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Commons Chamber

Volume 493: debated on Friday 12 June 2009

House of Commons

Friday 12 June 2009

The House met at half-past Nine o’clock

Co-operative and Community Benefit Societies and Credit Unions Bill

Consideration of Bill, not amended in the Public Bill Committee.

Third Reading

Queen’s and Prince of Wales’s consent signified.

I beg to move, That the Bill be now read the Third time.

As I trooped through the No Lobby, I reflected that, given the fervour for the modernisation of Parliament, I hope that the modernisers will look critically at the way in which we spend our Friday mornings. The shenanigans that go on are not fit for purpose in a serious parliamentary democracy.

It is my pleasure to present the Bill for its Third Reading. I thank hon. Members for their useful contributions on Second Reading on 24 April. I am grateful for all their comments and questions, and encouraged by the unanimous cross-party support for the measure. We had an equally useful, albeit short, exchange in Committee, and I am impressed with the commitment that hon. Members continue to show to the cause of mutuality and co-operation.

The Bill represents something of a rebranding of societies. It provides for all new societies registered under the Industrial and Provident Societies Act 1965 to be registered as co-operative or community benefit societies and it sets out the basis on which societies may be registered. The criteria are essentially those in existing legislation and no major change is made to the qualifying criteria.

The introduction of the registration requirement will also ensure that societies can be properly supervised by the Financial Services Authority, thus improving corporate governance over the sector. By modernising the name from “industrial and provident society”—which, I admit, has a historical resonance and status—to terms which are, in any case, in common usage, we can help the sector adopt a modern 21st century status and persona.

Societies that are already registered do not have to register again. If my Bill becomes an Act, societies that register before it is implemented will not be affected by the definitions of “co-operative society” or “community benefit society” in the measure.

The Bill also deals with circumstances in which a society’s registration may be cancelled so that it reflects the new registration provisions. The FSA, as registrar, will be able to cancel a society’s registration when it does not meet the new statutory definitions. Again, the Bill caters for the status of societies registered, or treated as registered, under the current section 1 of the 1965 Act.

The Bill changes the name of the Industrial and Provident Societies Act 1965 and that of other Acts concerning such societies so that “industrial and provident societies” is replaced by “co-operative societies” in the titles. That is part of the rebranding of industrial and provident societies.

On modernisation, perhaps the right hon. Gentleman will consider, given that “industrial” has gone out of vogue, whether that also applies to “Labour”, and whether the party should be branded “the Co-operative party” again. Will he remind the House that the registration of credit unions is unchanged, although some provisions affect them? Will he reflect on whether it is right to provide for “the Treasury” to have power to do things when, normally in Bills, power is given to “the Secretary of State”, which allows for greater flexibility in Government in later years?

I will deal shortly with one or two of those issues, not least credit unions, which both the hon. Gentleman and I regard as particularly important in the current economic climate in some of our poorer communities. On his useful—as ever—advice about the name of the Labour party, as every schoolboy and schoolgirl knows, there is a separate Co-operative party, of which I and many other Members are members. Indeed, some colleagues are returned as Labour and Co-operative Members. However, it is always useful to have a tutorial from the hon. Gentleman about the history of the Labour movement, although it is not the subject of the Bill.

The Bill applies the Company Directors Disqualification Act 1986 to officers of industrial and provident societies, as it applies to officers of companies, building societies and friendly societies. The 1986 Act provides for the disqualification of officers of companies and various bodies when such officers have seriously mismanaged those bodies. Disqualification means being prohibited from involvement in the management of a company or from acting as an insolvency practitioner for a period of time. Under the law as it currently stands, officers of industrial and provident societies who have mismanaged a society cannot be disqualified. Clause 3 will make their disqualification possible.

The Bill provides for greater investigation of societies. It gives the Treasury powers to apply to industrial and provident societies specific provisions of company law on investigating companies, company names, dissolution, and on restoration to the register, which the FSA keeps, of industrial and provident societies.

The Bill also applies part 31 of the Companies Act 2006, which contains provisions to strike defunct companies off the register of companies, to societies. It therefore provides a significantly more streamlined procedure than that which currently applies to societies, and one that will be less onerous on the FSA. The onus to prove that a society is defunct currently rests with the FSA as registrar. The FSA can act only in limited circumstances, frequently after having to devote considerable resources to investigation of a society’s status. The new regime will place the responsibility on a society to demonstrate that it is still active. The Companies Act 2006 provisions also contain related procedures governing voluntary striking off, treatment of the property of a dissolved company and restoration of companies to the register.

Parts 14 and 15 of the Companies Act 1989 also come into play. They cover a power by the Secretary of State—by that I now mean the Secretary of State for Business, Innovation and Skills; I think that is the correct name for the Department, after a period of being Business, Enterprise and Regulatory Reform and a longer period of being Trade and Industry. I have not walked along Victoria street this morning, but I think I have got the name right this Friday. The Bill gives powers to the First Secretary of State to investigate companies and their affairs, and to requisition documents.

Under the law as it stands, the FSA has certain powers to investigate industrial and provident societies. However, such powers are limited, particularly in respect of those societies that are not regulated by the FSA as providing financial or insurance services. In contrast, the Secretary of State has more extensive powers to investigate companies. That partly tackles the issue that the hon. Member for Worthing, West (Peter Bottomley) raised about the Secretary of State’s powers. The Bill will enable the Treasury to give the FSA powers of investigation of industrial and provident societies, equivalent to the powers that the Secretary of State has in respect of companies.

The Bill also includes important provisions for credit unions. It enables provisions that correspond to building society law to be made for credit unions. The power will allow any provision in building society legislation, which is deemed appropriate, to be mirrored for credit unions. Credit union membership has expanded significantly in recent times; indeed, perhaps I should declare that I have recently joined the excellent Croydon credit union. The best way of allowing credit union law to keep pace with that expansion in membership and operations is to bring it into line with building society law, which is tailored to deal with issues specific to institutions that accept deposits. The power is widely drawn, so as to allow any provisions of building society legislation deemed appropriate to be mirrored for credit unions.

There are restrictions, however, to ensure that specific provisions of existing credit union law cannot be modified. Thus, provisions regarding registration, the use of the name “credit union”, the general prohibition on deposit taking, amalgamations or transfers of engagements and conversion of status between credit union companies are safe. There is a requirement that the Treasury consult with the appropriate persons before using the power, which is a reflection of its potentially wide scope. Depending on which provisions of building society law are converted into credit union law, the Treasury might need to

“confer power to make orders, regulations and other subordinate legislation; create criminal offences; provide for the charging of fees (but not any charge in the nature of taxation).”

On Second Reading, hon. Members raised a number of important points, to which I promised to respond in due course. I would therefore like to take a little time today to put on record my reflections on those questions. The hon. Member for Southport (Dr. Pugh) cited some illuminating research by the Joseph Rowntree Foundation that pointed out some of the risks associated with increasing state and local authority involvement. He wanted assurance that the Bill would not denature credit unions. I think it fair to say that credit unions would welcome the opportunity to attract savings from larger community organisations and local authorities. I welcome that as well, but also recognise the hon. Gentleman’s concern. The legislative reforms that this Bill, and, indeed, the Government’s legislative reform order, seek to introduce will ensure that the role that people play as individual members, contributors and depositors will not be diminished. Individual membership will continue to be the main focus of credit union membership.

When I spoke at the annual general meeting of the Croydon credit union the other day, I was impressed by the fact that 40 or 50 people had gathered there as members of the credit union to spend an hour and a half discussing the affairs of the union and looking at how it could improve itself. That seemed to be self-help—to use an old-fashioned term—at its very best. Certainly, nothing in the Bill will interfere with that. Indeed, I think it will help to maintain and develop that honourable tradition and ethos.

On the issue of informal financial education for credit union members, I know that the Government, together with the FSA, have launched a scheme, under the brand name “Money made clear”, aimed at creating greater financial literacy in education. They have also been working together with credit unions under the auspices of the umbrella group, the Association of British Credit Unions Ltd, to increase financial education among members.

On Second Reading, the hon. Member for Fareham (Mr. Hoban) emphasised the importance of getting the regulatory regime right for societies, citing the recent fate of the Presbyterian Mutual Society in Northern Ireland as a case in point. Indeed, the problems at the PMS have emphasised the need for societies to make absolutely clear to their members the nature of their investment. That also highlights the need for vigilance by the registrar. I understand that the administrator for the PMS is due to present his report on this sad incident, and it would therefore not be prudent for me to comment further on the matter. However, I would like to say that we all sympathise with the plight of that society and its members, and that we hope that the matter ends in a satisfactory resolution for all those affected.

The hon. Gentleman also inquired why the enabling power granted under the Industrial and Provident Societies Act 2002, allowing the Treasury to amend industrial and provident societies legislation using secondary legislation in line with any changes made to companies law, had not been utilised. I am informed by colleagues at the Treasury that there is every intention to use that power at the appropriate time. They explain that it can be exercised only to apply to industrial and provident societies a “modification” of company law—in other words, a new provision. A large number of the provisions of company law covering the areas that the Bill intends to make applicable to industrial and provident societies are not modifications or new law, and these powers cannot therefore be used in this instance.

Based on my discussions with Treasury colleagues, I can also confirm that the Government intend to consult later this year on the application and applicability of the Electronic Communications Act 2000 to credit unions and industrial and provident societies. It is important for the sector to be able to communicate electronically with its members and with statutory bodies, and I am assured that this matter will be dealt with using all the diligence and urgency that it requires.

My hon. Friend the Member for Edmonton (Mr. Love) sought reassurance that the Rochdale principles would be applied when registering industrial and provident societies. The Rochdale principles of voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, as well as co-operation among co-operatives, are already enshrined in the International Co-operative Alliance’s statement on co-operative identity. I am not aware of any provisions in the Bill that will detract from those important central tenets.

The Bill has received all-party support, and I hope that that will continue today. On one level, it is a legal, technocratic Bill. It is about modernising, and about improving what we might call corporate governance. It is also about introducing measures for co-ops and credit unions to bring them into line with best practice in the corporate sector. We have mentioned the applicability of building society provisions for the credit unions in that regard. It might appear to be a rather dry Bill, but it comes at an important time when we are seeing a revival of interest in the principles of mutuality and co-operation. That revival is partly driven by consumers’ concern that goods should be appropriately sourced—without the use of child labour, for example—and by their increasing interest in the quality of products, given rising concerns about health and obesity, for example. The Bill is also being introduced against a backdrop of some corporate financial institutions, not least in the financial sector, having seriously let down the public. It is therefore unsurprising that we are seeing a greater interest in the co-operatives.

Following the historic great leap forward in earlier times, building societies have experienced many years of decline. Sadly, too many of the great societies were de-mutualised and most of them are now totally lost to the benefit of their communities. After that period of demutualisation—which got a lot of excited support at the time from certain segments of society—and a period during which the Co-op shop was simply not competing with the likes of Sainsbury’s and Tesco, we are now seeing a revival. I understand the problems that are affecting some of the building societies at the moment. The West Bromwich building society is a topical case in point. Nevertheless, my guess is that a lot of us are rather pleased that our savings and bank accounts are with the Co-operative bank or with one of the mutual societies, rather than with one of the private sector banks that have run into trouble.

Some interesting developments are now taking place that support my optimism about the co-operative and mutual sectors. First, the whole range of local and regional co-operative societies have at long last amalgamated into one Co-op Group. Some societies are not yet members, but 80 or 90 per cent. have amalgamated. Secondly, the Co-op Group is now taking over the Somerfield retail outlets to make it a significant player in the retail sector. Thirdly, we have seen the Co-op bank—perhaps I should declare an interest as I have been a long-term member or account holder of that bank ever since my student days—merge with the Britannia building society to form what some people are referring to as a “super mutual”. If we also add on the number of small organisations that are co-operatives—in fishing or some of the big agricultural sectors—we can identify a flourishing of this ethos of co-operation and mutuality.

Should the Bill receive support and eventually Royal Assent, and in some small way succeed in improving corporate governance and modernising such societies and credit unions, that would mean progress towards making the mutual and co-operative sector a significant one in the British economy once again. For that reason alone, the Bill will be most welcome.

I warmly congratulate the right hon. Member for Croydon, North (Malcolm Wicks) on his Bill and on the way he has conducted it through the House. We have seen a perfect example of the right approach, with him answering points that were quite properly raised by other hon. Members in earlier stages and shepherding his Bill to what I hope will be a successful conclusion today.

I do not know whether it is a proper interest, but I should declare that I am a long-standing member of the Witham Friary friendly society, one of the oldest in the country. That entitles me to attend a quinquennial dinner and, should I ever be debilitated and unable to work, to receive the princely sum of six old pence a week. I am sure that The Daily Telegraph will take a considerable interest in that extra emolument available to me if I am ever disadvantaged by illness.

I would like to point to a historical precedent in that one of my most distinguished predecessors as the Liberal MP for Frome was the author Thomas Hughes, who was a great advocate for the co-operative movement. He was the Liberal MP for Frome for only a short time, subsequently becoming Liberal MP for Rochdale, where the connection with the movement is perhaps more obvious. Our part of the world can nevertheless be said to have played its part in the development of the co-operative and mutual movement.

I shall not detain the House with a long speech. The right hon. Gentleman is absolutely right to say that the appetite for mutuality and co-operative arrangements is increasing. A few years ago I was worried, and said so at the time, when we saw the demutualisation of our great building societies. Members of all parties at the time sounded the warning bells that that was an abandonment of the principles under which those organisations had been built up, in an unholy scrabble after major capital for members and the organisations themselves, that could—and, in many cases, certainly did—end in tears. Now, however, there is a real understanding that working in a co-operative way for the common wealth is a beneficial way of organising a business. As the right hon. Gentleman said, we have certainly seen that in the agricultural sector in the selling of produce, but also in other sectors.

I thus greatly welcome further development from the bottom up of these smaller organisations in the financial sector, but they need to develop in some sort of framework—otherwise, they will be open to threats from those who have alternative motives. The right hon. Gentleman’s Bill, small as it is—he is right that this is not earth-shattering stuff; it is in some ways a technical Bill—will help to put the smaller mutual arrangements into a proper system of corporate governance and regulation. That seems to me a worthy aim, so I commend the Bill and I will encourage all my hon. Friends to support it.

My right hon. Friend the Member for Croydon, North (Malcolm Wicks) would have been as surprised as I was when, on looking into the history of the co-operative movement, I found very little connection with Islington. I know that he has a long-standing connection with Islington, so he will appreciate how much of the history of the labour and socialist movement began there. The only historical information I could find on Islington that is comparable to Rochdale in this respect, however, was that Thomas Paine wrote the “Rights of Man” at the site of the current Co-operative bank at the Angel. [Interruption.] I have an excellent researcher, so please leave her a note.

I echo my right hon. Friend’s comments on the need to look again at the way in which we conduct our time and ourselves on Fridays; if we modernised, we might be able to use our time for the betterment of Parliament.

It is right to look at the history of the co-operative movement and to understand what has happened so far. Although the Bill has been seen as largely technical and of small import in itself, it remains important if it puts the final brick in the wall needed to ensure that the co-operative movement is properly protected and able to fight on a level playing field with other financial institutions. At a time when we are going through such enormous convolutions and have been hit by dreadful threats to our financial system, the co-operative movement and the system of mutual finance is one that we really must look at carefully and protect. I share the aspirations of other Members to ensure that the co-operative movement once more assumes a very important role in the conduct of our business and financial institutions. I commend my right hon. Friend for the support to the movement that his Bill will provide.

Although the history shows that we have moved a long way from the roots of the co-operative movement, many of its core values continue to inform us today. Despite the changes over the last two centuries, co-operatives remain the same in one crucial respect: they exist to provide mutual self-help for their members rather than to generate profit for investors. They have been driven by their core values of ethical behaviour, and the absence of external shareholders throughout the sector means that there are no conflicts of interest between the claims of consumers and owners, leaving co-operatives no incentive to exploit their customers for short-term gain.

When I met the staff and management of the Co-op shop on Caledonian road, I was struck by the pride they have in their store. It is difficult to run a shop in the Caledonian road area and a number of other shops have closed, but the Co-op is committed to ensuring that a shop is maintained there. It offers a wide range of high-quality products—Fairtrade products, for example, that perhaps have a wider appeal on the Barnsbury side of the Caledonian road—but also good-quality cheap goods. The shop has had to increase its security and, in the teeth of opposition from the local Liberal Democrat council, place cameras outside in the street. It has expanded the shop and shown great commitment—

It is, I think, important for an institution such as that one in my constituency to be supported.

I look to you for guidance, Madam Deputy Speaker, but another event took place in my constituency shortly after I was elected. One member of staff at the Co-operative bank at the Angel was killed and another badly injured as a result of what happened on 7/7. The reaction of the staff and management there was remarkable. They worked with me on arranging a community meeting to celebrate the lives of those killed or injured. Islington continued to pull together—another example of co-operative values that we should all be proud of.

I am not a member of the Co-operative party, although frankly I wish that I were. I have made a number of attempts to become a member. When I stood for election in Canterbury and Whitstable, I wanted to stand as a member of the Labour and Co-operative party, but unfortunately—

Order. I am afraid that I really must bring the hon. Lady to order. I repeat what I said earlier: her comments must relate to the content of the Bill.

The purpose of the Bill is to remove all legislative obstacles faced by the co-operative and credit union movements, and to level the playing field in relation to other organisations. It represents the culmination of more than 10 years of work done by the Co-operative party in partnership with Government to level the playing field between co-operatives, credit unions and other corporate forms.

The first piece of legislation for the purpose—the Bill that became the Industrial and Provident Societies Act 2002—was tabled by the then chair of the Co-operative party, Gareth Thomas. It increased protection against the demutualisation of co-operatives, and enabled the Government to use statutory instruments to bring industrial and provident society legislation into line with company and building society law.

The second Bill piloted by the Co-operative party was Mark Todd’s, which became the Co-operatives and Community Benefit Societies Act 2003. It built on Gareth Thomas’s earlier Act by providing an asset lock for community benefit societies including housing associations, community child care facilities and football supporters’ trusts. It prevents the demutualisation of community benefit societies, making them more secure and much more suited to the running of public services. It also addresses a number of contractual and corporate governance issues for societies.

Sir John Butterfill’s Building Societies (Funding) and Mutual Societies (Transfers) Act 2007—

Order. I am sorry to have to interrupt the hon. Lady again, but when she mentions Members of the House she should refer to their constituencies rather than their names.

I am grateful for that assistance. I believe that Sir John Butterfill is the hon. Member for Bournemouth, West. His 2007 Act made it possible for different categories of mutual to transfer to each other without demutualising. The success of that Act was key to the proposed merger between the Co-operative bank and Britannia building society.

The long-awaited review of the industrial and provident societies legislation was launched by my right hon. Friend the Member for Normanton (Ed Balls) on Thursday 21 June 2007. It was fitting that the task was performed by the first Co-operative party Member of Parliament to fill the post of Economic Secretary to the Treasury, as it represented the culmination of 10 years of work by the party to level the playing field for the co-operative sector.

The following June, my hon. Friend the Member for—another hon. Member—[Laughter]—announced the publication of a number of proposals for legislative reform orders to level the playing field further. The fact that so much legislation can be delivered in this manner is a result of the success of the original Industrial and Provident Societies Act 2002.

The legislative reform orders are due to come before Parliament on 6 April. They will modify the provisions specifying the minimum ages for membership of an IPS and for becoming an officer of an IPS, modify the rules on share capital, modify the provisions relating to the fee paid for a copy of the society’s rules, facilitate easier dissolution of registered societies, give societies the flexibility to choose their own year ends, and remove the requirement for societies to have interim accounts audited. A recent legislative reform order announced a series of measures for credit unions. There is also a second tranche of orders to be consulted on and laid before Parliament.

This Bill represents the final piece of primary legislation in the jigsaw, and will tackle all outstanding issues that cannot be dealt with by secondary legislation. It proposes to change the term “industrial and provident society” to “co-operative society” or “community benefit society”. That strikes me as an excellent change, which will make the purpose of such societies much clearer to people. It is felt that the current title is a disadvantage when the aim is to portray societies as a modern way of addressing contemporary issues. Although the change is mainly presentational, it may be crucial to the way in which societies are perceived, and could play a role in attracting funds for investment.

The Bill also applies the provisions of the Company Directors Disqualification Act 1986 to the special circumstances of the mutual sector. There are currently no powers to disqualify the directors of an industrial and provident society under the Act, nor is there any statutory prohibition on disqualified directors from being members of a committee or board of a society. That seems nonsensical to me, and I am very pleased that we shall be able to bring it to an end.

There appears to be no reason not to apply this legislation, which would be helpful in terms of parity and oversight. It would ensure that industrial and provident societies were regarded as a no less reliable source of governance and oversight than other corporate forms, as well as protecting the public interest.

The Bill gives the registrar powers to require the production of information and documents, to appoint investigating accountants, and to wind up societies in the public interest. There are currently no powers to require the production of information and documents, or to appoint investigating accountants in relation to industrial and provident societies. It is important for that to be changed, and for societies to be brought into the 21st century. Such powers exist in relation to both building societies and companies. There are also currently no powers to wind up societies in the public interest, although such powers exist in relation to companies. The introduction of the new powers would also be helpful in terms of parity of statutory oversight, and in protecting the public interest.

At present, only an Act of Parliament can update credit union legislation in certain respects. The Bill permits the use of statutory instruments when building society law is changed in future to assimilate credit union law with building society law. That may prove crucial in ensuring that credit union law is kept up to date with the latest developments in related fields. There is a credit union in Islington, the Islington and City credit union, which was established in 1997. I hope that we can change the law in order to support that credit union, which is going from strength to strength, so that it can continue to assist my poorest and most vulnerable constituents. There are far too many loan sharks on the streets of Islington, and I wish the Islington and City credit union all the best.

I support the Bill, and I am very pleased that it has been presented.

The House will have enjoyed becoming familiar with the hon. Lady’s speech just as much as I suspect she did—with the bits that were in order, that is. I had not realised that we had to find something written in our constituencies before taking part in the debate. Oscar Wilde came to Worthing for three weeks, where he wrote “The Importance of Being Earnest”, which has no relevance whatever to this debate.

