§ [Relevant document: Second Report of the Treasury and Civil Service Committee, House of Commons Paper 228, Session 1982–83.]
Motion made and Question proposed,
That a Supplementary sum not exceeding £414,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure by Her Majesty's Stationery Office on the reimbursement of the trading fund in respect of stationery and printing supplied to the Houses of Parliament and to United Kingdom Members of the European Assembly.—[Mr. Hayhoe.]
§ Mr. Edward du Cann (Taunton)
Since the procedure upon which we are embarking is novel, perhaps I may be permitted a few general words about it as Chairman of the Liaison Committee of Select Committee Chairmen. I was making a speech in France recently, and I was introduced as Monsieur du Cann, "M. le President de la Societé des Presidents", which I thought was something of an honour. When these matters are better understood, we can deal with the Supplementary Estimates. The historical role of the House of Commons, established, understood and practised after protracted and sometimes dangerous struggles, was to force the Crown and those acting in its name—the Executive—to account for their actions. That is what Members of Parliament are expected and trusted to do. It is what, in my view, we do not always, do adequately. We have allowed the Executive, as its role and authority in our nation's affairs has necessarily expanded, to dominate the legislature and thus to narrow the limits of effective parliamentary scrutiny and criticism of its actions.
It is the urgent duty of those of us who are proud to call ourselves House of Commons men to seek to increase the power of Parliament to open further the processes of government to examination by this representative body. That must increasingly include, of course, the process of policy formation. We need to let a little more daylight into what is done in our name.
22 The control of government is at the heart of Parliament. At the heart of government is the correct handling of our country's finances. For centuries the procedures of the House have been constructed around the process for evaluating carefully Government expenditure, Supply, Estimates, the Supplementaries, the Vote on Account, the Consolidated Fund Bill and the Appropriation Bill. We all know the complicated and stately dance through which we go every year, which is designed to see that our constituents' money is not wasted. We also all know that for many decades this process has been largely unproductive—a charade of concern with nothing much to show for it, as contemporary, I would argue, as a stately minuet would be—a fatuous charade, fun but largely pointless.
When was the last time, in the memory of any of us, that the House withheld from the Government money they estimated that they needed? I believe that one has to return to the early 1920s for the period when the House would sometimes force the Government to reduce an Estimate. Those with a keen historical sense, or someone as venerable as the Father of the House, might reflect that in 1919, in a daring foray into the heart of government, its doings and purposes, the House refused money to spend on a second bathroom for the Lord Chancellor, to find that it had already been spent. There has been agreement between all of us on the Back Benches that there is something seriously wrong with our procedures.
Every Parliament has its essence, patina and character. I hope that we, the "class of '79", as it were, will be remembered as a reforming Parliament. We shall be if we deserve to be and if we see through the processes that we have already begun. We started by making the fundamental change of establishing Select Committees to oversee Government Departments and their work on a continuous basis. In addition, we have now created these new opportunities for the House to debate Estimates against a background of Select Committee inquiries and reports. What we are beginning today is due largely to the recommendations of the Select Committee on Procedure chaired by my right hon. Friend the Member for Worthing (Mr. Higgins). I am sure that the whole House would wish to pay a warm tribute to my right hon. Friend and his colleagues on that Committee.
Today is our first opportunity in the Chamber to take advantage of what we have created. There was an earlier opportunity, when some winter Supplementary Estimates were laid before the House, but it was not taken because the Liaison Committee felt that, in the absence of suitable subjects for debate, there was no point in having a debate for the sake of it.
The themes of our debates today are perhaps not dramatic, but the principle underlying them is dramatic. The House has always said that it wants to control Government spending. It has now made such control easier to operate and it must ask itself how sincerely it wants to cut out inefficiency and waste when they are clearly displayed before its eyes.
The debate is a parliamentary occasion of some significance—a historic opportunity, if only on a minor scale. Perhaps most important, it is the precedent for much to come.
I wish to make one point for the record. The Standing Orders of the House provide that three days should be allotted to debate Estimates. I have no doubt that it would be the wish of the Liaison Committee and the House that 23 if only half a day is taken, as it will be on this occasion, the second half of the day should be carried over, so that two and a half days would remain. [HON. MEMBERS: "Hear, hear."] I believe that that is the understanding and I am grateful for the obvious support for that assertion. I hope that that view will be formally agreed.
We might have three separate debates, one for winter Supplementary Estimates, one for spring Supplementary Estimates and one for the main Estimates. However they are arranged, the total should always be three days. I know that some hon. Members think that the allowance of three days could be expanded with advantage.
The House, which is generous in these matters, will agree that some of the credit for our reforms can properly be given to the Government. I pay tribute to my right hon. Friends the Leader of the House and the Chief Whip, both of whom have been sympathetic to the proper desires and wishes of Parliament. This is not a party occasion—there has been as much support on the Opposition side; it is basically a House of Commons matter—but the Government have sensed the feelings of Back Benchers and translated them into our new procedures. I think it proper that, as the first speaker in the debate, I should pay tribute to the Government for that.
I especially draw that point to the attention of my right hon. and hon. Friends. Some may be in two minds about whether to support the motions if they are pressed to Divisions. If the arguments today or on any other day, whatever the political complexion of the Government in power, lead us to criticise some aspects of the Government's administration, we shall be doing only what the Government envisaged we should do, and we shall be acting to make good the mistakes of an over-large public service. That is surely in line with the prime policies of this Government and should be in line with the policies of any Government.
There need be no tears in the Whips Office if we make some modest cuts in the Estimates. On the contrary, the episode would, paradoxically, reflect credit on a Government who have not been afraid to seek the help of the House in weeding out instances of inefficiency.
§ Mr. John Roper (Farnworth)
Does the right hon. Gentleman agree that a vote on such motions should be regarded not as a vote of confidence in the Government but as a decision by the House on a matter of housekeeping?
§ Mr. du Cann
I agree. Indeed, I would go further and add that there is a strong duty on the broad shoulders of hon. Members to insist at all times on value for money. Their national duties should, and I believe would, always take precedence over party loyalties. In any case, an insistence on value for money should be supportive of a competent Government.
As so often in the House, history is beginning in a small way and in a hurry. By the accident of the timetable, we are having to begin with the spring Supplementary Estimates, and we do so in a year when the fall in the inflation rate has reduced the need for them. In the batch of Estimates that the Select Committee looked at, there was no great scope for major economies, though there may be such scope on future Estimates days.
