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Westminster Hall

Volume 488: debated on Wednesday 4 March 2009

Westminster Hall

Wednesday 4 March 2009

[Joan Walley in the Chair]


Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Tami.)

I sometimes point out to the Whips that I follow a different clock, but they never seem to agree with me.

It is a great opportunity to have this debate on Iran. Perhaps this year more than any other it is vital to examine our policy towards Iran and consider where in our history we have failed, what we are really trying to achieve and whether we are going about it in the right way. I shall consider three different points: how to build trust, who to engage with and whether our current policies are working.

Over the next 12 months in Iran, there will be presidential elections, there is the potential for the first civil nuclear power station to come on line and there is the real and threatening possibility of enough nuclear material to make at least one nuclear bomb being in the hands of Iranians. If we consider those points alongside the fact that there is a new American Administration, a collapse in the oil revenues and a worsening security situation in Afghanistan and Pakistan, I think that we would all agree that the short-term challenges are considerable, to say the least.

I have been the chairman of the all-party group on Iran for more than two years. In that time, we have heard from a range of experts on Iran—contributors from the US Government, ambassadors, academics and trade unionists. Some contributors were pro the current Iranian regime, some were against, and some just wanted to share their wisdom. Only last month, we met a delegation of Iranian MPs from the Majlis, and more recently we met the Syrian ambassador. I visited Tehran with two of my colleagues, including my hon. Friend the Member for Aylesbury (Mr. Lidington), in July and I am due to go again soon. Our meetings are well attended by all parties and those from both Houses.

It is tempting to start with the usual speech about how historical and cultural the country is. I have heard it many times and it usual predicates the tit-for-tat rhetoric that we so often hear when dealing with Iranian issues. I think that it is sufficient to say that Iran is an ancient cultural and strategic power that we cannot afford to ignore or to fail in our efforts to improve relations with. The new world order needs Iran to become not only a member, but a player. Too many of our discussions about Iran are bogged down in the past. We should start by recognising that Britain’s role in Iran over the past century has, on balance, been more harmful than benign to many of the people of Iran. We have made mistakes. It was wrong of us to back Saddam Hussein in the horrendous Iran-Iraq war of the 1980s. Insult was added to injury when the indictment against Saddam Hussein only dealt with his crimes against Iraqis; no mention was made of the gas attacks on Iranian civilians and military forces.

Even though I was only eight at the time of the revolution and 10 during the Iran-Iraq war, I was deeply struck on my recent visit in July by how that conflict dominates so much of Iran’s society today. The tragedy of our policy in the west is that we still do not see Iran as it sees itself, and we have not communicated enough for Iranians to understand the way that we do see it. Too many people stopped the tape when the hostage crisis finished in January 1981, and as the Islamic revolution entrenched and western opposition hardened, it became in the interests of too many people in the US and Iran to maintain hostilities. Revolutionary hard-liners needed a bogey man to continue the momentum and consolidate their control inside Iran. The west wanted revenge for the loss of their placeman, the Shah. To this day, the revolution is used by many to justify policies on both sides. Such policies have failed to give Iran its place in the world and have also failed to ensure a stable middle east.

As a 38-year-old, it would be easy to feel old in Iran where the average age is 26, but, like most of its population, I just about have the luxury of youth when it comes to setting aside the past and focusing on the future. I have hopes for a richer, better Iran, just as I have hopes for a better Britain. So, let us talk about the future. In my dealings with Iranians, I have learned that the heart of the issue is trust. We do not trust them, and they do not trust us. Do they have cause to mistrust us? It is a matter of public knowledge that Iran helped us to bring down the Taliban in neighbouring Afghanistan. We have failed spectacularly to deal with the resulting explosion in the heroin crop that all too often finds it way on to the streets of Iran and its major cities.

Let us imagine what Iranian politicians feel when we try to do deals with so-called Taliban commanders whose day jobs are as drugs barons. However, when our soldiers in Iraq and Afghanistan are killed by devices incorporating Iranian components, we rightly feel that Iran exports terrorism. On the nuclear issue, Iran suspended enrichment in 2004 in the hope that the United States would engage, but unfortunately it was snubbed. Iran might ask why it should do it again. There are numerous examples on both sides. Do I think that Iran will admit its role or that the UK Government will admit their failures? I very much doubt it. We often dance around the rhetoric, and many of us have met representatives of the Iranian regime and members, and have sat for hours listening to the tit-for-tat rhetoric with little getting done apart from drinking coffee. The choice is simple: we can dance around the matter, or we can move in favour of starting afresh.

How do we build trust? We can start by accepting that whatever we think of the Iranian Government, we must accept that they are a legitimate authority. Even among Iranians who oppose the Islamic revolution or the current President, there is an acceptance that the Government in Tehran rules by consent. We should not engage in regime change or seek to subvert the Administration. If necessary, we should be prepared to guarantee their security. We must recognise that Iran has rights, while at the same time supporting all its peoples’ rights—and by “all” I mean rights relating to faiths, genders and race. Iranian rights and human rights can be compatible.

There are other issues that need resolving. At home, we are faced with pressure from some to de-proscribe the terrorist group the Mujaheddin-e-Khalq—or the People’s Mujahedeen Organisation of Iran. The PMOI group has been active in terrorism since the 1970s, both inside and outside Iran. We should not forget that in the 1970s, it killed a number of US citizens and supported the storming of the embassy in Tehran. As well as acting as Saddam’s death squads inside and outside Iraq, the PMOI has consistently waged attacks on the Iranian Government. As recently as January this year, the US Department of State reconfirmed the MEK as being a foreign terrorist organisation. I know that the UK Government support that listing and I implore them to keep the group proscribed, whatever it takes.

I congratulate the hon. Gentleman on obtaining the debate and I apologise for missing the first minute of it. We have been through this matter and had debates on the proscription of the PMOI, and universally the British courts and subsequently the European courts have decided to de-proscribe it. What evidence does he have that it continues to be a terrorist organisation?

If the hon. Gentleman looks at the terrorism legislation of 2000, he will know that many of the court rulings are based on the legislation on proscribing an organisation. I think that proscribing is flawed. United States legislation is allowed to take on board whether the organisation still has the intent to cause acts of terror. Given that most of the leadership of the MEK and PMOI has not changed over a considerable period, it is not right to de-proscribe it. Of course, I respect the rule of law and therefore if the courts have said that, we have to follow the rules of the court. However, I implore the Government to reassess their terrorist legislation to ensure that when we proscribe organisations, we do so not just on the basis of what they seek to do at the current time, but on what they seek to do in the future and have done in the past.

My hon. Friend said that the PMOI has been involved in terrorism since the 1970s. The High Court in the United Kingdom has heard all the evidence. Some of us were present in court but did not hear all the evidence because some of it was heard in camera. So the court heard all the evidence, as has the European Court, which has concluded that since 2002, the PMOI—the MEK—has not been involved in terrorism. What possible justification does my hon. Friend have for the remarks he has made?

The statement I made in my speech about the activity of the PMOI comes from the Department of State’s recent listing, in which it gives its reasons for proscribing—[Interruption.] I consider US intelligence to be important in making these decisions. Having personally been involved in actions against the Provisional IRA and the IRA, I recognise that the past is just as important as the future. I would be interested to know whether my hon. Friend the Member for North Thanet (Mr. Gale) voted for our colleagues in Sinn Fein to receive allowances when the matter was raised in the House. I suspect that—[Interruption.] That person did not, given that he is not an active member of a terrorist organisation, although I am sure that in the past he was. I would like to move on.

It is important that we recognise that the PMOI and the MKO represent a dangerous organisation at the very heart of Iran, no matter what people’s views are on the regime. In fact, the supreme leader himself was blown up by the PMOI and lost one of his arms, and the second President of the Iranian Republic was killed. Imagine what Conservative Members would think of any deal with the IRA, had it been successful in killing half the Cabinet in the Brighton bombing. We must recognise that there are terrorist groups in Iran that would not help the cause, let alone move it forward.

The second question is, with whom do we do business with in Iran? People often ask me that because Iran, which does not have a political system like ours—no parties, no party leadership—is often driven by personalities and factions. Some would like to posture around the Iranian President, and some Iran watchers are toying with the idea of waiting for a new, perhaps more moderate President.

From the outside, no matter what Presidents look like or say, we should remember that the nuclear programme has gone on under reformist and conservative Presidents. We should recognise that the Iranian constitution makes it clear that power in Iran is nearly always, and always has been, with the supreme leader. It is the words and actions of Ayatollah Ali Khamenei that, in the end, can help forge a resolution. Constitutionally, it is he who controls the levers of the state—the courts, the media and the revolutionary guard—and even the President and Foreign and Defence Ministers must be vetted by his office.

My message to the new Administration in Washington and to the Government is to try to go to the top. Let us try to speak directly to the supreme leader. Let us ask him to put aside his role of speaking only to heads of Muslim countries, and to try to engage directly with the United States and to put aside historical preconditions, because that is the way to get some real resolution.

Perhaps because Iran is a revolutionary state, or perhaps because it is not governed by a party political system, parties, personalities and slogans take centre stage. Observers find it hard to distinguish gesture politics from real politics. A good example of the gap between official speak and actions is that in Iran it is illegal to have a satellite dish, but everyone has one. One can see them on driving down any road. As one diplomat once said, there is something very French about the Iranians.

If people believed every slogan, they would certainly think that they would be in danger going anywhere in Iran, but that is not the case. The Iranian people are friendly, approachable and engaging. We have to distinguish between slogans and reality. We are, perhaps, safer in Iran than in Saudi Arabia, so let us not get hung up on inflammatory statements made by the current President Ahmadinejad or on the “death to America” day, an annual event to which I have not yet been invited. If I can live with a Bobby Sands avenue outside a British embassy, I am sure that other people can live with other gimmicks.

Perhaps the real hints to where Iran is are in the writings of supreme leader Khamenei. On the subject of future engagement with the US, only last year he said to students in Yazd:

“However we have never said that the relations”—

with America—

“will remain severed forever…Undoubtedly, the day the relations with America prove beneficial for the Iranian nation, I will be the first one to approve of that.”

Regrettably, like several Islamic leaders, the supreme leader does not recognise the state of Israel, and that is a bad step for Iran and other nations. We must deal with today, and I agree with the right of Israel to exist. However, his words are not the same as the inflammatory language of the current President.

Ayatollah Khamenei’s language might not be the same, but the hon. Gentleman has already said that he is the supreme leader, and that he is the one who influences everything that goes on in that country. If he does not agree with the inflammatory language of the President, why does he not do something about it?

There are two things to say on that. First, Presidents come and go, and there is no history of supreme leaders intervening with Presidents. It would not be in the interest of the supreme leader domestically to do that. However, when it comes to determining the significance of the threat from Iran, we need to look to the supreme leader rather than the President. The man who has the authority to declare war is the supreme leader, not the President. The constitution will guide us as to exactly when we should be worried about statements by Iranian leaders.

The hon. Gentleman is making a thoughtful speech. He has huge expertise in this area, and I want to ask his opinion. As he just said, the supreme leader has written that he would be open to engagement with America if it were to change its approach to Iran. Does he think that an opening-up to America and the west by Iran could potentially undermine the Iranian leadership and threaten its theological underpinnings and that, therefore, it might walk away, or does he think that it is more confident than that and that it is prepared to engage, even if that meant much greater opening-up to the west and interchange with it?

I thank the hon. Gentleman for his intervention. I would agree with the latter suggestion. The supreme leader recently made an exception to his rule and met President Putin. Although President Ahmadinejad may feel undermined—we must remember that he came to power on a wave of nationalism and cheap shots—the supreme leader has realised that his strategy has failed. Iran has been weakened, and it has not made any friends in the middle east. The arguments between Egypt and Iran over the Hamas-Gaza problem demonstrate that Iran has become less popular in the middle east than it was at the start of the presidency.

The supreme leader is the one who can move things forward. I do not think that his position would be weakened hugely if he made such an attempt. Of course, Iran can always say no afterwards. It is the preconditions to engagement that have often held up talks—the requirement that Iran suspend its nuclear programme before talks, that kind of thing—and they do not move the process on. I am optimistic, but I do not underestimate the threat to Israel from Iran. I am not trying to say that it is all a bed of roses, or that the threat is a fiction—it certainly is not. There is a threat to Israel from Iran, and we have to deal with it in short time, before Israel exercises its right of self-defence.

The hon. Gentleman is making a thoughtful speech. In trying to build relations, gestures and actions are important, particularly in that part of the world. He will know that Iran’s uranium enrichment programme could eventually lead to nuclear weapons. Does he think that if this country, given its long-term non-proliferation objectives, were to put the Trident decision on hold, such a gesture would help Iran to further its future objectives on the weaponisation of its uranium?

First, my understanding of Trident replacement is that it will still mean a reduction in the number of warheads, so it is a move in the right direction. Secondly, even if one were advocating the suspension of Trident replacement, that is not the same as advocating unilateral disarmament. I do not think that the gesture would work.

One could argue that western nuclear powers developed their weapons in the 1950s because of fears of instability. Certainly the French felt that it was vital for them to find their place in the world and achieve stability in what had been a very unstable Europe. Perhaps that is one of the factors that drives some of Iran’s neighbours to want nuclear weapons. Some may believe that a nuclear weapon will give them stability and a place at the top table. There are better ways of doing that, but, if my neighbours were Pakistan and Afghanistan, I would feel pretty unstable. I am sure that all of us would. However, the supreme leader is the man to do business with; history shows us that it is not the President.

What message can I give to Iran? What do the Iranian people need to hear from us to understand us better? First, the days of imperialism are over. Britain and the US do not want to make the Iranian people subjects, or to fill their country with spies and terrorists, which is often the first defence; we want Iran to be our friend. Iran must recognise that our fear of a nuclear bomb is born of the very modern desire for stability in the region.

I often ask myself why we in the west are so close to Wahhabi Saudi Arabia, when Saudi Arabia gives to Christians, Jews and everybody else fewer rights than even Iran does, and is less safe for us than Iran. Why is it that, over the years, we have been so close to Saudi Arabia? I am not even sure that Saudi Arabia officially recognises Israel either, so the only answer that I can come up with to my question is stability. Saudi Arabia provides stability in the region, and if Iran recognises that stability is the answer, it will also recognise that in today’s west, we value that currency more than anything else.

I am grateful to the hon. Gentleman for giving way in what is an excellent speech. Do the Iranians also have an incentive to engage more with the west because President Ahmadinejad came to power on a wave of desire from the overwhelmingly young population to see some of the material benefits that people in the west enjoy? On the occasions on which I have been to Iran, what has been most striking is that the anti-American rhetoric is a far weaker impulse than the desire to own a Michael Jackson CD and a pair of Levi jeans. If we could show the Iranian people that engagement with the west was of financial and material benefit to them, and that it would allow them to take their rightful place in the wider world, surely that would be a powerful incentive?

Yes, undoubtedly. If we had the time, economics, rather than sanctions and so on, would solve the Iran question, but, regrettably, we do not have that time. Ironically, one of President Ahmadinejad’s slogans when running for election was that he would refine more oil and give the revenue to the poor. Unfortunately, I think that he has replaced “oil” with “yellow cake”, because he now spends most of his money refining nuclear materials rather than benefiting his society economically. Interestingly enough, his popularity is not very high as a result.

A few moment ago, my hon. Friend said that stability was the most valuable currency in the west, and we recognise that. He implied that the Iranians should trade on it, but if stability was the most valuable currency in the west and we did not care about hanging people from the ends of cranes, and about human rights, we could argue that Saddam Hussein’s regime was stable and, certainly, that Robert Mugabe’s regime was stable. Is my hon. Friend in favour of that?

My hon. Friend lets himself down with that sort of question. He has to answer the question of why in the middle east we have other allies that openly behead people in squares and do not respect human rights anything like as much as Iran does. We seem to do business with many of those countries at the same time. I said earlier in my speech that human rights are very important, but they are compatible with Iran’s rights and we need to help Iran to recognise that. They are compatible with Islam too. It is remarkable that we trade with some of those other countries. The longest-term threat, which one hears about in Iran if one goes to the country, is Wahhabi Sunni Islam, rather than the Iranian regime. I said to the Iranians recently, “When you used your influence beneficially in 2006 to create a ceasefire between Hezbollah and Israel, you got closer to the top table than you’d ever been before. That is when you are powerful. When you use your influence the wrong way, such as with Hamas recently, you weaken yourself on the world stage and give no benefit whatever. It is a step backwards.” If Iran recognises that influence can be benign for all of us, it will obtain much more currency with western powers. That is my main message to Iran.

In this day and age, powerful countries are not those that create mayhem or fear, but those that use their influence to resolve conflicts. If they do that, they can take their place in the world order, as they hope to do. Members from all parts of the House are united on the policy of trying to develop better relations with Iran, but we must be clear about our end goals and whether the E3 plus 3 strategy works. I am always amazed that we have an overall strategy towards Iran. The E3 plus 3 is the European powers plus the United States, China and Russia, but the Chinese sell missile guidance systems to Iran, and the Russians are currently refitting two attack submarines. That is a problem, so Iranians see the E3 plus 3 as weak.

Under George W. Bush’s presidency, the E3 plus 3 was certainly leaderless; it did not have much strength behind its rhetoric. There is now a great opportunity for the United States, with a strong President who has a proper mandate, to help to develop clear leadership on policy towards Iran and not to give in to the neo-con wing that often undermined policy in the middle east and has been shown to have failed miserably. There is a real opportunity for President Obama to create a strong “3” to add to the E3, to enable us to achieve a resolution. We will know sooner rather than later—when the United States finalises its formal position on Iran—whether there are going to be preconditions for talks. I hope that there will not be. I have first-hand experience of having to talk to terrorists without preconditions; it is not easy and it is certainly not nice. However, some preconditions never work; they only play into the hands of people who do not want a resolution.

We must then examine the sanctions regime, because it strikes me that, historically, Iranians have been incredibly successful at trading. They were at the centre of trade routes for centuries, and they have already shown that, no matter what sanctions we try to impose on them, they are able to outwit them. They recently launched a satellite into space, they trade through Bahrain, which is opposite Iran and has a large Iranian ethnic population, and they are very canny traders. The problem is that sanctions help Iran’s religious conservatives, who demonstrate in their teachings and writings that isolationism is the way forward, because it keeps the revolution pure. With sanctions, we prevent the economic growth that would help to reform the way in which young people look at Iran today.

We must make it clear to our Government that next time we come up with sanctions, either they must be uniformly applied or we should not go down that route at all. That is the problem: we start with a sanction and China and Russia do not back it. Recently, Switzerland signed a big contract with Iran to obtain gas. There is a problem delivering the gas, but the contract showed that, when push came to shove, Switzerland did not hang around to stop helping the Iranian regime. Indeed, the Italian Foreign Minister recently urged Italian companies to do more business with Iran—trusty Italy comes to the rescue on another subject.

