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Westminster Hall

Volume 487: debated on Tuesday 27 January 2009

Westminster Hall

Tuesday 27 January 2009

[Ann Winterton in the Chair]

Palestinian Territories (Economic Aid)

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

I do not usually have much luck in House of Commons ballots, but this debate could not have come at a better time. The war has just ended, and we are discovering its true horrors—white phosphorus, bereaved parents and injured children—as we contemplate the destruction not only of many homes but of much of the infrastructure of Gaza. The international community and Gazans themselves face not just a humanitarian crisis but the task, effectively, of rebuilding Gaza.

It is exactly a month today since the war started. What has been remarkable about the past month is not just the scale and spontaneity of the worldwide protests, which have been far greater than anything that we have seen before—some of us were involved in the issue at the time of the Lebanon crisis, and the situation has far outstripped even that—but the readiness of people around the world to help the Palestinians. For example, last week the Muslim community in Blackburn raised £150,000 for a Palestinian charity in just one week. Last night, Channels 4 and 5 and ITV screened the Gaza crisis appeal. We do not yet know how much it has raised—perhaps some people do. To my mind, it is unforgivable that the BBC and Sky refused to screen it.

I congratulate my hon. Friend on securing this timely debate. I refer him to early-day motion 585, tabled by my hon. Friend the Member for Birmingham, Northfield (Richard Burden). Does he not feel that the BBC and Sky should not seek to pre-empt the work of the Charity Commission, which regulates the activities of the constituent organisations of the Disasters Emergency Committee? It is not for the BBC and Sky to make political judgments about the worth or partiality of humanitarian disaster appeals. Does he not think that the BBC and Sky should reconsider their disgraceful decision not to show the DEC appeal last night?

Before you respond, Mr. Linton, may I make the point that interventions should be somewhat briefer than that?

I agree with my hon. Friend. Broadcasters’ role is merely to ensure that appeals meet their criteria. I have before me the BBC guidelines for televised appeals, and anyone who runs through them quickly will find that they have been met completely. First,

“The disaster must be on such a scale…as to call for swift international humanitarian assistance.”

That is a tick. Secondly, agencies must be in a position to provide it. There may have been doubt about that earlier, but there is none now: agencies are there already. Thirdly,

“There must be sufficient public…sympathy…to give reasonable grounds for concluding that a public Appeal would be successful.”

Yes again. For the life of me, I do not understand on what grounds the BBC refused the appeal. It is undoubtedly true that however much money Channels 4 and 5 and ITV may have raised last night, much more would have been raised if the BBC and Sky had been there as well.

An organisation called the Ummah Welfare Trust has its headquarters in my constituency. Its bank is refusing to clear cheques, which is making its operation extremely tedious. The organisation is linked to Interpal, which is suffering similarly. Has my hon. Friend looked into the reasons why Interpal and the Ummah Welfare Trust are being refused access to banks and therefore cannot provide humanitarian aid to Gaza?

I hope that the Minister can respond to that. If it is in my power, I shall certainly look into it myself.

The war has shown us that, although there is a huge amount of sympathy for what is happening to the Gazans, we as a country seem to have lost our moral compass on this issue. It is one of the most brutal, ferocious, inhumane wars in recent memory, and although most people’s response has been strong, some institutions do not seem to have understood the seriousness of the situation in Gaza.

My hon. Friend the Minister has just returned—I think at 5.30 this morning—from Saudi Arabia and Yemen. He will know that King Abdullah has pledged $1 billion. Saudi TV raised $300 million in an 11-hour telethon. Next door, Kuwait has pledged $500 million, and the Emirates have promised to construct 1,300 homes in Gaza.

By comparison, our Secretary of State announced an extra £20 million during the course of the conflict, in addition to an earlier £6.8 million. I do not know how much our bilateral aid will amount to over the whole of this year, but I know that last year it was around £45 million, and my figures state that £40 million in multilateral aid was given the year before, making about £80 million in total. I hope that the total is more than that now; I hope to hear about it from the Minister. We have pledged £250 million over the next three years, which sounds as though it will come to the same figure of £80 million a year.

I know that, on one level, £80 million is probably much more than many other European countries give, but at another level, it may be much less than is needed, given the destruction of Gaza’s infrastructure not just by three weeks of bombardment with Israeli shells but by the three years of economic blockade that preceded it. I do not know whether my hon. Friend the Minister has had a chance to visit Gaza, but I have, and I can tell him that it looked like a bomb site before it actually was one. There were potholes in the roads because the Israelis would not allow in the tar needed to mend them. Huge piles of rubbish were dumped all over the place because the Israelis would not allow in the building materials needed for waste disposal. There is a desperate need for clean water, sanitation, building materials to repair shelters, fuel and power. That need, which was acute before the war started, is now 10 times more acute.

I certainly accept the scale and the seriousness of the situation, but does my hon. Friend agree that the situation came about because the terrorist organisation Hamas fired thousands of missiles and rockets of increasing range and sophistication at Israeli civilians? Indeed, 5,000 of them were fired after Israeli settlers left Gaza.

We are considering the Gaza issue from an humanitarian and international development point of view. It would be a great detour to go into the rights and wrongs of it. That is not the point that I seek to make, and I fear that if we stray too far down that path, we might even be out of order. If one starts from the recent past, my hon. Friend’s point may carry some weight, but going further back, the rights and wrongs of the situation in Israel start from 1948 and 1967. People in Gaza feel that they have been deprived of most of their own country. They have a sense of grievance that long pre-dates what she talks about.

I have been to Sderot and have seen the huge anxiety caused to the people who live there by the possibility that, at any moment, a home-made rocket will come into their community. Equally, however, I understand the sense of grievance of Palestinians, who feel that their land has been confiscated. They have been evicted from their villages and herded into a small strip of land; they have an unemployment rate of 80 per cent., and 80 per cent. of them depend on United Nations rations for refugees. I think that their sense of grievance is just as understandable. That is not to condone terrorism, home-made rockets or suicide bombers, but it is important to understand why people in Gaza feel so desperate and are prepared to go to such measures to, as they see it, defend themselves.

I shall try not to take up too much time, because there are many other hon. Members present who wish to speak. The most urgent needs are in the hospitals, which were desperately short of vital equipment even before the war started. Now, it is a race against time to see whether they can be re-equipped in time to save thousands of children who have life-threatening injuries. Organisations such as the Red Cross, the Catholic Fund for Overseas Development and Christian Aid are in the business of getting medicines and aid to hospitals, and they can get through. That is the light in which we have to see the BBC’s reluctance to screen the Gaza crisis appeal in order to

“avoid any risk of compromising public confidence in the BBC’s impartiality”.

Is its precious impartiality more important than children’s lives? Is it saying that it cannot save the life of a Palestinian child unless it saves the life of an Israeli child at the same time? What if there are no injured Israeli children? Does that mean that the Palestinian children will have to die?

It is a strange kind of even-handedness that cannot allow an appeal for horribly injured children on one side of a conflict because there are none on the other. The BBC director-general, Mark Thompson, should go on his own programme, “The Moral Maze”, to try to get his head around this problem. It is a complex moral issue, but it is not so complex that we cannot see what the answer should be. Practically the whole world can see what the answer should be, except, apparently, the governors of the BBC.

As I have said, the relevant conditions for a televised appeal have been met. We know how much money has been raised by previous DEC appeals that were broadcast by the BBC. The Burma cyclone appeal raised £19 million, despite the fact that many people thought that disaster was under-reported because the press were not able to get in. The appeal for the Congo crisis—a war that many people feel has been overshadowed, and has been ignored and overlooked by the world—has raised £9.7 million so far, and is still open. As The Times has said:

“A national appeal from the DEC would normally raise about £10 million, but without the broadcasts the total is certain to be lower.”

I hope that people will think about those words, because the BBC has a huge responsibility in this regard. It has a responsibility to be impartial, but it must not misapply that responsibility to the unnecessary injury of other people. Does the Minister have an estimate of how much more money would be raised if the BBC, and indeed Sky, changed their minds, as it is still open for them to do, and broadcast the crisis appeal?

I think that if the BBC were to broadcast the appeal, it would raise a lot more money than other appeals because of the ferocity, inhumanity and disproportionality of the Israeli assault, which has so shocked and horrified people, regardless of their views on the Israeli-Palestine conflict. My hon. Friend the Member for Reading, West (Martin Salter) has mentioned this morning’s Order Paper, which contains several early-day motions expressing people’s concern about the BBC’s decision. My hon. Friend the Member for Birmingham, Northfield (Richard Burden), who is the chairman of the all-party Britain-Palestine group, has tabled one that has been signed by more than 100 people, including me. I am the chair of an organisation called Labour Friends of Palestine and the Middle East, and people might therefore expect me to have a particular view of the conflict; however, another early-day motion, equally urging the BBC to screen the appeal, has been tabled by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who is the chairman of Labour Friends of Israel.

Right across the spectrum of views about the roots of the conflict, there is consensus that the BBC and Sky should broadcast the appeal, because there is absolutely no reason not to, and because the decision not to is unnecessarily depriving charities of money that could help them to save lives. One does not have to lay any blame to recognise that there is an humanitarian crisis, and I seriously question whether anyone could be found, even in the Israeli embassy, who would complain if the BBC screened the appeal. I look to my hon. Friend the Minister—I am glad to see that he is not suffering from any outward sign of jet lag—to provide the House with information about the level of the UK’s current contribution and about whether any increase can be expected as the seriousness of the extent of destruction in Gaza unfolds.

The debate is not only about Gaza, but also the west bank. It is equally important that humanitarian aid, and economic aid in particular, continue to flow into the west bank, because the roots of the problem—to come back to the point that my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) has made—lie not only in Gaza but in the west bank, where the Israeli Government continue to expand settlements and, from the Palestinian point of view, to rub salt into the wound. Until the Israeli Government stop expanding settlements and confiscating Palestinian land, and until they stop increasing the number of checkpoints—there are now 630 in the west bank alone, so an area the size of Lincolnshire has 630 checkpoints and roadblocks to keep Palestinians off the settler-only roads—they cannot expect the peace process to continue, or expect progress to be made. Neither can they expect people to feel that the Palestinian economy has any chance of escaping that asphyxiating grip, or expect people in the region to believe that peace is seriously and sincerely on the agenda.

The humanitarian, the economic and the political are all intertwined in the region. In order for humanitarian aid to work, we need political progress as well, so I very much look forward to hearing from my hon. Friend the Minister, particularly about UK and European Union contributions to the Palestinian Authority, which I feel should be stepped up, not just for Gaza but for the west bank. There have been various mechanisms, such as the Temporary International Mechanism and PEGASE to overcome the problems caused by the EU’s reluctance to give money directly to Hamas. Whatever the rights and wrongs of that, what is important is that the money should get through.

I hope that the Minister will also deal with what the Israeli Government’s role should be in this matter, because they are still the legal occupying power in both the west bank and Gaza, and therefore have responsibility for the entire population of the occupied territory. Legally speaking, every school that is repaired in Gaza, and every house that is built in the west bank, should be paid for by the Israeli Government, as the legal occupying power. At the very least, we should look to them to make a contribution and to tell us what their intentions are regarding the west bank and Gaza.

I should also like to be sure that both PEGASE and TIM are fully replacing the aid that the west bank and Gaza—the Palestinian territories—would have been getting whether the Government were Fatah or Hamas. We might all have strong opinions on those organisations, but surely the issue is about who the democratically elected representatives of the Palestinian people are, and who our Government should be dealing with. I shall not take any more time, because there are so many hon. Members present who want to speak. I very much look forward to hearing my hon. Friend’s reply.

I am deeply grateful for the opportunity to add my comments, which will be little more than bullet points because of the time constraint.

What the BBC and Sky have done is erroneous. The BBC supported a repellent regime such as Burma, in the sense that a broadcast was made and money flowed in, and so the floodgates are open for it and others to assist any desire to aid. However, humanitarian aid must get through. The big, international organisations— whether they are Muslim or those of the UN or EU—will make their own decisions and have mechanisms in place to ensure that aid gets through. Big, international non-governmental organisations, such as Oxfam, will also have their own mechanisms in place.

However, I am concerned about the smaller organisations, of which there is one in my constituency. It is a good organisation that helps throughout the world, but what does it do in such a situation? Does it drive up to the border with aid? Will it get through the border? If it gets through, will it be allowed to distribute aid to the sources that it wants to distribute aid to? I hope that the Minister will be able to advise small organisations, which might not want to have their assistance subsumed within a large organisation’s assistance programme. What help can the British Government give to a small organisation that wants to assist?

The history of giving aid to a country that is in a war zone or that is recently recovering from a war is patchy because the culture of the Government, entity or warlord concerned is not one that normally subscribes to high principles of charity or aid giving, or to the work undertaken by prestigious and important international organisations. All I hope is that those organisations, whether large or small, will be able to distribute their assistance without excessive interference because, as far as possible, they must ensure that all the money raised is spent on those who deserve the aid—not the participants in a conflict, but the victims of a conflict. For international, national or local organisations that are involved in any aid-giving process, the danger is that enormous sums of money will simply be transferred to organisations—whether in Burma or elsewhere—that will purloin the money and might have objectives that are inimical to the interests of the organisation giving the assistance.

I welcome the debate and look forward to what the Minister will say, particularly to hearing the advice his Department, the Government and the European Union can give to small organisations. I only hope that, as in the old days of the pony express, the mail gets through and that the assistance—whether it is large or small, to Muslims or non-Muslims—gets to the people who deserve it. That is imperative, and I hope that the advice given will be heeded.

Like other colleagues, I shall be brief because many hon. Members want to speak. That is good and I congratulate my hon. Friend the Member for Battersea (Martin Linton) on securing the debate.

The situation in Gaza is obviously appalling, but it is not new. The situation in the west bank is difficult—if not also appalling in many places—and, again, it is not new. Although the issue about the BBC and Sky refusing to broadcast the appeal is important—I will return to that in a moment—I want to draw attention to the systematic curtailment of economic activity and development in both the west bank and Gaza by the blockade, by the construction of the wall by Israel, by the prevention of the export of goods from Palestinian areas, and by the high levels of unemployment and difficulties that Palestinian people have in travelling.

In relation to any aid that is provided for development, we have to be sure of two things: one, that it will get through and be used to develop, and, secondly, that it will not be wasted by a subsequent bombardment. Many of us have memories of visiting Gaza in the past and of seeing, for example, the airport or the water treatment plant, which were splendid. The water treatment plant was built with a great deal of support from the Department for International Development. There were new roads and new pavements, schools, hospitals and all the other things that have been built largely with international support and aid—some of which came from this country, although some came from the EU and from all over the world. All those things have been destroyed in Gaza. On various occasions in the west bank, that degree of damage has also been done and many aid packages have been destroyed.

Although I strongly support appeals for aid and the international support currently being given to the Palestinians, there is a case for the Israeli Government to be presented with a large bill for the damage that they have done in Gaza over the past four weeks. What has happened has been a wanton act of carnage by the Israeli army against the civilian population in Gaza and has resulted in the destruction of their means of economic livelihood.

The aid appeal that the BBC and Sky ought to be broadcasting is being made by the Disasters Emergency Committee and, as others have pointed out, in relation to every previous international disaster of any sort—whether it is a tsunami, volcano, flood, war or any other form of humanitarian disaster—if the DEC meets and decides to launch an appeal, the broadcasting channels have always broadcast it, irrespective of the place concerned. They have done it for Burma, for the earthquake in Iran, for the Congo and many other places. I do not know what on earth is going through the mind of the BBC—it is mainly the BBC that has caused this problem—in not broadcasting the appeal. Is it that the Israeli Government have some kind of power of veto over what the BBC actually does, because it is beginning to look a little bit like that?

I thank the Government for putting what pressure they can on the BBC, and I welcome that. I hope that they will notice that a large number of hon. Members have also applied such pressure because we want the broadcast to take place. Of course, the whole thing has been counterproductive because the huge publicity given to the BBC’s refusal has damaged its reputation and encouraged people to contribute to the appeal anyway. I hope that they do so to a large extent.

I would be grateful if the Minister gave us some good news about DFID, British aid and support for Palestine, and the way in which aid will get through—particularly in relation to exerting pressure to open the crossings to enable people to travel and in relation to the development of education. I also hope that the Minister will give us some news about the situation facing other aid agencies, such as Interpal. A number of British banks have refused banking facilities for Interpal, in particular Lloyds TSB. My hon. Friend the Member for Birmingham, Northfield (Richard Burden) has put a great deal of effort into supporting Interpal, which is a well respected, recognised charity. We should support all charitable efforts by ordinary people all over the country—indeed, all over the world—to respond in a decent, normal way to ensure that the people of Palestine no longer suffer from a lack of medicine, clean water, decent food and, above all, an absence of education for the young people there. It is our job to do all that we can, but I want to see a permanent settlement that allows the Palestinian people to live in peace.

I, too, congratulate my hon. Friend the Member for Battersea (Martin Linton) on securing the debate. It is important that we consider the serious humanitarian consequences of Israel defending its citizens against the rockets of a terrorist organisation that has a charter proclaiming jihad, and that plants its weapons in civilian areas using civilians as human shields. Regardless of the origins of the situation, it certainly is true that there is a great deal of human suffering, and it must be addressed.

I shall concentrate my few points on what ought to be done, but, before doing so, I wish to raise one point about the partiality—or otherwise—of those giving some of the information about the scale of the disaster. We have heard a great deal of testimony from a number of Norwegian doctors, and particularly from Dr. Mads Gilbert. It is important to register that Dr. Gilbert is a well known activist on Palestinian issues and, much more than that, some years ago gave to his local Norwegian newspaper an interview in which he praised the 9/11 bombers. I state those facts just to put a question mark against whether Dr. Gilbert and others of his ilk are as impartial as the media believe them to be. Nevertheless, there is a major humanitarian crisis, and we need to concentrate on what needs to be done.

It is important that the ceasefire, which, even this morning, seems very fragile, holds. That means an end to arms smuggling and to the negative influence of Iran and Syria and that Egypt and other international observers must play a fuller part in border monitoring. It is important that the crossings be reopened fully, and I am pleased that the crossings at Kerem Shalom, Nahal Oz and Erez have been opened. The Karni crossing has been closed since Hamas attacked Palestinian Authority monitors there, but I hope that the situation can be rectified. It is important that the 2005 European Union agreement on monitoring the crossings and on movement and access is revived, but that means Hamas co-operation and an end to Hamas attacks on Palestinian Authority members.

I fully agree with the United Nations Secretary-General, Ban Ki-moon, who said that we need a stable political structure as a background against which individual agreements can be made and held to. That means a unified Palestinian approach, which, the Secretary-General suggested, should be under President Abbas. That is important, but I recognise that it may be difficult, given that, before and during the crisis, Hamas attacked and murdered several PA personnel. That has left a great deal of bitterness, but I hope that it is possible to form a unified Palestinian order to try to deal with the problems.

Aid should go to Gaza, and it is vital that it goes to where it is needed, but that means that Hamas should stop hijacking aid for use on its black market. For example, around 20 January, a Jordanian trucking company suspended its operations after its truck was stolen at gunpoint, and, on 5 January, Hamas opened fire on a convoy of aid trucks, seizing food and medical supplies. It is believed to have been done so that Hamas could either keep them for its own use, or exercise its own black market. That is not the way to bring humanitarian help effectively to the Palestinian people, and such activities should stop. It is also important that Hamas does not abuse humanitarian efforts. Cement and metal are needed for reconstruction, but, in the past, Hamas has built rockets from pipes imported to rebuild Gaza infrastructure.

These are serious points that must be made if we are genuinely to address ourselves to how we can help the humanitarian needs of the people of Gaza. The need is great and reconstruction is required, but that means that there must be peace, reconciliation and an end to Hamas aggression.

I, too, congratulate my hon. Friend the Member for Battersea (Martin Linton) on securing this timely debate. After the three-week war on Gaza, I had hoped to frame my contribution by looking at the long-term issues of economic development in the west bank and Gaza, because I thought that there would be a consensus around what needed to be done in the short term—around immediate humanitarian assistance. I welcome the efforts that my hon. Friend and the Government have made, but we all know that, if those short-term efforts are to be successful, the role of charities is absolutely vital, whether the charities are the Welfare Association, with which I have had the privilege of travelling to the area to see the good work that it does, Medical Aid for Palestinians, which had a major and very successful fundraising event on Sunday, or Interpal, which my hon. Friend the Member for Islington, North (Jeremy Corbyn) mentioned.

