Public Service

HC Deb 26 November 1992 vol 214 cc1027-89

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

5.45 pm

The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave)

On Second Reading of the Civil Service (Management Functions) Bill earlier this month, the hon. Member for Redcar (Ms. Mowlam) asked for a wider debate on the management of the public service, and I was happy to respond to that idea. I promised to consult my right hon. Friend the Leader of the House on whether we could have an early debate, and I am glad to say that we have managed to find the time for it.

I am especially pleased that we are having this debate so quickly after the publication yesterday of the White Paper, "The Citizen's Charter First Report: 1992". This is a good moment for considering the Government's wider policies on privatisation, market testing and other issues related to the management of public services.

It is true to say that fundamental change for the better has been under way in the management of the public service ever since 1979. It is worth recalling that on the day on which this process of change began—4 May 1979—the last of the debris, both literal and figurative, had only just been cleared away after the previous winter's near-anarchy, the bulk of it in the public sector. The inflationary consequences of the pay settlements with which the outgoing Labour Government attempted to buy off that chaos damaged the economy for years.

It was a squalid and disappointing, although in retrospect perhaps inevitable, end to what now appears an ill-controlled expansion of many public services without sufficient attention being paid to the forms in which they were to be managed. As Mr. Anthony Crosland had said not long before, the party was indeed over.

There had been much idealism in the early days, but the results, in practice, were all too often empire building, limited concern for efficiency, and above all excessive domination by the providers of services rather than by the interests of the users. The customers and consumers of the services were not seen, as they should have been, as the be-all and end-all of the whole operation. Complaints were always used as proof of the need for extra resources rather than as a spur to efficiency, flexibility and new ideas. The electorate was presented with a false choice—between higher taxes or poorer services. They emphatically rejected that choice in 1979, in 1983, in 1987 and in 1992. It is a lesson that, once learned, shows little sign of ever being forgotten.

The reality is that on the one hand the potential costs of the public service rise inexorably in the face of scientific and technical progress and rising expectation. On the other hand, taxpayers here and elsewhere around the world are no longer prepared to hand over 25 per cent. let alone 40 per cent., 50 per cent. or more of their income without clear evidence that the Government will make every effort to ensure that that money is spent efficiently, and to the greatest benefit of the user of the services that Governments provide.

Public services in this country are now in the process of changing fundamentally to meet that reality, and they will continue to do so. The change does not lie in the basic nature of those in the public services. As the White Paper makes clear, the Government recognise the obvious need for good public services on a continuing basis, and recognise the quality of this country's many excellent public servants. But we cannot expect a public service to work efficiently, however competent and industrious those in it, if it labours under local management which has been made powerless and unimaginative by distant and centralised control; and which lives within a structure which ignores the whole worldwide revolution in ideas about management based on putting the customer's needs first.

Ever since 1979, the Government have sought to free up the latent ability and commitment in our public services through improvements in the way in which they are managed. Initially this was done on what was essentially a pragmatic individual basis, as each one—the civil service, local government, the nationalised industries and the NHS —seemed to require. A great deal was achieved. Government withdrew altogether from many areas—especially the nationalised industries—which could demonstrably be better run by the private sector. As far as the rest of the public service was concerned, efficiency measures resulted in enormous savings—for instance, over £2 billion from the result of the efficiency scrutiny programme alone. The delegation or scrapping of unnecessary budgetary controls gave local managers the powers they needed to run their operations more effectively; and the incentive was provided to set and meet challenging targets in a wide range of areas.

The changes were essentially about getting modern management into public sector organisations. They now provide the means by which we can deliver the Prime Minister's citizens charter programme—the most far-reaching programme ever designed for driving up quality in public services. As I made clear yesterday when talking about the White Paper, for the first time since present-day concepts of public service began to emerge in the early decades of this century, we now have, through the charter, a commitment to improve and to maintain on a systematic and comprehensive basis standards of service and efficiency throughout the public sector, linked to mechanisms that can deliver them. I was grateful for the basic commitment of the hon. Member for Redcar to the programme and to the policy, although she has criticisms of the detail.

Mr. Michael Bates (Langbaurgh)

Would my right hon. Friend care to compare the constructive and helpful remarks made by the hon. Member for Redcar (Ms. Mowlem) in Committee yesterday when she welcomed the citizens charter, with those of the Leader of the Opposition who, when the charter was introduced, described it as banal and damaging?

Mr. Waldegrave

The hon. Member for Redcar, perhaps persuaded by my hon. Friend's eloquent argument and by my hon. Friend the Parliamentary Secretary, Office of Public Service and Science, may have come to understand the programme better than her leader did. I am grateful for the bipartisan spirit in which she approaches the matter.

Ms. Marjorie Mowlam (Redcar)

Does the Minister agree that the hon. Member for Langbaurgh (Mr. Bates) cannot decide whether he was in the House or in Committee yesterday? We did not discuss the citizens charter in Committee yesterday. In the House yesterday —either the Minister or the hon. Member for Langbaurgh may like to check the record—I said that the citizens charter was a good idea in principle. I said that we invented the idea and that many Labour local authorities introduced such charters before the Minister even thought of the idea. I also said that it was the way in which the Government had introduced the charter that made it a sham.

Mr. Waldegrave

I would not expect the hon. Lady to argue that my party could carry out principles better than her party. There would be little point in her being here if she did not believe that she could do a better job of it. I welcome in the spirit in which it was offered the commitment that we share the principle of wanting to improve public service. The hon. Lady says, as is her right, that she would carry out the charter provisions better. The citizens charter contains sensible commitments and I welcome the hon. Lady's reaffirmation of that point.

Mr. Hugh Bayley (York)

Will the Chancellor of the Duchy of Lancaster go one stage further in the bipartisan spirit displayed in the Chamber this afternoon? Will he pay tribute to the first public authority in Britain to introduce a citizens charter? York city council has now operated its charter for five years. Each year, it has done what the right hon. Gentleman did yesterday—produce an annual report on the progress of the charter. Will the right hon. Gentleman pay tribute to that Labour authority, which was the first to introduce a citizens charter?

Mr. Waldegrave

I certainly agree that what has been done in York is interesting. We would argue that the York charter should contain more measurable performance indicators. I make no apology. I warn the Labour party that, if it produces good ideas, we shall pinch them. There is nothing wrong with that. I shall give arguments later to show that some Labour party supporters and centre-left opinion—I shall not offend centre-left Labour Members who sit below the Gangway, as they have temporarily left the Chamber—share our approach to these matters, and I welcome that.

We saw one significant result of this radical programme of reform only last week—

Mr. D. N. Campbell-Savours (Workington)

Where's the beef?

Mr. Waldegrave

The hon. Gentleman had a large amount of beef last week when my right hon. Friend the Secretary of State for Education published for the first time full tables of examination results as the parents charter had promised would be done. The Labour party's reaction to that example of openness earned it some noteworthy press coverage. The Sunday Times concluded: Labour is a lost cause on education. That is hardly surprising. As more than 50 per cent. of Labour Members are sponsored by trade unions, the Labour party is pretty much a lost cause in any area in which a consumer voice is struggling to be heard. Among others, The Guardian concluded: the information will allow parents to make a more informed choice. No democrat should regard this as a reverse. On this occasion, I wholeheartedly agree with The Guardian.

The White Paper is a substantial milestone in demonstrating how we are moving towards public services with high-quality outputs and with service to the citizen as an overriding concern. However, as the White Paper states, better-quality services do not happen by accident. They are being brought about by a series of policies each of which is designed to serve a key objective in improving public service management.

First, we must ensure that those working in the public services are not employed at taxpayers' expense on activities that, viewed realistically, do not need to exist at all. It is the most difficult thing in the world to abolish a function once a bureaucracy has made it its own, but it should be done sometimes.

Secondly, we believe that public services should be engaged only in activities that really need to be in the public sector. That requires regular programmes of review to discover whether all activities need to remain in the public sector. Many do not.

Mr. Campbell-Savours

Can the Minister explain how I should respond to a group of people whom I have just met in the Central Lobby? They tell me that they work for the Inland Revenue and that they deal with the most private aspects of people's tax affairs. They told me that their work as typists is to be put out to a private company. The most intimate details of people's tax affairs will be dealt with by people who work for a private company in he north of England.

I heard that some Inland Revenue officers are so worried about that prospect—there has been a pilot project somewhere—that tax inspectors are now sending hand-written letters to ensure that correspondence is not typed by private firms. Is not that an absolute disgrace? Are not the Government abdicating their responsibilities by handing over that important work to private contractors whom the public will not trust on matters of privacy?

Mr. Waldegrave

The hon. Gentleman is wrong at two levels. First, at the lesser, but none the less powerful, level, the criminal law covers confidentiality in these matters. Secondly, the contractual arrangements that would be made in such a case would have to cover the question of confidentiality.

More broadly, the hon. Gentleman is falling into the mirror image of the mistake that some on the right have made in the past. It is just as foolish a mistake that way round. The hon. Gentleman says, "Private sector bad, cannot be trusted", just as some Conservatives used to say that nothing in the public sector was good. Both attitudes are wrong and the hon. Gentleman is out of date in his attitude.

On reflection, Opposition Members who are sponsored by trade unions that have a mostly private sector membership will not agree with the hon. Gentleman that people in the private sector cannot be trusted with confidential matters. That is an unusually foolish argument from the hon. Gentleman.

Mr. Matthew Taylor (Truro)

There is real concern, as I am sure the Minister accepts, about confidentiality and the Inland Revenue. It is commonly accepted that, if something is not broken, it should be mended. In this case, I am not aware of any problem about confidentiality. However, as revealed on the front pages of The Sun and the Evening Standard today, there are problems of confidentiality in the private sector with Access. I am sure that Access does all that it can to maintain confidentiality.

I think it is disgraceful that information has come out. The Inland Revenue has kept confidentiality. If it is not broken, why mend it?

Mr. Waldegrave

I share the hon. Gentleman's sense of disgust about the leak from Access. It is not wholly unknown for the public sector more broadly—I am not talking about the Inland Revenue—occasionally to leak things. Nobody is criticising the standard of confidentiality in the Inland Revenue. None the less, it is right to look at public services and to see whether the same quality can be achieved at better value for money for the taxpayer. That is the right thing to do in that area as in others—[Interruption.] The hon. Member for Workington, who continues to mutter from a sedentary position, knows a little about the nuclear industry. He knows perfectly well that, over the years, many highly confidential matters in that industry, as in the public sector, have been handled by private sector companies.

I repeat that we believe that public services should be engaged only in activities that should really be in the public sector. So far, 46 major activities and many smaller ones have been privatised; they range from huge industries such as steel and telecommunications, to the National Freight Corporation—at the time of its privatisation a declining business, now an internationally quoted company—and from the 17 electricity companies in Great Britain to the British Technology Group.

As a result, 920,000 jobs have passed from the public to the private sector. Even leaving aside all the benefits to the taxpayer of more efficient services, the annual charge that nationalised industries' financing makes on the Exchequer was £3.5 billion per annum less in 1991–92 than in 1979. That achievement has already largely ended the historically short and aberrant detour into nationalisation, which helped discredit the state by casting it in the role of the incompetent owner and manager of huge, inefficient and often out-of-date industries, and as the protector of powerful producer interests rather than the champion of the individual citizen.

I quote from the excellent speech on Monday to the Centre for Policy Studies by my hon. Friend the Financial Secretary to the Treasury, whom we welcome to our proceedings: in 1979 Government was an oil producer, a car maker and a steel maker". We are not any more, and we were not very good at it when we were. It seems a long time ago.

Novertheless, we have not yet finished. The White Paper lists 11 further substantial potential candidates for privatisation, ranging from British Rail to Companies House, and my hon. Friend the Financial Secretary has recently opened discussions with colleagues to identify the scope for further developing the successful privatisation programme of the past decade, as he said earlier this week in the speech from which I have just quoted.

Thirdly, we believe in encouraging a productive partnership wherever possible—

Mr. David Trimble (Upper Bann)

The right hon. Gentleman refers to activities that it was appropriate to move out of the state sector. I am sure that he will agree that there are some activities for which privatisation is quite inappropriate and which should not be moved out of the public sector. When the present Secretary of State for Northern Ireland was the Attorney-General, he said that among the things that should not be moved out of core governmental work was work relating to national security or with other specially sensitive implications.

In that context, will the right hon. Gentleman comment on the recent decision of the Secretary of State for Northern Ireland to approve market testing of security work carried out for members of the public in Northern Ireland who are regarded as being under a particular terrorist threat? Does the right hon. Gentleman regard it as appropriate that that activity, which is especially sensitive and which relates to national security, should now be moved out of the core of Government?

