Last December, my right hon. Friend the Prime Minister set out a clear and long-term framework for bringing security and political, social and economic development to Afghanistan. I would like to give the House an update on some of the progress that we have made since then in Afghanistan, based on my most recent visit to Afghanistan last month, and to set out future plans for the UK’s military contribution to the NATO-led international security assistance force—ISAF.

The security situation in Afghanistan has improved in the past 12 months. The Taliban’s leadership has been targeted successfully, and recent operations in southern Helmand have disrupted severely their training and lines of communication. That has had two principal effects. First, their sphere of influence has been reduced; nine tenths of the security incidents are confined to one tenth of the country, and the rest is relatively peaceful. Secondly, we have seen them reduce their ambition from insurgency to terrorism. The Taliban’s campaign is now limited to intimidating Afghan communities, coercing the vulnerable into becoming suicide bombers and carrying out brutal and indiscriminate attacks on the international community and, above all, on the Afghan men, women and children themselves. As the Taliban’s conventional attacks have failed, we have seen their tactics shift to the use of mines, roadside bombs and suicide vests. Those tactics run deeply counter to the Afghan culture, as does the Taliban’s reliance on paid foreign fighters—the so-called “$10 Talibs”, who now make up the majority of those doing the fighting for them. I fully recognise that the Taliban’s new tactics pose a different but very serious challenge, both to our forces and to the local people. We need to ensure that we do all that we can to mitigate the new danger, and I am fully engaged on ensuring that we do so.

I share the understandable international concern about the breakout from Kandahar prison that took place on Friday 13 June. The Government of Afghanistan are leading the response to the incident and we are monitoring that closely. We have always said that the challenge of supporting an Afghan lead on security goes wider than providing support to the Afghan armed forces to include the justice sector, and we are already engaged in supporting a programme of justice reform that includes work on prisons. International support to the Afghan Government’s security response is being provided through NATO’s presence in Kandahar. Let me conclude on this point by saying that notwithstanding the extremely serious nature of this incident, it does not change our view that the Taliban are losing the fight in southern Afghanistan.

The Afghan people, like people the world over, long for security, stability and prosperity. They understand that the Taliban cannot deliver those things. Our forces, alongside the US, Canadian, Dutch, Australian and Danish forces, and many others, are in Afghanistan to fulfil a UN mandate, to support the elected Government, to train and mentor the Afghan army and police, and to give the Afghan people hope for the future. I believe, as I think do the majority of this House, that Afghanistan is a noble cause, but we also know that it comes at a tragic human cost, as we have been reminded over the past week. The recent deaths of five members of 2 Para—as well as the 97 other UK fatalities in Afghanistan since 2002 and all those UK personnel who have been wounded or otherwise scarred by this conflict—are an enduring measure of the dangers that our young servicemen and women face on operations on our behalf.

The military know better than anyone that this is a campaign that cannot be won by military means alone. Once security has improved—it has already improved— delivering improvements in infrastructure, governance, the rule of law, schools, hospitals and services must follow. Generating those things in a country that has been devastated by decades of conflict and that is the fourth poorest country in the world is difficult and challenging—it will be a long-term endeavour. But I saw real progress there during my trip, and there is now a tangible sense that life for many Afghans is improving. In Helmand, they have a new and extremely able governor—Governor Mangal—who is spreading the writ of the Government of Afghanistan further into that once lawless province. During the week of my visit, the local people of Garmsir reopened their hospital for the first time in two years. In Lashkar Gah, they had also just opened a new high school, and some of the girls attending that school will represent the first women in their families ever to go to school and receive an education.

We the UK are not alone in our commitment to Afghanistan. Last week, 80 countries and international organisations met in Paris at the international conference in support of Afghanistan. In Paris, the Afghan Government’s national development strategy was launched. That plan provides an Afghan blueprint for the future development of their country. Last week in Paris, the international community pledged $20.4 billion to help to fund it and reaffirmed its support for Kai Eide’s role in co-ordinating its efforts to help to deliver it.

I am not underestimating how much remains to be done, but the green shoots of development and democracy are becoming even more firmly rooted in a security environment that has improved out of all measure since UK forces deployed in southern Afghanistan two years ago.

The focus on development does not mean that we are complacent about security—in fact, far from it. As I said before, the shift in tactics, while being in one sense a sign of strategic weakness, presents us with a different but still very serious challenge—one that our forces are confronting with the same courage, professionalism and intelligence that they have shown throughout the campaign. At the same time, the Prime Minister’s December statement made it clear that, over time, we plan to rebalance our military commitment from one based on direct combat operations to one of support for the Afghans’ own security forces. There is some good news here: the Afghan national army is a success story. Afghan soldiers are fearless and redoubtable fighters and the ANA is respected and admired by the Afghan people. Their professional competence is also increasing by the day. The first ANA kandak—or battalion—has now reached capability milestone 1, which means that it is capable of fully independent operations. Our soldiers are finding that the mentoring that the Afghan national army requires has reduced as its capability and experience has grown. That is no mean achievement.

Creating an effective police force is, however, proving to be a more difficult challenge. To accelerate that process, the coalition has introduced a process called focused district development, which is, in effect, a mass training and retraining of the Afghan national police, district by district. That ambitious plan has an annual budget of $2 billion, and it is making a big difference. But we have to accept that creating an independent, effective police force in Afghanistan will not happen overnight.

Counter-insurgency campaigns are ultimately about winning the support of the local population. With the diminishing relevance of the Taliban’s campaign and the increasing delivery of development, I am in little doubt that we are winning that, too. It is in this context that I have, with the military advice of the chiefs of staff, decided to make a number of adjustments to the profile of our forces in Afghanistan. Currently, we have 7,800 troops in Afghanistan deployed to Helmand, Kandahar and Kabul. As a result of a recent review, I have approved the removal of around 400 posts from the Afghan operational establishment table. Those posts are no longer required due to reorganisation and the changed nature of the tactical situation. At the same time, we have identified a requirement for, in total, 630 new posts, creating a net increase in our forces in Afghanistan of some 230 personnel, to around 8,030 by spring 2009.

Broadly, those adjustments have three aims: first, to improve the protection afforded to our personnel; secondly, to increase the capacity of our forces to deliver training and mentoring to the Afghan national security forces; and thirdly, to increase the capacity of our forces to deliver the civil effects of reconstruction and development in an insecure or semi-secure environment. All those aims are vital if we are to sustain the progress that we are making.

Let me set out the nature of those changes. The first objective of the force adjustments is to increase the protection that we are able to give to our brave servicemen and women as they conduct their mission in Afghanistan. In the months ahead, we will deploy more troops to man the additional Viking and Mastiff vehicles that we have already ordered. Further specialists will deploy to man reconnaissance and warning systems in our forward operating bases in Helmand. We will also reinforce the Royal Air Force Regiment squadron that helps defend Kandahar airfield.

The House will recall that the improvements that we have made to ground support and crewing arrangements for our CH-47 Chinook and AH-64 Apache helicopters have increased the total amount of flying time per month available to our commanders in Afghanistan. Part of the uplift will be delivered by an increase in helicopter crews, which I am announcing today.

Among the most potent of all our capabilities in deterring and denying the insurgency is our ability to project close air support. In Afghanistan we have a contingent of Harrier GR7/GR9s that have proven time and again their value in defending the lives of our troops, our allies and those whom they are there to protect. The Harrier force first deployed to Kandahar airfield in November 2004 and has been operational continuously ever since. That is an impressive record by any standards, but I am mindful of the strain that that extended deployment has put upon the crews, their families and the wider role of Joint Force Harrier. I have therefore decided to withdraw the Harrier force by spring 2009 and to replace it with an equivalent force of Tornado GR4s.

I have already mentioned that by developing the Afghan security forces we are setting the conditions to allow them to take an increased role in their own security. To accelerate that we will expand our fourth operational mentor and liaison team to accelerate the development of the Afghan national army, and we will continue to train the Afghan national police. In particular, we will focus our efforts to help Afghan national army and police commanders to develop the skills they need to lead their forces effectively in a demanding and often very dangerous area.

The improved security situation that our forces are generating has provided us with a real opportunity to increase the rate of our delivery of civil effect. I have therefore decided that when 3 Commando Brigade deploys to Afghanistan this October, it will deploy with an additional infantry battalion headquarters and sub-unit. The forces will operate in southern Helmand to ensure that we are able to consolidate and exploit the security gains that we have made in that area and 3 Commando Brigade will also deploy with an extra troop of Royal Engineers to support our provincial reconstruction team by undertaking quick impact projects in support of the local community. Those forces will be supported by more medical, logistical and equipment support troops.