We must also consider the Disasters Emergency Committee charities: 13 of the most impeccable and mainstream charities in the UK, which wished, as we have heard, to broadcast an appeal this week, as they have done before on natural disasters and on war zones, whether they are Darfur, Congo or various other places. Its appeal was a humanitarian appeal, not one about taking sides, but the BBC and Sky refused to screen it. It has been the subject of huge concern in the past few days, and reference has been made to early-day motion 585, which stands in my name. I am very pleased that the chairman of Labour Friends of Israel, my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), is also a signatory to that early-day motion, and I congratulate ITV, Channel 4 and Five on broadcasting the appeal last night.

The ability of broadcasters to screen such appeals is important both to how money is raised to assist Gaza in the future, and to whether the money gets through. The issue is not about the allegation from some BBC executives that some of us want to interfere in their editorial independence; it is not about that. They have the absolute right to take such decisions as they want, and the power to do so. The rest of us also have a right to express our views, publicly, if necessary, when we think that they are making bad decisions. The BBC said that if it had screened the appeal last night, it would have compromised its impartiality, but I do not see any evidence that, since last night, the impartiality of ITV, Channel 4 or Five has been compromised. The BBC’s refusal to broadcast the appeal—in other words, its refusal to treat the situation in Gaza in the same way as it has treated war zones in Congo and Darfur—compromises its impartiality, not the other way around.

I wrote to Mark Thompson, the BBC director-general, on Friday, when I heard about the issue. In his reply he said that there were two reasons for the BBC’s refusal. I shall turn to the first reason in a minute, but he said that the second reason was that

“Gaza remains an ongoing and highly controversial news story within which the human suffering and distress which have resulted from the conflict remain intrinsic and contentious elements.”

The issue is fairly clear. The BBC executives are worried not about impartiality but about controversy. If they want to avoid controversy, their actions over the past few days have not been very successful. It is dangerous, however, for a broadcaster to start to equate impartiality with an avoidance of controversy.

On that basis, the BBC would not have broadcast appeals on Burma, Congo, Darfur or any other place living with the consequences of a war. The BBC is advancing a simply ludicrous argument.

I completely agree. It is dangerous if the two ideas run together. Wars are controversial—it is in their nature—but the impact on the victims is real, and that should be our focus.

I have several questions, some of which I hope my hon. Friend the Minister will be able to answer, others that, perhaps through him, people outside Parliament may be able to deal with. In today’s Guardian, there is a report that the DEC approached the BBC on Tuesday, asking for the appeal to be screened. The BBC’s decision to refuse to broadcast it was communicated to the DEC at 5.47 pm on Wednesday, because, as we know, it believed that the content would be partial and compromise its impartiality. At that stage, the appeal had not been filmed, and I understand that on such appeals, editorial content rests with the broadcaster. So, what was the BBC saying? If it felt that there was a problem with impartiality, the solution was in its own hands.

On the first reason why the BBC refused to broadcast the appeal, the letter that I received from Mark Thompson says:

“There were two key factors in making this decision. In addition to the practical issue of delivering aid, there was a second important reason”,

and it then mentions partiality.

I just want to focus for a minute on the practical delivery of aid, because it is relevant to this debate and was clearly a reason that the BBC gave in its letter to me on Saturday. By the next day, the comments from BBC spokespeople were indicating that the issue of getting aid through was a less important factor because it probably could get through now. Interestingly, however, by yesterday that issue had re-emerged as a factor and, again, BBC spokespeople were saying, “We’re really concerned about whether aid will get through and whether it will get into the right hands.”

There are questions that the Minister may be able to shed some light on, but if he is not able to do so I hope that the BBC will. Who did the BBC ask about the issue of access for aid, when did it ask and where did it get its advice from? Was any advice sought from the Government, either through the Department for International Development or elsewhere, was any given and what was that advice? Apparently anticipating the DEC appeal, according to the report in The Guardian, the BBC charity appeals committee met in the run-up to the request for an appeal and some concerns were expressed about the ability of aid to get through. Apparently, those concerns had subsided by the time that the DEC made its request. We need to know who the BBC was asking and where it got its responses from. If the issue of access ceased to be such an important issue by Sunday of this week, why did it re-emerge as an issue yesterday? Who was the BBC asking and who told it that that was an issue? Who else did the BBC ask? I mention this matter because it raises some serious questions not only about what the BBC have been doing over the past week, but about the future of aid to Gaza and the Palestinian territories. If Chinese whispers can get in the way of the BBC’s broadcasting such a crucial appeal, will Chinese whispers not raise their head again and again and get in the way of the delivery of aid in future?

Before the war on Gaza started, for 18 months it was subject to an amazing blockade that was well reported by the United Nations and others. I spoke to the mayor of Gaza about 18 months ago, before the blockade got really tight, who said, at that stage, that he was having real difficulty getting the materials in to repair sewers, roads and so on. This man was not Hamas; he was an independent. He was having difficulties. We were told that hospitals were having difficulty getting medical supplies in, because those could be used, possibly, by terrorists.

My hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) said that some of the materials that come in could be diverted for use elsewhere. However, the question is, if there are concerns about that, who makes the decision about whether materials go in or not? So far, the decision has been made by Israel. Israel decides whether aid could be abused and, if it thinks that it could, it just stops it getting in. That happened for 18 months and for a long time before that, to a lesser extent.

If we are going to sort this matter for the future and if the borders are going to be opened, who will decide what goes through when they are open? Will it be Israel or the Palestinians? Will the decision be made between them, jointly, or will the international community have a say in that matter? If the international community is going to have a say in that, will my hon. Friend the Minister say what the mechanisms might be for achieving that rather than its remaining the prerogative of Israel in future?

The discussion so far has rightly focused on humanitarian aid, but the solution for Gaza is not humanitarian aid. This should not be a poor part of the world. I do not want everyone to say that the matter is sorted once the people of Gaza are able to live for the foreseeable future on food parcels let in by the grace and favour of the international community, Israel or someone else. I want the people of Gaza to be able to trade and to have a decent, normal life. That is what they want.

Finally, if my hon. Friend the Member for Liverpool, Riverside is worried about the smuggling of arms and about whether food parcels contain bits of food that could be used by terrorists, or whatever, the answer is to open the borders, let trade happen and let the Gazans raise money for an economy, for themselves, and let them link with the west bank. That is the solution and that is what we should all be working for.

We should never forget that half the population of the Gaza strip are children. When Hamas was elected to government only just over half of the half of the population who are adults voted for it—the rest voted Fatah. Many of those who were previously Fatah members voted for Hamas because they had given up hope that their party would deliver proper governance and a proper living in the Gaza strip, yet we are punishing all those who are certainly not firm Hamas supporters, many of whom have converted to being Hamas supporters. It is not right to impose collective punishment on a population in that way.

I was in the Gaza strip on 14 April last year, before the war, and I saw the effects of the blockade. I have never seen a population so subjugated—unnecessarily so, in my opinion. Even the Rafah crossing, where trade could have kept going with Egypt, was stopped. Is it any wonder that people were digging tunnels into Egypt to smuggle goods through? Arms were not all that was coming through the tunnels: basic materials, such as toothpaste and other things that we take for granted were coming through—even goats. The tunnels were not just there for arms. I admit that arms were coming through, but the vast majority of materials coming through those tunnels were necessary for life in Gaza.

Last week, I raised the question of public health in Gaza, which was bad when I was there. On the day that I visited Al Shifa hospital it had two days’ supply of fuel to keep the whole hospital running. It is the most important of the seven hospitals in Gaza and is the main centre for trauma treatment. It has an able intensive care unit, which I also visited—a traumatic experience. We talked to the staff there, including the director, who described his problems. He told us that 20 dialysis machines were out of action because there were no spare parts and not even technicians could be imported to repair some of the more expensive machines.

Al Shifa is an efficient hospital and it was well equipped, but even on 14 April last year it was not running properly. Basic medicines such as antibiotics, which we take for granted, were missing. Goodness knows how the hospital has survived attack during the three weeks of war without such basic materials. If the generators cease—if electricity is not supplied to that one hospital—80 patients will die within 30 minutes, many of them small babies in intensive care cots. If electricity is cut off for a week, the hospital will lose 250 patients at least, mainly as a result of its being one of the main dialysis centres in the region.

No wood was going into the Gaza strip; on 14 April people did not even have wood to construct coffins to bury their dead. In the grounds of Al Shifa hospital, there is a huge building that was derelict when I visited: all construction had had to stop because no concrete was going into the Gaza strip. That extension to Al Shifa hospital is important. There is no oncology in the Gaza strip at the moment, so no oncology work can be done. All cancer victims have to be exported to the west bank, Egypt or Jordan. However, doing that has been pretty well impossible too, so people have been dying unnecessarily.

When I visited there was $93 million in the bank for replacing houses that, frankly, were not fit for animals to live in. I went into quite a number of houses and I would not put animals into the kind of property that people have to live in. The United Nations Relief and Works Agency was reconstructing houses and I saw some of those that were newly constructed, which I guess are now absolutely flattened. What a waste of money. It costs $16,000 to make a nice house for an extended family in the Gaza strip. However, that $93 million, even on 14 April last year, could not be moved to build the houses necessary for the citizens of Gaza.

I am very pleased that our Government are putting in about £27 million. I hope that along with the help from other Governments it is enough to start the reconstruction of Gaza, but I want to raise again with my hon. Friend the Minister the question of Interpal and particularly the Ummah Welfare Trust. I hope that he can explain why money from those organisations cannot be sent to Gaza, because most of my local Muslim population are very angry about that. I represent a large Muslim population in Bolton and they are very angry because they like to give to Muslim charities. Islamic Relief is another charity. It is not affected by the block involving the banks, but Interpal and the UWT are and they have a considerable amount of money that could flow straight into Gaza tomorrow for humanitarian work.

Does my hon. Friend agree that it is sometimes surprising how little the vastly oil-wealthy middle eastern states give in that respect?

We heard from my hon. Friend the Member for Battersea (Martin Linton) that those states are giving quite generously at the moment, in view of the current crisis, but I accept that the Arab nations could help the occupied Palestinian territories a lot more than they may have done in the recent past.

When I was in Gaza, the whole of trade had collapsed. There were almost no businesses working except agriculture. Even people working in the public services were not being paid. There was no fuel for transport and no public transport, so people were walking to work. No refuse vehicles were collecting refuse, so there were piles of rotting refuse everywhere. We have to get the whole infrastructure going again.

It is very important that the sewerage infrastructure is repaired. Just inside the border, near Erez, there is a large lagoon full of raw sewage—or there was on 14 April; I do not know what happened to it during the war. People were very concerned that one of the dams would break and the raw sewage would flow into the villages. A five-year-old boy had already fallen into the raw sewage and drowned. That is an intolerable situation anywhere in the world.

Raw sewage was flowing into the sea and affecting fishing. I want to mention fishing because it is not often mentioned. The fishermen cannot fish beyond a very short distance from the shore, but that area is the breeding ground for the fish, so by restricting the fishing, the Israelis are destroying all the breeding grounds. Furthermore, the small fish that are being caught must be highly contaminated by raw sewage.

A third of the people did not have running water in their homes before the current crisis. Goodness knows how many people can access water now. It is vital that we get the sewerage and water systems flowing and the electricity infrastructure reconstructed. Those are the basic requirements now in the Gaza strip. I am conscious that other hon. Members want to make a contribution, so I shall finish on that point.

Nothing is new in the treatment of Israel and the attitude of the BBC to the conflict between Israel and the Palestinian people. When I first went to the occupied territories, in 1988, before I came into the House, I saw the fruit on the trees rotting because the Israeli Government would not allow the people of Hebron to pick their fruit to sell it. That was happening throughout the occupied territories at that time. Nothing is surprising, because every time one goes to the occupied territories in Palestine—call them what you like—whether it is the west bank, which is supposedly Palestinian-controlled, or elsewhere, one sees that the Israeli Government continue to carry out collective punishments against the people of the Palestinian nation, in areas either within Israel or in the occupied territories. Without regard to whether they can prove a connection with any incident, whether it is a demonstration by a young enthusiastic student outside a university or by an elderly woman outside a mosque, the family home is destroyed—smashed—and the people are driven to live in tents. Sadly, that is happening on a large scale and regularly, because of the attitude of the Israeli Government. I believe that the aim is either to drive the Palestinian people into subjection entirely to one Israeli state or to drive them out of what was their homeland in the first place. I do not believe that that is something that is alien to the current nature of the Israeli state, which I think has become a viper in the middle east, despite being put there to be a place of peace—that was the hope—by the Balfour declaration. Sadly, Balfour was a Scot. As a Scot, I am ashamed of what has been reaped after that declaration.

Recent events were not surprising, but the scale on which the Israeli armed forces attacked the civilian people of Gaza was shocking. There is absolutely no doubt about that. The excuses about Hamas being in the community and so on do not stand up to scrutiny. That is why Amnesty International is calling on the UN to have a high-level inquiry into the behaviour of all sides. I think that such an inquiry would reveal most fault on the side of the Israelis. I do not in any way, or under any circumstances, condone members of Hamas or anyone else firing rockets or attempting to fire rockets into civilian areas of Israel. They are doing their people a great deal of harm by doing that and they are giving an excuse to the war machine that is the Israeli state to attack the innocent people of the Palestinian areas.

Let us be frank about the context for the events that we are discussing. The ceasefire held from June until November. Between June and November, not one single rocket was fired into Israel from Gaza, but the Israelis attacked and killed six Palestinians in Gaza and thereby broke the ceasefire. Whether that was deliberate, I do not know, but it was the context for what followed, which led to the excuses that have been made for the attacks.

The context for the aid is very important, and in that regard Amnesty International has raised several very important matters. For example, in relation to the armaments used, the use of phosphorus was reported. There are eyewitness accounts from doctors. The Amnesty press release quotes one burns specialist at Al Shifa hospital as saying:

“We noticed burns different from anything we had ever dealt with before. After some hours the burns became wider and deeper, gave off an offensive odour and then they began to smoke.”

That is why aid is urgently needed for the medical services in Gaza. Weapons that should never have been used are being used. The descriptions of the continuing burning and deepening of wounds caused by phosphorus shells used by the Israeli forces are horrific.

Amnesty is clear in the letter that it wrote to the UN Security Council. It states:

“Amnesty International urges the UN, preferably the Security Council, to establish, without delay, a comprehensive independent international inquiry into all allegations of violations of international humanitarian and human rights law by Israel, Hamas and other Palestinian armed groups participating in the conflict.”

That is the context in which, as my hon. Friend the Member for Birmingham, Northfield (Richard Burden) said, it still seems that the Israeli state dictates how much aid will get into the area.

Masses of aid has gone in, and I join those who have commended the efforts of our Government and DFID in that respect. From my contacts through the European Scrutiny Committee, I am aware that the EU has been very generous. It provided €551 million in 2007 and €340 million in 2006. Massive amounts of money have gone in, as my hon. Friends have described. However, much of that aid, if it went into infrastructure, has been destroyed by the recent attacks and by attacks over the years.

I am a great supporter of those who try to tell us of the horrors of the past, especially about the aid that went to help the people of Europe, particularly the Jewish nations, who were attacked during the holocaust. I have been with students in my schools to Auschwitz to see the horrors of that place, which must never be forgotten. However, it is important that we do not become apologists for the Israeli state because of our sympathy for the horrors heaped upon the Jewish people during the Nazi period.

Some people say that all the wrong is on the side of Hamas and that things are happening that should stop aid going in. However, it is important to consider the report of the United Nations Office for the Co-ordination of Humanitarian Affairs, which states:

“Four Palestinians were injured on 22 January by a shell fired from an Israeli gunboat off the Gaza coast.”

Why is an Israeli gunboat shelling Gaza? The report continues:

“a house was set on fire by a shell fired from an Israeli gunboat…Also on 22 January, IDF troops shot and injured a child east of Gaza City near the border.”

That is not acceptable. Two wrongs do not make a right.

The scale of sympathy is not simply something to do with the organisations that have a deep understanding of what is happening. In my constituency, there is an organisation called Antonine Link—the Roman wall that runs through my constituency used to divide the people of Scotland. That group has set up a link with the peoples in the west bank who have been divided by the wall built by the Israelis. Organisations in Linlithgow do a huge amount of humanitarian work, and the Churches and faith groups have now turned to raising funds for the people in Gaza.

I finish by making one remark about the BBC. It has been run by idiots for the last decade. Whoever took the decision not to broadcast the appeal and the back-up given to that decision by Mr. Thompson, has brought the BBC into a position of unacceptable irrelevance to the people of this country. It is time that the BBC realised that it is a public broadcasting organisation. If it wants to be objective, it must advertise this appeal in the same way as it advertised previous appeals.

Many people have been shocked at the images shown on television of what has recently been unfolding in Gaza. The true horrors of war, some might think, yet that is not so—what we see on TV is an extremely sanitised version of what is happening on the ground. Watching TV in other European countries or on the internet gives a far more graphic picture of the reality—of the suffering that the action means for many innocent civilians, especially children.

However, even those sanitised images were enough to trigger many good people on to the streets of Edinburgh and other cities a couple of weeks ago to say, “This must stop.” Despite the bitter cold and rain, thousands of people braved the elements to call for an end to the bombing, the killing and the violence. Regardless of their political reading of the situation, the majority were there from a sense of compassion for the suffering of the people of Gaza. Jews were on that march, side by side with Palestinians and many others, old and young.

The conflict in Gaza was intensely political, but politics must not get in the way of efforts to stop further suffering wherever possible. Those who attended marches throughout the country may have had different ideas about the best long-term solution, but they were united in their desire to see an end to the suffering in Gaza. To achieve that, we need to facilitate the quick delivery of humanitarian aid to Gaza, the west bank and wherever else it is needed.

Gaza was a humanitarian concern before the recent conflict because of the severe restrictions imposed by Israel. Movement was all but impossible, and the supply of food and water, of sewage treatment and of basic health care were all creaking under the strain of the demands being made. Gaza’s 1.5 million inhabitants were enduring the worst conditions for 40 years, with 80 per cent. of the population dependent on food aid. A coalition of eight UK humanitarian and human rights groups warned last year of an impending “humanitarian implosion” in the Gaza strip. What we see today is nothing short of a humanitarian catastrophe.

Other hon. Members rightly addressed the BBC’s decision not to air the Disasters Emergency Committee appeal. I back the words of my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg) when he argued that it was nothing short of an insult to the viewing public—the licence-paying public—to suggest that they would be unable to distinguish between humanitarian needs and political sensitivities. The BBC claims that it cannot show the DEC appeal because it does not want to compromise its commitment to impartiality; at the moment, however, the BBC appears to be compromising its commitment to humanity.

I was pleased to hear that the Secretary of State for International Development has asked the BBC to reconsider its position. I would appreciate an update on what the Department is doing to resolve the matter. For the avoidance of doubt, it is easy to donate. I can tell those who read Hansard that they should visit the website www.dec.org.uk, or call the DEC on 0370 60 60 900. Ironically, the ban on the broadcast of the appeal has probably given it more publicity than could have been hoped for, but that still does not make the ban right.

The immediate needs in Gaza are the protection of civilians, emergency access for medical aid, electricity and fuel supply, water and sanitation, and food. Without immediate action, the UN is genuinely concerned about the total collapse of public infrastructure. Immediate and increased access to Gaza is the key to relieving suffering, and I would appreciate an update on what the Government are doing, through diplomatic channels, to ensure improved access to Gaza for the delivery of aid. Oxfam officials have identified the primary obstacle for aid delivery: the main crossing for aid to enter Gaza is 40 km from where most relief is needed, and it is too small for the number of trucks that need to go through.

The recent bombing damaged water wells and pipes and led to shortages; it has left half a million Gazans without running water. Five days after the ceasefire, 400,000 were still without water. Officials have confirmed that 2 million litres of waste water at Gaza city’s treatment plant, which was bombed on 10 January, have leaked into surrounding agricultural land. What is the Minister’s Department doing to ensure that Gazans are able to access reliable sources of water?

Eight hospitals and 26 primary health care clinics were damaged during the fighting. The World Health Organization says that Gaza’s hospitals were “completely overwhelmed” during the Israeli assault; as a result, Gaza has only 2,000 hospital beds to cope with 5,000 injured. Although the situation has improved slightly, there are still reported shortages of skilled medical personnel and there is ailing equipment, with the UN describing facilities as under “enormous strain”. I look forward to hearing what the Department is doing to improve the supply of medical equipment and personnel to Gaza.