We must understand that Iran is desperate to prove that it has rights in the world and is able to demonstrate those rights. We must assure Iranians that we are not going after control of their country: our rhetoric does not match our actions, and we need to bring the two into line. Britain is known by the Iranians for having soft rhetoric but hard actions, whereas the Americans are known for having tough rhetoric but an inability to carry out their actions. There is challenge to be met in respect of whatever policy we come up with, which will no doubt be formed in response to the policy of the United States in the next few months. I urge Her Majesty’s Government to come up with a clear road map that is strong, reinforced and shows Iranians the way, but at the same time demonstrates to Iran that we know that we could have done things better in the past.

I congratulate the hon. Member for Lancaster and Wyre (Mr. Wallace) on his interest in this subject and on getting this debate. However, I view some of his words a little sceptically and I wonder whether he is looking at the Iranian regime through rose-tinted spectacles. I agree that we need to engage with that regime, that we need to win the trust of the Iranian people and that we need a bigger carrot than we are currently offering if we want to get that engagement, but I found his comments rather conflicting. He said, for example, that we needed to engage with the regime, whatever we think of it and whatever actions it has taken in the past. Yet he does not want us to engage with the People’s Mujahedeen Organisation of Iran, because it may have past links to terror.

The hon. Gentleman asked the hon. Member for North Thanet (Mr. Gale), who is his hon. Friend and my parliamentary neighbour, whether he would have supported the Conservative Government’s talking to Irish terrorists if they had succeeded in killing members of the Front Bench. I remind the hon. Gentleman that they did; they killed Airey Neave a few feet from where we are standing now. To the credit of the last Conservative Government, they engaged with Irish terrorists and started the process that we were able to conclude. If violence is in the past, as it would appear to be with some of the organisations involved with issues in Iran, which are operating outside that country and have renounced violence, we have to engage with them and give them a voice, because surely that is what being members of a democratic society requires us to do.

I do not consider myself a specialist in foreign policy and I rarely speak on the subject in this House. But I became exercised about our relationship with Iran and its influence in the middle east as a result of a visit to Israel and Palestine last year. During that visit, I heard first hand about the influence that Iran wields, particularly over Hamas and, increasingly, in the north with Hezbollah. In return for providing resources to those organisations, Iran expects them to engage in continued violence against Israel. There is no questioning that. If I had been told that on my visit only by Israeli politicians, I might well have concluded that they would say that, wouldn’t they? But I was told the same thing by Palestinian politicians when I visited the west bank. Again, if those politicians in Palestine had all been members of Fatah or had links to it, I may have come to the same conclusion, because they have a dispute with Hamas. But I also heard it from Palestinian politicians with no links to Fatah and who are not beholden in any way to Fatah.

It is clear to me, from subsequent events—the actions that we saw as people tried to negotiate a ceasefire after the Israeli attacks on Gaza in January—that Iran is making its continued support for Hamas dependent on Hamas’s continuing to allow, or turn a blind eye to, attacks on Israel. While those missile attacks on Israel continue, the Israelis will continue to attack Gaza and the dispute and the awful violence that is happening at the moment will continue. We have to detoxify that whole area if we are to make any progress.

We were getting somewhere in the north. I visited Israeli settlers on the Golan, who were saying, “We will give up the Golan to Syria as part of a peace deal and, for the first time, we believe that a real peace deal with Syria is within our grasp. We can do a deal with Syria. We understand that giving the Golan back to Syria will be part of that deal. And we will go. We, the Israelis who occupy the Golan, will go as part of a real peace deal.” What has happened to that peace deal? Iran has exerted its influence again. It has started to try to build influence with Hezbollah and tried to make it clear to Syria that any continued relationship between Syria and Iran depends on Syria’s not making any progress with such peace negotiations. This is the reality of what I have called Iran’s toxic influence in the middle east. Until we detoxify that influence and get Iran to start engaging more positively and more constructively, we will never have a resolution to these problems.

How do we move forward? I mentioned to the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Harlow (Bill Rammell), at Foreign Office questions a few days ago that Einstein said that it was madness for people to carry on doing what they are doing and expect it to have a different result. It is clear to me that what we are doing at the moment is not having the effect that we would like.

If I do not regard myself as an expert on foreign policy, I do regard myself as an expert on nuclear policy and nuclear energy. I can tell the hon. Member for Lancaster and Wyre unequivocally that the uranium enrichment programme in which Iran is engaged is unnecessary for peaceful use of nuclear energy in this world. I accept Iran’s right to have a nuclear energy programme. I support nuclear energy in this country and I see no reason why it cannot benefit countries throughout the world. I would be 100 per cent. behind our engagement with Iran in helping it to build a peaceful nuclear energy programme. But it is not doing that. Iran now has enough uranium probably to build a bomb. It may not be able to construct the bomb yet, but that will come. It certainly has enough uranium to build a dirty bomb. Who can doubt, listening to the President of Iran’s words, that, in this world, an Iran with a nuclear bomb would be a nightmare that all of us and our children should do everything in our power to avoid?

We have to start tightening up the sanctions. The hon. Gentleman was right. We have to make some of our partners in the E3 plus 3 a bit more honest about those sanctions. Russia is helping Iran to build one of its nuclear reactors and that has to stop. China is selling equipment to Iran that it should not be selling and that has to stop. Even in the European Union, Austria, Cyprus, Luxembourg and Greece are all putting their business interests in Iran before the interests of their citizens in the wider world. We need to deal with that in two ways: formally, within the EU, and by raising the rhetoric in those countries, so that the people there realise what their Governments are allowing to happen. I do not believe that the people of Austria, Greece and the other countries that I mentioned want Iran to have a nuclear weapon.

We must tighten up the financial sanctions. Our own Lloyds bank was found guilty of helping—inadvertently or advertently I will not say—Iran to launder money to get past the sanctions. Now we own a big stake in that bank. If any of those banks in which we, the British Government, have a stake are found to be continuing to launder money on behalf of the Iranians, that would be the same as the British Government doing it. So it must stop.

We must tighten the sanctions to avoid Iran being able to get access to the financial sector and the City of London. I admit that we might have done slightly more harm to the Iranian regime by allowing its banks to become involved in the financial services sector over recent years, but we now need to ensure that they are excluded. We also need to tighten up our efforts through the United Nations and Europe.

I have decided to become involved in the debate for the reasons that I mentioned. We need to build trust with the Iranian people and we need a bigger carrot as well as a heavier stick. I encourage my hon. Friend the Minister and the Government to do more to involve the Arab nations in our effort to get Iran to engage constructively in the future, because they have as much, if not more, to lose from a nuclear-armed Iran as we have.

We need to tighten sanctions, and to make it clear to Iran that we are serious. We must explain our position to the people of this country so that they understand exactly how serious the matter is, and that taking action now will avoid the violence that will come if we are weak or lack resolve.

Order. It may be helpful to tell hon. Members that I hope that we can start the winding-up speeches at 10.30. I see no problem with that, but I remind hon. Members so that everyone can speak.

I shall be brief. I had not intended to speak and came to listen, but having done so, I am moved to comment a little.

When introducing the debate, my hon. Friend the Member for Lancaster and Wyre (Mr. Wallace) described the regime in Iran as legitimate, by which I assume that he means that it was elected. Hamas was elected, but I do not recall the United States or the United Kingdom legitimising that regime on the basis that it was democratically elected, so I can only conclude that one man’s legitimacy is another’s terrorism.

The People’s Mujahedeen Organisation of Iran and the National Council of Resistance in Iran have been consistently and variously described as terrorists by the British Government and others, and there is not much argument that they have engaged in terrorist activity in the past. Forgive me, but Jomo Kenyatta was a terrorist. Someone called Nelson Mandela was regarded as a terrorist, as were Gerry Adams and Martin McGuinness. But games move on, and if we are to look to the future of the middle east rather than the past, we must accept the fact that there are people of good will whose past is not admirable to us or even to some of them, but who have an important role to play. If we are talking about engagement, the time has come for the United Kingdom and European Governments to engage with those other organisations that are legitimate and have an interest in the democratic future of Iran.

The British Government fought furiously against de-proscribing the PMOI. They resisted the findings of the European Court of Justice and tried every which way not to de-proscribe it, as indeed did the European Council of Ministers. The Foreign Secretary recently attended a meeting at which I was present on the Upper Committee corridor. When I asked him whether the organisation should be proscribed, he told me that I did not know all the facts. I do not know all the facts. I am not privy to the secret files of MI5, MI6 or, as my hon. Friend the Member for Lancaster and Wyre apparently is, the State Department.

If they were on the website, they would not be secret. With great respect, I suggest that secret files are secret, and not published on the website. Irrespective of whether I have been privy to those documents, the Court was; those MI5 and MI6 documents were made available to the judges.

I was privy to the discussions in the European Court of First Instance when the barristers representing the PMOI SE repeatedly asked for that evidence, but it simply did not exist. We anticipated a long adjudication, but it came the next day, because there was no evidence to justify the continuation of the ban on the PMOI.

I am grateful to the hon. Gentleman. There is evidence and evidence, but our Foreign Secretary—who am I to doubt him?—said that the information existed. If it did, it was made available to the High Court, and I attended some of the hearings. Our High Court judges are not blithering idiots, but they came down clearly in favour of de-proscription and said so clearly in their ruling. As a result, to be fair, the Government de-proscribed the PMOI.

The same thing happened in Europe. Notwithstanding the best endeavours of the United Kingdom Government to try to use the French Government to oppose the de-proscription of the PMOI by proxy—the French Government are still opposed to de-proscription— the Council of Ministers found in favour of de-proscription, so it has been de-proscribed. My understanding is that it is therefore no longer considered to be a terrorist organisation. The British Government’s secret service may regard it as such; the United States State Department may regard it as such; and for all I know, the Quai d’Orsay may regard it as such, but that does not make it a terrorist organisation today.

The PMOI and its supporters face a desperate situation in Ashraf city, where the Americans have handed control to the Iraqi Government on the understanding that the security of the residents will be maintained, but there are grave doubts. First, I would like an undertaking from the Minister on the record, in so far as he can give one—I appreciate that he may say that it is a matter for the Americans and the Iraqis, rather than us, but we have some influence in Iraq—that the Government will do everything to ensure that the residents of Ashraf city and the Iranians who are mainly supporters of the PMOI are secure.

Secondly, there is the small matter of PMOI funds, which are still frozen in France. The organisation has been de-proscribed, and the French Government are acting illegally, so will the Minister use such influence as he has in the European Union, particularly with the French, to ensure that those funds are released?

Thirdly, if we are to find a way forward, people must start talking to one another. Curiously, despite everything that I have said, I have no particular brief for the PMOI or the NCRI. I do not believe that they are the solution, but I believe that they have the potential to be part of the solution. I would like the PMOI, Pahlavi’s organisation and all those who wish to make a contribution to a genuinely democratic future for Iran to work together to secure what I believe we all want, irrespective of our position on the issue—free, fair, democratic and monitored elections in that country with respect for the outcome, whatever it may be. I would not want to predict at this stage what it might be. The people of Iran have a right to a democratic election, and then to adhere to its result.

Finally, will the Minister indicate whether the Government would look favourably on an application for a visa for Maryam Rajavi to visit the United Kingdom?

Like the hon. Member for North Thanet (Mr. Gale), I did not intend to take part in this debate, and I apologise for having to leave a few minutes early, so I shall have to read what the Minister says.

I want to concentrate on the narrow but important domain of human rights. The greatest condemnation of the mullahs’ regime should be reserved for their dreadful human rights record. I remind hon. Members that that state is probably second only to China in the number of people it kills by capital punishment, and there is an argument that it may kill more people than any other state. The hon. Gentleman referred to the way in which it conducts those punishments. Hanging people publicly from various capital equipment is horrific, and last Saturday’s Daily Mirror shows graphically the 59 people who were hanged in January.

Whatever else one thinks about Iran, it is a great nation. It is not Arabic, but consists of Farsi-speaking people. We should always respect it and want to work with it, but until it improves its human rights record, it is up there with the nations that I feel deeply about—including Sudan, Zimbabwe and so on—because of the way it subjugates its people.

As has been said, do not be a member of the opposition in Iran, because people who are have every chance of being arrested, imprisoned and subsequently hanged. Do not be a Baha’i. I was pleased to see early-day motion 937 on that issue, tabled by the hon. Member for Montgomeryshire (Lembit Öpik). Again, the Baha’i are being singled out for mistreatment, arrest and worse.

I was also pleased to see in today’s Hansard that the Minister has answered the hon. Member for Romford (Andrew Rosindell) on how many representations he has made to Iran on behalf of Christians. He said that he had made more than 40 representations. Do not be a Christian in Iran. Those are minority religions, but they are important religions. If we were mistreating Muslims in this country, I would expect us to be held to account in the court of world justice. Iran does it, because it appeals to the mob, and that has to stop.

Does the hon. Gentleman share what I am sure is the concern of the whole Chamber about the position on juvenile executions? The Minister, to his credit, has raised the issue and has had assurances from the Iranian ambassador that, in October 2008, there was a decree outlawing juvenile executions, yet there have been reports since then that that practice still happens in Iran.

It does, and again there is no effective defence for people.

The other issue, besides human rights, is the failing Iranian economy. In a sense, the suppression mirrors the economic failings. I know that in these times, when the whole world seems to be in difficulties, we can perhaps exaggerate the difficulties in other parts of the world to make ourselves feel less worried about our own situation, but there is an economic crisis in Iran, and it has resulted in even more pressure from the centre to deal with any form of opposition.

Iran is, of course, an oil economy: as the price of oil has collapsed, it has been able to earn far less revenue. It also has very high inflation, and the public of Iran are therefore hit both ways. We know that there is great unhappiness. Anyone who studies Iran will know that there are regular street demonstrations, until they are put down. There is a lot of insurrection on university campuses, but of course the secret service ensures that that does not last long. Even within the regime itself, there is a split between the hard-liners and the more liberal element, represented by Khatami. It is reputed that he will make another attempt to run for the presidency, but at the moment Ahmadinejad seems to have the support of the great leader Khamenei. That will probably mean that he is likely to win any election.

I shall finish by echoing the remarks of both my hon. Friend the Member for South Thanet (Dr. Ladyman) and particularly the hon. Member for North Thanet. There are concerns among those of us who would be quite proud that we have supported the Iranian opposition that we need to look at what is happening to the PMOI in Ashraf city. I ask the Minister to examine carefully what is happening now that the Iraqi Government have taken responsibility, to ensure that there is no revenge against the people there and particularly to ensure that they are not doing the bidding of the Iranian Government, because that would be a tragedy and a negation of some of the things that they have done.

My hon. Friend the Member for South Thanet reminded us about the nuclear situation. Without the PMOI and the NCRI, we would not necessarily have known about the enrichment going on at Natanz. They did immeasurable good in announcing that to the world. That is where the process started of trying to get Iran to understand that it is not acceptable behaviour. I ask the Minister to consider that issue and to consider the general issue of human rights.

It is right of Parliament to look at parts of the world where the human rights record is abysmal. We should never be frightened to highlight such things. Even though we continue to talk and do business with people and we want to bring them into the great body of democracies, we can never do that until they improve their human rights record, so that it is at least tolerable. At the moment, the one that we are discussing is absolutely unacceptable.

I congratulate the hon. Member for Lancaster and Wyre (Mr. Wallace) on securing the debate and on introducing it in such an intelligent and informed manner. I agreed with a great deal of what he said. It was almost like coming to a seminar, and I am particularly grateful to him for that. I plan to go to Tehran, but perhaps I should go to Thanet, where there is clearly a lot of expertise on Iran.

No doubt. I was particularly interested in what the hon. Member for South Thanet (Dr. Ladyman) said about Iran’s negative influence on many parts of the middle east, which is a huge worry. I should say that it has not just been a worry with the current regime, as over the centuries, the Iranians have undertaken their foreign policy in that way. Rather than foreign conquest, which many Iranian rulers have never gone for, partly because of the geography that the regime is dealing with, the country’s mountainous nature, its supply lines and so on, Iranian leaders have tended almost to conduct their imperial ambitions by proxy. That does not make it right, but it is a typical approach by the Iranians, and one has to understand how they work, both historically and in the current regime, if one is to deal with them.

The only point that has not come out in the debate so far is the urgency of the Iranian question. Much of the evidence suggests that the Iranians could be close to being able to produce a bomb. Recently, we have seen reports saying that they have enough low-enriched uranium to build a dirty bomb. When I speak to people at the Ministry of Foreign Affairs in Israel and to the Foreign Office in this country, my impression is Iran could be a year, or perhaps two or three years, away from having enough highly enriched uranium to make the sorts of weapons that would be particularly threatening and destabilising, leading to the proliferation across the region about which everyone is rightly concerned. Even if they are not going to go to weaponisation by getting the highly enriched uranium and putting it in a missile, they will be near to what is known in the terminology as break-out. They could keep within the rules of the non-proliferation treaty, but within three months, get themselves weaponised and break out in the way other countries have done in the past. The potential for them to get to that threshold creates a dynamic, particularly with Israel but also with other countries, that is very destabilising, so this is not just a theoretical discussion. It is something that we could be dealing with as a country and as a world very soon.

The question is how we approach the issue. There will be two major events in the next six months that relate to that question. The first and most important is the conclusion of the review undertaken by the new President of the United States. We are told that later this month the Americans will decide their new policy and tell us all about it. Clearly, that is critical in how we develop our policy. The other big event is the Iranian elections. I think that they are slightly less important to the development of our policy, partly for the reasons that the hon. Member for Lancaster and Wyre discussed. Even if President Khatami returns and defeats Ahmadinejad in the elections—it looks as if that will be the contest—he maintained the nuclear programme under his presidential leadership before, so the nuclear issue will not go away, even after the election. Understanding what the Americans will do is therefore critical.

What must the Americans be thinking, what questions must they be asking themselves and how should the Foreign Office interact with their review, as I hope that it is doing? There are a number of issues to consider. First, there are the sanctions, then there are the negotiations and the preconditions, and, finally, there is the rhetoric, which can be important. On sanctions, we and the Americans have to ask ourselves whether the current sanctions regime is working, and the answer is clearly that it is not. There are therefore only two options. First, we could strengthen the regime, because we think that it could work politically but we need to plug the gaps in the way that the hon. Member for South Thanet said, getting the Chinese, Russians, Austrians, Cypriots, Italians and all the others who have been mentioned to sort themselves out and creating a regime that brings Tehran to book, so that it will listen to us. That is a possibility, but it is clear from my description that it might not be as easy as some would hope. That option should certainly be considered, because sanctions regimes can work, but they must be rather more far-reaching than the current one.

The alternative view is that sanctions might not work. We might regret that, but we should perhaps look at another way of doing things. Perhaps sanctions are sending the wrong political message and preventing engagement. I genuinely do not know, but that is a matter for debate, and we need to ask the Americans how they will proceed. There is genuine concern that the sanctions regime is ineffective and, arguably, counter-productive. We then come to negotiations. Her Majesty’s Government have done an awful lot of work through the E3 plus 3 to get negotiations off the ground, and I pay tribute to them for doing so. On the face of it, Iran has been offered some fantastic deals and economic inducements, but, again, that does not appear to be working, and one has to ask why. Again, I am not sure and I am speculating, which is why I was particularly interested in what the hon. Member for Lancaster and Wyre had to say.