I should declare an interest—or rather not an interest, but a matter of fact. I have a Co-operative bank account and I am a member of the West Sussex Credit Union, which I commend to others. It provides both safe savings and sound borrowings, and I expect many commercial banks to adopt similar principles from now on.

Let me say to the right hon. Member for Croydon, North (Malcolm Wicks), who has kindly nursed the Bill through its stages so far, that he has done an excellent job. If he is thinking of any kind of modernisation, he might suggest that this should be a Government rather than a private Member’s Bill, although I understand that the various parts of the co-operative movement have had an interest in developing its principles.

If we are going to have to modernise everything—and I note that every candidate for the Speaker’s Chair is now a moderniser—it might be an idea, if a Bill is non-controversial, for the Government to consider inviting members of other parties to put their names to Government Bills to show that it is not a case of one side fighting another or taking all the credit for something. Having offered that thought, which I hope is in order, I shall move on.

I know that the hon. Gentleman was not implying this, but he will know that my Bill is sponsored by members of the Conservative party and by the hon. Member for Twickenham (Dr. Cable), the Liberal Democrats’ Treasury spokesman, as well as by members of my party. I understand the other point that he made, and we would welcome Conservative support for one or two controversial Bills that are due to be presented.

I thought that the Postal Services Bill had been delayed, but we will do what we can to help the Government.

The right hon. Gentleman made a serious point in observing that the Bill has been sponsored by two Liberal Democrats and two Conservatives. That is what prompted me to suggest that where there are non-party Bills, even though there may be controversy about parts of them, the Government might consider saying, “Why don’t we have a big-tent approach to the sponsorship of these Bills, just to show that, behind the principles, there can be all-party agreement?”

The focus on co-operative provision of services should not be to the exclusion of the private sector. It is just as possible in the private sector as in the co-operative movement for a failing shop to be taken over by someone who provides a proper service, and for the shop to develop and grow and for its customers to be grateful. Such a private shopkeeper might be a recent immigrant to this country, and I pay tribute to the many people who came here when the Asians were thrown out of Uganda. They showed that such businesses could be successfully established as family concerns, and that they could serve their customers with just the same commitment as those in the co-operative sector.

The co-operative sector has an honourable tradition, and it comes in many forms. A few days ago, there was a function in Parliament for employee-owned businesses. The range of them is much greater than most people are aware of. I do not think they are covered by this Bill, but they are part of the tradition of co-operation or common ownership, and of alternative forms of ownership more broadly.

As the Bill passes to another place, I would like the Government to think about whether the approach summed up in the expression, “The Treasury can do this, and that, and the other,” is always the most appropriate. I do not argue that it is wrong, but I think that the tradition in our legislation of giving power to the Secretary of State is worth considering. I remember being told by my father, who was at the time a junior civil servant, that he had to get a letter to his Secretary of State, who was in Australia. He arranged with the Royal Mail that it would be taken to Hounslow—or whatever Heathrow was called at the time—where it would be put into the hands of a pilot, who would then fly to Sydney and find the Secretary of State. Two hours later, however, No. 10 asked if it could have the letter back—a reshuffle had probably been cancelled, as usual—so my father got in touch with the Royal Mail to ask for the letter to be returned. “Under whose authority?”, he was asked. He said, “The Prime Minister’s”, but he was told that that was not good enough as the relevant Act says the Secretary of State has the power and that this Prime Minister was not a Secretary of State. He was told that the only Prime Minister to have been a Secretary of State was the Marquis of Salisbury, who was Foreign Secretary at the time. As a result, my father had to wander around Whitehall until he found Chuter Ede, the Home Secretary, to whom he said, “Excuse me, my name is Bottomley from the Dominions Office, will you please sign this authority to get back a letter from your colleague the Prime Minister to your colleague Viscount Addison?” and the letter was then withdrawn from the mail. I therefore offer the thought that using the expression “the Secretary of State” allows any Secretary of State to sign a document if and when needed.

The Bill is useful. Most of its provisions are necessary; some are window dressing, but I do not think that that matters too much. The explanatory notes are valuable and they make it plain that the Bill does not change the registration requirements of credit unions themselves. I therefore hope that those in credit unions will see such references to credit unions in the Bill and will not feel that they have a problem with their current registration.

I hope that credit unions such as the West Sussex Credit Union will grow not just in the provision of services for savers and borrowers, but also in order to raise financial literacy—I think that is the right expression. I hope that young people will get to understand the range of provision of financial services, and also that the old rules about money are probably the right ones: it is all right to borrow, if it is safe; and it is right to save, but the real reason for saving is not just to get a return on the money, but to have something put by for a rainy day, because, as we all know, summer does not last for ever.

It is, as always, a pleasure to follow my hon. Friend the Member for Worthing, West (Peter Bottomley), who made a thought-provoking speech.

Until now, I have had no dealings with the Bill, so I should start by reassuring the right hon. Member for Croydon, North (Malcolm Wicks) that my presence at the Dispatch Box reflects the day of the week rather than any U-turn on behalf of the Conservative party, because we welcome what is a useful Bill. On a personal note, I would like to extend heartfelt congratulations to the right hon. Gentleman for taking the Bill so far. I have had the pain or privilege of taking a private Member’s Bill through Parliament: it eventually became the Sustainable Communities Act 2007. Notwithstanding his understandable frustrations at the process, I hope this is a part of his political life that he will look back on with great pride, and perhaps reflect on the irony that so far it has proved easier to change the law of the land as a Back Bencher than it proved to install renewable energy in his home in Croydon despite being Energy Minister at the time.

We welcome this useful Bill. My hon. Friend the Member for Fareham (Mr. Hoban) spoke in support of it on Second Reading. The hon. Member for Islington, South and Finsbury (Emily Thornberry) made an entertaining speech—although I noted how difficult it was for her to get her mouth around the words, “my right hon. Friend the Member for Normanton”. She reminded us that the Bill should be seen as the latest in a series of private Members’ Bills sponsored by Members from both sides of the House that seek to update the legislation on mutuals.

We value the work of mutuals. I do not know whether the right hon. Member for Croydon, North keeps a copy of the “Mutual Yearbook 2008” by his bedside, but it is a good read, and it reminds us of the economic importance of this sector. It employs close to 1 million people and has annual revenue of more than £84 billion. It is therefore a sector that has significant economic weight, as well as an important social impact in the country.

It is probably wrong to pick out any particular sector, but I happened to meet housing association representatives yesterday and they were keen to remind me that they are not just about bricks and mortar; they are also about providing community services through employment, health and education projects. They are important partners of regeneration. A recent audit of those services found that they annually invest at least £435 million in that work.

Whether the bodies in the sector are building societies, housing associations or football supporters’ clubs, they need the right legislative framework, and one that is suited to the 21st century, and this Bill provides that. As the right hon. Gentleman said, the Bill addresses four key issues. First, it requires new industrial and provident societies to register as co-operatives or community benefit societies. Secondly, it calls for the renaming of the Industrial and Provident Societies Acts; it has been agreed that the term “industrial and provident society” is arguably an outdated term, and hides the wide range of bodies that can be constituted as mutuals. Secondly, it applies the Company Directors Disqualification Act 1986 to industrial and provident societies. It is my understanding that there was no outstanding reason why officers of mutual societies should not be dismissed for negligence, as they can be under company law. Thirdly, it gives the Treasury powers to apply to community benefit or co-operative societies the company law on investigation of companies, company names and dissolution and restoration to the register. Finally, it gives the Treasury powers to make provisions for credit unions corresponding to any provisions applying to building societies. The clear theme is one of recognising the contribution mutuals have made to our economy by passing legislation that updates the framework within which they operate.

The Bill has been widely consulted on, and the mutual sector is broadly happy with the proposals. It is customary now to thrash out any issues left hanging after Committee stage, but this Committee stage lasted 14 minutes, at least two of which, I understand, were taken up by my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) praising the Bill’s sponsor for his integrity and experience. Given the career implications of that, it must have been the longest two minutes of the right hon. Gentleman’s life, but I am glad to see that he has recovered from the experience, and has been here today to guide us through proceedings at a steady pace.

At this point, however, we must sound a note of caution. Cross-party consensus must not become an excuse for lack of scrutiny. The Bill is important. It will modernise the legal framework of co-operatives and protect the interests of their members and industrial and provident societies through the provisions. It is not simply a tidying-up exercise. There are instances where co-operatives should be considered as companies and credit unions should become more like building societies, but mutuals are not companies and credit unions are not building societies and should not strive to be. We need to make sure that these legislative reforms are able to deliver the necessary modernisation while protecting the unique status of societies and credit unions. They are not the solution to all our problems either. There have been many casualties in the mutual sector throughout the financial crisis. It is not the case that all mutuals are well managed and it is in the interests of the members and customers of mutuals that their directors are brought within the remit of the Company Directors Disqualification Act 1986. As a result, although support for the ethos of mutuals is unanimous, so should be the recognition that they need effective regulation and the right legislative framework in which to operate. The Bill is principally an enabling one, and much will depend on the secondary legislation and the legislative reform orders that will follow. The standard of scrutiny that we have seen thus far must be maintained. The one thing that did emerge from the Committee was the news that the secondary legislation is yet to be drafted, and even when that has happened, it will be subject to extensive consultation. It is vital that those changes have the support of the sector, and that can be achieved only by proper consultation.

In conclusion, Conservative Members welcome the Bill, which should help mutuals to achieve their full potential through a more modern legal framework. We welcome both the protection that it gives members of mutuals from poor directors and the modernisation of credit union legislation. We wish this welcome Bill well.

I am delighted to provide the Government’s response to this Bill. I thank my right hon. Friend the Member for Croydon, North (Malcolm Wicks) for the leadership that he has shown in introducing this Bill and I pay tribute to his commitment to the cause of mutuality. I echo what the hon. Member for Ruislip-Northwood (Mr. Hurd) said about the achievement that this Bill represents. I know that this is not the first time that my right hon. Friend has piloted a private Member’s Bill through the House—he did so with carers legislation—so this is a field in which he is well experienced and this Bill reflects that. It makes an important contribution to improving the framework within which co-operative and community benefit societies and credit unions will be able to work in future.

The Government place a high value on the role that co-operatives and credit unions play in the UK economy. Along with other mutuals, such as building societies and friendly societies, they have had an immense influence on the development of our financial system as it stands today. The hon. Member for Ruislip-Northwood is right to underline to us the extent and scale of this sector of the economy; mutuals provide a very wide range of services to millions of people up and down the country. The building society sector has traditionally had a very strong presence in savings and mortgage markets, but it is a particular characteristic of mutuals such as credit unions and industrial and provident societies that they reach into communities to help people who might otherwise not have any access to mainstream financial services. That is a particularly important strength that the sector offers.

Mutuals have combined total assets in excess of £400 billion and about half the UK population has membership of at least one mutual, so there is absolutely no doubt that mutuals are a major part of the financial landscape. This debate has touched on the history of demutualisation and people sometimes give the impression that there is nothing left following the demutualisations that have taken place, but that is certainly not the case; this is a large sector that makes a very important contribution, and we need to support it in the way that this Bill will help us to do.

From the Government’s point of view there are three major benefits of this Bill. First, by providing support to the mutual sector the Bill will promote choice and diversity in financial services. The hon. Member for Worthing, West (Peter Bottomley) warned us against the danger of placing too much reliance on the mutual sector and that is a fair point. Nobody in the House—I include my right hon. Friend the Member for Croydon, North in this—would argue that we should be solely reliant on the mutual sector, but there is an important point to make about diversity. After the problems that we have seen in the financial sector over the past year or two, it is particularly clear that the alternative model offered by the mutual sector is one whose value we should not underestimate. Choice and diversity in financial services are an important gain from the agreement of this Bill.

The second benefit to which I wish to draw the House’s attention is the Bill’s ability to encourage saving and confidence in it. There has been a big rise in the saving ratio over the past couple of years, for reasons with which all of us will be familiar, but it is important that we encourage a culture of saving and that we encourage people to be confident about saving. The mutual sector is making a very important contribution, not least in the availability of child trust fund savings products, individual savings accounts and other products that it offers, which are attractive to an important cohort whom we wish to encourage to save. Credit unions are also clearly making a very important contribution to the culture of savings. That is a second benefit that we can anticipate from the agreement of this Bill.

The third benefit, which was also touched on by the hon. Member for Worthing, West, lies in the promotion of financial inclusion and capability—ensuring that people have information on and access to a range of products that suit their needs. As my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry) rightly underlined, we should seek to provide an alternative to loan sharks and the very high cost sources of credit of which we are seeing too much in our constituencies at the moment. It is pretty clear that difficulties in the credit market more generally have pushed people towards those very high cost sources of borrowing over the past couple of years.

The financial crisis has highlighted, in a new way, the traditional strengths of the co-operative model—the mutual model; it has stood up very well through this crisis. As we have been reminded in this debate, this model has a very long tradition and is based on the values of support, the common good and community. I was not present in the House for the Second Reading debate, but I gather that my right hon. Friend the Member for Croydon, North was able to point to a lineage that stretched back to the Romans, so this model has a very long history indeed. In Britain, it arose, in particular, from initiatives on the part of workers to provide their own social safety net at the time of the industrial revolution and from community-based self-help in newly burgeoning towns and cities that allowed poor working families to secure at least some protection from the harsh insecurity and ravages that accompanied industrialisation and urbanisation. The hon. Member for Somerton and Frome (Mr. Heath) was right to remind of us Rochdale. I did not know that its Member of the House at the time had previously been a representative of his constituency.

This model has a very long tradition, whereby local community cohesion has provided a very good way of managing credit risk. The bonds formed in communities have proved to be a resilient and sound basis for the development of what went on to become some very impressive and substantial financial institutions. Workers have saved together and borrowed from each other, inspired by the writings of Robert Owen and adopting the model that was put in place by the Rochdale pioneers with the principles that they formulated. My right hon. Friend has reminded the House of that.

Credit unions have a rather different heritage. They originated in rural Germany among agricultural workers and then spread to much of Europe, including Britain, by the end of the 19th century. However, the modern credit unions in Britain have more recent roots, which go back to the 1960s and are linked particularly with immigration from the West Indies, where the credit union movement was a good deal more firmly established at that time than it was in the UK.

We have heard about some of the legislative underpinnings for credit unions, and the Credit Unions Act 1975 set in law the requirement for a common bond, which characterises the movement today. Like my right hon. Friend and others who have spoken in the debate, I am a member of my local credit union, NewCred, the excellent Newham credit union. Unfortunately, unlike my right hon. Friend and his local credit union, I was not invited to address its annual general meeting, although I have spoken to meetings of NewCred in the past. It is another of the patchwork of excellent organisations that several hon. Members have mentioned, strengthening the financial resilience of the communities that we represent.

I wish to associate myself with what my right hon. Friend said about the Presbyterian Mutual Society and the expectation that the administrator will present a report shortly on what happened. I add my sympathies to those that he expressed about the predicament of members of that society and the great anxiety that they have suffered in recent months. I hope that those difficulties will be satisfactorily resolved before too long.

The hon. Member for Worthing, West raised the issue of the Treasury’s role in this matter. It is right that the Bill gives powers to the Treasury, because it has policy and legislative responsibility for the mutual sector, of which industrial and provident societies are a part. It is consistent with the powers that the Treasury has in respect of such societies in the existing IPS legislation. The Financial Services Authority has the regulatory role, so in these circumstances—notwithstanding the hon. Gentleman’s illuminating anecdote about retrieving a letter from the Royal Mail—it is appropriate that the power is vested in the Treasury.

If the Bill reaches the other place, perhaps it might be possible to unpack in public what the words “the Treasury” mean. Otherwise, perhaps the Minister could write to me. I accept his point, but do those words mean that an official can do it or is a Minister required to do it? That would be useful information to have at some stage.

It would depend on the circumstances, but I would be happy to drop the hon. Gentleman a line setting out a response to that point in more detail.

We are living through extraordinary economic times. The global economy is forecast to contract this year for the first time since the second world war. We have seen a worldwide financial crisis more severe than for generations. Against that backdrop, the strengths of the mutual sector have been highlighted, and we have seen mutual organisations playing an important part. We have also seen mutuals suffering alongside other institutions, as several hon. Members have pointed out, but the availability of an alternative model during the difficulties that we have experienced in recent months has been valuable, and the importance of that alternative model has been highlighted in a way that has not been the case in the previous few years.

There was a time when lots of demutualisations were taking place, and it looked as though the value of the mutual sector was not well understood. It is better understood now, for several reasons—and my right hon. Friend has drawn attention to some of them—but not least because of the backdrop of the very serious difficulties that others in the financial services industry have experienced.

In response to the crisis, the Government have taken a range of steps to reinforce the financial system and prevent its collapse, which was on the cards in the autumn of last year. We have also provided direct support for the economy, and we have seen data this week showing that those steps have had the desired effect. We have also cleaned up the banks, enabling them to restructure and increase lending. In the Budget, we also introduced measures to prepare to make the most of the opportunities of the upturn.

At every stage, we have been acting with other countries, because the issues faced by the mutual sector and the financial services industry more generally are being tackled around the world, given the global nature of the crisis that we have been through. That is why we have taken action to strengthen the whole financial system and to restore the flow of credit, which is critical to the success of the economy. We recognise that although banks are the main source of credit in the economy, they are not the only source. We need to build a financial system for the future and my right hon. Friend the Chancellor will lay out the Government’s thinking on the future shape of financial regulation before the summer recess.

Against that backdrop, and given the problems that we have seen with access to credit for families and businesses, the importance of the mutual sector and the significance of its potential contribution is clearer today than ever. So the provisions in this Bill will stand credit unions and other co-operative financial institutions in good stead to be part of the renewed financial services industry, meeting Britain’s needs as we grow out of this crisis. I know that hon. Members on both sides of the House will want to see the importance of the mutual sector reflected in Government proposals for financial services regulation in the future.

The problems that we have seen in the credit crunch have trickled down to households across the country—pensioners worried about their savings, young couples struggling to find a mortgage, and people facing redundancy or the repossession of their home. Issues of personal finance have been pushed to centre stage, and the potential contribution of the mutual sector has also been highlighted. We have been able to commit to additional funding to boost the capacity of citizens advice bureaux in these difficulties to provide local face-to-face debt advice. In several instances, that will involve pointing people to the opportunities offered by their local credit union. We have also committed an extra sum of money to increase the provision of free telephone advice from the National Debtline service.

The Minister is right to talk about the concerns that people have about personal finance. To that extent, it would help them to understand how the Government’s spending plans bottom out over the next few years. The Minister is an honest man: can he confirm that the Government plan a 7 per cent. cut—

Order. The hon. Gentleman knows that we are on Third Reading, and any question must relate to the content of the Bill.

I will, of course, respect your ruling, Madam Deputy Speaker, although I am disappointed not to have the opportunity to answer the hon. Gentleman’s point.

The Government want to see a vibrant and self-sustaining mutual sector, offering high quality services and greater choice for its members. We recognise that one tangible way in which that can be achieved is to ensure that the sector is managed under a modern legislative framework. Increasing expectations from members and global competitive pressures make it important that we have such a framework that will facilitate the growth and expansion of the mutual sector, as well as enable the provision of a high quality service to its members. Those are some of the primary reasons why we welcome and support the Bill.

The main purposes of the Bill, as we have heard, are to modernise and update the law on industrial and provident societies by changing their name; to help to improve their corporate governance framework; and to give the Treasury the power to modify some aspects of the law on co-operative and community benefit societies in line with company law—

Proceedings interrupted (Standing Order No. 11(4)).

Swine Flu Update

With permission, Madam Deputy Speaker, I should like to make a statement on the A(H1N1) virus, commonly known as swine flu.

Yesterday evening, the World Health Organisation raised its pandemic alert status to phase 6. The criteria for making this declaration are based on the geographic spread of the virus and not its severity. There is now clear evidence of sustained community transmission in countries outside north America, which means that we are facing the first pandemic for more than 40 years. Across the world, nearly 30,000 cases have been confirmed in 74 different countries. As of today, there have been 909 confirmed cases in the UK. There have been 144 reported deaths in six countries, but none in the UK.

Yesterday’s announcement means that it is even more important that the global community works together to limit the impact of swine flu. Over the last few years, the UK has supported the UN system, including the World Health Organisation, in pandemic preparedness and response capacity. We will continue to support the World Health Organisation and its partners in the crucial months that lie ahead.

In response to this particular outbreak, we have also now set aside a further £6 million in additional help for the international response. The WHO declaration does not, of itself, trigger any material change in our domestic preparations, which have been under way for several weeks now and are at an advanced stage.

The Department of Health is continuing to work with other Government Departments, health protection officers and other health care professionals to slow the spread of the virus. That work includes our strategy of giving antiviral drugs for the treatment of those with symptoms and prophylactically to those who have potentially been exposed to the virus, and, where appropriate, closing affected schools. As our knowledge about the virus has increased, we have been able to refine our strategy to be in line with the best public health assessments.

At discussions at the Civil Contingencies Committee this week, we were able to update our strategy to respond to the latest advice. That includes the use of clinical diagnosis rather than laboratory testing alone where there is a high probability that cases are positive and the more targeted use of antiviral prophylaxis, which is where antivirals are provided on a preventive basis to contacts considered most at risk of contracting the virus. In practice, that will include mainly household or household-like contacts, or, in a school context, those at surrounding desks, for example.

We have been monitoring our domestic response continually. The formal declaration of a pandemic should not affect people’s day-to-day business and it does not affect our assessment of how the virus is behaving in this country. It is important to stress that the majority of cases in the UK so far have not been severe, with those catching the virus making a full and fast recovery—though a small minority of cases have been more serious.

As I said, the Health Protection Agency reported 909 confirmed cases of swine flu in the UK. Twenty-eight people are known to have been hospitalised and the majority have already made a full recovery. Nearly all those people had previous underlying conditions. We now have enough antivirals to treat half the UK population, with orders to increase that to 80 per cent. We also have orders for 226 million facemasks, 34 million respirators and 15.2 million courses of antibiotics, which will be delivered within the coming months.

The free swine flu information line, along with the nationwide leaflet, TV and advertising campaign, has kept the general public well informed about the steps they can take to protect themselves and limit spread. However, we recognised from the outset that we would be unlikely to prevent a widespread outbreak indefinitely. In recent days, there have been significant increases in the daily number of cases in certain parts of the UK, most notably Scotland, where Health Protection Scotland has concluded that sustained community transmission appears to be taking place. This is characterised by an increased number of sporadic cases—that is, cases with no identifiable link with other confirmed cases.

