As was pointed out by the former Foreign Secretary, the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind), the role of the United States as an honest broker is a shift—it has never played that role before—and the facilitation, encouragement and drive that will have to come from the international community will have to be subtle and careful. Detailed discussions about settlements and land swaps, given the basic parameters that were set out in 2000-01, remain to be held.

If it was right in principle for successive Governments to talk directly to the political representatives of terrorist groups in order to achieve peace in Northern Ireland, why is it not right in principle for the international community to talk to the political representatives of Hamas?

There are many lessons from Northern Ireland that it is worth trying to apply around the world, not least as regards policing, but one distinction that the hon. Gentleman might want to think about when answering his own question is the distinction between the Provisional IRA and the Real IRA; that distinction emerged as an important part of the peace process in the past 10 years. The deep debate within the Palestine Liberation Organisation between 1988 and 1993 led it and its supporters to conclude that a peaceful process was the only way forward. Hamas has not yet made that move, so the hon. Gentleman should be careful about suggesting that there is an exact parallel between Northern Ireland and Palestine to support his case. However, I am happy to continue this discussion with him.

My right hon. Friend was correct to draw attention to the hundreds of rocket attacks from Gaza, including one on a primary school in Sderot on 11 September. Hamas also used a UN school as a launch pad in Beit Hanoun in October. Will he confirm that if Hamas is to be involved in the process, the three previous preconditions must stick, including the requirement that it ceases violence and terrorism against Israel?

Yes, but I am sure that my hon. Friend would agree that we do not want to get into a position in which Hamas’s deliberations become a veto or a block on the political dialogue. An agreement hammered out by President Abbas and put to all the Palestinian people can trump the Hamas card, because in the end the Hamas argument is either, “No one will deliver a Palestinian state to you,” or “We’re the only people who can deliver a Palestinian state to you.” If President Abbas is able to do that, that is the best way to undercut Hamas.

The International Development Committee visited a soap factory in Ramallah piled high with simple olive oil soaps. It simply could not get those soaps out of the west bank because of the security checks and so on. No one should kid themselves that getting trade and jobs going in the west bank will not require someone with authority to broker a deal. Is that Tony Blair’s task? If so, that is very welcome, because if the United Nations Relief and Works Agency cannot deliver it, no one else will be able to do so. It will require someone with a capacity for mediation to kick-start the west bank economy.

The hon. Gentleman makes an important point. It was notable that yesterday, the European commissioner, Benita Ferrero-Waldner, talked about the release of some cut flowers and dried fruits. Perhaps I can refer to her the question of the soap factory that the hon. Gentleman raised. The former Prime Minister, Tony Blair, has focused on new economic projects, but I am sure that he has included in his discussions existing economic projects that are blocked. I am certainly happy to draw to the attention of the relevant authorities the case that the hon. Gentleman raised.

The whole House will appreciate the Foreign Secretary’s cautious realism. May I ask him a specific question about the role of the Arab states? It is obvious that they have influence even on Hamas, and can be influential in making sure that Lebanon is contained, which would be helpful. How much did public opinion in those Arab states feature in those discussions because, in the end, it is important that Arab public opinion plays a role to make sure that Arab states have the freedom to act progressively and constructively?

My hon. Friend makes a very profound point. The position of Arab public opinion featured more in the informal discussions than in the formal ones. There is growing recognition of it in the leadership that Saudi Arabia has provided, for example, in the Arab peace initiative, and in the determination of the Egyptian Foreign Minister, who happened to be on the same overnight plane as me, so I had a chance to have a further discussion with him following my meeting with him last week. There is recognition of the fact that public opinion needs to know that the delivery of a Palestinian state is a viable prospect, because without that there is a threat to the stability of the whole region, which is extremely dangerous for all the countries concerned.

While I personally perceive the meeting between Prime Minister Olmert, President Abbas and President George W. Bush as tremendously encouraging, does the Foreign Secretary not agree that the major responsibility—security and Hamas are clearly critical, and that is President Abbas’s responsibility—is the decisions made by the Israelis, which will make or break any future peace agreement? The settlements, the wall and the Palestinians’ freedom to trade are critical to progress.

