POSTAL SERVICES BILL (PROGRAMME) (NO. 2)

House of Commons, 9 June 2011.

Postal Services Bill

Clause 2 — Report on decision to dispose of shares in a Royal Mail company etc

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move, That this House agrees with Lords amendment 1.

Dawn Primarolo (Labour, Bristol South)

With this it will be convenient to consider Lords amendments 2 to 11.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I would like briefly to take hon. Members back to the Bill’s Third Reading in this House, when I marked the passing of the Bill into the capable hands of the other place by saying that the coalition Government’s decision to take on this difficult issue showed them at their strongest and most radical. As we welcome the Bill back, I would like to add to that and say that the Lords amendments before us today also show government at its most open-minded and collaborative, because they represent the constructive and collective efforts of both sides of the other place to improve and strengthen the Bill. The amendments in this group concern part 1 of the Bill and the provisions for the ownership of Royal Mail and the Post Office. I am clear that when it comes to undertaking a sale of shares in Royal Mail, the Government must have the flexibility to negotiate the right deal at the right time.

I know that hon. Members have been anxious to hear more about the next steps in our plans for Royal Mail, so with your indulgence, Madam Deputy Speaker, and in the interests of transparency, I would like to set out briefly the next two crucial steps that need to be taken to secure the future of Royal Mail. As my noble Friend Baroness Wilcox said on Third Reading in the other place, the Government intend to take on Royal Mail’s historical pension deficit with effect from March 2012 as part of the preparations for the sale of the company. I am sure that hon. Members will appreciate what a relief it will be to the 435,000 members of the Royal Mail pension plan to know that their accrued pension rights will be protected sooner rather than later.

The key concern of people up and down the country is that the universal service must be protected. To do that, Royal Mail needs to be on a sustainable commercial footing. The company currently has about £1.7 billion of debt facilities with the Government. We need to restructure the company’s balance sheet in due course, and in order to put Royal Mail on that sustainable commercial footing, we will need to reduce significantly that level of debt. Of course, we will need approval from the European Commission to provide this financial support, and we have already begun informal discussions with the Commission. The Government will submit a formal stated notification in the next few days, and I hope that the process will be completed by March 2012.

We will discuss amendments to part 3 of the Bill, which deal with the new regulatory regime, later on, but of course implementing that regime will be another

crucial step towards securing the future of the universal service. I would like to assure hon. Members that the work to establish this is already under way. In particular, Ofcom, the new regulator, will launch a consultation in the autumn with a view to establishing the new regulatory framework in the spring of 2012. I hope that that update is helpful.

I begin my main remarks on this group of amendments by commending Opposition Members on pushing us on whether, given our commitment to transparent government, more could and should be done to offer more information to Parliament. Amendment 1 is a direct response to that. Clause 2 already commits the Government to report to Parliament when a decision to dispose of shares has been made. Amendment 1 adds three new requirements for that report: first, that it must include the objective for the sale; secondly, that it must include details of the expected commercial relationship between Royal Mail and Post Office Ltd following the disposal of shares; and thirdly, that where the proposed disposal would result in shares being placed into the employee share scheme for the first time, the report must include details of that scheme. As I previously said to the Public Bill Committee, I will ensure that shares are placed in the employee share scheme from the time of the very first sale of shares in Royal Mail.

The second of the new requirements—to provide information on the expected commercial relationship between Post Office Ltd and Royal Mail after the sale of shares—will work together with amendment 9 to address a key concern that I know is held by many in the House. After much debate in the House and elsewhere, I can still see no reason why the strong commercial relationship between Post Office Ltd and Royal Mail should weaken after the two companies have been separated. More importantly, the senior management at Royal Mail has been clear that this relationship will continue. That is why the chairman of Royal Mail, Donald Brydon, felt able to say to the Bill Committee that prior to a sale of shares in Royal Mail, the two companies would put in place a new contract for the longest time legally permissible. I have gone on the record—and I am happy to do so again today—as saying that the Government, as sole shareholder, will ensure that the two companies fulfil this commitment.

The negotiation of that contract is, rightly, a commercial matter for the two companies, and not for the Government or this legislation. However, Lords amendment 1 will ensure that, prior to a sale of shares in Royal Mail, Parliament has a snapshot of the expected commercial relationship following the sale, and Lords amendment 9 would make it clear that the annual report on the post office network must include information every year on the postal services provided as part of that relationship. Lords amendment 10 is a technical amendment to clarify the enforcement powers that apply to the annual report on the post office network.

There can be no doubt that the future of this iconic British institution is of enormous interest to Members of this House and in the other place. I believe that a mutual Post Office is a radical and exciting proposal, and one that is supported by all parties. However, I acknowledge that our position—that mutualisation must be a bottom-up process that engages sub-postmasters, customers and management—means that we cannot be as explicit now about what that mutual will look like.

Co-operatives UK has now published its report on the options for a mutual, and that report will form the basis for the Government’s full public consultation in due course. Until the conclusion of that process, the Government remain open to all views. We will not dictate the form that mutualisation will take.

To give both Houses more oversight of what an eventual Post Office mutual might look like, we have tabled Lords amendments 2 to 8, which would introduce the affirmative procedure to the powers to mutualise Post Office Ltd. Furthermore, those amendments would ensure that the report on mutualisation provided for under clause 5 must be laid prior to the vote, so that hon. Members have full and detailed information on the mutualisation plans before they debate and vote on them. Let me be clear, however, that the plans, as I have said before, will be developed from the bottom up and in full consultation with all of the Post Office’s major stakeholders.

The last amendment in this group—Lords amendment 11 —addresses an issue that I know is close to the hearts of many hon. Members. When my right hon. Friend the Business Secretary opened the debate on the Bill on Second Reading, he talked of this country being a pioneer of postal services in the 19th century. It is that proud and rich postal history that Lords amendment 11 seeks to protect, by requiring Royal Mail to report annually on its activities in relation to the British postal museum and archive. Having visited the British postal museum and archive, I can say that it provides a wonderful and fascinating record of our postal heritage, and is absolutely deserving of the protection that Lords amendment 11 seeks to provide. I would be quite keen to share with the House the benefit of my visit and some of the lessons that I learnt—for example, that the first post boxes were green, before moving to chocolate brown and then ending up one of the shades of red that we see across our country—but I am sure that you would bring me to order if I did, Madam Deputy Speaker.

In conclusion, the amendments in this group respond to a number of concerns raised in both this House and the other place. They seek to offer more information on the implications of the sale of shares, more parliamentary control over Post Office mutualisation and greater transparency of Royal Mail’s heritage activities. I believe that the objectives that they seek to achieve are truly cross-party objectives, so I would urge the House to agree to them.

Nia Griffith (Labour, Llanelli)

It is indeed our intention to be a constructive Opposition and to welcome amendments that improve the Bill. However, even though we welcome some of the amendments this afternoon—particularly where they reflect to some degree the position that we have taken on aspects of the Bill—we remain totally opposed to the main purpose of the Bill, which is to sell off Royal Mail 100% to private enterprise. That is completely different from our proposal, which was to keep Royal Mail in majority public ownership. Selling off Royal Mail into 100% private ownership means that only through the regulatory regime will the Government and the taxpayers of this country have any influence on the service provided.

Lorely Burt (Liberal Democrat, Solihull)

Will the hon. Lady give way on that point?

Nia Griffith (Labour, Llanelli)

I shall take your advice on the matter, Madam Deputy Speaker; I believe that the hon. Lady should stick to the amendments on the Order Paper.

This first group of amendments concerns the sell-off of Royal Mail and the splitting up of the Royal Mail Group into a privately owned postal service and a publicly owned network of post office counters. It is against that background that we should consider Lords amendment 1, which requires that when the Secretary of State lays before Parliament a report on the disposal of a Royal Mail company, it should include

“information about the expected commercial relationship…between the Royal Mail company in question and any Post Office company”.

We genuinely welcome the inclusion of such information in the report, but no one should be under any illusion that this in any way constitutes an inter-business agreement between Royal Mail and the post office network. Hooper recommended in his report that there should be a long-term agreement between Royal Mail and Post Office Ltd, and the National Federation of SubPostmasters has asked for an IBA of a minimum of 10 years. We have repeatedly called on the Government, at all stages of the Bill, to include an inter-business agreement in the legislation, and have tabled amendments to that effect.

One third of Post Office Ltd’s revenue comes from Royal Mail. Without that revenue, Post Office Ltd would be unable to keep many post offices open. With the greatest of respect to Moya Greene, the current chief executive officer of Royal Mail, who has talked about a privatised Royal Mail continuing to use the post office network, it is no good simply having fine words. Those fine words need to be translated into a proper bankable contract—a proper agreement. Other countries manage to put agreements into their legislation, but the real difficulty in this case is an intense obstinacy on the part of the Government, who have set themselves against enshrining any protection for the post office network in legislation.

A profit-hungry privatised Royal Mail will be looking to cut costs and maximise profits. That could result in Royal Mail drawing up an agreement for part or even all of its services with providers other than the post office network, such as a supermarket chain or a high street store. A privatised Royal Mail may well wish to continue to have some sort of agreement with Post Office Ltd, but that agreement could be for a much reduced service from that which the Post Office currently provides. It could involve just a small proportion of the current network of Post Office branches. That could give rise to the surreal spectacle of some post offices being places where people could hand over their parcels or register their letters, with other post offices not offering postal services. It sounds a bit like a children’s riddle—“When is a post office not a post office?”—but it would be no joking matter for our post office network or for the public, who want easy access to postal services, if such services were available at only some of the current post office branches.

Any decision by a privatised Royal Mail to reduce the number of branches that it uses would have a catastrophic effect on the income of the post office network, and

threaten the viability and very existence of any branches that Royal Mail chose not to use. It is therefore regrettable that the Government have refused to include a clause in the Bill requiring an inter-business agreement and that Lords amendment 1, which requires a report on such an agreement, is the nearest that they are prepared to get. The amendment does, nevertheless, mean that the report that the Secretary of State lays before Parliament must include some mention of the expected commercial relationship between Royal Mail company and any Post Office company, and for that reason we welcome it.

Let me turn to the part of Lords amendment 1 that deals with shares. We accept the principle of employee shares, and appreciate the benefits that such schemes can bring, but in this instance employees will need to know a lot more about exactly how any scheme would work. We have pressed for greater detail about the scheme, so we welcome the proposal in the amendment that a report be laid before Parliament setting out the detail of a proposed employee share scheme before the disposal of Royal Mail takes place. In Committee, we pointed out that the Bill as it stands requires employee shares to be offered only when the last Crown share in Royal Mail has been sold. We argued the case for a trigger that kicks in when the first shares are sold. The Minister for postal services has suggested that, despite the wording of the Bill, the Government would, in fact, make available some employee shares when the first disposal is made. I very much welcome his confirmation of that point today, so that employees will not have to wait until the last Crown share is sold before being able to apply for any employee shares.

There remain, however, a number of unanswered questions, on which I hope the Minister can give us some guidance today. Would shares be held on an equal basis, with equal voting rights for each shareholder and an equal distribution of dividends, or would some shareholders be more equal than others? In Committee, we made the case for more than 10% of the shares to be in the employee share scheme; we have suggested up to 20%. That case is backed by specialist bodies that gave evidence to the Public Bill Committee, including the Employee Ownership Association and ifs ProShare. Is there any chance that the Government might consider that?

We would also like greater certainty about the eligibility criteria. Who would be entitled to shares or share options, and what would that mean in practice? Would employees be able to act to influence the strategic direction of the company to some extent, albeit from a minority position? In particular, what is to prevent shares from going to employees one day and being sold within a year or two? We all know of previous examples of where that has happened, with shares being rapidly sold on to big institutions. What mechanisms are the Government considering to prevent that from happening? We hope to hear from the Minister the extent of the detail that the Government intend to report and how much time they will provide for Parliament to consider the report.

We welcome Lords amendments 2 to 8, which give Parliament increased control over the mutualisation of a Post Office company. The effect of amendments 2 to 4 would be to subject the disposal of the Crown’s interest in a Post Office company to a relevant mutual to the affirmative resolution procedure. That would require

the Secretary of State to lay a draft order before Parliament and for it to be approved by both Houses before it could be made. Lords Amendments 5 to 8 require the Secretary of State to lay a report before Parliament before an order directing the issue or transfer of shares or share rights in a Post Office company to a relevant mutual is made. That is an improvement on the original requirement, which was to lay a report after any direction for the disposal of the Crown’s interest in a Post Office company to a relevant mutual had been made.

These amendments strengthen the opportunity for Parliament to scrutinise any proposals for the mutualisation of the Post Office. This is important because considerable challenges must be faced before any such mutualisation can take place. We welcome the work on mutualisation detailed in the recently produced report by Co-operatives UK, which includes information on various mutual options, and on the ownership and governance of a potential mutual, but we recognise that the real challenge is to make the post office network viable. For all the Government’s fine rhetoric, we are concerned about their failure to guarantee business for the post office network. For mutualisation to be a success, we need to see a serious, viable business plan for our post office network. We are fully aware of the Government’s plans to spend money on the network, but their accompanying document “Securing the post office network in the digital age” does not address the issue of how to generate new streams of business for the network.

Post office income can be divided into three main categories—Royal Mail business, Government business and other commercial business—and the Government have failed to provide guarantees of business in any of them. I have just explained how the lack of an inter-business agreement between a privatised Royal Mail and the post office network could result in the loss of all or a substantial part of Royal Mail business from the post office. As for the Department for Business, Innovation and Skills’ claim to be making the Post Office a front office for Government business, that message does not seem to be getting across to other Government Departments.

For example, we have just seen the Department for Work and Pensions award the contract for benefit cheques, the so-called green giros, to a rival organisation. Apart from a couple of pilot projects, there has been little progress on the proposals for more Government business made in a letter from the National Federation of SubPostmasters to the Secretary of State for Work and Pensions dated 23 September last year. At the moment, the post bank promised in the Liberal Democrat manifesto and mentioned in the coalition agreement looks like just another broken promise and missed opportunity, especially after Labour had laid the foundations for it before we left government. Nor is there any sign of any other substantial new commercial business for the post office network.

This complete failure to introduce new streams of business calls into question the wisdom of the way in which the £1.34 billion of taxpayers’ money allocated to the Post Office is being used, with the subsidy for running the Post Office and the provision of a few new counters seemingly accounting for the lion’s share of the funds. This also raises the question of what will happen when the subsidy runs out in 2015. The Government have stated that they wish to reduce their subsidy, but if

there are no new streams of Government business to make the network more viable, the post office network will be in serious trouble. However, the fact that Lords amendments 2 to 8 improve the opportunity for parliamentary scrutiny means that we will support them.

We welcome Lords amendments 9 and 10, which clarify that in the Post Office company’s annual report to the Secretary of State on the post office network, details of postal services provided under arrangements between a Post Office company and a universal service provider must be included. We welcome any amendments that improve clarity and increase the opportunity for parliamentary scrutiny.

Lords amendment 11 would require Royal Mail to report annually to the Secretary of State on its activities in relation to the British Postal Museum collection and the Royal Mail archive. The proposal would also require the Secretary of State to lay the report before Parliament. In Committee, we sought amendments to ensure that the work of the British Postal Museum and Archive—the BPMA—would continue following the passage of the Bill, and that the heritage cared for by the curators of the museum would be protected. That protection needs to be strengthened, because the Bill moves us away from a situation in which one Government-owned company, Royal Mail, is clearly responsible for supporting and safeguarding our postal heritage, to one in which there will be at least two companies with different ownership models. There will also be the potential for a privatised Royal Mail company to be taken over, perhaps by foreign postal administrations or other companies with no interest in supporting Britain’s postal heritage.

I do not feel that the Lords amendment is as strong as the one that we originally proposed. Nevertheless, anything that we can do to protect our heritage is to be welcomed. The BPMA is the leading resource for British postal heritage. It cares for visual, physical and written records dating back more than 400 years, including stamps, poster design, photography, staff records and vehicles. The BPMA is the custodian of two internationally significant collections—the Royal Mail archive and the collection of the former national postal museum. Together, the museum and archive collections form a unique record of a national institution, and offer a fascinating perspective on the history of British society, design and industry. We want the strongest possible protection for the British Postal Museum collection and the Royal Mail archive, and although we were looking for stronger protection, we are of course pleased to lend our support to that amendment.

Lorely Burt (Liberal Democrat, Solihull)

I welcome the Lords amendments that we are considering today. They are an indication of the way in which the Government and the Opposition can work together, because the Government have obviously listened to the constructive suggestions made by Members on both sides of the House. There is a great deal of consensus; I believe that the amendments went through the other place without a Division. That goes to show just how well things can work when everyone is minded to make that happen.

On the subject of shares going to employees, when I wrongly tried to intervene on the hon. Member for Llanelli (Nia Griffith), I was going to point out that it is not 100% of the company that is being sold off to private interests: it is actually 90%, and 10% will go to

the employees. The benefits to those employees will be huge. The Bill recognises the importance of the work of the conscientious postman or woman who keeps the post coming through the letterbox six days a week, come rain or shine, and the importance of the work force to the success of the company. The proposals will offer real benefits to the employees.

I greatly welcome the fact that the pension plan members will be protected and that the subsuming of the pension plan is being brought forward. That will give tremendous reassurance to prospective pensioners in Royal Mail. Perhaps most importantly, and despite the disagreement of the Opposition, we are securing the future of the company. The worst thing would be for the Government to do nothing, which would allow Royal Mail to decline and fall. It is an unfortunate fact that, under the previous Government, 65,000 Royal Mail employees lost their jobs and 7,000 post offices were closed. The future of the post office network is now secure. I also greatly welcome the proposal for a vote before mutualisation. That will put in place important protections.

I should like to ask my hon. Friend the Minister a few questions. Does he think that I have understated the benefits for employees? Can he think of any others? Can he give me an assurance that the universal service obligation will be properly protected? Has he had any discussions with representatives of the Communication Workers Union, and, if so, what do they think about the proposals?

Jack Dromey (Labour, Birmingham, Erdington)

It is important that, when we come to the House, we should reflect the feelings of our constituents. I should therefore like to tell two stories. First, just before Christmas, I visited the local postal sorting office at Sutton New road. I spoke to each of the excellent men and women there. They told me how they had worked there for 10, 15 or 20 years. Some had worked there for 25 years. They work in all weathers to provide an outstanding service to the people of north Birmingham. They felt bitter about what they regard as a betrayal of their loyal service to the country.

Secondly, I want to tell a story not so much about a local post office as about a local entrepreneur who wants to reopen a post office. We have in Perry Common a community well served by the Witton Lodge community association. That community has backed an individual who now runs the local grocery shop—it used to be a sub-post office—and he wants to reopen that post office. Through me, he has approached both the Post Office and the Government for support, only to have it declined. If I may, I will return to that matter at the conclusion of my remarks.

The Lords amendments focus on local post offices, among other things, and the evidence is clear that they are finding it increasingly hard to survive. By some estimates, only 4,000 of the UK’s 11,905 post offices are economically viable. Despite assurances from the Government that there will be no further programme of post office closures, the evidence shows that branches are closing every day of the week. More than 150 offices are closed on a long-term “temporary” basis and there

is no guarantee that these will re-open; many are likely to stay closed indefinitely. As Consumer Focus stated in a press release,

“we have continued to see a dwindling in the overall number of branches.”

Nationwide, 900 post offices are up for sale. That is why the Post Office cannot afford to lose any more revenue. The post office network is already loss making and depends on an annual Government subsidy to remain afloat. In 2009-10, the Post Office made an operating loss of £80 million before Government subsidy and its financial position continues to weaken. Its target this year, excluding subsidy, is for a £120 million loss.

The Government have pushed through this unwelcome Bill, allowing the privatisation of Royal Mail with scant regard for the consequences for the post office network or the universal service of a six-day delivery at a uniform, affordable price across the whole of the UK. As the Labour Front-Bench team has made absolutely clear, we continue to oppose the wholesale privatisation of the Royal Mail. We called on the Government for a guarantee of an inter-business agreement between Royal Mail and Post Office Ltd. The Government have refused to listen to that, including in these amendments, so they are abrogating their responsibilities to the post office network.

I have to say that Conservative and Liberal Democrat MPs are quick to use the Post Office in their localities for their own political ends, but not as quick to stand up in this place for their local post offices in their time of need. I also have to say that the Government’s approach calls into question the logic of allocating £1.3 billion of taxpayers’ money for subsidy and refurbishment of post offices when the Government are not prepared to put a clause in the Bill to guarantee the future of Royal Mail business to the Post Office.

The Minister referred to history, and this remarkable institution of the Post Office certainly has a remarkable history. We have seen over the last 50 to 100 years how it has developed ground-breaking initiatives that make no profit but serve the community—ranging from free delivery of articles for the blind to answering letters written to Santa free of charge.

Returning to the issue of the Post Office—

Dawn Primarolo (Labour, Bristol South)

I might be anticipating what the hon. Gentleman is going to do, but may I remind him that these Lords amendments are quite specific, so he needs to focus his remarks on them? Perhaps he was just about to do so.

Jack Dromey (Labour, Birmingham, Erdington)

I was just about to do so, Madam Deputy Speaker, but like the Minister, I embarked on some historical anecdotes, as the Post Office is very proud of its history.

There is a simple inescapable reality, which is that the Post Office is dependent on Royal Mail’s business. A third of its revenue—£334 million—and a third of sub-postmasters’ pay—£240 million—is generated by selling Royal Mail products and services. The Bill does not safeguard on a continuing basis the inter-business agreement. The Government will not undertake to extend the current five-year guarantee to 10 years. Key stakeholders recognise the importance of making a longer commitment

on the IBA. Let me cite what Consumer Focus said in its evidence to the other place:

“There are few safeguards to keep that contract for the long term. It’s entirely conceivable—though it seems an odd thing to suggest—but several years down the line you could have a post office network where you cannot undertake mail transactions. It would be for Royal Mail to determine which operator—whether it was Post Office Ltd or Tesco or whomever—to offer mail services and there would be no requirement for stamps or parcels.”

It continued:

“You could see a scenario where Royal Mail looked to cherry pick so Tesco, say, could meet its requirements in urban areas and the Post Office would pick up the slack in rural areas where there isn’t anybody else. And that has very serious implications in terms of the viability and integrity of the network because urban areas typically make money.”

Consumer Focus went on to argue that the number of post offices could fall by 37% as a consequence of these measures—from the current level of 11,900 to the minimum number consistent with the Government’s access criteria of 7,500. In Birmingham alone, seven post offices face closure.

The National Federation of SubPostmasters has added its call to the need for action. It also argues for a minimum 10-year IBA. Let me quote what it says:

“The NFSP believes that in order to avoid further post office closures, existing levels of Royal Mail work at post offices must be maintained with a minimum 10 year IBA between the two companies following separation.”

The Government’s stance is clear, albeit sad. They have rejected a number of opportunities to make the commitments that have been called for.

Fiona O'Donnell (Labour, East Lothian)

Is my hon. Friend aware of the recommendation in the Select Committee on Scottish Affairs report that the Government should be doing more to remove the barriers to local post offices providing services in relation to devolved and local government?

Jack Dromey (Labour, Birmingham, Erdington)

To develop our post office network, it is necessary to be imaginative and creative. Sadly, we are moving in the opposite direction.

The Government’s stance could not be clearer. They have rejected a number of opportunities to make the commitment firm in this important legislation. They have declined to accept a statutory commitment, as exists in countries such as Germany and the Netherlands, to a figure of 11,500. They have rejected the embedding in the Bill of the access criteria on how near people’s local post office will be. Post offices locally cannot live on warm words alone; good intentions and high hopes mean naught if we cannot have guarantees for the future.

Lorely Burt (Liberal Democrat, Solihull)

Will the hon. Gentleman refresh my memory on how many new post offices were created under the Labour Government? Was there not a net decline, or managed decline, of the Post Office amounting to 7,000 post offices. Why does he decry the fact that this coalition Government are doing all they can to preserve and enhance the post office service that we have inherited?