The hurry has been exacerbated by the early Budget. Hardly four weeks have passed since the Supplementary Estimates were tabled. In that period, they have been 24 examined in Select Committees, evidence has been taken on them, reports have been agreed in the Committees and discussed by the Liaison Committee, the House has accepted a timetable and we are now debating the Estimates.
The procedure has made inordinate demands on all those involved in it and we may have to look at it again, but I think that the House will wish to give credit to all who have made the procedure work against the odds.
The choice of subjects for today's debates was made by the Liaison Committee after full and spirited discussion. It is fair to take account of the fact that a Committee of 23 Chairmen, with immense experience of the House between them, has commended these matters to the close attention of hon. Members.
I start with Class XIII, Vote 23, on which the Select Committee on the Treasury and Civil Service has reported to the House. Her Majesty's Stationery Office is seeking £382,000 because in 1976 and in 1980 it failed to send returns to the Post Office for Hansard deliveries, so that the Post Office did not charge for them. The House may wish to know that the Public Accounts Committee has, on other occasions, expressed anxiety about the HMSO's system of financial controls and hon. Members may think, in the context of this particular piece of neglect, that there is much merit in the general comments of the PAC.
Since the original evidence was taken by the Select Committee, we have had some interesting further evidence from both HMSO and the Post Office. In particular, the Post Office's evidence shows that its auditors criticised the system for charging Government Departments as long ago as 1973–74 and in four of the next six years.
During that period, protracted negotiations were conducted with the Civil Service Department. Agreement was not reached until 1980 and implementation of it was achieved in two tranches, in April 1981 and April 1982.
If people had really got a move on, as they should have done, a new system might have been in operation before 1976, when the first HMSO error occurred, and certainly before 1981, when the second error occurred. In any case, there is something remarkable about the fact that auditors of the Post Office criticised the system of accounting year after year and no action was taken by the Civil Service Department.
§ Mr. John Garrett (Norwich, South)
Does not the right hon. Gentleman agree that this Vote to the HMSO is nonsense, now that the office has been set up as a trading fund? The costs should fall on the House of Commons Commission, because they relate to services provided for the House. Under the present arrangements, the accounting officer of the HMSO cannot be held accountable for the costs. Since the services are provided for the House of Commons, the costs should be included in the Estimates of the House of Commons Commission.
§ Mr. du Cann
The hon. Member for Norwich, South (Mr. Garrett) takes a keen and continuous interest in these matters. When he intervened, I was about to remark that it is surprising what larger horrors are discovered when a small stone is lifted. The hon. Gentleman's point may have some merit. The matter was discussed by the Treasury Select Committee. The matter is not quite as simple as the hon. Gentleman suggests, because House of Lords deliveries are also involved, but it is simple enough. The system was not working properly. The auditors to the 25 Department concerned reported on it several times, but neither that Department nor the Civil Service Department took any action. Furthermore, there was apparently no consultation between the Stationery Office and the sale office before figures were inserted in the Estimate. That shows an unacceptable casualness in the preparation of Estimates presented to the House of Commons.
Lastly, the evidence on this Vote and on the other Vote reported on by the Treasury Select Committee, but not chosen for debate, must lead one to question the effectiveness of the Treasury and its monitoring of HMSO's expenditure, and the way in which Estimates are presented to the House of Commons.
I have explained why we are starting today with a comparatively small Supplementary Estimate. We are also starting, as it may be right that we should, in our own building. The picture that emerges is not painted on a large canvas. There are no broad brush strokes to remind us of Crichel down. This is art on a small scale. It is a perfect miniature of inefficiency, a cameo of incompetence and casualness and of failure to inform the House properly.
This afternoon, not for the first time in this Parliament, Members of Parliament are giving notice that they will no longer be content to be a mere reactive body. We shall not be content to be mere commentators after the event on the already decided proposals of the Government of the day. The balance of authority has for too long tilted too far in favour of the Executive and against the people's elected representatives. We propose to alter that balance and restore an older and constitutionally correct emphasis, and this debate is an earnest of our intention.
§ Mr. Speaker
Order. Let me remind the House that this debate cannot last for more than a hour and a half.
§ Mr. Michael English (Nottingham, West)
As the senior Labour member of the Treasury and Civil Service Select Committee, I should like to say that I wholly agree with the last words of its Chairman.
I cannot understand why, on so many occasions, simple matters, which would be dealt with fairly speedily in trade unions or in industry, take so long in government. This issue has been with us for more than 13 years. I should like to fill in some of the comments made by the Chairman of the Select Committee.
I shall quote some words given to us by the Clerk to the Committee, after checking with the Departments concerned. He said:Following Corporation status in 1969 a Civil Service Department (CSD) Post Office (PO) working party was set up".In other words, this was not even considered before 1969, when the House was considering whether there should be a Post Office corporation. There had been criticism for many years of the inadequacy of the Post Office accounts, so that it was considered that the Post Office should become a separate corporation. After it was all agreed by Parliament and had happened, the parties concerned finally got down to thinking about the consequences.
We must remember that we are talking about the Civil Service Department. That Department is now almost defunct. Its name was changed to the Management and Personnel Office but it is not abolished. That Department was responsible for efficiency in government. That is the Department that is being criticised. It waited until a 26 separate corporation had been created before it even considered how Government Departments should be charged for deliveries.
Parliament decided that the Post Office should be a separate corporation and it should charge everybody, including Her Majesty's Government and the House of Lords and the House of Commons. In 1969, aworking party was set up to look at the arrangements for Government Departments' mail." It "concluded that the system was unsatisfactory; negotiations went on for some time, but agreement was not reached on an alternative.The first criticism must be of the new corporation. I understand that when an organisation suddenly ceases to be a Government Department and becomes a corporation independent of the Government it might not realise that it is autonomous, although it should, and should do something about it. It meekly accepted the Government's view that the Government should not be charged in the same way as everybody else.
The matter has been decided 12 or 13 years after it was first considered. There can hardly be a simpler comment than that about what is basically wrong with our system of government. There cannot be a better illustration of why we are having this debate today. Such a debate has been excluded from our consideration for 50 years.
