May I ask the Leader of the House to let us have the business for next week, please?

The business for next week will be as follows:

MONDAY 17 JUNE—Conclusion of remaining stages of the Enterprise Bill.

TUESDAY 18 JUNE—There will be a debate on European Affairs on a motion for the Adjournment of the House.

WEDNESDAY 19 JUNE—Opposition Day [3rd Allotted Day-2nd Part]. Until 7 o'clock, there will be a debate on the reduction of world poverty through trade, on an Opposition motion. Followed by a motion to concur with their Lordships on the establishment of a Joint Committee on the House of Lords.

THURSDAY 20 JUNE—There will be a debate on Energy: Towards 2050 on a motion for the Adjournment of the House.

FRIDAY 21 JUNE—Private Members' Bills.

The provisional business for the following week will be:

MONDAY 24 JUNE—Consideration of Lords amendments to the Export Control Bill.

TUESDAY 25 JUNE—Opposition Day [15th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.

WEDNESDAY 26 JUNE—Consideration Of Lords amendments that may be received to the Tax Credits Bill.

THURSDAY 27 JUNE—Estimates [3rd Allotted Day].

There will be a debate on public-private partnership for London underground followed by a debate on individual learning accounts.

At 7 o'clock the House will be asked to agree all outstanding estimates in accordance with Standing Order No. 54(5). The list of estimates to be agreed will be advised in due course.

FRIDAY 28 JUNE—The House will not be sitting.

The House will also wish to know that on Monday 17 June 2002, there will be a debate relating to reception of asylum applicants in European Standing Committee B.

On Tuesday 18 June, there will be a debate relating to broad economic policy guidelines in European Standing Committee B.

The House will wish to know that I hope to make an announcement regarding the summer recess dates next week.

I am grateful to the Leader of the House for letting us have the business. May I ask him when the Government intend to bring forward proposals, or a resolution, to enable the Select Committee structure to reflect the recent changes in the structure of Government Departments? Given the right hon. Gentleman's respect for the Select Committee system and the known desire of the House to maintain and strengthen it, we are all keen that those proposals should be introduced as soon as possible.

Given the excellent ten-minute Bill introduced by my hon. Friend the Member for Rayleigh (Mr. Francois) yesterday, may I ask the Leader of the House when the Government intend to do something about the Data Protection Act 1998? My hon. Friend should be praised for bringing this matter to the attention of the House in such a positive way. I know that it is in the mind of the Leader of the House to do something about this, but a lot of time has now passed and hon. Members are getting anxious about it. We would be grateful if the right hon. Gentleman could tell us when the Government are going to seize the issue and deal with it.

On the debate on energy next Thursday that the Leader of the House has just announced, does it not seem a little odd that the Select Committee on Trade and Industry will be on a fact-finding visit to China next week? The oddity is that the Government should select next week to debate energy, because one of the documents relevant to that debate is the Trade and Industry Committee's report on energy. I would not dream of accusing the Government—or, indeed, the Leader of the House—of sinister motives or any sort of dodgy conduct in this regard, but, given that we now know that the Select Committee will be away, I would ask the right hon. Gentleman to look again, even at this late stage, at the timing of that debate, to give the relevant Committee members an opportunity to participate in this long-awaited debate on a subject for which that Committee has responsibility. I hope that he will agree that that is not an unreasonable request.

On 20 October 1998—I refer to column 1071 of Hansard—the hon. Member for Carshalton and Wallington (Tom Brake) asked the Deputy Prime Minister to confirm that, in June 1997, he had said:

"I will have failed if in five years time there are not…far fewer journeys by car. It's a tall order but I urge you to hold me to it:"

In reply—this is set out in Hansard—the Deputy Prime Minister said:

"The hon. Gentleman quoted both the question and the answer and I agree to keep to that commitment: judge my performance in five years."—[Official Report, 20 October 1998; Vol. 317, c. 1071.]

All that I ask the Leader of the House is this: when will he give the Deputy Prime Minister an opportunity to come to the House and be judged, as he invited us to do? That is a very straightforward question. It is straight out of Hansard—there can be no question about it.

In that context, I am sure that the House will welcome the widely quoted words of the Leader of the House yesterday. Among many other excellent statements, he said:

"we have failed if we allow presentation to become more important than substance."

He went on to say that he was always a close admirer of John Smith, whose strength was

"the blunt honesty of his political style."

I am sure that everybody in the House will welcome the right hon. Gentleman's words and that he speaks for all of us in this respect. The trouble is that that seems slightly at odds with what seems to be going on even now inside the Government and in several Departments.

For example, following on from the comments that I have just quoted from the Deputy Prime Minister, why were many newspapers quoting Whitehall sources as having denied what he had said? How does blunt truth and honesty come into that? Or to take a different example, when will we get to the bottom of the case of Mr. Hood, that special adviser from the Ministry of Defence who now has a highly paid and cushy job on the back of having been a special adviser? Apparently, on Monday, the Cabinet Office was saying that it had not been part of the process and that there was no need for it to be so, but that is directly at odds with what the Prime Minister said yesterday in column 858 of Hansard. He said that the process of dealing with Mr. Hood

"was done in consultation with the Cabinet Office in the normal way."

Despite the words of the Leader of the House yesterday, we have examples of how a Department is saying one thing on the one hand, and the Prime Minister is saying something completely different on the other.

To give yet another example, what about the bizarre episode involving the Press Complaints Commission" Without going into the details—I am sure that the House would not want me to do so at this stage—all that I ask is this: who should we believe? Perhaps the Leader of the House can tell us. Should we believe No. 10 Downing street or Black Rod'? It is a pretty simple choice. I do not know which one the right hon. Gentleman believes; perhaps he will tell us. Perhaps we should have an opportunity to debate the matter in some detail, because it touches on some very important issues.

There was another bizarre episode just yesterday. In column 862 of Hansard, the Prime Minister said:

"I can tell the House that as a result of the new deal, the number of young people who are on the dole today is 4,500."

Almost immediately, in column 867—you will recall what was said, Mr. Speaker, as you were in the Chair—my hon. Friend the Member for Havant (Mr. Willetts) said:

"the correct figure is 244,000."—[Official Report, 12 June 2002; Vol. 386. c. 858, 862–867.1

Someone is wrong and someone is right, so all I ask is that the Leader of the House give the Prime Minister the chance to come to the House as a matter of urgency and tell us whether he was right in saying that the figure was 4,500 or whether my hon. Friend the Member for Havant was right in saying that it was 244,000. There is a discrepancy and I think that we are owed the truth.

Leading directly from what the Leader of the House said yesterday—and we want to support him in what he said—all that we are asking is that he give his colleagues opportunities to come to the House to correct the record, tell the truth and put an end to all this spin and deception.

What a load of crap.

I am not quite sure how that will he reported in Hansard tomorrow. I was about to begin by welcoming the support of the right hon. Member for Bromley and Chislehurst (Mr. Forth) for what I am trying to do.

Obviously the right hon. Gentleman has missed our weekly exchanges over the past two weeks, because he has given me a real multiple choice question this afternoon. I shall try to address all his points as briskly as I can.

On the changes to Select Committees, it is a cardinal principle of our departmental Select Committee system that the Select Committees should track the Whitehall Departments. It is therefore necessary that we should put the Transport, Local Government and the Regions Committee on the same footing as those Departments that now exist in Whitehall. I am keen to make sure that when we do, we do so in a way that ensures continuity of scrutiny of those Departments. For instance, the DTLR Select Committee has just commenced the study of the draft local government Bill that was published yesterday, and I would not want to see that work disrupted.

Before we rise for the summer, I intend to bring before the House a motion that will establish new Committees, but I will do so in way that ensures that there can be continuity of scrutiny and no break between one set of Committees ending and new Committees starting.

And the Chairmen?

It is not for me to decide on the Chairmen. I am very grateful to say that it is for the House to decide on the members of those Committees and for the Committees to decide on their Chairmen, thank heavens.

Moving swiftly on to safer territory, on data protection, I can say to the House that I anticipate that before the summer recess we will bring before the House a statutory instrument, and it would be my intention to address the two big problems affecting Members in their constituency work. The first is the rather bizarre argument that we should not be empowered to pass on to any third party what a constituent says to us in our surgeries. That seems topsy-turvy to me; constituents come to our surgeries in order that we then tell someone about their problem. Secondly, we want to remove from those to whom we write on behalf of the constituent any impediment to their replying frankly and openly about what they may know about that constituent's case. That would be of great assistance to Members on both sides of the House and I hope that we can take that step.

On the debate on energy, the right hon. Gentleman has been here as often as me when I have been lobbied from both sides of the House, but particularly from my right hon. and hon. Friends, on the importance of having such a debate. When I announced that debate three weeks ago, there was a broad welcome from Members in the Chamber that we were to have an opportunity to explore energy-related matters.

The Select Committee will he away.

There's always somebody away on a junket.

I was going to express it with more dignity and respect for the Select Committee than my hon. Friend, but it is open to members of the Select Committee to be here for the debate rather than elsewhere if they choose to do so, and there will be plenty of Members who will wish to take part.

I looked at the possibility of delaying the debate but, as the House will see, the subsequent week is crowded. If I were to delay the debate, I would need to delay it for some time. That would not be welcomed by the majority of my right hon. and hon. Friends who want to proceed with this important debate.

