MACHINERY OF GOVERNMENT

HC Deb 23 March 1956 vol 550 cc1689-734

1.40 p.m.

Major H. Legge-Bourke (Isle of Ely)

I beg to move, That this House considers that a comprehensive review of the machinery of Government should now be instituted with a view especially to deciding the correct rôle that should be played by the Treasury in the implementation of defence decisions. I realise only too well that the subject of the machinery of Government sounds as dry as dust, but it has always seemed to me a little paradoxical that we spend a great deal of time in this House deciding what our policies shall be and yet we rarely pay very much attention to the machinery in which lies the only hope of putting those policies into operation.

We dealt with a good deal of burrowing in the previous discussion, and in respect of this Motion I should like to continue burrowing, but to burrow in rather a different direction and through or into something which, I am told, is quite as impregnable as any of the substrata of the Irish Sea. The machinery of Government has not been discussed in very great detail since the days of the war, when the Select Committee on National Expenditure went into the matter and published a Report thereon in 1942.

I hope I may claim some precedent for introducing this Motion from the fact that that particular Select Committee did recommend, by No. 23 in the summary of recommendations, that A Select Committee should be appointed sessionally under Standing Orders and charged with the duty of conducting on behalf of the House a continuing review of the Machinery of Government with special reference to the economic use of personnel, and should report to the House from time to time. It went on to suggest that there should be A permanent Assessor to the Committee who should be an officer of the House and should have the statutory right to call for reports, papers, and other information concerning matters properly falling within the purview of the committee. Finally it recommended that: The Committee should be required to examine the memoranda laid before it by the Assessor together with such matters as may be specifically referred to it by the House. A debate took place in the House in January, 1943, on that Report. I will quote only one short sentence from the words of Sir Kingsley Wood during that debate, when he said: …I am in favour of periodic reviews of the organisation and efficiency of Government Departments."—[OFFICIAL REPORT, 28th January, 1943; Vol. 386, c. 696.] I hope, therefore, no one will suppose that this Motion is a private hunch of mine or is in the least original. All I do feel is that, in the light of those recommendations, we have not seen very much done to keep under review the machinery of Government. We all agree, I am sure, that it is important for Parliament from time to time to look at this matter.

What do we mean by the "machinery of Government"? As I intend to use the phrase in this debate, I mean that arrangement between Ministers and their Departments whereby we have Ministers' responsibilities defined as clearly as possible, and the arrangements in their Departments also as clearly defined as regards responsibilities and activities.

The machinery of Government has changed very considerably down the years. There was a time when the Civil Service was organised on a purely patronage basis by individual Ministers. As we all know, close inquiries—instituted in particular, I think, by Mr. Gladstone—were directed into that state of affairs in an effort to "clean up" Whitehall. I certainly do not want to "un-clean" Whitehall in any way today. I would only suggest that it is our duty in this generation to make sure that there is no need for further "cleaning up" or alteration.

If the House looks at the history of the machinery of Government Members will see that it has to some extent kept pace with changes in political parties down the years. I do not propose to discourse on the changes which have taken place. I suppose we can truthfully say today that whereas in the heyday of the Whigs the main duty of Government was looked upon as one purely relating to national security and the protection of the value of the currency, we now have the Government coming in at all points in the complex activities of the electorate. We can sum up by saying, I think, that on this side of the House we have an amalgamation of Whig, Tory and Liberal, and on the other side of the House a mixture of Radical, Labour and Socialist.

The important thing which has happened simultaneously with the emergence of that situation is that gradually we have tended to move into an increasingly collective frame of mind, and the individual has more and more frequently had to bow to the needs of the community at large. With that change, we have seen Ministerial capabilities strained to the utmost—indeed, I should say strained almost to breaking point. All of us, no matter of what party, are certainly very acutely aware of the fact that certainly Cabinet Ministers, and, I believe, Departmental Ministers too, have a great responsibility today, a responsibility which must put any human being under an immense strain. That applies also to the heads of their Departments, I am sure, and to many of the officials.

I must make clear at the outset that it is not my purpose to say anything which I intend to mean, or which might possibly be thought to mean, that I have any disrespect for the work of civil servants. I believe the vast majority of them serve this country to the best of their ability, and all too often when mistakes are made for which they are blamed, it is really we in Parliament who are more at fault.

As is inevitable, if the work of Government is to be carried out, there has been a vast increase of delegation. Nevertheless, we ought always to bear in mind that, in a Parliamentary democracy, if we do delegate and if we fail to keep a careful watch and restraint upon the operation of that delegation, we can easily land ourselves in a state of tyranny without realising what we are doing.

It has for a long time been held, rightly, I think, that it is the constitutional duty of Ministers to take responsibility for what goes on in their Departments in the implementation of Government policy; if something goes wrong, then Ministers take responsibility for it, or, to put it in vulgar parlance, they "take the can back." It has long been a principle also that Ministers should take responsibility for the appointments in their Departments.

Recently we have had examples of how invidious can be the position of Ministers as a result of the increased complexity of Government itself. I still regard as tragic the example of my right hon. Friend the Member for Richmond, Yorks (Sir T. Dugdale), who, when Minister of Agriculture, felt obliged to resign before this House because of certain mistakes by members of his Department. All of us deeply sympathise with him, I feel sure, in respect of the situation in which he found himself, and all of us respect him for the step he took, which, on the basis of precedent, was constitutionally absolutely right.

Today I ask whether it is any longer really fair on the individual that Ministers should still have to take responsibilities of the kind that I have mentioned, in cases where appointments have been made in Departments purely on the recommendation of some officials and very often made before the Ministers themselves came to their Departments.

I realise how very dangerous constitutionally it could be were we to divorce altogether from Ministers the responsibility for appointments in their Departments. Nevertheless, is there not something really rather unfair to the Minister himself, and probably unfair to the Department as a whole, that a Minister should have to take responsibility, even to the extent of resigning, in the case of an inept appointment in his Department which could only have been made—I think I would restrict it to that definition—as a result of recommendations made to him by those who knew the individual concerned far better than he could hope to do. Very often in such cases the Minister might well not have met the person concerned before the appointment was made.

That is a question to which we must give more and more consideration as time goes on and the duty of Government becomes more complex. I do not profess to have the right answer to this problem, which is an acutely difficult one. If we are to retain Parliamentary responsibility it is extremely difficult to suggest that someone should take more responsibility than the Minister himself, who is answerable to Parliament, but that the present situation is becoming more and more unfair I have no doubt at all.

I hope that from what I have said no one will draw the conclusion that I wish in any way to whittle down the responsibilities which Ministers must always have for their policies and the implementation of those policies. It is not my intention to discuss what should be the policy in regard to any subject upon which I touch it is the machinery whereby any such policy is implemented—in no matter what Department—that I have most in mind. That is the only comment I have to make upon the Amendment which appears in the name of the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes).

Some change is required in the system whereby these appointments are made not only in the matter of responsibility if an appointment proves to be wrong but in the actual way in which the appointment is made. My view is that just so long as the Government have to rely upon the advice of higher civil servants as to whom an appointment should be given, so the accountability of those who give advice which later proves to be extremely erroneous should be greater than it is. How that policy should be operated those who have been heads of Departments or Parliamentary Secretaries will be far better able to judge than I can.

Under the present system some of the higher appointments in the Civil Service must receive the Prime Minister's prior approval. I understand that it is a principle that the Prime Minister consults the Ministerial head of the Department in which the appointment is to be made, but upon the official level the final counsellor to the Prime Minister is the Permanent Secretary to the Treasury who, since 1919, has been given the designation of "Head of the Civil Service." We are indeed well served by the official who at present holds that post. Sir Edward Bridges is a man who commands immense respect, stretching far beyond the confines of the Civil Service.

In 1950 he gave a Rede lecture entitled, "Portrait of a Profession. The Civil Service Tradition." I say in all humility that it is a most delightful study of a profession which has become a very great one. Sir Edward had a few comments to make about the defects of civil servants, which I should like to quote. He said: Our most obvious defects spring from the constitutional position of civil servants. They are at all times answerable to some Minister who will get the praise and blame for what they do, and this determines many of their actions and reactions…the same absence of direct responsibility is perhaps also responsible for the civil servant's highly developed sense of caution. …There is also perhaps on occasion a tendency to seek a greater degree of logical completeness or of regularity than the matter in hand requires… Probably we all realise that those remarks are true of all Departments, but of no Department are they more true than the Treasury itself—for all its officers are responsible to the Chancellor, and all its officers, I believe, are as conspicuous for their caution as they are unassailable in their anonymity. In addition, I would say that they are all as meticulous in their insistence upon regularity as they are ubiquitous in the scope of their activities. In relation to the control of the expenditure of money voted by Parliament, the Treasury is the dominating Department, but it is also the Department which decides the establishment of all other Departments, and its Permanent Secretary is the final official counsellor of the Prime Minister in the making of higher appointments.

I want to discuss for a few moments the establishment and promotional aspect of the matter. There was a Treasury Minute of 1919 which has always struck me as one of the freaks of our Constitution, in that it was purely by means of that Treasury Minute that the official head of one of the greatest professions in the land was appointed. In 1919, Sir Warren Fisher became the official head of the Civil Service. I should be the last to dispute that there was a need for unification in Civil Service at that time, and of all the great things which Sir Warren did—and he did many infinitely fine things—none was greater than the action which he took to enable keen and promising civil servants to transfer from a Department in which promotion might be very slow, even to the point of positive discouragement. By unifying the Civil Service, as he did in the 1920s, he instilled into its officials a new spirit of enthusiasm, to the extent that they were able to become extremely efficient at many different jobs.

