asked Her Majesty's Government:

My Lords, the Government have no immediate plans for legislation on local government taxation. However, we have established the balance of funding review to consider possible reforms to the current arrangements. The review will consider possible options for change in the course of the next few months. It is due to report in the summer.

My Lords, I thank the Minister for his Answer. Does he agree that the level of council tax, which is up by 70 per cent since 1997, is reaching the limit of public acceptability, so that even pensioners are going out on to the streets to protest?

My Lords, no one can argue with the figures, but I have nothing really to add to what I said. We have set up the balance of funding review; it is looking at possible reforms; and it will report in the summer. No doubt there will be public debates about the issue. We have given significant extra sums to local government in real terms over the past few years and a substantial sum for the next financial year—some £3.6 billion extra.

My Lords, does the Minister agree that, now that about 80 per cent of local government expenditure comes from central government or specific grants, there is a danger that local government will become little more than the agent of central government, at the expense of a democracy that we should cherish?

My Lords, again I do not have much to add to my Answer. I will agree, though, that the balance of central funding for 2003–04 was 74 per cent central funding and 26 per cent locally determined taxes.

My Lords, does the Minister agree with the Local Government Association that council tax distorts accountability, is not fair and cannot meet demand? Can he confirm that the review of local government finance that the Government are undertaking will consider in some detail the local income tax options?

My Lords, I hate to be boring about it, but I do not have a great deal to add to what I said in my original Answer. A balance of funding review is already under way. It is considering a range of options, and we will report in due course.

My Lords, the Minister said that, over the past few years, local government had been given many extra millions of pounds. However, as he will know, the Audit Commission report that came out just before Christmas put the blame fairly and squarely on the Government for the enormous rise in council tax last year, caused by the redistribution of grant.

Over the past few years, the Government have required local government to do more and spend more than is allowed by the grant that it is given. They have used that as a stealth tax. What will the Government do in the short term to address that problem? It cannot happen; it is unacceptable to the public. The council tax cannot be used as a substitute for income tax.

My Lords, it is worth pointing out that we have increased the grant to councils by 30 per cent in real terms since 1997, compared to a 7 per cent cut under the four years of the previous government. For the next financial year—the one that really counts—the increase for local government will be £3.624 billion. That is an increase of 7.1 per cent, and we therefore expect council tax increases in low single figures.

My Lords, will the proposals that could come out of the Minister's consultation require legislation, or could the Government, for example, alter council tax bands by regulation?

My Lords, it would be wrong to pre-empt the balance of funding review. It may come up with a range of options or one option; I do not know. Some things can be changed by secondary legislation, and some would require primary legislation. It depends on which way forward we choose to go, with the approval, obviously, of Parliament.

asked Her Majesty's Government:

My Lords, the construction and operation of new generating capacity is a commercial matter for generating companies. According to data from National Grid Transco on the possible non-renewable future power stations in England and Wales that have the necessary legal consents, around 1.7 gigawatts of new capacity could be commissioned in 2004; 0.8 gigawatts in 2005; and 1.7 gigawatts in 2006.

My Lords, I thank the Minister for that Answer. It is intriguing that, since the seven-year statement by National Grid Transco for 2003, the figure has fallen by almost 50 per cent—that is in years during which the prospects for construction should have been fairly certain.

The Minister will know that I already think that the margins are inadequate. Does he take the view that the Government have any responsibility for securing electricity supplies? How much of the reduced capacity now to be commissioned in the three years considered will be on interruptible gas supplies?

My Lords, as the noble Lord indicated, we discussed the issues recently. Of course, the Government are responsible for the security of energy supplies to the nation. We monitor the situation with great care, through the Joint Energy Security of Supply Working Group in order that signals should be sent to the market about where shortfalls might occur in sufficient time for there to be a proper commercial response to such shortfalls. It is on that basis that we have confidence in the system as it works at present.

This winter, there has been only one occasion on which a signal was sent out about an immediate shortfall, which did not occur. No signal is being sent out in the present week, although noble Lords will recognise that this is the coldest week we have experienced thus far.

My Lords, has the Minister's attention been drawn to the very powerful letter in the Times a fortnight ago by two very respected and acclaimed experts in this field, Professor Sir Hermann Bondi and Professor Ian Fells? They said:

"A decade or two ago there was in this country a comfortable excess of generating capacity over peak demand, but this margin has been allowed to be eroded almost to vanishing point".

Do Ministers take that seriously?

Certainly, my Lords, Ministers take the margin seriously. What has been reflected is that the margins of security which obtained 20 years ago look to have been wider than were necessary for the system to guarantee that heating, light and power were provided to our people. At present, plant operating margins, for example, are considerably lower than they were in the 1980s. However, I put it to the noble Lord that I thought that was the principle under which his administration introduced privatisation of the system.

My Lords, following on from the question of the noble Lord, Lord Jenkin of Roding, is the Minister aware, and does he agree, that in the period between now and 2020, according to the DTI Energy Paper 68, the closure of coal-fired and nuclear plant could result in a one-third reduction in present generating capacity? In view of the fact that there is a reluctance to introduce sufficient new gas-fired plant, that the contribution from renewables is likely to be limited and that the Government have deferred their decision on new nuclear plant, the question I put to the noble Lord is: how is the generation gap to be filled?

My Lords, I am grateful to the noble Lord for projecting the issue two decades further on. It is right that we address the issues of electricity generation in the long term because we need to make long-term plans for it. The noble Lord will recognise that the Government have a commitment to renewables—to increase generation from that source by 10 per cent by 2010 and by 20 per cent by 2020. Of course, if that target looked as if it were not realisable for any reason, it would be necessary to review the process and the programme whereby, for example, nuclear production is being run down. However, he will appreciate that the Government are regularly monitoring not just the immediate needs of this particular year but also projections over the next three decades.

My Lords, does my noble friend agree that the generation of electricity from renewables must have certainty? At the moment, the only certain thing is that it has the status of a letter written to Father Christmas, hoping that by the years 2010 and 2020 we may have a present of that magnitude. In the mean time, there should be, as the noble Lord, Lord Ezra, suggests, no closures of existing power stations, be they coal-fired or nuclear-powered, unless and until the adequate alternatives are in place rather than merely on a plan.

My Lords, my noble friend presents a cheering line about the light-hearted approach to renewables. That is not exactly the view of the Danish Government with regard to renewables; they have invested substantially in offshore wind generation. Of course he is absolutely right that any one group of turbines will be subject to intermittency because of the wind factor, but the proposal is that the wind turbines will be spread very widely across the United Kingdom. Most parts of the United Kingdom, for most of the year, have a fairly significant wind factor. It is also the case that we need additional research to ensure that from wind turbines energy can be stored more effectively than at present. However, I assure my noble friend that wind turbine technology is not quite at the primitive and insecure level that he suggests.

My Lords, is the noble Lord aware that the wind factor is infinitely variable? All Governments should be aware of that.

The Minister's reference to some decades ahead was very welcome. But so far as the DTI is concerned, are not those decades a vacuum, altogether lacking in any long-term policy?

My Lords, I do not think that that is fair, given that there is a clear series of dates for the decommissioning of individual nuclear power stations, for example. That process could of course be subject to reverse, given that one of the power stations we are talking about will not be decommissioned until 2035. The process can be adjusted against a background of changes in energy supply if necessary.

However, there are very significant developments in potential energy provision to this country—the stupendous investment that is being made across the world. The development of liquid natural gas and of major pipelines which will serve the whole of Europe— and Britain will play its part here—is guaranteed to meet the energy needs of a continent, not just the United Kingdom.

My Lords, if the Minister is giving figures, will he make them quite clear? He said that we had 4.2 gigawatts of new capacity coming on stream in the next three years, or the potential for that. Is that a net figure or does it make an allowance for the decommissioning that will take place?

My Lords, the Question was asked about new plants being developed, and I replied on those plants that have obtained planning permission and will be constructed and will therefore be contributing to the grid along the lines of the figures that I mentioned in my initial Answer.

My Lords, would the Minister mind if I reminded him that in his answer to the noble Lord, Lord Tomlinson, he quoted the Denmark experience? Perhaps he has forgotten that at the moment Denmark has stopped all that. I would have thought that that was quite significant.

I bring the Minister back to the first reply that he gave to the noble Lord, Lord Tombs, about new generating capacity. What is likely to be the amount of generating capacity during that same period, if there is decommissioning for the reasons that the noble Lord, Lord Ezra, gave, relating to the closure of nuclear and coal-fired power plants?

My Lords, I do not have those precise figures to hand. The reason why I have not is straightforward. I was asked a Question about new plant, in which we would invest and on which money would be spent in this country over the next three years, in terms of the committee's report and surveillance of the availability of energy to meet our needs for generation. That is kept under regular review.

I have sought to indicate to the House that it is of course not the case that Britain relies totally upon self-sufficiency as regards energy. That will certainly not be the case five years from now, because of the reduction of North Sea products. It is against that background that into the equation must come the question of energy sources from elsewhere, to which I referred in my previous answer.

My Lords, does my noble friend accept that replacing the Magnox stations with new nuclear stations might be a better alternative than extending the life of stations that have pretty well passed their useful life? Does he further accept that all that needs to be set against the background that we shall be increasingly dependent on imported gas from politically volatile regions? Therefore, we do not have the security of supply that we have traditionally had.

My Lords, we do not currently have that security of supply in terms of indigenous resources. We certainly cannot foresee, in the fairly near future, anything that obviates the need to import, in exactly the same way as every other country in the European Community will be a net importer of energy. There is no solution to the situation in the way indicated by my noble friend.

As for the question of whether new nuclear power stations would be superior to the old, that is a market decision. It is not the Government who build nuclear power stations; that issue will be decided by the market and whether the generation of nuclear power becomes more economic than it has been in the recent past, which has led to the fact that nuclear-powered electricity has been so expensive.

asked Her Majesty's Government:

My Lords, in their response to the ninth report of the Committee on Standards in Public Life, the Government proposed an amendment to the code of conduct for special advisers to provide a clarification of the relationships between special advisers and permanent civil servants. Since then, the Government have agreed to remove the reference to special advisers relaying ministerial instructions to officials from the amendment.

My Lords, I thank my noble friend for that reply. Is he aware that the recommendation of the Wicks Committee on Standards in Public Life called for a clear statement of what special advisers cannot do, which is to be set out in primary legislation? Will the draft legislation do that, and what assurances can he give that following the Government's draft legislation in this Session, in the next Session a Civil Service Act will reach the statute book in Parliament to be implemented in due course?

My Lords, I can confirm that during the current parliamentary Session, a draft Bill will be published. However, what I cannot do— and it would be improper for me to do this—would be to give a commitment to legislation being in the following parliamentary Session, as is the usual convention. I am sure that the matters that the noble Lord raises in this context are the sort of issues that will be covered in the draft legislation. They have been extensively discussed and, of course, we recognise the importance of the issue.

My Lords, does the Minister agree that over the past 30 years the system of political advisers, properly structured, has given excellent advice to successive governments? Would he further agree that, unless there is a clear delineation of roles and lines of accountability, there is a very real danger that political appointments will chair committees that they should not chair and that civil servants who are supposed to be giving neutral advice will find that subconsciously that advice is influenced by a political input?

My Lords, I am grateful to the noble Lord for confessing to a former life, in a roundabout fashion. It is right that we have clear guidance and guidelines on these matters. It is worth reminding your Lordships' House that this Government were the first to introduce a model contract and code of conduct for special advisers. That transparency did not exist in previous administrations, so our Government have a very good track record in ensuring that that transparency and clarity is there and understood.

My Lords, will the Minister tell the House why the numbers of special advisers and the costs of running the Government's media operation have increased so much since 1997? Is it that civil servants are so much worse or spin so much more important?

My Lords, each government must decide what they require in terms of special advisers. It is true that the number of special advisers has increased with the current Government. However, it is worth quoting the noble Lord, Lord Wilson of Dinton, when as Cabinet Secretary he gave evidence to the Committee on Standards in Public Life. He said:

"I do not think the senior civil service of 3,700 people is in danger of being swamped by 70 special advisers. That is not what is happening and I do not see it as creeping politicisation".

He was quite clear that our Government were acting properly in having the number of special advisers that we currently have.

My Lords, would the Minister agree with me that it is a very long time since the Cook-Maclennan agreement between my party and his party agreed on the need for Civil Service legislation? Would he also agree that there is a pressing public need to create a proper constitutional framework and to ban special advisers, such as I was, from exercising any executive power?

My Lords, I am grateful to the noble Lord for reminding him of his former life. We are clear about the boundaries that exist, and there is a clear delineation. The number of special advisers with executive powers is carefully guided. We have waited some time for there to be legislation on this and there has been a very valuable debate on these issues. We have given a commitment, which I repeated today, that we shall publish our own draft Bill in the current Session. The noble Lord may see that as slow progress, but it is progress that is right and we want to ensure that the legislation is right when it is brought forward.

My Lords, will my noble friend just reply to this question about the Wicks Committee, which is a very important committee. It said that the legislation should set up what special advisers cannot do. There are some serious matters here, as there have been some claims that they have gone beyond what had been expected, way back to the Fulton Committee. That is a matter that needs to be dealt with with some clarity for the purposes of proper government.

My Lords, the concerns that the noble Lord raised have existed for a number of years. In a sense that is recognised in the code of conduct, which is worth quoting. It states:

"Special advisers must ensure that, while they may comment on advice being prepared for Ministers by officials, they do not suppress or supplant that advice".

Their role is merely advisory. That is understood. I have no doubt that that issue will be covered in the detail of a Bill.

asked Her Majesty's Government:

My Lords, the authorities in Thailand have confirmed the presence of H5N1 sub-type of avian influenza in poultry in Thailand, but there have been no reports that they have found this sub-type in wild birds.

My Lords, I thank the Minister for his reply. Perhaps that makes the biosecurity measures needed slightly simpler. Will the Minister confirm that the importation into this country of all poultry meat and eggs from all of the 10 countries now affected has been banned? What help is this country giving through the EU in response to the Food and Agriculture Organisation's call for international concerted help to address this serious and developing crisis? Will the Minister assure the House that as this is a developing crisis that is moving very fast, Statements will be made both here and in another place as appropriate and that the Government will not simply rely on Questions from these Benches to address the matter?

My Lords, there is a high level of biosecurity in this country's poultry industry but we have informed the industry itself, the Meat Hygiene Service and the port authorities that they must be extra vigilant now that this situation has occurred. As regards the banning of imports, of the affected countries in south-east Asia imports were allowed only from Thailand. Imports from the other affected countries in the area have been banned for some time. There is now an EU-wide ban on all fresh and frozen poultry meat from Thailand as well.

My Lords, does the Minister agree that evidence to date suggests that the transmission of this avian virus occurs only as a result of direct contact between the chickens or poultry involved and the individuals and that as yet there is no evidence of person-to-person transmission of the virus? Has any progress been made in producing a vaccine against this particular strain of the influenza virus?

My Lords, the noble Lord is correct in saying that there is no known human-to-human transmission and that all human cases of avian flu have arisen in people who have contact with poultry. The virus is normally transmitted both between birds and to humans via poultry droppings. That continues to be the case. Although medicines and vaccines exist that deal with some strains of avian flu, there is not yet a vaccine to counter the particular strain that we are discussing. Work has begun on it but it is unlikely to be available for several months at best. So at the moment there is no vaccine to counter the virus in humans.

My Lords, how does the Minister equate his reply with the report by Miriam O'Reilly on that excellent BBC programme, "Farming Today", earlier in the week in which she reported that she had seen on television wild birds falling out of the sky? Will any members of the veterinary department go out to the Far East to assist and to make an assessment of what is going on there with regard to the spread of avian flu?

My Lords, I did not say that no strain of avian flu existed in wild birds. There is a low level of avian flu in most bird populations. However, the strain that we are discussing has not been found in wild birds in Thailand. Clearly, if the disease were to spread much closer to this country and we were affected by migratory patterns the danger from wild birds would be greater, as it was at the time of the Netherlands outbreak last year. As regards veterinary help, both the veterinary side and the public health side in the form of the Health Protection Agency have offered help to the WHO, should it want it. There is a meeting in Bangkok today of the countries involved with the WHO and the FAO. We shall see whether they put in requests for help.

My Lords, what measures are in place to increase surveillance for the virus in both wild birds and domestic stock in this country? In connection with that, will the Minister give us an assurance that the Government will respond positively to requests for surveillance from international organisations such as WHO and other countries to detect the virus wherever it might be?

My Lords, as I have already said, we shall respond positively to requests for help from the WHO, the FAO or, indeed, the EU. On general surveillance, clearly our request to the industry, the regulatory authorities and the port authorities to maintain a high level of vigilance should cover a possible outbreak in this country. Indeed, the very high level of surveillance prevented the Netherlands outbreak of less than 12 months ago spreading far beyond the Netherlands itself, although, of course, that necessitated a very substantial slaughter of poultry within the Netherlands.

My Lords, what discussions has the Minister had with the industry regarding what would happen if avian flu occurred in this country? We hope that it will not occur. What would be the policy of Her Majesty's Government with regard to infected flocks and any contiguous culls that might be necessary?

My Lords, we have established contingency plans in discussion with the industry. We have raised the level of vigilance, as we did at the time of the Netherlands outbreak. The industry is aware of, and involved in, those contingency plans. Should an outbreak of any strain of avian flu occur in this country, affected flocks would have to be slaughtered. As contamination occurs via droppings rather than by aerial transmission, normally the issue of contiguous cull would not arise although there may be situations in which a wider cull might need to take place. As this is a notifiable disease, there are compensation arrangements.

asked Her Majesty's Government:

My Lords, the Sudan peace talks at Naivasha have not been postponed. They were adjourned on 26 January and are due to resume on 17 February. Consequently this has no adverse implications for the peace process: on the contrary we expect the parties to make good use of this break to identify ways to resolve the remaining issues and to prepare for discussion of detailed ceasefire and implementation arrangements.

My Lords, I am very grateful to the Minister for that response. The situation in Sudan is deteriorating rapidly with 18,000 refugees fleeing Darfur last week. What steps are being taken to verify reports of major human rights violations there and to protect inhabitants of that region?

My Lords, as your Lordships had the opportunity to discuss on 15 January, the situation in Darfur is peculiarly difficult. It is not a situation that pervades throughout the whole of Sudan. There are remaining problems which are being discussed in the peace talks, but Darfur is a very particular problem. Our Special Representative, Alan Goulty, has reported back to me on these issues. I understand that our representatives in Khartoum are speaking on an almost daily basis not only to the Sudan Government but also to the various factions in Darfur. We are doing our best to monitor what is going on. It is extremely difficult when the situation is as violent as it is. What is needed first of all is a ceasefire and then access by the NGOs.

In relation to human rights I can, however, tell your Lordships—I am very pleased to be able to say this— that we have now learnt that one of the situations which was giving rise to considerable difficulty; namely, the cross-amputation sentence on a 16 year-old boy who had been accused of armed robbery, has now been successfully appealed.

My Lords, the noble Baroness will correct me if I am wrong, but was there not common agreement that the final peace deal would be signed by the end of this month? Has she noted that the SPLA has said that, from its point of view, there was no reason at all for the adjournment? Does that not indicate at least some possible difficulties, either with the constitutional status of the Abyei region, or, possibly, the power sharing? Can the Minister throw any light on that? Regarding Darfur, is she aware that the World Food Programme said that 110,000 people have fled across the border into Chad—many of them seriously injured—and that none of the humanitarian agencies has access to the people who are suffering in Darfur itself? Will Her Majesty's Government and the European Union under the Irish presidency make strong representations on the matter to allow humanitarian access to that territory?

My Lords, we are making strong representations and I hope that none of your Lordships is in any doubt about that. We are speaking on an almost daily basis to the parties and that indicates just how engaged Her Majesty's Government have been. Of course we are concerned about the situation in Darfur. I have said that the priorities have to be a ceasefire and humanitarian access. Until there can be a ceasefire it is difficult for monitors to go in safely. The priority after that will be aid to feed the people.

Regarding whether there is another agenda, which was the implication of the question put by the noble Lord, Lord Avebury, about the adjournment in the talks, I have specifically asked questions of officials. I am told that it was thought to be a good thing to have the adjournment, because some of the participants wanted to celebrate Eid.

My Lords, is the Minister aware that her reply to the debate on Sudan on 15 January in this House has given hope to a number of people who are seeking to improve the human rights situation there? Is she further aware that a number of the cases that were referred to in that debate have met with full and frank replies from her department? I should like to place on record my own appreciation of the efforts that she and her colleagues have been making.

My Lords, I thank my noble friend for that and for his participation in that debate on 15 January; and I thank the noble Baroness, Lady Cox, for initiating it in an energetic manner. It is important to put some of those messages across and I am grateful that they are reaching the places where we wish them to be received. Regarding human rights, the involvement of my right honourable friend the Secretary of State for International Development has had some impact in relation to the cross-amputation sentence. We now await a response on the other question that raised considerable anxiety among your Lordships concerning the sentence of flogging on a 16 year-old girl. We are still working on that important case.

My Lords, I am grateful to the Minister for her comments on Darfur province and for her recent Written Answer to me. However, can she assure the House that the Government will use their best efforts to make certain that the problems of all of the outlying and marginal areas of the Sudan are fully taken into account when the larger peace negotiations resume?

My Lords, I can tell the noble Lord that we will do our best. I am sure he will accept that it is not possible to be able to monitor what is happening when very violent situations exist. We have a special unit. We have a special representative, Alan Goulty, and his able team, comprising officials from both the Foreign Office and the Department for International Development, who are working hard on the issues. We continue to remain heavily engaged on the Southern Blue Nile areas, the Nuba mountains and the Abie area, which are part of the central negotiations in Naivasha.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the debates on the Motions in the names of the Baroness Gardner of Parkes and the Lord Astor of Hever set down for today shall each be limited to two and a half hours.—(Baroness Amos.)

My Lords, with the leave of the House I shall make a short Statement on the Hutton report and then repeat a Statement made in another place by my right honourable friend the Prime Minister.

This morning I received formal delivery of the report from the noble and learned Lord, Lord Hutton, into the circumstances surrounding the tragic death of Dr Kelly. Perhaps I may first pay tribute to the noble and learned Lord, Lord Hutton, for the exemplary way in which he and his team conducted this inquiry.

The inquiry was carried out in a meticulous and fair manner in little over six months. The report runs into 328 pages plus appendices and stands as a testament to the unstinting efforts of the noble and learned Lord, Lord Hutton.

The report was laid before the House at 12.25 p.m. today. The noble and learned Lord, Lord Hutton, delivered a summary of his conclusions immediately afterwards, in the Royal Courts of Justice. At 2 p.m. the Prime Minister made a Statement in the other place outlining the Government's view in relation to the conclusions of the report.

With the leave of the House I would now like to repeat that Statement. "With your permission, Mr Speaker, I will make a Statement following Lord Hutton's report into the circumstances surrounding the death of Dr David Kelly.

"I am immensely grateful to Lord Hutton, his team and inquiry staff for the work they have carried out. The report itself is an extraordinarily thorough, detailed and clear document. It leaves no room for doubt or interpretation. We accept it in full.

"Lord Hutton has just finished reading the summary of his findings. Before coming to those, I want to echo one thing Lord Hutton said about Dr Kelly himself. Lord Hutton makes his findings about Dr Kelly's conduct in respect of the matters at issue here, but as he says, nothing should detract from Dr Kelly's fine record of public service to this country. He was respected here and abroad. I am sorry that as a result of the gravity of the allegations made it was necessary to have this inquiry and that the Kelly family have had to go through reliving this tragedy over the past months. I hope, now it is over, they will be allowed to grieve in peace.

"Lord Hutton has given a most comprehensive account of the facts. It is unnecessary for me to repeat them. But let me emphasise why I believed it right to establish such an inquiry. Over the past six or more months, allegations have been made that go to the heart of the integrity of government, our intelligence services and me, personally, as Prime Minister. There are issues, of course, as to how the case of Dr Kelly was handled in personnel terms; and I shall come to those.

"But these have not sustained the media, public and parliamentary interest over all this time. What has sustained and fuelled that interest has been, to put it bluntly, a claim of lying, of deceit, of duplicity on my part personally and that of the Government. That claim consists of two allegations: first, that I lied over the intelligence that formed part of the Government's case in respect of Iraq and WMD, published on 24 September 2002; the second, that I lied or was duplicitous in respect of the naming of Dr Kelly, leaking his name to the press when it should have remained confidential.

"Lord Hutton finds the following: first, contrary to the claim by the BBC that intelligence was put in the dossier against the wishes of the intelligence services, the dossier of 24 September was published with the full approval of the Joint Intelligence Committee, including the intelligence about Saddam's readiness to use some WMD within 45 minutes of an order to do so.

"Secondly, that the allegation by the BBC that the Government deliberately inserted this 45 minute claim probably knowing it was wrong was 'unfounded'.

"Thirdly, that the allegation by the BBC that the reason for it not being in the original draft of the dossier was because the intelligence agencies did not believe it to be true, was also 'unfounded'.

"Fourthly, that no one, either in the JIC or Downing Street, acted improperly in relation to the dossier.

"Fifthly, that the BBC claim that it was 'sexed up' in the sense of being embellished with intelligence known or believed to be false was also 'unfounded'.

"Sixthly, that Mr Gilligan's key allegations repeated by the BBC were never in fact said, even by Dr Kelly himself.

"Seventhly, that there was,

'no dishonourable or underhand or duplicitous strategy by the Government covertly to leak Dr Kelly's name to the media'.

"Eighthly, that on the contrary it was reasonable for the Government to conclude that there was no practical possibility of keeping his name secret and that the Government behaved properly in relation to naming him.

"Ninthly, that the suggestion that either I or Sir Kevin Tebbit in our evidence were in conflict with each other or that one of us was lying was,

'incorrect and not supported by the evidence'.

"Tenthly, and for good measure, he also dismisses the allegations surrounding what I said on a plane to journalists in these terms:

'Some commentators have referred to answers by the Prime Minister to questions from members of the press travelling with him on an aeroplane to Hong Kong on 22 July and I have read the transcript of that press briefing. As I have stated, I am satisfied that there was not a dishonourable or underhand or duplicitous strategy on the part of the Prime Minister and officials to leak Dr Kelly's name covertly, and I am further satisfied that the decision that was taken by the Prime Minister and his officials in 10 Downing Street on 8 July was confined to issuing a statement that an un-named civil servant had come forward and that the Question and Answer material was prepared and approved in the MoD and not in 10 Downing Street'.

"Let me now return to the two central allegations. On 29 May 2003, following the end of the conflict in Iraq, the BBC "Today" programme broadcast a story by its defence correspondent, Andrew Gilligan. It dominated the morning bulletins and reverberates to this day. It alleged that part of the September 2002 dossier—that Saddam could use WMD within 45 minutes of an order to do so—had been inserted into it by Downing Street, contrary to the wishes of the intelligence services and that moreover we,

'probably knew it was wrong even before we decided to put it in'.

There could not be a more serious charge. The source for this extraordinary allegation was said by the BBC to be,

'a senior official in charge of drawing up that dossier',

and an,

'intelligence service source',

implying a member of the JIC or assessments staff who would be in a position to know. If true, it would have meant that I had misled this House on 24 September and the country, that I had done so deliberately, and I had behaved wholly improperly in respect of the intelligence services.

"From that day, 29 May onwards, that story in one form or another has been replayed many times in the UK, and all over the world. It dominated my press conference in Poland on 30 May and PMQs when I returned. It led that week to the Foreign Affairs Committee deciding to conduct an inquiry into the issue. In particular, on the Sunday following the story, Mr Gilligan wrote an article in the Mail on Sunday, not merely standing by the story but naming Alastair Campbell as the person responsible in Downing Street. The headline read:

'I asked my intelligence source why Blair misled us all over Saddam's weapons. His reply? One word … CAMPBELL'.

This again, was completely untrue, and not merely stood up but further inflamed the original allegation of deceit.

"The BBC has never clearly and visibly withdrawn this allegation. This has allowed others to say repeatedly I lied and misled Parliament over the 24 September dossier.

"Let me make it plain: it is absolutely right that people can question whether the intelligence received was right and why we have not yet found WMD. There is an entirely legitimate argument about the wisdom of the conflict. I happen to believe now, as I did in March, that removing Saddam has made the world a safer and better place. But others are entirely entitled to disagree.

"However, all of this is of a completely different order from a charge of deception, of duplicity, of deceit, a charge that I or anyone else deliberately falsified intelligence.

"The truth about that charge is now found. No intelligence was inserted into the dossier by Downing Street; nothing was put in it against the wishes of the intelligence services; no-one, either in Downing Street or the JIC, put any intelligence into it,

'probably knowing it was wrong';

and no such claim to the BBC was made by anyone,

'in charge of drawing up the dossier'.

Indeed, Lord Hutton's findings go further. The claim was not even made by Dr Kelly himself.

"The allegation that I or anyone else lied to this House or deliberately misled the country by falsifying intelligence on WMD is itself the real lie. And I simply ask that those who made it and those who have repeated it over all these months now withdraw it, fully, openly and clearly.

"Furthermore, Lord Hutton deals with the issue of the 45 minute claim. Instead of this being disputed by the intelligence services and inserted into the dossier at the behest of Alastair Campbell or Downing Street, the true position was that a concern about how it was phrased in the dossier was raised by a Dr Jones in Defence Intelligence Services, was rejected by the Head of Defence Intelligence and never actually came to the attention of the chairman of the JIC let alone Downing Street.