On the question of the Deputy Prime Minister, the right hon. Gentleman will have seen the terms of the reshuffle and he will know that the Deputy Prime Minister has assumed a responsibility which will, I am sure, involve him in more exchanges in the House. If hon. Members wish to question him on any matter, they will have the opportunity to do so. However, I have to say that the key reason why we have seen increased mobility within Britain and the increase in the number of journeys is because of the remarkable success of the Government in running a sound economy with fast growth, for which we make no apology.

I appreciate the right hon. Gentleman's support for the speech that I made yesterday to the Press Gallery. I shall try to make sure that, on future occasions, he is in the audience in order that he may vocally support and applaud me in the course of what I say. I remind him that one of the passages that he might have found more difficult to applaud had he been there was that in which I expressed pride in the record of the Government, particularly in the way in which we have secured a sharp drop in poverty among children and, at the other end of the age spectrum, produced a sharp rise in the income of the poorest pensioners.

It is perfectly true that I offered the Press Gallery a deal, and the right hon. Gentleman accurately quoted part of it; it was that the Government should cut out the spin and cut down the packaging and that the media should concentrate more on reporting content and substance, rather than the Westminster village gossip. I very much hope that since the right hon. Gentleman is persuaded by one half of the deal, he might buy the package as a whole. Our people out there want to hear about how politics are affecting their lives, not about the lives of spin doctors and press officers.

On Andrew Hood, I should declare an interest—Andrew Hood worked for me for some eight years as a special adviser, in opposition and at the Foreign Office. I would not wish any Member to be mistaken about the interest that I have in his welfare, his future and the success of his career. The approval of his appointment to a private sector firm was indeed handled in the normal way. The Cabinet Office was consulted about the procedure—

indicated dissent.

It was consulted. I am not saying that it approved the outcome, but it was consulted about, and approved, the procedure. The decision was taken not by Ministers but by officials, in full agreement with the permanent secretary. It should be stated that Mr. Hood had no dealings of a commercial character with commercial firms, and he was not closely involved with suppliers to the Ministry of Defence. Nor does his appointment at Brunswick involve his working with clients. Having said that, as somebody who wishes Mr. Hood well and who has a very high regard for him, I am not at all surprised at his securing a position of high status in the private sector. However, I am always mildly ambivalent about seeing a good man go into public relations. [Laughter.]

On the numbers involved in the new deal, what the Prime Minister said yesterday reflects entirely accurately the number of long-term young unemployed who have been unemployed for more than 12 months. Whatever definition the right hon. Gentleman chooses to apply—6 months or 12 months, new deal or otherwise—any figures that my right hon. Friend the Prime Minister produces for long-term young unemployed people will be lower than those recorded when the right hon. Gentleman's party were in office. That improvement is another thing of which I am proud.

May I suggest to the Leader of the House that we could all have been in his audience if the speech that he made to the Press Gallery had been made in the House? Why did he choose to talk to the media about their role in sleaze, spin and funding of democracy? Surely such a speech should be made only here. Why has he denied on several occasions on Thursday afternoons that the Government have any new proposals on the state funding of democracy? As recently as 23 May, he told me at business questions that there was no such proposal, but he seems now to be saying that there is a new proposal. Can we have an urgent statement and a debate in the House on the funding of democracy?

I also remind the Leader of the House that, on 23 May, he promised me that he would examine the outcome of the war pensions appeal tribunal's decision in the case of Shaun Rusling. The right hon. Gentleman will recall that, according to a tribunal report, the Ministry of Defence changed the terms of the submission to avoid any responsibility for Gulf war syndrome. May I ask him to expedite a statement from the Secretary of State?

The Leader of the House will be aware that, next Tuesday and Wednesday, the US congressional sub-committee on national security, veteran affairs and international relations will hold unprecedented hearings in Parliament—in Portcullis House—on Gulf war veterans and Gulf war syndrome. I ask that we have the Secretary of State's statement on the Rusling case before those hearings take place, given that they are material to it.

In view of the squalid little conspiracy between Conservative and Labour Whips on 16 May, which defeated the right hon. Gentleman's own proposals for more transparent and open appointments to Select Committees, has he received appropriate assurances that appointments to the new Transport Select Committee will not be interfered with in that way, and that the appointment of the Chairman will not be subject to such interference?

The simple and straightforward answer to the question of why I spoke to members of the Press Gallery is that they invited me to do so. Indeed, I should tell the House that there may well be future occasions when I accept invitations to speak outside this House. I stand entirely by what I said to the hon. Gentleman in our previous exchanges: there are no Government proposals for state funding of political parties, nor did I pretend yesterday that there were. However, as I have said, there is a debate as to whether there should be such funding.

As I observed to the Press Gallery yesterday, its members have put beyond all doubt the fact that business donations are open to innocent misconstruction, and that has certainly been the role of the press in this matter in the past six months. Donations by, and funding from, the electorate as a whole are not open to such misconstruction. It is my personal view—I do not claim to speak for the Government collectively—that the credibility of Parliament is being undermined by the current argument over funding of political parties. We cannot have parliamentary democracy without political parties, and we cannot have political parties unless they are funded. I believe that the best, most secure and most transparent way to fund political parties that is least open to misconstruction is from the public purse. I have no doubt that, in future, we will return to the issue on several occasions in the Chamber.

As I recall, when the hon. Gentleman asked me about the tribunal ruling and Gulf war syndrome before the recess, I said that the Ministry of Defence will want to consider carefully the judgment and respond in due course. I shall certainly draw Ministers' attention to the hon. Gentleman's view that due course has now arrived and that it is time that the MOD expressed its view on the tribunal ruling and gave its response.

Little new can be said about the vote in May. I am pleased that a majority of Labour MPs voted for reform, and I regret that I did not have a majority of the Labour Whips voting with me for reform. [Interruption.] My hon. Friend the Deputy Chief Whip was a paragon of virtue on that occasion. As for any future appointment to a Select Committee that will arise from the orders that I shall put before the House, I remind the House that the Labour party has already changed its procedures and the decisions will be made by the party, not by just the Whips.

Within the context of five years of outstanding management of the economy, when will the Government tackle the problem of the two-speed economy, which discriminates against areas such as the north-east that are strong in manufacturing, to the extent that despite continuous growth we have fallen further behind the nation as a whole? May we have a debate on that issue?

I would stress to my right hon. Friend that the Government have placed strong emphasis on regional policy. That is why we have introduced the regional development agencies and recently published a White Paper on the potential for regional government for those regions that wish it. On economic policy, it is a remarkable and substantial achievement of this Government that unemployment in every region of the UK is now lower than the EU average. I share my right hon. Friend's concern about manufacturing and he will be aware that the Secretary of State for Trade and Industry has made a specific statement on her strategy for manufacturing. The issue is at the front of her concerns and we will continue to do all that we can to ensure that manufacturing shares in the remarkable growth and success of the British economy.

Can the Leader of the House tell us how the Chancellor is getting on with his comprehensive spending review? Can he give a date when the Chancellor will make a statement to the House? Against the background of what the Leader of the House has just said, can he assure us, first, that the outcome of the CSR will not be trailed, leaked or spun to the press and that the House will hear it first and, secondly, that we will have an adequate opportunity to debate it?

I am happy to assure the right hon. Gentleman that the spending review will be of great importance to Government, Parliament and the nation and, therefore, must be adequately considered in the House. I have no doubt that that will take place. However, I would be in grave difficulty with my right hon. Friend the Chancellor and many other members of the Cabinet if I were to reveal now what will happen in the spending review. I am grateful to the right hon. Gentleman for his invitation, but I will resist temptation. As for the date, I anticipate that it will be before we rise for the summer recess, but I cannot go further than that now.

On Wednesday night, we will be presented with a list of names for the new Joint Committee that will consider the reform of the House of Lords, but no one has asked me if I want to join the Committee. I feel that I have something to contribute, and I think that my hon. Friends would agree with me—[HON. MEMBERS: "Hear, hear."] I would like this to be taken as a formal application to join the Committee and I look forward to hearing the response from the Leader of the House.

I am delighted to respond by saying that I take note of my hon. Friend's application, although I hope that it will not be a precedent for the remainder of the business statement to be turned into applications for membership of the Joint Committee. I anticipate that the names will be tabled on Monday night and will appear on the Order Paper on Tuesday, so that we may have a full debate on Wednesday.

It has all been decided. It is long done.

I assure the right hon. Gentleman that nothing has been decided and will not be decided until Monday when we table the motion. However, I draw the House's attention to the fact that we have provided—by agreement with the Opposition, for which I am grateful—for a three-hour debate on the motion on Wednesday. That is right, given the importance of that Committee and the Government's innovation in proposing a Joint Committee and asking Parliament to decide that important policy question. The House should welcome the opportunity to express a view.

I thank the shadow Leader of the House for his kind remarks and I welcome the announcement by the Leader of the House that he will introduce a statutory instrument to solve some of the problems with data protection by the summer recess. As the Member who moved a ten-minute Bill on the subject yesterday, I am grateful to hear that. In the right hon. Gentleman's negotiations—presumably with the Lord Chancellor's Department and the Information Commissioner—will he concentrate on the question of so-called sensitive personal data, as defined in the Data Protection Act 1998, as that appears to be the principal sticking point, in particular in correspondence with social services departments and national health service trusts?

