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Westminster Hall

Volume 475: debated on Wednesday 14 May 2008

Westminster Hall

Wednesday 14 May 2008

[Mr. Mike Weir in the Chair]

Commonwealth Development Corporation

Motion made, and Question proposed, That the sitting be now adjourned.—[Ms. Diana R. Johnson.]

I very much welcome this opportunity to open a debate celebrating the 60th anniversary of the Commonwealth Development Corporation. The CDC came into being by way of evolution. Its genesis arose from a determination to assist in challenging poverty in developing countries. To achieve that development and to encourage enterprise, it was essential that those countries should be seen to make progress in sectors ranging from agriculture to health care, as well as energy and the provision of infrastructure.

The CDC was pivotal, and remains so, in giving assistance and encouragement in some of the most deprived areas throughout the world. Why? Because the very purpose of the CDC is to be a pioneering organisation that ventures into areas where other companies would not dare to invest. In doing so, it acts as a beacon, by setting a clear example and sending a confident message to the investment community that those areas positively invite business investment.

The CDC was a product of the Attlee Government and reflected the ethos of those post-war years. At home, we sought to introduce the NHS but, notwithstanding the colossal problems of that period, we also recognised our responsibilities to many others who, even then, were less fortunate than ourselves. It was Nye Bevan, the Secretary of State for Health, who introduced the NHS, and it was Creech Jones, who was Secretary of State for the Colonies, who presented the Colonial Development and Welfare Bill, which confirmed the role of the CDC.

Creech Jones said then:

“The Colonial Development and Welfare Act provides money for the improvement of the social and other services of the Colonies and helps to provide the basic services for further economic development in the form of improved communications, better agricultural services, water supplies and the like. This has been, and is, very useful. But it is not enough. An instrument is also required whereby we can undertake individual productive projects likely to increase the wealth of the colonies themselves and to stimulate the supply of products of which this country and the world at large stand in need.”—[Official Report, 25 June 1947; Vol. 439, c. 439.]

Today, I pay tribute to an organisation that has rightly moved with the times, addressing the problems of a modern world and working with its shareholder, the Department for International Development. Together, they play a significant role in achieving the millennium development goals. That was recognised by the statement of the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Leeds, Central (Hilary Benn), the former Secretary of State for International Development, when he told the House:

“The purpose of CDC is to maximise the creation and growth of viable businesses in poorer developing countries, through responsible investment and mobilising private finance. The objective of the reorganisation is to enhance CDC’s capacity to fulfil its purpose, in particular the mobilisation of private and other third-party capital for investment in the poorer developing countries. This will contribute to the achievement of the millennium development goals”.—[Official Report, 12 July 2004; Vol. 423, c. 51WS.]

It was that foresight that led the Government to recognise that the CDC’s role had to change. In the ever-evolving world of business and investment, such change was necessary to reflect and keep pace with the challenges of globalisation. The CDC inevitably needed to be restructured and brought up to date; indeed, it has been restructured six times since its inception in 1948. Those changes were not simply meddling with the CDC’s role; they were about facing the fundamental new reality of changing times—a reality that any successful business needs to face.

The House recognises that the CDC, the private sector, the Government, non-governmental organisations and international institutions cannot themselves solve the problems of the developing world; Africa, in particular, has its own issues to address. The imperative for the CDC is to focus on where poverty and destitution resides across the globe and to offer a positive response.

Hon. Members will no doubt recall the International Development (Reporting and Transparency) Act 2006, which I had the privilege of piloting through the House two years ago, with wonderful support from the Under-Secretary of State for International Development, my hon. Friend the Member for Harrow, West (Mr. Thomas), who is here this morning. The main principles of that Act are reflected in what we expect from the CDC and from DFID itself. Those principles are poverty reduction—indeed, in time, the complete eradication of poverty; good governance; transparency; accountability; fair trade; a functioning civil service free of political control; and adequate infrastructures necessary to build and grow developing economies.

I would like to put on record my sincere thanks to my right hon. Friend for the work that he did on the International Development (Reporting and Transparency) Act 2006. However, since the Act has been introduced, can he tell us what evaluation has been carried out by parliamentarians on how effectively the Act is working?

I am grateful to my hon. Friend for his intervention. Perhaps the most significant development since the Act was introduced was that, last year, we had the first report to Parliament and, following that report, we had a debate in the House. That is the kind of accountability and response to parliamentarians that I hope to refer to further later on. I am grateful to my hon. Friend for the point that he made.

Will my right hon. Friend also acknowledge that one of the broader strategic impacts of the discussions that took place on the introduction of the 2006 Act, which he championed, is a demonstration of the continuing support of parliamentarians—particularly Labour Members, but hon. Members in other parties, too, and more generally outside the House—for continued progress to meet the 0.7 per cent. UN target on national incomes being spent abroad? Indeed, will he also acknowledge the continuing progress that the Government have been making to that end?

My hon. Friend the Minister is absolutely right, and he is entitled to say what he said, because he gave so much support to the 2006 Act. One of the main objectives of the Act was that the Government—indeed, all future Governments—should report on how they are achieving the 0.7 per cent. gross national income target. The truth of the matter is that, for a very long time and particularly during the last Government—I am not making a political point by saying that—we fell well behind what we were told should be the target, which is 0.7 per cent. of GNI. Therefore, it is perfectly reasonable and right for my hon. Friend to draw that to our attention, given DFID’s commitment to increasing international development aid and its endorsement of the other objectives of the Act, such as the millennium development goals and the transparency for which we called.

As a result of weak governance in developing countries, the private sector is often accused of being too avaricious. However, to their credit, diligent NGOs have provided numerous documents exposing such corporate abuses. Regrettably, that in turn has led to an increasingly common perception that those who invest in Africa or other emerging markets have done so at the expense of sustainable economic investment, environmental standards and good labour practices, including those on health and safety, and that, broadly, they have taken much from those countries and given very little in return. Thanks to organisations such as the CDC, that perception is slowly changing, but change needs to happen faster, and the CDC is one of our best instruments for bringing it about. Its status under Government ownership and its focus on profitability with best employment practice give it a unique opportunity to be a beacon.

A trend is emerging, in that how companies behave abroad has an impact on how they are perceived at home. People are asking whether they are responsible, reputable investors, and whether they engage in meaningful corporate social responsibility and sustainable ethical investment. Such questions are inevitably posed about the CDC itself.

We have seen a rise of single-issue campaign and consumer groups over the years. That is a sign that the consumer and, indeed, the investor have become more sophisticated about the choices that they make. Consumers weigh up a range of different aspects, whether choosing what they buy in their local supermarket or what companies to invest in on the stock market. Additionally, the power of institutional shareholders, such as trade unions, can bring much influence to bear on global markets and can effect behavioural change within companies. Doing business in a constructive, responsible manner is now considered a central tenet of increasing a company’s bottom line.

I hesitate to interrupt my right hon. Friend again, but as he is making a point about how ethical trading helps a company’s bottom line, will he join me in praising the work of the ethical trading initiative? As we approach the 10th anniversary of the initiative, will he join me in encouraging businesses that have not yet signed up to it—businesses that have large stores in our high streets—to take the opportunity in the run-up to the ETI’s conference in September to sign up to it?

Again, my hon. Friend the Minister is on the ball. We warmly welcome the ETI and observe that DFID is doing its very best to ensure that it is fully implemented and understood. I wish him and the conference well.

I now want to address the attitude to business. I understand where the Government are coming from with their ethical approach, and I know that my earlier comments about public perceptions are true. In common with other hon. Members, my postbag and inbox are full of mail on the issues that we are discussing, including fair trade. It is clear that a twin-track approach—not a choice between aid and trade but both—is required to encourage developing countries. That is acknowledged by the CDC.

In a recent newspaper interview, the current chief executive saw no contradiction between the demands of profit and social development. He stated:

“Most companies, if they want to be successful, will want to make sure they are not employing child labour, they are not spoiling the environment or pouring chemicals into drains. Behaving like this is not a conflict with being profitable. If you have employees who are not happy because they are not being paid properly, they are going on strike. If you pollute, the local environmental people will be on to you… There are certain areas in which we won’t invest—tobacco, drugs, pornography and armaments—but that’s it. If CDC answers to anyone, it is the Government.”

That last point is where parliamentarians necessarily become involved, because it is our job to hold the Executive to account. Indeed, that was the inspiration for the 2006 Act, as I know my hon. Friend the Minister will agree. It is all the more important when we recognise that the CDC is DFID’s largest asset, with net investments worth around £2.8 billion.

The CDC’s annual review entitled, “Generating wealth in emerging markets”, shows the diversity of investments across the whole range of geographies. Although Africa rightly remains a priority for DFID in delivering appropriate policy, there must be a recognition that extreme poverty exists in many areas of the globe, as the report states.

There are many examples of best practice in the CDC’s activities. When I visited Rwanda, I was introduced to the work of the Banque Commerciale du Rwanda. It was the CDC’s first entry into the country, which was still struggling after the genocide of 1994. As the second largest commercial bank in Rwanda, it can act as a catalyst in that resurgent sector. The CDC’s expertise helped to increase the bank’s market share from 20 to 25 per cent., and the bank has even started a leasing finance business for small companies. Thus we can see how the CDC’s investment in that area has far-reaching benefits for the whole of Rwanda’s economy.

We have to refer to Tatepa. It produces Chai Bora tea, which is Tanzania’s biggest selling brand, with a 55 per cent. domestic market share. The CDC’s involvement with Tatepa from its inception has had a significant development impact on the company, particularly on the working conditions of its staff, especially on the Kibena and Wakulima estates. Tanzania presents a particularly challenging trade environment for business. Despite that, the economy has enjoyed growth rates of close to 7 per cent. in recent years, and Tatepa has grown steadily, winning fair trade status.

In Kenya, Brookside Dairy produces superior quality milk, sourcing it from 80,000 suppliers. Seven per cent. of them are commercial farmers and the remainder are small-scale producers. The company’s sales depots now stretch from Mombasa on the east coast to Kisumu on the shores of Lake Victoria on the west coast. As well as selling to the domestic market, Brookside now exports to Tanzania, Uganda, Rwanda, Burundi and Mauritius. That is an example of development co-operation improving the lives of people not just in the country in which the investment is made, but those of people in the surrounding countries. Work is going on in central America, including Nicaragua, where there are many projects, and in Bangladesh and Fiji. I could go on, but time does not allow me to go into too much detail.

As well as celebrating the achievements of the CDC over the past 60 years, one of the main impulses for calling for this important debate is the uncertainty and speculation in the press about the future of the CDC. I feel that it is necessary to refer to that. The current investment policy expires at the end of this year and some sections of the media have reported that the Government are of a mind to sell the CDC. Plainly, I would not welcome that; nor would many hon. Members. In his closing statement, will the Minister reassure hon. Members in this Chamber about what exactly the Secretary of State has in mind for the CDC?

I said earlier that parliamentarians have the right to hold the Executive to account. That point was endorsed by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). This is all the more relevant as the Government are the only shareholder in the CDC, so we parliamentarians have a responsibility and a vested interest on behalf of the taxpayer in respect of how the Government proceed with the development of the CDC.

Surely, the speculation surrounding the CDC must have an impact on investment, particularly in African countries. If parliamentarians are to have a role in overseeing whether the CDC will be sold off, surely that role would be ideally fulfilled by the Select Committee on International Development, which could consider the matter. As a member of that Committee, I would welcome the opportunity to speak to CDC representatives as well as the Government.

I welcome my hon. Friend’s intervention. I would encourage a close relationship between the Select Committee and the CDC. However, in respect of the specific point that I am raising, I urge a little caution on his part and invite him to wait for the reply from my hon. Friend the Minister, because we have been round this course before and I have a feeling that we might be reassured before the end of the debate.

I would not be doing a service to the CDC if I did not acknowledge that it has, from time to time, been the subject of criticism, as we have seen in some press comment. The excellent Library paper prepared for the debate gives a flavour of some of those criticisms. Today, it is important that the question of privatisation has been debated and, rightly, rejected. In common with the vast majority of non-governmental organisations, I and members of my party and others in the House, as well as those who have made a considerable input to development policy formulation, hope that the matter has now formally been put to bed.

I hope that my hon. Friend the Minister will join me in congratulating the CDC on its success. A sign of that success is that in recent years it has not received any funding from Government—actually, it has had no funding at all since 1996—yet has significantly expanded its business, which is welcome. That is a sure sign that the CDC has been meeting its commitments in terms of attracting third-party investors in developing countries and expanding the company at large. I hope that officials, Ministers, parliamentarians and the CDC will work together and support the organisation as it progresses and inevitably faces new challenges.

The CDC is not a unique organisation among European countries, although the people of Britain should be very proud of what it has achieved, not least because of its focus on the poor countries of the world. By European financial institution standards, the CDC leads the International Finance Corporation, the World Bank’s investment arm in poor countries, in terms of investment. Some 12 per cent. of the IFC’s capital investment is focused on Africa, the Caribbean and the Pacific, with the figure at 26 per cent. for all the European development investment institutions. However, 60 per cent. of the CDC’s investment is in Africa alone.

The CDC is delivering Government policy now and remains at the forefront of responsible private investment development. However, if we are to achieve the holy grail of complete poverty eradication, much more has to be done. The CDC has a good reputation in emerging markets. None the less, I urge Ministers and officials to work ever closer with the CDC in future. If the Select Committee wants to take a lead, I would encourage that. A focused, working, constructive relationship will ensure that the institution and its shareholder can go forward in tandem, so that the CDC plays a major role in meeting the Government’s poverty reduction goals.

I conclude by inviting my hon. Friend the Minister, and all my hon. and right hon. Friends in the Chamber this morning, to join me in congratulating the CDC in its 60th anniversary year. I am sure that my hon. Friend will support the organisation in its objectives. In doing so, he will reflect the enduring legacy of those Labour greats, Clement Attlee, Aneurin Bevan and Creech Jones and be true to their spirit and aspirations.

I had not intended to speak, but I saw my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) speaking on the monitor earlier and it struck me that I should congratulate him on making such a good speech on an important subject.

CDC representatives visited me some three or four months ago and took me through their projects and plans across the world, particularly in Africa. I subsequently visited the great lakes region of Africa, as I do from time to time, as my hon. Friend the Minister knows because he responded recently to a debate on that subject. The important thing about the CDC—I was not aware of it beforehand—is that it applies business assumptions to potentially emerging economies.

Rwanda is a great case in point, because when considering central Africa and the great lakes region, one tends to focus on the poverty and the terrible conditions—the violence that still exists in the eastern Congo area, and so forth—and forget that in the small country of Rwanda there is a potentially emerging economy. Among all the investors going into the region, although there are not that many, the CDC is one of the most important. I was fortunate and privileged enough to have breakfast last week with President Paul Kagame during his visit to London. We spoke for five to 10 minutes specifically about the CDC and how important priming investment is. My right hon. Friend mentioned that. When the CDC invests, as it has done in a fund in Rwanda, through Actis, and through that into a bank that is developing new products, it encourages other companies worldwide to come in as well. The CDC has a good reputation and one hopes that private sector organisations follow it.

I understand that most of the investment going into countries such as Rwanda goes into the services industry. However, investments are by no means constrained in that area. It just happens that in Rwanda, which I know a bit about, investment goes to telecoms, banking and to the emerging capital to buy such service products.

I wanted to make not so much a speech as an extended comment to congratulate my right hon. Friend on initiating the debate. It caught my eye, and I had not realised that it was due to take place. I listened to him, but I am not aware of the internal and organisational issues, and the question marks about the CDC’s future.

I am grateful to my hon. Friend for his timely speech. He mentioned Rwanda, and I put it to him that the importance of the CDC in an almost unique situation—many of us have been there and have seen the results of the genocide—is that people are now focusing on what can be positively achieved in commerce and jobs. That is bringing people together in a way that many of us in 1994 would have thought was beyond reach.

My right hon. Friend is absolutely correct, of course. The occurrence in Rwanda in 1994 was terrible, but development since then has been remarkable, supported not least by the UK Government, which I think is the largest bilateral donor to Rwanda, despite it being a Francophone country. He is right that when one thinks about these countries we tend to focus on the negative—the terrible things that are continuing to happen in some countries, the social conditions and so on. However, in Rwanda and countries where the CDC can help and for which similar funds are available from abroad, the accent is on the positive and what can be achieved.

People have their own views and comments about the leadership in such countries, and it is not for me to comment on that, but I believe from my contact with the leadership of Rwanda that it greatly appreciates the CDC’s investment and that the accent is on the positive. The Government and their investment arm, the CDC, place that accent on the upside, which from the perspective of contemporary developments in central Africa is not always the case—far from it.

I congratulate my right hon. Friend again on initiating the debate, and I hope that the organisational issues—I was not aware of them—in the CDC and the Department for International Development are sorted out to everyone’s benefit in the near future.

It is a pleasure to follow on from the hon. Member for Falkirk (Mr. Joyce), and I pay tribute to him for the significant work that he and his colleagues do on the all-party groups on Africa. He referred to his close interest in Rwanda, but I know that his interest extends to the whole region. I am delighted that he could contribute to the debate.

The hon. Gentleman is not the first hon. Member to be drawn into the Chamber by the oratory and approach of the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke). I congratulate the right hon. Gentleman on securing the debate, and pay tribute to his sterling work over many years. He was able to draw attention to some of that in his speech. His legacy for all of us in the House is being able to monitor how Britain moves towards achieving its share of the millennium development goals and the like. He gave a comprehensive overview of some of the challenges still facing much of the developing world, and the importance of private capital and other organisations, particularly the CDC, in helping to achieve those aims. We owe him our gratitude for that.

Like the right hon. Gentleman, I congratulate the CDC on its significant achievement of reaching the age of 60. That is a significant milestone in anyone’s life—I have not quite reached it—not least for a public body. As he said, the CDC has been reorganised six or seven times over the years, and the question is what might happen next. I shall return to that.

I recognise that the public sector and the Government can play an important role in conjunction with the private sector in an area where capital may be in short supply. The challenge for the CDC and its ilk is surely to demonstrate how they are different—what they add to the overall process—by showing that without them, the investment would not have happened, or perhaps not in that form, without the tough ethical business arrangements that it seeks to put in place, or that the investment acts as a magnet to draw in other investors to help the economies of particular parts of the developing world to grow, as the hon. Gentleman highlighted. One of the challenges for the CDC is to demonstrate that in each of those areas it is a champion and market leader, without which much of the investment would not take place. Perhaps it must also demonstrate thought leadership to challenge the rest of the investment community to invest in particular ways. It should consider its infrastructure investments to ensure that they are sustainable, by investing as much in railways as it does in road systems and transport hubs.

There is a lot potential, and with due respect to the CDC’s management team, it is not always obvious in its annual review and broader detail of the annual accounts that that is what it is doing. None the less, the chairman, Sir Malcolm Williamson, highlights in the latest review that the CDC’s

“central purpose remains unchanged: sustainable economic development in the poorer countries of the developing world through responsible investment in the private sector.”