Without the publicity of error there is no sanction upon inefficiency. Without it the inefficiency goes on. I shall not weary the House about the first lack of decision:In 1978–79 a 6 month mat of public posting methods took place in selected Departments.That experiment was still being tried, when all that was needed was an invoice. Generally in the United Kingdom, if one provides goods or services, one sends an invoice fairly quickly and one hopes that within a month, or within three months at the most, one will be paid. In this case 12 or 13 years later the accounting system was still not agreed. All that was needed in law was to send an invoice.
Although we can vote against the Estimate tonight, that will not worry the Post Office. According to its current accounts, which are available in the Vote Office, last year posts alone made a profit of £91.6 million and National Girobank a profit of £8.2 million. Slightly more than £400,000 will not worry the Post Office.
If, after so many years, an organisation suddenly wakes up to the fact that it should have charged for a service, even when it has discussed the method with the Government for many years, it should suffer the consequences.
§ 4 pm
§ Mr. Terence Higgins (Worthing)
As my right hon. Friend the Member for Taunton (Mr. du Cann) has pointed out, this is the first occasion for a long time that we have had an opportunity to debate a specific Estimate. I hope that the new procedures that have been adopted will enable hon. Members to keep a much tighter grasp on Government expenditure and the manner in which taxpayers' money is expended. I join my right hon. Friend in saying that the reforms put forward and accepted by the Government have been achieved on the basis of Government co-operation. I believe that there was a widespread feeling throughout the House, not only on the Back Benches but also on the Government Front Bench, that there was a need to redress the balance between the Executive and Parliament. I am glad that some progress has been made.
27 I should like to make one or two specific remarks about the procedure itself. It is interesting that, at the end of the day, we can make a specific decision. This contrasts with the debate last week on the public expenditure White Paper when the consequence, even if the Government had been defeated, was that nothing would have happened. The previous Government were defeated in a debate on the Government White Paper. The result was absolutely nothing. It is salutary, therefore, that hon. Members should have the opportunity to debate the Estimates and also specifically to vote on them. We should also be grateful to the Government for arranging these proceedings on a half day.
I am sure that it is the intention that at least three days should be spent on Estimates debates. From time to time, particularly on Supplementary Estimates, it is appropriate that time should be divided and that a half day rather than a full day should sometimes be provided. I should like the Leader of the House to note that the present debate lasts for one and a half hours and that, with another debate on a Foreign Office Estimate to follow, there will be something of a lacuna before we come to a vote. The gap between the debate and the vote is not highly satisfactory. This is an issue to which more attention should be given. I understand that, at the end of the day, there will be votes on all outstanding Votes. When a half day is allocated, there may be a case for making it the second half of our proceedings rather than the first.
The machinery that now exists has worked pretty well on this occasion. It is important that the Select Committee should have the opportunity to examine the Estimates, take evidence on them and then report to the House. It is not likely that debates will be effective without a proper report having been produced and without evidence having been taken on particular items of expenditure that hon. Members are to discuss. It is true that the sums involved today are not great. No one supposes that the debate and the vote will have an enormous effect on the Budget of my right hon. and learned Friend the Chancellor tomorrow. However, it is possible that on future occasions—for example, on the main Estimates—a significant and large sum of money would be involved. That is not the case today. None the less, the Estimate under debate raises some important points of principle.
It is worth hon. Members reminding themselves that the debates we can hold on such Estimates are only for reductions and not for increases on particular items. There are divisions of opinion about this procedure. My own feeling is that it is right that we should maintain the royal prerogative. It is also important that our debates should be genuine and that hon. Members should be concerned to see that the sum of money involved is reduced, or at any rate that the debate should be concerned with whether or not it is reduced, rather than a more general debate on some token reduction. To go along that route would mean rapidly reverting to a situation that existed for many years, when Opposition or Back Bench Members chose a debate on a general subject. We need to confine the debates to the particular Estimate that we are in a position to vote upon.
§ Mr. Frank Hooley (Sheffield, Heeley)
We are placed in some difficulty today by the action of the Government in putting down a token Supplementary Estimate in 28 relation to the second half of this afternoon's procedures. This has precluded the Select Committee doing what it wished and making a real reduction instead of a token one.
§ Mr. Higgins
The hon. Gentleman raises an important point. There is a distinction between debate on a token Estimate and a token reduction. The latter, it seems to me, presents the real danger to which I have referred. Nevertheless, if the form of the Estimate is such that it is only a token Estimate, it is right and proper that it should be debated, because the House has the opportunity to express a view upon it. This may be increasingly important in the future if some of the evidence that the Select Committee on Procedure has taken into account recently suggests that we should have Estimates that involve massive increases in later years but only a small expenditure in the first year suitably designated. In that case, if we wanted to stop the thing dead in its tracks at the beginning, it would probably be on a token Estimate. There is a distinction between a token Estimate that we can rightly debate and a token reduction, which might merely be a device that the House is employing.
It would be wrong for the Government to regard the result of a vote as a vote of confidence. It is possible that, at some point, there is a dividing line. It could happen that the particular Estimate being debated involved vast sums on which the whole Government economic strategy was at stake. In those circumstances, one can understand that the Government should feel that it is a matter of confidence. Generally speaking, however, I do not envisage that this is likely to be the position. One might also hope that, if the arguments in such debates were persuasive, the Government would decide to withdraw the Supplementary Estimates rather than proceed with them.
§ Mr. English
It is fair to say, I think, that the Government have not applied a three-line Whip. Is it true, however, that they have put on a two-line Whip?
§ Mr. Higgins
It is understandable that, at the end of the day, if we are to vote on all the outstanding Votes, the Government have some interest in ensuring that they are passed. I understand that otherwise the entire mass of Government expenditure would come to a sudden halt. That would be a rather undesirable circumstance.
§ Mr. English
In this case, as I pointed out, the only effect would be that the taxpayer did not pay £414,000 or whatever but that the Post Office would pay it out of £91 million plus £8 million from giro.
§ Mr. Higgins
My understanding is that there are more Votes at stake at the end of the day than that now under discussion. In any case, the Whip merely says that one should be present rather than instructing hon. Members how to vote. It is perhaps possible on Estimates of this kind to adopt a flexible attitude on the merits of the case. I hope that this is so.
