HC Deb 13 May 1980 vol 984 cc1050-61
The Prime Minister (Mrs. Margaret Thatcher)

With permission, Mr. Speaker, I should like to make a statement on the efficiency and size of the Civil Service.

The Government have been reviewing the efficiency of the Civil Service in the light of experience gained in our first year in office. The work of the Civil Service divides broadly into two areas. The first is the formulation of policy and the direct support for Ministers in Parliament. The second, on which the great majority of civil servants are engaged, is carrying out the executive tasks that flow from the Government's policies in the manner and to the extent decided by Ministers.

In the past, Governments have progressively increased the number of tasks that the Civil Service is asked to do without paying sufficient attention to the need for economy and efficiency. Consequently, staff numbers have grown over the years. The present Government are committed both to a reduction in tasks and to better management. We believe that we should now concentrate on simplifying the work and doing it more efficiently. The studies that Departments have already carried out, including those in conjunction with Sir Derek Rayner, have demonstrated clearly the scope for this.

All Ministers in charge of Departments will now work out detailed plans for concentrating on essential functions and making operations simpler and more efficient in their Departments. The preparation of these plans will be coordinated by my noble Friend the Lord President of the Council.

When the Government took office the size of the Civil Service was 732,000. As a result of the steps that we have already taken it is now 705,000. We intend now to bring the number down to about 630,000 over the next four years.

I recognise that contracting the size of the Government always causes staff both fears of insecurity and genuine anxiety lest important work should suffer. The Government are allowing time to produce the best possible plans, to take account of the legitimate interests of the staff and to encourage them to involve themselves in drawing up proposals for reform. I stress that each year about 80,000 people leave the Civil Service on retirement or resignation. It should, therefore, be possible to accommodate a reduction of 75,000, spread over four years, without significant compulsory redundancy. We shall, of course, be consulting the Civil Service unions about implementing our plans.

My experience from visiting Departments, and that of Ministers and Sir Derek Rayner, is that the staff want to work in and for an efficient organisation. I have been particularly impressed by the quality and enthusiasm of the young people whom I have met in the Civil Service. They want more personal responsibility for providing the country with good value for money.

It is the Government's job to ensure that the structure of the Civil Service, its working methods and the rewards that it offers for success bring on the right kinds of talent, give it scope for personal initiative, and offer conditions that promote loyalty and commitment.

I believe that the great majority of civil servants will welcome the changes that I have described.

Mr. Wrigglesworth

Will the right hon. Lady explain why she has come to the House today to repeat a statement that was made a month ago in the Sunday Telegraph and has been repeated in various newspapers since that time? Does she really think that this is the way of overcoming the "insecurity and genuine anxiety" of staff, to which she referred? Does she also agree that this really is nothing more than a statement of pious hope and hollow phrases, reminiscent of the White Paper of the right hon. Member for Sidcup (Mr. Heath) in October 1970? We know, of course, where that led us.

Will the Prime Minister give an assurance that she will not pursue any further hiving off of Government activities to the private sector unless she can show with absolute certainty that they will not cost more to the public purse by being hived off—as some present hiving-off operations seem to be doing—than if they were kept in the public sector?

Secondly, will the right hon. Lady assure the House—I hope that in due course we shall have a statement of all the cuts that are proposed, Department by Department, as was previously the case—that there will be no further statistical conjuring tricks by simply moving the designation of public servants from being civil servants to being other people in the public sector, as in the case of the National Maritime Institute and the Hydraulic Research Station, which have been made independent institutes.

Finally, the right hon. Lady must be aware—when looking at our record and, indeed, considering all the statements that we have made—that the Opposition are in favour of maximum efficiency in the Civil Service but are opposed to quite arbitrary cuts such as she announced today, which are pure across-the-board percentage figures, which have nothing to do with increasing the efficiency and effectiveness of the Civil Service but are simply pandering to the worst prejudices against public servants in her own party and in its supporters in the country. Before she takes precipitate action, will she remember the public reaction that arose over the proposed closure of sub-post offices, and accept that the best way of achieving a smaller Civil Service is to cut back on the unemployment in the country and make unnecessary the support that has to be given to the community at a result of the Government's economic policies?

The Prime Minister

The hon. Gentleman asked why make a statement now? "It is because this is the first time that we have been ready with an authoritative statement of specific numbers, having carefully considered the experience of the last year, and I felt that we should make a statement at the earliest opportunity.

The hon. Gentleman asked "Is it a statement of pious hope?" I assume by that that he is really quite hopeful that the numbers will come down to 630,000 or so. It is not a statement of pious hope; it is a statement as a basis for action.

The hon. Gentleman asked "Will there be further hiving off?" Each Minister will be looking at his own Department, and I do not wish to restrict his conclusions in any way, except that they should be commensurate with sound management and good value for money for the taxpayer.