We all support that. The report also says:

“CDC has a long history of putting capital to work in some of the world’s most challenging economies.”

That perhaps encapsulates its unique role.

The figures are impressive and the right hon. Gentleman referred to a few of them. For example, £1.4 billion has been committed to 42 fund managers who are investing in 100 funds, and the asset base has increased two and a half times since 2004 to £2.7 billion. The report properly highlights that at the end of 2008, the investment policy and arrangements that were put in place at demerger will come to an end. That must introduce some uncertainty, and, like the right hon. Gentleman, I hope that at the conclusion of this short debate, the Minister will be in a position to address that uncertainty.

The hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) and others highlighted the issue of whether the CDC is ripe for privatisation. We should bear in mind that the Treasury has just forked out an unscheduled £2.7 billion for the great Crewe tax giveaway—every little helps, perhaps. The CDC’s chief executive raised the issue of privatisation and put it in the public domain when he was interviewed on the “Today” programme in April, and he certainly did not rule it out. He indicated that it had been considered, that it had advantages, that it would be good for the public, that it would provide an opportunity for the Government to raise money, and that it would leave the CDC intact to continue investing in the poorest countries. It would be interesting to know what lies behind the choice of some of that vocabulary, and perhaps the Minister will tell us. We must be mindful that privatisation is a serious option, but the House is not at this stage in a position to judge whether it is a good move.

In an attempt to understand more about the companies that the CDC deals with, at the start of the process I tabled a series of parliamentary questions on it. I sought to get copies of the accounts of the many different subsidiaries of the CDC placed in the Library of the House. The Secretary of State responded to my question by stating:

“CDC had 79 subsidiary companies at 31 December 2007…Where they are required to do so by their relevant regulatory authorities, these subsidiary companies file their accounts in those countries and with those authorities. Accounts are therefore not available from CDC, but from the regulatory authorities in the countries in question.”—[Official Report, 20 March 2008; Vol. 473, c. 1273W.]

I was completely taken aback by that answer because it struck me as strange that the CDC does not itself have any copies of those subsidiary accounts here in London. From time to time, I am forced to disclose that in anther life I was a chartered accountant. I paid my dues and spent more hours than is reasonable auditing companies across the United Kingdom. I cannot remember an occasion when the parent company in a group of companies did not have the formal statutory accounts of each of its subsidiaries, even if they were just filed away and gathering dust in the corner.

I wrote to the Secretary of State and asked whether he would address that point. He has not yet answered—perhaps it will come following this debate. However, I also asked for further information on the details of the subsidiaries and what regulatory authorities they were registered with. He responded by stating:

“CDC has confirmed that there is no requirement for the company to hold the information on the regulatory authorities with which their accounts are filed. However, they do require subsidiary companies themselves to comply with their respective local country requirements on regulatory norms for filing and submission of accounting information.”—[Official Report, 3 April 2008; Vol. 474, c.1226W.]

A list of the subsidiaries was appended to that response. If one looks patiently at the subsidiaries, about eight or nine of them are registered in the United Kingdom. Even if we accept what has been said about the other companies, I still find it a little strange that the subsidiary accounts for the UK companies are not available for the CDC.

I have followed the questions that the hon. Gentleman tabled and the responses he received. It is perfectly reasonable for him to pursue those lines of inquiry. Does he agree that essentially two points emerge from it? First, there is a case for the CDC to work much more closely with parliamentarians. Secondly, given our endorsement of transparency and accountability, the CDC itself would be moving forward if it took the lead in introducing the kind of transparency that he advocates. That would send a message to the developing countries that the CDC seeks to serve.

I agree. I would like to put on the record that I have held a meeting with the CDC and, in due course, I hope to meet the chief executive. The CDC has been unfailingly courteous and helpful in the discussions I have had with it so far. I want to make it clear that I am not casting aspersions on the company, the Secretary of State or anyone else. I am simply saying that when there is some doubt—although that will perhaps soon be extinguished—about the future of the CDC, greater transparency is the way forward, as the right hon. Gentleman has said. Having greater transparency would address any fears or doubts on the matter.

The subsidiaries matter because they are part of understanding the nature of the beast—particularly in terms of its taxation structures. The new business model means that most of the investments are made through fund managers into particular companies and are no longer held directly. The regulatory requirements in many of the countries concerned require a subsidiary of the CDC to hold the investment and the fund, not the CDC itself. However, how those subsidiaries are structured and how they hold that investment matters, not least for taxation purposes. An issue that is surely at the heart of the debate is ensuring that people pay the right amount of tax and that they fulfil the right criteria in doing so. If we wish to set an example, we should do so in our investments through the CDC.

Again, I am not making allegations or suggesting there is anything untoward. However, it is noticeable that on different occasions, investments are being made through what we might call tax havens. That was acknowledged by the chief executive on the radio and elsewhere and is evident in the accounts. Part of the justification for that is that the CDC would not otherwise attract other investors. If that is the sole criterion, I would like to know more detail about it. That policy must be better understood so that we can get to the heart of the taxation treatment of this organisation and how it might be being prepared for either a long life in the public sector or for some form of privatisation in the near future.

If one is truly diligent—I do not claim any great diligence—and reads the relevant note in the accounts from the past year, there is, in modern accounting parlance, an interesting footnote that illustrates all the taxation treatments and how they reconcile for what looks like a small tax charge back to the fairly impressive profits that have been made. Much of that is to do with the fact that the CDC is not liable to pay tax in the UK, whereas its subsidiaries overseas are.

Perhaps it would be useful if I brought the hon. Gentleman’s attention to a question. Is he aware that the CDC is not required to pay tax to central Government? We have deliberately exempted it from having to pay tax so that it can invest all of its moneys into businesses in poor countries.

I am happy that the Minister has emphasised that point. I hope that he did not infer from what I was saying that I was suggesting that there was something wrong with the CDC not paying tax. It is an entirely legitimate policy decision to free up more capital for those investments. Without overstating it, my interest is in the taxation treatment of the subsidiaries, how they are structured and how that is relevant to the future of the company.

I do not want to be rolled up and put in with the other conspiracy theorists whom I am sure the Minister and others have to spend half their lives dealing with when responding to questions—although I am sure that is a delightful job. However, in recent years, following the sell-off of Actis, questions were asked after the event that have not yet been adequately answered. It is entirely fair and proper that Members of the House ask at least some of the relevant questions in advance of what may or may not happen. The CDC has a strong ongoing relationship with Actis, which was sold off in 2004. Actis is one of the most important, but not the only, fund manager that handles the CDC’s investments. Questions about that sell-off relate to the valuation method used and the role of former CDC employees in the sell-off, particularly regarding the potential conflicts of interests that might have arisen. Again, we need to have the relevant information to make a judgment on that. I hope that we will be able to do so.

On 21 February, I wrote to the Comptroller and Auditor General and asked for the sell-off of Actis to be investigated. I was pleased that on 27 March, Mr. Burr confirmed that he has asked his staff to

“examine the reasonableness of the sale price and the profit sharing arrangements agreed in 2004.”

It would be a great service to the House if we knew the answers to those questions so that we can either put the issue to bed or raise further issues.

I do not want any of the questions to take away from the point of the debate, which is to congratulate the CDC on 60 years of impressive and important investments in difficult parts of the world. I hope that, as a result of the debate, we will begin to tease out answers about the CDC’s future and its role in leading-edge sustainable, responsible investment and in challenging other businesses, as the Minister said, to sign up to the ethical trading initiative. Sixty years of progress and achievement are being marked today. We hope that there will be another 60. At the very least, we are at the start of a lively debate, rather than at the end of one.

It is a pleasure to serve under your chairmanship for the first time, Mr. Weir. I start, of course, by congratulating the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) on securing this timely and very important debate. If he will forgive my saying so, it also serves as a celebration of his commitment to the issue, which was demonstrated not least by his private Member’s Bill, which is now the International Development (Reporting and Transparency) Act 2006. He made great reference to the transparency and accountability of the CDC to parliamentarians and to the Government—an issue to which I shall return. He also outlined very well the organisation’s development over the past 60 years—how it has evolved and successfully changed with the times. Like other hon. Members, I congratulate the CDC on its achievements over the past 60 years. That is worthy of celebration in today’s debate, and I look forward to the organisation operating successfully around the world for many more years.

As I said, the right hon. Gentleman made a key point on the CDC’s accountability to Parliament. I should like to explore that in a moment. We also had a brief but informed contribution from the hon. Member for Falkirk (Mr. Joyce), who once again demonstrated his first-hand knowledge of various such organisations in the field and the value of their work. The other day, I met a fascinating chap called Seb Bishop, whose efforts can be seen on a Channel 4 programme called “Millionaires’ Mission”. He went to Rwanda and, by using his own private investment in a village, ended up building a school and a hotel. The hotel has now been set up, connected to the school, and people pay to stay in the hotel and teach at the school. The funds generated by that project have created a self-sustaining educational establishment that is now servicing the areas for many miles around. That was a very good example of the type of work that we should be encouraging and of the areas in which the CDC, on a small scale and on a large scale, can make a major contribution.

We then had a very knowledgeable contribution from the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore). One of the most interesting points that he made to start with, before he went into detail on the CDC’s accountability and transparency—I will probably not add anything to that, because he gave all the required detail—was that the CDC needs to establish some comparative advantage. It needs to establish what specific value it can add and how that value complements other organisations around the world. It must also ensure that it continues to act in the interests of the UK Government and DFID.

I shall touch on some of the CDC’s aspects that I feel are important for us to understand and to praise, and perhaps even a few that we should question. It is clear that the CDC plays a leading role in international development-based economic investment. The broad remit outlined by the investment policy drawn up by DFID has allowed the CDC to demonstrate to the private sector that returns can be made from emerging markets in less developed countries.

Sir Malcolm Williamson, the CDC’s chairman, said:

“Emerging markets are not for the faint-hearted. CDC has a long history of putting capital to work in some of the world’s most challenging economies. We are a patient investor and remain committed to these markets. CDC’s long term commitment is vital in uncertain times and serves as a reminder of the development impact of our capital.”

Like many others, I agree with Sir Malcolm. The CDC’s link to DFID allows it to carry out that long-term economic investment and clearly demonstrates the commitment of successive UK Governments to economic growth as possibly the most powerful method of lifting people out of abject poverty.

The right hon. Member for Coatbridge, Chryston and Bellshill gave many examples, and I shall add just one to the list: the investment in the Fairtrade tea company Tatepa in Tanzania, which has led to the creation of 27,000 jobs for small growers. Such successful sustainable projects can be achieved only through long-term investment by organisations such as the CDC and should be commended.

However, the sole focus on economic growth, creating jobs and raising revenue as a means of development has led to criticism in some parts that the investment of the CDC’s capital in certain projects has not always acted, albeit perhaps inadvertently, entirely in line with DFID’s goals. Critics highlight the actions of Globeleq, previously entirely owned by the CDC until it was floated on the US stock market in 2006-07. Before it was floated, there were reports of companies in which Globeleq, and therefore the CDC, had invested whose policies were proving counter-productive to the aim of ultimately alleviating poverty in the developing world.

Let me give just a couple of examples. Since Globeleq took control of Uganda’s national grid in 2005, domestic electricity prices have risen by 70 per cent. Of course, there may be other underlying reasons for that, but the first impressions of the local population, which are all-important, were not good. In 2004, tribes from Papua New Guinea, backed by Friends of the Earth, sent the then Secretary of State for International Development a compensation claim for £25 million that related to the damage caused to their land by CDC-funded Higaturu Oil Palms.

Such work will always be controversial, but it is only fair to say that such occurrences are very rare. It is, however, worth noting the comments in the report by the Select Committee on International Development entitled “Private Sector Development”. Paragraph 119 in chapter 5 stated:

“CDC’s portfolio of investments must continue to be carefully scrutinised for their overall contribution to poverty reduction. CDC’s social and environmental record is patchy and we recommend close monitoring by DFID on where and how CDC invests. Acting as an investment catalyst is a necessary but not sufficient contribution to poverty reduction: CDC must ensure that its ‘development footprint’ is a wholly positive one.”

The hon. Gentleman made a number of comments about Globeleq’s role in Uganda and elsewhere, albeit with the important caveat that other factors may have been at play in the problems that relate to electricity generation there. Is he aware that, in Uganda, Globeleq has helped to increase access for an additional 20,000 households a year—some 8,000 above the target that was initially set—and is he aware of the work done by Globeleq in Tanzania, which has led to the price of power to the distributor being reduced by almost 50 per cent.?

I am grateful to the Minister for intervening, but perhaps he is being slightly over-sensitive. As I hope I made clear, the occurrences referred to are very rare. The reason why I highlight them is that first impressions are the ones that count. I am trying to establish that it is vital that the CDC’s work is entirely in line with DFID’s stated objectives, because all too often it is easy for those who are quick to criticise to pick up on such examples and then the good work that he rightly highlighted can be lost.

The Select Committee report also highlighted the fact that the CDC’s work, however worthy, remained one private-sector development initiative that appeared to be inadequately linked to a broader strategy. The CDC’s role to demonstrate to the private sector that returns can be made in emerging markets despite the perceived risks is important if the economies of developing nations are to grow.

I believe that the CDC should look closely at the model being implemented by the African Development Bank, under the leadership of its president Donald Kaberuka. I spent a week at the bank at the end of last year, and it was clear that the bank had decided that it’s comparative advantage centred around infrastructure. It actively sought to encourage private sector involvement by helping to remove the political risk that so many private sector companies feared; at the same time, it ensured that projects were de-conflicted with each other and were directly in line with the bank’s stated aims. In light of that, will the Minister outline how the CDC’s development footprint can be improved, thus taking the Select Committee’s comments on board and ensuring that it remains a wholly positive one?

The CDC’s investment strategy, in line with the investment policy outlined by DFID, has demonstrated to the private sector what can be achieved in emerging markets. Although the CDC has been leading the way by investing in less developed countries for the past 60 years, it has also had a major impact on improving people’s quality of life. Infrastructure has been improved, jobs have been created and standards of living have gone up, although more needs to be done.

The CDC’s work may be the tip of the iceberg; but in the main, its efforts have been supported by DFID and many NGOs, as well as by the wider international community. If only the Minister had waited, he would have seen how balanced my comments are. By looking past the risk to the potential, unlike the private sector, the CDC has invested where others have not dared to tread. In turn, that has ensured the success of many projects that would have failed if they had been left entirely in the hands of the private sector.

Although the CDC and its subsidiary companies have invested in emerging economies that have often been described by private sector economists as being too risky, the CDC has experienced a 79 per cent. increase in total returns after tax—up to £672 million in 2007. At the same time, net assets rose 33 per cent. to £2.7 billion. With the profits being reinvested in emerging markets and less developed countries, the CDC’s power to lift people out of poverty through economic empowerment continues to grow. However, there have been limited criticisms of the Government’s target of a 5 per cent. market return on investments; the feeling is that returns should be balanced at directing finance where it is most needed to reduce poverty. Will the Minister say whether he considers a 5 per cent. market return to be reasonable given the changing economic circumstances and what the reinvestment priorities should be?

Sticking with capital, rumblings also continue over what the CDC’s future direction should be. Should it be doing more, and if so, should there be an injection of capital into the organisation and how best should that be done? As the right hon. Member for Coatbridge, Chryston and Bellshill said, the last injection of capital was made in 1996, under a Conservative Government. It has been argued that an extra £500 million should be injected into the organisation. That, of course, is not a dissimilar amount to that given by the Government in the latest replenishment of funds for the African Development Bank shortly before Christmas. Is that view shared by the Minister? If so, how exactly do the Government intend to raise the money?

I hope that the Minister will outline his vision of the CDC’s future, not only for its funding but in establishing or reinforcing its comparative advantage, as other multilateral organisations have been forced to do recently.

I am grateful to the hon. Gentleman for making a carefully considered and well-researched speech. He will be aware that a number of hon. Members have spoken about privatisation, and we look forward to the Minister’s reply on those speculations. Will the hon. Gentleman take this opportunity to tell the House the Conservative party’s view? I am sure that it will be an important consideration.

I am grateful to the right hon. Gentleman. Many people seek my party’s view on many issues, as they sense a potential change in the wind. I hope that he will forgive me for not taking that opportunity today. He is absolutely right that the subject needs careful consideration, and he does not really expect me to make policy on the hoof, so I shall resist the urge. All will become clear in due course.

Will the Minister outline his view of the future of Actis and Aureos—the companies established in 2004—not least because I believe that Actis’s contract to negotiate and manage the investment of the CDC’s capital in developing countries is due to expire at the end of this year?

There is much to celebrate on the 60th anniversary of the Commonwealth Development Corporation. I believe that there is broad agreement across the House that, although the CDC still has room to improve its development footprint and the further integration of its goals with DFID and other players in the international community, the important role that it has played and continues to play in promoting and facilitating economic growth in countries where private sector foreign investors sometimes fear to tread is vital if we are serious about building sustainable economies and institutions in developing countries. It is right that we should celebrate those achievements today.

I join others, Mr. Weir, in welcoming this opportunity to serve under your chairmanship. I congratulate my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) on securing this debate. I join him and others who have spoken today in congratulating the leadership and staff of the Commonwealth Development Corporation on its 60th anniversary.

My right hon. Friend invoked the names of Clement Attlee, Aneurin Bevan and Creech Jones, giants of our party’s and the nation’s history. As he mentioned those names, I realised that a potential minefield was opening up before me. The fact that he was able to secure the presence of my hon. Friends the Members for Paisley and Renfrewshire, North (Jim Sheridan) and for Falkirk (Mr. Joyce) and of my right hon. Friend the Member for West Dunbartonshire (John McFall), the Chairman of the Treasury Committee, served to underline recognition and awareness of the CDC across our party. I also note the continuing interest in the subject of the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore); I shall deal later with some of the specific points that he raised.

I hope that the hon. Member for North-East Milton Keynes (Mr. Lancaster) will forgive me, but although his speech was balanced and although he raised one or two perfectly legitimate points, his opening comment about perceptions being important was an obvious truism given the arena in which we all have to work. Surely it is incumbent on us, as Front-Bench spokespeople, to deal with the substance and to correct erroneous impressions. Some erroneous impressions have indeed built up about the work of the CDC, but I shall come to them in a moment.

The hon. Member for Berwickshire, Roxburgh and Selkirk spoke about the need for the CDC to be a thought leader. That point was also made by my hon. Friend the Member for Falkirk and more generally by my right hon. Friend the Member for Coatbridge, Chryston and Bellshill. The Government need to do more to help to develop the private sector in developing countries. We need to consider what more we can do to catalyse more investment and interest in African and other developing countries not only by British businesses but by the international business community.

What interested me about the contribution of my hon. Friend the Member for Falkirk is that President Kagame, whom he met last week, is in London to attend a meeting convened by the Prime Minister. Seventy chief executives and a number of figures from the international donor community, including from the United Nations Development Programme, are in the UK to consider what more can be done—given that this year we are halfway to achieving the millennium development goals—to galvanise investment and interest from the private sector internationally in our efforts to tackle poverty. The CDC can continue to play an important role as we look at how to develop effective private sectors in the most challenging circumstances in the poorest developing countries.