"In any event, Dr Jones did not say it should have been omitted from the dossier. On the contrary, Dr Jones thought it should be included as it was 'important intelligence'. Dr Jones told the inquiry that Dr Kelly thought the dossier was 'good' and Mr A, from the Counter Proliferation Arms Control Department, said of himself and Dr Kelly,

"Both of us believed that if you took the dossier as a whole it was a reasonable and accurate reflection of the intelligence that we had available to us at that time'.

"Lord Hutton does fairly comment:

'However, I consider that the possibility cannot be completely ruled out that the desire of the Prime Minister to have a dossier which, whilst consistent with the available intelligence, was as strong as possible in relation to the threat posed by Saddam Hussein's WMD, may have sub-consciously influenced Mr Scarlett and other members of the JIC to make the wording of the dossier somewhat stronger than it would have been if it had been contained in a normal JIC assessment'.

"However Lord Hutton goes on to say:

'although this possibility cannot be completely ruled out, I am satisfied that Mr Scarlett, the other members of the JIC, and the members of the assessments staff engaged in the drafting of the dossier were concerned to ensure that the contents of the dossier were consistent with the intelligence available to the JIC'.

"Lord Hutton also says, in terms, that Mr Scarlett,

'only accepted those suggestions which were consistent with the intelligence known to the JIC and he rejected those suggestions which were not consistent with such intelligence'.

"I hope that from now on the wholly unjustified attacks on the chairman of the JIC, John Scarlett, and the JIC will cease. These people are people dedicated to this country and its well-being. The publication of intelligence by Government—which we did, let me remind the House, because of the clamour for it—was a unique exercise never done before, and difficult for all our agencies. But in the interests of openly sharing intelligence with people, they worked hard in good faith to release it properly. And let me also remind the House that when this dossier was published, it was routinely described at the time as 'low key' and by Mr Gilligan, no less, on 24 September 2002 as,

'sensibly cautious and measured',

and actually moved public opinion hardly at all. Only in retrospect was it elevated into the single thing that conclusively persuaded a reluctant country to war.

"The dossier reflected independent reports such as that of the IISS on 9 September. It reflected precisely that evidence which led the UN Security Council unanimously in November 2002 to agree Saddam and his weapons posed a threat to the world. The 45 minute claim was in fact mentioned once by me in my Statement in this House on 24 September and not mentioned by me again in any debate, not even in the debate on 18 March or indeed by anyone else in that debate. Only again in retrospect has history been rewritten to establish it as the one crucial claim that marched the nation into conflict.

"Lord Hutton establishes clearly why the 45 minutes was put in the dossier, what its provenance was—and whether or not subsequently it turned out to be correct or not—finds it was put into the dossier entirely in good faith by the JIC.

"So much for the first charge of dishonesty over the dossier.

"The second charge was over the naming of Dr Kelly. Again throughout these past six months, the context in which this has been debated has largely been that Dr Kelly's name should not have been revealed, it should have remained confidential and therefore anyone, including myself, who discussed or acted upon the issue was acting improperly.

"In hindsight, of course, the name of Dr Kelly and his evidence to the Foreign Affairs Committee has taken on a different and altogether more tragic aspect. Rightly, Lord Hutton puts it back into its proper contemporary context.

"The truth is that by early July the Foreign Affairs Committee was actively engaged in examining the truth of the Gilligan allegations and due to report on 7 July. The Intelligence and Security Committee was about to begin its deliberations the same week. Evidence had already been given by the Government to the Foreign Affairs Committee and all of us, myself included, were due to give evidence to the ISC, beginning with the chairman of the JIC, on 9 July.

"Suddenly in late June, Dr Kelly came forward and said to his managers he believed he may have been at least part of the source for the Gilligan story. That information was given to me personally on 3 July. By Monday 7 July it was apparent that: in all likelihood he was indeed the source of the Gilligan story.

"The dilemma we were in, therefore, as Lord Hutton accepts, was how we could possibly keep this information secret not just from the FAC, who had just taken evidence on this very point: but also from the ISC who were about to interview us all about the intelligence relating to Iraq, with the first session on the morning of Wednesday 9 July.

"The evidence, very frankly given, of both my right honourable friend, the Chairman of the FAC, and at least one of the Committee's members, was that if they had been told that the MoD knew the source and had interviewed him, the FAC would have wanted to do the same. As, of course, they did. Indeed, they told the inquiry that they would have liked to have been told sooner.

"The context therefore for the meetings on 7/8 July which I chaired was how to act properly in relation to these two committees where we were in possession of information plainly relevant to their inquiries and when one committee was on the point of publication and another about to begin proceedings.

"The evidence of Sir David Omand was that it would be 'improper' to keep this information secret and that we were under a duty to reveal it to Parliament. So as Lord Hutton accepts the whole basis of the claim that somehow Dr Kelly should never have been named or that his name was leaked in breach of a duty of confidentiality is based on a false premise. On the contrary our duty was to disclose his name to the committees and allow them to interview him if they so wished; and Lord Hutton finds that our concern, at being accused of misleading those committees was 'well-founded'.

"In any event, again as Lord Hutton finds, no one in fact 'leaked' his name. Not myself, not the Secretary of State, not the officials. As Lord Hutton finds, the decision by the MoD to confirm Dr Kelly's name, if the correct name was put to it by a journalist, was based on the view that in a matter of such intense public and media interest it would not be sensible to try to conceal it.

"There was no dishonourable or underhand or duplicitous strategy to name Dr Kelly. He was named for the reason we gave. And again I ask that those that have repeatedly claimed that I lied over this issue or that Sir Kevin Tebbit did, now withdraw that allegation also, unequivocally and in full.

"Lord Hutton does however find that the MoD was at fault in not telling Dr Kelly clearly and immediately that his name would be confirmed to the press if it was put to the MoD. The MoD accepts these findings. However Lord Hutton goes on to say:

'However these criticisms are subject to the mitigating circumstances that (1) Dr Kelly's exposure to press attention and intrusion, whilst obviously very stressful, was only one of the factors placing him under greater stress; (2) individual officials in the MOD did try to help and support him in the ways which I have described in paragraphs 430 and 431; and (3) because of his intensely private nature, Dr Kelly was not an easy man to help or to whom to give advice'.

"I believe that the civil servants concerned were acting in good faith doing their best in difficult and unusual circumstances. Lord Hutton has not criticised any individuals in the MoD. Some have been subject to trenchant media criticisms far beyond what they ever should have had to bear. Sir Kevin Tebbit has, as has my right honourable friend the Secretary of State. Both are cleared of any allegations of impropriety. My right honourable friend in particular has been subject to a constant barrage of such claims as parts of the media have alternated between wanting his scalp or mine.

"I hope that these attacks on him over this issue also cease.

"I come to the final issue: the cause of Dr Kelly's death; in effect, why he took his own life, since it is now beyond doubt that he did.

"Lord Hutton finds that no one could have foreseen that Dr Kelly would commit suicide. He finds further that in all probability, he did not decide to do so until the day of his death. He finds that the reason he did so was not for any reason of conspiracy or dark motives. The truth is that Dr Kelly did speak to Mr Gilligan and whatever the distortion, it was an unauthorised meeting, as was his conversation with Susan Watts, the 'Newsnight' journalist; and he was surprised to be asked about this at the FAC. Lord Hutton finds that the existence of a note of that conversation must have weighed heavily on his mind. Finally, on the day of his death he received notice of a series of parliamentary Questions about his contacts which he was going to have to answer.

"Dr Kelly was a decent man, whose very decency made him feel wretched about the situation in which he found himself.

"No one wished this tragedy to happen. All of us felt, and feel still, desperately sorry for Mrs Kelly and her family. None of us could have foreseen it because none of us, at that time, knew what Dr Kelly knew.

"Lord Hutton puts it in this way at paragraph 15 of his report:

'I also consider it to be important to state in this early part of the report that I am satisfied that none of the persons whose decisions and actions I later describe ever contemplated that Dr Kelly might take his own life. I am further satisfied that none of those persons was at fault in not contemplating that Dr Kelly might take his own life. Whatever pressures and strains Dr Kelly was subject to by the decisions and actions taken in the weeks before his death, I am satisfied that no-one realised or should have realised that those pressures and strains might drive him to take his own life or contribute to his decision to do so'.

"In conclusion, I repeat what Lord Hutton said in his summary, at page 322.

'The communication by the media of information (including information obtained by investigative reporters) on matters of public interest and importance is a vital part of life in a democratic society. However the right to communicate such information is subject to the qualification (which itself exists for the benefit of a democratic society) that false accusations of fact impugning the integrity of others, including politicians, should not be made by the media'.

"That is how this began: with an accusation that was false then and is false now.

"We can have the debate about the war; about WMD; about intelligence. But we do not need to conduct it by accusations of lies and deceit. We can respect each other's motives and integrity even when in disagreement.

"Let me repeat the words of Lord Hutton:

'False accusations of fact impugning the integrity of others …should not be made'

"Let those who made them now withdraw them".

My Lords, that concludes the Statement.

My Lords, I thank the noble and learned Lord for repeating the Statement this afternoon. It is a long Statement and comes after the publication of an extremely long report. I hope that noble Lords will take time in examining it before the House debates it a week today.

We now know that the Prime Minister believes that everything he did was right; that the Government have nothing to apologise for and that he proposes no action to change the culture in his Government to avoid what happened to Dr Kelly ever happening again.

I wonder if I was alone in finding the Statement just a little self-righteous in what was said. The noble and learned Lord, Lord Hutton, says at paragraph 472,

"I have no doubt that…the Government will take note of the criticisms which I have made in this report".

Sadly, the Prime Minister said nothing to justify that confidence. So perhaps the noble and learned Lord can make it clear in his response that the Government will take those criticisms seriously and will take action to implement the changes that are so clearly needed.

We on this side of the House accept the findings of the noble and learned Lord, Lord Hutton, in full. His report was in response to narrow terms of reference. The comments in his report as to matters that he was unable to investigate underline yet again how much there is that the public yet needs to know, and deserves to know, about the origins and planning of this war. The call for a wider public inquiry into this matter is not stilled by the Hutton report. Indeed, I believe that it is strengthened by the report and I hope that the noble and learned Lord will tell the House that such an inquiry will now be established.

Turning to the substance of the report, the fundamental truth remains stark and unavoidable. Last July, a distinguished public servant, whose record of service to the country was set out in the warmest terms by the noble and learned Lord, Lord Hutton— he was hounded by the media about whose onset he had not been warned and let down in a number of respects by his employers, as the noble and learned Lord finds—in utter despair at his predicament, walked out on his loving family and in an isolated wood took his own life.

We must never forget the human dimension of this tragedy. Dr Kelly was caught up in a war of words of obsessive intensity and ferocity between No. 10 and the BBC. He was used as a pawn in that war by both sides, with little understanding, if any, of what the consequences would be for him. The consequences could not have been more dire. As the Kelly family has rightly said again today, no public servant should ever be put in such a position again.

The noble and learned Lord, Lord Hutton, finds as unequivocal fact what has previously been a matter of some uncertainty. The decision to issue a press statement that led to the naming and hounding of Dr Kelly was taken by the Prime Minister on Tuesday, 8 July. He describes, and the evidence given to the inquiry described, the frenetic series of unminuted meetings, unrecorded telephone calls and conversations between the Prime Minister, Mr Hoon and Mr Campbell, not about whether to release Dr Kelly's name but about how and when to do so. It is clear that all concerned knew that the action taken would lead to the outing of Dr Kelly's name. I find it difficult to equate that finding with the Defence Secretary's statement on oath that he made,

"great efforts to ensure Dr Kelly's anonymity".

Perhaps the noble and learned Lord the Lord Chancellor can explain Mr Hoon's statement.

The noble and learned Lord, Lord Hutton, acquits the Prime Minister of any dishonourable intention. He says that the Government were anxious only not to be accused of a cover up; if only the Government were always so free with their information. I accept the view that was taken by the noble and learned Lord, Lord Hutton. But is it not an inescapable fact that, intended or not, the events set in train on that day in No. 10 led to a terrible conclusion? A man who would have been alive today is dead. The result may never have been intended. The noble and learned Lord, Lord Hutton, may be right to say that the Government acted reasonably in issuing a press statement, but those close to Dr Kelly will find little comfort in the fact that the wrong thing was done for the right reason.

So will the noble and learned Lord the Lord Chancellor apologise fully and unreservedly to Dr Kelly and his family on behalf of the Government? When he replies, will he also say, without qualification, what the Prime Minister failed to say; "We are sorry that our actions led to Dr Kelly's death and we apologise unreservedly"?

Oh!

My Lords, noble Lords will have an opportunity in a few moments to ask questions of the noble and learned Lord the Lord Chancellor.

The noble and learned Lord, Lord Hutton, concludes by saying that he does not make any recommendations because he is certain that both the BBC and the Government will take note of the criticisms made in his report. I trust that that will be done. He is right to say that the BBC has a very great deal to reflect on. No one in this House would for a moment question the serious criticisms levelled at the BBC. However, will the noble and learned Lord set out the actions that the Government will take in the light of this report? The evidence given to the inquiry throws light on the ugly and unappealing culture of life at the top of government—expletives deleted and all. It shows a Prime Minister spending hours and days not fretting about the health service or schools but about a war of spin with the BBC. I recognise that the noble and learned Lord, Lord Hutton, finds that Mr Campbell sexed up the dossier—

Where?

My Lords, in paragraph 228(8)— in an acceptable way. However, the noble and learned Lord, Lord Hutton, certainly confirms that Mr Campbell was up to his neck in drafting and redrafting the document. It may be that the intelligence services on this occasion managed to restrain his enthusiasm just on the right side of what would have amounted to changing the evidence, as the noble and learned Lord, Lord Hutton, concludes. However, is it not the case that on matters of peace and war and intelligence of this kind, on which the lives of many thousands of people may depend, it is inherently undesirable that a political appointee should be involved in the drafting and redrafting of such a document? There is a risk of the intelligence services and indeed other civil servants being drawn too far into essentially political matters and public confidence in them being undermined. In matters so important, the public interest and public confidence and trust in government cannot be put at risk.

Does the noble and learned Lord therefore agree that these events underlie the need for four measures? First, an end to the system whereby any political appointee inside government is enabled to issue instructions to civil servants; secondly, a reinforcement of the ministerial and Civil Service codes such that factual documents of the kind represented by the dossier, and certainly those relating to intelligence, should be drafted by civil servants and civil servants only; thirdly, a reinforcement of the ministerial and Civil Service codes such that no civil servant can again be treated as the noble and learned Lord, Lord Hutton, finds Dr Kelly was, left without the support that he was entitled to expect from his line managers in a position of such pressure; and, fourthly, as a matter of urgency in this Session of Parliament, a Civil Service Bill on the lines recommended by the Public Administration Select Committee in another place. Will he set in hand all those measures, in order to restore a proper separation between the political and official arms of government?

Dr Kelly's death was an avoidable tragedy. The consequence was unintended. But consequence it was of a culture of government and a loss of any sense of proportion at the top of government obsessed with the media. Only a real will to change the culture of government can go some small way towards atoning for Dr Kelly's tragic death—that and the renewed commitment to the wish to be open and avoid any suspicion of cover up. The noble and learned Lord, Lord Hutton, finds that avoiding any charge of cover up was the motivating force of government in taking the action that led to Dr Kelly's name becoming known. If that truly was the Prime Minister's motivation in those dark and difficult days, a wider inquiry into the origins of the war must inevitably now follow, with terms of reference cast far wider than the restricted ones given to the noble and learned Lord, Lord Hutton. Announce such an inquiry today, and the whole country will see that the Government have nothing to cover up in relation to the origins of the Iraq war and no wish to hide it from the British people.

My Lords, I, too, thank the noble and learned Lord the Lord Chancellor for repeating the Statement made in another place. I add my regrets and those of these Benches for the very sad death of Dr Kelly, who, whatever the later arguments swirling around his name, was clearly a very considerable and remarkable public servant who dedicated most of his life to the pursuit of the legitimate aims of a country such as ours to stop the proliferation of weapons of mass destruction. We extend to his family our deep sympathy.

It is important to start where the noble and learned Lord, Lord Hutton, started. In paragraph 9 of his report, he specifically states that he does not regard himself as having the right to go into the detailed material concerning the issues of weapons of mass destruction or the origins of and arguments for the war. He also said in so many terms that he believed that it would be right and proper to consider the issue of whether or not the evidence provided was "sexed up" in an unacceptable way. The noble and learned Lord said:

"The term 'sexed-up' is a slang expression … It is capable of two different meanings. It could mean that the dossier was embellished with items of intelligence known or believed to be false or unreliable … or it could mean that whilst the intelligence contained in the dossier was believed to be reliable, the dossier was drafted in such a way as to make the case against Saddam Hussein as strong as the intelligence contained in it permitted. If the term is used in this latter sense, then because of the drafting suggestions made by 10 Downing Street for the purpose of making a strong case against Saddam Hussein, it could be said that the Government 'sexed-up' the dossier".

The next question is: did they?

Oh!

My Lords, I have quoted from this whole section. I now turn to the ways in which that happened. In the original draft dossier, Iraq was said to be able to deploy chemical or biological weapons within 45 minutes. That language was queried by Mr Campbell. He then received a reply from Mr Scarlett saying,

"the language you queried … has been tightened".

The dossier was finally published to read,

"the Iraqi military are able to deploy chemical or biological weapons within forty five minutes".

I repeat: "able to deploy", instead of "may be able to deploy".

Under delegated authority, Mr Scarlett removed the following phrase from the original document:

"Saddam is prepared to use chemical and biological weapons if he believes his regime is under threat".

That was what the Joint Intelligence Committee said. The crucial phrase,

"if he believes his regime is under threat",

was removed by the chairman of the Joint Intelligence Committee at the direct prompting of Jonathan Powell, the Prime Minister's Chief of Staff.

I could go on, but it is clear that the final dossier was different in certain critical respects from the original dossier. As, indeed, the noble and learned Lord, Lord Hutton, points out in paragraphs 210 to 218, which I suggest the House should read carefully, that follows from the fact that Mr Alastair Campbell made no less than 16 proposals for altering and strengthening the dossier.

I draw several conclusions from that. It is incredibly dangerous to run together political servants in the employ of a Prime Minister with the absolute necessity for independence and integrity in the intelligence services. While I in no way wish to suggest that it would be wrong to do so or that the Prime Minister lied, the truth is that the appearance of that intervention has, in the eyes of our public, done grave damage to the integrity of the intelligence services.

Because of time restraints, I shall turn quickly to one other comment. I believe that the Ministry of Defence was rightly criticised for failing to inform a fragile and vulnerable figure—Dr Kelly—that he was about to be revealed as the source of the intelligence on both 8 and 9 July. I also believe that the BBC—the BBC is a jewel of integrity in this country in the reporting of information—must now address the weaknesses in its senior management that allowed its conduct of this case to fall below the standards to which it normally and, thank goodness for this country, usually adheres.

Finally, I want to say that the great issues still lie, as the Leader of the Opposition said, unplumbed. However, perhaps I should also add that, in my view, it is not for the Conservatives to raise questions when they themselves accepted, without query, the case for a war against Iraq.

However, profound questions arise about the intelligence that was used to support that war and about the reasons that were given for conducting and carrying it out. I remind the House that on this very day in the United States Congress, evidence is being given by the leader of the Iraq Security Group to the effect that, in his opinion, no weapons of mass destruction are stockpiled and have not been since shortly after the first Gulf War. He said that he did not believe that they would or could have been used. Even the Secretary of State said that, in his view, the question was now open. It is therefore of critical importance to the integrity of this Government and this country that these issues are explored in great detail by a further and far wider inquiry.

My Lords, I fully appreciate that the noble Lord, Lord Strathclyde, has had only a few hours to read the report. As he will know from the Statement made by my right honourable friend in another place, we accept the criticisms in relation to not telling Dr Kelly that his name would be confirmed if stated and in relation to not telling him immediately—it took about an hour and a half—that his name had in fact been confirmed. We utterly accept those criticisms.

What was disappointing and worrying about the noble Lord's response was that he did not appear to have gathered the full import of the report. The crucial finding of the noble and learned Lord, Lord Hutton, was that a very grave allegation had been made against the Government; namely, that they had deliberately put into a report false information and that they had done so against the wishes of the intelligence services. As soon as that statement had been made, the Government denied it emphatically. In fact, the noble and learned Lord, Lord Hutton, has now inquired into the situation and has discovered, first, that Dr Kelly never made such an allegation. Therefore, there was no basis for Mr Gilligan to make that finding. Secondly, he found that it was perfectly legitimate for the Government to protest, and to continue protesting, and to seek to have that put right.

Two parliamentary committees set up investigations into whether or not the allegation was true. If someone had come forward, as someone did, saying that he could be the source of Mr Gilligan's allegation, how could it have been legitimate to keep that information from the two committees investigating the matter? Surely any government would have had to bring that forward and surely it was inevitable that the name would come out. That is what the noble and learned Lord, Lord Hutton, found.

The noble Lord, Lord Strathclyde, is popular in this House and is regarded as a decent person. However, I found what he said distressing and disappointing.

Every single person in this House will appreciate the sensitivities of those who have been investigated and will realise that people might wrongly say that they had contributed to the death of that fine public servant. The remarks made by the noble Lord, Lord Strathclyde—albeit because he did not have enough time to read the report—were not helpful and, in my view, were irresponsible.

The noble Baroness, Lady Williams—again, I am sure that it was because she did not have enough time to prepare properly for her comments—read half the quotation in relation to the sexing-up of the dossier and gave an entirely misleading impression of what the noble and learned Lord, Lord Hutton, found. She read one part but then did not read the next part, which states:

"However in the context of the broadcasts in which the 'sexing-up' allegation was reported and having regard to the other allegations reported in those broadcasts I consider that the allegation"—

that is, the allegation that the dossier was sexed up—

"was unfounded as it would have been understood by those who heard the broadcasts to mean that the dossier had been embellished with intelligence known or believed to be false or unreliable, which was not the case"

Therefore, the noble and learned Lord, Lord Hutton, makes an explicit finding rejecting the allegation of sexing up.

As to the other parts of the noble Baroness's intervention, she said that it was wrong for people in 10 Downing Street to play a part in commenting on the dossier. The noble and learned Lord, Lord Hutton, explicitly finds the reverse. He finds that it was perfectly appropriate for No. 10 to comment because this was a document for which the Prime Minister would take responsibility in Parliament. I quote the noble and learned Lord, Lord Hutton:

"As the dossier was one to be presented to, and read by, Parliament and the public, and was not an intelligence assessment to be considered only by the Government, I do not consider that it was improper for Mr Scarlett and the JIC to take into account suggestions as to drafting made by 10 Downing Street'

Therefore, I believe that both the allegations that the noble Baroness made were misleading and wrong, but I am sure that that was not deliberate.

My Lords, does my noble and learned friend not agree that over recent months fine government servants, as well as members of the Government, have been subjected to the most scurrilous allegations about their professional and personal integrity, all of which the excellent report from the noble and learned Lord, Lord Hutton, finds to be unfounded? Does he agree that those who made those allegations should now apologise and withdraw them?

My Lords, I strongly agree. What is so distressing about the view of the noble Lord, Lord Strathclyde, and the noble Baroness, Lady Williams—which I am sure is because they have not had time to read the report—is that they will not accept that the noble and learned Lord, Lord Hutton, has acquitted all those public servants, whether political or official, of the wrongdoing that has so often been misalleged against them.

My Lords, I wonder whether the noble and learned Lord the Lord Chancellor can help on a matter that is puzzling me. Why, when the Government were so anxious to correct the statements made by Mr Gilligan, were they not equally anxious to correct the false impression given in the Prime Minister's foreword to the September dossier? I remind your Lordships of the foreword, which states that Saddam Hussein's,

"military planning allows for some of the weapons of mass destruction to be ready within 45 minutes of an order to use them".

The Prime Minister said that without differentiating between battlefield weapons and strategic weapons. Why, therefore, when the Sun newspaper ran the headline, "45 Minutes to Doom", did not the Prime Minister say at once, as was the case, that the statement in the foreword that some weapons of mass destruction could be ready within 45 minutes was a reference to battlefield weapons only, and that there was no question of strategic weapons being ready within 45 minutes or of a threat to this country? The Prime Minister seems to have been happy for the public to remain misled when it suited him for them to be so.

My Lords, it is rather unrealistic to suggest that the Prime Minister should correct every false statement in a newspaper. If the noble Lord, Lord Waddington, reads the report—I certainly do not criticise him for not having done so— he will see that the noble and learned Lord, Lord Hutton, concludes that the report to which the foreword refers represented an entirely legitimate account of the intelligence then available.

My Lords, I join in gratitude that the noble and learned Lord, Lord Hutton, undertook the task, and in compassion and sympathy for the pain and suffering of the Kelly family, which has been made sharp again today.

There is a tendency in this country that is sometimes encouraged by the media and politicians—or, indeed, by the Church and faith communities—to rush to judgment. The danger of wanting things to be absolutely in black and white was perhaps the trait that the inquiry has highlighted. We should be wary of repeating that now. The humility implicit in not rushing to judgment has a wider resonance. Power and influence exist to be exercised, but with a humility that makes us pause before seeing our fellow human beings, whoever or whatever they are, as mere instruments or tools for others.

Does the noble and learned Lord the Lord Chancellor agree that whatever the long-term lessons to be learnt from this tragedy, it already highlights a deep lack of trust within our society? The building, or rebuilding of trust, be it in the media, politics, or in the Church and faith communities, takes effort, time and patience. There are no quick fixes.

My Lords, I agree entirely with the right reverend Prelate that trust is at the heart of the issue. I also agree that rebuilding trust will take a considerable time. One aspect of trust, and a point that was emphasised by the noble and learned Lord, Lord Hutton, time and again, was not to make false allegations against people's integrity. There still appears to be no apology or withdrawal now that there is a definitive account of what happened. We know that neither Sir Kevin Tebbit nor my right honourable friend the Prime Minister was telling an untruth, as Mr Michael Howard alleged in the House of Commons. Yet, there has been not a sound of a withdrawal now that the position is plain. I cannot understand that.

My Lords, I join those who have paid tribute to the noble and learned Lord, Lord Hutton, for the competence, speed and comprehensive quality of his report, and for the skill with which he has conducted the inquiry.

I also express unqualified relief that the Prime Minister has been acquitted of dishonesty. Relieved though I may be in that respect, one cannot be at all reassured at the circumstances which gave rise to the allegation and to the need to refute it.

On one aspect, the noble and learned Lord the Lord Chancellor acknowledges fault. Dr Kelly is the victim whose death gave rise to the inquiry. The noble and learned Lord, Lord Hutton, demonstrated that there was a curious lack of consistency in the Government's handling of the disclosure of his name. On the one hand there was an endeavour to prevent it leaking out, but on the other there was a determination that it should leak out. It is clear that it was not published, but it was left to a kind of journalistic Russian roulette.

It is equally clear that Dr Kelly had no idea when his name would leak out, and for a considerable time, had no idea that it had leaked out. He was handled with what I might call casual ruthlessness. What worries us so much about the conduct of this matter is the sustained tenacity to achieve calculated ambiguity in the handling of information. Now that I have expressed my relief at the acquittal of the Prime Minister and others—there is nothing worse than being accused of dishonesty when there is no foundation for it—I hope that the noble and learned Lord the Lord Chancellor will acknowledge that there is something unsatisfactory about the conduct of the Government in the respects that I have tried to identify. Something is embedded in the culture of government, and I should love to see it removed.

My Lords, I do not blame the noble and learned Lord, but he gave a thoroughly inaccurate account of the findings of the noble and learned Lord, Lord Hutton, on the way in which government works. The noble and learned Lord said that the name came to the Ministry of Defence at or about the end of June or the beginning of July, and it took considerable trouble to ensure that Dr Kelly was the single source as it was not 100 per cent sure. The MoD was rightly criticised for not warning Dr Kelly in advance that his name would be confirmed—there being an hour or two before telling him that it was confirmed.

The idea that there was deliberate ambiguity, or that there was ruthlessness is not the flavour of what the noble and learned Lord, Lord Hutton, finds. He specifically draws attention to three mitigating circumstances, which are referred to in the Statement made by my right honourable friend. First, there were other factors pressing on Dr Kelly at the time. Secondly, people in the MoD did try to support him. And, thirdly, he was a difficult man to help. With the greatest respect to the noble and learned Lord, Lord Howe, and without impugning his motives for a moment, he did not convey accurately what the report says.

My Lords, does the noble and learned Lord the Lord Chancellor agree with me that this has been a bad day for the Opposition, and a bad day for Parliament? Would it not be much more dignified if, both here and in another place, it was recognised that the report underlines the total exoneration of the Prime Minister? The Opposition have indulged repeatedly in allegations of deceit and duplicity. It would be much more fitting if the Opposition in both Houses threw in the towel.

My Lords, it is for others to judge how bad or good a day it has been for the Opposition. My noble friend's account of the report is accurate. I share the concern expressed by my noble friend Lady Ramsay that nobody in this House should encourage the sense that honourable public servants, whether officials or politicians, are to blame for events, when the noble and learned Lord, Lord Hutton, has made it absolutely clear that they are not. That is especially true in such an area of sensitivity as we are discussing.

