HC Deb 09 March 1981 vol 1000 cc732-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]

11.30 pm
Mr. John Wilkinson(Ruislip-Northwood)

I am glad to have the opportunity to raise the important topic of the proposed transfer of 1,400 Ministry of Defence Civil Service jobs from the London area to Glasgow. There are three main reasons which could justify such a drastic move. The first would be if it would increase the operational effectiveness of the Armed Forces, the second would be if it would increase the administrative efficiency of the Ministry of Defence and the third would be if it would eliminate waste and save money.

I believe that the proposed transfer fails on all three counts and should therefore be abandoned. On 29 January I gave notice of my interest in this matter in a supplementary question to the Prime Minister. I claimed that the extra costs of the proposed move to the budget of the Defence Department would be £50 million. My right hon. Friend did not contradict that figure and accepted my argument that the move would mean some increase in public spending.

Such an increase is inappropriate at the present time, particularly for the Ministry of Defence and especially so since the Secretary of State for Defence believes strongly in cash limits for his Department. I can understand the strength of his belief on this point. The Prime Minister, in the exchange I have mentioned at Question Time, insisted that we put in charge of those Departments people who insist on proper control of public spending and effective value for money."— [Official Report, 29 Jan 1981; Vol. 997, c.1070.] Clearly, the new Secretary of State is just such a person. In answer to my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) at the conclusion of the Secretary of State's statement on the Defence Estimates on 20 January 1981, my right hon. Friend said: The cash limit system is absolutely fundamental. We must keep to cash limits. Unless we respect money as well as volume, we cannot conduct our affairs sensibly."— [Official Report, 20 January 1981; Vol. 997, c. 159.] On 20 January 1981 my right hon. Friend the Secretary of State announced savings in planned defence expenditure amounting to £200 million for the financial year 1981–82, including the postponement and cancellation of important equipment programmes for the Armed Forces, not least the deferment of a Royal Air Force order for the Jetstream 31 communications aircraft, currently being built by the Scottish division of British Aerospace Ltd. at Prestwick. If this aircraft were procured, as I hope it would be, by the Royal Air Force, it would come into service primarily in my constituency at RAF Northolt.

On the evening of 2 February 1981, Sir Frank Cooper, the permanent secretary at the Ministry of Defence, commented in evidence to the Public Accounts Committee— and I quote from The Daily Telegraph of 3 February: We have got to have a much stronger cash control system than we have at present. That is an understatement in view of his reported further admission, in his own words, that for 1980–81 there will be a large overspend, wholly on procurement Votes, of over £250 million net. The uninformed layman might presume, as the defence budget is severly constrained, with equipment suppliers sending their bills in early because of the recession and the Government being likely next year not to meet their Alliance commitment of a 3 per cent, increase in defence expenditure in real terms, that the Ministry of Defence would do everything possible to eliminate any wasteful expenditure planned by the Department for the future, so as to make the best use of limited financial resources, to meet the undeniably growing military threat.

Only the most avid student of"Yes, Minister" on television could see through the misty atmosphere, mixed motives and muddled thinking to the depressing reality behind the proposed transfer of 1,400 Civil Service jobs from the Ministry of Defence to Glasgow. It is actually a classic example of what the Americans would call pork barrel politics. The United Kingdom style is, of course, much less offensive, but it has, nevertheless, characterised the impoverishment of post-war Britain, mainly through the promotion of phoney—and I mean phoney—jobs at the taxpayers' expense in inappropriate places, usually known condescendingly by Whitehall as"the regions".

The public rationals for such schemes is usually social. At least, to his credit my hon. Friend the Under-Secretary of State for Scotland did not explicitly invoke this argument in his reply to the Adjournment debate on this very subject on 11 December 1979, but he made it by implication, because I feel that it is one of the strangest tasks for the Defence Department to pursue job creation rather than the security of the realm as a primary objective. However, the candour of my hon. Friend was revealed when he said in that debate: We should also bear in mind that Hardman did not recommend the dispersal of any Ministry of Defence jobs to Glasgow. In that debate my hon. Friend also described the sumptuous scale of the public works to be associated with the development of the St. Enoch site in central Glasgow. He said: The building to house dispersed civil servants will be one of the most significant Government office projects in Scotland in recent years. It will be about the same size as New St. Andrew's House in Edinburgh, with which the hon. Gentleman is familiar, and will form a key element in the major redevelopment of a crucial site in the centre of Glasgow. We think that this is also important. Any office building of this size would be a considerable undertaking. It is particularly desirable that this scheme should be planned and designed to a quality matching the importance of its location. Glasgow, after all, will have to live with the results for a long time. There is also need for a building that accommodates its occupants efficiently and in accordance with their needs and provides a good working environment. All this creates complex problems for the planners."—[Official Report, 11 December 1979; Vol. 975, c. 1268-70.] Sound stuff, Mr. Deputy Speaker, but there is no doubt that the new building is to be costly.

