§ 'Any function delegated under this Act affecting the Northern Ireland Civil Service shall be subject to an annual report made by the Comptroller and Auditor-General for Northern Ireland to the House of Commons.".—[Mr. Davidson.]
§ Brought up, and read the First time.7.40 pm
§ Mr. Ian Davidson (Glasgow, Govan)
I beg to move, That the clause be read a Second time.
I am moving the new clause in order to raise matters of principle and to seek assurances from the Minister. I am moving it in this form in order to avoid duplication of the amendments that were moved in Committee.
The new clause is basically about accountability, both in principle and in process. In the Committee my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) spoke at length about the role of the Comptroller and Auditor-General. This is probably well enough known to all hon. Members, so I do not propose to cover that ground again.
However, I am particularly interested in the role of that officer and his Department in providing information for use by hon. Members in holding Departments accountable for the actions they take following the passage of this legislation and the introduction of delegation. It is important that we are enabled, as Members of Parliament, to follow through the implementation of this legislation and be provided with appropriate information, so that we can genuinely scrutinise the use that is made of these powers.
I want to press the Minister to give us assurances that he will take the next available opportunity to introduce amendments or legislation along the lines indicated by my hon. Friend the Member for Hodge Hill. I understand that he indicated at an earlier stage that he did not see the Bill as a Christmas tree to which all possible good measures could be attached. But the giving of powers at some point in the future to introduce control of the Comptroller and Auditor-General's survey would seem to be relatively easy.
In terms of the general issues with regard to Northern Ireland, given that heads of Department are not Ministers but civil servants and that there is an enhanced role for the civil service in Northern Ireland, this new clause is truly relevant.
In the discussion in Committee, grave concerns were expressed about the prospects for regional variations in pay and conditions being introduced as a result of devolutionary steps taken under this legislation. Similarly, the prospect of the impact of the legislation upon the dispersal policy of the Government was the subject of 364 considerable discussion. I very much hope that reports that come back from the Comptroller and Auditor-General will cover both those areas.
It will be a source of considerable concern if the use of devolution becomes a mechanism by which wage rates in Northern Ireland and some other parts of the United Kingdom are brought down to a level below that prevailing in the more prosperous parts of the country. It is important to me and to many of my hon. Friends that there is some mechanism by which this issue is kept constantly under review. I can see no other mechanism by which such an overview can be achieved.
It is important that the role of the Comptroller and Auditor-General in surveying the work of the Government, by undertaking value-for-money studies, is brought into this whole area of work. I and many of my colleagues took a wider view of the impact of contracting out and market testing than did many Conservative Members. We need objective assessment of the scale of diseconomies that flow from this legislation. We need to make sure that someone—I believe that the most appropriate person is the Comptroller and Auditor-General—is continuing to survey not only the gains that are achieved by any contracting out but the diseconomies. We need to make sure that that survey is undertaken objectively.
I will give one example of a case where concern is being caused to me and my colleagues. I have with me the annual report of National Savings.
§ Madam Deputy Speaker (Dame Janet Fookes)
Order. I am truly sorry to interrupt the hon. Gentleman, but I am afraid that he is going rather wide of new clause 2, which relates entirely to Northern Ireland.
§ Mr. Davidson
I understand that, Madam Deputy Speaker. I was seeking to illustrate the general principle, that the Comptroller and the Auditor-General would be used to examine certain circumstances. I was going to use the example of the Department for National Savings, but I will not use that. However, if there were such a Department in Northern Ireland with which a parallel could be drawn, and if it were found that it was undertaking a particular task at a lower cost than that in the comparable private sector organisation—had I been using National Savings, I would have compared it with building societies—then it would be very difficult to see what could be gained by contracting out some subsection of its work.
The difficulty that we experience comes back to the question of whether to take an holistic view. Many Government Departments take an holistic perspective. They have targets set for them to which they work to achieve gains in efficiency. Once one starts to split up their activies it is much easier to identify the savings that might result from the contracting out of a particular service, but that does not allow one to measure, unless one makes a specific effort to do so, the diseconomies that result. In particular, it is not possible to identify, by any method that is known so far, the diseconomies that come from a loss of flexibility, team work or morale.
It seems to me that, if we intend to go further down the road of contracting out and market testing, someone has to play that wider role to provide information to the House. That is why, in the new clause, I am proposing that, for Northern Ireland, the Comptroller and 365 Auditor-General should regularly produce reports on all those activities that are not contracted out, in order that we may make that assessment.
I am convinced that the Government are concentrating on that which is easily calculable at the expense of that which it is more difficult to assess, but where the costs of this policy are far greater. So, in effect, even where we are achieving some short-term, limited gains, overall the picture is a loss. I know that Conservative Members will dispute that. The problem is that at the moment we do not have the evidence to establish which of us is correct.