With such widespread devastation, shelter is now a major concern. Other hon. Members may have seen reports that more than half of those questioned for a Care International survey were hosting displaced people in their homes. Officials in Gaza have estimated that 4,100 homes were totally destroyed and 17,000 damaged during the conflict. I know that many constituents who contacted me on the subject would appreciate knowing what the Government are doing to provide emergency shelter. I am delighted that a further £20 million in humanitarian assistance will be made available by the Government. Will the Minister update us on the current position?

Sadly, in the past we have supplied aid in the west bank and other places—for instance the port in the Gaza strip, as we heard—only to see it destroyed. I saw one example at first hand; a police station filled with UK-funded equipment and computers was bombed to complete destruction by the Israeli defence force, supposedly in an attempt to kill a prisoner being held in the cells. The building was destroyed, but he walked free from the rubble.

We have heard today of the scale of humanitarian need in Gaza. The figures are sobering. However, while Gaza is still smouldering—it is rightly the focus of today’s debate—we must not forget the situation in the rest of the west bank. The construction of the wall, new settlements, razor-wire fences, checkpoints and access roads are all part of the process of subdividing the west bank and ensuring that it will never be a viable state in its present condition. The economy has been destroyed, and agriculture is suffering as water supplies become more problematic. What was a key part of the two-state solution is now a mix of refugee camps, with people in villages separated from their fields, children separated from their schools and adults separated from their work. It is amazing that that area, too, did not recently explode into violence as a result. The only long-term hope for peace in the region is a two-state solution, but for it to be an option, the Palestinians must have a state that they can call home. Our aid will help to keep body and soul together until that happens, but they cannot wait for ever.

Next month, I shall be visiting Gaza with Scotland’s Medical Aid to see for myself the situation on the ground. Although the BBC says that airing the DEC appeal would be one-sided, we must remember the other side of the coin—military and other aid to Israel from the USA is estimated at £3 billion per year for the next 10 years. Any aid that we can give, or might have given, to Palestine will be dwarfed by that figure many times over. I hope that when the Minister replies, he will detail what can be done in the weeks and months ahead to go some way towards ending the misery for those innocent victims, who do not have food, water, shelter or medical aid.

I am delighted to serve under your chairmanship, Lady Winterton. I welcome the Minister back from Palestine and congratulate the hon. Member for Battersea (Martin Linton) not only on securing this debate, but on providing the Chamber with a well-informed speech. I shall draw later on some of his comments. I should add that the shadow International Development Secretary, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), is on his way back from Gaza.

Three weeks of fighting in Gaza have caused damage estimated at £1.4 billion. Four thousand homes have been destroyed, 17,000 residences partially destroyed and upwards of 1,300 Palestinians have lost their lives. In that context, we should remember the Israelis who have lost their lives as well as the Israeli soldier killed this morning. I hope that the latter death does not lead to a new upsurge in violence.

We should not for a minute underestimate the scale of the crisis in Gaza. The hon. Members for Bolton, South-East (Dr. Iddon) and for Edinburgh, West (John Barrett) graphically illustrated the destruction of public services and the absolute misery of people living with raw sewage, and without running water or enough equipment in the hospitals. The situation in Gaza is truly dreadful: it existed long before Operation Cast Lead began, but it is now inescapably more desperate.

The short and long-term scope for the spending of economic aid is huge. The United Nations Relief and Works Agency has launched a campaign whose stated aims demonstrate the immediacy of the need for humanitarian assistance—that need is recognised throughout the Chamber—and many other groups are, of course, working to provide that much needed assistance.

Many Members have criticised the BBC’s decision not to broadcast the Disasters Emergency Committee’s appeal. My hon. Friend the Member for Sutton Coldfield said that

“while it is clearly a decision for the BBC and other broadcasters as to whether they show the appeal, the British public ought to have the opportunity to make their own judgment on the validity of the appeal. British generosity through our leading NGOs will make a huge difference to this appalling humanitarian crisis.”

As the hon. Member for Islington, North (Jeremy Corbyn) said, the BBC must be very careful not to lag behind or to contradict public opinion. It is the guardian of the licence payers’ money, and ultimately they should have a broadcaster that conforms to their wishes, and indeed those of this Chamber—a number of signatures are on the relevant early-day motion.

A number of questions have been posed to the Minister this morning about the role of the Department for International Development. In 2007, DFID agreed funding of up to £243 million to the occupied Palestinian territories, although it is to be linked to progress in peace negotiations. In light of the recent violence, I would welcome an update from him on how DFID’s aid campaign will now progress and on how he envisages us getting the aid into Gaza. As I said in a debate in this Chamber last week, it is imperative that we get water, food and medicines into Gaza as soon as possible and that we use every means possible to do so, including, if necessary, by ship and under the auspices of the Royal Navy.

The UK is not alone in providing funding. The European Commission is providing nearly €500 million, and the United States has pledged $555 million. However, even with all that funding and good will, the cessation of violence and the steady establishment of the Palestinian economy and infrastructure have not been achieved. In Gaza it is even more tragic that any gains made might have been destroyed during the fighting, and many infrastructure projects will be back to square one. The hon. Member for Bolton, South-East mentioned the excellent housing projects that might sadly have been destroyed. That is a tragedy. I share with Members in the Chamber the genuine hope that the ceasefire can hold. We must continue to try to look forward, which is why we are all here today.

Economic assistance must be spent wisely and properly, and audited correctly. We must ensure that it does not find its way into the hands of the Hamas extremists. That is not where the aid is needed. We must do all that we can to assist in the negotiations for a lasting peace settlement in the middle east. Only through a two-state solution, with a secure Israel living alongside a sovereign and viable Palestinian state, can true peace exist. Trust must be restored through negotiations. There is recognition that Israel must open its borders, but in doing so it must be open only to items that foster development, not violence.

As I have said to the Israeli ambassador, if peace is to endure in the long term, there will have to be a political solution, as we found in Northern Ireland. The onus is on Hamas to demonstrate that it prefers its people’s welfare to warfare against Israel. In the west bank, Fatah has chosen a path of political engagement over conflict—a process that has not been easy but is beginning to show signs of progress. Developments are being witnessed in trade, employment, security and agriculture, all of which lay the groundwork for future economic and social developments, free from the threat of war. More can be done, however, and I hope that the Minister will say something about the fact that Mahmoud Abbas needs to receive more support from the western world to prevent him from being sidelined and silenced by Hamas. Israel needs to offer more carrot and less stick in the west bank, and the further opening up of borders to allow the free movement of goods and people that will allow the region to develop.

From the other middle eastern states neighbouring this conflict, we must see a greater demonstration that they truly believe in peace in the region and are doing all that they can to assist. I was very interested to hear the hon. Member for Battersea say that Saudi Arabia has pledged $1 billion and Kuwait $500 million, and that the United Arab Emirates has pledged to rebuild 1,300 houses. That is an excellent start. However, I urge all Arab states, many of which have plenty of wealth from oil revenues, to do more and to apply pressure to bring about a political solution. In addition, the international community must monitor developments to ensure that the rocket attacks do not resume, because the consequences of a resumption of hostilities, on top of what has happened already, do not bear thinking about.

I welcome Barack Obama’s initial engagement with the issue and greatly look forward to seeing how he and Hillary Clinton, the new Secretary of State, choose to proceed. In particular, I welcome the appointment of George Mitchell in his new role as special envoy to the middle east. He has a proven track record in Northern Ireland where he was pivotal to the peace process. Let us hope that he can repeat some of that work in the middle east. However, we should not lose sight of Britain’s historical involvement in the region and must ensure that we remain a key player and continue to work with our friends in the United States and Europe in trying to find a solution to this desperate situation.

In conclusion, I welcome the good will of all those, especially our generous public, who choose to provide money to combat suffering wherever it takes place. I hope that, despite the BBC controversy, they will continue to donate generously to the DEC appeal and to other non-governmental organisations trying to alleviate the suffering of those poor people in Gaza.

I congratulate my hon. Friend the Member for Battersea (Martin Linton) on introducing this debate. It is not only timely, but has been of a very high quality, as the hon. Member for Cotswold (Mr. Clifton-Brown) said. I congratulate all Members on their contributions; I shall address as many of their questions as I can, but if I cannot do so in the time allowed, I shall follow up in writing to the Members concerned.

We have heard hon. Members’ concerns about the grave situation in Gaza—concerns that the Government share. We have all been shocked by the loss of life and the scenes of violence in Gaza in recent weeks. The images on our television screens have been harrowing. My hon. Friend asked whether we should debate the causes of the situation—whether it was 1967 or 1948, for instance. When I was in Saudi Arabia, yesterday, we talked about events as far back as the 1917 Balfour agreement. However, we should leave historians to debate and rewrite the history books. What we should do as politicians is try to shape the future for the Palestinian people.

May I remind the Chamber, and all those listening, what the UK’s position has been since 27 December when the conflict resumed? We called for an immediate ceasefire. The Foreign Secretary led the way at the United Nations to secure resolution 1860. My Department has led efforts to ensure that, even when violence is wrecking people’s lives, they have access to medical supplies, food and shelter. The Government have not stood by, and we have not walked by on the other side of the road. My Department has moved incredibly fast to ensure the availability of all the resources that are needed for this immense humanitarian effort.

Since 31 December, the United Kingdom has pledged nearly £27 million for the relief effort. According to the UN, that makes the UK the current largest donor of humanitarian assistance. Many other countries have pledged future commitments. Saudi Arabia, for example, has pledged $1 billion for the recovery and reconstruction of Gaza.

Of the more than £11 million that we have spent since 31 December, £4 million has gone to the United Nations Relief and Works Agency, which provides food and shelter for the people in Gaza. Last Sunday, I announced a donation of £4 million to the International Committee of the Red Cross to deliver medical supplies and to support the medical evacuation to Egypt; £1 million has gone to the UN humanitarian emergency response fund to help non-governmental organisations support local work; and £1 million has gone to the World Food Programme to support logistical efforts in the task of getting aid through the crossings from Israel into Gaza.

Yesterday, the UK airlifted three specially modified vehicles to enable the UN to distribute safely humanitarian assistance and to allow the needs assessment to take place, with aid workers being kept safely in the vehicles. In addition, the Secretary of State announced that we were sending £200,000 to the Mines Advisory Group to help it clear unexploded munitions and other explosive material.

This morning, I can announce that £600,000 will be given to Oxfam to provide water and sanitation in Gaza. That should help to deliver clean water for up to 50,000 people who are most in need, and sanitation kits to more than 2,000 people.

I welcome what the Minister has said about the British assistance. Will he confirm that when the exploration is done to uncover unexploded munitions, any evidence of illegal weapons that have been used by Israel will be handed over to the appropriate investigators, who may refer the matter to the International Criminal Court?

I am conscious that there are allegations on all sides about the illegal use of weapons, and that the matter should be, and is, subject to international humanitarian law and its agencies.

The BBC has come in for a lot of criticism during this debate. Its decision has managed to unite the political parties, the friends of Israel and the friends of Palestine. Somehow, it is deemed to be impartial, and it is worried about its impartiality. As for whether today’s comments constitute interference in editorial decision making, I have to say that if an MP expresses a public opinion on a matter, that is not editorial interference. Trying to secure the best humanitarian aid for the people of Gaza does not constitute interference in editorial decision making.

Access has long been a problem in Gaza. We have been calling for the borders to be opened for a long time. It is an issue that I raised with Israeli Minister Herzog when I was in Jerusalem. It turned out that Israel was perfectly happy to consider increasing the number of trucks going through the crossings from 100 to 500 a day, which, according to the UN, will maintain the status quo. However, as my hon. Friend the Member for Birmingham, Northfield (Richard Burden) said, that does not take into account the 18 months in which the blockade has taken place and the backlog of work that is needed to be done.

I am sorry to intervene slightly out of sequence in the Minister’s speech, but it would be useful if he could tell us this morning—in addition to the very welcome announcement he has made on the amount of humanitarian assistance going into Gaza—when the aid is likely to get into Gaza and how much has gone in already. The situation is urgent and the aid is needed now.

That is a very good question. The aid is getting through, but clearly not in sufficient quantities. I witnessed lorries being loaded with food aid to be delivered to the Palestinian people, so the work is ongoing. As for the value of the aid that has gone through, that is a different calculation. I will investigate the matter to see what can be established. At the moment, the count that is being made is on the number of trucks going through the crossings as opposed to the value of the aid that is on those trucks.

At a meeting with Israeli Foreign Minister Livni last week, the Foreign Secretary and his European colleagues pressed for improved access for all humanitarian supplies. My hon. Friend the Member for Birmingham, Northfield raised the issue of what would happen to access in the future. Clearly, that issue will be part of the process that is evolving in Gaza. We have made it clear that the responsibility for managing the crossings should be held by the Palestinian Authority. However, if help is needed in the short term, the Prime Minister said that an EU mission would be made available to staff the crossings to maintain the security of the people of Israel while allowing the supplies to get through into Gaza.

Before my hon. Friend the Minister leaves the issue of the BBC, will he or his colleagues pass on to Mark Thompson the points that have been made? Does he have any estimate of how much extra could be raised by the crisis appeal if the BBC changed its mind and broadcast it?

My hon. Friend is right to remind the Chamber that Mr. Thompson will be in the House at 4 o’clock this afternoon. Colleagues may want to address their concerns directly to him. As for the likely cost of the BBC’s decision on the appeal and, therefore, the direct help that can be given to the people of Gaza, NGOs have told us that if the DEC appeal did not make the headlines, it could reduce contributions by up to 80 per cent., which is a substantial sum. However, the appeal has hit the headlines over the past few days, so the impact that it will make in the future is too hard to calculate.

In the minute or so that we have left, may I remind the Chamber that the UK has been the third largest bilateral donor to the Palestinian people after the United States and Saudi Arabia? At the Paris conference, we pledged £243 million to be spent over three years. In the first year, £84 million—just over a third—was committed. We are also the second largest contributor to the European Commission, and that has pledged more than $1 billion over three years. We are the second largest donor to the humanitarian relief effort in Gaza. That level of support demonstrates the importance that the Government attach to sustainable peace in the middle east and to improving the lives of millions of ordinary people who have suffered for far too long. We welcome the interest that this debate has shown and I will ensure that hon. Members are kept up to date with developments in the weeks and months ahead.

Equitable Life

I quote:

“I attended many of the public meetings convened by Equitable Life and found them truly depressing. I could see the fear and despair in elderly members’ faces though they invariably tried to put on a brave face. I particularly remember a frail couple in their seventies. They were only 30 feet from me and I could see that as the man spoke his wife was squeezing his hand in silent support. It is not easy to speak in front of hundreds of people. He explained that until the collapse they had been advised that their pension would be around £75 a week. They now had to take their pension and (six months later) it was to be £35 per week. Could anything be done? Charles Thompson solemnly explained that not only could nothing be done but the £35 may actually decrease in future years. The man thanked him and sat down. The expression on the couple’s face is seared in my memory. Both trying to be brave for each other. Both terrified.”

I wanted to start in that way because there is a human face to the Equitable fiasco. In the course of this debate, we will discuss parliamentary process, ombudsmen, Select Committees and all the rest of it, but we risk losing sight of up to 1 million people who trusted the Government and a financial institution, and have been profoundly let down. I contend—as, I suspect, do other hon. Members, of whom there is a good turnout today—that they will still feel let down, not just by Equitable Life and the regulators, but by the Government’s response to what the ombudsman said.

On 17 July, the ombudsman published her second report on Equitable Life. Almost six months later, on 15 January, the Chief Secretary to the Treasury gave a statement to the House setting out her response. I wonder whether, like me, other hon. Members did not follow it very closely. I just got a vague sense that the Government had said sorry, admitted a bit of maladministration and set up a compensation scheme. I thought, “Well, maybe that’s the end of it,” but my instinct was that it was not, and that that was not what had in fact happened. I believe that I am right in saying that none of the hon. Members who heard the Chief Secretary’s statement that day had yet had the opportunity to read what was behind it: Cm 7538, which gave the details.

The statement sounded reasonable. We heard an apology and the Chief Secretary sounded understanding. She thanked the ombudsman and the Public Administration Committee, and she even asked a retired senior judge to come up with a fair payment scheme. What could be better than that? However, the reality of the situation is very different.

Does the hon. Gentleman accept that it was obvious even then that there would be a further several years’ delay before anyone received compensation? The Chief Secretary said at the time that it would probably take two and a half years but might take longer.

The hon. Gentleman is absolutely right. The phrase “justice delayed is justice denied” applies in this case. It was apparent even in the statement that although the ombudsman wanted action to start within six months and to be completed two years later, what would actually happen was delay piled on delay. Many of the people affected have already died, and there are questions about whether estates and widows will benefit. Many families have had to live with such unanswered questions for a decade.

Does my hon. Friend agree that the proposals could not be further from what the Public Administration Committee recommended, which was an independent, transparent and simple compensation scheme to provide swift redress to those who had lost out?

My hon. Friend is absolutely right. As I hope to explain, there are many facets of the Government’s response that do not meet what either the ombudsman or the Public Administration Committee said.

The hon. Gentleman mentioned the judge appointed to oversee the matter. Does he agree that that judge’s remit has been deliberately restricted by the Government to ensure that compensation is limited and takes considerable time to be delivered?

There is a good deal of prescience in Members’ interventions. The hon. Gentleman is absolutely right. The process is fundamentally flawed in many respects, one of which is that the judge can answer only the question that he is asked, and that question is being circumscribed overwhelmingly and unfairly.

I congratulate the hon. Gentleman on raising this important topic, and I note that Opposition Members outnumber Government Members by about five to one. Does he agree that the simple message that we need to send from this Chamber is that many people feel that the Government are quite simply hoping that people will die off before they have to meet their obligations? The Government have a pressing moral obligation to do something immediately to compensate some of the most cautious and responsible investors in the country.

I certainly agree with the hon. Gentleman about the need for speed. I have received a copy of a letter that one of his hon. Friends sent to a constituent, and I am a little worried about what that Member wrote. They said that the Government had announced that they would establish a payment scheme and that they had made an apology, adding:

“I hope that these developments will lead to a resolution of the outstanding issues.”

One of my worries, not only about the hon. Gentleman’s colleagues, but about the whole House, is that we have been had. We heard a statement that sounded mellifluous and gave reassurances about feeling people’s pain, but I hope that every hon. Member present will leave this debate more worried than when they arrived, and more determined to do something about what the Government propose.

May I put it on record that the Government side is represented and that there are Labour Back Benchers in the Chamber? One thing that has troubled me—I have asked everyone who has written to me about Equitable Life to come and see me—is the difficulty of teasing out which losses were incurred as a result of maladministration and which as a result of market failure. Does the hon. Gentleman accept that rather than squabbling with each other and scoring party political points, we could try to find a way of taking the matter forward positively?

I agree that no one is suggesting that people should have a free ride, or that they should not be subject to the same stock market variability as everyone else. The analogy that has been drawn to my attention is the comparison with investment in “Elsewhere Life”: what people might reasonably have expected had their money been with a similar company of similar status, but elsewhere, and how what they actually got differed, particularly because of regulatory failure. We need to focus on those issues.

Let me make a little progress and then I shall give way again.

Everyone present knows that there has been a series of reports. The ombudsman’s second report involved four years’ work, at the end of which she made 10 findings of maladministration and five findings of injustice. The Government’s response—this was published repeatedly—said either that there was no maladministration, or, if there was, that no injustice had arisen from it. It is worth considering the list of findings. On finding one, about the dual role of the chief executive and the actuary, the Government’s response said:

“finding of maladministration not accepted”.

On finding two, the Government’s responses were:

“Valuation interest rates…finding of injustice not accepted”

and

“Affordability and sustainability of bonus declarations…finding of injustice not accepted”.

Neither have they accepted finding three of injustice, or finding four of injustice about valuation rates. One would never know any of that from listening to the Chief Secretary’s statement.

The hon. Gentleman makes a powerful case and is being generous by giving way yet again. Is he aware that because of the reasons that he has just articulated, it is estimated that perhaps more than 90 per cent. of those who have lost out through the Equitable Life scandal will not be compensated at all? Will he join me in expressing concern for the people of Lincolnshire and those where his constituency is? This issue is causing people major concern that needs to be rectified as swiftly as possible.

