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Westminster Hall

Volume 472: debated on Wednesday 5 March 2008

Westminster Hall

Wednesday 5 March 2008

[Mr. Joe Benton in the Chair]

Cashback Contracts

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Michael Foster.]

It is always a pleasure to initiate a debate under your wise and experienced chairmanship, Mr. Benton. I am particularly pleased to have the opportunity to raise the issue of the way in which the mobile phone industry operates, its acquiescence to mobile phone retailers who offer unrealistic cashback offers, and the consequences for customers when retailers go into liquidation.

I should first like to talk specifically about Dial a Mobile, which was an independent retailer of mobile phones in the Bordesley Green area of my constituency. It ceased business on 30 August 2007 with, it was subsequently revealed, debts of £12 million and more than 90,000 customers who were connected through the company to the networks of the big five providers, Orange, T-Mobile, O2, Vodafone, and 3.

Prior to being contacted by constituents who were affected by the collapse of Dial a Mobile, I confess that I did not know much about the mobile phone industry or how it operated. Like an ever-increasing number of people, I use a mobile phone, and I had a contract with an airtime provider, but I did not know how the cashback system operated, the relationship between the airtime provider and the retailers, or the powers of the regulator, Ofcom. Having spent several months dealing with issues arising from the collapse of Dial a Mobile, I now have a good knowledge of how the industry operates, and I find what I have learned extremely disconcerting.

My concerns are not mine alone; they are shared by the European Union’s Communications Commissioner, Viviane Reding, who has serious concerns about how the mobile phone industry operates, particularly in this country and, as she calls it, its cosy relationship with Ofcom. She is also—rightly—extremely concerned about the vulnerable position in which many customers find themselves when mobile phone retailers go into liquidation.

I should explain that cashback is one of a range of incentives offered by mobile phone retailers to attract new customers or to poach customers from the network airtime providers—the big five to which I referred. In a highly competitive industry, the retailer is paid lucrative commission by the airtime provider for each new customer signed up for the provider’s network. To entice customers to sign up, the retailer will offer part of its commission to the customer, which is payable, usually in stages, when the customer has been with the network for a certain period, in most cases 12 or 18 months. That sounds quite innocent; indeed, the customer could, in theory, have a sizeable amount of their contract payment reimbursed by the retailer.

However, there is a catch, and it is a very big catch. The retailer in the mobile phone industry is under huge competitive pressure to offer bigger incentives to get customers to sign up to the network that pays the biggest commission. To retain business, therefore, the retailer will offer bigger cashback offers to the customer. Slowly, as happened with Dial a Mobile, a business model evolves whereby if more than four out of 10 new customers claim their cashback, the retailer loses money and goes bust.

If a mobile phone retailer simply went into liquidation and could not honour its customers, and the contract—this is important—with the customer became null and void, it might not matter too much. It could be put down to the normal cut and thrust of business—some you win, some you lose. However, there is a clear difference in the mobile phone industry because of the way in which the system operates. To all intents and purposes, two contracts are involved. The contract that includes incentives such as cashback is between the retailer and the customer, but a network supplier insists on a contract with the customer when a customer hooks up to it. Also, as with Dial a Mobile, the network supplier disclaims responsibility for incentives such as cashback that are offered by the retailer. It insists that the customer pays the full amount to the network provider; otherwise, it will take legal action against the customer. That could, as is the case with many customers of Dial a Mobile in my constituency in east Birmingham, result in bailiffs being sent in and the customer getting an adverse credit rating.

My hon. Friend is talking about a similar problem to one that occurred in my constituency with Cell Fones UK; indeed, local trading standards officers have been liaising closely with those in Birmingham. Is he aware that his constituents, like mine, have often not signed, or even seen the terms of, the contract to which they are tied with the mobile phone companies?

My hon. Friend makes an excellent point on a matter to which I shall refer in a moment.

Some 90,000 customers were affected when Dial a Mobile went into liquidation, but since it went bust in August 2007, a number of other retailers have gone into liquidation. There are now hundreds of thousands of people who had contracts with mobile phone retailers that have gone bust who thought that those contracts were null and void because the retailer had not honoured its cashback obligations. Yet some network suppliers insist that they have contracts with customers, whether written or unwritten, and that customers should pay airtime contracts in full, and threaten legal action. Of course, mobile network operators—the big five—say that they will consider any representations that customers make “on their merits”, but they have not disclosed how many contracts they hold through retailers that have gone bust, such as Dial a Mobile, nor have they disclosed how many individual cases they have considered “on their merits”.

However, a large number of people are being taken to court by the mobile network operators and a large number are being pursued by bailiffs.

Is my hon. Friend aware of the Sunday Mail campaign in Scotland? Jane Barrie, the leading reporter, has highlighted the fact that the companies involved targeted the poorer people in our communities, who are now being pursued by the bailiffs to whom he referred.

My hon. Friend, as always, makes an excellent point. The mobile network operators target the most vulnerable and disadvantaged. They also target people who think that there is such a thing as a free lunch—but those people then find out that there is no such thing as a free lunch but that a price tag is attached.

As my hon. Friend said, many of the customers being pursued, such as those with Dial a Mobile, did not sign a contract with either the retailer or the airtime provider. However, the airtime providers say that once a customer has been linked by the retailer into their network, a contract exists. They expect full payment under that alleged contract—full stop, no argument.

One would have expected Ofcom, the regulator, to have been aware of the problem before the end of 2007, when Dial a Mobile and several other retailers went into liquidation. Ofcom was indeed aware of the problem. On 31 July 2007, it issued a press release stating:

“Ofcom welcomes new code on mis-selling in mobile markets but warns of consequences of failure.”

It went on to say that the five mobile network operators had more than 66 million active customer accounts, and that Ofcom was receiving in the region of 400 complaints a month from people who believed they had been misled by mobile phone retailers. It said:

“Ofcom has discussed the nature of these complaints with MNOs directly and industry has responded”—

the industry responded, not the regulator—

“with a code of practice which defines the best approach to promoting and selling mobile services.”

That is commendable.

The code of practice, written by the mobile operators, sets out minimum business standards on prohibited sales and marketing practices, details of proactive monitoring, due diligence, and how complaints to mobile network operators should be monitored. Furthermore, it says that mobile operators can determine how to apply those principles to their own retail channels. It also refers to selling incentives. But as is often the case with written documents, the devil is in the detail. One should always read the small print. In my opinion, the code of practice makes the voluntary code not worth the paper it is written on. The most important sentence in it is to be found on page 5, which states:

“Mobile operators do not, however, underwrite the obligations of other legal entities”.

In a nutshell, it means that the five mobile network operators are happy to encourage retailers to use business models such as the 40 per cent. redemption rate, which everyone knows is unsustainable.

The network operators are not interested in whether a retailer goes bust and cannot honour his obligations, because there will always be another one prepared to chance his arm to get business. Once the retailer has linked the customer up to the mobile network operator, the customer is, to use a fishing expression, hooked and netted. If the customer tries to escape, the mobile network operators send in the barristers and bailiffs. Of course, the mobile network operators—the big five—will say, “Oh, what you are saying is grossly unfair,” and that they do not expect retailers to use 40 per cent. business models, which are unsustainable. As someone once said, “They would say that, wouldn’t they?” One of the five—3—certainly encourages its retailers to do just that. In a letter to a retailer, 3 says:

“As promised, here is confirmation of our belief that many retailers currently operating cash-back schemes are experiencing a 40 per cent. redemption rate. This is based on feedback from a range of businesses operating both a Distant Selling model and a high street retail model. Perhaps the highest profile success story of a business operating this model is Dialaphone, whose results speak for themselves”.

The retailer to whom that letter was written tried it—and he went bust.

The power of the mobile network operators and their absolute determination not to give up these highly lucrative contracts, however they were obtained, can best be seen in their attempts to pressurise local authority trading standards departments, which have valiantly tried to help affected customers. Birmingham’s trading standards department was inundated by calls after the collapse of Dial a Mobile. Chris Neville, the head of the department, told the trade magazine Mobile on 13 September that

“The directors of Dial a Mobile told us that any documents—any contracts—were shredded and never passed onto the MNOs—and that was routine.”

That is the firm in my constituency that went bust. It did not even pass contracts on to the mobile network operators; it shredded them. Chris Neville continued:

“They said the network providers knew this, and that this has been the case for a few years, and they’d been happy to accept customers via a phone call”—

presumably a mobile phone call.

I pay tribute to Chris Neville and his colleagues. Based on the lack of written airtime contracts, they advised customers to give notice to their airtime network provider of their intention to terminate their airtime contracts. Chris Neville said:

“The air time providers are getting upset at the advice we put out and are putting pressure on us to remove our advice.”

The trading standards department was being told by the mobile network operators that it was not serving the best interests of their clients—the people who live in Birmingham—but that the operators were doing so.

The mobile network operators say that they have what the Independent Mobile Phone Dealers Association, a reputable body, calculates to be more than 1 million customers of failed retailers since 2005. Mobile network operators are saying, “We have them over a barrel. We don’t want trading standards or Government Departments interfering, and Ofcom’s in our pocket. We want to be left alone to pursue them through the courts for the millions of pounds that these contracts are worth.” I therefore ask, what is the regulator, Ofcom, doing? It is supposed to be looking after the interests of consumers.

I said that the regulator issued a press release in July 2007, saying that mobile network operators had produced a voluntary code, which they hoped would work. Seven months later, Ofcom launched an investigation into cashback and slamming. Slamming is a separate issue, but we all know what it is. Its true name is “erroneous transfers”; that is the posh expression. To mere working- class lads such as myself, it is called thieving of business. Nevertheless, I welcome the Ofcom investigation.

In a letter to me dated 23 October 2007, Ofcom said it wants:

“to find a permanent fix to these problems.”

Although I welcome Ofcom’s review of the voluntary agreement, that will not help the hundreds of thousands of people, including the 90,000 customers of Dial a Mobile, who are being pursued by the mobile network operators. Indeed Ofcom has already made it clear that the voluntary code of July 2007 is inadequate and has failed, and that Ofcom itself does not have the powers to compel the mobile network operators to tear up Dial a Mobile contracts.

The regulator sent me a very blunt e-mail in November, in which he said:

“Mr. Godsiff, in answer to your questions as to whether I have got any powers, as Dial a Mobile has gone out of business there are no Dial a Mobile contracts to tear up.”

This is the regulator, Ofcom, talking. The e-mail continues:

“The problem is, rather, that the Dial a Mobile contracts were supposed to give money to customers to part compensate for the money customers were paying to the mobile operators. Now that Dial a Mobile has gone out of business, customers are often having to pay the full amounts to honour airtime contracts with mobile operators, even though they are no longer in receipt of cash-back payments from the retailer who sold the contract to them.”

So here is Ofcom, the regulator, saying, “I am powerless. I know what the mobile network operators are doing and I cannot do anything about it.”

I would like to pose some questions. First, why did it take Ofcom until July 2007 to announce a voluntary code of practice, drawn up by the mobile network operators, which it now admits is inadequate? Secondly, why has Ofcom now acknowledged that it has no powers to force the mobile network operators to underwrite the unsustainable business models that they are encouraging retailers to adopt?

It may come as something of a surprise to many mobile phone users, particularly the many hundreds of thousands of people who have been affected by retailers going bust, that one mobile network operator—Orange—contributes £2.5 million a year towards Ofcom’s running costs. The other mobile network operators are believed to contribute to Ofcom’s running costs too. I say “believed”, because when my office sought the information on this from the regulator, Ofcom refused to release it on the grounds that, if it did release that information, it would reveal the turnover of the mobile network operators. So here we have a regulator, which receives £2.5 million from Orange, one of the companies that it is supposed to regulate, and quite possibly receiving other amounts of money from other mobile network operators, refusing to put that information into the public domain on the grounds that, if it did so, it might reveal the turnover of the mobile network operators.

I find that very interesting, particularly in the light of Orange’s memorandum to the House of Lords Select Committee that looked at the mobile phone industry. In that memorandum to the Select Committee, Orange questioned, quite bluntly, whether the £2.5 million that it was putting into Ofcom every year was:

“good value for money for their shareholders”.

So Orange is saying there, “We give £2.5 million a year, but we are not so sure that we are getting good value for money.” Well, it hit the jackpot over these cashback contracts, did it not?

This sorry saga began with the belated recognition by Ofcom in July 2007 that the industry needed a code of practice; it continued with the inevitable collapse of Dial a Mobile and other retailers who had been encouraged to operate 40 per cent. cashbacks, which were unsustainable business models, and it resulted in hundreds of thousands of customers being ruthlessly pursued by the big five mobile network operators for at least £10 million that is allegedly owed to them. However, if the big five were to reveal the true number of people who have been connected to them through firms that have subsequently gone bust, the independent assessments are that they would have to reveal that the amount that they are pursuing from customers is about £50 million.

Finally, there was a belated acceptance by Ofcom that what has happened over the last six months, including the failure of the voluntary code, has, in its own words, “highlighted certain weaknesses”, and that is the reason why

“Ofcom is now agreeing to launch a formal review to see if formal regulations backed by the full weight of Ofcom’s legal powers would provide better protection for customers”.

If Ofcom is saying, as a justification for now launching a review, that it might use “the full weight” of its powers, that prompts the question as to why it has not used those powers before.

In my opinion, what I have said this morning clearly shows that the mobile phone industry is not only an industry that is out of control but is operating a system—the cashback system—that is a totally discredited relic of the past. Indeed, when the furore arose at the end of last year, even some of the network operators themselves backtracked. Mr. Bernie O’Beirne, 3’s dealer and distributor chief, said:

“We would love to ban cashbacks, but legally we can’t.”

He went on to claim:

“Cashback is really last year’s problem. Cashback is always going to create problems”.

Basically, he was saying that cashback had reached its sell-by date. There is nothing like a sinner who repents, but it does not help the large number of people who are being pursued for money by 3 and the other mobile network operators.

The mobile network operators could have acknowledged that they were aware of what some retailers were doing in pursuing unsustainable business models. They also could have acknowledged that they themselves were sitting on a mountain of contracts worth up to £50 million, and they could have said something to their customers to the effect of, “We would like to help you.” They have said that they will consider any representations that customers make “on their merits”, but they deny any responsibility whatsoever for the shambles that has occurred.

I should make it clear that I not only recognise that the mobile telecommunications industry makes a valuable contribution to the UK economy but know that there are mobile phone retailers who will not offer cashback deals, because they know how flawed the business model for such deals is and they are prepared to forgo business rather than adopt a business model that could place their customers in difficulty if they themselves went bust. Many retailers, including some small family firms, contacted me when this furore arose over Dial a Mobile. They wanted it to be known that there are retailers who will not touch cashback deals, but they also wanted the general public to know that the mobile network operators, despite their protestations of innocence, are fully aware of the unsustainable business models being operated and pushed by them on to some retailers, and they are quite happy to turn a blind eye as long as the customers keep getting connected to their networks.

Following the representations that I have received, I have developed a great respect for those reputable retailers who have been prepared to say, “I’m not going to con my customers, even if I lose business.” Such dealers deserve respect; they are the sort of people Ofcom should be talking to and encouraging, and I very much hope that it will talk to some of them as part of its review.

I have endeavoured to set out the background to this sorry saga, which has impacted on a large number of my constituents and on many other people around the country. Ofcom should have been much more rigorous and should have drawn up a code of practice that gave customers far greater protection, instead of letting the mobile network operators run rings around it.

It is still not too late for the big five to make a gesture towards their customers, and I do not have in mind the two-fingered gesture that they seem to be making at the moment. Before Christmas, I had a meeting with the parliamentary representatives of the big five, where I suggested—it was the season of good will—that they at least tear up the alleged contracts of people who had not even signed a contract or received the cashback promised by the retailers. I said that the operators could keep the rest and that they were making a fortune, but I suggested that they could at least tear up the alleged contracts of people who had signed nothing. In retrospect, I acknowledge that I was naive to think that fat cats would give up even a drop of their milk, and, sadly, that proved to be the case.

I suspect that the Minister will say that he has sympathy for the many people who are suffering, but that this is a matter for Ofcom, and he is of course right, because it is the regulator. However, he, with parliamentary approval, is responsible for setting the parameters within which the regulator operates, and I hope that he will be prepared to raise a number of matters with Ofcom.

First, if the regulator was so concerned about slamming and cashbacks because of the number of complaints that it received each month, why did it take until July 2007 to ask the mobile network operators to come up with a voluntary agreement? Secondly, why did it think that a voluntary code was acceptable, only to state that it was flawed and needed reviewing seven months later?

Thirdly, I hope that the Minister will emphasise to the regulator that cashback schemes should be scrapped, as even some mobile network operators, such as 3, now suggest they should be. If such schemes are allowed to continue, operators must insist that all retailers who sell mobile phone contracts must get customers to sign and forward contracts to them. Most importantly, I hope that the Minister will emphasise that the mobile network operators must be made responsible for underwriting cashback offers made by retailers who are pushing their goods.

I hope that the Minister will also ask Ofcom proactively to engage with the European Commission, which, as I said, is unhappy about the relationship between the regulator and the mobile network operators. I hope that he will instruct Ofcom to make known its yearly contributions from the operators, rather than allowing it to hide behind the cloak of commercial confidentiality.

Finally, I very much hope that, as a result of this debate, the mobile network industry will soon be properly regulated by a vigilant regulator that protects the customer from the dodgy business practices and rampant greed that have, I regret to say, characterised the industry over the past few years.

It is a pleasure to be under your watchful eye today, Mr. Benton.

Let me start by saying where I come from on this issue. My constituency contains the world headquarters of Vodafone, of which I am a great admirer. The company has a very good corporate responsibility record, and there is a scarcely a school, arts body, sporting institution or voluntary organisation in the area that has not received funds or help from it. Although I am great admirer of Vodafone as a business, that is not to say that I come to the House as a mouthpiece for it or, indeed, any of the other network operators. In fact, I consider myself a challenging friend, and I have at times raised issues that would be of particular interest to the hon. Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff).

I have great respect for the hon. Gentleman, who has been a worthy campaigner for his constituents, many of whom are on low incomes and who have undoubtedly suffered extremely badly as a result of some dodgy dealings by Dial a Mobile. That said, he and I probably look at business issues from different ends of the telescope, and I will seek in my few remarks to add a tone of caution as we perhaps move towards a new regulatory framework for the industry.

I recently saw early-day motion 696, which is in the hon. Gentleman’s name, but one phrase leaped out and caused me such concern that I was unable to sign it. Speaking of cashback deals, the hon. Gentleman said that he believed

“network providers to be complicit in the active promotion of an unsustainable business model”.

That is a sweeping statement. There are five major network providers, and I have not had time to speak to them all since I heard that this debate had been called. However, I have spoken to Vodafone, which takes great exception to the hon. Gentleman’s assertion.

We must recognise that mobile phones are now cheaper and more reliable, that they cover much more of the British isles and that they do more—we can access the internet with them, and they have all sorts of other uses. Many of those advances in technology and provision have been achieved through competition. The marketplace is highly competitive, which is a good thing because it has given a lot of people on low incomes access to mobile communications and transformed their lives. I entirely concede, however, that that has resulted in some pretty dodgy dealing, as in all highly competitive marketplaces.