My Lords, will the noble and learned Lord the Lord Chancellor confirm that Dr Kelly, who was a distinguished scientific civil servant, was authorised to speak to journalists about matters concerning his work? Is it not right to say that occasionally journalists were referred to Dr Kelly as an expert on Iraq and that that could be the possible source of the great tragedy that befell him? He was a scientist doing scientific work, but if he was authorised to speak to the press—journalists will press their interviewees for the best result that they can obtain for their particular viewpoint—that could be the source of the trouble. Should not the rules in regard to this matter be looked at anew?

My Lords, the noble Lord is right to say that in certain specified circumstances Dr Kelly was authorised to speak to the press; he is right to say that Dr Kelly was a distinguished scientist; and he is right to say that from time to time journalists were referred to Dr Kelly to deal with particular issues. However, the noble and learned Lord, Lord Hutton, also finds unequivocally that he was not authorised to speak to Mr Gilligan on 22 May, which was the conversation that led to the broadcast on 29 May. I do not believe that the noble and learned Lord, Lord Hutton, commented in his report on whether overall the rules of authority need to be tightened.

My Lords, does my noble and learned friend agree that today two people have said that they agree entirely with the report of the noble and learned Lord, Lord Hutton? The Prime Minister said it and the noble Lord, Lord Srathclyde, said it. Does my noble and learned friend believe that the ensuing comments of the noble Lord, Lord Strathclyde, were compatible with complete acceptance of the report of the noble and learned Lord, Lord Hutton, in particular, when having said that he accepted the report in full, he went on to imply that the Secretary of State for Defence had some culpability in the death of Dr Kelly, a death that we all regret and in which we find sorrow? Does he also find incompatible with full acceptance the fact that the noble Lord, Lord Strathclyde, tries to quote a paragraph, but misquotes it, and goes on to imply that there were government responsibilities for Dr Kelly's death? When the Leader of the Opposition sees fit to apologise for his statements, would it not be appropriate for the noble Lord, Lord Strathclyde, to apologise equally for exaggerating the claims even further this afternoon?

My Lords, I heard the noble Lord, Lord Strathclyde, say that he accepted all the findings of the report. It was perfectly plain from what the noble Lord, Lord Strathclyde, then said that he had not read the report—he obviously had not read the whole report. What he said clearly was not consistent with the report that I read.

My Lords, is it not clear that there is great public interest in the report of the noble and learned Lord, Lord Hutton, partly because the public was under the impression that it would cover much wider terms of reference than the noble and learned Lord was asked to discharge? while the House accepts that the Government have been exonerated from knowingly using false intelligence, the issue will arise of great public concern about the fact that intelligence has apparently proved to be quite incorrect. I reinforce the point that following the report of the noble and learned Lord, Lord Hutton, there will be public disappointment that he did not deal with the wider issues and that, in the interests of the intelligence services as regards their integrity and reputation, it will be necessary for the Government to address those matters.

My Lords, I do not agree with the initial premise of the noble Lord. He said that the reason why there was great public interest in the report related to whether the intelligence was reliable, ignoring issues about what untruths were said. As my right honourable friend said in another place, the reason for the great interest is that people have persistently said that my right honourable friend the Prime Minister had lied and behaved duplicitously in relation to this matter. That kept the interest alive. On whether there should be an inquiry into the reliability of intelligence, no, I do not believe that that would be appropriate.

My Lords, today we are debating an independent and very lengthy report by the noble and learned Lord, Lord Hutton. I am distressed and disappointed that, although the leaders of the opposition parties clearly welcome and indeed accept the findings of the Hutton report, they go on to cherry-pick certain paragraphs, sometimes quoting and qualifying their statements and sometimes misquoting. That is a great disappointment. We have been at war with Iraq and many members of our armed services have been killed as a result of that war. Dr Kelly has committed suicide and his family is extremely distressed. It seems to me that the approach taken by the opposition parties in respect of the report today is rather shameful and somewhat shallow. I hope that in the future they will cease that behaviour. Does my noble and learned friend the Lord Chancellor agree with me that they have been shameful and shallow in their responses?

My Lords, I have made completely clear what I think about the comments made by the noble and learned Lord, Lord Strathclyde. I withdraw completely the word "learned" in relation to the noble Lord—some would regard it as an insult. His remarks were irresponsible and I hope that he will withdraw them.

My Lords, does the noble and learned Lord the Lord Chancellor accept that in various parts of the report the noble and learned Lord, Lord Hutton, confesses that his narrow terms of reference do not cover a number of very key issues? I do not believe that the Lord Chancellor has yet responded positively to the call for a wider inquiry. Does he accept that what unites this House is a feeling of deep sadness for the friends and family of the late David Kelly? Does he also accept that many noble Lords have not had the opportunity of reading every word in the report? I have spent several hours doing so and as my noble friend Lord Strathclyde pointed out, in paragraph 472 the noble and learned Lord states:

"I have decided that it is unnecessary for me to make any express recommendations because I have no doubt that the BBC and the Government will take note of the criticisms which I have made in this report"

Will the noble and learned Lord accept from me that there are not just the two narrow points that he mentioned, but the noble and learned Lord, Lord Hutton, also refers to a number of disquieting elements? I know that the Lord Chancellor received the report only yesterday, but when we debate the issue I hope that he will be able to come forward with some constructive points in answer to my noble friend Lord Strathclyde, who made four points. In this country we are proud of the independence, impartiality and integrity of our civil servants. I believe that the family and friends of David Kelly want to be reassured that the circumstances in which he endured the agony through which he was put can never occur again to one of our civil servants.

My Lords, I entirely agree with what the noble Lord has said about our feelings towards Dr Kelly and his family. As far as I could see the four points made by the noble Lord, Lord Strathclyde, did not come from the report; they were more general points and were not based on the report. I dealt explicitly with whether there should be a wider inquiry when it was put by the noble Lord, Lord King, and I said that I did not believe that that would be appropriate.

On the terms of reference of the noble and learned Lord, Lord Hutton, being restricted, at no stage was there any suggestion that he should inquire into the reliability or otherwise of the intelligence. He was to inquire into the circumstances surrounding the death of Dr Kelly and there was never any allusion to the intelligence.

rose to call attention to the Post Office and the postal services; and to move for Papers.

My Lords, first, I thank the noble Baroness for giving us this opportunity once again to debate something that, as she rightly said, affects all of us. I must declare an interest, because I am a member of Amicus, one of whose sections is the Communication Managers' Association.

I shall say a little more about rural post offices. The noble Baroness was right to talk about the importance to a community of having its own rural post office. Closures that have occurred under governments of both parties—3,000 under the previous government— mean that many communities have been deprived of the last place to which they can go and, often, the last shop in the village.

I know that the Government are committed to preventing unnecessary closures; nevertheless, the noble Baroness was right to say that that is being undermined in other ways. For example, benefits are no longer paid over the counter—or, at least, all the emphasis is on them going through bank accounts. I could not agree more with the noble Baroness about the difficulty of obtaining a Post Office card. Why do we have to have the complex form to which she referred? Why can people not just walk into their local post office and open an account there and then? They can do that at the bank; why can they not do so at the post office? There appears to be undermining by another department. When my noble friend replies, perhaps he will explain why it appears that one department is against another. One department is recommending that people go for a bank account instead of using the post office. Yet most people prefer to use the post office, which gives them an opportunity to meet other people, get out and about and use the local store.

If we are promoting in-town and in-village shopping, it seems silly to deprive the one centre that can offer that service of part of its revenue, because 40 cent of post offices' revenue comes from payment of benefits. If they are to be deprived of that, they need other resources on which they can fall back and all the help they can get.

It is not much good our saying that according to the most recent available statistics, closures have fallen considerably and are probably at their lowest since 1994–95. That is not helpful if those running post offices feel insecure, see their actual returns dropping and find it difficult to dispose of rural post offices— which means that as they come to retire, the post office closes and the community is deprived of that service. Will my noble friend tell us why we cannot have that simple method: going into a branch and obtaining a card there and then? If we cannot, why not?

It is right to say that in many urban areas post offices have joined together to try to make themselves viable, but that again deprives people who have been near to a post office, as it moves further away from them. The people who suffer in all of this are pensioners and those with disabilities. We ought to take them into account all the time.

I am pleased that Post Office Ltd is, as has been said, becoming a major player in the financial services field. It provides personal loans, credit cards, motor insurance and bureaux de change —one of, if not the, largest networks in the country. However, again, I could not agree more with the noble Baroness—we seem to be agreeing a great deal on this occasion. Why cannot post offices be made more attractive? Why cannot people know more about them? Why is it so difficult sometimes to discover them when they can offer all these services? That issue needs attention.

I turn to the Royal Mail's industrial relations with its employees, a matter which concerns me greatly. I asked a recent Starred Question on the 3,000 managers who were being made redundant. I pointed out that there had been no consultation with the Communication Managers' Association. The first it knew about the matter was when it was told that once again there was to be a further review of managers— the fourth review in four years. How can people feel secure against that background?

On 20 November, the union was told that there was to be another review. On 2 December that was confirmed verbally. On 11 December, a letter stated that there would be 3,000 redundancies. No consultation had taken place and Section 188 had not been complied with The answer given by the Minister with responsibility for science, the noble Lord, Lord Sainsbury, to my Starred Question was not completely accurate. I asked about the fact that the partnership was not working. He replied:

"As for the partnership, I think that I am right in saying that it was the unions that withdrew from the partnership arrangements. It would be highly desirable for the two sides to come together again to drive forward the change".—[Official Report, 8/1/04; col. 250.]

Since then the Minister has received the letter from Peter Skyte, the National Secretary of the Communication Managers' Association, pointing out that that is not completely accurate. It is true that CWU suspended its involvement in the partnership; but against that the Communication Managers' Association has never withdrawn and has continued to play a part in the process. I hope that my noble friend will take the opportunity of putting the record straight in that regard.

Managers and other employees are its most valuable asset. I do not understand why it is treating its staff in this way. Someone who is now a director of the Post Office may move from Royal Mail to another company but many of the staff have worked for Royal Mail for a lifetime. Their security and the welfare of their families depend on the good relationship with Royal Mail.

I agree with the noble Baroness that Postcomm is behaving in a shabby way towards the Post Office. I fail to understand how we shall maintain a universal service with the cherry picking which is being allowed. Equally, if the Royal Mail is to meet increased competition and the changes required in the liberalised future which it faces, how can it do so without working in partnership and consultation with its employees? Why cannot it be more open with them? Why cannot it disclose to them their future plans for investment, how it sees the corporate plan coming about and how it intends to meet the increased competition. I fail to understand why it does not seek more co-operation from them and why it is not working with them.

At the end of the day all of us—I do not refer simply to those who work for the Post Office or are the managers of the Post Office—have a stake in maintaining that high standard of service we have received in the past. I say this to my noble friend. We shall not receive that if employees are treated in this shabby and disgraceful way.

My Lords, I, too, am most grateful to the noble Baroness for giving us this opportunity to discuss the Post Office. When preparing these notes, I had intended to say that I was particularly grateful to the noble Baroness because as recently as 6 June of last year I had raised an Unstarred Question about the role of Postcomm which did not take place. It had not arisen again by the time the House prorogued. In my innocence. I thought that it might do so but it has not. However, we have this debate today.

In my time in this House, I have never enjoyed a speech so much as that of the noble Baroness today. I say that because of my emotional attachment to the Post Office. The noble Baroness said that she arrived here 50 years ago. Fifty-eight years ago I joined the Post Office. I declare my interest as a former telegraph boy, postman, sorter, the deputy general-secretary of my union and a trustee of the Post Office pension fund.

Having been directly associated with the Post Office for over half a century I feel a sense of deep sadness when I see what has happened to what was, and I believe could still be if it were given the chance, the best postal service in the world. The noble Baroness touched a range of emotions in me when she described postal conditions in Australia. All I experienced were squirrels in Kenwood, Hampstead, biting my fingers and the odd fox running in front of the mail van I was driving down to the Iveagh estate.

For many years the Post Office was contributing large financial surpluses to the Exchequer. I recall that in my maiden speech in your Lordships' House I drew attention to the success story the Post Office could tell. I said at that time—December 1998—that it was not just in 1998 that the Post Office had met the financial target set by the Treasury. During the preceding 20 years the Post Office had achieved subsidy-free profits. It had exceeded the external financing limit target set for it in 13 of the previous 16 years. At that time in 1998, in the 16-year period I referred to the Treasury benefited by more than £2 billion, on the backs of good, dedicated servants of the Post Office.

There were hopes among many that the coming of commercial freedom would herald a new dawn in Post Office finances. It was widely hoped that the successful public service would be able to build on its successes and meet the challenges that it would face as a result of the Postal Services Act 2000.

The Act came into being and this House has from time to time been reminded—by me, among others— that the hopes I have referred to have been dashed. The biased hand of Postcomm has rested heavily on the Post Office management. The long protracted discussions on the sensible rate to be charged for downstream access by the competitors of the Royal Mail is but one example of a waste of money.

It is worthwhile informing the House of the way in which Postcomm is funded. Postcomm is funded by the fees it charges to the companies it licenses to provide postal services. The licence fee increases with the volume of mail the company handles. By far the largest contributor to Postcomm's running expenses is Royal Mail which handles 80 million items of mail a day. Postcomm's annual budget is around £7 million. It has a staff of around 40 people. How on earth did we manage to be such a successful business without this wonderful group of people sitting in judgment, day after day, on what the Post Office should be doing?

There are many post offices that I would like to speak about during this debate. I will attempt to deal with just a few. A few issues cause concern, not just to me and the people with whom I have worked all my life, but to the public. This concern is felt by people in the Post Office, and people outside; the customers and the clients—both business and domestic—who rely on the maintenance of a reliable service.

The first issue is the role of Postcomm. I have not altered my view of this unnecessary organisation since I first described it as the vehicle by which the get-rich carriers would cream off profitable business, then dump their work on the Royal Mail, which, by the terms of the Act, must deliver the final mile to the addressee.

Just before Christmas, on 17 December, Postcomm's Graham Corbett welcomed the announcement that Royal Mail and UK Mail were likely to reach a voluntary agreement over the prices and conditions under which Royal Mail will carry its rivals' letters over that final mile. The announcement came as a result of Postcomm being asked to determine access prices, after talks between the companies originally broke down. Following the initial proposals as long ago as last May, Postcomm's final proposals were due for publication prior to Christmas, but we now are told that they will be published by the end of this month.

It is reported that Postcomm has agreed to postpone this publication to enable both parties to finalise the details of their agreement. If a final agreement is reached, Postcomm said that it would issue a paper giving its views on an appropriate framework for other firms whose business model requires access to Royal Mail's delivery network. If an agreement is not finalised, Postcomm's proposals will be published in their original form shortly afterwards. Can the Minister inform the House of the current situation?

I share my union's view of Postcomm's liberalisation and competition agenda. It is fundamentally in conflict with its primary duty to protect a universal service at a uniform tariff. Since its creation, the competition proposals from Postcomm have introduced too much competition, too soon, in the wrong form, at the wrong time. They directly contradict the measures and timetable being introduced by the European Union. Postcomm's interpretation of competition and postal services is that it will bring major benefits to customers without putting at risk the maintenance of the universal service at a universal tariff. That is unsustainable. That interpretation puts at risk the universally provided service. There is a belief in many countries and postal administrations that the postal industry is a unique and natural monopoly, which can be maintained only by preserving a system of cross-subsidisation, on which it depends.

The general principle of allowing third party access to Royal Mail's pipeline will undermine the simple business model of cross-subsidisation, on which the universal service depends. Allowing the development of this form of third party access would threaten Royal Mail's long-term viability, hit the company's revenues, undermine the recently determined pricing structure, and prevent Royal Mail from effectively meeting its universal service obligations.

It is my firm belief that access determination is being used to accelerate the introduction of competition in the postal market, by allowing competitors to take advantage of Royal Mail's economies of scale in delivery. Setting the access price at a level less than half the price of a first-class stamp amounts to a green light for mail operators to cherry pick profitable mail and thus threaten Royal Mail's ability to maintain the universal service obligation.

I am confident that anyone who believes in the British Post Office wants it to be an expanding postal industry that provides a first-class service to the public. At a time when mail volumes continue to grow, and the number of delivery points is increasing, the future of the industry can be built only by greater investment in staff and capital, a delivery service that concentrates on customer needs with a more customer-focused range of products and services, and constructive industrial relations. I will mention industrial relations again at the end.

On financial, operational and legal grounds, the proposed access arrangements will prevent Royal Mail from fulfilling its primary statutory duty to preserve the universal service obligation and a uniform tariff. In the light of the damaging impact that the current arrangements will have on the future provision of services, I have asked the Minister to look again at the role and actions of Postcomm, with a view to getting it to withdraw its existing proposals on access and to allow the matter to be looked at afresh by the new postal regulator.

It will not satisfy me to be told, as I have been told so many times in this House, that this is a matter for the Post Office and the regulator. This Government, whom many worked so hard to get elected, created Postcomm. They brought in the Postal Services Act 2000. They should not walk away from their responsibilities to the public.

The noble Baroness and my noble friend Lord Hoyle referred to post office closures. I will not mention names, but an 86 year-old lady living in south London rang her daughter miles away to ask her to come and help her, because she had been to the post office three times and had three forms. She did not understand what was happening, and she wanted to get her money. My noble friend Lord Sainsbury of Turville has told me many times in correspondence that people will always be able to get their money.

The Post Office is being encouraged not to provide post office cards and accounts—people are being directed to banks. It is no good for the Government to say, "This is a matter of understanding". This lady sat in tears in her kitchen, and her daughter had to travel a long way and take a day off to sort out the matter with the post office clerk, who, under pressure, probably said, "Just fill in the form and bring it back". It is a bit much for the Minister to say that it will all come right in the end, and that people will get used to it. It will not. Some people are vulnerable.

It is no good asking Ministers about how many sub-offices and branch offices have closed since the Government were elected. They are closing at a rapid rate. Many so-called "local consultations" about closure are just a sham—I use that word advisedly. I come from Hampstead, where I was a postman for many years and emptied post boxes outside foreign offices. Mansfield Road, South End Green, Finchley Road and Belsize Village are all due for closure.

Do not take my word for it being a sham. Take the response of the local paper, where a Post Office spokesman spoke at a public meeting.

"He told the meeting that the Post Office's only shareholder, the Government, expected him to plug a gaping £200 million hole in the annual budget caused by a decline in business. 'We are not as professional retailers as we ought to be', he told me in a frank admission. He added 'the Government will not allow us to operate at a loss. We have to make changes'"

I draw the Minister's attention to the Early-Day Motion tabled in the other place about the relationship between the Scottish banks and the Post Office. In the United Kingdom generally, there have been agreements to get benefits paid through banks, but the banks in Scotland will not co-operate. I commend Early-Day Motion 397 to him. Perhaps he will let me know his views on it in due course.

On 8 January, this packed public meeting was told the usual line—that there were post offices within a mile. Let me dispel a rumour. In Hampstead, they are not all running about in four-wheel drives, racing around corners. Vulnerable, elderly, sometimes handicapped people, are trying to get their pension from the post office. They are not all in a position to drive that mile. In some cases, that mile can be stretched, as it was in Loudoun Road, on the other side of Finchley Road—but I am getting too parochial. This is not the first time that I have drawn attention to the fact that it is not the fault of the Post Office that these closures are taking place, not just in Hampstead. In almost every community in the country, people are losing their local offices. When I say that the consultations are just a sham, do not take my word for it. Read what other people are saying who have no real connection.

The urban reinvention programme has a wonderful title—it is another one to put in the box, from the Carter committee 40 years ago onwards. Some £210 million has been allocated to this programme, among other moneys. Some £180 million of that money is going on compensation for people who want to give up their post offices. We wonder why they are closing, but it is being made so easy for them. The odd bit of money is going on refurbishment of the offices that remain.

I said that I would like to talk about industrial relations. I share the noble Baroness's view of the damage that has been done over years by industrial relations in the Post Office. In 1971, when we had 47 days of strike, I swore that I would do everything in my power to avoid people having to go on strike again. Sometimes, I was successful—and criticised for it— and, sometimes, I was not. Today, there is an agreement. The agreement is a testament to the success of negotiations after the sad events just before Christmas. Agreements are possible.

In the agreement is the key to a lot of the Post Office's problems. It is balloted on at the moment. The ballot closes tomorrow, and I am confident that the agreement will be endorsed. If the House will forgive me for speaking for 30 seconds more, I must say that I believe that the agreement contains the key. It allows for five-day weeks. People who work for the Post Office have had to get up in the early hours of the morning six days a week, year after year. If that change comes about, the agreement will be worth the effort put into it by the chairman of the Post Office, whom I have had the pleasure of meeting a few times. I do not know whether he was added to the list. I was told that the DTI wanted him added to the shortlist. Perhaps the Minister could tell us whether he was. The rumour is going round that Allan Leighton got the job because his name was put on afterwards. I wish him well, and I hope that, when he leaves the Post Office—I hope that that will not be for a long while—he leaves it in better shape than he left Leeds United.

My Lords, I too congratulate and thank my noble friend Lady Gardner of Parkes, who has brought this important topic before us today. The Post Office has been debated here and in another place on several occasions recently. Like many others, I have persistently asked questions about the Post Office and sub-post offices and about the wider service given by sub-postmasters in their local community. I agree with my noble friend that we should retain and improve postal services, services that are currently taken so much for granted. It is rather like having electricity and thinking that the lights will never go out.

I suggest to the Minister that the course that the Government are taking is putting severe strain on our postal services. The people who are most likely to lose out on all of that are the elderly, the disabled and people with young children, particularly those without transport. That affects us particularly in rural areas.

No doubt, others will talk about urban post offices; I shall feature two particular aspects. One is the way in which benefits are paid to clients. The second is the future of rural sub-post offices. At this stage, I declare that I am a patron of VIRSA, which does a lot of work with the Post Office to sustain post offices and prevent closure.

The Minister will not remember it, but his colleague the noble Lord, Lord Sainsbury of Turville—he is not in his place—would remember how, when we took the Postal Services Bill through the House, I tabled several amendments relating to the way in which welfare benefits would be paid to clients in future. The changes proposed in the ending of the book system caused several heated—perhaps that is not the right word; they were passionate—debates in Committee and at later stages. The concerns that I expressed at that time were wafted away as being over the top. I was told that the new system would be welcomed and that there would be no problem. That is not, in fact, how it is turning out, as other noble Lords have already said today.

The apprehensions are real, and I have many examples from CABs around the country highlighting cases like that just mentioned by the noble Lord, Lord Clarke of Hampstead, who spoke about an 86 year-old who could not get help. They are coming in thick and fast. I suggest that, if the Minister does not get the CAB's very good bulletin, he should do, as he would realise the difficulties that people have to cope with.

First, I shall speak about benefit payments. Secondly, I will say more on rural sub-post offices. In its excellent briefing, the National Federation of Sub-Postmasters has reminded us again that, in 2000, two-thirds of benefits in Britain were paid over a post office counter and around 18 million benefit recipients used the post office to get access to their payments. The federation goes on to say:

"Not only are people being forced to change the way in which they collect their benefits, despite the fact that 'there is little evidence that [claimants] have an unmet need for simple, trusted and secure means of accessing their benefit income'; but the Government has"—

as others have said—

"made it difficult for people to choose the post office based product"

The NFSP has serious concerns that the way in which the direct payment programme has developed will continue to undermine the ability of the national post office network to sustain itself. The federation says:

"We have internal memos from the Department for Work and Pensions which prove … staff are instructed to encourage customers to choose a bank account at every opportunity and that they 'should be aiming to get 9 out of 10 new customers paid into bank accounts with a small proportion of these paid through Post Office card accounts"

I encourage the Minister to believe that people applying are being leant on to go through their bank, rather than use the three options that are open to them.

Other noble Lords have referred to the closure of post offices. The figures speak for themselves. Between 1992 and 1997, 1,089 sub-post offices closed; between 1998 and 2003, the total rose to 1,769. So, the Government recognise that there was a problem when they were in opposition, but the problem has become worse. The Minister should apply his mind to the continuing closure of sub-post offices. Perhaps he is not particularly interested in that at this time.

The Government's response to the closures has not been encouraging. In April 2000, when the problem reached a pinnacle, millions of protesters came to London. I was there among them when they handed in to Downing Street a petition against the proposed changes. They were anxious and had reason to be. In response to the mass lobby, Labour introduced a provision in the Postal Services Act 2000 that gave the Government power to pay subsidies to sub-post offices. We believe that sub-postmasters are looking to their long-term future; they do not want hand-outs. They need security. One must remember that it is the sub-postmaster who owns the shop and organises what happens in his post office. If sub-postmasters feel insecure because of the changes, it is not surprising that more sub-post offices are closing.

On 17 July, the House of Commons Trade and Industry Select Committee published its report on the impact of direct payment on post offices, about which the CAB had given oral and written evidence. The Select Committee concluded that, for benefit recipients who preferred to conduct their day-to-day financial affairs through bank accounts, the introduction of direct payment would provide a more convenient means of receiving their benefits. However, the Select Committee also felt that there was a significant group of people for whom payments by order books was the best option and that the needs of those people had not been properly taken into account when those direct payments had been concluded.

I turn to slightly more up-to-date figures and refer the Minister to a House of Commons Written Answer published in Hansard for 21 January 2004 at col. 1338W. The Government had been asked how many clients had opted to use the three schemes. I shall share the figures with your Lordships. The number of those using direct payment into bank or building society accounts was 9,052,037. The figure for direct payments into card accounts at post offices—the thing that we are encouraged to use—was, on the date of the reply, only 175,269. That is a tiny number. The figure for those who were still being paid through the order book was 9,566,221. If you add together the first and second figures, they come to less than the third. We are told by the Government that the new payment systems will have to be up and running by April 2005. How does the Minister think he will achieve that if more than 9,566,000 people are still not choosing to use one of the Government's systems?

I turn very briefly to the rural areas. The distance might be within a mile in urban areas but certainly in rural areas the distance is greater. I still find it extraordinary that the average comes down to one mile away. I suppose that that is as the crow flies—perhaps it is rather a large crow with large wings which covers a mile in different ways. But that is by the way.

Certainly, there is great concern in rural areas about the continuing uncertainty for the future of rural post offices. I hope that I have demonstrated to the Minister that people are still opting to use their post office—9 million are still doing so. There is a long way to go before those rural post offices have any certainty that their future is there and they will be able to continue.

The post offices have tried to diversify and to bring added benefits to help the people using them, whether that means paying car insurance or electricity bills. Trialled in Leicestershire—it appeared in my own post office—was Your Guide. It was a computer by which people could access government information or local information, and the system ran for a year. Why was it suddenly dropped? Has it been reviewed? Was it considered not to be of benefit? It ran and then it died, and we have not heard back about what success it had. If it had possibilities for the future, why has it been allowed to die, because it was another way of bringing additional income to that post office?

All I can do is tell the Minister that the fears expressed by Members on all sides of the House—the noble Lord, Lord Dearing, will follow me and will, I suspect, have his own concerns to express—are very real. There is concern not just within the House—I am sure that many of my colleagues at the other end of the building feel the same. Working with VIRSA I know only too well of the very grave difficulties facing sub-post offices and sub-postmasters, particularly in rural areas.

I hope that the Minister will give us some words of encouragement and that he will answer those questions. The way in which we pay benefits is so crucial to long-term success, whether it be through the post office card account although, as others have said, it is a nightmare to access. I do not know why it is made so difficult. Leaning on the public to use banking facilities when many of them cannot even get access to bank accounts because they do not qualify is a waste of time and not very fair to them.

I have three questions. What will happen on the future of the welfare benefits payments? What will happen to the longer term future of rural post offices? Why was Your Guide suddenly dropped and lost after it was introduced?

I thank again my noble friend for making this afternoon's debate possible.

My Lords, I declare an interest as a post office pensioner. May I presume, as a former chairman, to congratulate the noble Baroness, Lady Gardner of Parkes, on her deep knowledge of these affairs, and the passion and enthusiasm with which she has spoken of personal service?

When I read the last annual report and accounts of the Post Office, I was in some despair. It shows a loss for the year of £600 million. It expressed concern for a possible loss of £1 billion worth of business. It said in the notes to the accounts, which not many people read, that it had had to borrow £1 billion from the banks so that it could do its accounts on a going-concern basis—rather an unusual thing to happen.

When I came to the half-year accounts, I saw, for the first time, signs of welcome progress in remedying the fortunes of the Post Office. I saw, for example, that for the first time in five years, it had managed to break even. In the same six months last year, it lost £500 million. More recently, as the noble Lord, Lord Clarke, said, there has been a really valuable, important agreement with the Communication Workers Union of a pay deal of 14.5 per cent over 18 months and new working arrangements, which will be paid for by efficiency gains. That is really epoch-making—a transformation. We should acknowledge the work of the noble Lord, Lord Sawyer, in developing a better climate within which negotiations could take place.

The noble Lord, Lord Clarke, was talking about the deal with UK Mail. I think we are right in saying that heads of agreement have been reached, and it is the final dotting. I hope that the regulatory body can be kept out of it. I share the concerns of a body that seems to see as its goal and the only relevant criterion competition rather than a good postal service at a fair price, available to us all, which will continue. The objective is not to compete but those three factors. I regret that the Post Office has not seen its role in a fuller way.