Mr. Waldegrave

Doubtless my right hon. and learned Friend the Secretary of State for Northern Ireland will observe closely the conditions that the hon. Gentleman has quoted back at him. It is impossible for me to assess a particular case, but such considerations must certainly be high on the list that it would be proper for the Secretary of State to have before him when considering contracting any such activities out. It must be right to emphasise that.

Mr. Ian Davidson (Glasgow, Govan)

The Minister said that he wanted to clarify the activities that needed to be undertaken in the public sector and the activities that could be moved to the private sector: some activities could be moved while others could not. Does he agree that he is assuming that things should automatically go out to the private sector unless they have to be kept in the public sector? He is not saying, "Let us consider whether activities can better be undertaken in the public or the private sector." He is starting from the assumption that it is better for them to be out of the public sector. That does not give those providing services in the public sector a fair chance of competing. The right hon. Gentleman is weighing the balance ideologically.

Mr. Waldegrave

The hon. Gentleman makes an important point. He has not quite understood my position, and it is helpful that he has given me an opportunity to clarify it. Where a policy decision is taken that the state is involved in an activity in which it need not be involved, that is a proper activity for privatisation, but where the policy decision is that responsibility should remain with the state and accountability should remain with Ministers, it is right to market-test, but there must be, and must be seen to be, a level playing field between in-house potential bidders and any out-of-house contractors. I shall come to some assurances on that in a moment.

There are matters in which public and private sectors can co-operate. Obvious potential candidates are transport and construction, and my right hon. Friend the Chancellor announced in his autumn statement measures to stimulate such partnerships.

At the same time, there are other opportunities for a constructive and efficient partnership. Some activities may still clearly need to be the ultimate responsibility of the public sector, as I said to the hon. Member for Glasgow, Govan (Mr. Davidson), but can be contracted out none the less. The process of deciding whether contracting out will he the most efficient way of carrying out a function is called market testing. It works by putting the function in question out to competitive tender, with internal and external bids assessed against the same criteria. That is another key approach in our reforms of public service management. In some respects, local government is ahead of central Government in applying it; yet, like privatisation, it has relevance to a wide range of Government activities.

Results so far are encouraging, as the benefits of the process are twofold: first, it is axiomatic that where an activity is market-tested and an external bid succeeds, it will be because we can get the quality of service we need at better value for money than under the current method of provision; secondly, where an in-house bid succeeds, the process of opening up that public sector activity to competition in itself often creates opportunities for greater effectiveness. Consequently, in central Government, savings arising from market testing, at any rate in its initial stages, have typically been around 25 per cent. of the original cost even where the activity has remained in-house.

Elsewhere in the public service, much has been going on; in the NHS, market testing has been mandatory in some support areas since 1983. In 1990–91, that produced savings of over £120 million, as well as other benefits through improved management and service standards.

In the services provided by local government, compulsory competitive tendering to stimulate greater efficiency and to secure better value through competition between in-house organisations and private contractors has been going on for many years, and, as studies by the Audit Commission and INLOGOV have shown, has produced savings of, for instance, up to 15 per cent. in building cleaning and 10 per cent. in refuse collection, with improvements in the clarity and objectiveness of contract standards.

That is a valuable start, but, as I said, market testing, particularly in central Government, is still at an early stage. The White Paper makes it clear that the targets agreed for market testing for central Government activities in the period until September 1993 are enormously more ambitious than anything undertaken so far. Targets have been set for more than 20 Government Departments covering activities valued at about £1.5 billion—a more than fiftyfold increase over last year's targets.

Those activities, which the White Paper lists, range from building and estate management to internal audit, from typing services and pensions administration to information technology and training. The list clearly shows that the scope for contracting out has moved beyond the longer-established examples of support services such as catering and cleaning to activities that have traditionally been somewhat more protected from comparison with the outside world.

Mr. Trimble

The Minister is talking about contracting out—or the possibility of contracting out—to the private sector a whole range of activities in addition to those that he mentioned earlier. Has he considered the implications of bids coming from the private sector outside the United Kingdom? With the single market and modern communications, and given that back office work can be located some distance away, a significant amount of that work—particularly that of a more general clerical nature —could be contracted out to people outside the United Kingdom. Are the Government aware of the problem, and are they likely to introduce safeguards to protect against it?

Mr. Waldegrave

I think that I am right in saying that we would breach European Community single market rules if we did not advertise such contracts in the European Community journal. There is nothing new about that. When I first arrived in the Environment Department as a junior Minister, all the rate support grant work of the sort that the House debated after the Secretary of State's statement earlier this afternoon was done on American computers and bounced back over the Atlantic off satellites, because there were no computers in Britain which were big enough to handle it, which seems rather extraordinary. So there is nothing new about this.

The possibility raised by the hon. Member for Govan is conceivably real, although I doubt that it will be real in terms of the sort of work that he has specified. It is more likely that foreign-owned companies might win part of the work, but I do not think that there is any objection to that.

Mr. Davidson

rose—

Mr. Trimble

rose—

Mr. Waldegrave

I must get on. Perhaps the hon. Member for Upper Bann (Mr. Trimble) wants to intervene once more.

Mr. Trimble

The Minister says that he does not think the problem will he serious. I assure him that it may be a serious problem for Northern Ireland, which has the only land frontier in the United Kingdom. I do not think that he should discount the extent of the problem in the south of England. The continent is not that far away.

Mr. Waldegrave

The benefit of the single market is that we are part of the continent, according to my political perception. The single market works both ways. It is possible for private sector companies to get work from other countries. I have no doubt that some of them get work from the United Kingdom or from other Governments in Europe.

Mr. Davidson

Does the Minister agree that there is a genuine danger that data processing work could end up going to other parts of the world? Is he aware that a company in the Philippines has bid for data processing work for the Metropolitan police? As I understand it, the company meets all the criteria. That puts a different slant on the Government's dispersal policy. The Government have a view on dispersing civil service and Government work from the south-east of England. I am in favour of that because I should like to see work dispersed to areas such as mine, not to areas such as the Philippines. Does the Minister agree that there is a genuine danger under his policy that work will go to all the airts and pairts, not to areas to which the Government would want it to go?

Mr. Waldegrave

The hon. Gentleman is scaring himself unnecessarily. I believe that he is a sensible man. He, like hon. Members on this side, has argued passionately for the ratification of a GATT agreement to free international trade. One of the results of freeing international trade is that such trade takes place, and that must be welcomed. It is unlikely that there would be international trade in software, because the British software industry is extremely strong. However, if we have international trade in software, we must judge the benefit of such trade to the consumer and to citizens against other considerations.

We should not frighten ourselves too much. After all, local government, which has undertaken competitive tendering for years, has not yet managed to transfer all its work to the Philippines, as far as I know.

I know that public service employees, the unions, Opposition Members and, indeed, those on the left in politics often express opposition to market testing. The view is not unanimous. Among those who have paid tribute to the opportunities and results of market testing are contributors to the Institute for Public Policy Research/Trades Union Congress publication "Meeting Needs in the 1990s" who acknowledge: There have been gains from Government legislation…the councillors had organised services but they had never specified what those services had to achieve. Now they have had to make the governmental decision—they have had to choose what standards of service they want". Two years later we find the general secretary of the Federated Union of Managerial and Professional Officers in local government writing in The Times: there is no doubt that it compulsory competitive tendering— sharpens up the way that we manage services". Nevertheless, people continue to be concerned. Some of that concern comes from defence of the existing status quo and an unwillingness to see whether services can be better provided—indeed, from traditional producer vested interests. I cannot deal with that concern, but some concern comes from misunderstanding and can be addressed.

Ms. Mowlam

It would be helpful if the Minister did not continue to quote selectively from documents. The conference of the IPPR/TUC to which he referred acknowledged that there were some pluses for examining efficiency through market testing. However, it did not follow the Minister's logic on the concept of contracting out as one option and privatisation as another. Equally, many local authorities, including Mr. Jeremy Beecham from Newcastle—whom the Minister seems to quote all the time—voluntarily acknowledged the value of competitive tendering before the Government put the other C in front to make it compulsory.

Mr. Waldegrave

That is no more or less than what I was saying. I was not claiming support for privatisation; I had departed from that part of my speech. I was claiming support for the process of competitive tendering, which, as the hon. Lady confirmed, is widespread among some local authorities—although, I must say, not all.

Let me deal with some of the concerns which I may be able to put to rest. Although the White Paper sets clear targets for the amount of Government activity which is to be contracted out, it would be meaningless to set such targets because we have no preconceived view of whether any particular function can be more cost-effectively provided in-house or on a contracted-out basis. The result in each case will depend on the outcome of the competitive tendering process. So there is no hidden agenda. The House well knows that, when we believe it is right to privatise, we do so. We have no need for hidden agendas. Market testing is first and foremost a management reform within the continuing public sector.

Let there be no doubt that what we are talking about here is the explanation of functions to see whether they can be carried out more cost-effectively in partnership with the private sector. Those functions are, by implication, activities which are considered to be essential. They will still be carried out—and carried out better than before this exercise. The work and the jobs needed to do it will continue to exist. Even when the market testing of an activity results in a contract being placed with the private sector, Government employees may be redeployed or taken on by the new contractor. That has happened in the vast majority of cases over the last four years.

In addition, let me make it clear that Departments which achieve savings through market testing and contracting out will be able to apply those savings for the benefit of their programmes. This policy was set out in the "Competing for Quality" White Paper which launched market testing in the civil service last year. It has not changed.

There will, of course, still be very substantial areas of activity which, after review, it is agreed should be left in the public sector and still be carried out by the public sector. We aim to improve management standards by looking for other ways of exerting an equivalent discipline to that of competition. Indeed, it is essential that we do so, since, when there is no choice, the supplier has a greater, not a lesser, responsibility to the customer.

Much is being done to promote better management in these areas. We are getting decent financial management systems in public services. We have now established in most public services proper purchaser/provider relationships as the basis for their operations. We have freed managers to use their delegated budgetary powers to buy services wherever they can find the best deal for their customers.

The creation of executive agencies has had a dramatic effect on Civil Service management. The agencies are run by chief executives who are usually appointed by open competition, ensuring we have the best person for the job from inside or outside the civil service. All agencies have published framework documents setting out key objectives, responsibilities and targets, set annually by Ministers and monitored by them. They have published annual reports and accounts and, in many cases, corporate and business plans. About half of all civil servants now work in executive operations run on those lines. By 1995, that number could he as high as three quarters. That means that, within a few years, the civil service is likely to consist of a relatively small policy-making core, and a series of devolved delivery organisations. Some of them will, by themselves, be as large as or larger than the core and will be expected to focus increasingly on their customers.

The citizens charter White Paper shows that agencies are indeed delivering a better service to their customers. Services are now being delivered quicker: for example, the Driving Standards Agency has reduced waiting times for a driving test to just over five weeks as against 13 weeks in 1988, and the average time for issue of a passport by the United Kingdom Passport Agency has come down from 3.5 weeks in 1988 to seven days. Agencies are carrying out research to find out what their customers want and agencies like Companies House and the Public Record Office have introduced longer opening hours in response to public demand. All agencies now publish full information on their activities and the way that taxpayers' money is being used in their annual reports and accounts.

Next week I shall be publishing the third annual review of the next steps programme, which will give detailed information on all the agencies set up so far and other organisations established on a next steps basis, together with information about future candidates and an overview of the effectiveness of the programme as a whole. This so-called next steps structure opens up the opportunity for delegation of managerial responsibility and accountability to a degree that had previously been impossible. The central Departments will be the more able to help agencies take advantage of this opportunity under the enabling provisions of the Civil Service (Management Functions) Bill which has just finished its Committee stage.

Of course, the operations of the delivery organisations —the executive agencies—may in time suggest further scope for change and improvement. I am concerned to establish an adequate balance between stability and the need to take advantage of further developments. Once an agency has been set up, the question whether privatisation has become a serious possibility should be considered during the review of the framework document—usually after three years of operation. If privatisation has become a serious possibility, it should be investigated fully. If agency status is confirmed once the review is completed, people will have reasonable security from further upheavals ahead of them.

Thus, we are setting in place throughout the public service a clear structure of management by service agreement, with Departments purchasing from private or public sector, the services that the public need against charter principles and charter targets. That that is the right way forward is again not just a view from the right. The former general secretary of the Fabian Society, who writes in the current edition of the Fabian Review argues: the model developed in the NHS reforms of splitting the function of purchasers from that of provider should be applied throughout the public services". That is my objective too.

Finally, the citizens charter underpins and links all the different initiatives that I have described.

Mr. Frank Field (Birkenhead)

The Chancellor of the Duchy of Lancaster says that he is reaching the end of his speech, and I must express some disappointment about one subject that he has missed. He began in good style, reminding us of the events of the winter of discontent. It is crucial for Opposition Members—as it is for Conservative Members—to say that such behaviour is totally unacceptable and that we have no intention of allowing such developments again. Without doing so, we stand little chance of success. The right hon. Gentleman also made much of the importance of the customer in services and that is right because it is proper in principle and because there are a lot of votes in it—we should not think that that means that it is a wrong principle.