I am well aware of the matter to which the hon. Gentleman refers and I thank him for having ventilated it in the Chamber in a way that received support from both sides. The sensitive information is the nub of the problem. In truth, we cannot serve our constituents when they come to see us about matters to do with the health service, for example, if we cannot have a free and frank exchange with the relevant authorities about such sensitive data. That is why we will be introducing a statutory instrument that will enable us to carry out a representational function that none of us thought would be impeded when we passed the 1998 Act.

Following last Monday's welcome statement, may we have further opportunities to consider India and Pakistan? May I draw my right hon. Friend's attention to early-day motion 633?

[That this House urges the Governments of India and Pakistan to seek to resolve their differences peacefully and to reduce the risks of nuclear conflict.]

That motion has already attracted the support of 417 Members of Parliament from across the political spectrum, including prominent supporters of each of those countries. It reflects the extent to which Parliament shares the Government's grave concern that, notwithstanding recent progress, there remains a high risk that confrontation could turn into war, which could go nuclear, bringing terrible suffering and death to many millions of people in southern and even central Asia.

My hon. Friend is right to draw attention to the fact that that remains a matter of concern and that too much tension remains within the subcontinent. I very much welcome the steps that have been taken recently on both sides to reduce that tension. I hope that we can accelerate those steps so that it is clear that both sides have backed away from any attempt at a military solution to a problem that can be resolved only through diplomatic progress and a greater rapprochement between the two countries, both of which we regard as our friends. Obviously, my right hon. Friend the Foreign Secretary will be considering developments carefully. Should there he a requirement for a further statement, I am sure that he will wish to make one to the House.

The Leader of the House will be aware that on Tuesday, Mr. Speaker kindly allowed me to raise, under Standing Order No. 24, the redundancies at Fisher Foods, where 400 people have already been made redundant and there may be another 1,000 job losses in the community. He has also kindly allowed me an Adjournment debate on the subject next Thursday. Is the right hon. Gentleman aware that Government Departments are involved, namely, the Department of Trade and Industry, the Department for Work and Pensions and the Department for Environment, Food and Rural Affairs? What mechanism exists to try to co-ordinate the approach of those Departments and what advice would the right hon. Gentleman give me?

If I remember correctly, the company to which the hon. Gentleman refers is the same company that was involved in the closures at Peterhead, with which we dealt in a business statement just before the recess. As I said then, Government Departments are very willing to assist in any way that is valuable or relevant to find alternative buyers and an alternative future for the employees. I fully understand his concern and that of the hon. Member for Banff and Buchan (Mr. Salmond) that the plants that are at risk—and the work force who face redundancy—are highly profitable, successful and have made a large amount of investment. It is important that we do all that we can to ensure that they can continue in production if at all possible. In the first instance, that is a matter for the private sector, but we stand ready to help in any way we can to find alternative management so that production can continue and to assist the work force should they face redundancy and loss of employment. There is a well worn and well trod path of co-operation through which those Departments will put in a joint task force to assist the work force and the local economy. Since the hon. Gentleman invited my advice, I suggest that he discusses that with the DTI and the DWP.

I am sure that the Leader of the House is aware that today the United States formally withdraws from the anti-ballistic missile treaty so that it can develop its national missile defence system. I draw his attention to early-day motion 1279, in which hon. Members express their concern about the matter.

[That this House notes the death of the ABM treaty in mid-June owing to USA withdrawal and recognises that the United States Government is now free to request use of Menwith Hill and Fylingdales as part of its proposed missile defence system; further notes that any use of these bases for a missile defence system will directly affect the people of the United Kingdom and that as yet their representatives have had no chance to express their views on the proposals in parliament; and urges the United Kingdom Government to call an urgent debate in the House before any such system is considered.]

Given the awful effects that the development of that system could have on world peace and the threat to this country in particular if the facilities at Fylingdales and Menwith Hill are used, will he assure the House that those facilities will not be made available and that time is allowed for an urgent debate on the matter, which surely affects all of us?

We have had no request for the use of those facilities for any such new purpose. Should such a request be made and should the Government reach a view on it, I am sure that the matter will be debated and explored in the House. In the meantime, surely we must all welcome the recent historic agreement between the United States and Russia to achieve historic cuts in their nuclear arsenals, taking us to levels that we had never hoped to secure. I very much welcome the agreement that has been reached between those two countries, which are of course the only signatories to the anti-ballistic missile treaty.

As we Ulster Scots would say, "There's mair than yin moose loose aboot this Hoose". I have seen a mouse in the Terrace cafeteria, in the Members' Tea Room and, indeed, in the House of Lords. Is the Leader of the House taking seriously early-day motion 1393?

[That this House is concerned at the large number of mice which currently reside in the Palace of Westminster including the dining rooms; believes that it would be fiscally prudent for the Sergeant at Arm's Department to invest in a House of Commons cat to try to tackle this problem; and calls upon the House of Commons Administration Committee to investigate this matter.]

Will the right hon. Gentleman address the problem? As a cat lover and with some experience, I know that, as the mice do not discriminate between the Lords and the Commons, the problem will have to be addressed in similar ways. Will the right hon. Gentleman accept my advice that the females of the species are much better hunters than tom cats?

I understand the concern that prompts the hon. Gentleman's question. The Chairman of the Catering Committee, with his characteristic vision and foresight, suggested some years ago that we might employ a cat in the House. I have some sympathy with the view expressed by the right hon. Member for Maidstone and The Weald (Miss Widdecombe) that if there was a House of Commons cat it would rapidly become spoilt and overfed and would compete with us for the use of the sofas in the Library. As the proud owner of two Scottish terriers, I might move the modest amendment that we should try a Scottish terrier.

The Leader of the House will be aware of concerns that terrorist groups can obtain materials to produce nuclear weapons. He will also be aware that Governments of different political philosophies already have such weapons and that if they are used they would be just as catastrophic as if they had been deployed by terrorist groups. Because of the consequences of the use of nuclear weapons, can time be set aside for a debate on weapons of mass destruction?

I am not sure that I can promise the House the opportunity for a specific debate on weapons of mass destruction, although the issue frequently arises when we debate other matters—notably, for instance, in relation to our anxiety to ensure that Saddam Hussein does not succeed in his ambition to acquire such weapons. I am sure that my hon. Friend would back the Government fully in our efforts to ensure that that does not happen.

I wholly share my hon. Friend's view as to the importance of ensuring that we guarantee that the non-proliferation regimes are as healthy and strong as possible. I also share the view that, as we have managed to secure an end to the cold war and a reduction of tension in the northern hemisphere, we may be becoming complacent about the degree of risk from nuclear weapons elsewhere. It is in the interest of us all to ensure that nuclear weapons are not used in any circumstances, whether by Governments or non-governmental bodies.

May we have a statement from the Prime Minister or, even better, a debate on early-day motion 1412?

[That this House is concerned to see the name of the honourable Member for Swindon North still listed on the official 10 Downing Street website as one of eight former Government ministers who had resigned; notes that the honourable Member was reported by the media as long ago as 2nd June to have been appointed Minister for Information Technology and Criminal Justice at the Home Office, but that this appointment had still not been listed on the Home Office Ministerial Team page of the official Home Office website by 10th June; and calls upon the Prime Minister to consult with other relevant Cabinet ministers to clarify the position.]

The early-day motion concerns the status of the hon. Member for North Swindon (Mr. Wills). The Leader of the House may be aware that on 29 May the Government reshuffle announced that the Queen had accepted the resignations of eight Ministers, including the hon. Gentleman. On 2 June, however, the press reported that the hon. Gentleman had been appointed a junior Home Office Minister, yet for a full fortnight after the first announcement the official No. 10 website recorded that the hon. Gentleman had indeed resigned and that the Queen had accepted that resignation. Only yesterday, after the tabling of the early-day motion by my hon. Friend the Member for Tatton (Mr. Osborne), was the official website altered. It now states that the hon. Member for North Swindon has indeed been appointed an Under-Secretary of State for the Home Department and that he is

"driving forward the reform to business processes and working practices … to deliver a modern and joined up Criminal Justice System".

It does not sound very joined up to me. Even today, when one enters the words "Michael" and "Wills" on the search engine of the Home Office website, why can one find no trace of him?

I have to confess to the hon. Gentleman that I have not had the leisure to peruse the websites as frequently and with such diligence as he has, and I am sure that the House is grateful to him for his explanation of his experience of surfing the Home Office website. My hon. Friend the Member for North Swindon (Mr. Wills) is indeed now at the Home Office, and I understand that he will be in action next week when he presents a Home Office statutory instrument.

If I may allude to an earlier exchange in the House, I have found my hon. Friend the Member for North Swindon extremely helpful in the matter of data protection. If we are successful in carrying that statutory instrument, I would want my hon. Friend's role to be properly recognised.

Greenpeace has responded to the Prime Minister's speech on science by suggesting that the application of science in the future should become some sort of popularity contest, ignoring completely the fact that, unless scientists are allowed to get on with their research, we will not have any technology to apply in the first place. When will we debate science? When will we debate the Prime Minister's speech? When will we get an opportunity also to put ideas such as creationism firmly in the file marked "crackpot"?

I am very firmly of the view that those who teach science in our schools should stick very closely to established and agreed scientific fact and that we should not confuse that process by offering our school children an alternative perspective that has no sound scientific basis. I am not sure that one can readily argue that it is good teaching if children are offered as equally valid a scientific and a non-scientific explanation, and my hon. Friends at the Department for Education and Skills have to reflect on that matter with great care.

On the central point that my hon. Friend makes, I totally agree with him on the importance of our pursuing and providing every opportunity for scientific research. None of us, sometimes including those who are involved in the research, knows what may come of it at the end of the day, and we should not prejudge it before we start.