Those increases come as no surprise and are in line with what we know from similar outbreaks, but it remains the case that, at some point, we will need to move our focus away from limiting the spread of a localised virus towards mitigating the effects of a widespread virus. I want to be clear: that point has not yet been reached. We continue to monitor the situation carefully, and any decision to move to mitigation will be based on the best public health, clinical and scientific advice.

There is always a careful balance to be struck between benefit and risk when offering any drugs to healthy people. The extra knowledge that we have gained during the last six weeks of containment means that we can now refine our approach. The Health Protection Agency will be using all its expertise and clinical judgment to look even more carefully at the circumstances behind local outbreaks before deciding who should be given antivirals.

The single most effective way to limit the impact of any future epidemic is the successful development and distribution of a vaccine. Significant progress has already been made, including the identification of virus prototypes, which are so important in the production of the vaccine.

The declaration of phase 6 is highly significant because it means that manufacturers will now be expected to meet the contractual obligations of advance purchase agreements for vaccine that countries, including ourselves, had already agreed in the event of phase 6 being declared. We are already speaking to manufacturers to agree what this means for our own plans for full country coverage of pandemic-specific vaccine, should it be required. We have advance purchase agreements that enable the UK to purchase up to 132 million doses of pandemic-specific vaccine—enough for two doses for 100 per cent. of the population, should that be necessary. On current projections, we expect the first deliveries of the pandemic vaccine to arrive in the autumn.

Current indications are that seasonal flu vaccine production is well advanced and is expected to be completed in the next few weeks with the requested UK quantities being delivered at the usual time. The WHO does not expect switching to pandemic flu vaccine production to have an impact on seasonal flu vaccine production.

The final important thing to stress is that people should continue to follow our advice on good hand hygiene, and the “catch it, bin it, kill it” messages. They should cover their noses and mouths with tissues when they cough and sneeze, throw the tissue away, and wash their hands. People who have flu-like symptoms should not panic, but should stay at home and check their symptoms using the online symptom checker or the swine flu information line. If people are still concerned, they should call their GP or NHS Direct.

The WHO’s announcement is an important signal that all countries should now ready themselves to deal with increased flu cases. The UK has been preparing for this for years. We are recognised by the WHO as one of the best prepared countries in the world, so we are in a very strong position to respond to the global pandemic we now face.

I commend this statement to the House.

I am sure that the House will be grateful to the Secretary of State for giving us an update in the light of the World Health Organisation’s announcement yesterday about the move to pandemic phase 6 status.

In addition to thanking the Secretary of State, may I extend through him our thanks to all the staff in the Department of Health, the Health Protection Agency and the NHS across the country for the way they have responded to the spread of this virus? I reflect, as the Secretary of State perhaps has, on the fact that preparation turned out to be very important and useful. The spread of the virus in this country, relative to the spread in some other countries, has been limited. The containment strategy has clearly had a substantial beneficial effect, not least because in Scotland the schools are breaking up for the holidays and because we will shortly be seeing the school holidays in England. There was a risk that if the virus had spread rapidly it could have had a big impact on the public examination system, but it did not have as big an impact as it might have done. The containment strategy worked well, from that point of view. We should convey our thanks to all the staff involved.

I entirely endorse what the Secretary of State had to say about the desirability of maintaining a containment strategy while we can do so, and agree that it is perfectly reasonable to do so with more limited use of antiviral drugs, if we can do that. We do not want to medicate people if it is not necessary. Clearly in Scotland, and perhaps soon in England, we may need to move to a mitigation strategy rather than a containment strategy, and in that context, and bearing in mind the risks of a substantial recurrence of the virus in the autumn—in our flu season—the need for preparation is even greater now that we are in a pandemic phase. We will increasingly see additional cases coming into this country from overseas, as well as community transmission in this country. To that end, may I ask the Secretary of State a number of further questions about the preparations that we undertake in this country?

The Secretary of State will have observed that Professor Neil Ferguson’s report the other day suggested the desirability of surveillance in hospitals of young adults who present with respiratory illness, as the virus seems not to attack the elderly particularly, and to attack young adults especially. Does he propose that the Department and the NHS encourage that surveillance?

The Secretary of State has talked about the current strategy of restricting the use of antivirals to close contacts. He will know that our view is that we should, in the mitigation phase, continue to pursue what is called a household prophylaxis strategy—that is, we think that close contacts of people who are confirmed or suspected of having the virus should be offered antivirals. In that context, he will know that the phase 6 alert from the WHO, under the contingency plan, should trigger the national pandemic flu line, which is not the same thing as the free swine flu information line. People should be able to ring the pandemic flu line to have their diagnosis confirmed, to have a prescription for antiviral drugs confirmed, to be given a unique number, and to be told where their collection point is.

On that flu line, in papers supplied only a few months ago to the House of Lords Science and Technology Committee, the Department of Health said:

“Signing the contract in December”—

that is, December 2008—

“should mean that the National Flu Line Service system is available for use in the event of a pandemic by April/May 2009.”

The Secretary of State knows that that is not the case, and that the national flu line is not available, even though it is due. Will he explain why? In addition, the national flu line should link to the distribution of antivirals through collection points. The same document said:

“In line with the NHS Operating Framework, the target date for identification of Antiviral Collection Points is the end of December 2008.”

So by now, primary care trusts across the country should know where those collection points are, but clearly they do not. There appears to be continuing uncertainty and confusion among community pharmacies about whether they should, or should not, be the antiviral collection points. Will the Secretary of State confirm that in many cases they should be? Community pharmacies that currently seem uncertain about whether they should be a collection point, and resistant to the thought, should be. We are not talking about people with flu symptoms visiting their local pharmacies; clearly they should not do that. We are talking about flu friends visiting local pharmacies.

Will the Secretary of State ensure that we have a further debate about the issue of school closures in the autumn? If the virus continues to be relatively modest in its severity, there will be an argument that school closures may be an excessive response, but there is also an argument that if there is a very large number of cases, and if schools look like they are places where the virus will spread rapidly, there would be a risk that if we did not close schools for a short period where cases were confirmed, we would overwhelm local health service facilities.

On health care facilities, can the Secretary of State say what measures have been taken to extend critical care capacity for the coming flu season? What has been done to make available teams trained in the use of non-invasive ventilatory support? The document from the Department on surge capacity suggests that in the case of this virus, such a strategy might be desirable. Can he say further, or let us know later—

Order. May I ask the shadow Secretary of State to begin to draw his comments to a close, because we are interrupting discussion on private Members’ Bills, and there are quite a few Members hoping to catch my eye?

I have just a couple of questions to ask, if I may, about critical capacity. Under what circumstances might elective work in hospitals be stopped, and what has happened to the concept of enhanced rest centres, which were to have helped to offset the pressure in the acute sector? Finally, what more can we do to help developing countries, in addition to providing £6 million for that purpose? What would happen, for example, if the virus were to reach South Africa in its current flu season? It is a developing country that has a serious problem with the risk of HIV immune-compromised patients, but its medical system would have the capacity to deliver antivirals rapidly to patients if the country had access to sufficient antivirals; many developing countries do not have that capacity. Can we contrive to assist southern Africa, for example, in responding to the outbreak?

I thank the shadow Health Secretary for the measured tone of his comments, and the help that he has given us today to ensure that together we can give a reassuring message to the public, as we should. I strongly agree with him that we in the House should today send our thanks to staff in my Department—the Department of Health—and the Health Protection Agency, and to front-line NHS, public health and local government staff, who are working on the ground to ensure that we are in a strong position to deal with the outbreak.

As the shadow Health Secretary knows, we have been preparing for years. I was pleased with his acknowledgment that the containment measures that we have worked to put in place have had an effect. That in itself has given us more time to improve our preparedness for the spread of the disease. He said that we should maintain the containment strategy, and I should like to confirm that that is our intention. Nothing is changed by the WHO’s declaration; we continue to follow the plans that we have laid out. However, obviously it is important to keep that under review. There will come a point when we have to move from the containment to the mitigation phase, as he acknowledged, but we are not there yet. We keep the matter under review, and we would update the House at such a point.

The Civil Contingencies Committee will consider the matter next week, including what the trigger points might be for moving from the containment phase to a mitigation phase, and what arrangements are needed to ensure successful distribution and treatment in that phase. Those are matters that we will consider next week with colleagues from Scotland, Wales and Northern Ireland. Of course we will update the shadow Health Secretary and the House when we have more information to give. On the decision taken this week about flexibility, I should just say that it is important to allow flexibility to the experts on the ground where clusters have developed. That was very much the message from Scotland. We agreed to that flexibility this week, and we think it is the sensible thing to have done in the circumstances.

The shadow Health Secretary asked me about the work of Professor Neil Ferguson and, in particular, the surveillance of young people in hospitals. I want to reassure him that we recognise the importance of that. As he will know, Professor Ferguson is on the Strategic Advisory Group of Experts, or SAGE. Obviously, his advice is being fed in directly to us on matters such as the one we are discussing. The hon. Gentleman also asked about restricting the use of antivirals to close contacts. I think he asked that question in the context of the mitigation phase of the spread of the disease. I want to assure him that that is precisely the kind of thing the committee will consider next week. The balance has to be struck between a flexible response that is practical for health professionals, including public health professionals on the ground, and taking sensible and precautionary steps to prevent the spread of the disease. But we think the important thing is to give public health professionals the flexibility that they need on the ground to make those judgments. We will consider the matter in more detail next week and I will update the hon. Gentleman at that point.

The shadow Health Secretary asked about the national pandemic flu service. As I indicated in my statement, that will be up and running by the autumn. We have put in place interim services to give the public the information that they need. We have well developed plans for such a service which, as I said, will be in place by the autumn, and it will be able to deal with the demand, as necessary.

The hon. Gentleman suggested that there was some uncertainty and that PCTs did not know where collection points were. May I assure him that work is continuing to refine plans to set up the collection points, should they be necessary? Ian Dalton, director of NHS Flu Resilience, has worked in close partnership with PCTs on this. The hon. Gentleman also asked about the role of pharmacists. Again, that is an issue we will consider next week, and I will update him on that.

It is important for the public who are listening to this debate not to get a sense that there is about to be a widespread plan for school closures. I am sure the shadow Health Secretary would agree that it is business as usual and that life must go on. Obviously there may be circumstances in which the HPA considers it necessary to require or advise school closures because that may help with local containment of the disease. It is properly a decision taken at a local level on the advice of the HPA, but at all times it is the head teacher and the board of governors of any school who should listen to that advice and take the necessary action. However, it is important to keep the issue in proportion and avoid overreaction.

The hon. Gentleman’s two final points were about critical care capacity and other measures in the national health service to deal with any expected pressure on NHS services as we work our way through. I want to assure him that I had a conversation with David Nicholson, the chief executive of the NHS, very soon after coming into office, in order to be assured that and understand how the NHS is ready to cope. It is important to say that the NHS has been preparing for this moment for a long time, and it was an important part of the operating framework which was sent out to the NHS last year. The plans are in place and we will ensure that the capacity is in place where it is needed. I am grateful to the hon. Gentleman for raising that point.

Lastly, of course we need to work through the WHO to ensure that we assist developing countries to manage the spread of the disease. I mentioned the £6 million that we have allocated for this purpose. The hon. Gentleman was right to mention southern Africa and the obligations that we have to help across the developing world. We take those incredibly seriously, and we will update the House as we have more information on precisely what practical steps we will take to make that happen.

I, too, thank the Secretary of State for making the statement today. In the context of the World Health Organisation decision to raise the alert status, it was important that the House be made aware of the Government’s position. I raised the issue of a pandemic and our preparations for it in a debate five or six years ago, at which time we were inadequately prepared. Enormous progress has since been made, and I give credit to the Government for their response to the current situation.

Given that the Government have, I think, been acting appropriately, does the Secretary of State share my concern that there might still be a lack of public understanding of some of the consequences? The media have generally been helpful, but there were elements of alarmist reporting in the early stages and, more recently, perhaps of complacency. The most important thing that the Secretary of State has to do is to increase public understanding of what is an appropriate response. He mentioned the closure of schools. That is often an important component of the response, particularly in terms of containment, because it removes a potent incubator population from the local community rather than any particular threat to the children at the school.

Does the Secretary of State foresee any difficulties if and when he feels it appropriate to move from the strategy of containment to the strategy of mitigation? Questions will inevitably be asked—“Why are we no longer being given Tamiflu when, last week, that was the response?” He needs to think through how he gets that information across. He must be clear about the level of prophylaxis and the distribution of antivirals if we move to a mitigation stage.

For instance, are we still going to concentrate on health care professionals in the wider sense—all those who work in close proximity to patients? I speak as a former optician. I realise that I would be likely to be in some danger of spreading the disease, were I working in close proximity to the face of someone who was affected.

What is the Secretary of State’s epidemiological assessment for the UK? Is he expecting a rapid increase over the coming weeks, or that when we reach the period for seasonal flu outbreaks in the autumn, we are likely to see a rapid escalation in the incidence of community infection in this country? In that context, are there any dangers inherent in the combination of swine flu and seasonal flu? How will the professionals know how to respond appropriately? Will they be aware which immunisation they should give, for instance, and will they be aware of the circumstances in which they should give a double immunisation, if appropriate?

Lastly, there was a reference in the statement to using clinical diagnosis to a greater extent, rather than laboratory testing. That is, of course, sensible but it raises questions about getting an accurate picture of the levels of infection. Is any differential diagnosis now available between swine flu and seasonal flu?

I pay tribute to the hon. Gentleman for his foresight in bringing the issue to the House all those years ago. I mean that genuinely. It was important that colleagues with a scientific background and understanding of these matters raised public awareness and the public debate, and I am grateful for his acceptance that the Department for Health, the Health Protection Agency and others responded and significantly upped their game. As a former Health Minister coming back, I know that the subject occupied a great deal of my time two years ago, so I can assure him that the importance of the issue was internalised a long time ago.

The hon. Gentleman mentioned the media. Perhaps I can do something that not many Members of the House have felt inclined to do for some time, and thank colleagues in the media for the balanced, fair and accurate way in which they have put over to the public information about the outbreak. That has characterised the vast majority of the media coverage so far. All of us, in all parts of the House, want that to continue through the rest of the year. It is important that we give a clear message to the public that things carry as normal.

The hon. Gentleman asked about the move from containment to mitigation and the issues that might arise about public messaging. I understand his point. Along the trajectory of this outbreak, there will be points where careful thought will have to be given to public messaging. Of course, there is a balance to be struck between the practicality on the ground for health staff carrying out the strategy, and the successful containment of the disease. The clear consensus of the committee this week was that we should give that flexibility to the Health Protection Agency.

The hon. Gentleman says that people might draw a distinction based on whether they can get an antiviral in one part of the country but not another. It is important to point out that there are dangers in over-prescribing and in giving medication to healthy people. That also has to be a consideration as we try to get the balance right.

The hon. Gentleman asked me to speculate on the projection of the disease, but it is important that I do not get into what can only be speculation at this stage. Obviously, there are scenarios for the development of the condition, which could take different paths, one of which he mentioned. There are also other potential scenarios. I assure him that the relevant scientific advice is being given to the committee. We need to plan for all scenarios, and that is what we will continue to do. The strategy has been described as “hope for the best, plan for the worst”. We will continue to plan for the worst at all times and make sure that robust plans are in place. I assure the hon. Gentleman on that point.

What the hon. Gentleman said about clinical diagnosis rather than lab testing was very much in tune with what I said earlier about flexibility for health staff. That is a sensible and practical step to take at this moment. At all times, we want to preserve an accurate picture of how the disease is spreading in the country. We have plans in place to ensure that.

Order. I ask hon. Members to ask just one single, concise question. If responses are brief, all Members present might be successful in catching my eye. I am ever-mindful that we have interrupted private Members’ business.

Across Whitehall and in many parts of the economy a great deal of planning has taken place because of fears of an outbreak of avian flu. I thank the Secretary of State for his calm and well informed statement and I am grateful to his Opposition counterparts for their approach. Will the Secretary of State assure the House, as I expect he can, that what we learn from swine flu will be fed into the longer-term planning for a more serious outbreak of avian flu, which we still expect to happen one day?

I thank my right hon. Friend for his important question. The information that we are gathering now is important not only for the immediate challenge that we face but, more generally, in preparing the country for any challenges in the future. That is why we have to strike a balance between practicality on the ground and accuracy. That takes me to the point raised by the hon. Member for Somerton and Frome (Mr. Heath). There is some discussion about the hospitalisation rate for the condition. The figure given by the World Health Organisation is 7.5 per cent., but it could be higher because of under-reporting in other parts of the world. It is important that at all times we try to get as accurate a picture as possible, not only to help in the here and now but to leave information that will be useful to future generations in dealing with any similar or worse conditions.

I congratulate the Secretary of State on his promotion to the top of the greasy pole at the Department of Health. I warn him, however, that if his party changes leader in October, his tenure might turn out to have been short.

Sadly, the Secretary of State has said nothing today about travel, although most of the country are thinking about going away, including many people in Hinckley, Burbage and Market Bosworth in my Leicestershire constituency. What advice is he giving? So far, we have had only two cases in Leicestershire, but there is real concern. Finally, is he trying to reach young people through YouTube and Facebook?

I am grateful for the hon. Gentleman’s congratulations and I look forward to discussing complementary therapies with him at great length in the coming weeks.

The advice on travel has been clear throughout: there are no border closures and no restrictions on travel. The World Health Organisation reiterated that yesterday; I did not reiterate it again because I did not want to imply that there might be a problem. There is not a problem; there are no restrictions on travel at all.

I understand that the Health Protection Agency, whose headquarters are based in my constituency, is encouraging the testing of people who have flu-like systems but have not travelled to one of the high-risk countries. Will my right hon. Friend confirm that all primary care trusts in London are able to run the required algorithm and that GPs have sufficient swab-taking supplies in their practices? Barnet, my PCT, has that facility. Its area has had seven cases; the first case in Barnet occurred in my constituency. It is important that all PCTs should be able to run that algorithm.

I can give my hon. Friend that assurance and I will write to him with further details on that point.

Will the Secretary of State consider preparing for to issue of a written statement on Monday? It could answer some of the detailed questions to which I am not sure the House has heard the answers this morning. What is the telephone number, either now or then, that someone should ring if they believe that someone in their household might have one of these respiratory conditions?

I would grateful if the hon. Gentleman said what he has not heard that he wants to hear. I answered the shadow Health Secretary’s questions. If the hon. Member for Worthing, West (Peter Bottomley) want answers to specific questions, I would be grateful if he submitted them to me today in writing. I shall make sure that he gets an immediate response. The swine flu information line is 08001513513.

I welcome my right hon. Friend to his new post. As he is new to it, he might not know that one of the early outbreaks of swine flu took place in Finsbury in my constituency, when a young Australian man came back from Mexico. However, the outbreak has been contained because of that man’s responsible behaviour and the prompt action of the local medical staff. Will my right hon. Friend join me in thanking them for their prompt and appropriate behaviour?

The most admirable thing about our national health service is how, at moments such as this, committed people up and down the country move into action and work hard to protect the public. That is a great thing. The shadow Health Secretary was right to raise that point; we would all wish to thank those people. We will be calling on them in the coming months, but as always they will be there for us and up to the task.

If there is a large increase in the number of people infected by swine flu, as we seem now to be anticipating, the national flu pandemic service will be the only means of distributing antiviral drugs. Why is that service not already up and running, as was intended? What has gone wrong with the BT contract? Will the Secretary of State give a clear explanation? What does he mean by “the autumn”?

We have put in hand plans for a national service that can deal effectively with the mitigation phase of the condition, as and when it is reached. A detailed business case for the service has been prepared. That, of course, has to be tested to ensure that it delivers proper value for money and that the system being developed does the job that we want it to do. That work is now well in hand, and as I said in my statement, the service will be up and running by the autumn.

It has been suggested that widespread prophylactic use of antivirals could lead to the development of resistance to those antivirals in the virus itself. Is that factor being taken into consideration in planning the use of antivirals?

The hon. Gentleman makes a good point. That is a consideration. The decision taken this week on restricting the use of antivirals prophylactically is mainly because of the practicalities of doing it for health staff. However, he makes the important point that overuse of medicines among the healthy population is never sensible.

I thank the Secretary of State for his courtesy in coming to the House so promptly after yesterday’s statement by the WHO—perhaps that will spread like a contagion among his colleagues, so that they too make rapid statements. Are any special measures being taken for those who have a lot of contact with people coming in from overseas, such as those who work at Luton airport, or those in my constituency at Yarl’s Wood, who deal so promptly with a lot of asylum seekers coming into and out of detention?

I do not believe that any particular measures are being taken for immigration staff at the moment; I will seek to get the hon. Gentleman a fuller explanation of why that is the case.

The Secretary of State has now admitted that he cannot prevent a widespread outbreak of swine flu. Why is it not better to have that widespread outbreak in the summer rather than putting it off until the winter?

My family love me, but there is a limit to what I can do, four days into the job. I am doing my best, as is everybody else, to ensure that the country is prepared. It makes sense to contain the condition as much as possible to give us time to put the necessary systems in place on the ground to take the country through this particular moment. [Interruption.] I am still slightly taken aback by the hon. Gentleman’s question.

The Secretary of State only touched on the impact of school closures and said that that will be a local decision. However, many people will be worried about the possible effect of school closures on parents and the knock-on effects on businesses. What assessment have the Government made of that possibility, and what discussions has he had about it with other Government Departments?

Obviously, we are working closely with other Government Departments to get our advice right on this point. School closures continue to be discussed by the civil contingencies committee, and we will update the hon. Gentleman and the House as necessary. Although more serious in a minority of cases, it is important to reiterate that in the vast majority of cases this has been a mild condition, and people have made a very speedy and full recovery. It will be important not to raise heightened concern about widespread school closures. Where they are necessary to prevent the spread of the disease within a particular area, let us leave that to the professionals and the experts. If they wish to give advice to school governors and head teachers, that is how these things should properly be done. It is not necessary at this stage to have a national policy on school closures, or whatever the hon. Gentleman seems to be pointing towards. Let us deal with this calmly as we go along, but at all times taking the steps advised by the experts.