The hon. Gentleman is right that they are critical to progress, but it takes two to tango in this process. We will need many, many steps by both sides. He used the phrase “make or break”, and the frightening thing is that there are many things that could break this process. There are plenty of wreckers and plenty of difficult compromises that could wreck the process, so it is right to be cautious. However, there is symmetry to the issue: the Palestinians’ suffering and the Israelis’ insecurity are two sides of the same coin, and both need to be addressed.

May I congratulate my right hon. Friend on a perceptive and balanced statement? I endorse what he said about President Abbas being the president of all Palestine, and that it is up to the Palestinians themselves to lead their own process of reconciliation. Does he agree, however, that the international community has a role in not making matters more difficult—something that I fear that we did after the election of Hamas in 2006 and up to the events of June 2007? Will he clarify the fact that the important freeze on settlements includes the E1 plan, which is of tremendous significance in the west bank?

On the latter point, I am sorry if what I said earlier sowed confusion rather than clarity. I am absolutely clear that the extension of settlements into the E1 area would set back the process of building a viable Palestinian state, and I will check the record to make sure that I have not suggested the opposite. My hon. Friend is right that the international community must not make things worse—I hope that we can aspire to do better than that—but we should probably save for another occasion a longer discussion of the history of how we got here. As for how we move forward, there is a process in place: it is the only game in town, and I suggest that is where we should focus our efforts.

The Foreign Secretary and other right hon. and hon. Members rightly raised the question of rockets, 1,100 of which have been fired in the past 12 months, resulting in more than 300 injuries and 15 deaths. Whatever we think about the security fence—in many ways, it is odious—it has served to protect many Israelis from suicide bombings, which have not taken place in Israel for many months. The Foreign Secretary alluded to the talks with Egypt on the smuggling of arms into Gaza. Will he amplify precisely what has been agreed, because smuggling is a major cause of destabilisation?

I am sorry to disappoint the hon. Gentleman, but I cannot provide that amplification, because while we have had discussions, to suggest that they were negotiations would probably go beyond the United Kingdom’s remit. What I do know is that the countries of Egypt and Israel are in intensive discussions about the issue. It is not a new issue—smuggling has gone on for a long time—but I gained the impression that there was a real commitment on both sides to try to address it, because it is not in either side’s interest.

Hospital consultants in Gaza are regularly reduced to tears, because they are losing increasing numbers of patients, including extremely young children, whom they know they can save. There is a lack of equipment, as well as basic medicines, and intensive care cots of children are broken. The doctors accompany very sick patients to checkpoints only to watch them die there. Will my right hon. Friend therefore make a pledge to the House that he will do everything in his power to open safe passages for those sick patients either to the west bank or to Israeli hospitals, so that those lives can be saved?

My hon. Friend makes the important point that while the words “humanitarian tragedy” can seem antiseptic or clichéd, there is real life-and-death suffering. I am certainly happy to follow up any particular cases that he wishes to raise, but I can assure him that when we talk about humanitarian tragedy, whether with the UN or with any of the other bodies involved, we bring it down to the human scale, and that is what he has done.

Does the Foreign Secretary agree that any final settlement on a two-state solution can be realised only if Israel’s security is guaranteed? If he does, would he consider a new innovation and extend an invitation to Israel to become a member of NATO so that its future security is guaranteed?

It is shared ground on both sides of the House that the security of the state of Israel is half the bargain—the other half is a viable Palestinian state. When I was in Israel—this may disappoint the hon. Gentleman—I discussed the matter with the Prime Minister and the Foreign Minister, and they were much more interested in joining the European Union than they were in NATO.

Earlier, my right hon. Friend made a distinction between those who vote for Hamas and Hamas itself. Does he accept that Hamas is as much a social movement as it is a political movement, and that in bringing about a reconciliation, while it is important that President Abbas plays a pivotal role, everyone else, including the Arab states, the EU and the UN has a role to play in bringing about reconciliation, otherwise we will end up with a three-state solution by default rather than the two-state solution that we would like?