I stress, therefore, that I have no dispute with the desire to unify the Civil Service and make it a comprehensive one. Lord Vansittart, who has very different views from mine about the operation of the Foreign Service between the wars, wrote a review which appeared in the Manchester Guardian on 25th July, 1950. He said this about the appointment of the head of the Civil Service: In common with many public servants, I saw no need for the creation of this new office. We had got on well enough without it, and thought it might have undesirable consequences. He finished by saying: As to his post, I concede that—as I originally thought—it can be dangerous in wrong hands—like any other important post, particularly a Ministerial one—and that there is no reason why it should be automatically occupied by the Permanent Secretary to the Treasury. Since the days of Sir Warren Fisher it has become the established practice that the Permanent Secretary to the Treasury also automatically becomes the official head of the Civil Service. I want to ask my right hon. Friend whether he can say that that matter has been reviewed, and whether it is now still thought that the Permanent Secretary to the Treasury should automatically become the official head of Civil Service.

Mr. Douglas Houghton (Sowerby)

Would the hon. and gallant Gentleman say who else he thinks might occupy that responsible post?

Major Legge-Bourke

I am grateful for that intervention. One or two suggestions have been made, and at the time Sir Edward Bridges was appointed an article in The Times suggested that the Secretary of the Cabinet might fill the rôle of official head of the Civil Service. There have been several other proposals, and I will refer to some of them in a moment. One is always up against the problems, first, of knowledge of the general situation in every Department, and, secondly, of a burden which no one individual can be expected to carry in addition to his ordinary duties.

Mr. W. R. Williams (Manchester, Openshaw)

Would the hon. and gallant Gentleman make one point very clear? Does he want this to be a political post, following the changes of the parties from one side to the other?

Major Legge-Bourke

I am grateful for the opportunity of banishing that idea from the mind of the hon. Gentleman. I have no intention of recommending any such thing. One of the greatest superiorities that we have over some other foreign countries is that our Civil Service goes on, however the parties change. I certainly am not suggesting that the appointment should change with the parties. Sir Edward Bridges will presumably have to retire one day, and I want to make sure that thought is being given in advance to the question of whether the man who will succeed him as head of the Treasury should automatically succeed him as head of the Civil Service.

This question of the control of the Civil Service was discussed in the 16th Report of the Select Committee on National Expenditure in 1942. Paragraph 68 of the Report said: The process has undoubtedly involved encroachments on departmental independence and has not been free from friction. There have indeed been times when antagonism between the Treasury and other Departments has been both an embarrassment and a hindrance to the work of Government. It goes on to say: Fortunately that antagonism, although still occasionally manifested, is less evident now than it was in the past. It is, however, sufficiently palpable to account for the occasional raising of the question whether, in order to promote more efficient and harmonious administration, the unifying influence now exercised by the Treasury could, or should, be transferred to some other authority. The evidence given before the Committee, and upon which presumably it made its recommendations, has never been published. I suppose that that was partly due to the exigencies of war and partly to the needs of security. I understand that the Committee had before it Sir Warren Fisher among others, and I think that the present Financial Secretary to the Treasury was a member of the Committee itself. I am therefore glad that he should be here to comment on this subject from the Front Bench today. May I say how much I appreciate the fact that Ministers are present to discuss this matter? The debate is indeed a privileged one for a private Members' day.

Having made those observations, the Committee went on to say that the evidence before it did not justify the transfer of the existing seat of control from the Treasury to another new Department. It recommended, in paragraph 104, That Establishment work should be separated from Supply at all levels below the Permanent Secretary. That recommendation left the Permanent Secretary in charge of the whole machine at the official level, while under him was to be a new Joint Second Secretary exclusively concerned with the machinery of Government, which I understand was the case between 1919 and 1932. I believe that that recommendation was implemented. I should be grateful if my right hon. Friend could tell us how it is working out, and whether the time has not now come when we should again review the position and see whether the separation should include separation from the supervision of Departmental expenditure exercised by the Permanent Secretary to the Treasury, in that capacity.

I believe there must be some danger in mixing, in one Department and still more in one man, both supervision over expenditure of moneys voted by Parliament and supervision of the work of that Department. Whatever else we feel, this is something that we should look at. Since it is as far back as 1942 since a comprehensive review took place, I hope that we may have an indication from the Government of their feelings on the matter. If this appointment were in the wrong hands it could lead to a sort of nepotism or stultification. Those things are undesirable in our machinery of Government, but there has been a tendency towards it in the past. We certainly do not want to see it recur.

Mr. Ede (South Shields)

Does the hon. and gallant Gentleman think that nepotism has occurred between 1942 and the present time?

Major Legge-Bourke

I am not saying that that was so between 1942 and now, but that there were times when there was that suspicion, and I do not want to see it recurring.

I do not want to hark back to the inter-war period unduly, but I shall have much to say about the future situation. it is only after a most careful study of the problem that I have come to the conclusion that there were times between the wars when there was a suspicion that favouritism crept in now and again. Let me give the right hon. Member for South Shields (Mr. Ede) a quotation from Lord Chatfield, who was First Lord of the Admiralty for some years and then became Minister for the Co-ordination of Defence. Referring to the Treasury, he said: Overpowering everything, was the immense power given to the Treasury. That power was to be found everywhere. Its proper function of avoiding waste and extravagance, was extended until it ruled as an autocrat in Whitehall, a veritable tyrant. It possessed innumerable officials whose duty it was to be ready to counter the demands of the fighting departments; and in those departments themselves it had its familiars who could, if they used their power, oppose, or delay, all action involving the spending of money. It was a power that was greatly abused. In the 'twenties, this power given to the Treasury, backed by popular opinion, was used with crushing effect by that efficient department.

Mr. Ede

The hon. and gallant Gentleman has used the word "nepotism," which has a distinct significance when we go far back in English history. I do not know how far the hon. and gallant Gentleman wants to suggest that the use of the word "familiars" in that quotation indicated some sort of corruption in the selection either of relatives or of other persons on whom the Treasury, by reason of the favours that it had conferred upon them, could make undue demands.

Major Legge-Bourke

I am not in a position or in any way qualified to say what went on in Government Departments between the wars. All I can say, from what I have read, is that I get the impression that there were instances where there was a suspicion that all was not well with the system. The right hon. Gentleman will recall that I said most carefully that if the wrong man became head of the Treasury it could lead to the extremes I have mentioned. I am not suggesting that between the 'wars it ever reached that pitch: I am simply basing myself on the evidence which I quoted from Lord Chatfield just now.

The Times, in a special article on 28th June, 1942—just after the publication of the Report of the Select Committee—made a very important recommendation. At the end of the article, it was stated: It seems clear that further integration of the Civil Service and improved efficiency in its establishment must depend upon the deliberate organisation of the control of staff inherent in central government under a single authority. It went on—and this is important: But experience supported by industrial and business practice suggests that such an authority should be distinct from the financial authority. The headship of the Civil Service is an office of great and increasing importance. But it can no longer be usefully combined with the office of Permanent Secretary to the Treasury. If I am correct, that article was written by the late Mr. Alwyn Parker, whom many hon. Members will remember as the editor of the Lloyds Bank Review, and who had experience at the end of the last war of re-organising a department of the Foreign Office. Certainly he was a man with both departmental and business experience, whose observations were extremely important.

That view which he expressed—and it was indeed to some extent expressed by the Select Committee in 1942—was strengthened by the views of a group of Conservatives, many of them Members of Parliament at the time, who published in 1946 a small booklet entitled "Some Proposals for Constitutional Reform." They recommended that each Department ought to be able to stand up for its own efficiency independently of the Treasury, and recommended the abolition of the title "Head of the Civil Service." I would say that, on further reflection, I feel that that was a mistake. We want an official head, though personally I would call him something else, because the only head of the Civil Service is Her Majesty.

They also recommended that: …the functions now exercised by the Civil Service Commission should be transferred to this new department, together with the work done by the Establishments Branch of the Treasury, and that the administration of the Civil Service as a whole should be entrusted to it. This would have at its head a non-Treasury Minister, not necessarily in the Cabinet, who would preside over a Selection Board to advise the Prime Minister on higher appointments.

The Tomlin Commission recommended the use of a body of persons, bringing in outside businessmen.

Then there was a recommendation made by Mr. H. E. Dale in his most interesting book The Higher Civil Service, published in 1941, that The selection and recommendation for the Prime Minister's approval should not rest so largely with one man as the accepted theory allows. The possible candidates for a particular vacancy should be considered. I suggest, and the recommendation made by a small ad hoc Committee. It would probably require to meet only once. The Chairman should be the Minister for the Department where the vacancy has occurred or is about to occur; the other members should be the Secretary to the Treasury and one of his immediate subordinates, the Secretary of the Department concerned, if available, and one or two permanent heads of the other Departments—usually the Departments that, in the ordinary course of things, have most business with the Department of the vacancy. Those are pretty high-level recommendations, and I feel that the time may now have come when the matter should be reconsidered.