During the past 14 years, the Government's attitude to people who work in the public sector has changed. Many such workers, including my constituents, feel that, rather than first-class, they have been made third or fourth-class citizens. The right hon. Gentleman is far too civilised to make statements similar to those that his colleagues have made about people who deliver services. Does he care to comment on how he values public sector workers, and on the fact that in any discussion of improvements in the delivery of services—which is crucial—a secondary but important matter is how we treat and pay our staff?

I listened to the Chancellor, but when he talked about improving services he never mentioned what he will do about some of the appallingly low wages in the public sector. As part of the process of more open government, will he tell us how many public sector workers still earn wages which qualify them for family credit?

Mr. Waldegrave

I shall write to the hon. Gentleman with the factual answer to his last question.

In the earlier part of my speech I paid tribute—perhaps too briefly—to workers in the public sector. It is difficult to do so without it sounding like a cliché, but my tribute was real and the hon. Gentleman's point is well taken. I tried to argue that case with the hon. Member for Workington (Mr. Campbell-Savours). It is just as foolish to say that all private sector workers are bad as it is to say that all public sector workers are bad. If some Conservative Members hold the latter view, they are mistaken—just as the few Opposition Members who held the opposite view, and who persecuted the hon. Member for Birkenhead (Mr. Field) in his constituency, are wrong.

The citizens charter programme gives the Conservative party and the Government the opportunity to reaffirm their commitment to the need for long-term public services. I was happy to join the hon. Member for Redcar to make that commitment yesterday, and to pay tribute to those who work in the service. I do not believe that that relieves us—the public sector—from the relentless pursuit of efficiency in the interests of the services that we provide. I know that the hon. Member for Birkenhead would not think that it did. Therefore, I respond warmly to his invitation to pay tribute again to public sector workers. They are not third or fourth-class citizens, and they are both providers and consumers of the services that we are trying to improve.

The principles of the charter—standards, information and openness, choice and consultation, courtesy and helpfulness, redress for mistakes, and value for money—are especially important in those areas of Government which are not subject to ordinary competitive pressures. The more we devolve management responsibility, the more explicit we must make the public service principles and ethos that we want to run through all those devolved organisations.

Hon. Members will find, both in the first report on the charter, and in the many individual published charters, innumerable specific examples of how those principles are being implemented. The more we establish throughout the public service the new structure of management by clear service agreement—whether contract, framework agreement or internal service-level agreement—the more powerful the mechanism becomes for delivering those charter standards and ensuring better public service provision.

I hope that I have made clear to the House the nature and scale of the changes and improvements that the Government have, and are continuing to introduce in to the public service. I also hope that Opposition Members will be able to move beyond their sterile belief that, if only some huge but usually unspecified increase in resources could be made available and given to existing provider organisations, all would be well. Poor services do not come free or cheap either, as was discovered in the 1960s and 1970s. For any given level of resources, it is always possible to provide better services, which are more cost-effective and more responsive to the needs of the citizen and customer. It is the Government's constant and fundamental aim to ensure that that happens.

6.27 pm

Ms. Marjorie Mowlam (Redcar)

I welcome the debate. It would be churlish of me not to do so, since I asked for it and the Minister granted it so quickly. He would have been disingenuous if he had not known when he granted it that the Government were going to publish the citizens charter White Paper the day before, so it allows time for another four or six hours of debate on the matter in the House.

I am pleased that, in answer to my hon. Friend the Member for Birkenhead (Mr. Field), the Chancellor of the Duchy of Lancaster acknowledged his support for public sector workers. Charming though he may be at times, his colleagues are not charming to the public sector, which causes great concern to the many people who work in it. I am sad that he could not express such charitable views on local authorities. The right hon. Gentleman said that he found the work that York he had been doing interesting. It would have done him no harm to say that York and many other local authorities did a good job on charters in response to quality services before he or the Prime Minister dreamed of nicking our idea. That would have been a positive step.

As the right hon. Gentleman keeps trying to cosy up in this debate and to say how often the two sides of the House agree, it would be useful to put on record briefly the aspects of public services management about which we agree, or do not agree. First, both sides agree about the need for quality public services. Another point we have in common is that the Opposition also believe that a citizens charter is one mechanism to improve the quality of public sector services—we wrote about the concept before the Conservatives had even thought about it, and many local authorities implemented it before then.

We differ drastically with the Government about the mechanisms by which quality services are achieved. We believe that they are best achieved at the local level, with local accountability and with people being held accountable for the services that are offered by the local authoritiy or other local body.

The Government take the opposite position. They believe that quality services are achieved—the Minister said it more clearly than I have ever heard it said—by direct privatisation, by market testing as a precursor to considering an outside bid. That involves contracting out of the national civil service or the next steps executive agencies. Although the latter are at present operating at arm's length, in terms of their framework document, they could be privatised in the future.

Mr. Gyles Brandreth (City of Chester)

Is the hon. Lady saying that she is totally opposed to market testing now and for all time, even if it is shown that savings of perhaps 25 per cent. could be achieved by using market testing? Those savings could be re-employed to improve the quality of the services.

Ms. Mowlam

I have no objection to the use of indicators of a quantitative and qualitative nature to test the services of a Government Department or local authority.

Mr. Brandreth

Oh?

Ms. Mowlam

The hon. Gentleman expresses surprise. Local authorities have been doing that for ages. They may not have put the same label as the Government on the activity, but many efficient local authorities and other bodies have been doing it. So I agree with increased efficiency and the use of internal mechanisms to achieve it, and we can discuss many of them.

I disagree with the way in which the Government are hiding behind market testing and, instead of saying, "We are putting this out to competitive tender," are avoiding using that language. Had the Minister made the position clear and said that the Government were putting this or that out to competitive tender, large sections of the national civil service would have been aware of precisely what the Government were doing. People get a totally different view when the Minister says, "We shall do market tests and look at external contracts and so on," and dresses the whole thing up in language of that type.

Mr. Waldegrave

I said that market testing was the precursor, should outside bids be better, to contracting out. I am not sure that the hon. Lady answered my hon. Friend the Member for the City of Chester (Mr. Brandreth). Is she in favour of market testing as a mechanism?

Ms. Mowlam

I have no difficulty in looking for quality and efficiency of service using quantitative and qualitative indicators. I am not satisfied when market testing is put in the context used by the right hon. Gentleman today, which is in preparation for competitive tendering—[Interruption] Does the right hon. Gentleman find my remarks confusing? What is his problem?

The right hon. Gentleman described the competitive tendering which the Government are intent on implementing as taking place on a level playing field, and I hoped from what he said that he intended to describe the nature of the playing field, but he did not do that. I shall show how the playing field is far from level, which causes much of the problem. The Minister puts on a facade of citizens charter quality services, but beneath that lies his desire for a very different national civil service.

The parliamentary Secretary, Office of Public Service and Science (Mr. Robert Jackson)

The hon. Lady is discussing an important and interesting point and I am unclear about precisely what she is saying about her attitude and that of the Opposition to market testing. She said that she was in favour of market testing, except in the context of competitive tendering. Is she aware that market testing and competitive tendering are absolutely integrally related? I hope that she will clarify the point. We shall make considerable progress if she does.

Ms. Mowlam

Let us stay with the point until it is resolved.

Mr. Frank Field

What is my hon. Friend against?

Ms. Mowlam

I shall tell my hon. Friend what I am against. We are against compulsory competitive tendering if it represents the privatisation of our national civil service. Once that has been privatised and there is trouble with contracts that have been put out to competitive tender, there will be nothing left of the civil service to which to complain. If those responsible make some of the mistakes that local authorities have made, where shall we go from there? There will not be a national civil service to deliver what the citizens have a right to demand.

It is important to appreciate precisely what I am saying, because many Opposition Members have experience of local government and know what delivering quality service is about. We believe in having the ability to measure efficient quality so that, for example, cost centres in local government can be compared. We can thereby reveal efficient ways to improve a service.

In that context, it is still a public service and it is accountable to the citizen. The service has not been contracted out or privatised, at which stage it is not accountable to anybody but is run by private companies which are driven by the profit motive and which believe in short-termism. Their activities are certainly not based on the long-term interests of the people.

Mr. Davidson

Does my hon. Friend agree that market testing is being used by the Government artificially to divide the various functions of Government—for example, by taking the clerical services out of a general activity and creating sub-units which are tendered in a disruptive manner and in such a way that the various sections are not able to come together to provide a unified whole and a better service? That is market testing designed to disrupt and destroy a service rather than enabling like with like to be compared on an external basis.

Ms. Mowlam

I thank my hon. Friend for that intervention, which helps to show why the national civil service and local authorities, as they have functioned in the past, are important.

Mr. Robert Jackson

It becomes clear that the hon. Lady is in favour of market testing on the basis that no contract is awarded to any outside bidder.

Ms. Mowlam

We have discussed matters of this type time and again. We want a national civil service that is part of the nation's heritage. We want it to be efficient and to deliver what the people need—[interruption] The Chancellor of the Duchy seems to find that amusing. What we are debating is crucial to the future of our nation. We must have a civil service that delivers to the people the quality services to which they are entitled.

We accept the need for increased efficiency. That involves having indicators and testing, nationally or decentralised, to achieve the delivery of quality services. But it is clear from the Minister's remarks that the Government do not believe in a national civil service. They want it divided up into next steps agencies, privatised or, in some limited cases, remaining with Government. That would give us a totally different animal from what we want for the future.

We accept that it may be necessary for a Department to contract out the odd service. I have explained that local authorities have been doing that for years. A small rural local authority will contract out, say, its legal system because it is more cost-effective. The Government have not given a democratic choice for people to achieve that type of accountability at the local level. Their plan is compulsory, even though the Minister talks about the way in which it would be a good idea to decentralise certain matters. He says that national Government should not dictate. What is compulsory competitive tendering?

It is not as though the right hon. Gentleman is allowing local authorities the right to decide what services to run and how to run them. Local authorities have elections to make them accountable. Instead of having the ability to choose, they are being told that compulsory competitive tendering must be the way forward. That is the degree of centralised control that the Minister is imposing on them.

I hope I have explained the view of the Opposition to the satisfaction of Conservative Members. There are certain crucial differences between the two sides of the House. We believe in local accountability, while Conservative Members do not. We believe in quality services and that they cannot be achieved simply by privatisation. I will give some examples to show why privatisation is not the answer.

As I listened to the Chancellor of the Duchy, I presumed that he had again been reading the book from which he often quotes, "Reinventing Government" by Gaebler and Osborne. The Library copy has gone missing, so it is difficult for me to check whether the structure of what the right hon. Gentleman is proposing is in conformity with that publication. If he has it, we would welcome its return to the Library.

My hon. Friends and I have a commitment to the public sector which the Government do not have. The right hon. Gentleman said at the conclusion of his remarks that he agreed that the public sector was important. If he believes in the future of the public sector, I should appreciate it if he and the Financial Secretary would distance themselves from the Treasury and say that they disagree with the Treasury document issued in 1991 called "Selling Services into Wider Markets". That document states: The Government's policy is to restrict the size of the public sector and in general the presumption is that services should wherever possible be provided by the private sector rather than the public sector…This presumption applies in particular where a public body would be competing with the private sector". I presume that when the Minister says, as he did today and yesterday, that he wants to continue with the public sector, he disagrees with the Treasury.

Mr. Waldegrave

When the civil service trade unions used that quotation to make the same point, I wrote to the Financial Times—the hon. Lady may have seen my letter —making it clear that that guidance is about the completely different subject of trading. It is no secret that the Government and, I suspect, the modern Labour party are against state trading. If there is a trading activity, the presumption is that it should be in the private sector. If state organisations want to expand their trading, they cannot do it on the basis of their privileged access to public sector borrowing but should be privatised.

Ms. Mowlam

Then the Minister will distance himself from his statement to The Times conference in June, when he stated clearly that he believed that the private sector was superior to the public sector in delivering services. The Minister cannot have it both ways. He keeps saying that the public sector is far superior and that he wants to keep it, but when we get down to the detail of what the Government want, we find that they want to privatise the public sector.

As I have tried to explain to Ministers, the private sector model cannot be imported into the public sector because the private sector is driven primarily by profits and short termism. It is demand-led to satisfy the customer. In a demand-led system with limited resources—the public sector—one most decide between the allocation of resources, make political decisions and be held accountable. Local democracy and public sector services are important because it is crucial for the public sector to remain in control.

The Minister said that both sides of the House agree on the citizens charter, but the Labour party holds a different concept of the citizens charter. The Minister's view of the citizens charter is that individuals who pay council or poll tax receive services in return. That is a direct contract, just as in the private sector, between the individual and the local authority.