Jack Dromey (Labour, Birmingham, Erdington)

rose—

Dawn Primarolo (Labour, Bristol South)

Order. We are supposed to be discussing amendments that have come from the House of Lords and deal with commercial relationships, the interaction between various bodies and the issue of an employee share scheme. I would be grateful—no, I insist that Members stick to the amendments before us on these important issues.

Jack Dromey (Labour, Birmingham, Erdington)

In that case, I must regretfully resist the temptation to respond to the hon. Member for Solihull (Lorely Burt), much as I should like to do so.

Let me make a point that goes to the heart of what you have just said, Madam Deputy Speaker. We have been given few assurances about the method by which Royal Mail may be sold in a way that guarantees value for money for the taxpayer, and we have no idea who its new owner might be. We have no assurance that employee shares will be held in trust and could not simply be sold on in a short period, which would defeat the objective of employee involvement. We do not know for sure that access pricing for Royal Mail competitors will be fair. An IBA should have been included in the Bill, on a continuing basis. What will happen to the post office network after 2015, when the comprehensive spending review money runs out but the Bill’s provisions do not, and when, sadly, we then embark on the path towards privatisation of Royal Mail?

Let me return to the two constituency stories that I related earlier. Few jobs in Britain have been immortalised in children’s books, but Postman Pat reflects the high regard that exists for the postmen and postwomen in Birmingham and Britain, and they feel badly let down by the Bill. Will the Minister accept my invitation to visit Perry Common and meet Tarnjhit Dhesi, members of the Witton Lodge community association, and representatives of local care homes and tenants’ organisations? Will he sit down and listen to the case that they have put for the reopening of their post office in a small high street that some entrepreneurs are trying to regenerate, at the heart of which is an admirable man who wants to provide a service for the community?

That man said this to me: “Jack, I don’t understand why I read all these stories about the commitment to the post office network. The post office here closed a couple of years ago. We want to reopen, but the door has been shut in our faces.” Will the Minister translate his commitment to local post offices into action by coming to hear the voice of local people who want a local post office?

Damian Collins (Conservative, Folkestone and Hythe)

Following the speech by the hon. Member for Birmingham, Erdington (Jack Dromey), I wish to raise a few points relating to the inter-business agreement and the post office network.

The network should be under some obligation to adapt itself to the framework established by the Government. The creation of the post office local format, which allows limited services to be provided through other retail businesses, is an example of that at work. The location in his constituency that the hon. Gentleman cited may well be the type of location in which the post office can adapt its service to conform with the local retail environment and, in doing so, begin to thrive. I also agree with the Government that mutualisation should be partly a bottom-up process and not entirely driven from the top.

At the end of last year, I met in my constituency representatives of Action with Communities in Rural Kent. Unfortunately, the Bill had already completed its passage through the House of Commons. That organisation does excellent work, with some public support. When a post office closes—not as a result of any decision by the Government or a Minister, but because the person who owned the business has either passed on or retired—the organisation actively seeks a new location for it. In the village where I live, a post office moved from stand-alone premises to the local pub. The mutualisation for which the Bill provides can support such work, and should be welcomed.

The Post Office’s own initiatives in developing the post office local format can support the trend as well. As the hon. Gentleman pointed out, the Government’s financial guarantee will expire in 2015. The Post Office should be using the intervening period to establish how it can adapt its activity to ensure that its business platform is as sustainable as possible in the future.

The inter-business agreement is a two-way street. In terms of access for British consumers, the post office network is unrivalled by any other retail business. Its footprint is much larger than those of all the supermarket chains put together, and it is very unlikely that Royal Mail could find another commercial provider which could match that. The IBA provides the possibility of an interesting two-way negotiation between the Post Office and Royal Mail. To what extent would Royal Mail like the Post Office to offer mail services from competing companies when it is given the freedom to do so? There is also the possibility that Royal Mail could establish a better relationship with the post office network. The Bill provides the opportunity for a more equal relationship than that which, at present, is skewed in Royal Mail’s favour.

There is much to be welcomed in the Bill from a business point of view. The Post Office should see it as an opportunity to embrace mutualisation and a different type of relationship with Royal Mail which will enable it to provide a better service for its customers.

Michael Weir (Scottish National Party, Angus)

I have expressed opposition to post office closures for 10 years in the House, and my view is unchanged. My colleagues and I do not think that the Post Office should be privatised, but the Bill is going through. I would laugh if it were not so sad to hear Labour Members slagging off the Government, given the number of post offices that their party closed, but I had better confine my remarks to the amendments so that you do not call me to order, Madam Deputy Speaker.

Although I welcome Lords amendment 1 to an extent because it would improve the report, it does not provide a guarantee of business. That remains a difficulty: there is considerable uncertainty in local post offices about future business, and I fear that many more will close if it is not dealt with. Many are closing now, not just because of the Post Office side of the business but because of the general state of the economy. At the risk of opening up another front of argument between the two sides, I will cite Ferryden in my constituency. During the closure programme it was agreed that Ferryden’s post office was needed, but the post office was in the local shop, which recently closed. The reason was not to do with the post

office itself—and I appreciate that it is not within the Government’s immediate control—but the fact that the small shop, the last in the village, was considered to be no longer economic. When the shop went, the post office went as well.

The same difficulty exists in rural areas throughout the country. With respect to the hon. Member for Birmingham, Erdington (Jack Dromey), post offices will not take up the slack in rural areas, because they are closing there as well. It is a simple case of economics. It is unlikely that the Ferryden post office will go to another business, because it does not exist. The chances are that it will end up as an outreach programme and a restricted service to the village. The important thing is to try to keep some postal services in that village. I should have preferred an inter-business agreement that provided certainty about the future level of business. I appreciate the difficulties, but the continued uncertainty does not help.

My main point about the Lords amendment relates to new section (3A)(b), which concerns the proposed share scheme. I wanted to raise the issue at an earlier stage, but unfortunately we ran out of time. The amendment states that when shares are sold for the first time, details of the employee share scheme will be given. However, we do not know what the structure of the scheme will be. Clause 3(2) states that when the Crown no longer owns any part of Royal Mail, the share held by or on behalf of the employee share scheme must be at least 10%. I know that the Minister said that on the first sale of shares the share scheme details would be given, but the 10% is vitally important, because the Bill otherwise allows the sale of 90% of the company to one other entity, such as another postal operator. Leaving aside the argument put by the hon. Member for Llanelli (Nia Griffith) on behalf of the Opposition about whether 10% is an appropriate figure, the choice of this level does present a potential difficulty, depending on how the shareholding is held. In Committee, the Minister was pressed on whether the shareholding would be held in a trust for the benefit of the employees—the so-called John Lewis model—or whether it would be given in individual shares to the workers. We did not receive an answer to that question.

Fiona O'Donnell (Labour, East Lothian)

Has the hon. Gentleman’s party had any discussions with the Government about the future of Royal Mail in an independent Scotland?

Michael Weir (Scottish National Party, Angus)

The hon. Lady has taken her chances by asking that question, but it goes beyond the scope of the amendments before us. The Post Office is very important to rural areas of Scotland, and I will merely note that the Scottish Government have done much more than the UK Government to help rural post offices in the future—such as through the diversification and rates rebate schemes. That illustrates what we would do in an independent Scotland.

To return to the point I was making before being led down this interesting side road, the lack of detail about the structure presents a dilemma because, depending on what method is chosen, there could be unintended consequences in the future. If the John Lewis method is pursued, there may well be no problem, in that it will be a trust holding and will, in all likelihood, be held at or above the 10% level. However, if the shares are distributed

to individual employees, we could have a very different scenario. Experience of previous privatisations suggests that a number of employees would immediately sell their shareholdings, and others would be likely to sell at some future date, either when they retire or, perhaps, by their executors on death. There is absolutely nothing wrong with that; they would be their shares so they can dispose of them as they see fit. Such actions could, however, have a serious consequence for the continuation of a workers’ shareholding within the company, because of the operation of our current company law, and especially as Ministers have made it absolutely clear that they would be relaxed about Royal Mail being bought either by one of the major foreign postal operators or by private equity companies up to the remaining 90% figure.

I remind the House that in cases where private equity companies have bought listed companies, they have on occasion de-listed the company and operated it as a private company. I particularly draw Members’ attention to the terms of section 429 of the Companies Act 1985, which gives provision in respect of implementation of the EU directive on takeover bids. One of the purposes of the directive was to deal with the problems of, and for, residual minority shareholders following a successful takeover bid, processes known as “squeeze out” and “sell out”. The provisions in question provide that following a takeover offer:

“If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire—

(a) not less than nine-tenths in value of the shares to which the offer relates, and

(b) in a case where the shares to which the offer relates are voting shares, not less than nine-tenths of the voting rights carried by those shares,

he may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares.”

In effect, therefore, anyone who acquires 90% of the shareholding in a company can force the sale of the shares of the remaining small shareholders and become sole owner of the company. If the Government were to sell 90% of Royal Mail to, say, Deutsche Post, there could clearly be a potential difficulty in regard to the workers’ shareholding in the future if that is held individually by Post Office workers. If at any time the individual shares held by the work force were to fall below 10%, there is the potential for the owner of the remaining 90% to force a sale and therefore wipe out the shareholdings of the workers.

I am sure the Minister will, in his usual inimitable manner, tell me that I am constructing a theoretical problem that would not occur in the real world, but I wanted to propose an amendment on this point because of a real case of this kind involving constituents of mine. My constituents, who are pensioners, were shareholders in Dana Petroleum, and had been for a large number of years. The company was not paying dividends, but the shareholding did increase in value and my constituents regarded it as a nest egg for the future. Unfortunately, Dana Petroleum was subject to a hostile takeover by the Korean National Oil Corporation, which I believe is state-owned—I believe it is part of a sovereign wealth fund. That company purchased the majority of shares, although my constituents did not wish to accept its offer. The new owners decided to

de-list the company, with the effect that my constituents were forced to sell their shareholdings, in their case causing a capital gains tax liability.

Unless the Government give us details of the form the shareholding will take, there is a genuine danger that we could face that situation within Royal Mail in the future. If the Minister will stand up and say, “It will be the John Lewis model; it will be a share trust of at least 10% of the shares for all the employees in the company”, I do not think there will be a problem. Alternatively, however, we might go down the same road as with previous utility sales, where individual shares were given to the workers and that shareholding within the companies has been reduced over the years. It is interesting to note that many of the former utilities are now offering special deals to get small shareholders to sell out their remaining shares because they do not want the small shareholders. Although this idea of worker participation is a good one, I would rather the company was not privatised. If that does happen, however, the bigger the workers’ shareholding within it, the better, and the shareholders would, it is to be hoped, have real rights.

As there is a lack of detail on this point, there is a danger that we will end up with nothing for the workers and the company wholly in the hands of one, possibly foreign, postal service or private equity company. The recent experience of private equity companies buying out limited companies is not a good one; we need only look at the current problems with Southern Cross to see that. I ask the Minister to reflect on this issue, and give us an assurance on it, or at least more information as to how the shareholding is to be held.

Jim Shannon (DUP, Strangford)

I am aware that you have asked us to focus on the amendments, Madam Deputy Speaker, and I intend to do just that. I want to focus my comments on Lords amendment 9 to clause 11, referring in particular to the universal service provider. While some level of provision is given, I am not entirely convinced that we will have a better service. That is my opinion, and it is informed by the views of the people I represent, because they are telling me the same thing. It is being said not only by Post Office personnel, and among them it is stated by both those who own post offices—postmistresses and postmasters—and the Postman Pats of this world who do the hard graft out on the streets. Some Members have spoken about the business plan that post offices need in order to make them sustainable. Can the Minister convince me and other Members—and, through the Hansard report of the debate, convince my constituents—that the service will continue to deliver in the large rural community I represent that stretches from Portaferry to Ballynahinch?

For many of my constituents, post offices are a crucial part of their community. They are the front office of government. I am unconvinced that the revenues of sub-post offices will not decline, and that could lead to some of them closing. We need the Minister to respond to that point.

Some Members have spoken about the continuity of contracts beyond five years, and that is essential. The postmistresses and postmasters of the rural post offices in the areas I represent have told me that they are under

absolutely no illusion about how things will progress, and I say on behalf of them that we need to ensure that they have such continuity.

Under the new law, the universal service for six days a week with one price sending post anywhere could be downgraded in just four years, and it is feared that the everyday post office user will experience price hikes and have to pay for the privatisation. The unions have pointed out the possible consequences of privatisation in respect of postal services, and I look forward to hearing the Minister comment on that point. This has already happened in the Netherlands and Germany, where the rural service has been reduced to three days a week, and the costs have risen.

We might find examples where what is being proposed here has not worked out elsewhere, so what lessons have the Government taken to ensure that the same does not happen in this process?

I am keen and anxious to discover whether the Government have taken full account of the views of sub-postmasters. I understand that some 92% of them have said that they feel that the Post Office is “very unlikely” or “unlikely” to survive without the mail business provided by Royal Mail. As so many people are saying that, it would be unwise of the Government to ignore it.

As we all know the statistics on this, I do not intend to go into them. What consideration have the Government given to the crucial role of post offices in the community? I believe that we all agree that our post offices are more than just post offices; they are a social meeting point for a great many people. I know that that does not come into the economics of a post office, but it must be part of the process in deciding which post offices can remain open. Finance will be the driver in that, but post offices provide an opportunity for people to mix and mingle and the staff have clear contacts with the people in the community. Most of the hon. Members who are going to speak today will probably speak from a rural community background. The National Consumer Council has shown that the Post Office was thought to be more accessible than banks, and we cannot ignore that. When we decide what is going to happen with the Post Office today and what could happen in five or 10 years’ time, we have to ensure that we will get things right. Only 4% of villages have a bank, whereas 60% of them have a post office, so we should ask communities such as mine about this. It would be remiss of me not to make that point in the House today and not to ask the Government to tell us exactly what assurances we will be given. It is the essentials provided on a week-to-week basis that the banks do not do, because they are not in these places but the post offices are.

What consideration has been given to the view of businesses in rural communities that are near to the post offices? They say that some 15% of their revenue is created in the post offices, so has full consideration been given to that? What assurance do we have that that will continue to happen in the post offices? The fact that the service provision is universal is a crucial factor in what happens and what we take forward.

I raise the following point because I was asked it by the Royal National Institute of Blind People and other hon. Members have alluded to it. If closures go ahead,

they will hit the blind and partially sighted particularly hard, leaving them even more socially and financially excluded than they have ever been before. They will no longer be able to use their local post office to help with the mountain of forms pushed on them by civil servants.

So the role of the post offices in rural communities and in urban centres is a crucial factor in terms of how people can respond to any changes that will take place. Worryingly, as I said in my introduction—I will say it again and I look forward to hearing the response—I do not believe that the Government have convinced the general public that the changes that are coming are changes for the better. I am not convinced of that, neither are the people who speak to me, the postmasters and postmistresses, or Royal Mail staff. Most importantly, the general public, who we have a duty and responsibility to look after, are not convinced of it either.

Michael Connarty (Labour, Linlithgow and East Falkirk)

Despite all these amendments, which have been won by clear arguments put by Labour Members in the House of Lords and the Cross Benchers who supported them, I am still concerned about having a Bill that is fit for purpose.

Lords amendment 1 provides a new requirement that the report made by the Secretary of State will make clear the

“objective intended to be achieved”

by the disposal of shares in Royal Mail. I have followed this issue very closely so I know that everything else falls on that. As you know, Madam Deputy Speaker, I am the secretary of the Communication Workers Union liaison group of MPs in this House and have been so for more than a decade. Despite all the Minister’s warm words, it is not clear what this is meant to achieve that can be achievable under this privatisation model as structured.

Does the “objective intended” include maintaining Royal Mail as an organisation able to deliver to all parts of the UK for a single charge or two varying charges? The Bill and the amendments provide no guarantees that that is the case. Will that be covered in the report given each year by the Secretary of State to the House in order to show just how far the failure has been progressed, and how far my concerns and those of other Opposition Members have been realised? If we were to fragment Royal Mail—it is entirely possible that that will happen as there is nothing to prevent it under the Government’s privatisation model—a Scottish regional mail delivery service could be given responsibility for meeting that objective under this model. That provider might then find that that particular part of the United Kingdom—the same could happen in places such as Cornwall and elsewhere in the south-west—the sparsity of the population and the diversity of the communities mean that it is not possible to make a profit. This process is about a privatisation and about giving organisations the right to run Royal Mail as an organisation that must make a profit. The Bill would allow them to come back to ask the Secretary of State to allow them to get rid of that universal service obligation.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Will the hon. Gentleman tell the House which part of the Bill he is worried about? Which part will cause the fragmentation he is describing?

Michael Connarty (Labour, Linlithgow and East Falkirk)

The part of the Bill I am talking about—

Dawn Primarolo (Labour, Bristol South)

Order. We are not discussing the entire Bill. We are having a time-limited debate about specific amendments. The Minister knows that as well as every other Member of this House, so I am sure that he does not want to tempt the hon. Member for Linlithgow and East Falkirk (Michael Connarty) down that path. Perhaps the hon. Gentleman can focus specifically on these amendments so that the Minister will not be troubled.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I was talking about the amendments; the new requirement in Lords amendment 1 is that the report must include the

“objective intended to be achieved”

by the disposal of shares. That is a specific Lords amendment and I am questioning what will be put before the House as a result. Will it be a report on the progress of fragmentation and of these parts in trying to achieve the Minister’s stated aim for his sale of these shares?

The Minister has spoken repeatedly about finding some way of saving the post office network. I know that great steps have been made on the Bill through the amendments won by the diligent efforts of Labour Members and Cross Benchers in the Lords. There will be some sort of inter-business agreement and it will be extended. I know that the Minister is not trying to pull the wool over our eyes, because he is telling us about his aspirations. However, when I hear him talk, I am unsure what his benchmarks for achievement under these amendments will be if it turns out that his idea of having a full network of post offices and post office “locals” does not work, the “locals” fade away and—I believe this will happen—we begin to lose post offices at a faster rate than would have happened under the previous Government’s plans to stop the flood by taking out a number of post offices and hoping to leave enough business for those that remained.

I did not agree with that approach, but I recognised what the previous Government were trying to do. I do not understand how the Secretary of State will report on these matters as a result of these amendments. If the report were honest, it might suggest that we have to do something different. I want the Minister to tell us what he feels his duties now are as a result of these amendments or what he feels the duties will be of whoever succeeds him, should there ever be a change of Minister. I do not wish such a change upon him, because he deserves to come back to apologise for everything he is now bringing about.

Is this about return to the Exchequer? Let us look at the attempts of previous Governments to sell shares and at the way in which they sold those shares. The sale of the first tranche of British Telecom shares achieved a 90% profit in one day for those who bought them, because it was an attempt to get quick money into the Exchequer—or was it just to get British Telecom into the private sector? If it was to get money into the Exchequer, the then Government appear to have greatly short-changed themselves and the country. A better example, also in telecoms, is provided by the sale of level 3 broadband, in which we made a substantial

profit for the Exchequer because of the way in which we auctioned it off, although that did not please people in the industry.

I would like the Minister to tell us how these things are going to work. Will the judgment be based on return to the Exchequer? I know that the Government will, if they get their way, want to balance that against their willingness to take on any deficit in the pension fund that comes with taking on the pension assets. These matters have to be clearly spelt out by the Secretary of State so that people can judge what he is going to do in the Bill. That is what is accepted in the amendment. People want more clarity because we have not been given a clear understanding of the benchmarks and targets that the Government hope to achieve. We have had warm words and aspirations, but given the backdrop—the person who has given those assurances has previously given assurances that they were against full privatisation of the Post Office—we would like to see something a bit more solid on the ground. Perhaps the Minister could say something about what the intentions are.

The amendment also asks for more information about the purpose and structure of the mutualisation. It has been suggested to the Government that it might be useful to set up a task force immediately, but I do not think they have taken that idea up. The idea is to give share options to the members of a work force who have seen 55,000 of their members thrown out the door already and who have heard from the chief executive in the past few days that another 40,000 are about to go behind them, so there is hardly going to be an atmosphere in which anything can be done mutually unless a lot of hard work is done.

I agree with the points made my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about the hard work and dedication of long-term Post Office employees. We know that people go and work there in the short term and realise that it is a difficult job with unbelievably hard hours and that they often have to work in the most inclement weather to get the mail through. However, many of the people who have been there for a long time want the company to succeed and want its work force to be secured and modernised. A task force would be useful, and it would be useful if the Minister would spell out exactly what will be the benchmark for mutualisation so that the amendments have some value when they are in the Bill.

Michael Weir (Scottish National Party, Angus)

The proposal is for the mutualisation not of Royal Mail but of Post Office Ltd, so the average postie does not come into this. They are the ones who will be subject to whoever takes over. Mutualisation will apply only to Post Office Ltd after it is demerged from Royal Mail some time in the future.

Michael Connarty (Labour, Linlithgow and East Falkirk)

That is even more frightening. People at that end of the business are facing the same problems from the same management. If the management model has changed, I would like to think that the Minister would put that forward.

Those are my concerns about the amendments, which have been hard won and which came with a promise from the Government that there would be real changes that would make a difference to the Bill. I wonder

therefore whether the Minister, if he speaks on this again, will give some idea of what is going on to give us an infrastructure for these matters.

My final point is about the sale of shares to employees. The record is exactly as the hon. Member for Angus (Mr Weir) said. Shares are slowly but surely bought up by large organisations. The famous case is the one with Sid and the idea that Sid had some power, but Sid’s shares are probably now owned by several multinational hedge funds or equity funds or perhaps by insurance companies or a pension fund or two. There is this idea that members of the work force will get shares that will give them some sense of ownership, and I remember the first debates in which this was talked about by Ministers. This is one of the myths that the Liberals like to push—that if someone is given a few shares, that will make them a part of the ownership of the business. It does not do that unless those shares come with some powers. As we have seen from many of the banks’ recent annual general meetings, even having large amounts of shares does not give one any power over bonuses, performance or the behaviour of the people who run the companies. What will come with the deal apart from a few stocks and shares that will be stuck in the bank until they are sold to fund a holiday?

Lorely Burt (Liberal Democrat, Solihull)

The hon. Gentleman says that having large numbers of shares does not necessarily help, but being a small shareholder can be extremely helpful in large companies in which even small shareholders have a say and a voice.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I only wish that that were true. I assure the hon. Lady that although small shareholders can go along and make a protest and trumpet what they have to say, the bonuses, the sale of companies and the redundancies will still be voted through regardless of small the shareholders’ shouting. I am not in the business of standing on the fringe and shouting. I would much prefer the Bill to be rejected out of hand. I am against the privatisation of Royal Mail and I believe that the pension fund deficit was caused by the holidays taken by Royal Mail and Post Office Ltd, which were allowed by previous Governments of both hues. I would rather be standing here opposing what the Government are about to do to Royal Mail because I think that all the assurances we have been given, hard-won though they are, will not make a difference.

Capitalism will work as capitalism works and will do what is to the advantage of the people who hold the majority of the shares for the bottom line of their dividends. That will mean that people will lose their jobs and the Post Office will not be sustained using Royal Mail, which will not continue to provide a universal service at one price. The amendments will have to come with a lot more specific targets, which I do not see in the Bill or in any of the schedules to the Bill. Although I welcome the smaller amendments that have been made in this part of the Bill, I do not believe they will make a major difference to the outcome for Royal Mail or Post Office Ltd.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) finished where the hon. Member for Llanelli (Nia Griffith) started—in

total opposition to the Bill. I have to tell the Opposition that they are ignoring the economic and financial reality of Royal Mail. As a result of the reduction in letter volumes because of technology such as e-mail, the internet, text messaging and social networking, it is losing a huge amount of money. The reduction in letter volumes—its core business—is predicted to fall again and again, but it is not only Royal Mail that is affected. Every postal administration around the world is seeing letter volumes and revenues go down. That means that those administrations are leaching money and something has to be done. The previous Government failed to do anything, although I should pay tribute to Lord Mandelson, who had the decency, on Second Reading in the other place, to recognise that we were on the right track with this Bill. The fact that Labour Front Benchers are unable to recognise that today is testament to Labour’s unwillingness to face up to the reality of the challenges.