It is all right; no one knows where Northavon is. The hon. Gentleman makes a serious point: the process has curtailed massively the people who might be even potentially eligible. It is interesting that the ombudsman says in her report:

“My second—and central—recommendation is that the Government should establish and fund a compensation scheme”.

However, I have read the Chief Secretary’s statement word for word, and I cannot find the word “compensation” anywhere in it. What we are discussing is a hardship fund that will work on a charitable basis and probably be means-tested, and that is the fundamental problem.

Is my hon. Friend as struck as I am by the contrast between the Government’s approach on this issue and the swiftness of their decision to bail out the bankers in their hour of need? They acted with great urgency to assist the banking industry, while many hundreds of hard-working families who have investments in, or are policy holders with, Equitable Life feel that they are being asked to wait an extraordinary length of time for what is simply natural justice.

My hon. Friend is absolutely right. Other bail-outs have been provided—one thinks of the situation involving Icelandic banks—but this case is dragging on and on with no obvious end in sight. As we have heard, the worry is that people are dying as it goes on. Even if that is not the case, the situation is causing constant anxiety. I appreciate that there is a range of circumstances, but some policyholders are scrabbling to get by and are seeing their real-terms income declining year on year. I had not appreciated that until I talked to the Equitable Members Action Group, to which I pay tribute for its tireless campaigning. One of my constituents says:

“My Equitable Life pension has fallen from £7306.79 per annum, when I took it out, to £5525.76 now, despite being transferred to the Prudential…To add insult to injury, I understand that it will continue to fall year on year until it dwindles to nothing, if I don’t die first.”

The situation is not even static—it is getting worse.

The hon. Gentleman will be aware that the Government are relying on the earlier Penrose report, which stated that Equitable was the author of its own misfortune. However, even Penrose pointed to serious shortcomings regarding the regulators, which failed policyholders. The Government’s policy, with its reliance on Penrose, is flawed. Even if we go back to the first report, we find that the Government should be giving compensation. Some 30,000 affected pensioners have already died.

They have indeed. The Chief Secretary has quoted selectively from Penrose. Penrose goes on to say that

“it may be appropriate to comment that the practices of the Society’s management could not have been sustained over a material part of the 1990s had there been in place an appropriate regulatory structure”.

It is a both/and situation: clearly the society’s management and operation were at fault, but the regulatory regime should have picked that up and did not.

Does the hon. Gentleman agree that one necessary task for the Prime Minister is to explain why the Chief Secretary did not give the House the information in the report or the Government’s publication that followed shortly afterwards? Does he also agree that it would be suitable for the Liaison Committee to concentrate on that the next time the Prime Minister comes before it, in order to show that Parliament will not be treated in that way, especially when there is an issue of injustice?

If members of the Liaison Committee raised the point with the Prime Minister, I would welcome that. I am sure that we would get an answer.

The sorry saga of Equitable Life has rumbled on for eight years. The Chief Secretary to the Treasury said that when blame rests with the owners of a financial institution,

“it is not generally appropriate for the taxpayer to pay compensation”.—[Official Report, 15 January 2009; Vol. 486, c. 378.]

However, the ombudsman made it clear that the Government should pay up. Those Equitable Life policyholders who are left cannot afford to wait another few years while the Government procrastinate.

The hon. Gentleman is quite right. The waiting has gone on long enough; it is time for justice.

This is the fundamental problem. We have a process involving a parliamentary ombudsman who is independent and to whom our constituents, through us, can go for redress where maladministration has occurred. For many decades, what the ombudsman said went, and that was an entirely good thing. Sometimes when I have complained to the ombudsman, she has not found in the way that I wanted, and sometimes she has. The point is that we accept the outcome in either case. I am worried that the Government are essentially being defendant, judge and jury simultaneously. They do not like the verdict, so they are simply saying, “We’ll have this bit of it, but not that bit.” What is the point of an ombudsman process if the Government behave in that way?

Let us consider what Sir John Chadwick has been asked to do. I do not know a great deal about him, but I understand that he is a retired senior judge and I am sure that he is an expert. However, I feel instinctively uneasy that the whole process has been handed over to a good chap. We are asking a good chap to go away and think deep thoughts; to set up, presumably from scratch, an office and a structure to gather data; and to report not to Parliament, but to the Treasury. As far as one can see, he will report privately and in secret. I do not imagine that the Minister will say much that is helpful this morning, but if she can at least say that we will have access to what Sir John says to the Treasury and that we will see his findings and recommendations as we go along, that will offer a little transparency to the process that might otherwise be totally lacking.

Does my hon. Friend agree that nothing in Sir John’s remit addresses the issue of justice? Justice lies at the foundation of the claims of Equitable Life policyholders. If regulators cannot be held to the standard of justice, we can have no confidence in our financial system generally.

My hon. Friend raises an important point about confidence in the financial system. One of my constituents wrote to me:

“My own children, seeing what has happened to me, have decided not to bother saving for pensions.”

The Government’s response is so worrying because there is a presumption among the public that when they invest in the private sector, there is a regulatory framework to protect them. It may not protect them from all risk—nor should it—but at least it should ensure that companies are properly run. However, it did not do so in this case. If the Government walk away from their responsibilities, why should anyone else trust those institutions, especially given that Equitable was a gold-plated mutual with a nice crest on the letterhead, and all of that? If people cannot trust Equitable Life and the Government do not help, why would they ever invest?

I congratulate the hon. Gentleman on securing the debate. I have had the opportunity in the past to partake in such debates.

The hon. Gentleman has just mentioned the Government’s not giving a commitment to Sir John. However, I understood that they had given such a commitment. Indeed, Equitable Life states just that, noting,

“the commitment by the Chief Secretary to the Treasury to relay this information back to Parliament at regular intervals.”

There is a difference between what Sir John says privately to the Treasury, which is then filtered and relayed to us, and direct access to what he is saying—in other words, the incoming material not filtered through the Treasury. That is my point. If what Sir John says to the Treasury is placed in the public domain, I shall be delighted, and if the Minister can confirm that, I am happy with that. We need to hear what is said at the time, rather than what is filtered some time later.

What angers my constituents in particular is that the payment of compensation, as was made clear by the Committee, is not a matter of charity but a requirement of justice to redress a wrong, yet the Government have concluded that compensation will be paid on a means-tested basis. That is their whole remit. Can the hon. Gentleman think of any other case where justice has been dispensed on a means-tested basis?

The two concepts certainly do not sit well together. Clearly, if someone has suffered an injustice, the matter of whether they have other means or are still of working age and can earn money from somewhere else does not seem material in remedying that injustice.

Many Members want to contribute to the debate, so I shall just run through the fundamental flaws of the Government’s approach to Sir John Chadwick’s work. First, to assess people who have suffered disproportionately —although I do not think that is the right question to ask—an assessment of their circumstances and those of other household members, along with their other incomes, would be needed. A complicated household means test of some sort would be needed, which would be bureaucratic and time-consuming, and money that should be spent compensating people would be spent on bureaucracy. I do not recall the ombudsman saying that the compensation scheme should just be for those disproportionately affected and I am concerned that that element has been allowed to creep in. As the hon. Gentleman says, if the scheme is about justice, I cannot see why there should be a test for disproportionate effects.

Secondly, Sir John will be asked to apportion blame between the management of Equitable Life and the regulators, but I do not see how he can do that. If the company messes up and the regulators fail to stop it and alert policyholders, whose fault is that? It is both their faults. However, the Government are responsible for the regulatory regime. Why should the policyholder receive less compensation for the injustice that they have suffered from the failure of regulation just because somebody else was the ultimate cause? I do not follow the logic of that. How can Sir John put a number on it? I assume that he will have to do that and then say, “It was half the regulator’s fault and half the company’s fault, so we will pay half compensation.” It does not make sense.

Thirdly, we have talked about speed, which is so much of the essence. I understand that the average age of annuitants is 80, so the consequences are obvious. There are already plenty of Equitable widows—and widowers, for that matter—who simply need to know where they stand. I hope that the Minister will reassure us today that the estates, and thus widows and survivors, will benefit. It is not their fault that their loved one—the policyholder—died. Why should they suffer again because of delay in the process?

I congratulate my hon. Friend on securing this important debate.

On the issue of speed, eight years have passed already, and even the ombudsman has suggested another two years, which would take the period to more than 10 years. However, the Government, dragging their feet, suggest that it will be even longer. Can my hon. Friend think of any other case in which justice has been so long delayed? Let us compare Equitable Life with the Icelandic banks situation, where the Government acted quick as a flash. Why does the Equitable case not require urgency from the Government?

I congratulate my hon. Friend on the leadership that she has shown on this matter and on the debate she introduced in this Chamber some months ago. Sadly, there are other examples in which justice has been similarly delayed, but of course that does not justify the situation that faces us today. That is the key point.

A further point about Sir John’s study is how independent it will be. Crucially, the ombudsman wanted an independent tribunal, but Sir John has been appointed by, and is answerable to, the Treasury so how can he be fully independent? Let us bear in mind that he will be advised, presumably by the Treasury, which is ever so slightly implicated in this whole thing, and by the Government Actuary’s Department, which also has ink on its hands—I suppose that is the phrase. Surely, if such a structure is to be used, at the very least we need involvement from a policyholder representative. Just asking one decent chap to do the decent thing and give some advice does not seem up to the scale or urgency of the problem. Surely the Government should have acted on what the ombudsman said, not invented yet another structure and delay.

I congratulate the hon. Gentleman on securing this important debate. Will he expand on the point he was making? The lack of transparency in the original process led to what my constituents have called a cruel deception—when Equitable Life was technically insolvent, but they were still encouraged to invest. Without the involvement in the process of such good men as the hon. Gentleman described, people will have no faith either in the Government or the transparency of the process that they are trying to put in place.

There has been a series of regulatory failures under consecutive Governments, the answer to which has always been transparency. Had we known what was happening inside Equitable Life, many of those things would not have happened, but now we need to get inside Sir John’s mind. The whole business seems extremely strange to me. The structure that the Government have adopted is a new creation and another way of kicking the matter into the long grass. We need an open process to respond positively to what the ombudsman said.

Every Member in the Chamber today is here because they have constituents who have suffered as a result of the situation being discussed. They will be looking for something a little more concrete. I have not yet heard the hon. Gentleman say how much he thinks it will cost to put right this wrong. Without quantifying the amount that hon. Members think the Government should invest in a compensation scheme, all we are hearing today are warm words.

I have to disagree with the hon. Lady; she is starting in the wrong place. She asks how much we can afford and says that afterwards we should tweak the scheme to meet the bill. We are talking about an injustice that needs to be righted. She knows that figures of up to £4 billion have been talked about. That is one estimate. However, we do not have access to data on scheme members—how much they have lost and the different categories—so it is difficult to know how much the bill would be. The starting point must be to remedy the injustice. Of course, we will have to put a figure on that, but to start by asking what we can afford is not the way to remedy the injustice.

My final concern about the John Chadwick process is the following fundamental issue: is it about hardship, charity and discretion, or about righting injustice? Surely it must be the latter, which is why the ombudsman process was involved. Was there maladministration leading to injustice? The ombudsman said yes. The Government said, “Well, probably not.” However, they excluded most of the ombudsman’s expensive findings. The Government say that they agree with five in 10 of the findings, but those are the cheap five. The position is so constrained that it is not acceptable.

One of the Government’s objectives must be to draw a line under the whole case. If Sir John draws further conclusions with which hon. Members and, more important, policyholders, are not satisfied, it will leave the matter up in the air and it will return to the Government’s desk time and time again. Justice must be achieved quickly and with an end.

My hon. Friend is right. I suspect that the parliamentary process will not produce justice, so again the courts will probably have to do it. The winners will be the lawyers, and the losers—we hope—the Government. Sadly, the taxpayer will have to pay more money so that the case can be fought in the courts. I hope that Equitable policyholders get justice, but I have a nasty feeling that it might be in the courtroom rather than through Parliament. That is depressing for all of us who have gathered here today.

I shall end with a quote from a constituent:

“My husband is 80 in May and is suffering from dementia and Parkinsonism and is unable to cope any longer... his pension diminished by a quarter to a third several years ago when all the problems became apparent. Although the monthly amount we received is extremely small that little extra that was deducted makes a difference.”

We are not talking about fat cats or people on the take; we are talking about ordinary, decent people who saved and trusted. They deserve justice.

I add my congratulations to those given to the hon. Member for Northavon (Steve Webb) on securing a debate on the inequitable life fiasco. Two things come out of the issue. First, I hope that at some stage we will enshrine the role of the ombudsman in law, and, secondly, despite not just this case, but the occupational pensions case and all the banking issues that have arisen over the past six months, hardly anyone has said anything about the auditors. Those who audit these things write them off, put their reputation on the line, and get off scot-free. We must examine the law on auditing and auditors, but that is for another time.

I completely associate myself with the remarks made by the hon. Gentleman, and I will not repeat them because I know many hon. Members want to speak. In terms of compensation, there are some extraordinary parallels with the occupational pension scheme debate that I started in the House back in July 2002. We met the Secretary of State for more than a year and there were lots of warm words. If we had had 50 per cent. of the occupational pension scheme that we wanted, we would have signed. Those concerned were happy to go for 50 per cent.—they would have gone for anything because they had nothing. Instead, however, they sensibly dug in. Amazingly, they also had an ombudsman report, which found in favour of my and other constituents. There were only 126,000 people involved—not 1 million—but all were individuals with a case to be answered.

What did the Government do? They started by saying, “Let’s hang something out. Let’s have £400 million. That seems a good figure. Let’s go to £1.2 billion. No, that’s not enough.” Gradually, as the campaign developed, they said, “Let’s go to £3 billion.” Eventually, we got our justice, which was £8 billion.

It seems that exactly the same parallels exist in relation to Equitable Life and I simply do not agree that it is right for the Government to concentrate only on those who are needy. Let me give an example from just one constituency case out of 500. Lorraine and Richard Baker state:

“We find it unacceptable that the Government Minister is prepared to discriminate against some of those affected by the Regulators failure whilst others will receive compensation. Whether we have yet experienced hardship as a result of this fiasco is not entirely the point. If we are not compensated for the losses we have so far incurred we will of course experience hardship in the future.”

That just does not come under any jurisdiction that we have so far heard about from the Chief Secretary in the House.

My sense is—the point has been made previously—that the Government actively want a legal challenge in the court. In relation to a legal challenge, I will give 100 per cent. support to the Equitable members who are here listening to this debate and to those in my constituency. I do not know whether it should be a judicial review or whether it should take place in the High Court as I am not a lawyer, but it is imperative that we support them as a House. It is critical that we go with the people concerned and support them—whether in the High Court or as part of a judicial review.

Does the hon. Gentleman not think it is a disgrace that a strategy of dividing people seems to underlie the Government’s position? That means that those who face extreme hardship are so desperate that they will accept any mechanism that might get them something, instead of banding together to fight for full justice. Considering the people concerned are so elderly, such an attempt to break, divide and conquer is even more despicable.

I agree. I am reminded—this was mentioned previously—that we had miners’ compensation and compensation for dock workers who had cancer of the throat. There were loads of incidents in relation to which the Conservative party did not pay compensation for 18 years. It seems that this is in exactly the same territory—we are going to push and push, but, at this rate, there will not be a single cheque paid until 2012. That is just not acceptable. I agree entirely with what the hon. Lady says.

The issue is moral, which is exactly what the occupational pensions people said in 2002 and 2003. Ultimately, that is what Ministers came round to agreeing with and the money was paid. The Government must reconsider their response, and I hope that the presence of so many Members here today will make the Minister take back to the Treasury the fact that the initial response was inadequate and, to be frank, showed that nothing had been learned from the occupational pensions campaign. I believe that, in the end, Equitable Life members will win, however painful and slow the process may be.

The Government appear to accept that there has been regulatory failure, that the failure amounts to maladministration and that a resolution should come sooner rather than later, but they have also, almost immediately, gone in for a series of blocking and delaying tactics in response to the ombudsman’s report, and that is wholly indefensible. I accept that the Government have apologised, but what exactly did they apologise for? It seems that they apologised for some vague 20 years of regulatory failure, but we need an apology for the decade of delay while the issue was on the Government’s books waiting to be dealt with—while it was on their watch.

I congratulate the hon. Member for Northavon (Steve Webb) on his remarks, and I shall sum up his key points, to which he has already alluded. There are two unacceptable factors: first, the arrangements for compensation and, secondly, the effect of the decisions on the time it will take before compensation comes through.

On the compensation arrangements, we have had the transmogrification of what should have been a compensation scheme into a hardship fund, and that is wholly unacceptable. The Government have rejected the parliamentary ombudsman’s recommendations for arranging compensation, and they have introduced means- testing, which the ombudsman said would be a novel and worrying development. The approach has been rejected in other cases and, explicitly, by the Public Administration Committee. Somebody has already quoted point 84 from its second report on the issue.

I made exactly that point earlier. My hon. Friend is very knowledgeable about these matters, so can he think of a similar case in recent history, whereby a matter of injustice or maladministration was resolved by a means test rather than in relation to the scale of the losses of those with a grievance?

My hon. Friend has already made that point eloquently, and I certainly cannot think of a case. If there had been one, I am quite sure that we would have heard about it already from the Government.

In discussion with the Chief Secretary to the Treasury immediately after her statement, I sought from her in the corridor an explanation for the decision to create a hardship fund rather than a compensation scheme. She gave me a number of explanations that I did not understand, and I asked whether I could write to her and receive her explanations in writing so that they could be put in the public domain. I wrote that letter immediately—within 24 hours—but have not yet had a reply. I hope that the Exchequer Secretary is today furnished with something to enable us to take the explanation for, and justification of, the hardship scheme a little further.

Does my hon. Friend share my concern about the message that the Government are sending to my constituents and to those of everybody in the Chamber about the importance of saving and providing for the future, and about how the message is being taken by people making such provision, when the Government statement clearly shows that it is not only in this process that they will discriminate against such people? That is what the ombudsman has done throughout the process.

I completely agree. Some big issues are involved. One is the damage that has been done to the savings culture in Britain. Large sections of the community were looking after themselves and did not want to allow themselves to become a burden by requiring some kind of benefit from the state. Many of them will now be thrown back, or have already been thrown back, on exactly that support.

I find some of the wider questions perplexing. I still cannot work out whether the Government want people to start saving or to abandon saving altogether and spend even more. The Government have so many contradictory policies on the conduct of economic policy that it beggars belief. However, that is a subject for another day.

I turn to the second of the unacceptable aspects of the statement, which to some degree has already been discussed—the question of delay. As I said a moment ago, the Chief Secretary sought in her statement to shift blame by talking of decades of regulatory failure, going back well into the 1980s. As I pointed out, the Government have had the opportunity to do something about that for well over a decade, but they have done virtually nothing.

The delays built into the compensation scheme are unfair and will be seen to be unfair by the hundreds of thousands of policyholders who might be affected. Further delay will be seen as the Government kicking everything into yet more long grass. Policyholders now realise that the Government are not endorsing the recommendations of the parliamentary ombudsman; they are not even attempting to do so, but are doing the opposite and setting them aside. The Chief Secretary said in her report that any compensation scheme should be “independent, transparent and speedy”. No one could use any of those words to describe the Government’s response to that report.

In all the time that I have been campaigning for the policyholders of Equitable Life, I have tried very hard to avoid party politics. It would be difficult to find statements of mine that are party-political. Early on, when I was on the Front Bench and responsible for such issues, I had discussions with the hon. Member for Twickenham (Dr. Cable). We decided to work together in a wholly non-partisan way. However, the statement, with its attempt to shuffle blame on to an Administration of 20 years ago and the calculated introduction of further obstacles to speedy compensation, has drawn me to conclude that the quickest route to a measure of compensation—the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) in effect confessed this—will probably be the election of another Government.

I congratulate the hon. Member for Northavon (Steve Webb) on securing this debate. The subject affects constituents of all of us. As a former court lawyer, it occurs to me that the Government’s actions in relation to Equitable Life are similar to those of an old lag up before the sheriff. He starts with an outright denial, but as the evidence accumulates he reluctantly accepts that he will have to plead; he makes a half-hearted plea and then tries to minimise it and wriggle out of the consequence of his actions.

No one could have been in any doubt from the ombudsman’s report that the Government had a case to answer on the inaction of the regulator that led to the downfall of Equitable Life. I do not intend to cover the cause; what is required is urgent action to put right a wrong. Frankly, the actions announced by the Treasury are far too little, far too late. Like all hon. Members, I have a significant number of Equitable Life policyholders as constituents, most of them now elderly, who have suffered significantly. Sadly, some died while waiting for justice.