The difference is that the Labour party views the citizens charter more broadly, believing that citizens have rights and that they support services which they do not necessarily use. I have no children but I believe that local authorities should provide services for children. Similarly, I believe that community care, such as care for the elderly, should be provided by local authorities. That is not a direct contractual relationship between individual and provider, which is how the Government perceive the citizens charter. It is a fundamental difference in belief about the role of the individual in relation to the community.

For the Labour party, citizens' rights are not just about the consumer contracts which the Government are trying to provide but about access to information and choice, and equal treatment. We consider those matters to be crucial, which is why we find the Government's hypocrisy so bad when they try to deny access and information to the individual. It was made clear yesterday in the discussion on legal aid. How can the Government say that they are interested in increasing access and information to the individual when they are taking people out of legal aid and allowing only the very rich or very poor to have a chance to use the legal system? No wonder the public are cynical about the Government's belief in the citizens charter and individual rights. For us, accountability is crucial.

Towards the end of his speech, the Minister said how efficiently next step agencies had been performing. I have a couple of statistics that contradict that. The right hon. Gentleman said that the agencies had met their financial targets and some of their standards. The quality targets for 1991 show that only 37 of 53 quality targets, 20 of 28 financial targets, and 28 of 38 efficiency targets were achieved. The Central Office of Information, the National Weights and Measures Laboratory, Vehicle Certification, and Veterinary Medicine achieved not a single quality target.

In answer to my hon. Friend the Member for Birkenhead, the Minister said that pay in the next steps agencies remained comparable. Let us take, for example, the pay negotiations with Her Majesty's Stationery Office. The Treasury target of £4 million meant that the pay settlement for HMSO workers had to be delayed for four months because the agency could not meet the targets set by the Treasury and still pay the HMSO employees the amount that they had been promised. In the end, it was able to offer only 4.7 per cent., which was not the target set elsewhere.

The Minister's suggestion hat the next steps agencies are meeting those quality targets, that the service in the next steps agencies is up to scratch or that the workers are receiving a fair wage when they are taken out of the direct national civil service is belied by the facts.

The subject of ministerial accountability for next steps agencies has been discussed in the House on numerous occasions. The thousands of letters that Opposition Members receive about disability living allowance problems are legendary. I received a wonderful letter dated 12 November about a constituent in South Bank in Cleveland. We wrote to ask for compensation or an apology from the DLA agency and, after months of delay, that benefit agency finished its letter by saying: Would you please convey to Mr. and Mrs.…my sincere apologies". That is the degree of direct communication between the Department and individuals. If that is the quality service in next steps agencies which the Minister mentioned, the delays in which affect people surviving on minimal benefit under disability living, no wonder Opposition Members are cynical.

If the Minister is committed to quality public services, why cannot he understand—anybody in the private sector will tell him—that, when there is low staff morale and a constant air of uncertainty in an organisation—a sword of Damocles hanging over civil servants' heads day in and day out—we cannot achieve high quality services and encourage people to work efficiently. It undermines much of the good work that has been done in the civil service and civil servants' desire to improve the quality.

The Minister also discussed local authorities and, where contracting out had taken place, how the Audit Commission and the Institute of Local Government Studies had said that they had met their financial targets and therefore things were looking great. May I give some statistics which show that, although they may have met their financial targets, the quality of service that they offered was so poor that many of their contracts had to be cancelled and the service taken back in house.

For example, in the building cleaning section, 39 per cent. of contracts across local authorities are held by the private sector. There have been problems with more than a quarter of those contracts, leading to almost one in 10 of them being terminated. That compares with only 3.5 per cent. of the in-house contracts being terminated. In catering, the figures are similar, with 20 per cent. of contracts held by the private sector, a quarter of which have been terminated. Only 9 per cent. of contracts in the school meals service are held in the private sector, and there have been problems with almost half of that 9 per cent. Of the in-house contracts—the majority—only four were terminated. Some 28 per cent. of refuse collection contracts are held by the private sector, and there have been problems with 40 per cent. of them, compared with problems with only 12 per cent. of those awarded to in-house contractors.

With such a record, I do not know how the Minister can say that local authorities have delivered a quality service. Contracting out has produced not quality services but the exact opposite. In answer to a question from the hon. Member for Upper Bann (Mr. Trimble), the Minister said that certain services would never be contracted out or privatised. He said that services relating to security could fall into that category.

Security in the Ministry of Defence has been privatised. It started as far back as 1980. By 1988, the MOD had issued 16 contracts to guard 44 sites. They included—as I am sure the hon. Member for Upper Bann will remember—the Royal Marine barracks at Deal, where Reliance Ltd. was responsible for security. The IRA bombing in 1989 resulted in the deaths of 11 people. In the aftermath of that bombing, a House of Commons Select Committee report finally forced the Government to review the policy of privatising security. The Committee found that there was too high a turnover of staff", and it identified low pay—to return to the issue raised by my hon. Friend the Member for Birkenhead—as a particular problem contributing to the breach of security. That is an example of a sector that the Minister said might not be privatised but where contracting out has produced unsatisfactory security arrangements.

Elsewhere in central Government, security is still being contracted out, despite the repeated experience of security companies failing to vet employees properly. The West Midlands police found that 20 per cent. of Burns International's applicants had criminal records. If we continue to privatise and contract out services when there are difficulties of low pay and poor security—as shown by the examples that I have given—we shall clearly face problems in obtaining the sort of services to which we are entitled.

Another example that the Minister gave in response to my hon. Friend the Member for Glasgow, Govan (Mr. Davidson) was computerisation. The Minister gave cases involving the many contracts that go out to external companies because the in-house computers are not big enough to deal with the demand. Electronic Data Systems was given contracts to run two of the huge new social security computers in 1989, although it had previously been sacked from the English, Scottish and Northern Ireland national boards for training nurses. The English board director said that a five-year contract worth £250,000 was cancelled because we were unable to test the costings given to us by EDS and couldn't tell if we were getting value for money. If we look in detail at each of the examples given to us by the Minister this afternoon—computerisation, security, local authorities—we see examples where contracting out has not delivered adequate services. One example not yet mentioned is that of Windsor castle. Let us consider the fire there. In preparation for the privatisation of the Property Services Agency, responsibility for fire protection of royal buildings was transferred to the royal household. Therefore, the fire at Windsor castle provides the prime example of where, if the property had remained in the public sector and the Property Services Agency, pre-privatisation, had been responsible, there might—it is difficult to prove—have been a different outcome.

The Government closed the Crown Suppliers, which was responsible for providing expert advise on fire protection—[Interruption.] The Financial Secretary to the Treasury giggles, but the Government could not privatise that service as nobody wanted to purchase it, so they closed it. Therefore, the people responsible for providing expert advice on fire protection were not available. Given the record of those two organisations, I hope that the Government will reconsider their plans to privatise English Heritage, the only organisation left with the skill and ability to deal with the problems at Windsor castle.

The Minister mentioned confidentiality. My hon. Friend the Member for Workington (Mr. Campbell-Savours) spoke of the Inland Revenue, and the fear that the same confidentiality as applies in the civil service would not remain. The Minister did not mention that today. On previous occasions he has said that we are proud of the confidentiality and impartiality of the national civil service.

It would be useful if the Minister could explain the position were the Inland Revenue to be privatised. He mentioned criminal proceedings occurring "after the fact". What use is it to have confidential and price-sensitive information at the Inland Revenue if, when it is privatised, that information is then available for potential leaks to companies? In a takeover, that could make a crucial difference. It is no good stating that criminal proceedings would result, as that would be after the fact, and would be of no help to those involved in the takeover.

The secretarial and information technology services of the Inland Revenue are being put out to tender to private companies, which means that those companies will have access to the tax records of individuals and firms. A problem of confidentiality will obviously arise. Some high profile individuals and companies may have difficulty in keeping their records private.

It is interesting that Members' records are kept in a secure section—PD1—in Cardiff. It is unclear whether Members' tax returns will be privatised or put out to contract. If that section is excluded from privatisation, does it mean that the Government do not trust the private sector for Members' records but are happy to let private companies have access to everyone else's records? If Members' records are not excluded from privatisation, are Members aware that their tax and financial records are to be taken away from the civil service and placed in the hands of a private company?

Earlier today, the Minister said that he was disgusted that information on the Chancellor of the Exchequer's private finances had been leaked. I agree, but surely that provides a classic example of what can happen to confidentiality and impartiality when organisations are privatised. It is a living example on the front pages of most of today's newspapers, but it does not seem to cause concern to the Minister.

Mr. Alan Williams (Swansea, West)

That is the very point made by the unions at the Driver and Vehicle Licensing Agency. The agency's computer contains the criminal and medical records of people with driving licenses, which could be handed over to a private contractor.

Ms. Mowlam

I thank my hon. Friend as he has voiced our concern exactly. We are worried about the DVLA, which is why we have debated the issue a number of times in the House. We want to explain to Ministers that it is not simply a matter of privatisation, but involves obtaining quality service for individuals and our fears about the information that could come into the public domain as a result.

The Government are trying to skirt around another issue related to contracting out. The Chancellor of the Duchy of Lancaster did not mention it, but I am sure that his hon. Friend the Under-Secretary of State will do so when he winds up the debate. I am speaking of the recent changes in the Transfer of Undertakings (Protection of Employment) Regulations 1981, forced on the Government by the European Court of Justice.

Ministers present and their colleagues on the Committee on the employment Bill are trying to brush aside the fact that their entire market testing programme to date has sidestepped the acquired rights directive to rig the competition for contracts in favour of the private sector. The competition should be run on the basis of efficiency and best practice, but has been run on the basis of cuts in staff pay and conditions. That is why the Minister was being economical with the actualité when he said earlier that there would be a level playing field. When services have been contracted out, there has been a cut in staff pay and conditions. That is why the Government have avoided implementing the TUPE regulations. It is no good the Minister denying that.

The truth of my assertion is borne out by those people involved in contracting out who, when faced with the implementation of TUPE, have made the following comments. John Hall, the secretary of the Cleaning and Support Services Association, which represents contract cleaning companies, said of TUPE: This will make tendering totally unattractive. It is staggering news. It is probably the most serious challenge ever to our industry and we will fight it tooth and nail. Mr. Hall, who is also chairman of the Confederation of British Industry competing for quality committee, added: If this clause goes on the statute book then there will be little point in our members getting involved in public sector tendering. So it would be useful to find out about the situation with regard to TUPE. I can assure the Minister that a number of people will be taking it to the European Court if the Government try to wriggle out of it again.

On another point of clarification—my penultimate point, Mr. Deputy Speaker—I am pleased that the Financial Secretary finds that good news. I hope that he listens with as much generosity and openness when other people's jobs are put on the line as a result of this Government's policies. Those people will join the unemployment queues, and he sits there completely satisfied with the kind of policies and unemployment that this Government have brought about. I find the arrogance of Ministers like him appalling.

Mr. Ian Taylor (Esher)

On a point of order, Mr. Deputy Speaker. Have you noticed that the Financial Secretary to the Treasury has been here throughout the debate?

Mr. Deputy Speaker (Mr. Michael Morris)

As I have not been in the Chair for the whole of the debate, I cannot comment, but I understand that that is the case and I am sure that it has been recorded accordingly.

Ms. Mowlam

I readily acknowledge that the Financial Secretary has been here all the time. I did not deny that. I simply suggested that his attitude was arrogant when we were talking about people's jobs being under threat. That is a completely different point.

Will the Minister undertake this evening—the Minister skated over this point—to guarantee that there will always be an in-house bid for services to be contracted out? The "competing for quality" document failed to give this assurance and I believe that, in the interests of fair and open competition, the Minister ought to give it tonight. It was implied in Committee that, if there was an in-house bid, it would be accepted, and in order to be fair to employees in the civil service departments, if the Government goes ahead, there should be such an assurance.

It would also be appreciated if some assurance could be given that, if certain Departments are contracted out, there will be regulations to ensure that commercial interests are not involved. For example, if the present status of the Office of Fair Trading changes and it goes to a private contractor, there should be an assurance that the private contractor who gets the job could not have an interest in the work of the Office of Fair Trading. Quite clearly, such regulations would need to be put in place.

We believe that the citizens charter is part of the Government's plans, along with market testing, for cutting costs and—this is a crucial point—transferring responsibility for sometimes poor quality public services to individual managers and workers, who cannot hope to influence change on the scale required. Quality services require guaranteed adequate resources and highly motivated and well trained staff. The Government claim that the charter upholds the principle of free choice; the only principle guiding the Government is that the private sector knows best. Where is the choice for an individual who cannot change the person who empties the dustbins or the person who deals with tax matters?

The Opposition believe in the future of the public sector and in the quality of public services. We believe that the way in which the Government have handled the citizens charter is a cynical facade to cover the sustained destruction of the public sector and the wholesale transfer of many of its assets and responsibilities away from the citizen to private sector. That is not for the benefit of the citizens of this country.