I wish to make some remarks about the form of the Estimates. If we are to have sensible debates and if Select Committees are to be alerted to which Estimates are particularly important, the description of the Estimates is most important. I would not wish to stray out of order, but I believe that the comments of the Treasury and Civil Service Select Committee on Class XIII, Vote 22, as against Vote 23, gives cause for disquiet. The figure in the 1982 White Paper for that item was shown as £767,000. That was for a 50 per cent. discount. An Estimate was then 29 presented for the same amount of money but only apparently for a per cent. discount applying to those in public libraries and so forth. A revised Estimate then left the sum of money the same but with a 50 per cent. discount. Finally, there was a Supplementary Estimate stating that it was to maintain the 50 per cent. discount.
I am deeply concerned over the manner in which those Estimates were described. It is reasonable for the House to complain about an Estimate that mentioned a 40 per cent. discount, ignoring the fact that it had been 50 per cent. since 1924, with no note at all to say what was going on and lacking any subsequent history on the later amended Estimate and, indeed, the final Supplementary Estimate. I hope that my hon. Friend the Minister of State, Treasury, who is to reply, can give us an assurance that the future description that appears on the Estimates will be more illuminating than that set of descriptions. That is something of the greatest importance, and particularly so as presumably the Treasury Ministers approve the description that appears on the Estimates.
That is not to say that this is not an onerous task to place on Treasury Ministers. They have to look at an enormous range of Estimates, but none the less in this case Class XIII, Vote 22 was clearly an Estimate to which a great deal of ministerial time was devoted, and therefore Ministers were in a good position to know precisely what an accurate description would be of what was going on. I fear that it was not presented in a way that enabled the House to form a clear view of it in the absence of the investigation that could be carried out by a Select Committee under the new proposals.
Class XIII, Vote 23 is related to the charges made for delivering Hansard and House of Commons papers to individual hon. Members. This service has deteriorated considerably in recent years. It used to be the case that the report of the previous day's debate invariably arrived on one's doorstep with the first post and before one resumed one's duties in the House. That is almost invariably not the case now, even in London, and we need to consider whether we are getting the service for which we are paying—or, rather, for which we are not paying. That is a particular aspect of the problem.
Another point is that the Supplementary Estimate is not based on hard facts. It appears to be a negotiated settlement between the Government and the Stationery Office. When dealing with taxpayers' money, that must give one cause for concern. The whole problem goes back, as has been pointed out, to 1976, which is a long time. I am not clear to what extent the Post Office has a claim at this late stage. Perhaps my hon. Friend the Minister could tell us whether this is something that we are doing out of the goodness of our hearts rather than because there is any legal obligation for the Government to meet the bill that the Post Office has at long last presented.
A further point is that we have been told that it is not only the £325,000 that is now being asked, following negotiations, but that there may be a further sum for value added tax. The House needs to know whether this is simply to be rolled up in this Estimate or whether some further Supplementary is to be presented. At all events, this raises a difficult question as to who has not been accounting to the Customs and Excise for the VAT that should have been charged and has not been charged. I know that there are severe penalties for not completing the VAT form in the correct way. It would be wrong if the 30 Government were not to fill up forms and meet the VAT requirements in the way that everybody else is obliged to do.
A point of considerable general principle needs to be clarified. Some of these services are said to be demand-determined—that is to say, it is impossible to estimate precisely what the cost will be because the demand for the particular service may vary. Generally speaking, that expression has been used in relation to social security benefits, pensions and so on. It is purely a cash figure. It has not been used in relation to something for which both a price and a quantity are involved. We seem to be in an odd position over the Estimate. We are told that it is cash-limited but at the same time that it is apparently something in which the sum involved is demand-determined. This is an important point of principle; one cannot have both those things going on at the same time.
Auditors have already been mentioned, and the Treasury Committee has not been provided with additional information, in particular the letters from the auditors that were sent following their audits each year. It is obvious from that that over the years the auditors have complained about the way in which the Post Office and the Stationery Office have dealt with their accounts, yet nothing has been done. In the last management letter, dated 1980, the auditors say that they hope they will be kept up with developments. This debate should do that.
However, it would seem that the auditors, while their management complains about the system, make no complaint about the fact that the money had not been demanded and paid. One understands that in the context of normal accounting procedures this is not said to be something that is material, given the overall size of the Post Office operation. None the less, if money were due and had not been paid, that was something on which the auditors should at least have commented. Even if the auditors did not qualify the accounts, they should have brought the matter to the attention of those concerned. This also makes a strong case for the Parliamentary Control of Expenditure (Reform) Bill, introduced by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), because if the Comptroller and Auditor General had been more actively involved, it seems likely that this point might have come up in the course of discussions on the accounts of the Stationery Office and the Post Office.
However, we are looking at the overall picture, which gives us considerable cause for concern and raises many points of principle. It suggests that the control that has been exercised by the Treasury in this context has not been adequate. In particular, the way in which the Estimate has been formulated has apparently been carried out without proper consultation with the Deliverer of the Vote, who is in the best position to know what the Estimate should be.
The issue raises important points that need to be answered by the Government. I hope that this will provide an opportunity for the Minister to reply, and that we shall have other opportunities on future occasions to look at the Estimates more precisely and with greater knowledge, provided by the Select Committee on Procedure, than has been the case in the past.
§ Mr. Arthur Bottomley (Middlesbrough)
I should not have intervened in the debate had it not been for the proposition of my hon. Friend the Member for Norwich, 31 South (Mr. Garrett) that responsibility for the Estimates should be that of the House of Commons Commission. I have heard it said that if this Supplementary Estimate had been the responsibility of the Commission, the errors reported might not have occurred. That may be true, but it does not justify changing the whole system. The Commission is responsible for policy and assists in initiating demands for papers. That is a fact, and it cannot be ignored. For this reason, the Commission has considered whether it should accept responsibility. However, the Commission does not control the demands of Parliament any more than Her Majesty's Stationery Office does. It has no control over the combined activities of Members of Parliament, whether on questions, motions or amendments. The demands of Members of Parliament must be met. It is no good telling hon. Members that we do not have the money to pay for their demands. In many ways, we are in the same position as the Stationery Office.
Since the early 19th century, the Stationery Office has been responsible for this and, therefore, it has great expertise. It is by no means sure that if the Commission took over the responsibility, it would not have to go to the Stationery Office continually to use its expertise and to get its guidance. In some ways, this would generate more, not less, work.