When the Government said that they would apologise, there was real hope that action would finally be taken to end the saga. It was therefore a considerable let-down—to put it mildly—when all that was announced was yet another investigation, under Sir John Chadwick, on how a compensation scheme, if it was even that, would work. Worse still, it was abundantly clear that the Government expected that it would be some years before compensation was paid to anyone. In her statement, the Chief Secretary said:

“The ombudsman recommended that a payments scheme should be completed two and a half years after the decision to pay out. The Select Committee said that it could not assess whether that was viable, and our initial assessment of the ombudsman’s approach is that it might take significantly longer than that to implement fully.” —[Official Report, 15 January 2009; Vol. 486, c. 379-80.]

The more cynical among us might consider that statement as putting a decision beyond the next general election. However, it raises some pertinent questions. What is the date of the decision to pay out? Is it the date of the Chief Secretary’s statement to the Commons, the date on which Sir John Chadwick reports with specific recommendations or some other day? We do not know whether the two and a half year period has even started. It could be some time before it does. There is absolutely no time scale for telling anyone if and when they will get any payment. In responding to the debate, will the Minister clarify that point? How long do the Government think it will be before payments are made?

It seems that even after nearly 10 years of waiting, policyholders will still have to wait several more years before compensation is available, but of perhaps even greater concern is the Government’s stance on who will receive compensation. It seems abundantly clear that they do not intend to compensate everyone who has lost out but only those who have suffered disproportionately. What that means is unclear to me and, I think, to many others, but it seems clear that some sort of means test is envisaged, and the hon. Gentleman gave a clear exposition of what that could mean. Will the Minister clarify how the disproportionate effect will be calculated? How will it be determined which losses are directly due to maladministration? Both concepts could keep the lawyers in business for years, if not decades.

The worst thing about the scheme is that it will inevitably lead to endless arguments about definitions, calculations and who is more worthy of compensation than others. It is a mean-minded scheme that will set policyholders against each other. I appeal to the Minister, even at this late stage, to give justice to that group and come up with a simple, even-handed scheme so that my ageing constituents need not wait interminably before finding out whether any of them will be compensated. I leave it at that, as many more Members wish to speak in the debate, and I hope that the Minister will take these points on board. There is extreme anger within the House and among our constituents at how such a vulnerable group is being treated by our Government.

In all the documents about Equitable Life that I have read recently, one of the most salient came from the Equitable Members Action Group on 26 January. It states:

“EMAG estimates that, under this Treasury proposed process, more than 90% of Equitable policyholders would receive absolutely NO COMPENSATION whatsoever. It is Parliament’s prerogative to stand up for authority of its own Ombudsman and reinstate the independent Tribunal proposed by the PO.”

That is extremely important. We as Members of Parliament have a duty to stand up for the mechanisms put in place by the House to protect citizens. The Government are deliberately trying to obstruct the findings of the parliamentary ombudsman and making it impossible for her recommendations to be implemented. That is why MPs from all parties should be working together to ensure that the ombudsman’s findings are upheld. The time has come to create an all-party group specifically to look after the interests of Equitable Life policyholders, and we are in the process of setting one up. If anybody wishes to be involved, they should contact my office. We should harness all the interest and passion expressed in this debate into one all-party group to campaign on the issue. We cannot just leave it to the Treasury Committee and others, who will review the situation on a piecemeal, ad hoc basis. We must have an all-party group that uses its wherewithal in Parliament to support Equitable Life policyholders.

I shall be brief because other hon. Members want to speak, but the Chief Secretary has thrown the issue into the long grass, because she announced neither the scale of the compensation nor the timetable. Many of my constituents in Shrewsbury are very concerned that only a fraction of the £5 billion claimed will ever be paid out. As has been said, the system involves a means-tested concept, whereby if someone still has some savings or a roof over their head, they may receive no compensation at all. That is scandalous. It shows that new Labour is totally dead because the Government are saying, “We don’t care a fig about the middle classes. We’re only going to help those who are the worst off and the ones who are in dire straits.” That is disgraceful. What if someone expects to rely on a pension of £20,000 and is suddenly told that they will have only £15,000? That may not be a dire situation for the Chief Secretary, but it will have a massive impact on some of my constituents.

When the Chief Secretary made her announcement in the House, she gave no assurance that the first payment to policyholders would be made in 2009. That is another matter of deep concern. There must be interim payments. I would like the Exchequer Secretary to let us know whether she will consider ensuring that interim payments are made, given that there is no guarantee that the first payment will be made in 2009.

Even more worrying, the Chief Secretary refused to confirm the ombudsman’s time scale for the final payment—that everything would be done and dusted within two years. Again, she refused to give those assurances, and as we have heard, 30,000 constituents have died already. It is imperative that the situation is dealt with speedily.

I congratulate the hon. Member for Northavon (Steve Webb), who initiated the debate. He made an excellent speech. I reiterate what he said about estates and widows and widowers; people must receive compensation should their loved ones die.

Sir John Chadwick will now set up an office and will obviously have to recruit staff to sift through the hundreds of thousands, if not millions, of documents in order to arbitrate in the matter. What budget will the Government give him? Will he have enough resources to recruit sufficient numbers of staff and to be accessible, so that the process is carried out as speedily as possible? I intend to go and see Sir John Chadwick with the all-party group and hold him to account directly, because it is important to make him realise the extent of feeling about the issue in the House.

I congratulate the hon. Member for Northavon (Steve Webb) on securing the debate. He is absolutely right. If the Minister does not realise today that there is a truly human face to this disaster, that real people are suffering and that the difference it is making to their lives is incalculable, something is very wrong. I am appalled by the idea of means-testing. I ask the Minister to consider who would sign up to any savings or pension plan if the small print said, “By the way, if this goes wrong, you will be means-tested.” I suggest that no one would do so. To introduce that concept retrospectively is appalling, and it is not just me and other hon. Members in the Chamber today who are making such remarks. People have not been hoodwinked by the Government’s deciding to address the issue selectively.

I am aware that the debate is coming to a close, so I shall leave the Minister with a comment from a constituent of mine who has been affected by the matter. He used an interesting analogy to make it clear how he feels about the Government’s choosing to exclude people from fair and just compensation. He said to me:

“If, in a leisure moment you have seen any of the popular ‘Pirate’ films…you will remember Cap’n Jack Sparrow had a rather unusual compass—it pointed in any direction he wanted it to...a device borrowed”—

by the Chief Secretary—

“to respond to the Ombudsman report. Point it…in any direction except justice and fair compensation.”

He could not have put it better.

The perception, and the reality—unless the Government change their mind rapidly—is that the Government are choosing who is worthy. I cannot think of a more iniquitous way to proceed with elderly people, many of whom are relying on the scheme to make their lives comfortable.

I want the Government to bear in mind that those people are suffering disproportionately as a result of many different blows. In particular, the Department for Work and Pensions presumes an income savings rate of 10.4 per cent., which is actually five times the achievable level of savings accounts should people have savings elsewhere. When the Minister is deciding who is in disproportionate need, will she consider that point? Some people might have savings in other accounts, but they too will not be generating what was expected. That is a double blow for people caught up in the Equitable Life scandal. Should the Minister wish to meet any of my constituents, I am sure that they will tell her what it feels like to face an impoverished old age, because someone has decided that they are not worthy of receiving what is due to them.

It is a pleasure to contribute to this important debate under your chairmanship, Lady Winterton, and I compliment my hon. Friend the Member for Northavon (Steve Webb) on securing it. I say that with particular regard to the fact that the Government have so far steadfastly refused to allow such a debate in Government time. Just last week, I asked in business questions whether the Leader of the House would consider making time available in the Government’s timetable.

Many Members are interested in bringing their constituents’ concerns to the attention of the House, but in a Westminster Hall debate, no matter how brief we make our remarks, there simply is not time for everybody to participate. That adds to the general feeling that the Government are hoping to put this issue to one side, so that people will not have the chance to raise their concerns in a meaningful way. Perhaps they are even hoping that a general election will intervene before they have to make the difficult decision.

The hon. Gentleman will be aware that the right hon. Member for North-West Hampshire (Sir George Young) called for such a debate, and that the Leader of the House said that she would refer the matter to the business managers. However, we have heard nothing since. Will the hon. Gentleman encourage the Minister to commit to such a debate? Does he believe that in such a debate—in Government time and on the Floor of the House—the Government should introduce hard proposals for an interim payment scheme, so that those suffering terribly, and who might die before a scheme comes on stream, can receive compensation?

I concur with the hon. Gentleman. The response received by the right hon. Member for North-West Hampshire (Sir George Young) was probably exactly the same as the one I received from the Leader of the House last week.

My hon. Friend is correct in saying that this matter should be debated on the Floor of the House. The ombudsman’s report was to Parliament, not to the Government, and Parliament should take the decision. It should have the chance to vote and to decide whether to implement the ombudsman’s report in full by paying compensation, without means-testing, to everybody who lost out.

My hon. Friend makes a very important point and is, of course, absolutely right. There is no clearer demonstration of how isolated the Government have become on this issue than how Members here—a few have had to leave—have chosen to seat themselves. With great respect, it would not have been possible for the Labour Members here at the start of the debate to have sat any further away from the Minister than they chose to do. It was almost as if they were frightened of being tainted by the Government’s pathetically inadequate response to date.

I want to speak out on behalf of the many constituents who have contacted me about their policies held in Equitable Life and the many more who, I am sure, have been adversely affected. My constituents, and those of hon. Members around me, have waited long enough—years, in fact—to hear their fate and whether their savings will be returned to them. Despite the Government’s announcement, they are still none the wiser. They are left waiting in limbo. That is disgraceful, particularly in the current economic climate, when people find things so difficult.

The Government announced that they would fund a compensation scheme only for those who had been “disproportionately affected”. That is the term used in their response. The Government would decide who those people were by checking

“the extent of somebody's losses, how great the losses were but also perhaps looking at how great they were as a proportion of their income”.

As we have already heard, that is tantamount to means- testing. Does the Minister really believe that that is fair to all policyholders, who have been waiting so long to hear whether their pensions will be saved?

The ombudsman’s report also made it clear that the aim of any compensation scheme should be

“to put those people who have suffered a relative loss back into the position that they would have been in had maladministration not occurred.”

That is not what the Government propose. They decided to disregard the ombudsman’s recommendations by helping only those whom they decide are worthy. When will the Government accept the ombudsman’s report in full and put in place appropriate compensation for all those who are affected?

After the Government acted so promptly and with such urgency to bail out bankers in their moment of difficulty, and acted promptly for other depositors, who lost money in the Icelandic and other banking situations, does not the Minister believe that the same treatment should be afforded to Equitable Life policyholders?

It is a pleasure to participate in the debate and I congratulate my hon. Friend the Member for Northavon (Steve Webb) on introducing it so ably. I am sorry that my hon. Friend the Member for Twickenham (Dr. Cable) cannot be here as he is involved in other parliamentary business.

I take hon. Members back to a time not long ago when we had sound financial institutions in this country and mutual societies that were seen as rock solid in their propriety. Some of those, such as Equitable Life, had been in existence since the 18th century. Then came the get-rich-quick age, when all those institutions were torn apart and put together again, and management acted to maximise their profits rather than safeguard the interests of their depositors. That is the legacy of Equitable Life.

Let me just say a few words; the hon. Gentleman has made a couple of interventions.

I do not seek to diminish the role of the management and the pseudo-Ponzi scheme that they were operating within Equitable Life, or their culpability in creating the circumstances that came about, but we must and do also accept the role of the regulators—the Department of Trade and Industry, until 1997, and then the Treasury, and after January 1999 the Financial Services Authority and the Government Actuary’s Department. With all those taken together, there was a toxic mix of rule-bending within a financial institution and failure by the safeguarders of the public interest to do their job properly. That is why we ended up in a mess.

Since that time, we have had endless debates on the subject. I reread a speech made by my hon. Friend the Member for Twickenham on 27 November 2002, at column 67WH of Hansard. It was a superb exposition of the position at that time. My hon. Friend looked forward even then to the ombudsman’s report and to what he hoped would be the resolution of a sorry saga. Since then, as we know, the Government have decided to play it long. We have had a succession of questions, speeches and interventions. I participated in a Westminster Hall debate just before Christmas, and the Minister answering on that occasion, the Economic Secretary to the Treasury, cut a sorry figure. He was unable to answer any question cogently.

I think that is an accurate description of the Minister’s position.

[Mr. Roger Gale in the Chair]

When the House resumed in January, we finally had a statement from the Chief Secretary to the Treasury, which was the culmination of eight years of waiting. We have had 13 reports on Equitable Life. In 2001, there were reports from the Corley Institute of Actuaries, the Treasury Committee and the Financial Services Authority. In 2003, there was the parliamentary ombudsman’s first report. There was the Penrose report in 2004, Paul Myners’s review of corporate governance of mutuals and Sir Derek Morris’s review of the actuarial profession.

In March 2007, we had the Faculty of Actuaries consideration of Ranson and Headdon. There was an FSA report on Penrose in July 2004, a Financial Ombudsman Service report in March 2005 and a report by EQUI, the European Parliament’s Committee of inquiry into the matter, in June 2007.

We also had the report in relation to the joint disciplinary scheme for the Institute of Chartered Accountants, which has not yet been published, and in July 2008 the parliamentary ombudsman’s second report.

Therefore, although we have had no shortage of reports on the issue, the Government have effectively announced yet another review and yet another report. They issued an apology, but it was partial, not an apology for the things for which an apology was needed.

Uniquely, after an ombudsman’s findings of maladministration and injustice, no compensation was offered. Ex gratia payments were made to a few people who were affected. We had this concept—again unique in response to an ombudsman’s report—that the money was not to go to those who suffered the injustice or the maladministration, but to those whom the Government considered needful of support. That cannot be right.

I have a series of questions to put to the Minister. Why is Sir John Chadwick’s brief so restricted? Why has it been pared down to such a point that he cannot consider what many of us feel to be the crucial questions? Will that not ensure that the payments are minimal? Sir John Chadwick’s review is designed to ensure that the minimum amount, not the right amount, is paid out as proper compensation.

What has happened to the oft-quoted precedent that the Government cannot compensate everybody who finds themselves at a disadvantage, when they are prepared to compensate the depositors of Icesave without any culpability on the part of the regulator? No one is suggesting that the regulators were at fault in the circumstances of the Icelandic banks, yet the Government were prepared to make compensation. In this example, in which the ombudsman has clearly demonstrated that the regulators were at fault, the Government are trying every technique that they have in their armoury to avoid payment.

What estimate has the Minister made of the proportion of with-profits annuitants who will receive ex gratia payments? Many feel that it will be a small proportion of those who should be compensated. Has she even made such an estimate? Are the Government walking into this with their eyes closed?

Does the Minister believe—this is the crucial question with regard to the role of the ombudsman—that the payments will put individuals in the position they would have been in had maladministration not occurred? That is the whole point of the ombudsman system. It is not the role of the ombudsman to compensate for commercial losses; everybody accepts that. The question is, will everyone who has suffered an injustice and a loss—not just those who find themselves extremely hard up—be placed in the position they would have been in had the maladministration not occurred? The answer is transparently clear—they will not.

Why have the Government conceded the findings of maladministration but not injustice? Why do the Government take this pick-and-choose approach to the ombudsman’s report, which enables them to assess that the ombudsman is absolutely right when the findings are inconsequential, but absolutely wrong when the findings are damaging to the Government’s reputation? If the Government take the view that they can pick and choose from the ombudsman’s findings, what future is there for the ombudsman?

I have asked that crucial question in a couple of debates on this subject. What is the point of having a parliamentary ombudsman—an Officer of the House, not of this Government—if the Government are found wanting and to have created maladministration and injustice, but then walk away from those findings and are prepared to ignore them?

What is “disproportionate effect”? How are we going to assess the consequences of this review if we do not know what factors Sir John Chadwick will be asked to take into account in assessing what “disproportionate effect” means? Is a person’s losing half their life savings disproportionate? I would say it is, but I suspect that the terms of reference will mean that, unless someone is virtually destitute, they will not receive compensation and their loss will not be considered as having disproportionate effect. That is wrong.

The hon. Gentleman mentioned the word “destitute”, but as we know many pensioners who are affected are in the benefits system in a way that they may not have been before. I am not sure whether the Government have truly assessed the impact of deciding to give money to some people and the effect that that will have on their benefits, or even on their tax burden. It is worrying that, in deciding who they award compensation to, the Government have not considered the impact on the future benefits of pensioners.

I am grateful to the hon. Lady for that intervention. There are two interpretations: either the Government know precisely what they are doing but are not prepared to tell us or the people who were investors in Equitable Life, or they are blundering around finding yet more delaying tactics to stave off the evil day when they finally have to do something, rather than talking about possibly doing something at some time in the future. I suspect that it is the latter, but we may hear the Minister say which of those two interpretations is so.

I have another question to ask on a point that has, I think, been raised this morning. What is the position of the estates of deceased members? The Chief Secretary was unable to answer that question when the statement was made. Perhaps the Treasury has now thought about it and perhaps the Minister will tell us today whether the estates can benefit from the compensation that would have been paid to the person were they still living. That will affect a lot of people, as we have heard.

Will the process be open? That key question was asked by my hon. Friend the Member for Northavon. Will we know what is happening with regard to Sir John Chadwick’s considerations or will that be a matter between Sir John Chadwick and the Treasury, to be filtered, bowdlerised and released at convenience and, probably, to be delayed, as has been the case with the history of this whole episode?

Why are there to be no interim payments? That is a fair way to deal with people who are very elderly and are waiting—and have waited so long—for justice in this matter. Why must they wait yet another two or three years, or however long it is going to take to conclude this protracted process?

It seems that most hon. Members feel that this episode smacks of injustice to those who are not necessarily, as some might caricature it, rich people who chose to invest their money, but are ordinary people who invested their life savings in an institution that they trusted. There has been injustice done to those people. This Government find themselves in the shameful position of having so devalued the parliamentary ombudsman that I am not sure we can see a genuine future for that office. That makes the Government look extremely shabby. That is not my concern, although it makes politics looks shabby, which is something we should be worried about.

This episode gives the impression that regulators can fail without consequence, which undermines the whole system of regulation. After all, over recent years we have built up a pantheon of regulators that govern so much of public business. If we do not trust the regulators, we do not trust the system. Not trusting the system discourages people from taking sensible decisions about their money, discourages them from saving and makes the economic situation in this country even more parlous. The Minister has a lot of answers to give us. A lot of questions remain outstanding.

I welcome you to the Chair, Mr. Gale, and congratulate the hon. Member for Northavon (Steve Webb) on securing the debate. His case was well-crafted, well-marshalled and strong, as all the contributions have been. To single out a few, the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) made a brave contribution, my hon. Friend the Member for Chichester (Mr. Tyrie) was extremely helpful with his expertise, the hon. Member for Cheadle (Mark Hunter) gave an accomplished presentation on behalf of his constituents and my hon. Friend the Member for St. Albans (Anne Main) gave a particularly impassioned speech on behalf of hers.

I thought that I would turn round the usual way of summing up a debate by starting with questions, partly in order to give the Minister a bit more time to prepare the answers. I recall that at the last such debate, in November, we had no answers at all, on the basis that the Economic Secretary to the Treasury was awaiting a statement from the Government before anything could be answered. Today the Minister has a little more time to answer the many questions raised.

First, the reports from Sir John Chadwick were promised by the Chief Secretary in a statement two weeks ago. How will they be made? Crucially, will they be made available to the House and Parliament? Secondly—this point has cropped up several times—the Minister needs to explain the word “disproportionate”, which the Chief Secretary mentioned in her statement in terms of those affected by Equitable Life. In the same vein, the Minister needs to explain properly the situation in cases where the policyholder has, sadly, died. Most important, the Government must give at least some indication of what time frame is likely to be needed for compensation to be assessed and paid. That is the crux of the argument in today’s debate.

This is the first time that I have spoken from the Opposition Front Bench on Equitable Life. In the short time available, I will not be able to chart the background of the sorry state of affairs before us, but I can tell Members that during my time in the financial markets, I saw quite a lot of malpractice and maladministration. However, what I saw normally affected major institutions that arguably could or should have known better. In the case of Equitable Life, we are talking mainly about a set of small investors who were naturally risk-averse. Indeed, they were generally placing their life savings, or a part thereof, in trust with what they believed to be a distinguished, venerated and properly regulated institution.

