"Competing For Quality"

HC Deb 18 November 1991 vol 199 cc25-35 3.50 pm

The Financial Secretary to the Treasury (Mr. Francis Maude)

With permission, I wish to make a statement on the White Paper, "Competing for Quality", which is published today.

The citizens charter sets out a comprehensive programme to improve the quality of public services and make them answer better to the wishes of their users, where that can be done, by providing choice for the citizen. At the heart of the charter lies our commitment to provide services of the highest quality and the best value that can be bought with taxpayers' money. Extending competition is crucial to that.

The citizens charter promised a White Paper this autumn on the extension of competition and choice in the provision of public services. "Competing for Quality" fulfils that promise.

Governments of all persuasions have always bought in some services, but this Government have taken the process further. Where competition has been introduced, the results have been impressive— market testing has typically cut the cost of providing services in central Government by no less than 25 per cent.

Good managers everywhere know that they need to look both inside and outside their organisation to get the best deal for the citizens who use their services. Competition does not mean invariably choosing the cheapest service; it means combining quality and price to provide the best value for money for the service. That is what the best managers are doing. The White Paper will make it easier for them to do so.

We have already made some progress. The White Paper marks a step change in our programme for reforming the public sector. It sets out how the Government intend to extend competition in the provision of public services further and faster than ever before right across the public sector. That means providing incentives, removing obstacles, and enhancing purchasing skills—in short, it means driving competition much further into our public services.

Central Government Departments which achieve savings through competitive tendering will in future be able to apply those savings for the benefit of their programmes. Each Department and agency will set annual targets, with private sector help, for testing new areas of activity in the market. There will be a new public competition and purchasing unit in the Treasury to carry forward that work, led by a part-time chairman from the private sector, who will also be a member of the advisory panel on the citizens charter. I hope to announce that appointment before long.

Performance pay will play a crucial part in delivering the citizens charter programme. The successful application of competition to increase value for money should be an important factor in determining performance pay.

Market testing procedures in central Government have often taken far too long. They will be simplified and streamlined. In some parts of the public sector, documentation has been so unwieldy that businesses have been deterred from tendering. This will change.

Competition must be conducted fairly and openly. We shall remove tax distortions, require in-house services to be clearly costed and accounted for, and ensure that one-off costs are appraised over a realistic period. This will ensure that there will be no bias between public and private sector providers. We shall welcome suggestions from private companies on services which might be suitable for contracting out, and on ways of improving contracting out procedures.

The Government are committed to a publicly funded health service, firmly located in the public sector. None of the proposals in this White Paper will change that, but the NHS has always bought a substantial amount of services from external suppliers. We estimate that the drive to market test support services throughout the NHS has brought savings of some £626 million over the past seven years. These savings can be ploughed directly into patient care.

The White Paper sets out good practice to encourage buying in high-quality support services in hospitals, to improve direct health care for patients. We also propose that health authorities and provider units should report on their plans and achievements and that there should be a new national database on contractors for major services.

In local authorities, expanding competition through compulsory competitive tendering has shown many successes for about a decade. The White Paper sets out how we propose to take this further. It reflects the proposals which my right hon. Friends the Secretaries of State for the Environment, for Scotland and for Wales issued for consultation on 5 November.

Local authorities should buy the services that meet the needs of their local population, wherever the services can best be obtained. Many local authorities have responded enthusiastically to the competitive challenge. Some have led the way and have used the private sector to deliver a range of professional and technical services. We want to ensure that all local taxpayers reap these benefits. So we are consulting on proposals to extend competition under existing legislation to more manual and direct services; extend competition requirements to construction-related professional services such as architecture, engineering and property management; and in the longer term, require core services such as legal, finance, personnel and computing services to be opened up to competition. As a necessary first step, authorities would set up internal trading accounts, to identify the true costs of providing each service.

We also intend to bring forward proposals to introduce competition into the important field of housing management—in ways which will enable tenants to participate. The private sector must be given a fair chance to compete for local authority contracts. The Local Government Bill currently being considered in another place contains provisions for securing greater consistency of practice between local authorities.

Competition is good for the users of public services. It gives them a wider variety of facilities and services. Competition is good for taxpayers who get better value for their money. It is good for managers who can concentrate on their core activities, looking for the best deal for their customers. It is good for staff, who can give of their best in a more competitive environment. It is good for business, giving private firms new opportunities to market their services.