I give an example that demonstrates the importance of that role. I do not know whether the CDC is considering investments in Afghanistan—that is not my point—but Afghan farmers invest time and effort in continuing to grow opium poppy partly because of the absence of alternative livelihoods that would generate sufficient income for them to be able to send their families to school, receive hospital treatment and so on. On occasion, they continue to grow opium because they lack the ability to access finance in a way that we would recognise. The effort to develop an alternative private sector and financial institutions that we would recognise in Afghanistan, which could loan money to Afghan farmers, help them to save and so on, must be a priority for the international community. Anything we can do to galvanise interest, not only in Afghanistan, which may be in a particular situation, but more generally in the developing world, from financial institutions and the private sector can only help.

An issue for the future of the CDC is how we can work with it and continue to refocus the effort, talent and imagination within the organisation on the most challenging markets in the poorest countries. The corporation has had many successes in the emerging, now middle-income, economies of the world, and in the poorest countries, but if we are to continue to get the best from the talent of its staff, we need to continue to work with it to ensure that it is focusing on the most challenging countries.

In recognising the good work of CDC staff, will the Minister give consideration to recognising formally the work of the CDC and in particular its 60 years of good work on its anniversary, perhaps not today, but later? Perhaps the Department has already done so.

One reason why I welcome the debate is that it has given us the opportunity to acknowledge the considerable contribution that has been made by existing staff at the CDC, to whom I again pay tribute. However, we should also recognise that we need those talented individuals to continue to work in the most challenging circumstances if we are to maximise the opportunities that the corporation provides as our development efforts go forward. I shall reflect more generally on my hon. Friend’s point—although we should celebrate the 60th anniversary and 60 years of progress, we also need to look at how we can use the occasion to concentrate on what else the CDC should do.

As my right hon. Friend the Member for Coatbridge, Chryston and Bellshill said, the organisation has a distinguished history. It has taken several forms since it was founded in 1948 as Britain’s first development institution through to its present incarnation. Rightly, my right hon. Friend said that throughout its 60 years, it has had the same mission—to reduce poverty by promoting economic growth in poor countries. However, as he acknowledged, ideas on how best to tackle poverty in developing countries have evolved in those 60 years. From a belief that the developing world should produce the commodities and raw materials that industrialised countries need, we are now convinced that the way to defeat poverty is to produce more sustainable, broader-based economic growth in poor countries, and to bring poorer countries into the global economy by increasing trade and investment. Such sustainable growth can be achieved only by building a sound private sector, which provides the type of jobs that we would recognise and generates commerce and trade. Our approach to poverty, and therefore the way in which the CDC mission is implemented, has changed to reflect that. From being an occasional source of credit, often to agricultural enterprises such as tea plantations, the corporation now provides investment capital to help businesses in poorer countries to grow and develop.

The value of the corporation’s investments stands at some £2.7 billion.

I am extremely grateful to my hon. Friend for his considered reply and for his truly remarkable commitment to everything that Creech Jones set out to achieve—he is a first-class Minister. Of the first Adjournment debate that I introduced in the House, one profile writer said that it was rather surprising, given my local government background, that I chose to speak about the Philippines. The CDC’s message even at that time was that some things were going wrong—in the Mindanao palm oil project, for example—in employee relations and other aspects of the commitment. Nevertheless, it emerged that the CDC accepted its responsibilities to ensure, in so far as it could influence matters, good employment practices, as the Minister will confirm. As was mentioned, the environment is crucial to the CDC’s objectives. Does the Minister agree that we regard such objectives as a priority?

We do regard those objectives as a priority. My right hon. Friend underlines the phrase that the hon. Member for Berwickshire, Roxburgh and Selkirk used about the need for the CDC to be a thought leader on that work. My right hon. Friend rightly alluded to the fact that businesses operate within particular climates and legislative requirements in particular countries. We sometimes need to deconstruct the circumstances and environments in which businesses operate from the practices of organisations or their subsidiaries. However, that does not in any way negate the responsibility of businesses, hence our support for the ethical trading initiative, for example. It means that we must work through our aid programmes to help developing countries to put in place the appropriate standards and regulatory framework within which the business community operates.

I was detailing some types of CDC investment. A number of hon. Members referred to the continuing role of the corporation in agriculture, which of course remains hugely important for poor countries. The CDC has investments in fruit, flower production and a range of other commodities, but it also invests in many other perfectly legitimate economic sectors such as the financial sector. More than £100 million is mobilised for investment in microfinance. As the hon. Member for North-East Milton Keynes said, it also has considerable involvement in the power sector. Both those sectors are critical to the economic development of poor countries. A sound financial sector helps economies to have the credit and financing that they need to develop and expand. The CDC’s investment in the Banque Commerciale du Rwanda, for example, led to the launch of new savings accounts and personal loans, which had not previously been available to customers.

As we have heard, the CDC has been a major player in developing-world power generation through Globeleq, and it has a series of investments in Asia, Africa and the Americas. I make no apology for the fact that it is investing in energy generation, because access to power will be one of the things that underlines our ability, or otherwise, to make progress on meeting the millennium development goals. We cannot make progress on providing access to schools and health care or on developing the private sector if people do not have reliable access to electricity. Many of the company’s electricity investments were sold to private buyers last year, and the cash raised—$1.2 billion—is largely being ploughed back into developing new power facilities for developing countries.

Today’s CDC looks very different from the original Colonial Development Corporation that Creech Jones set up. It now invests through 40 investment managers around the world, including Actis, the fund management company that we de-merged from the CDC. Many of those managers are based in the emerging economies themselves, so the CDC is developing the financial services sectors of those countries, too.

By requiring fund managers to apply business principles that demand proper environmental, financial, health and safety and labour standards in their investee companies, the CDC also promotes effective corporate social responsibility. That is a key point, and the CDC has a key role in that respect. By investing in poorer markets that private investors are reluctant to enter and showing that responsibly run companies can be good investments even in those markets, the CDC has been able to attract more private inward investment—£325 million last year alone—to countries that badly need it to drive economic growth.

As all hon. Members have made clear, the CDC needs to demonstrate developmental impact as well as financial success. Some of that impact will come from its responsible business principles and from showing that companies can look after their employees properly and be financially successful at the same time. Many of the companies in which the CDC invests also provide housing and social services for employees and their local communities.

Several hon. Members raised the example of Tanzania Tea Packers, in which the CDC invested $75 million. As my right hon. Friend made clear, the company has gained Fairtrade accreditation. However, it is important to reflect not only on the financial success of that investment, but on the fact that the Fairtrade price premium that Tanzania Tea Packers has been able to secure has allowed schools, health centres and an extensive HIV/AIDS education and training programme to be financed in local communities.

That example is replicated in all sorts of other places. In Bangladesh, for example, the BRAC bank is providing microfinance services such as small loans and savings services to tens of thousand of poor people who had previously been excluded from traditional financial services. In India, CDC investments in a 1,000-strong taxi fleet in Mumbai are helping to demonstrate that first-world vehicle and driver safety standards can be implemented in a developing country. There is a series of examples of the way in which the CDC is having a developmental impact while being a financial success.

My hon. Friend mentioned Mumbai, which I visited about a year ago as part of a group considering the very big problem of tuberculosis in India, where 1,000 people still die each year from that preventable disease. Among many other things, we discovered that some companies were willing to make a contribution and to become involved in research into prevention. Given the ethos that my hon. Friend rightly associates with the CDC, does he not agree that such an approach is right for the organisation? Indeed, it is seeking to inspire other private companies to take the same approach and to accept their responsibilities to people in the communities in which they invest.

My right hon. Friend makes an important point. The work by the CDC that he highlights is an exemplar for the business community more generally. We are working in all sorts of ways with many businesses that want to put something back into local communities and which recognise their responsibilities to their employees and the communities from which they come. At last week’s call-to-action meeting with the private sector, which was chaired by the Prime Minister, it was striking that many different businesses were interested in, and committed to, doing more. As a Government, and as parliamentarians, our role is to continue to challenge members of the business community to do yet more and to help them to get the information that they need to invest in developing countries. We look forward to continuing to work alongside them in a series of settings and in a series of ways to challenge them to do more. We also look forward to doing what we can to help to improve the investment climate for the business community in developing countries. As my right hon. Friend rightly says, it is fundamental to making the progress that we need if we are to achieve the millennium development goals.

In 20 minutes, the Minister has given us a typically eloquent journey through different aspects of the CDC that we might not have known about, and through the different themes running through Government policy. In the four minutes that he has left, however, will he please turn his mind to the questions that have been raised from both sides about the CDC’s future and specifically about privatisation?

I was coming to exactly that point. As the hon. Gentleman and my right hon. Friend have suggested, a series of rumours have been doing the rounds about what the CDC’s future might look like. As my right hon. Friend made clear in his opening remarks and in a series of interventions, the question of privatisation has surfaced several times. As I suggested in an early comment, we are looking at how best to maximise the CDC’s developmental impact, and one thing that we are working on with the company is how to ensure that it continues to prioritise markets in the very poorest countries, as opposed to those in some of the emerging economies, where it has made a series of investments to date. I should make it clear that we are not looking at privatising the company, but we are looking at tightening up its investment policy still further. We are not having a battle with the CDC about that, but working collaboratively with it on the issue.

The hon. Member for Berwickshire, Roxburgh and Selkirk raised the issue of the release, or otherwise, of the accounts of the CDC’s subsidiaries. I will take his series of very deliberate points away with me and, with the Secretary of State, look at what else we can do to make at least some of those accounts available to the House. Commercial confidentiality is a serious issue, but notwithstanding that, I recognise the need and desire of the House to have as much transparency as possible. I will, therefore, take away from the debate the specific concerns raised by the hon. Gentleman and other Members about the need for the CDC to engage in as much disclosure as possible.

This has been an important debate. I re-emphasise the Government’s recognition of the huge amount of work that the CDC has done and of the huge talents of its leadership and staff. I welcome this opportunity to celebrate the CDC’s 60 very successful years, and we look forward to working with it for many more years as we help to fight poverty around the world.

Immigration Rules (Spouses)

I am most grateful for the opportunity to debate this subject and to do so under your chairmanship, Mr. Weir. The issue that I want to raise is a specific one, rather than the wider issue of rules relating to spouses who seek to come to this country. Furthermore, it really applies only to female spouses, for reasons that I shall make clear. The group that I wish to discuss consists of those female spouses cleared to enter this country from the main Muslim countries on the Indian subcontinent, where the tradition of marrying cousins is still strong. I refer to Pakistan and, to a lesser extent, Bangladesh, but particularly to Azad Kashmir. My constituency has a large population from the Mirpur, Chakswari and Dadyal communities in Azad Kashmir.

When a female spouse seeks entry clearance to come to this country after having married her husband, who travelled from the United Kingdom for the ceremony, she must meet the requirements of the immigration rules. The sponsor, her husband, must be able to demonstrate clearly that he can support and sustain his wife in the United Kingdom without recourse to public funds, and that he has sufficient financial resources and accommodation to sustain them both. That is a perfectly reasonable requirement, and I take no issue with it.

After a female spouse arrives in the United Kingdom, the terms of her visa include an initial two-year probationary period, for want of a better description, during which she must demonstrate that she and her husband live together and that the marriage is happy and successful. She can then apply before the two-year period expires for indefinite leave to remain in the United Kingdom. Under the change in immigration rules—again, I take no issue with this—spouses must show that they have made genuine efforts to assimilate into the life of the United Kingdom and to learn the English language, and an additional period of limited leave to remain is allowed. However, that is not what I am discussing today.

The specific issue that I am raising relates solely to female spouses who come from the parts of the Indian subcontinent that I mentioned. It does not really apply to male spouses because, when they come to the United Kingdom, they invariably become the breadwinner of the family. As a result of custom and tradition, they become the head of the family and take responsibility for the household.

Sadly, there are instances of male spouses using marriages arranged in their extended family by both sets of parents as a means to enter the United Kingdom without any definite intention of staying with their wives. I am sure that the Minister for Borders and Immigration, if he were here today, would know of instances of extremely distressed wives whose husbands have left the family household within a short time, and I am sure that he has dealt with the repercussions, including wives who feel that they have been used and want their estranged husbands thrown out of the country before the two-year probationary period expires. Such instances are extremely sad, but again, that is not the issue that I am discussing.

I have sought this debate to bring a specific issue into the public domain. When a female spouse is granted entry clearance to come to this country and moves into the family home—whether it is a property owned or rented by her husband or her father-in-law’s house—the first thing that invariably happens is that her husband takes her passport and puts it with other valuable documents. Then they get on with their lives. If the wife becomes pregnant during the course of their first 18 months or so of living together, some of the problems that I am about to mention, although not necessarily all, are easier to resolve.

Unfortunately, the husband and wife often overlook the fact that they must regularise their stay in the United Kingdom before the two-year probationary period expires, and they only realise that that has not been done when it is drawn to their attention by another family member or they take it in mind to travel abroad. The female spouse then applies for indefinite leave to remain in the United Kingdom, but as her application is made after her visa has expired, she is technically classified as an overstayer. In my many years’ experience, for what it is worth, if the application is made before the two-year period ends, the UK Border Agency seems to take a more relaxed attitude, but the same criteria must nevertheless be fulfilled. That is where the problem arises.

If a spouse applies for indefinite leave to remain after having stayed beyond the two-year probationary period, she must provide evidence that she and her husband have been living together for the past 24 months and, according to the guidance notes, attach the SET(M) application form. She is asked for a range of documents in joint names showing the address of where she is living with her husband. The guidance notes specifically say that the items of evidence should come from at least five different official sources and that a total of 20 items of evidence would be a good indicator, but that she must provide 10.

Sadly, many female spouses—including two in my constituency, to whose cases I shall refer—cannot provide the documents required, which include telephone bills or statements, gas bills or statements, electricity bills or statements, water rates bills or statements, council tax bills or statements and mortgage statements or agreements. As I have explained, a female spouse who lives with her husband or in a house owned by her father-in-law will invariably not be named on any of those items, as they will be in the sole name of either the husband or the father-in-law.

Many spouses who come to this country from Mirpur, Chakswari and Dadyal have not only a limited command of the English language but no experience whatever of owning property in their own right or jointly. Although some people in our emancipated society may frown on such traditions, it is a fact of life that they exist. The overwhelming majority of female spouses from Azad Kashmir who live in my constituency—and, indeed, in that of the Minister for Borders and Immigration next door—will not be named on any of the listed items.

The guidance also says that other acceptable documents include bank or building society statements or pass books, but a spouse cannot open a bank or building society account unless they can prove their entitlement to live permanently in this country, so they cannot produce such documents even if they want to. The next item said to be acceptable is a tenancy agreement, but as I have said, the vast majority of female spouses go to live with their husband either in houses owned by husbands or in their father-in-law’s house. As it is an extended family matter, there is no formal tenancy agreement.

The guidance notes then refer to insurance policies, certificates or other correspondence, or loan agreements. However, for the reasons that I explained in relation to utility bills, the female spouse’s name will invariably not be on any of those items, because it is traditional for husbands to deal with insurance and loan agreements.

It might be, of course, that the wife has a copy of an English for speakers of others languages certificate saying that she studied to learn the English language, but the certificate does not give the address to which it was sent.

The guidance note then refers to membership of the Automobile Association, the Royal Automobile Club or “similar membership”, but if the female spouse does not drive, how can she produce such documents? There is then reference to

“correspondence from Government Departments or Agencies, e.g. HM Revenue & Customs, Inland Revenue, Department for Work and Pensions, including evidence that you have declared your relationship to the appropriate Government Bodies”.

It might be that the female spouse has taken a job and can produce a P60 Inland Revenue certificate, but in many cases female spouses from abroad do not take full-time employment and concentrate on running the family household and, in the fullness of time, bringing up a family. She is not going to have documents from the Department for Work and Pensions saying that she is in receipt of unemployment benefits—nor, for what it is worth, a pension. It is more than likely, therefore, that she will not be able to produce any of these documents to satisfy the criteria.

The last correspondence that the guidance notes say would be acceptable is from a general practitioner or local authority, such as an NHS card, or regarding antenatal and post-natal treatment, including a letter confirming dates of visits to the home address by a midwife. Again, the guidance specifically says that the documents must

“show your home address and the date first registered”.

Most female spouses will obtain an NHS card from a GP, which is accepted by the UK Border Agency as an acceptable document, but if she has not become pregnant during the two-year period, she will not have had any involvement with antenatal or post-natal services or with a midwife.

The final acceptable documents are proofs of

“membership of a sports or social club and membership of a religious organisation”.

The overwhelming majority of female spouses coming to this country are very protective of their femininity and are not likely to trot off to a David Lloyd fitness centre, and nor do they enrol as a member of the local mosque. Such evidence, therefore, is not applicable to female spouses who come from the areas that I have mentioned.

In a nutshell, therefore, the only documents that they might be able to produce, out of the list in the guidance notes, would be something from the Inland Revenue, if they have a job, and an NHS card from their local GP. However, that constitutes only two items out of a total of 20 asked for, with a requirement that

“at least 10 should be provided”.

When only two items are sent in with an application by a female spouse for indefinite leave to remain, the application will be turned down. She will be told by the UK Border Agency that she has no entitlement to be in the country and should go back to the country whence she came. With all due respect, that is absolute nonsense.

I am fully supportive of good border and immigration controls, but the world does not fit into neat boxes that can be ticked by everybody. Female spouses who have their applications for indefinite leave to remain in the UK turned down will not return to Pakistan or Azad Kashmir. They stay in this country—including in my constituency and that of the Minister for Borders and Immigration—and become non-persons. They have no legal status to be in UK, but the enforcement sections, based in Solihull and elsewhere, have much more important things to do—dealing with organised people trafficking and men who have deliberately involved themselves in marriages in order to obtain residence in this country, but who then desert their wives—than pursuing housewives whose only crimes are that their husbands forgot to send in the passports before the expiry of the two-year probationary period, and whose names do not appear on any of the documents to meet the criteria, owing to the customs and traditions within their community.

I shall not go into the details of the two particular cases in my constituency, to which I referred, because time does not permit. However, I have raised the issues with the UK Border Agency, which responded in detail. Basically, it said, “Well, it is the fault of the spouse. If she had sent it in before the expiry of the two-year period, there would not have been a problem.” It does not seem to understand the way life actually happens in this country. I know that the spouse should send it in before the expiry of the two years, but it does not happen. The women cannot comply with the requirement to produce 10 documents or bills containing joint names, so their applications will be turned down and they will be told to return to the country whence they came. They do not go back, so they become non-persons and just add to the number of technically illegal people in this country.

