Government Trading Bill

HC Deb 08 January 1990 vol 164 cc728-80

Order for Second Reading read.

4.58 pm

The Chief Secretary to the Treasury (Mr. Norman Lamont)

I beg to move, That the Bill be now read a Second time.

The main purpose of the Bill is to extend the enabling powers under the Government Trading Funds Act 1973 to establish trading funds. The new powers will be a major contribution to Civil Service management changes, and thus to the benefits that the Government expect from the Next Steps initiative—the creation of agencies—and the fundamental reform of the Civil Service management and financial management.

To illustrate the links between the Bill and the wider processes of management improvement, we have published the White Paper, "The Financing and Accountability of Next Steps Agencies". The House, through the Select Committees that have so far taken most interest in Next Steps—the Public Accounts Committee and the Treasury and Civil Service Select Committee—has generally supported the Next Steps initiative, and I hope that the Bill will commend itself to hon. Members on both sides of the House. The Bill and White Paper are designed to strengthen the performance of Government Departments by encouraging civil servants to take a more businesslike approach to the efficiency and quality of the delivery of Government services.

The White Paper sets out the background to the Bill. As it says, although the powers to set up trading funds are not limited to Next Steps agencies, it is expected that future trading funds will be entirely, or almost entirely, drawn from agencies. Thus the Bill takes forward the objectives underlying the Government's whole strategy for public service reform—greater freedom for managers, coupled with greater accountability for delivering agreed objectives. It will allow more organisations to operate as trading funds, which will give them greater financial freedom and greater disciplines akin to those of private sector organisations.

It may be helpful if I explain how trading fund status will help to promote those objectives. As paragraph 4.2 of the White Paper stated: A 'trading fund' provides a financing framework which covers operating costs and receipts, capital expenditure, borrowing and net cash flow. It has powers to borrow to meet capital expenditure and working capital requirements, and to establish reserves out of surpluses. Within this framework, it can meet outgoings without detailed cash flows passing through Vote accounting arrangements. At present only some 20 per cent. of the running costs of Government Departments are offset by related receipts. It follows that the majority of Government activities will not be suitable to become trading funds. That does not mean that agencies dealing with those activities are second-class citizens. Indeed, much of the White Paper is devoted to improving arrangements for them. It is important that all agencies that could benefit from the more commercial discipline of a trading fund should be able to do so. As my right hon. Friend the Chancellor informed the House on 1 February 1989, when he was Chief Secretary, the main purpose of the Bill is to widen the enabling powers under the Government Trading Funds Act 1973 to cover bodies that are directed by statute to provide a service and where the fees are fixed by regulation. As bodies such as the vehicle inspectorate and Companies house do not fall within existing powers, the main purpose of the Bill is to extend the 1973 Act enabling powers to such cases.

Trading fund status will make possible a much more businesslike approach to the delivery of Government services. However, it has one characteristic that will rightly cause the House carefully to consider an extension of the Government's powers to use that particular financial mechanism. It is that the detailed cash flows of trading funds are outside the full processes of the supply system through which Parliament authorises and controls expenditure. In recognition of that, the 1973 Act rightly requires that no trading fund can be set up without Parliament debating each proposal on an affirmative resolution order. That principle is extremely important, and it is maintained in the Bill.

The other characteristic of the original legislation, which is strengthened in the Bill, is the statutory requirement for accounting to Parliament. That is much stronger for trading funds than for the remainder of the Civil Service, and the accountability operates direct from the trading fund to Parliament.

The Government Trading Funds Act 1973 arose from an early precursor of the Government's management reforms. That was the concept of units of accountable management proposed in the 1968 report of the Fulton committee on the Civil Service and the 1970 Conservative Administration's White Paper "The Reorganisation of Central Government". Although the concept is similar to that underlying changes implemented by the Government, it never really took off in the 1970s. The 1973 Act and the three trading funds still established under it—Her Majesty's Stationery Office, the Royal Mint and the Crown Suppliers—are almost the sole surviving relics.

Mr. Tam Dalyell (Linlithgow)

How do these proposals fit in with those for the PSA and Crown Suppliers Bill that we shall begin discussing in Committee tomorrow?

Mr. Lamont

The proposals for the Crown Suppliers and its possible privatisation are entirely matters for the Committee considering the Bill. If that Bill is enacted and the Crown Suppliers are ultimately privatised, it would cease to be a trading fund. The Crown Suppliers was one of the products of the original legislation, but it is being dealt with separately by the Bill to which the hon. Gentleman referred.

During the 1980s the Government have pursued a series of initiatives designed to secure better value for money. Government Departments have had a continuing programme of efficiency scrutinies run under the supervision of the Prime Minister's efficiency unit. The central unit on purchasing has encouraged development of better methods and greater professional skills. In the Health Service, cost improvement programmes have encouraged health authorities to identify and implement ways of providing services to patients more cost-effectively. The result of those measures alone has been total savings to date of some £3 billion. Such savings have helped to finance steady increases in priority areas of spending as well as reducing costs to the taxpayer.

Improved management can deliver better services at less cost. There is no conflict between greater efficiency and improving the quality of the service. As my right hon. Friend the Chancellor said when he was Chief Secretary: Shoddy public services should not be an option. Nor should they be tolerated. A key element in the Government's value-for-money strategy has been the delegation of budgets and financial control to units of management and, wherever possible, to individuals. For the Civil Service, the starting point was the financial management initiative. It had one major purpose—to place responsibility for decisions on both spending and costs at the level where operations and activities are managed and delivered. The units concerned, and the people in them, were then to be accountable for the results.

The statement of principle might be simple, but implementation is more complex and difficult. It has required a major change in attitudes throughout the Civil Service, which has responded enthusiastically to the new opportunities and challenges. It has also required a great deal of hard work in redesigning systems and procedures.

Government Departments are large, varied and complex businesses combining policy and executive functions. Those factors have sometimes made it difficult to delegate down the line, to managers at working level, the clear authority to enable them to make the changes that would deliver improved value for money.

Those issues were addressed in the efficiency unit report entitled "Improving Management in Government: the Next Steps". The key recommendation, accepted by the Prime Minister in her statement to the House on 18 February 1988, was that to the greatest extent practicable the executive functions of Government, as distinct from policy advice, should be carried out by units clearly designated within Departments, referred to in the report as 'agencies'. Responsibility for the day-to-day operations of each agency should be delegated to a chief executive. He would be responsible for management within a framework of policy objectives and resources set by the responsible Minister, in consultation with the Treasury." —[Official Report, 18 February 1988; Vol. 127, c. 1149.] The Next Steps initiative builds on the financial management initiative. It is a major step in delegating responsibility to Civil Service managers within clear parameters. It is designed to deliver services more efficiently and effectively, within available resources, for the benefit of taxpayers, customers and staff. It provides a clear framework for delegation and accountability. That makes possible increased delegation to an agency, and through the agency right down to those directly responsible for service delivery, coupled with accountability for the results achieved. The agencies already set up and the announced candidates are listed in annex A to the White Paper. Taken together, they cover about one-third of the Civil Service. My right hon. Friend the Minister of State, Privy Council Office, will reply to the debate and will deal with any issues that hon. Members may wish to raise on Next Steps agencies, possible candidates and the future for them.

When an agency is set up, it is necessary to look in detail at the financial controls and accountability arrangements within which it will operate. The wide variety of Government functions means that that inevitably has to be done on a case-by-case basis. But the early experience with Next Steps has enabled us to formulate the key general principles that are set out in the White Paper. The Government Trading Bill deals with the aspects of that policy which require primary legislation to implement, and it may assist the House if I outline briefly the coverage of the Bill.

Clause 1 repeals sections 1 and 2 of the Government Trading Funds Act 1973 and inserts five new sections in it. Section 1 deals with the new powers, which are the central change introduced by the Bill. They would, if Parliament approves the necessary affirmative resolution in each case, allow a trading fund to be established where its revenue consists principally of receipts in respect of goods or services provided, and where it would lead to improved management efficiency and effectiveness. The White Paper—in paragraphs 4.15 to 4.19—explain how in policy terms the Government propose that those new powers would be used.

Use of the powers would be considered on a case-by-case basis. It is therefore not possible to set out in advance a clear list of candidates. However, among existing agencies, early candidates for consideration as trading funds are expected to include the vehicle inspectorate, Companies house, the historic royal palaces and Warren Springs laboratory.

Section 2 deals with how the originating debt of a trading fund is determined. In particular, it allows for the possibility of varying the originating debt to take account of subsequent changes in assets and liabilities of a fund. Section 2A deals with the issue of public dividend capital to a trading fund. Annex B to the White Paper explains the circumstances in which that might be used. Section 2B deals with borrowing by funds, and in particular allows funds to borrow from Votes as an alternative to borrowing from the national loans fund. It is envisaged that the majority of borrowing by trading funds in the future will be from Votes.

Section 4A deals with winding up funds. There have been suggestions in some press reports that increased use of trading funds is designed to prepare more activities for privatisation. There is a grain of truth in this, but only a very small grain in that trading funds are a suitable regime only for the more commercially-oriented Government activities, and it is commercially-oriented activities that are likely to be most suitable for privatisation. But as the White Paper makes clear, the policy remains that described by my right hon. Friend the Prime Minister on 24 October 1988: 'Next Steps' is primarily about those operations which are to remain within Government. I cannot rule out, however, that after a period of years agencies, like other Government activities, may be suitable for privatisation".—[Official Report, 24 October 1988; Vol. 139, c. 14.] I should therefore make clear that section 4A is intended to deal only with cases where activities cease altogether, where funds are merged, or where they are better financed by other means within the public sector, and not with privatisation.

Mr. Dalyell

What does the Minister mean by this see-sawing? How does that proposal fit in with the proposals for the Property Services Agency?

Mr. Lamont

The Bill does not cover the Property Services Agency privatisation and the PSA is not listed in the annex. The PSA is the subject of separate legislation and my comments do not apply to it; they apply to the bodies covered in the annex.

Dr. John Marek (Wrexham)

That is an important point. Will the PSA not be run as a Government trading fund before it is privatised?

Mr. Lamont

It will not. The PSA and the Crown Suppliers are subject to separate legislation and a separate policy which will be considered in Standing Committee.

Clause 2 deals mainly with minor and consequential amendments, but it and clause 3 also deal with important improvements in reporting and accounting arrangements.

Clause 4 deals with a separate matter which has been encompassed conveniently within the Bill. Clause 4 takes advantage of the opportunity to remove from the statute book a 1946 power over private sector corporate borrowing which is largely a dead letter already, and will be wholly a dead letter from next April. Clause 5 deals with the short title, savings, repeals and extent.

I want to conclude by drawing the attention of the House to the important provisions relating to reports and accounts. A major objective of the Next Steps initiative is to reinforce accountability to Ministers and to Parliament by clarifying managerial responsibilities. That applies to all agencies, whether or not they become trading funds. The enhanced role and accountability of agency chief executives and the introduction of framework documents are essential parts of this.

For trading funds, the 1973 Act provided for each fund to produce annual commercial-style accounts which are audited by the Comptroller and Auditor General and laid before Parliament. The Government consider that the opportunity should now be taken to strengthen those reporting and accounting arrangements. The Bill therefore proposes bringing the Treasury's powers of direction over accounts into line with those in more recent legislation and it contains a new requirement for the production and publication of annual reports. Such reports will include, in particular, a review of performance against financial, efficiency and quality of service targets. Parliament will thus have available to it consistent annual reports and accounts for each trading fund.

For agencies that are not trading funds, the Bill would extend section 5 of the Exchequer and Audit Departments Act 1921 in a way that would give the Treasury powers to require the production of commercial-style accounts for any agency. Those would be audited by the Comptroller and Auditor General and laid before Parliament. As the White Paper explains, the aim would be to use these powers so that agencies which were not trading funds would supplement the appropriation accounts by commercial-style accounts prepared on an accruals basis and including balance sheets.

The proposals will increase the information available to Parliament and to the general public. The way agencies are run and managed will become more open, and their performance against the targets that they have been set will be made clear. This is an important step in increasing accountability to Parliament and more widely, and one which I believe will be welcomed by this House. The Bill may appear to be narrow and technical, but I hope that I have made it clear that it has major implications for the working of Government Departments and for the public sector. As such, I commend it to the House.

5.18 pm

Dr. John Marek (Wrexham)

The Chief Secretary to the Treasury said that the Bill may appear to be narrow and technical, but it nevertheless has important consequences for the way in which the Civil Service is run. I agree with him. In some respects, the Bill has come before the House as a result of a deficiency in the Government Trading Funds Act 1973 and because it is not as easy to set up Government trading funds as the Government would like.

The Chief Secretary outlined his view of the proposals. His interpretation of the Bill may be correct. However, another view may follow from the fact that the Government are obsessed with their dogma of privatisation. If the Tories win another election, perhaps many Government agencies will be liable for privatisation in subsequent Parliaments. [Interruption.] As my hon. Friends say, there is not much chance of that. But anything, however unlikely, is possible. It is true that, no matter how unprofitable it may be for the country, if something can be sold or even given away with an added backhander if necessary—for example, a green dowry which may cost about £1 billion, or a sweetener if Rover or British Aerospace is involved—the Government believe that the sooner the plans are laid to do so the better.

The second view is that the Bill is a step along the road to breaking up the Civil Service and preparing large sections of it for eventual privatisation. There is also a third view. It follows from the premise not that the Government are obsessed by their privatisation dogma but that they are obsessed by their cost-cutting and so-called efficiency dogma.

Mr. Norman Lamont

Shocking.

Dr. Marek

The Chief Secretary says, "Shocking." Nobody is in favour of spending more money than necessary, but there is a trade-off between spending money and delivering a service to the public. [Interruption.] Before Conservative Members laugh too readily, they should remember that anybody who has wanted a passport in the past year or two will not understand what they are laughing at. People returning from the continent must wait for an hour at Dover because there are not enough Customs officials. They will not understand why Conservative Members are laughing about this important matter. It is not about spending as little money as possible. It is about spending the right amount and giving the right service to the public.

Mr. Keith Mans (Wyre)

Does the hon. Gentleman agree that one good way of ensuring that we spend the right amount of money on a service is to create just the sort of trading fund that the Bill would allow?

Dr. Marek

I will come to that point because it is the whole object of the Bill. Certain things will be acceptable in certain circumstances if a fund is run correctly and if there are clear guidelines on how a chief executive should run it. Such an agency could deliver a service and be subject to greater scrutiny by the House. I am not prepared to believe that the Government will do anything along those lines. The Government's intention is to try to save as much money as possible.

The third view is that even this Government cannot privatise large sections of the Civil Service and that their ultimate intention is to commercialise services that are presently provided by the Civil Service.

Agricultural Development Advisory Service officers charge farmers, even though it may discourage some farmers from using that service and could also be to the detriment of the farming industry and the public. A system of low charges may ensure that farmers do not capriciously or unnecessarily seek advice, but if a trading fund is formed, such services must be operated taking one year with another without making a loss. Charges could become very high and farmers would not use services as much as they should. Without any shadow of doubt, that would be detrimental not only to the farming industry but to the public as a whole.

The third view is that charges will be increased by the Government from time to time so that people will eventually pay the total cost of services provided and a commercial operation will result. We have heard that Government trading funds will set certain Civil Service activities on a more commercial basis. Of course we could set activities on a more commercial basis, but would the service to the public become better or worse? Several documents have been published over the past three or four years, but that point has not been addressed by the Government.

The Opposition are hostile to the Bill in so far as it seeks to achieve any of the aims expressed in the second or third views to which I have referred. We are profoundly suspicious about the first view which the Chief Secretary pressed upon us. There will be some advantages in some situations, and I will comment on them later.