Part of the problem is understanding why Iran wants nuclear power or, indeed, why it wants the prospect of being able to get a nuclear bomb or to get a nuclear bomb itself. Is it because Iran wants to attack the rest of the world—perhaps Israel or somewhere else? Is it because it feels particularly insecure and thinks that it will be attacked? It has seen the American army in Iraq, and NATO in Afghanistan. It has also seen the instability in Afghanistan and Pakistan, and it knows that Israel has a bomb. Perhaps the Iranian leadership is worried that someone might attack it—let us face it, there has been an open debate about whether Israel would attack it, and we thought at one time that President Bush’s Administration might do so. Iran may therefore want to arm itself because it fears being attacked.

Another reason, which is presented as more potent for Iran in some of the material that I have read, is that Iran is seeking stature and status; it wants to show that it has arrived in the modern world. It believes that it has a proud Persian past and it thinks, “If everyone else has these things, why can’t we?” We have to understand that. Whether we like the regime or not, and even though we might think that it is appalling, we have to understand where it is coming from and why it wants to pursue its present course, even though we may find it distasteful. If we are to move the regime from its present course, we have to meet that status issue in some other way in our negotiations. We therefore really have to engage in the negotiations. Some Democrats in the US are talking about a diplomatic surge being required to get the negotiations going, and they may well be right.

A key issue for the negotiations, which the hon. Member for Lancaster and Wyre touched on, is the preconditions that we set. The current preconditions—in effect, that Iran must cease enrichment—are clearly not working, because nothing is happening. Despite all the inducements, the cessation of enrichment condition is not working. In some of the academic material and diplomatic debates, we have seen that preconditions can be finessed and tweaked, and that is clearly an option in the review. We have heard about the freeze-for-freeze option, under which we will freeze sanctions if Iran freezes enrichment. Several years ago, the International Crisis Group talked about a phased delay, with the west saying, “Yes, of course you have the right to enrich, but we want to negotiate with you and we want you to delay enrichment.” Such an approach would recognise Iran’s status, but get rid of the precondition that prevented negotiations.

The Americans’ review may look at those preconditions, and they may decide to drop them all, as the hon. Member for Lancaster and Wyre hinted. Candidate Obama certainly talked about that, although he got a lot of flak from the Republicans and slightly switched his position. However, he talked about negotiations with the Iranians with no preconditions, and I imagine that the Americans are reviewing that option.

I have dealt with the sanctions review and the negotiations, and I will finish with the rhetoric. Whatever the review decides, we have to tone down our rhetoric. Iran has rightly been criticised for some of the rhetoric in which it has engaged. That is particularly true of Ahmadinejad, whose rhetoric has been absolutely appalling—particularly the things that he said about Israel. However, I should quote former Vice-President Cheney, who said about Iran:

“We don’t negotiate with evil; we defeat it.”

The rhetoric is on both sides. The “axis of evil” rhetoric is not helpful, and we have to ensure that we drop that nonsense from our approach.

This is an incredibly complex and nuanced debate. Besides the hon. Member for Lancaster and Wyre, and perhaps the hon. Members for North Thanet (Mr. Gale) and for South Thanet, there are few people in the House who really understand all the levels. However, we tend to reach consensus on the issue in our debates, and I hope that we can take that forward so that Britain has the influence that it should have, particularly with the new American Administration.

I congratulate my hon. Friend the Member for Lancaster and Wyre (Mr. Wallace) on securing the debate. There could hardly be a more important foreign affairs topic and one more deserving of debate in the House.

British policy towards Iran should be based first and foremost on a hard-headed and pragmatic assessment of where the British national interest lies. That interest certainly lies in seeing Iran once again become engaged as part of the mainstream of the international community. Several hon. Members have talked about the impact of economic change on Iran. Anybody who has been to Iran and experienced the planned power cuts every day or looked at the half-mile queues outside filling stations in that oil-producing country will have some awareness of the economic pressures that are biting on ordinary Iranian families.

There is no doubt that, with 60 per cent. of the population under 30, there is a tremendous appetite for economic growth and educational development, and for Iran to become part of the world once again. However, as my hon. Friend and others have said, the political obstacles in the way of that re-engagement are formidable, and the time available—particularly given the crisis over nuclear policy—is very limited.

As I look at Iran, I see a country that takes enormous pride in its history and cultural achievements. There is perhaps a parallel with China, in that Iran also has an abiding sense of resentment at having had its interests trampled over by the dominant powers in the world—the powers of the western world—for much of the 19th and 20th centuries. We do not necessarily have to agree with the Iranians’ view of the world to want to understand what it is like to be in their shoes. If one talks to Iranian Ministers and officials in Tehran, one hears that they feel surrounded. They say, “We have a nuclear Russia to the north of us, which occupied the northern part of our country not so many decades ago; we have a United States fleet to our south in the Gulf; we have an American army in Iraq to the west and Afghanistan to the east; we have a nuclear-armed Sunni power in Pakistan; and we have Israel, which is assumed to possess nuclear weapons, which talks about Iran representing an existential threat.” One of the starting points in considering policy must be to appreciate how the other side sees the world.

There are huge differences. I want briefly to digress, because the hon. Member for Stroud (Mr. Drew) was right to flag up the continuing importance of human rights in any dialogue between London and Tehran. It is ironic that when one visits Tehran the Iranians talk with great pride about how there are designated seats in the Majlis for representatives of the Christian, Jewish and Zoroastrian minorities. That must be contrasted with the appalling apostasy laws and the ruthless treatment of members of the Baha’i faith, whose leaders are even now imprisoned without trial, possibly awaiting charges for which, if found guilty, they could face a capital penalty. As the hon. Member for Stroud pointed out, not only is the death penalty used, but it is used in the most barbaric fashion, and there is imprisonment without trial or due process. I encourage the Minister to continue to exhort the Iranians to improve their record on human rights.

Does my hon. Friend agree, on the subject of rights, that the Iranian constitution gives many rights, and protects human rights for all, but that the problem is that the present regime especially has tried to step outside the constitution and veto those rights, continually using terrorism and national security as an excuse? Does he agree that one thing that the west should do is urge Iran to stick to its constitution and stop it making exemptions in its laws under the guise of national security?

My hon. Friend makes his point effectively.

Iran has the capacity to play an important and constructive role in the politics of the middle east and south-western Asia. Initially, it was hostile to the Taliban and it co-operated with the coalition forces in 2001 when they first entered Afghanistan. There is no doubt, from talking to Iranian leaders, that they are acutely aware of the damaging impact of the drugs trade and large numbers of Afghan refugees on the stability of their society. There is scope for Iran to become a partner for stability in Afghanistan, but it would need a change of heart from Tehran, which would need to be willing to turn language about wanting co-operation into concrete policy.

It is fair, too, for the west to acknowledge that Iran has legitimate national interests at stake in Iraq and the wider Gulf region. However, if Iran wants the west to take its interests seriously, it needs to understand how destabilising are comments such as those made recently by one of the President’s advisers, asserting that Bahrain should be part of Iranian territory. I should like the Minister to say whether the Government have pressed the Iranians to make a clear assertion—because I think it is now needed—that they respect Bahrain’s sovereignty and independence. The current President of Iran has used inflammatory language about Israel. I have said to Iranians that they grossly underestimate the fear that such language has provoked in Israel. There is no doubt that there is genuine fear in Israel that Iran poses a threat to the state’s very existence, yet speeches are made by Iranian leaders—most recently by Dr. Larijani at the Munich security conference in February—in which they talk about Israel as they talk about other states; they do not talk about the Zionist entity, but about Israel, a country that exists: it is a country that they do not like, and with whose policies they are at odds, but they see it as part of the region, and part of the world. If the Iranians would make it clear that they are willing to accept the existence of Israel, and the reality of the Israeli state, it would help things to move forward.

I must finish with a few words about the nuclear programme. There are some unpalatable facts. The programme is popular in Iran. There is a question as to how far we can trust any opinion survey, but there are surveys that show that up to 80 per cent. or more of the Iranian population support the case that Iran should have a nuclear capability. There is no doubt that the non-proliferation treaty gives Iran the right to civil nuclear power, but that right is subject to the rules and inspection regime of the International Atomic Energy Agency. The verdict set out in the IAEA’s most recent report of 19 February is clear: the Iranians are still refusing either to accept the additional protocol, which provides for unannounced inspections of key installations, or to provide full access to and co-operation with inspectors along the lines that the agency has been seeking.

The question is now what should be done. Does the Minister believe that we can still persuade Iran to stop, or at least suspend, its policy of enrichment? It is quite possible for Iran to have a working civil nuclear energy programme without the need to enrich material on Iranian soil. Is it possible to insert into the system an effective and verifiable barrier between the acquisition of a nuclear capability and the development of a nuclear weapon, so that any temptation to move to nuclear break-out could be deterred, and any step towards it, however slight, could be detected, and appropriate action could be taken?

In my party, we welcome President Obama’s outreach to Iran, but we believe that that message needs to be complemented by a greater determination on the part of the European Union to provide effective sanctions, to make it clear to Tehran that the alternative to engagement in response to the American initiative is major damage to the interests of Iran and its people. In particular, we want European sanctions against new oil and gas investment and a ban on new export credits. We have a chance available to us, but time is short, and I hope that the Minister will explain how the British Government plan to take policy forward in the next few months.

I congratulate the hon. Member for Lancaster and Wyre (Mr. Wallace) on securing today’s debate, which has been constructive and well informed—across the Chamber. As hon. Members are aware, 2009 is shaping up to be a very significant year for Iran’s relationship with the international community. The United States, rightly in my view, is offering to extend its hand, and Iran, bluntly, will have to decide how to respond. President Obama said on 27 January that

“it is important for us to be willing to talk to Iran, to express very clearly where our differences are, but where there are potential avenues for progress.”

So far, the fist has remained clenched, but there is still time for Iran to change its approach. Iran could, and should, choose to transform its relationship with the international community. Such a decision would benefit Iran and its people and the whole international community. However, to take advantage of the opportunities that would flow from such a change, Iran must face up to its responsibilities, many of which it currently chooses to ignore.

We touched on the nuclear issue. Iran ignores its obligations to the UN and the International Atomic Energy Agency. It chooses to defy the will of both by continuing to enrich uranium, and refusing the IAEA the access that it seeks. Iran disregards its responsibilities; it supports terrorism and chooses to undermine stability and security in its own neighbourhood. Inside its borders, Iran pays no heed to the commitment that it has freely undertaken to its people to uphold international standards of human rights.

The point is that Iran has choices to make and the opportunity to change course. On the nuclear file, Iran can suspend enrichment, take up the E3 plus 3 offer and enjoy the many benefits that will come from co-operating with the international community, rather than standing toe to toe with us and seeking further confrontation and isolation. Iran could pursue its legitimate interests in the region through legitimate means, and play a constructive rather than destructive role. On human rights, Iran could take steps to recover the prestige it claims for itself by guaranteeing the rights of its people.

Our position is clear; we would like to have the opportunity of engaging in a positive and constructive relationship with Iran. We share interests across a wide range of issues, including promoting stability, security and economic development in Iraq and Afghanistan. If Iran took the opportunity and changed course, we could work together constructively. However, Iran’s behaviour undermines our confidence, and makes a mockery of the claims that it makes for itself. Until Iran changes course, we will be uncompromising in calling on it to meet its obligations.

I now address some of the points made this morning. I start by answering the hon. Member for Lancaster and Wyre, who initiated the debate. Let me be clear; we are not advocating or talking about regime change in Iran. We have made that clear both publicly and privately. This country has no hostility to Iran. As a number of Members said, it is a country with a long and distinguished history and a great culture.

We are open to contact with Iran. The Foreign Secretary has told Foreign Minister Mottaki that the United Kingdom sincerely wishes for a more positive relationship; but that requires Iran to change its behaviour, in particular to take up our offer on the nuclear file. If it does not do so, we will be forced to continue on the current path.

The hon. Gentleman also spoke about the suspension of enrichment by Iran in 2004. We need to look forward, rather than back to missed opportunities. Both sides have to be committed to the process. The international community is certainly willing to engage, but Iran has to meet its international obligations. The scope of the 2004 suspension was ambiguous, and Iran continued to enrich at a low level. That is one reason for the lack of trust and confidence.

I took some exception to the hon. Gentleman’s comments on the failure to tackle the drugs problem in Afghanistan. Progress is being made, but it is a colossal challenge. One problem in trying to thwart the drugs trade there is that although Iran supports Afghanistan through capacity building, it also gives the Taliban financial support, weapons and training. Support for the Taliban works fundamentally against the stability that we need in Afghanistan in order to undermine the drugs trade. The House should be unanimous in calling for Iran to stop such activities.

The hon. Gentleman underplayed the threat of Iran developing a nuclear capability. For almost two decades, Iran has concealed its nuclear programme. Five successive UN Security Council resolutions have urged Iran to engage, but it flatly refuses to do so. The latest IAEA report from Dr. El Baradei, published on 19 February, clearly demonstrates that there is a continuing unwillingness to engage, or to provide the information about the alleged studies with a military dimension that has been called for by the international community.

Some people pooh-pooh or dismiss concerns about Iran’s nuclear capability, but if it gains a nuclear capability it will inevitably invite a response from other countries in the region. That will lead to an arms race in the middle east, which is one of the surest ways of stepping towards Armageddon.

I do not underestimate the dangers of Iran having a nuclear weapons system. However, it would be right to observe that the international community could not prevent North Korea, Pakistan or India from developing one. Moreover, although Pakistan and India did so, the west continued to engage with them. Iranians would ask what they had to lose. We must be clear about what they could lose.

I agree. The thrust of our policy is about getting Iran to confront the choice that it faces and the direction in which it should go.

I welcome what the hon. Gentleman said in support of the state of Israel. However, to deny the responsibility of the supreme leader for what President Ahmadinejad said when he spoke of Israel being wiped off the map of the world and being wiped from the pages of time—I believe that such sentiments are abhorrent, and I hope that all hon. Members share that view.

The hon. Gentleman also mentioned the importance of there being no preconditions for talks. For a country that has a track record of being enormously well-versed in playing for time and stringing out the process so that the fundamental problem is not tackled, talks without preconditions are a real concern. I support the view of President Obama that we cannot just engage in talks for talks’ sake.

My hon. Friend the Member for South Thanet (Dr. Ladyman) made a helpful and well-informed contribution. He rightly focused on the influence that Iran wields in the region. Iran arms, trains and funds Hezbollah, Hamas and other Palestinian rejectionist groups. That is wrong, it is destabilising, and it is dangerous. It is of enormous concern not only to us, the United States and the rest of the international community but to every Arab leader to whom I have spoken. It is a fundamental reality that we cannot deliver peace in the middle east without Iran changing its behaviour. We need to work with other Arab states on the matter.

I respect the hon. Member for North Thanet (Mr. Gale), but on the question of the People’s Mujahedeen Organisation of Iran delisting, he engaged in a rewriting of history. I know, because I was at the centre of things, that the Government went out of their way to ensure that the decisions of our courts and of the European Union Court of First Instance on delisting were respected; it was others in the EU that we needed to win over—something that we did subsequently.

The hon. Gentleman asked some specific questions about Camp Ashraf. He will know that the US handed responsibility for it to Iraq on 1 January. The high commission for refugees and the International Committee for the Red Cross are involved, and the US received assurances from the Iraqi Government about the continued well-being of residents. We will obviously monitor the situation.

The hon. Gentleman asked a specific question about a visa case. That is a matter for the Border and Immigration Agency, but if he writes to me or to the Minister for Borders and Immigration, my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas), we can provide a response.

My hon. Friend the Member for Stroud (Mr. Drew) made an important contribution on human rights in Iran. We must remember that Iran is one of a handful of countries that still execute juveniles; more than 140 are on death row. Iran has a draft law before the Majlis that would bring in a mandatory death sentence for the crime of apostasy. With such alleged crimes being treated in that way, Iran has no right to be respected for its human rights record.

This has been an important debate. We want to work with Iran and we want a peaceful relationship with the country, but the problems that exist must be resolved, particularly the nuclear issue. Without a resolution, the region, the entire middle east and the wider world will have major problems. That is why we believe that Iran faces a choice. I and the Government urge Iran to engage with the international community and to take the benefits that are available through the substantive offers that are on the table. It should seek those benefits, but to do so Iran has to respond to the genuine concerns that exist.

British Curry Industry

For the benefit of hon. Members taking part in this debate, I would like to let them know that I am using the annunciator clock; we are not in a different time zone from the other clocks on the wall.

I am pleased to have secured this debate, because the curry industry is frustrated and threatened by severe staff shortages and has been trying to get some clarity from the Government about possible solutions. Curry houses can be found all over the UK; there are more than 12,000, employing some 80,000 workers and contributing an estimated £3.5 billion to the British economy annually. Yet the curry industry is in crisis: unfortunately, it has been a casualty of the Government’s failure to get a proper grip on the immigration system. In response to mounting public unease over what some describe as unfettered immigration from A8 economic migrants, the Government have sought to introduce a points-based system, which has disproportionately affected certain sectors, including the curry industry.

In an article for The Independent, Jerome Taylor wrote:

“I think part of the problem is the government’s patronising attitude towards the curry industry, which is one of the greatest immigration success stories of the past 40 years, not only in changing the British palate forever but also contributing considerably to the Treasury coffers… A vibrant industry such as the ethnic restaurant trade shouldn’t be penalised because the successful and ambitious children of restaurateurs have higher aspirations than doing what their parents did or because this government has caved into the anti-immigration hysteria and cut off the supply of chefs”.

That is a very strong sentiment, but I have some sympathy with elements of it.

Ministers have expressed sympathy for the plight of the curry industry and have apparently asked the Migration Advisory Committee to look into the matter. However, it is telling that, currently, no representative of the Bangladeshi curry industry is either on the Migration Advisory Committee or in the Migration Impact Forum. Even worse, the Government appear to have announced only last month that Ministers plan to compel restaurants and takeaways to recruit skilled cooks from people already resident in the UK or elsewhere in the EU. That announcement pre-empts a report from the Migration Advisory Committee on whether more job sectors should be removed from the special shortage occupation list, which allows firms in specified sectors to bring in staff from overseas. Sadly, that pre-emptive strike seems linked to highly publicised wildcat strikes over foreign workers allegedly taking British jobs.

All this is leaving the industry in an impossible position. It wants to work with the Government. Unfortunately, the numbers coming in to work in the curry industry are relatively small, yet the effects of the new immigration system will be disproportionately high. It is estimated that staff shortages will cost restaurants an average of £19,000 every year. In today’s economic climate, the economic impact of a downturn in or failure of many of the curry industry’s major restaurants in the UK would be catastrophic, particularly on many high streets.

The points-based system works against the curry industry. It is impossible to show formal recognisable catering academic qualifications obtained in Bangladesh. As has been observed, in Bangladesh, one is either totally poor, or rather wealthy, and the latter do not go in to catering. However, that does not mean that many restaurants are not bringing in skilled chefs—they just cannot necessarily prove it. Under the new points-based immigration system for workers outside the EU, which came into force at the end of February, chefs need to speak English and have academic qualifications to live and work in the UK.