My hon. Friend makes an important point. I am not sure about the term “social movement”, but it is certainly the case that Hamas provides an infrastructure of support that has been recognised by some of the Palestinian people in Gaza. Hamas has certainly fed off the sentiment that corruption in the Palestinian Authority is a real source of injury to the Palestinian people, and in that sense I very much agree with his comments.

On the question of settlements, does my right hon. Friend agree that Prime Minister Olmert needs to promise not just an end to the construction of new settlements and expansion outside the boundaries of existing settlements—I understand that that is all that he has promised so far—but a complete end to all construction within existing settlements and the release of areas for future settlements such as the E1 area that my right hon. Friend mentioned, if he wants the talks to succeed? It would not be fair to expect Palestinian politicians to negotiate while construction is still under way.

There are confidence-building measures to do with what happens to the settlements in the short term but, in the end, this is about the borders of a Palestinian state and the borders of Israel. We face the prospect that over the next year those issues can be addressed in detail, and that is the best way to get this sorted out once and for all.

Point of Order

On a point of order, Mr. Speaker. As you know, the Minister for the Cabinet Office is responsible for information assurance across government. In July, he received a report, relevant to our forthcoming debate, that was critical of the Government’s preparedness. I tabled a parliamentary question last Thursday, scheduled for reply yesterday, asking when he read that report and what action he had taken. Last night, I was given a holding answer. Can you advise me, Mr. Speaker, why it should take five days for a Minister to search his memory to discover when he read a report and which actions had been taken, and how best I can get him to apply his own Cabinet Office guidelines that named day questions should be answered on the day named in the question?

I am responsible only for my own memory, not for Ministers’ memories, and it is very good indeed.


Education and Skills

Secretary Ed Balls, supported by The Prime Minister, Mr. Chancellor of the Exchequer, Secretary Des Browne, Mr. Secretary Hutton, Mr. Secretary Hain, Mr. Secretary Woodward, Mr. Secretary Denham, Jim Knight, Caroline Flint, Malcolm Wicks and Mr. David Lammy, presented a Bill to make provision about education and training; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed. [Bill 12].

Opposition Day

[2nd Allotted Day]

HM Revenue and Customs

We now come to the debate on the first Opposition motion. I inform the House that in both debates I have selected the amendment in the name of the Prime Minister.

I beg to move,

That this House is deeply concerned at the Government’s failure to protect the personal details of 25 million citizens; believes this security breach is due to systemic failures at HM Revenue and Customs; notes the inconsistencies between the version of events set out by the Chancellor of the Exchequer in his statement of 20th November and that revealed by the Government emails released by the National Audit Office on 22nd November; and calls on the Chancellor of the Exchequer to provide a comprehensive explanation about how the security breach occurred, why previous warnings about data security were ignored and what policy changes will be introduced to protect the public in future.

Eight days ago the Chancellor had to come to the House and tell us that the Government had failed in their first duty to protect the public. He had to tell us of the incompetence in his Department that had led to the personal details of every child in the country being lost and the bank account numbers of every family in the country going missing. He said at the very end of his statement that he would

“of course, keep the House updated of any further developments.”—[Official Report, 20 November 2007; Vol. 467, c. 1104.]

In the eight days since then, the Chancellor’s version of events has been contradicted by the internal e-mails published by the National Audit Office. We have discovered that, contrary to what he said, senior officials in HM Revenue and Customs were involved in the key decisions. Further evidence has emerged of systemic failure in the Chancellor’s Department, and still there is no sign of the missing data. Yet, instead of keeping the House updated on these developments, the Chancellor has on two occasions since then avoided coming to the Chamber to make a statement. That is why this debate is necessary. It allows us to hold one of the most senior members of the Government accountable for one of the most catastrophic mistakes made by the Government.