I therefore believe that the new clause should be supported as the only way in which that can be done.
§ Mr. David Trimble (Upper Bann)
I welcome the fact that this new clause has been tabled, and I thank the hon. Member for Glasgow, Govan (Mr. Davidson) for moving it. It is particularly useful to have a clause of this nature specifically relating to Northern Ireland and imposing a duty to make reports to the House with regard to any delegations under the legislation. I hope that the hon. Member will forgive the reference to the drafting of the new clause, but I assume that it would also have to cover not just a delegation under the Bill but a delegation under any Order in Council that might be made under the existing clause 3 of the Bill, because the coverage of the new clause might not be effective without it. With permission, therefore, I will address the duty to report with regard to functions delegated under any Order in Council yet to be made or foreshadowed by clause 3.
It is particularly useful to have this obligation to account, because one of the concerns that we have had about the legislation—we went into this to some extent in Committee—is on the question of accountability. I suggested during the third sitting of the Committee that there were some special problems in accountability with regard to Northern Ireland because of the somewhat different administrative and legal structure that exists there. We made a very brief reference in Committee, where I used a form of shorthand, and it might be helpful to the House if I set out in a bit more detail what I think the situation there is and what the problems might be.
One of the problems stems from the fact that we still have in existence the legal structures for devolution. It may be paradoxical that a Government so opposed to devolution should retain in existence the legal structures for devolution, but that is the situation.
Originally, by which I mean under the Government of Ireland Act 1920, we had devolution establishing what were called "Ministries" and "Ministers". Clearly, Ministers ran Ministries. Under the Northern Ireland Constitution Act 1973, the term "Ministry" was transmuted into "Department" and it also created the concept of "head of Department". The Head of Department to be set up under that legislation was to take the place of a Minister. It caused a little confusion in Committee when I used the term "head of Department" as the Minister did not recognise it—it was a new term invented by a previous Conservative Government to provide a different name for a Minister. Therefore, heads of Departments are Ministers, and I use the phrase as a type of shorthand.
The point that I made in Committee was that the persons who sit on the Front Bench and who are called 366 Ministers with regard to Northern Ireland are not Ministers for the purpose of devolution in Northern Ireland. Of course, we have the Northern Ireland Office and the Northern Ireland Departments, the latter being run by heads of Departments. There was provision under the 1973 Act for heads of Departments under the devolutionary structures which no longer exist. The Northern Ireland Act 1974 provides that the functions of heads of Departments are now to be discharged by Departments.
I was slightly in error on that point in Committee because I referred to the function being discharged by permanent secretaries, but the legislation in fact states that the function of a head of Department is discharged by the Department, not by the Minister. The 1974 Act also provides that the Departments are to act under the direction and control of the Secretary of State but that does not refer to the Ministers. There are other Ministers in the Northern Ireland Office and they may be assigned functions by the Secretary of State but they are not heads of Department.
I felt that that could cause some difficulty with this form of legislation. In Northern Ireland we used to have a Civil Service Department. It exercised the sort of control which in Great Britain is exercised by the Treasury over the civil service. Under the Departments (Northern Ireland) Order 1982, the functions of the Civil Service Department were transferred to the Department of Finance and Personnel.Those functions being transferred by the 1982 order were the "management and control" of the civil service.
In this context, management and control must clearly relate to the type of functions to which this legislation refers. It will be interesting to know the exact form in which the Order in Council is drafted and by whom the delegation is to be made. Although the Northern Ireland Act 1974 states that the function of Departments when discharging the work of the head of Department is to be done under the "direction and control" of the Secretary of State, the term "control" must have a slightly different meaning to the term as it is used in the Departments Order with regard to the functions of the civil service and of the Department of Finance and Personnel with regard to the management and control of the civil service.
Clause 1(1) states:This section applies to any function delegated by Her Majesty with regard to the management of Her Majesty'sHome Civil Service". The equivalent provision when it comes in the Northern Ireland Order in Council will presumably have to refer to functions presently discharged by the Department of Finance and Personnel, and presumably provision will be made for them to be delegated to other persons in the civil service hierarchy or to heads of agencies. There may still be overall political responsibility through the Secretary of State and the provision of the 1974 order for him to exercise or to give direction and control, but in that context "control" must have a slightly different meaning from that used in the Departments Order and the functions that are to be delegated.