I am sure that such qualifications are desirable for many people who wish to come and work in our country, but sadly, in a country as poor as Bangladesh, such qualifications are extremely hard to achieve. The Bangladesh Caterers Association says that such policies have left its members in an invidious position. They cannot recruit trained Bangladeshi cooks but are critically short of staff, which is threatening the future of the industry in the UK.

Owners of restaurants who came to the UK and set them up—although often called “Indian”, a great number are Bengali from East Bengal, which is now Bangladesh, and predominantly from Sylhet, which is twinned with St. Albans, in the north-east of the country—find that their children do not want to work in their parents’ business. Many of them are setting their sights on becoming professional accountants, doctors, engineers and lawyers, and they are succeeding. Having met Bangladeshi families in my constituency, I know that that pattern is repeated again and again. It is part of an immigration success story and a tribute to the hard work ethic that typifies the Bangladeshi community. All young people, whatever their race, are being encouraged to skill up and get a toolkit of qualifications that will help to ensure career progression and job opportunities. Yet the curry industry cannot currently offer that educational opportunity. I shall explore that point a bit more later.

No business can function without a pool of skilled staff from which to recruit. Yet the Government have inadvertently—I hope—made the situation worse, because without working with the industry to put in place a safety net, immigration policy was altered overnight, causing, as we have heard, raids on restaurants and people falling foul of regulations. There is not a lack of dialogue on this matter, but there is a lack of action and short and long-term solutions.

My hon. Friend rightly mentions training. I am particularly concerned about high unemployment in the Bangladeshi community in this country. Does she agree that proper and better training, in this country, for British people of Bangladeshi origin would be a double-whammy winner, because it would help the curry industry, as well as one of the groups in our society most prone to unemployment?

My hon. Friend is absolutely right, and the curry industry recognises the mismatch. Some young Bangladeshi people would probably consider entering the curry industry, which is enormously successful and offers many opportunities, but no career training and progress path is in place. Unemployed people want to make career choices, so it is peculiar that they cannot obtain a skills set that will ensure that they can not only find employment in the curry industry, as a waiter, kitchen porter or whatever, but make a career for themselves. It would also allow them to obtain qualifications that they and the industry value.

In February 2008, the then Parliamentary Secretary, Office of the Leader of the House of Commons, the hon. Member for Bishop Auckland (Helen Goodman), suggested that there was no case for applying different immigration rules for this group of workers. Despite the ongoing dialogue, the door has been shut for a long time. She said:

“It is, of course, important that Indian restaurants in this country retain their high standards. However, I do not think that anyone can seriously suggest that different immigration regulations should apply to the sector. As the hon. Gentleman knows, there was a debate yesterday on this matter following the Home Secretary’s statement”.—[Official Report, 21 February 2008; Vol. 472, c. 532.]

It was made quite clear, therefore, that the Government never had any real intention of altering the immigration system to favour a particular group of workers, yet they have done nothing to help the industry to put in place an alternative solution.

Successive Immigration Ministers have met with representatives of Bengali caterers, including the Bangladesh Caterers Association, the Guild of Bangladeshi Restaurateurs and the Greater Sylhet Development and Welfare Council, all of which are actively engaged with the Minister. I wish to pay tribute to Enam Ali, who produces Spice Business magazine, is a restaurant owner, extremely influential in the industry and organises the British curry awards; to Mr. Rashid, president of the Bangladesh Caterers Association, which is the voice of the industry, and who has also met the Minister; and to Mr. Faruk Shahagir from the Bangladesh-British Chamber of Commerce. All of those men have met regularly and are frustrated that their industry, which has so much to offer, cannot get the ear of the Government, to sort out the problem. That really is a worry.

I pay tribute to those who have worked to raise the profile of the British curry industry and to champion its cause—some of them are here today to hear—but I share their frustration that they cannot move this forward. As my hon. Friend said, Ministers have suggested that unemployed Bengalis in Britain should fill the vacancies. In a Government-directed command economy, that might be feasible, but simply to say that unemployed Bengalis ought to work in the curry industry is derisory.

Unemployed Bengalis are no different from any other unemployed people in the UK. If merely fitting unemployed people to vacancies was the answer to the problem, we would not have to import large numbers of foreigners to pick fruit, de-bone carcases and do other unpleasant jobs that we are told that the indigenous population cannot or will not do.

Eastern Europeans may be able to serve as waiters, but they may not have the cultural sensitivity or the language that is necessary to work in a curry house kitchen. Mr. Rashid, who is president of the Bangladesh Caterers Association, says that eastern European workers are not the solution. He observes that they do not last terribly long and that they are not really keen on working in the industry.

We must ask how such a crisis has come about and what can be done to help. The catering industry as a whole is not a favoured career choice for young school leavers. Despite its vast size and economic clout, the curry industry does not have a desirable career path to offer potential young would-be chefs.

Jim Armstrong, chief executive of the Professional Association for Catering Education, says that the hospitality and catering departments find it hard to fill their cooking courses in general and to recruit students of Asian origin. He says that the latter group is more likely to be found doing courses in information technology or business. The reluctance of second-generation Bangladeshis to follow their parents into the family restaurant is readily admitted by both the business and the catering trades.

Any young person who wants to study catering at college with an eye to working in a Bangladeshi or Indian restaurant would have little option but to do a national vocational qualification in general cooking. Mr. Armstrong, who used to run hospitality and food management at Thomas Danby college in Leeds says:

“The awarding bodies and the curriculum authority do not see any difference between cultures. If you are peeling a potato you’re peeling a potato. The fact that it’s for a different culture’s cuisine is by the by. The curriculum doesn’t necessarily meet the market’s needs.”

That is at the heart of the problem. Some colleges have tweaked the NVQ with a module slanted towards international cuisine, but an NVQ can only be adapted so far, according to Gordon Sibbald, Thomas Danby’s assistant director of vocational skills. Therefore, the catering industry recognises that training must be both tailored and specific. Current training programmes are just not doing the job.

In 2008, the Prime Minister said:

“We will make it possible for people who are in this country to be trained to be either chefs or restaurant workers in the industry… We are doing far more to train than ever before. We know there are people who, if trained, could make a contribution to the industry.”

That is patently not the case. Skills are not being delivered and there is not the degree of specialism that is needed for a highly skilled chef. The industry recognises that and has been pressing the Government on the matter. It does not want to keep importing talent. It recognises that doing so is unsustainable, but restaurants do not want someone with an NVQ in general catering skills; there is a mismatch. The industry wants to set up a London catering college for curry. It is prepared to offer training courses and work placements. It recognises that such courses have to be of a high standard, because they would then be attractive to young people who wish to gain qualifications.

Having listened for so long to such problems, the Minister must make a commitment today. We have unemployed people in this country who could fill a skills gap if there was somewhere for them to train to get the necessary skills. We also need a temporary solution, because such colleges cannot be set up overnight. I am asking the Minister to revisit the points-based allocation system to ensure that people can bring in staff and to work with restaurants and the industry to come up with a short-term solution. We have an industry in crisis and a skills set that has not been found for young people. At the moment, the Government and the Prime Minister are saying that they will make it possible for more people to be trained. I suggest that that is not the case.

I hope that the Minister will say today that he will work with the curry industry. He must not cause it more problems, by cracking down and raiding restaurants, but offer advice and concrete assistance to help the industry set up the training college. Moreover, he must help it to work out a temporary solution, so that it can bring in chefs to fill the gap. I am not talking about bringing them in permanently and getting round the immigration system. If he does not provide such help and make a commitment to act now, this industry will see many of its restaurants close over the next year or two.

It is a great pleasure to serve under your chairmanship, Mrs. Walley. I congratulate the hon. Member for St. Albans (Anne Main) on securing this important debate. I hope that I can shed some more positive light on the rather gloomy picture that she has painted. The story is a rather more positive one, and I hope that she will bear with me so that I can explain why.

This year is the 200th anniversary of the opening of the first-ever Indian restaurant in London. In the intervening years, south Asian cooking has come to occupy a progressively bigger role in British culture and life. I myself have the privilege to represent a constituency in the city of Birmingham, in which I grew up. Birmingham is widely acknowledged as the curry capital of Christendom and the birthplace of balti. I have been well acquainted with such matters from an early age. Although the hon. Lady’s constituency may be better known for its Roman ruins than its rogan josh, I know that she is an advocate of such matters.

I have about 30 curry restaurants in St. Albans. Indeed, one was the runner-up in the Tiffin curry cup, so I ask the Minister to mind his words.

I was just going on to say that I know that she represents many Indian restaurants, including the famous Chez Mumtaj. I do not minimise the significance of this debate. Such matters are important both culturally and economically, and I do not underestimate our need or ability to assimilate in a multicultural society and turn such components into part of our national identity. Moreover, the industry is a growing economic and industrial phenomenon. As the hon. Lady said, the curry industry is worth £3.5 billion a year to our economy and offers jobs to some 80,000 people—although I put it closer to 100,000 people. Those are all good reasons why the health of the curry industry should, and does, matter to the Government. We take the issues seriously, and I will try to address some of the points that the hon. Lady has rightly raised. I can assure her that such a commitment has also been taken on by the Border and Immigration Agency.

The hon. Lady talked at some length about the points-based immigration system. I understand that the introduction of the system last year caused a lot of concern in the industry. I do not propose to mount a detailed justification or explanation of the changes to the immigration rules this morning, as that is properly an issue for my right hon. Friend the Home Secretary. None the less, I remind the hon. Lady that these are sensitive matters. Even the hon. Member for Ashford (Damian Green), in his capacity as the Conservative spokesman for home affairs, recently called for

“an explicit annual limit on the number of people coming here.”

One cannot have this argument both ways. It is true that British business must have access to the skills it needs to trade profitably and to build for the future, and that some of those skills will come from abroad. However, in my view, the Government’s view and, indeed, the view of the hon. Member for St. Albans, as expressed this morning, too many skills and talents of our own people who are already here lie undeveloped.

There are 500,000 vacancies in the UK economy. It is our responsibility to do everything that we can to give British people, which includes Bangladeshi British people and every other kind of British people, the chance to fill them. I am not alone in that belief. Last November, the hon. Lady herself tabled early-day motion 268, in which she said that the curry industry

“needs assistance to ensure that young people and skilled chefs are encouraged to enter the industry.”

As she said this morning, that means young British Bangladeshi people and skilled chefs of any kind, as well as those from abroad. I can assure her and the hon. Member for Ashford that that assistance is precisely what my Department and I are committed to try to give the industry. I am talking not only about sending people to go to college or university, but about helping them to gain practical skills in the workplace. We are already putting in £1 billion a year in employers’ hands to support skills development through the Train to Gain programme.

The Minister said that it is not necessarily just about going to college or university. Does that mean that he is not actively considering supporting the setting up of a London curry college?

No, I do not mean that at all. I simply meant that, as well as all the work that we are doing to send people to college and universities to train, including people in the catering industry, we are putting £1 billion a year into training in the workplace through Train to Gain.

The college is the crux of the matter. Does the Minister accept the evaluation of the existing courses that they are not suited as they stand, and that they cannot be tweaked to deliver what the curry industry needs? People are being trained, but they do not deliver the skills that the industry needs.

I understand the hon. Lady’s point, but I do not accept it entirely. I shall come on to discuss the matter in more detail if she will bear with me.

The extra money that we put into Train to Gain and the extra flexibilities that we introduced which were announced just before Christmas—the £350 million—were all focused on providing practical, flexible training support to small and medium-sized businesses. Level 2 and 3 qualifications will help companies with between five and 250 employees and, obviously, most of the businesses that we are talking about today fall into that category. In principle, they stand to benefit from the changes. The restaurant industry—not just the Bangladeshi restaurant industry but the industry as a whole—remains male-dominated. The hon. Lady will be aware, as I am, that many women in the British Bangladeshi community would welcome the opportunity to take up a job, and that many are very skilled cooks. Sometimes, they are held back by a lack of basic language skills. I hope that she will join me in welcoming the fact that women of Bangladeshi origin are one group that has benefited from the recently introduced reform of provision of English training for speakers of other languages. I hope that she will join me, too, in calling on the Bangladeshi restaurant industry not to overlook the potential of those women as a source of recruits, nor the help with training from the Government that would be available to them.

I am a little disappointed with that. The fact someone is a good cook does not make them a top chef. Very few London restaurants would employ my mother, who is a very good cook. I do not think that that is the way forward. I encourage Bangladeshi women to train, but—and I keep going back to this—where are they going to train? They cannot just turn up at a restaurant to get a job and say, “I make a wonderful taka dhal.” It does not work like that.

The hon. Lady’s position is noted. My position is that it would be nice to see more women, including Bangladeshi women, in employment in the restaurant industry. The fact that she is not convinced about that is on the record.

What I said so far does not imply that there are not specific problems facing the restaurant industry and ethnic restaurants in particular. That is why, for example, the Department for Innovation, Universities and Skills, and People First—the sector skills council for the leisure and hospitality industry—signed a compact last June which, among other things, is specifically directed to help supply ethnic restaurants with highly trained chefs. Through the compact with the industry, we will support the preparation and training of more than 1,000 new chefs for ethnic restaurants. Specifically, we will help employers by funding the development and training of members of ethnic communities to get to level 3—the equivalent of A-level standard—in courses run through a virtual strand of the new national skills academy for hospitality. We will also support the expansion of the number of apprentices in ethnic catering, building on the group training association approach now under way in London.

How do we balance the need to ensure that south Asian and other ethnic restaurants can develop the skills of staff already resident here against the importance of not allowing, say, Bangladeshi cuisine in this country to be cut off from the culture in which it originated? As the hon. Lady is aware, chefs and cooks were included on the list of skilled occupations that the Government published last November, as undertaking an occupation in which we consider there to be shortages in the labour market that could sensibly be filled by people from outside the European economic area. We took that decision based on advice from the Migration Advisory Committee, which is reviewing the evidence on skilled chefs.

Before that review concludes, the Government and key industry partners will attend a summit called by People First—the sector skills council for the industry, run by the industry—to discuss how to manage the transition from imported to indigenous skills. Our aim is to develop a partnership plan to ensure that we have the required skills and qualifications to meet the industry’s needs. The Guild of Bangladeshi Restaurateurs will be invited to the ethnic chef summit. Specific ethnic chef training is available. Employers can work with Train to Gain brokers to develop accredited qualifications, and the summit will look at developing further the work that is already being done. I accept that it will always be beneficial for ethnic cuisine in this country to refresh itself through the skills of people from the countries where it has its roots. Likewise, there will always be benefits in home-grown ethnic chefs gaining opportunities to hone their skills abroad. The state of the curry industry matters deeply to the Government and to the vast majority of people. I can assure the hon. Lady and the House that, in our efforts to safeguard British businesses and jobs—

Is the Minister going to support the curry industry’s desire to set up a specialised catering college in London?

I am happy to use my offices to ensure that the question of a London catering college is on the agenda of the Government-sponsored, but industry-led, ethnic chef summit, which is planned later this year.

On that note, may I conclude by restating how important the issue is, and that the Government are committed to getting it right? We are committed to supporting and developing the ethnic restaurant industry in this country, and I again congratulate the hon. Lady on bringing the matter to our attention.

Sitting suspended.


We have started 10 minutes late because of a Division, so 10 minutes will be added to the debate, which will finish at 4.10 pm.

I thank Mr. Speaker for allowing us to press the case for pensioners today, and I am delighted that you are in the Chair, Mr. Jones. I hope that we have a constructive debate. I am grateful to the excellent Members who have turned out today to bat for their constituents, and I thank them for that.

Pensioners should not and do not need to hold out a begging bowl. They do not owe us a scrap; indeed, we are indebted to them. They have given everything for a safer and more stable world and country. They fought for our freedoms and democracy, as well as working hard to build the economy of the City of London, and financial institutions and industry. They have given their blood, sweat and tears for us, and have created the wealth of this country, and I believe that they deserve a greater share of that wealth. Their share of gross domestic product has fallen year on year in the past decade. That is a shame, and it is not something that the Government should be presiding over. Their share has been falling while bankers, stockbrokers, footballers and the Jonathan Rosses of this world have selfishly been taking an obscene and far too great a share of the wealth of this country. That injustice needs to be put right. Pensioners deserve more respect from all sections of society and deserve a better deal, and that is what this debate is all about.

To move forward, we must understand a little of the history of this issue. I have said openly for many years, and several times in this Chamber, that pensioners have been let down by Governments of both flavours over several decades. Both parties have done good things, but both have also made major errors. There have been two glaring errors. First, the Conservatives cut the link with earnings, causing Britain to have one of the lowest state pensions in the developed world. Then, Labour did to personal and private pensions what the Tories had done to the state pension with changes to corporation tax in 1997, which were known in the vernacular as the great £5 billion pensions robbery.

Of course, the problem has not resulted only from Government actions. In the baby-boomer heyday of the ’50s and ’60s, which you would not know about, Mr. Jones, but I certainly do, masses of workers came on stream, there was a stable pensioner population and the economy went up and up. Things were looking very good, but then the demographic disaster began to emerge, and there were massive increases in both private and public sector debt. As economist Ros Altmann has said, we were

“effectively ‘borrowing’ growth from the future.”

If I may, I shall borrow liberally from Ros Altmann’s wise analysis, which has been reported by the Economic and Social Research Council in its “Winter 2009” pamphlet, although I imagine that it meant spring 2009. She points out that even the demographics are now against us. We are blessed with wonderful, far greater longevity, but that presents us with tough social and economic issues. There are not enough people in employment to support the rapidly growing number of pensioners, and we must pay back the debt that has built up in the past two decades, which amounts to tens of thousands of pounds for every man, woman and child in the UK. Pensions guru Dr. Altmann put it very succinctly when she said:

“This will lead inexorably to a ‘pensioners’ crisis, unless we make radical changes to pensions—and retirement.”

Let me put the obvious problems aside for a moment to thank the Government for what they have done and what they are doing. The cold weather payments have been very welcome, and the £60 that the Government recently gave was very well received. Also welcome is the intention to re-index pensions to earnings, so that we can start to rebuild a decent state pension. We need to do that in the longer run. Those moves, and much more, are not to be underestimated. I am sure that the Minister will tell us more about what the Government have been doing.

I congratulate the hon. Gentleman on securing the debate, and apologise that I cannot stay for the whole of it because I have to attend a Select Committee meeting this afternoon. As a co-sponsor of my early-day motion 301, on free TV licences for pensioners, does he agree that the Government could quickly and easily introduce free licences for all pensioners, not just those over 75? That would have a significant impact on pensioners’ money.

I did co-sponsor that early-day motion. I was going to suggest eight measures to the Minister, but now I shall add that point and suggest nine. For the elderly, TV often is not just an optional add-on that improves their quality of life, but the only way for them to keep in touch with the real world. Giving pensioners free TV licences would be a relatively inexpensive measure and would generate an enormous amount of good will. I thank the hon. Gentleman for his intervention.

Now that I have mentioned the Minister, let me say how lucky we are to have such an excellent Minister here. She is energetic and formidable, and she brings a certain elegance and charm with her. Last night, she told me—in the Lobby, not in the bar—that she is excited about having the opportunity to push forward this debate and to set out Government thinking on policy for pensioners, and that is what we are here to do today. I know that she is unable to say much about what will come in the Budget, because of the Budget purdah weeks, but I am sure that she will take some ideas from the debate and talk to the Chancellor and the Prime Minister about them.