The first thing that we should be told today is whether the Chancellor is any closer to finding out where those missing discs are. He has ordered that a letter be sent out to about 7 million people, telling them that their family details and bank account numbers are

“likely to still be on government property”.

How on earth does he know that? We all hope that it is true, but I am not aware of any positive evidence to support the statement that was sent to 7 million people. Perhaps the Chancellor can provide it today. I am willing to listen to that evidence. He can intervene on me at any point, or wait until his own speech. At the moment, we have evidence that the Government are searching the premises of external businesses such as TNT, so I would like to know how he can tell people that the discs are likely to still be on Government property.

We have also discovered that in trying to reassure people, the Treasury appears to have compounded its mistake by sending to some members of the public letters that include the personal details and national insurance numbers of other people. Those are the apology letters. The Financial Secretary shakes her head. She is obviously not aware of what is going on in the country. Let me read a couple of examples that have been brought to my attention. First, a member of the public states:

“I have just had an apology letter {dated 21 November, 07} from Dave Hartnett {Acting Chairman} of HM Revenue & Customs apologising about the error of losing my personal child benefits data, including my bank account…which I was expecting. However, its ironic…I’ve also received 7 other apology letters that should have been sent to other members of the public in the same predicament! I’ve got all their National Insurance Numbers, their Child Benefit Ref. Number, Name and address. It really is…an absolutely awful mistake when they are trying to reinstill confidence.

I have of course reported this to the HM Revenue & Customs helpline…I spoke to a gentleman… He made me aware I was not in the minority…this had happened to a number of individuals and asked me to relay the National Insurance No’s”.

My hon. Friend the Member for Banbury (Tony Baldry) brought to my attention another case involving a constituent of his who has just been sent a letter of apology that includes the names and national insurance numbers of someone other than them. The error is being compounded as we speak by the release of such letters. Perhaps the Chancellor could tell us a little more about that when he replies.

Of course. Perhaps the hon. Gentleman has received such a complaint from a constituent of his.

I am interested that the hon. Gentleman has moved from 500,000 records to single records. If he feels that the issue is important, as he seems to, is he not concerned that 90 per cent. of Conservative Back Benchers are not present, and that those who are present are mostly talking to each other rather than listening to him?

I am talking about 25 million people whose information has been lost. I suppose we have the worst 10 per cent. of the Labour party on the Government Benches.

Perhaps the Chancellor can explain what he has been doing in the past eight days to keep us up to date with the search for the missing discs. The second thing that he must do today is account to the House for not telling the British public the whole truth about how their personal details came to be lost.

When the Chancellor spoke to us last week, he wanted us to believe that it was all the fault of what he said in his statement was

“a junior official in HMRC”.

He repeated that when he referred to someone “at a junior level”. In reply to the hon. Member for Coventry, North-West (Mr. Robinson)—the paymaster general to the Brownites in more ways than one—the Chancellor said:

“It cannot be left to someone at a junior level in the organisation to decide whether information, especially information of this nature, should be downloaded”.—[Official Report, 20 November 2007; Vol. 467, c. 1101-1114.]

Let me put this in terms which I think are acceptable to you, Mr. Speaker. We now know that what the Chancellor told the House was not close to an accurate statement of what actually happened. We now know that it was not left to someone at a junior level in the organisation to make that decision. Thanks to the e-mails released two days later—they were released not by the Treasury, by the way, but by the National Audit Office; we still have not heard anything from the Treasury—we have discovered that senior officials at HMRC were involved in the decision.

Everyone has seen those e-mails. It was a senior business manager who replied to the first request from the NAO for the information on 13 March. It was that senior business manager who rejected the NAO’s request that the address and bank account details be removed, on the grounds that it would cost too much money—not something that the Chancellor has ever told us. The child benefit process manager, the senior official in charge of the entire child benefit system, as I understand it, was copied into those e-mails and was aware of the discussion about whether to send the information.