Let us assume that the first view is correct and the Government have no intentions in respect of overtly commercial activities by agencies operating trading funds. It is all very well considering matters case by case, but we have no clear idea of how much of the Civil Service the Government want to turn into agencies, although figures such as three quarters have been given in evidence to various committees in the past. Equally, we have not heard how many trading funds will be instituted. The passport office is one candidate [HON. MEMBERS: "Hear, hear."] Again many Conservative Members shout, "Hear, hear." There is a fee for passports. At present, there is an unacceptably long delay for new or renewed passports. Of course that delay does not apply to Members of Parliament, because the Home Office manages to provide us with a 24-hour service. Hon. Members have nothing to complain about, but the public have a lot to complain about. Except in cases of extreme urgency, people must wait weeks on end.

Let us suppose that the passport office is to be run as a trading fund. What will be the cost of a passport? At the moment, primary legislation would be required to change the cost of a passport. I hope that the Government will correct me if I am wrong, but I understand that primary legislation would be required to change one of the crucial ingredients of the operation of a trading fund in the Home Office. Who will decide the level of charges? A certain sum was decided many years ago, and no doubt inflation has taken its toll and somebody in the Treasury advises the Home Office from time to time on what it should be in future.

If a trading fund is instituted, the passport offices would have to look after themselves and take one year with another and not make a loss. The cost of a passport could be prohibitive. If the cost of passports is not to be prohibitive, members of the public will have to wait an unconscionably long time. Most members of the public would say that a week's delay would be reasonable in the case of a new passport and they would not see any reason why a renewed passport could not be delivered by return post or perhaps one extra day at most. Because the work is seasonal, an accountant managing the trading fund would advise a month or six months waiting time in spring or summer and would say that the backlog could be made up in the winter. That is largely what happens at present and if there were a trading fund, where would there be an incentive to do anything different? It would be a choice between providing a service for the public or being able to operate the trading fund so as to have a black figure on the bottom line.

Perhaps the cost of issuing a passport could be deemed to be too high and it might be decided to pass the total cost to the public. If that happened, the Government would have to provide funds out of general taxation to avoid a permanent backlog. The ultimate horror would be a two-tier system. Those who wanted a passport quickly and by return of post would have to pay double or treble for the privilege. Of course such things are not unknown under the Government because those who have the money are able to take advantage of such services while the rest of us have to wait.

Mr. Dalyell

My hon. Friend is speaking about a trading fund. The Minister answered my hon. Friend's query by saying that the PSA was not relevant. Paragraph 8 of the Property Services Agency's report on the management of the civil estate says: The Property Services Agency are considering the introduction of commercial accounts and a trading fund to give clear information to clients and Parliament. Improvements in their information systems are necessary, however, and although significant interim improvements are being made their strategy is unlikely to be implemented before the 1990s. That shows that my hon. Friend's question is highly pertinent to the debate.

Dr. Marek

I agree with my hon. Friend. It is a pertinent and important question, and I am glad that the Chief Secretary said that there is no intention of running the PSA with a trading fund, before it is privatised. There has been some confusion about that, but now we have a clear answer which helps many people and not just hon. Members.

I was speaking about the passport offices and how they would be run with a trading fund. The Government do not approve of public expenditure and because of that I suspect that a long waiting list would be permanent and inevitable. The central issues are whether the service should be self-financing and what are the trade-offs between the cost of the service and its proper performance. There is no point in supplying new passports within a week if proper checks are not made about the applicants.

There is no point in making a service self-financing if it is deemed beneficial for it to be used but it is too expensive for the average man or woman. Women have the right to a free smear test for cervical cancer. I hope that no hon. Member can think of any circumstances in which there should be a charge for such a test because it is patently and clearly in the interests of the country as a whole that that service should be free.

As I have said, I could be convinced that some of the pitfalls and difficulties could be avoided and that the passport offices could begin to provide a proper service and have a trading fund at the same time. However—and this is crucial—it is not the trading fund that is vital but having properly paid and properly motivated civil servants. If there are enough of them and they have a high regard for their work and are efficient, thorough, precise and accurate, people will have a good service. That has little to do with a commercial trading fund about which the Government are seeking to persuade us.

We have to decide whether a proposed charge for a passport is fair and reasonable and whether it is possible and sensible to operate a trading fund on a quasi-commercial basis and provide a first-class service to the public. It would be wrong to set up a fund, commercialise the passport offices, and charge the necessary amount. Passport offices make inquiries about applicants for passports. If they use the police, will the police charge for their activities? Perhaps the police already do that. I will give way to any hon. Member who knows about that. In some cases there would be an incentive for such checks to be minimal and that would be detrimental to the proper functioning of the Civil Service and thus to the country.

Mr. Dalyell

My hon. Friend speaks about the police. In one aspect of police work a new system is being brought in. For the first time in police history there is a system of paying for certain forensic science services. That is a new issue of principle. I am very interested in the forensic laboratories and to me the matter is serious.

Dr. Marek

My hon. Friend is right. That matter was next in my notes. The Government are interested in charges and cost cutting and eventual privatisation. Forensic science laboratories now have to receive money from the police when the police send them work to do. As a result, less work will be sent to them by the police. The police will be overstretched and will hesitate to send work to the laboratories. Perhaps eventually the forensic laboratories will have trading funds. Crime that should be solved will be unsolved. There should be no question of an accountant looking at unsolved crime and saying that at least thousands of pounds have been saved; I suspect that if we go too far towards trading funds and agencies we will end up in precisely that situation. When that happens it will provide work for many accountants. If the Government were to remain in office for a long time I would advise youngsters at school to train to be accountants. However, that is hypothetical because the Government will not be in power much longer. Much Government legislation is for the welfare of accountants and not for the good of the country or its expeditious and efficient governance.

I shall not dwell on my next two examples in the way I have dwelt on the passport example. Revenue received by Customs and Excise is well in excess of the cost of providing the service because the revenue comes from such things as value added tax and stamp duty. Let us consider ports of entry to the United Kingdom. Can one imagine Customs officers becoming really zealous in their tasks if items seized could be sold to contribute directly to the trading fund? That is certainly not beyond the bounds of possibility. Customs officers in Dover could say, "We are not making a profit for the trading fund and it is nearly the end of the month. We had better search everybody leaving the ships and make them wait for an hour or two." That example may be far fetched, but the principle is sound. The commercial activity that the Government seek to encourage among civil servants is precisely that which I am describing.

Mr. Kenneth Hind (Lancashire, West)

Does the hon. Gentleman accept that the searches to which he refers involve contraband, drugs and so forth, none of which can be used to contribute to the trading fund? Perhaps the hon. Gentleman's example is a little wild in the context of the Bill.

Dr. Marek

I would not defend my arguments all the way along the road. However, to some extent my argument highlights the philosophy of the Government. Perhaps not contraband or heroin but the odd bottle of whisky or item of clothing from Hong Kong may be taken through Customs without being declared.

Mr. Norman Lamont

Before the hon. Gentleman gets too carried away, has he noticed paragraph 4.14 of the White Paper which says: Thus for example the delivery of social security benefits, and tax assessment and collection are outside the powers"?

Dr. Marek

I have noticed that and that is why I have restricted my argument to the Customs and Excise which does not carry out tax collection in the strict sense in which the Chief Secretary means it. When goods are declared that is what the Customs and Excise does, but I was talking about the aspect of Customs work that involves detecting goods coming into the country which are not declared where there is an intention to defraud on the part of the persons bringing in the goods.

I do not wish to dwell on the Customs and Excise. Suffice it to say that it is not just about detecting contraband. Most of its task is to collect tax on goods which are properly declared. There is a trade-off between stopping the importation of illegal articles and ensuring that the proper duties are paid on other articles. It is also the job of the Customs officers at ports of entry to be civil to and not to inconvenience unduly the travelling public at ports of entry. At present there are long queues and much inconvenience is caused at ports of entry. It is tempting to say that any other system must be better, but that is not the answer. Nor is a trading fund the answer. Let ports of entry be properly staffed. Let there be more than one desk at immigration when 300 people come off a jumbo jet. Let the Government employ a few more Customs officers so that motorists taking their cars off the ferries at Dover, Folkestone and elsewhere can go through the formalities without waiting for one or two hours as they have to do on many occasions. That is the answer.

The Government have said that the vehicle inspectorate is a number one candidate for a trading fund. A balance will have to be struck between charging for the services that it provides and proper attention to and testing of vehicles to ensure that the public are safe and can be assured that the inspectorate is performing its functions properly. If there is a trading fund, the chief executive will be given powers to run the inspectorate at a profit. There is a danger that if he deems that it would be difficult to set charges at the market level or a high enough level he will be tempted to cut corners and tell his employees, "Do not spend half an hour testing this vehicle. Can you not do it in 20 or 25 minutes?" The Government must address the danger that corners will be cut. They must assure Opposition Members and the country that it will not happen.

The White Paper says on page 6 in paragraph 2.2: The main aim of the Next Steps initiative is to deliver services more efficiently and effectively". We can call that phrase weasel words. I think that at one time or another we have all used that phrase. Such concepts are not easily defined. We interpret them in our own way. I have my own interpretation of performing a service efficiently and effectively. If we read on, we see that the paragraph says, within available resources for the benefit of taxpayers There we have another example of the Government's cost-cutting ethos. It is the Government who set the resources. They will set them at too low a level and will then set the impossible task—not only to the chief executive—to carry out the functions of the agency properly and responsibly. The Government will put enormous pressure on the civil servants in the agency. Employees will have to struggle simply to keep their jobs and do them properly and accurately.

The same paragraph of the Command Paper says that agencies represent a new and distinctive development. That is what the Chief Secretary to the Treasury said in his opening remarks. There are problems with agencies. They depend on the director. A bad manager will mean, by and large, that we shall have a bad agency, if not immediately, certainly in due course.

Mr. Hind

This argument equally applies to civil servants at present.

Dr. Marek

I hope that the hon. Gentleman agrees with me in that argument. If we are to have agencies it is crucial that the chief executives are of high calibre and have management skills to enable them to make a success of running the day-to-day affairs of the agency. They must also have sufficient integrity not to buckle to the Minister at his every whim.

Government trading funds are intended for many agencies. Some agencies were not necessarily set up as a result of the Fulton committee but partly in an attempt to reduce the pay of civil servants. Agencies will result in regionalisation of pay, local pay additions and a lack of mobility for civil servants. Employees will not be able to transfer from one agency to another or return to the Civil Service as easily as they did in the past. I may be overstating the ease with which they could move in the past, but the onus is on the Government to assure us that if the Bill reaches the statute book and if agencies are set up, some with Government trading funds, the mobility of civil servants will be no worse than before.

Mr. Kemp, the project manager of the Next Steps project, is effusive in his protestations that agencies will provide a better service to the public and improve morale in the Civil Service. I have no reason to believe that he does not believe that that will be so. However, it is implied that pay will have to be differentiated on geographical grounds. That has been demonstrated. There is a hidden implication that agencies would make the Civil Service a more commercial organisation, dedicated to making a profit at the expense of the public. Sometimes that is a precursor to privatisation in a future Parliament.

All the factors that I have mentioned are worrying. Many people believe that the confrontation between management, which pursues profits, and employees has caused our economic decline this century. There is a danger that that confrontation will be introduced into the Civil Service.

To take an example of what is wrong with British industry, at the end of last week the ambulance workers' unions suggested that there should be a 15-minute stoppage of work. They did not say, "Everybody out. It does not matter what the employers say." They said, "Let us stop work for 15 minutes. Ask your employer if he or she will allow you to stop work. If that is acceptable, stop for 15 minutes." What did British industry do? It did not say, "All right, we agree. we do not think that the ambulance men and women are right and a stoppage of 15 minutes would be detrimental to the country generally, but we agree that something should be done to tell the ambulance men and women and the Government to get together and to reach an agreement." They did not say, "Production cannot be stopped in essential industries." Nor did they say, "We do not mind, but work 15 minutes later." Instead, the Institute of Directors and the CBI said to industry, "You can sue the unions if they stop work for 15 minutes."

That is an ethos which I do not want to see within the Civil Service. I do not want to see that confrontational style. By and large, the Civil Service is still administering the country on the bases of fairness and accuracy. By and large, civil servants take a pride in their work and aim for excellence in every respect. The Government have attacked that approach and made life difficult wherever possible.

When the Government took office, the pay review unit was cancelled. There was an attempt to privatise the National Engineering Laboratory. A ban was placed on trade unions at GCHQ. Research institutes became demoralised. The Bill's provisions propose the spread of agencies and trading funds. I shall need much convincing by the Government that the Bill's provisions are not merely another way of cutting staff, introducing regional pay and more contracting out, and ending national pay bargaining.

Mr. Edward Leigh (Gainsborough and Horncastle)

All good things.

Dr. Marek

There we have it. The hon. Gentleman says, "All good things." He is honest. I hope that what I am saying does not constitute the Government's intent. I hope also that Conservative Members will disown the hon. Gentleman's intervention. As I have said, I believe that the Bill signals the ending of national terms and conditions of service.

A code of ethics is to be introduced for the Civil Service. The loyalty of a civil servant to his or her Minister is to be absolute. I do not know how that can work. For example, Inland Revenue civil servants have statutory duties when they are dealing with the tax affairs of members of the public. Lawyers have legal obligations when discharging their functions. Statisticians have professional duties. How would we resolve a potential conflict?

The Government are not interested in fairness, justice or morality. Thank goodness there are not many bent civil servants. Under the Government, however, many decent people will have to continue to wrestle with their conscience, as did Clive Ponting. I am sure that my hon. Friend the Member for Linlithgow (Mr. Dalyell) will agree that if a civil servant improperly authorises the release of letters written by the Attorney-General—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The hon. Gentleman is straying wide of the terms of the Bill.

Dr. Marek

Yes, Mr. Deputy Speaker. I am coming to the end of my remarks.

If a civil servant improperly authorises the release of letters—

Mr. Dalyell

What my hon. Friend says is especially relevant to the fact, which I believe is unprecedented, that the First Division Association has formally protested to the Government about the new guidelines for relations between civil servants and the Government. It has argued that the Crown comes into the matter at some stage. Is it not extraordinary that the First Division Association should have complained about its treatment by any British Government?

Dr. Marek

My hon. Friend has made an important intervention. What he says is symptomatic of the Government's attack upon the Civil Service over the past 10 years. It is certain that a civil servant who improperly authorises the release of letters written by the Attorney-General is as bent as the Minister who asks him to do it. I do not believe that civil servants should be put in difficult positions of that sort. We are to have trading funds—

Mr. Deputy Speaker

Order. It is difficult to relate the hon. Gentleman's remarks to the Bill.

Dr. Marek

I shall seek to explain why they relate to the Bill, Mr. Deputy Speaker.

There may be cost cutting in the operation of a trading fund. Vehicles may not be inspected properly, for example, because of the pressures that are on the trading fund. The chief executive may say, "We are not making a profit for the fund." That will put the civil servant in the same difficulty that other civil servants have faced in other areas of the Civil Service. That has been happening throughout the Government's existence. We are not faced with an isolated problem with the introduction and spread of trading funds. If the Government are serious, I accept that it is possible that trading funds could work in some instances, but the Government must convince Opposition Members that they are not pursuing their old dogma and attacks on the Civil Service of the sort that we have witnessed over the past 10 years. That is the central issue.

The Bill will not do much for the Civil Service or the public. We suspect that clear intentions lie behind its introduction, and if that is so they will warrant unlimited opposition. Mr. Kemp, the Next Steps project manager, envisages three quarters of the Civil Service eventually being organised on an agency basis. When the agencies have been set up and the framework agreements instituted, the unions have not been consulted. Any hon. Member who wishes to pursue that matter a little further has to read only page 7 of House of Commons Paper No. 420, the 38th report of the Public Accounts Committee. It is there made pretty clear that the unions were not consulted properly.

The next Labour Government will put matters right. Mr. Kemp will be given something else to do when that Administration takes office.

Mr. A. J. Beith (Berwick-upon-Tweed)

I have been listening carefully to the hon. Gentleman for three quarters of an hour and I have not been able to establish so far whether it is the Opposition's intention to oppose the Bill. Will he make that clear?

Dr. Marek

I shall come to that.