I entirely share my hon. Friend's wish for science to be debated properly. I particularly welcome the bid for the House to debate the Prime Minister's speech; I am always happy to consider such bids favourably. Given the crowded schedule of legislation that we have to clear before the summer recess, I cannot promise that that will be possible on that timetable, but we shall certainly consider my hon. Friend's wish, which the Prime Minister will share, to consider carefully his very good speech on science policy and its importance to our nation.

I am not certain whether the Leader of the House has been able to read the excellent report, published this week by the European Scrutiny Committee, entitled "European Scrutiny in the Commons", among the conclusions of which was the concern of members of that Committee, including myself, that

"not all information about EU discussions relevant to the devolved administrations and legislatures has been forwarded to them by UK Departments."

The Committee has received some documentation from various Departments in which they confirmed that they had not been forwarding key documents about Council of Ministers' meetings. That contradicts parliamentary answers, stating that information is shared, to written questions that I have tabled, as well as assurances by the United Kingdom Government and Ministries that agendas would be distributed, and it breaches the spirit of the concordats signed with the devolved Administrations.

Since the publication of that report, the European Scrutiny Committee has received information from the Department for Environment, Food and Rural Affairs about who will receive the agendas for this week's Council of Ministers' meeting on fisheries, but it does not mention the Scottish Executive, nor the Administrations of Wales or Northern Ireland. That is of great concern to members of the European Scrutiny Committee and hon. Members from Wales, Scotland and Northern Ireland. Will the Leader of the House find the time for us to debate that matter?

I have read the Committee's recommendations. I regret to say that I have not yet had time this week to read the full argument leading up to those recommendations, but I thought that that would be a satisfying way in which to pass part of this weekend.

On the specific point that the hon. Gentleman raises, as Foreign Secretary I oversaw the agreement of the concordats between ourselves and the devolved bodies. I am very keen that we ensure that we honour not only the letter but the spirit of those agreements. By and large, relations between central Government and the devolved bodies over presentation in Brussels have worked well, and it has been a good partnership, but we shall certainly look carefully at whether there is any way of improving the distribution of documents as part of that process.

Will my right hon. Friend allocate time for an early debate on the actions of e-SURE, the internet insurer, which has announced that it will be considering withdrawing the option of cover for up to 10 per cent. of its customers because of where they live? Does he agree that that breaks the moratorium that has been agreed with the rest of the industry? Will he consider how the industry designates a flood area? Sealand in my constituency has not flooded to any serious extent for more than 200 years, yet it is considered at high risk.

I am not an expert on the areas to which my hon. Friend refers, but 200 years seems to be a fairly solid basis on which to make an insurance judgment for the future.

The matter came up yesterday during Prime Minister's questions, and I remind the House that the Government are investing several hundred million pounds in trying to ensure that we improve flood defences in order that no substantive population should have to experience the difficulty to which my hon. Friend refers.

As we work hard to try to ensure that we secure the future of properties and communities, and that no household is disadvantaged by its location and the flooding that we have come to expect over recent years, I hope that the private sector will consider how it can assist, and that the insurance industry in particular will reflect on whether it is wise to act at the very time that we are trying to ensure less flooding rather than more.

Will the Leader of the House please find time for a full and urgent debate on the crisis in national health service dentistry? In my constituency, particularly in Boston, 2,000 people have recently been deregistered from an NHS dental practice, others are having to wait more than three years to be allocated an NHS dentist, and both adults and children are not able to access dental care—either routine or urgent. In a low-wage area such as my constituency, the crisis is causing great hurt to those who are hardest hit.

We are seeking to put more money into NHS dentistry, as we are into all parts of the NHS, and we are trying to ensure that members of the public have access to NHS services. The hon. Gentleman is sadly mistaken if he imagines that the problem has arisen only recently. I do not know what he was saying to his own Government when they were in power for 18 years, but during that period, particularly latterly, they dramatically increased charges for NHS dentistry. It was perfectly clear to those of us in opposition at the time that there was a clear strategy to make NHS dentistry so expensive that more and more dentists and patients would be driven into the private sector. We saw the problem coming for the public; it is a pity that the hon. Gentleman did not acknowledge it until it was happening.

Could time be found for a debate on the appalling behaviour of some loan sharks—in fact, all loan sharks? I refer to that because one has had a particularly terrible impact on one of my constituents, Doris Armstrong, who has successfully seen him off through the courts. He was an appalling example of the sleazy end of the financial services industry. If it were not for the courage of Doris in taking him through the courts, she would now be homeless due to a loan for £2,000 that she took out 10 years ago and has repaid—I think—three times over.

I congratulate my hon. Friend's constituent on her courage and determination and her success in the courts. At the bottom end of the financial services market, unscrupulous people are charging wholly intolerable interest rates that would never be contemplated by those who had sufficient income to pick and choose from whom they were taking money and the borrowing undertaken. It is right that those unscrupulous people should be exposed, and I congratulate my hon. Friend on having raised a very important issue in the Chamber.

We have just reorganised financial services regulation and I hope that will result in proper and proportionate attention being paid to those at the bottom of the market who exploit the poverty of the most desperate.

Will the Leader the House find time soon for a discussion on the availability of advanced drugs in the national health service? To give two examples, visudyne can prevent blindness in cases of macular degeneration and glivec halts the progress of myeloid leukaemia in seven out of 10 cases. Both drugs are readily available in most European countries but are not readily available in the United Kingdom. That must be wrong. As one consultant has said:

"When we have one of the hest drugs that was ever invented nobody will let us use it. It is bonkers. This policy is costing lives "

Could be therefore have a debate on the terms of reference of the National Institute for Clinical Excellence?

It was a decision of the Government that we should make sure that decisions as to whether drugs can be prescribed on the NHS should be taken not by politicians, but by medical and scientific experts. That is why we set up NICE. Not all NICE's recommendations have met with universal political and public approval and some have resulted in controversy. However, I still believe that the principle is sound and right. As a member of the Cabinet, I have not the least scientific qualification by which I can judge a prescription or a drug. It is right that we should have an independent body to advise us, and we should be very careful before we depart from the advice that it offers us after careful consideration.

May I repeat the request of my hon. Friend the Member for Halifax (Mrs. Mahon) for a debate on the implications for the United Kingdom of today's American withdrawal from the anti-ballistic missile treaty? My right hon. Friend the Leader of the House legitimately says that we have currently received no requests from the American Administration for the use of Menwith Hill or Fylingdales for their national missile defence programme. However, when asked the same question, my right hon. Friend the Secretary of State for Defence points out that, although there are existing budget lines in the American budget for upgrading work at both establishments for the new star wars programme, the Ministry of Defence says that it is a matter for the United States Administration and not for the United Kingdom. Surely, it is important that the House debates the wisdom or folly of any UK involvement in the nuclearisation of space and the consequences—catastrophic as they may be—for our involvement in that process.

I do not deny the importance of us having a debate on an important issue for our country that has wider repercussions for the state of arms control on the globe. However, when we have that debate, it must be founded not on something that may be proposed by the United States in its budget but on a request that it makes to the Government. When we receive a request, I know that my right hon. Friend the Secretary of State for Defence will respond and I am sure that any response will be a matter for debate and exchanges in the House.

I should like to ask the Leader of the House a question about the use of the Parliament Act, a tool that is used to ensure that the will of the elected House is not in the end blocked by the House of Lords. Is it his and the Government's view that the procedure should be used to ensure that votes on large majorities in this House can find their way into legislation even when they are delivered in a free vote? Or is the tool to be used only to defend Government-backed policy and Government Bills? In other words, can the Government be trusted to use the Parliament Act to defend the will of the House as expressed in a free vote or is it used to defend just Government Bills and Government policy?

I will need to do some research in my weekend reading. However, as I recall it, the Parliament Act does not make any distinction between a vote in the House on a party basis and a free vote. It would therefore apply equally to both.

The hon. Gentleman's question is slightly elliptic, but the Government are seeking a consensus on a way forward on—if I can use a word he avoided—hunting. Whether we shall be able to secure that consensus remains to be seen, but we have promised a free vote in the House. Thereafter, the legislation will take its course.

May I also welcome the Prime Minister's speech to the Royal Society on 23 May in support of science and the remarks by the Chancellor echoing that speech at the Amicus conference in Blackpool? However, not everything is rosy in the arena of science. The Roberts report brought some of the problems to the notice of the House. There are also problems with science teaching in schools, and science departments in universities continue to close. Salford university had the largest chemistry department, in which I used to work, in Britain in the 1970s. Last week, it announced its closure with a terrible loss of resources, including staff and library facilities. May I underline the request made by my hon. Friend the Member for South Thanet (Dr. Ladyman) that we have a debate on science? I hope that my right hon. Friend the Leader of the House will allow that to happen as soon as possible in the autumn.

I shall certainly put down the interest in a debate on science as something for us to consider when the opportunity arises. I welcome what my hon. Friend says in praise of the speeches by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. I always welcome the opportunity to support and agree with as many speeches as possible by my Cabinet colleagues.

As my hon. Friend underlines, there is a commitment to science at a high level in the Government. We certainly want to ensure that we maintain the strong, excellent and necessary infrastructure that we have in science teaching and research in this country.

I should like to draw the attention of the House to my declaration of interests contained in the register.