Presumably, therefore, as the dispersal is bound to be costly, the jobs concerned will be ones obviously more appropriately fulfilled for reasons of cost effectiveness at locations other than those where they are presently carried out. I shall give a list of what those jobs are. There are to be 1,120 posts from London: Service and civilian personnel management, 325; stores management and procurement, including 80 victualling staff, 205; defence equipment codification, Nottingham, 240; Army pensions, Stanmore, 120; Equipment standardisation, 100; common services, 130. That makes 1,120.

Then there are 280 posts from the procurement executive; Master General of the Ordnance, assistant directorate of contracts (general stores), Chessington, 40; controller aircraft, air technical publications, Chessington, 130; controller research and development establishments and research, defence research information centre, St. Mary Cray, 80; additional common services staff, 30. That is 280 jobs, making a total of 1,400.

In evidence to the Select Committee on Scottish affairs Mr. West, assistant under-secretary at the Ministry of Defence, was categoric. On 5 November 1980, in answer to the question Can they"— that is, civil servants— be moved to Glasgow without loss of efficiency?", his reply was a monosyllabic"No". He explained it more fully in earlier answers to questions in the same committee when he observed that Hardman, and we would agree with him, could find no way of moving Ministry of Defence work to Glasgow in a manner that was conducive to efficiency, economy and the better running of the Department. In reply to Mr. O'Neill, he stated: The Ministry of Defence qua Ministry of Defence has no requirement to go to Glasgow … so we are prepared in a sense, one could say, to make a sacrifice. We are contributing towards a general plan to assist the city of Glasgow. In my view, the provision of outdoor relief has never been a role for the Ministry of Defence.

In evidence to the Committee on Scottish affairs on 29 October last year, Mrs. Sloman, under-secretary at the Civil Service department, admitted that the Exchequer cost at 1979 prices—I repeat, 1979 prices—of the proposed transfer would be £22 million. There is confusion over the precise resource costs—first, because the dispersal to Glasgow is lumped in with that to east Kilbride; secondly, because the oral evidence to the Scottish Committee had to be corrected by a subsequent memorandum from the Civil Service Department; and, thirdly, because the figures of resource cost given are clearly phoney. Alleged savings take into account private costs such as differential housing and commuting prices and ignore other factors such as the under-utilisation of MoD office premises in London which, for example, in the case of St. Christopher's house, St. Giles Court and Empress State Building, are already not fully occupied.

My own estimate covering the cost of land, building, furnishing, floor covering, communications, office machinery, canteen equipment, heating equipment, building depreciation plus depreciation for all interior capital items, the cost of moving 500 mibile posts—that is, executive, technical and management grades—the additional staff required to cover longer travelling times, the temporary staff in the transition period and relocating 900 non-mobile grades in London, plus excess travelling costs, comes to £26.3 million, which, together with 10 per cent, interest on the capital employed over 10 years, comes to a total of £52.6 million. A few simple examples will point out the enormity of what is proposed.

One of the major departments in the sphere of equipment which, it is suggested, should move holds 86 per cent, of its meeting and liaison visits in the London and South-Eastern areas. The proportion for Scotland is zero per cent. Even if some of this work can be done by telephone, the long-distance charge is 12 times that of local calls. If it cannot be done by telephone, the time wasted and the travelling costs are enormous. Furthermore, the overnight subsistence allowance in inner London for top civil servants is £44.80 a night, the cost per head of transfer to London is about £10,000. The personnel will, of course—this is typical—retain their London weighting allowance, although that, as a proportion of their total remuneration, will decline over the years.

If the public knew more widely that the civil servants concerned will, in effect, be drawing additional salary to the normal scale, based on their London weighting, to work in Glasgow, they would not be amused.