Those are not junior officials or lowly clerks—96 per cent. of the staff of the Revenue and Customs are on more junior grades than the most junior civil servants involved in this decision. Why did not the Chancellor tell the whole truth? The political editor of the BBC reported:

“I am told that when he spoke to the Commons the Chancellor had not seen the e-mails and had not been told of the potential involvement of a senior official.”

That is what the political editor of the BBC said, reporting the conversations that he had with the Chancellor of the Exchequer, I guess, or with the Chancellor’s special advisers or whoever he talks to in the Department.

Is that report true? Can the Chancellor tell us now that when he spoke to Parliament, he had not been told of the potential involvement of a senior official? Are we to believe that the Chancellor has so little grip in his Department that when he spoke to Parliament, he did not know that his own senior officials had been copied into and involved in those decisions? Are we to believe that in the 10 days that he had to prepare for that statement, he did not ask to see the internal correspondence that was published just a couple of days later? Or did he want us all to believe that it was all down to some lowly official and that no Government of any colour could prevent such a thing from happening? Ignorance or deceit—neither is much of a defence for a man who holds the highest office in the land.

The involvement of senior officials is—

Order. I have called before, on another occasion, for temperate language. I ask the hon. Gentleman to withdraw the word “deceit”—[Interruption.] Order. There is only one referee in the Chamber.

Thank you, Mr. Speaker. The involvement of senior officials is not the only inconsistency between what the Chancellor said to the House and what now appears to be the case. He told us that the reason that he had delayed telling the public and Parliament about the loss of personal data was—I quote from his statement—that

“the banks were adamant that they wanted as much time as possible to prepare”.

He said:

“Some small institutions asked for a couple of weeks”.—[Official Report, 20 November 2007; Vol. 467, c. 1102-1110]

The British Bankers Association issued a press release the moment he sat down saying that it

“must correct the statements made by the Chancellor of the Exchequer in his address to the House of Commons today that any bank asked for any extension to the delay in announcing the security breach by HMRC…At no point did the banks request a period of weeks, as the Chancellor stated”.

Who is telling the truth? Is it the banking system or the Chancellor? Is it the e-mails from the NAO or the Chancellor? I guess that the public will decide.

The public will also decide on the third issue that needs addressing today: HMRC’s systemic failure to look after people’s personal information over a number of years. The Prime Minister went to great lengths to deny that failure when he was questioned by my right hon. Friend the Leader of the Opposition at Prime Minister’s questions last week—and we know why. The Prime Minister presided over this department and its predecessors for longer than anyone in the past 100 years, so he knows that if there is evidence of systemic failure, the blame lies with him.

The evidence is compelling. In September 2005, an unencrypted CD-ROM containing the bank details of taxpayers went missing. What did the Treasury say at the time? It said:

“This is a one-off incident…we are urgently reviewing our procedures to make sure this type of incident does not happen again”.

Of course it did happen again. In May, the details of 42,000 families who are claiming tax credits were sent to the wrong people. The Treasury then said

“we have robust procedures in place to protect information provided by”

the public. But of course they did not, because earlier this month the national insurance details of a further 15,000 people were lost on a CD-ROM. The Government then said:

“we have reviewed our arrangements and introduced safeguards to prevent this happening again”.

I am grateful to my hon. Friend the Member for Banbury for bringing to my attention the case of Mr. Leaver, a constituent of his from Bicester. In July, Her Majesty’s inspector of taxes sent two letters apparently intended for Buckinghamshire county council to his home address in Bicester. They contained the names and national insurance numbers of all the employees who had recently left that council. Mr. Leaver phoned Her Majesty’s inspector of taxes and was told, “We are very grateful for your telling us this. We will correct the error.” He has subsequently received five more letters. My hon. Friend raised this with HMRC, which confirmed that that was the case, and having looked into the matter, it said:

“We did indeed hold an incorrect address for Buckinghamshire County Council.”

In Oxfordshire, as my hon. Friend points out.

When the Chancellor orders yet another review and issues yet another promise that something will not happen the public are not convinced. We want him to acknowledge what the head of the Institute of Chartered Accountants said last week: that the catastrophic loss of personal data was not a one-off, but

“an example of wider operational and managerial malaise within HMRC”.