I want to concentrate on the Post Office's network, which has been referred to by all speakers. When I was looking at the half-year accounts, and although I had great pleasure in seeing that the Post Office had broken even, on trading, Post Office counters had had a loss of £91 million. It was better than the previous year, but not much. I began to think about the environment within which these counters are trading and, of course, I came straight back to the change in the way in which benefits will be paid.

In the past, there was a choice. People could use their building society or their bank or they could go to the post office with their pension book or benefits card. It seemed to me a simple thing to say, "We're going to change things; you can still go to your bank or your building society, but instead of having a pensions book, you will have a post office bank card. It is very simple—there is no complexity, nothing new. In fact, you will find it easier". But what do I find? Complexity.

The House of Commons Trade and Industry Select Committee reported last year on the Post Office network, particularly the counters. It referred to the complexity of opening up a card account, and said:

"We do not accept that this requirement … means that the procedure must be more complicated than opening an ordinary bank account. The Government should consider again why a card account cannot be opened at a Post Office using the same basic procedure as employed by the banks".

All I hear is complexity in this.

My local sub-postmaster tells me the same as the noble Baroness, Lady Byford, has said. The whole system seems to be loaded against the pensioner—the beneficiary—changing over to post office card accounts. The pressure is all one way. There is the complexity and the push.

What is happening? We have lost 3,000 post office counters in urban areas. The thing that I find most surprising in the context of this change to new ways of paying benefits is that there was no cost-benefit calculation of the transformation. Those are not just the words of a prejudiced former chairman of the Post Office; I am quoting from that self-same report from the Select Committee in the House of Commons. The committee said:

"In the absence of a proper study of the costs and benefits of Direct Payment, it is difficult for us to comment on the merits of the Government's case that it represents value for money".

We are talking about big money here, however, not the odd million. The package involves £450 million over three years to maintain the rural network, which is £150 million a year. It involves £210 million for the urban network, £180 million to pay for sub-office closures and £30 million for modernisation. One does not spend £600 million without a little thought. The Select Committee said that it could not find that a cost-benefit analysis had been undertaken. I am a touch surprised at that, but perhaps the Minister—although not today—will drop me a line. I like getting letters; it helps my pension. Will he tell me whether it is the case that there was no cost-benefit analysis? If he finds that there was one, he should drop me a line.

Everybody seems to have three wishes. My first wish is that the Government will look into the issue of the complexity of opening one of those Post Office card accounts and see that the Department for Work and Pensions is helping pensioners by enabling and facilitating them to get one of those accounts. Secondly, I refer to the matter mentioned by the noble Lord, Lord Clarke, which is also the subject of a debate on an Early-Day Motion tomorrow, signed by 55 MPs. The Motion is to encourage a number of banks—and I say this with the hesitation of an Englishman, but they happen to be Scottish banks— which have not entered into an arrangement with the Post Office, to have some felicitous discussion that may help that process along.

My third wish is a point raised by the noble Baroness, Lady Byford. Yes, money has been put on the table for three years to sustain the rural network— £150 million a year. What happens after the three years? Does the rural network go to the wall? Do the people who run the little businesses need to be kept in suspense as to whether they will be scrapped, or will the Government seek to clarify the position? I know that they will not do that this afternoon, but I hope that they will sense the feeling in this House about the Post Office network, its value to society and its familiarity. It is something that needs to be conserved.

My Lords, I am most grateful to my noble friend for giving us an opportunity to have an update on this problem. Over many years we have discussed the basic needs of a rural community. A parson is nowadays run off his feet, with too many churches and not enough money. Physicians are all now withdrawn into group practices. Then there are primary school teachers. Rather like my noble friend Lady Byford, both in Lincolnshire and Leicestershire we have succeeded in having some fairly sensible amalgamations so that they have not been withdrawn too far from the local communities.

Pubs have also been affected, and then there are policemen, who have all been withdrawn from rural areas. In fact, all that a policeman is able to do now is, when there is some form of rural crime, to give one a number that allows one to ring up the insurance company so that the police do not have to do anything more about it. The matter is between oneself and the insurance company, which may pay out. However, above all—and by far the most important thing in the rural area—is that we should maintain our post office.

There is no better indication of the duplicity of this Government than the question of rural post offices. They say one thing, and once upon a time some of us believed it, but we now know that they always do the opposite. The Prime Minister said on more than one occasion that he valued the rural network—it was a sort of spin about the countryside. But he has authorised his Government to do the very opposite and to remove as much business from the Post Office as possible.

A person applying for child benefit is told that the only way they can get their money is by having it paid into a bank account. They were not advised about the option of drawing it through a Post Office card account until quite recently. An elderly person now receives a letter from the Department for Work and Pensions which says:

"We are now changing the way your attendance allowance is paid".

Right across the top of this letter, in big print, it now says:

"Direct payment—giving it to you straight".

I am referring to a person in our own village who has no bank account and no transport and wants the benefit paid into the post office.

The Government go out of their way to make it difficult for such a person to have future payments made to the Post Office card account. In the first instance, the Department for Work and Pensions asks the person to ring them up, at no cost to themselves, so that they can be persuaded that their allowance should be paid into their bank account. If they insist that, like many older people, they want to collect their allowance from the post office and want to have it paid into a card account at the post office, they have to fill in an elaborate form. It has to be filled in with a black ballpoint pen, they have to use capital letters, and they have to produce some form of identity to go with the form. That makes it as difficult as possible.

There is only one way in which to keep the rural post office open, and that is by the number of footfalls entering the post offices. Whatever they may say, the Government are doing their best to drive business away. As my noble friend Lady Byford said, over the past two years 80 per cent of all closures have been in rural areas. Despite the social network payment, most of the rural offices cost the postmaster money to maintain. In December 2002, a £450 million package was announced, but it has a run-out date of 2006. The package contains £190 million for the sub-postmasters and money for the new forms of business. Even so, the Post Office is finding it hard to find replacements for sub-postmasters.

One must admire the business that postmasters have built up around the central business of the post office, including newspapers, food, off-licences, cards and sweets. That is all done to support an essential service, which is needed and should be properly funded. The business of the Post Office should stand entirely on its own feet. The Government are driving more business away because of their prejudice against the Post Office card account.

My Lords, I join other noble Lords in thanking the noble Baroness for introducing this extremely timely and relevant debate. It is worthy of note that her Motion calls attention to the Post Office and the postal services. In this debate, only the noble Lord, Lord Clarke, has really addressed the postal services aspect. When we have discussed these matters in your Lordships' House on previous occasions the noble Lord, Lord Clarke, has endlessly repeated the same mantra; namely, that the Government must take responsibility for postal services. I fear that however often he repeats that, the Minister will still give him the same answer; that is, that most of the issues that he raises are management issues for the board of the Post Office and for Allan Leighton, when he is not occupied saving Leeds United.

However, as I have said to your Lordships on other occasions, I have some sympathy with the noble Lord as there seems to be a tendency for the Government to claim the credit when things have gone well but to say that it has nothing to do with them when things have gone badly. However, I shall pass from that to touch on the issues that other noble Lords have raised which relate to the changing face of the post office network, which is of significant concern to your Lordships and, indeed, to the country at large.

Over the past 30 years the number of post offices and the profitability of the post office network have obviously been in serious decline. As a number of noble Lords indicated, changes to the way in which benefits and pensions are paid will—and already have—significantly reduce post office footfall, to use the retail jargon. It is estimated that paying benefits directly into people's bank accounts will mean that individual sub-postmasters are likely to experience a drop of 40 per cent in their incomes as a direct result of the loss of those transaction payments. I suspect that figure will be generally accepted by the Minister. In response to that the Government introduced a modernisation programme for the post office network.

As well as the proposed introduction of the universal bank, there is to be—the noble Lord, Lord Clarke, quite rightly drew our attention to the wonderful phraseology here—the reinvention of the urban network. The policy of Her Majesty's Government is that rural closures are to be avoided wherever possible. However, the direct result of that policy is that the Government have had to make huge financial commitments to guarantee, or attempt to guarantee, an arrest in rural sub-post office closures and establish a massive compensation programme that far exceeds the investment programme in urban areas, as the noble Lord, Lord Clarke, indicated.

As the noble Lord, Lord Clarke, indicated, £210 million was allocated to the urban reinvention programme by the Government. In an answer to a Parliamentary Question on 17 December 2003, the Minister in another place, stated that the Government were,

"investing very substantial sums in supporting the transformation of the network—some £2 billion in total over the next five years".—[Official Report, Commons, 17/12/03; col. WA984.]

So the Government clearly have a very significant financial interest in what is happening in both the rural and the urban sub-post office areas. As regards the rural network, even after the £2 billion has been spent, the network will still need to support itself in the future. I believe that Postcomm has recommended that additional funding to deal with the gap in funding for central support costs for the rural network after the loss of the Benefits Agency income—a contractual amount of £400 million—should be negotiated by the Government as shareholder and purchaser of services from Post Office Ltd. I should welcome the Minister's comments on that.

Clearly, after investing all this money in the rural post office network, the Government must encourage development of an alternative income model for post offices if they are to become viable post-2006. The noble Baroness, Lady Byford, rightly said that no indication of what this revenue stream might be has been forthcoming from the Government. The noble Baroness rightly drew attention to the fact that the trial of "Your Guide", which I believe cost £35 million and was generally well received, was quashed by the Government without any apparent explanation. I hope that the Minister will expand on the Government's proposals regarding how that alternative income model for post-2006 for rural post offices can be developed.

The Government have received advice from Postcomm that they should provide direct revenue support to sub-postmasters using Post Office Ltd. as the delivery channel. The amount would obviously have to be negotiated between the Government and the Post Office. Postcomm has argued that funding administered independently from the Post Office should stimulate ways of providing post office services that ensure continuing provision of post office services in rural areas during the transitional phase, that maintain or improve the quality of those services and their wider benefits to the local community—a number of noble Lords said that the Post Office is really the only viable commercial enterprise in a village—and that funding should be provided to encourage the post office network to be self-sustaining from 2006 to 2007. I should be interested to hear what the Government have to say about progress in that area.

The policy for the either aptly or inaptly named urban reinvention programme is clearly to compensate sub-postmasters as they close what are regarded as unnecessary urban post offices. However, the intention was that the rationalisation of the urban network was to be a managed process rather than what we have at the moment which is an unmanaged decline and an, up to now, haphazard closure of post offices. The intention was that if one relocated offices into busier stores the Post Office would be able to capture more customers in one place thereby reducing the need for such a large number of outlets in urban areas. The Government, at the request of Post Office Ltd, made the £210 million available over a period of three years. However, as the noble Lord, Lord Clarke, drew to our attention, £180 million of that is intended to be spent on compensating sub-postmasters for closing their post offices and only £30 million on the matched funding for improvements to the remaining offices. Those are the figures that I have. Other noble Lords may have more up-to-date figures. However, I believe that under the consultation programme, proposals received by Postwatch for closure aggregated 1,522 urban post offices—the figure may be higher now— and that 759 urban post offices have actually been closed.

One of the problems that a number of noble Lords have touched on is that closure proposals are coming from the local level; that is, the sub-postmasters, rather than as a result of strategic targeting by Post Office Ltd. In other words, closures are almost entirely driven by sub-postmasters who volunteer to close their own businesses. With sub-postmasters fully aware that they face a significant fall in revenue through the move to direct payment and with £180 million set aside for compensation if they were to close their business, is it any wonder that a number of turkeys are voting for Christmas?

In addition, a number of sub-postmaster volunteers identified for closure are required to sign a binding contract, which includes a figure for compensation, before the consultation period begins but which is subject to its outcome. That obviously increases the pressure within the consultation period for that sub-post office to close.

I should like the Minister to respond to a number of points regarding the urban reinvention programme. Does he agree that all of the following suggestions— every one of which I believe has emanated from Postwatch—should apply? First, sub-postmaster preference should not be the sole determinant of post office closures. More emphasis is required regarding the adequacy of what remains post closure.

Secondly, if we are to have a properly rationalised closure programme, does the Minister think it is necessary to identify weak and potentially unviable offices which need to close, but where the sub-postmaster has not volunteered to go in order to ensure adequate coverage? Thirdly, does he agree that area plans ought to contain a genuine mechanism to mix and match those people wanting to leave with offices that need to stay open to achieve proper coverage?

The £180 million compensation fund, funded by the taxpayer, usually far exceeds the commercial value of the offices to be closed. That distorts the market, even though there is a genuine commercial interest in taking over a branch that would otherwise close. Does the Minister agree that that distortion needs to be removed? Does the Minister agree that Post Office Ltd. needs to engage much earlier in open consultation with MPs and local authorities to include local issues, such as regeneration, in area plans for closures? Does he agree that Post Office Ltd. ought to explain fully after consultation its decisions and respond to the issues raised?

Does he agree that the DTI should not release funds to Post Office Ltd. for sub-postmaster compensation until after the public consultation and that no funds should be released for a branch that remains contested after the consultation period until the matter is resolved satisfactorily? The overarching question is whether the Minister will urgently clarify the policy for urban deprived offices.

A number of detailed questions have been asked by myself and other noble Lords. I thank the noble Baroness for raising a worthwhile debate and I look forward to the Minister's answer.

My Lords, I join other speakers in thanking my noble friend Lady Gardner of Parkes for initiating the debate and for giving us a short insight into the difference that she found in the Post Office when she arrived here from Australia. My noble friend made an excellent speech which the noble Lord, Lord Clarke of Hampstead, also enjoyed. I listened with great interest to all the speeches made in the debate. If one looks at the list of speakers, it was not a question of quantity but of quality. I hope the noble Lord, Lord Razzall, will forgive me for not including him and myself, as we have the privilege of responding from the Front Bench and my noble friend Lady Byford has special responsibility for countryside matters. All noble Lords spoke from experience, especially the noble Lord, Lord Dearing.

My noble friend mentioned how many times we have debated the subject. Today we have the 69th debate on the crisis affecting the Post Office since Labourcametopowerin 1997. Between 1992 and 1997 it was necessary for our party to debate the subject on only five occasions because at least we knew where we were going. Unfortunately, we are now in a right mess. On the occasion of the 67th debate, which took place in the other place on 13 January, there was, simultaneously, a debate being held in Westminster Hall.

The contempt in which the Government hold the concerns of honourable Members in the other place and their constituents on the steady erosion of post office facilities is starkly illustrated by the fact that the Secretary of State did not attend the debate in the other place. In fact, she gave Mr Stephen O'Brien notice of that only a few minutes before it began. It was replied to by the Minister of State, Mr Stephen Timms, whose portfolio includes energy, which from my experience—I am sure noble Lords opposite will agree—is virtually a subject on its own. It was difficult for him to deal with the matter properly.

The smug complacency with which the Government regard the subject is also illustrated by the amendment put down in the name of the Secretary of State, who did not bother to come to Parliament to support it. No doubt candidates of all opposition parties will remind people of the words contained in that amendment. I expect that the constituents of the 326 honourable Members who voted with the Government will also take note of that fact. The Government's amendment to the resolution in the other place claimed that the Government were committed to keeping post offices,

"easily accessible to all customers".—[Official Report, Commons, 13/1/04; col. 789.]

The amendment went on to claim that 95 per cent of the urban population lived within a mile of a post office. That is a typical piece of government statistical smoke and mirrors. The Government measure that mile as the crow flies. But customers, including pensioners and those on disability benefits, are not crows and cannot fly. Many are disabled, elderly and so forth; and post offices, particularly in rural areas, are not easily accessible. In the country they may have to negotiate country lanes and hills.

It is significant that in what my honourable friend the Member for Eddisbury called a "nauseatingly self-congratulatory amendment", the Government did not deign to mention the plight of rural and semi-urban communities over the relentless loss of their local post offices. My honourable friend, Mr Roger Gale, the Member for North Thanet, a constituency of which I have the privilege of being patron, made nonsense of the Government's accessibility claims when he spoke in that debate.

It has been said many times, both today and in earlier debates—I do not apologise for repeating it, because it is necessary to do that—that the closure of a village post office, which is vital to the life of a community, often and usually means the closure of the only village shop. That results in enormous inconvenience and hardship to local residents, especially those without their own transport. Every noble Lord who has spoken in today's debate mentioned that.

The Post Office has more than 17,000 outlets and is the largest retail network in Europe. Only 600 of those outlets are Crown post offices. The rest are run as private businesses by sub-postmasters and sub-postmistresses who are people who have entered into the business by investing either their redundancy money or hard-earned savings for their retirement. A large number are hard working members of the Asian community—people who really believe in the entrepreneurial spirit. Those businesses depend on Post Office work to subsidise their other trades, which is often as newsagents or convenience stores that supply the needs of those who live in the villages and the local areas.

Other noble Lords have spoken of the 44 million visits a week to a post office. The Government promised to protect rural post offices, but in the past two years 80 per cent of closures have been in rural areas. The noble Lord, Lord Dearing, and other noble Lords mentioned that point. Now Post Office Ltd. is turning its unwelcome attention to the urban branches. It has announced a further programme to close 3,000 out of 9,000 urban branches by December—one-third of the total. That will entail shutting at least 140, possibly 250, offices every month.

On a personal note, my title included the London Borough of Barnet. In my home borough, there are no fewer than nine sub-post offices currently under threat of closure, which will take place after a so-called "consultation period". I was interested to hear the comments of the noble Lord, Lord Clarke, because all of the areas that he talked about, where the same is happening, adjoin my borough. It means that we are surrounded by the problem wherever we look.

The closure of local offices throughout the country is compounded by the Government's insistence on the introduction of the automatic credit transfer system affecting some 14 million people. Before that, benefit payments accounted for 40 per cent of Post Office business. The loss of that business will reduce revenues across the Post Office network by some £400 million a year. On 2 December 2002 the Government announced a package of £450 million in aid to sub-post offices. I noted that the noble Lord, Lord Dearing, nodded his head because that agrees with figures that he mentioned. The National Federation of Sub-postmasters has expressed concern that none of the money will go to sub-postmasters and sub-postmistresses, even though many rural post offices are already barely viable. We do not know what funds will be available to sustain them after 2006 when that branch of funding will cease.

My honourable friend Mr O'Brien asked the Minister how the Government intended to sustain the rural post office network in the long term—my noble friend Lady Byford is most interested in that. In his perfunctory nine-minute reply to the debate, Mr Timms did not even condescend to answer that very important question, which was central to the whole discussion in the other place. Perhaps the Minister, who presumably has had a little longer to think about it, will manage to give us some sort of answer today.

Despite the widespread concern that vulnerable pensioners and disabled and blind people will have problems in using the poorly designed PIN pad, the Government are still pressing on with this project. As recently as last Monday, the National Pensioners Convention launched a campaign against forcing pensioners to accept direct payments into their accounts or accepting plastic payment cards on the grounds that,

"they are unpopular; they are unfair; and they are unsustainable".

But possibly that is the reason the Government are pushing on with it.

In his brief reply to the debate in the other place, the Minister smugly claimed that 62 per cent of pensioners are requesting and getting card accounts. That complacent reply disguises the simple mathematical corollary to that statistic; which is that 38 per cent are having nothing to do with them at all. This is not surprising when your Lordships recall that some pensioners are finding it very hard to master the cards. I am pleased that my noble friend Lady Gardner of Parkes elaborated on that difficulty. It seems to me impossible to expect people to cope with the system— indeed, the noble Lord, Lord Clarke, and my noble friend Lord Kimball said that they had received letters from people to that effect. Others have difficulty in accessing pay points, sometimes miles away. My noble friend Lady Byford spoke about the difficulty in rural areas. Despite all efforts, the Government have not met with unbounding enthusiasm from the commercial banks to handle what in many cases will be troublesome, uneconomic and petty accounts.

In April 2000, a petition bearing no fewer than 3 million signatures was handed in to Downing Street opposing the rapid escalation rate of the closures. It is clear, however, that the Government's so-called Big Conversation is merely turning into a one-sided dialogue. The local consultation processes are just an exercise in window dressing as a preface to rubber-stamping the decision that has long since been made.

In August 2003, the Post Office proposed the closure of its branch at 69–71 City Way, Rochester. Note the date—August 2003. Two months later, following the mock consultation, the Post Office distributed a leaflet confirming that the branch would close on 23 November. I say "mock consultation" because that leaflet was marked "Printed in March 2003", five months before the proposed closure was even announced.

But the staggering losses suffered by the Post Office at one stage—I understand more than £1 million a day—are not due to the sub-post offices and the Crown post offices. It is regressively due, perhaps, to the mail operation itself. It is with much regret that I mention that the Post Office today is nothing like the Post Office I used to deal with in the 1970s and 1980s when the success of my former mail-order business was entirely dependent upon it.

The union still has the silver salver with which I presented it to mark the delivery of my 5-millionth package. It delivered it on my behalf. When I first came into the House, the noble Lord, Lord Clarke, told me that he was responsible for looking after that silver salver for quite some time. As we are on different sides of the House, I am not to describe the noble Lord, Lord Clarke, as "my noble friend", but I wish I could do so. I can say that only outside the Chamber.

In those days, the Post Office was outstandingly helpful and most efficient. It was so anxious to please that when I moved my mailing operation from the south coast to Sunderland the local postmaster telephoned to ask me what had he done to offend me. Nothing. What a contrast today—and I say that because my personal office is right in the heart of the West End along with all the professional people and businesses in the area. We do not receive our mail until 10.30 a.m. or 11 a.m. When you are running a business, that is hopeless and it is no wonder people start using other systems.

The recent increases in postal rates has momentarily stemmed the tide to the extent of turning in a profit of £3 million as opposed to the figure we mentioned a few moments ago. But that is only a palliative and is subject to the law of diminishing returns. Opening up the mail's delivery service to outside competition, document exchanges, coupled with the rapid increase of electronic mail and texting, clearly will reduce the number of letters that are posted. Even more dramatic is the fax. In my office, fax is the preferred method of mailing because it is quicker, more reliable and, above all, substantially cheaper both in the costs of the stamp and because of the absence of an envelope and the quality of the stationery that can be used. Repeat that over hundreds of thousands of businesses, and you have some idea of the erosion of the mail service.

My honourable friend the Member for North Thanet, whom I have already quoted, reminded the other place of what the Under-Secretary of State for Trade and Industry had said as recently as 11 December 2003:

"A viable post office is important to all honourable members".

Indeed it is. And equally so is the need for an efficient, timely and effective postal collection and delivery service.

However, as my honourable friend the Member for Eddisbury rightly pointed out to the other place,

"the manner in which the Government have discharged their responsibility for the post office network is undermining the future of that vital service".—[Official Report, Commons, 13/1/04; col. 736.]

The same can be said of the way that the Government, as the sole shareholder, are allowing the postal service, first created in the reign of Charles II, to be eroded.

The noble Lord, Lord Hoyle, mentioned the difficulties that workers sometimes have with management and the lack of consultation. Whether it is that way around, or whether it is the lack of co-operation that managers feel they get from the workers, I say now that that is not the issue that matters most to me. But it must be solved. I want to tell the Minister that because of all the help I received in the past from the Post Office and the postal services, I want to ensure that it survives. The noble Lord, Lord Clarke, spoke with as much emotion as I feel on the subject.

The Labour Party, in its 2001 manifesto, said:

"Labour is committed to … a dynamic post office".

In answering everyone's questions, will the Government put that manifesto pledge into practice?

My Lords, we are all grateful to the noble Baroness, Lady Gardner of Parkes, for introducing a debate on which there have been a range of extremely constructive, not to say challenging, contributions. Let me assure the noble Baroness, Lady Miller, that I will seek to establish that the Government not only have faith in the Post Office but have provided resources for it in order that it can fulfil its role in contemporary times.

However, it will not do for us to wade in nostalgia. Like many other noble Lords who have spoken today, I have fond memories of working for the Post Office for a considerable period during the summer months and Christmas time as a student. We always enjoyed that feeling of being Post Office workers and contributing to a common endeavour that is scarcely paralleled elsewhere. That is why I say straightforwardly that the great strength of the Post Office is its dedicated staff. We must build upon that resource and do our best to ensure that the recent industrial relations difficulties are set behind us.

Let me make it clear that the Post Office has been changing since the 1960s. To hear the Opposition spokesperson's contribution to the debate you would think that throughout the 1980s and 1990s no post office closure ever occurred. I would hate to go down all 18 years and detail the numbers, but suffice it to say that well over 3,000 post offices were closed.

My Lords, I thank the Minister for giving way. I clearly stated the closure figures when we were in government and also stated those for the past five years. It is not fair to suggest that we were not giving the figures. I declared there were more than 1,000 closures, which was bad, but the problem is that they have continued and got worse.

My Lords, it is not the case that they have got worse. The figures reached a high level in the 1980s. I thought that the noble Baroness spoke from the Back Benches. I was referring to the Front Bench spokesperson, the noble Baroness, Lady Miller of Hendon, who, I believe, castigated the Government for closures without offering any recognition at all of the programmes which preceded the current one. I believe that my point still holds although I accept the point made by the noble Baroness, Lady Byford. At that point I was not pressing the issue with her.

I want to emphasise that the Post Office faces an enormous challenge, and that is why in the past financial year Post Office Ltd., which runs the network, has had to face up to the fact that it lost £194 million before exceptional items. In the previous year it lost £163 million. It has reported a loss of £91 million in the first half of this year. With declining profitability in the network as a whole, the ability of sub-postmasters to sell on their businesses as they did in the past has taken a severe knock. Therefore, decisive action is needed to ensure that we maintain a sustainable countrywide network for the future. That is the action which the Government are taking.

I also point out to the noble Baroness, Lady Miller, that we were not talking about people in urban areas being within one mile of a post office as the crow flies. We are measuring a mile on the ground because we want to take into account those who often will not have access to an office because they find a journey of one mile a real challenge. That is why that situation is specified as the maximum distance we want between post offices. That requires a very substantial injection of money and development of resources.

My noble friend Lord Clarke pointed out that Postcomm had made various proposals as regards increased competition for the Post Office. I recognise the details he identified, but I do not believe that we should exaggerate the challenge to the services provided by Postcomm. For instance, the study of the letter market suggests that less than 0.25 per cent of traffic is controlled by companies other than the Royal Mail. I recognise the anxieties he expressed.

My Lords, would my noble friend tell the House where I exaggerated? My comments about Postcomm concerned stopping the erosion and the acceleration of competition without looking at the possibility of maintaining a universal service.

My Lords, I was reflecting on the point that my noble friend made. I was merely indicating that one should not exaggerate the extent to which competition had made incursions into the service at present. I appreciate my noble friend's anxieties: I am trying to put them into the context of how much they represent problems for the Post Office and a real threat to its obligation to be a universal provider.

As regards the urban reinvention programmes to which a number of noble Lords referred, the Government considered providing funding to compensate adequately sub-postmasters affected by the loss of their business. That is to help movement where that is necessary and to get some rationality into the structure, which is there to serve the public. We recognise that points have been made from all sides of the House on the importance of the Post Office network.

Post Office Ltd. has begun its urban network reinvention programme. I associate myself with the noble Lord, Lord Razzall, in saying that there are more felicitous terms for such a concept. The introduction of that programme has meant that 16,000 post offices have been involved in evaluation. One recognises that the Post Office has had a very dense network indeed. Before the programme started over 1,000 urban sub-post offices had at least 10 other post offices within one mile. There is insufficient business to sustain so dense a network of offices in an urban area. That is not to gainsay the fact that we recognise that a proportion of Post Office customers who are very dependent on it feel aggrieved and have a sense of loss when a post office closes.

The density of the network related to a rather different age from the present. There is simply not the business to sustain such a density of offices. That is why sub-postmasters have been finding it increasingly difficult to earn a reasonable income. They have shut up shop and left of their own accord. We need rationalisation of the process otherwise it would merely reflect the individual decisions by sub-postmasters without us being able to guarantee a proper, structured service to the community at large. That is why we are keen to a have general target in urban areas of post offices being within one mile. That is sustainable.

Under the urban reinvention programme, closure proposals were focused on offices known to be most at risk of closure because of poor viability. It was important that there was some rationalisation of the issue, and that is why an area-wide plan for the post office network brings a clear view of the level of service provision at the end of the programme. Discussion of the plan provides the Post Office with an opportunity to understand the views of Members of Parliament, local authorities and communities about the future shape of the organisation.

I accept the point made by the noble Lord, Lord Razzall, that certain aspects of the consultation process are open to criticism. That process is being reassessed. I could go into a lengthy refutation as regards the Rochester post office which the noble Baroness, Lady Miller of Hendon, introduced. There are technical elements concerning the form. The process started in 2003. It is the same form that goes out for all post office closures and did not apply specifically to Rochester. I accept her chiding and her anxieties. The consultation process could be improved and we are looking further into it. The Post Office is examining ways in which the form of consultation would meet the anxieties expressed over past consultations. My noble friend Lord Clarke referred to the process of consultation as a sham. I do not agree with him. There has been genuine consultation in a number of areas. I recognise that he has substantiated a case that the process could be improved, and that is being undertaken at present. I give him that assurance. He has added his voice to those which have been heard elsewhere for more effective consultation prior to a closure.

An additional element of the urban reinvention programme is £30 million that the Government have provided for modernising and adapting those offices which remain in the network. The key to improving standards in these offices will be the increased volume of business to be expected. We expect those post offices which continue to trade to improve their services to the public in a range of ways. The fact is that many post offices are not being used as they were. Customers have changed the ways in which they access services. Rationalisation is the only way to proceed against such a background.