On a point of order, Madam Deputy Speaker. May I point out that Front Benchers took 31 minutes to make their opening statements and ask questions, so you inevitably had to curtail the few Back Benchers who are present in our questions? I understand that, but will you and Mr. Speaker look into whether Front-Bench contributions should be formally time limited?

I can inform the hon. Gentleman that they are time limited, for that very reason, and that is why I intervened. That is even more important today, because it is a day for Back Benchers to bring their Bills before the House.

Co-operative and Community Benefit Societies and Credit Unions Bill

Proceedings resumed.

As we have heard, the proposals in the Bill are a direct result of Treasury consultation on the review of co-operative and credit union legislation in Great Britain, which was carried out in December 2007. The responses identified areas in the legislation for co-operatives and credit unions that would benefit from an update. We have held extensive discussions in the Treasury with the sector and key stakeholders, and we are taking forward the majority of the reforms using a legislative reform order, which I hope will be laid before the House before too long. The Bill complements the work that the Government are doing and deals with issues that have not been included in the LRO but have been widely sought by the sector. The sector and its supporters certainly wholeheartedly support the Bill promoted by my right hon. Friend the Member for Croydon, North (Malcolm Wicks).

The Bill provides for a change of name for relevant institutions, and specifically that societies registered under the Industrial and Provident Societies Act 1965 should be registered as co-operative societies or community benefit societies. Respondents to the consultation made a powerful case that the industrial and provident society name sounds somewhat outmoded and constrains the development of the sector. The Government agree that a name change would help modernise the sector and attract a new range of members, so we fully support it. However, my right hon. Friend is right that a simple renaming is not enough, and we also have to change the IPS name throughout the relevant legislation.

Applying the Company Directors Disqualification Act 1986 to officers of industrial and provident societies as it applies to companies, building societies and friendly societies will be useful, too. Clause 3 is necessary, as it will go a long way towards improving corporate governance standards by providing for industrial and provident societies to be subject to closer scrutiny by their registrar, the Financial Services Authority. The Bill gives the FSA new powers of investigation to enhance its scrutiny role.

The benefits of that increased scrutiny are twofold. First, enhanced corporate governance standards will give societies added credibility, which is particularly important in the current circumstances of the worldwide economic and financial sector crisis. Secondly, it will provide extra assurance and protection to societies’ members and to the statutory authorities.

It is equally important to ensure that powers are available to regulate the corporate body, as well as the individuals who control it. I therefore welcome the aspects of my right hon. Friend’s Bill that will help to create a level playing field by enabling the striking off and dissolution of defunct societies by the registrar and the application of company law in the investigation of companies. Importantly, it will also make it possible to apply to societies company law on company names, including directing a society to change its name if it is similar to other names or if the society has provided misleading information to register a particular name. At the moment there is no clear sanction for businesses operating under the guise of a co-operative, or with the word “co-operative” included in their full corporate name. Helpfully, the Bill will remedy that anomaly.

Again, the Minister may or may not know the answer to this question off the cuff, and I do not mind getting a letter later. Will that power apply retrospectively if a company already has the word “co-operative” in its title and it is challenged as being misleading?

I believe that the answer about retrospection in the way that the hon. Gentleman defines it is yes, but I will ensure that that point is covered in the response that I promised him earlier.

On clause 5, credit unions share a number of similarities with building societies, although they are on a smaller scale. Credit union membership has expanded significantly, and we need to ensure that the protections offered to members keep pace with the expansion of the sector. The Government consider that the best way of reconciling regulatory oversight with credit unions’ expanding membership and operations would be to bring it into line with building society law, which is tailored to deal with issues specific to institutions that accept deposits. For example, we should allow credit union members a statutory right to vote by proxy and require institutions to provide a summary financial statement to members and depositors. In fact, the Bill will allow any provisions of building society legislation that are deemed appropriate to be mirrored for credit unions. I should give the reassurance that the Government would consult fully on any application of building society law to credit unions before bringing it into effect.

The Bill extends to Great Britain only, and excludes Northern Ireland, the Channel Islands and the Isle of Man. It would not be right to interfere with the separate regime governing similar institutions in Northern Ireland, although there is a limited power in the Bill to make consequential amendments to Northern Ireland statute if appropriate.

The contributions to this morning’s debate have reflected the affection and esteem in which Members throughout the House hold the mutual sector, and I am pleased to reaffirm the Government’s wholehearted support for my right hon. Friend’s Bill.

We have had a good, essential and therefore encouraging debate on the Bill, although it involved an outbreak of flu. However, I understand the need for the interruption.

I thank Treasury Ministers and officials for their great help in planning the Bill and my presentation of it. I especially thank my right hon. Friend the Financial Secretary for his speech today and his support for the measure.

I thank the Co-operative party for its support, through research and intelligence, for my presentation. My hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry) said that she had not been able to join the Co-operative party. There is the old joke about the Labour party being full up, although I am bound to say that I do not think that that is the case at the moment. However, I have a feeling that a membership form will be winging its way to my hon. Friend so that she can remedy that one defect in her political personality.

I congratulate my hon. Friend the Member for Islington, South and Finsbury on her speech. She represents an important and historic part of London, which my father, Arthur Wicks, represented for more than 30 years on the London county council and the Greater London council. I therefore watch her carefully and she is doing well.

I thank the Liberal Democrat spokesman, the hon. Member for Somerton and Frome (Mr. Heath), for his encouraging words. We usually discuss water mills and their potential for microgeneration, and it was good to talk about other matters on this occasion. The hon. Member for Worthing, West (Peter Bottomley) spoke encouragingly about the Bill, for which I thank him. I also thank the Conservative spokesman, the hon. Member for Ruislip-Northwood (Mr. Hurd), for his remarks.

I am a great believer in the private Member’s Bill tradition. I had the opportunity in 1995 to introduce the Carers (Recognition and Services) Act. I know that Madam Deputy Speaker has an interest in that, and she and I worked together on it. I managed to introduce that Act under a Conservative Government, thanks not least to Virginia Bottomley, who was then Secretary of State for Health and who encouraged me.

I thought that if I could introduce a Back-Bench Bill under a Conservative Government, surely one day I could convince my Government to support a private Member’s Bill that I promoted. I cheated slightly by adopting a Government measure, because I knew it might be more difficult under Labour than under the Conservatives to get a Bill on the statute book. However, I am pleased that we have consensus on the measure; we will have to wait and see what the upper House makes of it.

The private Member’s Bill tradition is important. As I implied at the beginning of the debate, it is so important that I think we can approach the task mid-week in a slightly more adult and serious way than sometimes occurs on a Friday morning, when people make hay with often significant measures.

I ask the House to support Third Reading of this important Bill.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Crown Employment (Nationality) Bill

Second Reading

I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

I beg to move, That the Bill be now read a Second time.

This is not my second time but my seventh attempt to introduce the Bill. Twice—once a couple of years ago and once last year—I got as far as Report, so I hope to make a little more progress this time. The Bill was originally a Government handout measure, but it seems to have become my own work. I am persistent about it because the genuine problems that it seeks to address remain.

The purpose of the Bill is to remove the restrictions placed on the employment of non-UK nationals in civil capacities under the Crown. In place of the current system, the Bill would open up all civil employment under the Crown to applicants of any nationality, apart from such positions as would be rightly restricted to UK nationals—about 5 per cent. under rules made by the Minister responsible for the Department concerned.

Before looking at the detail, let me make it clear that the Bill does not deal with asylum, immigration or work permits, and does not affect the requirements for non-UK nationals to get leave to remain and permission to work in the UK. This is the Bill’s seventh edition and, as it has gone on, various changes have been incorporated to reflect concerns that have been raised at its previous Committee and Report stages. It must now therefore be nearing a degree of perfection.

The rules restricting the employment of foreign nationals by the Crown go back more than 200 years. The Act of Settlement of 1700 provides that

“no person born out of the Kingdoms of England, Scotland, or Ireland, or the dominions thereunto belonging…shall be capable…to enjoy any office or place of trust, either civil or military”.

That prohibition has been amended over the years, and does not apply to Commonwealth citizens, citizens of Ireland or British protected persons employed in a civil capacity. Section 6 of the Aliens Restriction (Amendment) Act 1919 provides that

“no alien shall be appointed to any office or place in the Civil Service of the State.”

“Alien” is now defined in section 51(4) of the British Nationality Act 1981 as a person who is neither a Commonwealth citizen nor a British protected person, nor a citizen of the Republic of Ireland.

During the second world war, defence regulations permitted the temporary employment of aliens, if no suitable British subjects were available. That was replaced by the Aliens’ Employment Act 1955, under which the prohibitions were relaxed so that aliens could be employed if they were either appointed in a country outside the UK, the Channel Islands and the Isle of Man in a capacity appearing to the Minister to be appropriate for aliens, or employed in accordance with a certificate issued by a Minister with the consent of the Minister for the civil service. In that connection, either there must be no suitably qualified UK nationals available to do the work, or the alien must possess exceptional qualifications or experience to do the job. Certificates last for five years and must then be renewed.

In 2006-07, only 66 people were employed under the certificates, 37 of whom were in the Ministry of Defence. That compares with 67 in 2005-06, and 57 in 2003-04. A few weeks ago, I tabled some parliamentary questions requesting up-to-date statistics, but those questions have not yet been answered. Perhaps when the Minister responds to the debate she will be able to give us those figures if she has them. If not, perhaps she will tell me when I might get those answers.

The European Communities (Employment in the Civil Service) Order 1991 amended the 1955 Act so as to allow nationals of member states of the European Community, and their spouses and certain children, to take up civil employment under the Crown, apart from “public service” posts within the meaning of the European Community treaty. The rights of nationals of member states of the European Community were extended to nationals of member states of the European economic area by section 2(1) of the European Economic Area Act 1993.

Against the background of a possible legal challenge to the European Court of Justice, further changes were made in 1996, to put Irish and Commonwealth citizens on the same footing as all other non-UK EC nationals. In that year, an amendment to the civil service management code was made to restrict Commonwealth and Irish nationals from being employed in posts reserved for UK nationals.

The most recent change was the European Communities (Employment in the Civil Service) Order 2007. That in large part gave effect to the St. Andrews agreement of October 2006. The Northern Ireland civil service was disproportionately affected by the prohibition of Irish nationals applying for reserved posts; in the Province, they accounted for 25 per cent. of the civil service. In annexe B to the agreement, there was a commitment to

“bring forward separate legislation before the end of 2006 to reform entry requirements to ensure access for EU nationals to posts in the Civil Service.”

The 2007 order amended the Aliens’ Employment Act 1995, to define more clearly and restrictively the categories of posts that could be reserved, reducing them to such areas as security and intelligence, defence, the diplomatic service, the Foreign and Commonwealth Office, border control and immigration, and that sort of thing. The result of the order was to open up about a further 70,000 posts to Commonwealth, Irish and EEA nationals—in addition to UK nationals, of course—through the reduction in the number of reserved posts, reducing the total number of reserved posts to about 5 per cent., or about 27,000 jobs altogether.

However, the same basic rules still apply. The order has no effect on Commonwealth, Irish or EEA nationals relating to public service reserved posts or on aliens for any post in the absence of a certificate under the 1955 Act, or on the alien spouse of a UK national—but not of an EEA national—who also remains ineligible for appointment to the civil service. The effect of the rules is that foreign nationals may be employed abroad in any civil post under the Crown, including in the diplomatic service if the Minister considers it appropriate.

As regards civil employment under the Crown within the UK, however, Commonwealth citizens, British protected persons and nationals of member states of the European economic area may be employed in posts that are not “public service” reserved, but nationals of all other countries may be employed in UK non-reserved posts only if one of the very rarely issued exemption certificates is in force. Thus, 95 per cent. of civil service posts in the UK are available to Commonwealth, Irish or EEA nationals and the remaining 5 per cent., requiring special allegiance for public service posts, are entirely reserved for UK nationals, while other nationals are pretty well entirely excluded, even if there is no good operational reason for that. Only posts that are operationally necessary are now reserved within the definition based on the EC treaty.

Attempts to define public service posts must follow EC case law and are subject to the judgments of the European Court of Justice. As a matter of UK law, however, EU nationals may now be admitted to civil service posts, but they cannot be admitted to ones that the European Court regards as employment “in the public service”. Although the European Court interprets employment in the public service narrowly, it has nevertheless taken the view in the past that officials concerned, for example, in the collection of taxes are employed “in the public service”.

The result was that, as a matter of UK law, a national of an EU member state cannot generally be employed in Revenue and Customs—because such a post constituted employment “in the public service” within the meaning of article 39(4) of the EC treaty, so the exception from the 1919 Act did not apply—and a criminal offence is committed if he is so employed. Revenue and Customs employment is now generally permitted, because of the effect of the new order.

I hope that Members are following the argument so far. What we have seen is basically a plethora of interacting and interchanging laws, regulations, rules, treaties and so forth, making it incredibly complicated to work out exactly what is what. My Bill will simplify all that lot, sweep away the complex spider’s web that people have to negotiate and produce some simple and straightforward rules.

To summarise, the net effect of the complicated web of law is that it is a criminal offence, even if done by mistake, to employ a non-Irish EEA national in a “public service” reserved post or any alien in any civil service post at all, apart from a tiny number of certificated exemptions. Although it is legal under the freedom of movement provisions to employ in a non-reserved post the alien spouse of an EEA national living in the UK, it rather bizarrely remains a criminal offence to employ the alien spouse of a UK national without an exemption certificate. It is all very legalistic and technical, so let me further illustrate the anomalies by example.

As I have said, the Bill does not change the rules on asylum and immigration in any way. In my constituency as in many others, there are long-standing communities— from Iran and Iraq, for example, and more recently from Afghanistan—often comprising highly skilled professionals. Some were senior public servants in their home countries, but became refuges, fleeing persecution and dictatorship many years ago. They and their children, who may know no other country, are entirely banned from Government posts. They have a lot to offer and experience of working in our civil service would also stand them and their home countries in good stead if they ultimately wanted to return.

In Hendon, we also have large Israeli, Chinese and Japanese communities and UK citizens married to people of those nationalities. Assuming that they retained their own citizenship, these Israeli, Chinese and Japanese people, even though married to UK nationals, would be barred from jobs in the new Business Department, for example, where their language skills and knowledge of their home countries would be invaluable in promoting UK exports. However, if they were living in the UK and married a French or German rather than a British person, they would not be so barred and would be allowed to take up such positions under the freedom of movement provisions. It is bizarre that the spouse of a UK national is barred from working for the UK civil service, whereas the spouse of a French or German national is not.

The notorious extreme fundamentalist, Abu Hamza, has UK nationality—at least until the Home Secretary’s efforts to remove his nationality come to fruition—and could, in theory, be employed in any civil service post, although I doubt he would want to apply or stand much chance of passing the interview as he is now in prison. However, the American widow of a British 11 September victim will be entirely excluded from Government employment. How bizarre an effect of the present rules is that?

As is so often the case, the police service is ahead of the game. I first raised this nationality anomaly in the context of the police regulations years ago, and I am pleased to say that it was dealt with by the Police Reform Act 2002. Subject to proper immigration status, competence in English and certain reservations relating to sensitive posts, nationality is no longer a barrier to joining the police.

In our country, some 780,000 residents of working age are not United Kingdom, Commonwealth or EEA nationals, and are thus excluded entirely. In London, a diverse world city, 330,000 people—7 per cent. of the working-age population—are entirely excluded not just from the higher echelons of the civil service, but even from applying for the most junior social security clerk’s job in the Department for Work and Pensions. It is no wonder that we sometimes have difficulty in filling civil service jobs in the capital when such a high proportion of my fellow Londoners are entirely out of the equation.

My Bill tackles these bizarre and discriminatory anomalies by sweeping away the complex interlocking legislation and replacing it with a simple amendment to the Act of Settlement so as not to prohibit the employment of any person in any civil capacity under the Crown, while at the same time empowering the Minister to make rules in respect of nationality requirements for certain categories of posts that it is clearly necessary, and in the national interest, to reserve for UK nationals.

As the hon. Gentleman knows, I have heard most of these arguments several times before, and indeed have advanced similar arguments myself. I wonder whether he has yet found an answer to another conundrum which I threw at him back in 2007. What happens when a Commonwealth citizen who, as he says, is entitled to be employed by the Crown, is so employed and his country then secedes or is suspended from membership of the Commonwealth? Must that person then resign his post?

I think my answer would be no, because the person’s country had been a member of the Commonwealth at the time of his employment. It could be argued that the contract of employment would be frustrated, but I think that the matter would be approached sensibly, on the basis of the rules as they applied when the person was employed. If the person was fit to work and suitable for appointment at the time when he was employed, the existing position would continue. The person in question would still be the same person even if his country had been suspended from the Commonwealth, like Zimbabwe.

When I embarked on this marathon, it was thought that about 10 per cent. of the total number of posts should be reserved. It is now estimated that only about 5 per cent. of civil service posts—27,000—need be reserved. It is expected that the Bill would open up the remaining 95 per cent. of posts to selection on merit regardless of nationality, enabling us to build a civil service reflecting the diversity of the society that it serves.

Over the years, support for my proposals has grown. In their evidence to the Public Administration Committee, the civil service trade unions said:

“For the record we should state that the present Civil Service Nationality Rules are blatantly discriminatory against people from the Irish Republic and the Commonwealth. This is not a situation which reflects well on the Government or the Civil Service and completely flies in the face of efforts to develop a diverse Civil Service which represents the whole community it serves and one which endeavours to provide equality of opportunity to all its staff.”

Several years ago, the Public Administration Committee said:

“This would be a much-needed reform and one that has long been called for”,

and that it was

“to be welcomed and such provisions should be included in primary legislation to be introduced when Parliamentary time allows.”

I therefore hope that the Bill will now be able to make progress. Obviously it would also raise issues in the context of clause 184(5) of the Equality Bill, which refers to schedule 22.

Some years ago, when the Opposition tabled a civil service Bill based on a Select Committee draft, they appeared to agree with my proposals, and I understand that they continue to endorse them as a sensible reform. Surely the time has now come for progress. Surely we can get rid of a raft of ancient legislation dating back 200 years and replace it with legislation that is modern and fit for the 21st century, so that the civil service can recruit the people who are best suited for the job and so that we can ensure that our rules deal with applicants in a genuinely non-discriminatory way.

There are certain rites and annual events of this House that mark the passing of the seasons, and one of them is the Second Reading of the Crown Employment (Nationality) Bill on behalf of the hon. Member for Hendon (Mr. Dismore). I find it unbelievable that we are still discussing, in this groundhog day way, exactly the same Bill year after year, when it is perfectly obvious that its provisions are sensible. It makes a very minor change to the enactments that affect the civil service, and there is no adequate reason why the Government cannot accept it. They might wish to do so with amendment, but the principle behind it must, I am sure, be agreed on both sides of the House.

I and some other Members from both sides of the House have argued for a long time that we should have a civil service Bill. We have been repeatedly promised such a Bill, but it has never transpired. We have been told that its principal features will be subsumed within the Constitutional Renewal Bill, but we have not seen that yet, of course, and some of us have our doubts as to whether it will actually encompass the provisions of a draft civil service Bill, which we have discussed on previous occasions, which the Public Administration Committee has been involved in, and which so many Members have advocated.

Even in the absence of a more comprehensive piece of legislation, it does not seem to me to be beyond reason for the following absurd anomaly to be addressed. If a citizen of Mozambique—I always seem to use that country as my example in these cases, perhaps because it is the most recent member of the Commonwealth, but also perhaps because it has no historic links with the United Kingdom—can have employment, why cannot someone from Montana? Where is the logic in that anomaly in terms of the proper running of the civil service and the interests of the country? Of course some posts must be restricted, and the hon. Gentleman’s Bill makes provision for that, but if it is right and proper that any citizen of a Commonwealth country or of the European Union, or any spouse of a citizen of the EU, can be employed in the civil service, why not extend that to others who do not come from those countries, but who are well qualified and who could, I am sure, provide the same level of loyalty to the Crown, if not by nationality then by contract? That is the crucial point.

I welcome the Minister to her new post. I hope she will set aside the attitude of her predecessors for seven years, or however long it has been—I am unsure on how many occasions this Bill has been brought forward—and welcome the Bill. Moreover, I hope she will welcome it with a determination to take it forward. If at the end of the day it is better for its provisions to be subsumed within the Constitutional Renewal Bill, and if we have that Bill and it makes progress in this parliamentary Session, so be it, but for heaven’s sake let us get on with this. Let us get rid of these anomalies and make our legislation make sense—and please can we not have to sit through another Friday morning with exactly the same speeches being made on both sides of the House supporting exactly the same measure, because it really is not a sensible use of our time?

On this groundhog day, may I, too, start by congratulating the new Minister on her appointment? I am sure our future exchanges will be more focused on the role of government in unlocking the potential of the third sector to help more people, but today we are rightly focused on what is a stubborn Bill, and I congratulate the hon. Member for Hendon (Mr. Dismore), not least for his tenacity. I have always been grateful to him because he showed relative benevolence to my private Member’s Bill, which became the Sustainable Communities Act 2007, although I suspect that that generosity had something to do with the fact that his own Bill was next on the Order Paper. I have always been grateful that he kept his assassin’s dagger in its sheath that day and I wish him well with this Bill. I congratulate him on the speech that he delivered, but there is no surprise in that because he has delivered it enough times. I suspect that he could recite it in his sleep, and the hon. Member for Somerton and Frome (Mr. Heath) could probably do the same. We believe that the Bill deserves to receive a Second Reading.

Like the hon. Member for Somerton and Frome, who speaks for the Liberals, Conservative Members regret that today we are looking at just one small corner of the painting and not at the wider canvas of the role and status of the civil service. We have consistently stated our view that this reform should be placed in the larger context of a civil service Act that defines the role of the civil servant in law. That has been promised since 1997 and is yet to be delivered. At a time when public confidence in the way in which we are governed is at such a low ebb, the case for such an Act grows even stronger. We now look to the Constitutional Renewal Bill to deliver it and we urge the Government to get on with it. I recognise the argument that private Members’ Bills should be focused on relatively modest and concise objectives, and we accept that the principle of this Bill is right.