I think we would all agree that it is essential that only the best men should reach the top, if possible in all Departments, and particularly in the Treasury. It is equally important that we should, within reason, prevent too much power being given to men whose misuse of it might not be detected in time to avoid calamity. I have never been able to understand why it should be thought that the most suitable person to be the head of the Treasury should always be regarded as the most suitable head of the Civil Service. As I say, we are most fortunate in having the present one, who has made a great success of combining the two positions.

It is the view of one whom I know very well today, who was in very close relationship to the War Cabinet, and who is still serving the country in a highly responsible position, that there should be no automatic linking of the two positions, although that should not rule out an occasional linking where that seems to be the best thing to do. There have been occasions when the exercise of these twin powers has turned him into what Sir P. J. Grigg described in his book Prejudice and Judgment as virtually: …a Minister without portfolio and also. alas!, without responsibility to Parliament. It is very much with those views in mind that I have said what I have said. It is salutary always to remember that even in the days of the Roman Empire this trouble reared its ugly head, and what Edward Gibbon called "the Master of the Offices" became all too powerful, and the Minister of State's duties were all too often taken over at the official level.

I now turn to the Treasury control over expenditure by Departments, and especially those Departments concerned with national security. It is not my intention today to discourse on the reasons why disaster overtook us in 1939. It is enough to recall that the war was not solely due to faulty policies, wishful thinking or failure to appreciate that international bodies, unbacked by power to enforce their decisions, could not secure the safety of the nation. It was also partly due to our own unpreparedness. I have very little doubt that the fact that we were unready was certainly partly due to a faulty machinery of Government, which did not adapt itself to keep pace with the rapidly-changing circumstances.

In a last-minute attempt to save the situation Parliament agreed to the appointment of a Minister for the Coordination of Defence. I believe—and it was confirmed, I think, in the subsequent White Paper issued when the right hon. Member for South Shields (Mr. Ede) was in office, entitled "Central Organisation for Defence"—that that appointment of a Minister for the Co-ordination of Defence was not really the right solution, in the long-term, of the problems with which he was supposed to deal.

Mr. Ede

That is what my right hon. Friend himself said before the war.

Major Legge-Bourke

I do not wish to go back to what happened between the two wars, because I do not think that the right hon. Gentleman's own party had anything to crow about during that time. I am trying to keep this discussion on a non-party basis as far as I can, and I should be grateful if the right hon. Gentleman would try to do the same thing. Perhaps I may repeat the fact that we were unready was partly due to the fact that our machinery of Government was not all that it should have been.

The appointment of a Minister for the Co-ordination of Defence was based, I think, on the misconception that all that was needed was someone to act, as it were, as the war-time rationing officer, so far as the Armed Forces were concerned, in time of peace: in other words, that it was a question of rationing each of the three Services. I believe that the trouble lay in a reluctance to put defence at the top of the priority list, and that that led the Treasury, so far as control of defence Departments' expenditure was concerned, to think in terms of a rationing system which left the Armed Forces much too low down the queue.

We all know what happened during the war. We all know that the office of Minis- ter for the Co-ordination of Defence was abolished.

Mr. W. R. Williams

Surely the hon. and gallant Gentleman must here be dealing with political and not Civil Service matters. Goering said to the German people in the inter-war years, "You can have either guns or butter, but you cannot have both." He made a political decision that the German people would have guns. Here we made a reverse decision, but it was equally a political decision.

Major Legge-Bourke

1 am only stating what I thought was an historical fact. I am not particularly recommending that we should have that policy at the moment; all I am saying is that it is one reason why we were so unready in 1939. I should have thought that that was an historical fact.

We know that during the war the Prime Minister of that time decided also to become Minister of Defence, and from that decision emerged the system which we now have, based on the White Paper Cmd. 6923, 1946, on the central organisation of defence, to which I have already referred. It was from this White Paper that the post of Minister of Defence in time of peace dates. What I am asking my right hon. Friend now is whether he can tell us a little about the system as it has worked over the years since 1946.

In a special article published on 7th May, 1949, The Times had some rather pertinent questions to ask, and I should like to repeat them. The article said: What is the main task of the Ministry of Defence? To co-ordinate. What does coordination amount to? Various things, but most of all the creation of a common policy and due apportionment of available resources between the three Services.…The Defence Ministry is rather called upon for a definite task of statesmanship.…After all a Ministry of Defence has no justification unless its position is regarded as one of supreme importance. "Supreme" is a very strong word, and I think that that Minister should have at least equality with the most powerful members of the Cabinet, especially the Foreign Secretary and the Chancellor. I do not think any of us will pretend, whatever our party, that the position enjoyed by Ministers of Defence since 1946 has always been in that category. I would now ask whether the present Minister should be placed in a position where, at meetings of the Defence Committee of the Cabinet, he could have the final say over the Chancellor. It is an essential part of their position that the needs of the Services are seen as a whole. Ought not the Minister of Defence to be the spokesman in the Cabinet for a combined operation? I understand that that is precisely what he is not, the individual Service Departments having to argue their own cases as far as expenditure is concerned.

I visualise a system in which the Minister of Defence first consults the Foreign Office and the Commonwealth Relations Department to agree on what is required and on the support that is available from abroad. He then consults the three Services at Ministerial and Chiefs of Staffs level as to the contribution by each of those three to fulfil that task. Next, he consults the Minister of Supply regarding ways of meeting the needs for weapons, and, finally, the Minister of Labour, regarding the need for manpower, both for the Armed Forces and for the manufacture of the necessary weapons and equipment.

Unless something like that takes place first, I do not believe that the Minister of Defence can possibly be expected to be able to lay before the Defence Committee and the Chancellor what is really required in order to perform the task. I would agree with The Times article which I have already quoted—that this is certainly a job which indeed calls for statesmanship and a very hard-headed business approach.

I would now ask, in order to assist that process, whether the time has not now come when the Departments concerned with defence ought to be separated from the rest of the home civil Departments in the same way as the Foreign Service was separated in 1946. According to the lecture by Sir Edward Bridges from which I have already quoted, the average period of turn-round in Departments is three years for each official. Some of the higher ones stayed longer, but Sir Edward Bridges said that three years was the average period of service in a Department by the more important officials.

I suggest that, with defence problems as complex as they are today, it would take the best part of three years for a new officer to become fully conversant with the subject, and it seems rather a pity that immediately he does so he is moved on somewhere else, not necessarily in a defence Department at all, and someone new is brought into his place.

Lord Chatfield, in his book from which I quoted earlier, made some startling recommendations. I do not know whether they would all be welcomed by the House; but on page 202 he says that all in the political ranks who are likely to rise, say to an Under-Secretaryship, ought to go through a course at the Imperial Defence College, which should be considerably enlarged. That would be preselection with a vengeance. Certainly, as defence becomes more complicated, we become more aware how difficult it is to talk with any very great knowledge about any of the latest weapons. Lord Chatfield also said that, by this means those taking up appointments in Service Departments would then be basically as well-informed as those entering Civil Departments, would earlier grasp the problems, and would be in a strong position to discuss such problems and better able to understand and criticise expert advice. One might add to that that a little knowledge is a dangerous thing. I think we have all long had an abhorrence of Government by experts, but certainly in the case of defence there is a case for potential Service Ministers having as good a knowledge as possible of the basic needs of the Armed Forces, as we all ought to have of the basic civil needs of our constituents.

I have said that I am trying to tackle one of the most impregnable of fastnesses, and I think my right hon. Friend the Member for Woodford (Sir W. Churchill) was once reported as saying that the Treasury was very hard to understand—in fact, too hard. However, nothing daunted, nothing done, and I therefore hope that hon. Members will agree that it is our duty to probe into the most closely guarded preserves of the Government machine for the very reason that they are so closely guarded. When that is not done, we find that appalling things can happen, as the quotation which I have given from Lord Chatfield's book shows.

I should like to ask a question of the Government now, because I think it is perhaps the real crux of the defence issue. One of the main reasons why I put down this Motion is that the Treasury seems to be re-asserting the stranglehold to which Lord Chatfield referred as existing between the wars, and that stranglehold is now beginning to tighten over the Air Ministry and the Ministry of Supply. I ask my right hon. Friend: ought it not to be the duty and indeed the aim of the Treasury to speed the implementation of decisions of the Defence Committee of the Cabinet and to ensure the economic placing of orders? If industry is to cooperate fully, it must be able to place orders for materials in economic quantities well ahead, and the take-up of production by Departments must be known beyond one year ahead.

It seems to me to be utterly wrong that Treasury scrutiny should ever again become as protracted or as obstructive as it was during the war. Far from checking waste—and I have every sympathy with my right hon. Friend in his desire to do that—it would tend to increase waste in the long run, for costs inevitably rise if manufacturers are forced to operate on uneconomic batches and on suddenly varied orders.

I say that it is the duty of the Treasury here to see that contracts are correctly drawn up and that proper accountancy is maintained, but let it not exercise that discretion over defence policy previously decided at Cabinet level. Its aim rather should be to speed up the implementation of those decisions.