As regards the rural network of post offices, I recognise the point made by the noble Baroness, Lady Byford, the noble Lord, Lord Kimball, and others. The post office in rural areas plays a particularly significant role. There is the additional difficulty that when one closes another may be a great distance away. That is why the Government placed on the Post Office an obligation to maintain the rural network and prevent avoidable closures of rural post offices in the first instance until 2006. We financed that requirement by making available £450 million over the years to April 2006. We are now considering what kind of network will be required in rural communities after 2006 and how the provision of that network can be funded. The work is being informed by Postcomm's advice on the long-term shape of the network beyond 2006.

I can therefore assure noble Lords that we recognise the particular difficulties relating to rural post offices, to which strategic thought needs to be given. The Government are requesting the Post Office to take significant account of those difficulties. Of course, it will be recognised that that will involve a considerable sum of money—£450 million is a significant allocation, which I am sure will be welcomed by both sides of the House.

Reference was made by the noble Baroness, Lady Byford, and by the noble Lord, Lord Razzall, to the "Your Guide" pilot study with regard to electronic kiosks in post offices. That pilot study showed that a publicly-funded national scheme would not represent value for money, and that is why we have not continued with the proposal. It was always billed as a pilot scheme to test the waters and to establish whether new services could be provided.

In response to the point raised by the noble Lord, Lord Dearing. I am unable to place the conclusions of the study in the Library of the House. However, the details were put before the Trade and Industry Select Committee in the other place and are therefore already in the Library. There was a very clear examination of why the pilot study did not produce the positive results that many of us would have welcomed for the Post Office.

The question of direct payment of benefits was raised during the debate. Noble Lords will recognise that the payment of benefits into an account is not a new concept. Before the move last April by the Department for Work and Pensions to migrate benefit recipients towards direct payments, over 43 per cent of benefit recipients already had their cash paid directly into their bank accounts, compared with 26 per cent in 1996. That is a very substantial percentage increase, which reflects the changes to the ways in which people organise their finances. Of course, I recognise the laments that have been expressed that that has a consequential detrimental effect on the Post Office. However, we are the servants of the consuming public, not their masters, and when people express their preferences for such changes, it us for us to ensure that public services are congruent with those changes, despite the fact that they represent a real challenge to post offices.

Under the new arrangements for benefit payments, customers will have three choices of how they are paid: first, a standard bank or building society account, some of which can be accessed at post offices; secondly, a bank or building society basic account, many of which can be accessed at post offices; and, thirdly, a post office card account. Those who have spoken so positively about the Post Office have criticised the post office card account as presenting rather more challenges than are desirable to the ability of people to enrol. I am not sure that we can make too much of that point. It seems as though we may be guilty of being somewhat patronising towards our fellow citizens. Two million people have already said that they want to open postal card accounts, which suggests that customers are fully aware of the availability of such accounts and how to open them. I have listened to the descriptions of what is demanded of individuals with regard to card accounts. However, we all know that, against the background of all the issues concerning security of money and fraud, in financial transactions today greater requirements are placed on those who want to open accounts.

The points that have been made forcefully in the House today will be taken on board. It is in the interests of the Post Office to produce a system for enrolling as easily as possible for the postal card account, but there are certain requirements with regard to such significant transactions.

I return to the point that I made at the outset and assure the House that we all value the service provided by the Post Office and the sense of commitment of its workforce, whether postmasters, sub-postmasters or the people involved with the delivery of mail and services. We look forward to improved industrial relations in the Post Office. We recognise that there have been difficulties in recent months, which set back the conspicuous work done by my noble friend Lord Sawyer in seeking to achieve better relations in the industry. However, we look forward to improvements in that respect.

I should like to take this opportunity to deal with the direct challenge that at Question Time on 8 November my noble friend Lord Sainsbury did not express himself with the conspicuous accuracy for which he has a very high reputation. On that occasion my noble friend Lord Sainsbury said that the postal unions had withdrawn from the partnership arrangements with the Royal Mail. However, he would like me on his behalf to emphasise to my noble friend Lord Hoyle that only the Communication Workers Union had withdrawn from those arrangements, which had been set up after my noble friend Lord Sawyer's efforts to improve industrial relations. I hope that my noble friend will accept that correction in response to his very important question.

I hope that noble Lords will recognise that the Government are committed to the postal services in a period of very significant change. We all recognise that consumer patterns with regard to financial arrangements have changed quite significantly. The nature of post offices and their roles as corner shops is also subject to enormous change in the market, and we therefore expect to see adjustments made to reflect the changes in consumer demand. Of course, all the issues that have been raised today will be studied very carefully by all those responsible for the services that we want to provide. I thank the noble Baroness once again for introducing such a stimulating debate.

My Lords, I thank the Minister for his reply. However, I am disappointed that, in his delightfully disarming manner, he has totally ignored my request that he should confirm that the Government will not put VAT on stamps. That is a very important matter.

My Lords, as noble Lords will recognise, I am in no position to prejudge any Budget. I have never heard of a proposal to introduce VAT on postage stamps. Therefore, I merely give the assurance that nothing that I have in my possession would give any substance to the point that the noble Baroness makes.

My Lords, I appreciate that the Minister does not feel that he can give a commitment. He says that he has not heard anything about that matter, but I suggest that he reads the points that Postcomm made in the consultation document. It is all there in the text. Postcomm comes out very strongly in favour of removing the exemption from VAT which the Post Office now has. It is very important that this issue is resolved.

I do not believe that the Minister answered satisfactorily the questions about the post office card account. People are being pushed into using bank accounts rather than the post office card account. I cannot agree with the suggestion that it might be patronising. Surely we are all looking for plain English awards in government documents. We certainly do not have one in this respect.

I shall not go on at length, although there are many points that I should like to take up following the many valuable comments that were made. I thank all those who took part in the debate. I am sure that I could come forward with several suggestions for nice, profitable lines for Post Office Counters Limited, but all that is for the future. Again, I thank everyone for their contributions, and I beg leave to withdraw the Motion for Papers.

rose to call attention to the situation in Zimbabwe; and to move for Papers.

My Lords, I begin by offering my sincere good wishes to the noble Lord, Lord Blaker, who is ill. We have been sparring partners over Zimbabwe and other issues for perhaps too long, but we agree that the situation in Zimbabwe is extremely serious; it is very dangerous and is getting worse. We agree entirely that the Government of Zimbabwe are engaged in intimidation. They misuse food aid and UK Government-funded programmes to favour ZANU-PF, and act against the MDC and the people of Zimbabwe. Any differences between us are not about the substance of the issue, but about how best to proceed—how to make a difference for the future.

I say immediately that pressure on the Government in Zimbabwe must be kept up, enforced and pursued with all vigour. I have no quarrel with that. I also believe that the proposed cricket tour should not go ahead. I would give every support to the Government, the England and Wales Cricket Board, or whoever is responsible, to ensure that that tour does not happen.

It is a strange position. When we used to argue for sanctions in the old anti-apartheid days, we were told, "They do not work. They only hurt the people you want to help". We were told that sporting sanctions were no good because the white population in South Africa would simply dig in its heels. Now it seems that the need for sanctions in Zimbabwe is the received wisdom in every quarter. I have no quarrel with that, and I make no accusation that those who have changed their minds over the years do so from money-based motives. I believe that they have changed their minds because it has now been recognised that we were right to call for sanctions.

The sanctions imposed on South Africa were not so hugely damaging that they brought the economy down, but they made a serious dent in its economy. There is no doubt that the sporting sanctions had an effect, and concentrated people's minds.

It is mindless to impose sanctions without an end to them. We must have some idea of what we want to achieve. It is true that different signals are coming out of Zimbabwe. The MDC has said that if there have been talks, no one has told it anything about them. There are suggestions, which the noble Lord, Lord Astor, has amply demonstrated this evening, that President Mbeki is playing a funny old game and is not serious. However, I draw the attention of the House to the statement issued by Paul Themba Nyathi, the MDC secretary for information and publicity, which was issued on 22 January this year, headed:

"Mugabe Needs to Add Substance to Mbeki's Encouraging Announcement".

It states:

"Today's comments by President Thabo Mbeki, suggesting that President Mugabe has agreed to enter formal talks with the MDC, are deeply encouraging. Similarly, we were encouraged when Mbeki made the same announcement after his visit to Harare back in December.

"Following Mbeki's comments back in December our initial sense of encouragement has been replaced by a degree of scepticism as to the nature of Mugabe's commitment to a process of dialogue".

We would agree with that. The statement continues:

"To date, Mugabe and Zanu PF have taken no steps that would indicate a commitment to enter into a process of formal dialogue to end the country's multi-faceted crisis. There have been no approaches to the MDC whatsoever. In fact it has been business as usual with court orders being ignored and political violence carrying on relentlessly.

"If Mugabe has given President Mbeki renewed undertakings that he is prepared to begin negotiations then Mugabe himself needs to formally announce, to the people of Zimbabwe, that dialogue is to take place. Mugabe and Zanu PF need to demonstrate a tangible commitment to dialogue. The MDC is ready for dialogue, as we unequivocally stated in December, but while we wait for Zanu PF the people's suffering continues".

I have read that in full because I believe that it spells out exactly the difficulties for the MDC. I would certainly ask President Mugabe, immediately and publicly, to welcome the progress made by President Mbeki and publicly and unequivocally to throw his weight behind discussion.

The question that I ask—I believe it is relevant—is: what are the discussions to be about? There are perhaps two schools of thought; there are different ideas. I know that not every noble Lord in the Chamber will agree with what I am saying but I have taken this view and if they dislike it they are perfectly free to challenge it. It is over-simplistic to take the view that all that is necessary is to get rid of Mugabe and that once he has gone everything will settle down into sweetness and light. Unfortunately that is not true, the fact is that there are serious and more dangerous issues. Intimidation runs from the top to the bottom of ZANU-PF and that intimidation—that attempt to use violence to impose ZANU-PF's will—has gone on for 20 or 30 years or even longer. It was said at the time of the unilateral declaration of independence that the two armies of ZANU and ZAPU spent more time fighting one another than they did fighting Smith. At times some critical comments have been made about the attempt to form a patriotic front in which the two sides could come together.

There are two schools of thought. One is that the discussions should attempt to set aside the result of the previous election. I accept entirely—I believe that it is universally agreed and accepted—that the previous election was rigged beyond belief. There is no doubt about that. But I do not believe that it is realistic to approach a dialogue in the present circumstances on the basis that the results of the previous election be set aside. Elections are due next year. We should look to the future without in any way accepting the validity of past elections or saying that, "It was all right so we do not need to worry about it". That is not the case at all.

Some say that a government of national unity should be set up. There are some attractions to that and there are some dangers in it. Some would say that if that were to happen, ZANU-PF would be let off the hook and that change would not take place. The participation of the MDC in a government of national unity would lead to the MDC being compromised and contaminated. If the general public of Zimbabwe, who are anti ZANU-PF, were to become disillusioned with the MDC, what would happen? What then would be the prospect? That is far too serious to contemplate or to voice.

Nevertheless, it is wrong to reject entirely a government of national unity. Provided the objectives of a government of national unity are clear cut, specific and time limited, it may provide a way to the future. The first objective of a government of national unity must be to prepare the ground for free and fair elections. We want to see the next elections being free and fair. The elections are not far away. As the noble Lord, Lord Astor, said, four years ago there were talks with the Government but nothing has happened and, therefore, we need urgent and speedy action. I do not expect speedy action; I do not believe that once the government talks begin they will resolve the issue very quickly, but they have to be held and considered.

It is perhaps worth mentioning that there is a possibility that next year's elections may have to be postponed to achieve free and fair elections. I understand that that will be looked at with horror because there are huge dangers in saying that if the time is too short the elections will have to be postponed. The acceptance of such a proposition may simply lead ZANU-PF to come to the conclusion that we would be quite happy to allow matters to drift on with no change. The last sentence of the MDC press release states:

"while we wait for Zanu PF the people's suffering continues".

We must bear that in mind as well. There is no doubt that such discussions must take place.

It is worth casting our minds back in history as sometimes we can learn from it. It may seem unlikely now, but when Nelson Mandela began his dialogue with the South African government and the South African National Party there were some who questioned the wisdom of that; some said that that was the wrong way to go about it and yet it worked. When I first had the privilege to meet Nelson Mandela at the Namibian independence celebrations he said to me that I must not expect that the discussions that they were having would lead to instantaneous results; that the discussions between the ANC and the government would continue; and that there would be periods when we thought there was great progress, periods when we thought that the whole situation would be reversed and periods when we thought that the whole exercise would fail. He said that we must have faith in the discussions and negotiations as being the only way forward.

Of course, I accept that there is no one on the scene in Zimbabwe like President Mandela and I accept that there was no one in Zimbabwe like President de Klerk. Those are two characters of immense vision who decided that they had to resolve the situation and they talked. Nevertheless, I believe that discussion is the only possible way forward. While we continue our pressure on the Zimbabwean Government and while we continue to insist that what the Government are doing is wrong—we make the right noises at the right times—we must also encourage the process of dialogue.

I know a considerable number of people in ZANU-PF. I am horrified by what some of them are doing and I can hardly believe what some of them are saying. However, there are also sufficient numbers of people in ZANU-PF to bring about a change. Although I said that the removal of President Mugabe would not bring instant results and make everything fine, the fact is that he cannot go on for ever. I believe that there is sufficient questioning within ZANU-PF to help that situation, but above all we must realise that if we do not solve the situation in Zimbabwe—it is important in its own right that it is resolved—the suffering of the people of Zimbabwe must be foremost in our minds. If we do not get the matter right, the peace and stability of the whole of southern Africa is in danger and the prospect of that is hugely frightening for us all.

When I speak and think about Zimbabwe and when I discuss it with my friends I have great mood changes. I swing from a mood of some optimism—rarely extreme optimism—to one of great pessimism. We must persevere. While it is right that the Opposition should press for change, I believe that this is an issue on which there should be a bipartisan approach between us and that we should all work together for the common good of the people of Zimbabwe.

My Lords, I too should like to send my best wishes to the noble Lord, Lord Blaker. I congratulate the noble Lord, Lord Astor of Hever, on introducing the debate with such an interesting speech. Taking up his point on cricket, I would adapt the old slogan, "Don't play games with apartheid" to a new slogan, "Don't play games with ZANU-PF".

The thought of anti-apartheid makes me say how honoured I am to follow my noble friend Lord Hughes of Woodside, who had such a distinguished record in fighting apartheid, and who made such a thoughtful speech this evening.

South Africa and Britain appear to diverge in their goals for the political future of Zimbabwe. President Mbeki has continually stressed his desire for a government of national unity, but he is silent about the need for democratic elections. The Foreign Secretary spelled out Britain's policy last July in his response to the report on Zimbabwe by the House of Commons Select Committee on Foreign Affairs. He said:

"We stand ready to work with any new administration in Zimbabwe which has been democratically elected by the Zimbabwean people in a process that is transparent and demonstrably free and fair and which is committed to respecting human rights and the rule of law".

The Government are in close touch with South Africa. Surely they must strive to persuade President Mbeki that the rebirth of Zimbabwe should be the joint goal of the two countries, and that the way to achieve that is by free and fair elections. Starting afresh must be the aim; not a formula lacking the approval of the Zimbabwean people. Mr Mbeki's government of national unity would probably comprise a ZANU-PF core with some MDC ministers grafted on to it. In 1988 ZANU-PF gobbled up the last serious opposition party—ZAPU. Any MDC Minister who joined a ZANU-PF government would have to tread very, very carefully.

I say this with all due respect to the noble Lord, Lord St John of Bletso, who I know will speak about national governments: some temporary transitional political authority would be required to bring the country to elections. Lesotho had such an authority in 1998. Zimbabwe could learn valuable lessons from that example.

Land has been a huge issue in Zimbabwe since the 1890s. An incoming democratic government will need a proper land-use plan to consult. Such a plan would assess how much of the land should be for peasant farming, how much for small-scale farming and how much for commercial farming.

Land tenure for farming is vital. Two of my nephews, who had their farms in Zimbabwe confiscated, have been welcomed for their expertise in Zambia, which I know will please the noble Viscount, Lord Goshen. There they have bought farms from the government on 99-year leases. Might long leases be the way forward for land tenure in Zimbabwe? Government ownership might soothe political sensitivities, while the length of the lease might give sufficient tenure to farmers. When I speak of the farmers, I speak of farmers at all levels, not just the commercial farmers; I mean the commercial, the small-scale and the peasant farmers.

For decades, tobacco has been the great Zimbabwean cash crop and foreign exchange earner. With the world tobacco market likely to shrink, finding alternative foreign exchange earning crops will be all important. The United Nations Development Programme (UNDP) is the obvious body to draw up a land plan for the use of a democratic Zimbabwean government. The UNDP was charged under the Abuja Agreement on land reform of 2001 to work with ZANU-PF and others on a land reform programme. But that agreement was aborted. Now the UNDP should be galvanised into producing an up-to-date land plan, including the aspects that I have mentioned.

With the destruction of commercial farming by ZANU-PF, as well as erratic rains last season, the UN World Food Programme (WFP) will be feeding 4.5 million of the 5.5 million vulnerable people who by March will be dependent on gifts of food to stay alive. That is nearly half the total population of 11.6 million. An examination of those vulnerable people reveals much about today's Zimbabwe. One must start with the orphans. There are more than 1 million orphans under the age of 14—nearly 10 per cent of the population. Of those orphans, 782,000 are the children of parents who have died of AIDS.

One-third of the population aged 15 to 49—some 1.8 million people—the majority of them women, have HIV or AIDS. Unless properly fed, the chance of those with HIV getting AIDS increases. As 3,200 people are dying of AIDS each week, there will be many more AIDS orphans.

Then there are 300,000 former commercial farm workers, each averaging five dependants—a total of 1.8 million people. Most are unemployed, while those employed on newly-settled commercial farms are not paid enough to buy sufficient food. Nearly all those people need feeding from outside sources.

Moreover, the patchy rains have produced patchy crops for peasant farmers, some of whom have not grown sufficient mealies to feed themselves. I think that we have all talked about Zimbabwe so often that I am allowed to say "mealies" without explaining that it means maize. In Matabeleland many cattle raisers have had to slaughter their stock to pay for food and are now dependent on the WFP.

Finally, mention must be made of the hordes of urban people without jobs. Unemployment nationally is between 70 and 80 per cent.

Zimbabweans owe a huge debt of gratitude to the WFP. I, as a former Zimbabwean, should like to single out and record my gratitude to Britain for the huge amount of aid it has given. But I think I will be saying thank you to Britain again and again. For even when a democratically elected government comes to power, the task of reconstruction will be colossal, and the equivalent of Marshall Aid required for Zimbabwe will be vast.

The Foreign Secretary, in his response to the Select Committee, said:

"With the rest of the international community including International Financial Institutions such as the International Monetary Fund (IMF) and World Bank, we will help a democratically accountable Zimbabwe with a reconstruction package aimed at turning its economy around".

Those words "democratically accountable" bring us full circle. President Mbeki's government of national unity would not be "democratically accountable", and under his plan Zimbabwe would in all probability continue to spiral ever downwards. Britain and its allies must press the South African president to seek proper democratic elections and thus, at last, bring hope for the future of Zimbabwe.

My Lords, I join noble Lords in wishing the noble Lord, Lord Blaker, a speedy recovery. I am pleased that your Lordships' House has never allowed the situation in Zimbabwe to slip off the agenda. I am grateful to, among others, the noble Lord, Lord Blaker, and of course the noble Lord, Lord Astor, who very ably introduced the debate, as well as the noble Baroness, Lady Park, for keeping the subject under review during the past few years.

Throughout this period I have shared the general sense of alarm and consternation at the escalation of violence and abuse of human rights in Zimbabwe, the deteriorating, social, economic and of course political situation—and its repeated deterioration, as we hear from these reports on a weekly basis.

However, I confess that, in consistently advocating an African solution to an African problem, in believing that megaphone diplomacy from afar will be counter-productive, I have sometimes felt a little like the black sheep of the family. Having the noble Earl, Lord Caithness, speaking after me, I expect a little bit of flak after what I have to say today.

Despite the severe reservations expressed by the noble Lord, Lord Astor, of the broken promises and, in his words, "the window dressing" of President Thabo Mbeki, I believe that the quiet diplomacy of various African leaders—I refer not just to President Mbeki and President Obasanjo but also to many other African leaders who of late have had meetings with President Mbeki—has been paying dividends. Obviously, President Mbeki has been at the forefront of and the front man for the negotiations.

There have been some positive developments. I really believe that the undertakings given by President Mbeki to our Prime Minister last year, as well as to President Bush, that there would be a change to the Zimbabwe constitution leading to the reintroduction of the position of Prime Minister, thereby laying the foundations for a government of national unity in that country, will be fulfilled. Moreover, President Mugabe will stay on as president but will be stripped of his executive powers and retain merely his ceremonial powers.

The big question is: when? The efforts to cajole Mugabe to accept change should be supported because they involve the only real prospect of relatively peaceful transition from cruel dictatorship to genuine democracy. I appreciate the concern expressed by the noble Lord, Lord Astor, that all the delays are causing the country more and more harm.

The process has not been easy, not least at the Commonwealth Heads of Government Meeting last year, when the issue of whether to continue Zimbabwe's suspension from the organisation— essentially, whether to present the stick or the carrot to Mugabe—proved extremely divisive among African leaders. In my opinion, the ultimate decision to uphold the suspension—to keep wielding the stick—was correct, even if Mugabe then attempted to save face in his country by withdrawing from the Commonwealth. I believe that the Commonwealth continues to play an important role, despite the suspension, and that, in his heart, Mugabe wants to rejoin it.

Although, as I said, I support the call of the noble Lord, Lord Astor of Hever, for effective, targeted sanctions against ZANU-PF leaders, an important element of the diplomatic process has been to maintain a balance between the stick and the carrot. It was significant that two of the three Commonwealth leaders designated to engage Mugabe—President Obasanjo and Prime Minister Howard—felt that there had simply not been sufficient developments in Zimbabwe to merit lifting the suspension.

I say that given that there had been a perception that President Obasanjo and President Mbeki were always of one voice. I had the good fortune to meet and have a lengthy conversation with President Obasanjo last week. He was firmly committed to his decision to suspend Zimbabwe and was definitely at odds with President Mbeki. In that context, President Obasanjo is emerging as a key player in the process, not least because he remains in regular contact with President Mugabe—he calls him Bob. Well informed sources suggest that his persistent approach—that Mugabe should transform himself from the problem to the solution by relinquishing executive power—will succeed.

I am aware that President Obasanjo met the Prime Minister in Teeside last Thursday and subsequently met various Commonwealth colleagues last Friday. Can the Minister give us an update on those discussions?

President Mbeki's reported statement last Thursday that a deal had finally been struck to ensure progress by June has prompted genuine hope. The noble Lord, Lord Hughes, cited a statement from the MDC. I shall cite a few lines from zimbabwenews.com of last Friday. It reads:

"President Mbeki of South Africa yesterday claimed to have made an agreement with President Mugabe that the Zimbabwean leader would negotiate with the Opposition to end his country's devastating political and economic crisis. Speaking at a press conference in Pretoria with Gerhard Schroder, the German Chancellor, Mr Mbeki said that he had mediated a deal lasi month that had been delayed only because of the Christmas holidays. 'I'm happy to say that they … will go into formal negotiations,' the South African leader said".

It continues:

'"Our position is that we have heard it all before,' Welshman Ncube, the MDC secretary-general, said. 'We will believe it when it happens. It is better for Mugabe to speak for himself and say he is willing to talk unconditionally'".

I believe that we are in the end-game, although I appreciate that many observers fear that this may be just another in the line of false dawns.

President Mbeki has announced one more positive development. He recently enlisted the help of a number of prominent black business leaders in South Africa to approach President Mugabe to make him aware of the region's blunt economic realities: in essence, that Zimbabwe's instability is contagious and that time is running out to secure a solution. That powerful business delegation, which will include Tokyo Sexwale and, possibly, Cyril Ramaphosa, is preparing to visit Zimbabwe in the next couple of weeks.

That new business initiative is significant because it addresses what many in southern Africa believe has been an underlying factor in President Mbeki's apparent reluctance to confront Mugabe. A theory in South Africa has been that it is not just that he is his old freedom colleague and comrade; it has been a fear of advancing trade union power in the region. It is held—I say this from President Mbeki's point of view—that the strongest potential source of real opposition to the ANC Government lies in the union movement. The theory runs that an example of union power within the MDC in Zimbabwe would not serve the general interests of the ANC Government in South Africa. Those specific fears would appear to be allayed by the installation of a government of national unity promoted and supported by business.

One outstanding issue is whether the deal should agree to requests for amnesty from several leading members of the Mugabe regime. It is beyond question that there have been many appalling abuses of human rights in that country, but many people believe that nothing—not even that—can be allowed to get in the way of a lasting settlement and restoration of a just democracy.

That appears to be the tone and direction of the ongoing African diplomatic process. That is cause for optimism. There is real hope that the Zimbabwe crisis will soon be relieved and that that will give new momentum to NePAD and real hope that the vision of an African renaissance will materialise. In recent months, positive developments in Sierra Leone, the Democratic Republic of Congo and the Great Lakes district have tended to be overshadowed by the escalating situation in Zimbabwe, but the underlying trend in Africa is bold and encouraging.

Moreover, the Government deserve credit for the quiet and necessarily understated role that they continue to play in those developments. The facts of history mean that Britain must always be wary of exposing itself to accusations of arrogant, heavy-handed colonialism, but the Government have recently shown an understanding of the issues and emerged as a constructive influence.

My only suggestion is that the Government do more to consolidate their standing in the minds of important African leaders and might gain from an intensive public relations offensive about what they have done. I say that because, when the Government are accused of reneging on the Lancaster House agreement, rather than shrug our shoulders, there would be no harm in laying out the facts and proving that we have not reneged on it.

Similarly, as the noble Lord, Lord Acton, mentioned, every African leader should be aware that Britain is, and has been, one of the major aid donors in Africa and is heavily committed to the fight against HIV/AIDS and the relief of famine in Zimbabwe. Sometimes perhaps our natural reserve allows us to become an easy target and we should be more pro-active in announcing our record.

In conclusion, while I support the calls of the noble Lord, Lord Astor, for effective targeted sanctions against Zimbabwe, I believe that Britain should continue to play a quiet and constructive role in supporting the bold diplomatic initiatives to resolve the situation in that country. We have been patient for many months. I believe that our patience will soon be rewarded.

My Lords, I am extremely grateful for the measured and helpful way in which my noble friend Lord Astor of Hever introduced the debate and set the tone for this interesting discussion. I also thank him for taking over the debate which was in the name of my noble friend Lord Blaker. I join other noble Lords in sending my best wishes to him for a speedy recovery.

The crisis in and collapse of Zimbabwe continues and is not improving. I agree with the noble Lord, Lord St John of Bletso, that we are in the end game for ZANU-PF. But in any conflict of this nature, we need to be thinking about the end game now, not when it occurs. On that aspect, Britain has a lead role to play in the world. I also agree with other noble Lords that Britain has nothing to be ashamed of in the way that it has behaved towards Zimbabwe since the Lancaster House agreement; and that needs to be stressed.

One of the most significant social consequences of the economic and social collapse of Zimbabwe since 1997 is in the field of human flight. It is now estimated that up to 4.5 million Zimbabweans have left the country since 1997. This represents 30 per cent of the total population and close to half the adult population. About 2 million Zimbabweans have moved to South Africa, of whom 1.3 million are illegal immigrants. Up to half the populations in squatter camps are now estimated to be Zimbabweans by origin. Mozambique and Botswana bear a similar burden. Although the embassies are engaged in a desperate effort to halt the flow by imposing restrictions on visas, it is not slowing the tide. There are about 1 million Zimbabweans elsewhere overseas.

Then there are the missing 1.4 million people who should be alive and living in Zimbabwe and who are not in the diaspora. Where are they? Here there are some really shocking figures. About 2 million are HIV positive. Two-thirds, nearly 1.3 million, are women and girls. Sixteen per cent of all women who give birth die in childbirth: that is one woman in every six who bears a child. Infant mortality has doubled in the past three years, driven in part by the HIV crisis. They have 600,000 full blown AIDS cases with barely a few hundred on any sort of treatment regime.

Historically, Zimbabwe has a population that has grown at a rate of about 3 per cent per annum, births outstripping deaths by three to one. Now the ratio is tipped in the opposite direction. By my calculations, with human flight plus deaths, the population is now declining at a rate of nearly 2 per cent per annum. But worse than that, the majority of this decline is among the young people—their best educated and most experienced people, people on whom the future depends. Zimbabwe has lost 20,000 trained and experienced teachers in the past three years, with similar numbers of nurses and doctors. As a consequence their social institutions on whom their human welfare depends are now almost at the point of collapse.

There are epidemics of tuberculosis and malaria— diseases they believed they had defeated years ago. The average life expectancy has dropped from 59 years in 1990 to 33 years in 2003. There are nearly 1 million orphans in their education system. Recently the head of a major high school in Harare said that half of her first year intake this year were full orphans, both parents dead. If we take into account the numbers with one parent—the other either dead or absent—the numbers rise to a clear majority. The social implications, let alone the economic implications of this massive dislocation of normal family life, are impossible to calculate. The burden on the remaining breadwinners who must try to support this enormous burden within the extended family system is now impossible.

School enrolment, once estimated to be close to 95 per cent in primary schools, has fallen and less than one-third of all girls of school-going age are now in school. Literacy and numeracy, once the highest in the sub-region, are declining. What a tragic waste of all the money already pumped into the Zimbabwean economy by other countries.

