HC Deb 28 October 1983 vol 47 cc535-88

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

[Relevant Documents:

Third Report of the Treasury and Civil Service Committee on Efficiency and Effectiveness in the Civil Service, Session 1981–82 (House of Commons Paper No. 236):

Efficiency and Effectiveness in the Civil Service (Cmnd. 8616): and

Financial Management in Government Departments (Cmnd. 9058).]

9.41 am
Mr. Edward du Cann (Taunton)

Having pressed my right hon. Friend the Leader of the House for a debate on the Civil Service, I should like to say at once how grateful I am to him—as, I am sure, is the House—for having arranged it, and how glad I am to see my hon. Friend the Minister of State, Treasury, sitting at his side in order to reply to the debate. He has heavy responsibilities, but he and I are old friends and I am sure that the House wishes him well in the task that he hopes to fulfil.

I wish first to pay tribute to the Civil Service. Its men and women are dedicated, loyal, incorruptible and most competent. We are indeed fortunate in this country to be so well and so honestly served. Yet never in my lifetime has the service been so heavily criticised as it is today. It is represented often and by many as a burden on society, parasitic, an obstruction to advance. How very different from the days of Sir Edward Bridges 30 years or more ago, when assurance and self-confidence were the usual characteristics of its members. Today, in contrast, it must be admitted that the morale of those in the public service is often low, chiefly because of the attacks, overt and covert, to which it is now so often subject. Many of those attacks are unfair, most are thoughtless, and some are made by those who should know better. When they are unconstructive, I am contemptuous of those who make them. Nevertheless, it has to be acknowledged that they reflect an unease about the direction of our nation's affairs, which has more than a little justification.

Therefore, I welcome the debate today because it is timely, and it is perhaps an opportunity to help to restore the high morale on which the best achievement invariably depends. I have long been an advocate of, and a worker for, reform in the public service. I am glad to open this debate, as I opened the debate in May 1978 on the need to strengthen Parliament's supervision over the Executive. On that day the House passed a motion—nemine contradicente, as they say—that I tabled and in the 1979 Parliament we began a revolution, at the option of Back Benchers on both sides of the House, to give practical effect to that determination. I ask you, Mr.Speaker, to note that—at the option of Back Benchers on both sides of the House.

I think that it is now generally acknowledged in the House and outside that the establishment of the departmentally related Select Committees has been a success. It was good to have the statement by my right hon. Friend the Leader of the House yesterday that those Select Committees are to be re-established and will start their work again on the nation's behalf in the immediate future.

Among the many advantages and benefits of the departmentally related Select Committees has been the new and unique opportunity that they afford to the civil servant to obtain a public platform—well used during the previous Parliament by the wisest among them. For those of us whose ambition it is to open the decision—making process increasingly to a more public debate, that has been an important advance. Furthermore, it is a step away from the outdated and anachronistic convention that the Civil Service should service only Ministers. Best of all, in my view, we illustrate through the work of the departmentally related Select Committees more clearly and in practical ways an unshakeable belief which I know I share with my hon. Friend the Minister of State that, in essence, Parliament and the Civil Service must always be strong allies in the cause of good government.

I hope that over the years many of us have done our best to practise what we preach. Certainly when I was Chairman of the Public Accounts Committee I found that we were able to do a great deal in that regard. I thought it splendid that in recent years qualifications in the Exchequer and Audit Department have become more significant. It is good to think, although at one time almost no one working in that department had a professional qualification, the number has risen to as high as 10 per cent. of the staff. It was good, too, to see increasingly succeeding the deliberate attempts that some of us made to raise the status of the department. By no means least, it was important, in my opinion, that we took the idea of audit as being exclusively a mathematical function away from that basic but, in a sense. elementary concept. Now the talk is all about the evaluation of programmes, from the point of view of the provision of value for money.

Mr. Tim Eggar (Enfield, North)

Is not my right hon. Friend extremely disturbed by comments in the press that it has been impossible to find someone to replace the current head of the Government's accountancy service because of the low salary that was offered?

Mr. du Cann

I am obliged to my hon. Friend, who I know is particularly interested in these matters. Yes, I had noticed, and it is not the only example of its kind. There was also the inability over a long time to fill the post of the finance director of British Shipbuilders, and there was the argument about the appointment of the last Comptroller and Auditor General when there was a proposal to appoint someone from outside which failed—again, because of the remuneration. There is no doubt that we have to pay more attention to ensuring that the right rate for the job is paid when filling these senior jobs.

I come back to the process of audit in the Government service. In the previous Parliament we began the process of modernising the functions of the Exchequer and Audit Department. The most obvious example of that was the passage into law of the Bill that was introduced by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas). That, too, was an important advance. But I ask you to note again, Mr. Speaker, that it came from Back-Bench pressure. It was sad that Ministers in the previous Government resisted that, and I am glad that our view prevailed.

There is much more to do. We have to get the Exchequer and Audit Department to follow public money, wherever that leads, as a matter of principle. However, that is a matter for the future. The reality always was, in my view, that the Public Accounts Committee and the Treasury shared a common interest. That needs primary emphasis. The same has been true in my experience of the Select Committee on the Treasury and Civil Service, of which I had the honour to be Chairman in the previous Parliament, and whose report "Efficiency and Effectiveness in the Civil Service" is the mainspring of this debate. The chief work in the report was done by a Sub-Committee of which the Chairman was the hon. Member for Motherwell, South (Dr. Bray). That report contained no fewer than 26 detailed recommendations and I have no doubt that, if he is lucky enough to catch your eye, Mr. Speaker, he will wish to address himself to several of them. I pay tribute to the hon. Gentleman and his colleagues for their painstaking and competent work in the course of the Committee's deliberations.

It is not for me to talk about the detail of that report, but to return to what I regard as the proper theme of the debate. It is up to hon. Members and Select Committees to ensure that the impetus for reform in its many facets does not falter.

It is splendid—I may say unsurprising—that encouragement for reform exists throughout the service. I refer in particular to the response of the Council of the Civil Service Unions to the Government's White Paper which commented on the Treasury and Civil Service Committee's report—one of the flagged papers in today's debate, Cmnd. 8616. Paragraph 7.5 says: We are … concerned to be constructive in the quest for a more efficient and effective Civil Service. Paragraph 7.6 says: we should like to mention again our concern that Parliament should give priority to completing the equation of efficiency and effectiveness in the Civil Service. In this connection, we welcome the moves to increase Parliamentary scrutiny of the effectiveness of policies and programmes. I am sure that I carry every hon. Member with me when I say that the constructive approach of the trade unions is admirable and I should like to express my appreciation for it.

Let me say a word about recent history. The Treasury and Civil Service Committee made seven reports on Civil Service matters during the previous Parliament. The most important was the one to which I have already referred, "Efficiency and Effectiveness in the Civil Service". It was published in March 1982 and the Government published their observations in a White Paper in September of that year, Cmnd. 8616, to which I have already referred.

I must say plainly that the Committee was disappointed with the Government's response and subsequently I exchanged letters with the Prime Minister in which I voiced the Committee's disappointment at aspects of the reply. I do not wish to trouble the House with the detail of that matter because the correspondence was a matter of record and was published by the Committee, but I want to read part of one paragraph which makes the point clearly. I wrote on behalf of the Committee to the Prime Minister as follows: Efficiency and effectiveness go wider than good financial management. As the Government's reply notes, we have to ask where is the money going and what are we getting for it? But the reply places less emphasis on performance indicators and output measures than we would like. The lack of systematic output measurement and response to it is a more serious deficiency in civil service management than the control of resources and administrative costs. I truly believe that that is the nub of the matter. Incidentally, the Civil Service trade unions also. made observations and we published those, too. The latest development is the publication of a further White Paper, "Financial Management in Government Departments", which was published in September this year.

To return to what I have described as the main point, perhaps one of the most significant proposals in the Committee's report, and one which seemed novel at the time that it was made, was that much more should be done to monitor the effectiveness of Government programmes. For example, are they fulfilling the aims for which they were set up? That is a matter quite distinct from the internal efficiency of the Civil Service. The Committee thought that the Government were not concentrating enough on effectiveness and recommended that Departments should carry out reviews of their programmes and report the results to Parliament. That proposal was not accepted by the Government, which was a pity; it should have been. I hope that when my hon. Friend replies he will tell the House that the Government have changed their mind.

Instead, Departments were called upon to examine the way they manage all aspects of their programmes and to report in 1983. Those reports are annexed to the latest White paper. Interesting and important as those reports are, they are mainly concerned with financial management, as the name of the White Paper implies, and the devolution of more responsibility to line managers, an admirable proposal which was one of the original recommendations of the Treasury and Civil Service Committee which I warmly endorsed.

However, the definition of the objectives of programmes and the measurement of the output of programmes—the monitoring of effectiveness—is seen as being simply part of financial management. It is apparent from the White Paper that Departments have only just made a start on that aspect and that much more work on suitable methods for measuring the output of programmes will have to be done. I suppose that that is understandable, but, if I use that word, I am being charitable. The new White Paper is riddled with phrases such as is being put in hand". One simply loses count of the number of times that such wording appears. A stimulus—a catalyst—and support for the work of the Management and Personnel Office is needed. I hope that that is exactly what the debate will provide.

No doubt some of the results of the new initiative in Departments will find their way to Parliament via the public expenditure White Paper and similar means. However, I cannot help feeling that a specific report on programme reviews, as the Treasury and Civil Service Committee recommended, which could be debated, would be the best way to monitor progress, would be the best support for my hon. Friend in the work that he is endeavouring to do, and would put some spark and command into the operations of the Management and Personnel Office.

I give fair marks to the report for trying. I give some marks for direction. However, I would be bound to give poor marks for what appears to be a failure to grasp the necessary concept of what is required.

All that apart, what is Parliament's general duty? First, it is to point a continuing debate. Let me give two signposts. We badly need to discuss the current nature and what should be the nature of Civil Service power. The balance between Civil Service power and parliamentary or ministerial authority is wrong and has been going wrong for a long time. It is also wrong that the Civil Service so often appears to be required to second-guess the market. Perhaps all that is an area for debate in itself.

Again, we should be talking about accountability, which is consistently ducked, or so it seems to the outsider. Accountability must be built into the system, be a matter of routine and be publicly demonstrable. If it is not, public confidence in the Civil Service will never be fully restored. There are other areas which I have no doubt right hon. and hon. Members will wish to suggest during the debate.

Secondly, Parliament must offer a better, clearer leadership and direction than has hitherto usually been the case. For example, I certainly did not agree with Sir John Hoskyns' proposal in effect to politicise the Civil Service, and I am glad that my hon. Friends seem to agree with me. Our non-political Civil Service, with its tradition of objectivity, serves our nation and constitution well. However, in other respects I agree with the review. We certainly need to make a thorough analysis of our nation's problems. For example, I refuse to regard our economic decline as inevitable. We should certainly develop a clear, long-term strategy to deal with whatever changes in direction are thought appropriate. As Sir John suggested, we should recruit—to return to the wise intervention made by my hon. Friend the Member for Enfield, North (Mr. Eggar)—the right people to implement that strategy when the decisions have been made.

Government now dominates our national life. I shall remind the House of three statistics. The working population is about 24 million, of which no fewer than 7 million are in public employment. More than 15 million people are state pensioners or are on social security. That is more than a quarter of the population. Last, but by no means least, the Government are responsible for the expenditure of about 43 per cent. of gross domestic product. Whatever the divide between the two sides of the House about whether that sum should be more or less, within the lifetime of us all the position will remain roughly the same.

Because of the burgeoning, pervasive influence of the state, the argument for the establishment of departmentally related Select Committees prevailed, in an attempt to provide the House with an apparatus with which continually to survey what is done in our name. When government is so dominant, it is essential that our Civil Service should be a paragon of managerial competence. Members of Parliament are the people's representatives. It is not up to the Civil Service to reform itself. We are responsible for effectiveness and the buck stops with us; it has nowhere else to go. Open government must surely be the aim. We must insist on the publication of the maximum information about what the Government are doing. That information must be intelligible so that the best judgments can be made. Mr. Likerman is sometimes an adviser to the Treasury and Civil Service Committee and we are greatly helped by him. With others, he is looking into this subject, and we look forward to his report. Indeed, I hope that my hon. Friend the Minister will bear in mind that the recommendations made by Mr. Likerman and his colleagues should be widely discussed by those Select Committee members who have experience of such matters.

Let us be clear about the type of information that we want. Paragraph 49 of the Command Paper states that the estimates of the public expenditure White Paper are a ready starting-point for examining the performance of a department in more detail. That is right. Accounts are not only for audit, but for assessing management performance and the effectiveness of policy. Again, I agree with the comment in the Command Paper that much has been done to improve financial management, but that a general advance is now needed. That is right. We are discussing the management of expenditure, the measurement of effectiveness, the regular monitoring of expenditure and effectiveness, and the comparing of outturn with forecast and of actual results with budget.

I have a quarrel with the Command Paper, because it suggests that we should rely on ministerial discretion as to what might be published. I do not agree with that. It is our job to insist on the greatest possible information. Parliament must demand information and use it. That, of course, is the challenge to the newly appointed departmentally related Select Committees. Inside Departments, there should be a new emphasis on professional qualifications.

I pay tribute to the Nisbet report, which is one of the best papers to come out of Government in recent times. I hope that bodies such as the Institute of Chartered Secretaries and Administrators will be used constructively to help ensure that more people with qualifications, whether in accountancy or in managerial, secretarial or technical skills, are brought into Government service.

We must substantially beef up the process of internal audit, which is currently amateur to a degree. My right hon. Friend the Secretary of State for Defence invented MINIS, and impressed the Treasury and Civil Service Committee mightily when he came before us to give evidence. We must ensure that there is a continuous measurement of effectiveness and that there is a systematic and continual review of what is done.

I hope that my hon. Friend the Minister of State will do all he can to ensure that there is a marriage between the Civil Service, commerce and the universities. I have long felt that we have allowed them to grow up almost as separate villages. There is much that commerce has to offer the Civil Service in sharpness and financial appreciation, and I am sure that there is much that the Civil Service has to offer business. There should be much more interchangeability within their respective career structures.

The White Paper is an important progress report, and I congratulate my hon. Friend on it. So far, so good. I also congratulate him on the proposal in the White Paper to report further to the House in July 1984. We look forward to that. In the meantime I hope that the new Treasury and Civil Service Select Committee will analyse and report to the House on the paper. The direction is certainly right, but alas the pace is slower than I would like. It is said that aristocracies of talent—of which the British Civil Service is a supreme example—are far harder to change or reform than aristocracies of birth. I do not accept that. The opportunities exist, and so—as I hope I have illustrated—does the goodwill.

It was surely the theme of Sir Douglas Wass's valedictory speech in December last year that his generation would pursue efficiency conscientiously and strongly, just as accuracy had been the passion of the Civil Service of Bridges' day. I believe that effectiveness is a far better and much more important aim. It distressed me that Sir Douglas Wass did not seem to take on board that point. However, good results will also be their own advertisements. The road back to public esteem and to the winning of political and public confidence once more depends on their obvious and demonstrable achievement. I am sure that all hon. Members wish our proud Civil Service success and will do anything they can to help.

10.9 am

Dr. Jeremy Bray (Motherwell, South)

I am grateful to the Leader of the House for giving us the opportunity to debate the Civil Service and the three papers before us. I am glad to follow the right hon. Member for Taunton (Mr. du Cann) who was a distinguished Chairman of the Treasury and Civil Service Committee. He could always be relied upon to support the work conscientiously carried out in Sub-Committee when it came to be considered by the full Committee.

The hon. Member for Enfield, North (Mr. Eggar) was a member of the Sub-Committee and, I hope, will have an opportunity to speak later. He can bear out my claim that the Sub-Committee made a diligent and conscientious effort to study comprehensively the matters that we are debating this morning.

That brings me to the Government's response. When a Select Committee undertakes a major inquiry and produces substantial recommendations, the Government should accept its conclusions. We do not sit on Select Committees as neutered political animals—we are loyal members of our own parties. We carry out an objective examination of the facts and reach conclusions that we are all prepared to support. By the end of an inquiry we have spent more time, debated more thoroughly and listened to a wider range of opinion about a subject than Ministers could possibly hope to do. We might be considering a mainstream question of national policy such as monetary policy or international monetary arrangements, or an important administrative aspect of government such as effectiveness and efficiency in the Civil Service. Select Committees are entitled to assume that their recommendations will be considered.