To sum up, may I ask my right hon. Friend this question? Would he first comment on Ministerial responsibility for appointments, and see whether something can be done to improve the position and avoid the tragic happening that we all regretted so much? Secondly, would he tell us what has been done by way of implementation of the 16th Report of the Select Committee on National Expenditure regarding the separation of supply from establishment? Then would he comment also on the automatic coupling of the Permanent Secretary to the Treasury with the official head of the Civil Service? Would he tell us something about the position of the Minister of Defence vis-à-vis the Treasury and Service Ministers, and would he consider the possibility of separating the defence Departments from the rest of the home Civil Service?

I hope that the matters which I have raised will be regarded by the House as worthy of consideration. Perhaps a Select Committee is a better method of considering this matter in detail, but I should welcome comments from the Government and the House on this matter. I am convinced that, however good the policy, however qualified the Ministers, however painstaking the civil servant, unless the responsibilities of each are as clearly defined as possible at all levels, and unless the Treasury is directed to co-operate rather than to obstruct the work of Cabinet defence decisions, waste, frustration and delay will inevitably result, to the detriment of the nation's security.

More important than all these things is the division of loyalties that is inherent in a system under which the control of expenditure is exercised by the same Department as that controlling the promotion and advancement of civil servants. That seems to be the greatest flaw in our present machinery of Government, and I hope the House will support me in securing further and continuing examination of so important a matter.

2.32 p.m.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

I beg to second the Motion.

My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) has moved the Motion in a characteristically interesting and forceful speech, and I feel that the House, and indeed the country, should be grateful to him for having brought such an important matter to our notice today. We are directly concerned, in the terms of this Motion, with the expenditure of some £1,500 million of public money every year and we are indirectly concerned with a whole range of public expenditure no matter on 'what it may be.

My hon. and gallant Friend was perhaps mainly worried about the effect of Treasury control on efficiency. I myself am more worried at its failure to achieve economy. But, after all, efficiency and economy go hand in hand, and if we sacrifice the one we shall lose the other. The problem is essentially one of the machinery of government, a most complicated and difficult matter, but one on which differences do not normally develop on party lines.

I therefore hope that the House will not allow itself to be diverted by the Amendment on the Order Paper in the name of the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) into a highly controversial argument about the relative merits of welfare and defence. I suppose all of us will agree that we need both of them, and how much we spend on one as against the other is a question of policy which has very little to do with the question of Treasury control as such; although it is true that by the strict economy of expenditure on defence we shall have more money left over for welfare, and to that extent this Motion is both relevant and helpful to the cause which the hon. and learned Gentleman has so much at heart.

I have little doubt that my hon. and gallant Friend was right in his Motion to focus attention upon defence, not merely because of his special knowledge of the subject, but also because of the magnitude of defence expenditure, on the one hand, and also because the margin either for waste or for saving is perhaps greater in the case of defence than it is in the welfare services.

My hon. and gallant Friend said something of the mystery which surrounds the precise way in which Treasury control is exercised, and I am not in the least surprised that he should find it difficult to follow. Indeed, I should be very surprised if many hon. Members could pass an examination on the subject, and I would extend that comment even to those hon. Members who serve on the Select Committees dealing with the Estimates and Public Accounts. Indeed, I would go further and say that a great many of the officials who actually work the system are in some doubt as to the precise manner in which it is intended to operate.

Perhaps I could cite my own experience. From 1950 to 1952 I was Vice-Controller of the Navy, and in that office it fell to my lot to sponsor expenditure running into millions of pounds every year, and it was also part of my duties to give the official, albeit very often formal, approval to a very much greater range of expenditure. But at no time was I ever shown any clear or definite instructions delineating the respective spheres of the finance branches within the Admiralty Department on the one hand and the Treasury on the other.

Sometimes, it is true, when one was discussing some new project there would be dark hints that Treasury approval would have to be sought and would probably not be forthcoming. Again, when papers came for final approval for spending a certain amount of money, there was always the formula, written usually by the Admiralty Finance Branch, "No financial objection." Sometimes that was varied to read "The Treasury have been consulted and there is no financial objection."

I soon learned, however, that the absence of any reference to the Treasury by no means meant that that Department had not been consulted. I remember one piece of expenditure to which I took exception, and instead of writing "Approved" I wrote, "There is every financial objection to this extravagant and unnecessary project which reflects discredit on all who have sponsored it." This mild observation caused intense anger at the Treasury who apparently had studied it with great care and had certified—on what grounds I do not know—that it was an economical and proper undertaking.

When my right hon. Friend the Financial Secretary to the Treasury intervenes, I would not ask him to attempt to explain exactly how the system works, even were he so minded, because I believe that were he to try to do so he would unwittingly but inevitably mislead the House. I think the system has grown so flexible and is so dependent upon personal relationships between the various civil servants concerned as to become almost capricious. I believe that this flexibility has gone too far. It has dulled the sense of personal responsibility that should be felt by all who spend public money. I think that even Departmental Ministers are misled into a genuine belief that there is no room for economy in the Estimates which they are presenting merely because they know that those Estimates have been very carefully scrutinised and approved by the Treasury, and yet no one outside the Treasury knows how or by whom this scrutiny has been made or with what qualifications.

Therefore, my first recommendation would be—and I would welcome the views of my right hon. Friend on this—that we should have a somewhat more rigid system, even though it may be un-English, which at least is capable of fairly clear definition so that everyone in Whitehall knows exactly how he stands.

My hon. and gallant Friend spoke of the harmful effect of Treasury control on the efficiency of the Fighting Services, and of course this is undoubtedly a fact from time to time. I suppose that is inevitable with any system which is intended to save money. It occurs particularly when delays take place before a new project is authorised. Perhaps I might remind the House that the Treasury's principal weapon is delay. In my experience it is most uncommon for the Treasury to turn down a project flat. It is even more rare for them to write back to say, "This is a very good idea, but we have worked out a way in which you can do it more cheaply." The more common process is to delay in the hope that the originator may be run over by a bus, or something like that, but possibly if the delay can be kept up long enough the man will be moved on to another appointment, and his successor may have another bee in his bonnet and the whole thing will be dropped. Of course, those hopes are often well founded.

I would not necessarily quarrel with that side of the Treasury work. At the same time it is a method which can be exceedingly tiresome and frustrating. I recall that early in 1950 a project was submitted from a big establishment for a central heating system to replace a number of isolated separate heating systems in various buildings and a large number of the coke-burning stoves which were so popular in Army life in years gone by. It was a very expensive project. Speaking from memory, I believe that about £100,000 were involved. The sponsors, as always on these occasions, pointed out that the whole of this money would be repaid by economies within four years. One has heard that before. We checked the proposals very carefully. It was an exceedingly complicated and technical matter, and I must say, that rather to my surprise the claims appeared to be quite well founded.

Naturally, approval was sought from the Admiralty Finance Committee, approval was given and the necessary provision was made in the Estimates for the following year. As hon. Members who deal with these matters know, the next hurdle is to get the financial approval for going out to tender for the contracts. When this stage was reached months of delay followed. When this came to my notice I asked for the papers to see what was happening. Through, I think, the inexperience of a newly joined official, these were sent back to me without the private correspondence with the Treasury having been removed.

I read it with fascination. It was a leisurely exchange of letters between, I should imagine, two middle-aged classical scholars. They exchanged their views on the soundness or unsoundness of what, as I have said, was a highly technical problem and, not unnaturally, they could come to no conclusion. Meanwhile, nothing happened.

That, I submit, is not the way to go about financial control. Indeed, one of the greatest weaknesses of the present set-up is the isolation of the officials of the Treasury who so often have the power to say "yea," or "nay," from the professional officers who alone have the technical knowledge to argue the case. It is as if the Treasury were an omnipotent deity, invisible and unapproachable, only to be interceded with and placated by the high priesthood of the administrative civil servant in one's own Department who may or may not be equipped to argue one's case in one's absence.

It is very rare for the case to be presented directly to the Treasury by the professional officers concerned, though I must say in passing, out of fairness, that there are sometimes exceptions. Perhaps it is no accident that the exception which I can remember most clearly was that of Mr.—as he then was—Edward Bridges in the years before the war when he was chairman of the T.I.C., who always, when he could, asked the officers who put up a proposal to see him and argue the case directly. That, I submit, was the way in which it should be done.

To my mind, the most damaging weakness of the whole machinery of Treasury control is that so often it does not in fact achieve economy at all. I could give a great many examples to support this charge, but only a few must suffice this afternoon. I mention first the waste which results from spreading programmes over a very long period. I concede that the initiative for this often does not come from the Treasury but from the spending Departments; but it is an exceedingly wasteful thing. In fact, it comes under the heading of delays being imposed after a project has begun. The result is that the spending Department accumulates a whole mass of pots all of which are simmering instead of having two or three pots which are boiling, but each pot requires the supervision of design and technical staff until it is finished. That is one of the main reasons why Ministers come to the House and tell us from time to time about the acute shortage of design and technical staff. That is a point that arises directly from a sort of go slow policy and of having too many projects at the same time.

I suggest that the Treasury should take exactly the opposite to their normal line. They should prevent Departments from getting on with the new loves until they are off with the old. In effect the Treasury should say to a Department, "Against our better judgment you have obtained Ministerial approval for an £8 million palace of folly. We are advised now that the most economical thing is to get on with the building and finish it in four years. Therefore, whether you like it or not, you will set aside £2 million for each of the four years until it is finished, and do not bother us with any new ideas until it has been done." I think, incidentally, that if that line were taken the spending Departments would be very much more careful before they embarked on some of these projects.