In seeking to sift out the bad guys, however, we need to look at the actions of the independent dealers. As we seek to secure value for money and consumer rights for our constituents, we should ensure that our fire is directed at the real culprits, and it is open to debate whether the networks are complicit. In fairness, the hon. Gentleman made a good case, and some network providers may have encouraged activities among independent dealers that might, in the wrong hands, be open to question. However, we are certainly not talking about all network companies and we should all be careful about the words that we use.

The hon. Gentleman referred to the mobile networks’ self-regulatory code. I have read the code, which I believe was a genuine attempt by the networks to do what they could to set out the principles governing the behaviour of independent dealers. However, anti-competition rules limit the extent to which operators can restrict independent dealers’ freedom to set out their own deals. In other industries, such as the airline industry, we have seen how a cartel of large companies can set prices and establish business models in an entirely illegal way, and they pay a heavy price for that. It is not in our interests for network providers to behave in that way; indeed, they should not and would not want to do so. In attacking them, however, the hon. Gentleman might be taking them down a route that is illegal under the EU’s very strict competition rules.

The Independent Mobile Phone Dealers Association does not think that the code is enough or that it will work. If that is the case, perhaps Ofcom should look at the statutory regulations of the independent dealers. The independents have been offering the deals that have caused consumer harm. People close to me often tease me for my financial caution. The only cashback deal that I would take is the one that put cash in my hand at the time that I was purchasing the contract. Even then, I would question who was getting the money back at another time in another way. I have always been dubious about such arrangements and of snake oil salesmen who may, from time to time, try to sell me things beyond the area of telecommunications. Any cashback deal is surely an area for question.

I commend the hon. Gentleman’s caution. It is very true that if something looks too good to be true, then it usually is too good to be true. However, the hon. Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) has described people who do not have the same commendable financial acumen that the hon. Gentleman has. Does he not feel—and I am asking an open question—that there should be some form of protection for such individuals?

I think that there should be. Indeed, there is already a considerable amount of protection. It is a question of balance. How far should Parliament and the regulator go to hold the consumer’s hand throughout the whole process? The hon. Member for Birmingham, Sparkbrook and Small Heath rightly mentioned the clarity of contracts and the implications of the so-called small print. However, there is a point at which one has to say “caveat emptor”. I recognise that some people find it hard to read the small print. For example, they might have literacy problems or a shortness of attention span. Certain dealers and businesses across the whole commercial sector can take advantage of such people. However, it is very difficult to legislate for everybody. We have to recognise that if we go too far in one direction, we could achieve something that is much more damaging.

I am interested in the Independent Mobile Phone Dealers Association, which has an impressive website. I recommend that hon. Members look at it. However, it is hard to tell from that website how many members it has and what percentage of the independent dealers it represents. My understanding is that it has yet to have a formal meeting with the networks to discuss this matter, which seems extraordinary. I know that communications are a two-way street, but this matter seems to call for an urgent meeting between this organisation and the networks.

I welcome—and we should all welcome—any attempt by an industry or a commercial sector to police itself and to set standards. I hope that that is what the IMPDA will do. It is the rogues in the sector who are blighting the whole industry and blackening the name of telecommunications sales across the board, but we and the IMPDA should be careful what we wish for. If we go too far down a regulatory route, it could result in fewer dealers, less choice and a higher cost to people on low incomes for whom mobile telecommunications are increasingly important.

Let me give hon. Members an analogy related to the Financial Services Authority. A large number of independent financial advisers operated in an able and capable way, giving advice to individuals on a one-to-one basis. They went to people’s homes and talked about pensions, life insurance and so on. They provided a very good service. Among them, however, were some rogues who were involved in some very bad cases of mis-selling. The FSA went in very hard and has regulated that industry to within an inch of its life. Now, the only people who can provide the kind of financial services that are wanted are the large operators. Those small one-to-one, one-man-band financial advisers come to our surgeries and tell us how the FSA has ruined their business. I worry that if we go down the wrong regulatory route, it could work in a similar way in the mobile telecommunications sector.

Regulation is good if it is pitched right and targeted at where the problem lies. I suggest to the hon. Gentleman that his attack on the networks is slightly missing the target. The real rogues exist among the independent dealers, the vast majority of whom are entirely honest—and many want nothing to do with cashback deals—and provide a good service. Nevertheless, that is where the problem lies. The networks undoubtedly have a role to play in ensuring that the rogues are not buying into them.

The hon. Gentleman said that he has looked at the voluntary code of practice, which was drawn up by the mobile network operators. If he looks at that code, he will see that the operators say very clearly that they will come down very hard on the sort of rogues that he is referring to. But they will not do so because, as letter after letter from reputable retailers says, they are quite happy to turn a blind eye all the time that those rogues get connected up to their networks.

If you will forgive me, Mr. Benton, that is a simplistic view. Undoubtedly, such people sign up to the networks; that is their only means of operation. I have spoken to one company and it is not the case that it is encouraging them in any way that it can. Strict competition rules prevent companies from imposing on the dealers a business model that is too prescriptive.

In conclusion, regulation, if it is done correctly—not as it has been done by the Financial Services Authority in financial services—is the way forward. Otherwise, the perfect will become the enemy of the good and many people on low incomes will suffer a higher cost for their telecommunications provision.

I congratulate the hon. Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) on securing the debate. He has raised the lid on a particularly unsavoury can of worms, and I am sure that hon. Members will have been quite shocked by some of his stories. I appreciate the points made by the hon. Member for Newbury (Mr. Benyon) in relation to how far regulation should go. It is true to say that if something looks too good to be true, it probably is.

The question that we should consider is how far one should go to protect the gullible. Gullible people are not only those on low incomes who may or may not have the opportunity to read the small print in the first place, but ordinary people such as myself. Two members of my family have taken out cashback contracts, so I have personal experience of this. One of those family members is an organised person. He arranged his cashback through a reputable retailer and gets his money back. I am a disorganised person and often realise to my cost and chagrin that I have forgotten the relevant date, and that that date has gone by. Deals under which claims must be made on, for example, the third, ninth and 10th month—if the day falls on a Monday and it is not raining—are not sensible.

The problem is that even organised and sensible people who enter into contracts with their eyes open will find that sometimes it is virtually impossible to get their money back, and that cannot be right. I understand that, under the deal offered by Dial a Mobile, individuals were paid back the whole of their £35 monthly rental. Customers would have been given an agreed number of free calls and texts, but of course there is no such thing as a free lunch. The company’s business model obviously miscalculated the number of people who would claim back that cash, and that smacks of being disingenuous. Operating a business model that relies on people not claiming what they are entitled to is an inappropriate way in which to carry out any form of business dealings.

The hon. Member for Birmingham, Sparkbrook and Small Heath talked about the role of mobile operators. Certainly, Orange and T-Mobile insist on the honouring of contracts even when the middleman has gone, which is a fact that we should publish to make consumers aware of the pitfalls of contracts into which they might consider entering. The Mobile Broadband Group has mounted a defence of the situation. It says that the activities of less than 10 per cent. of dealers have been complained about, which it seems to think is highly commendable. As I see it, it means that we have a core of disreputable organisations. I agree with the hon. Member for Newbury that some of the larger retailers operate entirely honourably, but I do not think that it is a good thing that 10 per cent. of retailers are being complained about.

Ironically, the Mobile Broadband Group says that the voluntary code of practice is not voluntary for the dealers, but forms part of their contract with mobile operators. So there is one rule for operators, for which the code is voluntary, and another for dealers, for which it is compulsory. It says that there are no more complaints about mobile companies than about fixed-telephony ones, which apparently now have a smaller client base and are formally regulated. However, that again suggests that there is a nub or niche of businesses operating inappropriately, which raises the question of whether some form of formal regulation would be appropriate to rid the market of those who bring everybody else into disrepute.

Has the Mobile Broadband Group cleaned up its act? It claims so by pointing to the introduction of the voluntary code On examples coming to light, it says, “Well, it takes some time to flush through existing contracts,” which might be the case. However, I have concerns, particularly in light of the comments of the hon. Member for Birmingham, Sparkbrook and Small Heath about the lack of clarity from Ofcom itself on how long we should wait for that process to take place. Of most concern is the fact that the Mobile Broadband Group will not take responsibility for the actions of its dealers. It still claims to have a contractual relationship with people whom it has never met, even though the middleman—the dealer—has gone out of the equation. It also claims to be considering the matter on a case-by-case basis. I am not a lawyer, but I am dubious about whether that is appropriate, given that whole classes of individuals have clearly been affected.

The concept of what is going on in the market has a peculiar odour to it, which would not be the case if there was a straightforward deal from which everybody could benefit. Ofcom is considering whether regulation is needed, but perhaps we should wait and see whether the problem will flush through, as the Mobile Broadband Group claims that it will. In the meantime, mobile operators should take their fair share of the flack and publicity and be made to appreciate that they cannot just enforce what legally might be contractual arrangements with users without considering the consequences of people’s caution over, and annoyance with, the practices that they operate.

It is a pleasure to serve under your chairmanship, Mr. Benton. I congratulate the hon. Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) on securing the debate and on the way in which he introduced it. His commitment and passion were clear from the way in which he spoke, although I caution him about damning an entire industry, particularly one in which Britain is a world leader, because of problems in one small part of it.

I also pay tribute to my hon. Friend the Member for Newbury (Mr. Benyon) for the way in which he spoke. He presented an extremely balanced view and spoke with great clarity. He is indeed a critical friend of his constituency company, Vodafone. I had the privilege to visit that company with him a while ago. It has made an incredible investment in that community, which is typical of the industry. As I said, we must be careful that if we have concerns about failings in one sector of an industry, we do not simply damn the entire industry.

There are about 70 million mobile phone customers in the UK—more than one per adult. That is a huge penetration, and it is one of the success stories of British industry. As we have heard, cashback deals are a way in which to attract customers from one company to another, which is an entirely legitimate business practice. It happens in every walk of life and it is understandable that businesses would seek to do that, particularly in a largely saturated market. Clearly, there are not many people out there who want a mobile phone and have not yet bought one, which means that the only way in which companies can increase business is to attract customers from other companies. That does not mean, however, that they should do so by any means available. There still have to be rules and fairness.

As we heard from the hon. Member for Birmingham, Sparkbrook and Small Heath, Dial a Mobile went bust last year, and it is quite clear that its business plan was flawed. It put out into the network too much money and, ultimately, it was unable to honour its commitment. The hon. Member for Solihull (Lorely Burt) said that it was bad business practice to put out more than one could honour, but that is the way in which many business deals work. It is exactly the way in which Airmiles works, for example. One reason why British Airways moved Airmiles into a separate company was because if everybody had sought to redeem their Airmiles entitlement, BA would technically have been insolvent. BA relies on the fact that some customers will collect Airmiles and never redeem them, or redeem them in many years’ time. That is the way in which the business world works, and to stop such a thing absolutely would be rather damaging.

Clearly, people have been affected by the situation, and in some cases they have made their concerns known and complained to Ofcom. I understand that the number of complaints peaked last year with 569 in August, and 813 in September, which relates to the spike when Dial a Mobile went out of business. We must put the issue in context: 800 out of 70 million customers made complaints. I accept that this is a matter of great importance to those 800 people and others who have been affected, but one must put the issue in context. Let me draw an analogy. The Liberal Democrats got about 6 million votes at the last election, so the situation under discussion is similar to about 50 of those voters being unhappy about the outcome. I imagine that all Liberal Democrats were unhappy about the outcome, but in the situation under discussion, the number is relatively small when compared with the total market.

We also heard from the hon. Member for Birmingham, Sparkbrook and Small Heath that on 31 August last year, the code for the responsible selling of mobile telephony came into effect. That is a responsible action by the industry and, generally, it is the right way forward. The major companies—O2, Orange, T-Mobile, Vodafone and 3—have signed up to it, and although the Independent Mobile Phone Dealers Association wants legislation to force full cashback payments within 90 days, with penalties for failure to comply, we must understand what the right process is when something goes wrong.

First, local trading standards officers should investigate to ensure that nothing has been done illegally—from what the hon. Gentleman said, that has clearly happened in Birmingham. Secondly, once a problem has been identified, it is right that the industry involved tries to produce a voluntary code for better practice, and that has clearly happened. There might be debate about how effective that is, but it has happened. Thirdly, it is also right that the regulator should investigate the problem. Once it has had the chance to investigate, it should decide whether it needs to use its full powers to bring about change. The regulator can do several things: it can enforce a tougher code of conduct; stop cashback payments completely; and, probably, require repayments when people have lost out in the way in which the hon. Gentleman outlined. However, we must go through that process, and only if it fails should we consider legislation.

Ofcom will have to examine the issue of contracts. We will all have been concerned by what the hon. Gentleman said about the lack of contracts, but I suspect, although I am not sure, that the practice will have been driven by customers. They will have said, “I want a phone, I want it today and I want it to work today. I do not want to have go through the process of having a contract sent off, submitted, approved and everything else.” Businesses, therefore, might have been trying to react to the demands of their customers. I do not know that for certain, but I suspect that that has been the case.

We must also have cognisance of the principle of caveat emptor, however, and the fact that at the end of the day, people did a deal with their local phone shop, not with the company itself. Similarly, if I go into a travel agency and buy an airline ticket, I realise that I am doing business with the travel agency, and if I go into a garage to buy a car, I deal with not Mini directly, but the garage. This is the same sort of relationship, and we must have clarity about it.

The code of practice says that the offer must clearly state in writing which legal entity—the dealer or the mobile operator—is making the offer, and who will undertake to meet the obligation. It also sets out a number of unreasonable practices, such as

“a requirement that the customer submits their original statements—copies of statements should be accepted as proof; a charge for processing a cash back claim; a requirement that cash back claims are submitted within an unreasonably short period, such as anything less than 60 days”.

The code has a number of powers, such as a power whereby dealers that breach the code could have their contracts with the networks terminated.

The hon. Gentleman highlighted one aspect of the contract that states that companies would not be responsible for the losses of other business operators. I thought about that and wondered in what business sector that would apply. To return to my analogy of buying a car, would Mini be responsible for the losses of a garage in Birmingham? Would Zanussi be responsible for the losses of a high street electrical retailer that went bust? If they are not responsible, what is the opposite position? The company that provided the major service would be responsible for the losses of the companies that dealt with it. However, that would be a recipe for bad practice. It would allow companies to take risks in the knowledge that a large multinational company would step in to cover them if everything went wrong. Although I understand why the hon. Gentleman drew attention to the phrase, the alternative would be something that no business could contemplate.

Is the hon. Gentleman really suggesting that the mobile network operators did not know that retailers were operating unsustainable business models that pushed those operators’ products? With reference to the code of practice, the operators themselves did not root out retailers that operated unsustainably and used bad practice. I have a letter from a couple who live in Chesterfield. I have read it, and they do not strike me as particularly disadvantaged people. They signed up with a firm that went bust, and they say:

“From our perspective, at the time of taking this out, the cash back and network provision were intrinsically linked, and portrayed as this”

by the retailer. The retailer says, “I am selling you a product of one of the mobile network operators, and myself and the network operator are part of the contract.” The hon. Gentleman says that the mobile network operators’ argument is that there are in fact two contracts. What the retailer does is his business, but once there is a link to us, we want full payment.

I am grateful to the hon. Gentleman for his intervention, but it would be quite inconceivable that a network operator could be liable legally for the individual business decisions taken by every single retailer throughout the country selling its products. There must be a separate legal arrangement between the customer and the retailer, and the customer and the service provider. Clearly, the mobile operators will have known of the practices, but they could not then determine that they were unsustainable because, in some cases, they clearly were not.

Companies have managed to offer such a service and not go into liquidation. To make a decision on whether the situation was unsustainable, we would have to know how much money the directors took out of the company, the leases that they undertook and whether they were affordable, how much they paid in rates, and their staffing costs. A range of costs would determine whether a business model was sustainable, not just the ratio between the cashback that was offered and the take-up that was expected.

I fully understand, and agree with, the hon. Gentleman’s points. However, the problem has been exacerbated by the mobile operators’ insistence on prosecuting their contract with the retailer and then transferring it to the end user. That is the issue that we should examine, because the operators appear to have been acting very inflexibly and not exercising any discretion. They now have a new relationship with the end user, and they should examine the circumstances with that end user.

My recollection is that I signed a mobile phone contract with Carphone Warehouse, not directly with Vodafone, so the contract was made specifically with the retailer. However, I would have assumed that I had formed a contractual arrangement with the network operator the moment that I started using the network—in other words, I would not have been allowed to start making phone calls without some implicit contract relating to how the calls would operate and what charges would be imposed. To return to my point about caveat emptor, there is a point at which members of the public ought to think, “Well, if I’ve started using my mobile phone, I must, de facto, have some contract with the network operator.” Those are exactly the issues that Ofcom should investigate.

I am pleased that Ofcom is looking into the matter and I hope that it will not be long before it provides the evidence from its investigations, but I think that the comments made by the hon. Member for Birmingham, Sparkbrook and Small Heath about Ofcom, particularly its “cosy relationship”, were regrettable. I have had a lot of dealings with Ofcom and have found it absolutely objective and fair in all of them. When Ed Richards became its chief executive, some people were concerned, because he had worked at No. 10, that his appointment might be political. From everything that I have seen, I must say that he is an expert in his field and scrupulously objective and fair, and that he and the people who work with him do a great service to the industry.

I should make it clear, as I thought that I did in my speech, that the comment about the cosy relationship was not mine, but that of Viviane Reding, the European Commissioner with responsibility for telecommunications, who has made it perfectly clear that she is unhappy about what she calls the close-knit and cosy relationship between the regulator and mobile network operators in the UK.

It is my sense that we have one of the toughest regulatory regimes in Europe. Our system is the envy of many other countries. Ofcom is an expert organisation. I always find that it puts consumers’ interests first and is not afraid of a fight with the industry when it feels that that is appropriate. I want to put that firmly on record.

I hope that the Minister will answer a number of questions about his Department’s position on the matter. Does the Department monitor complaints, and to what extent have cashback sales been an issue of concern in the complaints that it has registered? What discussions have he and his colleagues had with representatives of the telecoms networks and dealers? Has he had discussions with Ofcom about the issue, and does he believe that the code of practice is generally working satisfactorily?

To return to the points made by my hon. Friend the Member for Newbury, the British telecoms industry is a world leader. We lead in innovation, we have one of the highest rates of market penetration in the world, and we have a very good geographical spread, as many hon. Members know from having opposed masts being put up in our constituencies. We have a system that works better for those on lower incomes than systems in many other countries because handsets are often given away free, which gives people access to mobile telephony who would not otherwise have that. Our system is also highly competitive. We have almost too many different tariffs on the networks; I find it incredibly confusing to look at the tariffs available to see whether I am getting a good deal.

Clearly, the system is not flawless, and some schemes will be mistaken, but it does not help to denigrate an entire industry and all its operations because of failings in one small sector. We have a blame-and-legislate culture in this country: whenever anything goes wrong, we find somebody to blame and pass a new law to address it. All too often, the newspapers that say that Parliament legislates too much are the same ones that call for the next law to be introduced. The right way forward is to identify the problem, which has clearly been done, and to create a voluntary code, which has also been done, although it does not work as well as it should. The regulator should then investigate and use its powers as necessary. Only if that fails should we look to legislation.