The Government appeared to receive sympathetically the recommendations that supported initiatives that were already substantially under way within Government. But where the Select Committee made a significant departure from established lines of work within Government, the Government's attitude was quite negative. We must ask them to think again about their response.

The systematic programme of reviews to which the right hon. Member for Taunton referred was one of the three recommendations that were not accepted by the Government—the annual programme of departmental reviews and the publication of results; the right of Select Committees to commission the Comptroller and Auditor General to carry out reviews of efficiency and effectiveness of Government programmes; and the right of Select Committees to table substantive motions for debate and vote in Parliament.

The consequences of not accepting such recommendations are that the work of Select Committees will be downgraded and they will attract less attention and less effort from hon. Members. By the nature of Parliament, there is an abundance of hon. Members prepared to work in Select Committees. The Government's attitude will undermine the control and responsibility by Ministers of events with which their Departments are concerned. The longer-term tide of events is working against a Government who reject Select Committee recommendations.

We have taken steps on audit which will increasingly come into effect during the next few years. There are precedents—principally in the United States but also in other countries—for the wide range of activities of the General Accounting Office. It is absurd that nationalised industry chairmen should resent proper audit practices. The general pressure for more open government and more thorough examination will increase and will change the atmosphere. The financial management initiative is already under way within Government, and the Select Committee has given momentum to that.

I speak unashamedly as a member of the Opposition. I make no attempt to speak today as an impartial Chairman of the Sub-Committee. That is the way in which Select Committee members see themselves. They are every bit as loyal as Ministers to the policies of their parties. In making recommendations in Select Committees, hon. Members do not in any way take second place to Ministers in their interpretation of their political responsibilities to the country.

There are progress reports from a range of different Departments on the financial management initiative. They are not systematic, but are fairly wide ranging. As the right hon. Member for Taunton said, they are very much progress reports rather than completed achievements. They are plans and aspirations. One report from the Department of Trade and Industry is about efforts on programme expenditure. That matter has been of enormous concern for the 20 years that I have been in Parliament. It shows that this non-interventionist Government are spending £1.4 billion on intervention in industry. It states that several studies have been carried out. The department recognises the importance of the link between exante and expost evaluation and proposes that all new schemes should incorporate, where practicable, 'quantified objectives' against which performances may be compared. More generally, the department is carrying out a substantial exercise to introduce output measurement more widely across its existing support measures. Quite frankly, the Select Committee received more detailed information in evidence than it did on how actual reviews for support under sections 7 and 8 of the Industry Act are administered.

We would have expected by now a systematic publication of the results that we know exist in the Department. Despite parliamentary questions and constant probing, the Government never come clean. There is a plain attempt by Government to withhold politically sensitive evidence.

The Office of Population Censuses and Surveys has, perhaps, suffered more than any other statistical section of Government from the Rayner review. Its report contains the nice, tongue-in-cheek remark OPCS is seeking Treasury MPO support and advice on problems of output measurements. The output measurers are asking how one measures the output of output measurers. The Government, having mutilated the OPCS and the instrument that it should principally be using to examine and monitor the effectiveness of Government programmes, received that nice, tongue-in-cheek response from the office itself.

Yesterday we debated the Griffiths review of National Health Service provision. The report states: The overall effectiveness of the current management arrangements in the Hospital and Community Health Service is being reviewed by an independent enquiry, headed by Mr. Roy Griffiths, taking account of the initiatives already taken to improve performance and accountability. The Griffiths inquiry—although chaired by the managing director of Sainsburys—could equally well have been carried out by any of a dozen Under-Secretaries at the DHSS. It could well have been a routine product of proper organisation of government. If, during the past 20 years, there had been in operation the systematic programme of reviews that we recommended in our report, the Griffiths inquiry would never have been needed. The idea that it needed a man bearing the aura of Sainsburys to give it the necessary authority for Government to act is absurd. The Government, in the ways they do not give their own Civil Service the chance properly to exercise management and review functions and report to Parliament, are gravely weakening its effectiveness.

A further consequence of the Civil Service having a proper programme of reviews is that it would carry out the function much more sensitively than an independent inquiry. Of course, the tradition of civil servants working to Ministers is right in maintaining acutely sensitive political antennae but that is not incompatible with the proper exercise of management functions, and if the management functions ignore the political sensitivities they will be frustrated and not be implemented.

In a debate such as this we cannot go through all Departments and pick out all the particular points. We must deal with the general questions which are the subject of the earlier part of the Command Paper "Financial Management in Government Departments". I shall pick out three matters on which to comment. First, the report remarks: Financial management … is the essential link between the Government's overall economic policy and the day-to-day pursuit of efficiency and effectiveness in government departments and other public sector bodies. The right hon. Member for Taunton correctly emphasised the greater importance of effectiveness over efficiency in assessing progress. But if we are looking on financial management as a link between the Government's overall economic policy and the day-to-day pursuit of effectiveness and efficiency, we must inevitably consider the effectiveness of economic policy. If that is questionable, the link between an ineffective economic policy and an ineffective management of public expenditure will not be impressive.

We pose a problem for the Civil Service. If a Government's economic policy has fallen to bits, gone adrift or is wandering in the wilderness, the management of public expenditure is a one-legged beastie. One cannot solve a problem such as the future of the steel industry without considering wider economic questions. One cannot correctly formulate the amount of national income that should go to the National Health Service without seeing what are the trends in that national income. One cannot consider a programme such as the youth training scheme without seeing what are the demands for employment in the economy as a whole. We shall have in this Parliament—and I hope in the Select Committees, although I shall not be a member of one myself—an argument about this wider pursuit of the linkages through to the mainstream policies of the Government in the economy.

Secondly, there is a plea on page 16 of the report, "Financial Management in Government Departments" for the closest possible relationship between both the public expenditure White Paper and the Estimates and the information system which Departments are developing for the management both of programmes and of their own activities and costs. It is certainly true that the White Paper, the Estimates and the management information system fulfil three different roles but if they do not tell the same story, if they are not functionally related, none of the systems can operate properly. We raised one question in the Defence Estimates as an illustration. The financing of ships is just one single number in the Estimates yet in the White Paper on defence vast programmes such as Trident appear as one element. Ships and weapons and so on are spread across the Estimates but are nowhere identified in the Estimates.

A third wing of this information flow is the management information system within the Ministry of Defence itself. The reconciliation of those three and the operational linkage calls for a substantial revision in the Estimates. We shall be feeling our way in this Parliament on how we conduct the new procedures but I hope that the House and the Select Committees will use their new powers to consider the Estimates and use them in such as a way as to force the Estimates into a role that makes the decisions of Parliament operational in respect of particular programmes.

The third general illustration is overall manpower in the Civil Service. The drive to see the reduction of Civil Service manpower as an end in itself, irrespective of what is the overall job of the Civil Service, is entirely mistaken. The report, "Financial Management in Government Departments" says on page 13: Since staff costs are by far the largest element in administrative costs it is desirable to include them in each budget, but necessary to do so in a way which maintains"— here there is an unfortunate Freudian slip taunt control over the size of the Civil Service. That is exactly what the Government are doing. They are exercising taunt control over the size of the Civil Service. The Government regard the Civil Service as parasitic, as blood-sucking on the main wealth-producing resources of society. It is because that attitude comes out over and over again from statements of the Prime Minister herself that we find the Government completely unable to restore morale or to provide the leadership on which the Civil Service depends.

We see the practical consequences of this coming through in the technical detail of this financial management paper. In our report we tried to spell out the dynamics of control—planning, management and review of programmes and how these are related to each other. In the White Paper on the financial management initiative the sense of dynamics of control and the relationships of the several parts is lost completely in the detail and so we have confusions about output measurement, effectiveness, and so on, leading to no clear message.

The reason for this lack of sense of the dynamics of control is not due to a lack of ability of the Civil Service, not a lack of individual civil servants' understanding of the problem, but because the political direction and purpose is missing. There should be objectives. When one looks closely at what the Government are doing and saying, one finds no objectives, just slogans. What does the Civil Service do in this position? It is engaged in a major development of the mechanics of financial management where that financial management system is having to function in a total political mess. What is the Civil Service to do? Should it fudge so that the damage does not become excessive? I hope that it will not, that it will proceed with the improvement of the mechanics but that it will look beyond these shores and beyond the party of government to see what the proper use of those mechanics is.

I hope that it will look closely at those links with economic policy, that it will begin to revitalise the ideas of economic planning. We need more information than just money and price. We need to consider output and real resources and to consider positive achievements in the management of programmes.

Secondly, I ask the Civil Service to take seriously the devolution of decision-making. At a time when the Government are bringing into the centre powers over local government, powers over enterprise and powers over nationalised industries and are restricting initiatives within the public sector, it is important that the Civil Service should seek within its planning system to create the possibilities of efficient devolution of responsibility so that it may be exercised under a different Government. Finally, where there are functions that must stay in the centre, it is necessary that those functions should be exercised openly within open government. The central issues in economic policy debates and their bearing upon financial management within the public sector must be seen as part of an open government approach.

The Civil Service has a vital task. The service is not parasitic for it is part of the essential structure of society. I hope that it will continue in a state in which it is able to serve, in its proper role, a Government who need the full capabilities that it is able to offer.

10.31 am
The Minister of State, Treasury (Mr. Barney Hayhoe)

I am glad to be able to take up the remarks of the hon. Member for Motherwell, South (Dr. Bray), who chaired the Sub-Committee and whose report is one of the main documents before us. I welcome much of what he has said, but he will understand that I cannot welcome all his comments. I think that it is for the convenience of the House for me to intervene now. Perhaps it would be right, with the leave of the House, if I were to reply to the debate and try to deal with at least some of the matters that are raised.

This is our first full-scale debate on the Civil Service since January 1979. On that occasion I spoke from the Opposition Front Bench. I have checked on the issues that we discussed in that debate. A casual observer might think that nothing much has happened and that nothing much has changed, but that is far from the truth. A real transformation of attitudes has been taking place and today's debate provides an opportunity to consider the progress that we have made and to ascertain where reality lies for the future.

It is appropriate that my right hon. Friend the Member for Taunton (Mr. du Cann) should have opened the debate. As in 1979, when he was the second speaker to be called by the Chair, he has made another distinguished contribution. As a former Chairman of the Public Accounts Committee, the Estimates Committee and the Treasury and Civil Service Select Committee, he speaks with unrivalled authority and from a rich background of experience as both Minister and Member. In 1979 he said: It is essential for us—indeed, it is our duty—to see that that bureaucracy is responsive, less expensive and, I believe, less numerous. It is our responsibility, too, to see that it is professional."—[Official Report, 15 January 1979: Vol, 960, c. 1343.] I am glad to have heard from my right hon. Friend today that he believes that we are making useful progress along the lines that he laid out for us. I hope that everyone in the Chamber shares a common appreciation of the traditions and high stand and of service for which our Civil Service is rightly renowned.

My right hon. Friend commenced his speech with a well-judged and, I believe, entirely appropriate tribute to the Civil Service. I echo those sentiments and underline the terms, if that is not too mixed a metaphor, of my right hon. Friend's remarks. I am glad that the tone of the debate should have been set from the beginning with that well-judged tribute.

The financial management White Paper, Cmnd. 9058, which was published last month, marked an important milestone on the way forward. We know that Parliament and Government must ever seek to maintain standards and improve cost effectiveness so that we have a Civil Service that is well able to respond to present-day needs and operate efficiently within the constraints of current economic circumstances. It is in that context that one sees the financial management White Paper, which followed the Select Committee's valuable report on efficiency and effectiveness in the Civil Service and the White Paper that followed, Cmnd. 8616. Of course, the financial management initiative is not an end in itself. I think it appropriate, first, to make some general remarks about the Civil Service and the task that the Conservative Government faced when taking office in May 1979.

The Civil Service is both large and extraordinarily diverse. There are over 600,000 employees, including over 100,000 industrial or blue collar workers. Four out of five civil servants work outside London and about half of them are women. One third of civil servants are aged under 30. Their employing departments vary from the Ministry of Defence, with about 200,000 staff, to the Law Officers' Department with about 20. About 90,000 are engaged in paying pensions and benefits to the public. About 1 billion payments are made each year to about 20 million individuals and over 30 types of benefit are involved. Many more civil servants are involved in collecting taxes and national insurance contributions. Civil servants staff our courts of justice and run our prisons. They forecast our weather in the Meteorological Office and provide the coastguard service around our shores. They produce coinage at the Royal Mint and provide a valuable and profitable export business. They are involved in customs control and immigration control and have responsibility for health and safety.

The Civil Service embraces an immense range of activities which those of us who are taking part in the debate will know only too well. However, I fear that many of our fellow citizens do not understand the wide range of activites undertaken on behalf of the community by the Civil Service. The bowler-hatted, striped-trousered, brolly-carrying, tea-drinking and red-tape-wrapping caricature of the civil servant is a figment of the cartoonists' vivid imagination. Successive Governments and Parliaments have placed more and more tasks upon the Civil Service and during the post-war years the number of civil servants has drifted upwards. That happened at a time when other public services were increasing even more rapidly. In the 1960s and 1970s staff in the National Health Service and in local government increased by about 75 per cent. If we exclude the Armed Forces, there were about 4.5 million public servants in 1979, and the trend was rising.

When my right hon. Friend the Prime Minster came to office, she was determined to change this long-term trend. She was determined to reduce bureaucracy and administration wherever possible. In May 1979 there were 732,000 civil servants. An urgent review was put in hand, and within a few months a tough but realistic target was set of a reduction to 630,000 to be achieved by April 1984. I am glad to confirm that we remain steady on course to achieve this target by the end of the financial year. We may even do slightly better. By 1 July the number was down to 642,800. Although the 1 October figures are not yet fully compiled, I am confident that they will show a further significant reduction.

We now have a smaller Civil Service than at any time since the end of the second world war. This is a considerable achievement, and I pay tribute to all those who have made it possible. It has meant a significant reduction in the Civil Service pay bill of well over £500 million a year. This substantial reduction has been achieved without massive redundancies. The processes of natural wastage, retirement and resignation have been sufficient to cover the reduced numbers.

Mr. Alfred Dubs (Battersea)

Will the Minister give his proposals for Civil Service numbers after 1 April 1984?

Mr. Hayhoe

I shall be saying something on that matter in a moment.

The main thrust of our manpower policies has been directed towards ensuring that the tasks placed upon the Civil Service by Government and Parliament are performed as efficiently and effectively as possible. However, we have sought also to eliminate functions that are unnecessary, or better done in the private sector. During the four years from 1979–80 to 1982–83 over half the reduction in manpower has been achieved by improving efficiency; about 20 per cent. by dropping or materially curtailing functions; about 10 per cent. by privatisation, including contracting out; and some 2 per cent. by hiving off to new or existing private sector bodies.

Privatisation and contracting out are key elements in the Government's economic strategy. They are perhaps more often thought of in relation to the public sector as a whole, but they are relevant also to the public services. Our aim is to privatise or contract out services whenever this will improve efficiency and effectiveness. We are continually reviewing functions to see whether it would be more appropriate for them to be privatised or contracted out.

Of course, not all Government functions are suitable for privatisation, and the savings can often be very small. Larger savings have been achieved by contracting out. For example, by the end of 1983, contract cleaning and catering will have been introduced in well over 600 Ministry of Defence establishments, with a saving of about £12 million a year.

I stress, however, that it is not our intention to contract work out regardless of cost. My right hon. Friend the Prime Minister made this clear when she said that it will be done when commensurate with sound management and good value for money for the taxpayer".—[Official Report, 13 May 1980; Vol. 984, c. 1053.] A small percentage of the savings in Civil Service manpower has been achieved by hiving off. I know that some people suspect that we are achieving our manpower targets by setting up quangos. That is not so. Only 2 per cent. of the reductions are in the hived-off area. I assure the House that we are in the business of getting rid of as many quangos as we can. Some 500 quangos have been eliminated already, with a saving to the taxpayer of about £100 million a year. We are continuing the hunt and hope to increase these figures.