With permission, Mr. Speaker, I shall make a statement to the House on postal services in Britain. This morning, Allan Leighton, the chairman of Consignia, announced the second phase of the company's restructuring plans. He announced that the Royal Mail would save £350 million a year by moving to a single delivery at a consistent time, six days a week, and that those plans would result in a further 17,000 redundancies over the next three years. He said:

"The underlying loss from operations … graphically shows why we need to restructure the company and embark on a three-year renewal programme to restore profitability".

Thousands of postmen and women now face an anxious and difficult time. These are very painful decisions for the work force, who have shown their commitment to serving the public and who have often been frustrated and angered by poor management and failure to invest in better ways of working. Allan Leighton has made it clear that the company aims to achieve the reduction in jobs on the basis of voluntary redundancy and by offering alternative jobs within the company. Early indications from the Parcelforce restructuring, which I reported to the House on 25 March, suggest that that can be achieved. We will, of course, do everything that we can through Jobcentre Plus and other agencies to help people who leave the Royal Mail to get new jobs as quickly as possible.

The need for radical action is underlined by the company's financial results for the last financial year, published today, in which it announces a £1.1 billion pre-tax loss. Much of that loss comprises exceptional costs from restructuring, but the company made an underlying loss of £318 million on its day-to-day operations.

Central to the programme to restore the Royal Mail's business to profit, and to improve customer service and efficiency, is the reorganisation of mail deliveries that Allan Leighton announced today. The Communication Workers Union has said that it, too, supports the ending of the second delivery.

Twenty years ago, 15 per cent. of all mail arrived by the second delivery; today it is just 4 per cent. But that 4 per cent. of mail accounts for 20 per cent. of delivery costs and 30 per cent. of delivery time. Most other European countries, with far higher postal prices, make only a single delivery each day and none of them has a target of delivering before 9.30 am.

In future, customers who regularly receive 20 or more items of mail a day will get their delivery between 7 am and 9 am. That will include people working from home as well as businesses. All other customers will receive their mail by lunchtime. These changes will mean that 1 million more first-class letters every week should arrive on time. The changes will also mean that within a six-day delivery system, postmen and women will be able to work a five-day, instead of a six-day, week.

Let me put Consignia's announcement into context. This morning, Allan Leighton said:

"These losses did not happen overnight. Unresolved issues and problems stretching back for up to a decade are reflected in these results".

When this Government came to office in 1997, we immediately took steps to fulfil our manifesto commitment to give the Post Office what management and unions had long been arguing for—greater commercial freedom. The Postal Services Act 2000 completed that process, creating a public limited company and giving it the freedom to borrow for growth investment. We cut the dividend to normal commercial levels and announced the appointment of a new finance director in October 2000.

In April 2001, Lord Sawyer was appointed to look at deep-rooted industrial relations problems in Royal Mail. This year, we strengthened management further by appointing a new chairman, Allan Leighton, and securing a new chief executive for the Post Office network.

Greater commercial freedom is the right policy, but in exercising those new freedoms, decisions were made that, with the benefit of hindsight, we can now see were wrong. In his announcement, Allan Leighton said:

"management mistakes have been made over a number of years".

The company decided, for example, to expand internationally, a strategy that was supported by many distinguished observers, including the Select Committee on Trade and Industry. But other European postal operators were already ahead of the game, and in the meantime, disastrously, Consignia lost control of its costs at home. Costs went on rising at a time when revenue growth was slowing. In 2001, the growth of mail volume, at 3 per cent., was half that of 1999.

The financial results published today show that, over the past year, overall turnover grew by 3.6 per cent., but that was outstripped by a 4.8 per cent. rise in costs. The result is that the company is now running at an underlying loss of £1.2 million a day. Those losses cannot continue, and over the next three years, under the renewal plan, the losses will be eliminated and the company returned to profit.

I can also inform the House that the company announced this morning that the group chief executive, John Roberts, will retire later this year once his successor has been appointed. The search for his successor will begin immediately.

Let me stress that today's announcement, like the Parcelforce restructuring, is not the result of any decision by the regulator. Both announcements are about stemming the losses and creating an efficient company. Today's announcement would have been made whatever the decision by Postcomm. However, I would like to put on record the fact that I welcome the announcement by Postcomm a few weeks ago about the adjustments to the timing of its proposals for market opening, the change in the definition of bulk mail and the decision to monitor the market closely to ensure that the universal service, its first statutory objective, is not put at risk. In reaching its decision, it is clear that Postcomm has listened to the many representations made by hon. Members as well as by other stakeholders, including the CWU. The challenge now for Consignia is to improve the quality and reliability of its services, so that it can keep its customers rather than losing market share.

Let me deal next with the financial issues associated with today's announcement. I have agreed a package of measures to put the company on the right financial footing to enable it to deliver this renewal programme.

Consignia plc has reserves on its balance sheet of £1.8 billion, which represents accumulated past dividends and cash generated by the business. These are more commonly referred to as the gilts. We now propose that the £1.8 billion of gilts will be held by the group holding company as reserves while the business is being turned around. Those reserves will be available to back the investment required in the mails business to implement the renewal programme and to support the nationwide network of post offices, subject, where necessary, to the relevant state aid clearances.

As I explained to the House on 25 March, the Government have agreed to forgo the projected dividend for 2001–02, releasing an additional £64 million for the company. I told the House then:

"A decision on dividends for other years … will be taken in the context of the strategic plan."—[Official Report, 25 March 2002; Vol. 382, c. 571.]

I can tell the House today that the company will be allowed to retain the notional dividends for the previous year, as part of the overall £1.8 billion of reserves.

In addition, in case there is any doubt, I can confirm that the Government do not expect to take cash out of the business by way of future dividends during the three years of the renewal plan.

As part of the decision on the gilts, we have agreed to fund the Post Office network's historic losses. David Mills, the new chief executive of the Post Office, is working up a strategic plan for the network that will look at new ways of increasing revenues from commercial activities. As we informed the House on 26 April, we have also committed up to £210 million for compensation for sub-postmasters in the urban networks who are planning to leave the business, and for investment to improve urban post offices. The House will have a further opportunity to debate this when state aid clearance is granted.

I welcome today's announcement by the company that it intends to change its corporate name to Royal Mail Group by the end of this year. I can inform the House that Her Majesty the Queen has agreed in principle to this name change. I do not think that any of us will mourn the disappearance of the name Consignia.

Allan Leighton and his colleagues have shown that they are willing to make the very tough decisions that are needed to turn the company round. But the company is now set on a course for renewal and recovery. It will not be easy, as today's announcement shows, but it is essential if we are to have a Royal Mail that the work force can be proud of and that delivers the service that customers deserve.

I thank the Secretary of State for giving me good notice of the statement that she has just delivered. However, does she agree that the figures that have been announced by the Post Office today are truly shocking?

Three years ago, the Post Office was making annual profits of about £500 million. The then Secretary of State was boasting that it had a golden future in the public sector and that it was set to become a major global player. Instead, its performance has steadily deteriorated, morale and industrial relations have plummeted and it is now losing, by its own admission, £1.2 million every trading day. Yet this disastrous collapse has occurred during a period when the Post Office still has a monopoly in its core business, and when the volume of mail has gone on rising every year. It is an extraordinary achievement to have turned a highly successful business into a financial disaster, when turnover has gone on rising and it is protected from any competition.

As the right hon. Lady says, part of the blame lies with weak management. It lies also with militant trade unions. Ultimately, however, responsibility must rest with the Government, who remain the sole shareholder in the Post Office and who have been interfering in its management on a daily basis. Yet in her statement there was no acceptance of any blame on the part of the Government. Instead, as usual, she tried to suggest that somehow the fault all lay with the last Conservative Government. Will she at least accept that her Government must take some responsibility for this disaster and express some regret?

The measures that have been announced by the Post Office today are undoubtedly necessary. They will not have come as a surprise to the work force, who learned before Christmas that up to 30,000 redundancies were in prospect. At the time, we were told that that was speculative arithmetic. We now know that that forecast was entirely accurate, although we welcome the fact that it has been stated that it is intended to achieve the redundancies by voluntary means.

The Secretary of State said that the cost is to be met by utilising the money invested in gilts by the Post Office over many years. However, until now, that money was regarded as a payment to the Treasury under the requirements of the negative external finance limit. Will the right hon. Lady confirm that in essence the Government are giving the money back to the Post Office? Will she confirm also that that will require clearance by the European Commission under the provision for state aid?

I turn to the other elements of the restructuring proposals. The Secretary of State did not even mention that the Post Office has applied for a price increase in the cost of first and second-class mail. Will she give an indication of the Government's attitude towards that application? Is she satisfied that the Post Office will not simply try to increase its prices in the area in which it still has a monopoly to subsidise its heavily loss-making operations in areas where it is subject to competition?

The Secretary of State said that the changes would mean that in future up to 1 million more first-class letters should now arrive on time. I have to say that that is not much of an accomplishment if the target time for delivery is to be moved from 9 am to lunchtime.

The Post Office has sought to justify its decision to drop the second delivery on the ground that it accounts for just 4 per cent. of the mail, but 20 per cent. of its costs. Will the Secretary of State acknowledge the fears of some small firms, many of which operate from home, that rely on the post for their cash flow and orders and are worried that the decision may lead to a significant drop in the standard of service that they receive and add a significant extra cost? Will she ensure that people who are concerned that they may not qualify for the protection and additional priority given to those who receive 20 items of mail a day have some capacity to apply to the Post Office for priority treatment?