In addition we will attach civil-military co-operation officers to each of our battle groups and we will form military stabilisation teams on the model of the ad hoc team that we deployed with great success in the wake of the reoccupation of Musa Qala. Both measures will enable us to take forward development projects including quick impact projects in areas where the level of threat remains high.

My announcement today of a net uplift of 230 additional troops does not in proportionate terms represent a very significant increase. It does mean our mission is expanding. It means we are taking the steps necessary to take our mission forward as effectively as we can, with a force whose profile and capabilities are optimised to the conditions that they face. As I have explained, the uplift and rebalancing will enable our forces to strengthen their protection and to increase the rate at which they can build Afghan capacity in security, governance and development. Some of those new capabilities will need a year before they are available for operations in Afghanistan, but others will deploy much sooner. Of course, we shall continue to work to develop the optimum balance of forces and capabilities, in conjunction with the Afghan Government and our allies, in what can be rapidly changing conditions. The additional forces will ensure we can maintain the growing reach of the Afghan Government in Helmand, increase the military contribution to development and accelerate the pace of Afghanisation.

We talk in this House in terms of numbers, units, and strategies, but as the events of the last week have reminded us all, behind these numbers are individual young men or women, working courageously in strange, difficult and dangerous conditions far from their family back home. I am constantly impressed by their bravery and resourcefulness, and on behalf of the Government and I am sure the whole House I express our gratitude for their service to the nation, and commit myself to continuing to do everything we can to support them.

I commend the statement to the House.

I thank the Secretary of State for his statement and for advance sight of it. I fully associate the Conservative party with all that he has said about our servicemen and women and the dangers that they face.

Those who have given their lives in Afghanistan are irreplaceable to their families and friends and we will remember those families in our thoughts and prayers. We will also share their pride that we still have professional and courageous servicemen and women who are brave enough to sacrifice themselves for the security of the people of this country.

We must always remember that we are in Afghanistan for reasons of national security, to deny a safe haven to those who would commit indiscriminate acts of terrorist murder on men, women and children. We must remember that it is an international mission sanctioned by the UN and led by NATO. The Afghanistan compact, which followed the London conference, set out four objectives: increased security, drug reduction, an efficient Executive and economic and social development. Progress has been made on social development, but the process of government remains compromised by corruption and a lack of co-ordination between the military, reconstruction and political missions. The military command also needs greater clarity of purpose and simplification of structure—a point regularly raised by my right hon. Friend the Leader of the Opposition, and he raised it again today in talks with President Bush.

There has been no progress on the drugs issue, with no alternative sources of income being made available to those for whom growing poppies is the only means of feeding themselves. If anything, the situation has deteriorated. Security has improved in some parts of the country, as the Secretary of State said, but it remains undermined in the south by the continued insurgency, the breakout of Taliban prisoners in Kandahar, and the Pakistani Government’s attitude to border issues. A former NATO commander, General McNeill, recently said that more troops were needed to defeat the Taliban-led insurgency. He said that

“it’s an under-resourced force”,

and he expressed concern that NATO could become a “two-tiered alliance”, with an insufficient number of countries truly committed to fighting against the Taliban.

We have seen how the fighting in the south of the country has been left to the Americans, the British, the Canadians, the Dutch and a number of valiant smaller forces, while some of the biggest NATO allies have been risk averse, to say the least. Will the Secretary of State give the House an assessment of how great a threat is posed to the achievement of the aims of the Afghan compact by the underactivity of some of our NATO allies, and does he agree that the message from the United Kingdom should be that it is unacceptable for all those in NATO to have the same insurance policy if only some of us pay the full premiums?

We will now have 8,000 personnel in Afghanistan and 4,000 personnel on active operations in Iraq. We have consistently raised concerns about the force size in Afghanistan. Does the Secretary of State believe that, with the increase that he announced today, the force size is now sufficient for the safety and effectiveness of our troops, and can he tell us by how many troops General McNeill believes NATO, as a whole, is short? How confident can the Secretary of State be that he can fill the 630 new posts that he announced today with correctly qualified personnel who have had sufficient rest and training? He tells us that some of the announcements that he made today will take a year to come into effect; can he be more specific on that point?

Recent deaths in Afghanistan have shown the Taliban’s shift towards suicide bombing as a tactic. We have seen in Iraq what that can mean. Will the Secretary of State give an assurance that all necessary protective equipment is available to minimise the risk to our armed forces on the ground, and can he give an assurance that there is the fullest co-operation from the Afghan police and military in attempting to minimise those threats? The increase announced today was predictable, but does it not make a mockery of the Government’s national security strategy, published only 12 weeks ago, which said that

“we are entering a phase of overall reduced commitments, recuperation of our people, and regrowth and reinvestment in capabilities and training”?

That is a dangerous and harmful fantasy; what we have is overstretch.

I believe that the Government are genuinely committed to a successful outcome in Afghanistan, and they know that they have our full support on that objective, but they need urgently to address the gap between commitments and military capabilities if we are to succeed. Above all, we need to recalibrate expectations. We cannot simply drop a Jeffersonian democracy on to a broken 13th-century state and expect it to work in five or even 10 years’ time. It will be a long haul, so we must properly plan for a long haul, and not for six-month rotations for our commanders, or sixth-month or annual budget allocations for reconstruction efforts. We need to bring our military and financial planning into line with the political reality. I am sure that those on both sides of the House agree strongly that the costs of failure are far too high to contemplate.

The hon. Gentleman and I have discussed both inside and outside the House the mission in Afghanistan, on many occasions. It may not appear so from his contribution, but there is much less between us than people who heard him for the first time today might imagine. I am grateful to him and his Front-Bench colleagues for the support that they have consistently given our mission, and for their appreciation of the complexity involved, which was implicit in his contribution.

The hon. Gentleman made so many points that if I sought to answer them all, I would stretch the patience of the House, so I promise to do what I usually do in the circumstances. I will read the Hansard record of his questions carefully, and if I do not deal with them, I will respond in writing, so that everyone in the House can see the answers to his specific questions. However, the heart or gravaman of what he said must be responded to. I carefully constructed the statement to the House to show that we were responding to changed circumstances on the ground, which have been brought about by an acceleration of progress in the past 12 months, largely because of the contribution of our forces, but not only because of that, as he knows. Indeed, the situation in the south of Helmand province has largely been created by the deployment of the marine expeditionary unit that served with our forces in the lower part of the Helmand valley, and which has transformed the area around the town of Garmsir. I am responding to that, because that marine expeditionary unit plans to be there only until about November, so we are putting some forces down there who will work alongside Afghan security forces to hold what has been achieved and keep the Taliban from reinfecting that part of the country.

May I tell the House—and I think that this is important—that there are of the order of 17 countries in ISAF represented in either the south or the east, where the heavy lifting is being done? I agree with the hon. Gentleman about sharing the burden across the whole alliance. I repeatedly make those points, and there is now some success to be gleaned from that advocacy, in which I and indeed others engage in NATO. I should share the statistics with the House, because they show an impressive commitment by the alliance, the broader ISAF alliance and, principally, by NATO. When NATO met in Riga last year, there were 32,000 forces in the ISAF. When we met in Bucharest, there were 47,000, but when NATO Ministers met in Brussels only last week, there were 50,000, and those numbers are increasing. That is a measure of the level of commitment: there are more helicopters, there is more helicopter time, and other allies are now taking steps, in conjunction with initiatives that we have generated, to improve helicopter availability. In short, the NATO alliance has been transformed by its engagement in Afghanistan. I have a different way of going about it from the hon. Gentleman, but I think that my way has shown significant progress in that regard, in the number of countries that are there, the absence of caveats for their forces, and the significant increase of force deployed in the south.

My right hon. Friend the Prime Minister said in the House on 11 June that we are making progress in training the Afghan army and police. Clearly the statement by my right hon. Friend the Secretary of State takes that forward—especially the additional deployment for training purposes. Does he have in mind a time frame for the completion of the training of the Afghan army?

We have trained 55,000 members of the Afghan army to date, but they are not all trained to the level at which they can conduct operations without significant support from command and control, logistics and planning. As I said to the House earlier in Defence questions, the first kandak of that army has reached capability measurement 1, which means that it is capable of moving forward. There are other niche capabilities in the Afghan national army and security forces that are very effective. The other day, we saw the biggest ever haul of drugs seized by an Afghan force which we trained in part.

From here, it is impossible to put a time limit on when that army will be able to conduct large-scale security operations on its own, but my right hon. Friend ought to look at what has happened recently in Iraq. In a comparatively short period, the Iraqi army has gone from being almost totally dependent on the support of the allies to being capable of carrying out operations that it plans and commands itself. When one reaches the tipping point in relation to the training of an army, then, at least in my experience over the past two years, the process of improvement accelerates quite dramatically.