Mr. Tom Clarke (Monklands, West)

Before the Minister leaves the point about privatisation, and given that he has referred to the 10 per cent. reduction achieved so far, will he say whether he has in mind a figure for future years?

Mr. Hayhoe

I propose to comment on future years. As I said a moment ago to the hon. Member for Battersea (Mr. Dubs), perhaps we can wait until then.

Detailed figures for future years have not yet been announced by the Government. We are keeping up the pressure to ensure that quangos are set up only when there is a genuine need, and every proposal is rigorously examined. More to the point, we review each advisory body every year, and each executive body is subject to a review every three to five years. On the quango front, we are determined to review functions and seek economies when it makes sense to do so.

It is worth recording that within the non-industrial Civil Service—the white collar workers—proportional reductions are greatest in the most senior grades. For example, numbers in the most senior grades of the open structure—Under-Secretary and above—between 1979 and 1983 were reduced by 16 per cent. while in the clerical grades they amounted to only 9 per cent. However, taking the Civil Service as a whole, reductions have been greatest amongst industrial civil servants where they have totalled about 23 per cent.

Manpower targets and cash limits encourage efficiency, especially in the public sector, where the usual profit and loss disciplines do not apply. An example of how manpower reductions have gone hand in hand with greater efficiency is the DHSS net staff reductions since 1979 which have amounted to 6,000, but unit costs for delivering benefits have been reduced by about 20 per cent. There has been a real productivity gain in that area of Government activity.

The significant reductions in Civil Service manpower to which I have referred have been achieved against a background of an increasing workload in many areas of the Civil Service. For example, in the employment group numbers have increased because of the rise in unemployment and increases in benefit payments, but there has been an improvement in productivity. In addition, the youth training programme has been introduced. This is a massive operation. In transport, the waiting time for driving tests has been reduced, despite fewer staff. Home Office staff numbers have increased because of the increased workload in the prison service. In the Land Registry, staff numbers have been increased because of more registration work arising in part from the policy on the sale of council houses.

We shall shortly announce our plans for Civil Service manpower after 1984. They will be detailed in the 1984 public expenditure White Paper. Our aim will be to match departmental spending levels to their functions. In so doing, we shall continue to seek economies by reviewing functions, further increasing efficiency, using new technology and contracting out work to the private sector when that makes good management sense and represents value for money for the taxpayer. A major privatisation is planned—as was announced in the Gracious Speech—for the royal ordnance factories in which 18,000 individuals will be involved.

Information technology provides an important aid to Government Departments in widening policy choices, improving efficiency and providing a better service to the public. Total spending last year on computers, telecommunications and office machines was about £350 million. Some 680 medium to large computer systems are already installed in Government or are on order, and they serve both administrative and scientific purposes.

As the House knows, technology is changing rapidly. Existing nationwide administrative systems are designed to process in batches millions of transactions. The payment of benefits lies behind a computer set-up at Newcastle which I believe is one of the largest in the world. The nationwide systems are centralised at dedicated institutions, such as the one at Newcastle. More and more the emphasis will switch to interactive working of nationwide systems from terminals placed in local offices.

The Board of Inland Revenue, for instance, plans to computerise PAYE in about 600 local tax offices by means of 47 large computers in 12 regional processing centres linked to the local offices by a telecommunications network. The efficiency and flexibility of tax assessment will be much enhanced by this system, and staff savings of some 6,800 are involved in the full installation of the computerised PAYE system.

Likewise, the Department of Health and Social Security is developing an operational strategy for the administration of social security benefits over the next 20 years. An investment in new technology of some £700 million will enable the full range of an individual's, and his or her family's, social security business to be handled in one place, more efficiently, and with a better service to the public. At the same time, this computerisation is expected to offer cost reductions of nearly £2 billion, mainly from staff savings.

The changes to information technology do not just affect the large administrative systems. A wide variety of small, stand-alone applications are also being introduced in Departments. Over the four years ending in 1982–83, some 925 microcumputers and some 1,250 word processors were purchased by Departments. This pace is quickening as familarity grows and proven applications in one area are replicated elsewhere, and new applications are identified constantly by studies and trials.

One leading edge application—to use the current jargon—is worthy of particular note. Five Government Deartments are taking part in the Department of Industry's office automation pilot projects scheme, and others are conducting their own trials. In the longer term, it is in office automation that the full potential of information technology is likely to be demonstrated as data, text, graphics, image and voice information is created, processed, stored and communicated among the various office work stations. The value of such applications has yet to be fully assessed, and the impact on staff and organisations will be especially significant. Much work remains to be done on this concept, but a start has been made.

When I talked about the reduction of numbers, I referred to the contribution made by improved efficiency, and Lord Rayner's contribution has been immense. Tributes have already been paid to my noble Friend, and I am happy to pay a personal tribute to him. His name is identified with positive and effective reviews of activities. The work that he initiated will continue for many years after his personal direction and involvement has ended. As a result of the efficiency programme, which the noble Lord played such a large part in initiating, we have identified potential savings in excess of £400 million a year, £250 million of which has been realised. To this must be added the very considerable savings which have arisen from departmentally initiated reviews. Then there are the broader "lasting reforms" which we have initiated in Government administration generally—for example in financial management, in personnel work, and in such areas as Government forms. Taken together, these are beginning to bring about a major shift in the way that Government business is conducted.

I turn to scrutinies and reviews, which are very much associated with my noble Friend Lord Rayner. Scrutinies are examinations by Departments of specific areas of work. The test that they apply is value for money. But do they have to be done at all? Do they have to be done in their present way and can more value be added for the same or less cost?

Multidepartmental reviews are scrutinies of a single common topic conducted by several Departments together. The work is co-ordinated by a central team, that reports to my right hon. Friend the Prime Minister.

There have been 194 individual departmental scrutinies since 1979. All major departments have participated, with some of the larger departments having done 10 or more studies each. Five multi-departmental reviews have examined Government forms, statistical services, running costs, personnel work and support services in research and development establishments.

Dr. Bray

Why does the Minister exclude from the possible scheme arrangements that would give better value for more money? Why is the figure always the same, or less?

Mr. Hayhoe

One or two reviews have shown that more money and effort were required to give a better service. The present approach to reviews has changed to some extent. Initially, the emphasis was on finding areas of Government activity where value for money was not provided. We are now looking at areas of work to see whether better services can be provided and whether the job can be done in a better way; but we must always bear in mind the overall constraints of the Government's economic position. That must be so. It would not be difficult to think of many ways, both in the public and private sectors and in all aspects of policy, in which to spend money. The difficult task of the Government, as the hon. Gentleman knows only too well, is to achieve the right priorities and at the same time to ensure that the money is being directed and spent in the best possible way in the interests of the community.

I shall give some examples of what has been achieved from the reviews. One instance has been in reducing paperwork. As a result of the review of Government statistical services, one million fewer statistical forms were sent to businesses in 1982 compared with 1979—that is a reduction of one third. That has much reduced the load on industry in having to complete those forms. This has been widely welcomed.

In 1982–83, 14,000 Government forms were reviewed, and I am glad to say that 3,600 were abolished and 2,700 were redesigned, including such well-known and much-used forms as the income tax return and the passport application. The redesigned forms are much easier to complete, which means that fewer mistakes are made so that less time is spent by civil servants in checking the forms. Furthermore, the public are pleased by the service which flows from the new forms.

I believe that the saving of £2 million a year which has been achieved as a result of the forms exercise, was probably much surpassed by the savings to the public and to businesses by both the elimination of forms and the improved design of those which remained. The burden of form-filling has been reduced dramatically. All Government forms will continue to be subject to regular review. This was not a one-off occasion. It means that each Department now has a programme for regularly reviewing the forms that it uses.

I turn to the reviews of the common support services in such areas as messenger services, stores, transport and typing. Reviews in those areas are being carried out across the Civil Service, and those operations have been made more effective and efficient. The annual saving from those reviews has totalled £20 million a year. Guidance has been given to the whole service as a result of the reviews in some of the major Departments.

Then there are the major programmes of lasting reforms. Apart from identifying here and now improvements in specific areas which have been studied, these scrutinies have also provided the basis of firm evidence on which to build broader reforms in Government administration. The most notable, obviously, was the financial management initiative. This was launched by my right hon. Friend the Prime Minister in May 1982. Much work has been done already by the 31 Departments taking part in the initiative. I hope that the House will agree that the results reported in last month's White Paper show that good progress is being made.

Our approach is to improve top management systems and information so that Ministers and senior officials can get a firm grip on what their Departments do and the resources that they use in doing it. We have taken account of the powerful support given by the Select Committee to the MINIS system initiated by my right hon. Friend the present Secretary of State for Defence when Secretary of State for the Environment.

Line managers are now being made accountable for results and resources as far as possible down the management line—the devolution of which the hon. Member for Motherwell, South spoke. They are being given the necessary information and systems to enable them to exercise that accountability. The review and audit capabilities needed to support such a system of delegated management are being provided, and the necessary financial and personnel management training is being undertaken.

As the White Paper says, it is a programme for the life of a Parliament and beyond. Departments have made good progress in developing their top management systems. Responsibility for budgeting, monitoring and controlling running costs is now much clearer and more effective than before. But great effort still needs to be put into developing the management of programmes to ensure that they deliver value for money. My right hon. Friend the Member for Taunton stressed the importance of ensuring value for money by monitoring output and the effectiveness of programmes.

Mr. Dubs

On the financial management initiative, I wonder what is the Minister's comment on the criticism that by devolving responsibility down the line one might get variable qualities of service as between one part of the country and another and one unit of operations and another. Does that bother the Minister? If it does, has he any proposals to deal with it?

Mr. Hayhoe

Although the intention, obviously, is that the quality of service should be the same in every part of the country, as we all know as constituency Members of Parliament, and as I know as a Minister dealing with hon. Members' queries, the reality is that there is a difference in the quality of service provided, for example, in one tax office compared with another and in one DHSS benefit office compared with another. Our intention is to try to raise standards by the devolution of managerial authority and accountability, and there must be a role for the central core of a Department in seeking to ensure that although the disparities could never be eliminated except in some wholly Utopian state of affairs, they do not grow as a result of the changed line managerial authority that we are hoping to introduce.

I was about to refer to what my right hon. Friend the Member for Taunton said about output and performance measurement. Like him, I recognise that this is of great importance. As my right hon. Friend knows, it has been used in government, and I can confirm that there is now an increasing emphasis on its wider publication and more intensive use internally.

My right hon. Friend referred to the public expenditure White Paper. He will have noted that in 1983 is contained about 400 quantified output measures—an increase of more than 60 per cent. compared with its predecessor. I believe that we shall do better in the 1984 White Paper. I hope that we shall continue to do better because I accept what my right hon. Friend said about the central importance of checking performance and output. Many Departments publish annual reports which give performance figures. I have in mind the Inland Revenue and Customs and Excise. These measures show what the public are getting for their money.

The financial management initiative is part of and linked with the process of the development of output and performance measurement. Finding ways of expressing objectives in terms of desired outputs is an important way of improving the planning process. Like my right hon. Friend, I believe that there is a special role here for the departmental Select Committees. They will unquestionably be interested in the effectiveness of programmes, and I should be surprised if they did not find ways of fleshing out the more general points made in the departmental reports attached to the latest White Paper. My right hon. Friend said that he thought that the departmental Select Committees would be using this material as a route to getting more knowledge and understanding and being able to contribute to the general effectiveness of the work of all the Departments concerned.

I have sometimes heard it said that the financial management initiative will run out of steam or wither on the vine. This Government are determined that that should not happen. The FMI is both far-reaching and self-evidently relevant to Civil Service management. It is bringing about a major shift in Civil Service attitudes, and I hope that it is a non-reversible shift. The search for efficiency and value for money in future will become an integral part of the decision-making and executive process. It will require continued ministerial support and interest and each Minister, being responsible for the effectiveness of his own Department, is accountable to Parliament for its performance. That is the essence of the FMI approach and the scrutiny programmes.

To quote the Government's reply to the Select Committee, the role of the centre is to establish clear principles, to provide information and advice abouth the practical application of principles, and to check that they are applied in practice. The role of the central Departments is a combination of guidance, prescription and scrutiny.

The introduction of MINIS-type systems will also mean better information for Parliament and the public as the general aim is to disclose as much information as possible from Departments' internal management information systems. Each Minister in charge of a Department must make his own decisions about areas where publication, for example, for security reasons or because it discloses management intentions, would be self-defeating, such as in actions against fraud or tax evasion.

I thought that my right hon. Friend the Member for Taunton was less than generous in saying that publication was a matter of ministerial discretion. The intention of putting the reservation in the White Paper was to protect security and matters of very real concern to which I have referred. But it is no part of the Government's intention that arbitrary judgments should be made that just because publication of the information may present some minor inconvenience for the individual Ministers concerned, that is justification for withholding it. From what I have seen of the performance of Select Committees, I believe, anyway, that they will be seeking to have the fullest publication. It is in the interests of the Government in a wide and broad sense, Parliament and the community generally that that should occur.

Mr. Eggar

My hon. Friend may recollect that when replying to an Adjournment debate at the beginning of this year he said that the Government would seek to publish everything possible, and he went on to make the reservation that he made today about security and the national interest. My analysis of the content of the White Paper just published does not go along with either the spirit or the letter of the promise that he gave me in that Adjournment debate.

Mr. Hayhoe

The White Paper contains the summaries; there are massive documents backing up those summaries, but I do not think it would have been for the convenience of the House to have included them all in the White Paper, which would then have become a massive document. However, it is the Government's intention still, as I said earlier this year, that as much as possible of the information that is flowing from the financial management initiative and the new management and information system should be published. Looking at what has happened in relation to MINIS, one can take that as the broad precedent for what we are seeking to do. As my right hon. Friend pointed out when commenting on the significance of that, we are committed to making a further report to Parliament next July. That is one means of keeping the pressure rolling forward on this programme as a whole.

I come to the review of personnel work. The financial management initiative is about making the most efficient and effective use of resources, and people are the most important resource we have. Managers must manage them, so the efficiency and effectiveness of the Civil Service depend greatly on how staff are managed and their abilities developed and used.

The Management and Personnel Office has carried out a detailed examination of personnel work in nine Departments. Its review was published in July and it made important proposals which are to be developed and applied in the next few years. The whole objective is to adapt personnel work to the needs of Departments. Where possible, line managers will be given, and should rake, more responsibility for their own staff.

Secondly, the FMI emphasises the need to define the purposes of jobs and the objectives of the people who do them. That should be reflected in the way that performance is judged. Thus, we are carrying out a major reform of the system of annual confidential reports to focus those reports on job performance and to improve the manager's assessment of his staff's performance.

Thirdly, the quality and cost-effectiveness of central personnel management in support of line managers must be improved through greater expertise, more flexibility and streamlining procedures without making them less fair to individuals. Procedures for such things as recruitment, probation before appointments are confirmed and treatment of those whose performance is inadequate are being given careful consideration.

The Select Committee referred to the need for a close working relationship between the Management and Personnel Office and the Treasury. Having referred to the MPO and the Rayner unit, I will explain the present split of responsibilities between them and the Treasury. There have been two changes since last year. The MPO is no longer an independent Department but is now a separate office within the Cabinet Office.

My noble Friend Lord Gowrie, as Minister of State, is now responsible to the Prime Minister for its day-to-day management, and Sir Robin Ibbs has replaced my noble Friend Lord Rayner as the Prime Minister's adviser on efficiency. In effect, we have a triumvirate at the centre, with the Prime Minister as Minister for the Civil Service; I have responsibilities in the Treasury for money, manpower and industrial relations; Lord Gowrie has the lead interest in personnel matters, training, recruitment, retirement policy and other general conditions of service; and Sir Robin Ibbs has the lead interest in the efficiency programme.

The key parts of the MPO and Treasury, as the Select Committee suggested, will soon be co-located in the same building. The original programme, alas, proved rather ambitious, but we now have nearly all the main parts together in the same building.

Although the subject of Civil Service pay has not been mentioned in the debate, I appreciate that there is considerable interest in it. Last December the Government said that they accepted in principle the broad approach of the recommendations of the Megaw report. Since then, officials have been engaged in discussions with the Civil Service unions to see whether agreement can be reached on a new pay determination system based on Megaw. During the summer, the union side asked for a formal statement of the Government's position on three issues which had arisen in the talks. This is an opportunity for me to inform the House of the Government's reply.