The law on who is eligible to work in the civil service is rooted in a different age and it is complex, it has been amended on many occasions and, unsurprisingly, it is a mess. It throws up plenty of anomalies, and those were described well by the hon. Member for Hendon. They must be irritating to work with and the provisions are no longer rooted in any logic. Foreign nationals can be employed by the Crown abroad, if that is considered appropriate, but in the UK non-reserved jobs are limited to Commonwealth citizens, British protected persons and nationals of European Union member states. In 2009, it makes no sense that someone from Nigeria can apply for a job in the civil service here, but someone from the United States cannot do so. In the past, the law might have been justified by concerns about securing allegiance to the Crown, but that justification evaporated with the relaxing of eligibility for members of the EU. In any case, the oath of loyalty to the Crown is now a question of contract, above all, and the Bill does nothing to change the right of Ministers to reserve sensitive posts for UK nationals.

There appears to be an opportunity cost to this muddle, because at a time when we want to be attracting the brightest and best to the civil service and we want our public servants genuinely to reflect modern Britain and its growing ethnic complexity, not least in London—I, too, am a Greater London MP, so I entirely endorse what the hon. Gentleman is saying in this context—it makes no sense to leave a group of people totalling 800,000, according to his numbers, outside the tent. All those people have a legitimate right to be here to make a contribution in appropriate roles. We think they should be given that chance and we are therefore happy for the Bill to be receive a Second Reading.

First, I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on his continuing commitment to this Bill; I believe he said that this is his seventh attempt with this particular piece of legislation. I understand that the former Member for Wimbledon, Mr. Casale, also introduced this Bill, so it has a long and dignified history.

As I understand it, the Bill has sought in the past, and continues to seek, to do two things. First, it seeks to remove nationality restrictions applying to employment or the holding of office in a civil capacity under the Crown. Secondly, it seeks to empower a Minister of the Crown to make rules in respect of the nationality requirements of certain categories of posts. In effect then, the Bill would open up Crown employment, including in the civil service, in non-reserved posts to all individuals of any nationality who can live legally in the UK and have entitlement to work here. There would be no bypassing of the UK’s immigration system.

I wish to go into a bit more depth about the Bill, but may I say at the outset that I think it contains considerable merit, although some issues will require further discussion? So although I am unable to give full support to the Bill today, I want it to progress to Committee, because that seems to be the appropriate place to discuss those issues and examine any concerns that may be raised. In the fine traditions of this House, that is the right and proper way to address such concerns. I cannot give it my full support, but it is appropriate that it should go to Committee for further discussion.

I shall set aside the effect of the Bill for the moment and consider the current nationality rules and framework, and who can currently be employed under its remit. Holders of an office in a civil capacity under the Crown include civil servants in Departments, including the devolved Administrations, the judiciary, the security and intelligence services, the royal household and civilian Army personnel. Within those two groups are two types of post—the reserved and the non-reserved. As we have heard from my hon. Friend, reserved posts are those that are seen, owing to their sensitive nature, as requiring special allegiance to the Crown and therefore reserved for UK nationals only.

Some posts are reserved as a matter of course—for example, all posts in the intelligence and security services are reserved, as are those in the diplomatic service and the Foreign and Commonwealth Office, unless in the latter case the Minister decides otherwise. Certain other categories of post are also capable of being reserved for UK nationals, but only if the Minister responsible for the Department or agency considers that to be necessary. Examples of such posts include posts in the defence intelligence staff in the Ministry of Defence or those posts whose functions are concerned with access to intelligence information received directly or indirectly from the security intelligence services; access to other information that, if disclosed without authority or otherwise misused, might damage the interests of national security; or access to other information which, if disclosed without authority or otherwise misused, might be prejudicial to the interests of the UK or the safety of its citizens. Other such posts include those concerned with border control or decisions about immigration.

If a post does not fall into one of the above categories, it cannot be reserved. This supports the deliberate intention to keep the posts as open as possible and to reserve as few as possible. My hon. Friend asked about some parliamentary questions that he had tabled. I can tell him that some 5 per cent. of posts in the civil service are currently reserved and the rest are available to all other qualifying nationals. Some 27,000 posts are reserved. As I am relatively new to this position, I have not seen the other questions that he mentioned, but I will ensure that he receives answers as soon as possible. He also asked how many alien certificates had been issued in 2008-09. The final figures are being collated, so they are not yet available, but they will be made available to him as soon as that happens. For 2007-08, the figures peaked at 80 through the year, although the final figure was 60. Those figures have not been finally confirmed, but when they have, they will be provided to my hon. Friend. I hope that that is helpful to him.

So which nationalities, under the rules, are eligible for employment in those remaining 95 per cent. of posts and who is precluded? The answer is that the rules do not specifically preclude any nationality from being considered for employment—individuals who apply for posts will be eligible in their own right or, potentially, employable through one of the available exceptions. As of right under the rules, the following countries or associations of countries are eligible for employment: the UK; the Republic of Ireland; the Commonwealth; the European economic area; and Switzerland and Turkey. Also, certain—not all—family members of EEA, Swiss and Turkish nationals are also eligible regardless of their nationality. UK nationals include citizens born in the UK; British citizens born abroad; British Overseas citizens; British Overseas Territories citizens; British Nationals (Overseas) British subjects; and those recognised as British citizens through naturalisation or registration.

The hon. Member for Somerton and Frome (Mr. Heath) asked about Commonwealth citizens. A Commonwealth citizen is any person who has the status of a Commonwealth citizen under the British Nationality Act 1981, and the territories forming part of the Commonwealth are listed as part of that Act. That includes more than 70 countries and territories. His particular question was about what would happen if a country ceased to be a member. The response given by my hon. Friend the Member for Hendon pretty much headed in the right direction. The rules do not affect the rights of those who might be in employment whose countries are then suspended from the Councils of the Commonwealth. When a nation is suspended, its nationals remain in employment if they are already employed or remain eligible for employment. That would change only if the nation concerned was formally excluded by the amendment of the Act. There would have to be a formal exclusion under the legislation; a suspension would not affect eligibility for employment.

Do I then understand that were a country to be excluded from the Commonwealth—or to exclude itself by secession—the terms would apply? That was the corollary of what she said, which was that it would not apply under suspension.

Yes, that is the case. If the legislation changed and that country was no longer a member of the Commonwealth—if it had been formally excluded by amendment of the Act—its nationals would not then be eligible for employment.

The EEA comprises not only the member states of the EU, but, as hon. Members will be aware, the nations of the European Free Trade Association. That means that the Crown can draw on the talents of some 30-plus nations from that group alone. Also included is Switzerland, whose nationals have the same rights as EEA nationals.

That pool of talent is widened further to include Turkish nationals and certain family members of EEA, Swiss and Turkish nationals. Turkish nationals are eligible for Crown employment if they have been lawfully employed in the UK for four years in any job or for three years in the same occupation as the post that they wish to take up under the Crown. The family members of EEA nationals gain their rights in such circumstances as the EEA national has exercised their rights under the treaty establishing the European Community—in particular, the right to freedom of movement. As a result, those family members of EEA nationals, irrespective of their nationality, are eligible to take up employment in the member state where that national is employed.

That means that certain family members of EEA nationals employed in the UK would also be eligible to be employed in the UK and therefore to be employed in non-reserved posts in the civil service, even if they did not as individuals satisfy the civil service nationality rules. That was the point that my hon. Friend the Member for Hendon was making.

The family members concerned are the spouse or civil partner of the EEA national, and the direct descendants of the EEA national or their spouse or civil partner, such as their children and grandchildren. Direct descendants qualify only if they are under the age of 21 or are dependants. Dependent direct relatives in the ascending line of the EEA national or their spouse or civil partner, such as their parents and grandparents, are also included.

Certain family members of Swiss nationals resident in the UK, who are not Swiss and would not otherwise satisfy the rules, have rights to reside and to take up employment in the member state where that national is employed. That means that family members of Swiss nationals employed in the UK would also be eligible to be employed in the UK and therefore to be employed in non-reserved posts in the civil service. My hon. Friend did say that this could get to be rather a technical argument, and I think that we are proving that point.

The family members concerned in this case are the spouse of the Swiss national, the direct descendants of the Swiss national—such as their children and grandchildren, as I have said—who are under the age of 21 or are dependants and their dependent relatives in the ascending line, such as grandparents and parents. In the case of a Swiss national who is a student, rights extend only to the spouse and any dependent children of the Swiss national. Those family members can work in the UK and are eligible for employment in non-reserved posts in the civil service.

Certain family members of Turkish nationals who qualify for employment in the civil service are also eligible for employment in the civil service. Family members of Turkish nationals are eligible for employment in non-reserved civil service posts if they have been lawfully resident in the United Kingdom for three years or more.

The family members concerned are Turkish nationals’ spouses and direct descendants of either the Turkish national or the spouse. Those descendants are children—including stepchildren—grandchildren, and great-grandchildren who are under the age of 21 or who are dependants. Also included are direct dependent relatives in the ascending line of a Turkish national or their spouse—that is, their parents, grandparents and great-grandparents.

In order for the family member to be eligible for employment in the civil service, they must have lived in the UK with the qualifying Turkish national. There are also special rules that entitle children of qualifying Turkish nationals to take up jobs in the civil service if they have completed a course of vocational training in the UK. There is no length-of-residence requirement attached to that right. The Turkish national or the other parent of the child must have been legally employed in the United Kingdom for at least three years. After that fairly brief overview, I am sure the House will agree that the framework already allows for recruitment from a wide range of nations. I think it would also agree that there is some complexity in the rules.

It is worth considering where the framework came from, and how we got to this point. The statutory prohibition on the employment of aliens in a civil capacity under the Crown—including, but not only, in the civil service—stems from the Act of Settlement of 1700. That Act provides that

“no Person born out of the Kingdoms of England Scotland or Ireland or the Dominions thereunto belonging”

may

“enjoy any Office or Place of Trust either Civill or Military”.

That provision was repealed in 1919—it took a few years—and replaced by the Aliens Restriction (Amendment) Act 1919, which provides that

“no alien shall be appointed to any office or place in the Civil Service of the State.”

My hon. Friend rightly feels some frustration at having proposed the measures in his Bill seven times in seven years; he would feel greater frustration if he had been trying to change things from 1700 to 1919.

An alien—I grant that that is not the most attractive of words to use to describe a non-UK national—is defined in the British Nationality Act 1981 as

“a person who is neither a”

British nor a

“Commonwealth citizen nor a British protected person nor a citizen of the Republic of Ireland.”

The position with regard to the employment of aliens changed during the second world war. At the time, defence regulations permitted the temporary employment of aliens if no suitable British subjects were available. That situation was altered under the Aliens’ Employment Act 1955, which provided that

“an alien may be employed in any civil capacity under the Crown”,

either in posts outside the UK—an example would be locally engaged staff—or, exceptionally, in other circumstances under cover of an aliens certificate, signed by the responsible Minister. I shall say a bit more about the 1955 Act shortly. Following that Act, the European Communities (Employment in the Civil Service) Order 1991—Statutory Instrument 1991/1221—and the European Economic Area Act 1993 had the effect of opening up Crown employment to nationals of the European economic area, with the exception of “public service” posts, or, as we know them in the UK, reserved posts within the meaning of article 39(4) of the European Community treaty.

That was followed by the European Communities (Employment in the Civil Service) Order 2007, which came into force on 7 March 2007. It amended the 1955 Act and the 1991 order to specify in more detail the definition of reserved posts and to clarify eligibility to take up non-reserved posts in the civil service. The 2007 order sets out categories of posts that are either automatically reserved to UK nationals or can be reserved to UK nationals if the relevant Minister considers it necessary.

The Bill would remove the nationality restrictions by providing that section 3 of the Act of Settlement does not prohibit

“any person from being employed or holding office in a civil capacity under the Crown”,

and by repealing section 6 of the Aliens Restriction (Amendment) Act 1919, the whole of the 1955 Act, and the 1991 order.

I think we understand the point made by my hon. Friend when he says that in many cases the complexity of the legislation can make it difficult to ensure that the right rules have been applied. Is there merit in the changes he proposes? That is a matter for the House to decide and the Committee to consider.

I mentioned a moment ago that the spouse of an EEA national can be deemed eligible for Crown employment irrespective of their own nationality. The family members of EEA nationals gain their rights in circumstances where the EEA national has exercised their rights under the treaty of the European Community—in particular, the right to freedom of movement. My hon. Friend raised this specific point.

The interrelationship of EC and UK law has created what is commonly referred to in the civil service as the alien spouse anomaly, whereby a Chinese national married to a French national who was working in UK could be deemed eligible for civil service employment by extension of their spouse having exercised their freedom of movement rights. But if the same Chinese national were married to a UK national working in the UK, they would not be deemed eligible, thereby giving more rights to EEA nationals and their families than to UK nationals.

It is worth noting—this is where I have some disagreement with my hon. Friend’s analysis, though he is essentially right in practice—that the consequence of the freedom of movement rights does not represent a complete bar on the spouses of UK nationals. UK nationals themselves may have gained their rights by exercising freedom of movement or are open to that, as any other EEA national is. If they have triggered those rights, their spouse may well be eligible for Crown employment, irrespective of their nationality. However, it is accepted that in reality an EEA national living and working in the UK is more likely to be able to show that they have engaged their freedom of movement rights than a UK national living in the UK.

The Bill seeks to remove the anomaly. Beyond this, one could argue that the Bill represents a sensible tidying up of somewhat aged and complex legislation, removing an administrative layer from recruitment and putting the Crown and civil service on an equal footing with the rest of the UK. That is the considerable merit of the Bill. However, there are difficulties that need to be teased out in Committee, and that is why I cannot give the Bill my full support at present.

One of the questions that we should consider is whether there is at the moment a problem with the recruitment or retention of talent and which the Bill addresses, and whether it is helpful in that regard. The Crown, including the civil service, evolves like all other employers. It needs to be able to reflect a diverse society to understand and meet its needs. To do that, it must be able to draw on a range of talent and variety of individuals. The civil service would accept that the widest pool possible was to its benefit in getting the talent and the skills that it requires. The legislative framework as it stands allows recruitment from a wide range of nations so that the Crown and civil service are able to recruit the talent that they need, without affecting policies on national security and/or immigration.

The changes in the economic and working climate within which we should consider the Bill are brought into focus if we consider that during the Bill’s presentation in 2007 my hon. Friend:

“I have the honour to represent a constituency in London, which is a diverse city, but 330,000 people in London, or 7 per cent. of its working-age population, are entirely excluded, not just from the higher echelons of the civil service, but from even applying for the most junior social security clerk’s job. It is no wonder that we have difficulty filling civil service jobs in the capital when so many of my fellow Londoners are entirely out of the equation.”—[Official Report, 29 June 2007; Vol. 460, c. 579.]

He made a similar point today.

The use of aliens certificates means that individuals are not barred per se from employment, even at the most junior levels. They can be employed at any level, in any city or town, when there is a need. That they are not suggests that there currently is not the need. What is more, and critical in illustrating the changing climate, is the fact that since my hon. Friend made his statement in 2007 about job opportunities in London, the efficiency and relocation programme undertaken by the civil service dictated that some 20,000 jobs were to be relocated out of London and the south-east by 2010.

In the recent Budget, the number of jobs to be relocated out of London and the south-east by 2010 was further increased to 24,000. So far, more than 17,000 jobs have been so relocated. Now some three quarters of civil service jobs are located outside London and the south-east. Alongside that, the civil service currently has a work force of 487,000 full-time equivalent civil servants. That is the lowest number since 1999. In the year ending March 2008, the turnover was 7.8 per cent., so there is evidence of a slowing down in the rate of departure in the current economic climate.

To put that in context, when the Bill was first introduced in 2001, the civil service had 39,230 entrants and 31,360 leavers, and a work force of more than 500,000. By 2008, that had fallen to 23,490 entrants and 41,050 leavers, and a work force of 487,000. Indeed, the number of entrants to the civil service is at its lowest level since the Bill was first introduced, whereas the number of leavers is proportionally at its highest.

In 2001, 39,000 people joined the civil service, against 31,000 people leaving, so 11 per cent. more joined than left. In 2002, 47,370 joined, against nearly 28,000 leaving, so 42 per cent. more joined than left. In 2003, well over 60,000 joined yet nearly 45,000 left, so 26 per cent. more joined the civil service than left. In 2004, 54,500 people joined the civil service, while not that many fewer—46,000—left, so 15 per cent. more joined than left. In 2005—another year in which my hon. Friend introduced his Bill—40,000 joined, against nearly 51,000 leaving, which gives a difference of 20 per cent. In 2006, 37,000 joined, with 42,000 leaving. In 2007, nearly 25,000 joined, against 36,000 leaving, which gives a 31 per cent. difference. In 2008, 23,000 joined the civil service and 41,000 left, which gives a difference of more than 43 per cent.

Of the vacancies available in the civil service, all departmental vacancies are initially advertised for a minimum of two weeks to staff at risk of redundancy, because we obviously want to maximise redeployment and minimise any possibility of compulsory redundancy. I am sure the House would accept that, particularly at this time, those are the actions of a good employer. They are, of course, also supported by the national trade union side, and form part of an agreement made in April 2008.

Coupled with that, the civil service, like any other big employer, has a policy of redeployment, within departments and across departmental boundaries, and promotions. That enables the service to utilise people’s key skills, which Departments will have invested in, and retain key talent. That said, the civil service cannot be protectionist or keep all its posts for its own people. It recognises that external recruitment is essential at all levels to provide opportunities to jobseekers and bring in new talents, experiences and ideas. To that end, a large number of jobs at all levels are advertised in the external market each year, both in the press and in a number of other ways, but mainly through local jobcentres and on the civil service website.

The key is to have balance. External recruitment and internal moves allow new ideas to be brought in and job opportunities to be created, while ensuring a level of stability in organisations and—I emphasise this point—reducing the need to resort to compulsory redundancies. The civil service, as the largest employer under the heading of the Crown, has to strike that fine balance between finding efficiency savings and supporting the UK and its workers through the current economic downturn, and it has shown a determination and commitment to achieve this.

I spoke earlier about the relocation away from London and the south-east, and about the current position on recruitment. Relocations away from London are not the only issue, of course. As part of the efficiency and relocation programme, significant work force reductions have had to be faced and some 76,600 were achieved between July 2004 and March 2008. Further reductions continue to take place.

Despite that context of efficiency savings and relocation, the civil service is seeking to play its role in the current economic climate, and is actively recruiting to Jobcentre Plus to deal with the rise in registrations and to assist people back to work. It is right that that should be done; if finding work becomes harder, we should do more to help, not less. The civil service has also committed fully to the success of local employment partnerships. As the House will know, LEPs aim to get priority group customers into work. They are a partnership between business and Jobcentre Plus and provide tailored support to prepare the unemployed for work. I am pleased to report that the civil service has committed to filling at least one in four of its administrative staff vacancies through LEPs.

The discussion on recruitment helps to illustrate the fact that there simply is not an endemic problem that repealing the existing legislation on nationality would solve. Whatever merits the Bill has, it would not automatically resolve the point at issue. With the exception of Jobcentre Plus, which is creating jobs for a specific reason—actively to assist the British economy towards recovery—recruitment is at a reasonably low level. Repealing the legislation at this time would have little practical effect in the current climate.

That is supported by the most recent findings of the Migration Advisory Committee, which recently published its first review of the shortage occupation lists for skilled workers coming to the UK from outside the EEA. In announcing the publication of its recommendations, Professor David Metcalf, the chair of the committee, said:

“The points-based system, including the shortage occupation list, has to operate for the benefit of United Kingdom workers, especially given the current economic climate. These latest recommendations take account of the impact of the worldwide recession on the United Kingdom. We have looked critically at the evidence regarding the occupations under review and made recommendations which balance the needs of the UK workforce against those of employers. It is important to note that some shortages of skilled labour will still exist in a recession. This can be where there is a long-term structural shortage of skilled workers, where workers provide key public services, or in areas such as culture where the United Kingdom needs to maintain global leadership.”

If we consider the occupations on the list for tier 2 of the points-based system, we see that the terms “civil servant” and “Crown employee” do not appear. Terms that we might associate with professions in the civil service or in Crown employment—for example, “administrator”, “policy official” or “project manager” do not appear on the list. It is reasonable to conclude that they do not appear because there is not a shortage in those areas.

Any roles within the civil service or under the Crown that may appear on the list are likely to be in more specialist or technical areas and would not, as a result, be widespread across the civil service. Situations such as a qualifying national not being available or specialist skills being needed would attract the use of the aliens certificate route. For example, “structural engineer” appears on the shortage occupation list and a structural engineer is currently employed in the civil service under cover of an aliens certificate.

You will be aware, Mr. Deputy Speaker, that I have only recently undertaken this brief. One of the things that I have wanted from my officials is more detailed information on aliens certificates—how they are used and how many are used. My hon. Friend the Member for Hendon has also been looking into that issue. I shall share the information that I have received with the House.

A criticism of the framework has often been that, although it provides for a wide-ranging group of nationalities to be deemed eligible for employment under the Crown, a significant number of nationalities and individuals are precluded. It is argued that that preclusion prevents as wide a pool of talent as possible from being chosen, denies the Crown the best available people and prevents a diverse work force from being created. That is not strictly the case. Where necessary, the current framework does allow individuals to be employed from outside the UK, the EEA, the Commonwealth, Switzerland and Turkey.

The Aliens’ Employment Act 1955 allows for the employment of non-UK, non-eligible nationals under cover of what are known as aliens certificates. The circumstances in which an aliens certificate may be issued are set out in section 2 of the Act:

“a certificate may be issued under this section either in respect of employment of a specified alien in specified service, or in respect of the employment of aliens generally in specified service or in service of any specified class or description; but no such certificate shall be issued unless it appears to the responsible Minister, at the time of the issue of the certificate,

(a) in the case of a certificate in respect of the employment of a specified alien in a specified service, either that no suitably qualified person being a British subject is available for employment in that service or that the alien possesses exceptional qualifications or experience fitting him for such employment;

(b) in the case of any certificate, that suitably qualified persons being British subjects are not readily available, or available in sufficient numbers, for employment in the service, or class or description of service, specified in the certificate.”