The next Labour Government will not disband the agencies that have already been created but in all probability we shall not create any more. I say that because the nation's economy is in such a mess that there are many important actions that the next Labour Government will have to take. We shall then see how the agencies and the trading funds have operated. At that stage we may be able to take a more considered view.

There is nothing wrong with the accountability to Parliament that is provided by the Bill. I have no quarrel with that. Besides publishing accounts, however, there should be scrutiny by Parliament over the day-to-day affairs of chief executives of agencies. That can be carried out by the Public Accounts Committee. Better still, however, the scrutiny should be available to every Member of this place. That could be provided for but at the moment I am not sure of the Government's intentions. I refer to page 18 of the White Paper. At the end of paragraph 5.10 there appears the following: The exact format of individual reports, and their degree of detail, will be for the responsible Minister and the Chief Executive to decide in the light of circumstances and objectives. That is not good enough. I should like a more forthright statement about the Government's readiness to accept, first, accountability, and, secondly, scrutiny.

There is one other initiative that the next Labour Government will take because the Bill says little about responsibility to the consumer. It makes mention of delivering a service but not of accountability. Agencies could he vehicles for a much better service to the public. It will be possible to give agencies guidelines on how they should go about their activities. Such guidelines would not be dictated solely by commercial considerations, and because of the nature of the agencies it will be easier both for Parliament and the public to judge them and their success—or otherwise. That particular aspect is one to which a Labour Government will pay close attention.

The Bill has some good points, depending on which Government are responsible for enforcing its provisions. For that reason, the Government should publish a list of trading fund candidates as they have in respect of agencies. The Government should declare also how much privatisation is envisaged for the long term.

Mr. Norman Lamont

We have done so.

Dr. Marek

I am speaking of the long term. I do not wish to delay the House, but there are quotations from the Prime Minister in which she stated that it was not possible to reveal what will and will not be privatised in the long term.

As to the question of the hon. Member for Berwick-upon-Tweed (Mr. Beith), if the Bill receives its Second Reading, we shall press the Government in Committee on all the issues that I mentioned.

6 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

I congratulate my right hon. Friend the Chief Secretary to the Treasury on his short and effective presentation of the Bill, in just 20 minutes. The hon. Member for Wrexham (Dr. Marek) spoke for nearly 50 minutes, and I feel sure that even his own right hon. and hon. Friends would like to see him shunted off into a trading fund. We might then be able to get on with our business.

The Bill is an important, albeit technical, measure. At present there are 10 executive agencies employing 7,000 staff. The Bill makes provision for a further 42 agencies involving perhaps 190,000 people, so we are talking big business. I welcome the Bill, which is entirely in line with Government policy. Such services need to be more business oriented and geared to consumer demand and market forces. If matters of managerial judgment are involved, why should not more flexible arrangements be made in the agencies?

Annex A of the White Paper "The Financing and Accountability of Next Steps Agencies" presents a long list of the agencies, but few of them concern the Ministry of Defence. One relates to the Royal Air Force, but there is no agency connected with either of the other two services. Perhaps my right hon. Friend will comment on that when he replies to the debate. There is scope within the Ministry of Defence for more initiatives of the kind that we are debating.

The White Paper states that the Next Steps project manager will identify obstacles and tackle them. Can my right hon. Friend state what kind of business experience is available in the manager's office? Will it be manned entirely by civil servants? There is clearly a need for much greater business acumen, and that is particularly relevant in the light of paragraph 2.6 of the White Paper, which reads: Before any Agency is established, the need for the activity is reviewed and alternative options, including contracting out the work and privatisation, arc examined. Will there be continuous monitoring of the prospects for privatisation, and will there be sufficient impetus and knowledge of the private sector in the Next Steps office to ensure that trading status is not a convenient and quiet alternative to privatisation? In many instances, privatisation may be the better solution.

Paragraph 2.7 of the White Paper makes it clear that the Bill is a response to the work of the Public Accounts Committee. I take it that the Government are seeking to clarify the managerial role of trading agencies as distinct from the policy role of the relevant Ministers. When my right hon. Friend winds up, perhaps he will say whether all the Committee's recommendations have been implemented. If only some have been implemented, which recommendations have not been implemented?

The outcome of each agency's work will be set out in the framework document and "made available to Parliament". What does that mean? How much scrutiny will there be? I accept, given the different natures of the agencies, that there will be some diversity in their relationships and closeness to Ministers. The key question is whether they will be equally accountable to Parliament.

Under existing arrangements for the Civil Service, Departments are cash limited and subject to scrutiny by' the Public Accounts Committee and Treasury and Civil Service Select Committee. The new arrangements will be different. The trading funds established in 1973 allowed the Government to finance activities outside normal parliamentary control. Those funds have considerable independence, including the power to borrow. Paragraph 4.3 of the White Paper states: Parliamentary control is obtained through:—the affirmative Order establishing each fund—the scrutiny of statutory annual accounts, and the power to examine the fund Accounting Officer. How much scrutiny of those funds by Parliament has there been? What evidence is there that they have been successful?

The Government Trading Funds Act 1973 established a strictly limited number of well-known trading funds, such as the Royal Mint and her Majesty's Stationery Office. Will my right hon. Friend give an assurance that the much longer list of smaller and lesser-known bodies that will, under the Bill, be allowed to enjoy trading fund status will receive adequate parliamentary scrutiny?

Paragraph 4.6 of the White Paper states: Under the 1973 Act the accounts of a trading fund are audited by the Comptroller and Auditor General, who is required to lay them before Parliament together with his report. They are then published as a House of Commons Paper. This provides a basis for Parliament to consider the performance of the funds against its financial and other performance targets. We often hear those comforting words in our debates, but how much parliamentary scrutiny of the trading funds has there really been and how effective was it? I am not saying that I disagree with the Bill, but it is only right for this House to demand more clarification on Second Reading. The Bill is clearly needed, but as it gives the Government enormous powers Parliament has a right to the answers it seeks.

I agree that the present definition of trading status is imprecise and I welcome the new formula, which was originally outlined in paragraph 4.12 of the White Paper. However, is not the new formula so broad as to include virtually anything? That may suit those who share my ideological standpoint, but that degree of breadth may concern other right hon. and hon. Members. It is important that my right hon. Friend the Chief Secretary to the Treasury reassures them when he replies.

The rules of payment for the use of Government services in respect of social security benefits, for example, apply to fewer than half of all receipts and therefore will not be covered by the Bill. However, I should like to know how the figure of 50 per cent. was arrived at, for no explanation has been given. I would welcome my right hon. Friend's comments on that aspect. Why stick at 50 per cent.? Why not make it less, or more?

I would appreciate further information on the way in which the Government intend to use what is a very generous enabling Bill. Paragraph 4.16 of the White Paper states: The first criterion for assessing suitability is whether, as a matter of policy, the Government considers that levels of activity and expenditure should vary in line with demands and receipts. I do not claim to be a highly intelligent Member of Parliament, but I find it difficult to understand that particular phrase and shall be grateful for my right hon. Friend's elucidation of it. Also, if agency trading comes about, how will the arm's length relationship with other Government Departments be maintained? The White Paper does not provide sufficient assurances. How will staff performance be rewarded? Will there be increased pay or bonuses? That aspect relates to paragraph 18 of the White Paper. Finally, how will the external finance limit restrict business initiative by the staff operating in the trading funds?

I apologise to my right hon. Friend for asking so many questions. In general, I welcome what is a worthwhile and useful Bill, which will do much to increase public confidence in the agencies. I wish the Bill every success in Committee and in its later stages.

6.9 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

This is a useful Bill which will improve the present statutory provision for creating trading accounts within the public service.

I listened for about three quarters of an hour to find out whether Labour Members would vote against the Bill, and I have come to the conclusion that no one will vote against it tonight. I assume that I am correct. It was clearly inadequate to continue to rest the creation of the funds on the basis of the old legislation, and the Government are sensible to introduce the Bill.

Although I assume that it is the case, it is not clear from the face of the Bill whether the creation of any trading fund will require an affirmative resolution of the House. The Government have said that in the White Paper, and I assume that the combined effect of the two Bills is that it will require an affirmative resolution for any fund to be set up. If that is not the case, it should be put right during the passage of the Bill. The Government have said that that is their intention, and I assume that they will keep to that.

A series of possible candidates for trading funds is listed in the White Paper. A number of those listed do not lend themselves to being trading funds because they do not fall within the just-quoted definition of activities in which there can be some variation of expenditure according "to demands and receipts." That applies to a relatively small number.

When the candidates are considered, it is important that not only the trading fund operation is taken into account but how performance standards can be set for the funds. The worry is that agencies will not have adequate performance standards set and that standards will not be monitored. The White Paper says that the Agencies will commit themselves to substantial and measurable improvements in performance, in terms of services and their costs". It should be made clear that the standards will be set at the beginning, and that they will weigh as heavily on the agency as the requirement to balance its books. If that is not so, we will simply get a perpetuation of inadequate standards or worse.

The passport office has been referred to, and I hope that nobody has come to the conclusion that the existing system is working satisfactorily. No one who has observed the work of the Liverpool passport office during the past two or three years can argue that it is working satisfactorily, and that was the case long before the industrial dispute. I am glad that the Government Chief Whip is in his place because he was a Home Office Minister and many of the staff in his office were helpful to hon. Members seeking to chase up passports for constituents who urgently needed them. Passport applications were extracted from a mound of applications that had not been dealt with. I had a number of experiences that led me to believe that the organisation was not being run as a commercial organisation would be run.

Late one Saturday afternoon I was on the telephone to an official in the Minister's office at the Home Office. I was working on a passport application. The Minister and civil servants in London were working on a passport application but no member of the management was in the Liverpool office to find out what had happened to it. I expect that they were out watching Liverpool or Everton. In any commercial organisation, in the middle of an industrial dispute, when it was unable to meet its requirements, the management would have been working at the weekends. That was not happening in the passport office. Long before the industrial dispute arose—and there were good reasons for that dispute—there was a state of near chaos in the Liverpool passport office, and they were unable to meet the heavy summer demand.

The candidate organisations are generally monopolies and it is therefore important to ensure that there is a system to set performance standards. One cannot get a passport from anywhere other than a passport office. Those people who were shrewd enough to send their applications to the Belfast office before the dispute arose got their passports on time. In that respect it is not a monopoly, but one can get a passport only from the Government. A vehicle can be validly examined only by an inspector authorised by the Government. Many of the organisations listed in the White Paper are monopolies. We cannot simply create trading funds, and allow them to exploit their monopoly position to continue to provide a bad or an inadequate service. Therefore, it is important that trading requirements and strong performance standards are set and that they can be monitored by Parliament.

Some of the organisations that are already working under the trading fund arrangements—for example, Her Majesty's Stationery Office—would not survive for long in the real market place, or the public sector, if they engaged in the pricing arrangements that they have now. The White Paper, "The Financing and Accountability of Next Steps Agencies" is printed by HMSO, which claims that it has 29 pages. It has only 25 pages, as four are blank. The price of those 25 pages is £4.60. That is supposed to be commercial enterprise working in the public service. Clearly there is a long way to go to get the level of efficiency that a non-monopoly commercial organisation has to achieve to survive, and I would welcome any attempt to achieve that.

I emphasise that it is the monopolistic position that many organisations enjoy that makes it insufficient merely to set up a trading fund. If the Government-appointed agency is the only supplier—as it has to be for some things—it will take more than a trading fund requirement to ensure that the public get a satisfactory service, and that is what the Bill is about. The public should get satisfactory service at the lowest possible cost to the taxpayer, and the present situation does not ensure that.

Dr. Marek

Perhaps the hon. Gentleman would like to reconsider his words. A satisfactory service is perhaps too low a standard. Let us have a good, first-class service for the public.

Mr. Beith

I am prepared to accept that qualification, although to my mind a satisfactory service would be getting a passport within a week, but a good service is to get it by return of post. The way that the terms have been used shows how standards have slipped over the years. The currency has become debased. I accept that a stronger term than "satisfactory" is needed. We want to ensure that a good service can be provided at reasonable cost. The present arrangements in many areas of the public service have not ensured that.

The trading funds system is appropriate to some areas of public service, but it will have to be backed up by strong performance standards, particularly when the Government are the monopoly suppliers.

6.17 pm

Mr. James Paice (Cambridgeshire, South-East)

I believe that most right hon. and hon. Members welcome the Bill because it recognises that the role of the Civil Service is vital to Britain but cannot be divorced from the needs of the public; that has been one of the cornerstones of Government policy.

The Bill goes a long way towards trying to relate the structure of the Civil Service more closely to the needs of the people through the various trading funds and the staff that manage them. I think that the hon. Member for Berwick-upon-Tweed (Mr. Beith) was trying to make that point in his lucid speech.

The Bill sets out to expose Civil Service practice to some of the pressures of commercial practice, although it cannot be 100 per cent. successful in achieving that.

We listened for more than 50 minutes to the hon. Member for Wrexham (Dr. Marek) and he made a lot of spurious points. One was the work of ADAS, which does not appear in annex A of the trading funds. Many of the points the hon. Gentleman made demonstrated that he does not know much about the subject.

ADAS, in fact, brought in a charging mechanism to demonstrate the wealth of advice from a range of private bodies that is available to farmers, whatever the activity in which they are involved. Its introduction has shown that farmers, once they have to pay, prefer to pay for advice from private bodies that have kept up with modern developments in technology and work systems: the problem is not the charges, but the evidence that has emerged that what was required was not being provided. The hon. Gentleman should, perhaps, consult his hon. Friend the Member for South Shields (Dr. Clark), his party's spokesman on agriculture, I do not think that he will find much evidence of support for the suggestion of a subsidy to enable ADAS to provide a free service, as it used to.

It has become fashionable to regard civil servants as a cohesive group. We should not do so, however, for they are involved in a range of different activities, as is demonstrated by the number of possible agencies listed in annex A. They may be research or investigative scientists, clerks, historians, administrators or members of many other disciplines, and thus cannot be lumped together. All the agencies and candidate agencies have some impact on the public, and most have a considerable impact: the vast majority of staff are in employment or social security offices.

The overwhelming majority of civil servants are highly competent and capable. I do not subscribe to the theory that they are workshy and could not survive in the private and commercial sectors, although I know that many people hold that view; I had a good deal to do with civil servants in certain sectors before I came to the House, and I believe that the Bill will show that they are as competent as I consider them to be. The problems of poor service and insufficient accountability have been caused by the system that has operated for so many years—a system that stultifies initiative, discourages innovation of any kind and encourages people to believe themselves immune from accountability, disciplinary measures and even dismissal.

By allowing trading funds to be set up, the Bill will go a long way towards solving those problems, although it is bound to cause uncertainty among staff: everyone fears change, and many civil servants will doubtless wonder what that change holds for them. While I do not dismiss their anxiety, I believe that in time it will be shown to be groundless. Trading funds will help to improve accountability, and will create conditions much more akin to those in the private and commercial sectors—conditions in which the individual can prosper. They will assist personal development and encourage the innovative processes that are so essential to a commercial operation.

I have, however, some anxieties about the Bill. First, I am keen that, where appropriate, civil servants who run the trading funds should be given terms and conditions of employment comparable with private-sector operations in the same sphere. However, while that may involve a considerable review of salary structure, it may also mean a weakening of the position of such staff—for instance, their protection against dismissal. We should remember that the Ibbs report criticised the centralised pay and conditions rules of the Civil Service for being outside the control of most managers and structured to fit everything in general and nothing in particular". I hope that the Government will not simply conclude that, with agency status, those responsible for operating the trading funds will still be civil servants, with Civil Service conditions and pay scales. Some of the agencies will have to compete for staff and in terms of the quality of their service, just like private-sector operations.

My other concern is competition. The hon. Member for Berwick-upon-Tweed has already made some of the points that I wanted to make. Simple responsibility for a fund will not achieve all that we would wish; financial targets—for returns on investment, for example—will not bring about all the desired results. We must go as far as we can towards creating competition, perhaps even breaking down some of the agencies into two or more groups so that they can compete among themselves—on a regional basis, for instance. We must try to engender competition wherever possible.