The hon. Gentleman asked about statistical conjuring tricks. All statistics are freely available, as he knows, and are in fact published.

The hon. Gentleman calls this a statement of arbitrary cuts. I do not think that he can have been listening to the statement. This is a statement designed to reduce the tasks carried out by the Civil Service, to carry them out more simply, and to get very much better and more efficient management in the carrying out of those tasks throughout the entire Civil Service.

Mr. Higgins

My right hon. Friend will know that it was said that an increase of more than 18 per cent. in central Government pay was brought within the 14 per cent. cash limit only by a reduction in numbers. As, presumably, it is not the intention that every reduction in numbers should justify an increase in pay, how shall we distinguish between reductions due to high pay claims and reductions due to the programme that my right hon. Friend has just announced?

The Prime Minister

It think that reductions in numbers will go towards the target that I have announced. Part of that target is already on the way to achievement. As my right hon. Friend heard, we have already reduced the numbers by 27,000. There are further reductions under way this year, arising partly because of that pay settlement, and others will go in partial achievement of the target that I announced today.

Mr. Richard Wainwright

Will the Prime Minister accept that the key part of her statement is in refreshing contrast to the statements of her Cabinet colleagues? The right hon. Lady finds it practicable to commit the Government to a precise and specific figure four years hence. With regard to her reference to young civil servants wanting more responsibility, what will she do now, perhaps partly in the light of her own achievements, to remove the unjustified and unnecessary barriers to engineers, scientists, accountants and other professional people reaching the top administrative posts in the Civil Service?

The Prime Minister

With regard to the key part of the statement, it is that experience has shown that we are not necessarily using the best and simplest management methods throughout the Civil Service. Having looked at some of those matters, I am confident that we can carry out the tasks with fewer people than at present. The hon. Gentleman asked why it was impossible for scientists, engineers and others to get to the top in the Civil Service. It is not, and I hope that more will.

Mr. Whitney

Will my right hon. Friend accept the view from one who has made a personal contribution to the reduction of bureaucracy that the reduction that she has in mind is at least attainable over the next four years? I hope that we would do rather better. Will my right hon. Friend also accept that the fact that her Government have discovered such a scope for reduction seriously calls into question the contribution of the Civil Service Department over the years? There is therefore a case for carefully considering whether that Department should be either made more efficient or abolished.

The Prime Minister

I do not believe that we can take all the reductions in bureaucracy into this House, which is the course that my hon. Friend followed—and we were delighted to have him. With regard to the CSD, we have to remember that for years the Civil Service has had a Government who loaded extra tasks on to it and who seemed to us to encourage the retention of as many people as possible. We have a different approach, and we shall have the cooperation of the Civil Service Department in carrying out that new approach. Of that I am confident.

Mr. J. Enoch Powell

Will the Prime Minister reconsider her statement—which might give rise to misunderstanding—that the formulation of policy is a function of the Civil Service? Is it not exclusively the function of Ministers, in respect of which the function of the Civil Service is purely to assist?

The Prime Minister

Perhaps I should have said that it was to assist in the formulation of policy. I wholly accept the right hon. Gentleman's rebuke.

Mr. Donald Stewart

Can the Prime Minister tell us about the omission from her statement of a matter touched on by her Government and the previous Government—the dispersal of Civil Service posts from London?

The Prime Minister

There is no change in the plans, numbers and destinations announced.

Mr. Butcher

May I congratulate my right hon. Friend in implementing yet another election pledge? Does she agree that these reductions in central Government administration are an excellent example to set before those local authorities that still insist that it is impossible to make staff reductions?

The Prime Minister

I am grateful to my hon. Friend. I hope that local authorities will see what is being done in central Government—and being done more efficently. That efficiency will be further improved. I hope that local authorities will regard it as their duty to put the minimum rate burden on their citizens.

Mr. Charles R. Morris

I appreciate the Prime Minister's aspirations to improve the efficiency of the Civil Service, but does she accept that it is slightly unrealistic, even nonsensical, to talk about reductions of 75,000 over four years without indicating from where those savings are to come? Are they to come from the 200,000 industrial civil servants, where manufacturing functions are already contracting, or from the 500,000 administrative civil servants? Will the right hon. Lady accept that to make such a statement without drawing that distinction between the industrial and administrative civil servants is wholly unrealistic?

The Prime Minister

The reductions will come from both sides. The statement is not unrealistic. In the past year we have already secured a reduction of about 27,000 jobs. The attitude taken by the right hon. Gentleman is typical of a number of hon. Members of his political faith. They defend every job and never consider whether that job needs to be done, or how best it can be done.