I welcome the statement, the progress that the Government have been able to report and the reaffirmation of their acknowledgement that the situation cannot be won by military means alone. Specifically, I welcome the news that extra Engineers are going and the emphasis on giving them the ability to focus on civil reconstruction work. I also welcome very much the increase in helicopter crew numbers.

I, too, recently visited Afghanistan, and I was deeply impressed by the work of our young men—they are, in the main, very young men—particularly in searing heat of more than 50°C. It was truly humbling to see at close quarters just what they are doing on our behalf. I pay tribute to all those who are serving in Afghanistan, and have done, on our behalf. I was also very impressed by the deeply thoughtful and measured way in which the British troops go about their tasks and how the long-term impact of everything they do is always very clearly in their minds.

We did not hear in the statement anything specific about the poppy crop, and I should be interested to hear from the Secretary of State whether this year there has been any progress in persuading Afghan farmers to plant alternative crops. Last year’s poppy crop was the biggest ever. That in itself is worrying, but with the price having dropped there may be better prospects for persuading farmers to look for alternatives.

When I returned from that visit, my biggest concern was the state of British public opinion, which does not truly understand what we are doing in Afghanistan, why we are doing it, or how long it will take. Given that there is broad political consensus in the House on the issue and we are all committed to the long term, between us we must do something to try to move public opinion forward. In that regard, it is a matter of regret—to me at least—that the announcement should have been made on a day when George W. Bush is in the country. I fear that there is confusion in the public’s mind between what we are doing in Afghanistan and in Iraq. The biggest connection between the two is overstretch, and the sooner the public can be persuaded to see those situations separately, the better our chances are of getting the public on board for a long haul in Afghanistan.

The timing of the new announcement was dictated by the decisions that were made. Once they had been made, I determined that I would come to the House at the earliest possible opportunity to explain them. Unfortunately, I had to be at a NATO meeting last week, on Thursday and Friday, otherwise I would have been able to make the statement earlier. I always try to make statements to the House at the earliest possible opportunity.

I welcome the hon. Gentleman’s introductory remarks and am delighted that he and his party are in exactly the same place as the significant majority of those in the House and, indeed, in the other place in respect of what we are seeking to do in Afghanistan. Of course, many people say that the mission is impossible. They either say that it cannot be done and we should not be engaged in Afghanistan, or they misrepresent the situation. They do exactly what I suspect the hon. Gentleman fears in respect of the coincidence of the visit of the President of the United States and the statement, which is to look at everything that we do militarily through the prism of Iraq. That is deeply unhelpful. I have spent a lot of my time as Secretary of State trying to persuade our media that Afghanistan is the right place for our people to be. The fact that 40 countries are involved and that many of the most developed social democratic countries in the world are present with troops on the ground is an indication of just how right it is.

This morning I had a conversation with the Secretary-General of the United Nations, Ban Ki-moon, in which his support for what we are seeking to do in the context of the Security Council resolution was completely unwavering. We all have a responsibility to try to shift British public opinion. I believe that it has shifted in relation to the rightness of the mission and the military objectives, and we now have to shift it in relation to the progress being made in all the other complementary parts of the comprehensive approach and explain to the public that we need strategic patience in order to do what we are doing in a very difficult and challenging environment.

As for counter-narcotics, this year we will, as usual, have to wait for the official count as regards the assessment of the poppy crop, but early indications suggest that we have stabilised or reduced the production of poppy. There may be several reasons for that. The hon. Gentleman rightly identifies that that generates an opportunity. The whole focus of our efforts in northern Helmand is designed to put together the secure spaces that we have generated and to control the ability to communicate between them. That is part of the key to creating a secure logistical environment for moving other, legitimate, crops around so that they will not be taken advantage of by the Taliban. That will be key to building sustainable alternative crops for the farmers in Helmand province.

I join my right hon. Friend in supporting the considerable efforts of British forces in Afghanistan, particularly because failure would result in the complete reversal of women’s rights in that country. However, I still believe that we pay far too little attention to engaging with women in terms of solutions for the security of Afghanistan. I would be grateful if he could confirm how many servicewomen will be going to Afghanistan as a result of his announcement; whether we have recruited any female translators, who are often the only people who can communicate with women on the ground; and what efforts are being made by ISAF to adopt a comprehensive plan regarding UN Security Council resolution 1325.

My hon. Friend makes several important points. She will be aware that the representation of women in the Parliament of Afghanistan is proportionally greater than the representation of women in our Parliament, although that is not the end of the story. She will also be aware that a third of the young people—6 million—who are in education in Afghanistan are girls or young women, none of whom were educated under the Taliban. As she knows, there are still attacks on women and occasions when things happen particularly to women that suggest we are not making any progress, but we need to ask ourselves whether the lot of women in Afghanistan would be better if we were there or not there. I was in Lashkar Gah a couple of weeks ago and saw significant numbers of women on the streets of that community for the first time, and I know which way they would vote.

On my hon. Friend’s specific questions, I do not imagine that she expects me to have those statistics at my fingertips, but I will ensure that she gets them and that they are given to her in such a way that everybody else in the House can share that knowledge.

After another sad week in Afghanistan, may I remind the Defence Secretary that on 27 February 2006 I warned his predecessor that we could not hope to fulfil our declared objectives in that country with 100,000 troops or even 300,000 troops? Recently, the outgoing NATO general has said that he would wish to see 400,000 troops there. What is the point of sending yet another small contingent, particularly bearing in mind the fact that the main terrorist training grounds are in Pakistan and that the great majority of our NATO allies are determined not to allow their troops to become committed in serious fighting?

The hon. Gentleman has the merit of consistency, but in my view—he knows that I have enormous respect for him—he is consistently wrong on this subject, and I am absolutely determined to prove him wrong in respect of the observations he made to my right hon. Friend the former Defence Secretary on 27 February 2006. I have been in Afghanistan on many occasions in the past 25 months; with respect, I am not sure whether he has been once. If he wishes to come with me to Afghanistan, I will take him there. He can see on the ground what our people are doing and talk to our troops—

indicated assent.

But mostly, he can talk to Afghans. The significant difference between his historical analysis of the situation and what we are doing is that on previous occasions those who failed in Afghanistan were fighting the Afghans, whereas we are fighting with the Afghans. That is the significant difference.

I pay tribute to my constituent, Private Cuthbertson, who was killed in Afghanistan last week.

May I ask the Secretary of State what assurance he can give regarding steps being taken to avoid civilian casualties in Afghanistan? As he will know, in the past there have been a large number of civilian casualties, which has been a source of friction between NATO forces and President Karzai. I would be grateful to know what we are doing to minimise them and what recompense is available when they occur.

I also pay tribute to my hon. Friend’s constituent. I am sure that my hon. Friend has been a support to the family and friends involved, and has made it clear to them that the deaths, terrible as they are, and which can never be explained in a way that is satisfactory to families, are part of a greater whole that has made a significant difference to many millions of people in Afghanistan. The men and women who do this work are genuine heroes. With respect, that work is not restricted to members of the armed forces. A number of young men and women working in Afghanistan come from Departments of State, including civil servants from the Ministry of Defence; they have volunteered to work in that difficult environment and are doing a sterling job.

My hon. Friend raises an important point, which I know exercises him, and we have discussed it on several occasions. The most relevant part of his question was his use of the past tense. We have made significant improvements. The last commander of ISAF, General McNeill, was very conscious of the effect that collateral damage, or civilian casualties, had on the overall mission, apart from the effect that it was having on those people caught up in it. He issued a series of instructions dealing with the issues raised by my hon. Friend, and they have had a significant effect. We should never forget that all the civilian casualties caused by ISAF operations are accidental. Those caused by the Taliban are, more often than not, caused deliberately.

Last week, I met the chairman of the Helmand provincial council, who was visiting London, and he mentioned the positive help given to provide security against insurgents, the training being given to the Afghan police and army, and reconstruction works, including the building of schools, hospitals, clinics, houses and roads. It was a positive speech, and I took great comfort from the knowledge that none of that could have come about were it not for the bravery of our armed forces. The Secretary of State referred to Afghanistan as a noble cause. In order that the British people fully appreciate that, could I urge him to redouble his efforts so that people know that our military personnel are making a huge difference to the lives of ordinary Afghans, ensuring that their country does not return to being a haven from which terrorism is exported around the world?

I am very grateful to the hon. Gentleman because I saw his news release following his meeting with the chairman of the Helmand provincial council. He has done what is necessary, which is explain to the people of his constituency, through an Afghan voice, exactly what our young men and women are achieving. The quotations included in the press release from that genuine Afghan voice speak much more eloquently than Ministers of the Crown, the armed forces or, with all due respect, Members of this House could. What we need—and I have been trying to get—are more Afghans telling us the substantial difference between life now and what it was only five or six years ago, because of the presence of our young men and women in their country. That message will convince our people that the sacrifices and investments that we make in Afghanistan are worth while. Not only that, but when we get that country into some sort of stabilised position and can deal with the issues, which the hon. Member for Woodspring (Dr. Fox) rightly identified, of governance, corruption and counter-narcotics, it will make a substantial difference on the streets of our communities, which will be safer and more drug free than they are now.