After a few years we may find that some of the agencies are not really needed, at least within the public sector, and if that happens so be it. The hon. Member for Wrexham wanted an assurance that the Government's proposal was not the precursor of privatisation or even abandonment. Perhaps, in view of the party that I represent, it is not surprising that I find it difficult to understand the ideology that the agencies should continue regardless, and that we should not consider privatising them. Such is the rate of change in Labour's policies that before many moons have passed its members may well suggest privatisation themselves—not, I hasten to add, that they will have the opportunity to do so.

I feel that we should question some aspects of the agencies listed in annex A, which will be prime candidates for the establishment of trading funds. The hon. Member for Berwick-upon-Tweed mentioned Her Majesty's Stationery Office, and I should like to know why it is necessary for such an organisation to be in the public sector. As the hon. Gentleman emphasised, some of its provision can hardly compete with what we would expect from a private-sector equivalent.

I also wonder—this will be dear to the heart of my right hon. Friend the Minister for the Civil Service—why we need a special college for civil servants. If we wish to encourage civil servants to operate in a commercial environment, they should be trained by people who already work in such an environment, rather than by people trained under the system that we are trying to change.

Mr. Ian McCartney (Makerfield)

Is not investment in the training of British managers in the private sector very low compared with our European competitors? The private sector's record of investing in the training of British managers is very poor.

Mr. Paice

As one would expect, the hon. Gentleman's comments are some years out of date. Management training in the United Kingdom has gone forward by leaps and bounds during the past few years. Private sector investment in training has increased by at least 50 per cent. in the last three or four years. That fact cannot be disputed. The hon. Gentleman needs only to check with the Confederation of British Industry, if he doubts it.

I do not suggest that British industrial management training right across the board is adequate. However, the ability of commercial training firms to train to the highest level has been proved throughout the United Kingdom. The companies that provide private sector management training could also provide it for civil servants.

The Queen Elizabeth II conference centre is a building of renown, especially to those of us whose offices are in Dean's yard or elsewhere in the conference centre's vicinity. I was surprised to find that it is listed. I wonder why the public sector is running the conference centre. I hope that in the near future it will be funded by a trading fund, to be followed shortly afterwards by privatisation.

I have already referred to the employment service as being one of the most important potential candidates for financing through a trading fund. It employs 34,000 civil servants and it is involved with the public. Members of Parliament receive many letters of complaint from constituents. They complain about how they have been dealt with by employment service employees. It is an essential part of the public sector, but it must remember that it is there to serve the public.

The fuel suppliers branch may employ fewer than 50 people, but one has to ask why there should be a fuel suppliers branch to provide a bulk fuel purchasing service to Government Departments. Surely a trading fund ought to be established so that the fuel suppliers branch can be got rid of altogether. A multitude of private sector companies could do that job.

Much has been said about passport office delays, but nothing has been said about Land Registry delays. During the last few years I have received many letters from people who have complained bitterly about Land Registry delays. When people want to move from one part of the country to another—usually to my constituency because of the thriving economy and low levels of unemployment—they find that it is difficult to do so. Delays are due to lack of accountability. Improvements must be made.

Property Holdings, which is responsible for the management of the Government's property portfolio, ought to be run in the same way as the private sector runs such a business. If it is cost effective for the Government to have their own property holdings, that is fine; I have no fundamental objection to that. However, if it is to be cost effective, Property Holdings must be staffed and run in such a way as to make it competitive with the private sector. A trading fund would ensure that it could be compared favourably with the private sector.

As for the Training Agency—formerly the Manpower Services Commission—I had a great deal to do with that organisation before I became a Member of Parliament. The Training Agency is venturing into an area that, so far as I know, is unknown to the rest of the Civil Service. There has been the introduction of private management, through the development of training and enterprise councils. Private industry will set up its own councils. Some members of the Training Agency's staff will be seconded to the training and enterprise councils to carry out administrative, operational and executive functions. Civil servants will be responsible to the private sector management. It will be interesting to watch the experiment over the next few years. It will provide civil servants with the opportunity to demonstrate all those characteristics that I described earlier as being essential if the operation is to be commercial and serve the public.

Despite the implications of some of my remarks, I believe that the majority of civil servants are competent. They have the ability to compete in a much more commercial operation. Ultimately, however, their job is to provide a service to the public, whether it be across the counter at a Department of Social Security office or behind the scenes in a research laboratory. This enabling Bill will allow most of the agencies to operate in a way that will demonstrate clearly how effective and efficient they are. I hope that in a few years time we shall be able to introduce a tranche of Bills to privatise some of the agencies. As a first step towards privatisation, I welcome the Bill.

6.36 pm

Mr. John Battle (Leeds, West)

This enabling Bill will provide the Government with enormous powers. Therefore, we are entitled to probe the Government's intentions. I should like to follow what was said by the hon. Member for Cambridgeshire, South-East (Mr. Paice) by asking a few detailed questions about some of the entries in the annex to the White Paper.

According to annex A, the Resettlement Agency Provides resettlement units for people without settled way of life. The social security IT services directorate Provides computer and communication technology services for the DSS. The social security benefits administration Assesses, issues and administers social security benefits. According to the Chief Secretary's speech, some of those services could be brought within the ambit of the Bill.

The Government announced in November the relocation of Social Security and Health Service departments to Leeds, involving 2,000 members of staff, from the chief executive down. That move has been welcomed in Leeds, and I hope that it is a sign of the Government's commitment to a regional policy. It is a key regional centre and the staff will get a warm Yorkshire welcome when they arrive in Leeds.

The Chief Secretary said that Government Departments are complex. Will the Resettlement Agency and the social security IT services directorate and the social security benefits administration, which are candidates for agencies in under Next Steps, be funded as trading agencies? Is it intended that commercial-style accountancy should be introduced in those departments?

The Resettlement Agency provides homes for people with no fixed abode. They will pay rent, for which they will get a receipt. Paragraph 4.14 of the White Paper says: The powers extend only to bodies which generate receipts in respect of goods or services provided. Where there are no such receipts the powers could not be used. The effect is to exclude areas of Government where the payment is not directly related to the provision of the goods or services, or where such payments constitute less than half of the body's revenue … Thus for example the delivery of social security benefits, and tax assessment and collections are outside the powers. I wonder whether the reference to collection only involves tax and whether all social security benefits are clearly outside the remit.

The social fund was a shift of policy from benefit as grant to benefit as loan—a loan which has to be repaid from benefit. I hope that there will not be a shift to commercial-style accounting in that area. Social security offices should offer a fair, efficient and just service to claimants who, through no fault of their own, need to make a claim. They have often been made to feel that they are victims or that they have committed an offence.

In a leader last January, The Times said: Last year one of the brighter sparks in the Social Security Department introduced an impressive prospectus for change. It proposed to remove from London the processing and basic clerical tasks occasioned by claims for income support … It also urged the treatment of claimants not as enemies of the system but as citizens deserving efficient administration. I hope that that will indeed be the case. The Department of Social Security recently introduced a new logo for its leaflets. It appeared as a smile. Some might argue in other debates that that smile is somewhat ironic in the light of benefit reductions. But as the Department is to move to the friendlier location of Leeds, let us hope that the service will be much more efficient and friendly rather than shift towards a business intent on shaming those who claim benefits. That is the type of improved management and efficiency that we would like.

I should be most grateful if the Chief Secretary would assure me that the Government have absolutely no intention, now or in the future, that any part of social security provision should be covered by this Bill.

6.42 pm

Mr. Kenneth Hind (Lancashire, West)

This is an excellent Bill. It takes forward much of what the Government have already done to reorganise the Civil Service. I fully support it and urge the House to vote for its Second Reading.

The hon. Member for Wrexham (Dr. Marek) was at pains to tell us that the Bill is worrying. More than anything else, the Bill shows up the differences of attitude between the two sides of the House. We look for efficiency and better cost management and see a role for the private sector. The Opposition want central control and maintain that the civil servant is always right and, as a result, must be left alone. If the hon. Gentleman plans to be a Minister, I urge him to be subjected to a compulsory session of "Yes Minister". Sir Humphrey Appleby could teach him quite a bit. Civil Servants can look after themselves extremely well.

When we consider the delivery of necessary services by the Government, the need for improvement is hammered home to us. I am a lawyer and must say that the Land Registry is a complete shambles. Solicitors carrying out conveyancing experience great difficulty getting the proper documents, and getting certificates for leases takes far too long. House transfers are delayed most unnecessarily.

The same can be said for the driver and vehicle licensing centre at Swansea. Any solicitor or barrister who has applied on behalf of his client for a copy of a driver's licence for the magistrates' benefit and anybody who has applied for a new copy of his licence will know of the terrible problems there. The Liverpool passport office is on my constituency's doorstep. Many of my constituents who wanted to go abroad on holiday were caused great anxiety last year by the dispute there. That office has a history of inefficiency. Such difficulties must be tackled. The White Paper is an excellent document, and the Bill based on it is the way forward.

Mr. McCartney

The hon. Gentleman mentioned the Land Registry. Does he agree that one of the difficulties, to say nothing of the lack of resources for additional staff, is that people who try to sell homes to other people may find that they are involved in litigation about who pays the ground rent? Every day of the week, thousands of transactions involving the sale of ground rents are made in London. That causes huge delays in the Land Registry. The Government have failed to prevent such speculation, which creates difficulties for the Land Registry and the hon. Gentleman's clients.

Mr. Hind

The hon. Gentleman is right to say that the transfer of freeholds, when the occupier is a leaseholder, is a big problem. I am sure that he is aware of the Lord Chancellor's proposals, based on the Australian and New Zealand model, to introduce a new style of ownership for flats in London. That will eventually do away with the problem he mentioned. The hon. Gentleman and I experience the same difficulties in our constituencies. The same is true for much of the north of England. I accept the need for reform, as does the hon. Gentleman.

Mr. McCartney

The Lord Chancellor's proposals relate exclusively to transactions in London. They do not affect transactions in the rest of the United Kingdom. This is not a party political issue. The House should find time to resolve this difficulty, which affects millions of potential purchasers each year.

Mr. Hind

As an active member of the all-party leasehold reform group, I hope that the hon. Gentleman will join us—

Mr. McCartney

I am a member of it.

Mr. Hind

We are working with the Building Societies Association to bring forward a proposal such as that—

Mr. McCartney

I am the assistant secretary.

Mr. Hind

I said that the hon. Gentleman is an active member. He will come along and help.

The examples I have mentioned demonstrate the need for Next Steps agencies. A trading fund is the logical step for many of them—they provide services directly to the public.

The White Paper draws attention to the problems of monopolies. We should consider that problem carefully. I endorse what my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) said about the list of Next Steps agencies in the back of the White Paper. Do the Government need to be involved in many of the functions listed there? Could they not be done equally well by the private sector? I welcome the fact that the Government are considering privatising those functions in future. Many of them could be carried out just as well in the private sector.

The trading funds that will be set up for the Next Steps agencies will not in any way reduce accountability to Parliament. Paragraph 5(1) of the White Paper states: Next Steps will involve no diminution in Ministerial accountability to Parliament. Indeed, the creation of Agencies will clarify managerial responsibilities and reinforce accountability to Ministers and to Parliament. The majority of chief executives will be former civil servants. The hon. Member for Wrexham says that chief executives will feel under pressure to produce results and will not feel able to satisfy the public's need for service. But civil servants feel the same pressure and the same need to satisfy the public's requirements at the moment. That will not change except that the agencies will be treated individually. The Comptroller and Auditor General will publish a report which, along with the accounts, will be brought before the House of Commons so that we can scrutinise the operation of that part of the Civil Service. Today, much of it is subsumed into the whole and we never know how efficient individual parts of the Civil Service are. The report will provide us with a good opportunity to look at it. The funds will be created by affirmative order of the House of Commons and the chief executives will be subject to examination by the Comptroller and Auditor General and no doubt will be called before Select Committees when it is considered that matters need to be investigated by the House. In future these matters will be safe in the hands of the House and Ministers.

I now turn to more parochial considerations. Next Steps agencies will be important for the provinces of England, Wales and Scotland because they will be self-contained units with chief executives responsible directly to Ministers, so there is absolutely no reason why they need to operate in the south-east. Hon. Members on both sides of the House who represent northern constituencies will agree that we have a classic opportunity to move those agencies into the provinces to create jobs in areas of high unemployment.

Dame Elaine Kellett-Bowman (Lancaster)

In Lancashire.

Mr. Hind

I agree entirely with my hon. Friend. There is no reason why many of the agencies should not move north. A number of Department of Social Security offices are located in Blackpool and before it was privatised the new headquarters of Girobank was set up in the constituency of the hon. Member for Wigan (Mr. Stott) close to the constituency of the hon. Member for Makerfield (Mr. McCartney). The Government have successfully transferred Civil Service jobs from the south-east to the north. That must continue. Given the technology and the communications that exist today, there is no reason why all the major offices of state should be located in the south-east of England. Next Steps agencies will be the beginning.

Mr. McCartney

rose—

Mr. Hind

Let me finish this point.

In the past six months I have had the privilege to serve in the Northern Ireland Office as a parliamentary private secretary. A similar situation exists in the Welsh Office where Ministers are based in London but can communicate with civil servants by video and by television link so that they can have meetings with civil servants who are 100 or 200 miles away. Those jobs will provide much-needed prosperity in the regions and should move out of the overcrowded south-east where Conservative Members are desperate to protect the green belt. Up north we have the infrastructure, the housing and the quality of life to absorb those jobs.

I note that the Minister for the Civil Service is in his place. I hope that he will take on board my comments. Part of St. Joseph's college, the seminary at Upholland, is in my constituency. It is available for such an organisation as a Next Steps agency and is close to the M6 and the M58. A Next Steps agency could be set up in a class II listed building, a magnificent Victorian building in 180 acres of parkland providing a superb standard of life, as anyone living in my constituency or in that of the hon. Member for Makerfield would agree.

Mr. McCartney

I agree that hon. Members on both sides of the House should continue their efforts to achieve the transfer of jobs northwards and to create initiatives to provide new jobs in the north. The hon. Gentleman and I have recently been involved in the privatisation of Girobank. He supported the privatisation process which nearly lost us jobs in the north-west from Britoil in Wigan. The battle was not only about privatisation but about retaining the jobs in the north-west after privatisation. The hon. Gentleman was silent in the argument about privatisation and the possibility of jobs being transferred. I shall not go into his difficulties at Upholland and the fact that his constituents are up in arms about the possibility of development, commercial or otherwise, at the seminary. It may be difficult for the hon. Gentleman in view of his small majority which will not be helped by his speech today as most of his majority is probably made up of civil servants in the passport office in Liverpool.

Mr. Hind

The hon. Gentleman referred to the problems at Upholland. Perhaps he will appreciate that it is an ideal centre for a Next Steps agency. West Lancashire district council, which is Conservative controlled, has rejected the proposals by the church to develop in green belt and recognises as I do that that college could be more sensibly used for such a development.

The trading fund which underpins the Bill will provide a financial framework which will cover the operating costs, receipts, capital expenditure, borrowing and net cash flow of the Next Steps agencies. Those that are suitable will find that it will provide a more commercial and disciplined approach to the delivery of Government services coupled with a greater accountability to Parliament for the results achieved. Where it is appropriate for such trading funds to be attached to Next Steps agencies—and that will not always be the case—it will result in improved performance and improved provision for the public which they will welcome and which I am sure will be welcomed by all Members of Parliament.

Several Hon. Members

rose—

Mr. Speaker

Mr. McCartney. Are you ready?

Mr. McCartney

I was rather surprised because, to be perfectly frank, I thought that my hon. Friend the Member for Linlithgow (Mr. Dalyell) was here before me.

Mr. Speaker

Fair enough. Mr. Dalyell.

6.58 pm

Mr. Tam Dalyell (Linlithgow)

It is a most unusual compliment, and it will be repaid.