The institute has said that this gone on for most of 2007. Its head said that

“there is a deterioration in service standards at HMRC. It manifests itself in things like postbags being unopened for weeks.”

Will the hon. Gentleman guarantee to the House that if he were to achieve the high office to which he aspires, there will be no loss of personal data under his watch?

What I can guarantee is that if I saw evidence of systemic failure in a department for which I was responsible to this House, I would look into that systemic failure and seek to correct it. There is no evidence that either this Chancellor or the previous one did that at all.

I shall give way to the hon. Gentleman because his question to the Chancellor last week again implied that this was all about the lowly official sitting at a computer. Presumably he was as astonished as I was to find that senior officials were involved in this decision.

The hon. Gentleman perhaps misheard or misunderstood the question put by my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp). Given how smug and sanctimonious the hon. Gentleman is being, surely he could give a 100 per cent. guarantee that not one iota of data will be lost under any future Conservative Government in any circumstances. Will he give us a guarantee please?

First, I guarantee that I and anyone who serves in a Conservative Government will examine evidence of systemic failure. I think that I am pretty safe in guaranteeing that if I were Chancellor of the Exchequer, we would not lose the personal details of half the people in the country.

Is not the hon. Gentleman making a bold pledge? Would it not be more gracious for him to examine the records of previous Governments, including those of his party, and check how many times data have been lost by them, and to review the pledge that he has just been making?

I do not think that the hon. Lady can seriously point to an incident where any previous Government, Conservative or Labour, managed to lose 25 million people’s names, addresses and national insurance numbers. This Government managed to lose the name, address and date of birth of every child in the country. As far back as 2002, the Prime Minister’s performance and innovation unit talked about

“the lack of public trust in the way that the public sector handles personal information and the security of that information”.

Yet that warning and subsequent ones by the Information Commissioner and Select Committees of this House and the House of Lords have been ignored.

The Chancellor will no doubt tell us about the fact that the chairman of PricewaterhouseCoopers has been asked to conduct yet another review of HMRC’s security procedures. Will he confirm that we are still awaiting the results of the previous one? Does he remember something called the Crosby review? It was set up last year to explain how HMRC’s tax credits system had been defrauded of £1.7 billion. Parliament was promised the report this summer, and I know that Labour Members were eagerly awaiting its arrival so that they could read it during their summer break. The Chief Secretary to the Treasury disappointed us, saying that it would arrive later in the summer, but we are now approaching December and there is still no sign of it.

We have been told that plans are afoot in the Treasury—perhaps the Chancellor will confirm this—[Interruption.] The answers come scurrying from the Government officials; at least this message did not get lost in the post. We have been told that plans are afoot in the Treasury to merge different HMRC databases into one single super database starting in April next year. Will the Chancellor confirm that, starting in April, everyone’s tax records will be merged with everyone’s benefit records? How can anyone be sure that such a super database containing the details of every person in the country will be any safer than the databases that it replaces?

Has the time not come to consider whether HMRC should continue in its role as a benefits agency? I suspect that this issue might find sympathy with some Labour Members, because every MP knows that HMRC has proved itself incapable of administering tax credits effectively. It has now proved itself unable to administer child benefit competently. A tax-collecting department is not best suited to being a tax-spending department. This situation is a legacy of the previous Chancellor’s obsessive desire to carve out for himself an empire in Whitehall. Now that the emperor has been shown to have no clothes, that empire should be dismantled. The administration of benefits should return to the Department for Work and Pensions where it belongs.

Finally, the Chancellor must acknowledge the growing public concern about this Government’s insatiable appetite for holding more and more personal data on their citizens. In a rare display of independent thought, he once said:

“Identity cards are unnecessary and will create more difficulties than they will solve…I do not want my whole life reduced to a magnetic strip on a plastic card. Those who advocate ID cards should think long and hard before continuing to do so”.

Surely an incident such as the loss of half the country’s data would make him think long and hard.