§ Mr. English
I hope that my right hon. Friend will not be too defensive. This matter began before the Commission was created and is simply a case of the old Civil Service Department, now the Management and Personnel Office, responsible for efficiency in government, resisting being charged the costs of what it received.
§ Mr. Bottomley
I am aware of that. I am suggesting that the House of Commons Commission should not accept the responsibility. However, that is not my final word, because the House of Commons Commission has asked the Officers of the House to look at the proposition and to give their views as to whether it would involve higher costs and probably less efficient service. When the Commission receives that guidance, it will give further consideration to the proposition. I have looked at it carefully and, in my view, it would not improve parliamentary service if we took away from Her Majesty's Stationery Office the responsibility for looking after affairs and for this Estimate.
§ Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)
It is extremely rare for an hon. Member to be able to say sincerely that he agrees with all that has been said so far in a debate. Indeed, it might be rather ominous if anyone did so because that would probably mean that everyone was wrong.
Class VIII, Vote 23 involves a large sum of money. It seems a small sum relative to the other amounts set out in the Estimates. However, to anyone in the business world, £400,000 is a large sum of money, wherever it arises. We should not describe such a sum as peanuts. If it is peanuts, it is an awful lot of peanuts.
The whole flavour of the inquiry is that here was a rather lazy, hazy way of running a business. I can almost hear the clinking of cups and the civilised chat before people trotted off to perform far more important tasks involving decisions about who was to get promoted and 32 who was not. This sort of procedure is a disgrace. There is no getting away from it. It has been going on since 1969 with a series of civilised chats between perfectly nice people. It is quite disgraceful
We start in 1969. The CSD, or the Post Office, did not like the arrangement. So the talks rumbled on. No agreement was reached. Nothing was done. If anyone is not required to make a profit and his job is not at stake, it is always so much easier to let matters run on. It is so much more civilised to approach them in that way, even if it is so much more costly to the taxpayer.
It took about another three years before the Post Office said "Let us have another little go, shall we?" The Post Office wrote to the CSD expressing its views. At the end of 1973, after many more months had passed, a further working party was set up. The Civil Service seems to set up working parties for the same reason that the Government set up Royal Commissions: it avoids the necessity to make a decision.
Further strong representations were made, though not in the same year and not even the next year but in 1976. I do not know what is meant by "strong representations". I suspect that it refers more to slapped wrists than to writs.
We arrive at 1977, when trials and samples were made. Then another joint working party was set up, not in 1977, 1978 or 1979, but in 1980, and at long last a decision was taken.
As the Select Committee's report points out, it gives cause for grave concern. I usually find that if a business mistake is brought to my attention, especially a small one, and one lifts the stone of that small mistake, there is some larger mistake lurking beneath it.
The Post Office is meant to have on its staff 22 members of accountancy bodies, 14 graduates of accountancy bodies, 50 employees who are undertaking qualifications, and so on. Whoever is responsible for this error must realise that it is not a minor one. It is a major error. No one must be allowed to get away with the idea that £400,000 is a minor matter. One of the great problems when dealing with the affairs of big companies, Government Departments or huge organisations, such as the Post Office, is that an error of this magnitude represents only a very small sum of money as a percentage of the whole. However it is looked at, it is a lot of money.
The Post Office is supposed to have received the accountants' award for its accounts. That says a lot for the people who do the judging.
§ Mr. Beaumont-Dark
I think that it was given by people who themselves had made mistakes in the past, on the basis of Buggins' turn for the award.
§ Mr. du Cann
I am in a position to help my hon. Friend. There is now an annual competition organised by the Chartered Institute of Public Finance and Accountancy, and thoroughly meritorious it is. Accounts in the public sector are judged for their presentational style. There is no doubt that the Post Office deserved to win an award for its presentational style. However, my hon. Friend is saying that style is not everything.
§ Mr. Beaumont-Dark
I agree with my right hon. Friend. I have often found that the more glossy the cover, the more horrid the facts inside.
33 There is no doubt that £400,000 is a comparatively small sum by Government standards. If the House of Commons can show that under the new set-up we can spend one and a half hours of our time considering this issue, I hope that, above all, it will be a shot across the bows of all those who think that, because they are in a state enterprise or a Government Department, they can go on in a lazy, hazy way because there is no fear of the "push". Business efficiency is achieved when people, in the end, are answerable. If they have not a good answer, they go or are penalised. If Government Departments and these great corporations adopted the same attitude, there would be some unhappy people in the short term and some greatly 'more efficient organisations in the long term.
§ Mr. Richard Shepherd (Aldridge-Brownhills)
I wish to lend support to the arguments advanced by my right hon. Friends the Members for Worthing (Mr. Higgins) and Taunton (Mr. du Cann) and the observations of Opposition Members on these Supplementary Estimates. I take up the words of my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) because, in my view, accountability assumes that there shall be some form of demonstrable accountability.
I know that my hon. Friend the Minister has read the Select Committee's report carefully. I shall be interested to hear what measures he has taken to discipline the people involved in this continuing—it is not an odd or irregular occurrence—default of duty.
I draw my hon. Friend's attention to two parts of the Select Committee's report. The first occurred during questions from my right hon. Friend the Member for Worthing. He asked the financial planning officer of the Post Office who were the auditors. He was told that they were Touche Ross. My right hon. Friend's next question was:Have they offered any explanation as to how it was they did not discover what is now apparent?Mr. Wilde. representing the Post Office, replied:Under the original methods for calculating government department postal charges, Touche Ross had been very critical for many years of our methods of raising charges to government departments.A little later, the hon. Member for Colne Valley (Mr. Wainwright) asked Mr. Wilde:Have these observations of Touche Ross been incorporated in the auditor's management letter when they report to management on the audit or have they been strictly verbal observations only?Mr. Wilde replied, with candour:They have been in the management letters in previous years.It is not as though one is ignorant. It is not as though one did not have warning that something was very unsatisfactory.
I also draw my hon. Friend's attention to the conclusion of the Select Committee's report:On the basis of what we have found in examining these two Supplementary Estimates, we feel bound to record our unease about the quality of financial control exercised by the Stationery Office. We note in this context that in two recent Sessions the Committee of Public Accounts, examining on a wider front, have drawn attention to problems with HMSO's management accounting system. The evidence on both Votes also leads us to question the effectiveness of the Treasury in monitoring HMSO's expenditure and performance and in presenting proper Estimates to the House.