In brief, a certificate can cover the employment of a particular individual in a particular post or the employment of individuals generally in specific posts or in posts of a particular class or description. For the purposes of the civil service nationality rules, this is described as a certificate being able to be issued where

“there is no suitably qualified UK national available for employment in that post; or the alien possesses exceptional qualifications or experience for the post. Other certificates (including those covering the employment of aliens in posts of a particular class or description) may only be issued if suitably qualified UK nationals are not readily available, or available in sufficient numbers for employment in the post or class or description of the posts specified in the certificate.”

Aliens certificates currently in force cover a diverse range of nationalities. It may be helpful if I provide the House with a breakdown of where individuals covered by the certificates come from. Fourteen certificates cover individuals from the USA. One individual is from Egypt, three are from China, one is from Iran, 61 are from Nepal, one is from Tunisia, one is from Chile, one is from Argentina, one is from Japan, one is from Sudan, one is from Ukraine, one is from the Democratic Republic of the Congo, one is from Colombia, one is from Brazil, one is from Venezuela, and one is from Thailand. The range of posts is equally widespread, from junior administrative grades to specialists in scientific fields—from individuals employed in Ministry of Defence barracks to specialist marine biologists and, as I said, a structural engineer.

As my hon. Friend the Member for Hendon suggested, the use of aliens certificates has been criticised for being an overly onerous administrative process. It would therefore help the House if I explained how a Department goes about getting an aliens certificate. It is not that burdensome, but it is, as he said, an additional administrative layer of bureaucracy. For applications for a certificate on the grounds that no qualifying national is available, the Department concerned makes a business case to the Cabinet Office setting out certain details: confirmation that there are no restrictions on the candidate’s taking up employment or that the Home Office has given the necessary clearance; confirmation that the post is non-reserved; confirmation that no qualifying national is available; details of the recruitment campaign, including when and where the post was advertised, the number of applications and the results of interviews; and a draft copy of the aliens certificate.

For applications on the grounds that the candidate brings specialist skills, experience or qualifications, the business case to the Cabinet Office should provide: confirmation that there are no restrictions on the candidate’s taking up employment or that the Home Office has given the necessary clearance; confirmation that the post is non-reserved; details of the recruitment campaign, what is the specialist requirement of the post, and what specialist skills the candidate brings that others do not; and a draft copy of the aliens certificate. The Cabinet Office will then consider the case and, assuming that consent is granted, send the confirmation back to the Department with the certificate for signature by the Minister in that Department. Once signed, the certificate is returned to the Cabinet Office. Given the numbers involved, the processing of aliens certificates is not an overly onerous administrative task to place on Departments and agencies, so repealing the legislation and removing the need for the certificates would not solve a problem or create any significant efficiency savings.

I would not for one moment claim that the current system is perfect. It would be inappropriate to do so. My hon. Friend addressed the issue moderately by saying that the Bill would remove an administrative burden and tidy up legislation, but the current law allows a workable, pragmatic approach to recruitment.

UK, Commonwealth and European economic area citizens are available to the Crown, and the issuing of aliens certificates allows Departments, agencies and so on to widen their scope where necessary, perhaps when a post requires such specialist skills that the number of candidates is naturally limited, or if recruitment at a junior level is traditionally difficult due to the geographical location of the post, its salary, its low level or local unemployment. The pool of talent available to the civil service is therefore both wide and diverse.

It is reasonable to suggest that were there a shortage of eligible nationals available to take up posts or a lack of expertise in specialist posts, applications for the certificates would be growing in number. They are not, and I gave my hon. Friend the relevant figures earlier. At any one time there are approximately 60 to 80 certificates in force, in a civil service that currently has 487,000 employees. Indeed, in the financial year 2008-09, requests for applications fell by almost 20 per cent. In the current financial year to date, the number requested is three, compared with six in the same period in 2008-09.

I shall expand the discussion on the use of aliens certificates. It has been argued that the mechanism is difficult to use, which is why its use is minimal compared with the total number of civil service employees. In 2004, the late Eric Forth spoke about the Aliens’ Employment Act 1955 in a debate on the earlier version of this Bill. He said:

“It takes a rather sensible approach, which seems to have stood the test of time. As I understood it, the measure reverses the presumption, so that instead of opening our doors to anyone regardless of their nationality, it states that we would not wish automatically to allow people who have not chosen to express their loyalty or identity to this country by taking British nationality to work within our Government, but that we are prepared to consider...on a case by case basis those who may wish to be so employed and that, if they can satisfy us that their skills are relevant and that we need and would appreciate their services, we have a mechanism to allow them to do that work.”—[Official Report, 14 May 2004; Vol. 421, c. 595.]

The current Bill is a somewhat negative interpretation of the purpose of the Act, which I suggest could be looked on in a much more positive light. It should be seen not as a vehicle to block non-UK nationals from gaining employment but as a mechanism that allows the employment of such individuals. It is a tool whose use is not discouraged, nor is the number of certificates that can be issued across the civil service limited. It is driven by need, and it does not appear that Departments are requesting a vast number of certificates. That suggests that they are not using the Act simply because they do not have an overwhelming need to do so, as they can currently recruit successfully.

Rather than argue that the civil service is bound by an Act that says, “You cannot be employed because you do not fit into nationality requirements”, we should be far more positive and say, “We have an Act that says we can consider employing you, and where the circumstances are such that we need to do so, we will be very happy to.”

To end my comments on aliens certificates on a positive note, I am pleased to say that the Cabinet Office has informed me that in the light of the Bill, it is looking to assist the users of the nationality rules by considering whether their drafting and presentation could be different. Perhaps the language could be updated or the presentation modernised, and they need to be user-friendly. Their complexity is an issue to consider.

I want to raise a couple more points on which we need to reflect and ask questions. I should like to address them also in Committee. One might argue that what we do with employment in our civil service is for us to determine in the best interests of the UK, but should we not also consider reciprocity? Are our rules that different from those of other nations? Should they be? The United States is a large user of aliens certificates. However, it seems that it would be no easier for a UK national to enter the US civil service than for a US citizen to enter ours. If individuals are not citizens of the United States, they cannot be considered for most positions in the federal Government through the standard process, as failure to provide a social security number when requested will result in the application not being processed. Some agencies can and sometimes do hire non-citizens through special hiring procedures, but it is up to the relevant individuals to contact the agencies directly to ascertain whether they are eligible for any available positions, and to find out how to apply.

Let us consider other countries from which nationals have joined our civil service under aliens certificates. In Thailand, non-citizens may apply for Government jobs only with the permission of the relevant Cabinet Minister. Of the larger Commonwealth countries, Canada appears to determine any nationality criteria on a job-by-job or organisation basis. Job adverts state either, “open to all” who have legal status to work in Canada, or a preference for the job to be given to a Canadian citizen. In Australia, there is a general expectation that a person who is to be engaged as an Australian public service employee will be an Australian citizen, although non-citizens can be engaged in certain circumstances.

In Europe, some nations are more open than others in their recruitment. For example, in the Netherlands and Finland, civil service posts are open to all European economic area nationals and beyond, with the exception of reserved posts. Approximately 10 per cent. are reserved in the Netherlands—more than in the UK, where 5 per cent. are reserved.

I have spoken about reserved posts—those that are reserved for UK nationals, on the ground only that special allegiance to the Crown is needed. Under the Bill, the current situation would continue—that is a merit of the measure. Some posts would remain automatically reserved, while the responsible Minister could make others reserved. However, would there be an effect on non-reserved posts and the administration in relation to recruitment?

In the appointment process in the civil service, candidates are subject to two procedures: character checks in relation to recruitment and, when appropriate, the Government’s system of security vetting. Character checks are used to determine whether candidates are likely to give satisfactory service and whether anything in their recent past is likely to bring discredit on the Department, agency or the civil service in general.

Let me deal with some of the wider practical issues that might arise from the Bill, and why I believe it merits further discussion in Committee. We must, of course, address national security. In particular, we should study carefully the range of issues around the checks that need to be carried out on those who apply for civil service or military employment, outside the context of reserved posts. They include the need for employing Departments to ensure that applicants are who they say they are, that they can check the applicant’s employment history, nationality, immigration status and criminal record, and that, when the risk justifies it, they can carry out other checks concerning the applicant’s financial position, integrity and trustworthiness.

The House does not need me to dwell on the reasons for the necessity for such checks—I suspect that hon. Members do not want me to do that, either. We are only too well aware that the threats to our security have grown in recent years. However, I emphasise that it is a vital responsibility of Government to do all they can to protect the assets of our nation and its people from any threats, by an informed assessment of the risks and by maintaining a proportionate range of measures to guard against them.

Protection against any possible insider threat is a central element of these measures. Under the Cabinet Office’s new security policy framework, it is mandatory for all Departments and Government agencies to apply the requirements of Her Majesty’s Government’s baseline personnel security standard to all recruits. That covers the verification of identity, nationality, employment history and unspent criminal records. Details are available in the Library, as hon. Members know.

When a lack of UK residence makes it impossible to carry out meaningful checks in the UK, prospective employees are required to provide official and verifiable overseas police certificates obtained from the country or countries of residence, when those are available. Prospective employees should provide a reasonable account of any significant periods—six months or more in the past three years—of time spent abroad. However, the weight that can be attached to such evidence, when it exists, will vary from country to country.

When a recruit needs access to sensitive material or assets, further checks need to be carried out under the process known as national security vetting. Vetting for a particular post may be required for different reasons: the threats from terrorism and espionage; the consequences of compromise of sensitive information and other assets; information sharing across Government; and a wide range of agreements and security protocols with international partners.

National security vetting provides an assurance framework for Departments sharing information or allowing other access to their assets to employees in other Departments and agencies. Approximately 250,000 people are vetted or re-vetted on review each year across the Government, the defence industry, other Government contracts and the security regulated sectors, including transport and civil nuclear security. A wide range of international agreements and security protocols require the UK to apply appropriate personnel security controls, including vetting in certain circumstances. An effective vetting system therefore provides an essential level of assurance, not only for the confidentiality and integrity of our own assets, but for the conduct of business with our close allies.

A question that is often asked is whether the application of the nationality rules discriminates not only against individuals whose nationality falls outside the eligible nations but against those UK nationals whose spouses do not have the same rights as the spouses of other EEA nationals who are living and working in the UK. That is a reasonable question. The application of the civil service nationality rules is not discriminatory in law. Section 41 of the Race Relations Act 1976 provides that it is not unlawful to discriminate on specified grounds in pursuance of enactments, Orders in Council or instruments made under such enactments, or in order to comply with conditions or requirements imposed by such enactments.

Section 75(5) of the Race Relations Act 1976 provides that the Act does not invalidate rules restricting employment in the service of the Crown or by any public body prescribed for the purposes of section 75(5) by regulations made by the Minister for the Civil Service, to persons of particular birth, nationality, descent or residence. Further, section 35 of the Race Relations Act 1976 (Amendment) Regulations 2003 amended the 1976 Act so that it is not unlawful to discriminate against another on the basis of nationality, place of residence or the length of time of residence or presence in or out of the UK if the act is done in pursuance of any enactment, Order in Council or instrument made by a Minister under such an enactment, or in order to comply with a requirement, condition or arrangement imposed by a Minister under such an enactment. The cumulative effect is that, under UK law, it is not unlawful to discriminate on the ground of nationality, where to do so is to comply with obligations pursuant to primary legislation.

Concern has been expressed, however, that a Department might find itself open to a claim of discrimination if it determined that an individual could not be employed on the ground that they were unlikely to be able to satisfy a security check. Recently, an employment tribunal and an employment appeal tribunal found that a decision not to consider employing an Indian national on the ground that he was unlikely to get a work permit constituted indirect discrimination. That case involved a private law firm, not the civil service, but I understand that the precedent would also apply to the civil service. It is not inconceivable that, if a Department or agency rejected an application on the ground that completing a security check was either unlikely to be satisfactory or impossible, that precedent might well apply. Further, if a non-UK national were to be employed, having been subjected to a less stringent check than a UK national, might the UK national have grounds for complaint?

These issues merit further reflection, which is why I suggest that the Bill go forward for consideration in Committee. I have come to these matters only recently, but I appreciate that the Bill has tremendous merit. However, there are issues that the Government would like to explore further, and we are therefore unable to support it today. I would like to take some time to reflect on those issues with my colleagues, and it would therefore be helpful if the Bill were considered in Committee so that they could be discussed.

The Bill has been subject to consultation with Her Majesty the Queen, as it would have two identifiable impacts on the Crown. As the House has been informed, Her Majesty has asked the House to be acquainted that, having been informed of the purport of the Bill, she has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Minister spent some 51 minutes setting out her reservations about the Bill. Given that it has such a historical background and has been considered iteratively over many weeks, months and years, it comes as a bit of a surprise to find that the Minister—who is at this moment talking to the Bill’s promoter—or her predecessor did not spend more time talking to the promoter to find a form of words more acceptable to the Government.

As the hon. Member for Hendon (Mr. Dismore) said, this was originally a Government hand-out Bill, but the Government have had second thoughts, probably because some focus group told them that extending employment to non-British nationals in the present economic crisis, brought about by the Government, would not sound very good. That is probably why the Minister is now pouring cold water on the Bill, but she identified so many shortcomings that it is hard to understand how the Government would change their approach if the Bill went into Committee.

As the hon. Member for Hendon knows, I have had reservations about this and previous Bills under the same broad title that were debated in previous Sessions. My concerns are different from those articulated by the Minister. My current concern is that she, having poured enormous buckets of cold water on the Bill, now says that it is worth expending a lot more parliamentary time on further consideration in Committee.

The Minister made a good point about recruitment, which I have also made on previous occasions—namely, whether we really need to open up the civil service to a wider group of people who are not currently eligible to join its ranks. I must say that 487,000 full-time equivalents in the civil service is rather too many. The Minister says with some pride that it is the lowest it has been since 1999, but I would like to see the number reduced to the levels under the previous Conservative Government, if not further reduced. She is on to a good point there. She made some other points about fairness, particularly when some 10 per cent. of posts are reserved in the Netherlands, whereas they have already been reduced to 5 per cent. here.

I shall not speak at length, but I would like to put my reservations—not necessarily the same reservations that the Minister articulated—on the record. I congratulate the hon. Lady on learning the skill of articulating reservations at great length, albeit that she read them from her brief. We welcome her as a new recruit to the Government Front Bench on this subject. Perhaps next time she will be able to articulate at similar length without having to refer to any notes.

I have nothing to add other than to say that everyone agrees that there is a serious anomaly in the construction of our present law, so something needs to be done about it. I hope that the Bill will now receive its Second Reading.

Question put, That the Bill be now read a Second time.

The House proceeded to a Division.

I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

Broadcasting (Public Service Content) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

This Bill is, in a sense, a sequel to the Bill that I presented last year on television licence fee abolition. It builds on some of the comments made during debate on that Bill, and approaches the issue from a slightly different direction. The argument is that if we are to have a licence fee, income from it should be expended solely in support of public service content. Ed Richards, chief executive of Ofcom, was guest speaker at a breakfast that I was privileged to attend earlier this year that discussed Ofcom’s review of public service broadcasting and content. I asked him what part of the BBC output, funded by the licence fee, was not public service content. He assured me that the definitions of the genre of public service content are so wide and all-embracing that 100 per cent. of the output of the BBC is public service content. I do not think that that accords with common sense or with the views of most people.

I shall not get involved in lots of examples, referring to Jonathan Ross and Russell Brand, but I shall make the point briefly by referring to some programmes on BBC 3. In the last few weeks, I have been confined to barracks by a health condition, and I was able to note how various programmes on BBC3 were described by the BBC itself. I did not waste time watching these programmes, but one programme caught my attention—“Kirsten’s Topless Ambition”, which was produced by the BBC, funded by taxpayers’ money and, according to the chief executive of Ofcom, is “public service content”. The BBC describes the programme on its website as

“A documentary in which kids TV presenter Kirsten O’Brien must decide whether to take her clothes off for a lads’ mag to try and clinch bigger presenting jobs.”

It adds that the programme

“contains adult themes.”

In other words, it contains smut. Why should that programme be funded out of public money raised by a poll tax—that is effectively what the licence fee is? I understand that BBC3 has very low viewing figures, and it is obviously trawling desperately to try to attract new viewers.

Another programme that caught my attention on BBC 3 was “Horne and Corden”. The description of it read:

“Matt and James struggle at synchronised swimming, while gay reporter Tim Goodall investigates knife crime. Contains adult humour.”

Does my hon. Friend agree that when the BBC is threatened with a lower increase in its funding than it was hoping for, which it deems a cut, it always suggests that it will need to cut important things such as news coverage and current affairs, but all it need do is cut out that kind of garbage on BBC 3 and stick to what most people would consider to be core public service content?

I agree absolutely. Indeed, that is what this Bill is about. It seeks to define public service content for the purposes of public service broadcasting. Clause 1(2) proposes that public service content should be

“content which is primarily produced in the United Kingdom”,

which I think has a lot of public support. Why should we fund foreign-produced TV programmes and broadcast programmes from scarce public resources? Public service content would also have to satisfy one or more of the following criteria.

The first criterion would be that it should comprise

“local, national, international news or current affairs which is impartial, factual and objective”.

The words “impartial, factual and objective” are very important. Perhaps I can share a little anecdote with the House. Hon. Members will recall that the Prime Minister addressed Members of the European Parliament, and his speech was covered by the BBC reporter Mark Mardell. In advance of live questions to the Prime Minister, the Member of the European Parliament for South East England, Mr. Daniel Hannan, notified Mr. Mardell that he would be making what he regarded as rather a newsworthy contribution to the debate. Mr. Mardell chose to ignore that and to absent himself from the Chamber, and as a result Mr. Hannan’s contribution was not recorded by the BBC. However, we know that it was recorded by Mr. Hannan and put on YouTube.

Within a matter of hours, more than 2 million people had looked at the YouTube content of Mr. Hannan’s pertinent criticisms of the Prime Minister. I can recall collecting my son from a friend’s house in Surrey that same afternoon and I was immediately told, “You must come and look at this. Have you seen this on YouTube?” I had not, so I looked at it. Over those 24 hours, it was something that everybody had to see. I think that it was a brilliant piece of parliamentary behaviour by Mr. Hannan, for which I commend him warmly. I am sure that that is not the only reason he was so successful in the recent European elections and is the leading Conservative in the South East of England.

In fact, in less than 24 hours that recording became a worldwide phenomenon. Friends of mine from the far east and the United States e-mailed me the hyperlink to the speech. I had no idea that it had happened until friends of mine on the west coast of the United States e-mailed me and said, “You must see this.”

I am grateful for that extra information on the worldwide appeal of our friend Dan Hannan MEP.

The point of the story is that after that occurred I wrote to Sir Michael Lyons, who I thought was the custodian of impartiality in the BBC. My letter to him, dated 8 April, was passed on to the director-general of the BBC, Mark Thompson. He was kind enough to respond personally to me on 27 May, apologising for the delay in his response. He recited the concern expressed in my letter, and said that he had asked colleagues in BBC News for their perspective. He said:

“They, like me, are sorry to learn that you felt that Mr. Hannan’s speech received insufficient coverage.”

Mr. Thompson did not even concede that he thought that it had received insufficient coverage. In a sense, he was criticising those 2 million-plus people who found great enjoyment and entertainment in seeing the clip. He went on to say:

“Choosing which stories to include in bulletins is of course a subjective matter”—

don’t we know it?—

“and BBC News do acknowledge that not every viewer or listener will feel we get it right every time.”

He noted that

“the main story of the day on Tuesday March 24 concerned the comments by the Governor of the Bank of England on the desirability of further fiscal stimulation. The clip of Gordon Brown at the European Parliament was used as part of the reports on BBC News outlets in the context of the wider story, rather than as a report simply of the PM’s speech to the European Parliament.”

The letter went on to say that I would have noted that, two days later, Mr. Hannan was interviewed on BBC News and on the “PM” programme. However, he was only interviewed then because 2 million people had seen the clip on YouTube and were wondering why there had not been a report on BBC News in the first place. To try to explain the issue by saying, “Well, we covered the story of the 2 million YouTube viewers” misses the point completely. The BBC went on to say—perhaps this is Mr. Mardell speaking in code—that Mr. Hannan was

“‘completely perplexed and slightly stunned’ by the global reaction to the speech.”

That is what my friend, Dan Hannan, had said about it, with typical modesty, but I think that a lot of licence fee payers were completely perplexed and slightly stunned by the fact that Mr. Mardell had not felt it necessary to include the incident in his reports from Strasbourg on the day.

What was the conclusion from Mr. Thompson? By the way, I think that he is on £800,000 a year, but it does not matter about that. He ended:

“Thank you for bringing your concerns to our attention. I hope my letter has at least served to explain the thinking behind this editorial decision.”

That is wholly inadequate. In fact, it is contemptuous. He is saying to those 2 million people, “To hell with it. We made that decision; we’re standing by it. We’re not even prepared to admit that we made an error of judgment in failing to anticipate the significance of that question to the Prime Minister.” We have a lot to do before we can be sure that the “public service content” of some BBC news programmes satisfies the criteria of being impartial, factual and objective.

The second element of “public service content” to which I draw attention is the fact that it should include content whose primary purpose

“is to inform, educate or entertain children”.

A lot of us are concerned that in the present squeeze on funding for public service broadcasting, traditional children’s programmes are losing out. The definition of “public service content” in my Bill would ensure that programmes designed to inform, educate or entertain children would have a high priority and could draw on licence fee revenue as programmes that contained public service content.

The third category is content whose primary purpose is “charitable or religious”. That speaks for itself. Again, there has been a lot of concern that religious or charitable objectives in broadcasting are being squeezed out in the BBC’s never-ceasing search for higher viewing figures.

The fourth criterion would be that the content was not otherwise likely to be provided by the market responding to consumer demand. That criterion reflects the thinking of, for example, the Culture, Media and Sport Committee in its report. I am delighted that my hon. Friend the Member for Shipley (Philip Davies) is a member of that Committee and may be able to inform us of some of its thinking later.

I am listening carefully to the hon. Gentleman and the criteria that he is setting out. Am I right in assuming that he does not believe that the BBC should ever televise sport, which is not part of any of those criteria? Can he explain to me the rationale behind asking the National Audit Office, which is an estimable body in all sorts of ways, to act, in effect, as critics of future programming and to decide which programmes are going to be flops and which are not?