I, too, congratulate my hon. Friend the Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) on securing this debate. I think that all of us have been struck by his commitment and concern on behalf of his constituents, particularly those on low incomes. Many have certainly been badly treated, and I was struck by his comments on the consequent financial distress that some are suffering. I thank him for continuing to highlight the issue.

My hon. Friend is right to be concerned; thousands of people feel aggrieved that they have lost money by agreeing to cashback deals. I hope that he will understand that I shall not comment in any detail about the particular case of the collapse of Dial a Mobile, as that would not be appropriate. However, he has raised wider issues, so today’s debate is welcome.

Consumer protection is a key role of the Department for Business, Enterprise and Regulatory Reform. I know from my constituents and the many people who write to the Department that consumers expect to be treated fairly and expect their voices to be heard by business. Most importantly, they expect the best consumer protection regime that we can provide.

Regulation of the telecommunications market in the UK falls to the independent regulator, Ofcom, a statutory corporation set up under the Office of Communications Act 2002 with duties to further the interests of citizens in communications and relevant matters. Ofcom introduced the voluntary code of practice last July with the aim that consumers should be able to trust those who sell to them. As Ed Richards said at the code’s launch:

“We expect this new voluntary code of practice to stamp out mis-selling in mobile; if it does not, we will not hesitate to step in to protect consumers.”

The Department monitors complaints, which have, unfortunately, continued at a relatively high rate, peaking at an average of 665 per month in September 2007. Given the continuing complaints to Ofcom, it is absolutely right that it has reviewed the voluntary code of practice. I understand that the conclusions of the review will be made public shortly, and I look forward to seeing them. I hope that before Ofcom finalises its voluntary code, it will listen carefully to the voices in this debate, which I know it is monitoring, particularly the complaints of my hon. Friend. That seems the best way of tackling mis-selling and cashback deals that do not materialise in practice.

Part of the role of an independent regulator is talking regularly to mobile network operators and retailers about enhancing mechanisms to give consumers improved protection. As we have heard, the mobile telecommunications sector is one of the most intense and competitive in the UK. By the end of 2006, there were nearly 70 million active mobile phone subscriptions in the UK. Further growth is being driven by multiple handset or SIM card ownership. That intense competition has given us one of the most dynamic markets for mobile telecommunications in the world, and it puts pressure on everyone—vendors, customers and regulators—to ensure that business is done fairly and contracts are honoured.

The Office of Fair Trading can take action against standard terms used by traders in contracts with consumers, seek assurances from anyone using terms that it considers unfair and, if necessary, seek injunctions forbidding the use of specific terms. A term may be unfair not merely in substance but, equally, by being so obscurely worded that the consumer cannot reasonably be expected to understand it. If a trader uses standard terms and conditions but hides away important or onerous contract conditions in the depths of the document, that may be unfair. There are also controls on misleading trading practices. If a trader knowingly misleads a customer about what is on offer or the conditions of the sale, that may be a false trade description or misrepresentation.

In a couple of months, we shall bring into force new regulations implementing the unfair commercial practices directive. The regulations will repeal much of the existing law in this area and replace it with a simpler, more general framework. The essence of the new system will be simply that the trader should not mislead the consumer or omit important information if those actions or omissions might lead the consumer to take a different decision. I give that information as general background, as it is not clear that those aspects of the law are of particular relevance to this issue. The central problem in most cases seems to be that the reseller has gone out of business. In those circumstances, the general consumer protection regime is unable to offer any practical assistance.

Cashback has been a commonly available offer from independent mobile retailers for the past five years: retailers undertake to pay an amount of money to customers when they take out mobile phone contracts. Cashback contracts are with retailers and are separate from customers’ airtime contracts with mobile providers such as Vodafone, Orange and O2. Ofcom recognises and welcomes Vodafone’s rescue package for its Dial a Mobile customers. It has offered contract exits and downgrades to affected customers, and Ofcom has urged other providers to adopt similar, generous rescue packages. In most arrangements, cashback is funded by retailers from the commission that they receive from mobile providers for making sales. There has been a welcome focus on operators supplying customers without using third-party suppliers. By May 2007, direct sales accounted for nearly 60 per cent. of sales.

It is important that customers ensure that they have as much information as possible before agreeing to anything. However, I recognise that my hon. Friend would argue that people on low incomes who do not have information that many other people might have can be particularly vulnerable. We need to think through the implications of that. My Department is committed to putting knowledgeable, empowered consumers at the heart of a strong UK economy, and to ensuring that the UK has a first-class consumer policy framework. We want confident, well-informed businesses and consumers, because they are key to ensuring that competition benefits us all. We are determined to maintain and, crucially, to enhance a robust, effective consumer and competition regime that gives consumers the knowledge and information they need to shop confidently at home and overseas. We want it to educate consumers so that they know their rights and where to turn for protection.

On 26 May 2008, the new consumer protection regulations will usher in the EU’s unfair commercial practices directive. The new rules will help consumers by banning all types of unfair selling and marketing methods and by tackling unfair conduct that is not currently illegal. The directive will ban misleading statements or omissions, and deceptions about the value of cashback deals or the conditions necessary to qualify. It will not, however, ban cashback or other incentives.

My hon. Friend has raised an interesting issue. I do not think that my words will satisfy him entirely, but it is important to re-emphasise that Ofcom has recognised that the voluntary code needs reforming and strengthening. Although the code is near to publication, I hope that Ofcom will step back for a few moments and consider today’s debate and the different contributions that have been made. We should consider in particular the important issues that my hon. Friend has raised.

Sitting suspended.

Governance of Britain

I should like the Gordon Brown Government to be remembered as one who revitalised our democracy and returned power to our people, individually, locally and regionally; who finally ended the privilege of the unelected to vote in our legislature; who allowed people locally to run their own local affairs; and, finally, who enabled the people directly to elect not only their parliamentary representatives but their nation’s chief executive, as is commonplace in virtually every other western democracy.

The Blair Government did their best to pay their debt of honour to the democratic radicalism of John Smith, especially through Scottish and Welsh devolution, but we knew that in their heart they were not motivated by democratic change. They fatally—some say deliberately—delayed efforts to establish English regional government, which could by now be entering its second decade and be a stable part of our democratic arrangements. They were inconsistent on mayors and local cabinets. There was no rebuilding and refurbishment of the vital local party political infrastructure that is required by all parties. There was no tackling of issues around state funding to sustain our democratic parties, and we know the consequences of that: funding is not even at the level at which we rightly fund the BBC. Our parties, politics and democracy apparently are not even worth that amount of money.

That all betrayed a Government who, at heart, trusted Whitehall before the localities, and officers and bureaucrats before politics and parties. They preferred to manage the dance between the media and No. 10 that monopolises British politics, rather than re-engage directly with the British people. They presided over well-meaning, policy-light centralism, not the creative, liberated political entrepreneurship of the sort for which many of us hoped.

Ten years of massive majorities and unprecedented economic growth gave real space to transform our democracy, but the opportunity was not even seen, let alone grasped. Instead, we have empty shells of elected local councils, people who do not have written rights, an unelected second Chamber, and, perhaps above all, a Parliament that is seen at best as irrelevant, and at worst as the hapless, dependent lapdog of the Government. Parliament can now be popularly defined as the house of sleaze, individualised and greedy. We are pilloried on expenses, and not respected for representing political opinions. Parliament itself has the most to gain from democratic renewal and serious self-appraisal. It, instead of the media, should become the forum of the nation. The “Today” programme and “Newsnight” obviously occupy a good place in the pantheon of British democracy, but so should our Parliament.

Parliament should hold the Government to account, rather than be seen as rival supporters’ clubs. It should reach out to involve the electorate in law-making, rather than being a shabby rubber stamp. This is the best opportunity in my lifetime for democratic change. In our system, the grossly overdeveloped and unchecked Executive allow the Prime Minister to make change in a way that no other western democracy permits. That is a bad system. Its only advantage is that it enables our new Prime Minister to move forward with real pace and urgency on an agenda that he cares about, and to change for good the way in which we are governed. I have no doubts whatsoever about the Prime Minister’s sentiments on the issue, nor those of the Minister, whom I regard as an hon. Friend indeed.

In his leadership campaign, the Prime Minister made only one commitment to legislation, and that was on democratic reform. He chose to use his precious and unique first speech to Parliament as Prime Minister to outline a new democratic settlement for Britain. However, even with such prime ministerial resolution, the dead-weight of conservative culture, bureaucratic tradition and the soporific comfort zone of colleagues all combine to slow, soften, and suffocate his vision to spread democratic power.

I have called the debate today to enable the Minster to reassure those of us who want democratic change that we should keep the faith, and to enthuse and motivate those who wish our Government well in this endeavour. He has been working hard, but he knows that outside there are no torches lit, no passionate debates being held, no sense of this being Philadelphia in 1787. New technology should enable literally millions of people to take part in debates. The media should be abuzz with excitement around creating free-standing, independent local government, democratising the health and police services in regions with elected representatives, enabling taxation and bonds to be raised and spent locally in accord with the wishes of local people, being clear about the federal nature of the United Kingdom and the powers of the nations and the regions of our country, and defining our rights and responsibilities in a British Bill of Rights.

I gladly give way to my hon. Friend, who has a long and honourable record in local government and in democratising local government.

I apologise for the fact that I shall have to leave before the end of the debate, Mr. Benton. Unfortunately, in this place, we all have to be in two places at once.

Would my hon. Friend agree that the elephantine gestation period between the idea and the concept, let alone the concept and the implementation, of the regional Select Committees is far too long? Would he also agree that one of the good things that has happened is the appointment of regional Ministers, but that they cannot do their job properly if they are not properly scrutinised and supported by regional Select Committees? That change could be made fairly quickly, irrespective of some of the other ideas that are in the Government’s White Paper.

My hon. Friend makes sound sense, as always. I believe that we all welcome the fact that regional Ministers have been appointed, but that has to be just the first step. There must be proper parliamentary scrutiny of regional Ministers and power structures. Equally, regional Ministers themselves could form the nucleus of regional government, if they chose to bring in as an advisory board two or three people from each of the key parties and started to give responsibility to people in the regions, perhaps on the basis of variable geometry. Perhaps in the north-east they would want to go a bit quicker, whereas in my region, the east midlands, which does not have the same sort of identity, we would go a little slower. If we were to let those things blossom, and give regional Ministers the authority to push the envelope and push the boundaries back a little, incredible things would happen, not least in terms of proposals for democratising health, the police, transportation and several other services. That could happen and be supported by Parliament.

There seems to be a view that if Parliament holds the Government to account for anything, it diminishes government. My view is that it enhances government. It adds value and can often save money to have effective scrutiny by people such as my hon. Friend—I do not flatter him at all—who have experience in the field, who have passion and who care about such matters. They often have something to give from this place rather than merely going through a formulaic process. I, too, wish for Select Committees and more powerful regional Ministers with advisory boards to be established in the near future.

It should be possible to generate excitement around the writing of a British Bill of Rights, or the writing of a written constitution for the UK. We should seek to have millions of founding fathers and mothers eagerly participating in debates and drafting documents. Passion and excitement should be generated and provoked by a Government who are committed to profound change. Instead, if we listen carefully, we can hear the scratch of a quill pen somewhere in the bowels of Whitehall: worthy, workmanlike and carefully crafted, no doubt, but not in the same league as the Prime Minister’s original starburst vision that he gave us all and enthused us with so much last July. We need to recapture that as we proceed over the next few months and as we move towards a general election.

I am happy to give way to my hon. Friend, who has great experience in local government, before I come to the end of my remarks.

The Prime Minister must revisit the policy area of democratic reform, give the democratic plate a vigorous spin and restate his vision for our democracy, so that the time between now and the writing of the next manifesto is used to work out how we can fully involve and excite the British people. Without their full understanding and participation, whatever change is introduced will not be theirs and will not, therefore, command their allegiance.

I congratulate my hon. Friend on securing this important and timely debate on issues that he feels powerfully about and on which he is speaking again today persuasively, as he has spoken and written in the past. I encourage him to say some more about the need in Britain for a Bill of Rights and a written constitution. Although the steps that the Government are taking at the moment are important, does my hon. Friend not agree that the vision that he is setting out for a much more democratised Britain can be achieved only in the context of such a Bill of Rights?

Sadly, this goes back to 1993, when I was the shadow home affairs spokesman in the future Prime Minister’s home affairs team. We wrote and agreed, and had endorsed by our party conference, not only that we should incorporate the European convention on human rights, but that the second stage would be a British Bill of Rights. Admittedly, that would come some 200 years after that of our compatriots across the Atlantic, but it is better late than never. We had, effectively, a draft of that Bill of Rights: I have a copy and there is, no doubt, one mouldering somewhere, perhaps on shelves in the Cabinet Office, that could be dusted down and used as a basis for debate.

Let every school and every sixth form debate what should be in a British Bill of Rights; let every Labour group, Conservative association and Liberal Democrat group in the localities debate what should be included in that; and let us do our job and pull together those thoughts, mediated properly through the Hansard Society, to form the core of what we would want to see in a British Bill of Rights. Those arguments are even more applicable to a written constitution.

If we have rights and responsibilities and a democratic framework in this country, let us write it down. What are we afraid of? Why should we have to engage in what John Smith called judicial archaeology to find out what are the responsibilities of a second chamber, a monarch or local government? Why can we not own this so that every schoolboy and schoolgirl, and every local councillor and Member of Parliament, can have it in their back pocket or purse? We could raise people with clarity about their rights under a written constitution.

One of the sad things about the current debate in the main Chamber is that a so-called constitution for Europe is so vague, woolly and amorphous, rather than being crisp, clear and inspirational and able to lead us to feel that we all want to be European and have our rights written down. Let us not make the same mistake in the United Kingdom. Let us start that debate in this place, start formulating our own written constitution and find out what we need to reform before we write it down.

Many things in our current unwritten constitution would be laughable in a written constitution. For example, it would not say: “There shall not be an election for the Prime Minister of the day; Parliament shall send the leader of the main party to Buckingham palace to be anointed as Prime Minister; there shall be an unelected second Chamber; there shall be no British Bill of Rights.” A written constitution could not be produced on the back of that without a lot of belly laughs from other countries around the world. We would need to get the parts in place and then write a written constitution. That is a fundamental thing that we need to do.

The Prime Minister cannot kick-start a written constitution given the current state of debate. However, a debate needs to take place in the country and in Parliament in order that a written constitution can first be drafted and modelled. I am sure that that was the Prime Minister's intention in July last year and I hope that it remains his intention today. The opportunity for significant, democratic change has not been missed and has not passed us by, but it requires reinvigoration and reaffirmation from the top. I hope that my hard-working hon. Friend the Minister, who is labouring away in the depths of the Ministry of Justice on so many important and detailed issues, takes that message to the Prime Minister. We need the Prime Minister to reassert leadership of the democratic vision that can sustain our country for the next 100 years.

I congratulate my hon. Friend the Member for Nottingham, North (Mr. Allen) on securing this important debate. I pay tribute to his many years of hard and creative work on building an increasingly democratic society. I also thank my hon. Friends the Members for Wigan (Mr. Turner) and for Leicester, South (Sir Peter Soulsby) for their contributions.

This is an enormously important subject. People often think that constitutional reform is a matter for a few parliamentarians locked away in the Library poring over old textbooks. That is absolutely wrong. As my hon. Friend the Member for Nottingham, North has so cogently pointed out, this fundamentally concerns everyone in our society, because it goes to the heart of who we are. In the end, it is about power: where it resides in our society, how it is distributed and how it should be distributed better so that we have a healthy, vibrant politics and society. There is nothing more important.

People often talk as if this matter is remote from the concerns of everyday life and perhaps think that concerns about public services, health, education, traffic, and all such matters, really drive politics. However, none of those issues can properly be decided unless we have a fully functioning democratic society. That goes to the heart of my hon. Friend’s comments. This is an enormously important issue and I assure him that the Government take it seriously. There is no need for the Prime Minister to reassert his leadership in this matter, as my hon. Friend said, because he is demonstrating it every day. It is important to him and to the whole Government. We will move forward on that.

Before I set out some of the steps that we are taking, I should like just to say to my hon. Friend that he was a little bit hard on the first stage of constitutional reform that the Government have already undertaken. I think that when he looks back in a few years’ time on the period since 1997 he will see an enormously significant programme of constitutional reform. He would have to go back at least 100 years to find anything equivalent in our history.

I shall remind my hon. Friend of some of the reforms. For example, we have had devolution in Scotland, Wales, Northern Ireland and London and a changed relationship with local authorities—perhaps that has not gone far enough yet and there is more to come—which is clearly dramatically different from 10, 12 or 15 years ago. Let us consider the vibrancy of political debate, which is often difficult for this Government, in Scotland and London at the moment. Such vibrancy of political discourse would have been inconceivable without the devolution measures that the Government introduced. The Human Rights Act 1998 was fundamentally important in bringing home to the British people essential rights that define who we are. Those rights, which belong to all of us, have been brought home to the British people by this Government.

Freedom of information, another area for which I am responsible, has been given a new lease of life, and has been taken forward to bring transparency to the practice of government. One of the most important and empowering devices that we can offer to our citizens is to make government more transparent. The Government have implemented that Act and are taking it forward to the next stage of its development.

My hon. Friend mentioned House of Lords reform, which has been an intractable problem in the governance of our country for many years. My hon. Friend, with his deep and intimate knowledge of our constitutional history, will recall previous attempts to reform the second Chamber that have failed for a variety of reasons. The intractability of that problem has defeated Government after Government. Almost everyone knows where we need to end up—a few may disagree—and that we must have a wholly or largely democratic second Chamber for the governance of our country.

It is absurd to have the current system, which has persisted for so long, but this Government have brought the governance of this country to a stage at which we can imagine that democratic second Chamber. We are close to publishing our White Paper on our proposals, but my hon. Friend should not underestimate the enormous degree of hard work, passion and commitment shown particularly by my right hon. Friend the Secretary of State for Justice and Lord Chancellor, who has worked tirelessly and met colleagues in the House of Commons and House of Lords endlessly to try to find a way forward. For the first time in our lifetime, we are at a stage at which can see a real prospect of a democratic second Chamber, and my right hon. Friend deserves credit for that enterprise.

My hon. Friend has been a little harsh about the achievements so far, but he is absolutely right that we must continue to move forward, and to drive forward. That is exactly what we are doing. I can offer him that reassurance. I understand his impatience, but constitutional change is an area, above all others, in which we must take people with us. We must prepare the ground carefully. That means that we cannot proceed energetically and publicly in a matter of weeks, and I understand my hon. Friend’s impatience about that. We must take months, but not years and years, and we will not take years and years.

This debate is timely, because we will shortly announce a whole raft of constitutional reforms, which, I hope, will encourage my hon. Friend. I assure him that we are not being suffocated as he fears. We are energetically working away, and it might reassure him if I take a few minutes to set out some of the areas in which we are moving forward.

We shall shortly publish our draft constitutional renewal Bill, which will be available for pre-legislative scrutiny—another innovation that the Government have introduced—which my hon. Friend, as an eminent parliamentarian, will welcome. Proper scrutiny of legislation is crucial, and is an area in which the governance of this country has been deficient in the past. I hope that he agrees that that measure and others that we have introduced are improving the process.