The effect in employment terms of this Alice in Wonderland policy is to import unemployment to Scotland. Many of the wives and dependants of civil servants affected now work in the London area. They will not be nearly so likely to find jobs in Scotland. Unemployment in Greater London stands at 248,900 against 287,900 in Scotland. To put it another way, unemployment in the South-East, including the Greater London area, as my hon. Friend the Under-Secretary of State, who is also a London Member, will know, is at 526,600, much more than that of Wales and Scotland put together, at 434,300. Furthermore, in the past year unemployment grew almost twice as fast in London—by 72 per cent., compared with 41 per cent, in Scotland.

We face a serious problem in making good use of the limited resources available to defence. It cannot by any argument be said that the transfer is a good use in defence terms. I have made clear that the Jetstream project which could be funded, for RAF purposes, almost entirely out of the cost of the transfer has been postponed. There is to be other real work for Scotland—for example, the provision of new port facilities for the Trident boats.

There are, finally, two other little matters. It is noteworthy that the militancy displayed by civil servants during the day of inaction—if that is the right word—today was greatest in Scotland and least in the South-East. If civil servants are disgruntled at the prospect of a pay increase limited to 6 per cent., they will not be exactly pleased to see money that could theoretically be used to improve their remuneration going on a thoroughly unprofitable and wasteful diversion of resources in transferring civil servants from the London area to Glasgow.

11.46 pm
The Under-Secretary of State for Defence for the Army (Mr. Philip Goodhart)

As my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) noted in his closing remarks, it is perhaps ironic that the debate should coincide with the one-day strike which was supposed to bring about a complete shutdown of the Civil Service.

I am sure that the Government as a whole are grateful to all the civil servants who continued to work today, and I am particularly grateful to all those connected with the preparatory work for the debate who stayed at their posts. However, in one respect I am sorry that my hon. Friend was successful so soon in his request for a debate. The Select Committee on Scottish affairs, which has been considering the subject—I note that the Chairman of the Committee is in the Chamber—recommended that there should be a re-evaluation of the relative merits of the St. Enoch and Anderston sites in Glasgow and that the re-evaluation by the PSA should be completed by the middle of March. It would have been surprising if the PSA had succeeded in completing its re-evaluation in time for the debate, because re-evaluations of the subject over the years have gone on at a stately pace.

The question of the dispersal of Civil Service work in order to avoid an over-concentration on London has a lengthy history, and the current chapter began 10. years ago with the publication of a White Paper on the reorganisation of central Government in October 1970.

Mr. Donald Dewar (Glasgow, Garscadden)

Before the hon. Gentleman goes on to the history, will he make a note to deal with when he expects the reply to the Select Committee report, because we were anxious to hurry the rather stately pace to which he referred and to get a speedy decision on the contentious matter of the competing sites? Will he also say something about the information apparently given to the ad hoc committee in Glasgow this afternoon to the effect that the Army pensions jobs from Stanmore which were to be phased up in 1982–83 are to be delayed again from that date because of the expenditure cuts that have been enforced on the Ministry?

Mr. Goodhart

I hope to cover those matters in my remarks.

The White Paper announced the establishment of a further study, which was led by Sir Henry Hardman. His report—published two and a half years later in June 1973—was prepared at a time when the Civil Service was. growing in size and there was the prospect of having to provide more office space at high London rents. The Hardman recipe was a drastic one—to move 30,000 Civil Service jobs out of London. On 30 July 1974, the Labour Government broadly accepted the Hardman target of relocating 30,000 jobs, although not in quite the way that Sir Henry had suggested.

The Ministry of Defence was due to carry a major share of this change. No fewer than 4,250 jobs, mainly from the ordnance and aircraft sides of the Ministry, were to move to South Wales, while 5,000 jobs, of which the bulk would have come from outside London, were earmarked for Glasgow. The cost of the whole package would have been at least £250 million in the period up to 1983–84, and the net cost to the MOD alone would have been about £100 million. At that time, a number of London Members—including myself—pointed out that, apart from the financial cost, there would be a substantial loss of efficiency in the MOD and unnecessary disruption in the lives of the civil servants, many of whom were valued constituents of ours.

