HC Deb 20 January 1982 vol 16 cc367-89

10 pm

Mr. Alan Williams (Swansea, West)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Transfer of Functions (Minister for the Civil Service and Treasury) Order 1981 (S.I. 1981, No. 1670), dated 24th November 1981, a copy of which was laid before this House on 1st December, be annulled. The order is the latest in a series of Prime Ministerial campaigns against the Civil Service and civil servants. It is paradoxical that we are discussing it in the week in which we have read in The Guardian that, much as the Prime Minister is known to despise civil servants, the new director of marketing for the Conservative Party intends to use the Civil Service—the Central Office of Information—to sell the Government.

Before coming to the substance of the order, I should tell the Minister of State, Treasury that I hope that he will make it clear to the new political appointee that any political use of the COI by the Government would be a major abuse of public resources and would inevitably lead to intense questioning and discussion on the Floor of the House.

In a way, it is appropriate that I should be present at the demise of the Civil Service Department, because as the Parliamentary Secretary in the now extinct Department of Economic Affairs, I was in at the birth of the CSD. I joined Lord Shackleton and the late Lord Armstrong in the preparatory work to the setting up of the Department in the 1960s.

It is clear to us that the debate and the order have little to do with the machinery of government and are a continuation of the Prime Minister's vindictive vendetta against civil servants. She is still smarting from the fact that they dared last year to oppose her unilateral tearing up, without consultation, of a 25-year-old agreement on how pay was settled in the Civil Service.

The order has to be seen, not in isolation, but in the perspective of other attacks made by the Prime Minister and her Ministers. Soon after coming to office she attacked the indexation of Civil Service pensions, discreetly ignoring the fact that the same privileges extend to the Armed Forces, the police and teachers. She stirred up a major public campaign against civil servants.

That action was an early warning of the Prime Minister's stubborn determination to get her own way with the Civil Service. Even after her contentions were rejected by the Government Actuary, she set up what she thought was a stacked committee—the Scott committee—which, in turn, rejected her prejudices and confirmed the advice of the Government Actuary on Civil Service pensions. From an early stage, we have seen the build-up to the order.

Indeed, we have even seen the ludicrous situation of the honours system being used by the Prime Minister as an industrial relations weapon. Like many of my hon. Friends, I do not believe that civil servants should expect honours as a right after so many years' service. They should be treated on the same basis as any other group in society. On the other hand, I disagree with the timing of the action, which is clearly an attempt to use the Royal Prerogative to underwrite Prime Ministerial spite towards civil servants.

This order is the right hon. Lady's response to the fact that the civil servants had the temerity to exercise their legal and democratic rights to oppose and resist her disastrous campaign to destroy without consultation existing pay procedures within the Civil Service. The order is an act of petty spite masquerading as a contribution to efficient Government machinery.

The Prime Minister is humiliated by the reality that as a result of her campaign against the civil servants, by the end of December interest charges on uncollected taxes alone cost between £400 million and £450 million. That is on the admission of the Chancellor of the Exchequer. That result of the right hon. Lady's vindictiveness is increasing at the rate of between £50 million and £60 million each month.

The Minister knows as well as I do that a settlement could have been reached at a respectable level in the early days of the dispute, but by the end of this financial year the Prime Minister's vindictiveness will have cost the Chancellor more than £500 million in interest charges alone on uncollected tax revenue. When one thinks of what that could mean for expenditure on schools, education, hospitals, the Health Service or kidney machines for children and adults, one realises the magnitude of the Prime Minister's bitterness and understands the extent to which she is willing to push her vindictiveness when she gets involved in a campaign.

Nothing else explains why in January 1982 we are facing the absolute reversal of the position adopted by the Prime Minister in January and February last year. She then rejected any merger. Indeed, she said that if a merger went ahead all concentration would go on reorganisation rather than on dealing with the true problem". If that were true of a straightforward merger, how much more true is it of splitting a Department's responsibilities, with all the overlap and anomalies that arise?

The only material change since the right hon. Lady made that statement is that we have been through the quite unnecessary and avoidable Civil Service dispute, calculatedly and deliberately stirred up by the Prime Minister who at a time of political pressure was in search of an easy victim that she thought she could bully into submission. The civil servants did not submit, and the country is still paying, and will continue to pay, the cost of her campaign.

The Prime Minister told the House that, despite her original thoughts on the subject: I have decided to strengthen and improve the existing organisation of the CSD"— not to modify, change or split it— rather than merge the two Departments".—[Official Report, 29 January 1981; Vol. 997, c. 1070.] A month later, having had time to consider the position even further, the Prime Minister could still see a "logical cohesion" in the role and functions of the Civil Service Department. Yet by November of the same year she had discovered that it had become increasingly difficult to separate control of expenditure from manpower. By November, on the Chancellor's figures, it had become between £360 million and £410 million more difficult to separate control of expenditure and control of manpower. All that was a result of the unnecessary dispute with the civil servants.

The Prime Minister's confusion, her emotional involvement and irrationality in dealing with the issue were shown when she said that putting responsibility for manpower into the Treasury would lead to much greater efficiency. Yet she went on to say of the manpower and personnel office within the Cabinet Office: Much of their main work will be in improving efficiency". Ambivalence and split responsibility pervade the whole of her conduct with regard to this aspect of policy.

Later the Prime Minister compounded the situation that she had created by saying: The unions will deal both with the Management and Personnel Office and with the Treasury, according to the matters involved in the consultations. However, it has already been shown that there is such an overlap in the responsibilities of the two Departments, particularly with regard to industrial relations, personnel and manpower, that confusion and inefficiency are already creeping into the system of consultation.

The resulting administrative confusion only mirrors what emerges from the Prime Minister's statement to the House—her intellectual confusion arising from her emotional involvement in the issue of the Civil Service. Paradoxically, a little later on the same day the Prime Minister praised the Civil Service Department, which is being eliminated because of its efficiency, for reducing its staff. She said: In the past few years the CSD has reduced its own staff by about 10 per cent."—[Official Report, 12 November 1981; Vol. 12, c. 661-4.] Those conflicting statements typify the confusion that the Prime Minister has created. The Minister of State has said that under the CSD the Government's plans for slimming the manpower of the Civil Service were being fulfilled ahead of schedule. The Minister may correct me later if I am wrong.

The lack of reality in the Prime Minister's position was shown in her answer to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) on the same day. As an ex-Civil Service Minister he said that now that the responsibilities had been transferred to the Treasury the Civil Service unions would not be happy with being diverted to junior Ministers; they would want to fight their campaigns right the way through to the Chancellor of the Exchequer. It has been suggested that the Chancellor is a fairly busy man. Perhaps the Prime Minister sees some advantages in diverting the Chancellor from blindly meddling in the economy to becoming sunk in the morass of the problems in the Civil Service. However, she dismissed the idea that the civil servants would want to see the Chancellor of the Exchequer. She said that, after all, the Minister of State had just been transferred from the CSD to the Treasury.