I welcome my right hon. Friend’s statement and the progress that has been made in Afghanistan. Does he agree that one of the keys to more progress in southern Afghanistan is co-operation with Pakistan? Despite the critical statements that are often made, and which the hon. Member for Woodspring (Dr. Fox) repeated today, does my right hon. Friend agree that Pakistan is making a genuine sacrifice? More than 1,000 Pakistani soldiers have been killed in the northern territories and on the borders of Pakistan.

My hon. Friend raises an issue mentioned by the hon. Member for Woodspring, which is key to a sustainable and peaceful future for Afghanistan. There is a mirror image of Afghanistan’s problems on the other side of the border in the Fatah and tribal areas of Pakistan. With respect, hon. Members need to be consistent. We cannot celebrate the election of a democratic Government in Pakistan without living with the consequences of control in that country moving from the military to politics. The engagement with politics in the areas that we are considering will create challenges for that Government, but we universally welcomed the elections, to the extent that they were successful, in Pakistan. However, they have consequences. The army is moving from the position that it previously occupied in the Pakistani community, and that change is important to the future stability of that part of the world. When I was in Afghanistan and subsequently in Pakistan, and when I spoke this morning to the Secretary-General of the United Nations, I concentrated on the need—I know that my colleagues do it all the time with institutions and on visits to the region—to get the two countries to work together across the border, recognise that they share a series of common problems and stop blaming each other for the problems in their countries. That is the only way we will make progress.

Following directly from that, does the Secretary of State agree that one of the key issues is that of patrolling the border between Afghanistan and Pakistan? To do that, we need to fulfil the terms of NATO’s combined joint statement of requirements—in other words, provide more troops. Does the Secretary of State agree that that is the only way we can avoid the catastrophe of the forces of Afghanistan or Pakistan making incursions into the other? What more can we do about that patrolling?

The necessity for a battle group that can manoeuvre around the border is crucial. However, that is only part of the solution to problems on the border. I emphasise that there are 2,900 km of the most mountainous border one can imagine. There needs to be an acceptance on both sides of it that both countries face the same problems, with the same roots. There are opportunities for the two Governments to speak to each other. Indeed, the Foreign Minister of Pakistan was in Kabul immediately after I was there and after I spoke to him in Pakistan. Some progress was made, although this morning’s press conference or statements by President Karzai suggest that the progress has gone backwards a bit. However, we need to keep working with those two countries so that their forces, which will be there in the long term, recognise the issues that they have in common on that border. If we can get them to live up to commitments made separately to secure and police the border, that is as much a long-term issue as any challenge that we face in that part of the world.

The Secretary of State made an optimistic statement about Afghanistan. Will he comment on the way in which the Taliban’s tactics appear to have changed into that of a guerrilla war against an occupying force? Increasingly, there is pressure on those forces to cross into Pakistan. What effect will that have on the politics of Pakistan? How long does he expect British troops to remain in Afghanistan?

The only answer I am prepared to give to that question is that British troops will remain there until we assess that the Afghan security forces are capable of sustaining the security that has been created. We are making remarkable progress in that regard. To the degree that there was optimism in the entirely realistic statement that I made to the House, it was realistic optimism; but there was some pessimism in it, too. I recognise the challenges that we face, and we have to redouble our efforts to deal with them.

I say with some regret to my hon. Friend that there is no answer to the problems that the Pakistanis and Afghans face in that region that involves the international community turning its back on them. To refer to ISAF, which is in Afghanistan at the request of the democratically elected Government there and supported by a UN Security Council resolution, and which represents almost the whole world—there are no national voices suggesting that we should not be there—as an occupying force that people are somehow justified in fighting against is entirely to misrepresent what we are doing there.

Although the Secretary of State said that 50,000 Afghan troops had now been trained, fewer than 10,000 of them have been fully equipped. What will NATO do about the shortfall in equipment, to ensure that the 50,000 trained Afghans have the right equipment to allow them to participate in the sort of action in which British troops and others are currently involved?

There are, I think, 55,000 trained Afghans in the national army. There are also a greater number of police officers, who have been partly trained but who substantially need retraining, and we are working our way through that. Properly equipping an army of that size to face an insurgency is a challenging task. Every day we make more investment in doing that, but at the same time we are trying to ensure that the Afghan institutions of government learn how to do that for themselves and to sustain their own army. So we are doing many things, investing billions of dollars from the international community—mostly from the United States of America—in equipping this army to deal with the insurgency challenge that it faces. I cannot give the hon. Gentleman a measure of exactly where we are in that process from the Dispatch Box today, but I know from my observations of that army, as it has been trained and equipped over the past two years, that we have made a lot of progress. All those soldiers who are deployed and working with ours in the south are equipped well enough to deal with what they need to do.

I welcome my right hon. Friend’s statement, and in particular his indication of the progress being made militarily, which is a tribute to the courage, commitment and professionalism of our armed services. He has outlined some of the benefits that have now accrued to the Afghan people from our presence, but could he give an assessment of the development of Afghanistan’s public infrastructure and national economy?

The Afghan economy has grown at the rate of about 9 per cent. or more a year since 2001. Frankly, however, that masks the problem in the Afghan economy, which is that a substantial proportion of the real economy relies on drugs. Breaking the link between the Afghan economy and its dependence on drugs is crucial. At the heart of that is the ability to deal with the comparatively small number of people who are extremely influential in Afghanistan. My assessment is that if we can develop the governance and justice system of Afghanistan in the short term, so that it can deal with the comparatively small number of very influential families and their leaders, we will be able to make important progress in developing the Afghan economy. However, exactly when we will be able to do that will be a function of our ability to get the Afghan capacity built up. As I said earlier at Question Time, we must bear in mind the fact that Afghanistan has been ravaged by decades of violence and that we start from a very low base.

The Secretary of State knows that the whole country should be extremely proud of the performance of British armed forces in Afghanistan. However, even after this welcome, if very small, addition, there are still critical gaps in the military structure which, unless filled, will prevent us from completing the mission successfully. Will the Secretary of State, together with the Prime Minister, urge the Germans, who have remarkable and substantial engineering assets in the north, to realise that their business is south and that we and the Americans will provide them with force protection so that we can get on with the absolutely essential, almost untouched part of the vital reconstruction, without which the mission will not be able to proceed?

The hon. Gentleman makes a very good point. At the NATO ministerial meeting last week, I encouraged all those countries with assets to make a contribution by deploying them in the south. I am sure the hon. Gentleman will forgive me for reminding the House that large parts of Afghanistan have improved immeasurably, but that we have to be very careful not to abandon and leave those areas as the soft underbelly of country, because if we do that is where the Taliban will go. The German Defence Minister reminded me—he was right to do so—that Germany had suffered some casualties where they are and that retaining the north and west and the area around Kabul, which we may be able to see handed over to the Afghans themselves, is quite important. The Taliban have a habit of going where the weakest spot is and I certainly do not want them to see success in places where we have already seen significant improvement.

I thank the Secretary of State for his statement and I welcome the increase in CIMIC—Civil Military Co-operation—personnel, which will help to further civil reconstruction. I also welcome the reference in the statement to an increase in flying hours. Will he join me in paying tribute to the workers of Fleetlands, many of whom live in my constituency, who have delivered real improvements in service and repair techniques, which enabled us to have this increased operational capability?

I have no difficulty in acceding to my hon. Friend’s request. Everybody who has made a contribution to the success we have enjoyed in Afghanistan, the recognised improvement in security there and the creation of the opportunity to which this announcement is designed to respond deserves the utmost credit. That is true whether they do what they do in uniform or out of it. In whatever way they have contributed, we should celebrate the success of these extraordinarily brave, dedicated and professional people.

Last week, President Karzai responded to allegations of corruption within his Administration—his response appeared in Der Spiegel magazine—by attacking coalition forces, accusing them of having Afghan warlords on their payroll, of offering other financial inducements in the form of land and, in one case, of using their soldiers for force protection. Will the Secretary of State take this opportunity to confirm that, as far as he is aware, these accusations are entirely baseless? Will he also comment on what this says about President Karzai’s attitude to coalition forces?

I do not think the hon. Gentleman believes these allegations either—at least, I hope he does not. There are often people who advise President Karzai of some quite bizarre allegations in respect of ISAF, and I have personally had to disabuse him on many occasions. I remember that on one occasion, a deeply corrupt individual who had access to the President’s ear advised him that we were, in fact, training the Taliban; I wondered why that was given any consideration at all.