The unions had asked whether the Government would be prepared to agree that the negotiating parties should have access to the detailed material collected by the independent pay information board proposed by Megaw. The Government are prepared to discuss this possibility constructively; but any arrangements would need to be consistent with the role envisaged for the board under a new pay determination system.

The unions proposed that the range within which Civil Service pay levels should lie under a new system should be narrower than that put forward by Megaw. The Government do not believe that such a narrow range would allow proper scope for factors other than outside pay comparisons to be brought into the negotiations.

The unions sought a statement of the Government's view on arbitration. The Government recognise that arbitration can have a role in resolving disputes in certain circumstances. But as they told the Megaw inquiry, the Government do not believe that either party should be bound to go to arbitration against its will. Moreover, the Government could envisage circumstances in which Parliament might need to be asked to approve the overriding of an arbitration award, or of the operation of the new arrangements overall.

The unions have expressed disappointment at the Government's approach on pay levels and arbitration, but they are prepared to continue negotiations. So are the Government, and discussions between the two sides continue.

Mr. Alan Williams (Swansea, West)

Does not the hon. Gentleman find that position somewhat inconsistent with the Prime Minister's continual haranguing of trade unions on her wish that they would go to arbitration rather than, as she put it, rush straight into industrial disputes? It seems rather strange that, in a position where they are able to make the decision themselves, the Government are so coy about arbitration.

Mr. Hayhoe

If the right hon. Gentleman reminds himself of the Government's evidence to Megaw, he will see that our position is clear and logical. Although I accept that the unions would like unilateral access to arbitration, with no possibility of a parliamentary override, that is not a possible position for the Government—indeed, probably for any Government—to take.

Perhaps it would be wise for me not to refer to the 1984 negotiations, though I shall do so if the matter is raised during the debate. The same applies to the 3 per cent. factor in relation to the aggregate position on public expenditure pay estimates. The Select Committee referred to the facilities agreement. Those facilities provide for Civil Service non-industrial union representatives to carry out industrial relations duties and take part in trade union activities. The Select Committee recommended that they should be brought under greater control.

The revised framework National Whitley Council facilities agreement introduced last year is aimed at doing just that. I am glad to report that most Departments have now renegotiated their departmental agreements with their trade union sides in line with the national agreement and are now beginning to operate the new control and accountability measures. I hope that this will lead to tighter control and monitoring in future of this element of public expenditure.

I can also report that a recent review by Departments has confirmed that the cost estimates of the old facilities agreement, which I gave to the House last year and which were based on an old survey, were about right taking account of price increases. I intend to make these latest estimates available in a written answer today. I apologise to the House for speaking at such length, but it is five years since we have had a debate on these matters and much activity has occurred.

We are seeking a lot from our Civil Service. We are setting tough standards. We are seeking a better service for the public and we are seeking that at a lower cost to the taxpayer. In asking for much, we know that the Civil Service can deliver. Civil servants have taken many hard knocks in Parliament and the media in recent years, often most unfairly, as my right hon. Friend the Member for Taunton said.

I welcome the remarks on this by my right hon. Friend the Member for Taunton. Unfair and thoughtless criticism does not help. We are, as my right hon. Friend said, indeed fortunate to be so well and honestly served. Sir Douglas Wass in his speech to the Royal Institute of Public Administration last year rightly said that activities such as the payment of social benefits, the maintenance of the prison service, and even the collection of taxes are among society's essential overheads. He said: Civilised society would cease to exist without them. Of course I agree with that and utterly reject the ill-judged unfounded and uncharacteristic comments by the hon. Member for Motherwell, South who sought to associate the Government with the most absurd, vicious, caricatured comments, which I hope all right hon. and hon. Members will roundly condemn.

We cannot expect people who are already trying their hardest to produce ever better and better results, often under great difficulties, to maintain their morale under a continual barrage of ill-informed criticism.

I am not saying that the Civil Service should never be criticised. Of course I am not. But credit must be given where it is due. I welcome what my right hon. Friend the Member for Taunton said about Parliament's role. The job of Government and Parliament is to encourage the trends and developments that have been taking place. I welcome my right hon. Friend's agreement that we are going in the right direction, even if we are not going as fast as he would like. We intend continuing to reinforce and promote trends already running inside and outside the Civil Service, which are producing a more effective service which is more relevant to present conditions and provides a better service to the public at a lower cost.

We have a smaller, more efficient, more cost-conscious and more cost-effective service. The accent increasingly will be on personal responsibility, and personal achievement. It is a challenge. If Government, the media, and indeed this House itself, all play their part, I am sure that the Civil Service will meet that challenge with great skill and achievement.

11.22 am
Mr. Alan Williams (Swansea, West)

It is a pleasure to stretch my legs. The Minister obviously believed it appropriate to introduce a programme for the life of a Parliament and beyond with a speech for the life of Parliament and beyond. It was an interesting and fascinating exercise in longevity, if not effectiveness. It is a precedent for the speech that I am about to make.

As I listened to the Minister for 52 lengthy minutes I recalled a speech at the Oxford Union by someone whom the right hon. Member for Taunton (Mr. du Cann) might remember. His name was George Gammans and he came to the Oxford Union when he held the exalted office of Assistant Postmaster-General. The holder of that job was always noted for his high quality of oratory. After speaking for 40 dreary minutes Mr. Gammans said of some issue: "You may well ask how long it can go on. I can tell you that it could well go on for the rest of your natural days." This morning I remembered that sentence.

I congratulate the Select Committee on its report. There is no doubt that the Select Committees have proven themselves more than adequately. They are a tremendous addition to Parliament's armament for probing and checking the Executive. I congratulate the right hon. Member for Taunton on his role in establishing the status of his Committee. I also congratulate my hon. Friend the Member for Motherwell, South (Dr. Bray). He said that he was not willing to be a neutered political animal. We served in Government together in the 1960s. If there is one thing that my hon. Friend has never been it is a neutered political animal. He has always had an independent mind. He even left the Government to publish a book on Government statistics because he wanted to be able to write freely.

The Minister spoke of what has happened since the Conservative Government came to office. He said that a transformation of attitudes had taken place. I agree with him. I invite the Minister to look at the correspondence column in The Times today. Unfortunately the views of the lady referred to by the general secretary of the Inland Revenue Staff Federation include unparliamentary language so I shall not quote them.

Hon. Members should be worried at the disintegration of morale. The right hon. Member for Taunton referred to it, but he is too loyal to his party to put it in strong terms. He implied that morale had suffered. That is understandable with the successive bashings that it has taken. There can be no doubt that one of the arch culprits is the Prime Minister.

The right hon. Member for Taunton said that the Civil Service had never been so heavily criticised. That is correct. Much of the criticism in the past few years has come from the Dispatch Box. From the content and tone of his speech I judge that the right hon. Gentleman was making an attempt at rehabilitation. The message must be heard in the Civil Service unions with whom apparently the Government now want to make peace. It is about time. Enough damage has been done in the past four years.

Morale has disintegrated under arbitrary manpower cuts. I say "arbitrary" because, as the Minister admitted, the target figures for the cuts were set before the levels of unemployment and the pressures of demand on the employment and social security offices were even envisaged. The figures were irrelevant to the functional needs of the service.

Morale has crumbled as a result of a grossly mishandled dispute, which could have been settled much earlier for the same sum at which it was eventually settled. The cost of over £700 million in interest charges on uncollected taxes is still being met by the Government. Morale has collapsed because of the charade over Civil Service pensions, which has been fuelled by the Prime Minister in the House.

The right hon. Member for Taunton said that most criticisms of the Civil Service had been unfair, thoughtless and from people who should know better. He said that such criticism was contemptible. I could not put it better myself. I hope that the Minister will draw that opinion to the Prime Minister's attention. I think that she deserves every word of it. The right hon. Lady castigated faithful ex-employees for daring to draw the pension that successive Governments had negotiated and agreed. She rejected the advice of the Government Actuary because it did not confirm her prejudices on the funding of those pensions. She set up a rigged committee and then spurned it when the logic of its findings did not confirm her prejudices. The Scott committee came out with its conclusions, but they did not confirm her preconceived ideas. Her role has been a miserable and destructive one in terms of the Civil Service and its relationships with the Government. She arbitrarily and unilaterally tore up, without consultation, a 25-year-old pay system introduced by a Conservative Administration in the 1950s. Then, in an about-turn, she abolished the Civil Service Department.

As the right hon. Member for Taunton rightly said., morale is a key factor in efficiency and effectiveness, and this is understood in the Army and industry. That is why we face a service in which there is unprecedented inefficiency and ineffectiveness that is not the fault of the officials involved. Today, we have been treated to what the Minister clearly sees as a Government success story. All things are relative. By the Government's standards this might be a success story, but I hope to demonstrate that by any normal standards it could hardly be seen in that light.

The Minister tells us that the Civil Service now has the lowest level of manpower since the second world war, regardless of the fact that demand for the services that it supplies happens to be at the highest levels since the second world war. The Government have tried to achieve these objectives through manpower cuts, hiving off and privatisation, but this has resulted in a lower standard of service to the public. The cuts have been achieved by the financial sleight of hand of passing costs from one part of the public sector to a different part of the public sector and at the cost of unbelievable inefficiency bordering on bureaucratic chaos.

In November 1982, a report of the Treasury and Civil Service Select Committee said that 50 per cent. of the previous 12 months' savings had been achieved through general streamlining, including a lower standard of services and the dropping or materially curtailing of a function. As we look at one sector after another of the Government's activities we see, as a result of the cuts in the past four years, lower standards of service to the public. It is not just lower standards for the public generally but, all too often, lower standards to the most needy. Those able to defend themselves are looking after themselves.

There is an illogicality about so much of this. It was in 1980, early in this process, that the chairman of the Board of Inland Revenue pointed out to the Government that £3 billion was being lost to the Government through the black economy. In their own financial statement and Budget report in 1981–82 the Government said that on VAT alone they were being denied between £120 million and £200 million of tax due to them. That is a massive loss of taxable income to the Government, and this was before they imposed the continuing round of interest charges on uncalculated taxes.

Against this background of clear and obvious evasion of tax obligation, 400 VAT control posts have been cut. Now, over half of the people who pay VAT will not have been visited within the three years during which they have to keep their records. Thus, they will not be visited before they are entitled to destroy their records. This is despite the fact that one in three of the checks have revealed underpayment. The Inland Revenue staff has been cut by 12,000 since 1979, but the PAYE backlog is still costing the Government £10 million a month on top of the £700 million to which I referred earlier.

The Government have cut the numbers of staff by 12,000 despite the fact that in 1982, the Public Accounts Committee report said that the 1,870 investigatory staff in the Inland Revenue had produced £173 million-worth of extra taxation income. Small wonder that the report concluded that these figures suggest strongly that substantially more investigation staff should be employed by the Inland Revenue. As we recorded in our Twelfth Report 1980–81, the immediate yield in additional revenue as a result of the activities of present staff is at least four times the cost of their salaries. Although, in cost benefit terms, these people were able to yield in income to the Government four times what they cost the Government, the Inland Revenue is still suffering major cutbacks. Such is the new efficiency that the Government have created in the Inland Revenue that, as the letter to The Times says, there is no prospect of the target of in-depth examination of only 3 per cent. of self-employed accounts, 1 per cent. of companies', being met. What will happen to these already massive figures of tax evasion and loss? Day in, day out, year in, year out, they far outweigh the figures of gain that the Minister has claimed for the Government. With 12,000 Revenue staff gone and another 3,000 likely to go in the next six months, we find that, in July this year, when the Revenue carried out its count of outstanding correspondence, there were 5 million pieces of mail awaiting reply in the tax department. Some 1,800,000 were over two weeks old and nearly 250,000 were over two months old. With 12,000 jobs gone in tax offices in July, there were 1.25 million more letters waiting to be answered than there were in April, a 34 per cent. increase in three months.

The tax office arrears were up 42 per cent. on April and 36 per cent. on July of last year. However, according to the letter in The Times today, faced with a backlog of 5 million items of correspondence waiting reply, what economy has the Minister made? He has put a ban on recruiting typists. No doubt it will be quicker if the Inland Revenue staff do the letters in longhand. To this existing chaos the Minister is about to add new cuts—in fairness to him it is one of his colleagues, but nevertheless in the same Department—by saving 600 clerical posts. This system is called "selective record-keeping" and means that the tax files on 22 million people paying PAYE will be destroyed. That is quite an economy campaign. There will be desk folders, but the system will have problems.

The Inland Revenue has had an unusual burst of honesty and openness on this matter, and in a press release admitted that the change might cause problems, as the loss of 22 million files might well do. As we would expect, the Inland Revenue has investigated the matter and in a press release it said: what those cases will be, how many there will be … we cannot yet see. In our view this is a consequence of the (new) system for which there is a price to be paid. In other words, without consultation with the staff and on an inadequate pilot study the Government are unleashing a new system in relation to PAYE taxpayers when they have admitted they cannot forecast the problems that it will create.

I can tell the Government of some of the problems that it will create. The people whom they did not consult, the people who work in the offices, have taken the trouble to try to tell Ministers-not that the Ministers have listened. It will be impossible to deal with complaints properly. It will be harder for taxpayers to check their tax affairs, particularly some years back. There will be extra delay because the papers will be scattered around various offices. Evasion will be made easier. The work of Members of Parliament and the ombudsman—we all know how many tax cases we have to deal with—will be made more difficult because of this administrative saving that the Government are making, doing away with 22 million of their tax files.

This proposal has the makings of a repeat of another masterpiece of Conservative efficiency—the housing benefits scheme. When it was introduced, it was heralded as saving 2,300 DHSS staff and as a great saving in manpower. The Government failed to point out that it would probably lead to the need for as many staff again in local government, but local government has to pay for that, so why worry about it? As far as the Government are concerned, it is a saving, but it is not a saving as far as we, the taxpayers and ratepayers, are concerned. However, that is irrelevant, because the Prime Minister can say that she has kept a meaningless commitment about manpower figures.

The scheme that the Government introduced to save 2,300 staff is so complex that the Department of Health and Social Security, before it washed its hands of responsibility in helping with rents, produced a booklet—"booklet" is an inadequate description; it was a book of over 100 pages—merely to explain how this simple little scheme works. Nevertheless, although it was so complex, and against the advice of the local authorities, the Government rushed ahead. After all, the Government had a timetable to keep, with dates on which they had to reach their targets for cutting down manpower. So, despite the advice from the local authorities that the scheme was complex and that they needed time to train new staff in the requirements of the scheme, the Government drove it through. I wonder how many hon. Members have not received complaints from constituents about the workings of the scheme.

Months after the scheme was introduced, many private tenants still have not received an assessment, and many of them have received little or no benefit. As a result of this economy on the part of the Government, not only is there the chaos that the hon. Member for Stockton, South (Mr. Wrigglesworth) described, but the needy—the people that the scheme was intended to help; 2 million of them—will lose financially. it is another example of the needy paying for arbitrary staff economies at the centre.

Another dogmatist brainchild was the sickness benefit scheme. I was tempted to say that it was a scheme of which you, Mr. Deputy Speaker, have an almost unique knowledge, but it is unfair of me to make that comment. In came the sickness benefit scheme to save 5,000 Civil Service jobs in the Department of Health and Social Security. Now the very employers, particularly the small employers, whom the hon. Gentleman said had benefited from this enormous cutback in filling in forms giving statistical information to the Government, say that they need the time to fill in all the forms that they have to fill in for the sickness benefit scheme. They have to keep records of who has been paid, who has not been paid, why they have not been paid, and the qualifying days. It is little wonder that the chairman of the National Federation of the Self-Employed, speaking on behalf of his 50,000 members, said: We object strongly to the fact that we shall be acting as unpaid civil servants". In a way, it is rather poetic that one of the organisations that had been howling for a cutback in bureaucracy now finds itself recruited to aid the cutback of that same bureaucracy.

We must not forget the sick. After all, the scheme is devised to help them, but perhaps that is a mere peripheral consideration. Under this scheme, many of them are far worse off than they were under the scheme that it replaced.