We have known about the regulatory failings since the Penrose report, in which Lord Penrose criticised both the regulatory system and the fact that the regulators failed to act after becoming aware of a problem. The Opposition therefore welcome the ombudsman’s conclusion that maladministration took place and the Government’s apology. We welcome the fact that the Government have accepted at least some of the ombudsman’s findings of maladministration and some aspects elsewhere. However, did they make representations about the findings of maladministration and injustice before the ombudsman published her report, or did they simply trot out their earlier arguments all over again?

The main purpose of today’s debate is to look forward and to deal with the urgent and overdue problem of compensating those who lost out. The last debate in Westminster Hall on Equitable Life was on 25 November. Thirty Members were present on that day, and 31 Members are present today. I share the opinion of the hon. Member for Cheadle that such debates should take place on the Floor of the House to enable more Members to speak. After all, about 1 million policyholders have been affected, which means that an awful lot of Members have constituency correspondence and issues to raise.

Since November, we have heard the Chief Secretary’s statement, but the saga goes on. The Opposition very much share the concerns raised during the statement and again today about the extraordinary and completely inexcusable delays in making the payments that policyholders deserve and, in many cases, so desperately need.

Many Members—

The hon. Lady will have her chance to respond, but I want to get on, because I have limited time available.

Many Members have compared the situation with aspects of the current financial trouble and the speed at which the Government have acted on some facets of the present crisis. Several policyholders have contrasted the Government’s prompt action to protect savers in the Icelandic banks with their almost glacial progress on Equitable Life. If the Government can act quickly on the current financial crisis, when the right course of action is frequently unclear and controversial, surely they can act quickly to rectify the tragic situation of Equitable Life, where the problem that we need to address is all too clear. We agree that there is no quick calculation to determine how much compensation should be paid, and we further agree with the ombudsman that the condition of public finances is relevant when determining how much should be paid; at the same time, however, the financial condition of those wronged has worsened.

Does the hon. Gentleman acknowledge, however, that the full compensation, as calculated by EMAG and others, would be somewhere to the right-hand side of a decimal point in the financial rescue plans, so the issue of public finances scarcely has a bearing in this circumstance?

The hon. Lady makes a powerful point, but one problem for all of us is that we are operating in a complete vacuum as regards the amounts involved—the individual amounts, the relative amounts and so on. Until we have some information, it will be difficult to know where the decimal point might fall.

I shall carry on, because there is only limited time left.

We agree that there is no quick calculation; at the same time, however, the financial condition will have worsened. Above all, the Government must act quickly. Some 30,000 policyholders have already died, many more will do so before justice is done, and further delays will be inexcusable. It is difficult to quantify the losses, but it is even more difficult to understand why so little progress has been made in trying to get the process even started. Time is running out, and most policyholders do not have the option of returning to the workplace. Every one of us has had letters from constituents, outlining how much they have suffered and still suffer in real life.

The ombudsman described the delay in addressing the issues as “iniquitous and unfair”, and every step of the way, the Government have sought to block, frustrate and delay the fight for justice. Does the Exchequer Secretary recognise, therefore, that what appears to be a new decade of delay is entirely the Government’s fault? In her reply, will she tell us how Sir John will keep the House abreast of his progress? Will his interim reports be made available to Parliament? The Chief Secretary to the Treasury tore up the ombudsman’s proposed timetable, but no alternative appears to have been proposed. When will Sir John make his first interim report, and will the Treasury ask him to produce an outline timetable?

On the compensation scheme, it is time for the Exchequer Secretary to explain what is meant by those who have suffered “disproportionately”, whom the Chief Secretary has mentioned on various occasions. Will the Exchequer Secretary explain whether she has rejected the Public Administration Committee’s conclusion that it would not be appropriate to compensate only policyholders and annuitants who have experienced financial hardship?

One concern raised in the House during the Chief Secretary’s statement was the status in any payment scheme of those who died before justice was done. More than 30,000 policyholders have already died, and it is vital that there is clarity about how their widows or widowers will be treated in the scheme. Re-reading Hansard, I noted that it appeared that the Chief Secretary had not really thought about that, so has the Exchequer Secretary had time to consider all the ramifications?

In a previous debate on the subject last November, my hon. Friend the Member for Fareham (Mr. Hoban) set out three things that the Government needed to do: admit responsibility, issue an apology and create the payment scheme. The first two have been done, but the crucial and most difficult third step must now be taken with absolute urgency. If the Government fail to do that, we will do it when we are in government.

If I had not already been aware of the degree of worry about these issues before attending and listening to the debate, I certainly would be after the speeches we have heard. Those who said that many policyholders who experienced losses might be in difficulties are right.

I congratulate the hon. Member for Northavon (Steve Webb) on securing a debate on the subject. I give hon. Members an assurance that I will take all the questions asked back with me but I will do my best to provide answers this morning. I think that hon. Members of whatever party understand that the lack of clarity about individual circumstances and losses has to be considered. That is why Sir John Chadwick has been asked to do his work.

In the circumstances, it is only natural that the Government’s response to the ombudsman’s report should generate such interest. Reflecting the extent of her remit, the parliamentary ombudsman’s second investigation of the regulation of Equitable Life’s with-profits fund under the Insurance Companies Act 1982 regime, which has now been superseded by more modern forms of regulation, looked exclusively at the role of the prudential regulator and the Government Actuary’s Department. It would not have been permissible for her to have considered the actions of Equitable Life, or any other party in the private sector.

The substantial report published by the ombudsman in July 2008 was the culmination of a four-year investigation, as has been said this morning. The factual and technical complexity of the issues investigated by the ombudsman, which contributed to the length of her investigation, are the reasons why it has been necessary for the Government to take time to consider that report. Indeed, the Government would rightly have been criticised had they not considered the report carefully before giving their response.

I repeat that the Government accept that maladministration occurred in some areas, and that in some cases—although not all—we believe that it may have led to injustice for policyholders. My right hon. Friend the Chief Secretary apologised for that on behalf of the public bodies and successive Governments who were responsible for the regulation of Equitable Life between 1990 and 2001. We also accept that some policyholders may have suffered a disproportionate impact.

We have looked in detail at the ombudsman’s central recommendation for a compensation scheme. I have heard suggestions that the Government are at fault in not accepting the recommendation that we should establish and fund a compensation scheme. Such a scheme would have the aim of restoring Equitable Life policyholders who suffered a relative loss—a loss that policyholders would not otherwise have suffered had they invested or saved somewhere other than Equitable Life—to the position in which they would have been if the maladministration the ombudsman found had not occurred. I attempted to ask the hon. Member for Hammersmith and Fulham (Mr. Hands) what the Opposition’s policy on that is, but he would not give way.

I want to deal with some of the many issues and questions that have arisen.

Is the Minister prepared to tell us clearly whether it is the Government’s view that people should be put back in the position that they would have been in if maladministration had not taken place?

Those are precisely the issues and calculations that we have asked Sir John Chadwick to consider in detail. Those who actually listened to my right hon. Friend the Chief Secretary’s statement will have heard her say that we have asked that Sir John be given access to the detailed policy information held by Equitable Life, so that he can examine—as those who have seen his terms of reference will have seen—the balance of loss as it is measured between maladministration and the behaviour and activities of the society itself. He will then be able to form a view.

Various hon. Members have said that 90 per cent. of Equitable Life members will not be repaid. I believe that calculation appeared on the EMAG website. However, I reassure Members that it is only with access to Equitable’s data that we can assess which classes of policyholder will receive payment under the scheme. That is precisely why we have appointed Sir John Chadwick to review the data, so that figure must have been plucked from the air. It is certainly not one that the Government would recognise at this stage of the work.

The House will be slightly, if not totally, dismayed at the apparent lack of sympathy or sense of justice in what the Minister is saying this morning. We all understand that exact figures may be difficult to calculate. Given that the Government are about to assume responsibility for the pension payments of all the Post Office workers, can she not set up a scheme quickly that, in the interim, at least allows a measure of responsibility for the pensions of Equitable Life policyholders?

I shall try to deal with some of the issues about interim payments and other payments that have been raised by hon. Members during the debate. As my right hon. Friend the Chief Secretary said on the Floor of the House during her statement, we will consider the idea of interim payments, but we would not want such a scheme to hold up the swift delivery of the main scheme—[Hon. Members: “Swift?”] I am talking about going forward from where we are now.

About 11 days ago, we had a statement in the House in which the Government apologised and said that they would set up an approach to enable those who have suffered disproportionate loss to receive ex gratia payments. Hon. Members have asked for a timetable for that. My right hon. Friend the Chief Secretary said in her response to the statement that we wished the process to be as swift as possible, but the ombudsman herself said it would take up to two and a half years. We have not made that kind of assessment. We want Sir John to make progress as quickly as possible so that we can expedite the ex gratia payments.

Opposition Members must recognise—as the ombudsman did—that these are complex areas. There was no costing in the ombudsman’s report or any idea—apart from the scheme taking two and a half years—about how such payments can be made in practice. We are attempting to deliver an ex gratia payment scheme as quickly as possible. We have asked Sir John to give us his advice as quickly as possible on how that can be done. Clearly, delivering such a scheme must be as simple as possible. The ombudsman recognised that there is a tension between a simple and quick scheme and consideration of the kinds of losses that relevant policyholders have suffered due simply to maladministration. Such issues must be separated out, as hon. Members have recognised, from the losses that would have occurred because of market movement or because of the behaviour of the society, to which the hon. Member for Somerton and Frome (Mr. Heath) referred, and which was so criticised in the Penrose report.

The hon. Member for Northavon was the first of many to ask how Parliament would be kept informed of Sir John’s work. We hope that he will give us interim reports. We want the information to be shared as it is generated. As his work reveals the nature and extent of the practical issues before us, we will put in place a parallel system to ensure that delivery is as quick as possible. We do not want to wait until he reports—

Dying Well Strategy

Through you, Mr. Gale, may I thank Mr. Speaker for choosing today’s debate? I am particularly pleased to see my hon. Friend the Member for Meriden (Mrs. Spelman), who I know wishes to catch your eye.

It is a particular pleasure to open this debate, because I come to praise the Government. That may not last all day, with the Welfare Reform Bill to be debated in the main Chamber later, but certainly in relation to the dying well strategy, my praise is without limits for the way in which the Government have not only raised the issue and tried to give it a public profile, but begun a conversation with those of us in the wider community who have a particular interest in it. Full marks to the Government there and full marks to them for holding the line against those who believe that an appropriate way for people to end their lives is to meet up with some form of death squad. The Government have resisted those easy, beguiling solutions, which again is cause for praise. It is also a pleasure to see the Minister of State, Department of Health, my hon. Friend the Member for Corby (Phil Hope), who has, over a long period, taken an interest in the issue and approaches it with the sensitivity that it deserves. Today, I come to praise Caesar, rather than to undertake any other activity.

The initiative that the Government are attempting to build on is clearly strengthened in Parliament by the fact that we have the all-party dying well group. That group is led admirably by Lady Finlay and my hon. Friend the Member for Heywood and Middleton (Jim Dobbin). My interest in the issue and in initiating the dying well group, along with my colleagues, was prompted by the death of my mother just after the last general election. As the Government have said on a number of occasions, this is not a topic that we normally talk about, so death steals up unexpectedly and takes us unawares. What happened with my mother reinforced to me a number of lessons, which I want to lay out for the Minister’s consideration because they have wider significance.

My mother was blessed for the last five years of her life in that she was looked after by the Little Sisters of the Poor. There are only two establishments that I have ever attended in which I would be happy to die; most of the others fill me with foreboding. The Little Sisters of the Poor is one of those establishments and I would consider myself fortunate if, at the end of my days, I were able to gain admittance to it.

However, in the last week of her life, my mother was in hospital and was treated there by a doctor of considerable skills. He diagnosed that the drugs that she had been on for four years were ones that were meant for four weeks and that they had solidified her lungs, hence the difficulty in combating the lung disease that finally killed her. However, that doctor, who, just by listening to my mother’s chest, began an analysis that led to an understanding of the cause of that death, was totally unprepared to allow her to die in the way that she wished. Indeed, when I told the doctor that my mother wanted to go home to the Little Sisters, he said, “You can’t move her. She’s dying.” I said, “But she’d be really happy to die at home” and he said, “No, no. She’d die on the way home.” I said, “Don’t you realise how happy she would be even to die on the way home? That, to her, would be a success, even though you regard it as a failure.” He said, “No, to move her out of her bed risks her death.” I said, “But why can’t we just borrow your bed. As we can get on to the moon, surely there are ambulances we could hire that could take her and the bed back to the Little Sisters. Maybe she would die in the ambulance, but as I say, that would be an enormous success.” I was asked, “What written agreement do you have with her on how she wishes to end her days?” I said, “We have discussed the matter with the Little Sisters, and they know perfectly well what my mother wishes.” He said, “But it’s not written down?” I said, “No, it is not written down.” Of course, he was worried that if things turned out as we all knew they would, legal action could be taken.

On one of their regular visits, some of the nuns from Little Sisters spoke to the doctor about allowing my mother to return home. He asked whether they knew about people dying and whether they would be prepared for it. The nuns told him that they specialised in helping people come to the end of their lives successfully and happily and that, to them, dying was part of living well. That doctor, so talented, did not know about the Little Sisters, an organisation that is brilliant in looking after people towards the end of their days. That suggests that the Government have set themselves a gigantic job in trying to change not only the attitudes of lay people, as death takes us by the hand, but of those who are professionally trained to help us in the last stages of life.

The figures speak for themselves. Most wish to die at home; but most die in hospital. To have your last conversation—you have to have that last conversation—in a public ward in a well-run hospital and in front of other people, some of whom are thoughtlessly watching their televisions, is not good for the person who is dying nor for those with them. My mother was in a four-bed ward. The old lady opposite her, who knew the score, took off her hearing aid so that she could not hear what we were saying. I am sorry to say that the other two, the younger members of that establishment, did not have those good manners or that sensitivity.

I wish to put four questions to the Minister. First, what steps are the Government taking to try to give effect to people’s wish to die where they want? Secondly, I again ask the Government to share their ideas on the next steps in having a conversation not only with the professionals but with us lay people, who also will die at some stage? Just as the Victorians specialised in talking about death but would not talk about all sorts of other phobias, so we have rid ourselves of the other phobias but find it difficult to talk about dying. How do the Government hope to break through that barrier?

Thirdly, given that in important areas the Government sometimes ring-fence funds, what plans do they have in this respect? I do not want to develop that line, because I know that if my hon. Friend the Member for Meriden is able to catch your eye, Mr. Gale, she will want to say more about that. Fourthly and lastly, the Government, like no previous Government, attach considerable importance to this part of our lives. My hon. Friend has a private Member’s Bill going through the House. To what extent might the Government give protection and fair passage to that Bill, so that it gets on to the statute book?

I end as I began, by praising the Government. When the record of our Administration is written up, I fear that it will not be the huge increases in public expenditure and the fantastic targets that the Government have set that will occupy the history books: I think it will be those changes that begin significantly to change the quality of our lives and the culture in which we live. It is those areas that cost the taxpayer nothing but bring a huge amount of happiness and encourage the verities to which most of us subscribe and which increase happiness and faithfulness—I think of the Government’s reform of civil partnerships—that will merit considerable note in the history books. I also believe that the Government have tried to break through the nation’s phobia—the fear of talking about last things—thus ensuring that our last wishes can be given better effect.

I am glad to have had the opportunity to open the debate, and I am grateful to Mr. Speaker for allowing it. I know that other hon. Members wish to contribute and, having spoken for 10 minutes, as I said I would, I shall now sit down.

In the same vein, I praise my right hon. Friend Member for Birkenhead (Mr. Field) for the way he has championed this cause and for articulating both the needs of people at the latter stages of their lives and the needs of their relatives. I thank him for calling for this debate, thereby making it possible for me to contribute to it.

I, too, care passionately about this subject, not least because both my parents were unable to die at home, although they wished to do so, and because, in my constituency, there is a centre for the study of ageing and spirituality, which is led by the Reverend James Woodward, who spoke to us only last night in another place about what more could be done to improve the quality of the end of people’s lives. I share my right hon. Friend’s view that, if only we did more to improve the quality of life at end of life and to make people’s ending better for them, they would be less afraid and less likely to resort to ending their lives prematurely.

As my right hon. Friend said, there is a stark contrast between the 75 per cent. of people who say that they would like to die at home and the 25 per cent. of people who manage to do so. We as legislators have something to address here in respect of an aspiration that is completely unmet. However, this issue is even more important than that. As a Member of Parliament—I am sure that you experience the same thing, Mr. Gale—I have noticed the number of times that relatives have come to my surgery burdened with a sense of guilt and grief about not being able to provide the best end for a loved one, because all their efforts to bring a loved one home or to make them more comfortable in dignified surroundings were thwarted. That is what has motivated me so strongly.

We hear also from professionals working in this area how difficult it is for them to help to meet the wishes of the person who is dying and the wishes of their relatives. One professional nurse relayed how she had to make 10 or 12 phone calls a day over a prolonged period to ensure that her mother did not go into accident and emergency but went instead into a nursing home with a visiting palliative care nurse. I am sure that plenty of people who read the report of this debate will be able to relate to the difficulty of trying to secure for people what they really want.

It is difficult for the terminally ill patient to find out what their choices really are. If they are not fully informed and given all the information available, almost by default they find themselves swept into the system and swept into a hospital bed, which, often, they are unable to get out of to go back to where they would like to die or into palliative care, which has the specialist provision that they need.

It is vital that palliative care teams are fully integrated into hospitals, so that at the point of decision, when a terminal prognosis has been gently and clearly given to the patient, they can be presented with the choice of dying elsewhere—in a hospice, for example—or being able to go home. It would be no good asking a patient if they wanted to go into a hospice when it had not been made clear to them that they had only weeks to live. As my right hon. Friend says, we are, as a society, for whatever reason, not good at talking about such matters to the people who really need to know. I ask the Minister, what could the Government do to facilitate that?

One reason why people do not wish to talk about death is that it raises huge existential questions, but we would help those facing their end if we shared their options with them and helped them to plan their last days. I, too, am grateful to Lady Finlay for helping me to understand better the needs of terminally ill patients through her own professional background. She was present at the talk given last night by Reverend James Woodward. At that talk, we heard from Lady Neuberger, who is also well-informed on the subject. She pointed out the stark contrast between this country, where our default setting is to put people in hospital beds and expect them to remain there until they die, and the Netherlands, which interestingly has gone further down the road to euthanasia, but in some respects has better end-of-life provision. We need to address the culture surrounding someone’s last needs and consider how to enable them to continue to accomplish tasks, until their dying day and hour, that confer on them a sense of human autonomy, which we do not relinquish until our last.

People are very afraid of the process of dying when faced with limited choices and forced to remain in a hospital bed where there is little that anyone can do for them. I tend to understand that. I encourage the Minister to address the question of what more we can do to enable people in their last days to lead a normal life. I am concerned, at this economic juncture, about the position of our hospices, which on average receive only 30 per cent. of their funding from statutory sources. Sue Ryder Care estimates that it is subsiding primary care trusts by about £6 million a year due to the shortfall in funding. In this recession, there is a genuine threat to hospices that depend so much on charitable funding.

Hospices and the Government have explored the possibility of a tariff negotiated with the NHS, so that a patient expressing a wish to die at home or in a hospice could bring with them the necessary funding from the acute setting. That would help many hospices to survive—hospices on which we depend, in partnership between the third sector and the state, for the provision of palliative care. The Secretary of State announced last week an increase in patient rights. Will that extend to the rights of terminally ill patients? Does the Minister see that as a means to secure the funding, so that the money could follow the patient back to a hospice or into the home, where they could end their days?

As a result of the out-of-hours contract with general practitioners, some terminally ill patients are less sure of being seen out of hours by the GP attending to their needs into the last stages of their illness. In light of last week’s announcement, have the Government any thoughts about helping to ensure that a GP who, over time, has built a relationship of trust with a terminally ill patient may be with them at the end? Good 24-hour nursing provision, supplemented by organisations such as Marie Curie Cancer Care and Macmillan Cancer Relief, and the comfort of the familiar face of the family doctor would help to improve people’s experience of their last days.

As the Minister will know, the gold standards framework is aimed at improving the standards of end-of-life care. Although it has come into being as an example of best practice, there are concerns that those in palliative care feel that its provision is patchy. What plans do the Government have to ensure that the framework is not patchy, but more consistent, and something on which everyone in the country can rely to ensure that our experience of palliative care at the end of our lives is to that standard?