The services that we get from the public sector affect all our lives and cost a great deal of money. For that reason, services must be bought wherever the best deal can be obtained. What the Government buy matters as much as what they spend. This White Paper expresses our determination that the taxpayers' money which the nation can afford should buy the best quality services for our citizens. This lies at the heart of the citizen's charter and the Government's programme for public services in the 1990s.

Mr. Chris Smith (Islington, South and Finsbury)

Once again, the great expectations unleashed by the Prime Minister and the inflated claims made for the citizens charter when it was first announced have resulted in a half-baked set of proposals which will do little to improve the real quality of public services in Britain.

Is the Financial Secretary aware that, in some instances, greater competition may lead to improvements in quality, but that that does not automatically follow? Only a Government as dogmatically fixated as this one would believe that all one needs to do is introduce a market or privatise sections of service and all will be well. Is he aware that that has not been the case in large parts of the national health service, where food, cleaning and laundry services have been put out to competitive tender, and where, as a result, standards have often fallen far short of what they ought to be?

On the health service, how was the figure of £626 million of savings in seven years calculated? Is it not the case that a similar figure would result from calculating seven years' worth of tax relief for private medical insurance? Is it not also the case that the cost of one or perhaps two years' worth of the administrative introduction of the NHS changes for the internal market would again result in the same figure? How dare the Government say that they are going to improve patient care when they are wasting money so disgracefully in other parts of the health service?

On housing, what exactly does the Financial Secretary mean by the introduction of competition into housing management? Is he aware that the Institute of Housing has recently reported that it does not believe that competitive tendering in housing management is a sensible option, saying that it does not easily lend itself to competitive tendering"? The Opposition strongly support tenant involvement in housing management. Labour-controlled authorities have been introducing imaginative schemes for tenant involvement for years. How on earth can the Government ensure that tenant participation takes place if they force through a tendering process which will not necessarily guarantee the tenant involvement we want?

Is the Financial Secretary aware that the introduction of more rigorous management and purchasing provisions in central Government will be welcomed by everyone, but it hardly needs a massive White Paper and a citizens charter to start the job? Surely the greatest guarantee of performance in central Government would be the guarantee of democratic access? Why do the Government still refuse to endorse the principle of freedom of information, and why do they not agree to support the freedom of information Bill which will shortly be brought before the House?

Finally, will the Financial Secretary accept that there is no dispute between us about the sheer importance of ensuring quality in our public services? Our disagreement is on how that is best achieved. Competition and privatisation are not always the guarantors of quality. Indeed, the cheapest price, which competition will principally lead to, may ensure the worst service.

The best guarantors of quality are rigorous management, open government, access to information, customer participation, clear contracts with the public which have been pioneered by a number of Labour-controlled councils, and the public sector's absolute determination to provide quality. That would be a much better way forward than this very disappointing statement.

Mr. Maude

The remarkable thing about that response was that the hon. Member for Islington, South and Finsbury (Mr. Smith) failed to tell the House whether he agreed with our proposals. I take it that, as he did not say that he opposed what we are going to do, we have his wholehearted support.

The hon. Gentleman said that the proposal was half-baked. A programme that offers the prospect of harvesting efficiency savings of 25 per cent. through great swathes of the public sector does not seem to me to be half-baked. It seems to represent a programme which is extremely good value for the taxpayer and which offers the best prospects of much better services for the user.

The truth is that the Labour party does not dare come out in favour of a programme of competition of this nature because it is in hock to the very public sector unions that have sought to oppose it over the years. That is why the hon. Gentleman timidly teetered round the edge of this at the outset, saying that of course there may in some circumstances be benefits. Either the Labour party believes that competition is good for efficiency and the quality of service or it does not.

I make no bones about the Government's position: we believe firmly that, where competition can be exercised, it has a wholly beneficial effect. It enables good-quality managers and staff to test their services against the best that can be provided elsewhere. That is good for morale and for the user of services. The Labour party owes it to the House and the country to tell us freely, frankly and openly where it stands. If it does not, all its claims to be the guardian of the citizen and service user fall to nothing.

If the hon. Gentleman genuinely thinks that services that are contracted out are of lower quality than those done in house, I invite him to make the short journey between the London boroughs of Lambeth and Wandsworth. In the former, he will find services provided in house by members of the National Union of Public Employees at extremely high cost and of poor quality. Over the boundary in Wandsworth, he will find services provided by the private sector at lower cost and of much better quality.