May I make an extremely careful and hesitant comment on one of the matters raised by the hon. Member for Lancashire, West (Mr. Hind)? He referred to civil servants and jobs in the new agencies. I do not know all the facts, but I should like to ask one question: are we sure that it is ethical these days for Mr. Patrick Brown of the Department of the Environment to go out of the Civil Service to the National Freight Corporation, back into the Civil Service, and now out again to the Property Services Agency? I stress that this is not a personal attack. I do not know all the facts, but it is high time that a Minister made a statement on the new ethics of the Civil Service.

I remember an enormous row when Sir Clifford Jarrett, who was permanent secretary at the Ministry of Pensions, got a job with a pension fund company. The then Cabinet Secretary had to decide whether his appointment was proper. Sir Clifford Jarrett had left the Civil Service, but it now appears possible for people to join, leave and rejoin the Civil Service.

This afternoon I asked the Attorney-General whether he would discuss with the director of the serious fraud office the propriety or otherwise of Coopers and Lybrand being commissioned by the Government to do a report on extremely important institutions—the Property Services Agency and the Crown Suppliers—when certain key people who are former employees of Coopers and Lybrand are the leaders in the management buy-out. That raises some pretty serious questions about governmental ethics. I see the Chief Secretary to the Treasury knitting his brow, but these are extremely delicate matters. A statement should be made on exactly what has changed in Civil Service ethics.

It is not every Saturday evening that I ring No. 10 Downing street, but I did so last Saturday to leave a message with one of the Prime Minister's secretaries. I said that in my opinion she should have made a statement to the House—the Minister of State, Privy Council Office has guessed on what subject—on a matter of enormous sensitivity, the protest by the First Division Association on guidelines. The First Division Association does not lightly protest, so when it does—I am not disparaging the Minister of State or being personally rude to him—the head of the Civil Service should at least make some comment.

In my speech I may ask some naive questions that may appear rather simple, but the Labour party has been in opposition for a long time. There was a time when many Members of the Opposition had recent ministerial experience, but since 1979, for reasons of which we are all aware, there has been a great change. I am not making a party point, but I think that, with the exception of my hon. Friend the Member for Bradford, South (Mr. Cryer), I am the only Opposition Member present who has any experience of government. That lack of experience makes it much harder for Opposition Members to understand the pros and cons of what a Government are doing. Having been exiled between 1974 and 1979 over devolution, it is more than 20 years since, as a parliamentary private secretary, I saw the inside of a Ministry.

I hope that hon. Members will forgive a little history, but I am interested in not only the Property Services Agency but the general subject. I recollect clearly—in another context I have had to work on the papers relatively recently—that the late Sir Otto Clark and the late Sir Leo Pliatzky, who were formidable civil servants, thought that they had persuaded a number of members of the Labour Government to set up something equivalent to the Property Services Agency. They certainly succeeded in persuading Lord Armstrong of the Midland bank, not Lord Armstrong of Ilminster. When those people said that the Government had to be themselves involved to make good decisions, they were not making simply a party political point.

There is a further general point to which I hope that the Chief Secretary will respond—I know that he is deeply interested in such matters. I shall leave out the privatisation of businesses because I understand that there is a party political difference over the privatisation of electricity and water, but in the case of the Crown Suppliers and the Property Services Agency, is the Chief Secretary absolutely persuaded that he is not trying to privatise, not a business, but a governmental function? Who will make the judgments that the Government must make?

I refer to a question that the Chief Secretary answered today. It says: To ask the Chancellor of the Exchequer what architectural and architectural-related staff he has in the Treasury to make technical assessments of decisions by other Departments to use agents other than the Property Services Agency. The first answer was a holding reply on 21 December. I make no complaint about that other than to say that if those proposals, which will begin to be considered upstairs tomorrow, had been properly thought out the question could easily have been answered. I have received a succession of replies from Ministers at the Department of the Environment saying "I shall answer as soon as possible", but if any thought had been given to the question an easy answer could have been written on the back of a postcard and answers to fairly obvious questions from me would have been unnecessary. The Chief Secretary replied to the question: No staff in such specialisms are currently employed in the Treasury. Where Departments are free to use agents other than PSA for building and maintenance work, it is for them to decide on value for money grounds, and after the usual tendering and contract procedures have been observed, whether such agents, or PSA, should be employed. Who makes those decisions? The PSA is a function of Government. Leo Pliatzky and many others regarded that as a great problem in the 1960s, and it has not gone away. In order to make sensible decisions there must be some proper expertise.

What are the plans for full commercial accounts for the PSA or its successors from 1991 onwards?

Who will supervise and check work in the private sector? How will an objective assessment be made? If a Department does not have the necessary expertise, I do not see how an objective assessment can be made. The Government's line is that the new agency's main aim is to maximise profits for the owners, but where is the independent source of advice?

The construction industry is not exactly famous for its honesty and integrity. Someone must make judgments about substandard work, shoddy materials and unreliable surveys. I may be referring to ancient history when I say this, but I remember when I was a lowly person in a Department that was run by a formidable lady, Dame Evelyn Sharp. She cried out for expertise which even the Ministry of Housing and Local Government did not have at that time. We seem to be going back to that experience.

I do not claim that the PSA is a perfect organisation. It has done many good things, certainly outside the city of London, and my constituents and many others who work for it are proud of much of what they have done, but because of the nature of their work they are likely to make mistakes. I am asking the Treasury whether, from now on, each Department is to have a commissioning and supervisory section.

Are there to be mini-PSAs in each Department? If the answer is no, how are we to avoid increased costs, undetected corruption and a dramatic lowering of standards? There must be someone who is competent to make judgments. My hon. Friend the Member for Leeds, West (Mr. Battle), who has experience of local government, knows what I am talking about. The same thing applies in the running of a great city as in the running of national Government. There is a big question mark over whether any private agency can do that, let alone over the question of accountability to Parliament.

Let us take a specific example—valuation. We are told by the National Audit Office, and there is no reason to doubt it, that the value of PSA properties in 1982 was £3 billion. I can understand that, given the value of the Whitgift centre in Croydon, St. Christopher's house and Argyll house in Edinburgh and some 8,000 properties, although admittedly some are small. I am told—the Minister may say that I am wrong—that the Property Services Agency and Crown Suppliers Bill, which is about to be considered in Committee, deals with more than £10 billion. Incidentally, when I have asked questions I have found that many people will talk—but only because post-Ponting they trust me not to reveal sources. I gather that there has been an edict—I do not know whether Ministers are responsible—to the effect that people should not talk about their work in the PSA and issues that relate to current events. That is all very well, but may I just say that we have had certain things to say about eastern Europe and leave it at that. It is unsatisfactory to put a gag on a legitimate subject of debate.

If the PSA is to be abolished, who in government is to decide what additional property is needed by any arm of the Civil Service? Is it to be the Civil Service Department? Surely someone centrally has to decide whether other departmental property may be useful. With privatisation of the PSA come 1992, or whenever it can be sold off—the Property Services Agency and Crown Suppliers Bill deals with that privatisation—who will make a decision quickly and effectively on the disposal of surplus accommodation? The Treasury may be thought to have had some interest in this aspect.

Who is responsible for the strategy of reducing the amount of vacant space to the minimum possible? Who is to judge the operational fitness of the value of the estate by adequate maintenance?

I shall not go on endlessly but, for reference, will mention "Property Services Agency: Management of the Civil Estate," the summary and conclusions of the National Audit Office report. My impression since 1987 has been that the PSA regional organisations have improved greatly. For all I care, Ministers can take credit for that. But why upset the apple cart and create a situation where no one will do this vital job?

What has happened to the trading fund to give information to clients and Parliament? As for the PRS scheme in 1983 to make Departments aware of the accommodation costs and administration of their policies and programmes, how is it to be achieved, and does the interdepartmental committee remain in operation?

Paragraph 9(c) of the National Audit Office report states: as old long-term leases fall to be renewed, the PSA has been faced with greatly increased rents and liabilities to regular five-yearly reviews". Does that continue? This was a problem for the PSA's investment appraisal unit. Paragraph 9(f) of the National Audit Office report says: the PSA's investment appraisal unit reported that in 1986–87 appraisals had been wrongly omitted in 16 out of a test of 35 defence and civil cases. [Interruption.] Ministers may be becoming impatient, because all this is a bit uncomfortable. The system has been ill-thought-out, and these points are relevant to Ministers and to the legislation. The NAO report says: the PSA is considering the introduction of commercial accounts and a trading fund to give clearer information to clients and Parliament. That brings my point completely into order. The report says: the saving on the PRS scheme accommodation charge is intended to provide occupying departments with sufficient incentive to surrender to the agency surplus land and buildings. The Chief Secretary is wise not to intervene at this stage because this is an extremely difficult question for the Treasury. I am not persuaded that the Under-Secretary of State for the Environment—the hon. Member for Southampton, Itchen (Mr. Chope)—is more clever or more able than Treasury Ministers. [Interruption.] Treasury Ministers are probably thankful that they will not take the Bill through Committee, because it is a can of worms. Paragraph 12 of the NAO report asks whether the Departments have sufficient incentive to identify surplus accommodation? The answer is no.

The defence estate was managed by the PSA. Who is to manage it now? There was a considerable row in the 1970s, and again in the 1980s, when, apparently, the Prime Minister actually came down on the side of the PSA against the Ministry of Defence managing its own estate.

Ah, we are greatly fortunate to have the Secretary of State for the Environment present, because the Property Services Agency and Crown Suppliers Bill is his Bill. As the Secretary of State has entered the Chamber, this would be the ideal opportunity to go through with him the Coopers and Lybrand report on what happened in relation to the PSA; I should like to check with him the history of all this.

Is it not true that the first report on the privatisation of the PSA and the Crown Suppliers, undertaken by a Treasury official called Jeannie Turton and her colleagues—I think that those in the Box know something about this—came down against privatisation?

Is it not also true that a second report—which the Government refused to publish—from the central unit in the Treasury also came down against privatisation'? And is it not true that Dewi Jones also came down against privatisation, with certain qualifications? I know that I shall be corrected if my history is wrong.

Then the Government strongly told Coopers and Lybrand that the question was not whether the Crown Suppliers—which is a function, not a business—and the PSA should be privatised but how. Those were the terms of the question, on the Government's instructions.

Is it not also true—I am careful about privilege, and I say this, under privilege, in the form of a question—that the person who had most to do with the Coopers and Lybrand report on the TCS was Mr. Bob Etherington? Is it not also true that Mr. Bob Etherington has become the mainspring—the driving force—in the management takeover of the Crown Suppliers? I stand open to correction, and if I am wrong I shall give way to any of the four relevant Ministers who are doing me the courtesy of listening—the Secretary of State for the Environment, the Minister of State, Privy Council Office, who is responsible for the Civil Service, the Chief Secretary to the Treasury and the Economic Secretary to the Treasury. I ask any one of them to tell me whether I am right or wrong about Mr. Bob Etherington's position. I think that I am properly informed, although I see that a note is coming from the Box.

Let me explain the history of the Coopers and Lybrand report. In March 1987, two reports on the Crown Suppliers were submitted to the Under-Secretary of State for the Environment. The first, by Coopers and Lybrand in association with Samuel Montagu, discussed the feasibility of the privatisation of the Crown Suppliers and the second, by Dewi Jones, a consultant, looked into options other than privatisation.

Coopers and Lybrand was asked to determine the prospects for the successful privatisation of all or part of the Crown Suppliers, including the best means and forms of achieving that objective. Coopers and Lybrand took the view that, for the privatisation of the Crown Suppliers to be feasible, its lines of business would have to be capable, first, of commercial viability—sustaining adequate levels of profitability in free competition—and, secondly, of being successfully transferred from the public to the private sector. Do the Government think that those conditions, imposed by Coopers and Lybrand—itself asked to do a job by the Government for reasons, some of us might think, of political dogma—have been met?

In the meantime, Ministers have information, and I should certainly be interested to hear what they have to say about Mr. Bob Etherington's position. I can only assume that silence indicates that I am broadly correct, and so I give notice that I hope that the Secretary of State for the Environment will instruct the Under-Secretary of State for the Environment to attend the Committee tomorrow morning and say exactly what the position is. Some of us think delicate questions of Civil Service ethics are involved.

I ought to tell the Secretary of State for the Environment that at Question Time I asked the Attorney-General whether he is prepared to examine the role of Coopers and Lybrand in the privatisation of the Crown Suppliers and discuss the ethical position with the director of the serious fraud office. I choose my words with extreme care. All this is extremely close—this is why I have been asking questions—to a variant of insider trading. If the Government are going to get involved in that kind of thing, they had better be extremely careful. As some individuals have found, insider trading is an extremely serious offence in this country. There really ought to be some explanation of how people can do a job for the Civil Service and then seemingly get into a position where it appears that they benefit. I am not in the habit of making personal attacks on individuals—still less, named individuals—under the cloak of privilege, but there ought to be some clear explanation of what is happening.

Coopers and Lybrand was asked to determine the prospects for the successful privatisation of all or part of the Crown Suppliers. The company's report opened with an overview of the Crown Suppliers, its organisation, aims and activities, and divided the organisation into three main divisions—product supply and services, transport and fuel. The prospects for privatising the whole organisation were seen to depend on the sum of the prospects of the three individual divisions rather than on the characteristics of TCS as a single entity. Are the Government happy about the organisation's break-up as a single entity?

I refer to the product supply and services heading. The main business line of the division is the supply of hard furniture. Coopers thought that it would be feasible to privatise that activity, together with the related activities of floorings and furnishings supply and contract furnishing services. Coopers thought that this core business, which would supply both own design and trade pattern products, had the potential to compete successfully within an established furniture distribution industry. It could defend a high share of public sector demand and additionally develop a share of selected markets within the private sector. That was Coopers' view.

Then we had the Second Reading debate. I listened to the speech of my hon. Friend the Member for Workington (Mr. Campbell-Savours), which, although long, was not over-long as it contained matters of considerable substance. My hon. Friend the Member for Workington may not be the most popular Member of the House with Conservative Members, but when he makes long speeches he always deserves an answer. I do not share his views on every subject that he has raised, but over the past few years I have learned that he had better be answered.

During a 50-minute speech on Second Reading, my hon. Friend asked delicate and awkward questions about furniture supply, but until now the answer has been the proverbial lemon. The question has not been answered. The whole purpose of Parliament is to get answers. For all I know, there may be answers to my hon. Friend's questions, but they have not been forthcoming. I am extremely sorry that my hon. Friend cannot serve on the Commitee as he is already serving on the Committee that is considering the National Health Service and Community Care Bill. I give notice to the Secretary of State and the Under-Secretary of State that I will find ways in Committee to go over, point by point, my hon. Friend's questions on furniture. We will not get far until we receive satisfactory answers.

Coopers and Lybrand thought that a major change in operating style between the Crown Suppliers and a privatised core business would be needed to adapt to a commercial environment. The business represented a relatively high proportion of the division's current revenues that could operate within the private sector on a relatively small proportion of current resources and assets. From the Bill it appears to the Opposition—although we may be wrong—that that has not been agreed. It reveals the nature of trading funds and how the Government propose to operate in that sector.

On the basis of Coopers and Lybrand's own conditions, the Government's scheme is unsatisfactory. Not all of the Crown Suppliers' activities could be privatised. For example, the procedures undertaken by the Crown Suppliers reassured customers that procurement was carried out in a manner acceptable to the Government. That added value formed part of all procurement activity and could not be privatised. The Government would not wish to rely on a private sector for that service and compliance with EEC or GATT regulations might not be possible for a private sector company.

The Treasury deals with the EEC on those matters. Have its proposals for the Crown Suppliers gained agreement in Brussels? I am told that there are real international difficulties with our Community partners and that certain aspects of the proposals for the Crown Suppliers may not have the agreement of the EEC Commission. The Treasury certainly does not yet have the agreement of the American air force, which is deeply concerned about security.

My hon. Friend the Member for Hammersmith (Mr. Soley) is an expert on security and he will be leading for the Opposition in Committee. I am entitled to follow up one of my written questions on the American air force, which I understand has not agreed to the new arrangements and is not persuaded about the security arrangements within the Government's privatisation proposals. The American air force should not determine Government policy, but there should be some serious answers detailing its objections. Will they be met, and how can they be met? What is the legal ruling in respect of the EEC and the American air force?