Nia Griffith (Labour, Llanelli)

I am sorry to stray away from the amendment, Madam Deputy Speaker, but I think it needs to be put on the record that our Bill, as it stood as Lord Mandelson was taking it through the other place, would clearly have kept Royal Mail in majority public ownership. That was written into the Bill, but it is not in the current Bill. We are talking about a totally different Bill that goes for 100% privatisation. They are two completely different scenarios and the amendments in the Bill arise largely from some of the situations created by that difference.

Dawn Primarolo (Labour, Bristol South)

Perhaps we could return to the amendments. We are debating the Lords amendments to the Bill—this is not Third Reading. The Minister is experienced and knows that. He has made his opening remarks. Will he answer the debate please?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am looking forward to doing that, Madam Deputy Speaker. The hon. Member for Llanelli welcomed Lords amendment 1 but felt that it did not go far enough. Despite all the arguments we have had in this place, she still believes that an inter-business agreement should be in the Bill, as do a number of her party’s members.

I do not wish to rehearse the long speeches that were made on Report, when our debate on this particular point lasted for about three hours, but let me repeat that putting provisions in the Bill in the way in which the hon. Lady suggests would create a significant risk of legal challenge owing to incompatibility with competition law. In addition, such an approach would almost certainly face a state aid challenge. I would have thought that she would have realised that, because it has been accepted by many who have examined the situation in detail.

The hon. Lady says that the absence of such provisions means that there is no protection for post offices, but the whole point is that the detail set out in our policy statement will enable them to be more profitable. It is real business that will save the post office network, not legal provisions in the Bill, so I disagree with her point.

The hon. Lady spent some time talking about employee shares. The Lords amendments will require the Secretary of State’s report to Parliament at the time of first sale of

shares to include details about the employee share scheme. I would have thought that she would have supported that welcome development.

We would certainly want to report on such things as the terms by which shares would transfer to the employee share scheme and the design of the scheme. Such detail might include questions of whether there would be a trust model or individual shares, or a mixture of the two. There would also be consideration of the percentages to be transferred and the governance arrangements.

The hon. Lady asked how the shares will be allocated, but clearly that is a point for later discussion. Such a point might be addressed in the report. We can imagine allocating shares to employees on many bases, such as length of service, grade and salary. The Government would certainly not object to a proposal that shares and their benefits should be allocated evenly across employees to ensure that there is equal entitlement regardless of grade, salary or length of service. We have been clear that the scheme is for all employees of Royal Mail, not just the management, so I hope that people will not run away with the wrong idea.

Several Opposition Members asked what would stop employees selling shares immediately. Again, we are not making premature decisions about the scheme’s design, but we have always said, as I have repeated several times, that we are designing the scheme with longevity in mind—there are many attractions to a trust model for that very reason. However, it is not true that individual employees’ shares are always sold off by those employees. People arguing that point try to pray in aid the BT example, but the Public Bill Committee heard evidence that 66% of BT employees held on to their shares after the share plan had matured, so there is longevity in share ownership, even with the individual model. A lot of myths are cited by those who oppose employee share ownership, which was no doubt why the Labour party did not include employee shares in its 2009 Bill.

Michael Weir (Scottish National Party, Angus)

The Minister says that 66% of those employees held on to their shares, but if they were 66% of a proportion of 10%, they would still be well below the threshold, so there could be a forced sale by the majority owner of the shares.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I listened carefully to that interesting point in the hon. Gentleman’s speech, and the way in which he eloquently described the situation and referred to the Companies Act 2006 showed that we need to ensure that we design the scheme carefully. We will do so, because we want to deliver on employee share ownership, which is an objective of the Liberal Democrats, the coalition Government and the Bill.

The hon. Member for Llanelli was generally supportive of the proposals on mutualisation, but she spent a lot of time—do tell me if I stray out of order, Madam Deputy Speaker—saying that Government front-office services had not been delivered. We are turning around the decline under which the previous Administration took away more than £300 million of Government services from post offices. Our policy statement and the things that we are delivering show that there is a real future for the front office of government.

Nia Griffith (Labour, Llanelli)

rose —

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Lady is in no position to criticise the Government about this, but I am happy to allow her to intervene—I hope that she will be able to remain in order.

Nia Griffith (Labour, Llanelli)

We are talking about the mutualisation of the Post Office, but that can take place only if it is viable. Will the Minister tell us what new streams of Government business have been given to the Post Office in the past year?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Lady is right—and we have been clear about this—that the network must be viable before going to mutualisation. The problem is that we inherited a post office network that was so badly managed that we had to turn it round. She asks for specific details, but she knows that several were set out in our November policy statement. She ought to know that the National Federation of SubPostmasters welcomed the start of the pilot scheme offering document verification for pension applications in 106 post offices in the north-east. She should also know that that is only the first of three planned pilots with the Department for Work and Pensions; the other two involve national insurance applications and testing the impact of requiring jobseekers who sign on by post to attend their local post office instead. I would have thought that she would have welcomed such pilots.

Fiona O'Donnell (Labour, East Lothian)

I note that the Minister missed the green giro off that list. The position not only puts the post office network in my constituency at risk, but means that people who cannot access a PayPoint in their villages must travel to cash their cheques.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I expressed my disappointment that Post Office Ltd did not win that contract from the Department for Work and Pensions, but I have described three pilots on which the DWP is working with Post Office Ltd. I could also have talked about the proposals on credit unions that we hope will go forward, or the fact that Post Office Ltd has won a contract with the London boroughs so that local authority staff can have an authentication service at the local post office. If that scheme develops, it might have applications throughout the country. Such developments have been welcomed by the National Federation of SubPostmasters, but of course we want to go further, which is why we are so pleased to have persuaded the Royal Bank of Scotland to enable its customers to access their bank accounts through the post office network, which we believe will start to happen from September. I would have thought that the hon. Lady would welcome such developments.

Ian Davidson (Labour, Glasgow South West)

If such developments arrive in the future they will be welcome, but will the Minister return to the point about the green giro? Do we have joined-up government? This was an opportunity to boost the Post Office, so why did the Government not do something about it? Surely the Minister, as a Liberal, will not just blame European regulations.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I certainly would not—but when Labour Members make such points they really have a cheek, because their Government removed more than £300 million of Government services from the post office network.

We are working hard across the Government to ensure that we can position Post Office Ltd in a place from which it can win contracts from Government Departments in Whitehall and local authorities to deliver the front office of government. I can tell the hon. Gentleman that a huge amount of work is being done on this, and he needs to be a little patient.

The problem is that when we came into government and developed the strategy, the cupboard was bare because the previous Government had done almost nothing. They had allowed the post office network and the process for developing new business to wither on the vine because they were so busy closing 7,000 post offices. I have to tell Opposition Members that the tender for the green giro began under the previous Government, so they really ought to be careful. We have had to deal with the tender that Labour Ministers wrote.

Fiona O'Donnell (Labour, East Lothian)

The Minister will no doubt want to read the piece of paper that has just arrived in front of him, but perhaps I should read him what the National Federation of SubPostmasters actually said:

“The government’s decision not to award the new contract for benefit cheques to the Post Office does not bode well.”

It seems to me that competence in the Government is not as high as he—

Dawn Primarolo (Labour, Bristol South)

Order. Will the Minister, in answering, return to the question of viability and the links with mutuality in the context of the amendments we are discussing?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I agree that we should focus on the long-term viability of the post office network. I recently attended the annual conference of the National Federation of SubPostmasters in Torbay, where we discussed the sorts of thing we are proposing and they were able to look at the new machines that Post Office Ltd is developing to position itself to win Government contracts, such as the application, enrolment and identity machine, which is already being used for contracts from the Driver and Vehicle Licensing Agency. They already have a portable one, which could be used across the network, and a number of other machines. The sub-postmasters were absolutely delighted. I wish that Opposition Members who have spoken today had been there, because the sub-postmasters showed greater confidence in the future of their post offices and their businesses than they do.

I will respond to some of the comments made by other hon. Members who have spoken. I thank my hon. Friend the Member for Solihull (Lorely Burt) for her comments. She mentioned the benefits to employees that will result from the proposals on employee shares set out in the amendments, and she mentioned pensions, which we will come to later. She specifically asked what discussions we have had with the Communication Workers Union on some of the amendments. It is interesting that on 13 April the CWU issued a press release in which it said that it welcomed the amendments to the Bill. Its general secretary, Mr Billy Hayes, said:

“We warmly welcome these amendments…We are pleased that Government has taken on board some of our concerns”.

I have met the CWU, and it has noticed the progress that we have made.

The hon. Member for Birmingham, Erdington (Jack Dromey) complained that post offices in his constituency would close as a result of the amendments, but I hope that he tells his constituents that four post offices closed in his constituency under the previous Government. All Members across the House will have discussed post office closures with many people in many communities. What we are offering in these amendments and in the Bill is hope that the Post Office will not see a repeat of those closure programmes, which have devastated so many people.

The hon. Gentleman asked what would happen after the spending review. The modernisation that the Bill and the amendments will enable us to undertake with the £1.34 billion will allow us to go further and continue the transformation. I believe that what we have with the funding package and the proposals is a radical change, but one that will lead to a sustainable network. He knows, because I wrote to him on 9 February, that the post office in Perry Common closed under the previous Government. Reopening it would lead to business migrating away from nearby offices at College road and Hawthorn road, which could jeopardise all three offices, which I am sure is not what he wants.

Jack Dromey (Labour, Birmingham, Erdington)

The Minister speaks of hope, and the same word was used when the Bill was launched. Seven post offices in Birmingham now face closure, one of which is in the Yardley constituency of a Liberal Democrat Member. Will the Minister agree to meet the community of Perry Common, which has signed a 1,000-strong petition asking for the reopening of a flexible post office in their locality? Earlier this week another Minister went to Perry Common and held it up as an excellent example of a community that has rebuilt its environment. It now wants to rebuild its high street, and it wants a sub-post office on it. Will the Minister meet the community and Mr Tarnjhit Dhesi, who is driving that proposal?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I say to the hon. Gentleman and his constituents that they should look at the economics of the post office network in the area, because there are other post offices nearby, and talk with Post Office Ltd about the “locals” model that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) mentioned.

The “locals” model holds real prospects for dealing with some of the post office network’s cost problems, and for helping to revive shops on our high streets by bringing them and post offices together. In our pilots, not only have postal operators liked the model that we are developing, but so have post office customers and local communities. Having seen the evidence, some communities that were sceptical have been delighted by the service quality that Post Office “locals” have delivered. That is the future, and my hon. Friend was quite right to turn to it.

Jack Dromey (Labour, Birmingham, Erdington)

I am sorry to press the point, but my local community has looked at the pilots, is inspired by the prospect of flexible provision and wants to engage, but it has had the door closed in its face. Ministers say that they are offering hope and are prepared to listen, so will the Minister meet a delegation from Perry Common and Mr Dhesi?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The reason why I am not agreeing to the hon. Gentleman’s kind invitation is that, under legislation that has been on the statute books for many years, and based on the practice of the previous Government, Post Office Ltd decides where Post Office “locals” open, so if that is his request he needs to address it to Post Office Ltd managers.

Jim Shannon (DUP, Strangford)

Hon. Members have referred to the pilots, but has there been a UK-wide pilot, or any in Scotland or Northern Ireland? If there has, could we have some idea of the feedback from them?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

There have been Post Office “locals” pilots in all parts of the country. We are up to 80 local schemes, and Post Office Ltd has tried to pilot them in urban, rural, suburban and urban-deprived areas. It is trying to test them out over time, taking account of seasonality and cash flow, so we are learning an awful lot of lessons from them. The recent analysis of the “locals” project by Consumer Focus is publicly available, and although it has some concerns about privacy it was able to show that on issues such as access, longer opening hours and reduced queues, people have found the projects to be a beneficial step forward.

The hon. Member for Strangford (Jim Shannon) said that he was concerned about the universal service obligation and worried that the Bill would undermine it. Far from it: one of the Bill’s main objectives is to secure the universal service, and Opposition Members have failed to realise that clause 30 includes stronger protections for the universal service than was previously the case.

The hon. Member for Angus (Mr Weir) made a very informed speech. He was a distinguished member of the Public Bill Committee, who failed to attend only on the few occasions when the weather prevented him from flying down to London, but in looking at the amendments before us I have to say that he has made the mistake of calling for guaranteed business for the post office network and, almost, of wanting to keep things in aspic.

On the train down to the annual meeting of the National Federation of SubPostmasters, I read the federation’s account of its 100-year history, which mentions the concerns that existed when telegrams were being phased out, and when postal orders were used. In other words, the business and services that have gone through our post office network have changed hugely, and we have had to develop them and move on, so setting things in aspic—putting things in the Bill, as some Members want—would not help.

Michael Weir (Scottish National Party, Angus)

With respect to the Minister, this is not about setting things in aspic. The problem is that there is a great deal of uncertainty, because Royal Mail is up for privatisation, the link between Royal Mail and Post Office Ltd now relies on the good will of whoever runs Royal Mail, and with no guarantee of business it is difficult for those trying to sell post offices to find people to take them on, as they are uncertain of what business there will be in one or two years’ time.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We are in danger of going over old ground. The hon. Gentleman will know, because we have had this debate many times, that it is my view that post offices are in a very strong position in this negotiation, because the idea that Royal Mail is going to absent itself

from the post office network and allow its competitors to go in there is, frankly, nonsense. As for the particular issue that he has been raising with Post Office Ltd—the closure of Ferryden post office—he will know that that closed not because of any action of the Government or Post Office Ltd but following the resignation of the sub-postmaster. Post Office Ltd is looking at all available options to keep that service in his constituency open.

Michael Weir (Scottish National Party, Angus)

If the Minister reads my remarks, he will see that that is what I said. I understand that the closure at Ferryden is not the Government’s responsibility. I have been in touch with the Post Office and it is trying to get an alternative, but it looks as though it will be an outreach service rather than anything else. That is a reduction in service to that community.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am sure that the hon. Gentleman will be engaging in that debate with Post Office Ltd.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) asked, in the context of the report, what objectives we have for Royal Mail and the Post Office. We have made it very clear that securing the universal service obligation is our top objective. Getting a good deal for Royal Mail and for the taxpayer is essential. There is no objective of fragmenting Royal Mail as he described. When he suggested that employee shares were not a good thing for employees, I began to despair. The only correct thing that he said was that employee share ownership—ownership of the company in which one is working—needs to be combined with involvement in worker participation.

We should look at what is happening in Royal Mail at the moment. Someone who goes to sorting offices such as Gatwick, Greenford or Cardiff, as I have done, sees a world-class mail system and the rolling out of a programme of modernisation that involves the workers directly and has as one of its key objectives the health and safety of those workers. Sorting offices are being made not only more productive but safer. There is great employee involvement. If we link that with employee share ownership, this business will have a real future. I hope that the House will welcome this group of amendments from the other place, and give them its approval.

Lords amendment 1 agreed to .

Lords amendments 2 to 11 agreed to .

Clause 21 — Restriction on power to transfer assets

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move, That this House agrees with Lords amendment 12.

Dawn Primarolo (Labour, Bristol South)

With this it will be convenient to take Lords amendments 13, 14, 23, 24 and 26 to 28.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The amendments in this group are either minor or technical—or, indeed, both. However, they make some important improvements to the Bill that I hope all hon. Members will feel able to support.

Lords amendments 12 to 14 concern the pensions provisions. Lords amendment 12 is, I must confess, not the easiest technical amendment that hon. Members will have had the pleasure of scrutinising, but I will attempt to explain it as clearly as possible. The amendment concerns the transfer of assets from the Royal Mail pension plan—RMPP—to the Government and is designed to deal with the fact that we expect the assets to transfer in two tranches. An estimated amount of the assets will transfer when Government takes on the historical liabilities of the RMPP. However, there will be a time lag between this point and the point when the necessary actuarial valuations are finalised. We will need a second transfer to take place when the scheme valuation has been completed: a corrective, or “mop-up”, transfer. The amendment ensures that this two-stage transfer is possible and that any adjustments applied to the second transfer are disregarded so that the funding level test to protect RMPP funding levels works as intended. This funding level test, assessed at the effective date of the transfers, should not be affected by any market movement in the assets that transfer later.

In supporting Lords amendment 12, I would like to be clear on one broader point. The Bill provides a safeguard in clause 21 so that the ratio of assets to liabilities in the RMPP must be no worse after assets transfer to the Government than before. However, we intend to go beyond that minimum and leave the RMPP fully funded after transfer, subject to state aid approval.

Lords amendment 13 will put in place a legal framework for the sharing of information between the new public scheme, the trustees of the Royal Mail pension plan and relevant employers. In her evidence to the Public Bill Committee, the chair of the Royal Mail pension plan trustees, Jane Newell, stressed the importance of ensuring a seamless service for pension plan members who will find themselves with accrued rights in two schemes, rather than one. That is exactly what Lords amendment 13 seeks to do. It will, for example, facilitate the provision to members of a single benefit statement, rather than two.

Lords amendment 14, which is the final amendment to the pensions provisions, will simply allow secondary legislation made under the pensions provisions to be commenced on a day specified by the Secretary of State through a commencement order. That might be necessary to synchronise the various elements of the pensions solution.

Lords amendments 23 and 27 will give effect to the recommendations of the Delegated Powers and Regulatory Reform Committee in the other place. The Government listen carefully to the views of that wise and respected Committee, as is reflected by the fact that we have accepted the two recommendations of its report on the Bill.

Lords amendment 23 concerns the appeals regime in part 3. Clause 58 allows the Secretary of State to apply, with or without modifications, certain provisions of the Enterprise Act 2002 to appeals made under the Bill. The Delegated Powers and Regulatory Reform Committee recommended that the provision be modified to prevent it from being broad enough to allow increases in civil or criminal penalties beyond the levels set out in the Enterprise Act 2002. Lords amendment 23 will do just that.

The second recommendation of the Delegated Powers and Regulatory Reform Committee concerns the Secretary of State’s power to amend Ofcom’s universal postal service order in a special administration scenario. Although the Committee accepted the need for that power and recognised that it would apply only in very limited circumstances, it recommended that the power be subject to the negative procedure. Lords amendment 27 will give effect to that recommendation.

Lords amendment 24 simply clarifies that directions made by the Secretary of State under part 3 must be in writing, and may be varied or revoked by a further direction. Lords amendment 26 will remove a reference to that procedure in clause 60 as it will be superseded by Lords amendment 24.

Finally, Lords amendment 28 is a consequence of this year’s referendum on the powers of the Welsh Assembly. The Bill sought to make a consequential amendment to schedule 5 to the Government of Wales Act 2006. However, the yes vote in the referendum resulted in that schedule ceasing to have effect. Lords amendment 28 simply deletes what is now a redundant reference in the Bill.

As I said, the amendments are technical and perhaps not of the most interest to the House. However, I hope hon. Members agree that they represent small but important improvements to the Bill and feel able to support them.

Nia Griffith (Labour, Llanelli)

This is a group of technical amendments. We all want legislation to be as clear, precise and effective as possible. We will therefore support them.

Lords amendments 12 to 14 will form an important part of the Bill. The transfer of the Royal Mail pension plan and the fact that the Government will take responsibility for it are aspects of the Bill with which all parties agree. Any amendments that offer further clarity and security in respect of the handling of workers’ hard-earned pensions are to be welcomed. We had a thorough discussion of the pensions issues in Committee, so I simply reiterate our support for those amendments. I also confirm our support for Lords amendments 24 and 26.

Lords amendments 23 and 27 give effect to recommendations of the House of Lords Delegated Powers and Regulatory Reform Committee. Lords amendment 27 strengthens parliamentary scrutiny by introducing the negative resolution procedure into the Secretary of State’s power to amend the universal service order in a special administration scenario. As it strengthens the opportunity for parliamentary scrutiny, we shall support it.

Lords amendment 28 is purely technical and has been made to reflect the new situation with regard to Wales, following the result of the referendum held on 3 March in which the people of Wales voted yes to additional powers for the Welsh Assembly Government. We campaigned for and welcomed that referendum result, as it will help to streamline procedures, cut out wasteful duplication and ensure that the Assembly has the appropriate legislative powers in the areas for which it already has spending responsibility. We accept the clear need for the amendment and will support it.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I thank the hon. Lady for welcoming the amendments, and I hope that the rest of the House will support them.

Lords amendment 12 agreed to .

Lords amendments 13 and 14 agreed to.

Clause 27 — General authorisation to provide postal services

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move, That this House agrees with Lords amendment 15.

Dawn Primarolo (Labour, Bristol South)

With this it will be convenient to take Lords amendments 16 to 22 and 25.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

As has been made clear at every possible opportunity, the Government are absolutely committed to the long-term security of the universal postal service. As Royal Mail is the provider of that universal service, and the only possible provider of it for the foreseeable future, its viability is clearly of huge importance to achieving that goal. The Lords amendments to the regulatory provisions of the Bill respond to points raised in both Houses and by Members of all parties, and will help to ensure that the Bill meets our primary objective of securing the universal service.

Lords amendment 17, on Ofcom’s duties, will ensure that Royal Mail has the opportunity to earn a reasonable commercial rate of return on all expenditure incurred in providing the universal postal service, and on any regulated access services in so far as they make use of the universal postal service network. Although it is obviously not within the gift of the regulator to determine precisely what returns Royal Mail can make—that should depend on the market and the company’s performance—it is essential that the regulatory framework should provide incentives for Royal Mail to be successful and make the necessary efficiency improvements, and allow for good performance to be rewarded without regulation eroding the effect of increased efficiency. The amendment will ensure just that.

Lords amendments 16 and 18 further amend Ofcom’s duties, to specify that the requirement for efficiency should apply

“before the end of a reasonable period”,

to give Royal Mail time to continue its vital modernisation. That is an important change. Clearly, the delivery of the universal postal service needs to become more efficient, and neither those amendments nor the ones to which I have already spoken will undermine that. However, we do think that it is important to give Royal Mail a reasonable period of time in which to modernise and achieve efficiency.

As part of that ongoing modernisation, Royal Mail will need to invest in new machinery and technology. Before making long-term investments, boards and shareholders look for certainty. Lords amendment 22 will give Royal Mail certainty that for a significant length of time—10 years—it will be able to remain the universal service provider throughout the whole of the United Kingdom. As previously drafted, the Bill could have given rise to doubts about the certainty of Royal Mail’s designation as the universal service provider in the short to medium term, as it effectively provided for a three-year moratorium period before there could be a procurement determination. Although it was not the

Government’s intention, the risk of Royal Mail losing part or all of its designation after three years via a procurement determination could clearly have discouraged the company from making otherwise rational and important long-term investments in its infrastructure. That is why Lords amendment 22 gives Royal Mail a 10-year period of certainty.

However, although we need Royal Mail to have that certainty, we also need to keep up the pressure on it to press ahead with modernisation. We must recognise that the threat of a compensation fund means increased uncertainty for its competitors. It is therefore not unreasonable to seek to delay the possible introduction of a compensation fund until necessary modernisation has taken place.

We have looked again at the moratorium period before Ofcom can initiate an unfair burden review and concluded that a period of five years is appropriate. Lords amendment 21 gives effect to that.

During the passage of the Bill, many hon. Members have raised concerns about the prospect of other operators cherry-picking profitable elements of Royal Mail’s delivery business and, as a result, putting the security of the universal service at risk. The Government have reflected on those concerns, and during the Bill’s passage through the other place engaged in constructive discussion with Opposition Front Benchers there, as well as with Royal Mail and the Communication Workers Union.