I know that the Minister will not take my remarks in any personal sense, but he knows—as I did when I had similar status in the Labour Government—that at the end of the day people who disagree with what a Government are doing, no matter how good their relationships may be with a middle-ranking or junior Minister, will still want to persist and take the matter to the appropriate Cabinet Minister who has the power to take decisions.

As the Minister will be aware, in the recent dispute it was on occasions Lord Soames whom the Civil Service unions insisted on seeing, despite the fact that there is a good accord between the Minister and certain of the trade union leaders. Therefore, it is absurd to think that in the new circumstances the Civil Service unions will be fobbed off with seeing the Minister of State, or with seeing the new spokesman in the Lords, Baroness Young, who is now Chancellor of the Duchy of Lancaster but who will have no power or authority whatever in decisions concerning the Civil Service. They will want to see the Chancellor of the Exchequer.

It is well known that over the past 18 months the Chancellor of the Exchequer has been trying to avoid having the extra responsibilities of the CSD imposed upon him, because he feels that he will not be able to give adequate time and attention to the significant problems that will inevitably now land on his desk. So we have the absurdity, if we take an industrial parallel, of the finance director taking over responsibility for industrial relations.

The Minister of State must, with his own experience of the Civil Service, know very well that this is a situation which can only undermine whatever minute amount of good will may remain between the Government and the civil servants. Indeed, I doubt whether relations with the Civil Service have ever been as bad as they are now. There is no problem so bad that it cannot be made worse as a result of the right hon. Lady's determined attention to it.

By their action the Government have worsened their already deplorable relations with the Civil Service. The action was taken without any consultation. The Prime Minister said, in effect,"We cannot consult; we have to tell the House first". Yes, the House has the right to hear the decision, but the Civil Service unions have a right to be consulted. We are not asking that they be told the decision in advance, but there should be full consultation. In her arrogance and her contempt for the civil servants and those who represent them, she brushed them aside as though 600,000 of them did not exist, and as though the unions which represent them had no right of participation in policy involving their members.

The worsening of relations was exacerbated by the Prime Minister's comment. to which I have already referred, that it had become increasingly difficult to separate control of expenditure and control of manpower. Those words have an ominous ring in view of the fact that we are about to enter into a new regime concerning pay negotiations for the Civil Service. It must throw great doubt on the meaning and the significance of the Government's undertaking that, if necessary, they will go to arbitration this year on Civil Service pay. It is clear from line after line in the Prime Minister's statement that she is saying that in future negotiations on Civil Service pay—not other pay—will be subject to the whim of the Chancellor of the Exchequer. That is the situation which in the 1950s a Royal Commission said was deplorable and should be avoided, and it said that a system to give objectivity to Civil Service pay should be introduced. The system that was introduced under a Conservative Administration and accepted by successive Administrations was wilfully torn up by the present Prime Minister.

By the change that the Prime Minister has introduced, through the greater control of the Cabinet Office over appointments, by the greater role that the Treasury will play in determining the pay levels of civil servants, by her alienation in the past 12 months of those who are normally instinctively loyal to Ministers of the day, the Prime Minister has taken steps which I suspect we shall subsequently regret and which are likely to lead to the greater politicisation of the Civil Service. That is a step for which no future Government of any political view will thank the Prime Minister.

The Prime Minister's decision is a calculated snub to civil servants. It is a rebuff to the Select Committee which unanimously rejected the abolition of the Civil Service Department. It is a reversal of the Prime Minister's position of less than a year ago.

The final nonsensical words on the efficiency of the new system are that the Prime Minister and her Ministers have now, under their new regime, recently appointed a new chief executive for the Property Services Agency. Previously that position was held by a civil servant. It was held by a second permanent secretary at the high cost of £30,495 per annum. Under the new regime, introducing the greater efficiency that the Prime Minister is seeking, someone has been brought in from private industry. Instead of at the gross overcost of £34,000, we now have him available at the bargain price of £50,000.

10.23 pm
Mr. Teddy Taylor (Southend, East)

I should like to ask the Minister five brief questions about the order. I am grateful to the Opposition for giving hon. Members an opportunity to ask these questions.

The first and obvious question is: what benefit will result from the transfer of function which has been put forward in the order? It is not terribly clear. Despite the points made by the right hon. Member for Swansea, West (Mr. Williams), it would be helpful if the Minister could record what would be the advantage of this move.

Secondly, does not the Minister see a danger that in the absence of a separate Minister basically to fight the corner for the civil servants, they might feel that they were being treated worse than other Government employees? I would not suggest that the present Government or any other Government are not wholly united in coming to decisions. However, in practice, we know that if there are negotiations on the wages of teachers, teachers are usually reassured by the fact that the Secretary of State for Education and Science, although a member of the Government, is probably in a position to fight their corner and ensure that they get a fair deal by comparison with other people.

In the same way, nurses, who are generally upset by negotiations, know at least that the Minister for Health, although again a member of the Government and part of the collective team, is there to ensure at least that they do not suffer more than Government employees generally. I wonder whether there is not a danger in abolishing what was a separate Department of making civil servants feel that they do not have a separate person to fight their corner.

Thirdly, referring to the point raised by the right hon. Member for Swansea, West, will the Minister give a clear assurance that, as a result of the transfer of function, there will be no change in the terms of the agreement which was made after the troubles last year—the agreement which solved the basic problem over wages. One of the ingredients of that was that there would be a form of arbitration this year, although it was made clear that if the results of arbitration were unacceptable on important grounds of national considerations, it could be overturned.

It would be helpful if the Minister could make it clear that this arrangement for arbitration will not be affected in any way by the transfer of function.

Fourthly, I wonder if the Minister could indicate whether the actual arrangements for this transfer will not hold up in any way the possibility of the parties arriving at fair arrangements for pay negotiations this year. I say this because, although there has been a pretty sharp recovery, particularly in the revenue-collecting sections of the Civil Service, a particularly good recovery from a problem which cost the Government a great deal of money, it would be a mistake to over-estimate the state of morale of the Civil Service at the present time. Whilst I am sure that they accept, like all sensible people, that no individual group in this community can expect to get extraordinarily high wages, it is very important, irrespective of any settlement reached, that there should be a feeling of fairness. My fear is that after the troubles and the cost to the Government of the strike last year, not having struck for such a very long time, they will have learned a great deal and the problems this year could be worse, if there were to be problems.

My final point is quite an important one. Because this Government, rightly, and, I believe, with the full support of the majority of people in the country, are trying to ensure that while private industry has had to reorganise itself to cut down on the numbers it employs and to become more efficient, the same criteria have been established for the Civil Service. This means that, as with private industry, it has experienced problems with reduction of numbers, vacancies left unfilled, and consequent reductions in promotion opportunities. Thus there are problems in the Civil Service which did not exist before.

In these circumstances, it would be helpful if the Minister, as I am sure he will do, will make it clear that, despite the problems of last year and despite the difficulties that might arise, the Government, like their predecessors, are very grateful indeed for the fact that we have generally a Civil Service which has the highest standard of integrity, honesty and efficiency in the world.