I should also like to see the Treasury instituting thorough post mortems into the actual consequences of certain expenditure. I would give one or two examples of what I mean. Anyone who cares to go to Portland Bill will see that it is now crowned with one of the most magnificent extravagances of modern times. I believe it is the biggest building in the United Kingdom. This is an entirely non-party matter, because I think it was put in train during the time of the Coalition Government. I fancy that it is now just finished. The object of the inquiry should be to try to ascertain what the total cost has been. I can assure hon. Members that that is by no means a simple thing. Those who spend the money use artifices to spread the cost between a large number of votes. It is by no means simple to find the true cost.

The next job is to find out what is the total use to which the thing is being put and whether exactly the same result could not have been achieved at a very much smaller cost, and finally, although this sounds vindictive, who was really responsible who originally was the person who really backed the idea and got it put in train.

Mr. Douglas Houghton (Sowerby)

Would that be one of the Service Departments at fault?

Vice-Admiral Hughes Hallett

I should imagine that it would.

Mr. Houghton

Then the complaint must be that there was not sufficient control over that Department by the Treasury. Is that it?

Vice-Admiral Hughes Hallett

That is precisely the point I have been trying to make for some time. The object of these inquiries should be to try to ensure that officers and officials who commit the defence Departments to unjustified expenditure should not again be employed in appointments in which they have to spend public money but should be given appointments of a different nature.

I am not a bit moved by the argument so often used to defend people that it is easy to be wise after the event. The point is that we pay these high professional men to be wise before the event. That is why we employ people at the sort of salaries we pay and with the sort of training and experience that we demand.

I should like to turn to another and entirely different criticism of Treasury control, the importance of which lies in the impression that it gives of financial laxity rather than in the size of the sums involved. As the House knows, ever since the days of Mr. Gladstone it has been virtually impossible for a public official to divert public money into his private pocket. That, I think we can say, has been stopped completely. But the same is not entirely true with regard to certain allowances which are collected by whole groups and categories of public servants under conditions which, I would say, are at least questionable.

I should like again to give examples. I refer again to the example quoted by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) during the course of the debate on the Army Estimates. He quoted the payment of home to duty travelling allowance. I do not want to discuss the merits of that allowance. There is room for two opinions as to whether it is justifiable or not. That is not the point. The point is that in order to obtain it, the applicant has to sign a declaration which in the great majority of cases is a false declaration, and which is known to be false. He has to sign a statement that he has made every endeavour during the preceding so many months to obtain accommodation nearer to his work. Of course, he has done nothing of the kind.

When he first took up the appointment he might have gone closer to his place of work had he been able to do so, but once he has moved in and settled in his house no one would expect him to uproot himself six months later and move ten miles nearer to where he is working. It would be most unreasonable to expect him to do so. It may be justifiable to pay him a home to duty travelling allowance, but what I challenge is the wisdom of the Treasury in requiring a form to be signed which contains in fact a false declaration, because that certainly tends to produce a climate of opinion among public servants which is unfavourable to strict financial stringency.

Equally discouraging is the response which the Treasury so often offers towards economies which they have not recommended themselves. It is a curious thing that if one makes proposals for big economies, particularly if they are bound to lead to reductions in establishment personnel, one has to move in secrecy or silence or one is outwitted before they can be put into force. That is my experience.

These are some of the reasons that lead me to the conclusion that the whole machinery of Treasury control is in need of overhaul.

I should like before I sit down to be constructive. I should like to suggest that reform should be directed towards one particular point. I think that we need a system which will result in the loyal and enthusiastic co-operation of the officials who are actually spending the money; that is to say, in the Defence Departments, of the directors of the spending authorities—the Director of Naval Construction at the Admiralty, the Master General of Ordnance at the War Office, and all the other high sounding directors-general at the Ministry of Supply. These are the people who are actually spending the money.

Then again, outside the Ministries we have the commanding officers and superintendents of the great Service establishments who are also spending money. I think that Treasury officials should realise that while they can help these people enormously to economise and run their places economically, they cannot coerce them, because, in the long run, the officials with the professional and technical knowledge will always outwit the Treasury. The terrible thing is that so many of them have come to think it smart and the right thing to do.

I would go further and say that officers of the highest rank feel it to be their duty to wring the utmost farthing out of the Treasury on behalf of the Department they represent. I think the cardinal fault in the present system and in the way in which it has grown up is the antagonism and the mistrust which exists between the Service officers and the professional service officials, on the one hand, and the Treasury, expressed vaguely as a sort of evil background entity, on the other hand. That is not quite such an ancient state of affairs as the hon. Member for Sowerby (Mr. Houghton) indicated in an interjection during the speech of my hon. and gallant Friend the Member for the Isle of Ely.

I can remember when I was a boy in the first World War, trailing behind the captain of my ship, when he went his rounds, and when we came to a compartment he would say to the second in command, "What are these two men doing?" The reply would be, "They are cleaning the compartment," or something like that. The captain would say, "I was afraid of that, commander. You have too many men in this ship; you are wasting manpower." Then we would go to another compartment and the captain would say, "What is the meaning of this? This place was painted out only a year or so ago. I will not have public money wasted in this manner." I assure the House that we do not find that attitude today.

Can we point to a remedy? Yes, I believe that we can. I would suggest for consideration that first of all these directors and commanding officers should be made more cost conscious and, when that has been done, they should be given greater financial autonomy. When that in turn has been done, they should be judged to some extent by that ability to run their commands economically. I feel certain that an approach on these lines is perfectly feasible, although it may not particularly commend itself to civil servants of medium seniority. To achieve this, the first thing that is necessary is to reclass the presentation of some of the Estimates so that they show the actual cost of certain establishments and certain services in a way which can be understood and appreciated by the people who are actually organising these services or controlling these establishments.

Some six years ago I went by instruction of Lord Hall, who was then First Lord of the Admiralty, on an economy tour around certain establishments with the object of reducing the manpower employed. Before starting, I got the finance branches to work out what each establishment was actually costing. I can assure the House that the commanding officers had absolutely no idea of this. They were astonished at the figures when they saw them, and they were the first to co-operate in the official economies which released a considerable number of men for productive work.

Having done this recast of the Estimates, I would suggest for consideration whether we should not redeploy some of the Treasury and some of the Departmental civil servants into a position where they could act as accounting officers and financial advisers to those people who are actually spending the money. I recognise that the level at which to do that requires very careful consideration.

Thirdly—and this is perhaps slightly off the point, but I feel that it is my duty to mention it—I should like to see much stricter enforcement of the rules against officers taking up appointments with firms with whom their Department has been in contractual relationship immediately after they retire. I think that it used to be a rule that there must be an interval of two years. I think that the House would be shocked if a return were called for of the number of occasions that exemption from that rule has been granted in recent years.

It is often argued that it is quite wrong to judge officers of the Fighting Services by their ability to run things cheaply and to economise. I believe there can be no greater fallacy than that. One of the greatest and most vital principles of war is economy of force. If officers are allowed to reach high rank without any regard for the economy with which they conduct their affairs, we see the result, as we did in the last war, in the production of plans requiring such immense forces that they could never be carried out.

I remember when we went to Norfolk House to outline the plan for "Operation Overlord" being given a plan which had been prepared by some body of staff officers, with what object I do not know, for the occupation of the Cherbourg Peninsula. It is an interesting fact that the forces for which those officers asked were actually greater than the forces subsequently used for the liberation of France.

In conclusion, I should like to make it perfectly clear that I do not blame the Treasury for the partial breakdown of financial control. Treasury officials, after all, are public servants, paid to carry out the policy of the Government of the day as endorsed by Parliament. If we wish to apportion blame, it rests with general public apathy. There are plenty of people who advocate economy of Government expenditure in broad terms, but there are very few people who either interest themselves in, or indeed support, detailed economy proposals to be applied to specific objects. That is quite a different thing, and it goes for the Press as well.

The Times, for example, regularly produces leading articles admonishing the Government to be economical, but on the rare occasions when hon. Members in this House propose substantial economies we find very little commendation or even reference to them in The Times. Not even the hon. Member for South Aryshire (Mr. Emrys Hughes), with the sweeping economies he proposes, ever receives any notice whatever.

We really cannot expect effective financial control in Whitehall unless Parliament itself is willing to apply strict and detailed scrutiny of expenditure when the Estimates are voted. I suggest that if we fail to restore a more effective supervision over financial expenditure, the consequences may be at once grave and far-reaching because, for many years, the most difficult problem which has confronted successive Chancellors of the Exchequer—no matter from which party they have been drawn—has been to try to persuade this country to live within its income.

The most recent example is the advice and exhortation contained in the White Paper on the Economic Implications of Full Employment: but exhortation is not enough; it must be backed by example. That is what makes the subject matter of this Motion so important and so urgently deserving of our attention.

3.3 p.m.

Mr. Douglas Houghton (Sowerby)

I am sure that the House will wish to congratulate both hon. and gallant Members who have moved and seconded this Motion. They have opened up a vast and interesting field of discussion, to some extent speculation, and in many respects of reform.

We cannot hope, in the time left to us today, to cover anything like the ground which a debate on this subject would justify. It is perhaps a pity that this House does not more frequently discuss these problems of the machinery of Government and of public administration. I agree that we are obsessed with questions of policy in this House and frequently ignore the difficulties and mistakes that may be made in administration. I say to my hon. Friends sometimes that the policy of nationalisation will be judged by the success or failure of administration. That is so frequently the case in bringing about big changes in the field of public life and social development.