The Secretary of State made brief reference to the regulator's proposals to open the postal market to competition, which is clearly a crucial factor in the Post Office's long-term prospects. I welcome the fact that the Government have resisted pressure from Labour Back Benchers to abandon the commitment to introduce competition and that the revised timetable issued by Postcomm involves only a slightly longer delay before full liberalisation takes place.

Does the Secretary of State agree that liberalisation offers considerable additional opportunities to the Post Office, including new sources of revenue, by allowing other operators access to its delivery network? However, if that is to be achieved, it is vital that sensible network access charges are agreed, so does she share my regret that the Post Office has so far been unwilling to negotiate realistically with those who wish to set up competing services? Does she agree that if there is to be true competition, it should be on an equal basis, which requires the issue of VAT to be addressed? Does she accept that, under the present arrangement, the Post Office has a 17.5 per cent. cost advantage over its competitors for about half its business, which acts as a barrier to the development of fair competition?

What are the Government's long-term intentions for the Post Office? When the Postal Services Act 2000 was passed, we were assured that it would remain a fully state-owned corporation, yet we now know that just a short time afterwards, negotiations were opened to sell it to the Dutch post office, TPG, and that that would have happened had negotiations not broken down. Are any negotiations currently under way and are the Government still willing for the Post Office to be sold to a foreign operator such as Deutsche Post? What do the Government intend to do to maintain and sustain the post office network, particularly in rural areas? The Secretary of State barely mentioned that in her statement, yet it is now just nine months until payment of benefits across post office counters ceases, which will deprive sub-post offices of up to 40 per cent. of their revenue. Even now, the Department for Work and Pensions is preparing letters to benefit recipients informing them that in future they should get their benefits via bank accounts.

The recommendations of the performance and innovation unit report have not been implemented. The "Your Guide" project was successfully trialled in Leicestershire, but has now disappeared completely. The Postcomm report on supporting the rural network has been sitting on Ministers' desks since December, yet nothing has been done. The Government must make clear what they intend to do to maintain the rural network and prevent the closure of thousands of sub-post offices that are under threat.

Finally, I welcome the one piece of good news that has been announced today—the decision to drop the name Consignia and revert to Royal Mail. Will the Secretary of State admit that the decision to drop a name trusted and respected across the country and replace it with an utterly meaningless name that has become the object of mockery and derision was one of crass stupidity? Is it not typical of the Government that, rather than tackle the underlying problems, they preferred to waste money on a re-branding that has cost millions and persuaded no one? Is it not the case that when the history of the Government is written, the name Consignia will always be remembered, along with the Jo Moore e-mail, Tony's cronies and the millennium dome, as a symbol of all that is rotten about them?

Until that last comment, I felt that the hon. Gentleman was treating this matter with exactly the seriousness that it requires.

The hon. Gentleman asked about the £1.8 billion of gilts. As I have said, we made it clear to the company that we had pledged that money to back the investment in Royal Mail's business to turn it round and to support the nationwide network of post offices. I can add that we have said that we will work with the company to help it to ensure that its borrowing requirements for working capital will be met from the national loans fund on appropriate commercial terms.

The point about the gilts is that, particularly under Conservative Governments, the company was forced to exchange the dividends—at a rate of 90 per cent. of the profits—for gilts. That reserve was never available to the company so that it could invest in the modernisation that was required. We are now making it available, to support the necessary investment and restructuring.

Royal Mail is discussing the application that it intends to make for a 1p rise in the prices of first-class and second-class stamps with both the regulator and Postwatch, the consumer body. It hopes to make the application before the end of the month.

It would have been quite wrong to agree price rises in the past simply to mask and compensate for the company's inefficiency. Some years ago, Lord Heseltine, the former President of the Board of Trade, confessed to the Select Committee on Trade and Industry that in the case of a publicly owned monopoly there was always the temptation—indeed, it was a reality—to go on raising prices rather than dealing with underlying losses and inefficiencies. I hope that, now that the company has grasped the seriousness of the problem and established the necessary restructuring, the regulator will look favourably on this modest application.

The hon. Gentleman raised important questions about the need to ensure that small businesses and people working from home, who do not necessarily qualify for the 20 items per day, will nevertheless have their requirements met by the tailored delivery service. That is exactly the kind of issue that the company will bear in mind when the pilot schemes start next month.

The hon. Gentleman raised a number of serious points about market opening and the role of regulator. As we made clear in the Postal Services Act 2000, we believe that the regulator's first duty must be to preserve the universal service obligation. Subject to that, however, both Royal Mail and customers can gain real benefits from market opening and the competition, innovation and greater choice that will result from it.

In Germany, where the bulk mail sector has been open to competition for some time, there has been a substantial increase in the amount of bulk mail. That has benefited Germany's former monopoly company, not only because it is securing its own share of that growing market but because it can sell network access to its competitors. That is precisely what will happen in Britain as the bulk mail sector is opened up. The company must of course negotiate fair and non-discriminatory pricing for network access with new entrants to the market. I believe that it will do so, but if it does not, Postcomm will be able to adjudicate.

The hon. Gentleman clearly forgot that his question about VAT was dealt with in the sixth VAT directive, which I am sure he knows well. It requires VAT not to be levied on public postal services.

The hon. Gentleman asked about long-term intentions. As the then Minister for E-Commerce and Competitiveness, my hon. Friend the Member for Paisley, South (Mr. Alexander), made clear to the Select Committee some weeks ago, the company was reviewing all its strategic options last year, including partnerships with other companies. As part of that, it entered into discussions with the Dutch mail, TPG, about the possibility of a merger. It was not possible to reach an agreement or common ground and no decision was made by Ministers because no proposal for a merger was put to us. The vision and the intention is simple: we want a successful, publicly owned postal service.

I stress that imposing on the company a duty not to close rural post offices, except when unavoidable because no one can be found to do the job, has slowed down—indeed halved—the rate of sub-post office closures in rural areas. Contrary to what the hon. Gentleman said, we are implementing the important recommendations of the performance and innovation unit report. The universal banking service is on track for next year. It is important to remember that when people cash their benefits at the sub-post office, whether through the new post office card account, a basic bank account or an ordinary bank account using one of the automatic teller machines, the sub-postmaster or mistress will receive a transaction fee and benefit from the fact that customers are coming to the post office.

As the hon. Gentleman said, there was a useful pilot of "Your Guide" in Leicestershire and Rutland. It is currently being evaluated, and I expect to receive the report in a few weeks. We shall shortly announce our decisions on payment, which cannot be met commercially, for the social services that rural sub-post offices provide.

The hon. Gentleman acknowledged that we are considering major decisions by a company that is determined to turn itself around. I hope that he will recognise that the source of the problems that have caused today's great losses goes back a long way. It is important not to indulge in finger-pointing, name-calling or trying to allocate blame but to support the company in its difficult decisions, and support the management and, above all, the work force in taking the company forward. The Government and Labour Members are doing that; I hope that the hon. Gentleman and Conservative Members will give the company the support that it deserves.

I welcome my right hon. Friend's announcement, and emphasise that some of us who argued for according greater commercial freedom to the Post Office underestimated its management's lack of commercial awareness at the time. That is a major consideration in Allan Leighton's new approach, which most of us welcome.

Does my right hon. Friend appreciate that the redundancy targets are ambitious? In London or Edinburgh, which have a high staff turnover, it may be possible to secure the figures through voluntary redundancy or even early retirement. However, in places such as the town of Alloa in my constituency, where working for the Post Office continues to be regarded as a good job, albeit not an especially well-paid one, people will hold on to the jobs desperately. The package must contain far greater flexibility to ensure that the trust and commitment of people in areas of high unemployment, who look to the postal services for secure employment, will not be betrayed at the stroke of a pen.

My hon. Friend makes an important point. This morning, Allan Leighton again underlined that he is determined to achieve the job losses through offering people other jobs in the company or through voluntary redundancies. We all know that the problems are not the workers' fault.

I understand the specific problem of securing the redundancies in more remote areas, where fewer alternative jobs are available, and I shall discuss it with Allan Leighton. However, he is confident that all the necessary job losses, though painful, will be achieved through redeployment and voluntary redundancies.

Indeed, because the union and management have quite rightly negotiated a generous redundancy package, he rather fears that, if anything, he will he oversubscribed in relation to the number of redundancies actually required.

I echo the earlier comment that our first concern should be for the families of the people who are to be made redundant. As it would appear that these redundancies will be funded from public funds, will the Minister give the House an estimate of the total cost of the redundancy package? Is it, as I believe, something of the order of £1 billion?

Is not the real scandal of today's statement the fact that the money that has been taken out of the Post Office in the form of dividends over a long period should have been invested to accumulate financial assets that are now going to be liquidated, not for investment purposes but to make people redundant? That is a terrible comment on the way in which the Post Office has been managed over many years through the Government.

I want to ask several specific questions. On the second delivery, why have the pilot studies not yet been conducted, in response to the petitions from small business? Can I have a reassurance that, when they are conducted, the concerns of many small businesses about the second delivery will be fully taken into account?

On the price increase, does the Minister acknowledge that one of the relevant factors is that the real price has actually been falling for some years? That now needs to be addressed. The price of stamps in British post offices is now significantly lower than the price in comparable European countries, including those with privatised postal services.