It is unfortunate that, because of the reorgansations we have had, the impression has been created in some quarters that some individuals do not fully appreciate the fact that, although I am sure there are many Departments which could become more efficient, particularly in view of problems in other countries, some far away and some closer at hand, we are very fortunate indeed in the standard of our Civil Service in this country. I hope that the Minister will make it absolutely clear that this Government fully appreciate the very high standards of integrity, efficiency and honesty which we have in this country and which do not exist in some others.

10.27 pm
Mr. Robert Sheldon (Ashton-under-Lyne)

The hon. Member for Southend, East (Mr. Taylor) is quite right to draw attention to the qualities of our Civil Service. It is because of this that it is so surprising that the Government are acting in the way they are. As my right hon. Friend the Member for Swansea, West (Mr. Williams) pointed out, we have a Government who are really against the civil servants of this country. This is the first time in the history of Britain that we have ever had a Government who really dislike the civil servants they employ. The Minister, who understands these things, well knows the problems he faces in trying to convince the civil servants that they have a future in the administration of this country of a kind not dissimilar to that which they have enjoyed for centuries.

The Prime Minister shows that day after day in her actions. She even declines to mouth the usual platitudes about the standing of civil servants which every Prime Minister automatically utters on coming into office and repeats at fairly regular intervals. For a Government that talk about the need for good industrial relations, the kind of relations they have at the moment with their own employees are really quite deplorable.

There is no advantage to the Government. My right hon. Friend the Member for Swansea, West spoke of the cost to the public sector borrowing requirement of the VAT and PAYE that have been lost. It is even more than he suggested. He was right to draw attention to the amount of interest charges that the Government have had to bear as a result of not bringing in the revenue that was expected, but the position is even worse, because some of the VAT that has been lost will never be obtained. The same is true of PAYE. When the Government are still trying after 12 months to obtain the money, some of it will inevitably be lost to the Exchequer. The Inland Revenue and Customs and Excise are familiar with the problem and are doing their best to mitigate it.

There has been much need for reform in the Civil Service. The difficulty in the past has been to interest Ministers, and particularly Prime Ministers, in the need. Any change in the Civil Service will take five or six years to bring into effect. The continual curse of government is that the immediate always has priority over the important. As a result, there is little ministerial input.

The present Prime Minister has given attention to changes in the Civil Service that is without parallel, certainly in this century. The great pity is that it has not been given to the important reforms that could have been made. The right hon. Lady is concerned only with numbers and the disciplining of a Civil Service which she believes has got out of hand. Her attention and interest might have met the need for concentration on the genuine reforms that could be made.

There has long been a need for a study of the tasks of the Civil Service. As the Fulton committee said, the basis of the examination of the work done by the Civil Service should be to look at the jobs and find the best and most suitable talents to do them. With only a small proportion of the energy that the Prime Minister had devoted to reducing the numbers in the Civil Service, she might have been able to do something about bringing the right kind of talents to bear on the right kind of jobs. She might have done something about making the Civil Service more open, ending some of the multiplicity of grades and reserved jobs, so that talents, wherever they may be found in the Civil Service, can be mobilised to deal with the particular problems to which such people are best suited.

The Prime Minister is not interested in reforms. She is not happy with the Civil Service. She is not happy with the numbers in it and wants to reduce them and to discipline the service.

I think of the tasks that could be done admirably by others. Let us take the Department of Industry as an example. How many civil servants in that Department come from industry and have an understanding of it? We need people from outside the Civil Service to come in at more senior levels than at present to give their expertise to various Departments, and then, having obtained an understanding of the Civil Service, to go outside, That necessary cross-fertilisation is not easy to achieve. What is needed is a determination which few Ministers have given to the study of these matters. The Prime Minister has the determination, but she is directing it in the wrong way, and to the wrong ends.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

I am sorry to interrupt my right hon. Friend's flow—[HON. MEMBERS: "He is not your right hon. Friend."] We served on the Select Committee on the Treasury and Civil Service together. Anybody who does that must be a friend to survive.

Does not the right hon. Gentleman agree that it is proper for any Government and any responsible Parliament to concentrate on the fact that private industry has had to make sacrifices of numbers to be competitive? The right hon. Gentleman talks as though nobody should make any cuts in the Civil Service. It is essential to make such cuts if there is to be room for private industry to survive, let alone thrive.

Mr. Sheldon

I shall deal, not with the narrow point, but with the more general point that the hon. Gentleman has rightly made. The number of civil servants is always important. However, the Government give it such overriding importance that they are not interested in seeing the Civil Service's tasks and how they are related to the demands made on it and the things that can be done. They are interested only in reducing numbers and in restoring the discipline that they feel has been relaxed over the years. It is difficult to do that. The Civil Service Department should have been in the forefront, because it was set up to stimulate and reform the whole Civil Service machine. It did not work out like that, because of the lack of interest on the part of Ministers as a whole. Ministers have not been interested. The Prime Minister could have used her new-found interest to obtain the fundamental changes that are as difficult to achieve as those that she is achieving in a much more restricted area.

The Treasury and Civil Service Committee--of which I had the honour to be Chairman of the Sub-Committee for a while—came down against the merger and the Government agreed with the report. As my right hon. Friend the Member for Swansea, West pointed out, between January and November there was a fundamental change of mind. The Government are not given to making U-turns, or at least not to publicising them. Why, then, did they make that change during those critical months? They came down firmly on one side and then moved in the opposite direction. We know that the answer is that the Prime Minister felt that she was dealing with an indisciplined body that had to be brought to heel. She could do so only by placing the functions of pay in the Treasury, where there are tough people who know how to deal with money. She was not much concerned about the rest and threw it into the Cabinet Office. The Treasury can deal with pay and numbers, but it will not do much to improve the Civil Service. The Treasury does not like man management and is not well equipped to deal with it. It has performed badly in the past. As the permanent secretary to the Treasury, Sir Douglas Wass, said, in a most enlightening answer to question No. 932 in the first report of the 1980–81 session of the Treasury and Civil Service Committee, when the iceberg broke—when the Treasury functions were split between its ordinary functions and Civil Service Department functions—he was happy to be on the right side of the iceberg. What does that mean? It means that his career would be in the interesting part of the Treasury and not in the dull and deadly part of dealing with the trade unions.

My right hon. Friend the Member for Swansea, West is right. The morale of the trade unions is low. They are much more alienated than they used to be and they will not be satisfied with seeing the Minister, much as he may be admired by individuals in the Civil Service. They will not be satisfied with the Minister and will go to the Chancellor of the Exchequer. The buck will find no stopping place short of the Chancellor's overloaded desk. That is inevitable. The rest of the Civil Service will go to the Cabinet Office. The Cabinet secretary and permanent secretary to the Treasury will be joint heads of the Civil Service.

Mr. Ian Wrigglesworth (Thornaby)

There will be three.