To be helpful, I told the UK Border Agency that it might care to change its system. I know that the issue of effective border control is a difficult one, particularly in dealing with cultural groups from around the world and from countries where rules and regulations are flexible, to put it mildly. However, the specific client group to which I am referring needs to be reconsidered, otherwise the number of non-persons is going to continue to grow. I pointed out to the agency that, at the very least, when a visa is issued it should be accompanied by a one-sided A4 leaflet, issued in English and other local languages, clearly stating that for spouses to regularise their stay in the UK after their two-year probationary period, they will need to present a range of documents with their name and that of their husband, and their address.

I also said that a copy of that should be signed for by the recipient of the visa and held by the high commission or embassy, so that it can at least be said by the authorities—the Home Office and the UK Border Agency—that they knew quite clearly what the rules were when they came to the country. However, the agency does not seem to get it. I mentioned earlier that it said that suggested evidence of cohabitation is set out in the SET(M) application form, which is used to apply for indefinite leave to remain as a spouse, and which can be found on the website—this is for people with a limited grasp of the English language! However, by the time that somebody applies for indefinite leave to remain by getting the SET(M) application form—namely, before the expiry of the two-year period—it is too late for them to get the documents registered in joint names.

This problem must be looked at. If it is not, we will have more and more people, who have done nothing wrong, except forgotten to send in their applications, becoming non-persons and technically illegal immigrants. That is a nonsense. I hope very much that the Minister will take back to her Department and the Minister for Borders and Immigration the message that this issue must be resolved, and that it can be with a degree of common sense on all sides.

It is a pleasure to serve for the first time under your chairmanship, Mr. Weir. I congratulate my hon. Friend the Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) on securing this debate on an important topic that I and the Minister for Borders and Immigration, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) are looking into, and in a moment I shall expand on some of the areas under consideration.

It is worth highlighting the importance of immigration generally. I welcome the comments of my hon. Friend the Member for Birmingham, Sparkbrook and Small Heath about the need for a robust immigration system, to attract the right people, to help the economy, to take tough action against those in the United Kingdom illegally and to set out a clear contract of rights and responsibilities for all. However, as we all know—this is one of the difficulties of the job of immigration Ministers and others in the Home Office—the system is abused.

It is important that we tackle abuse when we have evidence that it is taking place, and that we introduce rules and legislation to stop it occurring. That protects the public’s confidence in the system. However, as my hon. Friend rightly highlights, we need to ensure that genuine migrants—those who wish to live and work and raise their families in the United Kingdom—have a fair deal from the system.

Clearly, the issue of spouses is an emotive one. It is important that we have provisions in the immigration rules to ensure that we distinguish between genuine marriages and failed or sham relationships. I am discussing the issue of sham marriages with hon. Members from all parties because we need to ensure that we strike the right balance. That is the judgment we have to make when we consider any of my hon. Friend’s proposals.

The Government have introduced a number of legislative and policy changes to tackle rules relating to marriage and to combat sham marriages taking place in the UK. Under the Immigration and Asylum Act 1999, we required registrars to report their suspicions about any sham marriages. In April 2003, the probationary period for those seeking settlement on marriage was increased from one to two years with a view to limiting further the possibilities of people pretending that they were married when they were not. In addition, we introduced a no-switching rule for marriage applications, which meant that anyone in the UK on a visitor visa would not be able automatically to switch in country to a marriage visa, but would have to return to their country to apply for an entry visa. The Government believe that the two-year probationary period helps to protect the system against abuse. At the end of that period, if the UK Border Agency is satisfied that the marriage is subsisting and that the parties involved wish to live permanently together, we will grant leave of status. We have introduced the certificate of approval scheme, which is a key policy that has reduced the number of sham marriages dramatically.

We have taken important steps to tackle some of the abuses in the system. However, my hon. Friend raises some important points about cultural attitudes to marriage and issues around documentation. Some of the people to whom he refers are often vulnerable, young, unable to speak English and inexperienced in the ways of the UK, including in respect of property ownership and other issues that my hon. Friend mentioned.

At the moment, applicants for leave to enter or remain in the UK as spouses have to be 18 or over. We have to be satisfied that they have recourse to public funds. We are consulting on whether we should raise the age to 21 and insist on a level of English for any spouse to enter the UK.

Under the immigration rules, a person wishing to remain in the country as a spouse is normally granted leave to enter or remain for two years in the first instance. I may take a slightly different view from my hon. Friend on the issue of late submission of a passport. Although I appreciate what he says about passports often being put away in a safe place, it should be made clear—perhaps we should make it clear when a visa is given—that the application needs to be submitted a month before the two-year deadline arises. I think that the rule is reasonable and clear and that exceptions to it can lead to confusion and potential abuse. It is a basic rule that will not change, because it is important not just for marriages but for other applications. We need a cut-off and a deadline to apply the rules fairly.

My hon. Friend raised the important issue of documentary evidence. As the MP for a multicultural constituency, I, too, see that providing documentary evidence of cohabitation can pose a challenge to couples. As my hon. Friend rightly says, the lists of documents are in the form SET(M). He makes a fair point about the point at which someone gets hold of that form. It is unlikely that when someone applies for a visa they will also apply for their SET(M) form. It would be a good two years before they would need to use it. Perhaps we should consider providing better information when a visa is granted. My hon. Friend’s suggestion that we provide a leaflet in other languages is something we could consider.

I assure my hon. Friend that we want a robust system. It is important that we have some documentation to prove that marriages exist, but we must also ensure that people are well able to meet those requirements and that they know they need to meet those requirements at the point at which they enter as a spouse. The guidance about the required evidence is clear on the application form. Someone with the right advice is able to provide the right evidence, as many couples do.

I am aware that my hon. Friend has raised a couple of cases with the UK Border Agency. I will not go into them because of lack of time and because I do not normally talk about individual cases in such a debate. However, if someone has genuine difficulty in providing the documentation, it is open to them to provide a detailed explanatory letter. We probably need to consider more closely how the rules around that will work.

We are considering the issues in respect of marriage. We are planning a review of the marriage route and we are awaiting a judgment on the Baiai case; the hearing is scheduled for 23 and 24 June. After that we will consider certificates of approval for marriage.

In instances such as the ones that I have referred to, in which the spouse forgets to send in the application until the two-year period has passed, and when documents cannot be provided retrospectively with the joint names on, does the Minister accept that there is a case for allowing an interview to take place with a representative from the Border Agency? Those couples cannot go to appeal because they are outside the two-year period, but an interview would enable the representative to satisfy themselves officially that the application is genuine and that the couple have lived together for two years. I accept that there is a public cost, but the cost of such an interview should be borne by the applicant on the basis that they did not send in the application before the end of the two-year period. Does my hon. Friend accept that it is wholly unreasonable to say, “Sorry, you cannot provide the document, go back to Pakistan or Kashmir and apply again.”

I want to unpack that a bit. I think that it is reasonable for people to have to apply a month before their temporary visa runs out and for the Government to have a deadline and a clear rule on that point. On the issue of documentary evidence, clearly interviews are part of the process. If we are to consider charging people extra for a detailed interview, the issue that my hon. Friend raised about the cost of returning to the country of origin could be balanced out. It could be that the cost is about the same. We would thus not be reducing the cost to the individual, and we would be in danger of introducing a loophole in British immigration rules. We have to be very careful about that. That is always the balance that we make.

We are considering the issues relating to marriage. I have listened to my hon. Friend. He has raised such issues with me and my hon. Friend the Minister for Borders and Immigration in the past. We are working on a number of elements and we will include in that programme of work a review of the issues around the evidence required. My hon. Friend the Member for Birmingham, Sparkbrook and Small Heath has raised a couple of pertinent cases. However, we need to ensure that we have some documentation. It is reasonable in the modern world for people to have certain documentation. My hon. Friend referred to the national health card, which is something that everyone would have. There are other bits of evidence that people would have. Perhaps we need to look at the total volume.

I have been through all the documents listed in the guidance notes. The Minister says that there are others that would be acceptable. Will she tell me what they are?

I was only referring to the ones mentioned in the guidance notes. I am aware that time is running out, but I welcome my hon. Friend’s comments. I should also welcome his contribution to our review of marriage rules, particularly in respect of the evidence required. I look forward to having a meeting with colleagues who have a shared interest in the subject so that we can discuss the matter as we go through the review period. I know that my hon. Friend the Minister for Borders and Immigration is equally committed to ensuring that we get this right—that we tackle sham and false marriages, that there are no loopholes in the rules and that people in a genuine marriage get a fair deal.

Sitting suspended.

Royal Mail and the Post Office

It is a pleasure to serve under your chairmanship this afternoon, Mr. Weir, to discuss a subject that I know is dear to your heart. I applied for the debate after the panel that was set up to review the UK postal services sector published its initial report in response to the evidence submitted to it. I am grateful to Mr. Speaker for granting the debate.

I shall first talk about Royal Mail and later address the future of the Post Office. Royal Mail and its universal service obligation are part of the glue that holds the United Kingdom together. The delivery and collection of mail throughout the country at the same affordable price is very important. My constituency is sparsely populated and includes 26 inhabited islands, so it is definitely a beneficiary of the universal service. Small businesses in my constituency could not compete without it.

However, the interim report paints a picture of a bleak future for Royal Mail and the universal postal service if changes are not made. Paragraph 79 of the report, which is rightly highlighted in bold, states:

“We believe that there is a broad, emerging consensus among postal companies, business users, consumer organisations and the regulator that the status quo is not tenable: it will not achieve the vision we set out at the beginning of this paper. There is, therefore, a compelling case for action.”

That is a wake-up call to all of us. The report also concludes that householders and small companies have seen no benefit from the opening up of Royal Mail to competition, but that big companies have seen clear benefits. It warns that Royal Mail’s financial stability and thus the future of the universal service, with delivery to every home in the country at the same price, is under threat.

The report confirms what I and many other hon. Members have been warning for years: continuation of the present policies will inevitably mean the end of the universal service. In recent years, the service has worsened. The first delivery, by which mail used to be delivered by about half-past 9 in the morning, has ended. Delivery times for mail are now much later in the day—in some cases, as late as 7 o’clock in the evening. The price of posting mail has risen steadily. A second-class stamp went up in price by 12.5 per cent. last month, which is well above the rate of inflation.

An example from my constituency of a significant worsening of the service relates to deliveries to the island of Mull. For many years, the mail was delivered to the island on the first ferry of the day, at 8 am. Now it is delivered on the second ferry, at 10 am, which has a knock-on effect for the delivery time to people’s businesses and homes. Royal Mail’s excuse is a European transport directive that restricts its vans to 56 mph. However, that is only 4 mph below the speed limit on Argyll roads, and people familiar with the roads will know that their winding nature and the need to avoid all the potholes means that driving at 60 mph is impossible on most stretches anyway. I am not sure why that 4 mph difference means that mail cannot be on the first ferry.

As a result, the mail is not delivered to the shop in Fionnphort, at the end of the Ross of Mull, at the far south-west of the island, until almost 6 o’clock in the evening. Some houses outside the village do not get their mail until about 7 o’clock. Clearly, that is far too late for businesses to deal with the mail that they receive that day, but under Royal Mail’s performance statistics, it counts as mail delivered on that day. There is no incentive for the company to deliver the mail earlier in the day—if it is delivered before midnight, it counts as delivery on that day.

The Mull and Iona chamber of commerce discussed the problem with Royal Mail, which revealed that three quarters of the mail could reach the first ferry of the day. The chamber of commerce’s view was that it would rather receive three quarters of the mail during the working day than all of it after businesses had closed for the night. However, Royal Mail said that it could not entertain that suggestion, apparently because of performance targets. As I explained earlier, the targets set by Postcomm measure the day on which the mail is delivered, in theory even if it is only delivered at one minute to midnight.

That raises questions about the performance targets. Royal Mail seems to be driven by those targets rather than by the wishes of the customer. We need to make the organisation a bit more sensible, for example by having a target delivery time of perhaps 3 pm, rather than midnight as at present. We could even have a points system, with full marks for delivery before 3 pm and half marks for delivery between 3 pm and midnight.

I always stress to managers delivering any service that the islands need a degree of flexibility. Hard and fast rules that work okay on the mainland do not necessarily apply to islands. It is possible that some people on the island may have a different view from that of the chamber of commerce, so I want Postcomm to consider the proposal that Royal Mail should be allowed to deviate from the normal rules in any part of the country, following a public consultation and with the agreement of the local council. It should be allowed that flexibility as long as there is agreement, rather than slavishly having to follow national performance targets.

I am interested in my hon. Friend’s idea about greater flexibility. He is aware of the colossal post office closure programme that is affecting my constituency and others. Does he agree that it would be better to apply the same guidelines-based, rather than rules-based, approach in that case? People like me who are trying to save post offices such as Abermule, Berriew, Castle Caereinion and Garth Owen from closure could then appeal on the basis of a common-sense local decision, taking local criteria into consideration. It sounds to me as though that is what my hon. Friend wants to do in the case of the delivery service, but it makes sense to do it in the case of the closure programme as well.

I definitely agree with my hon. Friend, who makes an important point. As far as the closure programme is concerned, Royal Mail is constrained by the Government’s saying that it has to close 2,500 post offices.

Mull is just one example of a worsening service, and there are many others throughout the country. Royal Mail’s current strategy of constantly raising prices, combined with a worsening service, will inevitably lead to reductions in the volume of mail posted. That will get us into a vicious circle, triggering higher prices, leading to reduced volumes and so on, eventually making the entire business untenable and threatening the maintenance of the USO.

The hon. Gentleman has mentioned the increase in the cost of postage on two occasions—I arrived somewhat late, so it may have been on three occasions. Does he recognise that in comparison with other European countries, the cost is still one of the cheapest? For the service that it gives us, it is still good value for money.

I will take the hon. Gentleman’s word on the comparison with prices in other countries, because I have not made such a comparison. However, I am concerned that if there are such price rises every year, the vicious circle that I described will be triggered.

I congratulate the hon. Gentleman on securing the debate. Does he think that the problems he has identified—cost and lack of responsiveness to local needs—would be better or worse if Royal Mail were privatised? I understand that his party’s policy is to privatise Royal Mail and separate it from the post office network. Does he agree with that policy? If so, why does he think it would make things better?

Well, it would be inaccurate to describe my party’s policy as privatisation. I support the policy of the party, which is to bring more private sector investment into our mail services, and I will come to that later in my speech.

In the early stages of its existence, Postcomm argued that the universal service obligation was a help to Royal Mail and gave it a competitive advantage. I am pleased to read in the report that Postcomm has now woken up to reality and in its evidence to the review, it accepts that

“without extensive change, the Royal Mail’s business model will become unsustainable”.

It goes on to predict that, without policy changes, Royal Mail’s cash flow on its letters business could be in deficit by as much as £400 million a year in just four years’ time.

Given the threat to the universal service obligation, does the hon. Gentleman think that there is a case for the other mail operators that are emerging to make a contribution—as Royal Mail does—to the universal service obligation?

I am grateful to the hon. Gentleman for that intervention and I completely agree with him; I intended to mention that point later.

The hon. Gentleman’s intervention leads nicely on to the next part of my speech, which is to point out that Royal Mail is at a serious disadvantage compared with its competitors. It has to deliver mail to every home in the country. That obligation is often called “the last mile”, although in the case of my constituency “the last hundred miles” would be more accurate.

The private sector clearly picks the profitable side of the business. There will never be competition to deliver mail to rural areas, which is the expensive side of the business. Going back to the Fionnphort example that I gave earlier, we will never see two mail delivery vans rushing nose to tail down the single track road to Fionnphort. That scenario conjures up an image of the driver of the leading van ignoring all the signs urging him to be a courteous driver and to use the passing places to allow overtaking. However, that scenario will never arise; deliveries to Fionnphort will always be left to Royal Mail.

It is evident that Royal Mail requires more investment if it is to continue to deliver the USO without constant and large increases in the price of a stamp, so there are some issues that I would like the Government, the regulator and the review panel to consider. First, there is what is known as the “access headroom” rule. Royal Mail is required by its licence to maintain a minimum gap, known as the headroom, between the prices that it charges retail customers and the amount that it can charge its wholesale customers to use its network. The access headroom regime has paved the way for the fast growth of upstream competition—a rate of growth that is far ahead of all predictions.

I understand that no other postal market in the world has an access headroom regime that imposes such competitive constraints on the universal service provider; nor is there a market that makes new entry to the upstream market so easy by enabling competitors to rely on the existing infrastructure of the universal service provider to deliver “the last mile”. The UK’s access headroom regime is something that must be looked at. It certainly appears to be very unfair to Royal Mail.

Another way of paying Royal Mail for delivering the USO relates to a point I made earlier; we should take advantage of the clause in the European directive that allows a charge to be levied on mail companies that do not deliver a universal service, and use the proceeds to pay Royal Mail for doing so. If those private companies are cherry-picking the profitable parts of the business, they should compensate Royal Mail adequately for carrying out the unprofitable parts of the business. At the moment, it appears that Royal Mail is cross-subsidising the universal service obligation from other parts of its business, which makes it harder for it to compete. Royal Mail desperately needs more investment and the Government must either provide that investment themselves or ensure that private sector investment is secured for the company.

I turn to post offices. My constituency has already suffered from the latest post office closure programme; several post offices in my constituency have already been closed, so there is no point in my revisiting that ground. Instead, I want to look to the future.

The post office closure programme in Argyll and Bute reported in January. As well as closing several post offices, the report contained one piece of good news. Post Office Ltd said that it wanted to reopen one post office, in the village of Otter Ferry, which had closed several years ago. That seemed to be good news. However, yesterday—four months further on—the Post Office told me that it was still working to try to restore the service to that community, but it was not yet in a position to confirm anything. That certainly worries me; four months have passed and no one has been found to take over the post office in Otter Ferry.

To add to those worries, the post office in the village of St. Catherines closed suddenly in the middle of February. Again, the Post Office told me that the closure was only temporary and that it was planning to find somebody to take over the post office. However, three months later, the Post Office has again not managed to find anybody. I know that throughout the highlands and islands, there are post offices that are supposed to be temporarily closed, but they have been in that position for several years. It certainly worries me that, when a postmaster gives up a small village post office, it seems to be extremely difficult to find anybody to take over the business. That suggests that people looking at those businesses do not regard them as profitable, so I am worried that even after the closure programme we might continue to see a gradual decline of the post office network.

The key to keeping post offices open and profitable is clear—to ensure that the contract to pay pensions and benefits stays with the Post Office after 2010. We must not see a repeat of the TV licence fiasco, when the contract to renew TV licences was given to PayPoint, an organisation that lacks a rural network.

As the hon. Gentleman recognises, footfall is important. However, does he also recognise that the Post Office is having extreme difficulty in competing with the likes of PayPoint to win contracts? Let us take, for example, the fictitious “A Bank Ltd”, or a fictitious utility company, which might allow people to pay their accounts at a post office. However, the price has to be cut to such a level that the postmaster or postmistress receives a greatly reduced payment for providing that service, which in effect means that the business is no longer viable for them. I suspect that is why we end up with temporary closures that become almost permanent; no one is interested.