The situation is not improving. Human rights are still being abused. Political violence continues. The latest by-election showed that the whole electoral process is still being abused and distorted in favour of the ruling party. In addition, the police and the courts are still playing the game the way the ruling party dictates with some notable exceptions—such as the support for the Daily News, on the streets on 22 January for the first time in five months.

There has been about one political killing per week so far this year. Other forms of political violence also continue. The dispossession of farm assets continues unabated. Economic collapse is accelerating. Food production this summer is expected to supply only about 35 per cent of all their food needs. Last year it was about 50 per cent. This is due to the continued collapse of commercial agriculture and the decline in traditional forms of agriculture due to the decline in support services, previously based on commercial farming activity and extended to peasant agriculture. Shortages of seed and fertiliser have been serious. Industrial output is also in steep decline. Tourism shows no sign of recovery. The economy is expected to shrink another 10 per cent this year, the seventh year in a row.

The international community should be considering two issues. First, how to prevent widespread deaths from starvation and poverty in Zimbabwe without supporting the ZANU-PF claim that, "If you do not vote for us you will starve". Secondly, there are the talks which all noble Lords have mentioned.

There is an old adage in Zimbabwe. As leaders, the great difference between Joshua Nkomo and Robert Mugabe was that when one reached an agreement with Joshua one shook hands on it and had a deal. When one shook hands with Robert, one had only his hand in yours: no deal was guaranteed at all. In December last year, President Mbeki went to Harare and held two meetings with President Mugabe and one with Morgan Tsvangirai. At the end of the discussions., the two leaders shook hands on the deal. A few hours later, President Mbeki went back to Pretoria. He thought he had got President Mugabe to agree to talks initiating a process which would eventually bring Zimbabwe back into the community of nations. But, if I am right, President Mbeki had simply had a chance to shake hands with President Mugabe, something he has done many times before. No agreement was really established in truth.

On 22 January, the quiet diplomat in Pretoria signalled that he was willing to "up the anti". He stated publicly in Pretoria that in December President Mugabe had agreed to start formal talks with the MDC in January 2004. As we have heard, the MDC immediately issued a statement saying that no talks were under way and there was no sign that ZANU-PF was prepared to enter into such a dialogue. The statement from the ZANU-PF secretary for administration, Mutasa, that talks were not contemplated, reinforced this stand. Once again, President Mbeki was wrong-footed by President Mugabe. Will ZANU-PF talk? Not unless it is forced to, just as it was in 1979, when the world community conspired together to end the political life of the Rhodesian Front and Abel Muzorewa.

If the talks start, are serious, and are on a formal basis, this is the end, and ZANU-PF has capitulated. That is what formal talks with the MDC must mean. They mean that ZANU-PF has accepted that it is in power illegally, that it no longer has a mandate to govern and that the road block into the community of nations involves facing a final electoral test under the new rules that will, almost certainly, result in a loss of power.

For some in ZANU-PF, such a development spells the end of the world. For President Mugabe and his cohorts, Msika, Moyo, Shiri, Chihuri, there can be no deals. For them, negotiations mean political, social, and economic oblivion, perhaps even prison. They have their backs to the wall and are fighting back with all the skill and resources at their disposal. What is the Government's view of these people, who are criminals by any reasonable standards? Are they to be tried in due course, or are they, as African leaders, to be treated differently from Saddam Hussein or Slobodan Milosevic?

I disagree with the noble Lord, Lord St John of Bletso, on one technical point. He said, "an African solution for an African problem". Yes, but not in this case. We must have an even-handed world policy when it comes to ministerial criminals behaving in this way, no matter where it is in the world. If we treat African leaders differently from the way that other leaders are treated, Africa will only lose more credibility, and that is not what any of us would want.

For others, the status quo means huge losses as business empires fold and collapse. Some of the ZANU-PF hierarchy are now multi-millionaires in real money terms. They have created empires, and they think that they can survive a transition. This group is led by powerful elements such as Mujuru and Mnangagwa, and it is in favour of a change of leadership of ZANU-PF and negotiations leading to a restoration of international standing. ZANU-PF is now hopelessly split between these two factions, with President Mugabe mounting a full-scale attack on the reformists in recent weeks. Can the MDC govern on its own, which is what the electorate will probably want, or is the situation just too much of a mess? We have heard differing views tonight, from the noble Lord, Lord Acton, and others.

I wonder whether a government of reconciliation and national unity, as advocated by President Mbeki and endorsed by the noble Lord, Lord Hughes of Woodside, would not be better in the longer term. As we have seen in other African countries, it would not be a long-term solution, but one must practically help the Zimbabweans to move out of the rut that they are now in.

My Lords, I wonder whether the noble Earl will expand on that point. He said earlier that he thought that Joseph Msika and such people should have something terrible happen to them. Now, he wants them in a government of national unity. Is it both?

My Lords, no, the noble Lord has got me wrong. I was separating the two parts of ZANU-PF. There are those for whom negotiations spell the end of their world; and those—as the noble Lord, Lord St John of Bletso, reminded us—who want to see a change of leadership and see Zimbabwe continue. My underlying concern is that we have a horrible split in Zimbabwe between ZANU-PF and MDC. If there are elections and the MDC get in, are we still going to have that split that will prevent Zimbabwe from moving forward? That was my reason for suggesting, as the noble Lord said, a temporary way forward, to get that stability that Zimbabwe surely needs.

I hope that Britain will take a lead role. We have nothing to be ashamed of. If President Mbeki is the point man for the south African nations with regard to Zimbabwe, surely our Prime Minister, Mr Blair, is the point man for the rest of the world. I agree with the noble Lord, Lord St John of Bletso. I am not so sure that President Mbeki is still the right point man. He and President Mugabe are old friends, and they are stuck in the time warp of continually wanting to blame the old colonialists and colonial attitudes. That is outdated; it is long gone. There are new, young leaders in Africa who see past that and realise that something more must be done. I hope that the noble Baroness can tell us that there is a great deal of discussion, not just in the Commonwealth but in the UN, about a concerted approach to solving a very real problem for millions of people.

My Lords, this House has certainly not shirked its duty to keep Zimbabwe on the political agenda. Just because there is no one obvious solution that is being urged on Ministers, that should not mean that Back-Benchers from all sides of the House should not continue to press the Government to explain what pressure they are applying on various African leaders, on Mr Mugabe himself, on our European partners, and on colleagues around the world to try to bring a solution to this terrible situation.

It was extremely clear from the debate in the House this evening that no one thinks that we should look the other way. This is far too important to let slip from the international agenda. The debates in your Lordships' House are heard in Zimbabwe or at least are seen on paper. People listen to short wave broadcasts and reports on the Internet. It is encouraging for people in Zimbabwe to feel that their country has not been forgotten.

Archbishop Tutu was right to say that we should not have two standards for human rights, those for Africa and those for the rest of the world. My noble friend Lord Caithness made this point extremely forcefully. That is exactly what some leaders in Africa have implied when they seek to portray this situation in the old terminology of black versus white, haves versus have nots or colonialists versus nationalists. We are seeing the deliberate destruction of a once-prosperous country for the political and financial advantage of a small ruling elite.

We have heard some horror stories from all sides of the House about what is going on in Zimbabwe. I have received recent and personal briefings. We have heard about inflation touching 1,000 per cent. We have heard about banks with no money unable to honour cheques written in their name and about the destruction of 90 per cent of the farming infrastructure and of the national beef herd—an extremely serious development that will take time to put right. The confiscation of land is well rehearsed. There are terrible food shortages; the population is starving in some areas. Food aid is being used as a political weapon. Murder, rape and intimidation are organised by the state to suppress the populace. If this is deemed acceptable to anyone in Africa, Heaven help that great continent. We all fear the implications for South Africa and other countries in the region.

Strong leadership must be taken up by other African leaders. One thinks of NePAD. This is exactly the sort of situation for which this organisation was set up. If the nettle is not grasped by Mugabe's peer group, NePAD will have failed. There are serious implications for the political and financial credibility of countries in the region. We have a duty to be frank, not to couch our words and be overly diplomatic about this. If countries support Zimbabwe—even tacitly— their own economy, political situation, credibility and creditworthiness come into question.

The real tragedy is that the situation is entirely man-made. It is unnecessary, and it is the ultimate betrayal of a great country, undertaken by a weak, tottering regime. I might differ from some speakers in that I believe that there could be a rapid transition. We saw regimes in eastern Europe, for example, that looked invincible one moment but, the next moment, there is a crash, followed by sudden collapse. I support the point of view that, once the army, the police and the other institutions see which way the wind is blowing and sense weakness from Mugabe, the transition could be quicker than some of us believe.

We must consider what action has been taken by the West. On 14 January, the noble Baroness, Lady Symons of Vernham Dean, said that the UK was maintaining dialogue with countries in southern Africa, the Commonwealth, our EU partners and the US, as well as making a substantial emergency food aid contribution. Those are important developments, but I wonder about the sense of urgency. If I were to leave the Minister with one question tonight, it would be to ask how much time she feels Zimbabwe has. We have heard some say that the situation there is so bad that it cannot get worse. I think that it could get much worse. It could become very bloody, very quickly. That would be a desperate situation that we would should all do whatever we can to prevent.

We must examine the concept of quiet diplomacy in that context. It is all very well being quietly diplomatic, but, if things do not happen in time and there is no political change or any sign of such change, there could be significant civil unrest with severe consequences for the people of Zimbabwe.

There is no one in the Chamber this evening who doubts that South Africa holds if not the key then, at least, one of the keys to the situation. South Africa could certainly turn the lights out in Zimbabwe overnight—literally, as it holds the key to its power. Having at least some tacit support in the region is important to Robert Mugabe. We should listen carefully to the noble Lord, Lord St John of Bletso. He has good intelligence from the region and good contacts with South Africa. I listened carefully to what he said about the views of President Obasanjo. We need to know whether that is just talk or whether there really is a prospect of talks. I would like to hear the Government's view. The Minister should tell us as frankly as possible whether she feels that there are real developments. Conflicting reports have been quoted to us.

We have heard much discussion about the relative merits of a government of national unity. The most important thing is to see some progress towards change and some progress towards a better political situation. At that point, we could judge whether it would be sustainable, but I would rely heavily on the views of the MDC leadership at that time.

I sympathise with the Minister in some ways. There is little that she could announce this evening that would satisfy all of us. We need to hear that Her Majesty's Government are playing the role of leadership that they can play. I agree with my noble friend Lord Caithness and others that we should not be shy or worried about being seen as the former colonial masters. That was a long time ago. We have proved that our money is where our mouth is. We pump huge quantities of aid money into the country, and we have taken a political lead, to some extent. There is more that we could do, but the Government are in a good position to exercise their high level of political influence on the international scene to bring about a solution as soon as possible.

My Lords, I begin by joining in the good wishes that have been sent to the noble Lord, Lord Blaker, for a quick recovery from his illness. We are sorry that he is not here this evening, and we congratulate the noble Lord, Lord Astor of Hever, on his excellent speech introducing the debate. We thank him also for all the work that he has done on Zimbabwe. It is not the case that Zimbabwe has fallen off the radar screen, as the noble Lord feared. As long as there are people such as himself and the noble Lord, Lord Blaker, who are willing constantly to draw attention to the problems in Zimbabwe, there is no danger of that happening. We have heard people from all parts of the House with enormous knowledge of the situation in Zimbabwe. All are enthusiastic about trying to reach some kind of solution, even though there are minor differences about the right approach, which I shall come to.

There is always the danger that, if Mr Mugabe is conscious of the debates in the House, he would see them as supporting evidence for his propaganda that Britain is unnaturally interested in Zimbabwe—as opposed to letting it drop off the radar screen— particularly as compared with the rest of Africa because of the concern that, he believes, we have with the white farmers. That is not true, of course, and your Lordships have frequently debated many other problems in Africa, as the Minister will confirm. She has been present at debates on the Democratic Republic of Congo, Sudan, Angola, NePAD and general questions of development in Africa.

The noble Viscount, Lord Goschen, said that there was a danger of the situation slipping further towards civil unrest. I agree with him. I draw your Lordships' attention to what the Irish Defence Minister said, speaking from Liberia on last Sunday's "Focus on Africa" on the BBC. He said that the Irish presidency of the European Union would put Africa higher on the agenda and hoped, in particular, to see that action was taken to prevent conflicts, rather than to pick up the pieces afterwards. I paraphrase the Minister, but that is the sense of what he said. He might well have had in mind the threat that Zimbabwe would deteriorate even further into a situation such as he saw in Liberia, where many Irish troops are engaged. We thank them for the contribution that they have always made to peacekeeping.

How can the international community do anything before such a state goes over the precipice into total failure, when the principle of non-intervention is firmly enshrined in the United Nations charter? I remind your Lordships that, in the case of Kosovo, we appealed to a new concept of international law and claimed that intervention was justifiable when it was necessary to prevent an overwhelming human catastrophe. We obtained the tacit consent of the international community after the event for what we did in Kosovo, and there is no disposition nowadays to contest the legality of that action. What is the difference between Kosovo and Zimbabwe? Presumably, it is only the political inexpediency of a humanitarian rescue operation designed to remove the dictator and restore democracy through free and fair elections. There is also, perhaps, the strong feeling among other African states that, however awful the suffering of ordinary people in Zimbabwe, it is better to cajole the ailing tyrant into handing over power voluntarily than to use coercion of any kind. That was the sense of the speech that we heard from the noble Lord, Lord Hughes of Woodside.

Other African nations are not willing to take a firmer line. South Africa, for instance, will not refuse to admit Mugabe when he goes there, as he has just done, allegedly to undergo private medical treatment in an expensive clinic in Pretoria, a privilege that is not available to members of the opposition such as, for example, David Mpala MP, who was kidnapped and stabbed in the abdomen by so-called war veterans. In fact, as we have heard, the health service in Zimbabwe has collapsed. Nobody gets treatment, unless they can afford to spend 2 million Zimbabwean dollars a night to stay in a private hospital. We heard a catalogue of disasters concerning the state of health services in Zimbabwe. It is aggravated by the fact that last year 2,000 nurses left Zimbabwe for South Africa, Namibia and Britain and that in Harare's main hospital, only two out of six wards are open. Tuberculosis, dysentery and AIDS are being left untreated, as we have heard. Mr Mugabe is indeed lucky that he does not have to rely on his own health service. If he did, it might concentrate his mind rather more effectively than President Mbeki's powers of persuasion.

The noble Earl, Lord Caithness, who referred to the health statistics, also said that large numbers of people were fleeing into neighbouring countries. He gave some statistics—more than 2 million have gone to South Africa, large numbers have gone to Botswana and Mozambique—although we do not know the exact figures—with 1 million going elsewhere in southern Africa. We should take this rather seriously. Those people are not necessarily welcome in the countries to which they have gone temporarily. It may be that in some of those states, they are making up for the deficiencies of the working population through the losses suffered from AIDS. That may be true of Botswana, for example. But in South Africa, those people are not altogether welcome. There is a special camp where they are shovelling them back across the border at a rate of 40,000 a year, according to a recent article by Andrew Meldrum.

How long will it be before many of those people, not receiving a warm welcome in those countries, wish to come here? It would be the logical place for them to end up. As your Lordships know, 7,000 Zimbabwean asylum-seekers applied to this country last year. The only reason the figure has fallen substantially is because we imposed a visa regime which makes it almost impossible for them to come here directly. They have to travel via South Africa where many of them obtain false South African passports. We are now seeing people being sent back to South Africa because they claim to be South African to get passports when in fact they are Zimbabwean citizens. I suggest that the Government think carefully about this. With these several millions having gone to Zimbabwe's neighbouring countries, it will not be long before they start looking towards Europe as a safer haven than they have there.

Last week, President Mbeki said that when Mugabe returns to work next month from his supposed holiday in South Africa—whether he is in this posh clinic or whether he is helping his wife Grace to buy a block of houses, which is the alternative explanation, as they might be looking for a bolt-hole for when the crash comes—he will be graciously pleased to reopen the negotiations with the MDC that were suspended in May 2002. As noble Lords have pointed out, that has not been announced officially in Harare, but if it does happen, it would be a totally inadequate response to the crisis. If the ZANU-PF Government want to return to democracy, human rights and the rule of law, they have the power to do it themselves. They could ensure that the elections that are held are free and fair, such as the Gutu North by-election, held on 2 February. We will be watching that with great interest.

The ZANU-PF Government could repeal the laws cramping freedom of expression. In particular, they could stop the continuing attempts to silence the Daily News. I am not sure what happened today, but the case has been continuing before the Chief Justice, Godfrey Chidyausiku, who fast-tracked an application by the state's media watchdog for the Daily News to be shut down—a most exceptional procedure, which is in conformity with that judge's conduct in other cases. He has been sitting on appeals against the MDC's victories in parliamentary elections in 2000, while failing to hear constitutional cases, including appeals against the Access to Information and Protection of Privacy Act, the state's new press-gag laws. So we do not have free courts in Zimbabwe; the Zimbabwean Government could put that right without waiting for the dialogue between the government and the opposition, which may or may not take place.

I suspect that Mugabe's half-undertaking to negotiate is just a desperate ploy to gain further time. That is demonstrated by the treatment of journalists on the Independent newspaper who reported on his holiday excursion to south-east Asia on a wide-bodied jet commandeered from Air Zimbabwe. He ordered the jet to fly to Kuala Lumpur, to carry him and his family from there to Jakarta, then to Singapore, and back home. Passengers were bounced off flights which they had booked on the aircraft to come to London during the five days that the plane was away. That was said to have lost the national airline 3 billion Zimbabwean dollars, at a time when, as noble Lords have said, the economy is in chaos.

That was not the first time Mugabe had used national assets as if they were his personal property. However, if he was genuinely preparing to give way to democracy, as has been suggested, that is not exactly the way to signal the intention. To arrest journalists, to have the chief reporter of the Zimbabwe Independent savagely beaten up, to continue with this relentless campaign to shut down the Daily News, to hound the leader of the opposition through the courts on false charges and to continue with the human rights atrocities described in so many accounts—that is not the way to reconciliation and reform. It is not a preliminary to the kind of discussion that will be held on a level playing field between the government and the opposition which would be designed to lead to transitional administration.

Frankly, I do not believe in the optimistic noises made by Don McKinnon and by Presidents Obasanjo and Mbeki. I do not think they are warranted by any developments within Zimbabwe. If Mugabe is about to announce officially that he is prepared to enter into negotiations with the opposition, as has been leaked via these messengers, why cannot the regime demonstrate by practical means that it is ready to change? If I was in Mr Tsvangirai's shoes, I would remember the proverb that if you want to sup with the devil, you take a long spoon.

The MDC should not allow itself to be cajoled into entering a process that is no doubt intended to relieve the pressure, for example, by the EU when it considers the renewal and possible intensification of sanctions next month, rather than as a genuine move towards the restoration of democracy, the rule of law and human rights.

In conclusion. I ask the noble Baroness, when she replies, to say something about what the EU's attitude will be when the sanctions come up for renewal on 18 October. I hope that it will be tough in its approach and will not simply renew the sanctions as they stand. It is universally agreed that the situation has deteriorated seriously since the last time the EU considered the matter, so it would be totally inadequate if it merely renewed the sanctions as they stand. It has plenty of reports about the situation from the Zimbabwe Human Rights NGO Forum, Zimbabwe Lawyers for Human Rights, Amnesty International, Human Rights Watch and the US State Department. By the way, the US State Department has just issued a new travel warning, telling US citizens not to go to Zimbabwe, and if they are there, to come away. That is an indication of how the Americans view the deterioration of the situation.

I hope that the European Union will be strict in its application of the sanctions. I suggest that it examines the report just issued by the Redress Trust, which talks about 60 Zimbabwean police officers, who are being employed in the Kosovo Administration, including one gentleman who was accused of serious offences of torture in Zimbabwe. It seems shocking that an international body, such as the Administration UNMIK in Kosovo, should be a harbour, a refuge, for people who have committed atrocities in Zimbabwe. I suggest that when the EU renews the sanctions, it should extend them to any former serving police officer in Zimbabwe. As the Redress Trust points out, people are not going to be nominated to that position by the ZANU-PF administration unless they were loyal servants of the regime.

My Lords, this has been a debate of highly informed speeches. I fully share the gratitude that your Lordships have expressed to my noble friend Lord Blaker for being the original instigator of the debate and for his tireless questioning on the subject, and to my noble friend Lord Astor of Hever for stepping in and making such an excellent opening speech, which raised many issues that have run as themes through the debate this evening.

Zimbabwe is sadly today a stain on the African dream; it is a burden on southern Africa and a threat to development, which threatens and sours the whole high hopes for NePAD and all our hopes for achieving a better region of the world in southern Africa. Some of your Lordships have expressed their understanding of our own Government's difficulties in grappling with the issue. There is a problem about merely waving a hand and suggesting, even in this age of intervention, that there should be outright intervention by force. That is not on the table at all, or even possible. However, we have always maintained on this side, and we maintain again tonight, that we in Britain could do more. We have set out list after list of proposals of what can be done realistically here in London and with our allies and colleagues round the world to accelerate the move towards a better situation.

The MDC has repeatedly called from inside Zimbabwe for Britain to take a more positive lead, as my noble friend Lord Astor reminded us. Again and again it has been suggested that we should be more decisive, especially against those who are bankrolling Mugabe and his regime—and we know the names of many of them—those who have been coining money out of the DRC, and a whole network of undesirable operations and individuals who have supported the Mugabe system. Above all, we have urged again and again that we should seek to take the matter lo the United Nations Security Council. I know that each time we suggest it we are told that it is not the right time, that it would be counter-productive and that this or that would happen. However, I believe that we should try, try and try again and be at it all the time, in seeking to present to sympathetic ears at the UN the need for a much firmer stand—indeed, for a resolution at the United Nations.

The MDC has pleaded with us, as many others do, to really in practice use our policy of targeted sanctions to prevent Zimbabwe leaders from swanning around Europe and the world, as they appear still to be doing. We are left with the feeling, as I have said from this Dispatch Box before, that our American friends are somehow more outspoken and determined. The noble Lord, Lord Avebury, has just given an example of that. Colin Powell, the American Secretary of State, has spoken with great vigour—there has been no hanging back on his part—as has the whole of the US Congress, members of which have spoken out and raised their voices—and, indeed, used measures—in a way that does not seem to be matched all the time on this side of the Atlantic or here in London.

Why is that? One is always left mystified as to why we cannot move as boldly and strongly as our friend. Is the colonial guilt syndrome hanging in there? As my noble friend Lord Goschen said, we should not hang on to that and be shy. That is yesterday's pattern of thinking and simply does not apply to the global situation in the 21st century. Is it because we are dominated by the theory that it should all be left to Mr Mbeki, as the nearby influential next door neighbour? I find that a rather sad and, so far, very disappointing line of thought, and I believe that it is a basic misreading of Mr Mbeki. He was always going to bow to Robert Mugabe and always regarded him as his senior. He was even a little nervous and in awe of him, so the chances of any heavy pressure from that side were never very good, and I do not believe that they are now.

It may be that the effects of this tragedy will spread into South Africa and we shall begin to see starvation and maybe civil disturbance on a bigger scale in South Africa. The starvation is already there; the dangers of the lack of food is a knock-on effect of the situation in Zimbabwe in many ways. Of course, there are other causes, such as the drought, but it is partly a knock-on effect from Zimbabwe. As those things begin to shake up the scene in South Africa, minds may change, but I do not see that. At the moment, the report is that Mr Mugabe is in or has just visited South Africa for a medical check up and that he is looking for a plush estate for his retirement, which we obviously all hope will be soon. However, it does not sound as though pressure on Mr Mugabe is yet at a serious level where it is likely to lead to a radical change of course.

What is the position now? In the great country of Zimbabwe there is a downward spiral of economic performance, with 80 per cent unemployed and inflation rising towards 700 per cent, and a downward spiral of disease and HIV/AIDS, as my noble friend Lord Caithness so graphically and authoritatively described. There is also a downward spiral of food supplies, with shortages growing, as the noble Lord, Lord Acton, so graphically described. There have been some sort of informal talks but, meanwhile, the leader of the opposition is on trial, free speech is being suppressed and human rights abuses are abounding, including torture and arrest without trial.

That is a sickening situation and one in which the Government this time should stop dithering, although I can see that there are two sides to the argument on cricket and sport. They should come right out and not only tell the ECB to consider its position but tell it that the tour is off. I realise the difficulties and that a promise was made, but the situation is so bad and the dangers of strengthening and endorsing the direction and policy of Mugabe are so strong that I believe that the Government should take a tougher line than they have.

As for the hopeful talks, are they the way forward? I listened closely to the noble Lord, Lord Hughes, who speaks with great expertise on these matters. Of course, President Obasanjo has been in London suggesting that there are talks and that they could move to a more formal level. I do not know whether that is possible without the MDC becoming entangled in a ZANU-PF gameplan merely to prolong its power.

There are four important blocks—stumbling blocks or, as they should be, absolute conditions. One is restoring press freedom. The second is that the ZANU-PF fascistic militias should be disbanded. A third is that the constitution should be sensibly amended, which is a very complex issue. The fourth is that there should be free and fair elections—maybe at a specific time and not immediately. Those must be the conditions and I hope that the MDC stand firm on them, although none of them at the moment is within miles of being acknowledged or agreed to by the ZANU-PF people.

What can we do? We can have these debates, which do help, and keep the matter firmly in the frame. We can speak more boldly, too—we really can. The softly, softly approach in terms of our rhetoric has not worked, and I do not believe that we should be constrained by the complexes and parameters of past ideologies and 20th-century ideas, which no longer apply today.

The sanctions need toughening further to weaken Mugabe. I believe that they can be toughened. We need to work very closely with the Americans and obviously ensure that our EU colleagues move along the same line. When I say "we", I do not just refer to the British Government—they cannot carry all the burden—but to everyone who is concerned in the United Kingdom. I refer to the media. I should like to see the media be more active in defending media freedom which is being suppressed and destroyed in Harare. I refer to the trade unions who should be more active—perhaps they are already but I do not hear very much of it—in supporting their brothers and sisters in the suppressed and harassed unions of Zimbabwe.

I have raised my next point already. I think that it is our duty to try the UN route again. I pray that we are not given the line that it is not quite ready or would be counter-productive and so on. Our diplomats, who are vastly able people and very experienced, ought to be able to find a way forward in that regard. We must go against the bank rollers, as I have said. As one of my noble friends suggested—I believe that it was my noble friend Lord Caithness—we should identify the human rights abusers and the potential war criminals, as I suppose they would be called in another context, to show that these people will not get away with the horrors that they have inflicted on their fellow human beings.

There is the question of the asylum seekers. I know that now there is no forcible repatriation. Those who are refused asylum are not required to go back, although they are not given much support either. But are the criteria for deciding on asylum seekers from Zimbabwe the correct ones? There is a feeling that the Home Office still regards going back to Zimbabwe or South Africa as safe. All I say is that those I have met who are given that kind of judgment and that kind of direction do not regard going back to Zimbabwe or even to South Africa as safe at all. In their eyes they are not safe places.

My Lords, I hope that the noble Lord will allow me to put on the record that of the 7,000 people from Zimbabwe who applied for asylum in 2002, only 45 returned voluntarily at the expense of the IOM in 2003. The vast majority of them, in spite of the fact that they are left destitute at the end of the asylum process, prefer that to going back to Zimbabwe.

My Lords, that indicates the strength of their feeling and their fears but of course it is a shocking situation. It is one that the Government should look at again very carefully indeed.

Some say that we can do nothing. That has not been the view of your Lordships tonight at all but that view exists. I argue that the constraints on action that were believed to exist a few years back do not exist in the 21st century. It is a different place where everyone is demanding different standards of behaviour, different moral standards, different standards of observance of human rights, and that is a good thing. This is part of the global network. It is not just a remote country we can quietly ignore while we get into the big action in Iraq and Afghanistan. Zimbabwe is part of the global network. When one part gets infected, the virus affects us all. I believe that we should stand with our Commonwealth colleagues and with our brothers and sisters in Africa, Asia and Europe in condemning the cruel inhumanity that is being perpetrated in Zimbabwe and work night and day to see that the Zimbabwean people cease to have to cry for their beloved country and can rise and live again.

My Lords, I join everyone who has congratulated the noble Lord, Lord Astor of Hever, on having introduced this very important debate and on the way in which he did so. He should be congratulated also on the range and quality of the speeches that he has encouraged tonight. I send my best wishes to the noble Lord, Lord Blaker, who would have added his experienced voice to our debate tonight had he not been indisposed.

I hope that I shall be able to respond to many of the questions put by noble Lords in the body of my contribution. If, however, I do not respond in my allotted time to any outstanding questions, I shall, of course, write to noble Lords.

I should like to begin by assuring the noble Lord, Lord Astor of Hever, that the Government's attention remains closely focused on Zimbabwe. The debate to which he referred in his opening remarks is for the usual channels to take up. Our main aim is clear. The noble Baroness, Lady Symons, said on 14 January, in answer to a Question from the noble Lord, Lord Blaker, that the Government's objective,

"remains a return to democratic governance, prosperity and the rule of law in Zimbabwe".—[Official Report, 14/1/04; col. 553.]

That is not the view of a government who are not completely engaged in seeking a solution to this crisis.