I invite the hon. Gentleman to reflect again on his knee-jerk reaction to our proposals and to tell us frankly whether he is in favour of them and on the side of the citizen, the user of services and the taxpayer or on the side of Rodney Bickerstaffe, the Confederation of Health Service Employees and NUPE.

Mr. Michael Morris (Northampton, South)

Is my hon. Friend aware that, of all the White Papers that I have read in recent years, this document is one of the most detailed and practical? It shows a sensitivity that we have perhaps not always come to expect from Government Departments. The section on the management of theatres and arts facilities explains that certain community-based facilities may be exempt and that, provided that subsidies are put up front and form part of the tender process, they may be allowed, yet it is appropriate that there should be tendering for the management of theatres such as the Derngate in Northampton. That is greatly to be welcomed. Will he re-emphasise that at the end of the day the document is all about contracting out to produce as good a service at less cost or a better service at the same price?

Mr. Maude

My hon. Friend puts his remarks well, and I am grateful for them. His point about subsidies being shown is an important one. To return to the point made by the hon. Member for Islington, South and Finsbury (Mr. Smith), this is all about transparency and opening up the process to much greater public scrutiny, so that the public can see what is going on, the taxpayer can see what his or her money is being spent on and the customer can see the standard of service being contracted to be provided. That is a good deal for both customer and taxpayer.

Mr. Malcolm Bruce (Gordon)

Will the Financial Secretary accept that we welcome the proposals that will allow managers to buy competitively? Clearly, if that leads to lower costs and more services, we support it. How does he square the Government's commitment to allow public service managers the right to manage with compelling them to opt for competitive tendering in circumstances where, he will accept, that can be costly to prepare and can lead to inflexibility in meeting changing circumstances? Surely managers should have the right to make that decision.

Will the Minister explain why, if competitive tendering is to be encouraged as a means of securing better value for money, the national health service trusts are to be exempt from the process? Indeed, some of them are making a virtue of their exemption by saying that that is part of the reason for opting for trust status. If it is a good idea, should it not extend to all forms of public services—not just those that the Government decide?

Mr. Maude

I am grateful to the hon. Gentleman for expressing the support of his party for our proposals. That emphasises once again that the last redoubt of reaction in this matter is the Labour party. Just by coincidence, half its members are sponsored by the public sector trade unions—there may be a connection between the two facts.

The hon. Member for Gordon (Mr. Bruce) asked how the proposals will square with the delegation of management powers to the chief executives of agencies, which is a fair point to raise. The process of reform upon which we embarked some time ago runs against some ingrained attitudes in public sector management, but they are beginning to change. I have no doubt that the chief executives of agencies will want to embark upon this programme wholeheartedly. They will welcome the support that is given for that process from the centre.

As for NHS trusts, we have made it clear that we will expect them, as well as the directly managed units within the NHS, to report annually on what they have done. The hon. Gentleman will understand that the programme of NHS reforms gives managers a strong incentive to ensure that the money that they have to spend buys the very best possible. That is a strong incentive to ensure that what is being bought has been properly tested against what can be provided in the private sector. That is the way in which to maximise the amount of money that can go to buy direct patient care. I should have thought that the hon. Member for Islington, South and Finsbury, as much as my hon. Friends, would strongly support that.

Mr. Steve Norris (Epping Forest)

May I make it clear to my hon. Friend that this is a document that the Labour party simply could not write, because the principle of being critical of the producer is anathema to a party that is totally in thrall to the producers? Will my hon. Friend underline the clear concept that, in terms of public expenditure, it is not what one spends but what one buys that finally counts?

Mr. Maude

My hon. Friend is entirely right about that, and about the Labour party. The Opposition have given a pitifully embarrassing performance today by refusing to tell the House whether they support the programme.

We have a duty, as the authority that extracts money from the taxpayer and then spends it on buying services for the taxpayer, to ensure that every pound we spend on the taxpayers' behalf buys as much as it possibly can. Except for the last Albanians in the Labour party, I do not believe that anyone seriously disputes that the process of competition is essential to maximise what is bought for the taxpayer. Even the Liberal party has eventually come to that conclusion—even the Albanian Government have come to that conclusion. However, as in so many other things, it is only the Labour party that is still way back in the tired old 1960s.