Mr. Latham

Is my right hon. Friend aware that her statement will be widely welcomed in the country as a major step in the right direction? Will she seriously consider accepting the proposal, which I believe has been made by Sir Derek Rayner, to abolish the grade of undersecretary? Will she also consider whether there is still a useful role for the Property Services Agency?

The Prime Minister

We are looking at the grading of the Civil Service. Some people believe that the chain of command is too long. A review is under way, but it will take time to reach conclusions. With regard to the Property Services Agency, my right hon. Friend the Secretary of State for the Environment is looking at the work that it does and how Ministers can be more responsible for buildings, rent and overheads, which hitherto have been handled by the agency.

Mr. Joel Barnett

I recognise the need to improve efficiency, but will the Prime Minister publish the scientific method that she has adopted in order to conclude that simplification will provide a reduction of exactly 75,000, or has she simply thought of that figure and divided it among the Departments?

The Prime Minister

Neither. It seems to me that the right hon. Gentleman knows precious little about management.

Mr. Sainsbury

Does my right hon. Friend agree that in an efficient and well-managed private sector firm it would be normal to find at every level of management some who had been promoted internally and others who had been recruited from outside, who had brought other experience to the business? In seeking to improve the efficiency with which the Civil Service manages its executive responsibilities, will my right hon. Friend consider whether advantages could be derived through increasing recruitment from outside at all levels and removing obstacles that might exist to civil servants moving into industry and the private sector?

The Prime Minister

My hon. Friend has identified a problem to which, frankly, we have never found a solution. From time to time we have been able to recruit people for a limited number of years, but they have then returned to industry. We have never had people working regularly in industry and then the Civil Service with the ease that occurs in other countries. That is a problem to which we must give attention. It is very much easier to have better and sound administration if we have more people in the Civil Service who have practical experience of industry and commerce.

Mr. John Garrett

Will the Prime Minister accept from those of us who have substantial numbers of civil servants in our constituencies that her flatulent and empty statement will do no more than spread uncertainty among civil servants and lead to a worsening of labour relations? If the right hon. Lady is interested in effective and sound management in the Civil Service, why does she give so much support to the clumsy forays of Sir Derek Rayner, instead of opting for the systematic method proposed by the Fulton committee 10 years ago and wrecked by the previous Conservative Government?

The Prime Minister

If Sir Derek Rayner could teach the Civil Service to manage itself as well as he manages Marks and Spencer's I should be very pleased.

Mr. Speaker

Order. I propose to call four hon. Members from either side.

Mr. Chris Patten

Roughly what proportion of the cuts will be achieved through redundancy and what proportion through natural wastage and early retirement? Can my right hon. Friend tell us more about the proposals mentioned in the newspapers about the early retirement scheme?

The Prime Minister

I believe that compulsory redundancy will be a very small exception to the general rule. Between 75,000 and 80,000 people leave the Civil Service every year through resignation or retirement. I therefore hope that over a period of four years we shall be able to reduce the Civil Service by 75,000 without many compulsory redundancies. There will be exceptions. There might be one or two jobs for which we could not easily redeploy the persons concerned, but the great majority of jobs will go by natural wastage. We are working on plans for early retirement, which we hope will prove attractive to some people.

Mr. Robert Sheldon

Will the Prime Minister confirm that the action that she has announced will include a proportion of the higher grades of the Civil Service? In coming to a decision about numbers, will she realise that this matter concerns the House deeply? It is coming to the view that all the Prime Minister did was to think of a number and leave the implementation to the years that were to follow. That is no way to obtain an efficient Civil Service.

The Prime Minister

The answer to the first part of the right hon. Gentleman's question is "Yes, Sir." The reductions must include the upper levels of the Civil Service. It would be wholly unfair and inefficient to make reductions only towards the base of the pyramid. The figure was chosen extremely carefully. The right hon. Gentleman will perhaps bear in mind that we have already reduced the number by 27,000. He can therefore have some confidence that we shall be able to reduce it by a similar amount annually in the future.

Mr. Bruce-Gardyne

May I join in congratulating my right hon. Friend on her admirable statement? Will she confirm, contrary to press reports, that no Departments of State are exempt from this slimming process? Further to the question raised by my right hon. Friend the Member for Worthing (Mr. Higgins), now that one of the major Civil Service unions has turned its back on the Pay Research Unit, will she consider putting it on ice altogether?

The Prime Minister

No Departments will be exempt, although there will be areas in particular Departments—for example, the prison service—where one would expect no reductions whatever. Apart from such areas, no Department will be exempt. With regard to the Pay Research Unit, we have just got through this year's pay round. I accept that public sector pay, particularly in the coming year, gives cause for concern, but we have not yet got a ready or easy solution.