That is an important observation. However, the key thing is that, where there are Government contracts, they must be given to the Post Office. The reason is that the Post Office is the only organisation that has a rural network. PayPoint has an extensive network, but only in towns. Let us compare PayPoint with the Post Office in my constituency. PayPoint has no outlet in the whole of rural north Argyll, nor does it have an outlet on several of the inhabited islands in the constituency. By contrast, rural north Argyll has several post offices and the inhabited islands to which I referred also have post offices, so when the BBC gave the TV licence renewal contract to PayPoint, it meant that people on several of the islands in my constituency and in rural north Argyll were not able to renew their TV licence over the counter. I do not want that situation repeated with the Post Office card account.

The way for the Post Office to compete with PayPoint is through the rural post office network; the Government must recognise that in specifying the contract.

On the point about costs and internal costings, has my hon. Friend heard, as I have, from people in the Post Office that one or two of the privatised processors outside the Post Office now cost more, not less? In addition, there is the huge social cost in places such as Llanbrynmair, Carno and Trefeglwys, which are remote villages in my constituency. On top of everything else, people in those villages have to pay a lot of money in fuel bills to drive elsewhere for their postal service. Those additional hidden costs must be taken into account as well, because in many cases we are adding many pounds to the cost of simple transactions. That money could be saved if the Government made the political decision to protect things such as the Post Office card account. However, apparently for dogmatic reasons, they refuse to do so.

Yes, my hon. Friend is perfectly correct. There are social costs and extra costs that rural dwellers have to pay to travel to a post office in a town if their post office is closed.

I thank my hon. Friend for his excellent speech. I am meeting representatives of Royal Mail in about 10 minutes’ time so that they can tell me which post offices in my constituency they wish to close. On my hon. Friend’s point about more trade for post offices, Fife council recently decided to put more business the Post Office’s way by allowing customers to use post offices to pay council bills, but Royal Mail does not seem to have taken that into account. Does my hon. Friend not think that it would be wise for Royal Mail to wait until the full effects of that extra trade, which is significant, are felt so that it can make a full assessment before deciding which post offices it does or does not wish to close?

My hon. Friend makes an important point. I was certainly pleased with the initiative proposed by Essex county council for the council and post offices to share services. Unfortunately, in my area, the proposal was made far too late to allow the council or community groups to put together a proper business plan. In the case of my hon. Friend’s constituency, I hope that the Post Office will give Fife council time to put together a proper business plan. One way to secure the future of rural post offices is by sharing services with councils, community groups and other public bodies.

The key to securing the future of post offices is the card account. The Government must specify that whoever wins the tender must have a rural network, but we also need to develop the Post Office card account. Clearly, it has limited functionality at present, but it ought to be developed into a bank account with a full range of banking products. That is the road that France, Germany, Italy and other European countries have followed. It would allow small rural post offices to become profitable and to survive, and it would be of great benefit to people on low incomes who are often financially excluded. I urge the Government to develop the Post Office card account into a proper bank account with full banking facilities, and to ensure that the contract for paying benefits and pensions specifies a rural network.

I shall speak briefly about parcels. One of the complaints that I receive regularly from people in my constituency is that when they give their postcode when placing an order for something that has to be delivered as a parcel, they are directed to small print saying that an extra amount is charged for deliveries to the highlands and islands. That causes great consternation.

Clearly, the private parcel delivery companies are not keen on delivering to remote areas. Part of the problem is that they do not have depots in remote areas where parcels can be left if the people to whom they are being delivered are out. The Government and the review panel should consider allowing small sub-post offices to retain parcels that parcel delivery companies cannot deliver because someone is out.

At present, under the contract that small sub-post offices have with the Post Office, a parcel delivered by a private delivery company cannot be held anywhere in the shop. Even if the post office is in a corner of a shop, it is still against the contract to leave the parcel anywhere in the shop. Often, the post office-cum-shop is the only shop in the village, which means that if a parcel is being delivered to somebody in the village, there is often nowhere for it to be left if the person is out. I would like the Government, the regulator and the review panel to consider whether we could allow post offices to store parcels on behalf of private companies as well as Royal Mail.

Royal Mail and the Post Office are clearly in a critical condition, as the report demonstrates, but I still believe that with the right action they could be rescued. I conclude with three questions for the Minister. First, will he assure us that the universal service obligation will continue and will not be watered down in any way? Secondly, will he assure us that the present round of post office closures is the last, and that the remaining network has a secure future? Thirdly, the interim report says that the present set-up is unsustainable, so what action do the Government intend to take to ensure that Royal Mail services are sustainable in the long term?

I am delighted to take part in this important debate, particularly as it comes on the back of the issuing last week of the report, “The challenges and opportunities facing UK postal services”, by Richard Hooper, Dame Deirdre Hutton and Ian Smith. I shall refer to it, because it is an important report that shows the seriousness of the problems that we face.

Clearly, we know the background. It is good to see the Minister in his regular seat. He must have spent more time in this Chamber over the past few months than any other Minister, and I am sure that we will eventually give him the seat if he sits in it much longer.

We have been through the political pain and community anger caused by the closures, some of which are still to come in parts of the country. Now—dare I say it?— there is an increasing likelihood of legal challenges, as individual post offices and communities look at how the consultations were held and see them as having been unfair. However, we are looking at the big picture today, and that is what I mainly want to do.

I have some responsibility and interest: as I have said previously in this Chamber and in the House, I served on the Committee that considered the Bill that became the Postal Services Act 2000. It was largely a consensual operation all those years ago and was about trying to save the Post Office and Royal Mail. It is fair to say, as I will say again later, that the legislation has not been an unalloyed success. We are in a mess at the moment, even if the report that has just been published is taken as the benchmark.

The purpose of the legislation that we introduced five or so years ago was twofold. First, there was an idea that liberalisation would make the British Post Office more efficient and competitive. It would be able to see off its main competitors in the British market but also become strong enough to work in France, Germany, Italy and everywhere else in Europe. Its reputation and prowess would be such that it would succeed. Clearly, on those measures, we have a complete disaster. We have no imprint on Europe, and our competitors—the Dutch, Germans and French—in one guise or another, are rampant in our homeland.

Before my hon. Friend moves off that point, all that opening-up of the market has not come without a significant amount of pain and a significant number of job losses, as I am sure he well recognises. The problems cannot be rectified quickly, especially in rural areas such as Argyll and Bute and my own area. Some 30,000 jobs have been lost—and, I hate to add, there may be more losses to come.

I thank my hon. Friend for that intervention, with which I agree. To use a horrible analogy, it has been all pain and no gain. It is about time we considered whether something could be turned on its head, so that we could see some gain and a bit less pain.

The second purpose of the legislation was to try to restore—dare I say to refine?—the definition of the universal service obligation. We spent a lot of time trying to make it clear in the legislation that there was such a thing as a USO and that the Post Office was largely responsible for delivering it but would be protected in so doing. I contend that the USO is more under attack now than ever before—zonal pricing is an obvious example of that—and, more particularly, that we have not been able to protect the Post Office and Royal Mail. Foreign competitors and other major carriers came in below the radar and took away business that, fairly, should be with the Post Office. It is the lack of fairness and the lack of a level playing field that I wish mainly to mention.

On the USO, the Minister’s predecessor stated clearly that the Government were looking again to try to identify whether other major national carriers—international, because they come from abroad, but national in the sense that they have a significant share of the market in this country—should now contribute to the USO. That clear statement, which said that we as a Government were considering whether those other carriers could contribute to the USO, has been restated in answers to parliamentary questions. It would be good to hear the Minister say that progress is being made on that issue and that some announcement is, to use Government language, imminent. It is about time that we expected those who are, by every definition, a national carrier to have an obligation under the USO and that we stopped exploiting the British Post Office by making it deliver the last mile in return for negligible commitment and contribution. Ergo, why should they not pay towards the USO? I hope that we will hear something interesting from the Minister.

Just to show the depth of the problem that we face, I shall read from the introductory remarks in the report by Hooper, Hutton and Smith. Hon. Members should remember that this interim report is posing the challenge and is not coming up with any answers at the moment: it is long on analysis but contains few answers. On the next steps, page 7 says:

“There is now a substantial threat to Royal Mail’s financial stability and, therefore, the universal service. We have come to the conclusion, based on evidence submitted so far, that the status quo is not tenable. It will not deliver our shared vision for the postal sector.

There is a strong case for action. The policies needed to establish a sustainable future will be the focus of our report later this year.”

Three wise people are looking into this matter. I welcome Parliament’s being part of that process, because at the moment nothing matters more to our constituents than postal services, whether in respect of shutting post offices, the lateness of the mail, the deterioration in mail delivery or this most loved institution’s now being regarded more under attack than ever before.

It would be good to get some idea from the Minister about the time scale that the three wise people are working to and what authority they have to come up with solutions, which we welcome. All hon. Members could come up with the headings used in the review—profitability, pricing, efficiency, access to capital, pensions, labour relations, regulation, competition and financial outlook—but it is good that we have that analysis. I like the report, because it is short and readable, and we can dwell on what it is trying to say, even though it is just a framework.

More than anything, the three wise people are demanding a new vision. If someone were to ask me what is the vision for the Post Office and Royal Mail, I would not know, apart from its being one of closure and despair. That cannot be right. We have taken the most loved, most trusted and, until recently, the most used institution and turned it into a big question mark. I could blame my own Government for that, but the problem is deeper and has gone on through the generations. The British public have to accept their responsibility: every e-mail they send to a Member of Parliament is a letter not sent through the postal service. We are all responsible for all the changes.

Does my hon. Friend agree that the solution is not to follow the Liberal Democrat policy, which I understand is to privatise and break up Royal Mail? Surely, that would be the worst-case scenario and would ultimately lead to job losses, which we want to avoid.

From my political perspective, I want to do everything that I possibly can to reduce competition, because it is unfair competition, and I certainly have no truck with further privatisation. Liberalisation was a nice term, and we used to bandy it around as though it were the answer to everything. In essence, in this respect, it has been an unmitigated disaster.

I shall make five simple points, forming the kernel of the debate, to which the Minister may wish to respond, although he may not wish to respond to all of them now. First, we must revisit the Postal Services Act 2000. That Act, which we were all proud of, is not working. I cannot put my finger on exactly what part of the Act is wrong, but we have created an unfair situation, whereby competition is one-sided. Those who compete with the Post Office and Royal Mail are doing okay, but the Post Office and Royal Mail are doing badly. Those of us who believe that there is a need for a state communications service think that that must be looked into. I do not see why something that is so beloved should be completely undermined. The current situation should not be used as an excuse for further privatisation. The service should be owned by the state, given that much of the communications service is already in private hands.

Secondly, the universal service obligation, which I have already mentioned, is not working because it is entirely vested in the Post Office and Royal Mail, which cannot be fair, given that other national carriers should also be contributing.

Thirdly, as the hon. Member for Argyll and Bute (Mr. Reid), whom I congratulate on securing this important debate—I am sorry that I did not say that at the beginning—and other hon. Members have said, competition has arisen in the form of losing PayPoint, possibly losing the Post Office card account and losing the passport business, which is not often mentioned. Whatever one’s views on the identity card, it was a potential money-spinner, yet the Post Office effectively gave up the ghost, because the criteria were rigged to make it so difficult for it to win the business. That is a tragedy, because it could have worked.

While ancillary services are being explored, would it not make sense also to consider the future relationship of post offices presently scheduled for closure, but where the postmaster or the local community would like to have an ongoing relationship with the Post Office for as many postal services as possible through the outreach programme—I welcome the Post Office’s announcing its expansion—or some other means? Both Iffley village and Grandpont post offices in my constituency face closure and an ongoing relationship of that nature, which could retain postal services, would be welcome.

I agree entirely. My last point is about investment and innovation, so I shall come to my right hon. Friend’s question after making my penultimate point.

Although it is controversial to say so, there is a serious problem with the leadership of Royal Mail and the Post Office. The double act of Leighton and Crozier, which was regarded as a marriage made in heaven, has been an unmitigated disaster. They have taken Manchester United and turned it into Derby, to use a football analogy. I am afraid that, if the Government have not yet given them a vote of no confidence, it is about time that they did, because we have had both a dispute that was lamentably handled and the closures, in respect of which no one seems to know the strategy, other than that there must be 2,500 of them. They will blame the Government, but perhaps the Government ought to say, “It would help if you knew what you were doing in terms of the closures.” We have rehearsed that argument, and I will not go through it again.

I am apportioning the blame. At the end of the day, people are being paid millions of pounds to sort out this matter, and when that is not being done, we must look at the people at the top, and it is about time that we did so. Having said that, I will be for ever held up in the Communication Workers Union’s hall of fame. Nevertheless, having attended various demonstrations, it is difficult to be told, as a Government Member of Parliament, what the top people are earning to shut down all the facilities that we want to keep open.

I feel a certain amount of frustration because the closure programme will only save £45 million and some £4.5 million in bonuses was paid last year to the gentlemen that the hon. Gentleman mentioned and the board of Royal Mail.

I assume that the players at Derby are getting a bonus, but I am not sure whether it is totally deserved. I will pass on quickly.

My last point, to return to the issue raised by my right hon. Friend the Member for Oxford, East (Mr. Smith), relates to investment and innovation. We cannot pretend—this is why we cannot turn back the clock—that everything will come from the top down and that the £1.7 billion will be turned into £3.4 billion as a result of ever-increasing investment. It is good that the Government have invested in the Post Office—previous Governments did not and instead took money out of it—but we must understand that there are other sources of funding that we can make available.

Pleasingly, the Government announced today that they will introduce a community empowerment Bill, although some of us thought that we already had one in the Sustainable Communities Act 2007, but never mind—we will reinvent it. However, if there is great support for post offices out there in communities and if those communities want to keep their post offices open, why do we not challenge them? Why do we not tell them, “Find some financial means, find the volunteers and take on the responsibility.”? Let us see this as a partnership. It can work. Community shops in my area work in that way, so why can we not see such an approach as an absolute winner? At the moment, all we seem to do is shut down facilities and tell communities, “Sorry. We don’t want a presence in your part of the world.” We need to rethink the ideology and to turn what is happening into a community opportunity, not something that is about closures.

There are plenty of challenges. The Minister probably has the most difficult job in the Government; it used to be the Immigration Minister who had the most difficult job, but now it is probably whoever deals with the Post Office. The Minister therefore has plenty to do, but we are all here to support him. I hope that he will make some nice comments about what my little programme would do.

I will be brief because I know that others wish to participate in the debate. I will not rehearse what has been said, but I congratulate the hon. Member for Argyll and Bute (Mr. Reid) on securing the debate. At least 5,000 sub-post offices have disappeared since 1997. In the Welsh context, we have lost 30 in Cardiff and the south Wales valleys, 19 in Gwent and 13 in mid-Wales, and others will go under the current programme.

The Post Office card account concerns everyone in the Chamber. One hopes that its successor will be given to the Post Office. It is estimated that 10 per cent. of the income of sub-postmasters comes from the card account, and the figure rises to 12 per cent. in urban deprived areas. The card account not only gives sub-postmasters and mistresses a transaction fee, but draws people into post offices, thereby encouraging the sales of other products. Although the future of the card account is not clear from 2010, we urge the Government to give some positive signals. The National Federation of SubPostmasters tells us that if the successor to the card account is not given to the Post Office, a further 3,000 post offices will close, and nobody wants that.

As we all know, the post office provides an essential service in both urban and rural areas, and I will not repeat what has been said in the two excellent speeches so far. The post office is a focal point for communities. In many areas, 75 per cent. of post offices have a shop or other business attached to them, and they are often the only local place to take out cash. In my home village of Llanuwchllyn, we have one shop, which is also a post office. Without the post office, the shop will disappear. I have a car, as does my wife, and we might well be able to drive 5 miles to the next town, but that might be difficult for others. I am concerned about the future of that post office, which is well used.

If we look at the criteria being applied, the first thing that we see is that 99 per cent. of the UK population is to be within 3 miles of a post office. However, there is a sneaky reference at the end to 95 per cent. of the population being within 6 miles of the nearest post office branch. I am not sure which of those criteria will kick in in my home village. We are 5 miles from the nearest town, so if the sneaky criterion at the end applies, we are in trouble; if the one at the top, which everyone thought was the main criterion, applies, we will be fairly comfortable. I would like to know which it will be. I have written to the Post Office to ask, but it has refused so far to reply. What its representatives do not know, however, is that when they come to interview people and do their appraisal, I will be there telling them plainly what I think of them. I hope that the Minister will tell me when the sneaky criterion will apply and when we will apply the 3-mile zone.

Briefly, on the Royal Mail, yes, the word “liberalisation” was used, but it has been an absolute disaster. That is not because Royal Mail was not efficient; we have had a very good service under the universal service obligation, and we must maintain it at all costs. There have been several changes to working practices, such as the ending of Sunday services, the reduction to one daily delivery and changes to later deliveries. We can live with those things, however, provided that we do not go much further along that route.

Postwatch is concerned about the current situation with regard to the universal service obligation. I will not dwell on the issue, because it has been well highlighted by others, but it is the nub of the matter. The universal service obligation must stand; if it does not, there is no question but that it will be disastrous for rural areas.

I am sorry that I was not here at the beginning of the debate. Does the hon. Gentleman not agree that there is a degree of culpability on the part of Postwatch as far the unravelling of the universal service obligation is concerned? It was well warned six years ago that its attitude—that liberalisation could not come fast enough—would eventually be injurious. Now it is seeing the chickens come home to roost.

I will come in a minute to a court action that was launched yesterday, which the hon. Gentleman may know about. What he says may be true, but I do not know. Many of us felt that the word “liberalisation” did not mean what it said and that it would mean destruction or at least dismantling. It is vital that we have the universal service obligation. Even if other competitors come into the market, as has been said, they must contribute to the overall picture under the universal service obligation.

I hear what the hon. Gentleman says, and he might be interested to know that Postcomm has put its foot down at long last and said that we must protect the universal service obligation. Royal Mail has applied to the High Court to have the decision judicially reviewed and reversed. In that respect, I draw everyone’s attention to early-day motion 116, which was tabled by the hon. Member for Angus (Mr. Weir)—whoever he might be! I urge all hon. Members to consider signing it, because it encapsulates the whole matter.

I also congratulate Miss Judy Brown of Hastings, East Sussex, who yesterday secured permission to seek a judicial review of the decisions made by the Government and the Post Office to axe thousands of post offices. She secured permission based on the fact that she is disabled and that such decisions would be discriminatory. I therefore congratulate her and wish her well in her endeavours in the High Court.

Finally, the following quotation recently appeared on a website:

“Where there are large numbers of people who rely on the Post Office, or where transport to other offices is difficult, the Post Office need to think carefully about the impact of their plans.”

That was said by the Secretary of State for Wales.

I did not intend to make a contribution, so I shall keep what I am about to say as brief as possible.

I thank the hon. Member for Argyll and Bute (Mr. Reid) for securing the debate. As the Minister knows, this issue is just not going to go away, whether we are talking about the mail delivery service or our network of post offices. The current situation gives no one any pleasure. In that respect, I am looking to my hon. Friend the Member for Stroud (Mr. Drew), who sat in a room with me on more than one occasion as we tried to tell the first regulator that the liberalisation of the market would be a disaster. Everyone hates to say, “Well, we told you so.” What has happened in the past couple of years is what the regulator anticipated might happen over five or seven years, but sometimes people will not take a telling.