On the other hand, we have to accept that this man works in a very difficult political environment and that the things he says are quite often edited and presented in a way that he does not intend them to be presented. I know him to be a very brave and honourable man who works in a very difficult and challenging political environment. As we can all imagine, to volunteer to do his job and face all sorts of pressures and attacks on personal safety requires a degree of courage. Frankly, although I often personally disagree with him in his analysis, I respect the man as the democratically elected leader of the country. In my view, we should support him to move forward as long as he is the democratic leader, and we should give him a little bit of leeway in what he says publicly.

The Secretary of State stressed the importance of security and intelligence, saying that he was not complacent. This has not been mentioned so far, but what role does he see for the spy in the sky—the Nimrod aircraft, particularly the upgraded MRA4? They could provide fantastic information from observation and reconnaissance not only over the Pakistan-Afghan border, but from elsewhere, to give warning about what the Taliban are doing and their movements.

The hon. Gentleman makes a good point. One lesson of deploying the current Nimrod to do exactly that in Afghanistan has been an astonishing level of detailed information. He will forgive me if I do not, in public, go into just how effective it can be. I know that those who fly the aircraft look forward to the updated and further-invested version and the capabilities that it will have. This aircraft not only can be used in a maritime environment, but has proved very important to our capability above Afghanistan, and indeed above Iraq.

What is the basis of the Defence Secretary’s statement that half the Taliban’s fighters are paid foreigners? Does that include Pashtun speakers from Pakistan and has the break-out of 600 Talib fighters from the prison in Kandahar made any statistical difference to that assessment?

It is probably a bit early to be asking whether people who were sprung from prison on Friday night have made any statistical difference to the people whom we will face. That operation is still ongoing. We are, with others, keeping a careful eye on it and there has been some progress in rearresting some of those who escaped from the prison.

I think I used the phrase the majority of the fighters, so that is more than 50 per cent. What is the basis of that? I will not go into the detail of the figures in the House, but that is our experience from those with whom we are engaged and from the fact that, quite often, we recover people from the battle space because they are injured or identify their bodies later. That information is provided to me by those who are engaged with them.

The particular basis of that assertion arises from the place where there has been the most intense engagement with the Taliban over the last weeks—the southern Helmand area, where the US marine expeditionary unit has been deployed. That is the unit’s overwhelming experience of the people it is having to deal with.

With permission, Mr. Speaker, I would like to make a statement about the funding of political parties. The Government are today publishing a White Paper on party finance and expenditure in the United Kingdom. Copies are available in the Vote Office and on my Department’s website.

How our politics is funded is vital for the health of any democratic system, including ours. Over the last decade, important steps have been taken towards achieving this. In 1998, the Committee on Standards in Public Life, under its then chairman, Lord Neill of Bladen, published a landmark report, which went on to form the basis of the Political Parties, Elections and Referendums Act 2000.

It must also be fundamental to the health of our democracy that the regime for regulating political parties should never be used as a partisan tool by one party against others, and instead that change should be by way of broad cross-party agreement and achieved in a manner that carries wider public support. That spirit led to the passage of the 2000 Act by consensus and continues to be a guiding principle for this—and I hope any—Government’s approach.

The 2000 Act represented the first major overhaul of the regulation of party funding and expenditure for more than 100 years. It has greatly helped to improve transparency and standards, but it has not proved sufficient. In the intervening period, there has been continuing public disquiet about many aspects of how parties and politicians are funded. In March 2006, Sir Hayden Phillips was therefore invited by the then Prime Minister, Tony Blair, to conduct a further review, including as to whether state funding should be enhanced in return for a cap on donations.

Sir Hayden’s final report was published in this House on 15 March last year. It made major recommendations for reform of the Electoral Commission, for tightening the controls on expenditure, for greater transparency and for a gradual move to enhanced state funding linked to a cap on donations. All parties explicitly welcomed Sir Hayden’s report and accepted its main recommendations, including those for cross-party talks chaired by him to take forward the report’s recommendations. Those talks proceeded satisfactorily until last year’s summer recess. Sir Hayden then issued detailed proposals based on what he judged might form the basis for a consensus between the parties. It is a matter of great regret that, in late October, one of the parties decided to walk out of the talks, making agreement impossible.

Against that background, Her Majesty's Government undertook in the Queen’s Speech to bring forward proposals on party finance and expenditure. The White Paper is the result. It proposes measures to improve the regulatory system. It sets out the Government’s aspiration for long-term comprehensive reform, building on the model proposed by Sir Hayden Phillips. In those areas where the Government believe that a broad consensus exists, it outlines plans to bring forward immediate legislation, including reform of the Electoral Commission and more effective controls on candidate spending.

The excessive spending by parties and candidates gives rise to the wider problems with party finance that we see today. Repeated independent reviews—including those from Sir Hayden Phillips, the Committee on Standards in Public Life and the then Constitutional Affairs Committee—have called the problem a “spending arms race”, although some individuals, I know, still question its existence. But a spending arms race is evident within each electoral cycle. As Sir Hayden’s report said, spending by the two largest parties was £90 million in the 12 months preceding the 2005 election, up from £65 million in the 12 months before the 2001 election. That was despite the campaign limit being set at £20 million for each party. Although the parties did not act unlawfully, their ability to spend well above the campaign limit under the Act reveals a problem with the rules. In the interests of democracy, we need finally to achieve what all parties had sought to do through the 2000 Act, and to stop this damaging arms race.

The White Paper proposes some important steps for immediate action. Strengthening the Electoral Commission will send a clear signal that politics and politicians are effectively scrutinised: never above the law. The Electoral Commission will have robust civil sanctions to deploy, with criminal proceedings as an alternative. The commission will have more effective investigatory powers, enabling it to access information from anybody when it suspects a breach of the rules. Its governance arrangements will be overhauled better to ensure that greater practical experience is available to it.

The Committee on Standards in Public Life, the then Constitutional Affairs Committee and Sir Hayden Phillips all recommended that the commission would benefit from the knowledge and judgment of individuals with political backgrounds. Therefore, we propose, as the Committee on Standards in Public Life recommended, the appointment of four commissioners with recent political experience and fewer restrictions on staff appointments. Far from politicising the Commission, that will enable it better to understand the people it regulates and so help it to do a more effective job.

There has been widespread concern that a loophole in the 2000 Act has allowed certain unincorporated associations to obscure the original source of donations to parties. Therefore, as the Phillips review proposed, those will be better regulated, as will third-party campaigning organisations.

Let me turn to spending by parties. In 2000, when I took through the Political Parties, Elections and Referendums Act, all believed that we were, in the words of Lord Neill’s report, “buttressing” the existing restrictions on spending, including those in the Representation of the People Act 1983 and its predecessors. What we did not foresee at the time was the likelihood of significant increased and unregulated candidate spending as a result of the detailed drafting of the Bill, although the late Lord Mackay of Ardbrecknish, who was on the Conservative Front Bench, sought to alert us to the problem by tabling a clarifying amendment on behalf of his party.

The White Paper proposes a return to the system of “triggering”, which will regulate all candidate spending directed towards electoral success, and which was a key feature of the last Administration’s 1983 Act. A stronger, more focused Electoral Commission will help to avoid the previous uncertainty about the rules. In parallel with that, we propose to re-examine the list of activities that are defined as campaign spending.

Let me turn to the question of introducing donation caps in return for enhanced state funding. To do that, we would have to carry with us not only all the main parties, but the public—the taxpayer—as well. That is not happening at present. We are very ready to have the debate, and, indeed, to discuss donation caps at a lower level than Sir Hayden recommended, but that will require us to come together to allow discussion between the parties and the public. I intend to introduce a Bill before the summer recess, but with Second Reading taking place in the early autumn and the other stages being carried over into the next Session. That will provide ample opportunity both for comments to be made to us and for scrutiny to be carried out.

By any international comparison, the standards of our political system have long been high. Nothing more infuriates most Members of Parliament, local councillors and, especially, the thousands of unpaid voluntary activists in all parties than the fact that their work and good faith can be tainted by the failures of a very few. However, perceptions matter hugely. I hope the whole House recognises the imperative in these circumstances of strengthening the probity of British politics and of people’s faith in our democratic process as a whole. That is the principal aim of the White Paper, and we hope that all parties will support us in our endeavour. I commend the statement and the White Paper to the House.

I thank the Secretary of State for advance sight of his statement and of the White Paper. I think the whole House will agree that party funding reform is very much needed to restore trust in our politics, and to deal with the perception that large donations, whether from individuals or from organisations such as trade unions, can buy undue influence over policy or patronage.