Even Coopers and Lybrand said that certain lines of business could not be feasibly privatised such as Defence Contracts Organisation contracts, equipment product categories, procurement of low value products, contracted services and security furniture workshops. DCO contracts are resource intensive and would not be commercially viable in the long term. Do the Government agree with Coopers and Lybrand or not? It also said that it felt that the arrangement of DCO contracts was a valuable service that should be retained within Government. Some of those activities are highly specialised and would not readily transfer to the private sector. The transfer of the supply of security furniture would not be acceptable to the Government.

What arrangements are being made for Government transport in the four areas of operations—vehicle hire, the interdepartmental despatch service, the Government car service and vehicle workshops? All could be successfully privatised with the exception of parts of GCS and the Nine Elms workshop, which would be retained to provide high security maintenance. All feasible areas could transfer either by sale as a going concern or by closure and contracting out. In the case of the allocated fleet, where continuity would be helpful, a transfer of vehicles and drivers to the relevant departments would be appropriate. In particular, the vehicle hire business would represent an attractive proposition in the private sector where it could free itself from the capital restraints of vehicle ownership and thus compete more effectively.

Coopers and Lybrand said that it was not feasible or appropriate to transfer to the private sector the provision of high security chauffeur-driven vehicles, the peripheral activity of secure mail dispatch and secure journeys from the pool. The overriding consideration was security. Although the security could not be reasonably privatised, Coopers and Lybrand said it could be operated by another public sector body such as the police force.

In future, will the Minister for the Civil Service accept Coopers and Lybrand's advice and he driven in Government cars by the police? If not, why do the Government turn down the advice of their own expensive advisers? What is the Government's position on the question of sauce for the goose being sauce for the gander'? Are Government Ministers to be treated differently?

Hansard will show that I have posed some careful questions. I hope that proper answers will be given in Committee. I have no record of filibustering on any Bill, taking time unnecessarily or speaking for too long, thereby keeping out my colleagues. I warn the Government that some of us will be exceedingly persistent until we obtain answers to our questions. As I have named Bob Etherington and referred to Patrick Brown, it might be better if, in his reply, the Minister referred to the position of those gentlemen.

7.39 pm

Mr. Keith Mans (Wyre)

I was going to make a few detailed points about the Bill, but as the hon. Member for Linlithgow (Mr. Dalyell) did not cover any of those points, I will be brief because I know that other hon. Members want to speak. I hope that the hon. Member for Linlithgow does not mind if I do not follow his points because I could not see the relevance of many of them to this debate. We are talking about Next Steps agencies. Paragraph 2.6 of the White Paper states: Next Steps is primarily about those operations which are to remain within Government"— that is, operations that will not be privatised. I believe that the hon. Member for Linlithgow was referring primarily to the Property Services Agency which will certainly be privatised if the Bill is passed.

Mr. Dalyell

The hon. Member for Wyre (Mr. Mans) should look carefully at the Bill. It is for the Chair and not for him to allow me to make my points. I am sure that the hon. Member will concede that it is for the Chair to take that decision.

Mr. Mans

I was not in any way commenting on the relevance of the remarks made by the hon. Member for Linlithgow. I said simply that I was not going to follow them because I believe that the main point of the Next Steps initiative is associated with the creation of trading funds and not with the points made by the hon. Member for Linlithgow.

I was very interested in the contributions of the hon. Members for Wrexham (Dr. Marek) and for Berwick-upon-Tweed (Mr. Beith). The hon. Member for Berwick-upon-Tweed was right to maintain that if the initiative resulted in a better service for consumers and the people using the services that are to become agencies, the initiative should be welcomed. I agree with that.

As far as I could follow them, I would not agree with some of the points made by the hon. Member for Wrexham. It seems to be Labour party policy at the moment not to disband any of the agencies that we are going to create or have already created. Rather, Labour will not create any more agencies from those that currently have candidate status. The Labour party appears to be worried about committing itself to anything at least for the next year or two. It was very interesting that the hon. Member for Wrexham said nothing positive about the Bill. He did not give us Labour's view of the Bill. He seemed to say that Labour would leave things as they are and that the creation of trading funds would not lead to a better service for consumers. That was about all that I could understand from the contribution of the hon. Member for Wrexham.

I completely disagree with the hon. Member for Wrexham. The creation of trading funds and of the wider commercial climate is a prerequisite for a better service for those who require it from those agencies. Before we can decide the level of service and the amount of resources that are to be provided, we must know exactly what it will cost. The creation of trading funds will go some way towards achieving that.

The list contained in annex A of the White Paper is relevant. My hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) referred to the fuel suppliers branch. It is odd that an agency designed to cut expenditure and to ensure that we purchase fuel most economically for the public sector does not know how much money it is spending—according to the annex—or the number of people it employs. If nothing else, the Next Steps agencies will ensure that people will look more accurately at what things cost.

The Next Steps agencies will affect the RAF training organisations and the service schools in north-west Europe. Under the current financial structures the figures are not separately identifiable. The RAF does not know the exact cost of its training or of providing school facilities in north-west Europe. If nothing else, the initiative to create trading funds and new agencies will act as a discipline on those involved in those functions to ensure that they know how much it costs to provide those services. That must be a prerequisite to ensure that the services are provided efficiently and economically to the public and to the users of those services.

I welcome the Bill because it will increase accountability and the opportunity for scrutiny. I hope that it has a speedy passage through the House.

7.45 pm

Mr. Ian McCartney (Makerfield)

I want to make a short contribution about two aspects of the White Paper. Before I became a Member of this House I was involved in running a very large local authority which had a budget well in excess of £100 million a year. Even with restrictions on local government expenditure, with that level of resources we provided finance and accountability in the construction of services and in their delivery. We had methods which could be deployed to improve value for money and efficiency and at the same time ensure that that efficiency and value for money was governed by the need to provide services instead of a need to achieve a financial target imposed on particular aspects of local authority activities.

Against that background I want to consider the White Paper and the proposals in the Bill. I want first to refer to the Liverpool passport office about which several hon. Members have expressed a rather jaundiced view. I believe that if the employees in that passport office had not acted as they did last summer, the Government would still not have taken steps to improve the service and administration of that office. The staff brought their views to the public about the need to improve the working of the office and the level of manpower resources that should have been allocated to provide the service.

Sometimes when we debate local government services or the privatisation of services currently run by civil servants, the prerequisite for arguing for that privatisation as voiced by Conservative Members is an attack on the integrity, capability and work ethic of the people working in those services. In the final analysis, very few people who work in the public sector do so as a result of a malevolent feeling towards the people for whom they provide the service. The staff working under trying circumstances in the Liverpool passport office were the catalyst for the changes. They wanted to improve the service and we should remember that instead of attacking them when they cannot respond to our debate.

Annex A of the White Paper refers to the planning inspectorate which, according to the White Paper, Carries out public inquiries and appeals on planning, housing, highways, and other matters. It also deals in two ways with rights of way, pathways, bridleways, the change of use of property, opencasting and other mineral extractions. First, they are dealt with in the time-honoured fashion of a public inquiry. The local authority may take a decision which is appealed against and the Secretary of State refers that to a public inquiry. Following that, the Secretary of State will determine whether he accepts, rejects or amends in part the recommendation of his inspectorate. Secondly, it deals with written appeals against local authority decisions. Both parties submit written evidence to the inspectorate, and the inspectorate then makes a recommendation to the Secretary of State.

For two main reasons, over the past few years the work of the planning inspectorate has been made difficult. First, many planning inquiries have had to be held. Secondly, local communities are far more aware of environmental changes caused by housing and industrial planning applications. In past decades, planning applications were not publicly scrutinised, but they are now challenged and scrutinised by the public. As a result, local authorities take more account of a community's views than they did previously. There is a huge backlog of appeals before the planning inspectorate. I refer to written appeals and to a substantial number of appeals that are the subject to public inquiry.

Some appeals do not relate only to small matters such as a change of use of land for housing. In my constituency, a recent planning inquiry related to opencast mining and the Secretary of State's power to impose a mineral plan on Greater Manchester county. That mineral plan included policies on the extraction of coal, shale, sand and other minerals associated with opencast mining. There was a huge number of objections from local residents, Members of Parliament, heritage and environmental groups, and local authorities. Because of the backlog in the inspectorate's work, an outside planning inspector was appointed. Also, because of that backlog, the inspectorate appoints inspectors to conduct particular inquiries. In some instances that system can work satisfactorily, particularly when the inquiry reports in one's favour. However, there are instances in which an inspector has a similar background to that of an applicant. That happened in the case to which I referred.

The Government must recognise the need to provide resources for independent professional planning advice. Planning inquiries should be carried out in the most professional, independent and thorough way possible. Intolerable burdens will be placed on the inspectorate if it is included in the Next Steps initiative.

What is meant by competition in the planning inspectorate? The hon. Member for Wyre (Mr. Mans) is chary and wary about North-West Water polluting Morecambe bay. Does he believe that he has a better chance of preventing what is happening if competition is introduced into the planning inspectorate?

What is the role of competition in such activities? Can a Conservative Member provide technical, professional and accountable reasons why the introduction of competition into the planning inspectorate will assist the Secretary of State, local authorities or those who regularly use the system? The Government's White Paper is dogma. It is simply a list of organisations that the Government consider necessary to opt out as part of an overall policy to privatise. It fails to take account of other aspects of Government policy.

I do not believe that Conservative Members who have an interest not just in planning matters but in the environment do not want the House to retain the accountability and independence of the planning inspectorate and ensure that it operates outside the confines of the financial limitations which would be placed on it by a policy of competition. If the planning inspectorate operates at a substantially lower level than hon. Members would like, either in terms of the number of planning application inquiries that it conducts annually or the quality of its decision making, or if it does not operate in the public's interest, they should look at the reasons for the planning inspectorate's difficulties.

Mr. Hind

If the hon. Gentleman reads the White Paper carefully he will see that not every Next Steps agency will have a trading fund and that not all of them will be privatised or even considered for privatisation. Common sense dictates that the Department appoints inspectors on the basis that they are independent and quasi-legal and are able to make important judgments for the public. That cannot be open to competition. The Government would be reluctant to consider a trading fund, never mind privatisation.

Mr. McCartney

I thank the hon. Gentleman for his perceptive intervention. Why are they included in the document if it was never the Government's intention to include such activities of the Department of the Environment? It only highlights the Government's incompetence. The White Paper was not published on a wing and a prayer. The hon. Member for Lancashire, West (Mr. Hind) shakes his head. He made some valid points. I agree with them all except for one important one that appears in the White Paper. The inspectorate is being considered as a "First Steps" agency and could be considered for privatisation. If the hon. Gentleman agrees with me he should not support measures such as hiving off the planning inspectorate of the Secretary of State for the Environment.

Unlike the hon. Gentleman, I have taken the opportunity to look at the White Paper. One must consider some aspects which will be imposed on the planning inspectorate. Even if this is simply an exercise in accountability, let us consider what is being suggested. We are dealing with the legislation as it stands and, according to the White Paper, the planning inspectorate is in the front line. Paragraph 5.10 of the White Paper talks about, a summary of key targets for the future. What does that mean in terms of the planning inspectorate when the inspectorate deals with matters put before it by the Secretary of State for the Environment on behalf of local authorities or by the Secretary of State himself in relation to activities by his Department? At no time can the planning sector of the Department of the Environment be able to target future activities because its work is demand driven in the sense that the demand for inquiries arises from the activities of local authorities and the Secretary of State.

Paragraph 5.10 of the White Paper also talks about, a report of performance against financial, efficiency and quality of service targets over the past year, set against previous trends". What is meant by "report of performance"? Does it relate to the way in which inquiries are carried out and the nature of the decision that is taken? The hon. Member for Wyre and his hon. Friends who support such claptrap—

Mr. Mans

Why is the hon. Gentleman voting against it?

Mr. McCartney

I have no problem about that because the points that I am making are highly relevant. A debate about the environment should be open-handed. We are talking about not introducing competition into serious matters, and in such a serious debate we do not need silly schoolboy quips. The hon. Member for Wyre is on record about a planning matter in his constituency.

What is meant by "a report of performance" in relation to the planning inspectorate? The planning inspectorate can be judged only by the nature of the decisions that it takes. Every one of those decisions has to be approved or amended by the Secretary of State irrespective of whether it is about the building of a petrochemical plant or whether a new bridleway should be built between two villages. The spectrum of activity in the Department is such that the Secretary of State is involved in every planning inquiry or written objection to his Department. In no circumstances could the Bill be used to regulate and improve the activities of the inspectorate. I hope that the Government will rethink the whole concept of some of the organisations and activities included in Next Steps agencies. I oppose the Government politically but the general public will also start to ask questions about the validity of Government policy when they see the possibility of an independent planning inspectorate being hived off to an agency and the possibility of it going to the private sector.

The Government must step back for a moment and rethink their ideology about some of the activities of public sector bodies. These bodies are in the public sector for good reasons. One is because of the nature of the work that is carried out and the requirement for Parliament to retain accountability. Not only planning bodies but health, safety and training organisations are in the public sector for very good reasons. They are there not because of Socialist dogma but because of long tried and tested experience.

Some aspects of life are better organised through public accountability and cannot be left to market forces and driven by competition. That is at the heart of our opposition to the Bill. The Government see a need to create competition irrespective of the work carried out by the agencies, the need for parliamentary accountability and the conflict that is caused in the Department of the Environment. The Government want to privatise everything in sight.

Over the last 10 years the Government have used public expenditure cuts and privatisation to try to impose Next Steps agencies on local authorities. In my constituency the Wigan metropolitan council has had imposed on it privatisation of its cleaning and waste disposal services. Its services for waste disposal made a profit for ratepayers last year of over £3 million. The council is trying to protect those services and jobs and the Government are trying to impose a local government form of Next Steps agencies by which people are directly employed by a company—a "hands-off" arrangement—which runs the services for the local authority in competition.

Such things are done for the dogmatic reasons of the Secretary of State and have nothing to do with the improvement of services or accountability to the public. However, they have everything to do with hiving off profitable parts of public services to the private sector which looks to the quick buck at the expense of the long-term needs of the community. Following this debate, I wonder whether the hon. Members for Wyre and for Lancashire, West will be able to defend to their constituents the privatisation and hiving off of such an important body as the planning inspectorate, with all its consequences.

8.6 pm

Mr. Andrew Mitchell (Gedling)

I am grateful for this opportunity to make a brief contribution to the debate. I sense that the issues have been well and truly thrashed out and although there is a low growl of discontent from the Opposition I do not think that the Bill will be pressed to a vote.

The hon. Member for Wrexham (Dr. Marek) opened for the Opposition and his speech was briefer than some of those that my hon. Friend the Financial Secretary to the Treasury and I remember from the Finance Bill Committee. I think that the hon. Member said that it was a technical matter and I endorse that. We are not following the route that the hon. Member for Makerfield (Mr. McCartney) seemed to follow in his eloquent speech that the Bill is about privatisation. It may come to privatisation and there are aspects of the agencies which I hope will lead to that, but that is not the predominant thrust of the Bill. Its purpose is to improve the quality of public service that is made available to our constituents.

I strongly support the view of my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) who spoke about the need to extend the process to the Ministry of Defence. He identified one or two possibilities. I, too, believe that it could go a great deal further. My hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) talked about the Training Agency and I endorse the important points that he made. There is a critical role over the next 10 years and beyond for the Training Agency. There has been a 30 per cent. drop in the number of 18-year-olds in my constituency and there is a critical need to encourage more women in Nottinghamshire to go back to work. My hon. Friend's comments were extremely helpful in emphasising that aspect of the Training Agency.

Some hon. Members said that some agencies may need to relocate. I hope that if they do so they will come to Nottingham. There are too few national and quasi-national agencies there and I should like to see more. It is especially helpful that my right hon. Friend who will respond to the debate knows Nottingham well and while wearing his other hat as the Minister for the Arts has seen the tremendous depth and breadth of the cultural and artistic activities that go on there. I hope that he will consider it a suitable place for many agencies to relocate in future.