I must have a slight go at our Liberal Democrat colleagues—

No; perhaps I used the wrong terminology.

The Liberal Democrat policy of privatising certain sections to keep other parts alive would never work. At the weekend, we saw some of the figures on service delivery in terms of mail delivery, and the losses are beginning to pile up. The cost of postage still comes cheap in this country compared with elsewhere, but we have taken our eye off the ball.

It is perfectly fair for the hon. Gentleman to criticise our policy, and I would have agreed with him completely six or seven years ago, but the point at which the pass was sold was when we went down the liberalisation of the market route, which we did so ineptly, handing all responsibility to Postcomm. What would he do to preserve the universal service?

I was just about to come to the value of the universal service obligation, as someone who represents a rural area. Last Monday evening, I spoke to a local community group that wanted to talk about post office closures. By the end of the meeting, the group agreed with me that, in a rural area, the universal service obligation is every bit as important as their local post office, because no one else is coming forward to go 2 miles up a farm track, six days a week, to deliver a letter. That will not happen unless it is done by Royal Mail, which is why I fully agree that if there is anything we can do to get other carriers to make a significant contribution to that last mile, we should make every attempt to do it.

On the Post Office network change programme, I have still to go through what I suspect will be the pain of the closure programme in my constituency. I currently have 57 post offices, three of which are on outreach, and I am not taking any bets on how many might be lost. One of them is classed as being temporarily closed, and one is working in a partnership. We have to look more widely than what we have witnessed in communities over many years. The network change programme comes to my constituency in mid-August. Mrs. Brown, who is expecting to go on holiday in mid-August, will be disappointed, but she will know nothing about it because she does not read Hansard on a daily basis. There is no way that I will leave my constituency in mid-August when that news breaks.

The Post Office is unable to compete. PayPoint, which has been mentioned, has 17,000 outlets and 300 staff, so it is a mammoth task to compete for business. We always throw to the floor the change regarding TV licences, but that has saved the BBC £100 million.

PayPoint was able to undercut Royal Mail because it does not support the rural network that the Post Office has to support. If the contract specified that the rural network was involved, PayPoint would not be able to compete with the Post Office.

I agree, and I hope that that will be the saving grace in relation to the POCA.

We have not only lost TV licences; I was horrified to discover from the Post Office that 1 million people licensed their vehicles on the internet in November. I thought that figure horrendous. Not only did 1 million people do that in November, but 1 million people did it in December, in January and in February. Are we to say, “No, you cannot do that. You must go to your post office.”? I do not think that the general public will like us if we do that, as we all regularly conduct our business in that way.

The POCA is vital, because of the footfall it brings— 4 million customers. I do not know what other colleagues who are present have done, but I tell hon. Members on both sides of the House that I took a small delegation of my hon. Friends to meet my hon. Friend the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), who will consider and ultimately sign off the decision. So, he has already received a delegation making the case that this is about more than just providing a service—it is about the ability to provide a good-quality service on a daily basis.

We are all saying that the POCA might be a saving grace, but that will be in the short term, because the Post Office is not looking to sustain it much beyond the middle of the next decade. However, it would undoubtedly help if we secured that business. The Minister was asked whether he can guarantee that there will be no more closures, but I suspect that if we do not secure the POCA for the next round, there will be something much worse than the 2,500 post office closures that we are currently going through.

On the bright side, there are a few positive aspects. The Government continue to put significant sums of money into supporting the network. The Post Office is at the top of the premier league, as my hon. Friend the Member for Stroud put it, for bureaux de change and new drivers who are seeking car insurance for the first time. It is expanding financial services, but, regrettably, as it is rolling them out, the pressure on financial services and the credit crunch are impinging on its business in a different way.

Last week, I, too, attended the report-back by Richard Hooper and his team. There is much for us all to do, and it is not just up to that team to come forward with ideas. There is a duty on us all to come forward with our own thoughts. The delivery of a Post Office network in our communities needs to be done through innovative methods such as outreach and partnership working. We cannot continue to deliver a post office network in 2008 and beyond in the same way that we delivered it 30 or 40 years ago. It has to change if it is to survive.

At the height of the furore surrounding post office closures on the Isle of Wight, many of my constituents wrote to me voicing their concerns. For them, their local post office served not only as a place to collect pensions and to send letters, but as a vital source of social interaction. In many areas, the local post office is the nucleus of the community. Since the closures, I have received many complaints about people’s difficulties in getting to their nearest post office and about the increased cost of doing so.

Initially, when the closures were proposed, I wrote to the Post Office to ask why some, seemingly profitable, branches were destined for closure, but I failed to get any sort of sensible reply. When branches were eventually closed, I wrote again, asking it to provide me with documentary evidence to show that my concerns and my constituents’ concerns had been taken into account when decisions to close branches were made, but no such evidence was available. I had made joint representations with the island’s chamber of commerce and rural community council, but our concerns appear to have been completely ignored.

When Lowtherville post office closed, my constituents were forced to go to the branch in Ventnor town centre. The road into the town has one of the steepest inclines in the country, so it is virtually impossible for elderly and disabled people to walk down the hill, let alone up it again, and they are unable to use the kneeling bus because the kerbs prevent it from working properly. The Post Office, however, knew nothing about the buses, and said that it was not responsible for public transport.

In Meadow road, East Cowes, the Post Office could not prove that it had taken into account the fact that 500 houses were being built next to a closing branch. In Newport, Hunnyhill was a handy alternative to the central, very busy branch, so the central branch grew even busier when Hunnyhill closed. Surely it would have been better to resolve the difficulties faced by the Newport branch before closing Hunnyhill, but, again, there was no attempt to explain that.

The proposed alternative to Calbourne post office was Brighstone. That is complete nonsense. To use a bus, as proposed by the Post Office, means a round journey of 20 miles. If it had investigated the matter, it would have found that a nearer post office is at Carisbrooke or Newport. Hence, with no direct bus route, my constituents find it difficult, time-consuming and costly to travel.

In conclusion, the Post Office’s scheme was ill-planned and insensitive to the needs of my constituents. The post office service is in an unusual position because it faces no competition and receives a great deal of public money as subsidy. My constituents deserve better.

I congratulate my hon. Friend the Member for Argyll and Bute (Mr. Reid) on securing the debate, which is timely. He spoke clearly about the impact of the universal service obligation on his constituency and the importance of post offices as a social hub. I represent a very different constituency—an inner-London constituency. It was interesting for me to hear just how important is it for a rural area to have a universal service obligation and the impact losing it would have on people’s lives.

Although I represent an inner-London constituency, where picking up mail might appear to be easier, my constituents also feel strongly about this matter. They certainly share the same anger that has been spoken about today by many hon. Members, including the hon. Members for Isle of Wight (Mr. Turner) and for Meirionnydd Nant Conwy (Mr. Llwyd), whose constituency I hope I have pronounced properly—I have been practising it under my breath for five minutes. Both spoke about the impact of closures on their constituencies. There is a similar level of anger in Brent, where we have had a further six post office closures in the latest round, which is a 40 per cent. reduction since 1997. As my hon. Friend mentioned, the death of a post office often represents the death of a shop too. In an urban area, it can also represent the death of the local parade of shops because the post office ensures footfall and keeps local businesses alive.

A number of people have studied the impact that post office closures have on the local economy. In a study looking at Manchester, which is obviously an urban area, the New Economics Foundation suggested that closing a post office would result in the local economy losing about £270,000. In a rural area, it suggested that for every £1 of subsidy, between £2 and £4 is generated for the rural economy. It seems to be a false saving to make the closures. As I mentioned in an intervention on the hon. Member for Stroud (Mr. Drew), the closure programme generates just £45 million of savings.

My anxiety and that of a number of other hon. Members who have spoken, particularly in interventions, is that there does not appear to be a sustainable plan to keep the remaining post offices alive. I worry when I hear that just 7,500 post offices are required to meet the access criteria. If the post office network is losing money, what good reason do the Government have for keeping those post offices alive? I hope that the Government will commit to a sustainable plan and recognise the social value of the post office network. We cannot afford to lose another 3,000 post offices because we will undermine the whole of the network. There is no evidence to suggest that the 2,500 closures that are currently being forced through will generate the increase in footfall that the Government say is needed to maintain the financial viability of the network in the remaining post offices.

A number of hon. Members mentioned the consultation process, including the hon. Member for Isle of Wight. The hon. Member for Stroud talked about whether communities could be involved in bringing forward finances to safeguard post offices that are threatened with closure. However, it is difficult to do that when we are given only six weeks’ notification. We need a sustainable plan and a rapid injection of funds—both into the post office network and Royal Mail—not just to allow it to survive, which frankly it has just about been doing for the past few years, but to modernise, innovate and compete. That point was made well by my hon. Friend.

Royal Mail has been starved of investment by successive Governments and unfortunately it was inevitable that it would struggle with the liberalisation process if there was no immediate injection of funds. It will be difficult for Royal Mail to modernise to allow it to compete. It continues to have a large pension deficit, as the hon. Member for Stroud pointed out, which goes up or down according to the state of the market. The deficit appears to be £3 billion or £4 billion and was caused by a decision made by the previous Government to take a holiday from payments when the equities market appeared to be performing well. There is a desperate need to invest in the infrastructure of the Royal Mail. At a time when the public purse is tight, particularly after a pre-by-election bailout, what are the chances that the Government will invest the dramatic amount of money required to ensure that Royal Mail can cope?

Furthermore, successive Governments have been unwilling to give Royal Mail permission to go to the markets and borrow for investment. Part privatisation would give Royal Mail that permission because it would allow for a change in the nature of the business. Our policy is that there should be a separation of Royal Mail from the post office network, as other hon. Members have mentioned. I will say why that is necessary in a moment. Part privatisation of Royal Mail would enable the sale of 49 per cent. of the shares and the proceeds of that sale could be invested into the post office network to give it the kick-start that is needed. That will not solve all the problems of the post office network, but it will at least allow a kick-start in investment and enable the network to be modernised as required. The remaining 51 per cent. of shares could be divided between Government and a John Lewis-style trust for the benefit of employees. The shares could be held in a trust for the current employees of the business to ensure that they have a stake in the future of the organisation and can share in its success and profits. Employees would have a share in improving the performance of the business.

I appreciate that some hon. Members disagree with that policy, but the truth is that the Government do not have another solution. I suspect that the postal services review was probably paving the way for recommending something similar, but so far the Government have refused to come forward with a policy that will lead to the sustainability of Royal Mail or the post office network. Separating the Royal Mail from the post office network is key to the survival of the network. My hon. Friend mentioned post offices acting as a depot for parcels, which would be particularly important in rural areas. Actually, that is important everywhere. How often have we had the frustration of having something delivered by a private company and finding that we have to go a long way to pick it up or have the persistent hassle of renegotiating times when it can be delivered? It would be so much easier and more convenient if a parcel could be delivered to a local post office and wait there for us to pick it up. That would provide a source of revenue for the post office and would be better for those of us who are trying to pick up things sent to us.

The lump sum created by the sale would also allow investment in modernising the network, as I said. There is currently a particular problem with Crown post offices. They are not hospitable places to be and considerable investment needs to be made in training, in the appearance of the branch and in the infrastructure. That would allow the post office to function more efficiently and would be welcome.

A number of hon. Members spoke about the need for new sources of income. The hon. Member for Dumfries and Galloway (Mr. Brown) spoke about the Post Office card account. The Post Office should be central to a new universal service obligation: that of providing basic bank accounts. I am relatively open minded about whether the Post Office itself should be the provider of that bank account or whether it should work in partnership with others. I would be interested to hear the Minister’s views on that. There is a serious problem with financial inclusion and access to basic bank accounts. The policies the Government have so far pursued in trying to encourage other banks to provide such accounts does not seem to have been particularly successful. My proposal would marry together two different issues, provide a source of income for the Post Office, and recognise the value of the post office network as a public service.

My hon. Friend the Member for Argyll and Bute made a number of good points about Government services being given to PayPoint and the need to think about criteria for awarding contracts. That is key. When we think about the use of the post office, we need to understand it as a public service and ensure that things such as the rural economy are written in.

Several hon. Members spoke about the idea of a levy to pay for the universal service obligation for postal services. We deliberately left that open in our policy because of what we foresaw might happen if there was a failure to invest in Royal Mail. Judging by the interim report from the Postal Services Commission, it seems that such a measure will be necessary. I hope that the Government will think seriously about it because the universal service obligation must be protected. A levy may be a sensible way forward.

It is a pleasure to serve under your chairmanship, Mr. Weir, although you must have found this a deeply frustrating afternoon, as at times you would probably have preferred to be participating in our discussions rather than being in charge of them.

I congratulate the hon. Member for Argyll and Bute (Mr. Reid) on securing this timely and important debate, and on the thorough and thoughtful way in which he introduced it. He took us through some of the areas where we have seen a general decline in the post office service. He talked about the ending of the second delivery and the increasing cost of postage, although the hon. Member for Dumfries and Galloway (Mr. Brown) was right to point out that in most other European countries, the postal rate is two to three times what it is in the UK. The hon. Member for Argyll and Bute talked about the confusing approach that is used to show that the post has been delivered on the next day. We need to take more account of that. He could have added the end of the daily collections, the often confusing pricing system, which means that people do not understand the correct postage for their letters, and the decimation of the postbus service, which has been withdrawn in many parts of the country. The hon. Gentleman was treading on dangerous ground when he criticised the BBC for seeking to save £100 million of licence payers’ money. If people had to go through post offices, another £3 or £4 would be added to everyone’s licence fee to pay the extra £100 million that would be required. It is right that there should be open competition.

The Post Office is in a serious situation, but it is a mess of the Government’s making. After all, the Government set the framework for the closure of post offices. The financial rules and level of subsidy were set by the Government. The access criteria, which were about geographical location rather than economic viability, were set by the Government. The fact that the consultation period is only half the time recommended by the Cabinet Office was determined by the Government. It is intriguing that post office closures had to be suspended in the run-up to the local elections because of Cabinet Office rules, yet the same rules do not prevent the Government from announcing £2.7 billion of public funding for tax cuts this week, just before a by-election.

Furthermore, the rules on the closure of post offices must have been cleared by the Government. Post offices that are closing have been told that they may not offer a lottery service and they may not offer a PayPoint service, because the Post Office wants to encourage migration. It is one thing for the Post Office to determine where people may buy their stamps, but it should not be determining where people can buy bread and milk as well. As was said by other hon. Members, particularly the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), when we lose a post office, we often lose a shop and services beyond that as well, which does tremendous damage to local communities.

The sadness is that the Government ignored a formula that could have saved post offices. In addition to the subsidy, which is so important and which we support, they should have been finding ways to bring new business into the post office network before they tried to find out how many post offices they could get away with closing. There has been discussion this afternoon about how we could bring in business by allowing the Post Office to work with other carriers. It is environmentally crazy to have vans driving forwards and backwards past the local post office every day unable to deliver packages to local houses because people happen to be out. It would make much more sense to use the post office as a hub where people can access a range of local carrier services.

Other financial services could be considered. Sub-postmasters themselves are calling for that. We never meet a sub-postmaster who says, “I want more subsidy; I want to depend on subsidy.” They always tell us that they want to depend on business. We should be opening up opportunities for them to depend on business, and ensuring that post offices become a hub where people can access local and central Government services. Much more business could be done through the post office network, which would enable more post offices to survive on business, rather than having to rely on subsidy and seeing their numbers cut as they have been.

Investment should have been made to enable post offices to compete on a level playing field. The hon. Member for Dumfries and Galloway talked about the number of people who renew their car tax online, but if we go online, we just type in our registration and it is immediately known whether our car is insured and has an MOT certificate if it requires one. If we renew through the post office, it does not have access to that information through its computer, so we have to take with us the insurance certificate, the MOT certificate and all the bits and pieces that make the process less convenient. Even when we want to do things to support the local post office, we find that the system is skewed against us.

More generally, it is clear that the challenge facing Royal Mail is formidable. Some of the most lucrative parts of the business have been gradually chipped away. The issue is not whether it was right to liberalise, but that liberalisation works only if everyone liberalises at once. The problem we face is that we have done it ahead of most other countries in Europe. If it had happened in other countries at the same time, Royal Mail would have been able to explore opportunities elsewhere.

The Hooper report has been cited. It states:

“There is now a substantial threat to Royal Mail’s financial stability and, therefore, the universal service. We have come to the conclusion, based on evidence submitted so far, that the status quo is not tenable. It will not deliver our shared vision for the postal sector.”

From what Mr. Leighton and Mr. Crozier say, it is clear, too, that more money will be needed. It is wrong to blame them for what has gone wrong. They are trying to run a business with their arms tied behind their backs by the Government. Adam Crozier said:

“Clearly, the business needs more cash to invest.”

Allan Leighton said:

“We have got to know what cash we will have coming in.”

We need to know from the Minister what discussions he is having with them, how much money he proposes to put into the Post Office and Royal Mail and how he plans to do that. What will they offer in return? Just a year ago, a £3.7 billion rescue package was put together for the Post Office, but now we know that it was not adequate to secure the survival of Royal Mail and the all-important universal service obligation.

The hon. Gentleman just said that the money that the Government had put in was inadequate. Can he please tell us how much he proposes to put in, in addition to what we have pledged?

I am saying that the money has not been able to produce the restructuring that the Government said it would achieve, so we need to consider different formulas. We certainly need to consider whether we should divide the role of the Post Office from that of Royal Mail to put much greater clarity into their financial arrangements than is currently the case. We know that the Post Office and Royal Mail are coming back for more funding so we need to know how the Minister plans to respond.

Will the Minister also clarify the confusion that is emerging about the future of the Saturday delivery? That issue has been covered in the press in the past few days. Last week, The Daily Telegraph reported that the Saturday delivery was under threat. Postcomm immediately responded that the story had “no substance whatsoever”. However, Postcomm’s chief executive, Sarah Chambers, said:

“There are other ways to deliver a service to customers in far-flung areas than insisting on a six-day-a-week service.”

What precisely was she referring to? What is being considered? It appears to us that there is a real attempt to chip away at the universal service obligation. The Government must have an understanding of what Postcomm is considering and what Royal Mail wants in that regard.

In the course of a television interview, the Minister said, “We are absolutely committed to the universal service obligation.” However, he would not talk further about the threat to the Saturday service. We need to know what is happening. We all know that Royal Mail faces what may be the biggest threat in its history. The delivery service—the service our constituents rightly expect—is under threat, but at the heart of the situation is the Government. They cannot just say, “These are other organisations and we do not know what’s going on.” We expect some answers and we expect them from the Minister this afternoon.