The Minister will find the Prime Minister’s door open on this subject. Two indomitable pensioner representatives of Age Concern—Dorothy Axford and Kath Daly, from my constituency—helped to focus the Prime Minister’s mind a few weeks ago when they met him face to face. As he remarked, neither of them seems old enough to be in Age Concern—he was quite charming. I was so proud of them because they did UK pensioners a great service by telling the Prime Minister what pensioners really need and are really thinking. They found him anxious to listen, receptive to what they were saying and keen to help. However, we all understand that the speed at which we can change policy and move forward is limited by resources.

My constituents explained that pensioners are suffering terribly under the economic crisis. It is not only bankers who are suffering. The elderly, particularly those on small, fixed incomes, are facing real difficulties. Inflation for them is far worse than it is for we hon. Members, who earn above-average incomes. Their households face completely different inflation figures from ours and massive, unfair council taxes such as those in Castle Point, which are, astoundingly, being increased by 5 per cent. this year by Castle Point borough council. Given the Government target of 2.5 per cent., and the average for the rest of the nation, that is indefensible.

Pensioners have to choose between trying to keep warm, buying food and paying for TV licences, and those decisions are becoming tougher in the current economic crisis. Dorothy and Kath thanked the Prime Minister for the excellent Warm Front initiative, and told him that it was excellent. One of them had benefited from it, but they both pointed out that it could deliver far more in value for public money if the contractor list were more flexible and local contractors could be used. Contractors could then be more competitive and could carry out a boiler change for £1,300 or £1,500, instead of £2,500. That would reduce the number of top-ups that are now being claimed, which has increased tremendously over the past three years. It would also reduce the size of the top-ups that poor people have to pay. Dorothy and Kath put that point to the Prime Minister, and he said that he would look at it. I know that that is a matter for the Department for Environment, Food and Rural Affairs, not the Minister, but I am sure that she will ensure that her DEFRA colleagues know about it.

The excellent and much-loved charities Help the Aged and Age Concern joined our delegation to the Prime Minister. They are doing magnificent work and are now combining their resources to form a single charity, or organisation, that will be totally focused and even more effective in putting the case for pensioners. I am sure that all hon. Members will wish sincerely to thank the charity’s staff, volunteers and members for all that they do. They are all stars, and they are all working to improve the quality of life of pensioners.

Age Concern in my constituency has many members—hundreds, actually. They get together for lunch on Tuesdays and Thursdays and have trips out and about. I went to a Thursday lunch just before Christmas and got heavily slagged off because the Tuesday people wanted me to go to one of their lunches, so I am going to one of those at Easter. By the way, they take no prisoners, and when I visit them they bend my ear. I know that they will be pushing for a bus service from Canvey town to Morrisons supermarket, and that they also want to keep wardens in our local residential homes as the borough council are threatening to withdraw the service. In addition, they want the council to keep the streets cleaner and safer, so that they can enjoy their environment, and they desperately want councillors to consult them properly and stop the overdevelopment that is destroying their quality of life and community. They are right on all those issues and I am fighting shoulder to shoulder with them on that. However, today is not about local issues. Thank you, Mr. Jones, for allowing me to mention my patch, but I will now move on to the economic crisis, which has hit pensioners harder than other groups.

With profits investments have collapsed and savings income has literally been decimated. Pensioners with, for example, £15,000 of savings, which provides just a few extra pounds to help them pay their bills, have seen their weekly income fall by £12 a week as a result of an interest rate cut from 5 to 1 per cent. That £12 a week does not mean much to us, I suppose, in this Chamber, but it means a lot to my constituents and pensioners. It will help them not to have to choose between food and heating, and it will allow them to have a little treat, such as a takeaway or a glass of beer. Why should they not be able to do that? Pensioners with savings of £15,000 are not rich.

Pensioners’ lack of spending ability is hitting the general economy because, compared with other groups, the UK’s 12 million pensioners generally have low debts and tend to spend more of their net disposable income. As Dr. Altmann states:

“Cutting rates is like a tax increase that will reduce their spending.”

That damages the rest of the economy. If we want to get money out into the economy and for people to start spending again, putting it through pensioners is probably the most reliable way of doing it.

I am sorry to distract the hon. Gentleman slightly from his macro approach and from talking about the economy, but in dealing with this shortfall, I understand that he is active in his constituency in trying to encourage pensioners to have full access to their benefits. What approach does he take to that, and does he not think that a better take-up of benefits would solve some of these issues and be more of a stimulant to the economy, as he was trying to suggest in his comments?

I am grateful to the hon. Gentleman for that intervention. I assure you, Mr. Jones, that it was not planted and that I was not expecting it. I will come on to benefit take-up in one of my eight suggestions. The hon. Gentleman is right: about one in three pensioners lose an average of £1,477 a year because they do not take up, for example, pension credit. We have debated that matter in this Chamber, and I have run a local campaign on it using my local newspaper the Yellow Advertiser. I have taken a full-page advert that explains to pensioners that the pension credit is theirs by right and that they should claim it. I have explained to them how they can claim it and that they can come to my surgery and let me claim it for them if they feel challenged by picking up the phone. Of course, the means test is one of the reasons why people are not encouraged to claim pension credit and find it difficult to do so. Many pensioners fail to do so. The hon. Gentleman makes an extremely good point, and I thank him.

I, too, congratulate the hon. Gentleman on securing the debate. I also apologise for the fact that, because of the short notice of it that we had, I will be unable to stay for the entire debate. Does he share the concern of one of my constituents who recently wrote to me to say that, when he reached the tender age of 65, he was not told where and when to pick up his pension; he was not informed about what benefits he might be entitled to; and he was not even given any information about age-related tax allowances? Is it any wonder that so many pensioners do not claim what they are entitled to and, in some cases, end up paying more tax than they should?

That is an extremely good point, and I am grateful to the hon. Gentleman for making it. The Minister will, I am sure, address benefit take-up. When someone reaches a certain age, they should automatically receive not only the pension that they have paid into all their life, but clear and easy-to-read information about what benefits are available, so that they can take advantage of them. I am astounded that the Government have not done more, although they have got their act together to set up programmes—I suspect that we will hear about them from the Minister.

There are many different types of pension. There is that based to an extent on social insurance—the state pension—and that based on long-term savings by the individual, employer, or both.

I, too, congratulate the hon. Gentleman on securing the debate. He has just mentioned the issue that I was waiting for: employers contributing to pensions. Does he agree that we cannot have a purely public sector answer and that there must be a bit of private sector and individual thinking as well? One option would be to make it compulsory for all employers to contribute to all employees’ pension funds, because if we could push up the amount that people get out of a pension fund, the public sector could target the people who really need help.

That is an extremely valid point. Of course, the Pensions Act 2007, which the Government recently put through Parliament, moves a long way to achieving that. I think that that Act received all-party support in the House; it is a good Act. The problem with relying too much on employers is that the returns on equities and employers’ ability to fund pension schemes have been greatly challenged in the past year. We must develop public policy to address that and fill that gap.

In the 1980s and 1990s, with rising equity markets and a falling state pension that was driven down by Government social policy—or, as some might say in relation to the ’80s, lack of social policy—employers took the lead from Governments and started to provide decent pensions. That was a good thing—God bless them. However, with people thankfully living longer and the sudden fall in investment and stock market returns, private pensions are no longer able to provide sufficient income alone. The state must therefore step back up to the plate and do more. What the state has done so far has meant wide, extensive and demeaning means-testing, which is a problem, as I have already discussed.

Let us try to plough new ground in relation to the problem. The state has long encouraged pension savings, but opting out costs the Exchequer £10 billion a year. Pension savings tax relief costs us £30 billion a year, and half of that—£15 billion a year—goes to a few, rich people who are top rate taxpayers. That situation is like the Pareto rule. I am not even going to go anywhere near the 50-year-old banker’s pension this afternoon—we have heard enough about that over the past week or two—so let us focus on how effective and efficient the use of that £15 billion really is. Could it be used to help poorer pensioners, rather than being spent on yet another tax break for often tax-avoiding rich people?

I am talking more like a socialist than a Tory, but so be it. The answer is clearly that, yes, a major policy rethink is necessary, so I would like to set out eight specific responsible and workable suggestions to add to the one on TV licences that was made earlier. Some of them were suggested by Dr. Altmann, and I am grateful to her for her paper.

First, we should make computers talk to each other to automate pension credit awards. My campaign in Castle Point has already been discussed. I believe that many more people in Castle Point are now claiming their pension credit—I hope so, anyway. I used my communications allowance to run that advertising campaign and several others. It is absolutely right and proper that MPs should use the allowance to do good work in their constituencies and to inform constituents about things such as pensions, benefits, planning issues and so on. I try to do that, and I encourage other Members to do it.

Secondly, we should change the pension credit rule that assumes, in this day and age, an utterly ridiculous 10 per cent. return on savings. That is highway robbery. Thirdly, we should end the £5 a week earnings disregard. Fourthly, the Government should simply say “sorry” again and reinstate the 10p tax rate for pensioners and the lowest paid. Fifthly, we should change annuity rules in the coming Budget, so that we can give people who have to buy annuities over the next few months and years more flexibility. They are being badly stuffed at the moment, but the situation is not their fault. We should help them.

My sixth suggestion is that we should now end the interest rate cuts. It was right to cut them, and I congratulate the Government on their policy of action to try to work our way out of the world economic crisis, but we have gone far enough on interest rate cuts, and I hope that they will now stop.

My seventh point is that we should pay £140 per week to all those aged 75 and over. That would end savings disincentives and provide fair and equal treatment of women, which is something that I have argued for in the House. I voted against the Tory Whip on the issue a year ago. That policy would remove means-testing for almost all the elderly, which would be a good thing. Dr. Altmann estimates that it would cost less than £3 billion a year—not a lot of money when one considers the £15 billion a year that we waste on tax relief on wealthy people’s pensions, which does not go a long way towards changing their quality of life.

My eighth and final recommendation is that we should issue specific pension and annuity gilts to take advantage of current low yields in the market and to help pensioners and the pensions industry.

The question is whether we want a fairer society. Those polices would be fair, and they would be popular. I draw attention, if I need to—I probably do not—to the much greater propensity of elderly people to vote. I ask the Conservative and Labour parties to say today that they will consider my suggestions. I hope that they will and that they will not simply slag me and each other off and fail to address the needs of vulnerable people and pensioners.

I am so lucky to be an independent MP. I have to read the Order Paper for myself, of course, but I am free of party Whips. Martin Bell, God bless him, once quipped that his party conferences were all party and no conference. Joking aside, the fact is that, as an independent, I can be terribly open and honest. I can say what I truly believe needs saying, and I try to do so. In a hung Parliament or one with a small Government majority, either of which is very likely after the next general election, an independent would have great influence, so I hope to return after the election to fight for pensioners, for people and for fair play in politics.

The financial sector has gone from the extreme of embracing risk to the opposite extreme of being utterly averse to it and thereby harming individuals and businesses alike. In short, it is now strangling the economy. It messed up, and now it is making businesses, pensioners and individuals pay. The stock market collapse has wiped billions off the value of investments and stripped massive sums out of pension funds, including those of charities. The credit crunch has hit the third sector like a steamroller, and it is not only limiting the sector’s ability to raise money but leaving it with a big hole in its pension funds and massive problems as a result.

The Parliamentary Secretary, Cabinet Office, the hon. Member for Cardiff, West (Kevin Brennan), who has responsibility for third sector, recently announced improvements to the grassroots grants programme for building capacity, and I am grateful for that. He is a good man. Nevertheless, many charities face large deficits. The debate on the third sector may be for another day, but I put down a marker on it. We must return to it, probably in this Chamber.

Policy for pensioners is most important. There are many issues that I have not been able to cover today, such as incentivising people to work beyond 60 or 65, so that they do not fall off the cliff edge of retirement but get those bonus years and phase out of full-time work by doing part-time, third sector or voluntary work and continue to contribute their wisdom, reliability and application. They have so much to offer.

I have not mentioned health care or the charging and care regimes in residential homes. Those are all important matters for pensioners. I am sure that the debate will develop over the coming months. Again, I sincerely thank all the hon. Members who turned out for this debate and you, Mr. Jones, for your latitude.

I, too, very much thank Mr. Speaker for the opportunity to hold this debate on policy on pensioners. The terms of the debate are drawn quite widely to allow us not only to discuss the recent developments in the financial markets, as the hon. Member for Castle Point (Bob Spink) has done, but also to look at the experience of senior citizens in terms of services for the elderly that are provided by local authorities.

I congratulate the hon. Gentleman on securing this debate. As I implied in the question that I posed to him, he has been a strong campaigner for the benefit rights of senior citizens in his constituency. It was good of him to spend some of his communication allowance on that important issue. He referred liberally to Dr. Altmann, and I have attended some of the meetings that she has addressed in the House. I would like to contribute to this debate by discussing the experience in my constituency, and perhaps to draw some lessons from it. I am particularly grateful to the Croydon Older People’s Network and to the Croydon Retired People’s Campaign for the advice that they have given me, both in recent years and for this debate.

It is helpful to consider the experience of senior citizens in Croydon, bearing in mind that Croydon is a top-class local authority for adult services, or, to use another term, social services. Indeed, it was up for a nomination for a beacon award only yesterday evening for the good work that it does. It is a three-star authority for social services, which is the comprehensive performance assessment equivalent of a four-star rating. Although it did not secure the award yesterday—[Interruption.] I was under the impression that it had not, and am grateful to be corrected. I heard from the authority that it had not secured the award, but it has, which is excellent. It is recognition that, despite some difficult financial circumstances, an additional £6 million is being provided for adult services this year, including support for the elderly.

There are very real challenges in Croydon. I was grateful for advice from a Croydon voluntary action official who advised me that because of the adverse weather conditions in particular, as well as the current level of fuel poverty benefits, the Mayday, our local hospital, has had more elderly residents attending accident and emergency with chronic cold-related illnesses. I have not had the chance to check that with the Mayday. When I last called the chief executive’s office for information, I was referred to the press department, which suggests that I was not going to get far—being referred to the press department normally means being supplied with very limited information, rather than extra information. Clearly, however, senior citizens have been put under stress by having to face higher fuel bills this winter, and Age Concern has said that one in three pensioners now face fuel poverty.

It is interesting that Croydon Retired People’s Campaign estimates that 10,000 senior citizens in Croydon—the borough is quite large and has more than 350,000 residents—are living in poverty, defined as having an income of less than £7,850 per annum. In the context of the discussions ahead of this year’s Budget, it is interesting to consider the point made by the hon. Member for Castle Point. Pushing extra money in pensioners’ direction is an attractive option, because they are likely to have a high propensity to spend it. Their incomes can be very limited, so those moneys would be likely to find their way back into the economy. The past financial year was stressful for pensioners, because the impact of the high rate of inflation fell particularly on them. A high percentage of their expenditure goes on food and fuel, so they were particularly disadvantaged.

It is encouraging that we have strong organisations in Croydon, such as the Croydon Retired People’s Campaign and the Croydon Older People’s Network, which has a membership of 400 senior citizens. Those organisations have been conscientious in getting feedback on many of the good initiatives that the Government have taken, including “Putting People First”, which showed very good vision in its approach to the care needs of the elderly. In the consultation on that initiative, it was interesting that the Government conceded that two thirds of senior citizens felt that they were not exactly getting a fair deal on their care needs. The responses from Croydon suggested that thousands of senior citizens felt that they were not getting fair access to services. As Members of Parliament, we often hear senior citizens express concerns about their different experiences of agency and permanent staff whom social services employ in adult services. Nevertheless, I do not want to give the impression that I am decrying the quality of services to senior citizens in Croydon.

The hon. Gentleman referred to the unfortunate 5 per cent. increase in council tax that his local authority is introducing, and council tax is an important issue for senior citizens. I have met many widows—as one does as a politician, knocking on doors—who live in properties with which they are reluctant to part because of the family memories they hold. Those women’s savings are often heavily eroded by significant increases in council tax and the transference of other taxes to council tax, and such developments hit them particularly hard.

The hon. Gentleman mentions the way in which council tax hits people on low incomes. Does he accept that it is basically an unfair tax and that although it might be a good thing to freeze it, it would be much better to replace it with something such as local income tax?

I thought that the hon. Gentleman was going to boast about the council tax freeze in Scotland. There is no doubt that his proposal would lead to a significant improvement in senior citizens’ circumstances. Governments have struggled—at least since the Layfield report on local government taxation—and a council tax freeze at this stage would be helpful.

On pensions generally, there are other considerations. Croydon council recently announced that in continuing to provide proper services to senior citizens it must meet the competing demands involved in keeping provision under its own pension fund up to scratch. The current financial crisis makes things extremely difficult for the local authority, and it has recently been suggested that its pension fund faces a £200 million shortfall. I know that that sounds like a large number, but I suspect that the situation is very similar in many local authorities, and that is a significant challenge. That said, Croydon council always pursued a rather extravagantly aggressive stance of investing its money only in equities, which does not work well in the current circumstances.

On the point about local government pension funds, groups such as the Institute of Directors have suggested that we should get rid of such funds because they are unfair on the private sector. Does the hon. Gentleman agree, however, that they are better than nothing and that it is good to top them up a bit or help them in some way? The majority of people do not get a huge amount from them, and very few get a lot. The average worker in councils such as his and mine would not get a huge pension from these funds.

I agree entirely. I was somewhat perturbed by the suggestion that was made. It is a bit like what is happening in the Republic of Ireland. My local authority has suggested that it lobby the Government to be allowed to increase employees’ contributions from 6 to 8 per cent. Going down that route would give rise to great consternation and great disruption to good industrial relations in local authorities.

I am, however, allowing myself to drift far too far from the issue of fair access to care. I am interested in the response from senior citizens in Croydon on this issue, because they tend to find that fair access to care is complicated, convoluted and sometimes lacking in compassion, despite the fact that the Government have the very best intentions. Indeed, the Croydon Older People’s Network said:

“Older people in Croydon feel too many are missing out on essential services and are experiencing ill health and isolation because their needs are not being met”.

It is fair to say that despite the local authority’s best intentions, it tends to concentrate its support on pensioners with the most chronic needs.

We need to remember that many carers are pensioners or are about to become pensioners. Like many colleagues, I have come across people who have sacrificed almost all of their career, right up to becoming a pensioner. They have stayed in social housing with their mother or father, who has then passed away. Having made that caring commitment, and saved the nation a great deal of money, they find that they are unable to continue with the tenancy. I am currently dealing with the case of a gentleman who looked after both his ailing mother and his father. He lived in the property for 46 years, but now faces the prospect of being turfed out.