In July 1979, within weeks of the general election, this Government announced a dramatic reduction in the size of the Hardman package. The 9,250 Hardman Ministry of Defence relocations were reduced to 1,400, and the estimated gross cost to the MOD had been reduced from £100 million to about £12 million. This figure of 1,400 job relocations was worked out after the closest consultation between the Scottish Office, the Civil Service Department and the Ministry of Defence. As my right hon. Friend the Prime Minister reminded the House on 13 May 1980, There is no change in the plans, numbers and destination announced".…[Official Report, 13 May 1980; Vol. 984, c. 1055.] We are wholly committed to that figure of 1,400, although a review under the auspices of the Defence Council which is to be held in 1982 could lead to some readjustment of the blocks of work affected, to which my right hon. Friend referred.

Mr. Wilkinson

Is my hon. Friend aware that the estimates of cost prepared by the Civil Service Department and others, including the university of Strathclyde, were made before they knew which Departments would be moving, so that those estimates were really"guesstimates"?

Mr. Goodhart

I think that the £22 million figure to which my hon. Friend referred covered the ODA as well as the Ministry of Defence.

We are committed to make this move by 1986, and, as my hon. Friend has reminded us, preparations have already begin to transfer the Army Pensions Office from Stanmore to Glasgow in advance of the rest of those involved. The Army Pensions Office will open its doors in Glasgow towards the end of 1982 or the beginning of 1983, and the hon. Member for Glasgow, Garscadden (Mr. Dewar) is not right to suggest that the economies announced will affect the timing of that move.

The present staff of the APO at Stanmore is 89—although the 48 staff at Guildford will be affected also. Of the 89 staff at Stanmore, 65 are classified as non-mobile and cannot be asked to move. In any case, 45 of them are over the age of 55, and of those 14 are over 60. A preliminary survey of the 24 so-called mobile civil servants suggests that the number of eager volunteers for a move to Glasgow is precisely nil.

It may be, however, that there are some people doing other work in the Ministry who would welcome a chance of a transfer to the APO in Glasgow. But, in any event, our present calculation is that next year we shall begin to recruit 75 people in Glasgow itself. It will be a complex operation for, as I understand it, some of the new Glaswegian recruits will have to be trained at Stanmore, and for a time there will probably have to be an element of double-manning as well as detached duty. The whole exercise will certainly reduce our efficiency and will probably cost at least an extra £1 million. That is a lot of money, but it would not, I think, quite buy one of the Jetstream aircraft about which my hon. Friend is rightly enthusiastic.

I have no doubt that the problems which the APO at Stanmore is beginning to tackle will also be faced by the other groups that travel to Glasgow, and I suspect that the complexity of the problems involved is not appreciated by our critics in Scotland who have sometimes claimed that the MOD was dragging its collective feet. Certainly, it is true that the Government would never have supported this move if the percentage unemployment figures in Glasgow were not twice as bad as they are for Greater London.

But of course the transfer of blocks of work from London to Glasgow is only one dramatic and highly visible part of an extensive involvement by the Ministry of Defence in the Scottish employment scene.

On 1 January 1979, the MOD employed 22,159 civil servants in Scotland. Two years later, on 1 January 1981, the number of MOD civil servants was 21,870—a fall of 289 or 1.3 per cent. In the South-East of England on 1 January 1979, the MOD employed 99,938 civil servants. By 1 January 1981, this number had fallen by 7,568 or 7.6 per cent.

In other words, in two years there was a shift in actual Civil Service jobs in favour of Scotland which was larger than anything contemplated by Sir Henry Hardman back in 1973, but very few people noticed this quite dramatic swing. But this is a controversial subject on which differing views are widely held. The apprehensions of my hon. Friend's constituents and of mine cannot easily be reconciled with the aspirations of the citizens of Glasgow.

Mr. John MacKay (Argyll)

Surely, one factor should be the number of vacancies in the Ministry of Defence in the South-East. I believe that they are considerable and that the number of vacancies in Scotland would be fewer in proportion. That should be taken into account when considering moving the jobs. The Department cannot fill all the jobs that it has available in the South-East.

Mr. Goodhart

There are certain recruiting restrictions in force. They were not in force throughout the two-year period when there was a dramatic shift in favour of Scotland.

When one adds together the fears, and hopes, costs, past pledges and the needs of the Ministry for a machine that works, we are left with a policy which provides a proper balance between conflicting interests.

Question put and agreed to.

Adjourned accordingly at two minutes to Twelve o'clock.

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