It is a pleasure, Mr. Weir, to serve under your chairmanship. It is also a pleasure to be here in Westminster Hall, in my usual place, discussing the Post Office. Members who are really keen can see me in action again in half an hour, in a debate on post office services in Stafford. However, it is always a pleasure to debate the wider issues, which is just as well, as we do so with some frequency.

Today’s debate is not quite like the usual post office debates, which are normally about the closures taking place in various parts of the country. Although some hon. Members took the opportunity this afternoon to mention the various local communities in their constituencies to be affected by closures, our debate has ranged more widely. It focused particularly on the Hooper review, which was set in train by the Government just before Christmas.

The Hooper review arose from a manifesto commitment to undertake a review of the liberalised market during this Parliament. The timing is right, because something significant is happening in the mail market, but I do not think that it was referred to during the debate. Many Members spoke about the inequities of competition—about creaming off the more profitable parts of the mails market and about the evil nature of various companies that have come into the market. I have to tell them that those companies will be employing people in their constituencies, so I urge caution. However, that was the tone of the debate.

No one mentioned the wider changes in the mails market. It would be complacent to say that the problems and challenges facing Royal Mail are due only to competition from other mail providers. There is competition, but it is hugely and significantly additional competition. It comes not from TNT or UK Mail, or the other operators at the access pricing end of the market, but from Google. That is not only my verdict; it is the verdict also of the chief executive of Royal Mail. The competition is the internet. As my hon. Friend the Member for Dumfries and Galloway (Mr. Brown) said, it is about the capacity to put services online. It is popular and is used by 1 million people a month.

I shall give way in a moment. The debate is not only about transactional services online but about how we communicate with one another. When I said that something significant is happening in the mails market, I meant that the volume of mail once tracked economic growth—they were like two peas in a pod; they would go up together and come down together. Over the last couple of years, however, the total volume of mail has declined by about 3 million items a day. It would be complacent of us to place that at the door of the liberalised mails market.

The Minister is right about the changes in the mails market as a whole. The changes were taking place six or seven years ago, when the Government first spoke of liberalising the postal market. From our experience of parcel post, we know what unregulated competition in such a market can achieve. With hindsight, does the Minister not think that pushing liberalisation of the market as far and as fast as the Government chose to do, and allowing Postcomm to set the access price as low as it did, was a mistake?

There are two points. First, Postcomm did not set the access price; it was negotiated by Royal Mail. Secondly, whether we were correct to liberalise at a particular time—a point mentioned also by the hon. Member for Wealden (Charles Hendry)—is becoming a moot point. The European directive has been agreed. The rest of Europe is committed to liberalisation over the next few years, with the largest countries doing so by the end of 2010. Liberalisation is coming in other countries.

Many hon. Members quoted the Hooper review, saying that it stated that

“the status quo is not tenable…There is, therefore, a compelling case for action.”

No one quoted Hooper’s statement:

“Returning to the days of statutory postal monopolies is not a policy option in the European Union”.

It is important to remember both statements when considering the challenges facing the mails market.

What has been the effect of competition? The report is clear about the benefits to large users of mail services. It is also critical of benefits to small business and domestic users. Of course we care about domestic users, because they are our constituents. Even though only 13 per cent. of mail is what we would describe as social mail—the stamped mail with which we are all familiar—it is important that our communities receive a top-quality service from Royal Mail. The large bulk mailers—they account for 87 per cent. of mail—have done well from competition.

In the few minutes that remain to me—it is always a feature of these debates that I am asked to respond to more points than is possible in the time—I turn to some of the specific points raised in the debate.

Although postal prices for the UK were increased recently, they are comparatively low internationally. Our service to the user is not expensive compared to services in Europe.

Many hon. Members asked about the future of the card account and stressed its importance to the future of the post office network. I spoke to the National Federation of SubPostmasters earlier this week, and it is keen for the Post Office to win the contract for the new card account. Hon. Members will know from their attendance at previous debates that the process is out to tender. The hon. Member for Argyll and Bute said that the Post Office must get the work. That may be a statement of intent on his part, but it is not one that the Government can legally make. Tendering rules have to be pursued, and the decision will be taken in the proper way by my colleagues at the Department for Work and Pensions.

If the Government were to specify the contract so that the provider had to have a rural network, including branches on the small islands in my constituency, the only company that could win the contract would be the Post Office.

The contract specifies that whoever wins it has to have 10,000 outlets throughout the country. Some of the Post Office’s competitor networks may take issue with the hon. Gentleman’s description, but the contract stipulates 10,000 outlets. That decision will be taken later this year.

My hon. Friend the Member for Stroud (Mr. Drew) spoke of his guilt at serving on the Committee that considered the Postal Services Act 2000, which initiated the present regime. I was interested to hear him say that, because the Act enshrines the universal service obligation in legislation. The Government are committed to the continuation of the USO and to a one-price-anywhere service throughout the UK. I know that is important to our constituents.

I have not gone into all the ins and outs of post office closures today; I have concentrated on the mails market. I end by saying that the third stage of the Hooper review will be to report later this year on how to maintain the USO in the changed mails market.

Unitary Authority (Shropshire)

This is an important debate on funding for the proposed unitary authority in Shropshire. My hon. Friend the Member for Ludlow (Mr. Dunne) and I had a terrible battle on our hands to try to prevent a unitary authority from going ahead. The best comment on the matter, which I read in today’s Evening Standard, was from the late Gwyneth Dunwoody, who said it is one of the most cynical policies of the Labour Government, ignoring the wishes of local people. Regardless of that, we will now have a unitary authority.

The Minister will be pleased to hear that I shall make very few criticisms of him and the Labour Government; rather, I will stick to the key issues that I would like him to consider surrounding future funding for the county. However, I should like to press him on one issue. The reason why I was against a unitary authority is that I feel passionately about local accountability to my constituents in Shrewsbury. It was important that only councillors who lived in Shrewsbury and who were accountable to my constituents through the ballot box could make decisions on key issues that affect Shrewsbury.

We have many controversial matters before us in Shrewsbury, including co-location of the two colleges and plans for a huge incinerator. I would argue that Shrewsbury has the best and most experienced councillors in the county, so I hope that many of them will have senior positions on the new unitary authority. However, my first question to the Minister is: what mechanism is in place to protect a county town such as Shrewsbury in a unitary authority? We find ourselves with only a third of the councillors in the new authority, so we could be outvoted by the rest of the county on the incinerator issue, for example. It is easy for councillors who live 30, 35 or 40 miles away to vote for an incinerator to be built in Shrewsbury; obviously, it will not be built in their backyard and they will not be held to account through the ballot box, because their constituents might live 30 miles away from the town. I hope that some form of mechanism, certainly when it comes to planning law, will protect a county town such as Shrewsbury from the overwhelming votes of other parts of a county.

We are going to have a unitary authority, and I am determined to make the most of it. The only downside is that there were no elections this month. We were due to have elections in May—we had elections every year in Shrewsbury—but, regrettably, because we will have a unitary authority, the Government decided that we would not have those elections. They will instead take place next May, when the unitary authority comes into place. With the drubbing that the Labour party got in the May elections, in which they lost hundreds of councillors, I believe that the Conservatives could have made a few gains in Shrewsbury. We already have a big majority on the council, but it worries me—the Minister may scoff—that some Labour councillors in Shrewsbury will continue in office when they might not have been councillors if the elections had gone ahead. I say that not to have a go at the Labour party, but to urge the Minister to think again in future when such organisations are introduced. Are such things legitimate, no matter what the difficulties of holding an election only 12 months in advance of the unitary authority? I am a democrat—I went into politics because I feel passionately about democracy and accountability. Is it right and correct to get rid of such an election and for people to sit as representatives illegitimately?

I must praise the work of the leader of Shrewsbury and Atcham borough council, Mr. Peter Nutting. He is doing a brilliant job in making the accession to a unitary authority work as well as possible, and I applaud him for it. Like me, he fought against the unitary authority, but he is now determined to do everything possible to move to the unitary authority. I should like publicly to acknowledge his work.

I should also like to praise—sincerely—the chief executive of Shropshire county council, Mrs. Carolyn Downs. She obviously had to implement and undertake the policies of the Conservative-controlled county council when it pursued its wish for a unitary authority. Regrettably, we disagreed on many occasions on the matter, but I must put on record that I admire her stamina and determination to ensure that what she felt was right for Shropshire was implemented. I acknowledge her hard work on the matter and the achievements of Shropshire county council—it has achieved so much with so little money. The Minister will be aware that there are good, average and poor chief executives. Mrs. Carolyn Downs is an excellent chief executive. The Department for Communities and Local Government could gain a great deal by learning how Mrs. Downs manages to achieve such extraordinary results with so little funding.

The Labour Government are determined to focus on the redistribution of wealth—to me, that is a cornerstone of socialism. Of course, Shropshire is a net contributor to the Exchequer—I have tabled many questions on how much tax Salopians pay and how much we receive, and there is no doubt that Shropshire is a huge net contributor to the Exchequer. We have a similar population to the London borough of Ealing, yet we receive a fraction of its funding. The Minister would be alarmed by a comparison of what the Government spend on Ealing and Shropshire. I am in the process of producing a pamphlet on the differences in funding between Shropshire and neighbouring Telford and Wrekin. I shall send a copy to the Minister, so that he can see how two communities, cheek by jowl, receive huge differences in funding for essential public services.

When preparing for the debate, I spoke with Mrs. Laura Rowley, the director of resources at Shropshire county council, who helped me to articulate some points to put to the Minister. In Shropshire, there are tremendous pressures on services for older people. The number of over-85s in Shropshire is twice the national average. That is important because a tremendous amount of social service support is needed for people in the last two years of their lives. Having such a huge number of elderly senior citizens will obviously have an impact on the social services that the unitary authority will provide when it comes into being.

Shrewsbury was voted one of the best places in England to retire in a major national finding. I am pleased about that because the older a person gets, the more inclined they are to vote Conservative—wisdom comes with age. However, I should like the Minister to address the serious social services problem. The senior citizens forum in Shrewsbury is partly funded by the county council. I should like to tell the Minister what a tremendous job the forum does for senior citizens. Its leading representative, Mr. Bill Harris, has written to me. I shall give the letter to the Minister; I have a little dossier for him here with all the facts. Mr. Harris says:

“We believe that enabling the involvement of increasing numbers of older people in community affairs through frequent public meetings and coffee mornings, etc. is the way forward. This is part of our effort to increase membership numbers from the present 6,000.”

The forum has 6,000 members. I have never come across a body more adept and able at lobbying than the Shrewsbury senior citizens forum. I hope to hear from the Minister what sort of extra help his Government will give to the unitary authority, bearing in mind the demographics of Shropshire and how many senior citizens we have.

To move on to education—the most contentious point for me—Shropshire is ranked 145th of 149 local education authorities for funding. There is huge pressure on small rural village schools. According to the Minister for Schools and Learners, the Government have a specific policy of safeguarding rural schools, whereby they should be closed only in extremity, yet many rural village schools in my constituency have come under threat of closure, simply because we do not receive anything like as much money as other parts of the country. We get £200 less per child than Telford next door, never mind Ealing. That is simply unacceptable.

I recently visited St. Andrew’s school in Nesscliffe, where I saw for myself the extraordinary benefit to rural village life provided by such schools. It is important to keep rural schools going. I appeal to the Minister, who knows from his own county of Gloucestershire how important rural village schools are and how vital it is to save them. I do not know whether it was broadcast in Gloucestershire, but on Central news last week, the Government announced an extra £28 million for schools in the black country. My goodness me, I should like to see something like that in Shropshire. Interestingly, the black country is full of Labour marginals, so it is perhaps not surprising that the £28 million will go there, rather than to solidly Conservative Shropshire. Never mind; I hope that the Minister will take my views on board.

An independent report on sparsity was sent to the Department for Communities and Local Government. It was funded partly by Shropshire county council and was submitted to the Department in 2006. It is important, because it highlights the cost of providing services across Shropshire—a huge rural county—due to the sparsely populated rural areas within the county. Scotland takes sparsity into consideration, using measures of dispersion when distributing finances throughout the country. My understanding is that Shropshire is treated similarly to Cumbria. More work must be done to differentiate the rural counties. The population in Cumbria is far more fixed in certain areas that are close to one another and large parts of the county are empty. In Shropshire, rural communities are spread out far more. That is why it costs even more to provide services in Shropshire than in Cumbria. I hope that the Minister will take on board my concerns about funding for sparsity. He knows as well as I do the huge increase in transportation costs and all the other costs involved in providing services in rural communities, and I hope that he will be able to say something on that point.

The Government trumpeted their actions on concessionary fares. I have spoken to many people in Shropshire who are disabled and who say, “It’s all well and good having a national scheme, but in parts of Shropshire at the moment, that scheme only operates after 9.30 am.” Many senior citizens want to make use of that service to go to work, and most people start work before 9.30. It is a marvellous policy to ensure funding for free bus services for people who are disabled and senior citizens, more and more of whom now have to go to work to make ends meet. If the Government are serious about the scheme, it is important that it should operate before 9.30. I look forward to hearing when sufficient money will be given to ensure that people who are disabled and senior citizens have free bus transport before 9.30.

A constituent, a lovely young lady called Ellie Johnson, came to see me. She is the designated nurse for looked-after children in Shropshire. She is responsible for 400 children in care homes around Shropshire. There is only one such nurse, and 29 hours a week is all that the council seems to have money for. Interestingly, 50 per cent. of those children are not from Shropshire, but from other parts of the country. Because Shropshire is such a beautiful county, many care homes set up business there, bringing in such children. It is important that the Government should acknowledge that Shropshire is dealing with far more vulnerable children than the average for a county its size. We are a magnet for disadvantaged children who need care. The dedicated nurse provides various vaccinations—she spoke to me about the importance of ensuring that vaccinations are given for cervical cancer—and advice on smoking, drugs and sexual health. All those issues are being raised with the children.

Sitting suspended for a Division in the House.

On resuming—

I shall end by saying that I hope that the Minister has realised the extent of my passion for proper and fair funding for Shropshire unitary authority when it comes into existence. His Government have a policy to roll out unitary authorities throughout the rest of the country, and if he wants them to work well, I urge him to help us to help the excellent chief executive, Carolyn Downs, and the Conservative-controlled unitary authority—it will undoubtedly be Conservative controlled after the elections next year. I hope that he will help us to make it a success by giving us adequate and fair funding.

It is a pleasure to serve under your chairmanship, Mr. Weir. I congratulate the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on sticking up for his patch and on his contribution. I always find his contributions in the House to be passionate and sometimes amusing. He has provided a bit of both today.

The hon. Gentleman mentioned the leader of his local council and his local chief executive, to whom he is obviously close and with whom he has a good rapport and has worked closely over the years. Another good and effective local councillor is Malcolm Pate, who is a Conservative councillor and leader of the county council. The hon. Gentleman opened by saying that the Labour Government have been cynical—that was cruel, to say the least—in imposing these measures on the people of Shropshire, but closer analysis bears out the fact it was Councillor Pate who pushed forward those ideas as a local Conservative councillor. It is well worth remembering that.

The hon. Gentleman talked about incineration and the dangers for his constituency from having an incinerator. He will be aware, as I am, that under the old structure, incineration would have been the responsibility not of his district authority, but of the county council. The position is similar on my patch where my district council, Gloucester city council, is against incineration, but the county council is trying to impose it in or around my constituency. If we had a unitary authority, at least Gloucester city councillors would be able to have their voice heard in trying to block that incinerator. Perhaps the hon. Gentleman’s local councillors will, as part of his new unitary authority, have their voices heard in that debate. Such matters are well worth recalling.

The hon. Gentleman talked about having an election this year. I assume that that will be to the existing structure, because the new council will come into being in April or May next year. I fully understand why there would not be elections this year for an authority that will not begin to exist until the subsequent year. There is no political cynicism in that, and the reality is that practical changes must be made with the change to a unitary structure.

I appreciate the hon. Gentleman’s comments about accepting the change, and his debate was really about other matters concerning funding. One of the merits of unitary authorities that people often mention in my area is not least the savings. In Gloucestershire, unitaries will probably bring about £16 million of annual savings. I understand that Shropshire is looking to save around £9 million a year, every year, which will have a direct consequence on the case that he was making for local funding and what Shropshire could do with that funding when it does not have one authority with responsibility for roads and another with responsibility for road humps on those roads, or one authority with responsibility for pavements and another with responsibility for shrubberies by those pavements. It is small wonder that many of our constituents find that farcical and sometimes bureaucratic, and it is probably fair to say that sometimes even elected members of a local authority are not sure what one local authority does and what another does.

The hon. Gentleman talked passionately about other areas and how they seemed to do better than his locality. I am sure that he is aware that formulae are at work and that they often reflect deprivation issues. I clearly recall hearing him on the radio during the 2001 general election campaign when he was a younger man—he is still a young man—making a passionate case for why Ealing, of all places, although he was a parliamentary candidate there, should receive more funding rather than less funding, which could then be spread elsewhere. That is also worth recalling, because I do not think he was opposing the formula at that time when he was doing those interviews.

The hon. Gentleman talked about the importance of rural issues such as transport and schools, and made a fair point. Issues concerning rurality and sparsity are taken into consideration, particularly when considering the older population. He also talked about social care. When considering the formulae for social services, sparsity is taken into account, whether in his area of Shropshire or mine of Gloucestershire.

I have heard the hon. Gentleman during Prime Minister’s questions ask why all the money in his locality goes to Telford. I can think of an example in my constituency of inner-city schools receiving via the county council—the top-tier authority—funding of less than £3,000 a child. I also know of a school in the county that has just 12 pupils and receives an average of £8,700 a child. I suggest that that is not fair either.

The hon. Gentleman passionately made the case for pensioners and their right to free travel on buses. If he were on his party’s Front Bench, I would ask him whether it is a policy commitment to introduce free travel for pensioners before 9.30 in the morning. He is well-read and intelligent, and I know that he is aware that the Government are pouring nearly £220 million a year into the new scheme, which is making a real difference to pensioners throughout the country.

The hon. Gentleman also talked about a report by SPARSE—a grouping of the most rural local authorities in England—to which his own local authority contributed. It was given to us in July 2006. The Department was not convinced by it, and I will explain why. We do not accept the contention that it costs, on average, 85 per cent. more to deliver services in rural areas. The research did not look at all local government services. Instead, it focused on a small number of local government and NHS services, the costs of which are most affected by population dispersal. The work to establish the costs was entirely theoretical and took no account of the fact that, by their nature, rural areas tend to have lower levels of provision for some services. It contained no comparison with the costs of service delivery—I am thinking of wages and housing issues—in urban areas such as London or Birmingham. However, we acknowledge that it costs more to deliver some council services in rural areas, such as those that involve travel or transport. For example, household rubbish collection, help for the elderly and responding to a crime costs more in some rural areas. For that reason, the funding formula for older people social services, education, police and the environmental, protective and cultural services contain adjustments that direct extra resources to sparsely populated areas.

We are also aware of the approach taken in Scotland to the funding of rural areas, which the hon. Gentleman also mentioned. I note that he suggested that Shropshire’s pattern of settlement is very like that in Scotland. However, I would say that in general, the patterns of settlement in the two countries are very dissimilar.