Mr. Sheldon

Hon. Members should not believe that. There will be only one head of the Civil Service, because the only job that matters at that level is the chairmanship of the senior appointment selection committee. He decides who the next permanent and deputy secretaries will be. In the past, that task has resided with the Civil Service Department. He had virtually no other power, yet that power is going to the Cabinet Office. He has an enormous day-to-day contact with the Prime Minister and controls the Cabinet agenda, the honour system, Civil Service promotion, the Civil Service college, Civil Service contracts and their security and is responsible for business appointments of those previously Civil Servants and he has control of the public appointments unit. What a great power to give to an individual. We are creating one of the most powerful men in Britain. We are only fortunate that we have Sir Robert Armstrong, a great public servant in the finest tradition of the service. We must ask how long these traditions can remain in the light of such power.

Mr. Charles R. Morris (Manchester, Openshaw)

My right hon. Friend was right to refer to the power that certain permanent secretaries hold. However, ought he not refer to the glaring omission of the Statutory Instrument? That makes no reference to the fact that there are now two heads of the Civil Service where, hitherto, there was one.

This must be the first time in the history of the Civil Service when a Government, dedicated to cut back the number of Indians, have increased the number of chiefs.

Mr. Sheldon

I grant that in name there are two heads, but, in practice in terms of power in the Civil and Government Services and wider than that, we are creating one of the most powerful men in Britain who can make or mar any career in the public service, when he enters, takes part in or leaves that service. That is the danger we face and that power makes most of the United States White House Secretaries green with envy when they see the sort of power we are creating as a by-product—without thought or consideration—as a result of this order. Such a creation ought not to be made as an incidental to this transfer of functions.

The Prime Minister has missed a great opportunity for reform which her energies allowed her to have. She has committed serious errors and I believe that the order should not be accepted by the House.

10.43 pm
Mr. John Garrett (Norwich, South)

The debate on this order is historic in its way, as it marks the end of the only serious attempt in 100 years to reform the British home Civil Service. With the passing of this order we consign to the archives the most radical public document put before the House since the Second World War—the Fulton Report of 1968. That is what the higher administrative Civil Service—the mandarins—have wanted and have striven for in the past 12 years since that remarkable report was published. They have won.

The power that matters has been returned to the Treasury; and all the great reforms proposed by Fulton, to make ours a more managerial, technically competent and more responsive Civil Service and a Civil Service capable of anticipating and meeting the challenges of the late twentieth century, have been brought to nothing. However, the issue will not rest there. The pressures and the problems which gave rise to the need for Civil Service reform and the need for a Civil Service Department to drive it through are building up again and I am sure that the measures set out—[Interruption.]

Mr. Alan Williams

On a point of order, Mr. Deputy Speaker. An hon. Member has just meandered into the Chamber and he is clearly utterly uninterested in the debate and is carrying on a conversation as if he is still in the smoke-room. Could he not be asked to either listen to the debate or, at least, accord to hon. Members the courtesy to go back from whence he came?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. With great respect to the right hon. Gentleman, that is a matter for me and I have not heard any conversation going on since I was talking.

Mr. Garrett

I had noticed the tiny Tory teenybopper, the hon. Member for Grantham (Mr. Hogg), sitting on the Front Bench and I thought it best, as all hon. Members seem to do, to ignore him.

Mr. Roger Moate (Faversham)

On a further point of order, Mr. Deputy Speaker. Could it be that hon. Members find it difficult to follow another hon. Gentleman who appears to be reading his speech verbatim? Will you rule, Mr. Deputy Speaker, whether it is in order for the hon. Member to read his speech in that way?

Mr. Deputy Speaker

The hon. Member for Faversham well knows the answer to that question. The debate must end at half-past eleven and the Minister said that he wishes to reply at ten minutes past eleven.

Mr. Garrett

The problems and pressures that gave rise to the need for Civil Service reform and the need for a Civil Service Department to drive it through are building up again. A future Government of any complexion will have once again to create a unified management structure for the Civil Service that the Civil Service Department represents.

I am sure that the measures that are set out in the order, which were introduced in a fit of pique by the Prime Minister over the success of the Civil Service strike, will be shown to be quite inadequate. In that event we shall have to reconsider the issue.

It has been suggested in the correspondence columns of The Times that there was no need to create the Civil Service Department and that the Department did not spring from the findings of the Fulton report. It is said that they were wished upon the Fulton committee by the Prime Minister of the day, my right hon. Friend the Member for Huyton (Sir H. Wilson). The proposal to set up the Department that appeared in the Fulton report arose from field research that was undertaken by the staff of the Fulton committee, of which I was one. There was no doubt that the conditions of management that we found in the Civil Service could be rectified only by the creation of a Civil Service Department.

How could the conclusion be otherwise? The Fulton investigations revealed longstanding and serious weaknesses in the management of the Civil Service which were attributable directly to Treasury control. A new direction was needed. A fundamental change in the people who ran departments was imperative. There was a need for a change of style from administrative to technocratic and managerial. That is what we found when we examined the Civil Service. There had to be less secrecy, more accountability and a new emphasis on training and developing talent.

These initiatives could not have sprung from the Treasury. It was the Treasury that had suppressed them in the years before. There had to be new and powerful machinery at the centre of Government to produce and implement them. The machinery was the Civil Service Department. It was made powerful because the permanent secretary at its head was called the head of the Civil Service and because the Prime Minister was its political head. Yet by 1970 the CSD had shown itself to be ineffective in implementing the reforms that had been proposed in the Fulton report and endorsed and supported by the then Government. In the first two years and for some time afterwards it did valuable and underrated work in improving efficiency and in training, but as an engine of reform it failed. It failed because no Prime Minister after 1970 understood the importance of its work, because successive Civil Service Department Ministers did not carry sufficient political clout and because it was sabotaged by the higher Civil Service.

I do not want to criticise the late Lord Armstrong. However, it is on public record that Lord Armstrong was chosen as the first post-Fulton head of the Civil Service to establish the weight and power of the CSD and to implement the Fulton reforms when he did not believe in the reforms. That was bad enough, but the sabotage was carried out by the permanent secretaries, who were outraged by the Fulton report referring to them as amateurs when for decades they had been calling themselves intellectual colossi. They were determined never to give up one iota of departmental autonomy to a central Department concerned with efficiency.

It is true that permanent secretaries and their clones—deputy secretaries and under secretaries—are the creme de la creme of the intellectual output of this country, but they are also managerial amateurs. The damage that they have done to Britain's post-war performance is incalculable. Oxbridge and public school historians and classicists who join the Civil Service at 21 years and never leave it—most of them fall into those categories—are by education, training and experience incapable of managing an advanced twentieth century State. They cannot grasp quantifiable techniques of management or technological or social issues.

The central crucial task of the CSD was to change that top management cadre—

Mr. Tam Dalyell (West Lothian)

On a point of order, Mr. Deputy Speaker. Does the House have no protection against the constant chat from the Government Benches? Those of us who want to follow the debate think that some manners might be shown.

Mr. Deputy Speaker

That is a legitimate point of order. It is difficult for the Chair to hear chat that is carried on quietly under the breath of hon. Members. It would be appropriate if the hon. Gentlemen concerned carried on their conversations outside the Chamber.