Mr. Chris Mullin (Sunderland, South)

Is the Minister aware that, in Sunderland, we have recently had a taste of the Government's competition policy, because private companies have won the contracts from the local education authority to provide school meals and from the health authority to clean health centres? Those companies propose to reduce the hours of the already not well paid workers to below the level where those companies have to pay national insurance and take responsibility for pension payments, sick pay and holiday pay—all the things that we used quaintly to associate with civilisation. Will the Minister accept that many decent people will not accept cheaper services at the cost of rubbing the noses of people who are already quite-downtrodden in the dogma with which the Government have come up?

Mr. Maude

I cannot comment on the individual circumstances of the contracts.

Ms. Marjorie Mowlam (Redcar)

Deal with the principle.

Mr. Maude

I will deal with the principle, since the hon. Lady invites me to.

The remarks of the hon. Member for Sunderland, South (Mr. Mullin) suggests that his primary concern is not the interests of the taxpayer who supplies the money or the customer who uses the services, but the staff who work in those services. That shows that the Labour party remains the producer party—the party in hock to producer interests. The Conservative party is concerned with the taxpayer who produces the money and with the quality of service provided to the customer. I make no apology to the House for that.

Sir John Wheeler (Westminster, North)

Does my hon. Friend agree that the secret of contracting out is the drawing up of a contract between those who buy a service and those who supply it, and that, together with independent inspection, that is an essential ingredient to ensure that quality and standards are maintained in the public's interest?

Mr. Maude

My hon. Friend is entirely right. Every public sector manager should be doing that, whether a service is contracted out or not. The process of putting a service to competitive tendering requires that very beneficial process. Indeed, the hon. Member for Sheffield, Brightside (Mr. Blunkett) made precisely that point. He is a latter-day convert to the cause. Unfortunately, like the response of the hon. Member for Islington, South and Finsbury (Mr. Smith) today, his conversion is half-hearted and timid. We believe in that process; that is why we are pushing the programme forward.

Mr. Bruce Grocott (The Wrekin)

Is the Minister aware that he has done a useful service to the House in spelling out the inadequacies of so many of our public services after 12 years under Tory management? Will he explain something that puzzles many Opposition Members as well as many voters? Why are the Government so sensitive to our explanation of the creeping privatisation in the health service, when the tenor of his statement is of the tremendous benefits that privatisation is supposed to bring? The Opposition and the electorate at large do not believe that.

Finally, if the proposed programme is a follow-up to the citizens charter, will the Minister confirm what the Prime Minister said in a written answer to me, that the citizens charter's provisions to improve our public services promise not a penny in additional public expenditure? Like the previous blue glossy document, this blue glossy document contains Conservative party propaganda published at taxpayers' expense. How much did it cost?

Mr. Maude

On a point of information, the hon. Gentleman may have noticed that the citizens charter was not a glossy blue document but a glossy red one.

I confirm that the citizens charter is not about providing more money. As the autumn statement said, we provide more public money where it is required for key services. We have done that this year, as in previous years. The citizens charter and this White Paper, "Competing for Quality", are about ensuring that that money buys as much as it can for users of the service. It is a simple concept, and I should have thought that the hon. Gentleman would support it.

He is wrong if he thinks that the White Paper is about privatisation, because it is about competition. The document says explicitly that the programme implies no dogmatic preference for private over public sector, or vice versa. However, to test and ensure that as much as possible is bought with the money available, we believe that those services should be subject to fair and open competition. The Labour party's reaction shows that it is the only party with a dogmatic stance on that matter. One must assume that the reasons are connected with the fact that it is in hock to the public-sector trade unions.

Mr. Tim Smith (Beaconsfield)

Does my hon. Friend agree that the great merit of the establishment of the agency programme in government is that there is now a clear distinction between the formulation of policy and its execution? Now that we have a clear emphasis on the execution of policy, the new chief executives are becoming more customer-oriented. If, in the private sector, one cannot go far wrong by putting the customer first, the same must be true of the public sector.

Mr. Maude

That is entirely right. Chief executives in the new agencies are approaching their tasks in precisely that way, which is why they will warmly welcome the new approach to competition and will work with, rather than against, the grain. Unhappily, some public authorities work against the grain. For example, Derbyshire county council set up a special panel at a cost of £300,000 of taxpayers' money specifically to combat the effect of competitive tendering. The final insult is that it is using taxpayers' money to frustrate the object of the programme, and effectively doubly robbing the Derbyshire taxpayers.