I entirely agree with the Secretary of State that perceptions matter hugely. That is why we produced radical reform proposals early in 2006, well before Sir Hayden’s appointment. Sir Hayden, incidentally, deserves our huge thanks for the enormous work that he put in. His proposals on Electoral Commission reform are especially welcome. We took part in the discussions enthusiastically, and, as evidence of our commitment to reaching agreement, even accepted that an overall settlement could include an increase in state funding, although we neither seek that nor consider it desirable. We further accepted that there could be overall caps on spending by parties, although it is clearly how money is raised that worries the public, not how much is spent. [Interruption.] It is interesting to note that Sir Hayden’s terms of reference refer only to donations. Spending by parties does not even get a mention.

The Secretary of State will recollect that, in setting up the review, Tony Blair said explicitly that there would be no no-go areas and, in particular, that trade union funding should not be exempt from any donation caps. Was it not always understood that reform must be comprehensive, and that there should be no cherry-picking to serve the governing party’s partisan interests—that nothing would be agreed until everything was agreed? Does the Secretary of State accept that a partisan Bill now cannot provide the basis for a long-term and sustainable settlement? Has he read the independent research by Dr. Pinto-Duschinsky, which shows that there is no arms race in party spending? Is this not a myth to give credence to a bankrupt Labour party’s desire to hamstring its opponents?

Will the Justice Secretary agree that the discussions came very close to overall agreement, but foundered on the key issue of whether trade union donations should be subject to donation caps on the same basis as other donations? Will he now place in the Library the minutes and the background papers to the review, which will show that it was Labour’s refusal to allow further work on trade union funding that brought the talks to an end? Does he recall that he and Peter Watt—the then Labour general secretary—refused point blank even to discuss giving trade union members the right to a real choice in whether to pay the political levy? [Interruption.] Well, does the Secretary of State remember the revelation that a Lib Dem MP received a ballot paper for Labour’s leadership contest, having unwittingly become a Labour party member through a trade union? Will he not acknowledge that when trade unions routinely declare that 100 per cent. of their members—and in two cases, more than 100 per cent.—are paying the political levy, the idea that these are voluntary individual donations to Labour are laughable, especially when polling shows that fewer than half of union members even vote Labour, let alone want to support it financially?

Does the Secretary of State accept that his proposal to reintroduce “triggering” was not even part of Sir Hayden’s draft agreement? Is not this change designed to make it more difficult—a caption in the White Paper makes this clear—for candidates to campaign effectively, and thus to benefit sitting Labour MPs? Does the Secretary of State not understand that it would be an atrocious abuse of power for the Government to force through restrictions on what parliamentary candidates can spend from money they have raised privately, while sitting MPs can spend ever-more taxpayers’ money on promoting themselves?

Last year, we came close to an overall comprehensive agreement that could genuinely have started to repair the public’s trust in politics, and I say to the Justice Secretary that we can still achieve this. However, it would require Labour to accept that dependence on a small number of union bosses has to end. Sadly, it is hard to see that happening when 92 per cent. of Labour’s income comes from the unions, which even now are squaring up to demand their payback in the form of a Warwick agreement mark 2. It is precisely Labour’s dependence on these union bosses and the big donor culture that is preventing us from getting the reform that our politics so desperately needs.

I greatly regret the tone adopted by the right hon. Gentleman, and his unsuccessful and thin efforts to rewrite the history of what happened in respect of the Hayden Phillips discussions, for as he knows—and as the hon. Member for Somerton and Frome (Mr. Heath), who was present, has stated—the truth is that we, the Conservative party and the Liberal Democrats all said on 15 March that we were ready to negotiate on the basis of the Hayden Phillips recommendations, and we did so. Indeed, we continued to negotiate on that basis until there was a sudden change, late in the summer of last year, in the policy and approach of the Conservative party. The hon. Member for Somerton and Frome told the House that

“the process that led to the breakdown of the talks…was caused by the Conservatives walking away.”—[Official Report, 7 November 2007; Vol. 467, c. 224.]

The right hon. Gentleman may, if he wishes, put in a freedom of information request for the minutes, but he has not yet done so. That would deal with this situation, however. An independent individual could judge the issue. We would consider this, but it is a matter for Hayden Phillips, not for me. However, we do not need FOI requests or the minutes of the meeting, because two other Members of this Chamber, as well as the right hon. Gentleman, bear witness to precisely what happened. The truth is that, as we have just witnessed from his partisan approach—which was totally different from the one that he and his party colleagues adopted in the working party—the Conservative party decided to move away from the main recommendations of the Hayden Phillips report. [Interruption.] Did the right hon. Gentleman say, “Yes”? [Interruption.] Indeed, Hayden Phillips did deal with the issue of trade union funding.

We made it clear, before and afterwards, that we were ready to implement what Sir Hayden Phillips proposed, but the Conservative party sought to recommend something very different, breaking not only the spirit of what he had said, but, for example, of what the Constitutional Affairs Select Committee had said. It said, again endorsed by Sir Hayden Phillips, words to the effect that no party had the right by legislation to seek to change the constitution of another party. We have never done so. We could have when we had a very considerable majority in this House back in 1999 and 2000; we still have, and we are not going to do so.

The right hon. Gentleman said that there is no arms race. This defies arithmetic and everything that his representatives said in the working party with Sir Hayden. I will quote, if I may, the then Opposition spokesperson on this issue, the hon. Member for Arundel and South Downs (Nick Herbert):

“We are much more interested in reducing the cost of politics and that is what David Cameron has made clear.”

So far as Dr. Pinto-Duschinsky’s so-called research is concerned—it rather desperately needs some peer reviewing—he very skilfully selects mid-term spending by political parties. He says that there was

“no time to analyse published and unpublished budgets of Labour and Conservative…organisations for 2004, 2005 and 2006”.

How convenient, because what we see and what we know is that spending always rises in the last two years before a Parliament is due to end. Had he addressed himself to the available research—the much better research—by the Joseph Rowntree Foundation, he would have seen, for example, that spending donations received in local Conservative parties and marginal seats averaged £19,600, compared with £6,500 and £7,700 in Labour and Liberal Democrat marginals. What we—and, I believe, the Liberal Democrats—wish to see, and what the Conservative party wished to see until last summer is sensible, non-partisan rules that we can come together and agree on. I hope that, even at this late stage, the Conservative party will think again.

rose—

Order. A considerable number of Members are hoping to catch my eye. Time is limited and there is a further statement to follow; may I please ask for one brief supplementary question?

I am also grateful for prior sight of the Justice Secretary’s statement and the White Paper.

We Liberal Democrats welcome new investigatory powers for the Electoral Commission, its proposed new governance arrangements and transparency for unincorporated associations. In general, however, I have to say that this is a woefully inadequate package, and the Secretary of State is getting scant reward for his modesty from the official Opposition. There is nothing in this statement that will stop the arms race between the parties. He was quite right in his remarks about Dr. Pinto-Duschinsky’s paper—which was, by the way, produced and published by a Conservative-leaning think-tank. Nor is there anything that will clean up party funding by capping big contributions. There are no caps on donations or local spending, and is public confidence not at a low because the Labour and Conservative parties are seen to be in the pockets of big business or the trade unions?

Is it not scandalous that there is nothing here that will impede Lord Ashcroft, through his UK company, Bearwood Corporate Services Ltd, in trying to buy any number of parliamentary seats? Lord Ashcroft already accounted for 8 per cent. of Conservative funding last year. The Justice Secretary says that he can legislate only with all-party consensus, but in that case, many abuses would never have been cleared up, including some of the most anti-democratic practices of the trade union movement that were put right in 1984 by the Conservative party against the Labour party’s views at that time. Are we now to give miscreants a right of veto over new offences?

Does the Justice Secretary really think it just a coincidence that the Conservative party broke off cross-party talks in the very quarter when it took record donations of £9.7 million, which was an increase on the previous quarter’s £3.7 million and a record quarter for a non-election year? Was that mere coincidence? Why should the Government not now legislate to remove the stink of big-money politics? Is it not time that millions of votes, not millions of pounds, decided British elections?

The hon. Gentleman has had time to read the White Paper because it was sent to him, as it was to the right hon. Member for Horsham (Mr. Maude) earlier today. I hope that the hon. Gentleman does read it carefully. No one is talking about any one party having a right of veto; indeed, I was surprised to hear the right hon. Gentleman appearing to claim that it was wrong now to legislate on strengthening the work of the Electoral Commission and re-introducing the trigger, which formed a central part of the Conservatives’ legislation and which they tried to ensure, for the avoidance of doubt, stayed as part of the 2000 Act. I wish that I, or our Minister in the Lords, had accepted that; the only reason we did not do so was because we were told that it was not necessary. We will proceed on that basis, but I think that the hon. Gentleman will accept that no one party should use the party funding regime as a partisan tool, because we must ensure that there is stability in the system that we adopt.