We have consulted widely on the various measures that could go into the draft Bill. There has been extensive consultation on the role of the Attorney-General. The Prime Minister has said that reform is needed, and there will be significant reforms to that role. We have consulted on war powers and the ratification of treaties. We have consulted on judicial appointments. We have consulted on protests around Parliament, which is a particularly emotive and symbolic issue, as my hon. Friend is aware. We have consulted on flag flying, which is also an important symbolic issue for the cultural expression of our national identity. Those consultations have now closed, and we are considering the responses and will respond in due course. We will announce the Bill shortly.

In December, we established a concordat between the Department for Communities and Local Government and the Local Government Association, which will take forward our commitment to work with the Local Government Association to try to find ways of increasingly empowering local authorities, which, as my hon. Friends have discussed, is so important. My hon. Friend the Member for Nottingham, North emphasised that a Bill of Rights and duties is fundamentally important. We have made it clear that we intend to build on the Human Rights Act 1998, which has been an enormous achievement.

When my right hon. Friend the Secretary of State for Justice and Lord Chancellor took the Human Rights Bill through Parliament, he made it clear that it was to be a floor not a ceiling. We are now in the process of building our approach to the next stage of this important reform. I hope that it will reassure my hon. Friend if I say a few words about our approach.

First, contrary to what some people are saying, we are not resiling from the Human Rights Act. It is important, and we want to build on it. We want to bring out more the responsibilities that are so integrally intertwined with the rights that citizens enjoy. That is important, and we believe that it will reassure people who feel that rights are for other people and not for them. That is an important strand of the work going forward.

We want to explore the rights and duties inhering specifically in citizenship. This is a complex and difficult area, and it is not about excluding anyone. We want it to be a genuinely inclusive process for all the peoples who live in these islands, but we believe that specific rights and duties inhere in citizenship. One area that we want to explore—I reassure my hon. Friend that I am not advocating this, but it is important to explore it—is whether there should be a duty to vote. Voting is a fundamental expression of our citizenship, and is obviously a fundamental act in our democracy, so it is important to look at that. We will also look at other ways in which to ensure that the democratic process is legitimate.

My hon. Friend will know that as part of the reforms that we are taking forward, we have looked at a range of measures such as modernising electoral administration to try to increase participation. We must look carefully at the levels of participation in society, because it is crucial, in everything that we do, that the democratic process is seen to be legitimate. People must have faith in that process.

Everything that my hon. Friend discussed would contribute to enhancing the legitimacy of the democratic process, but we can go further and look at ways of increasing participation. We must be careful, because if we have reached a stage in our constitutional development at which participation falls to the level that we saw at the last general election—and possibly even lower—we face the prospect of successive Governments being elected by a very small minority of voters, with other voters abstaining or voting against them. That must be cause for concern, and we must see what we can do to increase participation.

One measure that we shall take forward is to consult intensively with the British people, using new processes, on whether we should move the voting day to the weekend. Associated with that consultation, we shall look at other measures, and we must keep an open mind on that. As my hon. Friend knows, I announced in a written statement a review of voting systems, which sets out a survey of all the different voting systems that we have introduced in this country—again, a significant measure of constitutional reform. The debate about the first-past-the-post voting system often ignores the fact that we now have a plural system of voting arrangements in this country. It is enriched. The review of voting systems analyses experience and draws out some of the lessons.

When my hon. Friend considers what we are doing, I hope that he will feel able to take part in the debate about what is the most appropriate voting system. If one is concerned about participation and its implication for legitimacy, the alternative vote system—I stress that I am not advocating this, but it is a subject for discussion—

In the one minute remaining, will the Minister address the question of how to excite the media and the public to become involved in our democratic renewal?

My hon. Friend has put his finger on an important challenge for all of us. It is obviously my job, the Government’s job and the Prime Minister’s job to persuade the media not to be cynical about the process, and to understand that it is fundamentally about things that genuinely matter to people. It will not be easy, for the reasons that I suggested earlier, but we will shortly publish—there are a lot of publications on the stocks right now—our view about some of the ways in which we can better engage with the British people. If we can engage with the British people, online, practically and physically in town hall meetings up and down the country—

Sitting suspended until half-past Two o’clock.

Climate Change

When I was at school, the standard orthodoxy in geography lessons was that we were on the threshold of a new ice age. Another orthodoxy was that the world faced an era of unparalleled mass starvation unfolding as a consequence of a Malthusian population growth trap. Forty years later the science of global cooling has been replaced by the science of global warming and the Malthusian crisis has been solved by man’s capacity to adapt, using new technology. In the latter case, high-yielding crops delivered what became known as the green revolution. We need to be careful about swallowing orthodoxies. I have initiated the debate to make one straightforward point about the latest orthodoxy. I support the view that mankind might be contributing to global warming, but there is little evidence to support the view that the correct response at this time should be rapidly to decarbonise the economies of the world.

I was at school slightly more recently than my hon. Friend—probably about 30 years ago. One other orthodoxy to which he has not referred, and which has since been disproved, was the idea that we were going to run out of oil and gas by the end of the century. That was the theory of well-paid Government scientists who had research grants in the late 1970s. The same people, or perhaps their successors, are now coming up with the theories that I hope that my hon. Friend will do his best to explode.

That was an interesting intervention. The idea of a peak oil moment in the resources industry is an old chestnut that has been around for at least 50 years. Anybody minded to give the idea houseroom could do no better than read the outstanding paper that was written only a few months ago by Professor Peter Davies of BP in which that theory is decisively scotched—of course, it is complete nonsense.

On current knowledge, acting swiftly to reduce carbon emissions across the world could be as economically imprudent as it would certainly be morally reprehensible.

As my hon. Friend knows, I share many of his views. Does he agree that it would be a mistake to act too swiftly when, according to the Met Office Hadley Centre, last year there was a 12-month long drop in world temperature sufficient to wipe out a whole century of warming? In addition, China, which is supposed to be spewing out more carbon emissions than ever before, has had its coldest winter in 100 years.

There are a lot of measurement problems with global warming. There has not been any global warming for the past eight years, although that is not well known, and whether there was a rate of faster growth in the temperature of the planet in the 1930s or in the 1990s is hotly disputed—if I may use that phrase. There are also some interesting disputes about whether the last century or the mediaeval warm period was the warmest in the last millennium.

I am pleased that the hon. Gentleman has secured this debate, and I am glad to be able to squeeze in between the interventions of his hon. Friends. Does he accept that if the downside risks of not acting are greater than the downside risks of acting, given the scientific knowledge that we have—even with the qualifications that are put on that scientific understanding—it is imperative for us to act?

That is the nub of the matter. I shall discuss that in a moment as it is why I have initiated this debate.

To finish off my comments on the intervention made by my hon. Friend the Member for Shipley (Philip Davies), the summary of the Harvard-Smithsonian centre for astrophysics’ study on proxy climatic and environmental changes in the past 1,000 years states:

“across the world, many records reveal that the 20th century is probably not the warmest, nor a uniquely extreme climatic period of the last millennium.”

There are, of course, equally well-qualified people who dispute that vigorously, so a fierce debate is going on about this.

The Government are advocating a policy of almost completely decarbonising our economy over the next 40 years. That will mean drastic reductions in the use of fossil fuels on the roads, for heating our homes and in industry. Such a policy will cost a fortune and will represent a massive undertaking. It will also almost certainly mean a fundamental change in our way of life and will leave us less well off. We are embarking on such a policy without having properly thought through the consequences, or the alternatives.

Has my hon. Friend read the recent report by Professor David Newbury of Cambridge university, which concludes that if motorists were required to pay the true cost of the effect of motoring on the environment, they would pay fuel tax at 20p a litre? Our fuel tax levels are nearly 60p a litre, so whatever side of the argument one is on, there is not a case for further increasing tax on the motorist.

I need to think carefully about that point. At first blush, I am not convinced of the argument, so rather than dwell on that now, I shall move on.

Six conditions need to be met to justify the Government’s proposed action on carbon emissions over the next 40 years. The first is to establish whether the planet is actually warmer, which was what we were just discussing. Establishing that involves considerable measurement problems, but it is clear that the planet has warmed. The Intergovernmental Panel on Climate Change’s median estimate is 0.6 per cent. over the past 100 years, with a margin of error of plus or minus 0.2 per cent. Secondly, it needs to be shown that we are causing that increase.

Thirdly, we need to be confident that global warming will continue and that the so-called feedbacks that will come with any change in the temperature will not abate the warming. Fourthly, we need to be clear that by sharply reducing mankind’s carbon emissions, we can secure an arrest or reversal of temperature increases. Fifthly, we need to be sure that the main carbon producers of the world—the UK contributes about 2 per cent. of total carbon emissions—will co-operate and implement massive reductions with us. Sixthly, we need to ensure that the cost of largely decarbonising all the world’s economies is less than the damage that would be caused by a failure to abate carbon emissions. That was the issue raised by the right hon. Member for Oxford, East (Mr. Smith).

I intend to consider only the last of those six conditions today, although it is important to bear in mind that they all need to be fulfilled before any country embarks on sharp reductions in carbon emissions. As I have pointed out, several of those conditions might not be fulfilled and, contrary to popular perception, all six are highly controversial. There are strong majority views among experts on some of the issues, but the world of climate science is new and fast-changing and, contrary to what we are often told, there is certainly no consensus on many of those matters.

Like my hon. Friend, I have a sceptical frame of mind. It is important to consider this matter in such a frame of mind and not to be blind to certain evidence or science that is important in relation to climate change. He referred to initial conditions that he will not discuss at great length now. I want to mention one issue. On a number of occasions he said that we needed to be sure. Does he not recognise that, at least in the context of this debate, this is not a matter of being absolutely certain, but about the balance of probabilities? That perhaps makes his argument a little less forceful than might otherwise be the case.

That is an issue of cost-benefit analysis. Clearly, one can never be absolutely sure when one tries to mitigate a risk, but one has to apply a probability, and the balance of probabilities—51 per cent.—is clearly not enough to justify a complete restructuring of our economy. What percentage should be applied is one of the issues that we need to examine carefully.

People often invoke the precautionary principle. If that means anything, it should lead us to be wary of embarking on a policy unless we are clear that it is right. The risk of making a mistake, prejudicing global growth and consigning a substantial proportion of the world to continued poverty, not to mention the risk of hitting hardest the poorest in our own community—they are the people who pay for this—could be even greater than the risks of global warming. In other words, the precautionary principle is double edged. This is only another way of addressing the sixth condition to which I referred. The key question is how one weighs the benefits and costs of mitigation policies to remove carbon from the atmosphere against policies to adapt to warming once it has happened.

By far the lengthiest piece of work on the subject has been produced by Professor Stern, the former chief economist to the Treasury. He concludes that the damage caused by unchecked global warming would substantially outweigh the costs of reducing carbon emissions. The key question is: is he right?

Rather than going into too much detail, perhaps it would help if I gave the considered view of some of the world’s leading environmental and welfare economists on the subject. Professor Richard Tol of Carnegie Mellon university, who is a top environmental economist, said:

“If a student of mine were to hand in this report”—

the Stern report—

“as a Masters thesis, perhaps, if I were in a good mood, I would give him a ‘D’ for diligence; but more likely, I would give him an ‘F’ for fail.”

Professor Dr. William Nordhaus of Yale university, arguably the world’s leading environmental economist, has described the policy prescriptions of the Stern review as “completely absurd”. Professor Dasgupta points out that the implications of Stern’s logic are “patently absurd”. These people are queuing up. The list is so long that I do not have time to read out all the names, but what about a few more from the home team? There is Professor Wilfred Beckerman, one of Britain’s and the world’s leading environmental economists of the past 30 years and a former economic adviser to earlier Labour Governments. There is Sir Ian Byatt, the former director general of Ofwat; Professor David Henderson, the former chief economist of the OECD; Professor Alan Peacock; Lord Skidelsky—the list is virtually endless. To cut a long story short, they all say that Nick Stern has got it wrong, that he has overestimated the damage relating to global warming, and that he has underestimated the costs of decarbonising the economy.

Perhaps, though, we should not be as harsh on the Stern review as some of those academic colleagues. For a start, Stern does have some equally eminent supporters. More importantly, he has done us a service by setting out a framework for thinking about how to address this hugely complicated question.

My hon. Friend is making a case that he obviously believes quite sincerely. Does he remember that back in the 1980s, more than 100 eminent economists wrote to The Times, I believe, to slam the policies of Margaret Thatcher, saying that she was doomed to failure?

That is exactly my point. When we see a consensus, we should be wary of it. That one turned out to be completely wrong. Another from the list of those that we have had to address in the House in the past might be appeasement in the 1930s. A better one, which is more closely related to that cited by my hon. Friend, would be post-war Keynesian economics as a means of controlling inflation. That idea has now been overturned and rejected by the Labour and Conservative parties, but it was the prevailing consensus. To challenge that consensus in the economic community took a great deal of bravery in the 1950s and ’60s. It was down to the bravery of a small number of economists, mainly the Chicago school—whether we agree with everything that it said is another matter—that there was a breakthrough to enable us to re-examine it.

The hon. Gentleman has been very generous in taking interventions. In principle, there ought to be an objective scientific issue to be debated. Relatively few of us are expert scientists, but what puzzles me about this issue is that it tends to cause alignment on political grounds. I wonder whether he has any thoughts, because he is a thoughtful man, about why it tends to be people of the right who are sceptical about the science. Is it that climate change might imply some sort of collective action, which is anathema to them, so they look for the flaws in the science? That is an important question. Why does it tend to be the right that does not believe the science?

That is quite an interesting question. I have not come to debate this issue because I have a hidden agenda about attacking a new form of collectivism that might derive from the science. I have studied a good deal of the material carefully and come to the conclusion that we are rushing to take action about which we should be very cautious.

I wanted to defend Nick Stern a little, having had a go at him. This man stepped up to the plate and at least set the right framework for analysis, so even if he got the answer completely wrong, as I think that he probably did with his main conclusions, that should not necessarily be treated as a blot on his escutcheon. However, he really should stop digging. He is still trying to defend a position that has been pretty much discredited.

At the very least, even those who want to support the view in every particular would have to conclude that Nick Stern’s conclusions are deeply controversial. That point is beyond controversy. Therefore, the question that we should be asking ourselves is: should the UK, or the rest of the world for that matter, embark on such a radical restructuring of our economies on the basis of that controversial advice?

This is not just a question of Nick Stern. My hon. Friend will know that Al Gore’s film, “An Inconvenient Truth”, was ruled by a judge to contain at least nine inaccuracies, yet the Government have sent it out to every school in the country. Does my hon. Friend agree that that is more propaganda than science?

Absolutely. The Gore report is a scandal. The fact that it has been distributed to our schools reflects badly on the House. It has been comprehensively rubbished by a series of top papers produced by the American Academy of Sciences, so much so that even a judge felt the need to intervene in the debate. It should be withdrawn from our schools. There are many mistakes in it. If hon. Members want to challenge me on that, I will start going through them one by one, but if I do so, others will not get a chance to speak. I am not quite sure how many Members have put in to speak. At the moment, I know of only one, so I do have a bit of time.

At the very least, we all have to agree that the Stern report is deeply controversial. It should have been the duty of the Treasury and the Opposition parties to listen to some of the trenchant criticisms, but both, regrettably, have swallowed the Stern report whole. My party’s Front-Bench spokesmen welcomed the recommendations of the Stern report before they had even had a chance to read it, and I find that quite shocking.

Treasury Ministers, however, have done worse. A full year after the report’s publication, and with the benefit of a cacophony of dissenting material to hand, the Treasury published “Moving to a global low carbon economy: implementing the Stern Review”, which recommended that we proceeded as if none of the criticisms had been made. That beggars belief.

It is worth briefly examining some of Professor Stern’s many mistakes, although perhaps I will pick just one. Nick Stern has applied a discount rate of only 2.1 per cent. to his calculations, although the Treasury requires a discount rate of 3.5 per cent. for any other major project. There are some very good arguments, and some of the world’s leading economists, behind the view that the rate should be much higher than 2.1 per cent. The World Bank customarily uses a rate of 8 to 10 per cent., and 3.5 per cent. is considered historically extremely low.

This is not a trivial or academic point; it is quite fundamental. Just by using a sensible discount rate, Nick Stern’s conclusions would probably be put into reverse. In other words, he would have had to conclude not that we should be rapidly decarbonising the economy, but that we should, for now, be primarily adapting to climate change.

To arrive at his conclusion, Nick Stern had to make an extraordinary assumption: that we should value the welfare of every future generation, however far distant, to the same extent as our own. A moment’s thought shows us what a ridiculous assumption that is. If it were taken to its logical conclusion, as one of the many eminent professors whom I cited pointed out, we should start saving virtually all our income for the benefit of a future generation. Alternatively, as Ian Little, perhaps the world’s greatest post-war welfare economist, put it when I discussed the matter with him to ensure that my head was clear on the subject, we might as well start safeguarding the planet now in case the Martians decide that they have a use for it when they invade.

I find that a curious statement for a national politician to make. Is not thinking about the welfare, livelihood and liberty of future generations at the heart of the matter? Was that not the driving force behind our forefathers who fought in the second world war? If they took my hon. Friend’s line, those people would have appeased Adolf Hitler, done a deal and kept the British empire, and perhaps things would have carried on very well for a generation or two. However, it is surely incumbent on politicians in this place to think about future generations and their welfare and to act accordingly, and not to take selfish, self-interested, short-term decisions. That is the weakest point in my hon. Friend’s argument.

The best thing that I can do in response to that somewhat confused intervention is to move on.

Nick Stern has one powerful shot in his armoury, but for reasons that I cannot fully explain—only he can—it is not set out anywhere in the 700 pages of his review. I am talking about the thought that we are dealing not with damages that can be broadly estimated over 50 or 100 years of global warming, but the likelihood that the planet will cease to be habitable as a consequence of global warming. That might be true, but it is certainly not the view of mainstream climate scientists, who have queued up to disagree with it—most of them repudiate it. Most, including the Hadley Centre, which my hon. Friend the Member for Shipley cited, also repudiate the view that we should implement policies on the basis of what has become known as the “Save the planet” mantra.

I congratulate my hon. Friend on his excellent speech. Does he accept that if it is so desperately vital that we have low-carbon economies now, we should expect to see a much larger campaign for nuclear energy than there is from people across the political spectrum? The logic is that we should convert our electricity production to nuclear immediately, but that is not what even the most enthusiastic greens go for.

That is an interesting point about some of the people who argue most strongly for early action on global warming. There are interesting implications for Nick Stern’s discount rate analysis regarding what we should do in the nuclear industry. However, although I have been speaking for about 22 minutes, I have got only a little way through my speech, so I shall not detain hon. Members further on that point.

Even if we accept that there is a risk that we will fall off a cliff, or that if we do not take urgent action, we might suddenly face extinction, we need to weigh that against the other, similar risks with which we are dealing. For example, a number of leading scientists have told us that nanotechnology, bioengineering, meteors and pandemics such as avian flu will imperil the planet in the next 100 years. Of course, we are already taking what most people would consider to be reasonable steps to mitigate the risk of those things. Some experts might say that the amounts that we are spending are inadequate, and others that that is a waste of money. The point is that the threat of extinction from global warming cannot be exempted from the need to weigh its risk against those that I listed and the application of a probability function. That is where the idea of the precautionary principle breaks down completely.