Certainly in the years of the Labour Government the administration was strained to the utmost by having to adapt itself, to improvise and take the weight of a continuous stream of fresh and almost revolutionary legislation. The problems of administration can be easily overlooked, and yet it is probably there that the impact on the public will occur. The success of the whole venture will be judged by the experience of the man-in-the-street, when he seeks a particular service or goes with his troubles to a particular Government Department.

I impress on all those with whom I come in contact in the public service that the good name of the Civil Service will be judged by the man who comes to the counter in the Post Office or in the tax office or at the Ministry of Pensions and National Service. How he is treated will be his only test of whether the Civil Service should have the respect of the community at large. Therefore it is of great importance that the machinery of Government should be as good as we can make it, that the public administration should be as efficient and as flexible as the circumstances of the case require, and that the spirit of those applying the laws passed by this House is of the right sort.

The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) had scarcely been speaking for more than a few moments when we had an echo of Critchel Down and the question of Ministerial responsibility. I have no desire to go back to that unhappy episode. But I think it as well for the record, at all events from my point of view, to say that in my judgment it was not the Minister's 'acceptance of the responsibility for a mistake of his subordinate which alone led to his resignation. In my submission, it was the failure of the Minister to make his policy sufficiently well known and to ensure that all his officers understood clearly what he, as Minister, stood for, and what Her Majesty's Government stood for, about the particular matters with which each of these officers had to deal.

It was a failure all down the line rather than a simple case of the Minister accepting responsibility for delinquency or a mistake of a particular civil servant for which he felt he was accountable to the House. The Minister might have said, "I have found one of my officials doing wrong. I disapprove of the way that this matter has been handled and I shall take disciplinary action against him. I must accept responsibility for what has been done and I must give what redress I can to the injured citizens who have been the victims of this mistake in my Department's policy. There is no reason why I should resign. I have taken the necessary action in my Department since I discovered that it needed to be done." But that was not what the Minister said.

We all remember—I do with some shame—the proceedings at the Committee of Inquiry appointed by the Minister to go into these matters, with the right to call for papers and documents and do a job which in my opinion the Minister should have done. I hope that never again shall we have individual civil servants called before an independent committee of inquiry of that kind; with all the files, dossiers, minutes, personal and semi-official correspondence exposed to the gaze of the committee and the public, when really the Minister should have been in command of his own Department, and taken the responsibility for seeing that those in his Department in charge of those matters obeyed his views and carried out his policy.

The next thing dealt with by the hon. and gallant Gentleman was his own particular "King Charles's head"—the head of the Civil Service. I had nothing to do with the creation of the head of the Civil Service, though I remember clearly the circumstances in which it was done. The hon. and gallant Member asked whether it was necessary or desirable to have any such appointment, and, if so, need the headship of the Civil Service necessarily be linked with the post of Permanent Secretary to the Treasury.

I imagine that the designation of an officer at the head of the Civil Service is necessary if that person, or some person, is to be regarded as the principal adviser to the Prime Minister and to the Government on the suitability of an appointment at the highest level in a Government Department. Quite clearly there could be no internal promotions board of the conventional kind which could review possible candidates for headships of Departments; a promotions board can function only if those on it are higher in rank than any of the posts for which they have to consider candidates. We could not have a promotions board composed of heads of Departments selecting new heads of Departments. If there is a suggestion of calling in people from outside, I think there are obvious deficiencies and disadvantages in such a suggestion.

On the whole, the present arrangement works pretty well. Indeed, we have a genius for making things work which are theoretically open to criticism or objection. Consider the great triumph of the Income Tax system in this country, which tore up the law from beginning to end and made the thing work; and which until a few years ago was operating this most complex administration of direct taxation on the law of 1842. It is amazing what genius we have for public administration and for getting round all the difficulties and pitfalls of the theories and machinery of government.

Somebody must advise the Prime Minister or the Chancellor of the Exchequer or the head of the Department on a suitable appointment to make to a senior post. The Minister may have just arrived or have been there only a few minutes when the Permanent Secretary dies or when a vacancy occurs for some other reason, and in that event he will not be in a position to appoint a successor from his own Department, and still less be in a position to appoint a successor from any other Department or make a transfer where a promotion would not be involved.

Recently we have had a new Chairman of the Board of Inland Revenue. He has come from the Ministry of Food. That Department disappeared and a Permanent Secretary post was no longer available to him there. One arose in the Inland Revenue, and we had Sir Henry Hancock sent to us. He has been made very welcome, and I am sure that he will make a very good Chairman of the Board of Inland Revenue.

The hon. and gallant Member said that these people remain in their positions, on an average, only three years. He said that Sir Edward Bridges had stated that they change frequently, and he asked how much they can get to know about their Departments; they would just be getting to know it and then would probably be transferred. To some extent that is true, although Sir Harold Parker has been Permanent Secretary to the Ministry of Defence for the past three years, and the Permanent Secretary to the Treasury has been there longer than three years. Sometimes the stay is short and sometimes it is long.

I well remember what Sir James Grigg said when he came to the Board of Inland Revenue, "I have not come here to learn all about Income Tax. There are 20,000 people whose job it is to know it all and I am not going to try to catch them up. I am here to tell the Inland Revenue what the public will not stand for." I think that was a pretty good start for a new Chairman of the Board of Inland Revenue.

In those high administrative posts it is the interpretation of policy in terms of administration which is the prime function of the head of the Department—and, of course, to advise Ministers, when they come to him with their hare-brained schemes and cock-eyed ideas. His job is to advise and to warn the Minister of possible consequences of following a particular line of policy.

On the whole, I think, the present arrangements work pretty well, and if we were to have a head of the Civil Service who was not Permanent Secretary to the Treasury we should have much confusion at the top. When the Labour Government left office it was all arranged that Sir Norman Brook, Secretary to the Cabinet, should become Permanent Secretary to the Treasury in succession to Sir Edward Bridges, who was approaching 60 and who would, in the normal course, have retired. When the right hon. Member for Woodford (Sir W. Churchill) became Prime Minister, he was not going to let the Secretary to the Cabinet go. Sir Norman Brook had been there before when the right hon. Gentleman had been Prime Minister, and the right hon. Gentleman was going to hang on to him. He did, with the result that the Permanent Secretary to the Treasury who wished to transfer to a quieter and more academic life had to postpone doing so.

If that is going to be done in the future, are we going to have the head of the Civil Service, whom the hon. and gallant Member said might be the Secretary to the Cabinet, stepping up to the Permanent Secretaryship of the Treasury, or stepping down, or what? There has to be a pinnacle to the whole thing, and it is much more suitable for the headship to be in the hands of the permanent Secretary to the Treasury. I do not see very much point in that suggestion of the hon. and gallant Member.

Of course, there were more questions of this kind and many others affecting the organisation of the Departments which might have been referred to the Royal Commission appointed by the Government to deal with principles and pay in the public service—the Priestley Commission. But the Government chose to make that reference fairly narrow. I am not complaining because I think such a task would have taken them a long time, and it is as well, perhaps, that they were not given too much to do.

I agree with the hon. and gallant Gentleman that it is a matter which would well repay closer study in the light of our experience in these post-war years where the problems of Government, the machinery of public administration, have had to take a much heavier strain than ever before. I would certainly welcome any opportunity of studying the workings of this system and of making a report to the House and to the public.

I think I had better stop now because other hon. Members may wish to make a contribution to the debate. Therefore, I will conclude with only two or three sentences about what the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) said with regard to allowances. I think that the Civil Service will expect me to say something in reply to that.

I do not believe that the individual civil servants make false declarations in order to receive these allowances. What happens is that the civil servant may be transferred from one place to another, when a change of residence is desirable or necessary in order to enable him to live reasonably near his new work. He may have a house, he may be an owner-occupier, and he may have gone into a house quite recently. He is naturally upset at having to move again. Authority is given for him to move his residence when he finds suitable accommodation, and while he is searching for that he is paid an allowance to cover the additional expense of living away from home in the station to which he has been posted. He has to certify, I know, that he is searching for alternative accommodation—diligently searching for it—and I am sure that in present circumstances many officers are diligently searching without any visible result.

I do not think that there is very much there which is open to criticism. Moreover, there are supervising officers who know fairly well what the man is doing, and it is open to them to express any view on whether they think their subordinate officer is making a diligent search or not.

Vice-Admiral Hughes Hallett

It is not the individual whom I am criticising; it is the idiotic form which he is asked to sign. That is my point.

Mr. Houghton

I think it very right and proper that, if an allowance is being paid to an officer for living in apartments or in a hotel in his new station while he is searching for suitable alternative permanent accommodation, he should be searching for suitable alternative permanent accommodation, because, otherwise, these heavy temporary expenses may continue for an indefinite time.

I do not quarrel with the principle; I merely quarrel with the hon. and gallant. Gentleman's belief that a number of officers sign these statements falsely. I do not think that many of them do. I fully agree that these travelling, subsistence and detached duty expenses, and all the rest, are complex matters, and they do require adequate supervision and integrity on the part of all concerned.