The Government's narrow concept of efficiency—the right hon. Member for Taunton was right when he said that we should talk about effectiveness more than efficiency—is pursued regardless of the effect on the people that they should protect, the people who most need their protection. In 1979, for example, the date when the hon. Gentleman started his review of the changes that have taken place, we had 952 factory inspectors in Britain, and the Government promised that an extra 200 would be added to the staff because of the work loads. We now find that, far from the extra 200 who were promised, 100 of the inspectors who were there have gone. The result is that fewer than 5 per cent. of workplace accidents are investigated. The Health and Safety Executive staff has been cut by 700 in three years. So, when the new asbestos regulations came in—we should remember that 50,000 people will die in the next 30 years from the effects of asbestos—the work related to those regulations could be carried out only by dropping other HSE work. Seven hundred people will die in accidents at work each year, over a quarter of a million suffer severe occupational injury at work, and 900 die from industrial diseases. The Health and Safety Executive estimates that the total cost is more than £2 billion a year, and as a result of the work of the HSE, between 1974 and 1983 the accident rates fell by a third. If ever an organisation has justified its existence, this one has. Yet if the request from the Department of Employment in January this year is met, the HSE will have fewer staff than it had when it was set up.

We see the same thing in the Mapower Services Commission. The tragedy is that young people are lured into crackpot schemes in industry that have not been properly set up, because the MSC does not have the staff to ensure that the youngsters are working in a proper environment. There have been tragic cases of youngsters maimed and killed simply because the manpower is not there for these organisations to carry out their work. These economies are not only false but unforgivable, because they have been executed with a cynical disregard for their effect on life and safety.

Even the most needy of all do not escape the Prime Minister's obsession with manpower cuts. In the two years to 1982, the numbers claiming supplementary benefit rose by 34 per cent., yet in the three years up to 1982, at the time the increase was taking place, the staff administering it was cut by 6,000 and next year is due to fall by a further 11,000. Yet the Government cry crocodile tears because people are not claiming the benefit to which they are entitled, because there is not the uptake that there should be for some of the more obscure benefits. Is that surprising when one looks at the changes that have been introduced while Ministers profess concern for the disabled at the Dispatch Box? Ministers go back to their Departments and make administrative decisions that ensure that those who are ignorant of the system remain ignorant. For example, the unemployed used to be visited within four weeks of making a claim at a time when they also had earnings-related income. That meant that they were then probably better off in their redundancy. The unemployed were visited in the first four weeks of making their claim to ensure that they were made aware of their benefits. Such a visit now takes place once a year, normally towards the end of the year.

Postal applications have been introduced, which is fine for those who understand the system, who happen to be average, ordinary and literate, without any unusual problems, who understand the forms and are not frightened by them, and if we overlook the fact that the Government's pilot studies have shown that there is a high incidence of error and delay as a result of switching to those forms. That is another move that ensures that those whom the Government say need help are actually finding it increasingly difficult to obtain that help when they go or write to the local offices.

Visits to pensioners used to be once a year but they are now to be once every four years and it is doubtful whether even that programme can be sustained. Yet those are people who are most likely to have great difficulty in understanding their entitlement. The west midlands county council—although other areas have similar levels of unemployment the accelerated growth in unemployment there has been unequalled—was forced to observe that the welfare benefit system in its area was nearing breaking point because of the huge demands being made on it through soaring unemployment.

At a time when need is most desperate the Government are making it more difficult for people to obtain services. As a poetic side comment, it is probable that operation Major in Oxford would never have been needed if the old system of home visits had been in operation, thus preventing the fraud that took place. Indeed, my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), who is sorry that he is not able to be with us today—we all know of his work over the years with the disabled—has told me that in his experience the disabled suffer particularly from the changes that have taken place as a result of the so-called improved efficiency in the Department of Health and Social Security.

Attendance allowances are now taking on average 13 weeks to process. Supplementary benefits, particularly the special benefits such as dietary and heating benefits, of which many people are unaware, are the very benefits that are most important to the elderly. Because they are not now receiving the benefits that they used to receive from the DHSS, increasing numbers are being denied the entitlement that Ministers assure us that they want them to have.

It is tragic that someone should be denied help that exists because he does not know how to obtain it. On other occasions the position becomes farcical. For example, in Bath the Ministry of Defence took the hon. Gentleman's advice and brought in contract cleaners. They were cleaners of considerable ingenuity because they gave each of their staff an extra name. Their staff would turn up one day working under one name and the next day working under another. That might be exciting but it has nothing to do with productivity. However, it has everything to to with avoiding national insurance. It meant that the staff was able to ensure that they never reached the threshold at which they needed to register for national insurance. It also meant, and this should concern the hon. Gentleman as a Treasury Minister, that while the Treasury had the files—it will not in future, so this will not be a problem—it was not aware of its entitlement to tax revenue from those people.

We all know that cleaning women are hardly the most affluent members of the British work force. They are often those who are working when they may be better off drawing social security benefits. They are the people who are trying to keep their pride by working when a job is available even when it may not make economic sense because they could probably do as well out of benefits. What are the Government doing to those people? They are driving them back into the benefit system because they are now telling those firms that are applying for Government contracts for cleaning work that they will not consider any contracts where the wage levels built into those contracts are not lower than the levels that presently apply in local authorities. So this caring Government take those at the bottom of the pile and squeeze them even further.

We have now reached the unbelievable position where as a result of the Government's policy the beneficiaries of the contract work—the employers—benefit from the fact that the Government have dropped the minimum wages clause for contract work. Those beneficiaries are the 20 per cent. in a trade association. There are many rogues in this area. They have recently told the Government that they want the introduction of a minimum wage because the 20 per cent. in a trade association were the more respectable cowboys who are now losing work to even worse cowboys. They now say that it is all well and good to get work from the Government by undercutting Civil Service rates of pay but that it is appalling that other people should take the work from them by undercutting their rates of pay. The leeches on one system are turning around and decrying the fact that they find leeches on their own backs.

Where will it end? What will happen? It is nonsense. In the Department of Employment, accordng to a study on hours of work—perhaps the hon. Gentleman will enlighten us on this if he catches your eye, Mr. Deputy Speaker—more than 25 per cent. of civil servants are working hours over and above those required of them. Officials are working more hours than they are legally required to and they are being told that they must continue to do so on a falling standard of living because their pay must not rise in line with the cost of living. In that same Department there is a shining example for those officals at Minister of State level. There there is a man who receives £5,000 more for doing less work. To be honest, in the Prime Minister's eyes, he is doing worthwhile charity work. She has identified a new, unregistered charity—the Conservative party. He is to be paid a higher salary for doing less work in the Department of Employment. How that must improve the morale of those who advise and work for him; all those who previously looked up to him.

The position is not what we have heard from the Minister today in a carefully tailored presentation. The reality is found, for example, in a report to the Prime Minister on running costs. It was not produced by a rogue elephant or an eccentric, but by Mr. J. S. Cassels, who is well known to both the Minister and the Prime Minister, because he has just been given a new and important role in NEDO. When he wrote the report at the request of, and for, the Prime Minister, he was second permanent secretary in the Manpower and Personnel Office. Therefore, it was not a wildcat operation. Like Sir Derek Rayner, he set up teams in various Departments and sought reports from them on the effectiveness and efficiency of the new systems. In that report to the Prime Minister, he said: The DES report says that meeting the cash limit may well have been: 'at the expense of efficient and cost-effective developments in the department."' That is not very encouraging, and does not quite fit in with what has been said today. Similarly, Mr. Cassels points out that the report of the Department of Trade stated: that the existing procedures have resulted in the cash limit being respected should not be taken as confirmation that resources are being used economically and effectively throughout the Department. Thus, someone right at the centre of things, in the new unit set up by the Government, is far less impressed than the Minister with the outcome of those cuts. As I have said, they have been disastrous for those who need the services of Government.

Reality is not as it was described in that long, turgid presentation of glossed-up claims for increased efficiency in the Civil Service. The reality is that the savings are illusory, and that is shown by the £700 million-odd costs on the revenue front. The accounting that enables the Government to claim such savings would win the respect of professional con men. The real cost is being met by those most in need. The beneficiaries are not the Government or the taxpayers, but the crooks, cheats and tax evaders.

12.1 pm

Mr. Charles Irving (Cheltenham)

We can all agree that the contributions made so far have been very important and interesting. I have some fear and trepidation in following the brilliance of my right hon. Friend the Member for Taunton (Mr. du Cann). It is a difficult task to speak after him. Therefore, I shall not dwell on the subjects that he raised, which are nevertheless very important to the Civil Service. However, I join with him in the fulsome tribute that he paid to the hundreds and thousands of those who work day and night throughout the land in the Civil Service.

I pay special tribute to the local offices in my delightful constituency of Cheltenham for the magnificent service that they give me as their Member of Parliament. Indeed, all the offices in the south-west are untiring in the way in which they respond speedily to the requests of their Members of Parliament, despite staff shortages and the difficult problems that they have had to face. I am happy to think that we can rely so heavily on the local offices, as that must relieve Ministers and their Departments of many of the problems that they would otherwise have to deal with directly. I join other hon. Members in saying that we should be proud of the contribution that everyone makes to the management of our important affairs. I include in that those, such as postmen, who play more humble roles and who are often forgotten.

I should like to raise three points that are of considerable consequence to those who work in the Civil Service. I know that the Minister is a moderate man and I hope that he will be kind enough to note carefully my points. I cannot believe that he would willingly be a party to what could well be construed as a grave injustice and an infringement of the national civil liberties of those in the Civil Service. About 35 years ago I was a young councillor responsible for the negotiations with the Government to bring the Government communications headquarters to Cheltenham. The headquarters plays an important part in the public and social life of the community. Between 7,000 and 10,000 people at Cheltenham are subject to positive vetting. In all, about 68,000 civil servants will be subjected to a fairly untried system in this country that I view with the gravest suspicion.

Civil servants very much support the proposition that state security is paramount and are quite happy to go along with a just and fair system of positive vetting. However, they are disturbed and worried about the introduction of the American system of polygraphs. Until their deputation came to see me, I knew little about polygraphs, but since then I have made it my business to find out more. My anxiety to treat people justly and fairly has consequently risen to heights seldom reached before.

I am worried about the situation. The civil servants who will be subjected to the new system of positive vetting are worried and angry that they should be subjected to a system that learned reports and papers show is often 50 per cent. inaccurate. Indeed, it is known that the polygraph is not an accurate way of distinguishing between the potential spy and the honest person. The Royal Commission on criminal procedure examined American tests on the polygraph, and concluded that evidence obtained by it was not sufficiently reliable to be admitted in a British court of law. Therefore, there is room for further examination of the issue to ensure that innocent people are properly safeguarded.

The confidentiality of positive vetting in the Civil Service is such that, if the new-fangled, unreliable system of polygraphing is continued a civil servant, unknown to him, may have a mark on his record that could destroy his future career prospects. I cannot believe that the Government and my colleagues willingly subscribe to such a system which, on the information available, appears to be manifestly unfair. Some of the claims about it must raise many eyebrows—for example, that the use of the polygraph will deter spies from attempting to gain highly secure jobs. That is a load of nonsense. Many techniques are available to the trained spy that will fool the machine. With all the sincerity in my heart, I say that the system should not be allowed to continue, even through its trial period.

This country's record is not bad. They hysterics about GCHQ are wholly unwarranted. Thanks to certain circumstances, the Prime case was brought to a firm conclusion. Peter Hennessey of The Times pointed out that in the United States 57 known spies had been caught or had defected since the second world war. The figure for Britain is 25. Is it not possible that the professional, trained spy will pass the polygraph test, thereby enhancing falsely the reliability upon which the test rests?

Money spent on machines and operaters would be far better spent on increasing the inadequate number of investigating officers, which has been sadly and wrongly reduced. Should not those professionally trained people make decisions on the basis of records and people? Those subjected to positive vetting are not seeking a weakening of that vetting; they are seeking only fairness and justice.

My second point has been pre-empted by the right hon. Member for Swansea, West (Mr. Williams). Surely the Minister and Treasury colleagues are disturbed and worried about the figures for Inland Revenue and DHSS cuts, which have not been disputed. It must surely worry the Government and taxpayer alike that a reduction in investigating staff has opened so many doors for abuse. I understand that there are some 5 million letters lying around the tax offices that cannot be processed because of a shortage of staff. There is an estimated black economy of £15 billion, which means a tax loss of about £4 billion. Those figures come from the Keith report.

In 1980 or 1981 there were 1,800 tax investigators. As has already been said today, those hard-working people collected about £170 million in revenue that would otherwise have been lost. The insidiousness of the black economy means that those of us who pay our taxes—we have little choice because it is taken off us before we receive our salaries—pay more than we should because many people escape their responsibilities. There are insufficient staff to ensure proper collection.

That criticism applies also to the DHSS. Senior officials have openly complained to me that they are aware that many people who understand the system design their lives to cheat it. Such people are happy to defraud the state. They take gash jobs when it suits them. The DHSS cannot cope with the necessary investigations into that practice.

I am sure that the Government intend not only to be fair but to ensure that those who can pay their dues do so, and that those who are old or infirm and need help receive it more speedily than happens under the present system. Few machines could replace the compassion, concern and sympathy of the personal approach to which people have become accustomed. The Minister and the Government, to their credit, are working to reduce taxes and the burden on the dwindling number of people called upon to pay tax. My hon. Friend said that he had reduced the paperwork by one third. What a joy it would be if it were reduced by two thirds and the one third that was left was printed and produced with simplicity, which is the only way that I am able to make a speech, so that even commoners like myself could understand some of the forms.

12.20 pm
Mr. Tom Clarke (Monklands, West)

The hon. Member for Cheltenham (Mr. Irving) made several useful points, not least of which was his reference to the menace of the polygraph. I understand that some of my hon. Friends, if they are able to catch your eye, Mr. Deputy Speaker, will deal with this matter, so I shall make no further comment at this stage.

I join the hon. Member for Cheltenham in paying tribute, as I think all of us would wish to do, to the management and staff in the various public offices which serve us in our constituencies. I refer in particular to the Department of Health and Social Security, because all of us know the enormous problems with which it and its staff have had to deal. Like the hon. Member for Cheltenham, I feel well served in that respect.

My right hon. Friend the Member for Swansea, West (Mr. Williams) and the hon. Member for Cheltenham mentioned the fact that great piles of mail are lying unsent in the Departments. Letter are not being answered for a long time. If that is true of those who are interested in the public service and these Departments, it is also particularly true of Members of the House who find that they are having to wait for months on end for replies to letters, particularly during the parliamentary recess, which should have come with greater speed. I have been criticised by some of my constituents because I have been unable to reply to them as I have not had answer from the various Ministries.

If we do not have the staff to cope even with the reasonable and responsible correspondence of hon. Members, I hesitate to reflect on what is happening to the general public when they, too, are exercising their right to put their questions and express their views, which we as Members seek to do.

I am disappointed and astounded—I say this with great respect to the Minister—that, in view of all the problems in the British Civil Service, including the problems that have been expressed by hon. Members today, we have not had a debate on the subject for five years. During that period we have had not only a major Civil Service dispute whose consequences my right hon. Friend the Member for Swansea, West illustrated, but the disappearance of one of the most successful Ministers—not that there was all that much competition—in the Prime Minister's Government. Lord Soames, after a spectacular success in Zimbabwe, was removed from office. I suspect that that happened because he represented, if it were possible, the human face of the Cabinet in dealing with the Civil Service.

On pay, why is the Minister afraid, why is the Prime Minister afraid and why are the Government afraid of arbitration? Arbitration represents an aspect of good industrial relations that should appeal to the Government and to the House. When I first arrived in the House in the summer of last year I heard several times from the Dispatch Box criticisms of trade unions. During the railway dispute I remember criticisms of ASLEF because it would not consider arbitration. If the Minister is telling the House yet again today that arbitration is not acceptable—he may correct that impression, but that is the one that he gave to me—the public will reach the inevitable conclusion that the Government's case is not strong.

To pursue their case the Government are relying on the problems in our economy and in particular on high unemployment. One does not need to have a wages policy and one does not have to be sensitive about consultations when unemployment is high and when our civil servants, especially those in the Department of Employment and the DHSS, are reminded not just day by day but hour by hour about the realities of the free market in terms of jobs.