If I may, I shall begin with a short overview of the situation in Zimbabwe as the Government see it. As several noble Lords have emphasised, the situation in Zimbabwe remains grim—a stain on the African dream, as the noble Lord, Lord Howell of Guildford, so eloquently put it. The World Food Programme's estimate that around 6 million people will need food aid during the January to April pre-harvest period— and this figure could rise further as new assessments are made—is a disgrace to the entire international community. I shall address, in due course, the measures that we are taking to help the people of Zimbabwe and to try to persuade the Government of Zimbabwe to change their disastrous policies.

The economy was referred to by many noble Lords. It remains in a dire state. Official inflation remains at some 600 per cent. Unemployment is 70 to 80 per cent. A much publicised anti-corruption drive has begun. The most high profile arrest has been ZANU-PF MP Philip Chiyangwa after he allegedly interfered with a Reserve Bank investigation into corruption in an asset management firm in which he allegedly has substantial interests. If the Zimbabwean authorities are genuinely moving against corruption, that would be most welcome. But it will take more than one or two arrests to convince the watching world that anything substantial has changed.

Political violence and oppression continue. One person was killed in a ZANU-PF attack on Movement for Democratic Change supporters in Mashonaland this month. The Zimbabwe Human Rights Forum has reported that during the January to November 2003 period, there were nine cases of murder, almost 500 cases of torture and over 500 cases of unlawful arrest. The figures speak for themselves.

Noble Lords may also have read of the horrific murder of the financial director of a tea plantation and there has recently been the first murder of a commercial farmer in 18 months. Those particular attacks do not appear to be politically motivated; rather, they are a tragic consequence of the crisis in Zimbabwe. While crime against whites in Zimbabwe tends to receive international attention, we should never forget that the great majority of the victims of ZANU-PF rule are black Zimbabweans, whose cases never hit the headlines. We are of course keeping our travel advice under constant review.

The MDC has been the subject of numerous threats and attacks. The treason trial of the leader of the MDC, Morgan Tsvangirai, has recommenced. It would be wrong for me to comment on the details while the trial is in progress, but I do not believe that it helps reconciliation in Zimbabwe. Neither does the state's decision to go ahead with those charges suggest that Mr Mugabe is seeking to create a climate in which dialogue can go ahead.

Regarding talks between the two parties, we understand that Robert Mugabe told President Mbeki, when he visited in December, that his party was committed to carrying forward the process of dialogue with the MDC. However, there appears to have been no progress since that discussion and police raided MDC headquarters on Friday 23 January. If there was a genuine desire on the part of Mugabe for talks, that would of course be welcome, as my noble friend Lord Hughes said. We have yet to see real evidence of that commitment. We need to see it.

Press harassment has been mentioned by many noble Lords. Harassment continues—the Daily News, the country's only independent daily newspaper, has been off the streets for several months. It finally managed to bring out an edition in Zimbabwe on 22 January, after winning five court orders saying it could publish. The Government returned to the High Court on 23 January in a fresh attempt to stop publication.

Regarding the vital subject of humanitarian aid, referred to so movingly by my noble friend Lord Acton, Robert Mugabe's policies have proved a disaster for the people of Zimbabwe—a matter also raised by the noble Viscount, Lord Goschen, and others. We are trying to help pick up the pieces. Since September 2001 we have spent £62 million on humanitarian aid to Zimbabwe, £20 million of which has been spent during the present financial year. We are grateful for the appreciation of noble Lords on our humanitarian efforts. We will be providing further funds for emergency feeding and HIV/AIDS programmes in the coming weeks. DfID is working with the World Food Programme and other UN agencies to ensure that resources are targeted on the most vulnerable. Our highest priorities are households with chronically ill adults, those headed by children or the disabled and those without access to land. In addition to UK contributions to UN feeding programmes, DfID's own supplementary feeding programmes are providing food to over 1 million people every month.

The Government are aware of concerns that food aid could be used for political purposes—a matter that was raised by the noble Lord, Lord Astor of Hever, and others. However, I assure the House that distribution of international food aid, including all the food contributed by the UK, is closely monitored and the World Food Programme has agreed satisfactory distribution arrangements in a memorandum of understanding with the Zimbabwean Government. In recent months there have been no significant cases of political interference with food deliveries.

The prevalence of HIV/AIDS in Zimbabwe gives enormous cause for concern, as the noble Earl, Lord Caithness, powerfully set out. A quarter of Zimbabweans aged 15 to 49 are infected with HIV/AIDS. We are spending £26 million on HIV/AIDS prevention programmes over five years to help tackle that crisis. It will be delivered through para-statal organisations and rural health clinics.

UN sanctions—binding on all member states—are the most effective option when considering targeted measures, but would require consensus in the Security Council. I am sorry, but despite the frustration of the noble Lord, Lord Howell, and his commitment to the issue, that is not an option at this stage. The UN Security Council's focus is on other international peace and security issues, despite the impact that we know the crisis is having on the wider African region. It remains the case that Zimbabwe's neighbours are not calling in the UN for wider UN intervention.

As noble Lords are aware, the EU has for the past two years tabled a resolution on Zimbabwe at the UN Commission on Human Rights. On both occasions, the resolutions fell to a no-action motion supported by, among others, all the members of the African group. However, if there is no improvement in the human rights situation in Zimbabwe by the time the UN Commission on Human Rights meets this year, I hope to see another resolution tabled. As we know, the commission meets in March and April.

We would gladly move a UN Security Council resolution on Zimbabwe if we thought it would succeed, but doing that and failing would provide succour to Mugabe and his supporters and we are not in the business of doing that. Five members of the Security Council voted for the 2003 no-action motion at the UNHCR and it is difficult to see them voting for a Security Council resolution on Zimbabwe after that action in the UNHCR.

I will now move on to what we are trying to do to persuade the Zimbabwean Government to change their disastrous policy and what our action is at European level. The noble Lord, Lord Avebury, made a pertinent point about the danger of this being seen as only a bilateral issue and therefore playing into Mugabe's propaganda hands. We must always be on our guard in that respect. However, the EU has imposed targeted measures against Mugabe and 78 leading members of ZANU-PF. These include a travel ban and an asset freeze. There is also an arms embargo. The Americans and others have introduced similar measures, as noble Lords are aware.

The EU measures are due for renewal next month and we are looking for ways to strengthen them. We are seriously looking with our EU partners at ways of maintaining their effectiveness and relevance, while not hurting the people of Zimbabwe. But one thing we will not argue for is general trade sanctions. That would be a propaganda gift to the Zimbabwe Government's claim that we are trying to undermine their country. No trade measures we could undertake would have the same impact on Zimbabwe's economy as ZANU-PF's own disastrous policies.

Implications for the withdrawal from the Commonwealth have been raised. The noble Lord, Lord St John of Bletso, shared with us his interesting and experienced observations on the role of African leaders post-CHOGM. My right honourable friend the Prime Minister argued at CHOGM that it was inconceivable that Zimbabwe could be readmitted to the Councils of the Commonwealth until we had seen concrete evidence of a return to democracy and respect for human rights and the rule of law—the very principles on which the Commonwealth was founded. I am glad to say that the heads of government agreed by consensus to continue indefinitely Zimbabwe's suspension from the Councils of the Commonwealth at CHOGM in December.

They also agreed to the issue of a statement on Zimbabwe, giving the lie to Mugabe's claim that suspension was a UK-led white conspiracy against black Africa. Mugabe has now increased his country's isolation by withdrawing from the Commonwealth. The ties of affection between the people of Zimbabwe and the rest of the Commonwealth remain and I look forward to the day, as I am sure do all noble Lords, when a democratic Zimbabwe is welcomed back. In the mean time, we will continue to work with our international partners to bring about the restoration of good governance and the rule of law in Zimbabwe.

The subject of cricket was referred to by the noble Lords, Lord Astor of Hever and Lord Howell of Guildford, and my noble friends Lord Hughes of Woodside and Lord Acton. Whether or not to tour Zimbabwe is a matter for the England and Wales Cricket Board. However, noble Lords will be aware that my right honourable friend the Foreign Secretary has written to the board clearly pointing out the situation in Zimbabwe and suggesting that it may wish to consider whether a high-profile tour at this time is compatible with the international community's isolation of Zimbabwe. A copy of the letter has been placed in the Library of the House.

Noble Lords may have picked up on the discussion in another place this week when my honourable friend Mr Mullin, the Minister for Africa, said that the Government would prefer that the England cricket team did not go to Zimbabwe. But at the end of the day, it is up to the ECB. I understand that it is meeting later this week and we await the outcome of its deliberations with interest.

Many noble Lords have asked me questions and I shall get through them as quickly as I can. I shall make sure that noble Lords whose questions are not reached receive a written reply. Many noble Lords have asked whether we are doing enough; could not Britain do more; could we not try, try and try again; and could we not put more urgency into the problem? I believe that the noble Viscount, Lord Goschen, spoke about quiet diplomacy and it being a little louder.

I refute the charge that the Government have been dragging their feet on the crisis in Zimbabwe. We continue to work closely and robustly with our EU and Commonwealth partners to bring about a return to democratic government in Zimbabwe as regards human rights and the rule of law. The Commonwealth has stood firm. When its leaders met in Nigeria last month, and they included our Prime Minister, they agreed to the indefinite suspension of Zimbabwe following its failure to meet basic Commonwealth standards of good governance.

The EU is also engaged. It has issued a number of statements condemning the Mugabe regime for its repeated attacks on trades union and civil society leaders and on the independent media. The EU has continued to enforce its target of measures against the ZANU-PF leadership and to look at ways of making these measures as effective and robust as possible. At the same time the UK has provided a sizeable programme of humanitarian assistance to the people of Zimbabwe.

We are the largest cash donor and, after the United States, the largest bilateral aid donor to Zimbabwe. Since September 2001 when the current crisis began, the UK has provided £62 million in humanitarian assistance, as I said earlier.

The noble Earl, Lord Caithness, asked me about the end game. That was also referred to by the noble Lord, Lord St John of Bletso. We stand ready to work with any new administration in Zimbabwe which has been freely and democratically elected by the Zimbabwean people. With partners, we are already planning for a time when we will be able to re-engage with Zimbabwe and assist with its reconstruction. It is premature to speculate on the scale of future UK support, but we would be certain to play a leading role in helping to rebuild Zimbabwe when the rule of law and representative government are restored. Our record of providing over £500 million in development assistance to Zimbabwe since independence shows that our commitment to Zimbabwe is for the long haul.

I was asked by noble Lords about President Mbeki and his role and what the Government feel about it. Following his visit to Harare on 18 December he has stated that he met both Robert Mugabe and Morgan Tsvangirai and that a formal process of dialogue between the ruling party and the opposition is now imminent. We hope that that is the case. We have made it clear for some time now that we see such a process of dialogue as the vital first step towards restoring democratic governance in Zimbabwe. But we have seen no evidence that the parties are moving in that direction. We hope that both President Mbeki and Olusegun Obasanjo will continue in their efforts to get the parties re-engaged and that we soon see concrete evidence of that progress.

Noble Lords asked me about extending the EU sanctions to business people. We note that the Movement for Democratic Change visiting the European Parliament this week called for EU sanctions to be extended also to business people. We remain open to the argument that any individual who is demonstrably responsible for the suppression of human rights might at some stage be added to the list.

The noble Lord, Lord Astor of Hever, asked me about the Grain Marketing Board stockpiling and withholding food. It is very worrying if the Zimbabwean Government are using food in this way. But that government signed the memorandum of understanding with the World Food Programme last year agreeing to its principles on distribution. Ultimately, of course, we have no control over the food that Mr Mugabe's regime buys in.

I have come the end of my time and will answer noble Lords' further questions in writing.

The Government's desire is to see a democratic and prosperous Zimbabwe. To that end, we are working robustly with our international partners. We may not yet have achieved that aim, but we have helped to provide humanitarian aid to half the population of Zimbabwe, in which this country can take great pride. We continue to keep the pressure on ZANU-PF and engage with all those working for change in Zimbabwe. It will come, and Britain intends to help Zimbabweans build their lives again.

My Lords, this has been an excellent debate, and I am sure that it will cheer up my noble friend Lord Blaker when he reads it. I hope that it will also give some comfort to those suffering in Zimbabwe, who, as my noble friend Lord Goschen said, will be closely following this debate.

I thank all those who have taken part in the debate. Each speaker has a long record of not letting Zimbabwe slip off the agenda, and it is to be hoped that all will continue to speak out. All speakers would agree with the observation of the noble Lord, Lord Hughes, that the situation is very dangerous and getting worse. There were differences about how to help resolve that situation, but all suggestions were constructive and thoughtful. Finally, I thank the Minister for constructively and resolutely addressing the various questions that have been fired at her. I beg leave to withdraw the Motion for Papers.

rose to ask Her Majesty's Government what is their assessment of the total costs to date in economic and human terms of the recent conflict in Iraq and the likely future costs of the occupation, reconstruction and rehabilitation of Iraq.

My Lords, I welcome the right reverend Prelate the Bishop of Southwell to the debate and very much look forward to hearing his contribution.

Iraq has been under partial British occupation for the past nine months. British troops conquered and now control a large swathe of the south. But what are Britain's role and voice in the Coalition Provisional Authority in Baghdad? How is power shared—if at all—between Britain and the United States in the CPA, and what say do we have in vital decisions about Iraq's economic future? Those are important questions for scrutiny by the House. I shall concentrate on them tonight, and I look forward to full and frank answers from the noble Baroness.

The CPA's very informative website announces on its home page that,

"it is led by the United States and the United Kingdom".

What exactly does that mean? Is the CPA appointed by and accountable to the United States Government only, or is it also accountable to us? Do we have nomination rights, and if so, to which positions?

The Foreign Secretary, in his letter of 15 December to my right honourable friend Sir Menzies Campbell said that,

"about 150 personnel are currently seconded by HMG to the CPA. They are selected by HMG for their suitability and availability. In some cases, particularly for more senior posts, appointments are agreed with CPA colleagues".

However, consultation is a two-way street. If the CPA is led, as it asserts, by the United Kingdom as well as the United States, were we consulted before Paul Bremer was appointed? What can we do if we are unhappy with his performance in office? Does Sir Jeremy Greenstock have executive authority or an official title within the CPA? Have our Government requested one for him? To what extent does the CPA devolve responsibility to Britain in southern Iraq?

On the management of the economy, the CPA makes no secret of its mission to remould Iraq's economy in an aggressively free-market Western image. Its private sector development division has specific responsibility for developing a privatisation programme for state-owned enterprises, for developing foreign investment and for helping to introduce an entrepreneurial attitude. Looking at its website today, one sees that it features the Business Opportunities in Iraq Index, giving comprehensive sales packs called State Owned Enterprise Profiles, for 45 of the largest companies in Iraq. Today's choice special offer is,

"Ninawa and Samarra—manufacturers of pharmaceuticals, mainly generic versions of branded drugs, supplied 60% of Iraq's market, with good potential for profitability in a free market and exports … high margins … many technologies under its belt to keep supplying highly profitable products without incurring high research and development costs … motivated staff and workforce. High levels of know how and good brands. The facilities are modern".

So hurry, hurry while stocks last. That should make a pretty tasty morsel for one of the big drugs companies backing President Bush's re-election campaign.

The CPA's policy is pre-emptive privatisation of Iraq's economy. Is it being developed and pursued with the active involvement of British members of the CPA? If we are serious about building a democratic Iraq, how can Her Majesty's Government support that? Those are not decisions to be taken by a temporary foreign administration; decisions about how to run the country should be taken by an elected Iraqi government. Unlike cowboy movies, Mr Bush, one has to accept that democracy means that the good guys do not always win in the last reel and the guys who win do not always do what one wants.

The annual Iraqi budget issued in October makes chilling reading for many of the half a million Iraqis employed in public sector enterprises. Clearly, many of them will be closed. The budget states:

"The transition of Iraq's economy to one driven by market forces will involve significant restructuring".

It refers to,

"the hardship associated with this necessary but difficult process".

At the same time, the CPA, through Order 39 signed by Paul Bremer last September, has opened up,

"all economic sectors except the natural resources sector in all parts of Iraq to foreign investment, with full and immediate remittance of profits, dividends, royalties and interest out of Iraq",

subject only to a proposed 15 per cent company income tax. No wonder that just after Order 39 was signed, the Iraqi Governing Council trade minister, Mr Alawi, was quoted in the International Herald Tribune as saying:

"Now we face the prospect of free-market fundamentalism. The Iraqi people are sick and tired of being the subjects of experiments".

The Foreign Secretary's letter to Sir Menzies Campbell also states that Order 39 on foreign direct investment,

"was produced following consultation with the IMF and the World Bank".

How long were those bodies given and was the order amended in any way as a result of any representations that they made? Were Her Majesty's Government, as the other leader of the Coalition Provisional Authority, consulted as well? If so, what was our response and what effect did it have?

Last February, even before the attack on Iraq, President Bush suggested that Iraq could become a "dramatic and inspiring example", as the Middle East pushed towards economic openness and free trade. The United States, of course, has its own highly selective definition of free trade, excluding such trifles as steel and food. But if the invasion of Iraq was really to remove a dictator and let the Iraqis decide their own future, how can Britain allow Iraq's assets to be flogged off first to foreigners? Why should the CPA impose free-market fundamentalism on Iraq in Britain's name?

I have stuck tonight to the economic aspects of Britain's role in the occupation and reconstruction of Iraq and the actions being taken partly in Britain's name there without any clear scrutiny or authority from Parliament. Other noble Lords may press for more answers on the costs of Iraq to the British taxpayers, as the noble Lord, Lord Rea, has done already, and the apparent reluctance of the CPA to award any significant reconstruction contracts outside the magic circle of the well connected giant US corporations like Bechtel and Halliburton. Those are important areas of concern. But first our Government must set out fully and convincingly the legal, moral and operational basis of British involvement in running Iraq. Otherwise many people here and around the world will see Britain as little more than a fig leaf while the Americans force out-and-out capitalism on the people of Iraq whether they want it or not. What a mockery that makes of democracy.

My Lords, I am grateful to my noble friend Lord Rea for introducing the debate. I look forward with anticipation to the maiden speech of the right reverend Prelate the Bishop of Southwell.

The questions the debate raises are very important. I was one of those who opposed the war from the beginning. There were many who felt as I did. We were often accused of being anti-American. We are not. It is becoming clear that there are numerous Americans who feel the same way. Take the attack on President Bush's State of the Union speech by a leading Democrat, referred to in the current issue of the House Magazine. She said:

"The President led us into the Iraq war on the basis of unproven assertions without evidence. He embraced a radical doctrine of pre-emptive war unprecedented in our history, and he failed to build a true international coalition".

It now seems unlikely that any weapons of mass destruction will be discovered. It is being acknowledged that they may in fact never have existed—at least in recent times—and that the Iraqi Government could well have been speaking the truth when they said that they no longer possessed weapons of mass destruction. We were told by Government Ministers at the time that no one could possibly believe a syllable of that. So there was the war—on the basis that Saddam Hussein was a threat to everyone, including ourselves and the United States.

The Motion tonight, however, seeks information from the Government about the costs of this venture; not only the economic costs, but the cost in human terms.

So far as concerns the economic costs, it is clear to everyone that this has been a very expensive exercise, and continues to be so. We know that the United States now faces a substantial budget deficit, despite the fact that President Bush inherited a budget surplus from his predecessor. He has had to seek further funding. It is alleged that the total costs so far are in the region of 160 billion dollars.

On our costs, the Foreign Secretary has said that British troops may have to stay in Iraq for a number of years, even if there are elections later this year and it becomes possible to hand over sovereignty to an Iraqi Government with some claim to popular support.

There have been references to the Chancellor's war chest, with the inference that the cost to Britain is manageable. But is it? There is concern about public services. The necessary improvements may require investment. There are social costs associated with an ageing population. I have criticised the lack of expenditure regarding care of the elderly, particularly those requiring long-term residential care. To improve facilities would cost a fraction of what the Iraqi conflict is likely to cost.

We have not heard much from the Government about economic costs. I hope we may learn something tonight. Turning to human costs, we know of course about our casualties and those of coalition forces. I believe that the American deaths—now more than 500—exceed those of US deaths in the first Gulf War. These seem likely to continue.

We hear little, however, about Iraqi casualties. Various figures have been mentioned—sometimes 10,000 deaths or 16,000 and occasionally even more. As to injuries, it does not seem possible to arrive at any reliable figures. I have heard it said that children are killed or injured every day by cluster bombs, since these remain after an attack and are lethal. Moreover, they appear to have been used in urban areas.

We have very little information about the losses sustained by Iraqi forces. Yet we know from descriptions of the fighting at the time that many must have been killed or injured since the Iraqis possess no aircraft capable of providing a defence, and so the coalition dominated the skies. That led to the slaughter of masses of ill-armed Iraqi soldiers. It is likely that we shall not get reliable information for some time.

We did not get much information about this issue after the First Gulf War, at least for a number of years. There is a rather horrifying description of the slaughter of Iraqi troops—many of whom were young conscripts—in the first Gulf War in John Simpson's recent book, The Wars Against Saddam. He says that it was nine years before General Schwarzkopf would say even roughly how many soldiers he thought Iraq had lost, and when he did speak he put the figure at tens of thousands.

Referring to some of the battles, John Simpson said:

"It wasn't a battle at all, merely the slaughter of tens of thousands of Third World soldiers armed only with weapons incapable of penetrating American armour".

That was the first time around. It seems unlikely that Iraqi soldiers fared any better in the recent war.

It would also appear that napalm was used on Iraqi troops—something that some US soldiers did not at all like; they said so to the press. Moreover, we have little idea about what happened to Iraqi troops: what were their casualties and what happened to those, if any, who were captured. The Government must have some idea and perhaps we shall be told tonight.

As for civilian casualties, I had an opportunity recently to meet an Iraqi doctor whose family had suffered in the war. He was a surgeon working in a hospital in Basra. Believing Anglo-American statements that civilians would not be targeted, only government installations and military sites, he gathered together his extended family to stay with him in his house in Basra. One evening, while he and his wife were out—he was working in the hospital—his house suffered a direct hit in a bombing raid. The entire family—11 of them—died. Four of his children died in the house; he has one remaining child.

He showed me a photograph of his family. He is staying in this country for a while. He says that he loves his country, but that the tragedy that he has suffered is so overwhelming that he cannot go back there for some time. He wants to live and work here. He is a sophisticated, highly civilised man with excellent English who is apparently highly qualified. I am sure that he would be welcome to work here, but his experience was so utterly dreadful that I did not know what to say to him.

I have on occasion asked whether there will be any compensation for the civilian victims of the war, but have been told that that is impossible, at least for those killed or injured during the war. Frankly, I do not know why. All we can do now is ensure that there is no repeat performance of such military intervention on the basis of misguided intelligence, and that everything possible is done to ensure that Iraqis are able to rebuild their shattered lives and have a government with at least a degree of popular support.

I hope that my noble friend will not again tell me that had we not gone to war Saddam Hussein would have killed more of his people than have the coalition forces. That is a morally dubious argument, especially as the bulk of Saddam's victims met their fate when he was an ally of the West—during and after the war with Iran. Moreover, there seems no good reason why we should add to the number of Iraqis killed or horribly injured. As we know, regime change is not within the United Nations' mandate. Diplomacy and economic pressure are sometimes better ways to deal with unacceptable regimes than sending in the B52s, especially without United Nations support.

I find it surprising that it is apparently assumed that people who have seen their country devastated by bombing—who have lost homes, relatives and, usually, jobs, and who have seen the collapse of the civilian infrastructure as a result of war—would want to support Western-style government and embrace the culture of those who they feel have been responsible for their suffering. That has not happened in Serbia, where, in recent elections, the population has given much support to the extreme nationalist party, which is anti-West and opposed to sending indicted war criminals to The Hague.

So let us hope that there will be no more military adventures at the behest of President Bush—costly in human life and for the economies of the countries concerned. I await with interest the Government's response to the questions posed by my noble friend.

My Lords, I am grateful for my welcome to your Lordships' House and for the great kindness extended to me by Black Rod, the Clerk of the Parliaments and all their staff for the helpful induction last week. Perhaps I should first issue a disclaimer that any early failure on my part in observation of the traditions and protocols of the House will be solely my responsibility. I also say thank you for the personal welcomes that have been extended to me from Lords Temporal and Spiritual; they are much appreciated. I am also grateful to the noble Lord, Lord Rea, for tabling the Motion.

Costing of things is prevalent in all spheres of life and in government policy. For example, in health, economists try to assess costs and benefits to calculate whether prevention or treatment of various diseases and conditions represents good value for money. In the field of the environment, others try to put a value on the preservation of rare species or landscapes and then compare that with the benefits in reduced journey times of building new roads. Whatever strengths there may be in this approach and analysis—at the least it should ensure we are sensitive to the implications of what we do or do not do—we should also be aware of the limitations.

There are two chief limits. First, some things, including perhaps the human costs mentioned in the noble Lord's Question, defy quantification in monetary terms and cannot simply be priced in and counted in with other things. This would be true also of certain benefits too. Freedom and justice, for which the war was allegedly fought, cannot be priced. Secondly, while we should be ready to count the costs we should not think that costs and benefits simply can be traded one against the other. There are certain things we have a duty to do, such as to uphold justice, and certain things we should not do, such as intend the death of the innocent in war. We may need to do those things—or not to do them—even at considerable cost. Most significantly, the human costs of all concerned include social, emotional and spiritual dimensions.

The security situation continues to be an important impediment to reconstruction. Lack of security is affecting the daily lives of Iraqis in many parts of the country but most notably in Baghdad. Shootings, lootings, kidnappings, vehicle hijackings and an upsurge in common criminality have increased alarmingly. Widespread looting, including strategic items essential for the provision of water and electricity, continues apace.

Perhaps we should not be surprised that those who just under a year ago were the subjects of a tyrannical regime and then on the receiving end of the "shock and awe" of the coalition forces should find it hard to establish the rule of law as we understand it. There are many in Iraq who, although they rejoice at the fall of Saddam Hussein, still bear the scars of body, mind and spirit inflicted as a result of the war. These human costs defy quantification.

Neither can we ignore the less obvious cost of the undermining of friendships which are all the time developing across barriers of race, language and religion within the United Kingdom caused by the controversial background to the war.

The more the coalition troops are themselves under threat and the more they have to engage in counterinsurgency operations, the more difficult it is for them to provide security for Iraqi civilians. This corrosive climate of insecurity does not provide the context for developing democratic processes and institutions. It erodes trust and creates a climate of suspicion. I am encouraged, therefore, that the training of Iraqi security forces is now recognised as being of the highest priority by the CPA.

Faced with such a wide range of challenges in Iraq, I must pay tribute to the courage, professionalism and steadfastness of those who have served or are currently serving in Her Majesty's forces. Our thoughts and prayers are with them and their families at this difficult time, never forgetting those who have lost loved ones.

As a bishop, I would also want to pay tribute to the work of the chaplains of all three services in their support of the Armed Forces personnel both during the conflict and as they continue to serve those who remain in the theatre.

Neither should we, in considering costs, ignore the cost to many members of the armed services in terms of conscience. The men and women of the services are not unthinking automatons and many were profoundly disturbed by the ambiguous justification for the war.

Security is not just a matter of concern to local Iraqis nor to coalition forces, or the CPA. It is a significant factor in the consideration of those aid and development agencies operational in Iraq. The attacks on the UN and Red Cross offices allied to the death of a mines advisory group employee suggest that many Iraqis fail to differentiate between these organisations and the coalition forces. This is not surprising given that many NGOs started work in the centre and south of Iraq immediately following the war. They are unfortunately tainted by association.

This problem has not been eased by the tendency of the coalition forces to prosecute what they believe to be a humanitarian agenda. Pictures of coalition forces distributing non-food items in Basra, immediately following the conflict, have contributed to the narrowing of the humanitarian space for organisations to work in. As a number of NGOs have made clear, coalition forces should not try to do this work themselves, but should provide the humanitarian agencies the space to fulfil that agenda.

It is therefore regrettable, though understandable, that Christian Aid and other NGOs have significantly reduced their presence in Iraq. Even Christian Aid's partners, such as the Iraqi Kurdistan NGO Network, a Baghdad-based organisation, have been forced by the situation to work slowly and carefully. The work of such NGOs is often a target for attack. CARE reports that the sabotage of infrastructure means that one-off repairs often end up being repeated two or three times to keep an installation going. All this adds to the economic and human cost of reconstructing and rehabilitating Iraq. Let us hope that the United Nations can help to orchestrate even greater collaboration of international effort in helping Iraq on the way to finding, and playing, its proper role among the families of the nations, while at the same time continuing efforts to create a viable Palestinian state.

I am grateful to the noble Lord, Lord Rea, for introducing this debate. We are blessed with a robust system of democratic government in this country. I have no doubt that this issue will be a recurring theme on this House's agenda, and I look forward to contributing to future debates on this issue and on other issues.

My Lords, it is an honour to be the first to congratulate the right reverend Prelate the Bishop of Southwell who has given us a fluent and balanced assessment of the situation in Iraq, which shows his considerable experience of world affairs. He has worked in Africa, and more recently he has been Archdeacon of London at St Paul's. His interests are rugby football and chamber music, among others. He has said that he wishes to speak on asylum seekers, gun laws and on other issues, including Nottingham, for which he has a particular affection. I sincerely thank the right reverend Prelate, and I hope that we will hear more from him soon.