7.3 pm

Mr. Michael Lord (Suffolk, Central)

I am very pleased to take part in this important debate. In a sense, the two opening speeches have summed up the dilemma. In my view, the solution to many of these problems is for us somehow to achieve the kind of efficiency that one sees in the best private companies, without necessarily going through the process of privatising those parts of government that do not really lend themselves sensibly to privatisation.

I congratulate my right hon. Friend on the citizens charter and his excellent initiatives and on much of the privatisation that has taken place so far, but sometimes, sound government, both local and central, is better than new legislation in helping us to cope with many of our problems. It is the quality of leadership and management in the public service that is crucial. Before changing structures, whether of local government, the health service or education, we ought to examine carefully why existing structures are not working—structures which until now, perhaps, have worked well and stood the test of time. As I have already said, some services do not lend themselves readily to privatisation.

The key, surely, to all this is leadership and responsibility at every level of the public service, with the Government themselves displaying those qualities as well as holding firmly to account those charged with delivering services to the public. The way in which men and women carry out their duties may be influenced largely by the leadership they are given within the structure in which they work. Perhaps some of our existing structures are now unworkable and have come to the end of their useful lives, but perhaps not. Many of them have developed and have been tried and tested, and we should give careful thought to each before changing them.

I shall give a few examples of issues which are of concern to me. The water industry has been privatised. I do not say that that is a bad thing, because I appreciate the problems in raising capital to fund much of the work that is needed. However, I am greatly concerned that enforcement, where people were polluting our waterways, was not carried out as it should have been and, as a result, many of our rivers and streams are badly polluted. Why was there not that enforcement? Why, over all those years, did the people responsible for ensuring that industries did not tip their waste into our rivers allow those industries to carry on doing just that? The responsibility lies not only with the individual who is charged with visiting those companies but with his manager and, at the end of the day, the very senior individuals in the water authorities whose job it was to make sure that rivers were not polluted. Why was that allowed to go on? Why were those responsible not brought to task?

We are now in the business of reorganising the health service. We have done that before. We had districts, which have now gone, we now have our regions and our areas. I believe that the present reorganisation will be helpful, but I want to ask one or two questions about other aspects of the health service.

I well remember talking many years ago to a consultant in the health service. He shocked me by displaying total disregard for any responsibility in his hospital for efficiency or waste—waste which he knew was taking place on a daily basis to the tune of tens of thousands of pounds. He saw it as no part of his responsibility as a medical consultant to do anything about it.

I have been particularly keen over the years to have matrons brought back into our hospitals. I wonder why they ever went. Matrons were brilliant at their job. They knew how to deal with patients and relatives, consultants and surgeons. They also kept a good eye on the efficient running of their hospital and looked out for waste. Why did they go? Whose idea was it that they should go? To a great extent, the lack of that kind of efficiency has affected our view of our hospitals and resulted in the changes that we have been forced to make.

I served on the Committee that considered the role of the health ombudsman and I was amazed at the cases that were brought before us. Often, there had been a complete breakdown in communications between doctors and patients. There was also the jargon which was used. On one occasion, we were told that the default lay with the "line manager". I made the point to the witness whom we were interviewing that there might well be line managers at Ford of Dagenham but I saw no place for them in our hospitals. That impersonal way of discussing things relates very much to the way in which people deal with each other, the kind of leadership shown in hospitals and the way in which they were organised.

In education, standards have fallen greatly in recent years. During that time, what have our inspectors, who are charged with the task of keeping up standards in schools, been doing? What have local authorities being doing all that time? Have they been doing the job that they are paid to do? I suspect not. So, because the education system is not what we want it to be, this House decides—or rather the Government decide—that drastic measures are needed to restore standards. But if the people originally charged with the responsibility for keeping up standards had done their job, perhaps the subsequent changes would not have been necessary, and many children would have had a better education.

The relationship between central and local government is extremely complicated. In the old days, it was sensible and happy; central Government decided how much local government should spend and, by and large, local government was happy to accept that money and to spend it sensibly. There was a reasonable relationship between the House and local government. Then, a few years ago, Liverpool and the Greater London Council started to behave in what the Conservative party thought was an unreasonable way. We had to take steps to change the rules and the framework, because the people who had taken control of some authorities had to be restrained.

What have we achieved so far with these changes in local government? We changed from the rates to the community charge and then from the community charge to the council tax. We are already discussing another reorganisation of the structure of local government. The basic problem remains, however. It concerns the relationship between the House and local authorities: how we trust them, how they trust us and how we work together. Unless that relationship is healthy and happy and restored to a sensible basis, no amount of changes to structure or system will bring about the sort of relationship that we want.

How much is wrong with British Rail? Is the problem its structure, or its management? I use British Rail regularly, and I think that the management of the system is what is wrong, not the system itself. How many organisations or businesses of any other kind would think of changing the structure of their organisation before being sure that the fault did not lie with the management? Now we are looking into how to make British Rail more efficient; but I strongly believe that if we change the company's structure dramatically without first having ascertained that the present one will not work much better under a different managerial system, we will do the country a great disservice. I suggest that we go slowly in this direction.

Tonight, the privatisation of Whitehall has been mentioned. It may well be a good idea. I have always thought that we have one of the best civil services in the world—it is widely respected. Perhaps it is not the most efficient of organisations, but we cannot have everything. Perhaps it is a good idea to privatise Whitehall, but for heaven's sake let us look first at ways of making our civil service much more efficient in its present form before we reach too readily for the privatisation lever.

What is the role of the Minister in all this? What is the role of our Secretaries of State in running their Departments? They have a duty to look inwards at the Departments to find out whether they can improve their running. That is part of their responsibilities.

The Inland Revenue is a good example of a body that has to be handled extremely carefully because of the confidentiality of many of its activities. It is also a good example, therefore, of why we should first try to do everything possible to make it more efficient in its present form before trying to change it radically.

The Government, they say, want to reduce legislation. They are introducing 28 Bills in this Session of Parliament —a fair amount of legislation, resulting in a lot of disruption. If changes are to be made, there will obviously be disruption; but unless something really needs changing, an unwarranted amount of disruption may be entailed. Sometimes that disruption lasts so long that one wonders whether it has all been worth it.

Although it may sound as though I am criticising the public services, I am not. We should appreciate the job that public servants do. If they are well led and rewarded, their job can be rewarding for them and they can provide an excellent service for us all.

I am conscious that I have posed more questions than I have answered. I have already said that I think that the citizens charter is excellent in principle. I do not suggest for a moment that privatisation is wrong; it is usually right. Nor do I suggest that structures must never be changed, but I do say that before any structure is changed, its leadership and management should be examined so as to ensure that it is the structure, not the management, that is at fault. Sometimes a fresh appraisal, a new management and a new approach are needed within existing frameworks. The quality of service to the public is often more likely to be improved by sound, firm government every day than by a never-ending flood of legislation.

7.15 pm

Mr. Matthew Taylor (Truro)

This is the second time in the opening months of this Parliament that I have dealt with what has been termed a flagship of Government policy. The previous occasion was the debate on the poll tax legislation; now we have the citizens charter. It may be instructive to examine the reactions to those two measures to get some idea of the reaction to the Government.

The previous Prime Minister, at the end of her time in power, had a peculiar knack of splitting her party and uniting the country against her; certainly, that is what the poll tax legislation did. This Prime Minister seems to have more of a knack of making everything grey, torpid and languid—at least until recent weeks.

In debating the flagship of the Prime Minister's Administration we have a virtually empty Chamber. The Chancellor of the Duchy of Lancaster may have been hoping for some support from Back Benchers, but not many of them have shown up to offer it, and the one speech so far by a Conservative has shown at best half-hearted support. That is because the charter has been extraordinarily narrowly focused and unambitious.

The principles behind the Minister's version of the charter are, of course, shared by all in the House. He makes a great deal of welcoming support from both sides of the House, but that support is hardly surprising. Of course public services should be responsive to consumer preferences and should meet the public's need for high-quality services—no one can doubt statements put in those terms. The issues that need to be debated concern how such a charter should be shaped, how its provisions should be delivered and guaranteed and how much real change it should bring about. Unfortunately, Ministers seem content to ignore all alternative views on those matters.

The Conservative charter has been shaped too much by Ministers and by a Government who are unprepared to fund public services properly or to back the charter with full access to information. The Government's limited agenda was epitomised in the Minister's speech tonight.

Contrary to the Government's view, most of the public take a more pragmatic view: they think that management can be improved, savings made and alternative avenues explored, but they also take the view that they need to know more than the Government allow them to know. They cannot trust Ministers to run every local service centrally. Above all, they take the view that many services will be improved only by greater investment in them. Why else did 78 per cent. of people polled during the general election campaign say that they were prepared to pay an extra penny in the pound on income tax to fund improvements in education?

In the House yesterday, the Chancellor of the Duchy of Lancaster spoke of the transformation of public services brought about by the citizens charter. In the past few days, I have had letters from constituents concerned about bed closures and the introduction of car park charges at my local trust hospital. I have heard from a friend stuck in the underground waiting without explanation while a tube simply did not move, and from others who daily have to stand on packed trains on their way to work.

A constituent, trying to collect his daughter from a railway station late at night, was unable to discover why the train was delayed. He telephoned Paddington but received no answer; he contacted the station but it was no longer staffed; and he telephoned the information bureau at Truro, but that was no longer staffed either. Eventually, his daughter arrived some two hours or more late.

I received a letter today from an elderly person who had received a warning of an overdue bill from what was formerly a public service, desperately upset by the tone of the letter. Many people have contacted me during recent weeks and months after experiencing problems with the disability living allowance unit and getting not so much as an answer to a telephone call or even a letter of explanation.

Those people will not recognise that there has been a transformation in public services; nor will the majority of people who regularly use public services, as opposed to Ministers who do not. The charter is weak on real commitment and vague about compensation schemes, because the funding is not there.

Having set the targets, what are the mechanisms for delivering them and making progress? When targets are not met, who will knock heads together or put in extra funding, and who will take decisions on what is needed? Where services prove that they cannot meet the standards set by the charter, will their funding be reconsidered? Shall we have a report in the Budget or autumn statement process telling us how the charter failures match up to the Government's investment proposals?

Some charter proposals are not funded at all—for example, the citizens charter set the response time for an ambulance to arrive at an emergency in rural areas at 19 minutes. In Cornwall, the health authority is dependent on the air ambulance even to come close to that target. Cornwall has many remote areas and, especially in the summer when the roads are choked with caravans, it would be ludicrous to expect land ambulances to reach people in 19 minutes. Everyone in the county knows that the air ambulance is vital, yet despite the fact that the Government say in the citizens charter that people can expect such a service, they will not fund it. It relies entirely on coffee mornings, fetes and other fund-raising events supported by the generosity of the people of Cornwall.

It is hypocritical of the Government to claim credit for the citizens charter when it is the charitable donations of a low-wage area such as Cornwall that delivers their pledges, not Government investment in order to bring services up to scratch.

Another example of how the Government's supposed transformation of a public service, its management and the delivery of the service does not come up to scratch was the recent decision, approved by Offer, the Office of Electricity Regulation—the body which is supposed to protect the ordinary public—to increase electricity prices in the far south-west by 5 per cent. and to cut electricity prices for those nearer to power stations. Businesses therefore face a 10 per cent. price differential in areas where the costs of running those businesses are already higher than in most parts of the country.

Not only are people suffering from that increase, but when I raised the matter with a Minister at the Department of Trade and Industry, he was not even aware of it. When Conservative Members of Parliament from the south-west told the Prime Minister that their seats were at risk to the Liberal Democrats because of that decision, he did not know what was happening.

The transformation in public services is not an improvement. All that has changed is that things get worse and Ministers and Prime Ministers no longer know what is going on in the basic services on which people rely in their homes and businesses.

The basic elements of a good service may be obvious, but to what extent did Ministers consult to discover which aspects of services people felt were most in need of improvement? Too much of the early round of the citizens charter consisted of asking Ministers and civil servants what targets they should be setting, not asking the people on the receiving end what they needed, be they suffering from a disability, in education or the consumers of a service.

Have the Government insisted, Department by Department, on proper, early and responsive consultation with the users of public services in future before setting the charters and updating them? Too often Ministers have answered the questions themselves, guided by their own ideological assumptions about what people ought to want and ought to know, not what they want and what they want to know.

An example of that is the school league tables. Did Ministers ask parents' representatives what kind of information would be useful to them in choosing a school for their children? I do not mean at a meeting of the Conservative supper club or at a Conservative fete or raffle. Did they comprehensively and rigorously consult to discover what people wanted?