Although we are confident that Ofcom has the necessary tools to ensure fair and effective competition in the market, it is our belief that on occasion it will need to build in greater time to inform its use of those tools. Lords amendments 15, 20 and 25 address that by giving Ofcom the power to require operators to pre-notify them of the planned commencement or expansion of a letters business on a specified scale. We have left the precise scale for later definition—it will depend on the market at the time—but our clear intention is that that should apply only to a significant letter delivery operation that could have a damaging impact on the provision of the universal service. That notification mechanism will ensure that Ofcom has the necessary time to evaluate the potential impact on the universal service of such an operation before the operation has commenced and, critically, before any potential damage has been done to the security of the universal service.

I stress that the notification condition is aimed at avoiding damaging cherry-picking that would put in jeopardy the long-term security of the universal service. As such, our clear view is that the condition should apply only to those operators seeking to commence or expand a significant letter delivery service, but it will not impose any additional burden on, for example, current access competitors, courier services or parcel delivery businesses.

Finally, Lords amendment 19 addresses concerns, which were again raised in both Houses, about access to postal services. The central concern of hon. Members who have raised this issue is how we can ensure that people right across the country and from all walks of life continue to have access to the high standard of postal service on which they depend. The Bill already specifies that Ofcom’s duties include ensuring that there is provision of sufficient access points to meet the

reasonable needs of users. In determining those, Ofcom will conduct thorough research and analysis, and consult users to take their views into account. Importantly—this was often misunderstood in our previous debates—Ofcom will also be bound by its broader duties, as set out in the Communications Act 2003, to have regard to, among other things, the needs of persons with disabilities, the elderly, those on low incomes and those living in rural areas.

I am confident that that will mean that Ofcom’s requirements on the distribution of access points across the country will ensure that all users can continue to post their letters, packets and parcels in a convenient way. However, although we are clear that the reasonable needs of users is the right test, it is conceivable that in some cases the Government will wish to apply different considerations. For example, the Government may have wider public policy objectives to consider, perhaps in relation to rural policy or small business support.

Such broader public policy goals are rightly a matter for the Government and not for an independent sector regulator. Therefore, amendment 19 allows the Secretary of State to step in and require Ofcom to ensure sufficient access points throughout the United Kingdom to meet the interests of the public. That is not a power that we would ever expect to use—its inclusion simply serves as a fail-safe to address the legitimate, albeit unlikely, concerns expressed by hon. Members on both sides of the House and by colleagues in the other place.

I hope that this package of regulatory amendments demonstrates that we have listened to the concerns of hon. Members and those in the other place. The amendments constitute a real strengthening of protection for the universal service—an objective that I believe all hon. Members share—and as such, I hope they are warmly welcomed.

Nia Griffith (Labour, Llanelli)

Lords amendment 17 requires that, when having regard to the requirement for a postal service to be financially viable, Ofcom should include the need for a reasonable commercial rate of return for the universal postal service. We argued this very determinedly in Committee. The provision of the universal postal service constitutes a considerable financial burden and we have seen how, in recent times, the opening up of opportunities for competitors to come in and cherry-pick some invitingly profitable parts of the postal delivery service, leaving Royal Mail to provide the universal postal service, has led to some considerable controversy about the price charged for the final mile. Royal Mail feels that the price set by Postcomm is too low, while the competitor providers would quite naturally always want the price kept as low as possible.

We welcome the fact that—as is made clear elsewhere in the Bill—Royal Mail will continue to be the provider for 10 years after privatisation, not just three. This will provide some much needed stability for the service and make it worth Royal Mail investing sufficiently in the necessary infrastructure. But crucial to the success and stability of the service is the need for the postal service to be financially viable. It would be immensely disruptive and damaging if a privatised Royal Mail got into difficulties and had to be bailed out. That is one reason it is essential that the regulator, Ofcom, should understand the need for a reasonable commercial rate of return for

the universal postal service and make its judgements and interventions accordingly. This is common sense, so we shall support this amendment.

Lords amendments 16 and 18 provide clarity that the requirement for efficiency would apply after a reasonable amount of time and provide a definition of that reasonable period as a period beginning on the day that the provisions of the Bill come into force and which Ofcom considers to be reasonable. These amendments also help to improve the Bill and we shall support them.

Lords amendment 19 is an extremely important amendment. In Committee, we tried very hard to persuade the Government to amend the Bill to ensure that the post office network was used to provide the network of access points, and we were very disappointed that the Minister chose to turn down the opportunity to show any real commitment to the post office network and refused to accept our amendment on using the post office network to provide the access points to the postal service.

This Lords amendment does not safeguard the post office network. It does, however, provide some protection for the public, and some reassurance that the Secretary of State may direct Ofcom to take action to ensure that sufficient access points are provided to meet the interests of the public. It is not, however, anything like as specific or forceful as we would have liked. It does not specify, as legislation in some other countries does, the number of access points or their geographical distribution. This is done elsewhere either by specifying a precise number of outlets, as in the German model, or by insisting on specific access criteria, as in the Australian model.

This amendment is much more subjective and leaves it as a matter of opinion for the Secretary of State to decide what is meant by sufficient access points to meet the interests of the public. Will the Minister clarify the thinking behind this, and specify the number of access points? We understand that the access criteria, as laid down in the document “Securing the post office network in a digital age”, could be met by a network of some 7,000 or 8,000 post offices. When we were in government we put in money to keep open a network of 11,900 post offices, and the present Government are doing likewise. What number of access points is the Secretary of State likely to designate as sufficient to meet the interests of the public? Will it be as many as the current network of post offices, or will it be fewer? If it is the latter, some post offices could cease to be access points for postal services and not only would they lose the third of their income that comes from the Royal Mail work that they do but they would stand to lose a lot more income, as they would lose footfall.

Access points would not, of course, have to be post offices. We have already seen some very adverse public reaction when post offices have been moved into the upstairs of some high street chains, making them difficult to find and time-consuming to access. Will the Minister clarify the number of access points he envisages meeting the interests of the public, and whether the Secretary of State might also have criteria for the accessibility of access points so that we do not end up with access points that are hard to access?

Access points does not just mean counter services, but can also include post boxes. Will the Minister give us any indication of what number of post boxes the Secretary of State would consider sufficient to meet the

interests of the public? Would it be the same number as now, or are we likely to see post boxes removed or boarded up? I say that as someone who has only recently had to fight for Royal Mail to restore a post box at Brynteg in my constituency, and I can well envisage that a profit-hungry privatised Royal Mail would look to reduce the number of post boxes in order to cut down on collection costs. That could mean people losing their local post box and no longer having one within walking distance of their homes. We welcome the amendment because it could improve the chances of a better service to the public, but we would have liked a much stronger amendment to give a stronger guarantee of a comprehensive network of access points.

We welcome Lords amendment 20 and the consequential amendments 15 and 25, because they enable Ofcom to impose a notification condition on any person providing, or intending to provide, a service within the scope of the universal postal service. Again, this is important for the rational management of the universal postal service, and we should support it. Lords amendment 21 makes a significant change to Ofcom’s review of the costs of the universal service obligation. Whereas previously the Bill specified that Ofcom would have to wait three years from when the Bill came into force before it could carry out a review of the costs of the universal service obligation, the amendment increases the period to five years, unless the Secretary of State intervenes and directs Ofcom to carry out a review. We have not sought amendment 21. Will the Minister clarify under what circumstances the Secretary of State might intervene before the five-year period is up?

On Lords amendment 22, we have consistently pointed out that the universal service provider incurs very large costs and needs to have as much certainty as possible about its future obligations so that it can plan long term and make the necessary investment in the latest technology. We therefore welcome the amendment, which means that Royal Mail will continue to be the universal service provider for the next 10 years, rather than just the next three years. This is a significant improvement. We know that significant modernisation has taken place within Royal Mail over the past few years. In the evidence sessions, the chief executive, Moya Greene, expressed her pride and delight in the world-class facilities that Royal Mail has in some of its depots, but she also pointed out that there are still areas awaiting modernisation. If Royal Mail is to continue to invest, the certainty of knowing that it will remain the provider of the universal service for the next 10 years will provide a much better basis for doing so than a mere three years. This is very important to create the necessary stability and justify the necessary investment. We therefore welcome the amendment.

Lorely Burt (Liberal Democrat, Solihull)

This final string of amendments is another testimony to how the Government have listened to colleagues on both sides of the House. I greatly welcome a number of the amendments, particularly those that make the duties of Ofcom stronger than under Postcomm. I want to ask the Minister about amendment 19, which specifies that the Secretary of State can override the regulator on access points. We need to be wary about setting up an independent body but saying, “Never mind, the Secretary of State can override it”. We want to be sure that that could be done only to the benefit of the consumer. Bringing politics into the matter concerns

me a little, so will my hon. Friend confirm that he cannot envisage any circumstances in which the Secretary of State could intervene, perhaps to specify that we do not need as many access points as now?

I particularly welcome amendment 17. Royal Mail has found it difficult to make a profit given the constraints under which it has had to work. The previous situation was impossible, so I am delighted with the amendment. We had to address the appalling decline in profitability, which was due to the ceiling imposed by the previous Government, who were unwise in their overzealous interpretation of the European legislation. If we can do it now, why could we not have created a more competitive environment for Royal Mail in the past? No one can make a profit with one hand tied behind their back. I particularly welcome Lords amendment 22, which guarantees that Royal Mail will remain a USP for 10 years, thereby removing any lurking uncertainty, which is particularly helpful.

Finally, Lords amendments 20, 15 and 25 require pre-notification to Ofcom of the planned commencement or expansion of a letters business on a specified scale. That will allow Ofcom to evaluate the potential impact beforehand, not after the stable door is opened and the horse has bolted. I wonder whether the Minister could say a little more about the circumstances in which he would envisage the provisions applying. Opposition Members have rightly raised the spectre of lots of other organisations wanting to come in and expand their letter delivery services, so how will the provisions work to ensure that Royal Mail’s commercial interests remain viable?

Thomas Docherty (Labour, Dunfermline and West Fife)

I would like to press the Minister on Lords amendments 16 to 19, to clause 28. He has rightly spoken of the need for Royal Mail to continue to modernise, and I hope to give a simple example of why this is so important.

The House will recall the severe snow that affected large parts of Scotland last winter, including West Fife in my constituency. Fife was particularly badly hit because of the incompetence of Fife council, which failed to clear the roads and keep traffic moving. That had a huge knock-on effect for Royal Mail. If residents are stuck in villages or large parts of Dunfermline and cannot get out, it would quite obviously be unreasonable to expect Royal Mail to be able to deliver a regular service, because for genuine health and safety reasons it is vital that posties are not exposed to unnecessary risk. However, Royal Mail failed to provide a robust contingency programme to deal with the huge backlog that quickly built up.

It will probably not surprise the House to know that mid-December is a particularly busy time for Royal Mail, as there is a substantial increase in the volume of packages and cards. Unfortunately, business continues in the build-up to Christmas for many of my constituents. I was approached by a number of small businesses and local law firms that were waiting desperately for important documents—in some cases legal documents—and that were simply unable to get them delivered by Royal Mail. Many of my constituents showed some initiative and went to the Dunfermline sorting office to see whether they could simply collect their post. However, Royal

Mail had no plan in place even to allow local businesses or my constituents to do so, which is a sign of poor planning by Royal Mail management. I would be grateful if the Minister outlined what discussions he has had with Royal Mail about that lack of strategic or, some might argue, tactical thinking, which should be happening at the local and regional levels.

The backlog was such that many of my constituents did not receive the parcels and cards that friends and relatives had sent them until the middle of January, which is clearly a most unsatisfactory circumstance. To be fair, after I met Royal Mail in the build-up to the new year, it took a number of steps, including putting on Sunday deliveries, drafting in additional staff from other sorting offices and putting on extra deliveries. But, with the best will in the world, I hope that the Minister will agree that it should not have been necessary for us to reach a state of chaos before Royal Mail took proactive steps to tackle the problem.

I would be grateful if the Minister outlined the specific issues he has raised with Royal Mail relating to the modernisation of its procedures. Has he discussed how its policies might become more robust? Has it given him any indication of whether it has learned the lessons, not only from Fife but from across Scotland, in time for next winter? I fear that we might otherwise face a rather challenging set of conditions.

Richard Fuller (Conservative, Bedford)

I should like to echo the comments of my hon. Friend the Member for Solihull (Lorely Burt). This is a listening Government who are seeking to improve legislation at all stages and in every way, and that is evident from the Lords amendments before us today.

I should like to speak particularly to Lords amendments 17, 20 and 22. They represent a significant shift in the terms offered to Royal Mail, to the advantage of the Royal Mail group. In Committee and again today, we have heard justified praise for the present management of the group. Moya Greene is an exceptional leader of the group and she is bringing her depth of experience to the provision of Royal Mail services in the United Kingdom. It was not always thus, however. The group has at times had a poverty of good management. Indeed, its management has at times been weak. Many times during our discussions of the Bill, we have recognised that the people who best knew how to run the Royal Mail group were the postal workers themselves and their representatives in the Communication Workers Union. The amendments demonstrate our faith that the management and the unions will use the new advantages to the best effect and in the long-term interest of the people who use Royal Mail services.

We are extending for 10 years Royal Mail’s ability to be the sole universal service provider. As hon. Members on both sides of the House have pointed out, that is a sensible and welcome change, because it will enable difficult investment decisions to be made with more certainty about market conditions. We are also providing that, after five years, the other operators will be able to receive a charge for any inefficiencies or burdens resulting from universal service provisions not being made. I hope that the Minister will be able to assure me that sufficient incentives will exist for the management of

the Royal Mail group to continue to make the improvements that he rightly identifies as necessary over the next five years. Perhaps he will also be able to update the House and give us assurances on progress with the unions in relation to these advantages.

These measures demonstrate that we are placing additional trust in responsible management and responsible unions in our Royal Mail group. We are making significant changes in the Bill, to the benefit of the people who work for the postal service. They will move it forward, and they represent a welcome step. However, we shall require the recent excellence in the provision of services to continue. We do not want to have to look back in five years’ time and say, “We gave you those chances, but you didn’t take the necessary steps to modernise. Now we are going to have to burden other people because you didn’t take up all the advantages that we provided.” These are good amendments, and I fully support them.

Michael Connarty (Labour, Linlithgow and East Falkirk)

The hon. Member for Bedford (Richard Fuller) referred to the trade unions in a way that sounded as though he did not accept the hard work they have done over the past decade and a half to try to get a good relationship with the management. The amendments were driven by the work of the Communication Workers Union, working alongside the Labour Lords and reasonable people on the Cross Benches, and they have now been taken up by the Government. Only one of the amendments before us today did not come through the debates in the Lords as a result of the work with the CWU. The unions have always been responsible. I can assure the hon. Gentleman that, over the decade in which I have been the secretary of the CWU parliamentary liaison group, the management have been horrendous in the running of Royal Mail and the Post Office.

Richard Fuller (Conservative, Bedford)

I appreciate the opportunity to reassure the hon. Gentleman that he must have misheard what I said. I said precisely what he has just said—that the people who have provided leadership in the Royal Mail group and who have provided a consistency of belief in the ethos of public service provision have been the workers themselves, and that they have been let down by the management over a number of years. I said that the CWU, with the business agreement it put in place, showed that it had learned that it needed to be constructive and positive, and that it provided great leadership. My hope was that, with Moya Greene in place, we have a solid partnership of management, workers and the unions that can move forward. The hon. Gentleman was not always present in Committee; if he had been, he would have heard more clearly that I am strong supporter of the CWU. I am glad to have the opportunity to clarify that.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I am grateful, and I am glad that we have a solid platform on which to continue the debate.

It is remarkable that not just myself, but not a single Labour member of the CWU parliamentary liaison group, which worked together with the CWU and the Post Office, was asked to participate in the Committee considering this Bill. I might ask the Minister some detailed questions that he could have answered before if I had been granted access to his knowledge and aspirations

in Committee. That position will have to be explained by the business managers—not by me, as it has never been explained to me.

I wish to focus on amendments 21 and 22. Let me provide some background. The 10-year period in amendment 22 for the universal service provider—currently, Royal Mail—is welcome, but the phrasing of the provision amounts to a get-out clause. Lords amendment 22, as it says in the explanatory notes,

“would prevent Ofcom from making a procurement determination within 10 years from the day that Part 3 of the Bill comes into force, unless the universal service provider agrees.”

Thus we have a privatised Royal Mail with a universal service obligation; it has all the burdens, which are not going to be shared properly with others in the business. Others have already cherry-picked much of the provision—TNT, to name just one, and many others come through our door, delivered in the last mailbag by Royal Mail employees. As far as I can see, none of the burden is going to be shared with Royal Mail for providing that universal service; it all falls on the universal service provider.

By using deductive logic, people can see that the privatisation of the universal service provider, Royal Mail, should not be continued. We would like Ofcom to look at splitting up the obligation and sharing some of the burden by allowing some other regional post office or mail provider to come in and take on some of it. It is possible that in a privatised scenario, the interests of Royal Mail—at the moment, the public service provider—will not be the same. As I say, there is a get-out clause.

Clause 33(5) will permit the Secretary of State to amend the minimum requirements of the universal service postal provision in clause 30—a mail service for six days a week, provided at an affordable and uniform price throughout the UK. Under clause 33(7), an affirmative resolution is required before the Secretary of State can make amendments, but a coalition Government with a majority can easily achieve that. This is predicated on good will, in a sense. On a more negative view, we see these provisions as being nothing but wallpaper for public consumption, which will not help us to face up to the financial problems of a privatised Royal Mail operating in a privatised environment. In that context, it might not be sustainable.

I am concerned when the amendments can be interpreted in two different ways. I have not had the benefit of interrogating the Minister in Committee, of hearing the Committee debates or of participating in the debates in the House of Lords that led to these amendments being brought forward.

Lords amendment 21 increases the three-year period in clause 42—which provides for Ofcom to review the extent to which the universal service provider is bearing a financial burden—to five years. If that extension is such a good thing, why is this a Government amendment? Why was it not tabled, here or in the House of Lords, on behalf of the work force, via the Communication Workers Union? What is the reason for the extension?

The provision of a universal service is one of the great burdens on Royal Mail. Delivering post in parts of the constituency of the hon. Member for Angus (Mr Weir) or a constituency in Somerset is much more burdensome than delivering it within the square mile of the City of London. The last Government, who allowed

commercialisation, were immediately accused of allowing some companies to cherry-pick the deliveries. That is why TNT made so much money: it is much more interested in cities and large conurbations than in the universal service obligation, which covers all the sparsely populated and difficult parts of the country. The capital and work force required by the universal service provider cannot be utilised at its optimum level because of the unevenness of the urban density and geography of the country. Some areas are more profitable than others, but the burden of delivery must still be carried.

Clause 43 provides for the regulator to consider mechanisms for a burden-sharing arrangement if Ofcom finds that such a burden exists. I welcome that proposal. Ofcom could take three possible courses. It could review the minimum requirements of the universal service under clause 33, which means downgrading the service. The Minister said earlier that that was not one of the Government’s aims. There could be an industry or users’ levy, which has been hotly resisted by the privatised cherry-picking companies which have made a killing from the commercialisation of Royal Mail delivery in the past decade. There could be a “procurement determination”, allowing the universal service provider’s obligation to be changed under clause 43. No one knows what course Ofcom will choose, but we do know that if there is to be any logic and justice in a levy across the industry to help with universal service provision, the Lords amendment will not allow it to happen for five years.

This is a negative amendment. It leaves Royal Mail with a burden that it cannot shift, cannot share with others, and cannot ask Ofcom to share with others for five rather than three years. Perhaps the Government want that to happen. If that is what they are up to, let them tell us. I know that the extension to five years has been welcomed by those who are currently making a nice killing by cherry-picking certain kinds of mail, but a real problem will face whoever bears the universal service obligation under privatisation. No subsidies will be offered; the provider will have to stand on its own two feet and make a profit. It will have to seek a change.

The extension to 10 years proposed in Lords amendment 22 is all right as long as the procurement trigger is not used by the universal service provider, but I think that the two proposals are heading in the same direction. Following privatisation, there will be pressure on the universal service provider—currently Royal Mail—to offload some of its universal service obligation. It could do that by means of a change in the number of deliveries. There have already been some changes: there is now only one delivery per day, and letters are not collected from mail boxes between lunchtime on Saturday and 5 pm on Monday. All those adjustments were made under the pressure of commercialisation, but there will be other pressures.

What worries me particularly is the possibility that regions to which a provider does not want to deliver will be offloaded on to another provider. That provider will then go to the Secretary of State or Ofcom and say, “We cannot make a profit on this.” My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) was asking about this point earlier. The provider will say, “It is not viable, so we want to be able

to change the arrangement either by cutting the number of deliveries or pick-ups or by altering the price of the delivery.”

All those options are available under these amendments. It may not be the intention but if it is the intention, the Minister and those who drafted the amendments are being Machiavellian in their approach to Royal Mail. I do not think they are Machiavellian, however. Frankly, I do not believe they are sufficiently smart; I think they are just blundering along, putting together groups of clauses and amendments that will have unintended consequences.

I am worried because the Bill, with these amendments, is deeply flawed. There are even flaws in the amendments that we are welcoming now. We are providing for 10-year terms, but it is still possible to get out of that by going to Ofcom and saying, “We can’t make it. We can’t cut the mustard here. We can’t make a profit. Either we give up as a universal service provider and sell out the lot, or you let us break up the franchise.” I think that is what will happen. I have serious reservations, therefore.

Also, why does the Minister want to extend the time period for Ofcom to be able to review the situation from three years to five years, under amendment 21? Is it to protect those who at present do not want to pay a levy, or to stop the burden sharing being properly looked at, or is it because he wants to save the minimum requirements of the service order? We are not sure. Will he address those concerns to give me the confidence so that I do not choose to press amendment 21 to a Division?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am grateful to the hon. Member for Llanelli (Nia Griffith) for her general welcome for many of our amendments. I began my remarks by saying that a degree of consensus had emerged in the other place.

The hon. Lady spent most of her time talking about access points and amendment 19. We must be clear about what an access point is. It comes from the directive; the definition of an access point and the requirement to provide them flow from the universal postal service directive, and we then define it in this Bill. It would be wrong for us to state that it could only ever be post offices, and to enshrine that in the Bill, because, for instance, some rural communities might need access points in a form that the post office network is unable to provide. I hope that the hon. Lady recognises that it is therefore important to have some flexibility.

The hon. Lady was concerned about some post offices not being accessible, and gave the example that some of them might be upstairs. In addressing the access points issue, Ofcom will be required to look at the needs of users, and its obligations, under the Communications Act 2003, are much stronger than those of Postcomm, and they include taking account of the needs of disabled people. I hope, therefore, that the hon. Lady will understand that the accessibility requirements have been improved. On access points more generally, the hon. Lady did not give the Government credit for the fact that in the—signed and legally binding—agreement we have reached with Post Office Ltd providing the £1.34 billion, Post Office Ltd has to secure a network of at least 11,500 post offices. That is the clearest and strongest way to ensure that the network is delivered.

The hon. Lady had some concerns about amendment 21, and asked why the Secretary of State would intervene before the five years was up. It is sensible to maintain the Secretary of State’s ability to intervene and direct Ofcom to conduct an unfair burden review. That measure adds some flexibility to the Bill. If all the evidence pointed towards there being a need for an unfair burden review, a process to allow a review to be conducted would clearly be beneficial. We wanted that extra flexibility in the Bill.