My experience is that there is nothing about which the public could really complain; and, what is more, the public get away with a good deal in imposing additional travelling and living costs on civil servants as a result of transfer, for which they are not reimbursed out of public funds.

3.21 p.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

I should like to thank warmly all three hon. Members who have so far taken part in this debate, and in particular to congratulate, in company with the whole House, my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) on having used his place in the ballot to bring this exceedingly important matter before us. My only regret is that there has not been a larger House to listen to the debate. We are touching on matters of great moment.

I feel some diffidence, having only two years ago been sitting on the back benches, in seeking to reply over so wide a field and to answer a number of the questions raised, when some of them are of a character that could properly be answered only by my right hon. Friend the Prime Minister himself. I will do my best to give such information as I can, and I certainly promise here and now that all constructive suggestions which have been thrown out during the debate will be further investigated.

A few moments ago the Treasury was described as an evil background influence. I hope I may be able to repel that charge. The Treasury was said to be an impregnable citadel into which it was impossible to break and which ideas such as have been adumbrated in this debate could hardly pierce. The Treasury is not quite like that. When I knew that this debate was to take place, I sought what information I could on these great subjects in the Treasury library, the very keep of the citadel. From there I took out a book published in 1950 called "Master of the Offices," which was written either by my hon and gallant Friend or by somebody else of the same name. It bore the bookplate of the Treasury inside and it has evidently been thumbed.

My hon. and gallant Friend asked me a number of questions. He spoke first about Ministerial responsibility for appointments in the Civil Service, and it was quite clear to me that he had in mind the Critchel Down affair, setting that against a background stretching over the years.

The Civil Service is a permanent body; it is the permanent Civil Service. I am quite sure none of us would wish to see introduced in this country anything even approaching the spoils system which, to our mind, mars administrative arrangements elsewhere. We have set up the Civil Service. There is no patronage in entry into it. There is no patronage in appointments, and the Service has this magnificent record of serving all parties in the House equally, whichever may form the Government of the day. After a General Election has taken place and the colour of the Government has changed, I have never heard of Ministers complaining that the civil servants whom they found in their Departments were not at once putting themselves wholly, absolutely and impartially at the service of the new Government.

I submit to the House that my hon. and gallant Friend the Member for the Isle of Ely is going too far when he asks—if indeed he does ask—that in some way the Minister should be held accountable only for the actions of civil servants whom he has appointed to their posts, or whose appointments he has himself approved. We cannot break up the work of the Civil Service into sections according to the date of a new Minister in a new Department. The Minister must clearly satisfy himself that the staffing of his Department is right, and if he is convinced that somebody in his Department is thoroughly unsatisfactory or disloyal he must take steps to have that person removed from his position.

Subject to that, I would say that our system works well. My hon. and gallant Friend probably has in mind that, not at present but perhaps in the past and perhaps again in the future, unsatisfactory consequences have or may follow from the power which can be exercised by the Permanent Secretary of the Treasury with regard to higher appointments. It is important for us to appreciate exactly what is the position. It is not the case that permanent secretaries are appointed by the Prime Minister, or by anybody other than the Minister in charge of the Department concerned. Permanent secretaries, deputy secretaries, establishment officers and finance officers in the home Civil Service are appointed by Departmental Ministers, subject to the Prime Minister's approval, and before the Prime Minister expresses his approval he is advised by the Permanent Secretary to the Treasury.

That is the way in which the procedure is laid down, and that is the way in which I would say that it was working very satisfactorily at the present time. I am sure that we should all agree that some machinery is desirable, both to ensure that a Departmental Minister cannot appoint somebody as permanent secretary just because he has a special personal feeling towards that man, or a special personal knowledge of him. We should equally agree that when the post of permanent secretary falls vacant all those inside as well as outside the Department concerned who appear to be of the requisite calibre should be considered for it, and considered at the highest level.

My hon. and gallant Friend further asked me about the Sixteenth Report of the Select Committee on National Expenditure, 1941–42. It is true that I was a Member of the National Expenditure Committee at that time, but I did not serve upon the sub-committee which produced that Report. I certainly take my share of responsibility for it, but I cannot for a moment claim to have originated any of its ideas. My hon. and gallant Friend asked what had been done as a result of that Report. One of its recommendations was that organisation and establishment work in the Treasury should be separated from supply at all levels below the post of permanent secretary. We have gone a long way in that direction already.

My hon. and gallant Friend was not correct when he said that since 1943 we have not seen very much done. One of the second secretaries in the Treasury, Sir Thomas Padmore, is concerned exclusively with establishment work and the machinery of government. It is not customary to mention civil servants by name in this House, but civil servants have already been mentioned by several hon. Members, with appreciation of their work. It is in that same spirit that I might mention one or two, because I want to make the situation as clear as I can.

The divorce between supply and establishment work at divisional level in the Treasury has also been carried a long way. It is true that there are mixed divisions which handle both kinds of work, for reasons of administrative convenience and efficiency. Treasury control of expenditure on establishments is inseparable from its control of all other forms of Government expenditure. That was accepted in the Report of the Select Committee, but I am not sure whether it is accepted by my hon. and gallant Friend. We really must stand on that.

The Select Committee later recommended that there might be a new junior Minister in the Treasury, a new Parliamentary Secretary, who was not to be Chief Whip, but was to have a special Parliamentary responsibility for the supervision of the Civil Service. Since then a new junior Minister has been created, but he is the Economic Secretary to the Treasury. I am thankful to say that my hon. Friend greatly relieves me of a load of work which otherwise would fall on the Financial Secretary. To that extent the burden on the Financial Secretary is less than it was.

I would regard it as a matter of regret and a retrograde step if Treasury responsibility for the supervision of the Civil Service were taken right away from the Financial Secretary and were given to a new Minister who had nothing else to do. There would be the danger of that new junior Minister's attempting to do the second secretary's work himself. He would inevitably become deeply involved in, and fascinated by, the detail. I doubt whether that is the kind of Ministerial supervision that is desired. I may do my job inadequately as regards the Civil Service, but that is for the House and the Civil Service to judge. I count it as an advantage from my point of view that my special responsibility there runs along with my responsibility in a great many other fields, so that I can use my judgment on one and on the other and can assess financial questions arising in connection with the Civil Service along with, and as an integral part of, the special responsibility for control of expenditure generally that lies always with the Financial Secretary to the Treasury.

My hon. and gallant Friend asked me whether it was really necessary that the post of official head of the Civil Service and the post of permanent secretary to the Treasury should always be combined in one person. I do not suppose there is anything sacred and immutable about that, like the laws of the Medes and Persians, but it is working extremely well at the present time. From all my experience I would think it a very great pity to break up, on theoretical grounds, an arrangement which is working so satisfactorily. With respect to the whole field of the machinery of government which we have been discussing, I hope none of us thinks that all the present arrangements are settled and crystallised for all time.

The needs change, personalities change, and what the House is right to demand is that Ministers should be constantly on the watch, constantly ready to learn and constantly ready to adapt arrangements to new needs, and Ministers need to put themselves in a position to satisfy the House that this is so. But I would deprecate any idea that we should necessarily change because someone, however eminent, has advocated change in years gone by. We are all inclined to scoff at the sort of soldiers and sailors who appear to be planning for the last war. I must say that occasionally in my hon. and gallant Friend's speech I thought that he was planning for the last peace. What we must do is to take our arrangements as they stand, judge whether they are satisfactory, never make them too inflexible, and always be ready to improve where improvement is shown to be essential.

My hon. and gallant Friend spoke of the position of the Minister of Defence vis-à-vis the Treasury and vis-à-vis the Service Departments. My right hon. Friend the Minister of Defence was here throughout my hon. and gallant Friend's speech—he asked me to apologise that he was not able to stay until the end of the debate—and I would be chary of expressing dogmatic views about the relationship between the Minister of Defence and Service Departments. That is the sort of matter which can be debated in the Defence debates and elsewhere, and obviously I can speak only at second hand.

When it is suggested that perhaps the Minister of Defence is not in a strong enough position vis-à-vis Service Ministers, it surely needs to be recollected that he is a member of the Cabinet and they are not. I am quite sure that it is the policy of Her Majesty's Government to make certain that the Minister of Defence is in a strong enough position to discharge the responsibilities which clearly rest upon him.

As between the Minister of Defence and the Chancellor of the Exchequer, and on this whole question of Treasury control of defence expenditure, I would suggest that one needs to bear in mind that if there are clashes about big issues they can only be resolved by the Cabinet. When the Service Estimates are being planned clearly there must be close consultation, not only between the Minister of Defence and a wide range of other people who can help him to judge what the defence needs of the country in the years ahead will amount to, but also between him and the Chancellor. In those direct consultations between those two Ministers there must be an endeavour to work out a ceiling of defence expenditure for the coming year, or years, which the Minister of Defence judges will suffice to enable him to provide the country with the defences it needs, and which the Chancellor of the Exchequer believes the economy can bear.

I do not want to take up a selfish Treasury view on this, but I am sure that both sides of the House appreciate that in these days when our resources are strained to the uttermost the one way in which we can be sure that we shall bring down the whole structure is to try to do too much at once. Therefore, it is essential that the Minister of Defence should carry the Chancellor with him as to the amount which we can afford to allocate for defence purposes.