Several Hon. Members

rose—

Mr. Speaker

Order. I have to have regard to subsequent business, so I shall allow questions to continue until 4.30. As I then have notice of an application under Standing Order No. 20, I ask for brief questions so that, hopefully, most hon. Members will be called.

Mr. William O'Brien (Normanton)

To return to the reference to services provided by local authorities, is it not a fact that compulsory competitive tendering, as designed by the Government, has failed in local authorities because the majority of contracts have been won in house, thus proving that local authorities are efficient?

I hope that the Financial Secretary will attempt to address a question of what happens when local authorities have secured an open tender that has been won by outside private contractors, who have then failed to do the job properly, so that local authorities have had to pick up the tab and carry out the services? That has happened in relation to vehicle maintenance—in Kirklees and Wakefield, contracts were given to private contractors who failed to do the job, and the local authorities had to pick up the pieces. I have asked for a meeting at which that important issue can be discussed, and I hope that the Financial Secretary can prevail on his colleagues to discuss the problem, which is costing local authorities a large amount of money. Compulsory competitive tendering has failed in local government.

Mr. Maude

The idea that compulsory competitive tendering has failed for local authorities is absurd. There have already been significant savings from the process, even where bids have been won by the in-house operation. Many local authorities have, like Derbyshire, deliberately set out to frustrate the process of running the tender scheme in such a way as to stack the odds against private sector competitors and in favour of the in-house operation. The consultation paper has been brought forward to make the process open and fair, which was necessary in the interests of local residents who would otherwise be ripped off in taxation and denied the benefits of greater quality that comes from competition.

Mr. Robin Squire (Hornchurch)

I congratulate my hon. Friend on the latest instalment of the citizens charter, which underlines the fact that it is better value for the taxpayer and the citizen. In the light of his mention of Derbyshire, is he also aware that the same public sector trade unions that pull the Labour party's policy strings have set up a unit deliberately designed to frustrate open and free competition? Is that not an absolute disgrace, and should we not expect condemnation of that action from the Labour party, which has been quiet about today's statement? Perhaps Labour Members are going along with the statement, but they are not showing that by their comments.

Mr. Maude

My hon. Friend is entirely right. Many of us have seen with dismay what some of the public sector unions have been doing as they deliberately seek ways to frustrate the will of Parliament and rob their local residents by denying them the benefits of competition. One would expect the Labour party to have some view on that, but it seems to be timid about offending its paymasters in the unions.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Some public services are utterly essential to the well-being of communities and hence need to be subidised. One such example from Scotland is the provision of passenger ferry services between the mainland and the islands, and among the islands. Throughout all other north Atlantic countries, such services continue to be subsidised, and I hope that that essential service in Scotland will not be harmed.

On page 7 of the document, it states that those who believe that they have suffered by way of the EC directive on such matters can obtain compensation by way of the High Court. Do I take it that that will apply, in Scotland, by way of the Court of Session?

Mr. Maude

I am sure that that is right: the process will apply to the Court of Session just as much as to the High Court.

On the hon. Gentleman's first point about the ferry service to the islands, we are talking about services principally provided directly from taxpayers' money, so that subsidy is not merely an element, but often the entirety, of the services' cost. Often, the services are wholly subsidised, which means that it is of the utmost importance that we should buy as much as we can with that money. That certainly does not run counter to the idea of subsidising a specific service, which is a wholly separate consideration, about which there may be a lively discussion. That policy is not in any way compromised by the measures that we propose.

Mr. Alistair Burt (Bury, North)

Is my hon. Friend aware that Bury health authority has already contracted out 17 services, which result in an annual saving of £750,000 for the health service? That money has already been applied to a new obstetrics unit, to the upgrading of maternity wards, and to more patient care and doctors and nurses. Can he possibly calculate how much damage would be done to my constituents if this money, because of Opposition policies were not available to my health authority?

Mr. Maude

My hon. Friend graphically illustrates the benefits to direct patient care that can flow from this programme, which is growing not because of a dogmatic commitment to the process, but because—[Interruption.] The hon. Member for Dunfermline, East (Mr. Brown) might like to listen and learn something about this. Public-sector managers throughout the public services are increasingly seeing how they can deliver, through this process, an ever better service to their customers, patients and passengers. I would have expected the hon. Gentleman to support that.

In any event, my hon. Friend is right to say that enormous benefits in patient care can be provided by this programme. More than £600 million has already been saved—the cost of about 200,000 hip replacement operations which could not otherwise have been paid for.