Nia Griffith (Labour, Llanelli)

I am not against the idea of Ministers intervening, because it is very important to have that opportunity for a review. I was just wondering whether there were any particular circumstances in which the Secretary of State might be proactive, because of the damage that could be caused if the review was left for five years rather than three. I am all for the Secretary of State having that additional power, but are there any circumstances that would precipitate an instant review?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We need to have flexibility in the legislation to ensure that if the circumstances are so bad for Royal Mail because technology is having a worse effect than we had expected on its letter flows, we can still provide the universal service. That is what this Bill is about. This extra flexibility ensures that if an unforeseen circumstance arises requiring an unfair burden review before the five years is up, that flexibility is in place. I am glad that the hon. Lady welcomes that.

I was grateful for the comments made by my hon. Friend the Member for Solihull (Lorely Burt), who acknowledged that these amendments show that the Government have listened. She was concerned that amendment 19 would give the Secretary of State an override. May I assure her that we think it very unlikely that the power would be used? We need to make it clear that the first step is for Ofcom to assess the needs of users, and it will consult the public. We would not expect to use the power, and it is highly unlikely that we would interpret the “interests of the public” as being less important than the “needs of the public”. The words in the amendment should reassure her. The amendment is intended as a broader test to capture elements that the “needs of the public” do not, and that Ofcom is not allowed to consider. I hope that she will be reassured by that.

My hon. Friend also asked about the notification scheme. I assure her that it is designed to enable Ofcom to act to prevent harmful cherry-picking, which would damage the universal service. Again, this is another tightening up of part 3 and the regulations, to ensure that we can deliver the universal service through this Bill.

The hon. Member for Dunfermline and West Fife (Thomas Docherty) talked about what happened in his constituency following the bad weather just before Christmas, and asked me whether I talked to Royal Mail about it. Of course I regularly meet the management of Royal Mail, and they are committed to providing an excellent service. I think we all accept that the conditions last winter were exceptional and did create lots of problems. Royal Mail took exceptional measures to try to deal with them, including investing £20 million of extra resources to ensure that deliveries could be maintained.

Although the details of Royal Mail’s operations are, of course, a matter for Royal Mail, it is worth pointing out that in areas of Scotland, including his constituency, the private companies had much greater problems in delivering. Royal Mail acted strongly, made the investment and was able to deliver. As the universal service provider, it showed its strength.

Ian Davidson (Labour, Glasgow South West)

Does the Minister believe that that additional expenditure—that enormous cross-subsidy to the highlands and other isolated areas of Scotland—would have happened in an independent Scotland?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Mr Deputy Speaker, I would love to speculate on such a matter, but Madam Deputy Speaker has made it very clear that she would not wish us to do so. All I can suggest to the hon. Gentleman is that he might wish to debate that later with the hon. Member for Angus (Mr Weir) in order to get an answer to his question. He should not believe everything he hears.

Thomas Docherty (Labour, Dunfermline and West Fife)

Let me take the Minister back to the point about some of the other providers, such as City Link, which he is absolutely right to say did not provide any service at all. That affected quite a lot of packages; for example, Amazon uses a non-Royal Mail provider. Will he give a cast-iron guarantee that if one of those companies tried to become the USP, it would be expected to make the same provision as Royal Mail does, and that we would not get the kind of cowboy operations that handle some deliveries now?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

That is the whole point of the Bill’s ensuring that the universal provision is there for us. It will be maintained, because the regulator, Ofcom, will ensure that the universal service provider meets the minimum requirements, including on performance. If a company took over the management of Royal Mail and became the USP, it would be subject to that very tough regulatory regime.

My hon. Friend the Member for Bedford (Richard Fuller) rightly praised the management of Royal Mail, led by the chairman Donald Brydon and the chief executive Moya Greene, who have made a real difference in their time at the helm; the Government have huge confidence in them. My hon. Friend asked what the incentives for management were. Having met the chairman and chief executive and having attended a board meeting recently, I assure him that its management is really seized of the need to modernise Royal Mail. Look at the way in which we have set the regime up: the Bill makes it clear that Ofcom must, when regulating, have regard to the need for the USP to become, and to remain, efficient, so there will be a regulatory framework to bear down on management—but there also are other incentives for management. He was right to make that point.

My hon. Friend also asked about the role of the unions. Royal Mail’s management and I have engaged very constructively with the Communication Workers Union, and I have already welcomed its very strong support for the amendments we are discussing today, which it recognises as strengthening the protection of the universal service that its members provide. There are, however, some difficulties. I was disappointed by the CWU’s decision to ballot for strikes in London

about modernisation and I hope that the ongoing talks will prevent a strike from going ahead, as industrial action would only damage the very universal service that we are all acting to protect.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) went very wide in his remarks on the regulation. I know that he is secretary of the CWU parliamentary liaison group, and I wish that he had been on the Bill Committee, as that would have spiced things up. We had a great time on the Committee. I remember fondly the days of Red Bull amendments, Gordian knot amendments and clause 3 amendments and all the rest that we heard from the Labour party. No doubt we would also have had the Linlithgow and East Falkirk amendment if the hon. Gentleman had been on the Committee. He is particularly concerned about Lords amendment 22, on which he spent a lot of time, about the procurement determination. As I said in my opening remarks, that change has been welcomed by Royal Mail and the CWU because it provides greater certainty. I also said that people had interpreted the option of procurement decision, if there were a decision that the USO represented an unfair burden on the USP, in ways that we had not expected. We believe it is a useful tool in the regulator’s armoury to make sure that the universal service will be provided throughout the country. It is not an attack on the USP, as some people had expected. The measure is designed to ensure that the legislation is future-proofed and to make sure that the regulator has all the necessary tools at its disposal.

Let me bring my remarks to a close—

Michael Connarty (Labour, Linlithgow and East Falkirk)

The Minister has missed out Lords amendment 21, which came from the Government side and has not been discussed or pushed for by anyone else. That amendment changes from three years to five the time after which the issue of levy and burden-sharing will be set aside. That has been welcomed by the people who are making lots of money out of cherry-picking in relation to Royal Mail at the moment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I apologise to the hon. Gentleman. I thought that I had dealt with that when I responded to the remarks made by my hon. Friend the Member for Bedford, who also raised that point, albeit from a slightly different perspective. We need to ensure that Royal Mail management have incentives to deliver. On reflection, I was concerned that the three-year period before which an unfair burden review could result in

compensation was too short. Five years is the right length of time, because we need to put pressure on Royal Mail management—I think that they willingly accept that—to drive forward modernisation, because that is the only way in which the company will survive in the context of a universal service provider, and we will deliver the universal service.

I put on record my thanks to the hon. Member for Llanelli for her sterling work in scrutinising the Bill, both as a member of the Public Bill Committee and in the Chamber. I also thank her former Front-Bench colleague, the hon. Member for Ochil and South Perthshire (Gordon Banks), who brought a great deal of wisdom to the Opposition Front-Bench team, which I am sure it will be sad to lose. I welcome the hon. Member for Streatham (Mr Umunna), although he is not in the Chamber, to his new role. I also thank all other members of the Public Bill Committee, especially the hon. Member for Angus, who was with us when he was able to beat the weather.

I am sure that all Members of this House and the other place would wish to join me in thanking Richard Hooper, whose two excellent and comprehensive reports formed the backdrop to the Bill. He has been incredibly generous with his time, and the Bill would not be as strong without his contribution.

It is worth pausing for a moment to reflect on what a historic occasion this is. For more than 20 years successive Governments have grappled with this problem, ranging from the work in the mid-90s by Lord Heseltine to the more recent attempt at legislation led by Lord Mandelson, right through to the present day. If Royal Mail’s problems were stark 20 years ago they are considerably worse today, because of the advent of e-mail, social networking and mobile communications. I am thankful that rather than having to face the problem with a blank sheet of paper, I have been able to draw on a large body of previous policy thinking and evidence.

The Bill is a culmination not just of the present Government’s efforts, but of more than 20 years’ work by successive Governments to tackle the problems faced by Royal Mail. By enacting it, we will finally be taking the action that successive Governments have recognised as necessary and, most importantly, giving Royal Mail the best chance of a successful future. Only with a successful Royal Mail can we all be confident that our constituents and businesses will continue to benefit from the universal postal service on which so many rely. This is a momentous achievement in which both sides of the House can share.

Lords amendment 15 agreed to.

Lords amendments 16 to 28 agreed to.

Munro Report

Tim Loughton (Conservative, East Worthing and Shoreham)

I beg to move,

That this House has considered the Munro Report and its implications for child protection.

I am delighted to have the opportunity to lead the debate, as well as by the number of hon. Members who wish to speak in it. I would like to set out my stall, and although I am supposed to make a winding-up speech, I am keen that we hear from Back Benchers, so I shall keep that to a minimum.

Today is significant for two reasons. First, this is the only Government-led debate on child protection in Government time that I can recall in my 14 years in the House. The debate is therefore long overdue and it reflects the importance that I and my fellow Ministers attach to child protection. It is an enormous privilege to lead the debate and I look forward to what I am sure will be a constructive discussion, as I know that hon. Members on both sides of the House hold passionate and well-informed views about the subject.

The second significance is that this week is the first anniversary of the launch of the Munro review of child protection. Hon. Members will remember that this was the first review that was established by the Department for Education. It was launched on 10 June 2010, and that underlined the fact that getting child protection right is an enormous priority for the Government. I know we all share that as a priority, so let me pass on my thanks to all hon. Members, leading organisations in the sector, the child protection work force and the wider public, including children and young people themselves, who contributed in some way to Professor Munro’s report. Their experience, insights and expertise have helped make it a well-informed and widely welcomed report.

We should not forget that the vast majority of our children enjoy a safe and happy childhood, but even now too many still do not. Some of their names are sadly familiar—Victoria Climbié, Peter Connelly and Khyra Ishaq—but many more are not. Whether we hear about a case in the media or it goes unnoticed by the public, there is always an individual tragedy at its centre. It is those individual tragedies that have so often been the triggers for different reviews and inquiries on child protection over many years. Every one of those reviews has resulted in calls for action, and in response legislation has been passed, rulebooks have been expanded, more procedures and processes have been introduced and structures have been restructured.

However, the fundamental problems have not gone away. Despite the very best of intentions, our hard-working, dedicated social workers, foster carers and other front-line professionals are too often still unable to make the difference that they want and need to make for vulnerable children and families. Day in, day out, they are up against a system that too often simply does not help them to do their best for children.

From the start we wanted the Munro review of child protection to be different. That is why, unlike its predecessors, it was commissioned not as a knee-jerk response to a specific tragedy that had hit the headlines; that is why it is recommending that regulation and

prescription are reduced rather than increased—it is not just another case of adding a few hundred more pages to the “Working Together” guidance; and, most importantly, that is why the review has focused on the child rather than the system. Professor Munro’s final report, “A child centred-system”, is wide ranging. It looks not only at the problems, but at the underlying environment that allows, and sometimes inadvertently encourages, such problems to occur. The review takes an holistic approach to child protection and bases its proposals on evidence and experience.

The report has been widely welcomed, as I said. The College of Social Work welcomed it as a “huge step forward”. Nushra Mansuri of the British Association of Social Workers described it as

“Music to the profession’s ears”.

The Children’s Commissioner praised its emphasis on the child’s right to protection. I am delighted that it has been welcomed as a breath of fresh air for all those hard-working professionals involved in child protection.

For that success, I have first and foremost to thank Professor Eileen Munro for her expert insight and analysis and the open and collaborative approach she has taken to the review over the past 12 months. I also pay tribute to the reference group that supported her so closely: Melanie Adegbite, District Judge Nick Crichton, Marion Davis, Avril Head, Professor Corinne May-Chahal, Lucy Sofocleous, Dr Sheila Shribman, Daniel Defoe, Professor Sue White, Martin Narey and the great many officials from the Department for Education and beyond who worked tirelessly over the past 12 months. I know that Professor Munro has hugely valued the support, expertise and different perspectives of all members of the reference group.

The report builds on previous reforms and the work of eminent experts such as Lord Laming, and I pay tribute also to the enormous contribution he has made in this area over so many years. This really is not about criticising previous, well-intentioned efforts to improve the system, but about making the time and space to understand why those efforts did not always work as well as they were intended to and should have done, learning from that to bring about long-term, sustainable reform in the future.

Eleven years, three months and 17 days since the tragic death of Victoria Climbié I still find myself asking whether the ever more complex systems that were created have actually made children safer now than they were then. Has the enormous additional amount of legislation, regulation and guidance made that much of a difference where it really matters? I fear that the answer may be no. Has, in fact, the child protection system in this country become rather more about protecting the system than about protecting the children whom the professionals went into their professions to protect? That is why it is now of the utmost importance that we restore public confidence in child protection, and restore confidence in the social worker profession and others—not least through those professions themselves.

The Munro review report seeks to do exactly that. Its fundamental analysis is that the system has become too focused on compliance and procedures and has lost its focus on the needs and experience of children themselves. That interest has occurred not just since the election, however; we started the process when, in opposition, I

chaired a commission on children’s social workers and we produced the “No More Blame Game” report back in 2007, with contributions from all parties, followed by our policy paper “Back to the Front Line”, produced before last year’s election.

Professor Munro makes 15 recommendations for reform. She makes it clear—and I agree—that they need to be looked at in the round, because they are interrelated and impact on the system as a whole. I shall go through them briefly, and in doing so I start by noting that this is an excellent report with which I find little to disagree.

The first recommendation is to revise the statutory guidance “Working Together to Safeguard Children”, and the framework for the assessment of children in need and their families to distinguish essential rules from guidance that informs professional judgment, because, although we need rules it is important that they are the right ones.

The second recommendation is that the inspection framework examines the effectiveness of the contributions of all local services—including health, education, police, probation and the justice system—to the protection of children.

The third recommendation is that the inspection framework examines the child’s journey from needing to receiving help, explores how the rights, wishes, feelings and experiences of children and young people inform and shape the provision of services, and looks at the effectiveness of the help provided to children, young people and their families. Too often, do we not hear that, actually, nobody really listened to the child at the centre of a case? We need inspection to look across all the relevant agencies and to focus on the things that really matter: outcomes for children and young people.

The fourth recommendation is that local authorities and their partners use a combination of nationally collected and locally published performance information to help benchmark performance, to facilitate improvement and to promote accountability. It is crucial that performance information is not treated as an unambiguous measure of good or bad performance, as performance indicators tend to be, because it is important that performance data are used intelligently to drive improvement in practice.

The fifth recommendation is that the existing statutory requirement for local safeguarding children boards to produce and publish an annual report for the local children’s trust board are amended to require its submission instead to the chief executive and the leader of the council.

The sixth recommendation is that “Working Together to Safeguard Children” is amended to state that, when monitoring and evaluating local arrangements, LSCBs should, taking account of local need, include an assessment of the effectiveness of the help being provided to children and families, and the effectiveness of multi-agency training to safeguard and promote the welfare of children and young people. Local safeguarding children boards play a vital role, and I see a much enhanced future for them as the linchpin of how we get this right.

The seventh recommendation is that local authorities give due consideration to protecting the discrete roles and responsibilities of a director of children’s services

and a lead member for children’s services before allocating any additional functions to individuals occupying such roles. We know that that is an important concern, and it has come up in the House recently.

The eighth recommendation is that the Government work jointly with the Royal College of Paediatrics and Child Health, the Royal College of General Practitioners, local authorities and others to research the impact of health reorganisation on effective partnership arrangements and the ability to provide effective help for children who are suffering, or likely to suffer, significant harm. I shall discuss that point further, but the implementation board, which will put forward these reforms, is heavily weighted—over-weighted in fact—towards health, and it is important that it should be.

The ninth recommendation is that LSCBs use systems methodology when undertaking serious case reviews with accredited, skilled and independent reviewers and have a stronger focus on disseminating learning nationally. Ofsted’s evaluation of SCRs should end, because serious case reviews need to be about learning rather than about processes or the story of a case; they need to be about supporting analysis, beyond identifying what happened, in order to explain why it happened. They should not be all about blaming people, because blaming individuals for errors and mistakes is unhelpful and counter-productive. Rather than having a blame culture where people try to conceal mistakes, surely it is better for people to work together to identify errors early so that they can be managed or minimised, often through the redesign of local systems. That is not to say that people should go without any repercussions when things have gone wrong, but simply wagging the finger of blame has clouded our judgment too much in the past. The name of the report that we produced in 2007—“No More Blame Game”—is as appropriate now as it was then.

Meg Munn (Labour, Sheffield, Heeley)

I feel that I should apologise for interrupting the Minister, because he is giving a very good exposition of what is in the report. However, will he deal at this point with the issue of Ofsted not looking at serious case reviews in future? I find that slightly puzzling, and I do not understand the basis for it. In my view, Ofsted’s role is not allocating blame but assessing whether it is an adequate case review that properly describes what went on.

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Lady makes a good point. I have had reservations for some time about the way in which serious case reviews are produced, read and inspected. This area was clearly highlighted in the report, and the implementation group will need to do a lot more work to see how we get to where we want to be. Ofsted itself will say that evaluating serious case reviews is not the best use of its time and resources.

In the past, we have seen questionable gradings of some serious case reviews. We should be using serious case reviews as serious learning tools. Before the baby Peter case, I did not realise that serious case reviews were not available in their full form to every other director of children’s services and other such relevant people around the country so that they could read what had happened in a certain case in a certain authority, say, “Gosh, hold on a minute—could that happen here?”, and be alert to the problems that had happened elsewhere

to see whether they needed to do things locally to ensure that they did not happen there. However, serious case reviews in their full form are available only to a very small number of people.

There have been question marks over the consistency of the quality of serious case reviews, who is commissioned to carry them out, who is controlling the quality of the people producing them, and, above all, who is bringing together the learning expertise and learning points to see whether they have generic applications for people up and down the country. That is not happening as a result of the way in which Ofsted does it, with the very best of intentions. We need to get to a place where a serious case review is not about learning from things that went wrong in a particular case but learning from things that went wrong in the system and applying that to the system elsewhere. We also need to ensure that the people producing serious case reviews produce things of a sufficiently high quality. We have a lot of work to do because the current situation is not sustainable and serious case reviews are not producing what we need them to produce.

Mark Tami (Labour, Alyn and Deeside)

Does the Minister accept that we have a media who are obsessed with the blame game? They will attack social workers for not intervening soon enough, and perhaps the following day attack them for wrecking families and breaking up family units.

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Gentleman is absolutely right. He might have heard me say on many previous occasions that social workers, and other professionals, are damned if they do and damned if they don’t. Certain newspapers will carry headlines saying, “Those terrible, incompetent social workers were to blame—they should have intervened earlier and taken that child into care.” Two weeks later, they are saying that those terrible, incompetent social workers are too busy snatching children from good, decent, middle-class families and should be ashamed of it. Social workers cannot win. To get a better system we have to restore the confidence of the public in our child protection system. A key part of that is to get the media to understand more what the job of child protection is all about, and not to be so swift to wag the finger of blame but to help in the explanation and understanding of what went wrong and look to want to bring about solutions jointly, because that is in all our best interests. We are not in that position yet. Things are improving, but we have a long way to go.

Toby Perkins (Labour, Chesterfield)

In the report, Professor Munro expresses how concerned people in the profession are about the Minister’s decision to make overviews of serious case reviews available, rather than simply the executive summaries. Many people feel that that reduces the capacity of such reviews to aid learning because it makes people more defensive. It seems that the priority is wrong. I will expand on my views with regard to Ofsted later. Does the Minister accept the concerns of Professor Munro and others who fed into the review about the negative consequences of making the overviews of serious case reviews widely known?

Tim Loughton (Conservative, East Worthing and Shoreham)

I do not think that the hon. Gentleman is entirely right. Actually, Professor Munro supports the publication of full serious case reviews. She would

much rather support the publication of a better form of serious case review, which is what we need to get to.

Professor Munro made the right decision to make serious case reviews open and accessible subject to three criteria: first, that the anonymity of the characters involved is maintained; secondly, that there is appropriate redaction where information would intrude on private details; and, thirdly, that it will not go ahead if a case can be made that publication in full would be detrimental to the welfare of a surviving child or sibling. With those considerations, I think it is absolutely right that we should all have access to those reports as a learning exercise.

If the hon. Gentleman is saying, as others have, that people might be less prepared to co-operate with such reviews, he is wrong, because it is in all our interests to ensure that the fullest information possible is in the public domain so that it can be assessed and the lessons learned. The people who will benefit most from the publication in full of serious case review overview reports are social workers, for the very reason set out by the hon. Member for Alyn and Deeside (Mark Tami), who is no longer here: when there is a tragic incident, it is always the social workers what done it. When one reads the full details, one finds that in some cases the police were not too clever or perhaps there were serious shortcomings with the GP, the school or various other agencies. However, it is always social workers who are on the front line. It is only by seeing the full picture that one can get an understanding of what was the weak link in the chain or where the co-operation between agencies that is needed did not happen properly. I do not agree with the hon. Gentleman’s analysis.

Already, a lot of learning has come from the serious case reviews that have been published in full in Haringey and on the Khyra Ishaq case in Birmingham. All serious case reviews published after 10 June 2010—we have not had one yet—are obliged to follow the new publication process.

Helen Grant (Conservative, Maidstone and The Weald)

rose—

Jim Shannon (DUP, Strangford)

rose—

Tim Loughton (Conservative, East Worthing and Shoreham)

I will give way to my hon. Friend, and then to the hon. Gentleman.

Helen Grant (Conservative, Maidstone and The Weald)

In addition to stopping the blame, does the Minister agree that more credit should be given for the hideously difficult job that social workers have to do?

Tim Loughton (Conservative, East Worthing and Shoreham)

My hon. Friend has great expertise in family law and in this matter, and she is absolutely right. Serious case reviews should reveal not just the failures and the bad things, but good practice so that we can learn from where things went right. Of course, we only ever read about the stories that go wrong in the papers. The media are not interested in the plane that lands safely. People do not really understand social work. It is easily caricatured, and that happens even in the soap operas that we see on our screens. Our report in 2007 made the not entirely flippant suggestion that there should be a soap based on social workers to give the public a better understanding of the exceedingly complicated

job that they do. Day in and day out, they have to exercise the judgment of Solomon in deciding whether children should be taken into care or left with the family.

Jim Shannon (DUP, Strangford)

May I remind the Minister that these are devolved matters in Wales, Northern Ireland and Scotland? Learning, experience and good value have been mentioned. Does he intend to make the devolved Administrations in the Assemblies in Wales and Northern Ireland and the Parliament in Scotland aware of the 15 recommendations in the Munro report? I think it is good to exchange information for the benefit of parts of the United Kingdom that might not have experienced what has happened in England and Wales.

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Gentleman is absolutely right. There has been some correspondence between Professor Munro and the devolved Assemblies, and I have been trying for some time to meet my counterpart in Northern Ireland to go through such matters with him or her, whoever it was on either side of the elections. I am keen to go and hold conversations with our counterparts in Scotland, Wales and Northern Ireland so that they can hear what we are doing, but also so that I can hear what they are doing. There are different ways of working in those areas.

Jeremy Corbyn (Labour, Islington North)

Like the Minister, and I think everyone here, I welcome the Munro report. The hon. Member for Maidstone and The Weald (Mrs Grant) made a point about the status of social workers, how they appear in public and how the newspapers denigrate them. There is also the problem of young social workers who are just out of university and newly trained and qualified having enormous difficulty in getting their first job, because they lack experience. Particularly in areas of inner-city Britain such as the one that I represent, there is great difficulty in retaining social workers because of housing difficulties and because of the enormous pressure and case loads that they face in fast-changing, high-turnover communities. It is not surprising that many do not stay on. I am sure the Minister is well aware that that turnover debilitates the entire service.

Tim Loughton (Conservative, East Worthing and Shoreham)

I agree, and we could have a debate just about the list of matters that the hon. Gentleman mentions, most of which are covered in the Munro report. The social work profession in this country has an awful lot of good people who do not get recognised and some poor people who need to be weeded out. In the past, people have felt frustrated and undermined, and the media onslaught against them has been completely demoralising. They have therefore left their jobs or taken early retirement, because the pressure has been too much for them. Who would want to go into a job like that, after all the publicity about baby P and other cases? Who would want to put themselves in the firing line by taking a job in which they try to do their best, but blame is pointed at them because they happen to be a social worker, even though they might be doing a good job?