When the overall estimate for defence in general and for each Service Department in particular is settled, then what is the rôle of the Treasury? My hon. and gallant Friend, and at some points also my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), was inclined to suggest that the Treasury then went all out to try to stop the spending of money and to see whether by any possible means they could bring down the actual amount that was spent in 12 months to figures substantially below what the Chancellor of the Exchequer and the Minister of Defence had agreed it was reasonable to spend.

I do not think it works quite like that. What the Treasury has to do is to exercise the same general supervision, the same duties and the same control as regards the Defence Estimates which everybody accepts that it has to do as regards the Civil Departments. There must be a scrutiny of expenditure within the Service Departments themselves. Nothing can take the place of that, and I was very glad to hear my hon. and gallant Friend the Member for Croydon, North-East speaking of the necessity for training people in particular positions in the Service to be cost-conscious, because this certainly cannot be done by the Treasury alone. It certainly cannot be done by the Service Ministers alone, and, right through the whole public service, both civil and military, we shall in fact gain if those who carry large responsibilities, professional or otherwise, are constantly asking themselves whether they could achieve the same results with a smaller expenditure of money.

I hope it is not true, as my hon. and gallant Friend suggested, that the Treasury's principal weapon is delay. We certainly do not go into it with that purpose, and I would rather think that the Treasury's principal weapon was inquiry—the technique of asking questions to make sure that the proposals for implementing policy are thoroughly thought out, so that as the money comes to be spent it will achieve the maximum results.

Certainly, we at the Treasury do not believe that it is good tactics for us to seek to rival the Departments in the expert knowledge which they possess in their own fields. Treasury officials are amateurs; they are exceedingly clever amateurs, and they are not, I venture to say, always cautious amateurs. Perhaps, before I went to the Treasury, I had the mistaken idea that the essence of the Treasury civil servant was caution. I think it is a wise discretion that asks questions before taking or agreeing to action, but I would say that vigour rather than caution was the predominating quality of those who are in responsible positions in the Treasury concerned with this matter of the control of expenditure.

We have got away from the old situation in which the Treasury, so to speak, sought to meddle in everything and to allow no detail to pass until express Treasury approval had been given. On the contrary, it is for the Treasury to test the projects put forward and to obtain enough information to satisfy themselves whether the schemes which are being planned are well-founded, to make sure that enthusiasm does not run ahead of prudence and commonsense-and to bear in mind the remark of the Haldane Committee, which I believe no one has ever challenged, that our whole experience seems to show that the interests of the taxpayer cannot be left to the spending departments. The Treasury officials and Treasury Ministers alike are well aware that by constantly calling for delay one can vitiate economy. Very grave decisions have to be taken in the defence field in these days, especially with the new nuclear weapons, transforming strategy Judgments have to be reached as to what kind of war we have to prepare for and to what extent we should allocate our resources for the new or the old strategy. This is a time when the most profound thought must be given to these questions, and that is one reason why I welcome this debate.

I submit that it would be a mistake if here and now the House called for a comprehensive review of the machinery of government, because in my view a comprehensive review of the machinery of government is too big a task for any one set of men to tackle. We have got to divide it up. We have got to take our problems one by one, and I hope that I have succeeded in these few remarks of mine in showing that we have not been asleep since 1943, that we have gone a long way in the direction recommended by the Select Committee, and that, far from being petrified in our views, we are constantly seeking new and better ways of achieving the greatest value for money.

Finally, Parliament itself has a part to play in all this, not only in Friday debates. We have the Estimates Committee which has been hardly mentioned in this debate. We have the Select Committee on Public Accounts which is admirably fitted to do a great deal of the work of the post mortems to which my hon. and gallant Friend has referred. These Committees may sometimes criticise the Treasury, but we at the Treasury regard them as most valuable potential allies.

When I ask my hon. and gallant Friend not to press this Motion, I do so, not because I wish in any way to escape from the pressure of Parliament in respect of the importance of these matters, but rather because I believe we need to divide them up to take one thing at a time and, above all, to show ourselves constantly alert to adapting our methods and actions to the developing needs of the time.

Mr. I. J. Pitman (Bath)

May I ask my right hon. Friend whether the Machinery of Government Committee served by the Organisation and Methods Division of the Treasury is not, in fact, giving just such a continuing and comprehensive review which is current all the time?

Mr. Brooke

Yes, that Committee is in existence. In addition to that Committee, as I have sought to show, we have inquired into various facets of this matter and we have also, department by department, carried out investigations since the war over a very wide field, all designed to bring our arrangements up-to-date.

3.49 p.m.

Mr. Ede (South Shields)

I was relieved when I heard the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) say that he was not going to press this Motion, because I should have voted for it if he had left out the last six words.

My impression, after listening to this debate—and I have heard every word of it—is that there is nothing like leather—for bootmakers. We had two speeches from distinguished members of the Services, who pointed out how perfect they were, and then we had my hon. Friend the Member for Sowerby (Mr. Houghton), who was lost in admiration of the Treasury, and especially of the Income Tax Department which could operate down to a couple of years or so ago on lines that were based on 1842 and could still give satisfaction to everybody. Then we had the right hon. Gentleman the Financial Secretary to the Treasury, who is quite certain that the way in which his part of the Department is run at the moment is such as to make him feel every confidence in the person who has to discharge that part of the duties in the Treasury.

I could not go all the way with the two hon. and gallant Gentlemen who so ably moved and seconded the Motion. If there is trouble between the Minister of Defence and the Chancellor of the Exchequer—and it is well nigh inevitable—there is no ground for thinking that either of them is necessarily right. The people who have to settle the argument in the end must be the members of the Cabinet. That is self-evident. That is why I could not vote for the Motion.

Every Department has its troubles with the Treasury, and I think that some of the comments made about how the way the defence Departments on occasion think that their Estimates are mauled about could be said by every Department. We even say it at the meetings of the Trustees of the British Museum, and that is a department for which the right hon. Gentleman is responsible, and successive holders of that office are regarded, as they succeed one another, as public enemy No. 1.

Anyone who has served in public life, apart from Parliament, knows that exactly the same thing operates. The chairman of the finance committee of a county council or a borough council or even of an urban council, who has to say to the chairmen of the spending committees, "You must justify every penny you want to ask for," is in exactly the same position. He has his quarrels with the chairmen of the spending committees and, in the end, the council has to settle what the policy shall be.

As was well said by the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett), if one can save money on defence there is more money for welfare. That is on the assumption that there is a sum of money which ought to be taken and then shared out. That is not the view that I hold about public expenditure. I think that every Department should prove what it wants, and then the Cabinet, and ultimately this House, in its control of the Cabinet, should decide whether it can have it or not. It does not always follow that what we can save on the swings ought to be spent on the roundabouts. I hope that we shall not get into that way of looking at this sort of thing.

The hon. and gallant Member for the Isle of Ely said that he hoped that he would not be accused of being original. That is the last thing I would accuse him of. I rather expect that if I did say it he would regard me as having offered him an insult. But he certainly showed in his speech that he had given a great deal of attention to the details of this matter and had amply fortified himself with all the authorities necessary. I am glad to know that his book is in the Treasury.

Mr. H. Hynd (Accrington)

No advertising.

Mr. Ede

He did not advertise it. The right hon. Gentleman tried to defend himself behind the book. I am glad to know that it is there because a little light reading in the Treasury would do the people there a great deal of good and might convince them that the world is not nearly as serious a place as they are apt to think that it is.

The main point which the hon. and gallant Member raised was the issue as to who ought to be the head of the Civil Service. My belief in all these matters is that the best man for the job ought to get it. I cannot believe that of necessity the person who is the best Permanent Secretary to the Treasury must be the best head of the Civil Service because the two tasks, on occasion, call for very contradictory qualities.

The head of the Civil Service has to be a man who can deal with widely different human problems which sometimes must be anathema to the Permanent Secretary to the Treasury. In saying that, I must not be thought to be casting the slightest reflection on the present Permanent Secretary to the Treasury, who is a very remarkable man because he possesses both qualities in a degree which is unusual in any one human being.

I can see an occasion when the next appointment has to be made to the Permanent Secretaryship of the Treasury. I do not know who the candidates are or who will be the people considered to be in the running for it, but it may very well be that the particular gentleman who is wanted for the Permanent Secretaryship to the Treasury does not possess some of the qualities that are necessary for the-head of the Civil Service and for the person who, at some stage or other, has to express an opinion as to who should fill the permanent headships of the other Government Departments.

The right hon. Gentleman read out the rules laid down as to the way in which consultations take place. I am quite sure that he will agree that, while those are the rules and they are in the end complied with, we do not always wait until the strict application of the rules takes place before the consultations take place. We have in this country an elastic way of dealing with these matters which enables a great deal of truth to be expressed in ways which do not hurt anyone's feelings. The whole thing is done in such a way as to avoid getting into conflicts which strict adherence to the rules might entail.

I think that the hon. and gallant Gentleman is to be congratulated on the debate which he enabled us to have today, and I am glad to know that he does not intend to press the Motion.

Major Legge-Bourke

Before the clock strikes, may I thank the House for the consideration which has been given to this Motion and say that it was put down in an exploratory frame of mind. I am extremely grateful for what my right hon. Friend the Financial Secretary has said and also to the right hon. Member for South Shields (Mr. Ede): In particular, I am grateful for the assurance of my right hon. Friend that these matters are not sacrosanct.

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.