Take meteors, for example. Astrophysicists are able to give us a probability function for the likelihood of being hit by a meteor. It is a small risk, but not a zero risk. If we were to apply what some people think of as the precautionary principle logically, we should stop investing in everything until we find the technology that could definitely enable us to cope with the very small risk of being hit by a meteor. Of course, we need to balance that risk against all the others against which the Government are rightly trying to safeguard, using reasonable assumptions about each one and employing a probability function.

The hon. Gentleman has spent a great deal of time on a critique of the Stern report, but suppose that it had never been written. Does he not accept the evidence of the intergovernmental panel on climate change that there are predicted effects and that the science indicates where we are going—the sea level and temperatures have risen and we can expect them to rise further? That being so, it is within our means to tackle the effects, whereas it is perhaps not within our means to tackle things such as meteors. Does he not believe that some action is needed?

I do. I was nearing the point during that intervention at which I would have said that there was some woolly thinking creeping in, but the Minister rescued herself a little.

The point is not that the science might be nonsense; rather, we should ask whether in response to the science, we should attempt to remove carbon from the atmosphere or find other ways of addressing it. That is the key question—the Stern review was set up to address that, but made a mess of it. I shall address how to come to the right answer in a moment.

The Stern cost-benefit analysis is almost certainly not correct; it is way out. Anyone who has looked at the evidence would have to conclude that there is something seriously wrong with it. We need to ask ourselves how much would it really cost to decarbonise the economy. The truth is that we simply do not know—the experts are only in the foothills of the subject. In answer to the Minister, while that controversy rages, the right Government response should be to prepare for global warming in case it happens, not to rapidly decarbonise. That means adaptation through, for example, allocating a much more sensible budget for flood and sea defences, not least, if I may say so, in my constituency, where the Government are not providing enough even to maintain existing defences. It also means more research into the best adaptive techniques, for example, in agriculture, sea defences and so on.

I disagree with the hon. Gentleman’s view of the risk and the need for urgent action on mitigation, but he has now mentioned adaptation. We are still in Sir Nicholas Stern territory, because he recommends action on adaptation. To tempt the hon. Gentleman one step beyond that, Sir Nicholas also says that retaining our forests and avoiding further deforestation is cheap. Would the hon. Gentleman take that step with Sir Nicholas?

I do not know. I would like to think about that, and I would need to do quite a lot of reading on the subject before coming to a view on something so technical.

For clarity, to avoid the woolly thinking of which my hon. Friend is such an enemy, am I right in thinking that he accepts the premise that climate change is to some extent man-made—

—yes, partly through the emission of carbon into the atmosphere? Does he accept that premise, but not that the way in which to deal with the problem is to reduce the amount of carbon? In other words, he does not disagree that climate change is man-made per se, but that reducing the amount of carbon is the way to deal with it. I am not clear on that and I wish to understand the terms of reference.

At the beginning, I gave a list of six conditions that need to be met, among which were that we need to be clear that the planet is warming, that we are causing it, and whether removing the effect that we might be introducing to the system can arrest or reverse the process. My personal view is that global warming is taking place and that there is, in the language of climate science, an anthropogenic signal, which might be large.

I have noted that arguments within the scientific community about the scale of that signal are now extremely vigorous. It is not true that the scale of the anthropogenic signal is settled among climate scientists. However, my hon. Friend asked for my personal view. I have read quite a lot on the subject, and my view is that the anthropogenic signal probably forms a large proportion of the increase. Nevertheless, we must bear in mind that the temperature increase was only 0.6 per cent. over the past century, with no further increase in this century, and a not yet fully explained cooling period between the late 1930s and early 1940s and the 1960s. In other words, we are back to the measurement issue that I raised a moment ago.

In addition, there is another measurement problem. Although we know pretty accurately the temperature at sea level for the past 150 years, our records are much poorer about temperature in the ocean depths and in the atmosphere, particularly in what is known as the tropical troposphere, about which a fierce debate is taking place. There are unreconciled differences in temperature readings from the tropical troposphere and sea level. Some have tried to come to a clear view about that dispute, but they have failed. The tropical troposphere has not risen in temperature by remotely as much as theory and models predict that it should have, based on what has happened at sea level.

I am grateful to my hon. Friend for giving way. I apologise for not being here at the start of the debate. It is a subject that interests me. Indeed, I was with the Minister in South Africa at the sustainability conference several years ago.

The nub of the matter is using science to establish why global warming exists, and we all agree about that. Another aspect, about which I have read, is the sun’s activity. Records show that there is far more activity on the sun, which is shown by sunspots. Indeed, not only is the earth warming but it is now thought that other climates are warming. We need to differentiate what could happen naturally and what is man-made. That is vital, and far more research needs to be done.

My hon. Friend has articulated in a few sentences one of the key minority dissenting views. The majority view, to which I tentatively subscribe, is that the increase is primarily anthropogenic. A serious group of people, mainly astrophysicists—I have some of their material with me—are convinced that the increase is not primarily anthropogenic but that it is caused by variations in the activity of the sun, particularly its interaction with parts of our atmosphere, especially cloud cover and the ionosphere. However, I do not want to go into the detailed science. Incidentally, most scientists who speak on the subject are from other parts of the scientific community, and have scarcely more legitimacy in commenting on the subject than we have. We need to listen to that much smaller, select group—the world’s leading climate scientists, particularly those of a certain type. I shall now do my best to make progress with my speech.

Given the uncertainties that I have flagged up and the controversies that are clearly raging on the subject, what should we do now? I shall list a few things. First, we need to get out of what I described a moment ago as the foothills of knowledge about the cost-benefit analysis. We should create a commission of our best economists to examine Professor Stern’s conclusions. The commission should include some of the leading critics of that review as well as some of its advocates.

Secondly, the Treasury needs to take a lead by creating an internal group, which should publish an annual assessment of the full cost of decarbonising measures taken during the preceding 12 months. We must have transparency. The public need to know what is being spent on decarbonising the economy.

Thirdly, the same Treasury group needs to examine critically whether the carbon trading emissions scheme, which is not a market-based scheme but a quota-based rationing scheme by another name, can be made to work. It should be borne in mind that all other attempts at quota-based controls have generated massive economic inefficiencies, and that many brought with them corruption and fraud. The European Union’s initial experiment has so far been a disaster, something that could easily have been predicted.

Fourthly, we should seriously examine introducing a carbon tax, initially at a low level, with its proceeds being allocated to reductions in general taxation elsewhere in the economy.

Fifthly, the Government should begin the process of removing all subsidies to carbon consumption still in the system. That raises some highly contentious political issues, and it can be done easily only with all-party agreement—and then only gradually. The sort of things that need to be considered include VAT on domestic fuel and power, red diesel and others. I do not advocate action now; I am saying that the Government should start examining such things. The reason is that most measures in this field distort economic activity and therefore, ceteris paribus, reduce economic growth. Removing the subsidies will increase efficiency and growth, provided that there are offsetting tax cuts elsewhere in the economy.

Sixthly, the Government should give much greater prominence to removing carbon subsidies in other countries. It is a scandal and the height of absurdity that the Germans are still subsidising their coal industry.

Seventhly, Nick Stern relied for much of his work on the political summaries of the IPCC panel. Another huge row about whether those summaries are accurate is now taking place in learned journals. Those who are interested might want to read World Economics, but there are many others. We need to find a way to include the Washington institutions and the OECD in the scrutiny of the IPCC process, to bolster the credibility of their conclusions, to ensure that their summaries are a fair reflection of the main text, and to review their methodology.

Eighthly, we need to find a more intelligent and systematic way of allocating research into global warming. I am reliably informed that such research is threatening to crowd out other important work in our universities. It is difficult for applicants to get a grant unless they can find a way of describing their research as being related to global warming—usually on one side of the debate. We need to come to a clear view about how much we want to spend each year, and ring-fence it. We also need to ensure a balance between those challenging and supporting the orthodoxy.

Ninthly, we should act only when the world can go forward together. The UK should not try to take the lead by cutting carbon emissions faster than other countries. It would be particularly absurd if we were to impose carbon-reducing measures that resulted in the closure of British industries, only to see those same industries reopening in China.

Does my hon. Friend agree that the argument is similar to the one put forward by CND in the 1980s—that if we were to get rid of our nuclear weapons, everyone else would follow? I was never persuaded by it. Does he agree that there is no real evidence to suggest that if we were to reduce our carbon emissions by 80 per cent. every other country would automatically follow suit?

I completely agree with my hon. Friend’s unilateralist-multilateralist analogy. Our actions must of course be multilateralist.

Tenthly, we must ensure that we do not use bogus or ropey arguments drawn in from outside the climate change debate to justify our actions. Among them is the idea that because fossil fuels are ultimately a finite resource we might as well end our dependence on them now rather than later. That, of course, is an absurd piece of economic illiteracy, and the argument could have been used at any time in the last 100 years.

Another such argument is that we should decarbonise our economy because it would make us more secure against blackmail by producers. For those old enough to remember the oil crises of 1973 and 1979—I am sorry to say that that includes me—it is an old chestnut, and we know the answer. Short-term interruptions to supply can be a major threat and need to be dealt with by a variety of measures, including stockpiling. However, long-term interruptions are exceptionally unlikely. That is because all resources cartels collapse and, in the end, all producers need to sell their product.

I should also like to throw in a few things that we definitely must avoid. First, we must do our utmost to avoid doing anything that could hurt the poorest, whether at home or abroad. As I said, it is the poorest, not the rich, who will be hit hardest by decarbonising at home.

Secondly, we must resist protectionism at all costs. A number of western leaders, including the EU industry Commissioner, Mr. Verheugen and President Sarkozy, have foolishly proposed that we consider protectionist measures to coerce China and other developing countries to introduce rapid carbon reductions, but that would be as economically suicidal as it was morally reprehensible.

Thirdly, we must avoid gesture politics as much as possible. I fear that the Climate Change Bill falls into that category, and on the basis of what I have seen so far, I do not think that I will be able to vote for it.

I want now to come to a conclusion. I have taken a huge number of interventions, but I think that I can bring my remarks together. Alarmism is breaking out everywhere on this subject. When the Government’s chief scientific adviser tells us that Antarctica is likely to be the world’s only habitable continent by the end of this century if global warming remains unchecked, and when their former chief economic adviser tells us that the damage by the middle of century might be greater than that caused by the first and second world wars put together, politicians may suspect that something is amiss with the advice that they are getting from their experts—and there is.

The issue of global warming is acquiring some of the characteristics of a religion. On the one hand, those who disagree with the so-called consensus are often treated to abuse, being described as flat-earthers and no-hopers or condemned as selfish and immoral.

The Minister has added to that abuse by saying, “You said it.” It is a pity that she is so disengaged from the points that I am trying to make.

On the other hand, toeing the line on global warming is becoming a new moral comfort zone in modern politics—a seemingly unassailable moral high ground. We need to be very wary when our political culture suspends the application of all reason and common sense to this debate. We need to be clear that it would be just as immoral to make mistakes in responding to climate change—mistakes that could trap the most vulnerable in the world in poverty—as it would to ignore the claims of those who press on us the need for urgent action, although much of the media, and particularly the BBC, seem to have been ignoring that point. Of course, apocalyptic predictions make good copy, and challenges to the so-called orthodox are rarely given a fair hearing.

I end where I began: some global warming is certainly happening, and mankind is probably contributing to it, but before we rush to decarbonise our economies, we must think most carefully about those who will be hit hardest by any mistaken restructuring of the global economy. Our primary duty must, as always in this place, be to protect the most vulnerable, at home and abroad, and they deserve better than they have had so far from policy makers on this subject.

I am pleased that the hon. Member for Chichester (Mr. Tyrie) has secured this debate. He made a thoughtful speech, but he will know from the many conversations that I have had with him that I disagree with most of what he said about the causes of climate change. I am not a flat-earther; I accept Stern and I accept that human activity is leading to an increase in greenhouse gas emissions, which are having a deleterious effect on the climate around the world, including in this country. The hon. Gentleman mentioned Antarctica, and I am glad that I am a Canadian citizen, because Canada includes part of the Arctic. I hope, however, that things will not get that bad if we take action in time.

Like many hon. Members, I have listened to a lot of debates on climate change on the Floor of the House, and they are dominated to the point of hegemony by those who are concerned about the causes of climate change emissions. The debate in Parliament is totally unbalanced, and we seldom talk about effects, although we talk a lot about causes. Action on causes is important, but so is action on effects, by which I mean adaptation. Let me give one example. On 22 November 2007, we had one of our new one-and-a-half-hour topical debates on climate change on the Floor of the House. Unfortunately, I could not get to the debate, but I read Hansard carefully afterward, and not a single word was said by any speaker about adaptation during that hour and a half. That is a shocking indictment of the politicians of the United Kingdom.

I pay tribute, however, to the hon. Member for Croydon, Central (Mr. Pelling), a Conservative MP who secured a Westminster Hall debate on the issue on 10 July 2007, which I attended. That was thoughtful of him, and he was absolutely right to raise the issue. We should talk a lot more in the House and in society about adaptation to climate change. When I say adaptation, I have in mind the definition used by the Intergovernmental Panel on Climate Change, which states that adaptation is the

“Adjustment in natural and human systems in response to actual and potential climatic stimuli and their effects, which mutually moderates harm and exploits beneficial opportunities.”

The Minister is well aware of my interest in this matter, and one of the things that got me going on it was a DEFRA publication on climate change from March 2006. In round terms, that publication contained 190 pages on climate change, of which a dozen, or 6 per cent. of the total, were on adaptation to climate change. When I went through that publication, I was outraged by that imbalance.

As the hon. Member for Chichester said, the UK is responsible for 2 per cent. of world emissions in round terms, and we have 1 per cent. of the world’s population. The intervention by the hon. Member for Shipley (Philip Davies) is the first time that I have heard him say anything with which I agree. He will correct me if I misunderstood him, but he said words to the effect that we must be careful not to end up beating our breast and driving down emissions in this country, while others do nothing. That does not remove from us the moral responsibility to drive down our emissions and to urge that on others, but what, as the hon. Gentleman rightly said, if we do it all and others do nothing? If we do it all and others do nothing, and one accepts, as I do, that human activity leads to deleterious changes in the climate, this country will still be hit with those changes. We therefore need to adapt to them, and we need to start adapting now.

UK emissions are within the control of the UK, but world emissions are not. Let us therefore have a bit more emphasis on that part of the climate change equation that is within the control of our country, rather than talking almost exclusively about that part that exists at the world level and which is outwith the control of our country. That is another example of imbalance.

My hon. Friend knows that I agree very much about the need to advance the issue of adaptation, and I hope to get a chance to say a few words about it if time permits. Does he not accept, however, that there is a real case for having international leadership, which is what this country has shown on the issue of mitigation? That was incredibly important in getting the Bali agreement, where all countries could come in at last, and in persuading the emerging economies of China and India that we will do our bit, which is the only way that we will ever get them to do their bit.

I entirely agree. The UK has a leading role, if not the leading role, in addressing the causes of climate change emissions internationally through agreement and debate. However, we must be realistic and we must bear it in mind that emissions have gone up massively around the world since 1990.

I thank the hon. Gentleman for his sensible comments about adaptation. The concern among many on our side of the debate is that much of the so-called leadership that the Minister mentioned is cost-free—it is a matter of great, rhetorical talk and of targets to be met in 42 years or beyond. There are great concerns that this is a wonderful bandwagon on which certain rather cynical political leaderships can jump, without achieving any results in the short-to-medium term. That is why the issue of adaptation is of great importance, and it is with that in mind that I thank the hon. Gentleman for raising the issue in a much more practical way without any high-flown rhetoric.

To some extent, I agree with the hon. Gentleman. The international discussions are cost free, but there is a huge cost to not having them and to failing to have international agreement. The Government are acutely aware that they must continue to try to build international action through agreement. Emissions in the world have gone up massively since 1990. For example, the figures for cars in the UK are slightly out of date, but a reply to a parliamentary answer in February 2006 said that between 1997 and 2005, the average CO2 emissions per kilometre of new vehicles sold in the United Kingdom—I do not think that that covers the commercial sector—went down by 1.2 per cent. per year. Despite all the publicity that we had, the emissions went down by only 1.2 per cent. a year. Between 2000 and 2006, which were the latest figures I could get, per capita—not overall—CO2 emissions in the United Kingdom increased.

While the Government have shown a lot of international leadership, people living in the United Kingdom are not as seized of this issue as the Government are in terms of changing their day-to-day activities as regards emissions.

No, I must make some progress. Therefore, we must look at the practicalities. We all know young people of 18, 19, 20 or 21 who are flying off to stag nights and weekend trips to Berlin. They are taking their gap year in countries such as Thailand, Australia or the States. Good luck to them, I say. Those opportunities were not so available for my generation because there were no low-cost airlines. However, those are all massively CO2 producing activities undertaken by the next generation who will cop for this and the effects of climate change.

I agree with the hon. Member for Chichester that some of the stuff that gets talked about on emissions is gesture politics. To talk about 80 per cent. is gesture politics. There is nary a Member in either House who will be an active politician in 2050. I think that the youngest is the hon. Member for East Dunbartonshire (Jo Swinson), who is 28. She might be an active politician then, but she is about the only one. It is easier for people to say that we will go for an 80 per cent. rather than a 60 per cent. cut. It is gesture politics and we need to be doing much more about adaptation. The Government are slowly starting to deal with adaptation. I do not have time to go into all of the replies that I received when I sent a written question to every Department except for the Northern Ireland and Scotland Offices, because of the devolved stuff. I asked them what they were doing about adapting to climate change. Some are doing a bit of stuff and some are doing nothing. I tabled a question to the Department for Environment, Food and Rural Affairs and I received a written reply from my hon. Friend the Minister on 6 December. It said:

“Defra is also leading on the development of a cross-Government Adaptation Policy Framework to be published in the Spring.”—[Official Report, 6 December 2007; Vol. 468, c. 1411W.]

I think that means spring 2008, which is good. But 2008 is now and we are just starting to have a cross-Government adaptation policy framework.

We have been talking about climate change for years and years. It is now 42 years until 2050, which is the 60 per cent. deadline. I have been aware of this issue for the last 34 years. I learned about greenhouse gases at university. In those 34 years emissions from around the world, including from this country, have gone up massively, not down. That is why we need to do so much more about adaptation. I mention briefly in passing that there are other institutions doing rather more than the Government. I urge on my hon. Friend the Minister a little faster progress co-ordinated across Government on adaptation to the effects of climate change. She should listen to the Association of British Insurers, the Woodland Trust, the Wildlife Trust, the Royal Society for the Protection of Birds, the Marine Climate Change Impacts Partnership and the British Beekeepers Association. She should also listen to the Met Office, the Environment Agency and the European Union Commission itself, which produced a very helpful document on adapting to climate change on 29 June 2007.

The hon. Gentleman is undoubtedly the greatest expert in the House on adaptation. Most of us are very familiar with his thesis, which he makes with great emphasis. However, given that he has only a few minutes left, can he give us a few specific points about adaptation that we should consider? He cites those organisations. I am familiar with what they are saying. Connectivity, for example, for biodiversity is very important. In using his knowledge and understanding of the imperative for adaptation, will the hon. Gentleman talk about the specifics that we should be doing now?