We have problems at both ends. We need to retain and encourage good social workers and ensure that they can do their job as efficiently as possible, and we also

need to ensure that the people coming into the profession—there has been a big rise in applications for social work degrees recently—are the right people. They need to have the necessary calibre and dedication and be there for the right reasons, and we need them to stay the course. That is part of the work that the Social Work Reform Board is doing and part of the reason why the College of Social Work is so important. Having a chief social worker, which is the 15th recommendation in the report, will help to raise the game. It will raise the profile and status of the profession, and it will give people in it the feeling of being valued. Those are important matters.

Jim Shannon (DUP, Strangford)

rose —

Graham Stuart (Conservative, Beverley and Holderness)

rose —

Tim Loughton (Conservative, East Worthing and Shoreham)

I will give way to the hon. Member for Strangford (Jim Shannon) and then to my hon. Friend the Member for Beverley and Holderness (Mr Stuart), but after that I would quite like to make some progress; otherwise nobody else will get in.

Jim Shannon (DUP, Strangford)

The Minister will be glad to know that the new Minister in Northern Ireland is a colleague from my party, and that the new Northern Ireland Ministers have hit the ground running. I assume the situation is the same in Scotland and Wales. I am sure that he will find an open door from the Minister in Northern Ireland, and probably from those elsewhere in the UK.

Tim Loughton (Conservative, East Worthing and Shoreham)

I am grateful. I am planning a visit to Belfast next month, and if the hon. Gentleman’s colleague would like to meet me, I would be delighted.

Graham Stuart (Conservative, Beverley and Holderness)

When the Select Committee on Children, Schools and Families looked into the training of social workers in the last Parliament, it found that they could find themselves dealing with the most acute and difficult children’s cases having had placements in their training that did not involve children’s social work at all. They went from having no experience at all to the front line. Has the Minister been able to do anything about that yet, and if not will he tell the House what he will do about it?

Tim Loughton (Conservative, East Worthing and Shoreham)

The Chairman of the Select Committee on Education again makes a very good point and he has a good deal of expertise in this matter. It is completely self-defeating for newly recruited social workers to be turfed in at the deep end on tier 3 or 4 cases—serious cases—with little experience or expertise. How demoralising is that, let alone the danger it poses for the vulnerable children who need to have the appropriate level of support?

A number of things need to be done and they are being done. We need to ensure that we have the right calibre of people coming out of universities with degrees in social work. In the first year after their qualification, they should be given on-the-job guidance and training, preferably by people with great expertise. They should be eased into jobs at an appropriate rate in appropriate circumstances. My hon. Friend raises a very important point. Virtually every week I speak to social workers

and visit children’s services departments—I make a point of seeing social workers on the front line—but I have met too many who are given challenges for which they are not appropriately equipped at that stage.

I should like to make progress now because I am keen for other hon. Members to contribute and I have a few more points to make. I got up to recommendation 10—I do not know why recommendation 9 brought about the pause that it did. Recommendation 10 is that the Government should place a duty on local authorities and statutory partners to secure the sufficient provision of local early help services for children, young people and families. That is very appropriate to the early intervention work that the hon. Member for Nottingham North (Mr Allen) has been doing for the Department.

Recommendation 11 is that the social work reform board’s professional capabilities framework should incorporate the capabilities necessary for child and family social work. That is precisely the point that the Chairman of the Education Committee just raised. That framework should explicitly inform social work qualification training, postgraduate professional development and performance appraisal.

Recommendation 12 is that employers and higher education institutions should work together so that social work students are prepared for the challenges of child protection work, including through better quality placements.

Recommendation 13 is that local authorities and their partners should start an ongoing process to review and redesign the ways in which child and family social work is delivered.

Recommendation 14—I am almost there without taking another intervention—is that local authorities should designate a principal child and family social worker who can report the views and experiences of the front line to all levels of management. I have too often seen good social workers, who have built up good reputations and who are really good hands-on, get promoted, become managers and get stuck behind a desk. In that way, we lose front-line expertise. Some models, such as the one in Hackney, mean that people can gain seniority within their profession but not lose contact with people at the sharp end and the families that they entered the profession to help.

The 15th and final recommendation is that a chief social worker should be created to advise the Government and to bring the voice of the profession to policy. That was discussed recently in relation to the Health and Social Care Bill, and it was a recommendation of my report back in 2007.

Helen Grant (Conservative, Maidstone and The Weald)

Does the Minister agree that to safeguard children—in addition to that very comprehensive list—much more needs to be done generally to strengthen families?

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Lady is absolutely right. The first priority—this is the most desirable outcome for any family who find themselves on the child protection radar of a children’s services department, and who become a social worker’s focus of attention—is keeping that family together. We should ensure that where possible, the child can be kept with that family. The phrase “fostering a family”, which has been used before, means ensuring that parents have the parenting skills and that

it is safe for the child to stay with them. Only when leaving a child with a family is deemed unsafe should we consider taking them into care. Of course, the work done in the Department for Education and the Department for Work and Pensions—the projects that deal with families with multiple problems—aims to ensure that parents have the tools and the confidence to parent properly. In too many families in this country, there is a serious problem with the standard of parenting. The right hon. Member for Birkenhead (Mr Field) made that point very clearly in the report that he produced for the Department for Education.

Bill Esterson (Labour, Sefton Central)

Will the Minister give way?

Tim Loughton (Conservative, East Worthing and Shoreham)

As the hon. Gentleman is new, I shall give way one last time.

Bill Esterson (Labour, Sefton Central)

I apologise for being late—I was on the Finance (No. 3) Bill Committee, which has just finished.

The Minister’s last point—on whether a family should be kept together and at what stage a child is taken into care—gets to the nub of child protection issues. I hope he agrees that the threshold for making, and the timing of, such decisions bears constant review and analysis.

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Gentleman is right. An understandable result of what happened with baby P is that social workers have become more risk averse. If it is a marginal decision, they might take the child into care just in case, whereas if they have the time, space and appropriate tools and applications to deal with that family, it might be possible to keep it together rather than break it up.

I have set out Professor Munro’s recommendations for reform. Rightly, they address every aspect of the system. Rightly, they place the child at the centre. And rightly, they have as a basic principle the importance of placing trust in skilled professionals at the front line. It is of course the case that there are vulnerable children outside the immediate child protection system, and we need to improve radically how they are supported and make sure that they have a voice.

One of the main groups of such vulnerable children, for which I have responsibility, is of course children in care. With more than 64,000 children in care at the moment, we need to improve all aspects of their lives, including placement stability, education, health and the transition to adulthood, which are all priorities for Government and the wider sector. If we get Munro’s proposals right, there will be benefits for all those involved in children’s social care, not just those at the acute end of child protection.

From 1 April, we introduced a new statutory framework for looked-after children, which is far more streamlined, coherent and clear about the “must dos” for local authorities. In particular, we have brought together the care planning regulations and guidance into one volume, which should ultimately help councils put together better care plans. Less is often more. We have also strengthened the role of independent reviewing officers so they can challenge poor care plans, and make sure children’s voices are at the heart of all reviews. We have given clear steers in the revised fostering guidance about how local authorities should support foster carers and children

better. The revised transition guidance makes it clear that young people should leave care only when they are ready and have a strong support package in place.

I have also written to every local authority about foster carers being encouraged to treat foster children in their care no differently from their own children. In March, I launched the foster carers’ charter, which sets out clear principles for the support that should be available, what foster carers can expect and what foster children can expect of their carers.

I also launched earlier this year the Tell Tim website so that carers and, in particular, children and young people in care can let me—as the Minister responsible—know directly what they think is working well, what improvements they think need to be made or what is going wrong. I have also set up reference groups so that I can hear from foster children, care leavers, adopted children and children living in residential homes. Just this week, I met my regular group of young people who have left the care system, who recount their often moving and relevant experiences of what is going wrong in the system. We could all learn a lot if we spent more time with the children who are still being failed because, through no fault of their own, they have become part of the care system.

As hon. Members will be aware, some children and young people—including young runaways—become victims of sexual exploitation. The report published by Barnardo’s in January, “Puppet on a String”, highlighted the scale and severity of this horrific abuse. I pay tribute to Barnardo’s work and expertise in this area and I especially congratulate Anne Marie Carrie for hitting the ground running in her first few months at the helm of Barnardo’s.

The Government are determined to do everything possible to stamp out this abuse and safeguard vulnerable children and young people. Recent events brought to light in the midlands through Operation Retriever and the other ongoing police investigations underline the extent of this insidious abuse. As the lead Minister in this area, I have been urgently considering, with my colleagues at the Home Office, Barnardo’s and other national and local partners, what further action should be taken. The Government are now committed to working with partners to develop over the summer an action plan to safeguard children and young people from sexual exploitation. This will build on existing guidance and our developing understanding of this dreadful abuse, including through local agencies’ work around the country. It will include work on effective prevention strategies, identifying those at risk of sexual exploitation, supporting victims, and taking robust action against perpetrators.

Another area where excessive central prescription has had unintended consequences, leading to risk aversion rather than risk management, is in vetting and barring. The Government believe that children will be better protected if we move away from unnecessary and top-down bureaucracy towards more responsible decision making at a local level. It is vital to balance the need to protect the vulnerable against the need to respect individuals’ freedoms, and not to create a system that imposes unnecessary burdens on individuals or organisations. That is why the Government undertook a review of the barring and criminal records regimes in order to scale them back to common-sense levels. We need to get away

from a system that has unintentionally driven a further wedge between children growing up and well-meaning adults who come forward genuinely to offer their time to volunteer and to work with young people. They have been deterred from doing so by all the regulation.

I spoke earlier about the action we were taking to improve the lives and prospects of children in care. For many of those children, adoption will be the most appropriate outcome, which is why in February I issued new guidance with a call to arms to local authorities to re-energise their efforts on adoption and improve front-line practice. This refreshed and improved statutory guidance will be an important element in the Government’s programme of reform aimed at supporting adoption agencies in removing barriers to adoption, reducing delay and continually improving their adoption services.

Andrea Leadsom (Conservative, South Northamptonshire)

Does my hon. Friend agree that it is essential, when adoption is the best answer, for it to take place before the baby is two in order to give that child the greatest chance of bonding with the new family?

Tim Loughton (Conservative, East Worthing and Shoreham)

My hon. Friend, who has great expertise particularly in dealing with young children and in the whole area of attachment, knows how important it is that a child growing up is able from an early age to bond with, and develop an attachment to, parents or carers. We know from all the statistics that young children who are unable to grow up safely with their own parents benefit from adoption, where appropriate, at an early stage. If we can find them an appropriate adoptive placement, their chances of growing up as normally and conventionally as if they were with their own parents are greatly heightened, and they will have a better chance of catching up with their peers who are lucky enough to be able to grow up with their parents, so she is absolutely right.

Meg Munn (Labour, Sheffield, Heeley)

I welcome the tone that the Minister is taking in this debate. On adoption, may I ask him equally to adopt another approach—if that is not too many adoptions? It is enormously difficult to make the decision to place a child for adoption. It is a lifelong decision, and it is as important not to rush into it inappropriately as it is to make the decision to go for adoption. In reality, some of the biggest problems derive from other matters in the process, whether decision making in local authorities or decision making in the courts. I urge the Minister to consider those issues as well.

Tim Loughton (Conservative, East Worthing and Shoreham)

The hon. Lady is right and will know that we have been doing a lot of work on adoption. I have set up a ministerial advisory group with all sorts of people, and we have issued new guidance, as I said earlier. We need to balance timeliness with appropriateness to ensure that where it is clear—it is not always so—that an adoptive placement is the best way forward and in the best interests of the child, we get on with it.

There are, I have to say, some people who, usually because of excessive addiction to drugs and alcohol and a complete failure to rehabilitate, will never be able safely to bring up children in their care. I have sat in family courts and seen parents—usually single mothers— have their ninth, 10th or 11th child taken into the care

system. If that parent’s situation has not improved, can we be sure that it will ever improve? Need we take that risk, and wait years while a child is kept in an abusive situation? Again, those decisions require the judgment of Solomon, which is why I will shortly be holding a round-table meeting with a group of judges from the family court, directors of children services and chairmen of adoption panels to consider how we can make the adoption process better, more efficient, more robust and fairer; to ensure that we are making the right decisions for the too many children who are left in the system and could benefit from adoption; and to ensure that we are not taking into adoption children for whom it is not appropriate. I know that there are concerns there as well.

Finally, we need to remember in our policies the particular needs of vulnerable young people and the fact that they have the same right to enjoy the rich experiences of growing up, the transition to adulthood and becoming valuable members of society as those lucky enough to be part of safe, loving and stable birth families of their own. I recognise that it is vital for the sensible policy put forward by Professor Munro to be backed up by proper investment. As my hon. Friends will be aware, the Government have already announced some funding to support work force development, but the real cost is the cost of failure. The current system needs fixing. Because it needs fixing, huge amounts of resource are wasted. One local authority that has been working with Professor Munro and the review team as a “journey authority” calculated that around 50% of its children’s social care workers’ time is wasted in nugatory activity that does not add to the quality of service or outcomes, which is something that the authority is now starting to recoup—a resounding endorsement of the need to eliminate unnecessary red tape if ever there was one.

Few things are more important than helping and protecting vulnerable children and young people. In our first year in government, we have shown in the wide range of actions that we have taken—on child protection, children in care, adoption, fostering and dealing with the sexual exploitation of children—that we are deeply committed to tackling these issues, and I am determined to ensure that we make progress. Sadly, we need to recognise that despite Government reforms and the hard work of professionals, tragedies will still happen. There are individuals who will harm children. We cannot eliminate that risk, but we can all work to help to reduce and manage it—indeed, we all have a duty to do so. Society is right to expect professionals to take responsibility and make the best judgments that they can in the best interests of children. Those judgments will not always be the right ones, but they need to have been made for the right reasons and on the best possible evidence.

This Government believe that we need to move towards a child protection system with less central prescription and interference, and in which we place greater trust and responsibility in skilled professionals on the front line. Professor Munro has provided us with a thorough analysis of the issues. It is now for the Government, working with the sector, to help to bring about sustainable reform. That is why I have established an implementation working group, drawing in expertise from local authority children’s services, the social work profession, education, police and the health service, to

work with the Government to develop a response to Professor Munro’s recommendations by the summer recess. We are today publishing on the Department for Education website the first account of the group’s deliberations, which started at the end of last month.

Graham Stuart (Conservative, Beverley and Holderness)

Will my hon. Friend give way?

Tim Loughton (Conservative, East Worthing and Shoreham)

Before I reach the final line of my speech, I will give way to my hon. Friend.

Graham Stuart (Conservative, Beverley and Holderness)

I am delighted to hear that those other agencies are represented on the implementation group. Will my hon. Friend say a little more about the group’s remit and how we can ensure that other Departments integrate with it, so that it is not just the social work profession that looks to respond to the Munro review?

Tim Loughton (Conservative, East Worthing and Shoreham)

The Chairman of the Select Committee on Education makes a good point. The people serving on the group, whose names are published on the website, have been chosen not because they are the great and the good—although I am sure many of them are great and some of them are good—but because they are experienced practitioners with expertise in their particular areas. For example, we have on the group the chief safeguarding expert from the Royal College of Paediatrics and Child Health, and a safeguarding expert from the NHS Confederation. We also have the Under-Secretary of State for Health, my hon. Friend the Member for Guildford (Anne Milton), who is the Minister responsible for public health, a senior headmistress of a secondary school, a senior headmistress of a primary school, a senior police officer with a long record in child protection, a real social worker from the front line, along with a Labour councillor from an authority with a good track record in child protection, and so on.

This is absolutely about getting all the right parts of the jigsaw together and trying to produce a system that, by working together from the same song sheet and with the same priorities and the Government’s backing, produces an environment that ensures that we can keep more of our children safer. Today’s debate—even though I have taken up rather too much of it, and more than I had intended—will help to inform the implementation group’s response. I very much look forward to my hon. Friends’ contributions this afternoon.

Toby Perkins (Labour, Chesterfield)

I echo the Minister’s welcome for the work of Professor Munro, and thank her and everyone involved in the production of the report. I also give the Government credit for commissioning this important piece of work. Unlike many other reports on social work, this review has not been produced in the immediate aftermath of a specific, much-publicised tragedy. It takes a holistic view of how we could protect the most vulnerable children in our society better. I also echo my hon. Friend the Member for Sheffield, Heeley (Meg Munn) in welcoming the tone of the Minister’s remarks today. We look forward to working constructively with the Government to take forward Professor Munro’s recommendations.

Protecting our most vulnerable children is crucial, difficult and emotionally charged work. Providing the most resilient environment in which to protect children

is a responsibility that has challenged and exercised Governments of every hue for many years. I pay tribute to the many hundreds of social workers who, through their hard work, commitment and professionalism, literally save lives. Social workers know that theirs is often a thankless task. When they perform at the top of their game to improve lives for the better, safeguarding children from harm and assisting families to get back on to the right path, they rarely get bouquets or thanks. They do not expect to get even a mention in the local free paper. Their own satisfaction at having made a difference has to suffice. But they also know that should any of the multitude of their borderline decisions be proved, with the benefit of hindsight, to have been wrong, and should a tragedy then occur, they will be on the front page of every newspaper in the land and held to account for their decisions.

It is in that context that Professor Munro produced her report, and that the previous Government took many significant steps to support the social work profession and our children. It is also in that context that we all have a duty to speak up for the importance of the work that social workers do, and to recognise the knife-edge nature of much of their decision making in an imperfect world.

I shall also follow the Minister’s lead in thanking foster carers across the country for their invaluable work. I know from personal experience how vital their role is. I also welcome the measures to make the route to adoption a quicker one. As an adoptive parent myself, I know the importance of children being taken on by a new family as early as possible, once they have been identified as suitable for adoption.

This is not the first report on protecting children to call for a change in society’s attitudes towards and expectations of the social work profession. Nor is it the first to call for an approach that puts children at the heart of our thinking on this subject, but it is no less valuable or right to call for these things just because they have been spoken of before. We recognise that in this vital area, progress is always more easily made when there is a sense that all the parties involved are working together constructively and positively, and there is a great deal in the report that we are happy to support enthusiastically. It builds on many of the reforms that the previous Government embarked on, and endorses many of the structures that they implemented. It also builds on the work of the social work taskforce and the social work reform board, whose contribution the review warmly endorses.

I shall turn now to the specific recommendations in the review. In calling for a child-centred approach, it recognises that the needs and rights of the child, and the child’s involvement in and ownership of a process that might be happening at a confusing and frightening time in their lives, must be paramount. We absolutely support that idea, and recognise that children must feel that the interventions and decisions being made about their future should involve them and not just be a process that happens to them. We are pleased that the review recognises that we all owe a debt of gratitude to the firm foundations of reform laid down by the social work taskforce. Among many other reforms introduced by the Labour Government, the report recommends the

protection of, and specifically cautions against the dilution of, the role of directors of children’s services. I shall return to that point later. The report also endorses the vital role of the College of Social Work in lifting standards and representing the profession internally within local authorities and more broadly across all parts of our society.

The report gives further support to local safeguarding children boards, and to the 10 principles of the assessment framework. We hope that, as recommended in the review, the position of chief social worker will be able to play a key role in promoting the interests of children through the improvement of the profile and professionalism of social work, and through influencing Government policy on behalf of children and the profession.

We will support any efforts that will improve the standing of social work. This includes its profile within the media and among the wider public. It includes helping to make social work a career of choice for talented graduates, helping to build the self-esteem of the social work profession and, within the House, recognising the debt we all owe to the profession for the work it does on behalf of our most vulnerable children and families.

Jeremy Corbyn (Labour, Islington North)

My hon. Friend will have heard my earlier intervention on the Minister about the status of social workers, and I am sure he will have agreed with me. Does he also agree how important it is to have some sort of steer or directive for local government to take on newly qualified social workers and to provide them with the relevant training and entry into the profession? I observe huge cuts taking place in local government all over the country, as a result of which there are fewer new job opportunities for qualified social workers—and therein lies a problem 10, 15 or 20 years down the line.

Toby Perkins (Labour, Chesterfield)

My hon. Friend is absolutely right. The problem is not just 10 or 15 years down the line; it is more immediate. When we know that there are social work vacancies around the country, it seems bizarre that newly qualified people in this sector are finding it difficult to find work. Professor Munro’s recommendations on practice and assessment years at the early stages will make a significant difference—at least, I hope they will. My hon. Friend is absolutely right about the considerable anecdotal evidence that newly qualified social workers are finding it difficult to find work. I hope that the proposed measures in the report will be followed through, as it is vital that people should choose to work in this area. As the Minister has said, we want to make social work an attractive career option for talented people leaving university, but if those people find it hard to find work as a social worker, that is going to become more difficult.

Andrea Leadsom (Conservative, South Northamptonshire)

Does the hon. Gentleman agree that one way to support new young social workers freshly out of university would be to provide a better end-to-end network of support, taking into account what is already available in children’s centres and other therapeutic services that could be available in a package, which could help to provide the network of support that social workers desperately need?

Toby Perkins (Labour, Chesterfield)

The hon. Lady makes a valuable point. The Munro review recognises the significant steps made in the direction of partnership working and some of the challenges, particularly in difficult financial circumstances. The report also deals with other innovations that might be needed to help achieve the hon. Lady’s suggestion in her valuable point.

The report’s recommendations on the education, training and continuous professional development of social workers are an important step forward. We entirely endorse the review’s commitment to the highest standards and consistency of education, the importance of the highest quality of practice placements and the new supported and assessed first year in practice, acting as the final stage of becoming a fully practising social worker. We recognise that more must be done to strengthen the quality of social work in this country, and a real commitment to improving education and recruitment will be very welcome.

We also believe that the recommendation for local authorities to appoint a principal children’s and family social worker could play an important role in ensuring that the voice of those who safeguard our most vulnerable children is heard loud and clear in every town hall in the land.

We particularly welcome the further support for early intervention to identify and work on problems as soon as they are presented. Professor Munro particularly identifies the importance of early intervention whenever it occurs in a child’s life, and we entirely agree with her on that. Although many families that require the help of social services might appear likely to head down the wrong path in life from an early stage, changing circumstances can mean that children and families hit problems and need support at any time in the childhood journey—and the earlier those problems are identified and the more broadly all parties work together, the better the chance that families can be kept together and problems averted before they become impossible to deal with.

The review also focuses at length on the importance of partnership working, extolling the virtues of the existing networks in early years practice and the importance of a constructive relationship with the police, mental health services, adult social services and health professionals. The review expresses the fear that widespread changes and the desperate financial position in which some public services find themselves could lead to a fracturing of the partnerships. Indeed, we are already seeing evidence of that.

We know from the Secretary of State’s letter to Professor Munro, the choice of Professor Munro to head the review team, and the press releases that have emanated from the Department for Education that the need to cut paperwork and bureaucracy in order to enable social workers to do what they should be doing is intended to be a prominent theme, but anyone who focused solely on that element of the report would greatly undermine its quality and depth. I hope that no one will again attempt such a paraphrase, because the quality of the research and the importance of the issue deserve better. I am thankful that the Minister went far beyond that in his speech today.

We welcome the recognition of the importance of administrative support for social workers so that they can spend more time in the field. It is sad, however, that

that comes at a time when Unison is reporting that many of its members with administrative roles are among the first to be laid off in councils. Administration and record-keeping vital: they can save social workers’ time, and are invaluable to the quality of their intervention. No one in this House wants to prevent social workers from spending as much time as possible working with children and families, and we all know that social workers themselves do not go into the profession with the dream of sitting at a wooden desk typing away.