Parents point out that exam results are not the be-all and end-all. They are concerned about the atmosphere in a school, the quality of the facilities and class sizes. Above all, they recognise that the social background of pupils will have an impact on examination results, making comparisons of raw results difficult or even meaningless.

Information is a good thing, but it must be adequately provided in the form which people want and in which they can use it. The Audit Commission has shown that value-added league tables can work, but the Government have still made no pledge to publish such information in a form which will be readily usable. They tell us that parents will be able to obtain the information from the tables. The Government could not even get the data in the tables right, so how do they expect parents to extract that information'? The Government design systems too much to suit their own political priorities and not enough to suit those of the consumer.

That brings me to an essential point in the process. Ministers like to stress the importance of information, but they must be prepared to accept the pressing need for a freedom of information Act. Citizens are free only if they have rights of access to information at their determination, at their choice, not merely to information that Ministers choose to deliver to them.

As I said yesterday, in the documents that we now have, the Chancellor of the Duchy of Lancaster is reported to have pressed his colleagues, Alan Clark and the noble Lord Trefgarne, to make available to the public information on the reinterpretation of the guidelines governing Iraqi arms sales, but that advice was not followed. The Minister lost his argument.

Now that he is in a stronger position, he should be pressing the Government for a freedom of information Act. Such legislation would have made it unnecessary for us to rely on him in his losing battle or on the chance decision of a judge in court to make the information available. Above all, individuals would have been able to rely on the legislation in order not to be sent to prison when not only were they not breaking the rules but they were being encouraged by Ministers to act as they did.

For a Government to hail the citizens charter as a flagship policy yet to refuse to give the public the basic entitlement to information that a freedom of information Act would provide, suggests once more that the citizens charter is shaped more by what Ministers decide that people should know, rather than what the public want and need to know.

The Government are repeatedly criticised for their changes to legal aid and for tackling the problem of lengthy cases and the costs to which they give rise not by reforming the system, to make it easier to obtain access to justice, but by cutting back finance to limit the numbers who can hope to have any chance of enjoying justice in the first place. The question is not whether a public or private service, or public individuals or private individuals, are involved. Everyone should be able to seek redress through the courts without being financially blocked. We hear no complaints about that from Ministers with responsibility for the citizens charter.

I do not deny the need for an efficient and value-for-money civil service; nor do I deny that there can be real value in market testing, but it must be used with discretion—on that, the Minister is woolly and unclear. Neither he nor anyone else has expressed concern about confidentiality within the Inland Revenue, yet everyone accepts its importance because there can scarcely be an area of government where confidence in the security of information can be more important to the ordinary person.

Only today, we saw how unreliable confidentiality can be in the public sector. I was appalled when I saw the front page of The Sun this morning, but not because of the Chancellor of the Exchequer's actions. I overheard one hon. Member—his identity and party do not matter—say,"Mind you, it looks like his account is in pretty much the same state as mine." I suspect that is the general reaction—but most members of the public would not expect to see such details about themselves on the front page of The Sun and repeated on the front page of the Evening Standard tonight.

I do not suggest that any privatisation will necessarily undermine the charter's confidentiality clause, but confidentiality is crucial in the case of the Inland Revenue—and, as there is no problem with that Department, if it is not broken, why try to mend it?

There is a silly continuing debate about who first thought of the citizens charter. My right hon. Friend the Member for Yeovil (Mr. Ashdown) published his book, "Citizen's Britain", and then Labour and the Government published their charters. They are merely different interpretations of party interests in serving the system better. My right hon. Friend's book came first, but we should not make anything of that.

Different views are expressed in the House about what should be done. The Government are market-orientated and tend to assume that if something is market-tested or privatised, it is likely to become better—unless someone can prove otherwise. Probably, the proof of that pudding will only be in the eating.

Members of Labour's Front Bench—perhaps because civil service trade unions are a little too influential—tend to protect the status quo and the public sector. Inevitably perhaps, my party tends to call for more root-and-branch reform of the way that our democracy works. It is not just a question of localising and decentralising, in which I support Ministers. It is a question of giving ordinary individuals real political control, of decentralising political control as well as management, in both central and local government, as Tower Hamlets has done with its neighbourhood councils; of giving the public more control—not of privatising services but of democratising them; and of not having schools opting out of local democracy but giving them even more of it and of maintaining local democratic control over those schools.

It is a question, too, of a far-reaching root-and-branch reform with a Bill of Rights, so that the public can have real access to justice and freedom of information. That is the kind of citizens charter that we need and the kind of citizen's Britain that we need—but it is the kind of agenda that the Government signally fail to address.

7.34 pm

Mr. Gyles Brandreth (City of Chester)

The hon. Member for Truro (Mr. Taylor) referred to the number of right hon. and hon. Members present in the Chamber, but omitted to touch on the quality. Were the Liberal Democrat Benches stuffed to overflowing, they would not present quite as much intellectual firepower as my hon. Friend the Under-Secretary of State for the Civil Service, seated alone on the Government Front Bench. Throw in the Whip, my hon. Friend the Member for Sheffield, Hallam (Mr. Patnick), and add my right hon. Friend the Chancellor for the Duchy of Lancaster and one is talking about a veritable All Souls on wheels.

I would not throw myself into that intellectual cocktail, but it is worth recording that the last occasion on which I spoke in the presence of my right hon. Friend the Chancellor of the Duchy and my hon. Friend the Under-Secretary of State was a quarter of a century ago, when sitting at our feet admiring us was the President-elect of the United States. He went west, and it worked out slightly differently for him.

The civilised nature of this debate might suggest that there is no real division between the two sides of the House, but I suspect that there is—despite the courtesies that pass to and fro. Opposition Members give the impression that they are determined to see the worst in everything, whereas my right hon. and hon. Friends and I are determined to bring out the best, particularly in our public services.

Since the arrival of the citizens charter, Opposition Members have been cynical at worst, sneering at best, and grudging with their praise. Perhaps they are irritated because, having thought of it first, they were not quick enough off the mark in making the public realise that, or perhaps because we thought of it first. That is a foolish game to play.

More seriously, perhaps Opposition Members are irritated that ordinary people believe that the charter stands for something important. The Opposition's patronising attitude towards the charter annoys those who use it not simply to obtain a better level of service for themselves but to deliver better services to others.

The charter and the new office that it creates will, for the first time, offer accessibility, courtesy, punctuality, and openness—all central to the agenda of public service. Opposition Members dismiss the charter as gloss, public relations, and hype—not realising that those who use our public services are crying out for higher standards, and that the providers of our public services want to do a better job. Many of them welcome the challenge that the charter presents, and are proud of the charter mark.

I have long wondered why there is only one Monopolies Commission, so I warmly welcome the fact that public bodies having that monopolistic status—such as the Benefits Agency and the courts—are to be confronted by a series of ever more stringent standards, designed to deliver the best service and value for money. Being treated courteously and quickly by a named official is not trivial but a fundamental change of approach. Standards are important, but so are incentives, and for half a million civil servants now to receive performance-related pay is as it should be.

The good news is, all that is begining to work. After yesterday's statement by my right hon. Friend the Chancellor of the Duchy, I mentioned that I happened to be the grateful recipient of a refund from British Rail after travelling on a severely delayed train. Of course we would all prefer our trains not to be late; but the refund not only compensated me completely for the money that I had spent and lost, but will help, cumulatively, to concentrate the mind of British Rail.

At this point, the Opposition will no doubt cry—certainly they should cry—that the answer lies in further investment. So it does, but it does not inevitably and solely lies in further cash investment. Investment is also possible in terms of better management, better practice and better service.

The British Rail passengers charter, published in March —happily, on my birthday; I see the whole thing in personal terms, and the joy of the citizens charter is the way in which it relates to the citizen as an individual—is just one part of a package of measures designed to make life easier for the rail traveller. The targets have been set; performance is being monitored, and the results are being published; fares are being adjusted to take account of different standards of service on different routes.

Previously, such disciplines have been conspicuous by their absence. It is no use Opposition Members saying that everything is all right as it is. Without the charter, the standard to which I have referred would not have been introduced. Under the charter, British Rail has introduced the standards of reliability and punctuality that passengers should be able to expect. Every four weeks, as part of its "track record" initiative, British Rail is publishing up-to-date performance figures. The results show that, while many routes are meeting their targets, some are still failing to do so. On routes where British Rail continues to under-perform, season ticket rebates of up to 10 per cent. may be triggered by the charter.

The principles of the passengers charter are to be extended in the future: British Rail has now committed itself to publishing conditions of carriage that are fairer, simpler and easier to understand, and the 1993 reliability and punctuality standards for Inter-City, regional railways and Network SouthEast will be published this month.

I should like the passengers charter to be extended to cover the quality of railway stations, as well as services on trains. The conditions in ticket offices, waiting rooms and public lavatories are often an absolute disgrace; perhaps, in the fulness of time, the charter will get to grips with that. Incredibly, the ticket office at Chester station—where I shall be in a matter of hours—is currently located in a Portakabin. That is not a temporary measure; it is to remain there for a couple of years. Would hon. Members fly on an airline that made them buy their tickets from a nissan hut? No: they would feel a certain lack of confidence about the validity of their tickets.

The city of Chester is historic; it is the jewel in the crown of the north. [Interruption.] Forgive me; it is the jewel in the crown of the country. We may have to wait for the privatisation of British Rail for a solution to the problem—although I prefer to think of it as private investment in the railways. No railway station that had benefited from private investment, and from the attitudes that are prevalent in, say, the British tourist industry—attitudes that should be prevalent throughout public services—would allow the lavatories and ticket office at Chester station to remain in their present condition.

The parents charter is another of the successes of the citizens charter movement. In England and Wales, school examination results are now published, and comparative tables showing examination results in local secondary schools are now being made available to the parents of children who are about to transfer to such schools. From autumn next year, national curriculum results, truancy rates and the routes taken by pupils when they reach school-leaving age will also be published. Already, parents are receiving written reports on their children at least once a year; they are also reminded of their right to appeal if they are not successful in their choice of school. School prospectuses and governors' reports must now include examination results and truancy rates.

I am delighted at the breadth of the welcome for the publication of the tables. Noting the approval of The Guardian and that of the hon. Member for Macclesfield (Mr. Winterton), we begin to wonder whether the Government are on the right track; but, given that all the parents to whom I have spoken also approve, I realise that the Government certainly are. I was also delighted to read in today's press that the Opposition are apparently now back-tracking in their objection to the league tables. At least they are consistent in their back-tracking: I commend them for that.

The Opposition's earlier attitude was extraordinarily patronising to parents, who understand full well that, although examination results constitute a fundamental test of a school's performance, they are not the only test: a range of other performance indicators contribute to the overall picture. I hope that, as the parents charter progresses, those other indicators can be developed more fully. Inevitably, the cultural and the sporting life of a school will be involved. Let me declare an interest as chairman of the National Playing Fields Association. Such aspects as the number of well-used school playing fields are elements of the equation that adds up to a successful school. I hope that we shall also be able to develop performance indicators in relation to a school's commitment to the community, careers advice and further education advice, and that parents will gain easy access to those indicators.

I know full well that parents in my constituency will not only look at the league tables, but visit the school to which they intend to send their children and look at it in the round. Let me cite two schools in particular. Blacon high school has made a substantial contribution to technical education; it also has a wonderful team of handbell ringers. Currently that is not to feature in the league tables, but in time, if we can develop the right kind of indicators, we shall be able to incorporate it. Similarly, Bishops high school, in my constituency, has a marvellous community library. Its role as a community school is very important to it: the school library is shared with the community at large.

The White Paper that was published yesterday contains much encouraging material. It is, moreover, a stylish publication, featuring good English and clarity of presentation, which is important. It seems that putting over information in an accessible, clear way is now dismissed as gloss and hype, which is a pity. So much of t he paper is good that it is difficult to know what to highlight. Personally, some people might wish to highlight the various commitments in relation to the Inland Revenue—which, I must confess, wants to take more from me than I earn, and is writing to me from a variety of addresses with a series of different but equally indecipherable signatures.

I share the concern that was expressed earlier about confidentiality. If we cannot trust our bank, it is a little depressing. I have read the scurrilous stories about my right hon. Friend and flexible Friend the Chancellor of the Exchequer. I must say that I do not believe them for a moment—but, if they were true, how marvellously courageous my right hon. Friend was last night in voting with Conservative Members who decided to support the pay freeze. A man in those personal circumstances has a chance to offload his own problems with a single vote—and what does he do? He thinks of others first.

Although I speak in a slightly jesting manner, there is a serious undertone to this, because some 90 Opposition Members voted for a wage increase at a time when wage restraint is being urged on those in the public sector and forced on those in the private sector by the recession. It is a serious issue, particularly in the light of this afternoon's statement on the standard spending assessment.

Mr. Davidson

How many other sources of income does the hon. Gentleman have, and how much do they amount to?