Does the Minister not now believe that the regulator's discussions about competition need something more radical than adjustment, and that they should probably be shelved? With the Post Office in its current dire position, it would be totally inappropriate for private sector companies to come into the industry, without paying an entry fee, and to cream off the few remaining profitable bits of the business. Does the right hon. Lady agree that it would be much more appropriate to allow the European Union liberalisation rules to apply?

Does the Minister acknowledge that the biggest losses—£160 million last year—occurred in the Post Office Counters network, and that, on top of that, there will be a further loss of £450 million next year because of automated credit transfer? Can she explain why the Consignia statement contains no estimate for banking income, and no mention of "Your Guide"? When do the Government intend to produce a clear business plan explaining where these additional sources of income are to come from, so that the counters network does not collapse in the same way as the rest of the Royal Mail system?

First, on the issue of the use of the gilts and the cost of restructuring and redundancy, provision is made in the accounts that have just been published for £682 million in redundancy and restructuring costs. Further provision will be made in the current financial year's accounts, when they are published next year, for the additional redundancy and restructuring costs of the Royal Mail. The provisions in last year's accounts, just published, relate to the Parcelforce restructuring.

The hon. Gentleman's central point that the profits accumulated over many years of operation should have been used for investment and modernisation is absolutely right. On that we are completely at one. If the modernisation and restructuring had been done much earlier, the process might well have been less painful. We must recognise, however, that whenever the restructuring was done, it would have involved a certain number of job losses and redundancies in any case, because the process would have involved making the company more efficient. The important thing, however, is not to worry about the past but to determine how to get out of this situation and to ensure that the company now has access to those reserves—that £1.8 billion of gilts—to take forward its restructuring and to support the post office network.

So far as the price of stamps is concerned, we do, indeed, have almost the lowest postage costs in the European Union. As I suggested earlier, however, I do not think that there has been any justification for a price rise at a time when the company has shown itself unable or unwilling to deal with its underlying inefficiencies and with what were, frankly, appalling industrial relations. We have to remember that almost I million days were lost in strike action in 1996 and that there were very deep-seated problems, which I am glad to say that the company is now sorting out in partnership with its trade union. It is only now, in the context of the renewal plan, that the company can quite properly go to the regulator and seek a price rise.

On the broader issue of competition and market opening, I do not agree with the hon. Gentleman that the proposals and decision that Postcomm has made should now be shelved. I am surprised to hear him blowing hot and cold on competition. One might have thought that the Liberal Democrats were in favour of competition and of encouraging new entrants to the market in the interests of consumers. [HON. MEMBERS: "That was yesterday."' However, as I hear Opposition Members saying, that was yesterday; today is today, and opportunism is never far away when the Liberal Democrats are present.

If the opening of the market, which is already taking place in many other European Union countries, is done sensibly and at a sensible pace, it will benefit consumers and also the Royal Mail, by ensuring that it does not fall back into the bad old ways of a protected monopoly that relied on price rises to cover up its inefficiencies. The hon. Gentleman has got the situation the wrong way around. One of the paradoxes of Royal Mail's current situation is that, in many cases, it is making a profit in the parts of its business that are open to competition, but has, extraordinarily, none the less succeeded in making a loss on its monopoly business. Of course, that will have to change.

On Post Office Counters, as I have indicated, we are on track to create and deliver the universal banking services. The Royal Mail and the Post Office are in discussion and reaching a conclusion to their negotiations with the banks and the Department for Work and Pensions. Those negotiations are commercially confidential, which is one reason why figures have not been published. On "Your Guide", as I have said, we will get the evaluation report very soon. We will then make a decision about whether rolling out "Your Guide" across the country as a whole would provide the value for money and new income for sub-postmasters, new customers and service to citizens that it has the potential to deliver.

As I said, the new chief executive, David Mills, is conducting a strategic review of the post office network and looking not only for opportunities to provide services for government, but for new commercial opportunities. It is quite extraordinary that the household insurance that sub-postmasters and sub-postmistresses are now selling very successfully is the first new product that the Post Office has rolled out since it invented postal orders decades ago. We will be looking to David Mills and Allan Leighton to come forward with a strategy for the network that includes a significant expansion of its commercial opportunities, as well as, quite properly, a role for government in supporting its social function.

Order. The House has important business to transact this afternoon, so I appeal to hon. Members to put very brief questions. I hope that they may get brief answers.

The matter with which we are dealing goes back many years, and it is to this Government's credit that we have seized the issue since 1997 and tried year on year to tackle serious problems. May I ask my right hon. Friend about the provision of local post offices and, in the decisions that are being made, her views about how consultation with local communities should take place, bearing in mind low-income communities in which people do not have cars in which they can travel to the nearest urban centre? Also, can I ask her about the viability of post offices—

Order. The hon. Lady is not getting us off to a very good start, first with a prefatory statement and then two questions. I think that that is quite enough.

The question is extremely important. In the reorganisation of urban post offices that has just begun, we have told the company that as the restructuring is taken forward, it must ensure that at least 95 per cent. of people living in urban areas are still within one mile of a sub-post office after the reorganisation. Of course, the majority should be within half a mile of a sub-post office. But no sub-post office in an urban area will close until there has been consultation not only with sub-postmasters, but with Postwatch and, above all, the local community.

Will the Secretary of State promise that there will be no further redundancies and no further reduction in service quality after this statement? When will the Post Office be back in profit? Does she agree that the third way idea of a not-for-profit corporation has been taken to extremes by Consignia?

Allan Leighton made it clear this morning that there should be no further redundancies in the front line work force. He was not willing to make the same promise to management. The renewal plan that he announced this morning includes £100 million worth of savings in management and administrative overheads. I hope, and he expects, to be able to find further savings in that direction. Far from representing a reduction of service quality, the renewal plan will enable the Royal Mail to improve its service standards.

Many hon. Members know from their constituents' experience that, in parts of the country, the mail is not arriving on time and it is pretty haphazard as to whether people receive it within a few days or a few weeks. That has to change and the renewal plan will enable the company to increase its service standards, I hope dramatically, over some years. We expect the company to be back in profit by the end of this three-year renewal plan.

Does my right hon. Friend accept that it is very difficult to see how the universal delivery service can be maintained on the back of thousands and thousands of swingeing redundancies of this type? Does she also accept that the difference between profit and loss in the Post Office is between 2p and 3p on a first-class stamp? She says that the director of Postcomm has been listening to the comments of hon. Members; you could have fooled me. Would it not be better to clear out the director of Postcomm and his loony plans and to bring in a regulator who cares about public service?

There is no threat whatever to the universal service from the changes to the delivery specification and, in particular, the ending of the second delivery. The second delivery has never been part of the universal service. The union itself has been arguing for the ending of the second delivery, and quite right, too. As I have said, 4 per cent. of mail is costing 20 per cent. of the total cost and 30 per cent. of the hours walked by postmen and women. That is not sensible.

I do not agree with my hon. Friend's comments about the Postal Services Commission. I welcome the fact that, as it spelled out in its decision, Postcomm has clearly listened to the representations made to it. Although, as it says in its decision, Postcomm was reluctant to reward, as it saw it, an incompetent management by slowing down the introduction of liberalisation, it none the less appreciated the real risks of introducing competition too quickly and has therefore scaled back and delayed the introduction of that competition.

May I be certain that I understood the Secretary of State? Will she confirm that a business that receives an average of more than 20 items of mail per working day will receive early delivery? Will she confirm that that would apply to a sole trader and to businesses in rural areas as well as urban?

I can certainly confirm that the early delivery-7 o'clock to 9 o'clock—will apply to a sole trader as well as a larger business. The size of the business is not the issue here. There are obviously greater difficulties, particularly in very remote rural areas, in making the delivery by 9 o'clock. That is one of the issues that the pilots in rural areas will be specifically designed to address to ensure that businesses and sole traders in our rural areas get the service that they need to succeed in their business.

Will the Secretary of State explain why the Post Office has been allowed to slip from being a very profitable business for many years? Despite poor management, bad industrial relations and lack of investment, it constantly made a profit until quite recently, when it became a loss-making industry. Does she share my view that perhaps it is easier for a loss-making industry to make huge redundancies and to sack 30,000 people than it would be for an industry that was seen to be in profit?

As I explained a few moments ago, a number of different factors have contributed to those very large losses, and my hon. Friend has referred to some of them. In addition to a lack of investment over the years and bad industrial relations, there was also a failure to appreciate the effect of the growth in e-mail, faxes and courier services. The company did not anticipate the slow-down in the substantial annual growth in mail volumes on which it had relied for years. Above all, since being given commercial freedom it has simply lost control of its costs. At a time when revenue growth was slowing, costs were rising massively, and it has now to deal with that situation. The job losses, which will be achieved through re-deployments and voluntary redundancy, are the means of eliminating a large part of the company's underlying inefficiencies, and ensuring that it is once again the profitable business that it ought to be.

The statement is rather disappointing, inasmuch as it appears to water down the idea of universal service obligation. [Interruption.] The right hon. Lady shakes her head, but in many areas in my constituency deliveries are not made before lunch as it is. With fewer postmen delivering, one wonders when—if ever—people will receive their post.

The right hon. Lady mentions redundancies. Echoing the comments of the hon. Member for Ochil (Mr. O'Neill), in areas in my constituency such as Bala and Llanrwst, the sorting offices are small, so there is no possibility of job transfers. What will happen when those employees refuse voluntary redundancy?