We need to bear in mind the fact that carers in employment, who benefit from the Government’s generous carer’s allowance, face difficulties if they want to leave employment and take up other benefits, because they will lose the carer’s allowance. Rather perversely, the system encourages people to stay in employment who would perhaps save the state additional moneys by acting as full-time carers. I see many such problems as a director of Croydon Carers Centre. True independence is a distant dream for many older and disabled people, and charging and means-testing dictate that many older and disabled people are living their life in poverty or struggling to cope. The Government recognised that in their “Care, support, independence” consultation, and should be supported on the issue. However, pensioner poverty is so widespread—in the past year it has risen by perhaps 300,000—that it may take the total number living in poverty, when that is defined as being on less than 60 per cent. of the median population income before housing costs, to 2.5 million.

Many Members of Parliament often come across women pensioners living in poverty, because those women are not entitled to the full basic state pension. Many of them have paid not paid full attention to the matter in the past, or they may have been badly advised about the small stamp and been unable to pay their national insurance contributions, because of the need to care for their families. I know that the Government are concerned about that and want to deal with it, but it does not look good for our country that a recent European Union survey found that only pensioners in Latvia, Spain and Cyprus are more likely than those in the UK to fall into poverty. The Institute for Fiscal Studies concluded that the proportion of pensioners below the poverty threshold will remain at its current level at least into the next decade, despite the best intentions of the Government to reform the process.

For all of us who have benefited from saving for our pensions, the financial crisis offers a very bleak prospect, but there may be things that the Government can do to deal with some effects of the reduced interest rates, which can significantly affect pensioners, as the hon. Member for Castle Point mentioned. Age Concern takes the view that income from savings provides a modest but important top-up to the pension and benefits of many low-income pensioners, but the average gross savings rate on an instant access account fell from 4 per cent. to 1.6 per cent. over the year to January 2009. That can greatly affect the likelihood of a pensioner having a reasonable standard of living. For a pensioner couple with savings between them of £10,000, which is a substantial sum, the fall represents a reduction in income accrued from interest from £400 to £160 over a year—a loss of £4.62 a week. Perhaps it is possible for the Government to give consideration to the £16,000 upper capital limit for receiving housing benefit and council tax benefit. The rate has been frozen for several years, which is another source of frustration for older people, who feel penalised for saving. It is appropriate for the lower capital limit for income-related benefits to be increased to £10,000. The assumed rate of income for people with savings above the lower limit could be reduced to £1 in every £1,000, and the upper capital limit for housing benefit and council tax benefit could be increased.

I accept that it is easy for me to come to the Chamber and make suggestions about how things might be treated to deal with pensions needs, when the demands on the Government’s finances are severe in the economic downturn. However, to repeat the point that I made earlier, if we want to stimulate the economy, we could do so by putting more money in the hands of pensioners, which is much more likely be spent locally in communities than it would if we took other economic initiatives. Despite the demands on the Government’s finances, that might be justifiable from a macro point of view. From a micro point of view, I have spoken about Croydon, but I think that something can be said about the positive responses to the consultation carried out by Croydon Older People’s Network and Croydon Retired People’s Campaign: the Government’s action is appreciated by Croydon people, but nevertheless the shortfall in standards of living affecting many Croydon pensioners suggests that further urgent reforms are required.

It is a pleasure to serve under your chairmanship, Mr. Jones. I congratulate the hon. Member for Castle Point (Bob Spink) on securing the debate, and other hon. Members, including the hon. Member for Croydon, Central (Mr. Pelling), on taking part. It is a timely debate. In the run-up to the Budget it is important to discuss issues affecting pensioners, and pensioner poverty. As the hon. Member for Castle Point said, it is a huge issue, but I want to focus on some practical steps that I believe the Government should take.

Inflation has hit pensioners much harder than most other people, because their spending on fixed costs such as food, fuel or council tax takes up a much higher proportion of their income than is the case for most other people. Figures provided by Age Concern show that in August last year, while the rest of us were dealing with an inflation rate of about 5.4 per cent., for pensioners it was 9 per cent. That is why in the past 12 months the number of pensioners in poverty has risen from 1.8 million to 2.1 million. This winter approximately one in four elderly people is opting to stay in bed because they cannot pay their fuel bills, and one in 10 must cut back on what they spend on food, or at least buy cheaper types of food, because they cannot afford not to. It is not a mark of a civilised society when pensioners, who have given so much for us, are forced into such choices.

I hope that the Government will recognise such concerns in the Budget and deal with the issues, such as fuel poverty. Fuel bills have increased by more than 40 per cent. in the past 12 months; yet in the pre-Budget statement the maximum increase in support for someone over 80 is only 25 per cent. The average fuel bill now is £900 and the maximum that any pensioner can get is only £400. There is a huge disparity. The Government’s flagship policy is of course pension credit, but it has been dogged, despite all the Government advertising, by the stubborn refusal of a huge number of pensioners to claim what they are entitled to. The Committee considering the Welfare Reform Bill reported yesterday, and I welcome the fact that the Government are introducing a pilot programme to auto-enrol people and pay them the benefit to which they are entitled. That goes some way, but not far enough.

The poorest pensioners are those over 75, which is logical, because anyone who retired at 60 or 65 with any savings would, over a period, exhaust them because the state pension is inadequate. That is why it was regrettable that, when the Government changed the rules on backdating benefit claims, cutting the time to three months, they did not take account of information provided by Citizens Advice. The information showed that people over 75 would be worst affected by the change in backdating, because most older folk are very proud, quite independent and do not rush to claim something to which they are entitled. By the time they do make a claim, they usually have a large number of debts, so I regret that policy. It is why we would move to a citizens pension—£124.05 a week for a single pensioner and £189.35 for a couple—over two Parliaments. Immediately, however, we would grant it to all pensioners over 75, because they are the people who currently have the greatest need.

The Government have an opportunity with the Budget to demonstrate that they are concerned about pensioner poverty and its effects. As the hon. Member for Castle Point rightly said, the Government can introduce several measures to help those people. It is quite wrong that the notional interest for people’s savings is still 10 per cent., because the amount of money to which a person is entitled when they apply for pension credit is eroded. The loss of the 10p tax band has also adversely affected a considerable number of pensioners. I do not argue for its reintroduction, because we believe in the principle of simplification, but it is important to raise the threshold to ensure that pensioners’ income is sufficient, and to take account of the cut.

The Government have not tackled fuel poverty. Yes, the fuel allowance has been increased, but the Secretary of State for Energy and Climate Change, despite promising that he would legislate if necessary to do something with the fuel companies, has gone down the Ofcom route of trying to persuade people instead. The changes that have been made still mean that people who have card meters pay £51 a year more than those who are able to pay by quarterly instalments, and that is neither fair nor right. Those are some of the issues that the Government must tackle.

The earnings link must also be restored. I accept that the link with prices is right at the moment, but we have always said that the link should be with prices or incomes. The long-term change would more than make up for the losses. Although the prices link is currently more advantageous, in the longer term the earnings link must be restored.

During the passage of the last Pensions Bill, my noble Friend Lord Oakeshott tabled an amendment to make flexible the period pensioners have in which to purchase annuities. Sticking to the rigid age rule of 75 simply does not make sense in the current market. I know that the Minister cannot tell us what is going to be in the Budget, but I hope that she appreciates just how hard done by many pensioners feel due to the rigidity of that rule. The changes that Baroness Hollis secured for women are likely to benefit only a small fraction of those who are entitled to backdated payments, and that issue must be looked at. One change that the Government are introducing is a carer’s allowance. It will go some way towards helping, but, for those women who have lost out because of what they have done in the past, payments must be made up.

There are 12 million pensioners in this country and they have given their best to serve it. The Government are helping them to some extent, but more needs to be done. If we can afford to pay for ex-bankers’ huge pension increases, whether approved by the Government or not, we ought to consider the ordinary man in the street. I hope that the Minister will take account of that point.

It is a great pleasure to serve under your chairmanship, Mr. Jones. I congratulate the hon. Member for Castle Point (Bob Spink) on securing the debate, and I thank the hon. Members for Croydon, Central (Mr. Pelling) and for Rochdale (Paul Rowen), who, in their different ways, made very helpful contributions.

It is helpful that the hon. Member for Castle Point has chosen this subject to tell us what his party might do. However, I saw only a couple of days ago that there was something of a distraction involving his colleague, Mr. Robin Page, who spoke about

“accusations of rigged internal elections, tales of extravagance and high living in Brussels”.

On a point of order, Mr. Jones. I am an independent MP who does not belong to any political party. I do not know what the hon. Gentleman is talking about, and he should really get his facts right.

I may have missed it, but if the hon. Gentleman has now joined the general exodus from the UK Independence party, I commend his common sense. I just wonder where his attentions will alight next. I wonder whether he has tried the Liberal Democrats.

In all fairness, although the hon. Gentleman’s own one-man party may not be in government, he has given us all a chance to look at the current Government’s policy and, perhaps, those of the next Government. I join him—I think it was him—in what he said about the two organisations, Age Concern and Help the Aged. We have all enjoyed huge assistance from them over the years, and it is great that they are about to embark on a joint life together under the provisional name of Age UK. Indeed, we have all benefited from the organisations’ extremely informative briefing for this debate, in which they primarily talk about three different issues: first, rising pensioner poverty, much of it due to low take-up of benefits; secondly, the impact of interest rate cuts on savings, which has already come up in this debate; and thirdly, the plight of older workers in the economic downturn.

I shall focus on the Government’s disastrous policies in respect of pensioners over a number of years. We could start with the decision on corporation tax in the Government’s early days—the policy that they kept secret during the 1997 election campaign—going right the way through to the current economic turmoil, which is affecting pensioners so much. Back in 1997, the now Prime Minister said in his party’s manifesto:

“We believe that all pensioners should share fairly in the increasing prosperity of the nation.”

That is a very fair aspiration for a political party but, in recent times, there has been a double whammy: the Government not only failed to match that pledge while the nation’s prosperity increased, but now seem to be ensuring that pensioners bear the brunt of the recession and of the nation’s declining prosperity, both of which are due at least in part to the Government’s own policies.

There are 2.5 million pensioners officially living in poverty—a figure that, by now, I am sure is well out of date—and one in three pensioner households live in fuel poverty. Many pensioners face huge problems and, as Age Concern said in its research last year:

“60 per cent of low income pensioners were struggling to get by… Two-thirds were cutting back on gas and electricity”.

All those factors have got worse rather than better. More than one Member has today raised the issue of the inflation rate that affects pensioners. Owing to the fact that such a high proportion of their fixed income is spent on food, utility bills, heating and so on, they face an inflation rate in the real world of something like 9 per cent. Going round my constituency, which has more than its share of pensioner households, I find that many pensioners fear utility bills or the council tax demand arriving on the doormat. We have seen huge council tax rises under this Government. Our policy of a two-year freeze on council tax would be extremely popular.

On the earnings link, we could have theological discussions about what happened in 1980—when the hon. Member for Castle Point was a loyal Conservative, I am sure, and probably a Thatcherite—but in the here and now the Government are saying, “Yes, we will restore the link, but not yet.” I understand that their current policy is that they will do it sometime in the life of the next Parliament. I think it unlikely that they would have that opportunity, but it would be good to hear from the Minister whether that thinking has moved on at all.

The subject of benefits is crucial to pensioner poverty. We have heard that £5 billion in benefits goes unclaimed by pensioners every year. Some 1.8 million pensioners are not claiming the pension credit to which they are entitled. Only the other day, I received some parliamentary answers about the proportion of pension credit claims that are not dealt with within the target period of 10 days. In fact, in the past year or two, it has taken something like 15 or 14 days to process these claims. People are desperate for help and are, presumably, able to negotiate the jungle of forms and information that they have to provide, but still the bureaucracy is not able to deliver within the 10-day target. I should be interested to hear what the Minister is doing to put that right.

Then there is the mystery of the £60 extra Christmas payment, which, as it now turns out, many pensioners will only get at Easter. Did we misunderstand the Chancellor when he made that announcement in the pre-Budget report? I am sure that he was not setting out to mislead people, but many pensioners out there have yet to receive that extra money. On the issue of savings, which has come up more than once, we are talking about pensioners who have done absolutely the right thing: when they were working, they set aside money, and saved for their retirement to supplement their pension, which successive Governments have always said is the right thing to do, but they are now looking at something like a zero return on those savings. According to Age Concern and Help the Aged, 9 million people over 60 have at least £1,000 in savings of some sort.

The other day, during departmental questions, when the tariff income rule was raised with the Minister, she seemed impervious to the suggestion that there was a problem at all. Surely, it is bad enough that people are getting a zero return on their savings, but does it not add insult to injury when they are told that it will be assumed that they are getting a return of at least 10 per cent. on at least part of those savings? There would be a stampede down the high street if anyone was actually offering that kind of interest rate. The brief from Help the Aged and Age Concern says that

“recent interest rate cuts mean that the current assumed rate is now completely out of step with the actual rate of income people earn from their savings.”

What do Ministers propose to do about that? An interesting side point in the brief mentions tax overpayments, which are almost as important:

“Up to 3 million on low incomes, many of them pensioners, overpay a total of around £250 million a year in tax on savings income.”

That tax is deducted, and many pensioners fail to claim it back. Again, it would be good to see what the Government have in mind to right those overpayments. The brief also says:

“HMRC must do more to identify those on lower tax rates and ensure that overpaid tax is refunded.”

We want that money to go into the pockets of pensioners in these difficult times, not into the hands of the Treasury.

With all due respect, does the hon. Gentleman understand why some of the hand-wringing points that he is making at the moment are profoundly nauseating to Labour politicians such as myself? Forgive me, Mr. Jones; I do not like to resort to anecdote, but my parents’ experience was one of the motivating factors that drove me reluctantly into this murky world that we call politics. They worked all their lives on low incomes and retired on the basic state pension, which was eaten away, partly by the removal of the link with earnings. Under this Government, they have seen real-term increases in the annual pension, the minimum income guarantee and, subsequently, pension credit, the winter fuel allowance, free TV licences and free dental and eye checks. On top of that, they have access to a much improved NHS and the modernisation of the council house in which they have lived for 60 years, which went to rack and ruin under a Tory Government who cut housing investment by such colossal amounts. Does the hon. Gentleman understand why, given that record, some of the things that he is saying are profoundly offensive?

I was always taught that the definition of a gentleman is someone who is never unintentionally offensive. I certainly was not setting out to offend the hon. Gentleman.

No apology is called for. I should just say that in the list that the hon. Gentleman managed to rattle out in his intervention, he omitted to mention that the one thing the Labour Government have not done in more than 11 years of government is restore the earnings link. Finally, they have belatedly legislated—it is on the statute book—but still they will not tell us exactly when they will do so.

There is a kind of demonology about what happened in 1980. I remind the hon. Gentleman, since he has given me a new rush of enthusiasm with his intervention, that a disastrous and financially incompetent Labour Government were replaced by a Tory Government who had some serious decisions to make about the economy, one of which was the decision he mentioned.

Does the hon. Gentleman not see that the sort of exchanges that are going on here, and his seasoning his speech with bitterness and party political points, is just what the public do not want to hear and see? They want us to take a constructive approach to solving the problems that we face—they do not want us to try to lay the blame on others. When is he going to get real?

If I am going to be patronised, I do not want to be patronised by a one-man party. [Interruption.]

May I pluck something from the hon. Gentleman’s comments with which I agree? Yes, let us stop all this bickering, and take the opportunity to sort these matters out. However, the way things are looking, we are going to have 14 months of this mess, as are the British public and the pensioners, before we can start sorting it out.

Returning to taxes on savings and savings generally, it is bad enough that people are getting nothing, but the tax treatment, including the tariff income rule, is unfair. Our policy of scrapping tax on savings for basic rate taxpayers would be useful. I hope that it will be considered—taking the hon. Gentleman’s point—not in a party political light, but sensibly and genuinely by the Chancellor in the run-up to the Budget. Likewise, our proposal to increase the personal allowance for people of 65 and over by £2,000. That is real help for people in real difficulties.

I have talked about the collapse of the stock market, much of which emanates from the failures of Government policy and regulation. More than 1 million people work beyond normal retirement age, and there is an interesting article in The Daily Telegraph today by Emma Soames about the boomerang employees, who retire at 65 and go off somewhere for a year, perhaps to climb Machu Picchu, then return home, wanting to work a few days a week. The reality is that we shall all have to continue working longer than was normal.

My final point was raised by Age Concern and Help the Aged, which have given us a lot of statistical evidence about what happened to older workers in previous economic downturns. A London School of Economics study shows that unemployed men over 50 have only a one in five chance of being in work two years later, and the chance of older men finding employment falls by a quarter for each year that they are out of work. Age Concern and Help the Aged refer to their campaign, particularly in the European Court, to persuade the Government to scrap the default retirement age, but that is a big issue and perhaps one for another debate.

Sweeping aside the party political knockabout, to which the hon. Member for Castle Point referred, the group of people whom we are talking about will almost certainly bear the brunt of Gordon’s Brown’s recession. It is important to have some imaginative thinking, not just from the Minister, who is well intentioned, but from her colleagues in the Treasury, so that the Budget includes some practical measures to help pensioners.

It is a pleasure to serve under your chairmanship, Mr. Jones. I congratulate the hon. Member for Castle Point (Bob Spink) on securing this debate and join him in his opening comments about the valuable contribution that pensioners have made to society. I also join him and other hon. Members in their comments about Age Concern and Help the Aged, which are both extremely valuable organisations for older people. I wish them well in their forthcoming merger, and I am sure that they will continue to be powerful in their lobbying activities and in providing services for older people.

I was pleased to hear that the hon. Gentleman’s constituents were pleased with the Warm Front programme, and I take on board his points about the installers. I understand that a re-tendering process is taking place, and I am sure that there will careful examination of how those services are provided.

The debate provides a good opportunity to consider the general landscape of policies for older people, and it is worth reminding ourselves that one in four children born today can expect to live to 100. Another fascinating fact that I heard recently is that, by 2063, we in the UK will have our first 120-year-old. That woman—I am told that it will be a woman—is already drawing her state pension at the age of 65. That is all food for thought when planning policies for older people, which is why yesterday’s beacon awards were important. One of them involved the engagement of older people in shaping policies at council level.

On the comments of the hon. Member for Croydon, Central (Mr. Pelling), although Croydon did not become a beacon council, it was nominated and should be congratulated on its involvement and on the engagement of older people locally, which we want to promote. He said that some of his constituents thought that the process of accessing council care services was perhaps not as good an experience as it should be. I firmly believe that the key to solving some of those problems is not only the extra resources that the Government have provided, but ensuring that older people are involved in shaping and developing services locally, regionally and nationally. We recently published our response to the Elbourne review to capture that spirit of involvement and to ensure that we set up structures, so that many of the older people’s organisations that hon. Members have talked about today are properly taken into account when developing policies.

I certainly challenge the assertion of the hon. Member for Eastbourne (Mr. Waterson) that our policies for older people have been disastrous. We are concentrating on addressing some of the points that hon. Members have made about the problems that pensioners face in difficult times and the fact that they need real help now and that we must put money in their pockets. That is why we increased the winter fuel payment by £50 for the over-60s and by £100 for those aged 80 and over, why we increased the Christmas bonus by £60 for more than 12 million pensioners, why we increased pension credit by the highest amount since its introduction and why we are increasing the basic state pension by 5 per cent. from April this year.