§ Mr. Higgins
Does my hon. Friend agree that although the management letters draw attention over many years to the deficiency in the system, they do not draw attention to the fact that the money has not been collected?
§ Mr. Shepherd
One is always hesitant to criticise major accounting firms, but the information given by such firms is often inadequate for the proper supervision of companies.
I was speaking about the conclusion of the Treasury and Civil Service Select Committee's report. It is a very damning statement. The Select Committee's observations bear out the anxieties of the Public Accounts Committee. I therefore press my hon. Friend the Minister on the following matters. What disciplinary steps have been taken? Have any officials been reprimanded? If so, has it represented merely a pause hi their careers? Has it interrupted their careers at all? Has the Minister demonstrated the urgency with which he treats what can only be called incompetence and casualness of the first order, and have the officials concerned been reduced in status or standing? If we raise these questions on the Floor of the House, it is important to demonstrate the accountability of our democratic system by taking action at the point where good examples can be set. If the Minister, who, after all, is responsible to this House, cannot carry out injunctions to ensure that his staff and the great bureaucracy down the line who fail in their duties are held accountable, he should suffer the fate that he should insist is meted out to his officials down the line.
§ Mr. Charles R. Morris (Manchester, Openshaw)
I welcome the opportunity to contribute to this debate, mindful that it is a parliamentary innovation. I am sure that the House as a whole appreciates the actions of the Liaison Committee and the Treasury and Civil Service Select Committee in identifying these two items for consideration.
The right hon. Member for Taunton (Mr. du Cann) was right to preface the debate with the historical background giving hon. Members the authority to analyse financial estimates and bring the Executive to account for the disbursement of public funds. Right hon. and hon. Members of this House have a duty and an obligation to be vigilant in examining expenditure and in eliminating waste. On that basis, I shall consider the two Votes now before us..
Vote 22 refers to the anticipated shortfall of £393,000 to compensate Her Majesty's Stationery Office trading fund for the losses that it would otherwise have sustained through providing public libraries with copies of parliamentary debates and other publications at a discount of 50 per cent. I understand that Ministers wish to examine the options of continuing the discount at 50 per cent. or rethinking and lowering that discount to 40 per cent. However, one cannot justify in any form the manner in which the Estimates were presented on three occasions with precisely the same figure and with no reference to the exercise of options that Ministers were considering. This discount, which is now running at an annual sum of over £1 million, and which, as both sides acknowledge., is demand-related, should be seriously examined. Ministers should explain why, in questions on 8 February, if there was no conspiracy to mislead the House, there was in my view a conscious intention to conceal the fact that there 35 had been any concern as to whether the matter of the 40 per cent. to 50 per cent. discount on these publications should be re-examined. Ministers should account for that element of concealment.
I shall say a brief word about Vote 23. There are two elements in this additional expenditure—£245,000 for deliveries of Hansard to Members of the other place, and £137,000 for deliveries of Hansard to Members of this House.
§ Mr. Morris
These items reveal that the people who are responsible for financial control in both Her Majesty's Stationery Office and the Post Office entirely failed on two occasions to spot the resulting distortions in their financial accounts. No one expects infallibility of any institution, but for the same mistake to occur on two occasions projects a picture of muddled accountancy and financial incompetence of a rather unusual nature in the public services.
I hope that the Minister will comment on the suggestion of my hon. Friend the Member for Norwich, South (Mr. Garrett) that this expenditure should properly come under the House of Commons Commission. I noted the contribution of a distinguished member of the House of Commons Commission, my right hon. Friend the Member for Middlesbrough (Mr. Bottomley), who was not in favour of such expenditure coming under the House of Commons Commission. In my view, we are talking about a service that is provided for the House, and financially and properly it should come under the Commission. However, I noted my right hon. Friend's comment that Officers of the House are examining that matter.
I was encouraged to learn from the report that the Services Committee is looking critically at the justification for the continuance of this rather expensive service to ensure first-post delivery of the previous day's Hansard. Can we continue to justify that expensive service? All right hon. and hon. Members recognise that the delivery is not as efficient as it was. Communication in this House has improved tremendously, and one is bound to question whether Members of both Houses really need delivery of the previous day's Hansard before 9.30 in the morning. Certainly, it should be done in response to an individual application, if that can be justified, but I question whether the public at large would endorse that expensive provision, bearing in mind that facilities in this House are currently running at £6.5 million.
§ Mr. English
As it does not happen, and as it is always delivered before 9.30 on the subsequent day, why worry?
§ Mr. Morris
No doubt my hon. Friend's point will be noted by the Post Office authorities.
I endorse the contribution of the right hon. Member for Worthing (Mr. Higgins), with one reservation. He said that if we vote against the Estimate the Post Office might be able to carry the burden—the right hon. Gentleman shakes his head; perhaps it was my hon. Friend the Member for Nottingham, West (Mr. English). As I understand it, if the House rejects the Supplementary Estimate it will not be the Post Office which has to carry the financial burden but Her Majesty's Stationery Office trading fund, bearing in mind that there has been a 36 negotiated settlement of the Post Office's claim. In those circumstances I hope that the Minister of State will explain the consequences of a rejection of the Estimate.
§ Mr. Richard Shepherd
Does the right hon. Gentleman's party, of which he is a disinguished representative, believe that disciplinary action should follow as a consequence of the reports of the Public Accounts Committee and the Treasury and Civil Service Select Committee?
§ Mr. Morris
Every senior civil servant is adequately paid for the responsibilities that they shoulder and will be subject to the action of their superiors.
§ The Minister of State, Treasury (Mr. Barney Hayhoe)
I am glad to be taking part in what is something of a historic occasion for the House of Commons. For the first time for many years the attention of the House is focused on the details of the Government's expenditure plans as embodied in the Estimates in substance as well as in form. In future, when the Order Paper says that the House is discussing Estimates, that will be exactly what we shall be doing. That has never happened in the 12 to 13 years that I have been in the House and I suspect that not a single hon. Member can remember when that happened.