That was a very helpful intervention. We need to look at wildlife corridors so that those creatures and species that have to move north because of climate change have a passage north and do not get blocked by urbanisation. With regard to flood control, the Government have announced a big increase in spending on flood control, which is not nearly enough. I would pray in aid the Association of British Insurers, which probably knows that issue better than anyone, which says that we need to spend a lot more on flood control. We have to be a lot more careful about where we build houses because of future flooding. We have to be a lot more careful about coastal defences. We are already doing stuff on that, but we need to do a lot more, as the hon. Member for Chichester said. We need to consider the design of our buildings to make them more flood resistant. We need to change planning regulations so that the National Trust, which owns ancient properties, can put proper drain pipes on them. Such drainpipes would not be an original feature but will be needed for the heavier downpours. I am happy to give the hon. Gentleman some more examples afterwards.

Overall, what we need is more leadership, and more foot to the floor from the Government. Adaptation to climate change simply should not, and will not, wait. I accept that the climate out there is changing, and changing because of human activities. I accept that those human activities are largely unabated. From that I draw the conclusion that climate change will continue to occur and probably accelerate across the world in the next 50 years and that that will produce hugely negative effects both in the United Kingdom and in other countries. While we should do our bit in terms of international aid to help people adapt to climate change in other countries, particularly the poor countries that have been the worst affected due to our industrial activities, we must have a huge concentration on adaptation to climate change within the United Kingdom because that is the major thing that is within our control. International agreements, desirable as they are—I salute the Government’s efforts in that regard—are not within our control and neither is international action. Let us do what we can more quickly and more comprehensively in our own backyard.

I must admit that I came along this afternoon anticipating a routine—if I may use that word—Westminster Hall debate on the relative merits of adaptation and mitigation, and no one can say that the hon. Member for Chichester (Mr. Tyrie) has given us a routine afternoon, so I thank him for that. He is a thoughtful man. I first met him when he was a special adviser to the Treasury in the mid-1980s. I was a wet-behind-the-ears economist, and he was busy totting up the cost of Labour’s spending plans. I was trying to validate the Treasury’s numbers, so some things never change.

Let me try to find some common ground with the hon. Gentleman because I did not find very much. He has probably never seen a Liberal Democrat membership card. On the back, it says:

“Liberal Democrats exist to build and safeguard a society in which none shall be enslaved by ignorance or conformity.”

When he began, I agreed with him that we should be nervous of consensus, and of received wisdom. I also agree that those who have divergent views and who criticise the orthodoxy should be heard and their comments should be evaluated and treated with respect. [Interruption.] They should not be heckled, for example. The serious points that they make should be listened to.

Having said that, I have some reservations about the hon. Member for Chichester’s speech and my intervention on him earlier got to the nub of my concern. I have come to this issue relatively fresh, having been the party’s environmental spokesperson only since Christmas, so I do not regard myself as an authority on these matters. When I examined the climate change evidence, I wondered what I would conclude.

The first thing that struck me is that, although there is divergence of scientific opinion, as the hon. Gentleman says—I do not think that it is on the scale that he suggests, but there is some divergence of scientific opinion—I wondered why it tends to be those on the political right who are most sceptical. Why was it the Americans who were most sceptical and why was it that the social democrats of Europe were most ready to be convinced? There was a clear correlation. I think that the answer is the one that I suggested to him in my intervention. It is the sense that, if the diagnosis—I know there are a lot of steps from saying that there is a problem to reaching a particular diagnosis—is that, essentially, the rich west is the biggest part of the problem and we, the market economies of the rich west, may need to make sacrifices to tackle the problem, that is a very unpalatable message, especially if some sort of collective, co-ordinated action is involved. That diagnosis is anathema to the political right, as broadly defined.

The hon. Member for Shipley (Philip Davies) intervened earlier and said that the opposite would also be true and the left would think that such a diagnosis is great. But, of course, that is not true. That is because none of this is terribly palatable. Nobody really wants to believe in climate change; we would all love it not to be true. There are not votes in standing up to the rich west and saying, “Actually, we may have to have a lower standard of living and we may have to change the way we do things”. That is a tough sell.

I will not give way to the hon. Gentleman, if he will forgive me, because I think that I have the shortest time slot in the entire debate and I want to try to develop my argument.

That division of political opinion makes me suspicious. My point is this: if even President Bush, who presumably has no real incentive to believe all this stuff on climate change—he certainly had no real incentive to believe it when he became President—has started to believe it, and is now one of the people talking about India and China and international co-operation on tackling climate change, surely that is prima facie evidence that the scientific and economic evidence is quite striking. Otherwise, why would someone coming from that political perspective have moved so far? Clearly, one could say that, once someone is not fighting for re-election again, they can just indulge in rhetoric. However, I am struck by the fact that, although this is an uncomfortable political message, many politicians are accepting the need to make it and many of us would not do so if we were not convinced of the need for it.

I hope that the hon. Gentleman will forgive me for not giving way.

I disagree with the hon. Member for Chichester on a number of points. First, he said that it is the poor who will suffer from decarbonisation. Certainly, in the personal sector, the carbon outputs are coming from driving, and the people who do not have cars are poor people. We are also talking about flights, and the people who do not fly are poor people. On a global scale—this was what I expected to hear at some point in the hon. Gentleman’s speech, but we did not hear it—if the climate is changing and if sea levels are rising, it is the poor “that’s gonna get it” around the world. He argued that decarbonisation is somehow bad news for the poor; carbonisation is bad news for the poor, in the big picture. For that reason, the message that he gave was rather unbalanced.

I agree with the hon. Gentleman on the need for a sober cost-benefit analysis. However, as the right hon. Member for Oxford, East (Mr. Smith) said, my judgment is that the downside risk is potentially cataclysmic, and I do not use that word lightly; some of the things that could happen are pretty dramatic and would have to be seriously weighed in any such cost-benefit analysis. Some of the costs that the hon. Member for Chichester mentioned are not, in my judgment, as great as he suggested.

The hon. Member for Chichester also suggested that international leadership is a bit of a con and is irrelevant, and we are a small part of a big problem. I do not think that that is true. Funnily enough, I would cite the example of Germany, which has really gone hell for leather on renewables and made huge strides on them. No doubt the hon. Gentleman may think that Germany perhaps got the cost-benefit analysis on renewables wrong. Nevertheless, if renewables is part of the response to climate change, the fact that Germany has a comparable economy to ours and has seriously gone for renewables and delivered a huge amount in that area enables us to shame the British Government for their pathetic record on renewables. Because the British Government are hearing this all the time—“Germany has done it, Germany has done it, another country has done it and our country has not done it”—they are starting to move on renewables. Therefore, it is not an entirely empty argument that, when one country provides a lead, other countries can be shamed, cajoled or encouraged to follow. One country demonstrating that change can be achieved does provide a lead. There is an issue about unilateral action, and there is some evidence that there is a role for leadership.

I would like to return to the central point made by the hon. Member for Chichester. I fully accept the argument for a cost-benefit analysis, but I also agree with the hon. Member for Wolverhampton, South-West (Rob Marris) that adaptation has been very much the Cinderella at the feast; I am not quite sure if that image works, but hon. Members will know what I mean. We have heard little about adaptation and I was thinking about why that should be. I think that the answer is straightforward. From a Treasury point of view, adaptation has a price tag attached to it. Mitigation can be achieved through carbon pricing, emissions trading and all the rest of it, and it is not a Budget line; it is there, it comes through, but it is not a Budget line. Adaptation, by contrast, is a Budget line. I agree with the hon. Gentleman that Chichester needs better flood defences, but that is a public spending line and I think that that is the nub of the problem. That is why we do not hear much about adaptation. As the hon. Member for Wolverhampton, South-West says, adaptation is not only about public spending; planning, reform and other measures could help.

I think that that explains why we hear so little about adaptation. The draft Climate Change Bill had virtually nothing—only a tiny little bit—about adaptation. I think that it is being beefed up a little, thanks no doubt to the hon. Member for Wolverhampton, South-West. When the Bill comes to this end of the building, I hope that the hon. Gentleman will help to beef it up some more.

Where do we go from here? I am puzzled by the suggestion from the hon. Member for Chichester that there is a considerable diversity of opinion on the science. I am not convinced that the scientific viewpoints on climate change and its causes are as diverse as he suggests they are, but we can differ on that. My sense is that the leading-edge science is well ahead of the international consensus of opinion. The IPCC assessment is a consensus document and tends to be what the hon. Gentleman would no doubt call a lagging indicator. It is not a leading indicator at all; it tends to follow behind scientific opinion, because it has to get all the Governments to agree, and some of the scientists who are most worried about climate change cannot get their latest evidence included. Consequently, there is a time lag. The scientific consensus is a lagging indicator in the IPCC and that makes me think that the case for urgent action is growing.

Climate change is not a philosophical issue. My sense is that the scientific opinion is much more alarming than the hon. Member for Chichester thinks it is, and so my sense about the cost-benefit analysis is different from his. I accept the need to evaluate mitigation against adaptation and I also accept the need to look after the most vulnerable people, although I conclude that the best strategy to help them is to treat this issue more seriously, because my judgment is that, in the long term, serious global climate change will ultimately hit the poor most of all and that is what I am most concerned about.

It has been an interesting afternoon. I thought that we were in for a run around the course and a discussion simply about adaptation; I had not realised that we were in for a “sceptic fest”. Nevertheless, it is always good to test one’s own beliefs and to go through the arguments to make sure that they are robust.

Certainly, nobody could accuse my hon. Friend the Member for Chichester (Mr. Tyrie) of not having thoroughly researched his subject, although I am led to very different conclusions from those that he reaches. Despite the sceptical rhetoric that he couched his opening remarks in, we are not so very far apart in our views. He conceded that some global warming was happening and that—I think that I wrote this down verbatim—“man is probably responsible for part of it”. If we accept the principle of anthropogenic climate change, we are simply discussing the degree to which it is responsible for climate change as it is happening now.

Climate change is happening now. I have been to the Arctic. I have seen the vast stretches of open Arctic sea water where there were frozen ice caps just a few years ago. In 2007, the Arctic summer ice reduction was 30 years ahead of the predicted melt rate of the most advanced climate models. If melting continues at that rate, before 2030 the Arctic ice shelf itself could completely disappear in the summer months.

I also had the opportunity to visit the Arctic and I saw the retreat of the glaciers there, which was very visible. However, this takes us back to the IPCC assessment, because the IPCC is, in fact, a consensus body. It tries to find agreement among the many countries that are involved. There are many scientists on the IPCC who would go much further than the IPCC report, alarming as it is.

Absolutely. The right hon. Gentleman, who has a great deal of experience in this sector, makes a key point.

I must also agree with the hon. Member for Northavon (Steve Webb), who speaks for the Liberal Democrats, that the IPCC is, by definition, a lag indicator. If my hon. Friend the Member for Chichester could point to at least one Government who were dissenting from the IPCC report, his remarks would have a little more credibility. Of course, I am not suggesting that there is no scientific dispute. There will never be an end to scientific dispute. As long as there are more than two intellectuals, there will always be a debate on any given subject. It is good that there are sceptics out there questioning the science—no knowledge on this subject is perfect. However, on the basis of a rational assessment of the risks, very few people, and certainly no single Government, would now doubt that the climate change effects being seen all around us are man-made and that we should act to try and prevent the catastrophic effects that will follow if we allow the world temperature to rise rapidly to 2° above pre-industrial levels.

Will my hon. Friend explain why, over the past year, we have seen the single fastest temperature change ever recorded—a reduction in world temperatures of between 0.65 and 0.75 per cent.—and why China has had its coldest winter in 100 years, despite increased carbon emissions?

Absolutely. We are seeing an extraordinary change in weather patterns. With global warming, we could see a 2° rise, which sounds very boring and quite slight. However, the real impact of climate change is an increase in extreme weather patterns, which is why Africa’s worst floods in three decades hit 23 countries from Senegal to west Somalia, and affected 2 million people, in 2007; why Nepal, India and Bangladesh were hit by their worst floods in living memory affecting 41 million people; why two category 5 hurricanes and unusually heavy rains in central America and Mexico affected more than 1.5 million people in 2007; and why, at the height of the flood in Mexico, more than 80 per cent. of the state of Tabasco was under water.

With climate change, we are seeing not just a steady, manageable, predictable rise in temperatures, but violent, global weather patterns and, of course, fluctuations, which explains the hurricanes and catastrophic losses recorded by the insurance industry. If my hon. Friend the Member for Shipley (Philip Davies) goes to the City of London and asks about pay-out rates from insurance companies 20 years ago, compared with today, he will find an extraordinary seismic shift. That is why the capital markets and business are taking climate change very seriously.

Those who doubt the scientists and cannot come to a consensus, should consider what the most progressive businesses, nationally and internationally, are doing. My hon. Friend should go and ask his old employer, Asda, or Wal-Mart, what they are doing about climate change. He will find that his old employer, whom he cites quite frequently, is taking climate change extremely seriously. The chief executive of Wal-Mart has signed up to a massive reduction in its carbon emissions and is not waiting for the Government to tell it how to do it. Progressive, responsible, private-sector organisations, such as HSBC, BP, RTZ, Marks and Spencer and Tesco are not waiting to be told by the Government what they should be doing, but acting now. They are doing that not just because of the imperative of climate change or because that is what their consumers and customers are telling them to but because they realise that it makes good business sense. They also realise that squeezing out fossil fuels and decarbonising their production costs makes sound economic sense.

Companies such as BP, GlaxoSmithKline, RTZ and General Electric have all managed to reduce their overall operating costs by hundreds of millions of pounds—BP has saved about $500 million over seven years. That money has gone straight to the bottom line. It is never wrong to get rid of waste and inefficiency, to bear down on the cost of energy and to squeeze out manufacturing costs. I worked in the oil industry. In 1999, the cost of a barrel of oil fell below $10; at times, it now reaches nearly $100—an extraordinary rise in the cost base.

I can tell hon. Members what the single biggest threat to poor people is: it is the spiralling cost of fossil fuels. Never mind climate change—in the short term, the fuel- poor and those dependent on fossil fuels for heating and cooking will be the ones to suffer. They are the ones being squeezed the most by fossil-fuel dependency and who will benefit the most from actions that we should take to reduce that dependency, to tap into the potential of renewable energy and to ensure the long-term, cheap, predictable cost of renewable energy. The world’s poorest people, in places such as south-east Asia and sub-Saharan Africa, will be hit the most if we do not tackle the causes of climate change, and adapt and mitigate. They are the people who require adaptation—never mind us in the UK, who will probably be among the last to suffer the ill consequences of climate change, which are being felt already by people in Bangladesh and sub-Saharan Africa. They suffer already from drought and flooding and feel now the direct consequences of 200 years of industrialisation. We cannot sit back and wash our hands. We have a moral responsibility, not only to our own people in the UK and those abroad, but to future generations. We cannot sit here complacently.

I am sorry; I will not give way.

Some say that we should act for long-term climate change reasons, others because of the spiralling cost of fossil fuels. I do not believe in peak oil any time soon, but I do believe that, whichever way we cut it, the cost of oil and fossil fuels will continue to rise in the long term, not just because it is running out, but because, given consumption patterns and the demand from the fast-growing economies of the far east, pressure on those reserves will increase—even if they are not going to run dry tomorrow.

Those factors will push up the cost of oil and fossil fuels. We should do as much as we can to squeeze out our dependency on high-cost fossil fuels and to invest in clean energy and the technologies of tomorrow. We should follow the model of places such as California, where people have realised that non-polluting, sustainable forms of economic progress are the way forward. Look at sunrise technologies and silicon valley. Look at the entrepreneurs whose private capital backed the fast-growing businesses of the ’80s and ’90s and who are now looking to the green-tech revolution and at sustainable forms of economic growth. They see that as the big future.

That is what we should do in this country. We should do exactly the things that the hon. Member for Wolverhampton, South-West (Rob Marris) spoke about. In our own backyard, we should be looking at climate change and empowering local communities and local authorities, which need the power and responsibility to frame solutions that are right for their areas. For example, some of the things that we need to do in the south-east, on connectivity and flood defences, differ greatly from what needs to be done 200 miles away in Derbyshire. Pockets of local and regional sub-climates will be impacted on much more than places elsewhere. We need to think very carefully about that.

Biodiversity has not been mentioned yet—

Order. I apologise for interrupting the hon. Gentleman, but I want to give the Minister the chance to respond.

With that, Mr. Benton, I am very happy to draw my remarks to a conclusion. I look forward to hearing what the Minister has to say.

For the very first time in my life, I must say how incredibly grateful I am to the hon. Member for Bexhill and Battle (Gregory Barker). He has done a superb job of demolishing the arguments of his hon. Friend the hon. Member for Chichester (Mr. Tyrie), allowing me to come straight to adaptation. He has so wonderfully espoused the cause of mitigation, for which I am extremely grateful.

I congratulate the hon. Member for Chichester on acquiring this incredibly important debate. Although he spent a great deal of time on the Stern report, he acknowledged that climate change is happening and that it is man-made. The Government are responding to the science. If Stern had never existed, the science would still dictate that we have to address what is now the misnomer of global warming, but which is definitively climate change. The climate is changing and we have to adapt.

We are working hard throughout the Government both to ensure that all our operations, investments and policies take into account the unavoidable impacts of climate change, and to facilitate adaptation in every sector of UK society. One of the cross-Government public service agreements for the new comprehensive spending review period is for the UK to:

“Lead the global effort to avoid dangerous climate change.”

That target includes an objective, shared throughout the Government, for the UK to develop a robust approach to domestic adaptation to climate change, and encourage adaptation to climate change internationally.

I shall not give way, because I have so little time. We have put in place a world-leading resource, the UK climate impacts programme, to provide information and tools that all types of organisations can use to help them adapt to the risks and opportunities of a changing climate. UKCIP is also working with the Met Office’s Hadley centre on the UK 21st-century climate change scenarios, known as UKCIP08. Those scenarios are due to be launched in November this year, and they will provide probabilistic UK climate projections up to 2099. They will be absolutely critical for doing the work to which my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) referred. The projections will provide more localised detail than we have ever had, drilling down to 25 km grid squares over land, regions and river catchments. The UKCIP08 scenarios will support risk-based decision-making on adaptation, and they will be a major tool for understanding the risks that we face and how we can respond to them.

We have already set up a new adapting to climate change programme, led by the Department for Environment, Food and Rural Affairs, to co-ordinate action throughout the Government and drive adaptation throughout society, the economy and the natural environment. Reference was made to biodiversity, and as Minister with responsibility for biodiversity as well as for climate change, I know how critical it is. From the work of the Royal Society for the Protection of Birds in particular, on the way in which birds already have difficulties finding suitable habitats and moving north, we already know that we need wildlife corridors to protect our biodiversity. There will have to be a huge programme of work, and Natural England, which is very much devoted to it, already has an adaptation strategy.

We have three main areas of work in our adaptation programme: the Climate Change Bill, to which the hon. Member for Chichester referred, the adaptation policy framework document, and the new local government performance framework. The Climate Change Bill, which is on Report in the House of Lords, not only sets statutory targets for emissions reductions, but introduces a legislative framework for adaptation.