I shall deal with the National Audit Office in a moment. On the hon. Gentleman’s reference to sport, none of the criteria would prevent the BBC from showing any programmes, but it would be able to be subsidised from the licence fee only if the programmes it was producing met the criteria of public service content, so if the BBC wanted to produce programmes such as those on BBC 3, to which I referred earlier, it would still be able to do that. Similarly, it would still be able to provide sporting programmes, and those would be funded by the licence fee if the BBC could establish that the content would not otherwise be likely to be provided by the market responding to consumer demand.

So I am right in saying that all the major sporting occasions, which many people look forward to seeing on the BBC, would not meet the hon. Gentleman’s test and would not be able to be televised by the BBC under his proposals. People who could not afford to pay a subscription charge would not be able to see—[Interruption.] The hon. Member for Shipley (Philip Davies) says from a sedentary position, “ITV.” ITV is losing contracts for major sporting events because it cannot afford them. What the hon. Member for Christchurch (Mr. Chope) is saying is, “Either you subscribe or, sorry, the grand national, the test matches, the football cup finals are not for you.”

The hon. Gentleman misses the point big time. One of the reasons fewer sporting events are now on independent television is that the BBC, with the benefit of unlimited public subsidies through the licence fee, has been bidding up the price to such an extent that ITV cannot afford to show such events. I argue that if the content can be provided by the market responding to consumer demand, it is wrong that it should be funded by the licence fee payer, who is effectively paying a mandatory poll tax for the privilege of being able to have broadcast receiving equipment.

My hon. Friend might be interested to know that I was at No. 10 Downing street today with Sir Peter O’Sullevan and Frankie Dettori handing in a petition to save horse-racing coverage on the BBC, to which I think the Minister is also sympathetic. The BBC is cutting some of the lower grade races to cherry-pick the big racing. Horse racing cuts right across the social divide, unlike any other sport, and people like me were brought up with fantastic people like Peter O’Sullevan, who encapsulated quality on the BBC. Does my hon. Friend agree that it is much more worthwhile for the BBC to cover horse racing, rather than spending £18 million on people such as Jonathan Ross?

My hon. Friend makes an excellent point. I regret the fact that much horse racing has been marginalised.

Continuing with a response to the intervention from the hon. Member for Somerton and Frome (Mr. Heath), sport that was not provided by the market responding to consumer demand could still be funded out of the licence fee. So the example of synchronised swimming on BBC 3 that I quoted earlier might be able to get funding on that criterion, but the hon. Gentleman misses the main issue relating to the funding of sport on the television.

Clause 1(3) states:

“Where the only criterion of public service content is that contained in subsection (2)(d)”—

in other words, in the case of market failure—

“the judgement relating to the likelihood of market failure shall be made by the National Audit Office, which must publish an opinion on any matter referred to it by the Secretary of State pursuant to this section.”

That is because we cannot really trust the BBC to make its own judgments about the likelihood of market failure. Clause 1(3) would introduce a degree of external audit and objectivity into the equation.

Clause 1(4) says:

“No content shall be public service content if it fails to satisfy prevailing standards of good taste and decency.”

I hope that that would have the support of all Members without demur, because a lot of the current output does not satisfy prevailing standards of good taste and decency. People may want to watch or listen to vulgarity and smut, but why should it be funded by a poll tax on licence fee payers?

Although I agree with the hon. Gentleman that we would want to see good taste and decency, who would be responsible for monitoring that and making decisions? Would it be the National Audit Office?

No, it would not, because I am not sure that the National Audit Office is qualified to do that. However, the National Audit Office would be able to receive complaints from people who, for example, felt that money from the television licence fee had been expended on programmes that only purported to have public service content complying with the prevailing standards of good taste and decency. The National Audit Office would be able to adjudicate after the event if such complaints were made.

I would expect the providers of content to try to apply standards that they would set and monitor themselves. Although I have already expressed my scepticism about how the BBC Trust operates, I did not think it reasonable to remove any sense of self-regulation from the Bill completely. I do not know whether this is a criticism of the Minister, but clause 1(4) would, I accept, rely to a large extent on self-regulation in the first instance, although it would be subject to audit after the event.

Clause 1 is linked to the payment of the licence fee, because as clause 2(1) says:

“No licence fee revenue shall be paid to the BBC by the Secretary of State for services which do not satisfy the criteria of public service content in section 1.”

It may come as a bit of a surprise to some people to learn that the licence fee revenue does not go directly to the BBC. Rather, the royal charter says:

“‘the licence fee revenue’ means any sums which may be paid to the BBC by the Secretary of State from time to time, pursuant to any Framework Agreement, to fund the services provided by the BBC for the promotion of its Public Purposes”.

The money is therefore under the control of the Secretary of State. Under the terms of the royal charter, it is for the Secretary of State to decide how much of that money should go to the BBC. If the amount of content produced by the BBC that could be funded out of the licence fee were much reduced—which, unless the BBC wanted to change its agenda significantly, is what I suspect would happen under the terms of the Bill—there would be more money, either to reduce the licence fee or to be made available to broadcasters and providers that did want to produce public service content in accordance with the criteria set out in clause 1.

If one looks at the mass of documents currently circulating in the lively debate on the issue, one sees among other things a set of very patronising statements from the BBC, which in effect say, “Well, we’re not sure that there’s going to be any money left over at the end to prop up shortfalls in funding for public service content from rival channels and organisations.” We know that a large amount of public service content online is currently funded without any subsidy, but it could be eligible for subsidy. We know also that ITV is being squeezed by the severe drop-off in advertising revenue, which means that it can no longer fund its public service obligations under the current regulations. The question is not whether we should have an ITV without regional news or children’s programming; in my book, it is about how we can enable ITV to have regional news and children’s programming. The Bill is one way of enabling that.

Clause 2(2) says:

“It shall be the duty of the National Audit Office to keep under review the total cost of public service television broadcasting”;

clause 2(3) goes on:

“In pursuance of its duty…the National Audit Office must conduct, in each calendar year…a value for money audit of the expenditure incurred on the broadcasting of public service content that is funded by the licence fee payer.”

That is highly pertinent and topical, because only a few days ago my hon. Friend the Member for Gainsborough (Mr. Leigh) was challenging John Humphrys on the “Today” programme on this subject, against the background of the National Audit Office report into the BBC’s substantial waste of resources in respect of its radio output. Not only that, but my hon. Friend and the National Audit Office were critical of how the BBC fiddled the figures and has denied public access to material that should be available to the public on terms of transparency and accountability.

All that is set out on the record. We now know that there is tremendous pressure on the BBC to be more open about how much money it pays its presenters. There is an enormous article in one of our national newspapers today setting out the incredible figures involved in the salaries of some of the presenters and suggesting that they might be reviewed. Basically, the NAO report to which I have referred was suggesting that far too much money was spent on some of the high-profile presenters and not enough on the actual content. An important part of the Bill is that the National Audit Office would be brought into the frame to make sure that the money from the licence fee—the poll tax on everybody who has a television—satisfied the criteria of providing good value for money. The report on that would have to be published and laid before both Houses of Parliament.

We do not have as much time as I had hoped for, Mr. Deputy Speaker, so I shall not refer to the wealth of other material that I have to hand. I say with all modesty that the House has to address the big lacuna of there being no definition of public service content. I put forward the Bill as a stab at that. It might not be the final answer, but I hope that it will inspire my hon. Friend the Member for Wantage (Mr. Vaizey), who is to speak from my party’s Front Bench, to go along similar lines when we get into government. In that way, there could be a level playing field for all the media and communications outlets, and a common description of the criteria for public service content. There could be equal funding for all public service content and equal access to public subsidy, when it is deserved.

My hon. Friend the Member for Christchurch (Mr. Chope) has introduced an important Bill. Before I address the detail, it is important to understand the context in which the Bill is being debated.

People are right to be concerned that this Government have lost their way as regards broadcasting policy. Next week, on 16 June, we are expecting the publication of the Digital Britain report, yet we meet in the House today having lost the former Secretary of State, the right hon. Member for Leigh (Andy Burnham), who has been in charge of this consultation and has now gone to the Department of Health. We learned from our newspapers yesterday and this morning that the Minister responsible for Digital Britain, Lord Carter, is set to resign very shortly after the report has been published; rumour has it that he may be on his way to Australia. Having put forward the framework, he is to abandon the sinking ship that is this Government’s broadcasting policy.

We also have a new Minister in this House, the hon. Member for Birmingham, Erdington (Mr. Simon), who was recently appointed to take responsibility for Digital Britain and broadcasting policy. We have learned that he is unpaid. We should perhaps applaud the Government for trying to make some savings, having driven this country into the largest debt that we have ever seen, but it may also be a signal of how seriously they take broadcasting policy. With the utmost respect to the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Bradford, South (Mr. Sutcliffe), who I have got to know in the months and years in which I have shadowed his Department, it seems extraordinary that today of all days, when we are debating such an important Bill about the future of the BBC, the Department has sent the Minister responsible for sport to the House, especially given that it has so recently appointed that talented Minister with responsibility for broadcasting, who displays his interest in and influence over broadcasting policy by not being in the Chamber but someplace else. Perhaps when the Minister winds up he can explain why his colleague is not here to deal with this important Bill.

My hon. Friend the Member for Christchurch and I have debated the future of the BBC licence fee in this House on another occasion, and I commend him for continuing to bring before the House important issues to do with the BBC. As I said in the previous debate, it is not Conservative party policy to abolish the licence fee; I will speak later about the principle of the licence fee. It is also important to state that I am a strong supporter of the BBC, as are my Front-Bench colleagues and, indeed, the leader of our party. The BBC is a bit like family, in the sense that we do not question its existence, and we admire and respect it, but that does not mean that we are not prepared to criticise it when appropriate. My hon. Friend cited some good examples of the programming that the BBC is putting out on BBC 3 that it might be relatively difficult for it to justify. I, too, have not spent my leisure hours viewing these programmes, but they seem highly questionable programmes for the BBC to fund. Nevertheless, it is important to restate the fact that all of us, in all parts of the House, should be jealous of the BBC’s editorial independence.

I understand my hon. Friend’s concern about the BBC’s failure to cover the speech by Daniel Hannan, a Member of the European Parliament. I have known Mr. Hannan for very many years. In fact, he started his career—this is perhaps pertinent—as my photocopier: when I worked in the Conservative research department, he spent a summer holiday doing my photocopying. It was there—I would not say at my knee, but perhaps at my elbow—that he learned some of his guiding political principles, and he has gone on to become an astonishing success on a far wider stage than I have. The decision not to cover his speech is a matter for the BBC, but it is interesting that it was second-guessed by the great British public, and indeed the global public, who endorsed his remarks about the Prime Minister.

What do the public want from the BBC? I hesitate to cite a report commissioned from MORI by Ofcom in case it provokes interventions from many of the hon. Members in the Chamber who might be sceptical about its provenance. First, it showed—motherhood and apple pie, as it were—that the audience sees television as a key source of entertainment. Although the Bill sets out worthwhile criteria for the definition of public service broadcasting, it is important to remember that when people switch on the BBC, as much as when they switch on ITV and Sky, they want to be entertained. However, some of the valid concerns of my hon. Friend the Member for Christchurch are met by the fact that people also want television to be seen as providing an understanding of British culture and identity as a whole, as well as building understanding and awareness between communities about different values, lifestyles and perspectives in the world around them.

Many respondents believed that the BBC had a role in educating and informing people. In fact, 83 per cent. said that they had learned useful things from television—whether that was from watching the BBC 3 programmes that my hon. Friend cited is not clear from the survey. Some 78 per cent. believed that television was influential in shaping public opinion. That addresses the point about the lack of coverage of Mr. Hannan’s speech, although it is perhaps worth reminding ourselves that our party continues to succeed despite the coverage given to us by the BBC.

Despite widespread pro-Liberal Democrats coverage on the BBC, they continue to slip in the polls, so perhaps we should not press the BBC too much on its news coverage, as it seems to be working in our favour and against the parties that it supports.

One of the most interesting things that MORI’s report for Ofcom explored was whether television should cater for the interests of the majority or for different audience interests. Opinion was mixed, and some participants were concerned solely with their own viewing enjoyment and believed that their personal needs would be better met by programmes that catered for the majority. Furthermore, many felt that that would make economic sense, as it would help guarantee higher viewer ratings. When people were asked whether they would prefer a wide variety of programme types or more popular entertainment programmes, 59 per cent. opted for a wide variety whereas just one third chose more popular programmes.

It is important not to be too prescriptive about the criteria for public service content. Many great and well-loved programmes on the BBC would not fall within the criteria set out in the Bill—one need only think of “Strictly Come Dancing” or “Top Gear”. I put on record my personal sadness that the BBC will obviously have to scrap another popular entertainment show, “The Apprentice”, which has been an enormous success in putting business at the heart of popular entertainment. Obviously the decision by Sir Alan Sugar to take up a Government position and advocate Government policy would preclude him from carrying on presenting “The Apprentice”, particularly since, as my hon. Friend the Member for South-West Surrey (Mr. Hunt), the shadow Secretary of State, has pointed out, the next series would almost certainly be broadcast during the next general election campaign. Of course, there is much time for “Suralan”, or “Lordalan”, as we are going to have to learn to call him, to change his mind and realise that his employment prospects are far more secure with the BBC than they would be with this outgoing Labour Government.

My hon. Friend will know that the Secretary of State has the power to authorise the BBC to enter into sponsorship agreements. Does he see that there might be a role for the Government to sponsor Sir Alan Sugar in the next edition of “The Apprentice” and make overt the way they are trying to manipulate public opinion?

As my hon. Friend knows, the amount spent on advertising by this Government has risen exponentially, and everywhere one turns there is now Government-sponsored advertising. We fully expect that advertising to increase as the election draws near. As he will be aware, the shadow Chancellor, my hon. Friend the Member for Tatton (Mr. Osborne), has made it absolutely clear that a Conservative Government would in no way manipulate taxpayers’ money to promote Government policy in the shameful way that this Government have in the past 10 or 11 years. If the Government do choose to sponsor “Suralan”, that sponsorship will end on day one of a Conservative Government. I can make that absolutely clear.

The hon. Member for Somerton and Frome (Mr. Heath) made a valid point about what he thought was lacking from the criteria in the Bill. However, as my hon. Friend the Member for Christchurch made clear, the measure has been introduced almost to provoke a discussion, and not to be over-prescriptive. However, I add my concern that the criteria do not include drama—which covers the well loved “Dr. Who”, “Spooks”, one-offs such as the plays about the early life of Margaret Thatcher, and comedy such as “Gavin and Stacey”.

When the current charter settlement was agreed, the BBC was reminded that, above all, licence fee payers want entertainment. One of the clearest messages from the public consultation on the Green Paper was the importance of the BBC’s role in providing entertainment. Audiences do not want an overdose of worthiness. The BBC was told to continue to take fun seriously, with entertainment ingrained in all its services and made central to its mission.

During Ofcom’s second review of public service broadcasting last year, extensive and significant audience research was undertaken. There was audience support for accessible and effective delivery of the public purposes that underpin public service broadcasting. Most people still believe that such broadcasting delivers well-made and high-quality programmes.

It is also worth pointing out that our public service broadcasters still contribute 90 per cent. of UK-originated content—the BBC is in the lead there. For example, BBC 1 had nine out of the top 10 TV shows on Christmas day. They were all made in the United Kingdom and the top three were made outside London. More than half of all people watching television tuned in to watch “Wallace & Gromit—A Matter of Loaf and Death”, which was the Christmas day programme with the highest ratings, with an average audience of 14.3 million.

I share the concern of my hon. Friend the Member for Christchurch about the future of children’s television, which is a live issue in broadcasting. The BBC provision for children is incredibly important, and the focus should be on what happens in some of our more commercial broadcasters’ children’s programming. They are finding it increasingly difficult to provide, partly because of Ofcom’s strictures on advertising during children’s television, which have rather backfired and made it harder to earn funds to make such programmes. That should be examined.

Although the licence fee has imperfections, it is probably the least worst mechanism for funding the BBC. However, we remain concerned that the BBC is set to exceed the total of private sector revenues by larger and larger margins. The free, plural media market needs a strong BBC, but it also needs strong competition. That will be increasingly difficult as the BBC gets £1 billion more in TV revenue and £300 million more in radio revenue than all commercial broadcasters combined.

We have set out a range of options to try to keep the BBC within recognisable limits. First, the increase in the licence fee from £139.50 to £142.50 should be frozen—the Government and the Liberal Democrats oppose that. We have also said that the BBC should start to publish the salaries of some of its highest paid executives and broadcasters, as well as their expenses. Our licence fee payers, who pay for that, should be able to see the figures. I agree with my hon. Friend the Member for Christchurch that it is high time the BBC was audited by the National Audit Office.

We are great supporters of the BBC, but that does not preclude our being its critical friends. We all have comments to make about the quality of the programmes that the BBC broadcasts—I am pleased that it is taking arts programming more seriously and appointing a senior arts editor to supervise it.

There is an important point at the Bill’s heart: the BBC has guaranteed revenues, unlike commercial broadcasters. It is therefore in a unique position to take risks or make programmes that will perhaps not draw in huge audiences but are worthy in themselves and plug the gaps that commercial broadcasters cannot fill. The director-general of the BBC should keep that at the forefront of his mind as he steers the BBC through the last few months of a Labour Government and into the next few years of a Conservative Administration.

It is a pleasure to follow the hon. Member for Wantage (Mr. Vaizey), who at least gives the impression that he has watched a television programme at some point. The most damning thing I heard from the hon. Member for Christchurch (Mr. Chope) was his condemnation of programmes, only to add, “Of course, I didn’t watch them. I just know they were rubbish.” Interestingly, one of the programmes that he damned had an intimate connection with a programme that the hon. Member for Wantage commended as a valuable asset, because “Horne and Corden” stars one of the major players in “Gavin and Stacey”, which the hon. Member for Wantage recommended. I have seen “Horne and Corden” and it was absolutely dire, but that is a matter of personal taste, and has nothing to do with whether the BBC should be attempting to build on and repeat the success of a programme using another concept.

The difficulty with the Bill is that it gives the impression—which the hon. Member for Wantage was keen to dispel—that the Tory party has waged war on the BBC. That is a great shame, because the BBC is too important to be used as a political point-scoring machine by the political parties in this House. I want to state clearly and unequivocally that we have something very precious in the BBC. It is the fons et origo of public service broadcasting, on which much public service broadcasting elsewhere is based. We should be very proud of what it has achieved over the years.

Does that mean that I am uncritical of the BBC? No, of course it does not. Nor should anyone be uncritical of it. There are certain issues that we need to look at—or, perhaps more importantly, that the BBC needs to look at. I am wary of politicians getting directly involved, particularly in the editorial content of the BBC. There are, however, expenditures at the BBC that are difficult to justify, and introducing more transparency into the funding of BBC programming and bureaucracy would be worth while. There is still evidence, for example, that the BBC uses several people to do a job that would be done by just one person in the commercial sector. I saw exactly the same thing when I was involved in medicine many years ago. I worked in the NHS and in the private sector when I was doing agency work, and I could see the difference between NHS operating theatres and those in the private sector. There were far fewer people involved in doing exactly the same job in the private sector. I actually think that the private sector went beyond the limits of safety in some cases, however, so there are arguments both ways.

The BBC needs critically to examine how it runs its business. An example is the number of duplications that we see all the time in news and current affairs. Different people appear to be doing the same job for different parts of the BBC, and we wonder whether that is really necessary. I would like the BBC to become better attuned to such issues. Some of the contracts awarded to what is called the top talent are difficult to justify in the context of broadcasting as a whole, certainly in the present economic climate, and I would like to see that question addressed as well. It is important, however, not to throw the baby out with the bathwater. We must not allow proper criticism of the BBC to be used as part of a campaign of attrition against the concept of the BBC itself.

The problem with the hon. Member for Christchurch’s Bill is that it does not provide a formula for public service broadcasting—not one bit of it. It provides for a desiccated, feeble imitation of public sector broadcasting that would be the equivalent of brown rice and cardboard as a diet to be put before the British public. The hon. Member for Wantage was right to say that entertainment is part of the mix, but it is not mentioned in the Bill.

Sport, as I said in my intervention, is an essential part of the mix, but it is not there in the hon. Gentleman’s Bill. Culture of any kind is not there, unless it is so unpopular as to be unable to achieve programming in any other way. Excellence in drama is not there and neither is comedy—an area where the BBC has been groundbreaking over many years and has achieved great results.

That is why the Bill is unacceptable—never mind the fact that it sets up the National Audit Office, for heaven’s sake, as some sort of arbiter of good taste, which is a function way beyond its normal parameters. I have a huge deal of respect for the NAO, but to ask it to decide whether programmes are in good taste defies any sensible definition of its present function and amounts to a most extraordinary suggestion by the hon. Member for Christchurch.

The hon. Gentleman mentioned sport. Will he tell us where he and his party stand on the BBC’s proposed cuts to horse racing? Does he think it wrong when the BBC seems so determined to show only the races that any other commercial broadcaster would show, or does he think the BBC should use the licence fee to promote wider support for horse racing, particularly given that it cuts across every social divide in the country?

The hon. Gentleman knows that I am not averse to going to the race track myself, particularly at Wincanton, where some of the best jumping in the country takes place; I also love watching horse racing on television. I have to say, however, that the hon. Gentleman should not support his hon. Friend’s Bill because it would prevent that happening. Not only would it prevent that from happening, but it would prevent the grand national from being shown, and many people would be very disappointed at that. [Interruption.] The hon. Member for Christchurch can shake his head as much as he likes, but such events are not covered in paragraphs (a), (b), (c) or (d) in clause 1(2)—and those are the criteria for public sector broadcasting.

If the hon. Gentleman is suggesting that the broadcasting of such events should be funded from elsewhere, where is elsewhere? Where is the BBC to get the funding in order to show these big-ticket sporting events? That is the problem with his Bill. The hon. Gentleman has not thought it through. He is so intent on providing the extremely narrow spectrum of things he considers to be the best of public service broadcasting that he will not allow anything else. He will not allow any of us to enjoy ourselves: we must only be educated; we must go only to church services; we must see things that nobody else wants to see. That is going to be the function of the BBC. What a miserable future for the BBC, as prescribed by the hon. Member for Christchurch and his Puritan friends. I am afraid that I do not and will not accept that. I will not support the Bill today.