When we discussed the new Standing Orders last July my right hon. Friend the Member for Worthing (Mr. Higgins) described these changes as a major reassertion of parliamentary power in relation to the Executive. He and I recognise that time will tell whether that proves to be so or not but it is an important step in making the parliamentary procedures for expenditure control more effective. As a House of Commons man I welcome this step although I must confess that I had not expected to find myself on the receiving end of it as a Treasury Minister quite so quickly.
I should like to add my tribute to my right hon. Friend and the members of his Committee on whose work the new procedure is based. It represents a further step in the continuing development of the departmental Select Committees that were established in 1979. Their reports and the developing expertise that underlines them will be important both in selecting the topics for debates on Estimates days and in enhancing the quality of the debate on them. On this occasion the House is much indebted to my right hon. Friend the Member for Taunton (Mr. du Cann) and his Treasury and Civil Service Select Committee as well as to him in his position as Chairman of the Liaison Committee, and to the Chairman and members of the Foreign Affairs Committee for their reports. That is particularly so as those reports had to be produced at short notice because of the inevitable time constraints on the spring Supplementary Estimates. Both the Committee members and the witnesses who appeared before them at short notice are to be commended on what they have done.
In dealing with the specific issues that concern the Stationery Office I want to say a word about the background of its financial regime, which, the House will know, was turned into a trading fund three years ago on 1 April 1980. It now operates on a broadly commercial basis and has no monopoly in its market. Since April 1982 Government Departments have been free to buy supplies 37 elsewhere if they can strike better bargains by so doing. Her Majesty's Stationery Office has responded well to the challenge of operating commercially. Uneconomic operations have been progressively and resolutely discarded and resource costs have been rigidly controlled to the extent that the staff has been reduced from 6,000 to 4,500 in the past two years.
Her Majesty's Stationery Office trading fund has met its financial targets. In 1981–82, the last full year, on a turnover of £251 million it earned a 7.3 per cent. return on capital in current cost accounting terms. In 1982–83 it is on course for a better result. The House will wish to note those results and commend the management, work force and trade unions on their achievement.
§ Mr. Beaumont-Dark
Do the figures include the enormous increase in costs of all HMSO publications, in which area it has a monopoly? As a user, I should have thought that any fool could make a profit if he could put his prices up every other week.
§ Mr. Hayhoe
While that is an important area of HMSO's operations it is by no means a dominant one. HMSO is concerned with making supplies to Government Departments but the increase in costs is as a result of imposing upon it the duty to run itself commercially as a trading fund. The high prices that are charged for small publications are the result of Parliament saying that they must be published. No normal publishing house would produce them, because there is insufficient demand and it is uneconomic to hold them in stock for many years. I can assure my hon. Friend that if he considers the matter carefully he will find that in recent years HMSO has conducted itself in a broadly commercial way, although not entirely so because it remains a public service. Nevertheless, all concerned should be commended.
The House will appreciate that by far the greater part of HMSO operations are financed by the trading fund but the activities covered by this Supplementary Estimate are handled separately. Before the trading fund was established, they were provided by the Stationery Office to Parliament on what was called an allied services basis—they were free of charge to the House of Commons. While other Government Departments now have to pay the trading fund for such services from their Votes, Parliament has remained an exception to that rule. The Stationery Office retains responsibility for the Vote and reimburses the trading fund for the cost of the service to Parliament. The difficulty that is illustrated in the Treasury and Civil Service Select Committee report is related to this Vote and to those arrangements.
The debate has been mainly concerned with Vote 23, the Supplementary Estimate with which we are dealing, but reference has been made to Vote 22, which also formed an important part of the Select Committee's report. Without going into the details of that aspect, looking back over what has happened I am sure that several things should have been done differently. An opportunity should have been taken, perhaps by a written question, to describe the changes that were being made. It was unfortunate that the recent Supplementary Esitmate did not give a full explanation, but I can assure the House that those lessons have now been well learnt and arrangements for meeting the full cost of the discount have been improved. The full extent of the subsidy, while it continues in its present form, will in future be shown on this Vote.
38 Vote 23 of the Supplementary Estimates covers two points. The largest sum Of money involved is £374,000 that results from payments to the Post Office for the early morning delivery of Hansard to Members of both Houses within the London postal area. The larger amount is a result of the payments that ought to have been made. Of the £374,000, £325,000 is the negotiated sum between the Post Office and HMSO. The VAT liability is £49,000, which becomes payable as soon as these charges are made. The background is set out clearly in the Committee's report.
§ Mr. Higgins
Should not the amount for value added tax have been accounted to the Customs and Excise a considerable time ago? If the bill had been properly presented and proper payment made, surely the VAT ought to have been paid at that time. It has not been paid only because the bill was not properly presented.
§ Mr. Hayhoe
My right hon. Friend is right. If the payments had been made, the VAT would have been paid. Since the payments were not made, the VAT was not paid. The invoices were not raised. Under the existing arrangements, records of the weights of material dispatched should have been notified by the Stationery Office to the Post Office, which would then have billed HMSO accordingly. This arrangement went wrong initially when a switch in printing arrangements was raade for the Lords Hansard in 1976. That error continued each year—it was not a discrete error—in that no notification was made of the weights of the material dispatched. When the change in printing arrangements was made in 1981 for the Commons Hansard, the record of the weights was not given. Neither the HMSO nor the Post Office discovered the error at the time. The errors came to light during the course of discussions arising from the changes to public posting methods in 1982, when the Post Office raised the question of the payments it should have received.
§ Mr. English
The hon. Gentleman is being over-fair to his Department, now known as the Management and Personnel Office, formerly the CSD.
§ Mr. Hayhoe
The long delays in establishing public posting methods—those were the discussions that were referred to between the Post Office and the Civil Sevice Department—were concerned not primarily with the way in which payments were made for Hansard but with official paid envelopes being used throughout the Civil Service. Those discussions went on for a considerable time. Although it is linked with the matter the House is debating, it is a somewhat separate issue. The introduction of public posting methods is a subject that ought to be investigated. This state of affairs, as has been said on both sides of the House, continued for a long time. This Government brought it to a conclusion and brought in these methods. They are for the general convenience of all concerned, and improve the, value for money aspects of Government use of those postal services. I express my regret to the House, both as Treasury Minister and as the Minister responsible for the HMSO, for the error that occurred. I assure the House that the necessary corrective action has been taken to ensure that proper invoicing is carried out in future.