Mr. Paul Flynn (Newport, West)

Does the Minister recall from his study of the mandarin civilisation of China that that society relegated the mercantile class—[Interruption.]—to a low place in society; and that the success of that mandarin civilisation is judged to have been due to the fact that it laid down regulations to ensure that the mercantile class never dominated the society? When the historians look back across history at our society, will they not judge the dark age of Thatcherism, in which competition was elevated to a supreme virtue, as a great heresy that has resulted in much misery? Have not the Government proved—[HON. MEMBERS: "Too long."] Have not the Government proved today that they are the idealogues and we are the problem solvers?

Mr. Speaker

Order. I did ask for brief questions.

Mr. Maude

I am afraid that I missed much of the earlier part of the hon. Gentleman's discourse, because the hon. Member for Worsley (Mr. Lewis) was bellowing at such a decibel rate that I could not pick it up. It sounded interesting, however. I do not know whether I am thought of within Whitehall as belonging to the mandarin class; I do not know whether I belong to the mercantile class, either. What I did hear from the hon. Gentleman was dyed-in-the-wool opposition to opening up public services to competition. He would have done better to stand up frankly and state it.

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

Does my hon. Friend accept that at last, after generations, the words "public service" will mean what they say, and not just public employment? Does it not show a lack of confidence among Opposition Members that they do not think that those in public employment can really compete? I have more faith in their members than they have.

Mr. Maude

I share my hon. Friend's confidence in the public services. He draws an important distinction between public service and public employment—they do not always necessarily go hand in hand.

Ms. Marjorie Mowlam (Redcar)

In the interests of the efficient use of taxpayers' money, will the Minister now answer directly a question that he has already been asked this afternoon: how much did "Competing for Quality" cost?

Mr. Maude

The production of the White Paper is reckoned to be recompensed from sales of the White Paper —[Laughter.] I am surprised that Opposition Members do not accept that, as it is the basis upon which these papers have been produced since time immemorial, under Labour as much as Conservative Governments. I think that the taxpayers will find it extremely good value for money. If the programme is put through successfully, it stands to realise billions of pounds for the use of taxpayers and users of services. It is surprising that Opposition Members do not support it, although perhaps less so in the case of the hon. Lady, who is supported by COHSE and who therefore has a vested interest in opposing this sort of measure.

Mr. Keith Mans (Wyre)

Does my hon. Friend agree that public service union bosses and their sponsored Opposition Members have no interest whatever in competition and competitive tendering but only in robbing the taxpayer for the benefit of union members?

Mr. Maude

I am sorry to have to agree with my hon. Friend. I had hoped that, when we made the statement and published the White Paper, the new so-called "modern" Labour party would make a rather more enlightened response than it has made in the past. Behind the lip service is the old Neanderthal reaction and opposition to anything that smacks of competition.

Mr. John Butterfill (Bournemouth, West)

Is it not outrageous that, for many years, public-sector employees who have worked hard to deliver good service have been prevented from receiving a just reward because they are paid the same as those who do not give such a good service? It is absolutely right to introduce performance-related pay. Perhaps we can encourage Opposition Members to support that, because, even though their trade union bosses will wish to prevent them from doing so, their mailbags will be lighter as a result.

Mr. Maude

We said in the summer that the extension of performance-related pay was a crucial element in delivering the citizens charter. That remains the case. Labour has been a little diffident in saying whether it supports that, but our support for it is unequivocal.

Mr. John Bowis (Battersea)

My hon. Friend was wise enough to refer to the experience of Wandsworth, which is my borough. Does he agree that the lesson from that borough is that competitive tendering results in increased quality and lower cost if the service is carried out by the private sector and that the same benefits accrue from efficiency savings if the service is carried out in-house? Those benefits would be lost if competitive tendering were abolished, which is the threat and the road block posed by Labour.

Mr. Maude

I am afraid that that is the case. Labour has repeatedly said, "We will abolish the Conservatives' compulsory competitive tendering regime." It has not yet explained to our citizens, who have gained greatly from the process, what will replace it, nor has it spoken about the poorer quality that will result and the higher taxes that will inevitably follow.

Several Hon. Members

rose—

Mr. Speaker

Order. There is an application under Standing Order No. 20. I call Mr. Cormack.

Mr. Jonathan Sayeed (Bristol, East)

On a point of order, Mr. Speaker, on the statement.

Mr. Speaker

It may be, but I shall first hear the application.