I am delighted to participate in what remains of today’s debate. The Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Birmingham, Erdington (Mr. Simon), sends his apologies, as he had a pressing constituency engagement that was in his diary before he was promoted to his new post. Far from our losing our way on broadcasting, I believe that this Government’s record of support for broadcasting and where it is heading for the future has been welcomed by the majority of the serious players in the broadcasting world.

Before I give way to the hon. Gentleman, let me point out that the Secretary of State for Health and former Secretary of State for Culture, Media and Sport was in the House this morning—he is not lost; he gave an important statement earlier on swine flu. The new Secretary of State for Culture, Media and Sport furthermore was a noted distinguished journalist with the BBC and has a proud record on broadcasting issues.

Will the Minister explain why the Minister for Sport, but not the Minister for Broadcasting, gets a ministerial salary?

That is, of course, a matter for the Prime Minister and the Government. I actually think that the Minister for Sport should be in the Cabinet—[Interruption]—and I am glad that the hon. Gentleman agrees. He should be in the Cabinet because sport is such an important issue for the whole country and it affects all our constituencies. I would be very pleased if hon. Members raised that issue with the Prime Minister at every opportunity to encourage him to make the decision pretty quickly.

We have had an interesting debate, but it has been conducted in a tongue-in-cheek way by the hon. Member for Christchurch (Mr. Chope). He may be consistent in the issues he raises about the BBC, but he knows that the Bill he has proposed would not achieve what he wants—or, perhaps it would, which would make it even more worrying for the BBC’s future. The hon. Member for Somerton and Frome (Mr. Heath) hit the nail on the head in what he said, so we have to be careful. I think that we should be proud of the BBC as an organisation. It has a distinguished record over many years in accordance with its broadcasting principles. It has been and is revered around the world for the quality of its public broadcasting. While I agree with the hon. Member for Wantage (Mr. Vaizey) that we should be proud of the BBC—that is the only thing on which I do agree with him—we can, where necessary, be the critical friend that we should be; but, in doing that, we should in no way try to undermine the BBC, which has provided us with superb programmes for many years.

I was concerned about the comments of the hon. Member for Wantage, who half-supported some of what was said by the hon. Member for Christchurch. That sent a clear message. I thought that the hon. Gentleman’s approach to what a future Conservative Government would do was rather arrogant. Any loss of the BBC’s editorial independence would be very damaging. I hope that he will assure me that a future Conservative Government would in no way damage that editorial independence.

As my hon. Friend the Minister of State points out, there will not be a future Conservative Government. In case that day ever dawns, however, we need to ensure that the BBC is protected.

It is important to establish where we are heading in regard to broadcasting. Having listened carefully to what was said by the hon. Member for Christchurch, I want to ensure that the whole House knows that it would be very dangerous to allow his Bill to proceed.

Given that the Minister asked me to guarantee the editorial independence of the BBC, will he tell me whether he thinks that the appointment of Sir Alan Sugar as a Government envoy, and his continued role in presenting a flagship BBC programme, compromise its editorial independence?

That has been covered in many different ways by the Secretary of State and the BBC Trust, and I think that the hon. Gentleman does a disservice in trying to score political points.

The description of public service television broadcasting that appears in section 264 of the Communications Act 2003 provides the basis for the framework of public service broadcasting regulation set out in the Act. In particular, it provides the basis for Ofcom’s statutory reviews of public service broadcasting. Ofcom has already undertaken two such reviews, culminating in final reports in 2005 and in January of this year.

The Government believe that the framework set out in the 2003 Act provides a valuable starting point for examination of public service content. It may be helpful if I remind the House of the precise terms of section 264 of the Communications Act, which would be lost if the Bill were passed. The Act lists the purposes of public service television broadcasting in the United Kingdom as follows:

“(a) the provision of relevant television services which secure that programmes dealing with a wide range of subject-matters are made available for viewing;

(b) the provision of relevant television services in a manner which (having regard to the days on which they are shown and the times of day at which they are shown) is likely to meet the needs and satisfy the interests of as many different audiences as practicable;

(c) the provision of relevant television services which (taken together and having regard to the same matters) are properly balanced, so far as their nature and subject-matters are concerned, for meeting the needs and satisfying the interests of the available audiences; and

(d) the provision of relevant television services which (taken together) maintain high general standards with respect to the programmes included in them, and, in particular with respect to—

(i) the contents of the programmes;

(ii) the quality of the programme making; and

(iii) the professional skill and editorial integrity applied in the making of the programmes.”

The Act states that a manner of fulfilling the purposes of public service television broadcasting in the United Kingdom should ensure

“(a) that the relevant television services (taken together) comprise a public service for the dissemination of information and for the provision of education and entertainment;

(b) that cultural activity in the United Kingdom, and its diversity, are reflected, supported and stimulated by the representation in those services (taken together) of drama, comedy and music”—

as the hon. Member for Somerton and Frome pointed out, drama, comedy and music would not exist on the BBC if the Bill were allowed to proceed—

“by the inclusion of feature films in those services and by the treatment of other visual and performing arts;

(c) that those services (taken together) provide, to the extent that is appropriate for facilitating civic understanding and fair and well-informed debate on news and current affairs, a comprehensive and authoritative coverage of news and current affairs in, and in the different parts of, the United Kingdom and from around the world;

(d) that those services (taken together)”—

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on Friday 16 October.

Business without Debate

Fuel Poverty Bill

Resumption of adjourned debate on Question (20 March), That the Bill be now read a Second time.

Object.

Debate to be resumed on Friday 26 June.

Protection of garden land (Development Control) Bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 26 June.

Airport expansion (parliamentary Approval) bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 26 June.

Broadcasting (Television Licence fee Abolition) Bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 3 July.

European Union (Audit of benefits and costs of UK membership) Bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 3 July.

Climate change (Sectoral targets) Bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 16 October.

Employment Opportunities Bill

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Friday 16 October.

British museum act 1963 (Amendment) Bill

Resumption of adjourned debate on Question (15 May), That the Bill be now read a Second time.

Object.

Debate to be resumed on Friday 26 June.

Law Commission Bill [lords]

Bill read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

Sri Lanka

Motion made, and Question proposed, That this House do now adjourn.—(Helen Jones.)

I am very grateful to have this opportunity to debate the situation in Sri Lanka. Since the conflict between the Sri Lankan Government and the Liberation Tigers of Tamil Eelam came to its bloody end last month, some people might be tempted to shift their focus to other matters. However, enormous problems remain. In particular, I want to draw Parliament’s attention to the plight of hundreds of thousands of people trapped in internment camps, and the need for reliable independent sources of information. The international community has a responsibility to take urgent humanitarian action, but the Sri Lankan Government have forfeited their position of trust.

As has been well documented, the conflict in Sri Lanka has lasted for decades. The 2002 ceasefire briefly raised hopes that an end could be negotiated, but peace talks stalled the following year. As the latest Library briefing paper acknowledges:

“While for a long time it looked as if there had simply been a return to the military stalemate...in retrospect the advantage was clearly shifting in favour of the Government.”

In November 2005, President Rajapaksa was elected on a nationalist Sinhalese platform, and his Government

“appeared increasingly intent on achieving a military victory over the LTTE”.

This culminated in January 2008, when the Government pulled out of the 2002 ceasefire. Even with the credit crunch enveloping the world, the Sri Lankan Government decided to invest an incredible share of the country’s economy in fighting a military campaign against ethnic Tamils. Last year, they voted to spend $1.9 billion of the country’s budget on the military. Coincidentally, they have since asked the international community, through the International Monetary Fund, for a loan. This is for a total of—believe it or not—$1.9 billion. Although it is claimed that this is to help Sri Lanka through the global economic crisis, it is hard to escape the conclusion that this money is actually to bankroll a massive military campaign against the country’s own people. The international community therefore has a responsibility to think long and hard before it agrees to such a loan. If the loan is granted, it will send out the message that the IMF is the place to go for any Government who want to fund a civil war. I hope the Minister will assure me that our Government do not want the IMF to be seen as a fall-back for any country that wants to attack its own ethnic populations.

Throughout 2008, the Sri Lankan Government decided to take on the Tamils no matter what the cost, financial or humanitarian. It has been impossible to follow the conflict in Sri Lanka satisfactorily, because its Government have not permitted any independent reporting of the conflict. By January, they had used their military might to take the town of Kilinochchi and the causeway between Jaffna and the mainland at Elephant pass. The Government had more than 160,000 troops—in contrast, by February there were an estimated 1,000 in the Tamil Tigers.

Tamil fighters were concentrated in an area of about 30 sq km on the Vanni coast. Despite the fact that 250,000 Tamil civilians also lived in this area, it was subjected to repeated pounding by the Sri Lankan Government. The British Government led international condemnation of that tactic, which many people believe killed thousands of people. I am proud to support the efforts of my right hon. Friend the Foreign Secretary, who, despite the pressure on him from diplomatic circles and all the other vested interests, recognised that it is not right for any Government to behave in that way. Governments need to uphold the very highest standards of behaviour. In February, he and the US Secretary of State, Hillary Clinton, called for a ceasefire and full access to the war zone for independent humanitarian organisations. That was largely ignored, except for a brief lull in April, when the Sri Lankan Government said they were allowing civilians to escape. Many others saw that lull as an opportunity for Sri Lanka to regroup for a final onslaught, and only 300 civilians actually left the conflict zone at that time.

Two weeks later, my right hon. Friend visited Sri Lanka, but President Rajapaksa reportedly said:

“I don’t need lectures from Western representatives”.

Sri Lanka had always denied using heavy weapons against civilians, but on 27 April it then announced that it would cease using weapons that could cause civilian casualties. To most hon. Members that would be a pretty clear indication that it previously had used them and that the original denials were completely untrustworthy. The Sri Lankan Government’s words therefore had no value.

It is impossible to verify the shocking numbers of those affected by the conflict, owing to the lack of any independent evidence, but they are undoubtedly huge. A quarter of a million people were in the so-called safe zone, facing daily bombardment; 80,000 people have died in the conflict since it began and at least 7,000 Tamil civilians are thought to have died this year alone. Even in January 2008, the US Congressional Research Service estimated there were about 300,000 displaced people in Sri Lanka, including Sinhalese as well as Tamils. A further 250,000 Tamils are thought to be living in London, having left Sri Lanka for whatever reason. The impact of the conflict has been huge.

Looking forward, even though the immediate fighting is over, most commentators agree there are going to be many problems. Although the LTTE has been destroyed, the grievances that led to its rise have not been addressed. Many Tamils actually opposed the Tigers, but they are even more opposed to the nationalist Sinhalese extremists. The way in which Sri Lanka ruthlessly crushed the Tamils will undoubtedly lead to resentment among those Tamils who survived the onslaught—indeed, to say that Tamils living elsewhere around the world are resentful would be an understatement. As Parliament has learned in the two months during which a protest has been going on here, British Tamils are anxious, angry and motivated. Many feel they have nothing more to lose. So far they have been entirely peaceful, but it is possible that some will have been radicalised by the brutality back home.

Britain has done more than almost any other country to resolve the conflict, but despite our efforts we were ultimately powerless to prevent thousands of Tamils dying. If we are disappointed and sad about that, we can only imagine how Britain’s Tamils feel. They are angry, and that anger is likely to be shared around the world. I therefore wish to take this opportunity to urge our Government to do all they can to work closely with Tamil representatives and ensure that their voice is heard. However, of immediate short-term concern is the fact that as many as 300,000 people are currently in refugee camps—that is the reason I called for this debate.

A kind of doublespeak exists when it comes to Sri Lanka. The camps are described by the Sri Lankan Government as welfare villages, but even the Library says that they are better described as internment camps. Last month, despite the desperate conditions in Sri Lanka, the last neutral organisation in the conflict zone, the International Red Cross, pulled out because the Sri Lankan Government had barred it from the camps. Some 300,000 civilians live in the camps, with huge numbers sick, malnourished or injured. But the Sri Lankan Government are still refusing to allow any independent monitors or agencies into the area. There must be unhindered access for independent international agencies like the Red Cross and the UNHCR to all the internment camps.

As usual, my hon. Friend makes a powerful speech on the plight of the Tamil people in Sri Lanka. Does she agree that the camps should be opened to the media? One of the real problems in all this has been the complete absence of objective press reporting—indeed, any press reporting—because of the Sri Lankan Government’s refusal to allow media access.

I agree with my hon. Friend, and I will come to that point later in my speech.

The conditions in the camps have not improved, and with the monsoon season on its way there is an even higher risk of disease. I hope that Britain can lead the way in calling for urgent humanitarian action now. Although the fighting is officially over, humanitarian assistance is needed now more than at any other time in the past six months.

The Government there have claimed that conditions are improving, but if that is true they have no reason to fear the presence of independent monitors or reporters, and if conditions are worsening, they have a greater reason to need the help of independent aid agencies. Many people fear that Sri Lanka’s claim about improving conditions in the camps is just a way to prevent external agencies from showing the world what is really going on. It is illogical for there still to be heavy restrictions on the media, aid agencies and human rights groups entering the camps now that the war is over. I hope my hon. Friend will comment on the need for independent monitoring of the camps in his reply. I hope he will also comment on the need to ensure the safety of civilians and even former LTTE cadres.

In order to achieve a long-term peace, there must be reconciliation, and that means treating people with respect. It is not right to intern mass populations, and civilians must be allowed to resettle as soon as possible. Interning mass populations breaches the rule of law and Governments should not be permitted to repress minority populations through the use of long-term internment. Again, I hope that my hon. Friend will agree that this can be achieved only with independent monitoring.

As a gesture, the Sri Lankan Government should allow the mercy mission ship to unload its humanitarian cargo. This would show the world the kind of magnanimity that we are looking for. I understand that the ship is said to have the wrong paperwork and cannot be allowed to dock, but in reality Sri Lankan officials have been on board and know that the cargo is purely humanitarian. Given the exceptional need for humanitarian assistance, the Sri Lankan Government would earn a lot of respect around the world if they allowed an exception to the usual rules and permitted the ship to unload its cargo. Such a gesture would be much appreciated, whereas not allowing it to unload simply looks mean and unnecessarily nasty. I have written to the Sri Lankan high commission asking Sri Lanka to permit the ship to unload and I hope it will show that it has a heart.

I also want to take this opportunity to call on Sri Lanka to show heart over the case of doctors who looked after the sick and dying in the conflict zone. A group of doctors who worked in the conflict zone are being held on suspicion of collaboration and could be in detention for a year or more before being tried. Many people are concerned that the doctors should not be treated like this, and feel that they are in fact heroes rather than criminals. They have not been heard from since they were detained, but their work during the conflict has been widely praised. They treated patients in makeshift health facilities in the war zone. They undoubtedly helped to save many lives, and the UN has described them as “heroic”. However, they were also a source of embarrassment to the Government.

As journalists and independent monitors were banned from the conflict zone, the doctors became one of the few available sources of news about the fighting. They told the world that shelling had in fact come from the Government side and had indeed killed civilians. Sri Lanka, however, has accused the doctors of spreading falsehoods and has implied that doctors were not really looking after civilians at all, accusing them of supporting the Tamil Tigers instead.

Sri Lanka wants the world to believe that not a single civilian died in its final offensive, but few people believe that. Imprisoning the doctors would help to hide an inconvenient truth. I hope that our Government will therefore do all within their power to ensure that the doctors are treated well and receive independently verifiable justice. I hope that my hon. Friend can assure me that the Government are doing all they can to help the doctors.

I have spoken to Ministers about Sri Lanka many times. The Foreign Secretary has shown extraordinary resolve in his efforts to help Tamils caught up in the conflict. Britain has, in my view, gone as far as any Government in working for peace and a solution to this humanitarian crisis. Our Government have repeatedly called for a political solution that establishes a meaningful role for Tamil and other minorities in national political life. Unfortunately, the UN has not covered itself in glory. The Security Council made strong statements, but we all know that words are not enough and there has been no action because Russia, China, Japan and Vietnam prevented it.

The cause of the Tamils has been my first foray into international relations and has been particularly depressing. Thousands are dead; many hundreds of thousands are homeless. They need our help now and I hope that the Government will do all they can to reassure Britain’s Tamils, and everyone else around the world who believes in decency and values in foreign affairs, that we are on their side.

May I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) not only on securing today’s debate but on her long track record in fighting to bring the plight of the Tamils in Sri Lanka to the House’s attention? The issue is not only important around the world, but for the foreign policy values for which the UK should stand. It is absolutely right that my hon. Friend should choose now—at the end of a 25-year conflict—to raise these incredibly important issues.

Of course, we are relieved that the thousands of civilians who were trapped in the conflict zone are no longer at immediate risk from the fighting, but we must also be clear that this is no time for celebration. Too many Sri Lankans died during three decades of conflict. We may never know the final figure, but it is reasonable to assume that it was far more than the 70,000 that is frequently cited.

The significant challenges that now face the country are threefold: to provide immediate relief for the thousands of displaced civilians; to ensure their rehabilitation and resettlement; and to initiate a process of political reconciliation that is genuinely and authentically inclusive.

As my hon. Friend said, as soon as the fighting was over my right hon. Friends the Prime Minister and the Foreign Secretary spoke to the President and Foreign Minister of Sri Lanka and urged the Sri Lankan Government to launch a genuine political process and to address the needs of the internally displaced persons—the IDPs. I think that we would all be united in saying that the most pressing priority has to be tackling the humanitarian situation. Shockingly, there are now more than 280,000 civilians in the IDP camps. Any country would struggle to cope with that number, and that is why the presence of the UN and international humanitarian agencies is so important, but they can provide the much needed assistance only with the full co-operation of the Sri Lankan Government.

Since the visit to Sri Lanka at the end of April by my right hon. Friend the Foreign Secretary and French Foreign Minister Kouchner, the Sri Lankan Government have shown a greater willingness to issue visas to agency staff and to improve agency access to the IDPs, but problems remain. The camps are overcrowded and without adequate clean water or adequate medical facilities. Families who were separated when they fled the fighting have still not been reunited. The Sri Lankan Government must demilitarise the camps as soon as possible and grant unhindered access to the aid agencies and freedom of movement to the IDPs.

When they met last week, my right hon. Friend the Foreign Secretary urged the Foreign Minister of Sri Lanka to make continued progress on those fronts. He also made it clear that early resettlement must be an essential part of any reconciliation process.

We welcome the Sri Lankan Government’s undertaking to return the bulk of the IDPs to their homes within 180 days. Of course, we look forward to seeing how they plan to achieve that, and how we could offer assistance. The recent visit to Sri Lanka by the United Nations Secretary-General, Ban Ki-moon, who was able to visit four of the IDP camps, and his subsequent briefing to members of the Security Council, were important, but continued engagement by the UN is essential to keep the spotlight of international concern focused on Sri Lanka.

The United Kingdom will continue to offer practical help in addressing the needs of the IDPs. Since September 2008, my former Department, the Department for International Development, has allocated £12.5 million to support the work of the international humanitarian agencies. DFID’s contributions will continue to focus on the immediate needs of the IDPs, but they will also help to support displaced people in making a dignified and safe return to their homes. That could include activities such as mine mapping to assist in the demining process, and providing shelter and basic services for survival and the recovery of people’s livelihoods.

We have always made it clear that there could be no satisfactory military solution to the conflict; my hon. Friend made that plain in her contribution, too. Lasting peace can come about only as a result of an inclusive political process, in which all communities in Sri Lanka believe genuinely that they are accepted and valued members of society. After years of conflict, the process of political reconciliation will not be easy. My right hon. Friend the Foreign Secretary made the point strongly to the Sri Lankan Foreign Minister last week that winning the peace could end up being harder than winning the war. We therefore very much welcome the comments made by the President of Sri Lanka in his victory day speech on 3 June:

“The war fought against the LTTE was not a war against the Tamil people”,

and:

“It is now time to win the hearts of the Tamil people”.

We also welcome his acknowledgement, at the end of the UN Secretary-General’s visit, that

“addressing the aspirations and grievances of all communities and working towards a lasting political solution”

is

“fundamental to ensuring long-term socio-economic development”

In Sri Lanka. Of course, when it comes to those fine aspirations, the proof of the pudding will be in the eating. We will expect to see the details of how the Sri Lankan Government intend to take a process of reconciliation forward.

Any reconciliation will require legitimate grievances from the past to be addressed before we can move on to the future. The President recognised that during the Secretary-General’s visit. We welcome the President’s commitment, in his joint statement with the Secretary-General, to taking measures to address possible violations of international humanitarian and human rights law. My right hon. Friend the Foreign Secretary re-emphasised the need for such a process of accountability to the Sri Lankan Foreign Minister last week, and urged the Sri Lankan Government to make it clear how they intend to follow up on the President’s commitment.

We have always been clear that the United Kingdom would fully support an independent, credible and transparent investigation into allegations of breaches in international humanitarian law committed by all parties to the conflict. We cannot be certain exactly what happened during the fighting, particularly towards the end of the conflict, but enough reports have surfaced for us to have grave concerns about the number of civilians who might have died as a direct result of the fighting in the conflict zone. We are well aware of credible reports suggesting that thousands of civilians died between January and May this year.

I should like specifically to address my hon. Friend’s point about the doctors. We are very concerned that the three Sri Lankan doctors, who had been on the front line in the war zone, treating wounded civilians, as she said, were arrested on 18 May by the Sri Lankan Government on charges, we believe, of giving false information to the media. When our Foreign Secretary discussed matters with the Sri Lankan Foreign Minister on 5 June, he raised that specific issue, and we will continue to follow the cases closely. I shall be happy to keep my hon. Friend informed of developments.

In conclusion, many challenges still face the Government and the people of Sri Lanka, but there is also an historic opportunity now to heal the wounds caused by years of violence and to create a Sri Lanka in which all communities—

What is the Government’s view on the access of journalists and international reporters to the zone?

Any Government who are content with the way in which people in such circumstances are being treated should—taking account of security considerations—ensure that journalists have access. We hope the Sri Lankan Government will be willing to consider that.

For Sri Lanka to move forward, all communities—Sinhalese, Tamils and Muslims—must feel that they have an equal stake in that society. We will continue to use our influence and continue to work with the Sri Lankan Government and other partners to help bring this about, so that we can move from conflict and war to an authentic process of peace and reconciliation.

Question put and agreed to.

House adjourned.