There is no doubt that the review team considered at length the amount of central prescription and the amount of time spent on administration—matters that have also concerned the profession and its representative bodies and unions. We support the pilot schemes that are taking place in four authorities with the aim of relaxing time scales. They are at an early stage, but we look forward to the outcome. We urge the Minister to ensure that the additional quality assurance measures referred to in appendix D and implemented in Hackney are tightly observed while those trials are being completed, and that before anything is done to make the changes widespread, the full implications of those changes are understood.

Graham Stuart (Conservative, Beverley and Holderness)

The hon. Gentleman touched on the subject of bureaucracy, but he did not make his views clear. Does he accept that there was too much prescription from the centre, does he accept that it was getting in the way of effective social work, and will he give an undertaking that a future Labour Government would not seek to reverse sensible, practical and common-sense attempts to reduce bureaucracy and ensure that the priority is given to the front line?

Toby Perkins (Labour, Chesterfield)

I shall deal with that point in some detail later. However, I can say that we support the trials that are taking place. If the professionals feel that some measures can safely be dispensed with, that is acceptable as long as safeguards are established, as they have been in Hackney, to prevent slippage of cases. We do not want social workers to lose sight of the importance of some cases along with the paperwork.

The report is evidence based, and Professor Munro identifies both excitement and anxiety in the profession about the steps to be taken. Throughout its time in government Labour took advice from experts seriously, as the present Government are doing.

Meg Munn (Labour, Sheffield, Heeley)

In the report, Professor Munro observes that

“most bureaucracy which limits practitioners’ capacity and ability to practise effectively, is generated and maintained at a local level.”

We should consider that carefully. Headlines that blame people for bureaucracy are not helpful. We need to identify where the bureaucracy is coming from, and tackle it properly.

Toby Perkins (Labour, Chesterfield)

My hon. Friend speaks on the basis of tremendous experience as a result of the work that she did before entering the House—and, of course, since doing so—and she is absolutely right. Trade unions, social workers and others in the profession want us to proceed as carefully as possible. I reiterate that there is

nothing that we want more than social workers who are enabled to spend the maximum amount of time with the children and families with whom they are working.

We support the pilot scheme in four authorities, and we urge the Minister to ensure that the additional quality assurance measures referred to in the report are followed so that the full implications of the changes are understood before any measures are taken to make the scheme more widespread. The proposed changes are important and offer advances, but they must not be rushed. The Ofsted report detailing children’s experiences before entering care demonstrates the importance of social workers spending time in face-to-face, one-to-one meetings with the children and families in their care, but the research also shows how varied the quality of practice is, and with that in mind, and in advance of the improved education and training—and also in the context of the difficult financial settlement facing local authorities—it must be stressed that it is vital that every care is taken.

The National Society for the Prevention of Cruelty to Children echoes this view. It states:

“The Government should not move too quickly to rapid deregulation. It needs to invest heavily in building the skills, confidence and experience of all professionals working with children. Controls which safeguard against poor practice must stay in place while professionalism is built. Otherwise, children’s lives could be put at risk.”

We entirely support those comments.

We have concerns about the portability of documentation if each local authority has a different common assessment framework. The whole point of having a common piece of documentation was that it would only need completing once. Perhaps it could be slimmed down and used by all partner agencies, wherever they are. If that documentation needs to be re-done every time a child moves from one authority area to another, the intention of cutting back on paperwork may be undermined.

We also have concerns about the recommendation and current direction of travel with regard to serious case reviews. The review rightly identifies the importance of learning lessons from SCRs. Alongside learning lessons, however, they must also perform the task of building public confidence in the profession and illustrate that there is no cover-up, no attempt to hide from the truth and no sense of the ranks being closed. There is a delicate balance to strike.

Local safeguarding children boards are not forced to be independent and are inevitably seen by some as internal partners, having a relationship with the practitioners providing the service. In some cases, they are chaired by the director of children’s services. The independent evaluation of the work of LSCBs on SCRs offers an important neutral balance to ensure that the correct lessons have been learned.

Professor Munro identifies LSCBs’ unhappiness at the role of Ofsted, but I wonder whether the independent assessments analysing the quality of the SCRs might check on how successfully lessons are learned. It does not seem to me that the fact of an evaluation in itself prevents a culture change towards a more learning-based approach. Whoever does independent inspections in future can be directed by the Minister in whichever way

he wants, but simply to abandon any sort of independent review until a new body is in place in the next year or so is unsatisfactory.

We also feel that the decision to publish the entire overview of SCRs is having, and will have, very negative consequences. When in government, Labour increased the transparency of executive summaries of SCRs, but we feel that the balance is now leading to a less helpful situation. Professor Munro highlights on page 61 of the review the unhappiness felt by many in the profession about this move. It can hamper the attempt to make learning the principal aim of SCRs, and it inevitably restricts the enthusiasm of some practitioners to be frank about what they may have got wrong. We need to see the culture change before there is a move towards publishing the entire overview of the SCR. This also inevitably makes it highly unlikely that the better reporting of social work practice by the media that the Munro review cries out for will happen. It is also apparent that other partners are stepping back from getting involved in SCRs because of the full reporting of them. The Minister was right to say that if people are refusing to get involved in SCRs, that is wrong, and it is important that we learn those lessons. We are worried that publishing the full overview of them is having that effect, however, regardless of whether that should be done in the best interests of our children.

There is also anecdotal evidence, which we will be investigating further, that the threshold for serious case reviews is being lifted by authorities and that they are deciding that they are less likely to do them. Again, that will have a negative impact on our capacity to learn from past mistakes. It seems an odd set of priorities to remove the independent evaluator of serious case reviews at the same time as we are opening them up to wider public and media scrutiny. That suggests a “kangaroo court” approach, which is totally out of keeping with this review, and it could be a seriously retrograde step.

I mentioned that the review had identified, as had our own work with local authorities, that the role of the director of children’s services to be a purely child-centred position was under threat. That is hardly surprising, given that the Secretary of State for Communities and Local Government is positively encouraging this sort of change to local government practice, with managers merging roles and councils becoming a little bit cheaper and quite a bit worse. That seems to be the Pickles recipe for local government. We urge this Minister to stand up for children against the right hon. Member for Brentwood and Ongar (Mr Pickles) and we urge councils to protect the role of director of children’s services.

Jessica Lee (Conservative, Erewash)

Does the hon. Gentleman not accept that the flip side of his argument about serious case reviews is compelling? We must be transparent at this point and we need to assist all professionals working in child protection. Everybody needs all that information if we are going to learn the lessons, not only from where things have gone wrong, but from good practice. We need to have full transparency, and serious case reviews must be published in full.

Toby Perkins (Labour, Chesterfield)

As I said, we take advice from specialists in the profession and many people within the social work field are deeply concerned about that issue; page 61 of Professor Munro’s report alludes to those concerns.

Of course transparency is important, and it is precisely for that reason that we would like an organisation that is seen as independent continuing the evaluation of serious case reviews. However, alongside that important transparency, we need to deal with key issues relating to the protection of anonymity of both professionals and people within the families. It has been relatively easy for people in local areas to identify who has been alluded to in many of the serious case reviews. In one example that I was told about by a social work professional, a serious case review referred to a relative of a soldier serving on the front line. If that review had been published in full, a difficult situation could have been caused for someone who was already in a difficult position. Although I share the hon. Lady’s idea that transparency is important, and it is for precisely that reason that an independent review of the evaluation must remain a part of the system, I question whether this approach will aid learning and will instead reduce people’s willingness to get involved.

Much of this review is dedicated to the importance of improving the quality of social work training and the continuous professional development journey that social workers go on, yet worrying signs are already emerging about councils reacting to the savage cuts forced on them by cutting back on CPD and training. We also share Professor Munro’s alarm about the evidence of cuts to early years provision. Some 25% of Children England member organisations are experiencing cuts of more than a quarter of their income—for them it seems as if the big society is rapidly shrinking. The Minister needs to stand up for early years funding if the measures on sharing responsibility for early help set out in this report are to be more than warm words. Continued denial about the scale or fact of the cuts will simply suggest that the Government are not serious. It is particularly worrying that areas with the highest level of deprivation and the highest demands on social services are the very ones that have seen the largest Government cuts.

Andrea Leadsom (Conservative, South Northamptonshire)

rose—

Toby Perkins (Labour, Chesterfield)

I will just make this point and then I will be happy to allow the hon. Lady to intervene.

I have referred to the survey that we sent to every director of children’s services in England on the state of safeguarding services. We had an excellent response from a significant proportion of local authorities and a number of patterns emerged. Local authorities are trying desperately hard to protect spending on safeguarding, and we salute them for that. However, despite that commitment, 36% of local authorities expected case loads to increase this year and only 10% expected them to fall. One assistant director of children’s services explained the paradox of statutory guidance.

Before I move on any further, I will allow the hon. Lady to intervene. I was trying to find a natural pause, but the words just flowed so wonderfully that I could not stop.

Andrea Leadsom (Conservative, South Northamptonshire)

I am very grateful. In this time of financial austerity, is it not more important than ever to get good value for money by focusing on prevention rather than having the massive costs, further down the line, of taking children into care?

Toby Perkins (Labour, Chesterfield)

Absolutely. This is a matter on which there is clearly consensus across the House, but there is a difficulty when it comes to the reality on the ground, for example in Sure Start centres and with early intervention. People are seeing that the—for want of a better word—rhetoric around early years is not being supported by funding, and there is a danger that the massive cuts to local authorities mean that they might not be able to follow through on worthy intentions such as those that the hon. Lady mentioned, which are shared by Members across the House.

One assistant director of children’s services said that statutory guidance was extremely important to ensure that she could stand up to councillors who look to her services for cuts, as it meant she could say, “This is stuff that we have to do.” She warned that the more freedom local authorities were given to drop safeguards, the more likely councils would be to cut back on safeguarding. That is not an argument for keeping in place regulation that we can do without, but it is a possible unintended consequence of which the Minister should be wary.

Our survey also showed that directors of children’s services are almost unanimous about the impact of cuts on police, mental health and primary care services, saying that it will reduce their ability to safeguard children in their care. That is the voice from the ground and no one can run away from it.

On the subject of local authorities’ identifying which models of best practice they want to follow, we are again in support of the principle, but I am interested to know what drivers of best practice the Minister feels he has at his disposal to improve standards. Is he worried that if each council is radically different in the way that it provides services, the transition for social workers who move from one authority to another will be more difficult? Will it increase the postcode lottery? Will there be even greater variation in the quality of service provision from one authority to another?

As I have said, our greatest reservations about the direction of travel proposed in the report are not about Professor Munro’s suggestions, but about whether the Government will put legislative and financial muscle behind the changes that she suggests. An exciting opportunity to build on past progress has been presented, and the Government, having commissioned this report, now need to act on it fully, with the relatively minor exceptions that I have described.

We worry that the dogma of cutting back on the state could overpower the genuine desire to do the best for our most vulnerable children. The Minister and the Government can rely on us to support them on these reforms if they actually provide the resources needed. This is not an opportunity for cherry-picking, but it is a time for boldness. The Minister and the Government have an opportunity to act and we hope that they seize it because our children deserve nothing less.

Nigel Evans (Conservative, Ribble Valley)

Order. This was always going to be a short debate for Back Benchers, but it has been made somewhat shorter, so I am introducing a six-minute limit to ensure that as many Back Benchers as possible get in.

Edward Timpson (Conservative, Crewe and Nantwich)

Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to this significant, serious and now rather too short debate on this extremely important issue. Only a few months ago, I was granted an Adjournment debate on how we can improve outcomes for children in care and I am pleased that many of the arguments I raised with the Minister, together with recommendations on how to reform and strengthen the care system, particularly around child protection, are very much at the heart of the Munro report. I must declare an interest as a non-practising family law barrister specialising in care cases as well as being the son of foster carers who have fostered 90 children over the past 30 years.

The reaction to the Munro review has been almost universal in its praise. I have read the responses of the National Society for the Prevention of Cruelty to Children, the Association of Directors of Children’s Services, Action for Children, Home-Start, the British Association of Social Workers and the British Association for Adoption and Fostering, among others, and they all agree that the report is an important opportunity to create a high-quality child protection system. This prompts me to ask why these changes have not already happened. It is not as though previous reviews and reports have not drilled down and exposed the inherent flaws in the system.

In his second report of March 2009, Lord Laming lamented the

“over-complicated, lengthy and tick-box assessment and recording system”

that has developed since the Climbié report in 2003. Of course, he is right, but despite his exasperated pleas the tick-box culture has continued to spread its tentacles across social work and to sap the morale and professional judgment of the work force. Children in need do not require reams of paper produced by case reviews and do not benefit from a social worker who spends half their time strapped to their desk and sat in front of a computer. They also do not need social workers who sit in endless meetings.

Social workers do not want that either. As part of her social work taskforce report, Moira Gibb asked social workers to identify the factors that would most improve their professional lives and, by implication, their ability to do a professional child-focused job. They indentified: first, fewer targets; secondly, smaller case loads; thirdly, the abandonment of the integrated children’s system; and, fourthly, more experienced social workers in their teams. Of course inspection, accountability and good record keeping are important, but it has been clear for too long that, as the ADCS says, social workers are

“hindered by the restrictions and regulations concerning assessment, risk management and performance indicators that do not focus on the best outcomes for the children and young people involved.”

The social work taskforce found that those engaged in child protection work spent only a quarter of their time with the children they were there to protect. In short, the system has become too preoccupied with compliance, bureaucracy and defensiveness. As a consequence, we have a demoralised child protection work force who are depressed by negative media attention but without the confidence to break free and get on

with doing what motivated them to take on such an admirable vocation in the first place. As one BASW member said:

“I feel exhausted and stressed for the majority of the time. I have only been in the child protection team for 3 months and have already decided that the work is too stressful and too risky—I am now actively looking for another job.”

High staff turnover, high levels of sick leave, a high percentage of agency workers—the figure is as high as 50% in some children’s services departments—and an increase in long-service leavers are all signs of a failing organisation. More worryingly, however, that puts the children who need protecting at a greater risk of harm. The culture needs to change once and for all.

In their response to the report on looked-after children that was produced during the previous Parliament by the Children, Schools and Families Committee, the Government clearly identified those problems and endorsed the report’s view that high staff turnover, heavy work loads and administrative burdens lead to relationships that cannot flourish and social workers who do not feel empowered. They went on to express their commitment to changing the system so that social workers have

“more freedom to make decisions, more support and understanding, and less prescription and censure.”

It was extremely gratifying that the Minister re-emphasised that the Government take those important issues seriously. I do not doubt their determination, but given that people have asked why that is yet to happen, there is a worry that if we are not careful the critical state of some children’s services departments could lead to another round of regulations that result in even more prescription and red tape, which, as history has shown, would only make matters worse.

Eileen Munro is right that we need to reduce radically the amount of central prescription so that we help professionals to move from a compliance culture to a learning culture. We need to focus on the essential rules for effective multi-agency working that have been so successful in places such as Hackney and Ealing, as well as on the principles that underpin good practice elsewhere in our child protection system. We also need to focus on the quality of the help that is given by paying close attention to the views and experiences of those who receive the services and the professionals who help them. We will never completely eradicate the risks of harm to children, but by building a system with the child at its centre, rather than one that is driven by process, we can be in a much stronger position to anticipate, flush out and deal more effectively with the risks that still remain.

Ann Coffey (Labour, Stockport)

I, too, welcome the publication of the review of the child protection system by Professor Eileen Munro. Her excellent report is thoughtful, well researched and based on extensive consultation. She makes the strong point that the responses to the terrible deaths of children in recent years have shaped the existing child protection system. She identifies four driving forces and says:

“These forces have come together to create a defensive system that puts so much emphasis on procedures and recording that insufficient attention is given to developing and supporting the expertise to work effectively with children, young people and families.”

I agree with her conclusion that there should be a move from doing the right thing procedurally to doing the right thing for the child.

Professor Munro points out that her recommendations are not a quick fix but should be seen in the context of changing the system while putting in place the knowledge, skills and professional expertise to enable professionals confidently to exercise their judgment to do the right thing. Judging whether a child should be removed from their family because there is an unacceptable risk to their life or well-being might be necessary in a very complex family situation. It might follow months of concern, intervention and meetings with parents and other agencies. Assessing the risk to a child relies on many agencies working together to do the right thing. I absolutely agree that over-reliance on procedures does not help make such decision making effective. As she says, procedures can be followed in a way that is technically correct but so inexpert that the desired result is not achieved.

What is the right thing for the child? In my early years as a social worker I supervised a family—a single mother who was an alcoholic and who had a seven-year-old child. The bond was close. The problem was that the mother’s drinking took the form of drinking bouts, often resulting in blackouts, during which she was unable to supervise the child in the home. The child had taken to wandering outside the house at night and his attendance at school was suffering, but there was no question of his suffering any direct harm from the mother. When sober, she provided good parenting and the child responded to it, but no amount of intervention or exhortation could stop her drinking and instead she retreated into a tissue of lies to hide the extent of her problem. I use that example to illustrate the complexity of judging what is the right thing to do, as levels of risk are not easy to assess and must be balanced against positives for the child in an existing relationship and the outcomes of any actions on their long-term welfare.

I was particularly interested in the report’s chapter on sharing responsibility for the provision of early help, particularly early in the emergence of a problem. I entirely agree with Professor Munro that preventive services will do more to reduce abuse and neglect than reactive services and that the co-ordination of services is important to maximise efficiency.

As chair of the all-party group on runaway and missing children and adults, I would like to offer some comments on the child protection system in relation to children who are vulnerable to abuse and exploitation while missing from home or care. Sadly, many children and young people go missing from children’s homes. For them, it has already been decided that they cannot be safeguarded and protected at home. We are their corporate parents and they are in our care, and I was pleased that the Minister referred in particular to our responsibilities as corporate parents.

More than 100,000 children run away overnight each year. Readers of the Manchester Evening News were stunned to read recently that there were 11,819 police reports of children going missing in Greater Manchester last year. Of those, 2,281 cases related to youngsters aged 11 or younger. Another shocking figure is that half of those cases related to children living in care, with more children disappearing from the 43 children’s homes in Stockport than in the rest of Greater Manchester put

together. We know that running away is an important indicator that things are not right in a child’s life. One in five children who run away will be harmed and many will become involved in the things that worry parents and society the most—drugs, alcohol and falling prey to sexual predators. I pay tribute to the recent Barnardo’s report, “Puppet on a String”, which highlights those issues.

I welcome the Government’s recent announcement of an action plan to tackle child sexual exploitation and think it is important that it focuses on both running away and child sexual exploitation, as all the research shows that the two issues go hand in hand. I will be interested to hear the results of the Child Exploitation and Online Protection Centre’s current investigations on recent cases of sexual grooming. One of the problems is the collection and analysis of data and assessing the risk to children individually and in the wider community. I hope that the work being undertaken by CEOP will help to develop a risk assessment framework for incidents of children going missing that could form the basis of effective inter-agency work. Local safeguarding boards have an important role because they are in a unique position to monitor how effective local agencies are in addressing the problem.

When the Minister considers recommendation 6 in Professor Munro’s report, I would like him to take on board the child protection issues in relation to runaway children. I firmly believe that if we can reduce the massive number of children and young people running away and going missing, we can reduce the number at risk from violence, drugs, alcohol, sexual exploitation and grooming.

Craig Whittaker (Conservative, Calder Valley)

Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to the debate on this excellent review.

Strikingly, we knew as far back as 2009 that some social workers spent more than 80% of their time in front of paperwork, rather than out on the front line, face to face with children and families. Cameron’s quotation:

“Not everything that can be counted counts, and not everything that counts can be counted,”

published in 1963, has never been more apt than it is to our over-bureaucratic and compliance-ridden system. The focus on early intervention, also highlighted in the Allen, Field and Dame Clare Tickell reviews, shows the long-term benefits to the enrichment of families on the whole, as well as the massivly reduced burden in the cost to the state, and it can only highlight the need to turn that huge supertanker in a different direction.

It is time that we put social workers on the professional platform that they deserve. We need to develop a system in which child protection truly is a multi-agency business involving not only social workers but schools, police and health workers all finally working together—a system that removes constraints on local innovation and professional judgment. But let us not be under any illusions about the time that it will take to change mindsets and to implement the changes needed. The system has been so burdened for far too long.

I will home in on the role of the lead member for children’s services in local authorities, a position that Professor Munro says should not be undermined. Having

spent three years as lead member for children’s services on Calderdale council, I believe that the lead member role needs to be looked at and enhanced through further guidance. I know only too well how brilliant a lead member is and how brilliant they are considered when they are out there batting for that extra £1 million in the budget, but the moment they start asking tricky or challenging questions they can almost see and feel the shutters closing down around them.

One good thing that the previous Government did introduce, just over two years ago, was the lead member’s membership of the local safeguarding children’s board, albeit on a limited basis as a participant observer. With that privilege, I could at least challenge partner agencies, and had it been introduced earlier I might have been able to use it as a tool to deep-dive issues even further.

Generally, however, partner agencies were not the only problem, because they chose to work traditionally in silos; it was also down to our directorate. The problem started at the top in Calderdale, which, like most authorities in the UK, has an educationist as its director of children’s services. Educationists also take up most head of service roles. Educationists and social workers generally lack the professional knowledge and understanding of each other’s roles, and without question there is professional snobbery between the two.

Just imagine, then, how it was for a lead member with only 30 years’ retail and people management experience going into that lion’s den. As one head of service once said to me, “With all due respect, you are only a shopkeeper.” A tongue-in-cheek comment, I know, but the battle line was drawn.

The lead member is also generally part time and often from a totally different sector. They are the only councillor with legal responsibilities, but when things do not go as well as they should, as was the case for me in Calderdale, gaining access to information can be hugely cumbersome. The information is often non-existent, and frankly the lead member can hear those shutters going down around them.

Interestingly, Professor Munro mentions Klein’s view on intuition, and with my managerial experience and intuition it became evident to me early on that we had a head of service who was not fit for purpose, an information service that was wholly inadequate, a children’s service base budget that was under-resourced to the tune of £1.5 million, a work force with low morale and a high proportion of agency staff, core and initial assessments woefully behind on time scales, two serious case reviews in the pipeline and a children’s trust in name only—and all that was just the headline stuff. When I challenged those responsible for the day-to-day running of CYP services, there were always reasoned responses and excuses, but that is often exactly what they were—excuses. It took three heads of service, three serious case reviews and more than two years before the appointment of a new director of children’s services, who agreed to an independent review by PricewaterhouseCoopers, before we managed to get a truthful picture of how bad things were in Calderdale regarding safeguarding.

Professor Munro mentions the role of the lead member staying the same. I would like the Government to consider four key points, if I can get them in very quickly. First,

the lead member, who is currently a participant observer, should be a full-time member of the local safeguarding children board. Secondly, I would like the Minister to consider the fact that there is no mandatory training for the lead member role. Training of sorts is available, but it is difficult to accommodate if they have a full-time job. Thirdly, will the Minister consider guidance on making the lead member role a four-year term for the sake of continuity? Calderdale is now on its fourth in three years.

Finally, may I ask the Minister to look at the leadership—

Nigel Evans (Conservative, Ribble Valley)

Order. Three out of four is not bad.

Meg Munn (Labour, Sheffield, Heeley)

If the hon. Member for Calder Valley (Craig Whittaker) wants to intervene on me at an appropriate point, perhaps he can get his fourth point in.

I welcome this debate and this report. Child protection is an important issue that has been given too little attention, generally having periods of intense focus following the death or serious injury of a child or children. No one could disagree with the aims set out by Professor Munro, but I want to look at some issues that are perhaps more nuanced than the Minister set out in his speech.

Looking back, we have had investment in the past. From 1998, we had the Quality Protects programme, which made a big difference to social services; I speak from personal experience. More recent work done by the previous Government should be built on. Indeed, Professor Munro identifies the need to build on the firm foundations of reform created by the Social Work Taskforce and the Social Work Reform Board. Let us not reinvent the wheel where we do not need to.