In all, we will spend £90 billion on pensioners in 2009-10, which is £13 billion more this year than if we had simply continued with the policies of the last Conservative Government. We have lifted 900,000 pensioners out of poverty since 1998, but we are not complacent. We know that there is more to do.

I want to address some of the points made about comparisons with other EU countries.

The Minister told us how much she is spending on pensioners, and I welcome that. She said that she wants to address the problem of poorer pensioners. Does she accept that, if some of the money spent on very rich pensioners—the £15 billion tax break on pensioner savings will help bankers who retire at 50 on massive pensions—were redirected to poorer pensioners, it might be more effective and helpful to society as a whole?

The hon. Gentleman is arguing that pensioners’ savings have been hit—frankly, those are the more well-off pensioners—and he wants to remove tax breaks on pensioner savings and redistribute them, but I am not sure whether he can argue at the same time that people with savings should have more help. He might want to ponder that.

I want to return to the point about comparisons with other European countries and the recent EUROSTAT report and poorer pensioners. Even when taking into account differences in living costs across countries, the income of a poorer pensioner in the UK will be nearly a 10th higher than that of a poor pensioner in Germany, more than one fifth higher than that of a poor pensioner in France and more than twice that of a poor pensioner in Portugal. We need to look below the headline figures to understand our position when compared with other countries.

I want to deal with a question raised by the hon. Members for Croydon, Central and for Rochdale (Paul Rowen): why do we not just replace means-testing with a flat rate of £140 for all pensioners? The fact is that, from April, no pensioner in this country need live on less than £130 a week and no pensioner couple need live on less than £198 a week. Moreover, it is important to remember that pensioners on pension credit can claim housing benefit and council tax benefit. The average payout for housing benefit is £65 a week and for council tax benefit it is £15 a week, so we are immediately looking at an increase to between £130 to some £200 a week.

Replacing the current system with a flat rate of £140 or even £150 would mean that the poorest pensioners lost out. The poorest pensioners have often been women who were unable to build up the required number of national insurance payments, so we would be penalising the very poorest people, whom we have set out to help. That is the problem with introducing a flat rate. There has to be an element of means-testing. I admit that means-testing can be complex, because every individual is different. People will have different sources of income and different outgoings. However, adopting the Liberal Democrat policy of a flat rate would penalise the poorest people; it would provide a lower income.

What the Minister says raises two issues, one of which is take-up. The reason why we have said that there should be a flat rate for over-75s is the continuing problem with take-up. Such a flat-rate pension would not affect entitlement to housing benefit or council tax benefit, so people would be better off without having to fill in any forms.

I am not sure how the hon. Gentleman thinks that housing benefit and council tax benefit would get through. The other aspect that we have introduced is an increased ability, even when people have savings, to claim a small amount of savings credit. Whatever we do, we must have a system that enables people to access those payments. That is why I caution against what seems to be the easy idea of simply giving people a flat rate.

I also want to challenge the points that have been made about tariff income and particularly the point made by the hon. Member for Eastbourne. I have before me the regulations that were introduced back in 1987. I know that the hon. Gentleman was not elected until 1992, but I am not sure whether he complained at the time, perhaps as a prospective parliamentary candidate, about the Conservative party introducing a system whereby, for every £250-worth of savings, a notional income of £1 was considered.

When the current Government came to power, we changed the system, but let me be clear: the tariff income rules have never been about interest rates. Obviously, if the tariff income rules were linked to interest rates, we would have to change them every time interest rates moved up or down. The rules were laid down clearly in legislation and no link to interest rates was intended. The Government ensured that the system became more generous.

Under the previous Government’s system, anyone with savings of more than £12,000 was not eligible for any support at all. As I said, the less generous rules of the previous Government assumed an income of £1 a week for every £250-worth of savings. Not only is the rate of tariff income half the previous rate, but we abolished the upper capital limit, giving more people access to support.

Does the Minister recall that, in 2000, the Government of whom she is a member issued a consultation paper about changing the assumed income rule and that, in November 2001, they said that they had decided not to do that and not to take actual income from capital into account, but that they would assume a notional rate of income set at about 10 per cent.? Yes, the rule might have applied when my party was in government, but when we were in government, I do not recall any stage at which interest rates were more or less zero.

The point that I am making is that, as set down in legislation, there was no indication whatever that the rules should be linked to interest rates. That has applied since, and we have made the rates more generous. I can confirm in response to the hon. Gentleman that we have legislated to re-establish the link between the basic state pension and earnings, abolished by the previous Government. Our objective, subject to affordability and the fiscal position, is to do that in 2012, but in any event by the end of the next Parliament at the latest.

Fuel poverty was raised by the hon. Members for Croydon, Central, for Rochdale and for Castle Point. I reiterate that we have increased winter fuel payments. We have this year increased the Christmas bonus by £60, and cold weather payments have been increased from £8.50 to £25 a week for this winter. That has resulted in 8.3 million payments. I think that last year the total paid out in cold weather payments was £5 million or £6 million; this year it has been £209 million so far, so we have certainly been trying to help during these difficult times.

Can the Government do something more to establish a consistent set of social tariffs and to have them publicised in a form that people can understand, so that the elderly can take advantage of them?

The hon. Gentleman is right to say that we need to continue to work with the utility companies and others to ensure that people are aware of social tariffs and that they are reaching people.

I also take the point that we need to continue the work that we have been doing to increase pension credit take-up. There is a big role for Members of Parliament in helping to inform constituents about that, and I know that many hon. Members in this Chamber will join many of the campaigns that are run by, for example, Age Concern.

A range of issues have been touched on and I will certainly take away a number of the points that have been made, but I conclude by reaffirming the fact that the current Government have made pensioners a priority. We are spending record amounts, putting more money in the pockets of today’s pensioners. As well as the many measures that I have outlined, we have introduced free national off-peak bus travel, benefiting 11 million people over the age of 60, free eye tests, free TV licences for over-75s, and we are introducing free swimming from April. On average, pensioner households will be £1,600 better off this year as a result of our tax and benefit changes than if we had stuck with the policies in place in 1997. The Government are committed to tackling pensioner poverty. The poorest third of pensioner households will be £2,200 a year better off. That is about £42 a week. We are committed to tackling—

Network Rail

It is a pleasure, Mr. Jones, to initiate this debate under your chairmanship.

I wish to raise a serious matter. It is to do with an article in the latest edition of the journal of the Transport Salaried Staffs Association by Gerry Doherty, the organisation’s general secretary. First, I declare an interest, inasmuch as the TSSA has a constituency agreement with the Livingston constituency, which I am proud to represent.

TSSA is a trade union with some 30,000 members. It organises clerical, supervisory and managerial workers in the transport and travel industries, as the name suggests. About 7,000 of its members are employed by Network Rail, the not-for-profit company that replaced the failed Railtrack, which was put in charge of Britain’s railway structure following the privatisation of the railways in the mid-1990s.

Network Rail receives about £3 billion of Government subsidy per annum. The company is managed by a board of six executive directors and a number of non-executive directors. There are no shareholders, because it is established on a not-for-profit basis, so the board is theoretically held to account by some 100 persons appointed by the board from within and outwith the railway industry. Mr. Doherty, the general secretary of TSSA, is a member of that body.

In his article in the union journal, Mr. Doherty says that he refused to endorse Network Rail’s annual accounts at last year’s annual general meeting; he alleges that public money is being used to mask breaches of employment law and possible discriminatory practices by the company. He says that for some time the company has been dismissing employees with no regard to the agreed procedures for dealing with alleged poor performance—or, more worryingly, to people’s employment rights. According to Mr. Doherty, Network Rail achieves its aims by paying off employees to avoid matters being exposed in the public domain at employment tribunals. Details of the settlements, including the financial details, are covered up by the insertion of a confidentiality clause.

In an article in yesterday’s Daily Record, Network Rail says that its position—an astonishing position—is no different from that of other companies of a comparable size in matters of that nature. Whether or not that is the case I have no way of knowing; nor do I know to which companies Network Rail is comparing itself. If other companies wish to spend their shareholders’ money on such despicable practices, that is a matter for them. However, Network Rail is funded from the public purse, and the use of public money in that manner is utterly indefensible. We, the taxpayers, give Network Rail an annual subsidy of £3 billion to be invested in the renewal of our railway infrastructure—not to be used to dismiss its employees in breach of employment laws laid down by Parliament.

Sir Ian McAllister wrote to Mr. Doherty on 15 January this year; I have had sight of that letter. In it, Sir Ian indicates that in 2007 the company dismissed 247 employees, 38 of whom were covered by compromise agreements—that is, by confidentiality clauses. The figures for 2008 were 270 and 57 respectively. In the past two years alone, 95 employees have been dismissed by the company, and the details of their settlements have been covered up. The number seems to have increased year on year.

If an employee is successful at an employment tribunal in establishing unfair dismissal, the maximum compensation that can be awarded is £64,000. If Network Rail settled each of those cases at that level, it means that more than £6 million of taxpayers’ money would have been used to cover up those illegal practices.

I congratulate my hon. Friend on securing this important debate. He says that the maximum compensation payable is £64,000. Is that a hint that, somehow, the company is paying greater sums of money as hush money, to guarantee people’s silence?

That is one of the essential charges that I intend to make. I hope that the Minister will be able to say how much public money has been spent by Network Rail on such things. The minimum figure is £6 million.

If Network Rail has settled these cases at a lesser amount, what is the problem in putting that global figure into the public domain, as Mr. Doherty has asked? We could then judge whether our money was being used wisely. No one’s identity would be revealed by making public a global sum, and it would not breach confidentiality clauses in individual agreements.

Even more worrying, however, is the assertion in Mr. Doherty’s article that some of the settlements involved discrimination, and that last year the figure was 30 per cent.

I thank my hon. Friend for giving way; he is being generous with his time. As a former trade union official, he will be aware that in cases of discrimination there is no financial limit on the amount of compensation that can be paid. Does he understand that to be the case?

I do, and I am grateful for my hon. Friend’s intervention. I am sure that the House is aware that such payments can run to hundreds of thousands of pounds. It is therefore even more important that we find out how much Network Rail is paying in the cases that I have cited.

If the company uses public money to ensure that the allegations never see the light of day—that they never reach the public domain—that surely is a matter for the House and for the Minister. My information is that Mr. Peter Bennett, Network Rail’s head of human resources, is presiding over a culture of fear and bullying. Long-serving staff are being forced out, but only after they have signed confidentiality clauses that prevent the culture of fear from being exposed in the public domain. There is a saying among Network Rail’s staff that if someone is called to meet a senior manager, they are “away to a brown envelope meeting”. That is indicative of the prevailing culture.

In November 2003, Mr. Bennett presided over Network Rail’s so-called “Project Violet”. Almost overnight, some 600 employees, senior and long-serving managers among them, were dismissed and offered terms that in effect precluded them from voicing concerns in an employment tribunal, given the substantial settlements that were offered—settlements paid out of the taxpayer’s pocket. Again, we do not know the full extent of those settlements, because they are not reflected in Network Rail’s annual report.

Potentially millions of pounds of taxpayers’ money is being wasted because the company appears not to want Mr. Bennett’s management style to be examined at an employment tribunal. I remind hon. Members that claims of sex discrimination or other discrimination are not subject to the £64,000 compensation limit regarding unfair dismissal. There is no limit on the level of compensation that a tribunal can award in such cases. If my information is correct, therefore, and any of the 95 cases that Network Rail has settled in the past two years have involved such claims, the potential cost of settlement is likely to be much higher than the £6 million that I quoted earlier. No wonder that Mr. Doherty, doing his duty as a public member, refused to endorse the company’s accounts last year without receiving answers to the legitimate questions that he raised. I suspect that he will do the same this year.

It is simply unacceptable for Network Rail to come to the Government annually to seek taxpayers’ money to carry out its legitimate business of renewing our railway system, but then to use that money to circumvent the employment rights of its employees—employment rights laid down by this Government. Then to cover up how much money is involved in subsequently covering up these practices only exacerbates the crime. If, as alleged, any of that money is used to cover up alleged discriminatory practices on the part of the company, words fail me.

My hon. Friend will be aware that, since I was elected in May 2005, I have campaigned on the subject of Dundee railway station, which is an atrocious station and is the first thing that many visitors to Dundee see. How does he think that the people of Dundee would feel if they knew that £6 million, and possibly more, has been spent covering up bad employment practices, when it could have been invested in Dundee railway station?

They would be as angry as the TSSA, Network Rail employees and my hon. Friend, because frankly it is an abuse of public money. We do not know how much is involved, but as he rightly says, it could have been spent on improving and investing in the rail network.

If Network Rail has nothing to hide, let it answer Mr. Doherty’s questions in relation to the 2007 annual accounts and the questions that he will no doubt raise when the 2008 accounts are published. These questions are very simple: how many employment tribunal claims were taken out by employees or ex-employees against Network Rail over the years? How many were contested at tribunal by Network Rail? How many were successfully defended at tribunal by Network Rail? How many were unsuccessfully defended at tribunal by Network Rail? What was the total amount awarded against Network Rail by tribunals? How many settlements were reached between Network Rail and employees or ex-employees during the course of tribunal proceedings, but prior to a final hearing, whether by way of compromise agreement or otherwise?

What was the total amount paid by Network Rail in settlement of these claims? The general public have a right to know the exact figure, without breaching any compromise agreement or confidentiality clause, because this is our money. How many compromise agreements were reached between Network Rail and employees or ex-employees without the matter ever being the subject of proceedings in an employment tribunal? What was the total amount paid by Network Rail in settlement of these claims? Are these amounts included in the annual accounts, and if so, where can we find them? Those are crucial questions, answers to which should be detailed in the annual reports. We should know how much money Network Rail is spending in that manner. Finally, we need to know what bonuses were paid to senior directors of Network Rail in 2007 and 2008. In particular, it would be enlightening to find out the director of human resources’ bonus and the performance criteria to achieve it.

I want to go further, however, and challenge Network Rail to indicate how many of the 95 cases that it settled by means of compromise agreements with former employees, in 2007 and 2008, included claims of sex, race or other discrimination. I have highlighted the potential cost implications for taxpayers of a substantial number of such agreements being for sex, race or age discrimination. It has been explained that a company can incur unlimited costs at an industrial tribunal over such charges. How much was paid in total in settlement of those claims, and has any action been taken against those responsible? Failure to answer these questions in an open and transparent manner will only add to the suspicion that this company has been using taxpayers’ money to cover up breaches of its employees’ rights and, even worse, alleged breaches of discrimination legislation.

I congratulate my hon. Friend the Member for Livingston (Mr. Devine) on securing this debate, which raises some important issues. I also congratulate my hon. Friend the Member for Dundee, West (Mr. McGovern) on his interventions, which added to the points made.

Hon. Members will be aware that Network Rail is the not-for-dividend owner and operator of Britain’s railway infrastructure, which includes the tracks, signals, tunnels, bridges, viaducts, level crossings and stations. The company’s aim and purpose is, of course, to provide a safe, reliable and efficient rail infrastructure for freight and passenger trains to use. The company’s set-up and governance affect the issues to which I can refer. Network Rail is a company limited by guarantee—a private company operating as a commercial business—is independent of the Government, is directly accountable to its members, to whom my hon. Friend the Member for Livingston referred, and is regulated by the Office of Rail Regulation.

Network Rail’s members are drawn from the rail industry and general public. They do not have any financial or economic interest in the company and do not receive dividends, share capital or any other form of payment from Network Rail, except for travel expenses. Members perform a similar role to shareholders in a plc. As such, they review the performance of Network Rail against its commercial and other targets, as well as industry benchmarks for its provision, maintenance and management of the railway infrastructure. It is the members’ duty to act in the best interests of the business without personal bias. They do not make any strategic decisions themselves, but hold the board to account for its management of the company.

In particular, members seek assurances from the board that the necessary processes are in place and are being implemented to maintain high standards of corporate governance. The board is responsible for governing the strategic direction of the business, supervising its operational management and providing leadership within a governance framework, which it oversees. This extends to taking overall responsibility for financial performance, internal controls and risk management of the company, which, like any other employer in this country, has certain duties to its staff and must operate within relevant employment legislation and directives.

Network Rail is a company of some 35,000 people. My hon. Friend said that people have been dismissed for alleged poor performance, ignoring employment rights. His comments are on the record, but those are matters for the management to follow through on; as I have already indicated, the Government do not have direct day-to-day control over those matters.

I suspected that the Minister might use this argument, but he cannot seriously be telling the Chamber that, despite an investment of £3 billion a year, the Government have no remit to look after the management of that money.

Of course the Government have responsibility to ensure that there is value for money. Whenever taxpayers’ money is used, they have to ensure that it is used in the most effective and efficient way. As my hon. Friend is aware, numerous agencies exist within the Department for Transport—for example, those that run safety regimes for the Driving and Vehicle Licensing Agency—that operate on behalf of the Government, but which are not managed day in, day out by Ministers or their civil servants. I will come to some of the other points raised by my hon. Friend later in my speech.

In return for commitment from its staff, the company provides training and development for its signallers, maintenance workers, professionals and leaders. All permanent employees participate in incentive arrangements that reflect the company’s performance against its key business targets for train punctuality, asset stewardship and financial efficiency.

In addition, the company offers a company pension scheme, which I know is the subject of usual industrial relations negotiations, and a 50 per cent. discount on season tickets. As well as helping to meet immediate needs, Network Rail believes that such an approach encourages people to stay and develop within the organisation. The company’s equal opportunities policy seeks to ensure that anyone who meets the requirements of the job is eligible for employment within Network Rail irrespective of age, disability, employment status, gender, health, marital status, membership of a trade union, nationality, race, religion, sexual preference, social class or other non-job-relevant personal characteristics. The company also makes every effort to eliminate discrimination—direct and indirect—from the recruitment and selection process.

As I said earlier, this is a company of some 35,000 people, and as such there will always be cases in which someone gets dismissed. There are proper, recognised channels that have been negotiated over time and, in Network Rail’s case, have been agreed by the trade union and the employer representatives. My understanding of the level of staff turnover in Network Rail indicates that there is nothing exceptional in its operation.

I take seriously the comments that Network Rail’s management is presiding over a “culture of fear.” I also noted the reference to 2003, which was, if I recall correctly, just after the Government replaced Railtrack with Network Rail, which has managed the infrastructure in a far better way. I do not know whether that incident was related to what my hon. Friend said about the dismissal of some 600 people. Again, the issue of what can be claimed from employment tribunals is a matter for discussion elsewhere. We are not discussing the legislation that governs employment tribunals and levels of compensation. One would assume that there would be substantial numbers of employment tribunal cases if that culture of fear was such that it was leading to many people fearing for their jobs.

I understand that Network Rail offers a range of positions with development programmes specifically tailored to suit the needs of everyone from school leavers through to graduates and experienced engineers. Those programmes lead to nationally recognised qualifications. I am told that some of the company’s most senior engineers and managers have come through those programmes in past years.

Network Rail’s success in meeting the challenges of the future will depend on the skills, motivation and capabilities of its people. More than 50 per cent. of Network Rail’s work force are engaged in engineering functions.

I should like to ask the Minister one question before he concludes his speech. My hon. Friend the Member for Livingston (Mr. Devine) asked 10 specific questions. Does the Minister intend to answer them today, or will he forward his answers to my hon. Friend at a later date?