We have had a very constructive debate. It was not just about unitary authorities—I think we have moved on from that debate, as some of the hon. Gentleman’s local councillors, such as Councillor Pate, would welcome. We must now consider how we can best make the unitary authority work. I hope that the hon. Gentleman will find in the coming weeks, months and years that the local case for a unitary authority—the reduction in bureaucracy, the better working between local agencies and the projected savings of £9 million a year—is something that the local taxpayer will particularly value. I hope that he will feel that Shrewsbury and Atcham can, in many ways, have an enhanced voice at the table rather than, at times, a weaker one. I understand where he is coming from. Speaking as someone who has a district and a county authority, I can say that sometimes the district authority cannot be heard, not least on issues such as incineration, as he mentioned. However, we have moved on from that debate.

I hope that there will continue to be constructive meetings with local politicians, my Department and the local authority that is trying to fulfil such measures. I know that my Department and the local authority are meeting on a monthly basis.

During the break, I handed the Minister a dossier of Shropshire county council’s achievements. Will he join me in congratulating the council on those achievements and take on board the statement that I made about the excellent chief executive and how other parts of the country could learn from our experience?

We are always very keen to learn from best practice wherever it is around the country, including Shropshire. I am very happy to congratulate Shropshire county council on all the good things that it has managed to achieve over the years.

Stafford Post Office

It is a great pleasure to see you in the chair, Mr. Weir, as you watch over our debate on an issue of great importance to many people in the county town of Stafford. It will not have escaped your attention that my hon. Friend the Minister has often appeared in this Chamber to respond to debates about the closure of post offices under the Post Office network change programme. When I learned last week that I had secured this debate, I made a point of seeking him out to tell him that this is not one of those debates. I say in passing that he will know that the network change programme is under way in Staffordshire at the moment, and we are in the middle of the consultation period.

Perhaps it is an opportune moment for me to place on record my thanks and gratitude to the Minister for agreeing to see me in his Westminster room on 1 April to talk about the proposals for my constituency in which four post offices are to be closed. He might recall that I said that he and Post Office Ltd should do as much as possible to stop the closures of post offices if they are the last retail outlet in a village. The greatest focus of protest in my constituency is in the village of Great Bridgeford, which will lose its last retail outlet post office if the proposals go ahead.

Today, we are debating Stafford’s Crown post office. It is one of those included in the commercial arrangements that Post Office Ltd and WH Smith came to a year or so ago. It might be worth beginning by saying to my hon. Friend the Minister that for most of the 20th century, Stafford’s main post office—its Crown post office, its only post office in the town centre—occupied a very beautiful building called Chetwynd House. The building was built in 1746 by William Chetwynd whose family seat was Brockton Hall, which is now a well-known golf club in Stafford. The house was sold in the 1780s to William Horton, then a famous shoe manufacturer. A plaque on the wall of the post office testifies that Richard Brinsley Sheridan, the very famous playwright and the less famous MP for Stafford in the late 18th and early 19th century, often stayed there with his friend William Horton. It is a very imposing building that is listed because of its character and design. It stands on an important corner in Stafford’s main thoroughfare, Greengate Street, by what would have been in the middle ages the southern gate of the walled town of Stafford.

We have now moved our post office to WH Smith, which is also on Greengate street, so it has not moved far. Personally, having read all the information about the commercial tie-up between Post Office Ltd and WH Smith, I can see why both partners made such an arrangement. I understand the commercial pressures that both were under and I can see that both businesses are reasonably compatible. Therefore, I was not going to go to the stake saying that, if selected, Stafford post office should not move into WH Smith. I waited for the proposals and found that we were in the list of 70 post offices to move into a WH Smith store following what was claimed to be the success of the six pilots. I was willing to consider whether we could make a success of the plan in Stafford until I learned that the post office was to be located on the first floor of the shop in a building that has questionable arrangements for disabled access. It was at that point that I took the view that I did not think that such a move would work. I was one of 45 consultees who objected to the transfer of the post office. I know that in 20 of the representations, access issues were specifically raised before the transfer went ahead. The decision was made that the move would take place despite the objections, and it happened last October. I pointed out in a debate about post offices in this Chamber on 29 November that I had objected to the move taking place, and that it had gone ahead against objections.

Having seen that we could not save our post office from being moved, I resolved that I would do everything possible to make a success of the move. I had accepted the commercial pressures that drove the partners to work together. I wanted my post office to be successful, and it was fine that a famous trading business such as WH Smith should be successful in the town of Stafford. I wanted it to continue that success. I therefore arranged a meeting on site at the post office with managers of Post Office Ltd and WH Smith, representatives of Postwatch and Stafford borough council and, crucially, senior officers of the Stafford and district disabled access group, a man named Derek Boult and a woman named Joyce Middle, who are both strong and passionate campaigners for disabled access and disabled people’s rights. Joyce Middle is confined to a motorised scooter because of her disability.

We all met at the site before the move took place to talk about the changes that would be needed to make the building accessible to disabled people. In fairness to the management of WH Smith, they listened carefully and promised to make changes. They made the minor changes that we recommended, which were not costly, and I am grateful to them for that. It was a bit of a success. However, we saw that day that the post office was to be on the first floor and approached using an old-fashioned, wide staircase that is not particularly suitable for many disabled people or groups such as mothers with pushchairs. The store has what looks like a little goods lift in the corner of the building, and it was proposed that it would provide access to the first floor for disabled people. We expressed our view that it was not a big enough lift and asked whether a bigger one could be provided. We were told that that was out of the question because of the cost, the location or both—I am not sure which. WH Smith drew the line and would not agree to a larger lift.

As soon as the post office opened, mothers with pushchairs and disabled people in bigger than average wheelchairs or in motorised scooters started to complain that they could not fit in the lift. A subsidiary problem, which we had predicted, was that the ground floor was full of WH Smith customers and the check-outs were immediately between the doors to the store and the little lift in the corner. We had predicted that there would be queues of people blocking access to the lift, and so it has proved. We have had almost as many complaints about people not being able to get to the lift as about people not being able to fit in it when they do get there.

In response to the complaints, we asked whether more changes could be made. To give credit again to Post Office Ltd and WH Smith personnel, they agreed to meet us in the store again to talk about the changes. I was there, along with the council, Postwatch and Derek Boult and Joyce Middle. We again pointed out the big problems of getting to the lift and fitting in it, as well as one or two smaller problems that had arisen since the post office had been in operation. Again, people listened carefully and attentively and promised to make changes. The few modest changes that we suggested were made, but, crucially, the two big ones—allowing room for people to get to the lift and fit in it—could not be, or were not, addressed. The problems remained, and people could not reach the lift because of customers obstructing their route and could not fit in the lift when they got there.

Despite that second meeting and the attempts to reconcile our objections, we still received complaints from members of the public. Last month, I spoke again to Derek Boult of the access group and asked him, “What do we now think is the situation?”. We both concluded that if there is never going to be a bigger lift for customers, a first-floor location is not suitable for Stafford’s main post office. We agreed that we should ask WH Smith and Post Office Ltd to consider bringing the post office down from the first floor, which is unsuitable for access by some groups of the community, to the ground floor. I did so in writing to both partners, and then I requested this debate.

Stafford is the county town, and its population is 60,000. The borough’s population is more than 120,000 and the county’s population is nearly 1 million. The town attracts a considerable number of visitors, and to lose a beautiful, historic, ground-floor post office in a listed building, Chetwynd House, replaced by a first-floor post office with access routes that are insultingly inaccessible to some groups in our community, is just not good enough. I hope that my hon. Friend the Minister agrees with that. What can he do to lend his weight to our campaign to ask for the post office to be brought down to the ground floor?

I checked with the Disability Rights Commission, as it was then called, about the store and what the owner’s obligation was. It advised me that it was the owner’s obligation to make reasonable adjustments to make the building and its services accessible to all groups in the community and that, if the owner failed to do so, it was the responsibility of a disabled individual to take a case to a county court. I shall pursue that course if I must, but it seems a shame, especially considering that Post Office Ltd is in the public sector and might feel that it has a social responsibility to care about groups such as disabled customers.

I say to both WH Smith and Post Office Ltd that it makes good social sense to ensure that all members of the public have access to the services in their stores, but it also makes good commercial sense. The demographics of this country show that our population is expected to get older and that more people will have access difficulties. The Post Office is peculiarly reliant on older people as customers, and if the business is not accessible to such groups, it will be deprived of a considerable chunk of its potential customers. I am fortified in my view that post offices should be accessible to people with access difficulties because my argument is sustained by Age Concern south Staffordshire, Mencap mid-Staffordshire and the Communication Workers Union for the midlands region. We all take the view that the present arrangements are not suitable.

To make the matter personal and real for everyone in the room, I shall give an account that I received from a disabled visitor of their visit to the store this March. The person was in a motorised scooter and found that a filing cabinet obstructed the reversing space needed to get into the lift, that shopping baskets were piled next to the cabinet so that there was no room to manoeuvre and that the lift would not take the motorised scooter because of its size. They were asked to move from their scooter into a store-provided wheelchair, but there was no room and they needed help to move. There was nobody around to assist, and there was no electric bell to summon assistance. Their calls for help could not be heard by members of staff, because they were busy some distance away dealing with customers. There was therefore a delay. When they were eventually helped into the store wheelchair, they had to have their crutches and shopping on their lap as they made the short journey to the first floor.

As a result of that experience, that person wrote to me that:

“The postal services are essential and should not provide an obstacle course for the disabled”.

That is a perfectly sensible point for anybody to make to their elected representative. Derek Boult told me:

“Although WH Smith have been willing to listen and have carried out certain alterations, it is quite evident that the only way the post office is going to succeed is to place it on the ground floor”.

He has also said:

“Complaints are being received on a daily basis and the time for talking has to stop”.

It seems to me that complaints on a daily basis put pressure on people such as me and the Minister to listen and try to take action to help. There is a strong commercial imperative for something to be done, as I said earlier, and there is certainly a strong social imperative.

When I was preparing for this debate yesterday, I noticed a news report about a Hastings woman who has been given leave in the High Court to challenge the current post office closure programme. One of the grounds on which she has put her case is that the closures are contrary to disability anti-discrimination laws.

In the case of Stafford’s main post office, we are not debating a closure and the taking away of the physical post office, but talking about moving a ground floor post office to a first floor location without providing adequate means for disabled customers and other groups with special access needs to get to their post office services. Therefore, I wonder whether the situation in Stafford is in fact a breach of those disability anti-discrimination laws. We should not have to wait for someone to take out a case themselves in the county court before we act.

There is one last, minor point I would like to make to the Minister. I say “minor” in the sense that it is not germane to today’s debate, but it is certainly a vital subject of debate in Stafford. It is the question of what is going to happen to Chetwynd House, which I walk past every day when I am in Stafford. The building is now boarded up and closed and there are very visible ‘For Sale’ signs on the outside.

I have written to the building’s owners, Post Office Ltd, several times to ask how things are going with the sale and they tell me, “It’s none of your business, it’s a commercial transaction.” I said to Post Office Ltd, “If you get lots of people who make satisfactory offers for this building, there is a lot of concern in Stafford about what the use of the building will be, so would you consider consulting me, an elected representative, and other representatives of the local community, about which offer would be the best to accept?” Post Office Ltd said, “No. Go away.” That is disappointing, coming from a body whose only share is owned by my hon. Friend the Minister, so maybe he could persuade Post Office Ltd that it ought to give a little more attention to a Member of Parliament who would like what I consider to be some sensible information and dialogue about a key building in his constituency.

I want to leave the Minister time to respond. In conclusion, I am objecting to the lack of an adequate post office service for a significant proportion of the community living in and visiting Staffordshire’s county town, I am objecting as someone who has worked positively and constructively for half a year to try to make unsatisfactory arrangements work, and I am objecting in the knowledge that many organisations with a special interest and expertise in access issues agree with me . I certainly know that many members of the public also agree with me, including the people who are disadvantaged by the present arrangements.

In asking the Minister to help us, I leave the last word to Derek Boult, who said in his most recent contact with me this week:

“The relocation of the post office to the ground floor is the only solution that will provide the type and standard of service that the public expects. Nothing less will do.”

I hope that my hon. Friend the Minister can understand the strength of feeling in Stafford about this matter, which I hope I have been able to convey to him in this short debate, and I hope that there is something that he can do to help us.

I congratulate my hon. Friend the Member for Stafford (Mr. Kidney) on his success in securing this afternoon’s debate and thank him for initiating it. He has very clearly and eloquently outlined the importance of postal services to his constituents and, in particular, their concern about the move of the former Crown office in Stafford to WH Smith last October.

My hon. Friend said at the outset, and he is right to have said it, that postal services are very frequently debated in the House; in fact, it is less than an hour since the last debate on the subject ended. One of the features of these debates is, of course, that people talk in great detail about their constituencies. I was very touched by the obvious care and concern with which he spoke about his constituency; he spoke not just about his constituency as it exists today but about the history of the building that housed the former Crown office.

With regard to the arrangements of the post office branch in WH Smith in Stafford, my hon. Friend has, of course, visited it a number of times and is very familiar with the layout. I hope that he will understand that I have only received some briefing about the branch and have not visited it personally.

Let me say a word or two generally about franchising branches to WH Smith. I am grateful to my hon. Friend for saying that he understands the logic behind such an arrangement. The franchising process is being undertaken because the Crown offices, which numbered about 450, lost £70 million in the year 2006-07 and clearly that position—where 450 post offices are losing nearly £1.5 million a week—is not sustainable.

The Post Office was quite right to look at arrangements to see how services could continue to be provided in other ways. That is how the franchising arrangement with WH Smith developed. As my hon. Friend said, on the face of it there would appear to be quite a good fit between the type of products sold in WH Smith and the type of reasons that one would have to go to a post office.

The franchising process with WH Smith has involved 70 branches in total. Although some hon. Members have not taken the open-minded and positive attitude that my hon. Friend has towards such franchising arrangements, very often the choice is between that type of arrangement and not having a post office at all, in circumstances where the Crown offices alone were losing £1.5 million a week.

I should also say that franchising is nothing new; the arrangement with WH Smith is not the only one of its type that the Post Office has entered into. There are other franchises—for example, in the Co-op, TM Retail, RS McColl, Asda and Tesco, all of which operate successful post offices within their retail networks. So, on the face of it, this arrangement with WH Smith is a perfectly sensible, commercial arrangement for Post Office Ltd to enter into.

When such franchising happens, there are, of course, important contractual arrangements. Franchises are bound by those arrangements to ensure that service standards remain high, and that is, of course, also true of the 97 per cent. of the network that is run by sub-postmasters. Therefore, although entering into such an arrangement is an operational decision for the Post Office to take, my hon. Friend and his constituents are right to expect a certain standard of service from anything that carries the Post Office branding and provides Post Office services, whether that is in a WH Smith branch or in a Crown office.

As I have said, I have not visited the post office in the WH Smith branch in Stafford, but I have visited one of these franchise branches in WH Smith. It worked well, and the customer surveys of the first half dozen of these franchise branches in WH Smith were quite positive in their feedback. However, on one or two occasions, the issue of disabled access has been raised, and that is because among the 70 post offices in WH Smith branches, about 20 are either on the first floor or perhaps downstairs from the main retail enterprise, possibly alongside other retail products.

Before I go on to my hon. Friend’s specific points about disability access, one of the advantages that franchising in WH Smith has often brought is extended opening hours, and that is important. The branch that I visited was open for several hours on a Sunday. At a time when people are juggling family and work commitments, that type of flexible opening is a great help to customers.

Having said that, of course it is important that these services are easily accessible to people with mobility problems and to people with disabilities. Post Office Ltd has given an assurance that all branches will be compliant with the Disability Discrimination Act 1995 and accessible to consumers. My hon. Friend will be aware that WH Smith, as a prominent and highly regarded retailer, is also fully aware of its responsibilities under the Act.

I do not think that access issues are always to do with franchising or who is running a particular branch. Dare I say it, perhaps even in some of the existing Crown offices disability access may not always be as we would hope it to be, but it is something that Post Office Ltd takes seriously. My hon. Friend’s explanation of the responsibilities under the Act to take reasonable steps to ensure access is exactly the same as my understanding of them, so WH Smith and the Post Office both have responsibilities under the Act.

On the specifics, my understanding is that if a customer for some reason is unable to use the lift or if there are stairs in the branch, alternative arrangements should be available to ensure that they can be served on the ground floor. I will say more about that in a moment. My hon. Friend has followed this matter through in some detail with the WH Smith branch in Stafford. He has visited it, and he met representatives of local interest groups and the store manager and senior staff of both WH Smith and the Post Office.

I understand that some action has been taken. A well-defined route to the lift area has been created, the facility has been somewhat improved by installing a handrail and a mirror, and the branch is keen to investigate how it can further improve access to the lift control panel itself. Post Office Ltd and WH Smith are aware of the problem, and they are more aware of it because I contacted them yesterday to say that my hon. Friend had secured this debate and to flag the issue up with them and discuss my understanding of the generality of what he would raise.

In respect of service on the ground floor, my understanding is that there is a mobile unit on the ground floor and that it can be operated by a post office staff member if customers are unable to access the first floor for any reason. It comprises a Horizon terminal, which is the IT system that the Post Office uses, and customers can access the full range of Post Office products from it. It may be that more needs to be done to make people aware that that option is available in the store.

I am intrigued by that. Perhaps we would not be having this debate if there were such a facility on the ground floor. In preparation for the debate, I sent my hon. Friend a copy of my letter to Post Office Ltd about my campaign to bring the post office down to the ground floor, and I attached an e-mail from Derek Boult from last month in which he said that he and I remembered that we had been told about trolleys on the ground floor in other stores, and that we could have one in Stafford. I have been there twice and never seen one, and Derek says in his e-mail that we were promised a trolley but that the Post Office has reneged on the promise. He has been to the store much more often than I have, and nobody has seen a trolley.

I thank my hon. Friend for that intervention. As I said, he will of course be closer to the detail of what is on the ground floor in a particular store in his constituency. I have been told that a trolley is available in this store, so I can only say that in good faith.

To cut to the chase, some improvements have been made. My hon. Friend and local campaigners have raised more fundamental questions about whether the lift is large enough to accommodate wheelchairs. Again, I have been told that it is. It appears from what he said that the accommodation is not always satisfactory.

I agree with my hon. Friend that accessing services should not involve getting through an obstacle course. That is important. He is absolutely right to say that it is in no one’s interest if customers are discouraged or put off from conducting their business at a post office, whether it is in WH Smith or anywhere else. The issue is what can I do for him. The detail must be handled by Post Office Ltd. I contacted it yesterday about the generality of what I expected in this debate. Having heard what my hon. Friend said today, I am happy to contact Post Office Ltd again on his behalf to ask it to review disability access arrangements at the branch. He may be fed up with meeting representatives of Post Office Ltd and WH Smith, but I am happy to ask for another meeting to see what we can do to ease the problem.

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