The Bill requires the Government to produce a national risk assessment on adaptation, which we will follow with a cost-benefit analysis. No doubt, the hon. Gentleman will wish to contribute to that analysis, and I hope that as he approves of adaptation, he will join us as we try to create a national risk assessment so that we can properly develop policies to meet those risks. The Bill also requires that we produce a national programme of work every five years, with interim updates. In addition, it gives the Secretary of State the power to request reports and action plans on adaptation from public bodies and statutory undertakers, such as water companies. Those aspects are new, and I hope that my hon. Friend recognises that we have responded to his arguments in particular, and to the arguments made by many others, who either responded to the consultation on the Bill, or indeed, were critical in the House of Lords.

We are also developing an adaptation policy framework, to which my hon. Friend referred. The framework will identify the key impacts and vulnerabilities that we face. It will set out what action the Government are already taking and provide a road map for the way in which we will meet our statutory commitments under the Climate Change Bill. My hon. Friend quoted my parliamentary answer that the document would be available in the spring, and I know how anxious and frustrated he is. We have agreed that it will be produced as the Climate Change Bill becomes an Act, meaning a small delay but one of which he should approve, because it will enable us to take account of the amendments that we are making in the House of Lords. It is more appropriate to align that work with the new framework that will arise from the legislation. The APF will set out a strategic vision for a UK that is adapting well to the impacts of climate change, and it will explain our understanding of the existing barriers to adaptation and the role of the Government in addressing them.

We have also introduced climate change adaptation into the new local government performance framework. The new indicator will require local authorities to assess the risks that climate change poses to the delivery of their services, and to draw up and implement action to address those risks. It will help to ensure that local authorities are more prepared for the climate change risks to service delivery, local infrastructure, businesses and the public. Negotiations are still under way, but we have been pleased with the initial positive response from local authorities during our consultations on the indicators.

The Local Government Association has also set up its own climate change commission, whose recent report we warmly welcomed. At the heart of our work on climate change is the recognition that it is a cross-cutting issue. An example of that is the recently published water strategy “Future Water”, which was launched last month. That strategy has adaptation at its core. It is amazing that the lack of water in London is comparable with that in many Mediterranean countries. The water problem in many parts of the country is much more serious than many people appreciate, so addressing the questions of drought, water shortage and so on are important. We will do so, and the issues of water efficiency, maintaining sustainable supplies, and surface water drainage will all be critical to the development of that water strategy.

We have also been working closely with our colleagues from the Department for Communities and Local Government on the supplement to the new planning and policy statement—planning and climate change. It was launched in December last year and sets out how planning should help us to shape places with lower carbon emissions that are resilient to the impacts of climate change. Several people mentioned that issue, and again it is critical. We must ensure that the new homes we build, and those that we already have, are protected, because we anticipate more severe weather patterns and more flooding as a consequence. We have dramatically increased the flooding budgets, and we are dealing with coastal erosion, too.

The hon. Gentleman did not ask me any questions about that, but he certainly commented on coastal erosion in his constituency. I understand how he feels about that, but DEFRA concluded that the council’s scheme appraisal did not adequately demonstrate that the preferred option was the most appropriate. We will not be able to keep in place every inch of our coast, and we will have to understand that at times, allowing nature to come into our coastal areas is one of the best ways in which we can protect against flooding elsewhere. Those are difficult judgments, but I assure the hon. Gentleman that the decision has not been taken lightly; it has been carefully assessed.

More widely, throughout the Government, the Department of Health has recently published a report on the health impacts of climate change, and the Department for Transport has plans for its own adaptation strategy. In my Department, we are setting up a dedicated team to work with the agricultural sector to help it adapt its businesses in the most sustainable way.

I should be grateful if the Minister would confirm exactly what she is telling my constituents. Is she saying that the decision has already been taken to release a lot of land to the sea, or is it still a matter for debate and discussion?

Indeed, it is a matter for debate and discussion. I simply make the point that it is only honest to understand, say and accept that it is not possible—I use the term carefully—to protect every inch of the coastline. Those are matters for debate and for difficult decisions, and of course, more consideration will undoubtedly be given to the issue. We hope that we can persuade authorities that they should work on coastal defence plans.

There is undoubtedly a need for us all to work together to protect the very poorest people, as the hon. Gentleman said. I have not the slightest doubt that we must reduce our carbon emissions to allow space for the carbon emissions of the poorest economies in the world to develop. That is why there must be a global deal on mitigation and adaptation. If he had met, as I met on Monday night, a woman from Bangladesh who has rebuilt her home five times because of the floods, and now receives support from this country and so many others that are trying to help developing countries, he would understand that there is no conflict. We must mitigate and adapt in this country certainly, but we must also enter into that global agreement. Nothing else will save the planet.

Post Office Closures (Mole Valley)

I am grateful for the opportunity to debate this subject, Mr. Benton. I thank the Minister for attending, at least to listen, and I hope that he will pass on the information. He must feel like a one-man relay; he has a team on one side, and he is standing on his own on the other.

I looked up the Minister’s constituency. It is completely different from mine, but I have some understanding of it. Originally, I came as an ethnic minority immigrant from a very rural area of New Zealand to work in one of the deepest, darkest, most difficult areas in inner London, so I have some idea of the sort of problems that he faces, although I have moved to a mostly rural area. My constituency has real farms, some semi-rural. It is geographically the largest constituency in Surrey, and the electorate is somewhat bigger than the Minister’s. It has two small towns and approximately 32 villages, and the proportion of elderly people is equivalent to the proportion of votes that he received at the last election.

Transport is predominantly by private car. There are some buses and there is a little bit of train service, but they are not much use to local people, particularly for getting to post offices and so on, because services run predominantly along radial lines to and from London. As I said, a considerable proportion of the population—about 60 per cent.—are elderly, and the proportion is slightly higher in the areas where post office closures are being suggested. One must add to that the fact that in some villages, particularly those near farming areas, there are many families whose members do not or cannot drive—or at least mum cannot drive because the car goes with dad to work—or do not wish to drive.

Many outsiders see Surrey as green and wealthy, but it is mixed. I could take the Minister to some of the villages in my constituency, particularly the deeply rural ones, where people are extremely poor. The mobility of such people is also extremely poor. Life expectancy in Surrey and Mole Valley is high, but that brings access problems, because quite a few people there are elderly, and some are very elderly. I was intrigued by a Help the Aged survey pointing out that between 2001 and 2005, the proportion of the elderly who used the post office at least once a week rose in both rural and deprived urban areas. Some 99 per cent. of older people in rural areas consider their local post office to be a lifeline, and 88 per cent. would have to make special travel arrangements to reach alternative services. That applies particularly to the areas in my constituency where closures are suggested.

My Surrey villages have been under threat from a number of events. Village shops have gone and village halls have been hurt by recent licensing legislation, although that is not the subject of today’s debate. There have been a number of post office closures in my constituency over the years, but on this occasion seven closures are threatened. Seven closures is fairly savage, and most of them will have a severely detrimental effect. I realise that, realistically, asking for all seven post offices to remain open would be whistling in the wind. From looking at the results of the consultation and the changes that have occurred, it is particularly apparent that I am unlikely to get any, but I hope that the Minister will think carefully and perhaps pass back the information that I give him as part of the consultation. I shall pick several of the post offices, touching first on some of the most important ones, the closure of which would be severely damaging.

I do not know whether the Minister knows Surrey at all, but I shall start with the post office at Mickleham, which is a small village tucked in under Box Hill. On the other side of the village, some distance away and hidden by trees, is the busy A24 dual carriageway. The village is well known for the Running Horses restaurant and public house, the Box Hill school and Rose’s store and post office. Rose’s is a true community store. Several years ago, the then owner and postmistress wished to retire, so the people of Mickleham reached for their cheque books and wallets and the whole community bought the store. It is now run on its behalf by an enthusiastic postmistress and her equally enthusiastic partner, who share ownership with the village.

A high proportion of the community are elderly, and a surprising number are very elderly. Royal Mail’s figures say that 63 per cent. are retired. Some have cars, some prefer not to use cars, and some I would prefer not to use their cars, but all shop at the little local store. Some residents of Mickleham are unable to go elsewhere because they are elderly, disabled or children who attend Box Hill boarding school, which is an international school with many pupils from overseas. They have no access to postal services other than at Rose’s store and post office. I am being a little cautious because one young lad said to me, “Well, if the post office closes, my school report will be much delayed getting home to China.”

If the Mickleham post office closes, private transport will be the only choice for pensioners. They will have to go to the post office by car. Yes, there is a bus, but the service is pretty irregular, and going on foot is not a realistic choice. The store owners and managers accept people’s difficulties, particularly those of the elderly in the area, and they deliver to and work with residents in their homes, including by providing some post office requirements. I probably was not expected to be able to say that, but those residents would not get those services otherwise.

The local parish council’s reaction has been extremely vigorous. The council points out that Rose’s store is the only shop in the area; that it is central to the village; that it serves commuters, farmers and other workers, young families and retired people; that it is a general store and the only post office; and that it is used by the people of Mickleham parish, as well as by the pupils of Box Hill school, the staff and pupils of St. Michael’s school, St. Michael’s church, St. Michael’s community nursery, the Juniper Hall field centre, the Surrey Hills area of outstanding natural beauty project office, the Surrey Wildlife Trust office, the National Trust offices for the North Downs, the two local pubs, and a hotel, café and restaurant.

Many local residents, particularly those who are ageing, work from home. The post office is vital to them. The alternative would be to move full post office facilities to Leatherhead or Dorking, which would involve a six-mile round trip that is not easy. Parking, including disabled parking, is available outside Mickleham post office, and a small ramp is being developed for the severely disabled. Those facilities are not easily available at the alternative post offices.

Another post office that I should like to mention is the Abinger post office at Abinger Hammer, which is a very old and quite famous village on the busy A25. Because the village is so old, the A25 is particularly narrow there, but it is still as busy as one would expect from a road called the A25 and the footpath is very narrow. The retail areas in most villages in the region were busy 100 years ago, but now they have gone. The exception for Abinger Hammer is the post office, general store and tea shop. That is like a business with three legs and, like the three-legged stool, if one leg goes, it will fall over.

The post office serves Abinger Hammer and, unlike Mickleham’s, the area beyond it, which goes way back south into the country lanes all the way to Holmbury St. Mary. I mention Holmbury St. Mary because it has a little post office that is not used much and is closing. All the people between those two villages and beyond will have to go to Abinger Hammer, as many already do. If Abinger Hammer closes, they will have to go to Gomshall, which is where the nearest post office would be, but travelling there would be quite difficult.

I have received a large number of sad letters from my constituents about the post office closures. Most of the letters are about the Abinger Hammer post office, and many are from very worried, elderly people, a number of whom are disabled. There are still elderly and disabled people in this country, particularly in country areas such as that around Abinger Hammer, who do not understand or have cheque books and who do not use banks. They use cash for everything and rely on the post office to get it. The number of elderly and disabled people is surprising, and they will be severely affected.

There is a bus service, but it is erratic and many such people cannot use it. They time their shopping around the post office. I mention that because one complaint that has been made about the Abinger post office by outsiders—this is mentioned in the Royal Mail dialogue—is that it is not open every day. That does not matter in a village area such as Abinger Hammer, because the village people will shop on days when the post office is open. That is why the system works. It is extremely likely that if Abinger Hammer lost its post office, the other two businesses would close. If that happens, the village as we know it will be gone. It will have the structure, the old houses and the Abinger Hammer clock, but it will not have those three remaining retailers.

The last rural post office that I want to discuss is the one at Effingham Junction. Most of the points that I have made apply to this post office, so I shall not repeat them. Effingham Junction is a strange village in that it sits alone, isolated. It is near to a railway station, but one that is not suitable for the people who live there. The village has a high population of elderly people and a large number of families. Many of the mums cannot drive, either because they do not have licences, or because their families have one car and dad has the car in the day to go to work.

I am running short of time, but I want to discuss two more non-rural post offices that are in the main towns of Leatherhead and Dorking. It is disturbing that the Royal Mail usage figures—as both the postmasters and I see them—do not fit with the postmasters’ understanding. They are gross underestimations, which was why I asked the Minister about the mode and method of assessing usage. He gave me a holding answer and I received an answer yesterday saying that the query had been passed to the Post Office to get an answer. Unfortunately, therefore, I cannot discuss the answer today, but there is a distinct feeling, particularly at the Kingston road post office in Leatherhead, that the figures are wrong.

The owner of the Kingston road post office bought it about six years ago. He is an extremely enthusiastic gentleman who works exceptionally hard, and in the past 12 months, he has spent a considerable amount of money on refurbishing and modernising his shop and shop front, including the post office sections. As he, his accountant and the Inland Revenue understand the figures, they have gone up year on year. I wonder whether the Post Office saw that his post office was between two others and simply picked piggy in the middle. If it did, that was a big mistake. His post office serves one of the most deprived wards in Surrey, but it is different from others because around and behind it are a considerable number of firms on industrial parks. When a single footfall comes in off the industrial parks, it can mean a load of postal work, especially because the dubious nature of deliveries means that there are many special delivery, high-value and expensive postal requirements at that office.

One of the two alternative post offices is, admittedly, not far away from that post office—it is just down the road. However, it is not preferred by local residents because youths and gangs congregate in that area and there has been persistent trouble there. Also, as far as I can see, it is not open for the hours that the Post Office proclaims it to be. It is not popular. On the other side—the south—is a much bigger post office, which is in the centre of Leatherhead. That one is overworked and therefore has not been chosen for closure.

There is not much time left to discuss the South street post office in Dorking, to which the same issues apply. It is busy, but does not have the appreciation of the Post Office, because the usage figures seem to be low. It is used by many people, especially elderly people, because the main post office in Dorking is extremely busy. On Saturdays, the postmaster has to organise the queues because it is so busy.

I should like the Minister to look specifically at the cases I have mentioned—some more than others. I know that he will tell me sweetness-and-light things because we are in the consultation period and he cannot give me any yes-or-no answers. However, I ask him to put those cases to the Post Office for realistic reconsideration.

I congratulate the hon. Member for Mole Valley (Sir Paul Beresford) on securing the debate. I appreciate the spirit and genuine concern with which he made his points on behalf of his constituents. As he said, Post Office Ltd proposes to close seven of the 29 post offices in his constituency. There is no doubt that the closures have caused concern to the communities that will be affected, as he has outlined.

Let me start by responding to the hon. Gentleman’s final point and clarifying the situation. As the Minister, I have no role in asking Post Office Ltd to consider individual post office closures. Neither do I have a role in deciding whether post office A or post office B should close. I shall explain the Government’s role in the situation, but he is mistaken if he thinks that Ministers are the court of appeal on individual offices in the programme. Sadly, that is not the case. Post Office Ltd and Postwatch have a system for implementing such decisions, and a system for reviewing them if Postwatch is not satisfied. However, that process does not involve Ministers in relation to individual post offices.

The hon. Gentleman outlined the important role of post offices in his constituency, and many others, for elderly people, disabled people and other vulnerable members of the community. He is right, and the Government recognise that point. That is why we do not see the Post Office as a commercial service, and why it is heavily subsidised. Indeed, we are in the midst of a programme of support for the Post Office that is worth up to £1.7 billion between 2006 and 2011, including an annual subsidy of £150 million a year. Without that, instead of the current 14,000 branches throughout the country, we would have a commercial network of about 4,000, and many thousands more post offices would be under threat. We subsidise the Post Office significantly precisely because we realise the importance of its role. However, several changes occurring in this country and others mean that, even with that level of subsidy, the current network is not sustainable. That has been recognised by the general secretary of the National Federation of SubPostmasters, who stated:

“Although regrettable we believe that closures are necessary to ensure the remaining Post Offices are able to thrive in the future.”

I do not pretend that the process is an easy or popular one, but let me give some of the background reasons for the closures. The Post Office loses a significant amount of money. Every day that the network is open for business, it loses a little more than £500,000—some £3.5 million a week. There are 4 million fewer customers visiting post offices, compared with just a few years ago. In some of the least used offices, the subsidy per transaction—every time someone does something—can be up to £17.

Even after other closures in recent years—a programme a few years ago concentrated on urban areas—1,000 sub-post offices in urban areas compete with six or more sub-post offices within a mile for a declining number of customers. I appreciate that that situation may not be reflected in the hon. Gentleman’s constituency, but it is part of the national picture.

Why are financial losses going up and the number of customers going down? There have been big lifestyle changes. The hon. Gentleman mentioned pensioners, cash and so on, and I appreciate that that is a factor, but it is one that has gone down a great deal in recent years. Eight of 10 pensioners choose to have their pension paid directly into the bank. Among new retirees and people coming up for retirement, the figure is nine out of 10. The Post Office card account plays an important role for some pensioners, but not for the majority or close to the majority.

There have been other changes as well. People pay bills by direct debit and online.

I understand the point that the Minister is making, but I hope that he understands in turn that, with high life expectancy, my constituency has a large proportion of very elderly people who do not have cards, cheque books and so on. They do not understand and cannot handle change. So although the figures may be right nationally, they do not apply to my area.

The hon. Gentleman says that the national picture is not reflected in his area. I do not know whether that is also true in respect of the figures for people paying bills online. We gave people the option to pay their car tax online, and 1 million a month choose to do so. Perhaps none of them live in Mole Valley—I do not know—but I suspect that some do. People can still go to the post office to renew car tax, but, given the choice, 1 million a month choose to do it online. That reflects the wider changes that are taking place in society.

There is also a cost implication to how benefits and some bills are paid. It costs about 1p for the Government to make a payment directly to a bank. It costs about 80p for the transaction to be done at a post office, and £1.80 to make a payment by girocheque, which is then cashed at a post office.

I am not sure whether any Government in the future would reverse the process. We intend to have a successor product to the Post Office card account, and to keep that option available for people, but I doubt that we will ever return to the benefit books of the past. I do not know about the Conservative party. Perhaps it will make a commitment in that direction, but I am not sure that any future Government would do that.

Let me say a little about the process and the consultation, which have caused a great deal of controversy. People say, “The consultation cannot be genuine because we do not want the closures but they are still happening.” But it is important to understand that the consultation is actually about how the process will be implemented; it is not about whether people want closures. The overall decision was announced in May last year. Losses are running at such a rate that we cannot just make them go away. Through consultation, Post Office Ltd is trying to ensure that it does the best job of getting right what is already a difficult process. That is why it talks to local authorities, sub-postmasters and hon. Members. It then has to make the difficult decisions.

If the hon. Gentleman thinks that, within its criteria, the Post Office got it wrong for individual offices in his constituency—he touched on that—my advice to him is that the review process operates through Postwatch, which would say to the Post Office that it got it wrong. That starts on a local basis and builds up through the Post Office structure. Ultimately, Allan Leighton, the chairman of Royal Mail Group, will make a final decision. The decision does not come to Ministers, and I believe that that is right. I am not sure that Ministers should make decisions about which post office should close and which should stay open.