I intend to answer them, but I wanted to set out that we have a company that is making provision to recruit, train and retain staff within its organisation. That is why I was referring to the apprenticeship schemes that my right hon. Friend the Secretary of State for Transport visited at HMS Sultan in Gosport recently, and the advance apprenticeship scheme that was launched in September 2005. Moreover, NVQ and BTEC qualifications have been introduced, which will help to raise skills and to maintain a qualified work force within Network Rail, which is important both to the company and to the travelling public. The company has recently signed up to the Government’s skills pledge and is working with the local learning and skills council to undertake an audit of all maintenance operations people on adult literacy and numeracy courses, and will then put in place a plan to help and support them.

As I have said, the Government do not operate and manage Network Rail on a day-to-day basis. Management and employment policies are negotiated through the usual channels, of which my hon. Friend the Member for Livingston is well aware. Therefore, the matters that have been raised today have already been raised by members of Network Rail at the annual general meeting. I am sure that there will be another opportunity to do that at the July AGM that will shortly be upon us. None the less, they are not matters over which we, as Ministers, have any locus to intervene.

As for bonuses, let me say again that that is a matter for Network Rail. However, I am sure that hon. Members would expect Network Rail’s remuneration committee to be mindful of the public mood and not to award bonuses that the travelling public would consider unjustified by their own experiences of Network Rail’s performance. I am referring here to the hundreds of thousands of commuters on the west coast main line whose services were cancelled and massively disrupted in the new year due to the poor maintenance of overhead wires.

The Minister says that Network Rail will take on board the public mood about bonuses. Would he expect it to take on board the public mood about using public money to keep people silent?

That is why this debate is important. I am sure that members of the Office of Rail Regulation and of the Network Rail board will read this debate with interest and focus their minds on the issue.

In conclusion, Network Rail is running policies that are helping to recruit and retain members, but there is, as always, a long way to go. This debate will highlight the concerns that exist across certain sections of Network Rail.

Effectiveness of the European Union

It is a great pleasure to serve under your chairmanship, Mr. Jones. I am sitting on the Front Bench because we do not seem to have a Front-Bench spokesman, but as I have been speaking from the front on this subject for the past 25 years, I do not see why I should stop. If the best way to keep a secret is to make a speech in the House of Commons, I have been keeping a lot of secrets in the past 25 years, because I have spoken about the European Union on many occasions.

I have chosen to speak about efficiency in the EU, because we need to look at the extent to which the institution has matched up to its promises. The word “effective” means making things work. On any reasonable standard, the EU has failed on the two fundamental tests that I would apply: first, it has failed on democracy and, secondly, it has failed on the economy, especially during the economic crisis that we are experiencing. The EU appears—people have thought this in the past but it has not yet happened—to be breaking up under the tensions.

The hon. Gentleman mentioned two tests on which Europe has failed—democracy and economy—but would he add administration to those failures? If, for 14 years, the EU cannot get its own budget past its own auditors, something is going very drastically wrong. It is not a matter of minor problems or a question of tweaking the accounts; major failures under each of the major budget headings mean that the EU cannot get its accounts audited.

In happier days, when the hon. Gentleman spoke with me in debate after debate on the European Court of Auditors report, among other things, I made that very point, as he will remember. The failure of administration is an example of the failure of democracy.

It is quite impossible to deal with this subject in the depth that it deserves in the 20 minutes for which I intend to speak today. I had a debate with Mr. Joschka Fischer last week. He was particularly pessimistic about the present world crisis. He argues for more Europe, but when I demonstrated to him all the reasons why Europe is not working, he became more and more unhappy at the figures and the arguments. Even my Europhile friends, including professors of international relations, former Cabinet members and others—Eurosceptics like me do have Europhile friends—never thought that the arguments made by myself and others in the past 15 or 20 years would be proved so right. I am not here to say, “I told you so”. Rather, the debate is of immense importance to elected people and electors. They are the ones who matter.

I am concerned that the legal framework—the European Court of Justice adjudicates at one end, and an unelected Commission initiates legislation at the other—is creating an impossible situation and a compression chamber. The 27 member states need to act unanimously to overturn an ECJ decision, which is a straitjacket. When things go wrong, such a concrete system is completely unacceptable and unworkable in a democracy. Democracies have to change with the times. Unfortunately, the EU is designed to continue, irrespective of anything else, towards further and deeper integration, whatever the consequences.

I will give the EU credit on its propaganda machine, which is heavily and brilliantly financed. I will not repeat the debate that we had with the former Minister for Europe—he is now Secretary of State for Transport—on “Plan D” in Standing Committee, but there is no doubt that the money that is made available by the European authorities for argument within the EU always goes in the direction of organisations that are in favour of integration, and not to those with other views. Of course, the question is who is right? More and more, it is becoming obvious that those of us who wanted to come out of the exchange rate mechanism, fought our own Government over the Maastricht treaty, and over the Amsterdam and Nice treaties, and have watched the referendums on the constitutional treaty in places such as France and Holland, were found to be right.

I was in France and in Ireland during referendum campaigns on the Nice treaty. The EU is bullying the Irish again, and I hope that it gets its comeuppance—the way in which the EU has ganged up on the Irish is disgraceful. In denying referendums to countries and by not complying with the decisions taken by ordinary people, it is distancing itself further and further from the people, which is out of kilter with the arrangements prescribed by the Laeken declaration. I did not believe in the declaration, but there we are. It is always theology first, democracy second.

A YouGov poll last week asked people how strongly they felt about 10 issues: immigration, the powers of the European Union, traditional family values, identity cards, prison sentences, taxation reduction, climate change, council tax, grammar schools and public services. Despite the deliberate attempts by all political parties to dumb down the European issue in the past year—I except the debate on the Lisbon treaty—immigration, which is very much an EU-related subject, came top by a very significant margin, and reducing the powers of the EU and increasing the powers of Britain’s Parliament came second. There are serious lessons to be learned from that.

Back in the 1980s, I remember reading the Cecchini report. The Minister might think it a shame that I did not read all 16 volumes. Some 11,000 businesses were interviewed. The conclusion was that the report would trigger a supply-side shock to the Community economy as a whole, leading to lower prices, greater competition, lower Government deficits, reduced inflation and substantial job creation. That was the essence of the economic argument for the European Union’s integration process, but not one of those things has proved to be the case. In fact, on almost every count, exactly the opposite has happened. Take Government deficits, for example: the promises that were made were outrageous. We predicted that it would not work, but the EU has continued down that course. The foreign workers issue, on which I have introduced the Employment Rights Bill to try to get fairness for British workers, is a good example of where the EU has gone wrong. People believe profoundly that there is unfairness in the European Union. That is bad for democracy and for the European Union.

There is also the question of the Lisbon agenda, which has not worked. I do not have time to go into all the details. On over-regulation, as Mr. Verheugen said, massive over-regulation—£100 billion worth a year—is endemic throughout Europe. I have done research on the benefits claimed in the Cecchini report, which were estimated at about €300 billion, but even advisers to the European Commission recognise that they have not been realised, as the single market document “Yesterday and Today” by Canoy and others clearly indicates.

On the costs of compliance, the Boyfield and Ambler and Chittenden reports demonstrate that financial regulation is costing the City £23 billion. A letter in the Financial Times only last week discussed the question of extending banking and financial services regulations to supersede our own in the City of London, which must be resisted at all costs. Majority voting will result in other member states imposing on our country, and dictating to it, decisions that belong to us in our Parliament. I have consistently proposed a supremacy of Parliament clause in legislation. My party supported such a measure during debate on the Legislative and Regulatory Reform Act 2006. We lost the vote, but we won the principle within the party. After several Whips’ meetings, they decided to endorse it, and I sincerely trust that they will continue to do so.

We must not only override European legislation but do more. When the voters who have elected us in general elections decide what they want, those wishes and democratic decisions should not be overridden by European legislation. We should exercise the veto where necessary. Where our Parliament, on the basis of our democratic credentials and the fact that we have been elected, wishes to disagree with the European Union, we, in line with a national association of nation states, must assert not only our latest Westminster Act of Parliament but require the judges to obey that Act and not the European Union and the European Court of Justice. That is a fundamental matter of democracy.

Riots are already occurring. That is not scaremongering, as there have been riots in Italy, Greece and Latvia. There are problems with regard to countries such as Bulgaria and Romania. The European Union is being extended and enlarged. As I said to the Minister for Europe the other day, we are enlarging to take in countries such as Macedonia, Kosovo, Bosnia and Herzegovina and Albania, which is a centre for the cocaine trade. That is ridiculous. We do not wish those countries ill by any means, but even from a European integrationist point of view, if we are considering bringing in those weak countries that must mean that we should put a halt to it.

The EU is throwing money at the pre-accession countries as well. I read in The Daily Telegraph the other day that the enlargement strategy is being put on hold, but that is not the impression that I got from debating with the Minister only the day before yesterday. The common agricultural policy is a complete mess. We should enable our farmers to engage in fair, free markets and to earn their own living, not put them on single payment arrangements irrespective of what they do and depending on acreage, not production.

Unemployment figures throughout Europe are critical. In Spain, they are escalating massively. None of the European Union promises—the Lisbon agenda and the economic recovery plan—are working. The arrangement is not efficient or effective, and that is not just because of the United States of America and the sub-prime mortgage crisis. Unemployment is rising, because the system is not working. Europe does not have any answers except to produce more integration, more laws and more complications way above the heads of the voters. I fear that the matter is not getting the coverage that it deserves.

The eurozone itself is in crisis. Several countries are said to be on the point of breaking down, and now we hear that Ireland is going to be promised a bail-out by Germany, no doubt to keep the referendum on the right side. At the same time, however, that will happen only on the basis that Ireland abolishes its corporate tax advantages. That is absolutely crazy politics. It is Alice in Wonderland stuff, and very, very dangerous.

What is going on—the turmoil inside that compression chamber as it begins to implode—will bring out substantial instability. The strikes and riots may well continue, and they may end up giving ground to dark forces. We must get ahead of the argument to forestall extremists such as the British National party which, by the way, managed to get two points ahead of the UK Independence party in the most recent YouGov opinion. This is a serious matter. I speak as a Member of Parliament with a constituency adjacent to Stoke-on-Trent, where BNP numbers are significant.

I speak to my own party as well as to others. I am sorry that we do not have a Front-Bench spokesman here today to speak for me, but I will speak for myself. We must keep ahead of the curve. We need to reorganise and radically reform the European Union. I appeal to the Government and to my own party to come up with policies that will change the EU. I am in favour of European trade and co-operation, but not European government. I believe profoundly that it is not anti-European to be pro-democracy. I am not arguing that we should leave the Union, like the hon. Member for Castle Point (Bob Spink), but it may well turn into that. It may become inevitable. The objective will be brought upon us.

Surely the hon. Gentleman acknowledges, though, that the only way to obtain root-and-branch reform of the CAP and the common fisheries policy and to regain control of our own laws is to renegotiate the European Communities Act 1972, which would effectively mean coming out of the Union and re-forming a trading relationship with the rest of Europe. That is the only way forward.

Curiously, I do not disagree, and I have said as much. They put up the deputy leader of UKIP against me in the last general election. He lost his deposit and did not stay very long for the poll, but I had a public debate with him. I believe that the moderate, sensible attitudes that we in the Conservative party can develop towards achieving an association of nation states is the way to go. Trade, not government, should determine how Europe functions.

This is about who governs; it is about voters, elections and freedom of choice in the marketplaces of both the commercial and the political world. That freedom is the essence of a democracy. Both of them work, provided that they operate fairly. We want fair and free trade and fair and free politics. Within that framework, we can sort out the European Union. I am sorry that the media do not give as much attention to the subject as it deserves, because we are in a crisis in Europe—a vortex that could turn into a maelstrom if people do not get their act together and start renegotiating seriously for an association of nation states with the characteristics that I have described.

I conclude by saying, as a very wise former Cabinet Minister said to me this morning, that it is also a matter of national identity that we get this right. It is about keeping our nation together. The European Union is not a nation. We play the ridiculous games of majority voting and comparative advantage; we deal with the complications of UKRep, COREPER and the rest of it. The reality is that people want good government, they want stability and they want to know that when they vote in a general election, they will get the Government that they want, who will produce policies and laws that they are prepared to live with and obey. Where it turns out that they do not do that, because the European Union system deliberately prevents it, and we have unelected commissions and courts of justice laying down how people should live, the bottom line is that people will eventually revolt against it.

It may be that we can solve the problem by getting ahead of the curve, but right now we are hearing more and more calls for more and more integration. It is fundamentally undemocratic. As far as I am concerned, the Conservative party has an overriding duty, consistent with its traditions, to trust the people and to provide a model, both after the general election and in the manifesto before it, to assert the supremacy of our Parliament on behalf of the voters and to ensure that we have a referendum, whether or not the Irish vote yes on the second round, when they have been bullied into it. There should be a referendum whether or not there is ratification. We must then sit down and work out with our European neighbours a kind of Europe that will work and that will be democratic and effective, which it certainly is not at the moment.

I congratulate the hon. Member for Stone (Mr. Cash) on securing the debate. Of course this is not the first time that he has argued these points, among others, in the House, and I am absolutely certain that it will not be the last. I have listened to his concerns about the EU not being an effective organisation on many fronts and I still have a sneaking suspicion that beneath all that he says lies a hankering to leave the EU, which is not the wish or policy of any mainstream political party, including his own.

It will be helpful to remind hon. Members of where the EU has been effective in the past 50 years in boosting our economy and improving the lives of British people. The hon. Gentleman has said what he thinks this issue is all about; I think it is about the interests of the British people. Perhaps we just about concur on that point, although we come to it from a different place and we set off from it in different directions.

If the Minister is going to talk about how the EU is boosting the economy, will she explain how a £40 billion trade deficit between this country and the EU has done anything to promote jobs in this country? I expect that she will say that about jobs, but if she believes that, she must believe in the tooth fairy, as well.

Perhaps I do believe in the tooth fairy; it served me well when I was young. On the serious point that the hon. Gentleman raises, EU membership has been a major boost for the British economy in the past 50 years. An estimated 3.5 million British jobs, including jobs in my constituency of Lincoln, are directly and indirectly linked to the export of goods and services to the EU, which is the UK’s main trading partner, with trade worth in excess of £400 billion. That is 52 per cent. of the UK’s total trade in goods and services, so it is impossible to turn away from that.

In 2006, British companies exported about £150 billion-worth of goods to EU countries. Exports from the UK service sector, which is enormously important to us and our economy, were worth more than £45 billion in 2005—an increase from £30 billion in 1995. The single market has raised gross domestic product by an estimated 2.2 per cent. across the EU, bringing an average benefit to every person in the UK of £360 a year. Also, the UK’s EU membership helps to attract a high level of foreign direct investment from non-EU countries, because international companies choose the UK as the gateway to their European operations. There is still work to be done to make the EU even more effective at boosting our economy and the Government take those matters extremely seriously. We work with our partners to simplify and streamline the regulatory burden on business, which I am sure we all agree is necessary.

I am absolutely clear that leaving the EU would be hugely damaging to our economy. It would leave British goods subject to customs controls, we would need export certificates and certificates of origin for our goods, and tariffs would be payable on our goods and agricultural exports. We would still have to accept many of the EU laws that govern the operation of the single market to ensure access to it for our goods and services, but we would not be part of the negotiations that decide on those laws.

I am going to continue, as I have only five minutes left. I apologise to the hon. Gentleman.

The EU is acting to tackle the present economic and financial crisis, and co-operation across Europe will be crucial to getting us out of recession. The Prime Minister has been at the forefront of EU action. At the October 2008 meeting of the European Council, EU heads agreed on a common approach that is based on guaranteeing bank funding and on recapitalising banks as necessary. In December, member states agreed to act together to boost spending and to accelerate reform, including on employment, skills, energy efficiency and digital infrastructure, in a concerted push to help our economies to recover.

I am going to continue. The hon. Gentleman has made some important points, and I must have some opportunity to respond.

At last weekend’s informal summit, EU leaders agreed to take action together to improve the regulation and supervision of financial institutions and to make the maximum possible use of the single market as the engine for recovery to support growth and jobs. As a constituency MP, I am certain that that is the way we should be going. United action is vital to the UK economy, as it has a much greater impact on business and consumer confidence than the Government could ever have when acting alone.

On effectiveness in relation to the multiplier effect, I believe that the EU adds to what the UK could do alone. That applies to many UK priorities around the world, including climate change, sanctions against Zimbabwe, peacekeeping in Kosovo, guarding refugees in Chad and monitoring the ceasefire in Indonesia. Where we agree with EU partners and act together, that action is more effective than any action we could take alone. Environmental issues such as air pollution and carbon emissions do not have any respect for national boundaries and they do not stop to show a passport. By working together on such issues, we give a clear lead to the rest of the world in tackling this global threat. The EU is leading the world in brokering an historic climate change agreement, and we are the first Government in the world to introduce a climate change Act. In December, the EU agreed legislation that will deliver a unilateral commitment to reduce greenhouse gas emissions by a fifth, compared with 1990 emissions, by 2020.

The EU is delivering on safety and security. We co-operate with EU partners on terrorism, illegal migration and organised crime and that co-operation directly improves the security of UK citizens up and down the country. The European arrest warrant was used to extradite to the UK from Italy, within weeks, one of those who attempted to bomb the London underground on 21 July 2005. The Dublin system enables the UK to identify asylum seekers who have already lodged a complaint in another member state and return them to that state.

I thank the hon. Member for Stone for enabling us to debate the effectiveness of the EU, because it allows us to think more broadly about what is effective. He talked about accountability, on which I would say that democracies need to move with the times, which is why the Lisbon treaty is so important. It will ensure that the EU can now be more effective. Member states define the powers that the EU is given by the treaties, and it is therefore in the UK’s interests that the EU’s powers and where it can and cannot act are set out explicitly. The Union’s competencies are defined in the treaty for the first time and it sets out where the EU can and cannot act. I hope that that is welcomed by hon. Members across the House.

There is, of course, a true commitment from the Government to ensuring that the UK remains at the heart of the EU and gets the best for Britain.

I believe that the hon. Gentleman has debated the referendum many times and has been advised of the free will of both Houses in already deciding that there should not be a referendum. We deal with that matter within the Houses of Parliament, which I would have hoped he supports.

The Government are committed to ensuring that the UK remains effective and at the heart of the EU, and that they get the best for Britain. Our policy is clear: we want to implement the Lisbon treaty if all member states ratify it, and we want to move on to tackle the challenges that matter to the people in our constituencies—jobs, prosperity, security, and climate change. All our EU partners agree on that.

If I understand it correctly, the policy of the official Opposition is to reopen the whole question of the Lisbon treaty, on which this Parliament has already spoken, and seek some new agreement, but they will have no allies in other EU countries—either in government or in mainstream opposition. Introducing uncertainty into our relationship with the EU would be bad for business and bad for our economy. This, more than ever, is not the time to start on a road which leads in the direction of withdrawal and our own exclusion from the single market.

Sitting adjourned without Question put (Standing Order No. 10(11)).