The Bill seeks to extend the powers of the Government to create trading funds to finance central Government activities. Perhaps the measure has not caught the imagination of the general public as readily as it should have done.

Mr. Mans

Not yet.

Mr. Mitchell

My hon. Friend is right. As I said earlier, the measure will have a key effect on major public services. As my hon. Friend the Member for Cambridgeshire, South-East said, the Bill does not seek in any way to allocate fault or attack the Civil Service. Civil servants are saddled with a system that does not work effectively either in their interests as employees or in the interests of the public who receive the service.

As I flicked down the list in the annex to the White Paper this afternoon, four agencies particularly caught my eye. They were the driver and vehicle licensing centre, the Land Registry, the passport office and Companies House. Three of those are largely covered by related receipts, as defined in the White Paper. One of them is not. I am particularly pleased to hear that Companies House is an early candidate for trading fund status.

The majority of Government activities are not suitable for trading fund status, as my right hon. Friend the Chief Secretary to the Treasury said in his opening speech. However, 20 per cent. of Government agencies are suitable. We want that 20 per cent. to embark as rapidly as possible on the route to trading fund status. Why should we seek trading fund status for those important agencies? There are a number of key reasons. First, proper commercial disciplines should be passed on to the organisations. That brings with it a degree of self-management. The improvement and motivation of individuals is extremely important and brings initiative and some concept of size. Small is beautiful in many of the organisations. We want to encourage employees not to see themselves as part of a great amorphous mass.

The Bill is not entirely a cost-cutting measure, as some Opposition Members suggested. It is partly a cost-cutting measure, but, above all, it aims to improve the quality of service to the public and the efficiency of the agencies. My right hon. Friend said in his opening speech that £3 billion had already been saved by such measures.

The criteria for suitability laid out in the White Paper emphasise the matters that are really important. It is emphasised that decisions will be made on a case-by-case basis. The criteria recognise that it is not only a matter of revenue and expenditure and that the importance of service to the public is predominant. There must be a genuine separation of activity where one Government Department supplies another. As far as possible we must engender genuine competition. That, too, is extremely important.

There must be a commitment to substantial and valuable improvements in performance. It is right that the full accounts should come before the House of Commons as well as reports on whether targets are being met and details of new targets for subsequent years so that we can judge the effects of those targets and ascertain whether they are being met.

My hon. Friend the Member for Gainsborough and Horncastle spoke of the importance of adequate detail so that we can make those judgments. I understand that the Treasury will report on the general trends in the use of trading funds and assess their effectiveness. That, too, must be welcomed as part of the parliamentary process.

Some agencies may be suitable for privatisation. I hope that there will be many, but I do not believe that that is the critical judgment. The criterion must be to provide a better service. As the hon. Member for Wrexham said, we must be accountable to the consumer. I believe that that view is common to both Conservative and Opposition Members.

I mentioned four particular agencies which could provide a better service to the public than they do now. I emphasise that I do not blame the civil servants for being saddled with a system that does not work effectively. I mentioned the passport office. It is a demoralised service. All hon. Members have had to deal with the problems of constituents who find at the last minute that they do not have a passport to go on holiday. We all know that the system does not work effectively. There have been problems with the Land Registry. Everyone knows that buying and selling a house is a particularly stressful aspect of life. The failings of the Land Registry are legion and we must do something about them. In my former existence I worked in the City so I know the inadequacies of Companies House. It could do much better as a result of the process outlined in the Bill.

The driver and vehicle licensing centre, too, has legion inefficiencies and difficulties. All the organisations that I have mentioned will benefit greatly from the process that we are setting in motion today. The aim is to make changes in the interests of improved management, efficiency and effectiveness. The Bill is not an attack on the Civil Service but an attack on a system that does not work. It is a significant opportunity to provide a better service to the public, more job satisfaction for the people who work in the agencies and better value for money for taxpayers and those who pay for the services. I greatly welcome it and hope that it will speedily become law.

8.14 pm

Mr. Bob Cryer (Bradford, South)

Nothing is wrong in the passport office, Land Registry or driver and vehicle licensing centre that could not be remedied by an increase in the number of staff. The Government have curbed appointments of staff in the Land Registry office which, combined with an increase in activity, has produced delays. It is not the fault of the hard-working civil servants. The responsibility must be laid at the door of the Government, who have made a sustained attack on the Civil Service over the past 10 years and are proud of it. Ministers repeatedly make claims about the number of staff that they have sacked. The blame is fairly and squarely at their door.

I shall make a few brief remarks about the relationship between the Bill—which is not a clear piece of legislation —and the Act that it amends, the Government Trading Funds Act 1973. The Bill puts a different emphasis on consultation and the obligation on the Minister to consult before making an order. The 1973 Act placed a duty on the Minister to consult appropriate persons. That meant that the Minister had to approach appropriate persons. The definition of "appropriate persons" was left to the Minister and was subject to judicial action in the courts if the range of appropriate persons was unnecessarily narrow.

The Minister was required to consult people. That has been subtly changed. The Bill now provides: he shall take such steps as appear to him to be appropriate to give such an opportunity to such persons as appear to him to be appropriate. In other words, the Minister stays in his office and causes a notice to be put in a newspaper, specialist newspaper or magazine and takes whatever steps he deems appropriate. People then have to go cap in hand to the Minister to make representations to him. That is a change of emphasis which was not necessary because the traditional position where the Minister was obliged to consult appropriate persons is entirely adequate and satisfactory. No doubt the Minister will explain the reason for that subtle change of emphasis.

I am sorry that I was not present for the Minister's opening speech. I was attending a Committee dealing with a Bill during the relevant time. The Government and Conservative Back Benchers, with their Government-supplied briefs, have made great play of parliamentary accountability. Although not particularly in this Bill, there has been a significant removal of parliamentary accountability by a conversion from a consensus measure in 1982. I regretted it very much at the time and voted against it in the parliamentary Labour party. The Consolidated Fund has been removed from parliamentary accountability. Payments into the fund are required by the Bill. If the Bill becomes an Act, that payment will enable Members to debate the measure in a proper Consolidated Fund debate and to obtain the necessary votes to initiate a debate in the Chamber.

Now that the Consolidated Fund debate has been changed into a series of Adjournment debates selected by the Speaker with the time allowed for each debate set by the Speaker, the opportunity for detailed examination on the basis of votes both in the Consolidated Fund debate and others has been diminished. I also regret the change because under the previous operation of the Consolidated Fund debate the House disciplined itself well. If the debate was on a wide and important subject, there was an opportunity for many hon. Members who were interested to take part in the debate. If the debate was a narrow one, it lasted only half an hour. The House was well disciplined.

We now have limitations imposed upon us. When there could be a long debate on a wide-ranging subject we are limited to three hours. I regret that the Consolidated Fund procedure has been changed. There was no need for any change to be made, but on one morning the Government found it awkward to secure a closure. They could not get 100 Conservative Members to support the closure motion and so they decided, as it were, to shift the Consolidated Fund. The Opposition of the day—mistakenly, in my view —said to themselves, "We shall be in government one day and we might find it awkward to get a closure, so we shall agree to what the Government propose." As a result, a real element of accountability was knocked to one side. That cannot be attributed to the Bill, but it is a relevant factor and a continuing source of concern to me.

The Bill proposes that section 6 of the Government Trading Funds Act 1973 should be changed. The section provides an order-making power and requires that the establishment of a trading fund must be by way of affirmative resolution. That is the main pre-requisite of the section, and that is retained in clause 2(3), which sets out some changes to section 6 and the order-making powers of the 1973 Act.

As I have said, the establishment of a trading fund must be by way of affirmative order, and that means the tabling of a resolution on the Floor of the House for approval. This is extremely important. We must bear in mind, however, that there can be debate for only one and a half hours. Given the length of speeches that have been made on many occasions by Front-Bench spokesmen on both sides of the Chamber during the passage of affirmative orders, there has been only about half an hour left for Back-Bench Members to cross-examine the Government. Even though we say that an affirmative resolution in support of a statutory instrument is a useful procedure —the resolution is for debate on the Floor of the House, the Government have to secure its support and there must be a debate—it provides only a limited opportunity to question the Government and we should not elevate it beyond its importance.

Other powers proceed by negative procedure, including a Henry VIII clause. If some hon. Members are not aware of that term, I should explain that it is given to the power that is handed to Ministers to change primary legislation by order without any further primary legislation being required. We must remember that they is a great power. It is a relatively trivial one in respect of the Bill, but the sums that are involved for trading funds--the position is similar in the 1973 Act—can be altered, when the Bill is enacted, by a negative procedure instrument that is issued by a Minister. That is less than satisfactory.

The Government said that they would take legislation off the backs of the people. They told us that they would remove the weight of legislation which they claimed, in 1979, was burdening the people and preventing the enterprise culture from burgeoning forth. As they are fond of making comparisons with the Labour Government, let it be generally understood that they are producing more statutory instruments than their predecessors. The volume of statutory instruments is so great that it has become the primary source of legislation. In the past 18 months the Government have produced 23 Acts with Henry VIII clauses, includng the Education Reform Act 1988, which was a major piece of legislation. Given the Government's majority, we have, unfortunately, given Ministers the power to change primary legislation without introducing new primary legislation.

In a better ordered world, the Government would hve to return to the House to produce further primary legislation to alter the legislation that was already on the statute book. Should not the Mother of Parliaments be the Parliament that sets an example to the rest of the Commonwealth, for example? It should do so, of course, but it does not. At the end of last year we had the opportunity to examine the procedures of other Commonwealth legislatures. Delegates came to London from 18 Commonwealth countries, including Pakistan, which we welcomed back into the Commonwealth after the restoration of democracy following the removal of the military junta and the election in which President Bhutto was elected.

Delegates, particularly the ones from Australia and New Zealand, made it clear that the power of scrutiny of delegated legislation is a real one in their legislatures. They told us that they can hold up the application of legislation if a Minister is found to be abusing his or her powers. Nothing like that exists in our legislation. We are building up a huge volume of subordinate legislation without any sort of adequate scrutiny being available to us. I am concerned, for example, that under clause 2 the Minister is allowed to change the maximum sum provided for by means of a negative procedure instrument.

Mr. Beith

If the hon. Gentleman wants a vivid example of what has happened and of the drift that has taken place, he has only to look at the end of today's Order Paper. When the debate has come to an end the House will be asked, for the first time in my recollection, to vote forthwith on the amendable Census Order 1988. Previously such orders have been debated on the Floor of the House. The hon. Gentleman is right to highlight a dangerous trend, even in the detailed circumstances of the Bill.

Mr. Cryer

I am grateful to the hon. Gentleman for providing that example. I am aware that the Census Order was considered in Committee. I am aware also that several amendments were tabled—it was an unusual order—and I pressed for the amendments to be considered. I hope that the minority parties can somehow obtain the services of one of their Members to serve on the Joint Committee on Statutory Instruments, which they appear not to have been able to do up to now. I think that the Committee serves a useful purpose and the hon. Gentleman's remarks highlight his concern. I hope that he will be able to spread his concern to other Members of the Liberal party, the Liberal Democrat party and the other sorts of party which he helps to represent.

The issue of Henry VIII clauses is not often raised in the House. We should talk about it more, and it is my intention to do so. I have been inspired, at least in part, because it seems that other legislatures have proper and adequate scrutiny. The reality is that a Minister will not be much involved in an order-making power. A civil servant will present him with the order and he will say, "Minister, will you approve this? We must secure the order. We are running close to the limit and we need another £500 to be added to it. That should see us all right for the next two or three years." The Minister signs the order and the civil servant goes away.

The order goes before the Joint Committee on Statutory Instruments. If it is to proceed by way of the negative procedure—that is the procedure that will be used to increase the moneys available to the trading funds—and if the Opposition think that it is a dangerous measure or an unusual use of such a measure, for example, they will table a prayer. If the Government follow the usual pattern, they will provide time for the prayer to be debated if it is signed by Opposition Front-Bench spokespeople. If a prayer were to be signed by a group of Back-Bench Members who have a particular concern, 100 to 1 it will never be heard. The majority of instruments, including the potential instrument that is referred to in the Bill, have little chance of being debated. It is just not good enough that they can be pushed through.

I should like an assurance from the Minister that in Committee, and whenever primary legislation is being dealt with, Ministers will have to cast their eyes over the legislation. They will, of course, be briefed by civil servants. It could be a simple one-section measure, and it would be easy to secure its passage. In primary legislation, however, Ministers conduct its passage on Second Reading, in Committee, on Report and so on. That means that Ministers are much more personally involved in the legislative process. Such a procedure would mean that the increase in the maximum sums available to trading funds would be dealt with in a more elaborate way. With the negative procedure process, which is implicit in the alterations that will be made to section 6 of the 1973 Act, the chances are that the instrument will never be debated.

If the Government are really concerned about parliamentary accountability, they should say, "We know that there are difficulties over allocating time on the Floor of the House; there always are. But we will ensure that the Bill is amended in Committee to bring its order-making powers in line with those establishing a trading fund, and that any increase in the maxima allowed for the total, global trading funds sum will be by affirmative resolution and not by the residual power"—which, under section 6 of the 1973 Act, is the negative procedure.

I hope, though not with great expectation, that the Minister will give an assurance of that kind. The reality is that both the Administration and the Civil Service bureaucracy, as well as Ministers, find it easier to get negative procedure instruments through this House and therefore more convenient. We say that public accountability, not convenience, should be an Administration's main criterion. The Government have made an issue of public accountability, saying that the procedure will provide for more parliamentary accountability. The Minister now has an opportunity to say, "We are determined to ensure parliamentary accountability, and affirmative instruments will be our watchword."

8.30 pm

The Minister of State, Privy Council Office (Mr. Richard Luce)

I am glad to be associated with the Bill because it is not only important in itself but must be seen against the background of the Government's Next Steps policy and the important reforms that are taking place in the Civil Service. The Bill provides the first opportunity for the House to have a wide-ranging debate on the Next Steps reforms in the Civil Service, which are of great importance and will do a great deal to improve further the management of the large resources for which the Civil Service has responsibilities.

I am glad that the debate has allowed right hon. and hon. Members in all parts of the House to speak on a wide range of issues relating to the reforms. There were constructive and supportive speeches from my hon. Friends the Members for Gainsborough and Horncastle (Mr. Leigh), for Cambridgeshire, South-East (Mr. Paice), for Lancashire, West (Mr. Hind), for Wyre (Mr. Mans) and for Gedling (Mr. Mitchell). We heard speeches also —some of them more constructive than others—from Opposition Members.

I was astonished by the remarks of the hon. Member for Wrexham (Dr. Marek), and at his reaching the conclusion, having listened to the excellent and outstanding speech of my right hon. Friend the Chief Secretary to the Treasury —in which he demonstrated how the Bill will strengthen further the management of the Civil Service—that the Bill would lead to the break-up of the Civil Service and was about cost cutting. I inferred from his remarks that the hon. Gentleman feels that the Bill will prove disastrous for the Civil Service, but the very opposite will happen.

I am amazed that the hon. Gentleman takes the line that he does, particularly as the Treasury and Civil Service Select Committee, of which the hon. Member for Berwick-upon-Tweed (Mr. Beith) is a member, while perhaps being critical of the Government for being too slow in implementing the Next Steps policies, was generally strongly in support of the Government's broad policy of reforms within the Civil Service. Therefore, I am all the more surprised by the speech of the hon. Member for Wrexham.

Many detailed points have been made, and I trust that hon. Members will bear with me if I do not answer every one of them. Where I fail to do so, I shall make a point of writing to the hon. Member concerned with a clear response to his question.

Mr. Don Dixon (Jarrow)

Why cannot the Minister answer every point now?

Mr. Luce

I shall be saying quite a lot in replying to the debate, so I trust that the hon. Gentleman will bear with me.