Mr. Harry Ewing

Did the Prime Minister find it difficult to say at 3.25 pm that most people would want to go to work and then at 3.35 pm to say that, because of her policies, there would be 100,000 fewer jobs, in four years' time, to go to? Will she tell the House where this figure of 75,000 came from, and how it is made up? Most hon. Members now suspect, as has been stated, that it is simply a figure grasped out of thin air. As the architect of this report, Sir Derek Rayner, is managing director of Marks and Spencer's, is it her ambition to turn the Civil Service into a Marks and Spencer-type store, where the citizens of the United Kingdom call at the office to solve their own problems?

The Prime Minister

It is, indeed, our ambition to get maximum efficiency and co-operation from the Civil Service. On the extra target that I have announced—that is, 75,000 down—the hon. Gentleman will be interested to know that, following decisions already made, we are already half-way towards achieving that target. The extra target that I have given does not require a great deal more decision-making on functions.

Mr. Peter Lloyd

The target for reductions set by my right hon. Friend is wholly welcome. Will she confirm that it will be reached not by percentage across-the-board cuts, blindly conducted, but by a proper evaluation, carefully phased, of the value of the work actually done? In the categories of scientific and technical civil servants, for example, there are a number who are vital to our defence effort and who are already in dangerously short supply.

The Prime Minister

It is for that kind of reason that we have not said that each and every Department must produce the same percentage cut. We have asked each and every Minister to scrutinise his own Department in the way that I have described, assisted by the CSD and coordinated by my right hon. and noble Friend the Lord President of the Council. We have those factors very much in mind.

Mr. Dunlop

Is the Prime Minister aware that the Fair Employment Agency in Northern Ireland is shortly to scrutinise the Civil Service there? Will the numerous English civil servants who have gone to Northern Ireland recently be included in this scrutiny? Does the right hon. Lady agree that this so-called Fair Employment Agency is one of the most useless and expensive quangos in the country today?

The Prime Minister

With regard to the announcement that I have made, my right hon. Friend the Secretary of State for Northern Ireland will be in charge. I shall leave him to carry out the scrutiny of his Department, together with those who work in it.

Mr. Gummer

Does my right hon. Friend agree that in private industry the facts of the market mean that every now and then, because of a downturn in business, a company has to take stock, look at its business, and see how best to improve its efficiency? That may mean staff reductions. That does not happen in the Civil Service. The Government therefore have to come from outside and impose upon the Civil Service the kind of discipline that is imposed in private enterprise by the nature of the market place.

The Prime Minister

I agree with my hon. Friend that we must do ourselves that which we expect others to do. Above all, we must give efficient service and value for money to the taxpayers who pay for our action.

Mr. Straw

Is the Prime Minister not aware that even if there are no compulsory redundancies, her statement means 75,000 fewer job opportunities in the Civil Service in four years' time, and that 75,000 people, especially school leavers, who previously would have gone into the Civil Service, will be searching for jobs? Will she say where those people will find jobs? Will they have to join the dole queue?

The Prime Minister

There will be fewer jobs. It seems, however, that the attitude taken by Opposition Members is to endeavour to put the maximum burden on the taxpayer and employ the maximum number of people in the Civil Service.

Mr. Speaker

Order. Ten Minutes Rule motion, Mr. John Wells.

Mr. English

On a point of order, Mr. Speaker.

Mr. Speaker. Order. It is becoming a feature that when some hon. Members are not called on statements they raise a point of order. I shall see whether it is a genuine point of order and not simply the fact that the hon. Gentleman was not called.

Mr. English

On a point of order, Mr. Speaker. You will recollect the principle that when a Minister makes a statement of fact, those facts—a quotation from a document or whatever is involved—should be available to the House. In this case the right hon. Lady told the Opposition Front Bench that all the statistics on the subject were freely available. That is not true. I do not blame the right hon. Lady—

Mr. Cryer

I do.

Mr. English

I believe that she might not have been told that it is not true. On the last occasion when statistics on this matter were given subsequently in a Committee of the House, I asked for them to be translated into the legal definition of civil servants. Those figures have not yet been given to a Committee or to the House. On this occasion, the right hon. Lady seemed to be giving statistics in the same old form, according to a definition, coined in 1931, of a civil servant.

Hon. Members would like to know all the statistics that the right hon. Lady says are freely available, namely, the statistics of civil servants to be removed, under her proposals, in accordance with the Bill introduced by the Government of the right hon. Member for Sidcup (Mr. Heath) that became the Superannuation Act 1972. That contains the only statutory legal definition of a civil servant. It would be helpful to the House, since the right hon. Lady says that all these statistics are freely available, if she made them available to the House.

Mr. Speaker

The Prime Minister, like anyone else, takes responsibility for her own statements. Ten Minutes Rule motion, Mr. John Wells.