I accept, and share, the hon. Gentleman’s frustration about the fact that we came very close to reaching an agreement last summer. It would have involved many important, significant and difficult changes in my party, as well as in other parties, but we were aborted in that by the events to which a number of us in this House were certain witness.

On the hon. Gentleman’s question about groups such as Bearwood Corporate Services Ltd, we propose that there should be proper regulation of unincorporated associations, so that the source of the original donor becomes clear.

If my right hon. Friend intends to proceed, as I think that he is right so to do, on the basis that any agreement must be made by consensus across the political parties and if he can persuade the Conservative party back into those talks, will he also seek to persuade it that the donation cap of £50,000 that has been discussed is a long way above what ordinary people understand and that there is an overwhelming case for lowering it to a level that would put politics back in the control of the ordinary people of this country?

I agree with my hon. Friend. Our White Paper includes a lot of detail about how it is thought donation caps would impact at different levels on the spending of different parties. The sum of £50,000, which was Sir Hayden Phillips’s recommendation, is a lot of money for the overwhelming majority of families in this country, and we are certainly ready to sit down to talk about a lower spending cap, as my hon. Friend indicates.

I very much regret the omission of any proposals to impose a cap on donations. They would be welcome, although only if they were to extend to trade unions. May I ask the right hon. Gentleman to remind the House how much money the Labour party has received over the past five years from Unite, which is the union maintaining the industrial dispute involving tanker drivers?

We are ready to answer that for which I am here to answer. We were ready to negotiate an arrangement with the other parties on the basis of what Sir Hayden Phillips recommended, including in respect of the trade union donations. We continue to be ready to do that.

I welcome the general thrust of my right hon. Friend’s proposals in the White Paper, particularly as regards a spending cap, but may I point out that many in all parts of the House have reservations about linking a spending cap to state funding?

I understand that, and we all need to understand that Sir Hayden Phillips estimated that, at £50,000, the enhanced state funding needed to compensate parties for the loss of income would run at between £65 million and £90 million over a Parliament. A big issue for us, as the trustees of the public purse, is whether or not now is the appropriate time for that amount of taxpayers’ money to be spent on political parties.

Bearing in mind that Sir Hayden Phillips’s proposals were based on the unanimous views of the Constitutional Affairs Committee, does the Secretary of State recognise that the Government’s moral authority to legislate in this sensitive field is undermined if what they propose is not the full range of Sir Hayden’s proposals, with their different but significant impact on all political parties, including his concern about the potential power of paymasters of whatever kind?

First, may I offer my congratulations and, I believe, those of the whole House to the right hon. Gentleman on his knighthood, which was announced in the birthday honours on Saturday?

Secondly, on the question, the Select Committee on Constitutional Affairs produced recommendations that were taken forward by Sir Hayden, who made proposals, which we have previously discussed in the House. However, it is very difficult to move forward, since, among other things, Sir Hayden outlined his proposals but then said that the detail had to be negotiated between the parties. It was very difficult then to take that forward without the kind of constructive negotiation in which representatives of the Liberal Democrats, Labour and the Conservatives were participating perfectly happily until the summer recess last year. That is the problem. If the Conservative party now wishes to go back to where it was last July, we are happy to join it, and I believe that the right hon. Gentleman’s party would also be happy to join it.

I welcome the direction of my right hon. Friend’s statement this afternoon and the proposal to introduce the trigger mechanism into spending that is registerable as campaign expenditure. Does he accept, however, that the expenditure arms race is percolating across the whole electoral period and all forms of spending, national and local? Does he consider that a trigger mechanism and, indeed, the White Paper’s contents are a way station towards an overall cap on the expenditure of parties between general elections and during entire Parliaments?

Yes, I accept that, and Sir Hayden Phillips and previous reports have recommended that continuous, all-Parliament spending limits should cover what we loosely describe as national and local spending. That is, however, very complicated and requires detailed discussions between the parties and the Electoral Commission.

The Justice Secretary is right in thinking that the great British taxpayer would be horrified at the prospect of yet more of their money being used to fund political parties, but is that not what we have done in a back-door way with the communications allowance, which allows MPs £10,000 a year to tell our electorates how great we are? Therefore, the candidates in our seats may feel that they have to spend more just to keep pace with us. Will the Justice Secretary consider the abolition of the communications allowance and the saving of millions of pounds of taxpayers’ money?

The recommendation on the communications allowance happened to be a unanimous one from the House of Commons Commission, but I understand the hon. Gentleman’s point. I have said in the House that there should be serious discussions about the communications allowance, or that part of it which I do not think is used for party spending, given the rules, but which might be seen to be. Let us sit down and discuss it. What we and the Liberal Democrat party have been frustrated about is that there have been no constructive discussions on this issue, because the Conservative party walked away.

I welcome my right hon. Friend’s proposals on unincorporated associations—a mechanism that has been used by the Conservative party to hide the source of millions of pounds of funding not only to party central office but to individual Conservative Members. Will my right hon. Friend consider making the transparency of those unincorporated associations retrospective to the beginning of this Parliament, so that we can find out where a lot of the money that is sloshing around the Conservative party has come from?

I am not sorry to tell my hon. Friend that there are clear rules against making provisions that carry sanctions, as these will, retrospective. Therefore, the Bill will not contain proposals of that kind.

May I put it to my right hon. Friend that in the long term the key is to insert caps on spending rather than on donations, so that we get back to issue-driven rather than money-driven politics? With the benefit of hindsight, does he agree that the £20 million cap on national spending in the 2000 Act was rather too generous and that we should perhaps think about halving it at the next election?

I agree with the central burden of what my hon. Friend has said. The £20 million cap would be better than the current situation if it covered all campaign spending, and therefore one of the proposals to which I drew attention in my statement is that we should look again at the definition of campaign spending in schedule 8 to the 2000 Act as well as moving towards comprehensive all-Parliament controls in the future.

Will not the reintroduction of the trigger give more power to the national party and less to local candidates who want to get their point across locally?

I honestly do not think so. That issue was not raised by Neill or during the passage of the 2000 Act or its predecessor, the Representation of the People Act 1983. Neill said that all his proposed controls should be in addition to the 1983 regime—“buttress” was the word that he used. Everybody thought that that was the case except for the noble and acute Lord Mackay of Ardbrecknish. From the Opposition Front Bench in the other place, he moved amendments to clarify what he thought might be a loophole in the law on advice that was turned down as unnecessary by Ministers in the Lords. I have regretted that decision of ever since. I do not think that there is any evidence to suggest that the worries expressed by the hon. Gentleman will be substantiated, but I will check and write to him.

Sir Hayden Phillips did a very good job during the talks, in which I played a part, in establishing near consensus on a wide range of issues concerned with party finance. He also found some of the answers, until the Conservative party decided to change the question rather late in the day and therefore left the talks. Is it not therefore very disappointing that the proposals that the Lord Chancellor has brought forward today fail properly to address the issues of the cap on donations and expenditure and to make the significant changes to the transparency and propriety of trade union funding that we agreed?

I share the hon. Gentleman’s disappointment. He was party to the talks, and he represented his party very effectively. The right hon. Member for Horsham also represented his party very well, but his script was changed sometime in the summer of 2007. It is disappointing, but we can make progress, if there is broad agreement across the Chamber on spending controls, which is what we are proposing. Everybody, apart from one or two flat-earthers, recognises that the rise in spending is the driver for all the other problems.

I welcome my right hon. Friend’s proposals to close the loopholes on unincorporated associations and candidate spending. I also welcome cross-party consensus on the issue, if it is forthcoming. May I remind my right hon. Friend that to insist on cross-party consensus at all costs is to hand a veto to the Opposition? Some enlightened Members of the Opposition see that their interest lies in closing the loopholes, but others see that their interest lies in keeping them open. Those who want to keep the loopholes open are the ones who benefit from being able to escape controls on party spending by channelling money to local candidates and bypassing the controls on anonymous and foreign donations by channelling money to unincorporated associations.

We are not talking about a veto for any one party; we are talking about areas on which it is clear that there is already broad agreement, as there is in respect of the changes to the Electoral Commission—there must be broad agreement on that, given that I am reintroducing Conservative legislation that the Conservatives kept on the statute book from the 1980s right until they lost office in 1997.

We have sought to ensure that we follow through on the broad agreement on cutting spending—something to which all the parties subscribed—in terms of restrictions, but there are remaining issues to do with how we enhance state funding in return for donation caps. Those issues are complicated and—let us be clear about it—an increase in state funding would be involved, at a time when there are big questions about whether the taxpayer would be willing to bear that. There are many other complications, too. However, we were close to an agreement, and I hope that one day we will be close to one again.