The Government appeal for efficiency and effectiveness but their policy does not give priority to the quality of services that we would wish to see. I may be mistaken, and I apologise to the Minister if I am, but I do not recall him referring at any stage during his lengthy speech to services. Departments exist because the public rightly expect, and are paying through their taxes for, services—in the DHSS, in the jobcentres, in the Department of Education and Science, in the Home Office, and so on. Before we agree on manpower levels, and before we agree on the Government's rigid approach, we are entitled to ask what type of service we wish to provide. Surely we are entitled to take into account the views of our constituents, the public, and not least those employed in the Civil Service—those who in many cases have given a lifetime's service in their jobs.

That has not been happening, because, early in the life of the Government, the Prime Minister set an arbitrary figure for the Civil Service of 630,000. As a result of that target the approach in every Department has been based not on the services that the Government or the House wish to see but on whether they can meet the rigid doctrine of cash limits which has been set by the Treasury in an endeavour to achieve that target.

If it be thought that I am speaking rather strongly on these matters, I accept that charge. I had some personal experience of their consequences shortly before I came to the House. I was employed by the Scottish Council for Educational Technology, a fringe body within the Civil Service. I was privileged to be the chairman of my branch of the Society of Civil and Public Servants. The council was sponsored by the Scottish Education Department and it was the subject of a job inspection. The management and unions of the organisation were seldom, if ever, in any disagreement about their attitudes to posts and job evaluation, for example, but they found that the Treasury, after the Civil Service Department amalgamation, would not accept the understanding on job evaluation and other matters that existed between the management and unions. As it happened, I was a victim of that attitude, but much more important is that it was an appalling example of an exercise in industrial relations.

There were lengthy negotiations and time after time the Treasury went back on the promises that it had given. Faceless Treasury representatives—the union and staff representatives did not set eyes on them—sat in another room while the management was negotiating with the unions and staff on the job inspection exercise. It was clear that the Treasury representatives did not have the enthusiasm that ACAS representatives display in trying to solve industrial disputes. It appeared that they had almost contempt for the arguments that were being advanced, even though the exercise and the approach to this particular section of the Civil Service was directly relevant to the morale of the staff. It appeared to those involved in trying to reach an agreement that the service was being denigrated. This may well have led to great fear among other important fringe organisations within the public service—and with good reason.

I know that the Minister is not specifically responsible for the job inspection exercise which is taking place within the House. However, he will not be surprised if some of us pay keen attention to what happens as the exercise proceeds, if only because we have a responsibility to protect the rights of our staff.

Yesterday the Financial Secretary to the Treasury referred several times in a reassuring sense to the cold hand of the Treasury. Writ large, even over the sympathetic sections of the Minister's speech, is the influence of the Treasury. I think that the Minister will grow in stature if he is seen to stand up to the Treasury. Let it be realised that the Treasury is not always right, it is not always sensitive and it is not always aware of the demands of Departments within the public service. That applies as much to the Civil Service as to the Health Service and local government, for example.

The question arises—I intend to pose it from time to time—"Who guards the guards?" My right hon. Friend the Member for Swansea, West referred to the Manpower Services Commission and to the supervision of youth training and youth opportunity programmes. I have been greatly concerned about the question of supervision, especially recently. In the past eight or nine months, two of my young constituents have died in the course of carrying out their work on youth training schemes. One of the firms concerned was fined £800 after being found guilty in the courts. That fine seems entirely inadequate. I listened to many days of the court hearing and thereafter I re-examined some of the evidence that I had heard.

It seems to me that the MSC does not have sufficient staff satisfactorily to monitor the matters for which it is responsible, even if it has the right policies and knows what it wants to do. I am sure that it wants to be certain that safety policies are being implemented and that young people and employers are being made aware of the health and safety provisions. However, like many other Departments, the MSC does not have sufficient staff to ensure that its objectives are achieved.

Reference has been made to the great strain on the Department of Health and Social Security. In my constituency, inevitably unemployment has risen considerably. Since 1978 supplementary benefit claims throughout the country have increased from 3 million to 4 million. Unemployment benefit claims are well up. This is allied to the points made by my right hon. Friend the Member for Swansea, West about unified housing benefits.

It is inevitable that when society has changed in this way, when individuals and families and, therefore, these Departments are facing greater problems, the work load will increase. It is astonishing in the light of these factors that the Minister at the start of his speech said that we are employing fewer civil servants than at any time since the second world war. If that is the case, it might be helpful if the Prime Minister from time to time paid tribute to the work of those civil servants who still remain. It might be helpful also if the Minister explained how he relates that colossal drop in manpower to the services that we seek to provide.

If there has been a reduction of 10 per cent. in manpower during the past few years because of privatisation, the unions, people in the Civil Service and the public are entitled to know the Government's objectives. I understand that the Government's proposals extend to the Ministry of Defence. I wonder whether we can look forward to the time when we have a type of privatised Dad's Army—perhaps in the absence of American intervention. How far do the Government intend to go with privatisation? I believe that the House is entitled to know the answer. It is important for employees—Ministers have responsibilities as employers—to ensure that people working in these Departments, especially when considering their promotion prospects, know what they are entitled to do. Young people thinking of entering the Civil Service are entitled to know what the future holds. They are entitled not to be presented with pragmatism but to be told the demands that will be placed on the Civil Service Departments and the roles that they will play.

Civil servants at every level and in every Department ought to be seen as more reflective of the national character, of the various regions, and the schools. As a Member dealing with senior and not so senior civil servants, I have not met many who have been educated in comprehensive schools. I say to my right hon. and hon. Friends that it is the responsibility of the next Labour Government to ensure that opportunities are made available and barriers within the Civil Service—I am sorry that they still exist—are broken down.

The Prime Minister, no doubt advised by Saatchi and Saatchi, said that she would rake on a young trainee in 10 Downing street. We have heard no more about it. It would be interesting to find out when that remarkable event will occur.

Over the past four or five years, morale within the Civil Service has taken such a knock that it is the responsibility of the House to reassert the right to speak on behalf of our constituents and to defend staff in the Civil Service who, as the Minister correctly said, have done so much in the service's interests. If that is the case, with great respect to the right hon. Member for Taunton (Mr. du Cann) who has made a major contribution in this area, I invite the Minister, the Prime Minister and the Government to return to the drawing board and to examine the services which they wish to see available, and to set their objectives in. education, the National Health Service and so on. Having done that, they should try to produce a Civil Service structure which meets those demands and the demands of modern times.

I believe that that can be done only if the Minister accepts that people matter. People matter, whether they are unemployed and drawing unemployment benefit, widows who are looking for assistance or young clerical officers entering a career who are entitled to more of an assurance about their futures than the Minister or his colleagues have given.

12.41 pm
Mr. Jim Lester (Broxtowe)

I do not intend to take up the remarks of the hon. Member for Monklands, West (Mr. Clarke), other than his comment on the subject of supervision and safety in the youth opportunities programme and the youth training scheme. It is fair to say that, when introducing the youth opportunities programme in 1978, the Manpower Services Commission mobilised more manpower than was mobilised in the second world war because of the need for effective action in helping to deal with the severe problem of youth and school-leaver unemployment. In doing that. it made a major contribution to easing the unemployment problem. Unfortunately, something slipped in the carrying out of that operation. It is worth noting that the youth opportunities programme was a very effective operation, and the youth training scheme is its predecessor. We must ensure that there is proper supervision of young people and that health and safety provisions are adequate. We must not take out of context what was achieved by the initial programme.

I declare an interest as an adviser to the First Division Association, a job that I undertook out of respect for the service that I received from senior civil servants and out of respect for the service that we all receive in our constituencies. During my 10 years in the House, I have received nothing but courtesy and unstinting help from those involved in the public service.

I was very pleased by the way in which my right hon. Friend the Member for Taunton (Mr. du Cann) opened the debate. He referred to the way in which hon. Members work in the House and the balance between the supervision of the House and the establishment. He also referred to the important work carried out by the Select Committees and the contribution that they make to open government and, it is to be hoped, to intelligent and sensible decision making. Select Committees base their decisions on evidence which members of the public freely give and which is available for others to examine. Such work must be a major contribution to good government. My right hon. Friend reminded the House that it carried the ultimate responsibility. In doing that, he paid tribute to the work of the Civil Service, and I associate myself with his remarks.

As the Government begin their new term of office, we must put an end to the myth that the Government are anti-Civil Service. In that connection, I wish that some of my hon. Friends would re-read the Conservative party manifesto on which they fought the election and would make less strident noises.

I do not think that we should underestimate the mistrust and suspicion harboured by civil servants and their trade unions, many of whom were previously our supporters. That feeling stems partly from the legacy of our action on pay research in 1981 and the bitterness invoked by the subsequent industrial dispute. I remember deputations of those who throughout their working lives had been devoted civil servants coming to see me appalled at some of the editorials in the newspapers which classified them as public enemy number one.

Some bitterness undoubtedly remains, and the result has been that the political direction of the Civil Service unions, which moved to the left, has started to return to the previous position. This is the moment when the Government could make some helpful moves to reinforce that. It is essential in the work that we all seek to do that wherever we can we achieve co-operation. That is invaluable.

As an earnest of our good intentions, there are three areas that we might study in an attempt to build good relations. My remarks are really an attempt at bridge-building. I am thinking out loud and, if any of the noises that I make echo in the ears of the Minister, I shall be grateful for his response to them.

The first and most important area is that of pay. We have seen a sea change on pay from the form of comparability that we had to declared amounts and negotiations, and then seeking a new and better way. I am sure that the Megaw report provides a better basis.

In the end, any agreement must have an element of comparability. I do not think that any of my right hon. and hon. Friends would want to see Civil Service pay leading the private sector. At the same time, I doubt whether any of us would want to see it lagging behind. When we talk about comparability, we have to examine what the private sector pays for comparable work. That is no more than giving civil servants the rate for the job to which they are entitled, if we are to win the co-operation and active support that we want.

That leads me on to arbitration, and here I take up the remarks of the hon. Member for Monklands, West. I understand the Government's anxiety about abitration. If we are honest, we have to admit that arbitration has been used wrongly in the past. We have seen it used after prolonged negotiations have pushed the employers to the maximum that they can pay, and then arbitration has come down in favour of a figure between the employers' maximum offer and the original claim so that there has been an additional leap. I quite understand why the Government are wary of arbitration.

In my view, that attitude is wrong. We ought to be looking at the form of arbitration and using our intelligence to see whether it can be made the key to good industrial relations and turned into a way of avoiding disputes. I suggest that we should be considering arbitration on an all-or-nothing basis. That would defeat the way in which it has been used in the past. If people go to arbitration, it should be only on the basis of the original claim. We need to look at imaginative ways of using arbitration. The parliamentary override is a little like the ultimate weapon: it can be used only once.

I add a word in passing about pensions, which have given rise to grave differences of view between the Civil Service and the public. The Scott report proved that a great deal of difficulty was caused by misinformation. It is right to make Civil Service pensions openly contributory and to let the public see that index-linked pensions are paid for. If the pension arrangements are negotiated fairly, the outcome will be another contribution towards a better relationship.

The third area is that of manpower. I take a different view from that of the Opposition. The Government were right to set a target and to establish a momentum to try to achieve an important objective. The Minister spoke of the success that that had achieved.

I echo the remark of my hon. Friend the Member for Cheltenham (Mr. Irving) that we must look more constructively at any future reductions. I say that not only because of the cases to which hon. Members have referred but to return to the level of debate which my right hon. Friend the Member for Taunton introduced. The reductions in percentage terms have been greatest at the top of the Civil Service, at a time when all concerned, including the Select Committee, are putting greater emphasis on the role of civil servants as managers rather than simply as advisers to Ministers.

We want effective judgment and management. Hence the remarks of the hon. Member for Motherwell, South (Dr. Bray) to the effect that had we had that type of management in the DHSS we would not have needed an additional report on the way in which the Health Service is managed. Nevertheless, the manpower reductions have had a more salutary effect at the higher levels than lower down.

Reference has been made to the Hoskyns criticisms and we agree that we do not want to see a politicised Civil Service. Nevertheless—I speak from some small experience—there are great problems in moving management ideas through the Civil Service. We need more co-operation and more effective reviews if we are to change the institutions.

If we are to allow more time for thinking—I do not know a Minister who has enough time to think, actually to sit back and reflect—and if senior people are to help in strategic planning, it does not make sense to reduce spare capacity to nothing. We need stability, for we face incredible difficulties as a nation, and time for thought—for strategic planning and the consideration of wider information and debate—is essential.

Although the question of leaks has not been raised, the members of the First Division Association are particularly conscious of it because they are often accused of doing the leaking. It is accepted that it is unprofessional and inexcusable for a civil servant to leak information; it is a breach of the normal trust between employee and employer. They acknowledge that, but ironically they point the finger at the fact that increasingly in political terms leaks are a way of business, even a way of conducting Government business. Many of us scrutinise the Sunday papers to try to analyse from where leaks have come. We try to see which are genuine—which have come from the horse's mouth—and which are kite-flying. It is hypocritical, therefore, to criticise civil servants as though they are the main, indeed only, source of leaks when leaking has become part of our parliamentary system.

Do we have too many leaks because we keep too many secrets? Is the classification of discussion documents too high? Many leaks that I have seen in the newspapers recently have emanated from discussion documents which Ministers threw out at the first ministerial meeting when considering possible courses of action. If somebody picks such a document out of the wastepaper basket, puts it in a brown paper envelope and sends it to The Guardian and it is then put out as the Government view, people are reading something that was rejected in the first instance.

The consequences of the technological revolution—the fundamental changes in the social fabric of society, the weight of change that is being borne in Scotland, the northeast and the north-west, the problems of unemployment which will be with us for the next 10 or 15 years—underline the need for more open and wide discussion and the more effective work of Select Committees in thinking out loud on behalf of the Government and Parliament.

The Government spend many millions of pounds on the Civil Service and rightly insist on high standards of recruitment. We acknowledge the level of talent in the service. We must mobilise that talent, along with ours, for effective action. Having referred to the challenges that lie ahead, I suggest that we must now build a relationship which makes better use of this national resource for the benefit of Parliament, the public and the civil servants themselves.

12.55 pm
Mr. Alfred Dubs (Battersea)

I welcome the opportunity to debate the Civil Service. I declare an interest. I am a consultant to the Society of Civil and Public Servants and 16 or 17 years ago I was a civil servant. I know what it is like to prepare answers for Ministers in letters and replies to parliamentary questions. Now that I am on the other side of the fence it is a help to be able to imagine the papers that Ministers have before them at Question Time and on other occasions.

I shall speak about the Government's aim to reduce the number of civil servants, about ethnic monitoring and experimentation, the position of women in the Civil Service, and about lie detectors—polygraphs.

Many hon. Members today have paid tribute to the Civil Service. I go along with that, but it is difficult to accept the way in which the Minister pays tribute to civil servants when at the same time he supports a policy to deliberately reduce numbers. One cannot expect civil servants' morale to be all that high when they serve a Government with the avowed intention of getting rid of as many of them as possible. One cannot expect people to be confident in their jobs when they know that the Government want to get rid of them or their colleagues. The Government cannot escape that problem. The Minister's argument did not remove him from that difficulty.

Of course, rational and sensible planning over the Civil Service is essential. The Government have not been successful in that in recent years. According to the Financial Times of 28 September, the main reason is that the Government have gone in for the indiscriminate wielding of a very blunt axe. That blunt axe is the deliberate attempt to reduce the numbers of civil servants—and only to reduce the numbers—paying but scant attention to the consequences on the quality of service provided. We are talking of a major reduction involving over 100,000 staff between May 1979 and 1 April 1984.

The Minister did not reply fully to the question that I asked during his speech. Dangled before us is the possibility of further cuts, possibly as heavy as 5 per cent., in the number of civil servants in the four-year period from 1984 to1988. I hope that the Minister can provide more information about that.

The real difficulty is that the manpower targets are arbitrary and do not take sufficient account of the quality of service provided. Not only Labour Members believe that. On a number of occasions the Treasury and Civil Service Committee has made the same point. In its fourth report in 1979–80 that Committee said: Across the board cuts are effective in removing any fat there may be but thereafter it is likely that significant reductions can only be achieved by abolition or reduction of services We are concerned that the inability to express the 102,000 net contraction in the size of the Civil Service in terms of tasks to be either cut or reduced represents a weakness in the Government's policy. In evidence to the same Select Committee the Treasury referred to a number of matters that are relevant to my remarks. For example, it said: real efficiency savings only accounted for 15 per cent. of the gross staff cut. The Treasury also referred to the lower standards of service that would follow from the cuts.