Mr. Brandreth

They are negligible. Since becoming the Member of Parliament for City of Chester, I have devoted myself completely to my role as a Member of Parliament. If the hon. Member were here as often as I am, he would know that I have no time to be anywhere else but here or in my constituency, where I am committed to being a full-time Member of Parliament—fortunately, with experience from elsewhere, which I hope helps to inform my judgment.

As a constituency Member, my greatest concern is about the Benefits Agency. I am pleased that it published its customers charter at the beginning of the year. It sets out minimum national targets, including, for example, the fact that income support claims should be cleared in four days, which is down from a target of five days for the year 1991–92; that 65 per cent. of child benefit claims should be cleared in 10 days; and that 60 per cent. of family credit claims should be cleared within 13 days.

By the end of 1992, each of the Benefits Agency's 159 districts will display local targets, standards and information on performance achieved against them. Its annual report will be available at every local office. I shall study that with interest and concern, because although those standards are commendable they still are not good enough by any manner of means. I hope that it is an on-going programme, because we need to jack up standards each year.

The Benefits Agency charter commits the agency to telling customers about their appeal rights each time a decision is made about a benefit, explaining that customers who have a complaint about the service they receive can contact the customer service manager, who will respond within seven days. It has set a target that at least 85 per cent. of customers should say that they found the service satisfactory or better. I do not think that 85 per cent. of customers in my constituency are yet finding the service satisfactory or better, but I am glad that the standard has been set and I hope that we can achieve it, sustain it and then improve on it.

The major development outlined in the Secretary of State's statement yesterday and amplified today is the extension of market testing. This obviously must make sense. We want the highest standards and best value in all our public services, and all that market testing means is to test a particular service in the market to see whether it can be done better. I did not understand the semantic by-play that was going on earlier, because the issue seems quite simple: if an agency or department is delivering the goods, it has nothing to fear. If it is not, let us find something that can.

The list of Government Departments where market testing will take place, which was published yesterday, is very impressive: the Ministry of Agriculture, Fisheries and Food, Customs and Excise—I was delighted to see that —the Ministry of Defence—I was delighted to see that; we have plenty of opportunities for it in Chester—and the Department of National Heritage, where several items caught my eye, such as the national lottery. The lottery will obviously be handled most effectively by an independent agency with the right guidelines. There will be forms, a contract will be agreed and the standards will be established. All we are attempting to do is test it against the market to see who can deliver the goods most satisfactorily in terms of quality and price.

I was pleased to see the royal parks and historic royal palaces mentioned in the list. The monarchy was not listed, although it has little to fear, as I doubt that another team could do the job more effectively or could provide better value for money.

The Labour party has an enviable record for changing its mind on almost every public service reform introduced by the Government. I think I am right in saying that it opposed the next steps agencies, yet now its leader supports them, although I was a little confused by what the hon. Member for Redcar (Ms. Mowlam) said this afternoon. It used to oppose parental choice, but now it claims to back it. Last week, it opposed the publication of examination results, but this week—at least according to the news report that I read this morning—it now supports them.

I wonder how long it will be before Opposition Members drop their objections to market testing. There was a little semantic by-play this afternoon, leaving the options open, but perhaps the hon. Member for Vauxhall (Ms. Hoey) will clarify that. It would be wonderful to have a simple yes or no on whether Labour agrees with market testing.

It is understandable that some people are frightened of market testing. People are often frightened of the real world. I understand that and sympathise because I come from a family of good public servants. My mother is a teacher. I have a sister who is a teacher, another sister who is a nurse and a third sister who is a social worker. I have a sister-in-law who is a teacher and a brother-in-law who is a civil servant.

Mr. Waldegrave

Not more!

Mr. Brandreth

This is beginning to worry my right hon. Friend. Half a dozen members of my family are on the public payroll—and now me, too. A -magnificent seven" of us are living off the state. For us, the funds continue to flow in. and with any change we feel threatened.

I mentioned the threat that was clearly felt by the 90 Members who decided last night to vote against a pay freeze, despite what people are feeling all over the country and the effect that it might have if the example were followed in local authorities, which have been given a 3.7 per cent. increase. Seven tenths of local government expenditure goes on salaries, but if authorities keep to the guideline of up to 1.5 per cent. that will not force cuts on anybody. But cuts will be forced if people follow the example given by Opposition Members, including, I believe—I am ready to be corrected—Opposition Front-Bench spokesmen, who voted to put their own snouts in the gravy at a time when restraint is called for.

A survey of Members conducted at the last general election showed that 79 per cent. of the new intake had no experience of business or manufacturing. They were teachers, social workers, lawyers—dirty work I know, but somebody has got to do it—journalists, trade union officials and political researchers. It is a pretty depressing litany and we have to break the mould. We must confront the real world, which is what market testing is all about.

We must break the mould and cope with change, because without it and without being ready to confront change, we shall not achieve any improvement.

I have a distinguished—I use the word nicely—forebear by the name of Jeremiah Brandreth, who was the last person to be beheaded in this country for treason. He was executed at Derby on 7 November 1817. I do not believe that my ancestor was guilty of the sedition with which he was charged, but I must share with the House the family secret that he was a Luddite. He was known as the hopeless radical; it is a funny feeling knowing that his soul descendants are on the Opposition Benches—the other side. That is why I have that nice familial feeling tonight.

My ancestor was a Luddite; he could not cope with change. There are people—sadly, they include Labour Members—who believe that we should go on doing things exactly as we have always done them, simply because they have always been done that way. Unlike Jeremiah Brandreth, I believe in change. In Lord Liverpool's day, those who were locked in the past may have been executed; happily, today we have a much more civilised approach. We call it the citizens charter.

8 pm

Mr. Hugh Bayley (York)

We were promised quality rather than quantity from the Conservative side tonight, but we seem to have had a fair amount of quantity from the hon. Member for City of Chester (Mr. Brandreth).

I was glad to see "The Citizen's Charter—First report: 1992" yesterday. One of my first contributions in the House after being elected in April was a call for the Government to follow York city council's example in being the first public authority not only to produce a citizens charter but to publish an annual report on its successes and failures in implementing its charter standards. At that stage I was not given a firm assurance that that would be mirrored by the national charter, so I am delighted that only six months later the report has appeared. I wish that all Cabinet Ministers would listen as readily to my suggestions, and I congratulate the Ministers concerned on producing such an important part of the citizens charter initiative.

I was interested in one comment made by the Chancellor of the Duchy of Lancaster when he introduced the White Paper yesterday. He said: more than 90 per cent. of the 150 or so initial commitments"— I find it slightly odd that he should talk about "150 or so" commitments rather than a precise number. The right hon. Gentleman said: more than 90 per cent. of the 150 or so initial commitments in the citizens charter White Paper have been met or are in hand".—[Official Report, 25 November 1992; Vol. 214, c. 869.] I ask the right hon. Gentleman how many commitments have been met and how many are in hand. I would gladly give way now if he wished to give me the information—or perhaps the question will be answered by the Minister who sums up.

I ask that question because I carried out my own survey, if that is how it should be described, by asking parliamentary questions in the summer, on the first anniversary of the publication of the citizens charter. I wanted to find out how many of the 10 key promises which the Prime Minister made in introducing the charter to Paliament on 22 July 1991 had been fulfilled. I found that only one had clearly been achieved one year after the charter was published. That achievement, which has already been mentioned, was to reduce the waiting time for driving tests to a little more than five weeks. The Chancellor of the Duchy of Lancaster said earlier that in 1988 the waiting time was 13 weeks, but that by the time the charter was published it had fallen to seven weeks. Since publication, the time has been driven down by a further two weeks.

I do not belittle that achievement, but I wish that such demonstrable benefits could be shown in more of the areas in which the charter made promises. To say that a matter is in hand is not the same as to say that what has been promised has been done. It is a little like saying, "My cheque is in the post." It is promise rather than fulfilment.

Shortage of time prevents me from commenting on all the areas covered by the charter, but I have picked out one—the health service and the patients charter—partly because I am familar with the subject and partly because the Chancellor of the Duchy of Lancaster was Secretary of State for Health when the charter was published.

"The Citizen's Charter—First report: 1992", which was published yesterday, lists 10 key rights and entitlements under the heading of patients and the patients charter. I refer back to the document published a year ago, the patients charter, which listed 19 key rights and entitlements. What has happened to the other nine?

Among the missing rights is the patient's right to be referred to a consultant acceptable to him or her. We know that the internal market now means that patients can go only where the contract is placed. A second missing right is the right to a second medical opinion. A third is the right to ensure that everyone, including people with special needs, can use services. A fourth missing right is patients' right to have their community care needs settled before being discharged from hospital. A fifth is the right to have one's complaint, if one has cause for complaint, dealt with promptly. That was one of the three key new rights introduced in the patients charter—but it does not appear in the one-year report.

Other rights which appeared in the patients charter have now been subtly and quietly watered down. The patients charter said that patients should be guaranteed admission for treatment by a specific date. The new document says that the patient should be guaranteed admission to hospital for virtually all treatments by a specific date". That is a subtle introduction of new words which allow some treatments and conditions to be exempted. Why has the commitment been watered down, and why are the reasons for watering it down not spelled out? Why is the public sector's performance against the standards set in the "150 or so" commitments not spelled out? It is spelled out for some but for many it is not.

For instance, the patients charter promised that out-patients would be given a specific appointment time and be seen within 30 minutes of that time. In the summer I asked the Secretary of State for Health to find out in how many cases that promise was being met. The answer which I received was: This information is not collected centrally. Another patients charter promise was that patients would be seen immediately for an initial assessment on arrival at an accident and emergency department. I asked the Secretary of State for Health what proportion of patients were seen when they arrived at an accident and emergency department within five minutes, within 15 minutes and within 30 minutes. The answer which I received was: This information is not collected centrally. I asked about the commitment in the patients charter to the effect that your operation should not be cancelled on the day you are due to arrive at hospital." [Official Report; 13 July 1992; Vol. 211, c. 516 and 514.] I asked the Secretary of State what proportion of patients had their operations cancelled on the day that they were due to arrive in hospital. I received the same answer—the information was not collected centrally.

The patients charter says that the patient has a right to have his complaint dealt with promptly, so I asked what proportion of complaints from patients were dealt with within one week, within one month, within three months or within a longer period. Again, the answer was that the information was not collected.

The patients charter says that health authorities should ensure that services can be used by everyone, including people with physical disabilities, by ensuring that buildings can be used by people in wheelchairs. That is a laudable aim—so I asked the Secretary of State what proportion of NHS buildings were accessible to people in wheelchairs. I was told that the information was not held centrally.

I could cite many more examples in which the answer to such questions is, "Dunno, mate." I ask the Chancellor of the Duchy of Lancaster how he could be so sure when he told the House yesterday that 90 per cent. of the promises in the citizens charter were being met, when information on so many of them is not collected by the Government. How does he know?

I do not want to be uncharitable, so I point out that some of the standards are being met. The driving test standard has been met. The redundant workers charter promises that 80 per cent. of claims for redundancy payments will be paid within 14 weeks. I checked and found that the figure was 84 per cent. The charter standard has been out-performed. Some standards have been massively out-performed. Ninety per cent. of work permit applications were processed within eight weeks, against the charter standard of 75 per cent. In this area, it seems that the Government are taking a leaf out of Joseph Stalin's book. He managed dramatically to out-perform all his five-year plans by setting standards that were easy to achieve.

All the evidence tells us that if, as in the case of the work permit office, the Government set the standards low, it pays to set standards low. If, perhaps under pressure from a Minister, a civil servant is tempted to aim high, he can always get off the hook. Either the data are not collected so that no one can measure success or failure against published standards or, if the data are collected, the findings are not published in the annual report on the citizens charter. If the Government are really on the hook, the wording of a promise can be changed. The promise, for example, that patients will be treated within a certain time becomes a promise that patients will receive surgery within a certain time in almost all cases.

The golden rule seems to be that people can do what they like as long as they do not let on. If they do not let on, nobody will ever notice, they hope. As Members of Parliament, it is our job to notice and to hold the Government to account, as we are doing tonight. It is noticeable that there is no Select Committee that deals with citizen charter issues. The separate departmental Select Committees can examine the promises and the performance of individual departments, such as the Department of Health and the Department of the Environment, but there is no point at which the strategy of the citizens charter is open to scrutiny in the way that the work of individual Departments is. Why are the Government so shy? What have they to hide?

8.12 pm

Mr. Edward Garnier (Harborough)

You may remember, Mr. Deputy Speaker, from your days at school that there was an English king of whom it was said: Now is the winter of our discontent Made glorious summer by this sun of York. To a certain extent, it is a pleasure to follow the hon. Member for York (Mr. Bayley). I prefer to say that the sun has come from Chester this evening. The speech by my hon. Friend the Member for City of Chester (Mr. Brandreth) surpasses many this Session. I have a secret to impart to you, Mr. Deputy Speaker, in addition to those already revealed by my hon. Friend. We agreed to swap speeches before my hon. Friend delivered his speech. His speech was a tour de force and I congratulate him.