I participated in the talks from start to finish, and the Lord Chancellor’s description is a travesty of the truth—the House needs to know that. Frankly, the statement that we just heard was partisan. The return of the triggering rules will restrict candidates in marginal seats but not sitting MPs, who benefit from the communications allowance. As Labour holds all the marginal seats, is there not a blatant act of partisanship hidden under the guise of all-party agreement on the Sir Hayden Phillips talks?

That is completely untrue, and the hon. Gentleman knows it. I believe that he was among those who signed up to the unanimously agreed report by the Select Committee on Constitutional Affairs, but what he has subsequently said is completely different—both in spirit and in recommendation—from what was said in the Committee’s reports. He is one of the flat-earthers—he voted against the Climate Change Bill on the basis that it was bad science.

What has that got to do with it?

It says something about the attitude of mind of the hon. Member for Chichester (Mr. Tyrie). He continues to deny what is palpably true—namely that spending by political parties has increased, and will increase, unless we take control of it.

May I congratulate my right hon. Friend on not bringing forward a scheme for the state funding of political parties? Is he concerned that some current forms of candidate and party expenditure fall foul of existing spending limits?

Yes, they do; we accept that. I dealt with the issue of the 1983 trigger, to which, I notice, no Conservative politician ever objected—indeed, far from it—in my answer to the hon. Member for Ribble Valley (Mr. Evans).

Tight caps on individual donations and spending are essential to public support for the proposals, as is a debate on state funding, including existing state funding. As part of that debate, will the Government consider the Power commission proposals, under which state funding would be provided on a pence-per-vote basis only if electors chose to tick a box on the ballot paper? Does the right hon. Gentleman agree that that would focus parties’ attention away from expensive billboard campaigns and back towards more grass-roots campaigning and, dare I say it, engagement with the public?

There are a number of imaginative proposals for additional state funding, including the Power commission proposal, to which I was quite attracted. However, there are also problems with the proposals. We have to recognise that each of the proposals involves a transfer of funding from the taxpayer to political parties by some means or other. We would certainly need broad consensus on that, and we would have to carry the public with us.

The Conservatives in Ellesmere Port have adopted a new scam on their website; they are acting a bit like a discount warehouse. A whole raft of public, well-known companies advertise their wares on the local Conservative party website—BT was one of them, but I persuaded it to withdraw its advertising. Not one of the shareholders of any of those public companies has authorised such a donation. Will my right hon. Friend ensure that legislation stops that kind of scam?

I look forward to my hon. Friend raising that issue during the passage of the Bill. Meanwhile, if he has a complaint about the regulations, he should refer it to the Electoral Commission.

I congratulate the Lord Chancellor on ruling out further taxpayer funding of political parties. Will the Bill contain proposals for individual voter registration, as recommended by the Electoral Commission?

There are no proposals in the White Paper for individual registration, but I am grateful to the hon. Gentleman for what he has said. I am attracted to the idea of individual registration and believe that it has to happen.

Then do it.

We are going to bring forward—

When?

The hon. Member for Huntingdon (Mr. Djanogly) asked me a series of questions, and gave the answers before I could do so. If he calms down, I will give the answer. I intend to introduce proposals, but there are spending implications. I am in no doubt that we have to move forward, and a consultation document on this and other matters relating to the regulation of the voting system will be introduced soon.

Does the right hon. Gentleman know how offensive it is to ordinary members of the public who value our democratic traditions to see rich individuals bankrolling candidates before the election period commences? Would he expect a decent political party to stop that practice pending the reintroduction of the trigger?

I think that the independent hon. Member for Castle Point (Bob Spink) was referring to his former colleagues in the Conservative party. We look forward to further and better particulars of what he has to tell us about that party’s practices.

I was not minded to ask a question until I heard the sanctimonious bilge from the hon. Member for Eastleigh (Chris Huhne). In the document, there is nothing to address the abuse of incumbency. One of his senior colleagues has sent out letters in House of Commons-franked envelopes to all new voters on his register that include a leaflet slagging off the prospective parliamentary candidate in that constituency, so until the communications allowance is addressed, there is a serious problem and lacuna in the proposals.

I do not approve of that practice, and I have never followed it myself. We had a great debate about the communications allowance about 18 months ago, and one reason why it was introduced was to control the abuse of overspending, for example, on franked envelopes. That is one of the things that it has achieved, but I told the hon. Member for Ribble Valley that if there are issues—[Interruption.] I know that there are—to discuss, we should discuss them, but that requires all three parties to sit down and discuss them in talks from which one party should not walk away, knowing that they are departing from an agreed agenda established by an independent inspector.

The Lord Chancellor is right to talk about public perception, but does he not accept that the public will perceive that the Government are not serious about change until they break the umbilical cord between themselves, their party and the unions, and are seen to do so?

I do not accept that. I know that the hon. Gentleman has a different viewpoint about the relationship between trade unions and political parties, and he is fully entitled to make as many points as he wishes and to persuade his voters and others to support his party, not ours, because of our association with the trade unions. However, he must accept that trade union contributions to political parties, including the Labour party, are the most regulated of any contributions. They are completely clean—there have been no validated complaints against the payment of the political levy in the past 10 years. Contrary to what we heard from the right hon. Member for Horsham, members of affiliated trade unions know that they can opt out, and at least 10 per cent.—the percentage varies from trade union to trade union—do so. He is entitled to make comments about our connection with the trade unions, but what he is not entitled to do in a democracy is to try and rewrite our constitution in a way that suits his party, not ours.

Order. Will Members who do not wish to stay for the statement by Secretary Miliband leave quickly and quietly?

It is a pleasure and a privilege to be able to make this statement today. [Interruption.] I urge right hon. and hon. Members to contain their enthusiasm. With your permission, Madam Deputy Speaker, I should like to make a statement about the Irish referendum on the Lisbon treaty, which was held last Thursday. The no vote on the treaty in the referendum is important because of our strong national interest in an effective European Union, and that vote needs to be respected. The next step is for the Irish Government to give their views on how to proceed from this point, consistent with their aims for Ireland’s role in the EU. They have made it clear that they need time to absorb and analyse the result and its implications and to consult widely at home and abroad. The Irish Prime Minister has said that he is disappointed by the result but wants Ireland to continue to play a full part in the life of the EU.

I have just returned from a meeting of EU Foreign Ministers in Luxembourg, and that message was reiterated by the Irish Foreign Minister at that meeting. He emphasised the diverse nature of the Irish debate, and the overlap in the debate between issues that are affected by the treaty and those that are not. He also expressed his appreciation that around Europe, leaders had committed themselves to work co-operatively with Ireland. He committed Ireland to work for a common European approach, with Ireland at the heart of Europe. There will be further discussion among Heads of State and Foreign Ministers at the European Council this Thursday and Friday not to take final decisions but to hear a preliminary report from the Irish Government and preliminary thoughts on the next steps.

The rules of the treaty and of the EU are clear. All 27 member states must ratify the treaty for it to come into force, and we on the Government Benches will defend that principle extremely strongly. There is no question of ignoring the Irish vote or of bulldozing Irish opinion. Ireland clearly cannot be bound by changes that it has not ratified. Equally, there is no appetite for a return to years of institutional negotiation. The EU as a whole needs to find a way forward for all countries that allows the EU to focus on the big policy issues that confront us.

Eighteen countries have approved the Lisbon treaty. The Irish Government have set out clearly their respect for the right of other countries to complete their ratification processes. My conversations with other Foreign Ministers, representing all shades of political opinion across the EU, show this to be a very strongly held view. The reason for the approach is simple: an Irish vote is determinant of an Irish position but cannot determine the ratification decision of other countries. The British view is for this Parliament to determine. In this House and the other place, there have been 24 days of debate, and both Houses have voted strongly in favour of the European Union (Amendment) Bill at each stage. The final stage is Third Reading in the other place on Wednesday.

The Government believe that ratification should proceed as planned. It must be right that every country takes its own view on the treaty in accordance with its democratic traditions. That is right according to democratic principle; it is right in terms of our negotiating position in the EU; and it is right in terms of our national interest.

Our national interest is a strong Britain in a strong European Union. The EU now consists of 27 countries and 490 million people. The reform of EU institutions and working practices is important to ensure that the EU can function more effectively and cohesively, and to ensure that the EU embraces an outward-looking agenda that tackles in an effective way international issues such as migration, climate change, security and defence policy and counter-terrorism. But treaty change rightly requires unanimity across all countries. That is why it is right that we take the time to allow the Irish Government to make proposals on what they will do next, right that we assert Britain’s national interest in an effective EU that addresses the problems of the modern world, and right that we work to maintain the cohesion of the EU. That is what the Government will be doing in the weeks and months ahead, and I commend that approach to the House.