That raises questions about accountability. It is all very well to say that there will continue to be accountability through the Secretary of State, but the Secretary of State has a general power to give directions to the Departments and the Departments have the management functions—not the Secretary of State or the Ministers—and it will be further delegated to the heads of agencies. That means that 367 there are two or perhaps more steps between the political accountability through the Secretary of State to the House. That raises serious questions of accountability. I therefore welcome the new clause, because it would provide for an additional or better way to ensure accountability.
Another reason why it is desirable that this new clause be accepted and to reinforce the measure of control and accountability which the House could exercise with regard to delegation under the legislation is a special factor operating for Northern Ireland. That special factor is that the Northern Ireland Office, and the Departments which shelter under its wing, is unique among all the Departments of State of the United Kingdom in that it is the only Department for which the House has not established a Select Committee to scrutinise and monitor its functions.
That means that there is already a tremendous gap in accountability for Northern Ireland matters. Northern Ireland matters are remote not only geographically but in terms of the involvement of the House through such a Committee. The unique gap in the accountability for Northern Ireland matters means that there is a strong argument for a provision along the lines outlined in the new clause. I hasten to add that it is very much second or perhaps even third best, because any reports that are to be made to the House by the Comptroller and Auditor-General for Northern Ireland will merely give us information. The function of the Comptroller and Auditor-General is directed mainly to what could be called financial probity. It will not provide the proper scrutiny and control of policy, which is what we miss, especially because of the absence of a Select Committee. For those two reasons, it is desirable to have the new clause.
I must also refer to what could be regarded as the substance behind the new clause. At Second Reading and in Committee I expressed concern about the way in which powers to delegate functions under this legislation could be used. Despite repeated use in Committee of the phrase that salary and other matters could be set with regard to "local labour markets", the Minister did not allay my concerns about the way in which the legislation may develop.
It is not a concern which is unique to Northern Ireland. It can apply to other geographical Departments within the United Kingdom, the other Departments which the Chancellor of the Exchequer dismissively referred to in the autumn statement as "the territories", meaning Wales and Scotland. The same problems can arise there and, indeed, in other parts of England. Certainly we are delegating in what the Chancellor referred to as "the territories", so local labour markets could have a significant influence on the way in which salaries and conditions are determined in future.
The Minister sometimes felt that I was unnecessarily worried about that. I hope that he was right. I did not feel entirely reassured by what he said about the Government's policy. As hon. Members will know, throughout our debate on the Bill it has been felt—certainly by my colleagues—that the Government have a hidden agenda for the legislation, that it is not as innocent as it appears and that it may even be seen in retrospect as an important building block in a larger scheme which has yet to unfold.
368 That is why there are considerable reservations about the legislation, which have not been allayed by the debate so far. Our reservations lead us to believe that measures to reinforce accountability and supervision are necessary. In Committee, the Minister said that he would be prepared to make a form of annual report to the House on the operation of the legislation. Has the Minister been able to think in more detail about the form and content of that annual report? We tossed out some ideas and discussed them briefly in Committee and I look forward to hearing what the Minister has to say. Perhaps he can spell out the details of that annual report, because it is important that the House receives information about its operation.
If new clause 2 were incorporated in the Bill, that information would be provided. It is for that reason and for the other reasons that I have mentioned that I support the new clause. I have referred to the absence of the Select Committee and to the slightly different legal and constitutional structure in Northern Ireland. Those matters should be addressed, and I do not apologise for referring to them once more.
Because of the way in which the Bill is drafted, after tonight the legislation, so far as it affects Northern Ireland, cannot be discussed. We have not yet had the substantive Northern Ireland measure. That will come in the Order in Council provided in clause 3. We do not know the precise form that that order will take. As I said earlier, there may be slight differences between the Order in Council and the Bill, but we will be denied a debate on the Northern Ireland measure because of clause 3.
That is why I hope that the Minister will now be able to address the different constitutional and legal structures in Northern Ireland to which I referred in Committee. I must add that I have received a letter today from the Minister of State, Northern Ireland Office. Now that I think about it, I have covered all the points in the letter. There is no need for me to read the letter into the record.
I hope that the Minister is now apprised of the slightly different structures in Northern Ireland because of what was said in Committee and presumably because he has taken further advice on the matter. I hope that he will understand my concern. The functions of management and control of the civil service in Northern Ireland rest not with the Secretary of State or with Ministers, but with the Departments even though they are subject to direction from the Secretary of State. The Bill will delegate from the Departments down to other persons. That raises issues which the new clause seeks to address and that is why I support it.
§ 8 pm
§ The Parliamentary Secretary, Office of Public Service and Science (Mr. Robert Jackson)
We had a useful discussion in Committee on a similar amendment related to the position of the Comptroller and Auditor General for Great Britain. New clause 2 relates to the Comptroller and Auditor-General for Northern Ireland. I will talk principally about him, as I do not wish to be ruled out of order.