Importantly, Professor Munro recognises the multi-agency nature of this field. There is a danger of other Government policies making child protection more difficult. I am concerned not only about the cuts but about the proposals for how things are to be done. The all-party child protection group, which I chair, and of which many members are present, will be carrying out an inquiry into the proposals on vetting and barring, and I hope that that is helpful. The next session is on Monday—a little advert there—and I hope to see many Members attending to look at this in detail.

We need to be aware of the importance of child protection for children in all settings. Looked-after children have been mentioned, and the residential sector is important. On health, what is going to happen as a result of the abolition of primary care trusts? The PCTs have played an essential role in local safeguarding because they can give an overview and they are able to get involved in the wider issues of what is happening in their local area. I fear that the proposals do not deal with ensuring proper, effective child protection policies for the future. I also have worries about the role of the police.

I have great concerns about education. I will not go into those in detail now, as I have raised them with the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb),

who was here earlier. Certain aspects of the Education Bill put children at risk, and the Government need to deal with that.

I am also concerned about the localism agenda. The recommendations in chapter 4 on accountability lead us to believe that there are clear tensions in this respect. We should be able to specify what needs to be done, and there should be ways of following best practice while ensuring some local flexibility. The Government need to address that properly.

I want to speak briefly about the recording of information and time scales. That debate has been conducted in a one-dimensional way. Poor IT systems have made life difficult. However, it is significant that every major inquiry into child deaths has identified two things at fault: poor information-sharing between different professions in contact with children and poor recording of information. Not only is good recording essential to enable effective continuity of support for children, sometimes over years or when somebody is on leave, but it is part of the process that social workers need to go through to reflect on a family’s situation. The idea that the only work of a social worker is direct face-to-face contact is false.

I echo the concerns of my hon. Friend the Member for Chesterfield (Toby Perkins) about moving to the use of all localised forms. Frankly, that would take us back round the circle. Thirty years ago when I started in social work, every local authority used a different form and a different process. Not only did that involve lots of people writing those forms and producing guidance, but it meant that when people moved authorities, it took even experienced staff a long time to understand the systems and procedures. I know that the Minister is genuinely committed to this agenda, and I commend him for that, but I urge him to consider a middle way.

I also urge the Minister to consider a middle way for serious case reviews. He and I have disagreed on the publication of serious case reviews in full, and I will not rehearse those arguments now because I do not have time. However, I think that he should have held back, carried out a review, and put in place a new system. In my experience, not only are full case reviews poor learning tools, but sometimes their publication means that people do not come forward. There was a well-publicised case in Sheffield only a year ago of serious intergenerational abuse. The people in that family would not have come forward if they had thought that their information would be put into the public domain.

This is an important review in many ways, and we need to go into it in more detail. I ask the Minister to give more detail on how a wider group of people beyond his implementation group can have an input into the recommendations to ensure that we get the best possible things out of the review for the benefit of children, social workers and all who work in this important area.

John Hemming (Liberal Democrat, Birmingham, Yardley)

We now have about three minutes if we are to get everybody in. When do we have until? Is it not until 6? [ Interruption. ] Okay, I will keep going and stick to time. If I have six minutes, I will be quite happy. I want everybody to have the opportunity to speak in such an important debate.

I do not mind shortening my speech to make sure that other hon. Members can speak, but there are certain things that I must say.

I disagree with the Government’s objective of increasing the number of adoptions. Already in England, roughly twice as many children under five who leave care are adopted than return to their parents. In fact, the number returning to their parents went down last year. Of the 4,700 under-fives who left care in the year to 31 March 2010, 880 went to their parents and 2,000 were adopted. In Scotland, the reverse is true and the majority return to their parents. I define care as compulsory care and do not include all the section 20 children who go into care voluntarily. It is important to consider those issues.

Checks and balances are critical. I very much support the Munro report and think that the approach of being less bureaucratic is important. Sadly, I do not support the family justice review. The difficulty is that if one is to look at the process of dealing with a child who goes into the care system, one must consider all the aspects. Even if one considers just the local authority costs and the Children and Family Court Advisory and Support Service costs for a child who is taken into care at birth and then adopted, one sees that half the costs are for foster care and half are legal costs, fees for experts and such things. If one is to look at how that process can be managed to work effectively, one has to consider both the judicial processes with its checks and balances and the decision making in the first instance. The Munro inquiry is about the process by which decisions are made and the process by which those decisions are given quality control. In my view, it is the quality control on the decisions that fails. That is why there are a lot of odd decisions and some very strange outcomes.

I thank the Minister for the efforts of his statisticians in producing a detailed analysis of the SSDA903 return. I have a copy here and anybody is welcome to see it. Obviously it is available under freedom of information. That analysis demonstrates what is happening to the children. Our priority should be what happens to the children and what is best for the children.

The problem when we get something substantially wrong, as I think we are, and when the practice is substantially wrong for a number of years, is that people continue to practice in the same way. Only many years later when the children grow up and wonder, “Why was that done to me?”, do things get reviewed. That happened in respect of the children who were sent around the world, for instance to Canada and Australia. That decision is now recognised as wrong, but at the time it was thought to be right. A similar situation is occurring in respect of about 1,000 children a year—that figure looks right when the figures in England are compared with those in Scotland—in cases of forced adoptions in which consent is dispensed with. That problem is of a reasonable order of magnitude and, in the end, it comes down to the need for individual case studies.

Another area in which the Government are missing out is in studying what happens to children who are adopted. In many cases the adoption is disrupted, so about a quarter of those children return to the care system and some are then adopted again, causing them additional trauma. If we are to assess the effect of adoption decisions, we have to include the effect on children who come back into care because they have

had reactive attachment disorder, perhaps as a result of being taken into care too early and by overloaded foster carers. A lot of issues are not being looked at, and we need longitudinal studies of individual cases.

Many Members want to speak, and I have emphasised the points about adoptions that I keep making. The figures are there, and I thank the Minister for getting them, but he should take them into account.

Bill Esterson (Labour, Sefton Central)

I add my welcome for the work of Professor Munro and the recommendations in her report. The huge challenge for Ministers is how to put them into practice. I welcome the Minister’s announcement of the group that will be set up, and the expertise of the people who will be on it. I ask him to consider including a member of the Opposition in that group—other than a Labour councillor. He knows what I mean by that.

I want to speak about my concerns about the speed of intervention and the impact of neglect that does not hit the headlines through serious case reviews. I should mention one of my interests in the matter—I am an adoptive parent. When I trained as an adoptive parent, we were presented with evidence that over an extended period, neglect is often, although not always, far more damaging to a child or young person than physical or sexual abuse. That is why it is so important to consider neglect.

I will quote the comments of a senior NHS professional, who writes:

“Child protection’s preventative role in protecting vulnerable children/young people from neglectful behaviours is hindered and hampered by a lack of clarity and legislative support to recognise the impact of neglect on a child or young person until it reaches a threshold for ‘significant harm’. This results in an inability to respond in a timely manner until it is too late to prevent harm from occurring.

Practitioner tools and chronologies to identify and recognise these neglectful behaviours do not provide the requisite evidence base to support care proceedings or child in need packages that put the child in focus.”

She continues:

“Legislation needs to provide clarity of definition and recognise the impact of neglectful behaviours. The practitioners need to be provided with definitions which are not retrospective; in other words the legal system needs to recognise neglectful behaviours as significant before ‘significant harm’ has been caused to a child or young person, by which time it is too late.”

The Minister spoke about the importance of trying to keep families together and used the phrase “fostering families”. It is important that that is given every chance, but I am aware—this is the point made by that health professional—that in far too many cases, the balance is skewed too far in that direction. It can take too long, and evidence of potential neglect is ignored. Early recognition, and action on it, is essential. The evidence that I have seen, of which other Members will be well aware, shows that the long-term damage of extended neglect is incredibly bad for people psychologically and for their mental health long into adulthood.

To come back to the comments that one or two hon. Members have made, those in foster care are not universally treated as one of the family, because there are too many

barriers. Too many rules prevent foster carers from getting close to children for that to happen meaningfully in reality.

I welcome the Minister’s comments on learning from care leavers—that needs to continue. On the issue of neglect, my hon. Friend the Member for Sheffield, Heeley (Meg Munn) said that striking the right balance between protecting the vulnerable child and the rights of the individual is incredibly important. From the experience of constituents who have spoken to me, far too often the rights of the individual parent are given greater prominence than the needs and rights of the child.

Because I am an adoptive parent, I shall speak briefly in the time I have left about adoption. I welcome the comments in the report on reducing the delay in getting children through to adoption, but there are serious blockages in finding families. Measures for finding good families in adoption and fostering are very important, as is providing long-term support. There is a lack of support for foster carers and a lack of long-term support for adopters. I hope that the Minister will take that point on board.

The delays in the courts cause great concern to professionals and families. The courts are still far too slow. I am aware of a case in which some children from a large family were adopted and some went into long-term foster care. One child ended up back with the mother because the court refused to look at the evidence from social services, which had originally issued the order for the family to go into care. The system is quite unworkable, because the neglect remained after the child returned.

I welcome the report. This is a long-term project, and I hope that Members on both sides of the House come together to support it.

Jessica Lee (Conservative, Erewash)

I am pleased to speak in this extremely important debate on child protection. I find it quite startling that this is the first debate on child protection that has been instigated by a Government, as the Minister told us in his opening remarks. Given the difficulties and concerns over child protection, which have been ongoing for many years, I find that worrying. This might be the first such debate instigated by a Government, but I hope that it will not be the last.

I should declare an interest, because I worked as a family lawyer for about 10 years, specialising in child protection and adoption. I should also say at the outset that I welcome the conclusions in Professor Munro’s report. The point has already been made, but it is a quality report. It is extremely well set out and contains many helpful conclusions. I hope the Government implement many of its recommendations.

Over my years of working for and representing parties in care proceedings—that includes social workers and parents, or children, through their guardians—I have seen dozens or even hundreds of extremely dedicated, hard-working social workers, who try their best in very difficult circumstances to protect children. In my view, that is front-line work. It can be a dangerous job. Social workers must sometimes go into people’s homes when they do not know what is on the other side of the front door. They could find a parent under the influence of alcohol or find themselves in a violent situation. Children might need to be removed.

I bear that in mind, which is why I hope that following the conclusions of the Munro report, we focus on empowering those social workers to exercise their professional judgment as best they can, without being hampered by other pressures in their day-to-day jobs. I would not like to make those decisions—they can be life-changing decisions—on whether a child should be removed, whether one should undertake a further assessment of a parent, or whether all has been done but it is time to draw a line and look for an adoptive placement for a family.

The Centre for Social Justice has produced some figures that remind us that although care leavers form only 1% of the population, they are four to five times more likely to have mental health issues; a third of homeless people have been care leavers; 30% of children in custody and 23% of the adult prison population have been in care; and more than 20% of women who leave care between the ages of 16 and 19 become mothers within a year, compared to just 5% of the general population. These are troubling figures and, as we seek to support social workers, we must remember that they are trying to achieve improved outcomes for all the young people in their care. I know that all hon. Members will be committed to improving those figures.

I pay tribute to the contribution by the hon. Member for Sefton Central (Bill Esterson), who mentioned the important issue of neglect. There are different sorts of abuse that children can suffer—physical, sexual and emotional, as well as neglect—and more than 19,300 children are under child protection plans for neglect. That is a very high figure, and that kind of abuse can have long-term effects that are just as damaging as other forms of abuse. That is why the attempt to support early intervention work is so important. It is just those families in which neglect persists for several years, and who perhaps fall in and out of the attention of social work departments, who need our help to be able to move on.

Over the years I have represented local authorities, children and parents in some very upsetting cases. I do not wish to be over-dramatic, but some children arrive in foster care so thirsty that they drink out of the lavatory bowl. Some hide food in their room in case the food never appears again. Some have been shaken so badly that they are brain-damaged for life. I give these examples as a reminder of the pressures and challenges that social work teams have to face every day. Those examples are not from a Dickensian story set more than 100 years ago: they are happening in our country in 2011. We must all work harder to stop such abuse taking place.

Time is against me, but I shall conclude with my key point. We must take this opportunity to try to move forward with the Munro conclusions, empower social workers to make their professional judgments, and reduce bureaucracy.

Andrea Leadsom (Conservative, South Northamptonshire)

The greatest risk of dying a violent death is when you are less than one year old. And the greatest risk comes not from strangers, but from those who are closest to you in your own home—those who should love you and take care of you. Social workers are in the front line of the battle to protect babies and children. The importance

of caring, motivated and well-trained social workers just cannot be overestimated. Frankly, if we do not recognise the massive potential of a good social worker to turn around life chances for babies and children in vulnerable families, we shall get the society we deserve.

I congratulate Professor Munro on her comprehensive report on what is generally recognised to be a difficult and troubled area. I want to focus today on recommendations 10 to 13 of that report, because I have spent the last 10 years of my life developing a passion for and a detailed understanding of why she may have made those points.

Recommendation 10 states:

“Government should place a duty on local authorities and statutory partners to provide sufficient early intervention services for those children and young people who do not meet child protection thresholds”.

That, to me, is the key recommendation, and I can encapsulate why in the shortest of slogans: prevention is kinder and cheaper than cure. Supporting vulnerable families and enabling them to form a secure bond with their babies in the first two years of life has profound consequences for society. Can anyone here imagine what the relationship is like between a mother and her baby if she would allow her boyfriend to stub out cigarettes on her little boy, as happened in the case of baby Peter? No, none of us can quite get our heads around what on earth possessed a mother to so violate the nurturing role of parent and carer as to allow her own need for a boyfriend to overrule the tigerish instinct of a mother. For my own part, I am quite sure I would kill rather than let anyone harm my children like that.

What makes one mother or parent neglect, abuse or even kill her own child, while another would kill to protect her child, is simple: the quality of the attachment between the carer and the child. This attachment begins during pregnancy, and its development is most critical during the first two years of a baby’s life. We could call it the Harry Potter syndrome. Harry was loved and nurtured by his parents until Lord Voldemort murdered them when Harry was two years old. He then suffered unspeakable cruelty and neglect at the hands of his uncle, aunt and cousin, but through it all he kept his unshakable sense of self-worth, personal resilience and his ability to make friends and form strong relationships. Those qualities are the reward for secure early attachment between baby and adult carer.

That is not just an entertaining story; the scientific evidence is overwhelming. When a baby is born his brain is significantly underdeveloped, but between six months and 18 months, as a result of the stimulation of a loving relationship, of peek-a-boo games and silly baby-language chatter with mum, the brain puts on a massive growth spurt and the central frontal cortex—the part of the brain that enables empathy and deals with social interaction—starts to develop at an astonishing rate. Conversely, the baby who is neglected, abused or treated inconsistently by uncaring adults will fail to develop a healthy frontal cortex. His ability in later life to form strong relationships with friends, a partner, work colleagues and so on will be severely impaired—and for a girl baby who does not form a secure bond, the incredible tragedy is that without help, she will struggle to form a bond with her own babies in later life, and so the cycle of misery is perpetuated through the generations.

It is at the critical end of the spectrum of poor attachment that the social worker is the key to the outcome for the child and the family. Where a baby is severely neglected or abused, the development of the frontal cortex may simply never happen. Babies left to scream for hours at a time suffer other problems as a result of having constantly raised levels of the stress hormone. Those babies develop a tendency towards high-risk-taking behaviour, drugs, violence and self-harming. Our prisons, streets and psychiatric hospitals are full of the evidence of poor early attachment. It is in these cases—the most difficult to resolve—that social workers often represent the only chance of survival for the family. However, their challenges are manifold. How can they identify those particular cases? How can they tell if the problems are temporary or life-threatening, and how can they be supported in what is an almost impossible task?

I put it to my hon. Friend the Minister that providing parent-infant psychotherapy will dramatically change the work load of social workers and the amount of support available for these vulnerable families before those problems happen. I wanted to give you a perfect case study, Mr Deputy Speaker, but time does not permit, so you will have to take my word for it that the Oxford Parent Infant Project, a charity that I have chaired for the past 10 years, provides an enormous amount of life-saving support for families in Oxfordshire by working with social workers to reduce their work load, to provide them with the support they need and to help these vulnerable children. OXPIP also provides training in the crucial understanding of parent-infant relationships. What is so sad, to my mind, is that for many of those who attend, it is a “road to Damascus” moment. Previously they had no understanding of brain development, the critical importance of early attachment and the possible interventions.

I would like to leave my hon. Friend with these two thoughts: first, we need to provide parent-infant psychotherapy across children’s centres in the UK, and secondly, we need to improve significantly the quality of education not just for social workers but for everyone who works with babies.

Mark Pawsey (Conservative, Rugby)

I want to make just one brief but important point that has arisen as a consequence of representations made to me by constituents about the regulation of the social work profession.

The regulator of social work has been the General Social Care Council, which is charged with issuing and enforcing standards of professional conduct and practice. For the past few years the council has been located in my constituency of Rugby, having relocated from London. However, last July the council learnt that it was on the list of non-departmental bodies to be disbanded by the Government. Understandably, the Government wish to reduce the cost of bureaucracy and regulation. Early advice from the Department of Health was that there was no compelling reason to retain the council, with a potentially significant benefit arising from social workers being placed on a footing similar to that of professional workers and regulation being transferred to the Health Professions Council, a body that will regulate all

professionals, including those more generally involved in the delivery of health care. There will therefore be a transfer of functions between the bodies.

One consequence of that is that offices in Rugby will be closed, involving a certain number of redundancies, although the date is not certain. Since the announcement, I have met both management and members of staff at the General Social Care Council. Staff have concerns, principally that there will no longer be a body specifically dedicated to the regulation of professionals in the sector, and that the focus that currently exists may be lost. The Munro report draws attention to the important role of the social work profession in ensuring that all children are safe. Specifically, recommendations 11 and 12 reiterate the need for the robust supervision and training of social workers, supported nationally by a regulator. It is therefore crucial that the HPC should continue to monitor the ongoing professional development of social workers.

We have heard much in today’s debate about the value and importance of the role played by the social work profession in child protection. I hope that in summing up, the Minister can provide assurances that, in the interests of all the vulnerable people whom they support, there will continue to be proper and effective regulation of social work professionals.

Aidan Burley (Conservative, Cannock Chase)

Like the previous speaker, I do not intend to make a long speech. I rise to make just one point to the Minister before allowing him the time he needs to sum up the debate.

I welcome the Munro report and its recommendations. Everybody, on both sides of the House, would agree that it is important for the best interests of the child to be paramount in all child protection decisions. However, a number of constituents have raised concerns with me about the term “emotional abuse”, and how it is defined and interpreted by social services. I note that none of the recommendations of the Munro report relates to the term “emotional abuse” or its definition. We would all agree with the need for children to be taken away from such abuse, but some parents who have come to my surgeries are concerned that in some cases social services are being over-zealous or taking quite extreme action based on a rather loose interpretation of the term “emotional abuse”. In one case highlighted to me, social services removed a child from her parents because they felt that she had not been made aware of her father, the evidence for this being that there were no photos in the house. That seems to be based on a loose definition of “emotional abuse”. As part of the Minister’s review of child protection services, will he consider looking again at the definition of the term, to ensure that it is applied correctly and accurately?

Tim Loughton (Conservative, East Worthing and Shoreham)

I did not expect there to be time for a proper summing up, but as there is, I will make the most of it.

This has been an excellent debate—well measured and exceedingly well informed—with the House at its best, and certainly its most earnest. Indeed, the implementation working group on the Munro report could have been formed of the hon. Members in the Chamber who have contributed today. We have two

adoptive fathers who revealed themselves as such in their contributions. We also have two family law barristers, one of whom—my hon. Friend the Member for Crewe and Nantwich (Mr Timpson)—grew up with 90 foster children, because of the amazing contribution of his parents, as well as having adopted siblings.

We have two former social workers, who also happen to be the chairs of the all-party parliamentary groups on runaway and missing children and adults, and on child protection. They have always brought enormous expertise to the House on those matters. We have crossed swords, and also often agreed, in many Committees on many pieces of legislation over the years. We also have one former lead member for children’s services in a council, even if he was “only a shopkeeper”. Of course, Churchill said that we were a nation of shopkeepers, so my hon. Friend should not undersell himself in that way. My only regret is that we will never hear his fourth point. We know about the missing fourth man—

Craig Whittaker (Conservative, Calder Valley)

Will the Minister give way?

Tim Loughton (Conservative, East Worthing and Shoreham)

I would be delighted to hear my hon. Friend’s fourth point.

Craig Whittaker (Conservative, Calder Valley)

My fourth point was about the chairmanship of the local safeguarding children boards. There are still 23 authorities in the UK that have the director of children’s services as the chair of their board. Will the Minister ensure that in future the role of the chair is independent?

Tim Loughton (Conservative, East Worthing and Shoreham)

What an excellent fourth point that was! It was well worth waiting for. When we were in opposition we said that the chairs of local safeguarding children boards should be independent. I think that the boards should include lead members and perhaps directors of children’s services, in whatever role, but they should be independently chaired. If LSCBs are to make progress and have more teeth and more importance, that will be an even more important factor in the future. I am glad that my hon. Friend managed to get his fourth point in.

So, we have one shopkeeper turned lead member of children’s services. We also have one head of a very successful children’s charity who has enormous expertise in attachment. We have a Member who I think used his first Adjournment debate to discuss adoption, including some cases in his constituency. We have another new Member who has taken up the cudgels on behalf of constituents who are concerned about abuses of adoption. And we have one conspiracy theorist. I pay tribute to my hon. Friend the Member for Birmingham, Yardley (John Hemming); we disagree on many aspects of this issue, but he is assiduous and he rightly acknowledged that we had given him as much information as possible. We disagree on the interpretation of that information and we will continue to do so, but he has certainly got his teeth into this subject.

We have had an excellent debate. I do not have time to refer to every point that has been raised, but the personal experience that has been brought to bear today does the House credit. There has been overwhelming support for the principle, the thrust and the exhaustive nature of the Munro review. The hon. Member for Stockport (Ann Coffey) said that it was well researched and the result of extensive consultation. She also said that too much of what social workers have to do may be technically correct but inexpert in its findings.

The hon. Member for Chesterfield (Toby Perkins) made some excellent points. I thank him for his welcome for the report, and we look forward to working with Members on both sides of the House on carrying forward its recommendations. This is an evidence-based review, and I want to see Government policy guided by evidence, and by things that work and actually improve the outcomes for children at the sharp end. My hon. Friend the Member for Crewe and Nantwich pointed out that this is not rocket science, and asked why it had not been done before.

The hon. Member for Sheffield, Heeley (Meg Munn) mentioned the very good work of the social work taskforce and the social work reform board. We acknowledge that that work was undertaken under the previous Government. When we set up the Munro review, the first thing I said was that it was not intended to take the place of or to rubbish the work that had gone before; it was to complement that work. The first person Eileen Munro went to see was Moira Gibb, the head of the reform board. Members of the reform board have worked on the review and are now working in the implementation group.

The hon. Member for Sefton Central (Bill Esterson) mentioned the mixed destinations of siblings who are taken into adoption or care. That is a really important point, and I want to do a lot more work on it. I have heard too many horrific stories of families being broken up. At a time when they cannot rely on the stability and familiarity of their birth parents, it is crucial that they should have the familiarity of contact with their siblings when they desperately need some kind of anchor. My hon. Friend the Member for Erewash (Jessica Lee) has had great experience of children in the care system, and she told the House that the incidence of mental health issues and homelessness was absolutely appalling.

I thank everyone in the Chamber for an excellent debate. We are absolutely determined to carry forward the recommendations of the Munro review. Today’s debate will help to inform our response, and I look forward to receiving the help of all hon. Members to ensure that we get this right. I am up for that challenge, as are the House and the Government, and we are going to make this work.

Question put and agreed to .

Resolved,

That this House has considered the Munro Report and its implications for child protection.