I want to view the Bill in the broader context of the Next Steps policy and to examine more sharply the issue of accountability, which hon. Members in all parts of the House have raised. My right hon. Friend the Prime Minister spoke in her new year message of the tasks that lie ahead for Britain in the 1990s. One of the "six great tasks" that she identified was to improve our public services such as health and education, and make them more responsive to people's needs. That is very much at the heart of the proposals before the House. I have told the House on many occasions that it is my view that the Next Steps initiative—

Mr. Dalyell

Will the Minister allow me to intervene?

Mr. Luce

Certainly I shall.

Mr. Dalyell

Before the right hon. Gentleman leaves the subject of the Prime Minister, does he—or the Prime Minister—have any comment on the protest by the Civil Service First Division Association? One of the Government's tasks surely is to satisfy the Civil Service, but in relation to the guidelines, judging by the association's protest, the Government have failed to do so.

Mr. Luce

The hon. Gentleman, with whom I have frequently jousted in this House, which I have enjoyed very much, goes wide of the Bill. However, no doubt he will seek other opportunities to probe that matter. I hope that the hon. Gentleman will welcome my right hon. Friend's new year message and her emphasis on seeking to improve further the quality of Government services.

The purpose of the Next Steps initiative is to play a key role in improving the way in which we deliver Government services. I am glad that objective is widely shared both within this House and beyond. Both the Treasury and Civil Service Select Committee and the Public Accounts Committee have shown a keen interest in our progress, and I am grateful for the support that both Committees have given and for their constructive criticism.

As we stated in the White Paper "The Financing and Management of Next Steps Agencies" which was published with the Bill: The main aim of the Next Steps initiative is to deliver services more efficiently and effectively, within available resources, for the benefit of taxpayers, customers and staff. Agencies thus represent a new and distinctive development in the Governent's policies for improving all aspects of Civil Service management. The Next Steps initiative, as its name suggests, builds on previous measures that have brought about significant benefits for management in Government. However, it is much more than a consolidation exercise. The Treasury and Civil Service Select Committee's first report on Next Steps in July 1988 noted that this change could he the most far-reaching since the Northcote-Trevelyan reforms in the nineteenth century. I am convinced that we are putting into effect a gradual revolution in the way that the Government go about their business.

It is nearly two years since my right hon. Friend the Prime Minister launched the initiative, and progress since then has been good. I have tried in the various parliamentary replies that I have given to keep the House informed. So far, 10 agencies have been established and we expect 20 agencies to be up and running by the summer. In addition to the 10 already established, a further 40 activities in the home Civil Service and three in the Northern Ireland Civil Service have been announced as candidates for agency status. Together, they account for nearly 200,000 staff or about one third of the Civil Service.

Next Steps is not just about numbers, although the involvement, even at this early stage, of one civil servant in three is a pretty good indicator that we mean business. Our goal is to enable civil servants to use available resources in the most effective way to provide a high-quality service to the public.

The Bill will help the Civil Service to become more responsive to the needs of customers. The 10 agencies that have been launched so far have demanding performance indicators to do with quality of service, both for the public and for internal customers, and these targets are being achieved. For example—and this may go some way towards answering the hon. Member for Berwick-upon-Tweed (Mr. Beith)—the customers of Companies House will say that turn-round time for document searches has improved considerably, as has the lead time for orders placed with Her Majesty's Stationery Office.

The service has not just improved in terms of performance indicators. Next Steps has ensured that agency chief executives are keen to consult customers about what they want, and to meet those needs as far as possible. Agencies have been able to offer extended opening hours, premium services, and to provide offices in new locations.

The Bill will allow revenue-generating agencies in particular even more scope to respond to customer demand. It is worth stressing that point, because many right hon. and hon. Members were concerned about the quality of service to the public, and that is a major priority for the Government.

Next Steps agencies are also ensuring that they keep their customers in touch with what they are doing. They are training their staff better to meet customer needs. I attach much importance to that.

There has been a lot of stress on the issue of accountability, in my view quite rightly. My hon. Friends the Members for Cambridgeshire, South-East and for Gainsborough and Horncastle and the hon. Members for Wrexham, for Makerfield (Mr. McCartney) and for Bradford, South (Mr. Cryer), among others, focused on accountability. It is of such importance that I hope the House will allow me to spend a moment or two to reiterate some of the points made by my right hon. Friend the Chief Secretary to the Treasury.

I stress the importance of the greater openness that will come from the Bill and the procedures that we are adopting under the Next Steps policy. There will be much more scope for Parliament to scrutinise the activities of the agencies than there has been hitherto, and that has been recognised by some of my hon. Friends if not by Opposition Members. Agencies' objectives and performance will be more open to scrutiny than ever before, by Parliament and by others with an interest, including their customers.

Parliament will know what the Minister has asked the agency to achieve, the resources the Minister has allocated, through Parliament, for the tasks, and the targets by which performance is measured, and through the agencies' annual report, the way in which the chief executive goes about the task and the extent to which the agency has been successful. That will be expanded on in the Bill, and I have no doubt that it will be debated in more detail in Committee.

A central feature of Next Steps arrangements is the position of agency chief executives. Each has managerial authority delegated to him or her by the responsible Minister.

The Minister is and remains accountable to Parliament as a whole and its Select Committees. When a Committee's interest is focused on the day-to-day operations of the agency, the Minister will normally regard the chief executive as being the person best placed to answer the Committee—on his or her behalf—on the performance of the agency. Ministers remain fully accountable for Government policies.

Alongside these more formal arrangements, right hon. and hon. Members need to know that the day-to-day operations of agencies are still open to their scrutiny on a day-to-day basis. There will always be queries and matters to be raised on behalf of individual constituents, besides the more general need of Members to inform themselves about the way in which Government policies are being executed in practice.

We believe that it will make sense to right hon. and hon. Members to deal in the first instance directly with the chief executive of an agency or his or her staff on matters for which he or she has delegated authority. Because Next Steps agencies are by their nature particularly likely to be delivering services to the public, I would expect that a good proportion of matters raised by right hon. and hon. Members on behalf of their constituents or in connection with an inquiry made of them, are likely to be such operational matters. They will get a quicker response and be likely to resolve any follow-up points more quickly and to their satisfaction by going direct to the agency, rather than routing their inquiry through the Minister—who would almost certainly want to seek advice from the chief executive. That is, therefore, the course I encourage hon. Members to take, bearing in mind that it is the Minister who sets the policy, the resources and the targets for the agency and the chief executive who is responsible to him or her for the way in which the agency uses those resources and sets about achieving its targets.

Many right hon. and hon. Members will recognise this as confirming existing practice, since we already have good contacts with the appropriate Civil Service managers in our constituencies. Certainly, the experience of the existing agency chief executives is that hon. Members find it helpful to contact the agency direct and I know that many Civil Service managers welcome the additional feedback about what their customers really think and the opportunity to rectify errors and omissions when something goes wrong, which a businesslike relationship with local parliamentary representatives can bring.

Mr. Hind

My right hon. Friend has told the House that there will be strong accountability. Will he confirm that every Next Steps agency will have to come to the House and be considered for the inclusion of a trading fund within its operations by positive resolution of the House, and therefore that that additional safety net will be built into the system that he is putting forward?

Mr. Luce

I am grateful to my hon. Friend for giving me the opportunity to reiterate what my right hon. Friend the Chief Secretary to the Treasury said, and what is clearly established in the White Paper. Any organisation that is considered as a candidate for trading fund status under the Bill will be subject to the affirmative resolution of the House before it is established.

Mr. Cryer

Before the Minister leaves the general point, will he say whether the chief executives will have powers to send a minute to the Comptroller and Auditor General if they disagree with any policy laid down by the Government regarding the agency under the relevant audit and exchange control Act, for example, as a permanent secretary has the right to do as auditing and accounting officer in a Government Department?

Mr. Luce

Of course, in most cases the chief executive is established as the accounting officer for his operation. The same relationship would exist as with a permanent secretary, who is the accounting officer for overall policy. I confirm that that would be the general position.

To complete my remarks on accountability, I emphasise that it will be an addition to the existing practice by which hon. Members can raise any matter that falls directly within a Minister's responsibility with him in the House.

In short, as we said in Command Paper 524: Establishing Executive Agencies within departments will involve some developments in the way in which external accountability is discharged. These include the publication of framework documents and the expectation that Members of Parliament may often wish in the first instance to deal directly with Chief Executives on operational matters for which they have delegated authority. Ministers will continue to deal directly with inquiries about matters of policy or levels of resources, and with any cases where a Member of Parliament specifically seeks a reply from a Minister. As my right hon. Friend the Prime Minister has made clear, Next Steps involves no diminution in ministerial accountability to Parliament. On the contrary, agencies and their workings will be more open to inspection and more responsive, both to their customers and to examination by right hon. and hon. Members. The establishment of Next Steps agencies offers the potential for significant enhancement of the openness and quality of public services and of direct access to the people who manage them. Next Steps will in this way nourish and sustain the already firmly rooted concept of ministerial accountability.

I think that it is right to set out the position on accountability as clearly as I can, in view of the importance that the House attaches to it.

I shall briefly mention one or two other matters raised by right hon. and hon. Members. I reiterate what my right hon. Friend the Chief Secretary to the Treasury said about privatisation, as that subject featured considerably in the debate. The hon. Member for Wrexham, my hon. Friends the Members for Gainsborough and Horncastle, for Cambridgeshire, South-East and for Lancashire, West all mentioned privatisation. Before an agency is established, alternative options, including contracting out and privatisation, are examined. Next Steps is primarily for those operations that are to remain in the Government. However, after some years it may not be ruled out that agencies, like other Government activities, may be suitable for privatisation. When an agency is being set up and there is a firm intention of privatising it, that should be made clear. Our policy on the establishment of agencies, and on privatisation in general, remains the same.

My hon. Friend the Member for Gainsborough and Horncastle asked whether there were any candidates for either trading fund or straightforward agency status for which the Ministry of Defence was responsible. No fewer than seven, including those concerned with defence support, are included in the list. I hope that that will encourage my hon. Friend and my hon. Friend the Member for Gedling (Mr. Mitchell), who raised the same point.

Although he demanded answers to a number of questions in his long speech, I think that the hon. Member for Linlithgow (Mr. Dalyell) would almost fall out of his seat if I responded to all of them. Although most were not related to the Bill, I think it only right to deal with a point on which he challenged my right hon. Friend the Chief Secretary, and which he raised again in his speech—the position of the Property Service Agency in the context of agency status.

My right hon. Friend the Chief Secretary rightly made it plain that it is planned to privatise the vast bulk of the PSA—some 20,000 staff—and measures to do so are before the House. I should add, however, that a small part of the agency will remain in Government service and could therefore be a candidate for agency status, although whether it could be a candidate for trading fund status is a matter for further consideration.

Mr. Dalyell

May I make the reasonable request that some of my other questions be answered in writing, preferably before the Bill has made much progress in Committee? I believe that they are relevant to the Civil Service and other Departments. I was hoping particularly —because they were rather ad hominem—that the Minister would comment on my questions about the position of Mr. Patrick Brown and Mr. Bob Etherington. I think that they raise important questions of principle, to which some Minister may have an answer.

Mr. Luce

Such is the compelling interest aroused whenever the hon. Gentleman speaks that—as he will have noticed—my right hon. Friend the Secretary of State for the Environment came into the Chamber this evening and heard much of his speech. I am sure that my right hon. Friend noted what he said, and I shall ensure that he is shown the full text of the hon. Gentleman's remarks about matters that are principally his responsibility.

The hon. Member for Leeds, West (Mr. Battle) asked about the provision of social security benefits. As he said, the White Paper makes a clear reference to the matter in paragraph 4.14—which makes it plain that the delivery of such benefits would not satisfy the criteria for trading fund status—and I confirm that the service could not possibly become a trading fund agency.

My hon. Friends the Members for Gedling and for Lancashire, West (Mr. Hind) asked about the relocation of agencies. That is principally the responsibility of my right hon. and noble Friend the Paymaster General, but it would be the duty of any agency to consider whether relocation might bring about more efficiency and a better use of its resources. If it were already located in the south-east, for example, it might wish to move elsewhere. It will be the task of the Civil Service as a whole to look sharply at the benefits of relocation, and I have no doubt that every agency will undertake that task as well.

My hon. Friend the Member for Gainsborough and Horncastle also asked about experience in the Civil Service —in business, for example. I attach considerable importance to that, which is why the Government have increased the number of secondments and exchanges between the private sector and the home Civil Service; indeed, I should like to see a further increase. The Next Steps team is ably managed by Mr. Kemp, who gained accountancy experience before entering the Civil Service, and a member of Price Waterhouse is on loan to the team. I value such experience.

It is important that the right people, with the right experience, are appointed as chief executives. The Government are also anxious that the general principle of open competition should be maintained as far as possible, and that is increasingly happening. We must ensure that we obtain the best people for the job, and that as much authority as possible is delegated to them: I agree with my hon. Friend about that. I agree with my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) about the importance of delegating responsibility and accountability, and that is at the heart of the Bill and of the Next Steps policy. My hon. Friend also asked about training. Let me say again how important we consider that, and remind my hon. Friend that my office has introduced challenge funding for other Departments so that the level of Civil Service training is raised to an even higher standard.

I shall try to reply by letter to any questions that I have not answered specifically. Let me end, however, with a general issue raised by the hon. Member for Wrexham (Dr. Marek), who asked about the number of candidates for trading fund status. As my right hon. Friend the Chief Secretary made clear in his speech, among the existing agencies potentially suitable for trading fund status are the vehicle inspectorate, Companies house, the Historic Royal Palaces Agency and Warren Springs laboratory. There is, however, a long list of candidates—about 43—of which about 30 are possibilities. They represent about 50,000 of the 200,000 staff covered by the list. Although they may not all be given trading fund status, they can be taken as a guideline. The Bill will go a long way to strengthen the accountability of the agencies, particularly those suited for trading fund status.

As a result of the procedures introduced by the Bill, suitable Civil Service functions will be put on a more commercial and businesslike footing. The measures for holding agency chief executives fully accountable form a durable basis for giving agency management the tools to do the job and to provide the more efficient and effective and better-quality services which Next Steps is about. A trading fund represents a financing framework offering both independence of detailed control and clear accountability for results and value for money. That seems to me to be a most appropriate basis on which to move into the next decade.

Our Civil Service aims to achieve the highest standards of excellence. It has a high sense of duty. We have one of the finest Civil Services in the world. I believe that it will fulfil its tasks with great competence. The Bill will add to the range of tools that is available for the further improvement of Civil Service management and enhance the Government's drive towards improved financial management throughout the public services. I warmly commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Mr. McCartney

On a point of order, Mr. Deputy Speaker. I apologise for raising this matter on a point of order, but the hon. Member for Cambridgeshire, South-East (Mr. Paice) to whom I wanted to put this question earlier on a point of order had left the Chamber and has only recently returned. The hon. Gentleman referred in his speech to the Government's trading fund agencies and to the services that the Civil Service college provides in terms of management skills and techniques. He spoke at great length about the need to privatise these services.

I notice that in the Register of Members' Interests the hon. Gentleman is a director of Framlingham Management and Training Services Ltd. Would it be in order at this stage for the hon. Gentleman to declare that interest, given that my hon. Friend the Member for Linlithgow (Mr. Dalyell) and others have made it clear that it is vital that direct or indirect pecuniary interests should be made known to the House? It is interesting that the hon. Member for Cambridgeshire, South-East made such a vehement speech in support of the privatisation of trading fund agencies when the Register of Members' Interests shows that he is the director of a company that is directly involved in providing training services.

Mr. Paice

Further to that point of order, Mr. Deputy Speaker. The information to which the hon. Gentleman refers is out of date. I ceased to be a director of that company in May 1989.

Mr. Deputy Speaker (Sir Paul Dean)

The hon. Member for Makerfield (Mr. McCartney) has put his point of order on record. All that I need say from the Chair is that, as the House well knows, there is a Register of Members' Interests and that it is customary for any hon. Member who has an interest to declare it during a debate.