I thank the noble Lord, Lord Rea, for bravely choosing this subject on today of all days, when the Government's star is rising high in the sky, but also for bringing it firmly down to earth with a focus on the Iraqi people, which is what that report was originally all about. The Hutton report shows the Government unbowed, but still reeling under public criticism of the necessity for war, such as we are hearing tonight. We can understand why. Whatever tyranny there was in Iraq, whatever Hutton has proved, people remain confused about the reasons for a war that many people believe was illegitimate and without the explicit approval of the United Nations.

Far from a free Iraq, they see on their television screens a land occupied, divided, fought over and still suffering from inadequate public services. Instead of welcoming smiles, they see the continual anxiety caused by rocket attacks, car bombs and suicide. Wherever the rule of law is introduced, the lack of permanent security, unemployment and the frustration caused by acute material shortages seem to conspire to restore anarchy. With rising costs, shortages of fuel and medicines, taps that are often empty, lights that are often switched off, the people still wonder whether they were better under the dictatorship.

If the US and the UK between them, with their considerable international muscle, are still unable to bring peace and security, let alone shared resources to that once wealthy country, how can the Iraqis look forward to a new life, let alone truly democratic elections within two or three years? An illegitimate war or a war that is generally perceived abroad as illegitimate means that the rest of the world is not prepared to subscribe to solutions. It is the opposite of the peacekeeping in Afghanistan, where nations willingly joined in a wider coalition and the atmosphere with regard to national and international action has correspondingly improved. Many soldiers who gallantly fought in Iraq must now wonder when exactly the peace will begin. At times, I cannot help wondering, as, I am sure, some of the troops have, whether it would not have been better to finish the job in Afghanistan first. Of course, that is water under the bridge.

Apart from the gunfire and frequent bombing incidents, there is still a fundamental lack of trust between coalition troops and the local population that will take months to rebuild. The current issue of Newsweek describes the aggressive attitude of many US troops, about which we read frequently in our newspapers, betraying their lack of training and knowledge of, for example, the Islamic culture. Without a secure environment, humanitarian agencies will be unable to do their work. Without the visible reappearance of the United Nations, the coalition seems doomed to remain an army of occupation, so long as enough Iraqi gunmen survive to ensure that it cannot succeed.

With unemployment becoming more visible and with an increasing number of demonstrations in the streets, the situation is bound to be aggravated. Even with the partial UN return that is now under discussion—obviously, we hope that it will take place—the US will no longer be able to seek a rapid exit strategy. The Iraqi Governing Council is weak; the likelihood of summer elections is fading; and there is a real prospect of coalition forces remaining in Iraq beyond the US elections, perhaps for two or more years.

So much is speculation, and the noble Baroness is certain to present more positive images that will reassure us. What is not in doubt is the suffering of the Iraqi people under any regime, including the present one. The reports that I receive are similar to what we heard from the right reverend Prelate and suggest that most Iraqis still struggle to survive. I acknowledge the help of CARE International, of which I am an associate member. The noble Lord, Lord Rea, mentioned malnutrition, with the end of the UN Oil for Food distribution last month. Until a new system is in place, many destitute families no longer have any guarantee of food supplies. Fuel is short, with long queues and many resorting to the black market. Electricity is unreliable, with only two Italian-made turbines functioning at the main Dora plant, largely because of a dispute between Bechtel and Siemens. Although, according to Middle East International, that has been resolved, it has caused months of delay, not least in pumping vital fuel to terminals and refineries that will eventually get the country back on its feet. Those are problems of our making; they are nothing to do with the Iraqi people or Saddam Hussein.

Serious shortages of medical supplies have been reported by UN staff and Medecins sans Frontieres, with some areas having no essential drugs. Distribution problems have never been as bad, according to Dr Nima Abed, director of preventive healthcare at the Ministry of Health. Whatever the evils of the old regime, healthcare, including medicine, was almost completely subsidised, and patients paid less than a dollar to visit a doctor. Unless a new health service can be put in place, the poorest will suffer under the new coalition. They are, as in the least developed countries, at the mercy of private operators.

I have one or two questions for the Minister. The first relates to the subject raised by the right reverend Prelate: security. I am speaking about Baghdad. Perhaps the Minister could refer the problem back to the coalition. She will remember the concerns of NGOs, which I expressed many times in the context of Afghanistan, about the blurring of humanitarian and military aid. I am told that unmarked white vehicles carrying CPA staff are distributing aid. That is not so surprising, as soldiers have to distribute humanitarian aid, and we have seen that role well performed by our soldiers in Basra. White is often the colour used by the UN and others to distinguish aid vehicles. But these staff are also carrying weapons. Is it not increasing the danger to humanitarian work of all kinds that armed men are now to be found bringing aid? Protection, one admits, is often needed for convoys in post-conflict situations, but for armed individuals to be acting as relief workers is surely compromising the wider community, the majority of whom are Iraqis working with the United Nations and other agencies. I would not mention this if it was not a concern seriously expressed by the aid organisations which are there, many of which have been there for several years.

As a trustee of Christian Aid, I feel it may be helpful to quote from a recommendation it made more than a year ago:

"Christian Aid believes the UN and the international community at large must address a potential breakdown in social order in the immediate aftermath of any regime change in Iraq. Therefore, the issue of short-term and long-term protection of Iraqis must be addressed. It would be essential that the form of protection adopted had the acceptance of the Iraqi population".

I have three other questions. Can the Minister comment on the changeover from the Oil for Food system and confirm that the United Nations will continue to monitor food supplies? What is the current role of the coalition in delivering humanitarian aid and will the office of the US humanitarian co-ordinator now give its full support to a new United Nations body, such as UNOCHA, without any political interference? That question coincides with the one raised very pertinently by the noble Lord, Lord Oakeshott. Finally, what participation does the UK Department for International Development have in this process?

My Lords, after a day in which many of us have spent a lot of time reading and then commenting on pre-war decisions, it is quite refreshing to turn to the post-war record and the question of future commitments. I am one of those who believes that we can debate for some time the legitimacy and the wisdom of going to war. Nevertheless, we all share a common interest in ensuring that the current occupation and the rebuilding of Iraq is a success. We also have to recognise how immensely difficult that is proving and how difficult it will be.

The noble Lord, Lord Rea, asked about Iraqi casualties so far. I think we have learnt from other conflicts that honesty in recording and reporting who has died and where they have been buried is a very important part of rebuilding confidence in the international community. So that is an important part of rebuilding Iraq.

As for the Iraqi economy which was damaged further by the war, we have to recognise that it had already been damaged very considerably by sanctions over the previous 10 years, by the two wars that Iraq fought against Iran and Kuwait, and by the obscene imbalance of Saddam Hussein's spending. Huge amounts were spent on those palaces, while very little was spent on building up the economy and welfare of the people.

The noble Lord, Lord Rea, also asked about the costs to the coalition so far. Again, we recognise that one of the costs of going to war without a second resolution has been that those who took part—above all, the United States and Great Britain—have had to carry a much greater share of the burden this time around than we did for the first Gulf war, from which, some people even said, the United States came out almost with a profit after the financial contributions of other states. Can the Minister tell us how far that is now changing? I note that on current figures, the overwhelming majority of members of the European Union and NATO have troops contributing to the rebuilding of Iraq. Even the Icelandic Government have Icelandic coastguards working on bomb disposal in southern Iraq. Does that mean that the responsibilities and financial costs are being more widely spread? Does it also mean that influence over the decisions is becoming a little more multilateral?

We recognise that the state of Iraq after the collapse of Saddam Hussein's regime is awful. There are mines and unexploded ordnance all around the place, and the administration and the state itself have collapsed. Basic services and forces have to be rebuilt, and the mutual mistrust of the different religious, ethnic and tribal groups is deep. The bitter experience of state-building that this country has witnessed in the past 30 or 40 years shows us how long it takes to rebuild a state. Our experiences of Bosnia, Kosovo and Serbia so far show that it takes 10, 20 or 30 years—a generation or more—to rebuild trust once it has been destroyed. Our experience of Northern Ireland shows that even when government have taken office we cannot be entirely confident.

I am one of those who believes that our interventions in south-western Europe were entirely justified and that we have to maintain our commitment there. The setback in Serbia, to which the noble Baroness. Lady Turner, referred, is a setback to democratic forces partly because those forces have been so very badly led—but it is a real setback that we have to work through and work round.

It will be a very long haul in Iraq, in very imperfect circumstances. First, clearly, one needs to establish security. Also, at the same time, there is a desperate need to re-establish a sense of legitimacy and shared national community. Those two things have to be done together, but they also have to be done in circumstances in which it is evidently not going to be possible or desirable to maintain a foreign occupation or foreign authority in Iraq for very long. We are looking for the best available solution rather than the best solution. That is likely to be impaired elections with the considerable disorder and considerable continuing mistrust within the country that follows from that.

I have some questions for the Minister, which I hope that she can answer. First, what is now the nature of the British commitment, both military and economic? Do we see this as necessarily as long term a commitment as we have made in Bosnia and Kosovo and in south-western Europe, or do we see it as one that will be increasingly shared? It is obviously an aim of US policy to have most American troops out of Iraq in the next year or so, with their place taken by troops of other nations. Is that what we see happening with Britain, or do we expect to have a really substantial number of British troops still in Iraq for some time in the future?

Secondly, to raise the question that my noble friend Lord Oakeshott and others have asked, what is the degree of British influence over the CPA? It is never entirely clear to any of us how far this is a US-led occupation or one in which others are allowed occasionally to get a word in edgeways. The explicit unilateralism of the Bush Administration does not give us much room for confidence. I saw in the Financial Times a number of references to British companies being invited to bid for some of the contracts, and being entirely shut out of them. Will the Minister tell us whether any British companies have been awarded any of those rebuilding contracts? I share my noble friend Lord Oakeshott's mistrust of the process of privatisation, which does not seem a legitimate process of privatisation with the Coalition Provisional Authority, as it is rightly named.

Thirdly, what is the British attitude to the role of the UN in what is now going to be a rather more rapid transition back to Iraqi control? We all understand that the question is very delicate and that dumping difficult issues in the UN Secretariat's lap is not necessarily the best way in which to restore the battered authority of the UN.

Fourthly, what is the British and, I hope, also the European, attitude—I hope that the Minister can assure us that we are actively concerting our policy with our European friends—to the future of Iraq within the region and to the interaction between developments within Iraq and the region as a whole?

Many of us have read the two UNDP reports on human development in the Middle East and recognise that the idea of helping the authoritarian states of the Middle East through economic and social development is a necessary part of what we all have to do. But how one pushes democratisation on the Middle East is itself a highly contentious question. I read of think-tanks in Washington talking about coercive democracy, meaning you force them to be free, push regime change, force elections on them and then you can leave and they will be good capitalists afterwards. We all know from our experience in the western Balkans that things do not work like that.

The Bush Administration has just doubled the budget of the National Endowment for Democracy. That is one of the more helpful instruments of American foreign policy. What are the British and European governments doing about helping to promote changes in education not just in Iraq but in Saudi Arabia, Syria and elsewhere if this is the strategy that we wish to push on to the region? As was evident in the rather tense debates in December when the current Iraqi Governing Council Foreign Minister visited the UN, we all recognise that the surrounding states are actively concerned, and extremely nervous, about the implications of what happens in Iraq for their own future. Therefore, there has to be a broader strategy towards the region as well as towards the rebuilding of Iraq. We do not yet see that. We hope that Her Majesty's Government are working on it.

My Lords, this has been an excellent and important debate. I congratulate the noble Lord, Lord Rea, on sponsoring it.

I should like to reinforce what the noble Earl, Lord Sandwich, rightly said about the excellent maiden speech of the right reverend Prelate the Bishop of Southwell. I very much hope that the House will be treated to many more such good speeches from the right reverend Prelate in the future.

The Chief Secretary to the Treasury, Paul Boateng, reannounced on 13 November that the Chancellor had set aside £3 billion to cover the cost of the war and reconstruction in Iraq. Despite the Defence Secretary's assurances that the costs of the war were being met from this £3 billion contingency fund, it emerged that in fact £100 million was spent from the MoD's already restricted budget.

During the first 11 days of the war £90 million worth of munitions were fired by British forces. From the start of the war to the end of March—11 days—over £847 million was spent in total on troops, munitions and supplies. Thirty million pounds worth of equipment was lost in battle or accidents. An RAF Tornado, a Challenger 2 main battle tank and two CVR(T) light armoured vehicles were lost to friendly fire incidents in which, very sadly, five servicemen were killed and another five were injured.

The Iraqi environment brought its own costs. Fourteen million pounds worth of ammunition was written off after being stored unprotected in high temperatures. The 15 Lynx anti-tank helicopters achieved only 53 per cent availability against an average of 66 per cent availability for the British military helicopter fleet as a whole, due in part to the operating conditions. Pre-war cost cutting led to high levels of vehicle cannibalisation. Of equipment not deployed to the Gulf, 36 per cent of Chieftain engineering vehicles were plundered for spares along with 29 per cent of the more modern AS90 self-propelled guns and 22 per cent of the Challenger 2 fleet.

Some £510 million was spent on urgent operational requirements and £140 million to address stock shortages, presumably not on the most competitive terms. Against sums like that the £4.1 million spent on an air defence suppression capability for the Tornado F3, which was never deployed, looks like small change.

The noble Lord, Lord Rea, mentioned cluster bombs. The Brimstone advanced anti-amour weapon can avoid the worst aspects of cluster bombs and is a much more accurate system. Can the Minister confirm when Brimstone will finally be accepted into service? I understand that she may not have an answer tonight, but it would be helpful to have a letter on that important point.

So far, the cost of the operation in Iraq appears to be £3.8 billion, taking total spending on the war on terror to more than £6.3 billion since 2001. Each month, military operations in Iraq cost between £100 million and £200 million. If those figures are wrong, I am sure that the Minister will correct them.

It is easy to focus on the financial costs of the war in Iraq, but they must be outweighed by the human cost of the lives lost and the families bereaved. I echo the praise of the right reverend Prelate the Bishop of Southwell for our Armed Forces in Iraq.

It does not appear that there were weapons of mass destruction after all; whether there was the intent on the part of Saddam Hussein to revitalise earlier programmes will be debated for months, if not years, to come. Harder still to quantify is the effect on other areas of Britain's overseas involvement. Our financial ability to provide development aid to other parts of the world has been reduced. There has been much discussion of the assertion that the cost of the operation in Iraq has taken funding away from other DfID projects. The noble Baroness the Lord President of the Council, when International Development Secretary, admitted that projects in middle income countries such as Brazil would be affected by Iraq's reconstruction costs, including a £50 million cut from those middle income countries over the next two years to fund Iraq's reconstruction.

I share the emphasis of the noble Lord, Lord Wallace of Saltaire, on the importance of rebuilding Iraq. It is extraordinary how unprepared the Government were, in the words of the National Audit Office, for the consequences of the collapse of the Saddam regime. On 3 February last year the Prime Minister said that,

"we are well aware that we must have a humanitarian plan that is every bit as viable and well worked out as a military plan".— [Official Report, Commons, 3/2/03; col.26.]

That turned out not to be the case. The right honourable Clare Short, Member for Birmingham, Ladywood, former International Development Secretary, accepted that there were "poor preparations" for post-conflict Iraq, despite our Benches continuously underlining the need for a comprehensive plan for securing 3 new Iraq.

The status of the UN as an institution has been weakened. Relations between most of Europe and the US, although mending slowly, are still fragile. Those are all costs with an immediate impact on trade and a possible longer term impact on the ability and willingness of the international community to react to future crises.

There are growing concerns over the way that the US Government have awarded contracts for reconstruction and infrastructure projects mainly to US companies—without tender. Although DTI Minister Mike O'Brien has said that British companies could and should be awarded more projects, the US continues to award contracts to US companies, as the noble Lord, Lord Wallace of Saltaire, pointed out.

There are problems with who should sign the contract. Should it be the Coalition Provisional Authority, mentioned by the noble Lord, Lord Oakeshott, or the Iraqi Governing Council? Which has legitimacy? If the CPA signs, will the contract still hold after the IGC or the future elected government take over? More worryingly, there are claims of corruption. The Financial Times has reported that two CPA officials and the IGC's Minister for Communications are being investigated over bribery allegations surrounding the issue of mobile phone licences.

Late last year, it was claimed that a Halliburton subsidiary, Kellogg Brown and Root, had overcharged the US for oil deliveries it had been appointed to oversee. The commander of the Army Corps of Engineers, General Robert Flowers, exonerated the company, but a new agency, the Defence Energy Support Centre, has been set to oversee fuel deliveries to troops instead. It has since been reported that the Pentagon is now considering an investigation into fuel prices.

Can the Minister confirm the value of contracts awarded by the MoD to US companies in 2002 and 2003? Could she further confirm the value of defence contracts awarded to British companies by the US Department of Defense over the same period? I accept that she will not have answers to those two questions tonight.

Saddam Hussein's regime has been a costly one indeed. And a clear lesson is that despots are better dealt with sooner rather than later, whether in Iraq, Zimbabwe or North Korea.

But there are benefits also. A murderous tyrant has been removed from power and a powerful signal has been sent to other totalitarian leaders of the dangers of defying the major democracies of the world. Witness the improvement in relations with Libya.

The noble Earl, Lord Sandwich, mentioned the "oil for food" programme. Also important is the restoration of Iraq as oil producer. The estimated cost of 50 billion dollars is less than two years' revenue. Full oil production will contribute about 1,200 dollars a year per capita GDP.

The recovery of Iraq's oil industry has been hit by delays in assessing foreign reconstruction funding. Output is, at 2 billion barrels per day, still only 80 per cent of pre-war levels and 15 per cent is re-injected into the ground because of export bottlenecks. The CPA has said that the oilfield's reconstruction is its top priority and hopes to produce 2.5 million barrels per day by mid 2005. The Iraqi Governing Council is counting on projected oil revenues of 12 billion dollars, increasing to 19 billion dollars in 2006, to help pay for the country's reconstruction, but it is feared that the delay in providing funds to reconstruct existing infrastructure will reduce the amount of oil produced.

The forthcoming elections in Iraq are crucial to the future stability and prosperity of that troubled country. The test will be whether the forthcoming government represents the wishes of the majority Shia population while respecting the needs of the minority Sunni and Kurdish populations. We now have a good idea of what the cost of failure will be; the value of success to the people of Iraq, to the Middle East and to the world as a whole is much greater.

My Lords, I, too, thank my noble friend Lord Rea for what he described as the latest instalment in the long-running debate he has conducted with government Ministers on important questions about Iraq. I congratulate him because in a short debate he raised an enormous number of questions. I shall do my best to answer them.

I, too, congratulate the right reverend Prelate the Bishop of Southwell on a well-researched and very well-argued contribution which was delivered with the great conviction so characteristic of his colleagues on his Benches. We look forward to hearing more from him in the future.

Much as I disagree with the noble Lord, Lord Wallace of Saltaire, on the rights and wrongs of what happened recently in Iraq, I strongly agree with him that this is a long haul and that the issue excites an enormous range of practical and political questions.

This range of questions was very ably demonstrated by the noble Lord, Lord Astor of Hever, in his very thoughtful contribution in dealing with issues of hard costs, what has really happened and what we can quantify. Then there are the softer costs and dealing with the issue of good will.

I have a short time in which to try to deal with the matter. I suggest to your Lordships at the outset that as the Minister responsible for our relationship with Iraq, I offer noble Lords a briefing on the wide range of issues. In order to do justice to the enormously wide range of questions raised that is the best way in which I can try to pull the threads together. I shall do my best now. I do so in the knowledge that we shall try to have a meeting about this very soon in order to deal with a number of the issues which I shall not be able to deal with now.

At the heart of my noble friend's Question is how we quantify what has happened in Iraq over the past few months; what the balance sheet will look like at the end of the day. What financial resources have been spent and what has been the human cost of the conflict? What more are we to expect as regards those costs? Those are important questions. I shall do my best to deal with those matters.

It is also very important to focus on a point raised by the noble Lord, Lord Astor of Hever, about the gains to the Iraqi people and the international community more generally following our decision to enter the conflict. The balance sheet must take into account the costs on the one hand and the gains on the other and also consider what would have been the price of non-intervention.

Undoubtedly there are many different points of view. I say to my noble friend Lady Turner of Camden that I respect her views. She has been clear, unequivocal and consistent throughout the whole debate. But I too am consistent in disagreeing with her profoundly. I freely acknowledge that many will agree with her, but it is important to set out some of the facts as we have them.

The cost of military operations in Iraq has been published as part of the annual report and accounts of the Ministry of Defence. Operating and capital equipment costs for the year 2002–2003 totalled £847,211,000.

Perhaps I can say a little more about our military losses as well. I am very sorry to say that there has been a total of 56 fatalities since the start of hostilities. Thirty-nine of them occurred in action and 22 fatalities have been sustained since 1 May, 12 of them taking place while in action. According to the Department of Defense website, as at 26 January the US has sustained 514 fatalities of which 355 occurred in action. The US has suffered 376 fatalities since 1 May of which 240 occurred in action. In addition, five Bulgarians, two Thais, 19 Italians, 10 Spaniards, one Polish officer and two Japanese diplomats have been killed in action. Two contractors from South Korea and one from Colombia have also been killed in action.

We mourn the losses of all these brave service people, civilians and diplomats. For my part I also mourn the loss of the Iraqi military and civilians. I do so with enormous regret in that we cannot give an accurate figure about the civilian losses of Iraqi people. I know that a number of noble Lords are concerned about this. As many noble Lords will know, it is a question which is raised regularly in another place as well. I know that the Prime Minister is concerned about it and is getting a more accurate figure. We will do our best to get an accurate figure. I am sure that noble Lords will understand that at a time of military conflict there is great confusion and security issues surrounding obtaining information. It may take some time to get that information and it may not ultimately be as accurate as we would wish. What I can say is that considerable care was taken and indeed continues to be taken to limit civilian casualties in any engagement involving our Armed Forces. As a Minister who served in the Ministry of Defence, I know from personal experience that all Ministers in this country who are involved in decisions on targets and military action are made very much aware of their personal responsibilities in that respect.

I shall write to the noble Lord, Lord Astor of Hever, on the question of the loss of capability of equipment and how we will replace some of that equipment. I have also made a note of the issue that he raised in relation to Brimstone.

The noble Lord, Lord Oakeshott, raised questions about the financial issues. I shall try to deal with some of those factual issues. In doing so, I stress to your Lordships that many of the costs that I shall talk about accrue not so much from the conflict itself as from the years of neglect that preceded it under Saddam's regime. One of the difficulties that we experienced was in trying to separate out those costs. When I first started to talk about these issues to my colleagues in our own Government and in Iraq itself, we quickly discovered how difficult it was to allocate costs to Saddam's regime, and then to the period following it, in terms of how we would do our accounting.

The World Bank and the UN carried out a needs assessment on Iraq in 2003. That assessment estimated that the financial needs for Iraq's rehabilitation would be about 55 billion dollars over the next four years. I assure the noble Lord, Lord Wallace of Saltaire, that 73 countries which attended the very successful Madrid Donors Conference in October 2003 have now expressed interest in this matter. Thirty-three billion dollars was pledged by way of grants and concessional loans to Iraq for the period 2000–2007. Additional pledges were made in the form of trade credits and assistance in kind. It was particularly pleasing to see pledges from some of the major economic powers, such as Japan, as well as from less wealthy countries but none the less important partners. That confirms the confidence of the international community in the prospects for Iraq's future.

In relation to some of the issues raised by the noble Lord, Lord Oakeshott, I should say that my right honourable friend Hilary Benn was closely involved in the International Advisory and Monitoring Board, whose members include the UN, the World Bank, the International Monetary Fund and the Arab Fund for Social and Economic Development. They are responsible for monitoring the use of funds in the development fund for Iraq, and they will ensure international transparency over the use of Iraq's oil revenue. That comprehensive, international board is not run by an American clique—I think the noble Lord was rather worried that it was—or even a coalition clique, but it is broad based. As the Foreign Secretary said in Davos, Iraq's oil will be used for the benefit of all her people instead of being held hostage to the ambitions of the extravagance of a ruling élite.

We should not forget that Saddam ran up an exorbitant and extremely complex debt, which is estimated to run at about 120 billion dollars. James Baker's recent tour of European, Asian and Middle Eastern creditors created a consensus in relation to the need for substantial debt reduction for Iraq, and we believe that the vast majority of Iraq's debt will need to be written off in order to assure a sustainable solution. On debt, as on other aspects of reconstruction, the United Kingdom is providing a considerable contribution in terms of its financial and political effort.

On contracts and privatisation, I can tell the noble Lord, Lord Wallace of Saltaire, that we are talking about many different contracts. It would be very difficult to deal with the list from the Dispatch Box now, but it is one of the issues that we may be able to cover more comprehensively in the kind of briefing that I have suggested.

It is almost impossible to attempt in any real sense to calculate the costs in economic or human terms. One has to ask what is attributable to this conflict, as opposed to the other two conflicts in which Iraq has recently been involved, and what is attributable to the years of repression and the use of chemical weapons on Saddam's own people? We should not forget the full extent and nature of the crimes committed by the former regime. Some of the evidence relating to that is only just emerging. Some 270 mass graves have been reported. Estimates of the number of people buried reach some 300,000, although I suspect that we shall not know the real figure until a systematic investigation takes place of all the regime's activities.

On 10 December, the Iraqi Governing Council announced the establishment of a special tribunal to prosecute senior members of the former regime who are suspected of having committed crimes against humanity. That is a real gain in terms of Iraq coming to grips with its own past in its own way. We have heard some truly horrible eye-witness accounts of the execution of families, children and helpless civilians. Those are revolting and heart-breaking descriptions.

Therefore. I cannot agree with my noble friend Lord Rea that the people are not consoled by the ending of this ghastly regime. When I go to Iraq and when I see Iraqis, as I do, around Europe and here in this country, I find it very hard to find anyone who does not welcome the departure of Saddam's regime. I make no apology for asking what the cost would have been if we had not done what we did and if the coalition had not taken action. Would there have been more mass graves, more missing people, more threats against neighbours and defiance of the United Nations?

Now, Iraq can look forward—not to mothers being beheaded in front of their children and not to unspeakable torture of children carried out in front of their parents-but to peace, stability, prosperity and democracy. As the noble Lord, Lord Astor of Hever, said, we must look at the gains.

The noble Earl, Lord Sandwich, indicated that the problems are still profound. Of course, he is right; I fully acknowledge that. However, I believe that he must also look at the less gloomy side. We should consider the 17.000 construction projects, large and small, which provide more jobs and higher salaries than was the case under Saddam's regime. Let us look at the servicing of power facilities and at the water and sanitation projects which are providing cleaner water to 14.5 million Iraqis.

Specifically, I say to the noble Earl that we should look at the 240 clinics and hospitals which have now reopened; at the introduction of vaccination programmes around the country; and at the estimated 3 million children under the age of five who have been vaccinated. Let us look, too, at the 3.6 million children now in their primary schools or the 1.5 million attending secondary schools. In some parts of the country, the figures are higher than they ever were under Saddam Hussein. We have also seen Iraqis coming to this country benefiting from our Chevening programme, and we hope to arrange further exchanges of that nature.

The right reverend Prelate raised a very good point in relation to security. Criminal offences are now declining. There are more than 45,000 non-partisan Iraqi police on the streets and extensive police training is taking place. I can give your Lordships many, many figures on that. However, I believe that the right reverend Prelate was right to focus on Iraq's own security capability, which is building up. The 27 battalions of the non-political New Iraqi Army have graduated and are being deployed. There are also developments in the Iraqi Civil Defence Corps, whose numbers, we hope, will double to approximately 36,000.

I have my eye on the clock and I know that time is short. However, the noble Earl raised very important questions about armed individuals in relation to aid. I believe that the noble Earl must consider what our real alternatives are. Are they to send aid with an armed guard, which he considers to be deplorable, or to send no aid? Or are we to send the aid workers without guards and thus fail in our duty to protect those who are distributing the aid? These are terribly difficult questions. We are conscious of the point that the noble Earl raised and I believe that it is one on which we should have further debate.

I could say much, too, about the gains in the political sphere. I believe that the noble Viscount, Lord Astor of Hever, covered that point very well. We all agree on the need to hold elections. The only matter in question now is the form that the elections should take. We all know that there is a disagreement within the Iraqi hierarchy about that. Ayatollah al-Sistani takes one view; the Sunnis take another; and the Kurds take another. I assure my noble friend Lord Rea that we have warmly supported the intervention of Kofi Annan. He has confirmed that, once he is satisfied about the security arrangements, he will send his team to Iraq to examine the feasibility of holding elections in the near future.

I also take the point that there are issues for Iraq's neighbours, and I have discussed those issues with many of them. The United Kingdom attaches enormous importance to preserving the territorial unity of Iraq because we believe that the only long-term viable solution is one of a unified Iraq at peace with herself and her neighbours. That must mean discussion with neighbours about the way in which that will be done.

There have been financial costs and costs in human terms. But I think that most people—including most Iraqis— would agree that painful though those costs have been, they have been and should be worth while. Compared with the horror of what went on before, Iraq has gained immeasurably. It has gained in a practical sense from the financial support that it receives from the worldwide community. It has also regained its standing in the world. It is regaining its identity and the control of its democracy. It is regaining the asset of living under the rule of law. It is regaining its schools and hospitals. And, it is also regaining in the dignity that it is able to return to its people.