To conclude, the distribution of specialist palliative care across the country needs to be fair and even. There are pockets of good provision and pockets of weaker provision. I shall endeavour to address more of that issue when I introduce my private Member’s Bill. However, I am grateful to my right hon. Friend for initiating the debate, and I feel that we have a chance today to ask the Government some of the key questions on which so many people—perhaps even us, one day—will depend.

I congratulate my right hon. Friend the Member for Birkenhead (Mr. Field) on securing the debate, and thank him and the hon. Member for Meriden (Mrs. Spelman) for their remarks. Both spoke of their personal experiences. As Members of Parliament we are not only the representatives of our constituents; we also bring our personal experience to such debates. I believe that this is the first time we have had a debate on the end-of-life care strategy. In a way, we have even more reason to thank my right hon. Friend for enabling the debate to take place: because end-of-life care affects us in the way that has been explained, it is not debated very widely in the community, as he said. The all-party group on dying well, which he has mentioned, is part of the process of encouraging that wider debate.

Some people end their lives with dignity and respect, with family and friends around them and in comfortable safe surroundings that they have chosen to be in. However, I think that my right hon. Friend and the hon. Lady are right to suggest that many people do not, and that provision of such experiences is at best patchy. That is why we published the end-of-life care strategy last July. It sets a clear direction for the future of adult services in that respect and builds on previous work, not least the NHS cancer plan of 2000, in which resources were allocated. However, there is clearly more to do, and we need wider public debate. In a way, we are starting that today.

As my right hon. Friend and the hon. Lady have said, we need to get not only the public, but health and social care professionals, to engage with death and dying and to understand the content of the strategy, as well as the philosophy and principles behind it, and the practical action involved. Critically, it is right to focus on choice and to suggest that people’s preferences and needs for care are not fully elicited from them at an appropriate time, and are not fully planned or revised as those individuals experience the end of their life.

We need to be a lot better at ensuring that such planning becomes the norm and not the exception. The aim of the strategy is to raise the profile of the concepts—the idea of choice in end-of-life care and what the quality in question would look and feel like. Possibly it should go further and look at changing societal attitudes towards death and dying. Most people do not want to think or talk about death or engage with it. That is part of the problem, and why there is a lack of choice and a lack of the experiences that we would like for everyone.

An initiative that we are taking to get the debate going and deal with the point raised by my right hon. Friend is the establishment of a new national coalition of organisations to raise the profile of end-of-life care. It will be led by the National Council for Palliative Care and will develop a national tool to measure public awareness and assess public attitudes to death and dying. The strategy deliberately avoids targets and recommendations, but it gives excellent case studies and clear advice about what works and what represents the best we can provide at the end of someone’s life. It builds on the strategic health authorities’ visions of what end-of-life care should be like, and I am pleased to say that it has been well received by the national health service and by the voluntary and third sectors, which play such an important role in the relevant sphere.

I want to pick up on something that my hon. Friend the Member for Meriden (Mrs. Spelman) said earlier, which I hope the Minister will be able to deal with. If not, perhaps he will write to us. One aspect of having a strategy involves helping the nation to get its mind around this issue, but death sometimes trips us up quickly and unexpectedly. My hon. Friend’s proposal is really an extension of what the Secretary of State was saying last week. If the organisations that would help us to die at home knew that the bills were going to be paid at some stage, it would ease our transfer at that vital stage of our lives.

I think my right hon. Friend is referring to last week’s announcement that we are to pilot personal health budgets, which we already have within social care, to see whether that principle can be applied to the health service. We will announce those pilots shortly, and they will be flexible enough to encompass a range of services. I cannot pre-announce something that is coming up shortly, so he should listen out for that announcement. There might be opportunities in those pilots to explore this area into the future.

I agree with my right hon. Friend and the hon. Lady about the importance of choice. Personal health budgets might work as one approach to choice, but the whole system should respond to the need for choice. Care plans are a key feature of the strategy and a key part of good practice. Individuals produce, discuss and write care plans, which are then available as they enter their end-of-life period. The figures that the hon. Lady has given on what the public want and what is happening in practice are absolutely right. That is because we have not yet engaged many people in writing care plans. If that process were universal, those figures would change dramatically.

Having a care plan is a critical part of recording a person’s preferences, so that those who support and care for them during their end of life can refer to it. The plan can be revised, depending on the circumstances, and having one means that that person’s wishes are much more likely to be met. To do that, we need to co-ordinate care across a range of sectors, including health and social care and out-of-hours and emergency care services. We also need a local register and a helpline.

For a care plan to become reality, we need the architecture for co-ordination of those services to be in place. If both of those parts of the service are created and delivered consistently across the country—the hon. Lady made a good point about patchiness—many more people will get the choices that we want them to have.

We need services to be 24/7 if people want to die at home, and we need rapid response community nursing, which the strategy describes as being part of the answer. Also, multi-agency care must be seamless, with people working together around the needs and choices of the patient. That requires staff to have proper training, not least in communication skills, for end-of-life care.

On implementation, I want to make a couple of points about how these great strategies and this policy will become reality in every part of the country. As my right hon. Friend and other hon. Members will know, we are committed to spending an additional £286 million to promote end-of-life services, through the strategy, in the next two years. He will also know that most cash is sent to PCTs, which commission the services, so money is not ring-fenced in that way because that is the overall policy. However, we have told PCTs that we expect that extra investment to be properly detailed through the resources and applications planning form. That means that we can work with strategic health authorities to understand exactly how that extra money is being translated into investment in end-of-life care services at PCT level.

Many issues have been raised, and I have not been able to address them all. I certainly hope that the gold standards framework, which the hon. Lady mentioned, is something that we want delivered throughout the country. We are putting extra resources in place for that, with capital funding available as well. Some £12 million was in the NHS end-of-life care programme, rolling out key tools such as the gold standards framework and initiatives such as the Liverpool care pathway, with which she will be familiar. We are taking prompt action now to ensure that we deliver the kind of outcomes that we need.

Arbroath Abbey

It is a pleasure to speak under your chairmanship, Mr. Gale.

It is appropriate that the debate is taking place in a building that is part of a world heritage site. There are now some 27 world heritage sites in the UK and dependent territories, ranging from historic buildings to fantastic landscapes. Sites in Scotland are as diverse as neolithic Orkney, the city of Edinburgh, Robert Owen’s village at New Lanark, the Antonine wall and St. Kilda. The last is the only one that I have not yet managed to visit. In fairness, I have also visited several sites in England and Wales.

Each site is chosen for outstanding universal value to the world’s cultural and natural heritage. The idea first began in 1959 with a campaign to save Abu Simbel in Egypt from flooding. A convention was passed in 1972, and there are now 851 sites worldwide. This debate concerns the campaign to have the historic abbey of Arbroath designated a world heritage site, but it also raises a more general point regarding the Government’s policy on world heritage sites, particularly on applications for further sites.

There has been an ongoing campaign in Arbroath for the abbey to become a world heritage site, not only because of its grandeur in its own right—it is a magnificent example of a mediaeval abbey—but because of its association with the world-famous declaration of Arbroath. The campaign is completely non-political and encompasses people of all parties on the political spectrum and of none; indeed, one of its leading figures is a Conservative councillor, Jim Millar. The campaign has been supporting the case for the abbey and raising money for several years, appreciating that it would be some years before the abbey could be granted world heritage status.

A problem arose in early December last year when the Culture Secretary launched a review of the future designation of sites in the UK. The review was undertaken partly because UNESCO is seeking changes to the system, but a report prepared for the Department for Culture, Media and Sport by PricewaterhouseCoopers states that UNESCO believes the world heritage site list to be unbalanced in terms of the location and nature of sites included. It has therefore asked that well-represented countries consider slowing or temporarily ceasing nominations and that nominations, to the extent that they continue, constitute under-represented sites, such as scientific, natural or cultural sites, rather than urban or ecclesiastical sites, which are considered over-represented.

The campaign’s feet were cut from under it somewhat when the Department for Culture, Media and Sport was reported to have changed its policy, refusing to propose any more UK sites for UNESCO approval, although the PricewaterhouseCoopers report stated that the Department had several options. The campaign sought my help, and I wrote to the Culture Secretary to seek clarification. To date, I have received no response.

I therefore took the opportunity to raise the matter at Culture, Media and Sport questions last week. The Minister answered my question, but I was slightly concerned by the phrasing of her response. She said that after consultation, the Government would decide whether to put forward another list, which gave the impression that perhaps no more sites would be proposed. I can guess what she will tell me today: consultation is still ongoing, and we should await the outcome. That is not sufficient. There is great concern about the outcome of the consultation, given the various options before the Department. Furthermore, if we await the outcome of the consultation, we will in effect be challenging a decision that has already been taken, and it will be much more difficult to obtain any change.

We need to put the case for Arbroath abbey now, before we are faced with a fait accompli. It is of the utmost importance due to the nature of Arbroath abbey and the comments about UNESCO. On the face of it, it could be argued that Arbroath abbey is an ecclesiastical site, but it is much more than that. Its significance goes to the very heart of our culture and the democratic culture of the world.

UNESCO’s list of properties includes two categories that could have been written with Arbroath abbey in mind. Criteria III says that it must

“bear a unique or at least exceptional testimony to a cultural tradition”.

Criteria VI says that it must

“be directly or tangibly associated with events or living traditions, with ideas, or with beliefs, with artistic and literary works of outstanding universal significance.”

I shall relate the history of Arbroath abbey and explain why I feel that it falls in those categories.

The abbey of Arbroath was founded by William the Lion, King of Scots, in 1178. It is dedicated to Thomas Becket, the turbulent priest who was killed at the instigation of Henry II in Canterbury cathedral, which is also a world heritage site. In its day, the abbey must have been a very impressive and powerful institution. Even its ruins—particularly the impressive “Round O”—are an impressive sight in the centre of our town. William the Lion is believed to be buried before the high altar.

Nowadays, however, the abbey’s best known association is with the first declaration of Scottish independence, or the declaration of Arbroath as it is often referred to. As many hon. Members will be aware, that magnificent document was written by the then abbot of Arbroath, Bernard de Linton, and signed by King Robert I—the Bruce, as he is often known—at Arbroath on 6 April 1320. It is a letter to the Pope in Avignon and sets out the case for the continuing independence of Scotland, which had been regained following the battle of Bannockburn in 1314. However, the declaration is much more than that—great though it is; it echoes down through the centuries as one of the great documents of not only Scottish history but world history.

In his book “For Freedom Alone” Professor Edward Cowan puts the point very well:

“Scottish activists and thinkers of the period not only attempted to resolve their own political philosophies in response to the unprecedented contingencies which potentially threatened the very existence of their nation and kingdom, but they contributed towards ideas of constitutionalism which would ultimately feed into the mainstream of British, European and eventually American political thought.”

It should not be forgotten that in mediaeval times, the kingdom was very much considered to be a fiefdom of the king, who ruled by divine will. In the declaration of Arbroath, however, the first stirrings of democracy can be seen. The people of Scotland declared that the king was subject to the people and not just God. In this magnificent section, the declaration said:

“Divine providence, the succession to his right according to our laws and customs which we shall maintain to the death, and the due consent and assent of us all, have made him our prince and king. We are bound to him for the maintaining of our freedom both by his right and merits, as to him by whom salvation has been wrought unto our people, and by him, come what may, we mean to stand. Yet if he should give up what he has begun, seeking to make us or our kingdom, subject to the King of England or the English, we would strive at once to drive him out as our enemy and a subverter of his own right and ours, and we would make some other man who was able to defend us our king. For so long as a hundred of us remain alive, we will never on any conditions be subjected to the lordship of the English. For we fight not for glory nor riches nor honour, but for freedom alone, which no good man gives up except with his life.”

That is a powerful passage for any Scottish nationalist such as me, but it goes far beyond that. It sets out the beginning of democracy and outlines the right of people to depose a leader who is not acting in their interests. No longer would they tolerate a king who made deals and alliances without the consent of the people.

We should be thankful that the idea has taken root in many parts of the world. If anything goes to the heart of our culture, it is the idea of democracy. It is believed that the ideas of the declaration had a direct influence on the framers of the American declaration of independence four centuries later.

On 20 March 1998, the US senate passed resolution 155, which stated:

“April 6 has a special significance for all Americans, and especially those Americans of Scottish descent, because the Declaration of Arbroath, the Scottish Declaration of Independence, was signed on April 6 1320, and the American Declaration of Independence was modelled on that inspirational document.”

In other words, the Senate of the United States recognised the influence of the declaration of Arbroath, which led directly to perhaps the most famous of all modern political declarations and the subsequent constitution of the United States. The declaration of independence states:

“We hold these truths to be self evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.”

Of course, many nations have adopted the American constitution, or parts of it, in their constitution. The ideas of democracy that were born in the declaration of Arbroath in 1320 flow through to the modern world—to the United States and to the modern democracies that have established their constitution following that country. A resolution of the American Senate established 6 April as Tartan day in the United States, which is a day on which Scotland and all things Scottish are celebrated throughout the country. Heritage is not just about buildings and sites; it is also about ideas and the places where such ideas originated. That is, at least, to some extent recognised by UNESCO, as I mentioned in relation to the conditions it laid down.

Arbroath abbey can justifiably claim to have been one of the places where democracy put down its first roots, and it is worthy of recognition by UNESCO for that alone. That brings us on to another important reason why the Government are wrong to consider changing the scheme of UNESCO listings—at least in relation to the more draconian options proposed in the PricewaterhouseCoopers report. Since 1947, the Arbroath Abbey Pageant Society has regularly performed a re-enactment of the signing of the declaration, and an impressive visitor centre has been created at the abbey to explain the history of the building and the declaration. In short, Arbroath abbey has been extensively promoted as an important tourist destination. The advent of Tartan day has increased interest throughout the United States and, indeed, in Canada, which also has a Tartan day.

This year—the 250th anniversary of the birth of our national bard Robert Burns— has been designated as the year of homecoming by the Scottish Government. The year of homecoming was officially launched at the weekend, and is designed to encourage Scots expatriates and those of Scots descent from around the world to visit Scotland and, we hope, boost our tourism industry. It is vital that we do so at a time of recession. Tourism is still a huge industry in Scotland, as it is in other parts of the UK. The international interest in the declaration of Arbroath and its effect on democratic thought throughout the centuries will play a pivotal role in encouraging expatriates to visit Scotland, and Arbroath abbey in particular.

Following the Cabinet meeting in the midlands, even the Prime Minister acknowledged in a recent speech that tourism would play a vital part in bringing us out of recession. In its report, PWC also recognised that one of the benefits of being listed is that it can increase tourism. In the year of homecoming and at a time when even the Prime Minister is seeking to boost tourism, what message is sent if the Department of Culture, Media and Sport, which is responsible for the promotion of tourism, says that we no longer wish to promote our great monuments and buildings as sites of international significance? Is it not the craziest time to embark upon such a policy—if, indeed, there is ever a time to embark upon such a policy?

I fully appreciate that the Minister will say that consultation on the matter is ongoing. She will not throw up her hands today, and say, “Okay, you’re right. We’ll dump the idea here and now”—although, frankly, she should. However, I hope that she will at least go back to her Department and consider the matter further. I also hope that she will consider the huge damage that the proposed changes to UK UNESCO listings would do to our heritage and tourism industries at the very time when they seek a boost to help in the battle against recession.

The preferred option suggested by PWC may work against the claims of sites such as Arbroath abbey, because of the seeming bias against more ecclesiastical sites. As I have tried to explain, Arbroath abbey is much more than that. We need to make that point now before the consultation is complete. We need to continue making that point and push forward the campaign to show Arbroath abbey’s status in the history of Scotland and in the history of democracy throughout the world.

As I said at the outset, the campaign is broad based and has huge support in my constituency of Angus, and especially in my home town of Arbroath. However, it also has huge support around the world, from expatriate Scots and Caledonian societies and those with an interest in Scotland’s history and future. Many of us are waiting to hear what the Minister will say. I ask her not to close her mind to my important points. Such sites are vitally important; they have played a number of roles in history and could do so again in boosting our tourism industry. I hope that none of the changes that she and her Secretary of State will consider making to the system will work against the inclusion of such sites. Whatever option she chooses, I hope that important UK sites will continue to be proposed for UNESCO certification.

I congratulate the hon. Member for Angus (Mr. Weir) on securing the debate and on the passion and focus that he has brought to the subject. Arbroath abbey is very beautiful and incredibly important to the history of these islands. He did not mention that it is where the coronation stone—the Stone of Scone—was eventually found, just before the Queen’s coronation. I remember that it had been missing for at least two years, and as a little girl I followed the story with great interest. It eventually turned up at Arbroath abbey—for many of the reasons, I suspect, that he mentioned.

If the Minister is interested in the subject, I thoroughly recommend that she read “The Stone of Destiny”, written by Ian Hamilton, one of those who removed the stone from Westminster abbey. It is a fascinating insight into the story behind it.

I am fascinated by the subject, and the hon. Gentleman will know that my husband is particularly fascinated by all ecclesiastical buildings, including Arbroath abbey, so I shall take up his recommendation.

The hon. Gentleman is right: I am going to say that the Government are reviewing their world heritage policy. We are in the middle of a public consultation that began on 2 December and will end on 25 February. I understand his urgency, but given that the consultation is ongoing, I must confine my remarks to why we have chosen to hold it and the possible impact on future nominations. Given that he has read the PricewaterhouseCoopers report, some of my comments will be known to him. First, however, I would like to apologise to him. I have here a copy of my reply to his letter of 22 December, which must be winging its way to him as we speak. I am extremely sorry for the delay and shall let him have a copy. However, due to the Christmas break, I am afraid that our monthly targets sometimes slip a little.

This debate is timely and I welcome the opportunity to hear the hon. Gentleman’s views on the subject, which is a matter of national and international importance. As he said, where better to hold the debate than in this building, which became a world heritage site 22 years ago—not just for its architectural importance, but, like Arbroath, because it has a very important place in the history of our democracy. The Department for Culture, Media and Sport leads for the Government on world heritage issues, and is responsible for ensuring that the United Kingdom meets its obligations under the world heritage convention passed in 1972. We take that responsibility very seriously. As he mentioned, it is one of UNESCO’s most successful heritage conventions, and it has been signed and ratified by 186 countries. It has also proved to be a positive force in safeguarding the heritage of the countries that signed up to it.

The United Kingdom signed up to the convention in 1984, and has fully supported UNESCO and the world heritage committee in its implementation. From 2001 to 2005, the UK was a full member of the world heritage committee, stepping down only because our term of office came to an end. Over the past decade, our commitment to the convention has been reflected in our support for work on the revision of the operational guidelines, which govern how the convention is implemented, our encouragement of the world heritage committee in developing a strategy for managing the impact of climate change on world heritage sites—Abu Simbel being a clear example of that—and our supporting developing nations in putting together their own nominations for world heritage inscription.

Last year, the UK hosted an international expert working group on behalf of the world heritage committee to develop a framework for the recognition of sites of interest for the heritage of science and technology. The recommendations of the meeting were welcomed by the world heritage committee at its annual meeting in Quebec last July. We have also contributed funds for bilateral programmes to support world heritage in other parts of the world, including Anguilla and St. Lucia, and to help to start up the world heritage fund in Africa. At national level, the Government have been working to enhance our protection for the world heritage sites in the UK, which we are privileged to have. We are, as I said earlier, and as the hon. Gentleman knows, in the throes of a review considering how best the policy on the nomination of sites can reflect the world heritage committee’s priorities.

Inscription on the world heritage list is the highest possible heritage accolade and I fully understand the aspirations of those wishing to achieve it. As the hon. Gentleman said, there are 178 sites in more than 145 countries. We are lucky enough to have 27 sites spread over an enormous geographical and historical range. The UK is in the top 10—to be accurate, it is equal seventh—in terms of the number of sites represented on the world heritage list. This is a great privilege, but it also brings a great deal of responsibility with it.

The route to world heritage status is not easy and the process is, of necessity, selective. World heritage sites are recognised by the committee as places of outstanding universal value to humanity and many, even though they are of national and international importance, will not meet UNESCO’s stringent criteria for inclusion on the list. To be included on the list, sites that are likely to be put forward in future years must first go on their country’s tentative list. The current UK tentative list was published in 1999 and contains 25 sites, nine of which have since been inscribed and one more, Pontcysyllte—I have not pronounced that well—a canal and aqueduct in Wales, has been nominated for consideration by the world heritage committee this summer. This week, we will submit Darwin’s landscape laboratory for consideration next year and work is under way for the nomination of the twin monastery of Wearmouth and Jarrow in 2010.