Mr. Garrett

The urgent task of the Civil Service Department, in which it failed, was to change the top management cadre of the Civil Service. Fulton said that preference should be given in recruiting to the top management stream to people with relevant degrees in the social sciences, science and technology. The universities forced the abandonment of that recommendation. Fulton said that a unified grading structure should be created so that people with specialist qualifications could compete for the top jobs. The mandarins put a stop to that because they saw it as a threat. Fulton said that a powerful Civil Service college should be created, but the Civil Service college has been hopeless as a means of developing a managerial rather than an administrative style in management, although it has done excellent work at lower levels.

The first principal of the college, Professor Grebenik, told a moving story in the annual report of 1976, which he made on the eve of his retirement. He said that he had never been told what the college's objectives were supposed to be; it was a prime target for cuts in expenditure; its academic staff was treated as inferiors by its administrative staff; it had no support from Departments; its trainees were not given any opportunity to change things when they returned to their Departments; it was never entrusted with any research work and its only training of top management was a two-and-a-half day course for newly appointed Under-Secretaries.

With no effective move towards unified grading—I should like the Minister's current views on that issue—and no effective use of the college as an agent for change, it is no wonder that the top management staffing and structure of our Civil Service is as archaic now as it was before the Fulton Committee was set up.

There can be no comparable organisation in the world that has so eccentric a view on how to organise and staff its top management. The British Civil Service prevents technically qualified staff from attaining top management jobs. Administration trainees—the high flyers or crown princes—who are destined for top jobs, are still overwhelmingly public school, Oxbridge arts graduates, recruited on a model of excellence laid down by the Northcote-Trevelyan report of 1854. The situation is becoming worse.

The scores of engineers, technologists, architects, social scientists and accountants recruited every year by the Civil Service are recruited to separate career grades, so that, however good their qualifications and however skilled they are in management, they can never become permanent secretaries, deputy secretaries or undersecretaries.

Moreover, the Civil Service still has an organisation structure that separates the specialist and qualified staff from the administrative line, thus bearing out the traditional British nostrum of experts on tap but never on top. Worse still, in order to preserve the lay purity of the generalist admistrator, he is shifted from job to job so that he never masters the subject with which he is supposed to be dealing.

Our research for Fulton showed that administrators changed jobs at two-and-a-half to three-year intervals. Nowadays I understand from answers to parliamentary questions that the interval is 18 months to two years on average in a given job. However, the specialists—the advisers and technically qualified staff—stay in their jobs for a lifetime, so that they are always faced with the problem of giving advice on technical issues to lay generalist administrators who are newly arrived in a job, or about to leave for somewhere else.

The Civil Service Department failed in the promotion of efficiency. The Fulton Committee recommended high level audits of departmental efficiency. The Civil Service responded with management reviews. I was engaged on the first of them. Management reviews were studies of the efficiency of the Department controlled by the Department. It is no wonder that they never worked.

All that could have been changed. The Civil Service Department could have been made the engine of reform that Fulton intended. If Ministers had insisted that it set about the task of developing a new management and that it had the right to go into a badly-managed Department, make it efficient and reorganise it, the Fulton aims would have been realised. That could have been done when my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) was Minister for the Civil Service. It could still be done now. However, the present Minister has shown that he is unable to grasp those issues. A good example of that is the way in which the Wardale report was handled. It shows the way in which the establishment of mandarins is still leading the Government up the garden path.

Not long ago the Prime Minister came to the conclusion that there were too many levels or grades in the upper hierarchy of the administrative Civil Service. She was not original, but she was right. That fact had been pointed out before. She set up the Wardale committee to see whether certain levels could be omitted, but the mandarins drew up the terms of reference explicitly excluding staff in the specialist hierarchies. The main reason for too many levels in the administrative hierarchy is that they are not integrated with the specialist hierarchies. If one excludes the specialists, it naturally follows that there are not too many administrators. That is precisely the conclusion of the Wardale report.

How the Minister, who I understand was a technical civil servant and was, if he is not now, a member of the Institution of Professional Civil Servants, could allow the terms of reference to be written to such a disadvantage to specialists in the Civil Service amazes me.

The CSD is still the right machinery to improve the management of the Civil Service. The proposals are inane. How on earth can it be right to put pay in the Treasury and industrial relations in the Cabinet Office? How can it be right to put manpower control in the Treasury and efficiency in the Cabinet Office, when efficiency is all about manpower control? How can it be right to put the Central Computer and Telecommunications Agency under the Treasury when the Treasury has never shown any interest in innovation in computing? They are simply expedients. It is taking a hatchet to the machinery of government; letting one lot fall here and another there, without a rational analysis of the need.

The CSD should remain. Ministers could still use it to promote efficiency. Above all, Ministers should rebuild morale in the Civil Service by reinstating a system of fair pay based on outside comparisons. One cannot expect an organisation like the Civil Service to perform well when it is so often discriminated against in pay settlements and when it is known that its political masters despise it, loath its functions and want to abolish them as far as possible and have no interest at all in the welfare of the people who work in it.

The proposal is a gross error. It has been done on a whim. It has never been thought out. With the abolition of the CSD the Minister has thrown away the last chance that we shall have for some years for an orderly and systematic reform of the way that the Civil Service operates.

10.57 pm
Mr. Ian Wrigglesworth (Thornaby)

The functions affected by the measure have been the subject of debate for a long time. The striking feature of the Government's proposal is that it has never been suggested by a Select Committee, Sir Derek Rayner or anyone else. The Government have pulled the proposal out of the air for the reasons suggested and for others, and they are ending up with the worst of both worlds.

Although I do not agree with the argument, it can be said that the functions should be totally within the Treasury, as they used to be and as Sir Derek Rayner suggested. It can also be argued that there should be a separate Department. But we are ending up with a right old muddle, as the hon. Member for Norwich, South (Mr. Garrett) illustrated, by having some responsibilities in one Department and others in another. A proper personnel and management function cannot be carried in any organisation with such a split. I fear that the Government will go no way down the road towards the extra efficiency and cost cutting that they wish to achieve.

It has been implicitly or explicitly accepted by previous speakers that the CSD was not a success. It was not the engine of reform that it should have been. It did not carry the weight in Whitehall or among Ministers that it should have done, but that is not a case for abolishing it. I shall not further argue the case for the CSD, as this is a short debate. A Select Committee examined the matter in considerable detail and, after sifting through all the evidence, concluded that the Department should remain in being.

There is another alternative which could be a success and achieve some of the things that Fulton expected the Civil Service Department to achieve. I believe that there is a case for splitting the Treasury and having a finance Ministry and a Department responsible for expenditure and for the manpower functions of the CSD. The muddle created by the Government will not achieve the benefits either of retaining the CSD as a separate Department or of the arrangement that I have outlined.

Another major criticism of the Government's arrangements should greatly concern the House itself, in that the allocation of ministerial responsibility is totally inadequate. The Prime Minister has overall responsibility and the right hon. and noble Lady the Chancellor of the Duchy of Lancaster is responsible for the management and personnel office and the Minister of State answers to this House both for the functions of his Department and for that large area of responsibility which lies with the Cabinet Office, with which, from answers that I have received from him, he apparently has no contact and for which he has no responsibility. There is therefore a whole area of vital responsibility within the Government which hon. Members have no clear opportunity to question or call to account in the House.