In March 1982 the Treasury and Civil Service Committee completed a detailed investigation leading up to its report, "Efficiency and Effectiveness in the Civil Service". Again, concern was expressed about the effect on the volume and quality of services provided by staff and cash cuts.

A further report from the Treasury in 1981–82 stated: It is clear that a significant proportion of the savings was secured by reducing output, and therefore without a prima facie increase in efficiency". Perhaps I should refer more to the effect on the ground, in terms of the services being delivered. The Minister talked about the DHSS, so I shall quote a few figures. Between 1978 and now the number of supplementary benefit claimants has gone up from 3 million to over 4 million. The number of unemployed claimants has gone up from 600,000 to almost 2 million. However, during this period, staff levels have fallen from 97,000 in 1978 to 92,500 in July this year. If there had been no fall in the quality of the services for claimants, that would be an astounding improvement in productivity, but every hon. Member knows that that is not the case. Every hon. Member knows that there has been a deplorable fall in the quality of the services provided by local DHSS offices. Our advice bureaus are full, week in week out, with claimants protesting about the decline in the quality of services at their local DHSS offices.

Some people have said, not without justification, that we have had an almost complete collapse of the service in some DHSS offices. I need only remind hon. Members of the industrial dispute in Birmingham, which was caused by civil servants' concern at their inability to cope with the pressure of work upon them because of the lack of staffing resources. We have also had reference today to the report of the National Consumer Council called "Pressure Points", published at the end of June this year, which said that the social security system is close to breaking point through staff shortages and the increased complexity of benefits.

Moreover, the problem should have become easier for the Government because by introducing unified housing benefit they have taken the problem away from the DHSS offices and concentrated it on local authorities. However, we know, again from our constituents, that local authorities are under enormous pressure in dealing with housing benefits and they are cracking under that pressure. There are intolerable delays in dealing with the transfer from the DHSS office to the local authority, and many elderly people are paying out of their own pockets because the benefit has not yet arrived and they are desperately anxious to avoid getting in debt.

I was a member of the Race Relations and Immigration Sub-Committee of the Select Committee on Home Affairs which considered citizenship fees, and we filed our report some time ago. We found that, inadvertently, the Home Office had made a £6 million profit out of this service last year because it had failed to estimate the number of people with claims for naturalisation and registration as British citizens. However, that is a subject for another debate at another time.

There are long delays in getting the citizenship applications through, and even Home Office Ministers agree that these delays are too long. We put it to the Home Office Minister and civil servants that they should increase the number of staff. Even if we get rid of the profit, the Home Office will be able to break even on that service, so what could be the objection to increasing the number of staff if the income from citizenship applications meets the cost? We were told that that was not possible because there could be no increase in the number of civil servants. We said that this was absurd because if the civil servants were paid for by the people applying for citizenship, what could be the objection to having more civil servants? We were told that there was an overriding consideration, which was the number of civil servants. Therefore, we could only assume that this was regardless of the quality of the service at the Home Office for these applicants. Perhaps the Minister will either comment on this, or leave it for the Minister at the Home Office to deal with in due course.

There is another area of difficulty which I raised in an Adjournment debate in the previous Parliament and which concerns a lack of staff in Customs and Excise. We all know of the appalling increase in the amount of heroin that is coming into this country. We also surely know that the best way to stem the tide of heroin into this country, with its damaging social and physical consequences, is to increase the control at the point of entry into the country. It would be cost-effective, in my opinion, to have an increase in the number of customs officers controlling the amount of heroin coming in, instead of having to deal with the consequences of increased drug abuse, which we know is costly and damaging in social and human terms.

Furthermore, there is the boom in the black economy and the increased tax and VAT fraud and evasion. Again, that could be lessened if we had more civil servants to deal with it. The Public Accounts Committee expressed the clear opinion that extra staff would pay for themselves many times over, in terms of the additional revenues that the Government could then collect.

Other hon. Members have referred to the YOP and YTS schemes. I only say in passing that it is a matter of regret that more staff have not been available to enable the Government to monitor the schemes more effectively. The accident rates have been high and disturbing, and had there been more civil servants to oversee the schemes, I think that we should have avoided at least some of the undesirable consequences.

Then there is the wages inspectorate, where again lack of staff has resulted in what some people have said is virtually the collapse of the service. There are also problems with the staffing of the Health and Safety Executive, which means that there is not a sufficient follow-up of more than a tiny proportion of accidents at the place of work.

I want to say a brief word about privatisation. The Government put forward a number of schemes to privatise sections of the Civil Service. It is gratifying that they have been persuaded, by dint of pressure and argument, to drop them. For example, there was a proposal to privatise the ordnance survey, but it was clearly demonstrated by many people that it would result in an unacceptable decline in the quality of the service. The company records office was to be privatised, but pressure and argument stopped the Government there. There is also the example of heavy goods vehicle testing, where, again, such a development was prevented.

Perhaps even more disturbing is that the fact that the Government still seem intent on privatising the Inland Revenue sorting office at Kew. I am very concerned about that, because many Inland Revenue letters and documents are highly sensitive and confidential. In my opinion it would be a retrograde step if a service of this nature were to be privatised, because the Government would then lose control over the confidentiality of the documents that go through that sorting office.

We have heard this morning that the Government are seriously considering privatising the royal ordnance factories. Surely, something that is as sensistive and close to our defence effort as the royal ordnance factories should not be privatised. I am against de-nationalisation in any case, but at least the Government owe it to the House and the country and the defence forces of the country to answer questions about the way in which a privatised royal ordnance factory would he controlled and held accountable, and whether there would be safeguards for our Armed Forces to ensure that they would get the supplies on which they depend. Moreover, there are elements in the work of the royal ordnance factories which are not profitable in normal accounting terms. Are they to be dropped, to the detriment of our Armed Forces, or what other arrangements would be made? I am very disturbed about this matter, and I hope that the Government will tell us more about it.

I want to say a brief word about ethnic monitoring. which I welcome. The Government had an experiment in Leeds, which has now been extended, with the avowed aim of ensuring that people who apply to the Civil Service, whether they are black or white, have an equal opportunity to get the job. I welcome that. The Select Committee recommended that that should happen, and I hope that the experiment will be proceeded with quickly so that monitoring of this kind can be extended throughout the Civil Service. It will be good not only for employment opportunities within the service but it will enable the Government to set an example to other employers in Britain. That is useful and valuable, and I hope that the Government will proceed as quickly as possible with the experiments. The Civil Service unions support the experiments and they are generally to be commended.

The employment of women in the Civil Service is a large subject and I want to talk about only one aspect—opportunities for part-time employment. Those opportunities are of interest to men but, in the nature of things, women are more concerned about them. I am well aware that one device that the Government may use to reduce the number of civil servants is to convert full-time jobs into part-time jobs. A move to make part-time employment in the Civil Service more widespread must be looked at slightly critically lest it be another opportunity for simply reducing staff numbers. Having said that, I generally welcome the increased flexibility of operations which would result in more women having the opportunity for part-time employment.

According to the Department of Employment Gazette, in June 1982 there were just under 4 million part-time women workers in Britain representing 17 per cent. of all employees. However, in what is called national Government service, which I think means mainly the Civil Service, the figure is low—5 per cent. About one third of that is in local government and the figure is much lower than that in other sectors of employment. There are many Civil Service jobs that would lend themselves well to part-time employment and I hope that the Minister will consider sympathetically the plea that part-time employment should be increased to give more women the opportunity to work part-time, possibly for only a part of their careers. If that opportunity does not exist, many will have no chance at all of being able to work for certain periods.

I warmly endorse the comments of the Member for Cheltenham (Mr. Irving) on the polygraph. It is disturbing that we should have been pressurised—there is no other word for it—by the American Government, in this week of all weeks, to adopt something that is alien to our traditions and practices and which we would not have adopted, even on an experimental basis, without such pressure from Washington.

It is generally known, and the document produced by the Society of Civil and Public Servants makes it clear, that there have been many reports—at least seven—to the United States congressional committees over the past 20 years or so which have basically arrived at the conclusion that the polygraph is a defective instrument, inconclusive, unjust and unreliable. It is disturbing that we should seek to introduce something for which there is not sufficient scientific justification, albeit in only one place at present. It can be disturbing and upsetting to people who would otherwise be fully willing to co-operate in all measures to ensure adequate security at top secret and other establishments. The difficulty is that once it is introduced in one place there will be pressure to extend its use throughout the Civil Service to all areas that are security sensitive.

I am dismayed that we should be taking a step in that direction. Perhaps I should suggest that Ministers ought to be subjected to the polygraph before civil servants as a means of demonstrating in public their faith in the mechanism. We may have had some disturbing hiccups over the past few days if it were reliable, but the trouble is that it is not. If, as is alleged, one of the key questions may wrongly indict 50 per cent. of innocent subjects, the result is random and not reliable, and, as has been said, it could cause a great deal of upset. The skilled spies will know methods for cheating. I hope that the Minister will decide quickly that we ought not to have this instrument. The Civil Service and those who deal with civil liberties would also welcome the dropping of this nasty little device.

1.14 pm
Mr. Tim Eggar (Enfield, North)

I rise to speak because of my interest in the Civil Service generally and in Civil Service management in particular. That interest emanates from the two and a half years that I spent on the Treasury and Civil Service Committee under the chairmanship of my right hon. Friend the Member for Taunton (Mr. du Cann), and more specifically from my time on the Treasury and Civil Service Sub-Committee, which was chaired by the hon. Member for Mothenvell, South (Dr. Bray).

I am sorry that the hon. Member for Motherwell, South is not in the Chamber at the moment, because in some ways I was saddened by the tone of part of his speech. Although he made it clear that he was speaking as a Labour Member rather than as Chairman of the Sub-Committee, he did himself an injustice. Having served under him, I know him to be a fair Chairman, who is very willing to make decisions on the evidence submitted to the Committee. I hope that none of my hon. Friends will think that his contribution reflected the way in which he chaired that Sub-Committee.

I join the Minister and my right hon. Friend the Member for Taunton in paying a warm and genuine tribute to the quality of our Civil Service. I also join my right hon. Friend the Member for Taunton is saying that there is justice in some of the criticisms made of the service. I hope that those of us who have some criticisms to make will always make them constructively. We criticise because we care deeply about the service's independence. We very much want to protect the service from politicisation, and from the charge that, because it has somehow become inefficient, it should be fought over in a party political way, instead of being accepted as an impartial and major contributor to our way of life.

I join the Minister in accepting the considerable achievement of this Government in reducing the numbes within the service. There has been a reduction in numbers of about 11 per cent. with very little deterioration in the service offered to the public, and that is a creditable achievement. It demonstrates the importance of Governments setting a clear target to which they are firmly committed. I spoke to one very senior civil servant a couple of weeks after the target had been announced. He said that we would never achieve it, and that, if we did, it would be at enormous cost in terms of the functions that the service performs. He has been proved wrong. The pressures imposed by such a target on management and Ministers to review the objectives and functions of their Departments have done nothing but good.

However, although a pure numbers target was acceptable and right in the last Parliament, the target for this Government must be more complex and perhaps more sophisticated. We are starting with a smaller service, so the scope for reducing numbers is inevitably much smaller. However, the scope for improvements in efficiency and effectiveness still exists, and I believe that we shall be able to achieve a reduction in numbers by, above all, considering the way in which they are used. I hope—I stress "hope"—that the financial management initiative will prove to be the framework against which we can measure progress during the next four or five years.

The White Paper is remarkable not for its statement of what will be done in future, but for the way in which it has made clear what has not been achieved in the past. It is extraordinary that in 1983 the White Paper shows that until recently there were no management information systems in place in government, other than in very limited areas. Even now, only one Department has any department-wide management accounting system. Most Departments will not install management accounting systems during the next two or three years. We have an enormous way to go.

During the press conference when the White Paper was announced my hon. Friend the Minister went out of his way to make it clear that the Manpower and Personnel Office regarded the returns from Departments as variable and spotty. Some did not reach the standards for which he had hoped. I welcome the assurance that he gave to my right hon. Friend the Member for Taunton and me that the full details of the departmental replies will be published. I hope that it will not be left to the Select Committee to push for publication. Instead, in the same way as the MINIS documents were published, I hope that the relevant departmental Secretary of State will deposit them in the House of Commons Library where they can be studied at leisure.

I welcome my hon. Friend's comments about the facilities agreements. I was especially concerned about the terms of the original agreements. If I can get my hands on the relevant documents, I shall study with interest the precise terms of the new departmental facilities agreements that have been negotiated.

The White Paper has three main strengths. As I have mentioned, it sets out the objectives and creates the framework for better management systems. It provides a measuring rod that we, as parliamentarians, can use to judge how much is being achieved when we have the further publication of information in July 1984. We can base our parliamentary questions on that.

I had grave misgivings about the way in which the original requests were phrased to Departments. The financial management iniative appeared to be in danger of asking Departments to give sophisticated output measurements—which, however desirable, were both conceptually and actually extremely difficult to devise—at the expense of ignoring input measurement. My study of the departmental replies shows that almost all of them have concentrated on input—the development of management accounting and information systems—rather than on output.

That does not mean that I would not like Departments to move towards measuring output, but I do not think that that can be achieved until we have the necessary input information. The FMI takes that point. I am delighted with the emphasis placed on input rather than on output.

Perhaps the single most important aspect of the White Paper is the clear commitment to devolving management decisions. At long last, junior managers within the service will be given the tools of management. I mention in passing that there appears to have been a little too much concentration on the importance of them being able to manage their people and too little importance given to their being able to manage the physical assets. For example, almost every local manager of a DHSS or Department of Employment office will complain that he cannot even order typewriters or desks under his own authority, but has to go to the Public Services Agency, with the inevitable delays that that brings. I hope that relatively junior members of the service will be given more scope to manage the physical as well as the manpower side of their operations.

The challenge that faces us all, in government, in the House and in the country generally, is to convert the framework which is the FMI into a real step in the right direction. There is a danger that Departments regard the FMI as an unfortunate set of forms which have to be filled in and which then disappear up the centre in some extraordinary way where no action is taken.

There are three areas in which we can take action to try to ensure that the FMI does not become a framework and a matter of form filling. First, there must be continued political support for the FMI and all that it stands for. In that context I am delighted by the continued priority that my right hon. Friend the Prime Minister gives to this whole initiative. I hope that her lead will be followed to a greater extent than it has been in the past by some Ministers. It is unfortunate that it took my right hon. Friend the present Secretary of State for Defence two and a half years of courageous battling to get his MINIS system widely recognised as a move in the right direction. We could all have been saved some pain if the value of that exercise had been recognised more rapidly by other senior Ministers.

I know that my hon. Friend the Minister of State does not necessarily agree that there is a greater role for the centre in management, but I do not see why the Treasury, which has so much obvious power at public expenditure review time over the actual amount of money allocated to Departments, cannot have equal power over the way that money is administered and Departments are managed. Unless there are clear signs—I do not see them yet—that Departments are giving higher priority to management matters, we must consider whether the MPO and the Treasury should have some prescriptive role in this area.

We in the House have an important role to play. It must be admitted that one of the reasons why there has been so little devolution of decision taking down the line within the Civil Service has been that all the pressures from the House have been towards centralisation. Indeed, the whole way in which the Public Accounts Committee operates has meant that senior civil servants have always been able to say to Ministers, "You will have to answer in the House or we will have to answer before the Public Accounts Committee, so we must have central control." I would be the last person to argue that somehow the House should relax the way it looks after public money, but we should recognise that there is a balance to be struck.

We took an important step forward in the previous Parliament by going for the formation of a National Audit Office and, above all, by stressing the importance of value for money rather than ensuring that the money allocated by Parliament has been spent properly in accordance with the book. The more that we can adopt the value-for-money approach in the House the better.