UNESCO requires states that are party to the world heritage convention to review their tentative lists every 10 years. In addition, as the hon. Gentleman rightly said, UNESCO is pursuing a global strategy to redress imbalances, both geographic and thematic, on the world heritage list. For example, Europe and north America have 50 per cent. of the sites on the list, while Africa has only 9 per cent and the Arab states have even fewer, at 7 per cent. That unbalanced representation has led UNESCO to ask the well-represented countries to consider slowing or even stopping their rate of nomination.

UNESCO is limiting the number of nominations to a maximum of two per country per year, which puts a great deal of pressure on countries with tentative lists containing many aspirant sites. The UK is one such country. The interest in nomination grows each year, as does the number of aspiring sites. World heritage status is seen as being highly desirable in terms of prestige and economic benefit. As the Minister with responsibility for tourism, and the Minister who called the summit at which the Prime Minister spoke, I am keen that such events and site-led tourism should be developed, because people do not come here for our weather; they come for our heritage and other things that they can see.

The cost of bids can be high—up to £400,000 according to estimates—and has to be borne by the local bid partnership. The cost cannot be retrieved if the bid fails, and there is no guarantee of inscription at the end of the process. Given those considerations, the Government felt that it would be irresponsible not to take a close look, when formulating future policy, at the costs and benefits of world heritage status. There are many questions to consider. For example, is designation sustainable? Where are the development pressures? What is the balance between the benefits and costs of such status?

Another important question is whether the benefits have been overstated. Those, however, are questions not for the Chamber, but for the ongoing public consultation on this matter. We hope that the public, including the people of Arbroath, will respond to the consultation in a way that gives us a wide range of opinions. I look forward to hearing the outcome of the consultation and to reading the responses of those who are responsible for Arbroath abbey.

I thank the Minister for giving such a clear exposition of the situation regarding sites. On costs, those who are campaigning for Arbroath abbey understand that, given the amount that they will have to raise, and given what has to be done, it might be many years before an application for site status can be made, but a great concern is the idea that the Department is going to cease to put sites forward. I appreciate that the consultation is ongoing, but can I at least go back to those campaigners and say that there are various options, and that complete cessation is unlikely to be the one that goes forward?

In a consultation, I, as a Minister, cannot rule anything in or out, but it is a consultation, there are many options and we are looking at all of them. Believe me, we have heard what the hon. Gentleman has said. I wish him the very best of luck with Arbroath abbey. He is passionate about heritage in his constituency and his constituents are lucky to have him. However, I counsel him against what I call “waiting to get thin” syndrome, whereby people wait for something to happen before doing anything to advance the situation. There are many things that Arbroath and other sites could do to reap some of the benefits that are inherent to inscription on the world heritage status list. Again, I wish him luck.

Payment Protection Insurance

I thank Mr. Speaker for selecting this subject for debate. Payment protection insurance is very important, and is much wanted just as people are losing their jobs. However, what has been sold, in a widespread manner, can only be described as not fit for purpose. It is failing people, and it has been a disaster.

Payment protection insurance is typically sold with personal loans, credit cards and finance agreements to help individuals to repay what they owe if they are unable to work due to sickness or redundancy. It is big business. It is estimated that in 2006, 20 million PPI policies were in force in the UK, but as I said, they are deeply flawed and clearly problematic.

I came to the matter when I saw an article about a Competition Commission investigation into PPI that estimated that companies offering such policies were overcharging consumers by a massive £1.4 billion each year due to lack of competition in the market. I tabled a parliamentary question in July 2008 and received an answer from a Treasury Minister. I asked the Chancellor

“what steps his Department proposes to take on overcharging in relation to payment protection insurance policies as reported by the Competition Commission.”

The Economic Secretary to the Treasury replied:

“The Competition Commission’s report…is a provisional findings report. Her Majesty’s Treasury will maintain a close dialogue with industry and the independent Financial Ombudsman Service, Financial Services Authority, Competition Commission, and the Office of Fair Trading.”—[Official Report, 21 July 2008; Vol. 132, c. 725W.]

That is a helpful reply, but the Treasury clearly needs to act on its work with those organisations.

Which? staff followed up my question and met me. Which? believes that PPI is a fundamentally bad product that can cost an individual thousands of pounds yet lets them down when they most need it. Research by Which? and an investigation by the Financial Services Authority also found widespread mis-selling in the market, as salespeople use high-pressure tactics to sell unsuitable PPI to vulnerable customers. Which? said in a letter to me that

“as many as 2 million loan PPI policies”

may have been mis-sold. Even when PPI policies are sold according to the rules, they can often add between £2,000 and £3,000 to the cost of a £7,500 loan, which then attracts interest. That can be a massive financial burden for individuals on low incomes, who are more likely to take out PPI, as the Competition Commission reports.

The problem has been going on for a long time, and the FSA simply has not got to grips with it until now. It has started to, but it is not doing enough. Like the whole banking system, the FSA has been asleep at the wheel. It needs to get its act together, and the Government need to chase it up.

What is wrong with PPI? Which? has been campaigning about it for 10 years, and published a report last October pointing out the main problems. It is expensive, as I have mentioned. When it is sold alongside a loan, it is often added to the amount, attracting interest throughout the term of the loan, even when the insurance has expired. It is not fit for purpose. It has numerous deficiencies; it often pays out only for a limited time, such as 12 months, or pays only the minimum repayment amount each month on credit cards rather than paying out the amount borrowed.

PPI is mis-sold. Research by Which? and the FSA shows that advisers often fail to make it clear that the policy is optional, do not mention exclusions that would prevent an individual from being able to claim and do not properly explain the payment methods for the insurance. Many individuals do not need PPI, as they are covered through their employer. Others would be better off with an income protection policy instead.

A lot of shady practices go on. An article in The Independent on Sunday on 18 January referred to the sale of policies by Churchill and Ant Insurance that were really just accident, sickness and unemployment policies dressed up as income protection. There is a difference between the two. The article said:

“It might seem technical, but real income protection policies offer much more valuable benefits—ones that those who buy ASU miss out on.”

The article quoted Kelly Ostler-Coyle, spokeswoman for the Association of British Insurers, which represents the insurance companies, who said:

“There are differences between income protection and ASU policies, and it is important that consumers are able to understand these through product literature.

We expect our member companies to ensure all their products are properly labelled and that policy terms and conditions are written in clear language that consumers can easily understand”.

Well, Ant and Churchill did not do that in the case I have mentioned and many other companies have not done so.

Egg, for example, has just been fined by the FSA for aggressively and unfairly selling policies and even for selling unsuitable policies to customers. It sold 106,000 credit card PPI policies at an average cost of £156. The FSA finally got its act together in December last year and fined Egg for those failings. The fine amounted to £721,000, after Egg obtained a 30 per cent. discount for settling early with the FSA.

What Egg was doing was out of order. It made calls on spec to all sorts of people, including its customers. It did what is called objection-handling, so when the customer said, “I don’t want it”, pressure was put on them through all sorts of sales techniques. It overemphasised the positive features of the PPI, offered inducements, such as a free period, and said that people could cancel the insurance later if they did not want it—but the company did not proceed with the cancellations. In some cases, even where the customer did not consent, the PPI was applied to their credit card anyway. That was malpractice. Egg is expected to pay £1.67 million for every 10 per cent. of customers who receive a refund.

The FSA has finally got its act together, although it is questionable whether that is sufficient, in such circumstances, to change what has been going on. However, it is not just Ant, Churchill and Egg. Alliance & Leicester, Barclays, the Co-operative Bank, the Lloyds Banking Group, RBS and NatWest, for example, are all pulling out of the PPI market for unsecured loans, which implies that they were mis-selling or, at least, that PPI was not being applied as a proper protection policy.

The FSA has taken enforcement action against 20 firms found guilty of failings with PPI, including HSBC, Land of Leather and Liverpool Victoria. In its research, Which? shows that as many as 2 million loan payment protection insurance policies have been sold to people who may never be able to make a claim because of the exclusions and other aspects of the policies.

According to the Competition Commission, 4,343,466 active single-premium PPI policies had been distributed by the 12 largest distributors by the end of 2006, so there are a lot of problems, because those stand-alone single-premium policies were sold alongside loans or finance agreements. The PPI was sold as a single-premium policy, which means that a lump sum covering the cost of the insurance was added to the amount that the customer borrowed. The customer ended up paying interest on both the insurance premium and the loan, which was an extra burden on them.

The PPI policies are unreasonable when applied to credit and store cards, because they often last for only five years, so if the loan or finance agreement is for longer than five years, the individual will still be paying interest on the policy long after it has expired.

I congratulate my hon. Friend on raising this issue. I, like him, met Which? to discuss the matter, and it has come to my attention that if someone is in the habit of using a credit card and pays off the balance of the monthly account within the normal time limit, they could be double charged. If the bill arrives mid-month, they are given three weeks to pay, but if they purchase in-between times and leave it until the last two or three days to clear the account, payment protection insurance is charged not once but twice.

That is a well-made point, detailing another serious flaw that is unfair to consumers. There are some really unfair practices going on. Which? is not alone in pointing them out; Citizens Advice, in its parliamentary newsletter to Members last year, called PPIs a “Protection Racket” and said that they are

“over expensive and often unsuitable and that lenders are ripping off, rather than looking after their customers.”

We are talking about borrowers who are trying to be responsible by taking out such insurance, but they are being ripped off and far too many of them are not protected. Citizens Advice also cites the example of

“a full-time employed homeowner who had taken out a secured consolidation loan for £60,000 with an additional loan for £15,000 for Payment Protection Insurance in case he lost his job, or suffered ill health. The client didn’t realise that the PPI was only for 6 years, despite the term of the secured loan being 20 years. As such, the client has had his indebtedness increased by £15,000 for little discernible benefit, being unable to cancel the PPI or arrange other cover.”

The Minister used to be a Minister in the Department for Work and Pensions so he will be aware of the point that I am about to make, because there is a benefits deduction aspect. Which? told me:

“However, we are concerned that an individual receiving money as the result of claiming on a stand alone protection insurance policy is likely to see their entitlement to means-tested state benefits affected. The key trigger is that the payout is paid to the policyholder and is therefore viewed as income by the DWP. This leads to a reduction by 50 pence in benefit payments for every £1 of insurance payout received.

We feel that under these circumstances, it is unfair that benefits should be affected, and should not be classed as income when assessing entitlement to benefits. We believe this issue needs to be addressed to ensure that people taking responsibility for their finances through protection products are not penalised.”

That is unfair. At the very least, customers should have their position explained to them.

In the time remaining, I shall discuss what the Government should do. The FSA has not been tough enough; it needs to step up its enforcement activity and there must be higher fines for mis-selling. Where mis-selling has taken place, customers must have a remedy that informs them and gives them the right to seek and receive redress. They should be able to claim back PPI premiums where they were mis-sold, and robust, value-for-money protection products—proper income protection—must replace PPI.

The Competition Commission’s final report is due before the statutory deadline of 6 February. It has announced some provisional remedies; in particular, banning single-premium PPIs and proposing a 14-day break between the sale of the credit product and the sale of the PPI. Those provisional remedies must be made permanent, despite the industry’s pressure and clamour for them not to be. Indeed, I have letters from the Association of British Insurers and the Finance and Leasing Association, which represent the industry, saying that PPIs are worthwhile products. In theory they are, but in practice they have not been. The FLA says that the product allows for protection when there is a change in personal circumstances. That is true if the policies are proper products, but far too many are not. The ABI says that claims are

“up 113 per cent. in October 2008 compared to a year before”,

but are they being paid out, or do all the exclusions come into play?

The FSA needs properly to monitor the situation to ensure that claims are paid out and that any loophole is properly investigated to see if there was a case of mis-selling. There needs to be a change in the whole market in relation to the products. There should be proper income protection, not get-out clauses. It is a tragedy that the FSA has been asleep at the wheel, because this is the very time when such protection is needed—when unemployment is increasing. The Government need to step in and sort out the market, so that it is proper and fair for consumers.

I congratulate my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) on initiating such a timely debate and on shining a bright light into some slightly dark areas of our financial system. I shall not detain hon. Members long, but I want to raise with my right hon. Friend the Minister the case of my constituent, Mr. Mohammed Aitkaddour. He voluntarily entered into payment protection insurance for his mortgage and was explicit, when he took out the policy, about the fact that he was suffering from back pain, so that was a specific exemption in his policy. However, his wife, Alison, came to my surgery at the beginning of December to say that Mr. Aitkaddour’s diagnosis was actually lung cancer that had metastasised into a tumour that was affecting his spinal cord, so the back pain had been caused by the lung cancer tumour.

Alison had been in contact with Halifax Insurance Ireland Ltd and it had refused the claim. The only reason why my constituent had not been in trouble with her mortgage company when her husband was signed off as unable to work was that she had taken time off from her job at a local school and was having the first three months of sick pay, so she was on full pay and was just about able to nurse her husband through his illness.

Given the gravity of the situation, I wrote immediately to Halifax Insurance Ireland, but was quite astonished by the letter that I received from the company on 18 December:

“I can confirm this matter has been…investigated. However, we are unable to discuss specific claim details with third parties. Please be assured that Mr. Aitkaddour has been contacted detailing the outcome of the claim and the reasoning behind the outcomes of our investigations.”

That is the first time, as a Member of Parliament raising a constituent’s issue, that I have been fobbed off in quite so egregious a manner. It was left to me and my staff to contact Mrs. Aitkaddour in the new year to find out what had happened with her claim. On contacting her, we discovered that Mr. Aitkaddour had died on 30 December, but that the claim had been honoured by Halifax Insurance Ireland, although it had not written to us to let us know.

I raise that case with the Minister as an example of a responsible citizen being absolutely honest and open about his medical condition. Had his wife not been in work, they would have been in mortgage arrears. She would now perhaps be in the first stages of house repossession. The way that these companies handle people’s claims, even when there is parliamentary intervention, leaves a lot to be desired. We need to ensure that people who are mis-sold these policies have a remedy. I am perhaps more cynical than my hon. Friend the Member for Leyton and Wanstead, but I think that one of the reasons why so many companies are getting out of the insurance market in these difficult economic times may be that they are not making quite as much money out of people as they were in the good old days.

I, too, congratulate my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) on securing the debate. I am grateful to him for drawing our attention to this important issue, and for drawing his concerns to my attention previously as well.

Payment protection insurance is potentially an important product. When sold properly, it protects someone’s ability to maintain loan repayments and helps people to avoid getting into debt should they be unable to keep up repayments from their own means because of accident, sickness or unemployment. However, while endorsing the potential value to consumers of this type of product when it is sold in a proper manner, I entirely accept the argument made by my hon. Friend, and indeed all those who have contributed to the debate, that such products are often sold incorrectly; they have often been mis-sold. That is the heart of the problem.

Typically, PPI cover is purchased through the lender at the same time as the credit agreement. High street retail banks and building societies account for about 80 per cent. of the PPI policies that are sold. It is not usually compulsory to buy PPI. Some lenders, however, may suggest that mortgage PPI is appropriate for some customers. It can be sold as a single-premium policy or as a regular-premium policy. The concerns of my hon. Friend centre on the single premium variety in which the premium is due at the start of the cover period—it is often added to the loan with interest costs attached—and has complicated redemption fees.

PPI compensation is generally payable in the event of a reduction, or complete loss, of income, and is usually paid at monthly intervals for up to 12 months. However, about 25 per cent. of PPI claims are rejected, as has been mentioned. I am glad that the claim in case of the constituent of my hon. Friend the Member for Wakefield (Mary Creagh) was ultimately honoured. The main reasons for rejection are the identification of a pre-existing but unacknowledged condition, voluntary unemployment, the claimant not being actively at work when the claim event took place, the qualification period not being met or the claimant not being in 12 months’ continuous employment before the insurance contract was entered into.

Insurers compete to provide PPI policies to lenders, which then distribute the PPI policies alongside their credit agreements to consumers. There is often profit sharing between the lender and insurer—usually through commissions or bonus agreements—with the final price being set by the lender. Although consumers can buy PPI independently of the primary product provider, it is not common practice for them to do so. Sometimes that is because they do not know that they can.

My hon. Friend the Member for Leyton and Wanstead set out the criticisms that are levelled at PPI. He says that there is a lack of competition in its sale, which leads to high prices, and that it is poorly understood as a product. Efforts have been under way since 2005 to investigate and address those criticisms, involving organisations that are independent of the Government. The Financial Services Authority, which is the lead regulator, the Office of Fair Trading, the Financial Ombudsman Service and the Competition Commission have all been involved.

The FSA has been regulating the sale of general insurance, including PPI, since January 2005. It recognised that PPI was a complex retail product, and its sale was identified as an area of higher regulatory risk. The FSA set up a regulatory programme to improve sales standards, limit consumer detriment and raise consumer awareness. As a result of that programme, the FSA has taken enforcement action against 20 firms, as my hon. Friend acknowledged, and issued almost £12 million in fines.

The most recent action involved the FSA telling firms last week that, if they are not capable of selling PPI properly, they should stop selling it. A number of lenders had already ceased to sell single-premium PPI for unsecured loans, and several more have announced that they will withdraw from the market. My hon. Friend listed a number of organisations that have done so.

The FSA has also taken action to improve the selling of PPI for mortgages and credit cards. My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) touched on the credit card issue, and my hon. Friend the Member for Leyton and Wanstead mentioned the recent fine imposed on Egg, which was accompanied by an order that it conduct a review of all past sales.

The financial ombudsman offers those consumers who have been mis-sold a PPI policy an opportunity to seek redress if they are dissatisfied with the results of their complaint to their provider. The ombudsman plays an important role. He ensures that consumers do not lose out financially by making awards to them. Those awards act as incentives on firms to ensure that mis-selling is minimised, because if they continue to mis-sell, they will be penalised financially.

There has been a marked increase in the volume of PPI complaints received by firms and the financial ombudsman, who is receiving more than 500 complaints a week. Following an application by the ombudsman to the FSA, the FSA is considering ways to speed up the processing of claims. In April 2006, the OFT launched a market study, separate from the FSA investigation, to look in depth at PPI. It found evidence suggesting that how consumers purchase their PPI, their understanding of the product and the quality of information available to them hinder competition in the way that my hon. Friend indicated.

As a result, following consultation, the OFT referred the UK PPI market to the Competition Commission for a market investigation, as my hon. Friend also mentioned. The Competition Commission reported its provisional findings in June 2008. It found that, although PPI can offer useful cover and peace of mind in the event of customers having trouble meeting repayments, products can be overpriced and of poor value. The combination of the point-of-sale advantage and insufficient customer awareness and information means that PPI products might not face proper competition. The commission proposed several draft remedies, including a prohibition on selling single-premium PPI policies, an obligation to provide an annual statement of PPI costs and a reminder of consumers’ right to cancel. A number of those remedies have been consulted on and the final report will be published by the end of next week when we shall see the conclusions drawn on the changes needed in this area.

My hon. Friend mentioned the impact on means-tested benefits of receiving payments through PPI. Generally, PPI payments made direct to lenders so that they can make their mortgage repayments, for example, are not treated as income for the purposes of calculating means-tested benefits. I understand that it is open to anyone who buys a PPI product to arrange for any payments from that product to be made direct to the lender. If that is done, the customer is protected from the concern that my hon. Friend rightly raised.

Some payments direct to consumers might be disregarded for that purpose as well, but that is a slightly more complicated matter. However, it is possible to ensure that PPI payments are not made direct to the lender, in which case there will be no impact on the means-tested benefit. However, my hon. Friend is right to draw attention to that matter, because clearly it could make a huge difference to the value of the product to the consumer.

It is clear from the sheer volume of work—not least the number of complaints received by the ombudsman—that there have been significant problems in the market. I am grateful to my hon. Friend for drawing attention to them and for the work that he has done. It is also clear that the independent regulatory authorities are aware of the scale of the problem and are taking action where it is needed. Poor sales practices are being addressed, and consumers who suffered from them can apply for redress, either to the firm that sold them the policy or, should that fail, to the financial ombudsman. I hope that, as a result of this debate, more people will be aware of the steps that they can take to secure their own position.

Question put and agreed to.

Sitting adjourned.