As I said, today's announcement contains no threat whatsoever to the universal service obligation. As the hon. Gentleman has suggested, in his constituency the second delivery probably does not operate at all, and in any case it does not form part of the universal service. There is a very real problem with thoroughly unreliable deliveries in some parts of the country. In certain areas, the Royal Mail is perfectly capable of delivering not just 92.5 per cent. of first-class mail on the day after it is posted—the target figure—but 100 per cent. However, in many other parts of the country—sometimes because of industrial relations problems or logistical problems—nowhere near even 90 per cent. of such mail is being delivered. Reorganisation and the tailored delivery programme will ensure that customers get a much more reliable service, and that the universal service is delivered in every part of the country to the same high standards, which is what we all want.

The hon. Gentleman and my hon. Friend the Member for Ochil (Mr. O'Neill) mentioned the position of postmen and women in parts of the country where few other jobs are available. Management and unions are discussing that issue, and will take it forward as part of the consultations on the redundancy programme.

Will this high-flying management of the Post Office, who have been running the show for the past few years and brought it to this sorry state, be awarded fat cat payments? My right hon. Friend referred to a fella called Roberts, who is packing it in. How much money will he get? Is this not the appropriate moment to say that, at a time when the taxpayer is having to foot the bill, the people who have managed the affairs in this way should not get fat handouts?

There is no question of awarding fat cat payments or rewarding failure. Of course, John Roberts will receive an appropriate payment, in line with his contract. [HON. MEMBERS: "Ah!"] We are putting in place for the new chairman and the new executive and non-executive directors salary packages with a very significant element of performance-related pay. Allan Leighton has set an example in this regard by taking no additional payment as new chairman, over and above the £20,000 a year that he received as a non-executive director. The whole of his pay as chairman will depend on his turning around the company and delivering on the targets that he himself has committed to. We will expect an equivalent emphasis on performance-related pay in the appointment of other non-executive directors. Of course, with the appointment of the new chief executive, we will need a package that can attract an outstanding manager to lead the organisation through the renewal programme, but it will also have a large element of performance-related pay.

Will the Secretary of State tell the House why it has taken the Government five years to realise that the previous management was not up to scratch?

As I indicated in my statement, we have taken a series of actions since 1997 to strengthen the performance of the company. We started by giving it much greater commercial freedom and then we brought in a new finance director, because one of the highest priorities was to ensure that the company regained control over its costs.

The hon. Gentleman may not be aware of the untimely death of the finance director early in 2000. Because of that, and the time inevitably taken to appoint his successor, the board was without a finance director for many months, and that contributed to the problems on which the new finance director, who arrived at the beginning of last year, has had to get a grip. We have made significant changes in the management of the company and we are continuing to do so to ensure that we get the first-rate management that we need. I hope that Opposition Members will give the management and the work force the support that they deserve to turn the company around.

What reassurances can my right hon. Friend give to my constituents about the future viability of rural post offices? When will the universal bank be fully implemented and when will other commercial products, such as house insurance, be introduced into rural post offices, to increase footfall and keep the businesses viable?

That is one of the issues that we have asked the new chief executive, David Mills, to take forward. With a background in retail banking, he is ideally placed to ensure that the Post Office develops those new commercial products, especially in financial services, to serve communities that are often financially excluded. Sub-post offices have an important role to play in that and the success so far of the household insurance product illustrates the potential. The universal banking service is on target for introduction next year, as I have previously confirmed.

A sizeable part of my constituency is rural and some of it is very remote. In those remote areas, some businesses will receive more than 20 packages or letters a day. If they are to get priority service, will the other people who live in that area also get it, because it would be a nonsense to duplicate the service in those rural areas to which the reliable universal service is essential?

The hon. Gentleman makes a sensible point and that is exactly the sort of practical issue that will be considered in the new pilots for the tailored delivery scheme. Where businesses—perhaps only one or two—are located in a remote rural area and receive 20 or 30 items of mail a day that they need to have delivered early in the morning, it may make more sense to have a single delivery for everybody in that village, instead of going out again later in the morning. That is an operational and practical issue and the company will draw conclusions on that point from the pilots that it intends to run in rural areas.

My right hon. Friend gives cause for optimism when she tells us of the acceptance by the management of the error of their ways, including the daft change of name. Have they learned the lesson that not beating up staff is one way to create enterprise among them? Can she do anything to instil a sense of respect for the staff that has been so sadly missing in the past two or three years?

My hon. Friend will be aware that I have previously expressed criticisms of the management in part of the business. One has only to read the Sawyer report to see just how bad the management and industrial relations had got, not everywhere, but in some of the sorting offices in particular. I pay tribute to the union, in particular, and to the new management for the way in which they have worked together since the publication of the Sawyer report. We have seen an enormous reduction in the number of days lost to strike action, from hundreds of thousands five years ago to a few hundred in the past few months.

We are going in the right direction and Allan Leighton, who has made a point since becoming interim chairman of going to the sorting offices at 5 am, visiting delivery centres late in the evening and talking to the front-line staff, has been welcomed by the work force as the breath of fresh air that the company so badly needs.

Given the £1.2 million a day loss that Consignia is enjoying at present, what operating loss does the Secretary of State anticipate next year?

The company is anticipating that its total losses next year, including exceptional items, will be about the same as this year. It is rightly making cautious assumptions in order not to disappoint on its targets as it has so often done in the past. As I said, further redundancy costs will arise from this morning's announcement and those will, of course, be included in next year's accounts for the current financial year.

Could the Secretary of State clarify her role in ensuring that the reborn Royal Mail will provide good public services in poor urban areas, such as Liverpool?

I am already working with the new management of the company to ensure the first-rate management that we need and to ensure that the board and the management understand the importance of delivering the universal service obligation and higher standards of customer service throughout the country but, in particular, in vulnerable areas, whether those are poor urban areas such as my hon. Friend's constituency or rural areas where the post office and the Royal Mail play a uniquely important role. Equally, I have made it clear to Allan Leighton and David Mills that we must sustain an effective and modernised network of sub-post offices so that those can continue to play their vital social role, in particular in the most disadvantaged neighbourhoods.

The Secretary of State has just shared with the House the fact that next year the Post Office will make a further £1.1 billion loss, thus leaving only two years to return to profitability. As the owner of the company, will she tell the House what profitability targets will have to be achieved in years two and three to return to the profitability that she set, what rate of return on the company's capital she has agreed in future and, if those targets are not agreed, what sanction she will apply to the management?

As I said, the company—rightly, in my view—is making very cautious assumptions and is allowing for the fact that in the current financial year it will have to make further provision for the exceptional costs of redundancies and restructuring that flow from this morning's announcement. The path that it has set, however, is—as Allan Leighton made clear and as the right hon. Gentleman will see from the accounts, which are being published today—for a return to profitability by the end of the third year. We will be monitoring the company's progress extremely closely on those profitability targets. If they are not met, we have made it clear to management that they will not only not receive their performance-related pay but that we will, if necessary, make further changes to the management.

It is always a pleasure to be behind a Front-Bench spokesman who is willing to listen and then to act. In that spirit, will my right hon. Friend listen to customers in the forthcoming years of liberalisation, revisit the universal service obligation and strengthen it?

I have already said that the universal service obligation is at the heart of our policy. That is why we gave it statutory backing in the Postal Services Act 2000, but the biggest threat to that obligation comes not from liberalisation and market opening—provided that that is done sensibly and at a sensible pace—but from the company's own inefficiency and losses. If it had continued like that, there would have been a very serious threat to the universal service. That is why it is so important that the company, under its new leadership, has now put forward and agreed this renewal plan and is taking it forward in partnership with the union to ensure that that obligation is strengthened and that quality of service is delivered throughout the country.

What is the Secretary of State going to do about the independent regulator if he says that it is not reasonable to increase the price of a stamp? Furthermore, what is the point of having an independent regulator if the Secretary of State tries to lean on him by prejudging his decision? If the price of a stamp goes up, does she agree that it will mean, in effect, that the customers are paying for this awful incompetence?

I have made it clear several times already that I would not have supported any price rise—nor thought it justified—if it was simply masking the inefficiency of the company's operations. The regulator—the Postal Services Commission—was, rightly, set up as an integral part of the move to commercial freedom for a publicly owned company. The members of that body are reasonable people—as the hon. Gentleman would expect; they have clear statutory objectives and I have no doubt that they will continue to make reasonable decisions, as they did on this occasion. Their independence, as the chairman, Graham Corbett, recently confirmed, is under no threat whatever, but he thought it perfectly proper—as did I—that I should make my views of the risks inherent in the earlier proposals known both to the Consignia chairman and to the commissioners.

Ultimately, the success or failure of the Secretary of State will be judged in the communities that I represent in Orkney and Shetland by the continued security of the universal service obligation. Will she, therefore, bring early pressure to bear on Postcomm to publish in detail the targets and performance indicators that it will use to assess any possible threat to the universal service obligation? In all sincerity, I have to point out that nothing in Postcomm's performance in recent months gives me any confidence that it understands either the importance of universal service to communities such as ours or, indeed, what is required to preserve it.

As I have already told the House today, the universal service obligation and its preservation are the No. I and overriding statutory duty of Postcomm, and I have no doubt that, as Postcomm has indicated publicly on several occasions, it takes that duty extremely seriously. Postcomm will shortly publish a further report—a consultation document—on the definition and scope of the universal service, and I shall certainly draw attention to the point made by the hon. Gentleman about the need to understand not only how important that universal service is in a constituency such as his but also the steps that have to be taken to ensure its delivery.