Mr. Charles R. Morris

Will the hon. Gentleman enlighten the House as to what the SDP thinks about having two heads of the Civil Service where hitherto there was one, bearing in mind the contraction that has taken place in the Civil Service in recent years?

Mr. Wrigglesworth

It is even worse than the right hon. Gentleman suggests. There are in fact three heads of the Civil Service, as Mr. John Cassels is the second permanent secretary in the Cabinet Office; so there is the head of the Cabinet Office, the second permanent secretary in the Cabinet Office and the permanent secretary in the Treasury. in addition to all the spread ministerial responsibilities for these matters.

Finally, I believe that a major reason behind the change, apart from the kind of antagonisms that have been mentioned, is that the whole thrust of the Government's policy has been anti-Civil Service. They have pandered to and indeed built up public prejudice over a period and they wish to claim that they have not only cut the number of civil servants but actually abolished a Department. That may sound very good on presentation to the public, but they are simply masking the fact that they are creating a worse situation in the organisation of manpower in their own Civil Service.

Instead of concerning themselves merely with cuts, cuts and more cuts, the Government should consider how they might run their machine more efficiently and achieve the improvements to which the hon. Member for Norwich, South referred—better and more cost-effective management and more. cost-effective use of resources in Government. That will be achieved only if, like any other organisation, they have the personnel function in a separate department containing all the responsibilities within it rather than splitting them up as the Government propose.

I very much regret the changes that the Government have introduced. They deserve to be rejected today.

11.10 pm
Mr. Peter Viggers (Gosport)

If it was incorrect to accuse the Government of being anti-Civil Service before the debate, it is now quite preposterous to do so. We have listened to a diatribe read to us by the hon. Member for Norwich, South (Mr. Garrett). We have heard the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) recommending more interchange between civil servants and people in industry and elsewhere. Preceding them both, the right hon. Member for Swansea, West (Mr. Williams) produced as his coup de grace—a little dead rabbit from a crumpled hat—the fact that an appointment had been made at a senior level to the PSA, which fulfils exactly the requirement that there should be an exchange between senior civil servants and those in industry.

I agree completely that there should be such an exchange. In the United States, there are 2,500 appointed positions in Washington which allow considerable interchange between the views of those in the professions and industry and those in government. Those who have been in government go back and enrich and enliven the private sector. In France, it is recognised that the Polytechnique produces senior civil servants who quite often leave the civil service at a medium level and go into industry. That, too, is accepted. I have no complaint when senior or medium-level civil servants come out of the service and take senior positions in banking or whatever it may be. They, too, can be helpful to those industries. The right hon. Member for Ashton-under-Lyne is quite correct, and the major argument of the right hon. Member for Swansea, West was quite wasted.

I wish to make only one point, and I put it to the Treasury Bench in the form of a question. The Civil Service is our biggest business and is perhaps the best candidate for improved efficiency by way of computerisation. There are two ways in which this improvement can go. Either the improvement can be accepted, with the Civil Service welcoming the opportunity to increase its efficiency by using new techniques, or the service can adopt a Luddite attitude and say that it will have computerisation and improved technology only if there is no loss of jobs, which would be a reactionary and unhelpful attitude.

My reason for making this point is that there is an article in this week's edition of The Economist in which it is said that the civil service unions have told the government they will not work any new technology equipment unless they receive an assurance from the cabinet that no civil servant will be laid off as a result … the treasury has been in favour of giving such an assurance in order to 'maintain goodwill'. The article is either unhelpful or misleading, and it would be useful if my hon. Friend could comment on it.

11.12 pm
Mr. Richard Wainwright (Colne Valley)

I, too, am grateful to the Opposition for enabling us to have this debate. But no amount of informed speeches can dispel the air of profound unreality which pervades debates on the control of the Civil Service. I felt just the same about the pleasant and stimulating sittings of the Select Committee under the chairmanship of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon): although the issue was an interesting one to discuss, nothing that we decided would enable the uncontrollable to be controlled.

If any civil servant—apart from the top echelon—were asked to judge between control by a Lord President of the Council preoccupied, very successfully, with Zimbabwe, and a Chancellor of the Duchy of Lancaster preoccupied with the intricacies of leading the House of Lords, he would be tempted to use the words of an oriental potentate who was unwisely called upon to judge the finals of the Cleethorpes bathing beauty contest and dismayed the populace by saying "Both are worse".

In our present system of government, there is no political mileage in successful control of the Civil Service because there is not sufficient continuity in government to enable anyone to achieve demonstrable results. Until we have a system which provides some element of continuity between one Government and another, this matter will never be tackled seriously. Furthermore, until people have the humility, modesty and humanity to realise that a Civil Service on the scale of ours cannot be controlled en bloc by any Minister, there can be no change. If the Archangel Gabriel were made the Minister in charge of either of these functions in the Treasury or in the Cabinet Office, the scale of the operation would frustrate him.

This becomes clear when one goes locally to a splendidly run office with various sections and a good manager who keeps up local morale. That is fine. But as soon as one goes outside the purview of that office with a query and asks whether they can get some results out of another part of the Department, it becomes apparent that morale is at rock bottom. No one has the slightest faith in any part of a Department that is outside his immediate purview. Often people hold up their hands in despair and ask how they can get any sense out of a computer or a Ministry. Until we have a federal Britain with manageable units of Government, we cannot control the operations of public service.

In the remaining few moments, I wish to give two examples. It is clear that in public affairs we need a far more realistic approach to cost-effectiveness. Yet there is no provision for that in any Department of State, except defence where the constraints of NATO make it necessary that we somehow stagger into line with our more advanced NATO partners. Members of the Select Committee gained some satisfaction when, having been told by heads of Departments that cost comparisons with overseas countries, even as near as Holland and Belgium, were too difficult, we heard from the permanent secretary to the Ministry of Defence a clear acknowledgment that NATO must discover whether it is cheaper for the Dutch or the British to provide a frigate. It must make cost comparisons. Sir Frank Cooper concluded his evidence by saying about NATO: I can say pretty clearly by the time we come to a decision we are reasonably satisfied about the veracity of our own costs and the international ones. The Civil Service has, at last, responded under the constraints of an international organisation. However, most domestic Departments regard with horror the very idea of comparing the costs of an operation with those of neighbouring countries with similar problems. Instead, all sorts of abstract concepts are established to try to measure cost effectiveness.

That will never be put right while the generalists, who were unfortunately described as amateurs in Fulton's language, take the attitude that management skill can be added late in life. It is insolent to suggest that six months at some management course will turn a generalist into a skilled manager. Even if we double their salaries and promise to make them dukes when they retire, we could not find people capable of being both full-scale generalists and skilled managers.

Because the order, which is already in force, offers no hope of solving the problem of turning the Civil Service into a management body under skilled control, I and my hon. Friends will vote with the Labour Party tonight.