Just as we argued in Committee that it was necessary to add to the Bill in this way, so I will argue now that it is not necessary to add to the Bill the proposed role for the CAG for Northern Ireland. As I pointed out in Committee, the Bill has no effect on the existing powers of the CAG for 369 Northern Ireland or for Great Britain, on the powers of the Comptroller and Auditor General in general or on the Public Accounts Committee.
The CAG for Northern Ireland has powers under the Exchequer and Audit Departments Act 1921—I give the precise reference for the benefit of the hon. Member for Upper Bann (Mr. Trimble)—to audit the accounts of Northern Ireland Departments. I do not believe that that position has been changed by the examples in the hon. Gentleman's graphic and interesting comments.
Under the Audit (Northern Ireland) Order 1987, the CAG for Northern Ireland can conduct studies in economies, efficiency and effectiveness with which Northern Ireland Departments have used resources in discharging their functions. He can also report to Parliament. As I will argue in relation to the comments of the hon. Member for Glasgow, Govan (Mr. Davidson) the CAG for Northern Ireland already has powers to deal with the considerations that he raised.
The Bill will not affect those powers of the CAG for Northern Ireland. The hon. Member for Upper Bann made some interesting points about accountability and the exercise of that accountability in relation to the House. We will have an opportunity to discuss the annual report on a later amendment. I reaffirm that accountability through the Comptroller and Auditor General route is not affected by the Bill. Delegation under the Bill will be within Northern Ireland civil service structures, whether to Departments or to agencies. The Comptroller and Auditor-General in Northern Ireland will therefore be able in future, as he is now, to report the results of any examinations of delegated functions to Parliament.
I accept what the hon. Member for Upper Bann said about the different terminology, but senior staff, whether we are talking about accounting officers or agency accounting officers, may appear before the PAC to give evidence in future as now.
Let me reaffirm that the Government consider strong independent audit essential to ensuring the public accountability of the Northern Ireland civil service. If the diseconomies that the hon. Member for Govan fears arise, they will be picked up, as they would be now, by the Comptroller and Auditor General and brought before us.
The hon. Member for Govan asked for an assurance about the powers of the Comptroller and Auditor General. I reaffirm what I said in Committee. My right hon. Friend the Chancellor of the Exchequer has given a commitment that he will take a suitable legislative opportunity when it arises and that that matter will be dealt with then.
§ Mr. Alan Williams (Swansea, West)
I did not mean to interrupt the flow of the Minister's eloquent speech, but he referred to the PAC and the Comptroller and Auditor General. I am sure that our colleagues from Northern Ireland would be fascinated by the situation in the PAC yesterday.
The Welsh Development Agency came before the Committee at the behest of the Comptroller and Auditor General, but a key witness in allegations against the management of the WDA had already been nobbled by the officials against whom he was making the allegations, as he was tied down with a £250,000 redundancy package, including a secrecy clause which precluded him from talking about his work at the WDA. When the staff of the Comptroller and Auditor General went to see him,he 370 pointed out that he stood to lose £64,000 of his money if he were to tell them what he really would have liked to tell them.
§ Madam Deputy Speaker
Order. The right hon. Gentleman seems to be making a speech and not an intervention.
§ Mr. Jackson
I have read the press accounts and I was disturbed by them. However, I do not believe that the problem arises in relation to the clause about Northern Ireland. The right hon. Gentleman seems to be saying that there may be difficulties under the present arrangements for the Comptroller and Auditor General, but the Bill makes no difference to the position of the Comptroller and Auditor General, whether in the United Kingdom as a whole, in Great Britain or in Northern Ireland.
We believe that there should be a strong independent audit. The Comptroller and Auditor-General has an important role, which is not affected by the Bill. The supporters of the new clause must show why the powers of the Comptroller and Auditor-General, which I have said he already has, are insufficient. They have not tried to explain why the Comptroller and Auditor-General in Northern Ireland—and not in Great Britain—should be compelled and obliged by statute to report on all delegations made under the Bill.
That is highly unrealistic, particularly when we consider the nature and nitty-gritty of many of the delegations which we discussed in Committee. Some of the delegations may have little or no public expenditure implications. Is the Comptroller and Auditor-General in Northern Ireland to waste his time reporting on them?
The sensible approach must be to continue investigations under the existing powers. Insisting on investigations for each delegation could lead to a great waste of National Audit Office resources, weaken the power to investigate where there is real cause for concern, and therefore weaken the accountability that we all agree is important.
§ Mr. Davidson
Given the Minister's assurance that the Chancellor will table amendments in due course, I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.