§ Mr. Hayhoe
My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) asked whether any personnel have been subjected to disciplinary action. I presume that he is thinking of the Post Office and HMSO. I do not have that information available. I shall inquire into it and write to my hon. Friend, but I am not responsible for the Post Office.
§ Mr. Shepherd
Where does my hon. Friend's responsibility lie? In view of the serious reprimand which is expressed in the Treasury Committee's report, and in view of the observations of the right hon. Member for Manchester, Openshaw (Mr. Morris) on behalf of the Opposition, could not my hon. Friend have expressed his position better, having been given some time to reflect on the lessons from this report, as to why disciplinary action has not been set in train? It undermines public confidence in the control of the House over expenditure.
§ Mr. Hayhoe
My hon. Friend is drawing an unwarranted conclusion. I have not commented as to whether disciplinary action has been set in train. I do not have that information available. I wish to give my hon. Friend correct and adequate information, and that I will do.
My right hon. Friend the Member for Worthing asked about the liability of HMSO to meet these charges, which had not been called for at the appropriate time by the Post Office. The Post Office did not ask for its bills to be paid, so was there a liability? The legal advice that was taken and available from the Treasury solicitor was that the Post Office claim was valid.
For the Stationery Office to be involved in the administrative and financial details of the delivery of Hansard is a curious legacy as it is the concern of the House authorities and the Post Office. A logical case can be made for the House authorities to hold full financial responsibility. I trust this matter will be examined by those principally involved. I noted the interventions by the hon. Member for Norwich, South (Mr. Garrett) and the right hon. Member for Middlesbrough (Mr. Bottomley), who is a distinguished member of the House of Commons Commission. Hon. Members need to re-examine where the precise responsibility should lie.
Questions have been raised about the delays in the delivery of Hansard.
§ Mr. Hayhoe
I wish to continue because several points have been raised and I am under a time constraint. The Post Office and HMSO introduced new arrangements last summer to speed up the delivery of Hansard to hon. Members living in the London area. The Committee's proceedings have revealed that these are not working as they should in that some Members are not receiving their Hansard properly.
The agreement between HMSO and the Post Office is quite clear. Provided copies are ready for collection from the Hansard Press by 6.30 am they will be delivered to hon. Members in London numbered postal districts before 9.30 am. A check of the Hansard Press two weeks ago revealed that on 45 out of 46 occasions copies had been ready for collection at 6.30 am. Apart from statements made by hon. Members during the hearing of the evidence, neither the HMSO nor the Post Office had any knowledge that copies were not arriving promptly. The Post Office 40 has carried out an urgent review of vehicle scheduling. In addition, it is prepared to undertake special individual checks of deliveries to any hon. Member who notifies the Post Office of service failure. The chairman of the Post Office, Mr. Ron Dearing, has intervened to ensure that the delivery arrangements are closely monitored so as to give hon. Members the early morning service in London to which they are entitled.
The second aspect of the Treasury Committee's report referred to a shortfall of £40,000 in the appropriations in aid because of inaccurate estimates of the sales from the House of Commons Sales Office to members of the public. Receipts during the course of the year were well down on what was forecast when the original Estimate was prepared. I apologise for the error. Proper consultation with the staff of the House of Commons Sales Office did not take place. That has now been put right for the future. The informal consultations that took place with the Sales Office staff on the trends of actual receipts during the year will now be formalised and extended to seek information on longer-term trends for Estimate purposes. However, the House will recognise that it is difficult to forecast the extent of parliamentary business and public interest in it, and even the most informed estimate may prove somewhat unreliable. However, the latest advice of House officials is that the outturn for 1982–83 should be very close to the figure in the Supplementary Estimate.
In its conclusion, the Committee recorded its unease about the quality of financial control exercised by the Stationery Office. That issue was referred to in strong terms by my right hon. Friend the Member for Taunton. Undoubtedly, serious mistakes were made, but it is only fair to add that HMSO has made considerable progress in overcoming the inadequacies in its management accounting system, to which the Public Accounts Committee drew attention two years ago. It has been running as a trading fund for only three years. Pressures have been exerted throughout the whole organisation, and the trading fund's circumstances together with the comprehensive and modern planning and control mechanisms that are now in operation will ensure much greater accuracy.
The Committee also questioned the Treasury's scrutiny of the estimate. I accept that more care might have been devoted to the original scrutiny of Main Estimates. However, the figures did not appear unreasonable in the circumstances prevailing and, even with hindsight, there seems to be no clear basis on which they should have been queried by the Treasury. Therefore, I hope that the House will not reject this Supplementary Estimate.
§ Mr. Charles R. Morris
Can the hon. Gentleman comment on the absence of professionally qualified accountants at HMSO?
§ Mr. Hayhoe
The arrangements now in place will avoid such difficulty in future. I have tried to explain that when a change was made about the printing in 1976, an error was made that was then carried forward year after year. Given the explanations that I have offered, I hope that the House will approve the Supplementary Estimate. If it does not, the shortfall will have to be borne by the Stationery Office trading fund. Although I have acknowledged that HMSO has made mistakes, others made mistakes too, and it seems unfair that the cost penalty should be placed completely on the trading fund.
41 I hope that the House will also take account of the difficulties faced by HMSO as a result of the way in which its capital structure was determined, and will remember the sympathetic comments made by the PAC in its 30th report, which was published last November. Given all those factors, I hope that the House will agree to the Estimate. If the House does not approve the Estimate, I am advised that the automatic consequence is that £400,000 or so will have to come out of HMSO's trading fund. In all the circumstances, that is unreasonable. It would be a sharp discouragement to the trade unions, the work force and the management, who have been working well in the new, commercially orientated trading fund regime. Therefore, I hope that the House will agree the Estimate.
§ Mr. English
On a point of order, Mr. Deputy Speaker. How on earth can a Crown corporation claim against the Crown? If the Post Office does not ask for the money, why should it expect the money to be paid by another Crown corporation?
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
The Minister has heard the hon. Gentleman's contribution, and I am sure that he will act accordingly.
§ The debate having continued for one and a half hours, MR. DEPUTY SPEAKER interrupted the proceedings, pursuant to the Resolution [8 March].
§ Question deferred, pursuant to paragraph (2)(c) of Standing Order No. 18A (Consideration of Estimates).