11.13 pm
The Minister of State, Treasury (Mr. Barney Hayhoe)

I wish to respond immediately to some of the comments of the hon. Member for Colne Valley (Mr. Wainwright). Under the Conservative Government, the Civil Service is more efficient, better managed, more cost-effective and slimmer. It is the smallest Civil Service since 1967. We are on course to achieve our 1984 target for a Civil Service of 630,000, which will then be the smallest Civil Service since the war.

I welcome this short debate about the reorganisation of Government Departments. However, many of the speeches had precious little to do with the transfer functions order as such. Some of the criticism appeared to be excessively contrived, and some of the opposition was directed not at what had been done but at how, when and why it has been done.

The arguments were confused. The right hon. Member for Swansea, West (Mr. Williams) said that the whole thing was a terrible plot by the Prime Minister so that she could impose her vindictiveness on the service. The hon. Member for Norwich, South (Mr. Garrett) said that the mandarins were, as ever, getting their way and sabotaging the Fulton proposals. The Opposition cannot have it both ways. I reject the hon. Member for Norwich, South's attacks on senior civil servants.

In my criticisms of the way that much of the debate has gone, I exempt my hon. Friend the Member for Southend, East (Mr. Taylor), who made a constructive speech and asked whether I could give an assurance that the undertakings given in July about the 1982 pay negotialtions, their conduct and the access to arbitration, subject to a parliamentary override, had been affected by the change. I give him the absolute assurance that the change has made no difference at all. Those undertakings still stand.

Comments were made about the Government's general attitude to the Civil Service. We had a diatribe from the right hon. Member for Swansea, West about my right hon. Friend the Prime Minister, and I repudiate and reject his absurd allegations. His talk of spite and vindictiveness better described his remarks than the attitude of my right hon. Friend.

As I and other Ministers have often said, we are furtunate to be served so well by a Civil Service with high standards of integrity and a freedom from corruption which is much envied around the world. Civil servants are doing worthwhile jobs. They are carrying out the will of Parliament and the Government and they deserve our gratitude. It was noticeable that the only clear tribute to the Civil Service in the debate came from my hon. Friend the Member for Southend, East.

Mr. Charles R. Morris

Will the Minister explain during the diatribe that he is reading out what contribution is made to the efficiency and effectiveness of the Civil Service by having two heads of the service when hitherto we had one?

Mr. Hayhoe

The right hon. Gentleman made that point a number of times. I do not believe that it is fundamental. I accept that the arrangement is unprecedented, but that does not make the system unworkable or wrong.

Mr. Morris

It is nonsense.

Mr. Hayhoe

Knowing the two individuals concerned, I am clear that they will be able to work closely together, and they will have separate responsibilities on a number of matters.

Mr. Morris

Why do we need two?

Mr. Hayhoe

The right hon. Gentleman must not get so excited. He knows better than his hon. Friend the Member for Norwich, Soul h the quality of our senior civil servants, and I am sure that the arrangement of joint heads will work out perfectly well.

Mr. Michael English (Nottingham, West)

Why did the Minister say that civil servants were not corrupt when it is clear that after leaving the Civil Service some of them take jobs that were offered to them while they were in the service?

Mr. Hayhoe

I do not accept that that is an indication that the individuals concerned are corrupt. I hope that the hon. Gentleman will regret those remarks tomorrow.

The Opposition should ask themselves what would be achieved if they succeeded in annulling the order. It would not undo the hardships that they may think have been caused by the change. On the contrary, it would make matters much worse, because it would create more disruption and uncertainty for those in the Civil Service who deal with the central Departments.

We have now had two months of working under these new arrangements. I assure the House that things are settling down pretty well—very much better than many who have seen major changes in the machinery of government could have expected.

The right hon. Member for Swansea, West asked why there was no consultation with the trade unions before the announcement. He seemed to think that the Civil Service unions had an absolute right to consultation. He knows very well that machinery of government matters are traditionally regarded as being not for negotiation but for the Prime Minister's decision.

Certainly, after a general election, when Prime Ministers are constructing their Administrations, never has the question arose that they must negotiate with the Civil Service unions about how they deploy their ministerial team. Elaborate arrangements were made to ensure that the staff affected were told about the reorganisation and as much as possible about how they would be affected at the same time as the Prime Minister was making her statement. As is normal, the union leaders were given advance warning of the statement so that they could prepare themselves for the questions that they would receive from their members.

A great deal of effort has been made to ensure that the interests of the staff concerned are well looked after. They are being allowed to express preferences as to which Department they eventually wish to work in, be it the Treasury or the new Management and Personnel Office. Proper career management will make sure that individuals do not suffer.

Mr. John Garrett

Will the Minister give way?

Mr. Hayhoe

I shall continue because I am trying to answer other points that have been made. The hon. Gentleman knows that time is limited, and it is only fair that I should continue.

I was asked, why have a reorganisation last November which the Prime Minister had decided against about a year earlier? Reference was made to the report of the Sub-Committee of the Select Committee chaired by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). As he will know, that report said that it was a balance of argument. At the end of 1980, the arguments were finely balanced, but after about a year, seeing how things were working in practice, the Prime Minister decided, as she was fully entitled to do, that the advantages lay in uniting the manpower and expenditure aspects of resource allocation and control—giving a boost to efficiency and personnel management—by bringing the Management and Personnel Office and the Rayner unit under the same umbrella.

The hon. Member for Thornaby (Mr. Wrigglesworth) asked about hiving off the public expenditure sections of the Treasury and creating a "bureau of the budget" type solution. As he will know, because he follows these matters with care, this was referred to in paragraph 26 of the Select Committee report. The arguments there are persuasive, and although the matter was one for the Prime Minister, I believe that they were probably the determinant.

Questions have been raised about the effect of the Treasury now being more closely involved in pay issues; but the Treasury has always had an important say in Civil Service pay settlements. How could it be otherwise? There is no reason why the line should be altered in any way as a result of these changes. Major decisions on pay were never taken by CSD Ministers in isolation. Inevitably, and rightly, the Prime Minister and Chancellor, together with other Ministers, were involved. The new arrangements will not alter that in any way.

My hon. Friend the Member for Southend, East asked about the Megaw inquiry into the future arrangements for determining Civil Service pay and whether these new changes in the central Departments would delay that work. I again give him the assurance that there should be no delay as a result. I hope that the Megaw committee, which has a formidable task before it, will be able to report at the time when the Government ask it, in the summer of this year, so that its recommendations can contribute to and perhaps be a determinant in the settlements for 1983 and onwards.

The right hon. Member for Swansea, West referred to industrial relations and the contacts between those responsible for the Civil Service in the Treasury, in the new MPO and in the trade unions. There will, of course, be close co-operation between the Treasury and the MPO on industrial relations matters, as there had previously been between the different divisions of the CSD and the Treasury.

With regard to the point made by the hon. Member for Thornaby, there is a very close liaison and a continued co-location between the MPO and the sections of the Treasury principally concerned. He asked about the way in which matters would be handled in this House. I shall be dealing with them. I sit in on important meetings in the MPO and I hope that I shall be able to demonstrate at Question Time and at other times in the House that I am very much involved and concerned with the matters for which I shall answer. It is not unusual for a Minister to answer in this House for matters which are the direct responsibility of a Minister in another place. The Law Officers have always answered in this House for matters concerning the Lord Chancellor.