Now is the time to scrap the flawed plans for ID cards and a national identity register. Given that the Government have shown themselves to be completely incapable of looking after the data they already hold on us, how can they possibly ask for any more? I know that the Government increasingly look like a Monty Python sketch, but should they not take a leaf out of Monty Python’s book and just say, “ID cards are no more. They have ceased to be. They are an ex-project”? The sooner the Government wake up to that fact and stop wasting our money on this doomed white elephant, the better.

The Government have failed in their first duty—to protect the public. The Chancellor has presided over a Department that has lost the personal details of every child in the country, yet instead of an anxious public being kept informed, we have to wait for the Opposition to call him to Parliament to explain what is going on and why the version of events that he gave us last week is contradicted by the published evidence from the National Audit Office.

Since he took office, this Chancellor has lurched from one disaster to another—from the bank run, to the disastrous pre-Budget report, to the capital gains tax plans that seemed to change week by week. But the biggest disaster of all is surely this loss of the country’s personal data. As someone once said, accident-prone Ministers are not accident-prone by accident. This Chancellor will never regain a reputation for competence; let us see if he can cling on to a reputation for being honest about his mistakes.

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

“approves of the decisive action taken by the Government when it became aware of the data loss by HM Revenue and Customs, including the collaborative work undertaken in association with the UK Payments Association, the British Bankers Association and the Building Societies Association and through them individual banks, building societies and other financial institutions which enabled them to put in place appropriate safeguards and monitor any irregular activity; welcomes the decision of the Chancellor of the Exchequer to initiate an urgent investigation by the Metropolitan Police and his appointment of Mr Kieran Poynter to conduct an independent review of HM Revenue and Customs’ data handling procedures; acknowledges the steps which have already been taken to improve the department’s data transfer processes; and notes the Chancellor’s assurance that he will keep the House fully informed of further developments.”

This is a very serious matter, and I am sorry that the shadow Chancellor has chosen to make it an occasion for political knockabout. [Interruption.] It is extremely serious when so many records go missing. There are no excuses for it, and yet again I reiterate not only my profound regret at what has happened but my apologies to the millions of people in this country who have been caused anxiety and distress. It is because I want to ensure that we not only find out exactly what happened but ensure that it never happens again that I appointed Kieran Poynter, the senior partner and chair of PricewaterhouseCoopers, to conduct an inquiry and report. I will come back to that shortly.

No, not just now.

It is absolutely essential that we deal with the facts and the evidence, and we will have an interim report containing those in three weeks’ time.

Before I deal with the points made by the hon. Member for Tatton (Mr. Osborne), let me update the House on the current position. The Metropolitan police inquiry is continuing, as are searches. As this is a continuing police inquiry I do not want to say anything further on that, but the police inform me that they still have no evidence or intelligence that these data have fallen into the wrong hands and no evidence of fraud or criminal activity. The majority of accounts into which child benefit payments are made are with a small number of banks. The banks have now been able to check back to 18 October, and there are no reports, so I am told, of any activity suggesting increased fraud attempts deriving from this incident. However, Revenue and Customs will continue to ask for updates from major banks and building societies at least once a day.

Revenue and Customs also made changes to security processes and procedures for bulk data transfers, and such transfers will now take place only if they are absolutely necessary, written authorisation has been provided by senior Customs managers, and clear instruction has been given regarding the appropriate standard of protection for transfer.

As I said, Kieran Poynter, the chairman and senior partner of PricewaterhouseCoopers has started his inquiry, and I shall return to that shortly. [Hon. Members: “Give way!”] I shall certainly give way to the hon. Member for New Forest, West (Mr. Swayne), unless he has lost interest in the subject.

Twenty-five million records of children’s names and addresses have disappeared. Given the amount of data that the Government are collecting, no doubt including whether the children have been bad or good, and that it is six weeks before Christmas, it is blindingly obvious who has taken them.

I think that members of the public would hope that the House and the hon. Gentleman take this matter seriously. I am very sorry that he has chosen to strike that attitude.