I hope that the Select Committees will do rather more to investigate and analyse the way in which the relevant Departments are managed than they did in the previous Parliament. It is fair to claim that the Treasury and Civil Service Select Committee has achieved something in terms of the Civil Service as a whole, but one of my criticisms of the performance of other departmental Select Committees is that they spend far too much time considering policy areas and far too little time considering how money is spent by Departments and how the Departments are managed. I hope that the new Select Committees will move towards more detailed questioning in that area and that the FMI will help. My hon. Friend the Minister has promised that he will make available more imformation than that contained in the FMI to provide a benchmark against which the Select Committees can investigate and analyse.

Ministerial and parliamentary pressure is important to ensure that the FMI really works. The pressures within the Civil Service are important. Both the Megaw inquiry and the Treasury and Civil Service Select Committee went out of their way to recommend the implementation of merit pay. I do nt underestimate the difficulties of devising a system of merit pay. It is a complex task. I recognise all the problems and difficulties in comparing, for example, one superior's judgment with another's. However, merit pay operates in almost every area of white collar work, except the Civil Service. There must be a reason for that.

I recognise that the Civil Service has traditionally recognised performance differentials through promotions between grades, but one has the impression that far too often grade promotions have taken place because of length rather than quality of service, at least at the lower levels of the service.

I am distressed to see on page 17 of the White Paper some signs that the Government are not keen on the introduction of merit pay. There seems to be a hint that the Government are considering a system of docking increments for poor performance. That is not an adequate substitute for rewarding good performance. It is no good criticising bad performance by docking pay and not giving any reward to those who do especially well.

When promotions are discussed both within the overall structure and at a more junior level, especially when the annual review form is being revised, I hope that importance will be attached to management skills. The story is told—I believe it is true—that about 90 per cent. of civil servants are classed as being above average on the annual review form. 'There seems to be something wrong with an evaluation system that comes up with that result. I hope that my hon. Friend, as well as reviewing the form, will examine the introduction of merit pay. The FMI gives us a great opportunity and a necessary format. It is up to Ministers, the House and individual civil servants to ensure that it bocomes more than just a format—that it becomes an active way to ensure that we reach as good a level of management performance within the Civil Service as we have traditionally had with policy advice.

1.35 pm
Mr. Harry Cohen (Leyton)

It is not a bad thing to achieve proper management techniques and financial management in the Civil Service. In many respects, it is long overdue. It is not necessarily bad that expertise should be located within the Departments rather than centralised, as has been tried in the past. Those responsible for achieving this for the Government remain responsible to the permanent secretaries. They come up against the old problems associated with the permanent secretaries' view of their role which they see as political, involving an awareness of ministerial responsibility, rather than managerial which they view as inferior.

The Government have done nothing to challenge that view. They are spending £35 million on private consultants who will report to the same administrator in the Departments. What is the difference between the so-called expert private consultants and the expert accountants and specialists within the Civil Service who have been underrated for many years? We should all be told whether there is any value to be gained from this operation.

There has been a lack of information, monitoring and proof of worthwhile savings. It seems to be the view that these consultants are likely to be in favour of staff cuts—staff productivity has increased enormously because Government policies have led to increased unemployment—which will create greater exploitation of staff at lower levels and in local area offices.

One example of the increased exploitation is outlined in The Guardian of 28 September which refers to the Government's proposals on consultation. The Guardian stated: An internal memorandum from the Department of Employment's south-west regional office in response to the Government's initiative asks civil servants to save money by buying small tool kits, for example, so that staff at local offices can do their own emergency repairs. Presumably the Government will select a plumber for the executive grade and a do-it-yourself expert for the administrative grade. Is that really what they are saying?

The Government favour what they call a mobile task force which could be an alternative to recruiting staff. It could be also, as looks increasingly likely, a strike-breaking operation when staff strike for better conditions in their local offices. The Government are increasingly using such task forces in that respect. The cuts in the services affect those who need them most. In my consitituency, about 40 per cent. of families rely on the DHSS and they are having to wait longer to receive less support not because of the staff but because of Government policies.

There is and always has been a big Oxbridge bias at the top of the Civil Service and it is increasing. The Guardian dated 22 April, referred to the report by Sir Alec Atkinson in which he said: In 1982 … about three quarters of the candidates who passed the civil service's entrance examination came from Oxbridge compared with rather more than half in 1980 and 1981. Since the Conservative party has been in office the number of Oxbridge graduates in the Civil Service has increased. The Guardian report also says: the narrow base of Oxbridge is inadequate; and if one believes further that the civil service needs fewer arts graduates and more technocrats, then Oxbridge is inappropriate as a recruitment ground since technology and science are better taught at other universities. We seem to have a cycle of Oxbridge graduates entering the Civil Service who have careers as high fliers. Many then retire to masterships at Oxbridge colleges and encourage others to follow their example. It is a self-perpetuating Oxbridge hegemony with little room for others at the top. The Russians must dread a radical Labour Government coming to power and rooting out the Oxbridge bias because years of easy and patient spy recruiting would be wasted overnight.

The neutrality of the Civil Service has always been unreal. The senior civil servants are political by their class and by their privileged position in the establishment. We have seen many examples of senior civil servants being less than enthusiastic about a Labour Government.

The Listener, when referring to Tony Benn's reappointment as Secretary of State for Industry in 1974 after the Labour party had won the election in that year, said: The civil servants had carefully prepared their plans for a Labour victory. But, by mistake there was among the papers they handed to Mr. Benn one marked, Tor an incoming Labour Minister—if not Mr. Benn`. The document outlined the policy that the civil servants wanted the new Minister to follow. It was designed to undo much of the work Mr. Benn had carried out as Industry Secretary in the previous six months. Mr. Benn said: You couldn't have a clearer example of Whitehall manipulation than that.

Dr. Bray

I wish to aid my hon. Friend's argument by referring to the triffid-like qualities of permanent secretaries. He will have noted that our report recommends that an incoming Minister should have an opportunity to review the appointment of existing permanent secretaries. That plan was rejected by the Government, and the latest development is that permanent secretaries have taken over the control of minutes. Paragraph 17 states: A common pattern is the establishment of a top-level board or committee chaired by the Permanent Secretary, which prepares advice for the Minister and supervises the implementation of his decisions.

Mr. Cohen

I thank my hon. Friend. The Prime Minister is aware that the top echelons in the Civil Service are political, and has, in an overt manner, made them so for her own benefit. She has got rid of most of the wets within the senior ranks of the Civil Service.

An article in The Listener of 19 May refers to the Prime Minister inviting senior civil servants to see her just after she entered office. It reads: The head of the Home Civil Service … got up and made the kind of defensive speech that she cannot abide. She gets up and replies by hitting him in the teeth. I do not think that that is meant literally. The real heavyweight Permanent Secretaries realise that they are on to a complete loser and keep quiet. At one point … the Permanent Secretary for Defence gets up to go the bathroom. Permanent Secretary A. says to Permanent Secretary B…`Thank God Frank has gone to get the SAS to get us out of here.' It ends on an appalling note as Mrs. Thatcher says at ten o'clock, `Gentlemen, I think your chauffeurs are waiting.' The article goes on: Sir Patrick Nairne … lamented the fact that disparagement of his former fellow mandarins was now as inseparable a part of political discussion as throwing bottles is from professional football. Apparently, the Prime Minister is among the bottle throwers. That is a view from the wet civil servants.

The Prime Minister has created all these top posts. They are Maggie's mandarins. The head of the Treasury was apparently one of the few who understood her brand of monetarism, and he backed her against the fears of other Treasury officials at the time of the vicious 1981 Budget. The permanent secretary for defence was previously the Prime Minister's own principal private secretary and is reported to have a close rapport with the right hon. Lady. The permanent secretary for employment was praised for his paper advocating Trident missiles and for his work at the so-called holocaust desk at the Ministry of Defence. The head of the Cabinet Office also raised a lot of eyebrows in the Civil Service because of his political role under the previous Conservative Government, when he appeared on a platform with the previous Conservative Prime Minister to promote the Government's controversial pay policy.

Of 27 top posts, 23 have been appointed by the Prime Minister, and the Government have the cheek now and then to talk about the GLC appointing its own sympathisers.

There is a lesson here for the next Labour Government. All those who are now at the top of this Government's political Civil Service have to be looked at closely by the next Labour Government straight away. My right hon. and hon. Friends must put in their own people, just as the Prime Minister has.

1.49 pm
Mr. Hayhoe

I shall reply briefly to some of the speeches in the debate, but I am sure that right hon. and hon. Members will accept that I would make a very long speech if I were to attempt to cover all their comments in detail.

I was sorry that the right hon. Member for Swansea, West (Mr. Williams) made such a sour and negative contribution to what otherwise was a positive debate. However, I understand his reasons. The simple logic that seemed to pervade his remarks was that all would be well if only we employed more civil servants. That is an over-simplistic view of the way to treat all the important matters raised by the Select Committee and in the two Government White Papers which are of special relevance to the debate.

I shall try to deal with the major topic raised by the right hon. Gentleman and by my hon. Friend the Member for Cheltenham (Mr. Irving) and the hon. Member for Battersea (Mr. Dubs), which relates to the problem of numbers of staff in Departments such as the Inland Revenue, Customs and Excise, the Department of Health and Social Security and the Home Office. It is the basic question about the impact of a tight public service manpower policy on such areas as tax collection and customs control, including the control of drug smuggling.

I recognise the concern that exists about that and I shall be meeting the Society of Civil and Public Servants early next week to give it a chance to develop the case that the society recently put forward for increasing the number of staff employed on the control of VAT. That is germane to the points that have been raised because it is similar to the arguments adduced in The Times today by Tony Christopher writing on behalf of the Inland Revenue Staff Federation.

The administrative task facing the revenue departments is massive and a respectable case can be made in the abstract for an increase in the resources made available to them. But we do not have infinite resources and at the end of the day it must be a matter of political judgment where the balance is struck between maximising the tax yield and maintaining the full credibility of customs controls on the one hand, and keeping the number of staff employed within reasonable bounds on the other.

The last Labour Government started a programme in 1976 to reduce the size of the Civil Service. They did not pursue it in the way that the present Government are doing. Any responsible Government will be faced with making difficult choices of this kind.

Special reference has been made to the position of the Inland Revenue. It must be remembered that the number of specialist investigating staff available in the Inland Revenue and Customs and Excise is greater now, despite the reduction in overall numbers in those two Departments, than when the Conservatives came to office in 1979. In the Inland Revenue there are now half as many again specialist investigating staff, which shows that the Government have sought to get the right balance and priorities in their overall manpower policies.

Despite the pressures imposed on the revenue departments by, for example, the steady growth in the number of those registered for VAT and the declining standards of tax compliance, the efficiency of their operations continues to increase. I hope that I echo the view of all hon. Members in expressing our admiration for and appreciation of those in both departments who carry out their often unpopular duties so well in difficult circumstances.

My hon. Friend the Member for Cheltenham and others referred to the polygraph, the lie detector, and I have noted the reservations that my hon. Friend expressed with considerable force and the support he received for those reservations. In its report, Cmnd. 8876, on the Prime case, the Security Commission made recommendations for a pilot scheme to test the feasibility of polygraph security screening in the intelligence and security agencies.

The pilot scheme will be confined to staff in the security service and at GCHQ in Cheltenham and will incorporate the safeguards recommended in the Security Commission's report. I have noted the reservations that were expressed and I am sure that those responsible for the operation will bear them in mind as future decisions are made.

The hon. Member for Monklands, West (Mr. Clarke) misunderstood my remarks about arbitration. I hope that he will note the measured words I used on the subject. They were in line not only with the evidence we gave to Megaw but with its recommendations, though not wholly in line with the Megaw recommendations.

The hon. Member spoke about privatisation and asked that the House be kept informed. Of course that will be done. Ministers responsible will let the House know when privatisation plans are proposed. The major plan envisaged now involves the royal ordnance factories.

The hon. Member asked what was happening about the youth training scheme. He angled his remarks on the person who was to join the Prime Minister's Office. The delay is due entirely to the fact that the Council of Civil Service Unions has not yet found it possible to agree to the scheme going ahead. I hope that it will do so soon. There should be an element of the youth training scheme in the Civil Service. I prefer to say no more about that because negotiations and discussions are continuing. I am sure that all right hon. and hon. Members hope that a successful conclusion will be reached.

My hon. Friend the Member for Broxtowe (Mr. Lester) rightly reminded us of what we said in our manifesto about the Government's overall view of the Civil Service. We paid tribute in our manifesto to the high standards of administration and integrity maintained by the Civil Service. We commended the Civil Service because it has loyally and effectively helped to carry through the far-reaching changes we have made to secure greater economy, efficiency and better management in Government itself. The manifesto was directed at the country at large and it is a better reflection of our general view than some of the remarks made by Opposition Members today.

My hon. Friend the Member for Broxtowe said that there should be an element of comparability in decisions about Civil Service pay. I agree. That was acknowledged in the evidence that we gave to Megaw. My hon. Friend talked about arbitration. I have noted his suggestion about the all or nothing aspect of getting out of the present difficulties in the negotiations. The negotiations are continuing. I hope that an agreed system for Civil Service pay, based upon Megaw's findings, will emerge.

I am glad that my hon. Friend agrees that we should move to a contributory pensions system. The Government are carefully considering that matter. My hon. Friend is an adviser to the First Division Association. He referred to the significant announcement by that organisation concerning leaks. He said that leaks were unprofessional and inexcusable. I welcomed, as did Sir Robert Armstrong, the head of the Civil Service, the clear statement by the.FDA. that leaks cannot and should not be condoned and can never be in the public interest. I am glad that be trade union staff association responsible for senior civil servants should have made its views so clear.

Mr. Williams

The FDA applied the same strictures to Ministers. Does the Minister, on behalf of the Government, share that view?

Mr. Hayhoe

I shall speak only for myself on that. I think that deliberate leaks of a dishonest character, in contradistinction to one's own codes of conduct, are wrong, and, although I recognise that there are the procedures of the lobby and such things, I should not regard them as being the same as a senior public civil servant deliberately leaking a document for some purpose, whether political or otherwise. That is of a different character from, for example, the meetings that go on in the House between the Leader of the House and the Leader of the Opposition every Thursday in a room, which I gather does not exist, somewhere in the Palace of Westminster.

The hon. Member for Battersea spoke about the manpower plans for 1984–88, and these will be announced. I set out earlier today the criteria by which manpower policy is being judged. He also asked about privatisation programmes. He said some proposals, when they have been examined more closely, have been shown not to be commensurate with good management and did not provide value for the taxpayer, and have therefore gone. That shows that the Government are not adopting a dogmatic attitude but are judging these things on their merits.

As to the Royal Ordnance factories, they are close to defence sources, but that is no reason why they should not be in private ownership, any more than the firms that make aircraft for the forces to fly. For many years, firms in the private sector have produced munitions and warlike stores for our services and there has not been any problem about the ownership of those firms. It is the quality of the product that is important.

The hon. Member for Battersea also asked about ethnic monitoring. The two new projects in Avon and the northwest are going ahead on schedule. He asked too about women and the possibilities of part-time work. Departments are being encouraged to expand opportunities for part-time work for women where that is feasible.

My hon. Friend the Member for Enfield, North (Mr. Eggar) was opposed, as were other hon. Members, to the politicisation of the Civil Service. I was glad to hear that, and join them in believing that we should not go down that road. I was glad to have my hon. Friend's support for the merit of having targets for numbers. They exert an important discipline. I was also grateful for his support and for his constructive comments about the future development of the financial management initiative.

My hon. Friend acknowledged the difficulties in introducing merit pay in the Civil Service, and said that it would chime well with the emphasis of the financial management initiative on sharpening personal accountability. I agree with that. Moreover, in a smaller Civil Service, with fewer opportunities for promotion as a reward for merit, there is a greater need for other incentives for good performance, and this matter is being studied.

The hon. Member for Leyton (Mr. Cohen) has got it wrong. The £35 million to which he was referring is not the cost of consulting external consultants, but the in-house cost of the financial management initiative. As to Oxbridge, we would be wise to read some of our earlier debates and documents on this. The Civil Service Commission, which is responsible for improvement, does its level best to ensure that there is genuine equality of opportunity for all the candidates that come before us. As to his remarks about Prime Ministers and permanent secretaries, I am not sure which fictional publication he was quoting from, but it clearly had little to do with the real world.

This has been a useful debate, and I hope that we shall not have to wait another five years for another one.

Mr. Archie Hamilton (Epsom and Ewell)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.