Mr. Wrigglesworth

Is there a precedent for a Minister responding in this House for a Department for which he has no responsibility?

Mr. Hayhoe

I wish that the hon. Gentleman would listen. The Law Officers answer in the House for matters which are the responsibility of the Lord Chancellor.

I believe that a great deal of the criticism and of the fears and anxieties about which we have heard tonight are based on a combination of misunderstanding and misrepresentation of the motives and the details of the changes which have been made. My right hon. Friend the Prime Minister made clear in her statement of 12 November that there are advantages—they have been acknowledged by committees which have studied these matters—in brigading the control of manpower and the control of expenditure in the Treasury and in having a separate Department with distinct responsibilities for organisation, management and overall efficiency of the Civil Service, and for personnel management. It is wrong to think of the Management and Personnel Office as just the rump of the CSD now that pay and manpower matters have been transferred to the Treasury.

The MPO has clear, coherent and vitally important responsibilities which it will be able to pursue single-mindedly and with vigour. It is linked organisationally to the Cabinet Office, which helps to give a spread of vision to its aims across the whole workings of Government. The Prime Minister, as Minister for the Civil Service, continues to be responsible for the functions it discharges.

My right hon. and noble Friend the Chancellor of the Duchy of Lancaster is in day-to-day charge. I believe that it will be seen as a Department with a lot of clout in Whitehall, and that it will be able to carry out a very important function concerning the future of the Civil Service. This organisation of the central Departments should give a more concentrated approach to control of resources at the Treasury, and a stronger and more active approach to the Management and Personnel Office to secure efficiency, and not just in terms of cutting costs.

My right hon. and noble Friend will be announcing and publishing soon an action document setting out the aims and strategies of the Department. This, I hope, will meet many of the detailed criticisms made by the hon. Member for Norwich, South. The Treasury is equally determined to use the opportunities afforded by the reorganisation to make improvements in resource management. Of course, the Treasury and the MPO must work closely together to achieve common aims, and I am happy to report that the transition has been smooth and that much credit is due to the individual civil servants who have made all this possible. No one would claim that the present arrangements are perfect, but they are working well, they will get better, and it would be wrong to slam the gears into reverse as the Opposition would have us do tonight. I hope that they will withdraw the motion. If they do not, I hope that the House will reject it.

Question put:

The House divided: Ayes 51, Noes 107.

Division No.42] [11.30 pm
Alton, David Litherland, Robert
Beith, A.J. Lyons, Edward (Bradf'dW)
Bennett, Andrew (Sf'kp'tN) McKay, Allen (Penistone)
Booth, Rt Hon Albert Marshall, D (G'gowS'ton)
Callaghan, Jim (Midd't'n&P) Millan, Rt Hon Bruce
Campbell-Savours, Dale Morris, Rt Hon C. (O'shaw)
Clark, Dr David (S Shields) Penhaligon, David
Cowans, Harry Powell, Raymond (Ogmore)
Crowther, Stan Prescott, John
Cryer, Bob Robinson, G. (Coventry NW)
Cunliffe, Lawrence Sheldon, Rt Hon R.
Dalyell, Tam Skinner, Dennis
Dean, Joseph (Leeds West) Soley, Clive
Dixon, Donald Spearing, Nigel
Dormand, Jack Strang, Gavin
Eastham, Ken Wainwright, R.(ColneV)
Garrett, John (NorwichS) Welsh, Michael
Hardy, Peter White, Frank R.
Harrison, Rt Hon Walter Whitlock, William
Haynes, Frank Williams, Rt Hon A. (S'sea W)
HomeRobertson, John Winnick, David
Hooley, Frank Woolmer, Kenneth
Howells, Geraint Wright, Sheila
Hoyle, Douglas
Johnson, James (Hull West) Tellers for the Ayes:
Lamond, James Mr. George Morton and
Leighton, Ronald Mr. James Tinn.
Lewis, Arthur (N'ham NW)
Alexander, Richard Knight, MrsJill
Aspinwall, Jack Lang, Ian
Beaumont-Dark, Anthony Lee, John
Berry, Hon Anthony Lester, Jim (Beeston)
Bevan, David Gilroy Lloyd, Peter (Fareham)
Biggs-Davison, Sir John Loveridge, John
Bottomley, Peter (W'wich W) McCrindle, Robert
Bright, Graham MacGregor, John
Brinton, Tim MacKay, John (Argyll)
Brotherton, Michael Major, John
Brown, Michael (Brigg&Sc'n) Marlow, Antony
Bruce-Gardyne, John Mather, Carol
Budgen, Nick Maxwell-Hyslop, Robin
Carlisle, John (LutonWest) Mayhew, Patrick
Carlisle, Kenneth (Lincoln) Meyer, Sir Anthony
Chapman, Sydney Miller, Hal (B'grove)
Clark, Hon A (Plym'th, S'n) Mills, lain (Meriden)
Clarke, Kenneth (Rushcliffe) Moate, Roger
Cockeram, Eric Murphy, Christopher
Cope, John Myles, David
Cranborne, Viscount Neale, Gerrard
Dorrell, Stephen Needham, Richard
Dover, Denshore Newton, Tony
du Cann, Rt Hon Edward Onslow, Cranley
Faith, MrsSheila Osborn, John
Fenner, Mrs Peggy Page, Richard (SW Herts)
Fletcher, A. (Ed'nb'gh N) Parris, Matthew
Fookes, Miss Janet Pawsey, James
Forman, Nigel Price, Sir David (Eastleigh)
Garel-Jones, Tristan Proctor, K. Harvey
Goodhew, Sir Victor Raison, Timothy
Goodlad, Alastair Renton, Tim
Griffiths, Peter Portsm'thN) Rhodes James, Robert
Gummer, John Selwyn Ridley, Hon Nicholas
Hawkins, Paul Roberts, M. (Cardiff NW)
Hawksley, Warren Rossi, Hugh
Hayhoe, Barney Sainsbury, Hon Timothy
Heddle, John Shaw, Giles (Pudsey)
Higgins, Rt Hon Terence L. Shelton, William (Streatham)
Hogg, Hon Douglas (Gr'th'm) Shepherd, Colin (Hereford)
Holland, Philip (Carlton) Sims, Roger
Howell, Rt Hon D.(G'ldf'd) Skeet, T. H. H.
Jopling, Rt Hon Michael Speed, Keith
Kershaw, Sir Anthony Speller, Tony
Sproat, lain Waddington, David
Stanbrook, lvor Waller, Gary
Stevens, Martin Ward, John
Stewart, Ian (Hitchin) Watson, John
Stradling Thomas, J. Wells, Bowen
Taylor, Teddy (S'end E) Wickenden, Keith
Tebbit, Rt Hon Norman Wolfson, Mark
Thomas, Rt Hon Peter
Thompson, Donald Tellers for the Noes:
Thorne, Neil (llfordSouth) Mr. Peter Brooke and
Thornton, Malcolm Mr. David Hunt.
Viggers, Peter

Question accordingly negatived.