The financial implications are real. I cannot speak about the individual post offices in Mickleham, Abinger Hammer and the other attractive sounding places in the hon. Gentleman’s constituency, but the average cost to Post Office Ltd of the post offices that are closing is £18,000 per branch per year. The Government are committed to subsidising the Post Office network and have contributed a significant amount of money to do so—£150 million a year—but even that cannot sustain a network in which three out of four offices lose money. The loss is some £18,000 per branch per year, depending on the individual circumstances of the branch.

One of the branches that the hon. Gentleman mentioned appears to be profitable from the sub-postmaster’s point of view. I would make two points on that. It may be profitable in terms of a retail business and the post office going together. Post Office Ltd obviously does not take into account the retail side. On the post office side alone, the sub-postmaster does not see the central infrastructure costs—things such as IT support, delivery of cash to pay benefits, delivery of various Government forms such as passport forms and so on—for supporting the branch. They do not appear in his or her branch accounts, but when both the central infrastructure costs and the payments to the sub-postmaster themselves are taken into account, three out of four branches lose money, including, I have to say, some relatively busy branches, depending on whether they are close to others and so on.

The hon. Gentleman disputed the customer usage figures given to him by Post Office Ltd for some of the individual branches in his constituency. He is right to say that we have asked the company to write to him about how they are calculated. Perhaps I should not go into them today, but the figures indicate that fewer than 200 customer transactions a week take place in some of the branches that he mentioned. I appreciate the value that his local communities put on the branches, but a relatively small number of transactions take place in some of them on a weekly basis.

I appreciate the hon. Gentleman’s points. I also appreciate the nature of his constituency. Because it has many small villages and towns, it has 29 post offices in the first place. I appreciate that the closure process is difficult, but even with the large subsidies that the Government have put into the network and have guaranteed for the next few years, some closures are, unfortunately, necessary. That is the difficult process that we are going through at present.

The Post Office criteria for access are that, broadly speaking, most of the population in urban areas should be within 1 mile of a post office and, in rural areas, within 3 miles. Other factors are also taken into account. If the hon. Gentleman thinks that the criteria are wrong, he should ask Postwatch if it would be willing to refer the decisions on some individual branches to appeal. That is the way to deal with the issue. I cannot make decisions about individual branches, nor should I be able to.

The process is difficult, but at the end of it there will still be a larger number of post offices than all the banks put together, and three times as many post offices as outlets of the five major supermarket chains put together. I hope that the network will be more stable in future.

Portable Antiquities Scheme

I am grateful to you, Mr. Benton, and to Mr. Speaker for allowing me to address this issue in this short debate.

Over the past 10 years, the field of antiquities in England and Wales has been transformed—there is no other word for it—by the Treasure Act 1996 and by the portable antiquities scheme. After years of campaigning and lobbying, pressure and private Member’s Bills, led by number of people, particularly Lord Poole in the other place and Sir Anthony Grant in the House—and, in a small way, myself—the Treasure Act came into force in 1997. The portable antiquities scheme was started in the same year and it effectively animated and augmented the 1996 Act, which requires a small proportion of archaeological finds that qualify as treasure to be reported and offered to museums.

The portable antiquities scheme, which is a voluntary scheme, complements the 1996 Act by encouraging anyone who finds an archaeological object to report it to a finds liaison officer at a local museum. There are 49 such finds officers throughout England and Wales, from Cornwall to Durham and from Bristol to Suffolk. The scheme is administered by the British Museum on behalf of the Museums, Libraries, and Archive Council.

The effect of the scheme has been extraordinary. In 2007, 77,500 objects were recorded on the online database that now contains, after 10 years, 320,000 objects and 160,000 images. That is the largest database of its kind in the world, and it hugely extends our understanding of our post-iron age world. I say “post-iron age” because almost all the finds have been discovered by metal detectors, so we do not discover quite as many pre-iron age objects, which are discovered by chance or other means. In such areas of archaeology, which account for a great deal of our past, the effect has been extraordinary.

The centre for the scheme in Staffordshire, in and around my constituency, is the Potteries Museum in Stoke-on-Trent in the middle of my constituency. North Staffordshire is an interesting area, archaeologically. A gentleman called Mr. Tony Rhodes, a metal detectorist, found a bronze age sword that was 2,500 years old a couple of years before the scheme came into effect, unfortunately. However, that sword sits proudly in our local museum. Recently, a unique copper alloy Roman bowl, now known as the Staffordshire moorlands pan, was discovered. The names of four of the forts on Hadrian’s wall are written on it. It is of considerable archaeological importance and was acquired jointly by the Potteries Museum in Stoke-on-Trent, Tullie House, the excellent museum in Carlisle, and the British Museum. With such finds, the scheme is redrawing the archaeological map of England and Wales. In the last three years, its data has revealed 24 new Roman settlements in Wiltshire alone, which is an increase of 15 per cent. Suddenly, the Roman-Britannic map of Wiltshire is being changed because of finds under the scheme, so hon. Members can see how important the scheme is.

If the portable antiquities scheme is such a great success, why do we need this debate and what is the problem? This year, thanks to good lobbying by my hon. Friend the Minister and the then Secretary of State for Culture, Media and Sport, now the Secretary of State for Work and Pensions, there was a good comprehensive spending review settlement. Everybody who is interested in this area has probably already congratulated both my hon. Friend the Minister and my right hon. Friend the Secretary of State and, neatly, the subsequent Secretary of State for Culture, Media and Sport, his successor, who was at the time Chief Secretary to the Treasury and happened to provide this good settlement. Everybody was happy and all the national museums, including the British Museum, received inflation-proof increases. The important Renaissance programme in the regions, for example, was ring-fenced and was similarly well treated, but, bafflingly, the portable antiquities scheme was not.

The portable antiquities scheme is administered by the MLA and it was not ring-fenced. The core budget of the MLA will be cut by 25 per cent. over the next three years. The implication is that the scheme will suffer in the same way. The MLA has proposed that the scheme’s budget for 2008-09 be frozen at its present level of £1.3 million.

Staffordshire is interesting in this sense and so is Leicestershire, which is why I tabled written questions in November, February and March and oral questions in January. My hon. Friend mentioned the £1.3 million, but does he think that the Minister should tell the House that, even at that level, redundancies are still likely to take place, including some valuable education officers who are crucial to the success of the scheme in future? That is why I am seeing the local finds liaison officer in my constituency office on Friday. The PAS may be secure in the short term, but it is still short of funds because of its success.

My hon. Friend is right. If the budget is frozen at its present level of £1.3 million, that will in effect be a cut in real terms, because to stand still and not expand the scheme at all would require £1.49 million. If that £690,000 is not found, three posts in the PAS will be lost.

The hon. Gentleman has eloquently described how the scheme has transformed the archaeological map of Britain, nationally. Is not the real fear that, unless the scheme is properly funded, we will end up simply with a series of regional schemes that are not properly co-ordinated?

Absolutely. The regional element is important and feeds into Renaissance in the regions. My hon. Friend the Member for North-West Leicestershire (David Taylor) will know about a wonderful museum in Leicester that is directed by a Mrs. Sarah Levitt, who, by a curious coincidence, is the sister of my hon. Friend the Member for High Peak (Tom Levitt). Mrs. Levitt does an extremely good job in a distinguished, important museum.

If the scheme’s budget is frozen at its present level, there would be a real cut. These are small sums in Government terms but big sums for the scheme. The hon. Member for Sevenoaks (Mr. Fallon) is right: a national scheme could be reduced to a local scheme. The local element is crucial in all of this, of course, but it needs context. The custodianship of the British Museum, under the directorship of Mr. Neil MacGregor, is crucial and gives credibility, stability and good international, scholarly expertise and contacts for the scheme to operate. We need both detailed local work on finds and the umbrella of the British Museum, with its scholars, to make sense of the individual finds and put them into a much wider archaeological map.

Already, even at the present time, we have too few finds liaison officers, although the scheme operates well. There is only one finds liaison officer for the whole of the north-east—from Teeside up to the Scottish border—which is an area of incredible archeological importance and includes Hadrian’s wall and many other important sites. There is just one officer for that whole area.

The hon. Gentleman who wishes to intervene may talk about his own area, but in Berkshire and Oxfordshire—he will correct me in a moment if I am wrong—I do not think that there is anyone in post. Again, that is a most important archaeological area.

I congratulate the hon. Gentleman on securing this important debate. He is correct: at the moment Oxfordshire does not have a finds liaison officer because of uncertainty over the budget. Is he also aware that even when a finds liaison officer is appointed, they will not be able to cover Berkshire any more, so that area will also be without an officer?

I did not know that. Berkshire is an extremely important area, which covers the Thames valley and a lot of settlements, so it should not have only one officer. We need to expand the scheme and it seems tragic not to do so when it is such a success. If the scheme is frozen and cut over the next year, it will be a tragedy.

Generally, there is much concern in the House about this matter. It is interesting to note that such a number of people have attended this debate as they are sometimes not very well attended occasions. That reflects the concern about this issue. Almost everybody in the Chamber has signed the early-day motion from last year, which now has almost 280 signatures. That is an extraordinarily large number of signatures for a matter of cultural significance. When the budget settlement for the scheme was mooted last year, I visited Mr. Roy Clare of the Museums, Libraries and Archives Council with a number of other former arts Ministers—Lord Inglewood, Baroness Morris, Lord Howarth and the hon. Member for Salisbury (Robert Key), who sadly is not here, but who takes a great interest in these matters. In addition, we all formally and informally talked to the Minister and received a sympathetic hearing on all sides—I hope that it will also be an effective hearing.

There is concern in the House about the matter and that is reflected by what has been taking place. It is a wonderful scheme and it would be terribly sad if it was cut and held back. The scheme needs to be sustained and to do so requires very modest sums of money. It also needs to have a secure future. We need to know that there will be a three-year settlement at the very least, so that the British Museum, the MLA and everybody else can plan for the future of the scheme.

The scheme is too good to be cut, and there are solutions to hand that I shall briefly mention. The British Museum has been responsible for administering the scheme and has done so very well and therefore understands the importance of the scheme. Unlike the MLA, the British Museum has scholars rooted in the scheme and therefore it seems to be the ideal repository for it. If responsibility for the scheme could be transferred from the MLA to the British Museum—I gather from Mr. MacGregor that the British Museum is happy for that to happen—a real understanding and ownership of the scheme could develop. That would not only give the scheme security and continuity, but would send out the message to professional people and, crucially, amateurs and metal detector users around the country that the scheme is safe, is in good hands and will be secure.

I hope that the Minister will say that things will be worked out and that the British Museum will either be responsible for the scheme in future or will be more involved. I also hope that she will inform us that the funding will be secure and inflation proof, particularly over the next few years. That is crucial. After the budget settlement, I know that it might be quite difficult for the Minister to do, but these are relatively small sums and I hope, with her great skill, she will find something in a side-drawer of her Department that will enable her to make up the balance. The scheme is of real importance and is admired throughout the world. I understand that somebody from the British Museum who is involved with the scheme talked to Congress in Washington last year because there is such widespread national interest. We are pioneering the world of archaeology with the scheme as it incorporates and involves non-professionals and professional scholars in a quite remarkable way. The scheme touches the bases of scholarship and of widening access. We, in the House of Commons, cannot afford to let the scheme stall or flounder.

I warmly congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing the debate. I would like to acknowledge formally his huge contribution to getting us where we are today. We have a scheme of which everybody is rightly proud. The information he has given us supports the importance of the scheme in the ecology of what we have in relation to archaeology in this country. Congratulations to my hon. Friend on that. I also acknowledge that there has been considerable concern about the funding of the scheme from a number of hon. Members who are present.

For the record, I shall say a little about the scheme itself. My hon. Friend was right to say that the scheme was first set up as a pilot—probably when he was Minister with responsibilities for these matters—to complement the treasure system put in place to administer the Treasure Act 1996. The interesting thing about the 1996 Act is that it obliges those who find objects that fall under the definition of treasure to report them to their local coroner within 14 days so that we as a society can have the security of knowing that such objects will be held.

In a way, the scheme celebrates local history. What I have seen of the scheme during my time as Minister is that it is a powerful way in which to engage local people, particularly those who use metal detectors. It allows people to understand, celebrate and commemorate local history and it is great to see that happening. People do find some absolutely wonderful things. I have seen some really exciting and interesting objects. Those who use metal detectors are a bit like fishermen fishing on the land or on dry territory. It is a very lonely experience for those who use metal detectors, but it is incredibly rewarding to uncover something that helps us to better understand our past.

My hon. Friend was right to say that the scheme has been a huge success. The way in which we have run the scheme has been a win-win for everybody. The finder and the landowner are rewarded for their efforts in bringing the treasure into the public domain and the public benefit by being able to see and learn from the important relics of their community’s past. The other joy of the scheme is that it is pretty accessible. Everyone, whether a post-graduate researcher at one of our top universities or a young person entering secondary school, can access the information provided by the scheme on the website. Some 320,000 separate objects are catalogued on the website and are accessible to us all. In 2006, which is the last year for which we have figures, 250,000 individual users accessed the data, which are incredibly important for students and currently being used for a number of PhD theses and other dissertations.

On the funding of the scheme, which is what I think hon. Members want to discuss, although we had a good settlement—I am grateful for the kind comments of my hon. Friend—it was nevertheless a tight fiscal settlement. We have tried to ensure that the money went into priorities right across the Department for Culture, Media and Sport family. My hon. Friend will know that we ring-fenced some money for the renaissance programme. That was the right thing to do. The renaissance programme has been hugely effective in improving the quality and the environment of many of our regional museums. If we consider the figures on who accesses the treasures, as a result of the renaissance programme and regional infrastructure developments, people who in the past would probably never have gone into a museum now take the first step across the threshold and enjoy the benefits that that can bring them. That was a very good way of determining how to use a budget which, although better than many other budgets, was not as much as we would have needed to carry on all the programmes and expansions of programmes that we would have liked. We took a priority decision.

The portable antiquities scheme sits as part of the Museums, Libraries and Archives Council family. My hon. Friend is right to say that the MLA has had a considerable cut in its financial settlement and must look for considerable savings. Even with the best will in the world, we could not have protected entirely the portable antiquities scheme from the fiscal constraints that we all face. Getting a flat cash settlement for 2008-09, which is what it has, is not bad in relation to many other organisations that we fund, which are having to look to the future. Every organisation should constantly examine how it functions and how it can renew itself, to see whether it can eke out efficiencies. We should not protect any organisation from that endeavour.

I think that hon. Members will have considerable sympathy with what the Minister is saying, but she knows very well, being extremely experienced, that a standstill budget is much easier for a large organisation to handle than it is for a small organisation, although it is difficult for anybody. There is no leeway in something tiny such as the portable antiquities scheme. As I said in my speech, a standstill budget for that scheme, stuck at £1.3 million, will mean a cut in real terms—a cut in field officers, who are already very thin on the ground.

I hear what my hon. Friend says, but I have to say that although some of our budgets may look larger in their totality, they are, of course, distributed to many relatively small organisations. We could say the same of the renaissance programme. We could have taken a bit more money off the renaissance programme and put a bit more money into the MLA, but the impact of that on a programme that is just beginning to blossom and yield results could have been deeply damaging. We could say the same of most of the non-departmental public bodies that are responsible for distributing the resources that we give them. I am not sure that the portable antiquities scheme can be protected any more than any of our other bodies.

However, I have listened very hard, as the MLA and others have, to the representations that we have had from all hon. Members here today and others who have written to me or made representations either to me or directly to the MLA. I am pleased to say that an agreement in principle has now been reached between the British Museum and the MLA to ensure that the British Museum takes the lead and controls and runs the scheme in the future.

However—there are always provisos and these things will have to be negotiated—the British Museum and the MLA will undertake jointly a review of the way in which the portable antiquities scheme is run. That is right and proper to ensure that we maximise value for money. Then a financial negotiation will have to take place between the two organisations to determine what the diary should be after the review has taken place, so that we are clearer as to where we are.

I applaud the Minister’s enthusiasm for the scheme, which many of us feel very strongly about. I am delighted to hear the news and we have heard that things are going on in the background, but will she clarify a couple of matters? I understand that the transfer from the MLA to the British Museum may not happen until 2009-10, rather than this year, as had been anticipated. There is also a particular problem about the scheme issuing new three-year contracts to the 39 finance liaison officers, which it needs to do from 1 April, so it needs to have the security of the next three years, if it is to be run by the British Museum. Will she address that point? Also, in terms of it being right that there should be a review, will she acknowledge that the efficiencies in the scheme, which has produced, I think, a 73 per cent. increase in the finds recorded year on year, are absolutely phenomenal? In terms of bang for the taxpayer’s buck, this is an incredibly efficient scheme.

May I deal with the first point first? The MLA, I and others have all stated that we want to secure the future of the scheme over this three-year period. The issue in question is the level of funding that goes with that. That must be subject to the review that is taking place to see whether there is an opportunity to eke out further efficiencies or different ways of doing things. Then it has to be subject to financial negotiations between the British Museum and the MLA. The agreement is there in principle, so on the assumption that the organisation does transfer to the British Museum, the British Museum may well be able to attract other resources for this purpose, with the freedoms that it has to raise finance externally.

I cannot in this Chamber today define the precise financial parameters of the budget in year 2 and year 3, because there will be a change. Were the organisation to stay with the MLA, that would be easier. Because there will be change, it has to be subject to the detailed negotiations for which we do not have responsibility, and then to any joy that Neil MacGregor has, if and when it transfers to the British Museum, in trying to raise additional resources. The MLA has been a much maligned partner in this endeavour over time. It recognises as much as everyone else how valued and valuable the scheme is, but it, too, must face financial constraints that we have imposed on it to ensure that we get best value for money from the resources available.

I know from discussions that I have had with both parent organisations—the MLA and the British Museum—that there really is a will now to undertake the review together. It will be jointly commissioned, jointly led and jointly supervised, which is an important step forward. There is an agreement in principle for the transfer, but we have to leave it to them, subject to the review, to sort out the details of the funding.

I am grateful to the Minister for clarifying in effect that nothing is quite clear about the future of the portable antiquities scheme. People want the scheme to be transferred from 1 April. The portable antiquities scheme needs to know its budgets for the three years. Will she clarify one point? She said that renaissance funds were ring-fenced, but is it not the case that if there is some form of synergy between renaissance and the portable antiquities scheme, some renaissance funds could be used to subsidise the portable antiquities scheme?

The portable antiquities scheme is not under threat. Its future has been secured. I repeat that there is an agreement in principle for the scheme to be transferred to the British Museum. That must be subject, quite properly, to two things. The first is the review, which I think all hon. Members accept is a sensible way to go. Secondly, detailed—

Just to make it clear, the review is driven by the cuts; there is no other reason for the review.

No, I disagree with that. Every organisation that enjoys any benefits in the form of resources from the public purse should be consistently reviewing its processes and how it operates, and can, every year, eke out some savings. Having been involved in the running of organisations over many years, I think that that is possible. Then there will have to be detailed negotiations. The hon. Gentleman raises the issue of whether some of the renaissance moneys could be used for that. They could. We have to ensure that that does not in any way undermine the renaissance programme, and that is the responsibility of the MLA. We have to see what the review brings out and whether, when the organisation is transferred to the British Museum, that does not facilitate and open up the opportunity for attracting resources from other sources and therefore providing greater stability.

The portable antiquities scheme is very highly valued, but it has to go through a process at a difficult time, as others do—

It being Five o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.