There are four limbs to the citizens charter programme: privatisation, where it is appropriate; competition, where it is possible; the devolution of decision-making; and the application of charter principles, about which my hon. Friend the Member for Chester spoke so eloquently.

There has been a good deal of progress in privatisation since 1979. Some 46 major activities and many smaller ones have been privatised, to the benefit of the British public. That scheme of things has caused annoyance, dismay and alarm on Opposition Benches. There is alarm and dismay because, as the programme unfolds year by year, Opposition Members see the good sense of it and they see the poverty of their own arguments levelled against them. Why should the British public be imprisoned by monolithic, state-run organisations? The Government —the state—had no business being involved in so many of the activities that have now been privatised. I am sure that many of my constituents welcomed the privatisations of the past few years.

We know that there are to be further privatisations, and we welcome that in matters in which the Government have no proper role and in which there is no constitutional need for them to be involved. Why on earth should the Government—the state—be involved in the running and day-to-day management of an agency such as Companies House? It is ludicrous and unnecessary for the Government to be involved in such detailed work. The work could clearly be covered by an agency and I trust that it will be before long. Other examples are the docklands light railway, the drivers and vehicle operators information technology department, the National Engineering Laboratory, Parcel Force and the vehicle inspectorate. They are all areas of national life that are capable of being dealt with by non-governmental agencies. The sooner they are, the better they will be.

My hon. Friend the Member for Chester has dealt eloquently with the concept of market testing and I do not propose to add to what he said on competition. The third area is the devolution of decision-making, which, in essence, means taking decisions closer to the customer. As my right hon. Friend the Chancellor of the Duchy of Lancaster said, in instances where, for whatever reason, there is no choice but public ownership and no chance of competition being applied, the third of the four elements must come into play.

Our role must be to devise and apply disciplines that, in their own way, are no less demanding than open decisions. Why should we not bring to the public sector the disciplines of the private sector? As my right hon. Friend said, the system that we have used has been the creation of next steps executive agencies at arm's length from Whitehall. I understand that such agencies are increasingly, although grudgingly, being accepted as the proper way forward by Opposition Members.

The next steps programme, which was initially opposed by the Labour party, has revolutionised the organisation and management of the civil service. Some 76 agencies have been established and a further 27 candidates have been announced. Half the civil service is already working along next steps lines. I very much look forward to the day when the other half does the same.

The fourth element of the proposals is the citizens charter. The charter brings to bear on the public services a range of additional disciplines including the monitoring of performance and the publication of results, and consultation with service users to ensure that services are geared not to the convenience of the providers, but to the needs of the public. Why should Opposition Members fear that? Surely we are here to provide the public with a service and not a straitjacket. The third discipline is the introduction of truly independent inspection procedures so that public services are assessed not only by expert professionals, but by members of the public who use and rely on those services.

An area of the citizens charter of which I have some knowledge from my work as a lawyer is the courts charter and its application to the criminal and civil justice systems. Hon. Members may have had a chance to glance at the first report which deals in some detail with the citizens charter's application to the criminal and civil justice systems. Those of us who work in the justice system well know the frustration of clients, whether plaintiffs or defendants, or members of the police who are helping with prosecutions.

We know well the frustrations felt by jurors who come involuntarily to court to assist in the system of justice and of other lawyers who wish to get before the court when our case has finished. We know the existing deficiencies of the system, which the courts charter seeks to address. It will now be necessary for witnesses to be given more information before they arrive in court, and it will be essential, the charter promises, that they are kept in touch with the progress of their case on the day. That is not unfair; it is entirely reasonable and should be advanced as quickly as possible.

The courts charter also provides that arrangements should be made for vulnerable witnesses, such as elderly people, children and rape victims, to visit courts in advance of the proceedings. Going to court as a witness—be it involuntarily or voluntarily, to assist a friend—or as a party to a civil action, can be one of the most terrifying experiences for a member of the ordinary public. Imagine what it must be like for a person who is wholly unused to the somewhat Dickensian atmosphere of the High Court or a county court in a town or city far away from his or her own small town or village to have to come to terms with that strange environment and get used to giving evidence high up on a pedestal.

I have only had to give evidence once—at Wandsworth county court—and although by then I had had 10 years' experience at the Bar, I can assure the House that it was much more frightening than appearing before the Judicial Committee of the House of Lords, which I did not so long ago.

The charter also includes national targets for reducing delays in bringing cases to court, which were published last July together with details of performance against those targets. One of the great frustrations that both parties and lawyers face is the problem of listing. Often, a case listed for a particular day cannot be reached because the cases in front of it have been delayed—for good or bad reasons.

I am glad to see that the courts charter deals with that, because it seems to me that a revised and modernised system of listing, which can make use of all the computer technology now available to us, will enhance the role of the listing officer at the county court or the High Court so that we get a proper standard of efficient throughput. I fully accept that there is no justice in rushed justice. If a case requires a week, let it take a week. Equally, though, there is no justice in delayed justice. A man whose case is not reached on the day on which he expects it to be has good reason to be aggrieved and will think the less of our justice system for it. The courts charter will deal with that or do its best to do so.

Some 30 per cent. more cases have been transferred from the High Court to the local county courts, which, by definition, are easier to access for parties and witnesses. I know from my own experience of the High Court here in London that many civil jury cases, particularly those dealing with false imprisonment and malicious prosecution—cases against police forces—are now being referred to county courts in and around London, especially to the Croydon court centre. That has enabled the throughput of cases to be increased greatly over the past two years.

That procedure should be encouraged, and cases that are simple as matters of law and matters of fact—albeit important to those involved in them—should be transferred to a forum as close to the citizen as possible. I applaud the trend to move cases out of the High Court to the county court. I add to that a plea that there should be sufficient judges appointed to meet the new load on the county courts, that sufficient courts should be made available for judges to sit in and that the judges should be adequately remunerated for their work—but that may be a debate for another day.

It is essential that the greatest efficiency is brought to bear on our criminal justice system and our civil justice system. Without it, the system will crumble. Without lit, well-founded feelings of annoyance will exacerbate the frustrations that we all feel when Big Brother lets us down. It is vital that, with the Government's encouragement, we proceed rapidly towards the fullest possible use of the citizens charter throughout the system of government.

8.24 pm

Mr. Terry Davis (Birmingham, Hodge Hill)

I agree with the hon. Member for Harborough (Mr. Garnier) about one thing: I, too, have given evidence in court, arid I agree with him that it is a frightening experience for anyone to be a witness, especially in a Crown court. I have not had the experience of being dismissed or declared redundant, but I imagine that that, too, is a frightening experience. That is one of the things that the debate should be about, and I shall come back to it later in my speech.

I want to deal first, however, with the speech of the hon. Member for City of Chester (Mr. Brandreth). It is silly for Government supporters such as the hon. Gentleman to pretend that Labour Members are satisfied with the way things are and to claim that we accept low standards of performance from the civil service. The civil servants working in the city of Birmingham would tell him that it is Labour Members who are most demanding, who have the highest expectations and who set the highest standards of performance for civil servants. That is because we believe in the public service. We want a better public service and we are entitled to ask our civil servants to perform to higher standards, just as they are entitled to say to us that, if we want the highest possible standards, we must pay respectable wages in return. That, too, is one of the things that the debate should be about.

The hon. Member for City of Chester was too easily convinced by the targets set by the Benefits Agency. I recently went to the local office of an executive agency in my constituency and discussed with the local manager the performance targets that had been set for that office. Of the nine performance targets, seven showed no improvement this year over last. The other two showed a deterioration. In other words, the target for the current year is worse than the performance last year. When I asked that manager, "How on earth have you got away with this? How have you managed to convince your boss that you should have seven targets that are no better and two that are worse?", he told me, "Mr. Davis, I am better than the national average, so of course my boss lets me slip back a couple of performance indicators." That is how targets are operating locally.

Market testing has nothing to do with trying to get the best out of the civil service or with improvements in its quality. It is not—as the hon. Member for City of Chester said it was—something to do with getting things done in a better way. Market testing has nothing to do with the improvement of service; it has to do with two Government objectives, the first of which is cutting costs—reducing the cost of the civil service. As most of the cost of the civil service goes in civil servants' wages—it is a labour-intensive service—one can only reduce that cost by reducing civil servants' wages. It has nothing to do with measuring the human cost and everything to do with cutting the financial cost. We are talking not about doing things better but about doing them more cheaply.

The second Government objective is to privatise as much as possible. The hon. Member for Harborough was clear about it. He tore away the veil of the Chancellor of the Duchy of Lancaster, and I respect his integrity. He is dogmatic, and believes that privatisation is better—that things are done better by private organisations. He does not realise that, as the Chancellor of the Duchy of Lancaster says, some things may be done better in the public sector.

The reason the Government want to privatise the civil service is that they want to create profit opportunities for private firms, both large and small. Those companies care only about making a profit. It follows that, if they are to do the work more cheaply and make a profit, they must pay lower wages and provide poorer conditions for the people who do the clerical jobs and dirty jobs in the civil service. It is inevitable that the workers will be paid less and enjoy poorer conditions.

The way in which market testing will work is that the Government will market-test a particular activity in the civil service. A contractor will tender at a price which is less than the calculated cost of the civil servants who do the work at present. The contract will be given to the outside contractor, and the people who do the work will have two possibilities.

The first possibility is that they will simply be declared redundant—at the expense of the taxpayer. The second is that they will be taken over, as the Chancellor of the Duchy of Lancaster confidently forecast, by the outside contractor who wins the job. There is no guarantee that the workers will be taken over by the private contractor, or that they will enjoy the same wages, negotiating conditions and terms of employment which were so hard won by the civil service trade unions. The workers will be expected to work on exactly the same basis as so many people in the health service, who are expected to do the work that they did before the service was contracted out.

Many people who do the dirty jobs and domestic jobs in hospitals, and security guards in hospitals, are paid less than they were previously for the same work. I have met unemployed people who say that they used to work at the local hospital. They do not work there any more because the work was contracted out. They were offered a job at a reduced wage by the private contractor who won the bid.

The hon. Member for Truro (Mr. Taylor), who spoke for the Liberal Democrats, said that his party was all about giving people control over their lives. I cannot imagine anything that takes away someone's control over his or her life more than being unemployed. Being unemployed gives people no choice whatever. It is the total destruction of their personal liberty. Their status, income and everything else depend on having a job. Not only their financial resources but their psychological value in society depend on their being employed. Therefore, the Liberal Democrats should recognise that it is nonsense to tell people that the citizens charter and market testing are all about giving people control over their lives.

Some people will become unemployed; other will keep their jobs because the civil service will be forced, in the market-testing procedure, to bid and to put in tenders for work that is already done by the civil service. We have seen the way in which the Government impede that process. The Government may say that they want to see what the Chancellor of the Duchy of Lancaster always calls a level playing field. I remind the House what a level playing field is in practical terms. We have had some experience of it.

Several of my hon. Friends mentioned the Inland Revenue. When the Inland Revenue prepares in-house bids, it is required to include an on-cost to take account of the civil service pension scheme. The on-cost is 13.5 per cent. of the wage bill because the Government have calculated that the value of the pension scheme for civil servants is 13.5 per cent. Of course, the figure takes into account everybody in the civil service—not simply people on the lowest wages who do not have a good pension but those on the highest wages who have good pensions. The process is therefore weighted against the civil servants whose jobs are market-tested.

A group of typists in Bristol who are subject to market testing took the initiative and went to an insurance company for a quotation for their pension scheme. They were told that it would be 6 per cent. of their wages. That figure compares with the 13.5 per cent. that the Government make management include in the bid for the work that those people do at present. If management cannot find other savings of at least 7.5 per cent., workers lose their jobs and become unemployed. That is a scandal. It loads the dice against the people who do the jobs at present.

Another Bill is going through the House at present. The Civil (Management Functions) Bill introduces local pay bargaining and settlements for precisely the same reason as we have discussed tonight. The purpose is not decentralisation, which many of my hon. Friends support. It is to break national pay agreements and have pay agreements negotiated locally. That will enable managers to keep the work by having lower wage rates than they have at present.

Market testing is a one-way street. We never hear about market testing the other way. We never hear about the civil service being given the opportunity to quote for private work. Why should we not have public enterprise? Why should the civil service not be able to do the work it does well? If the Chancellor means what he says, he should accept that there are some things that the civil service does very well. Why should the civil service not quote for work from private companies? Apparently, that idea never crossed the mind of this dogmatic Government.

Market testing is not the only one-way street; there are others. Many of my hon. Friends have mentioned confidentiality. Indeed, some Conservative Members have made the same point. When we read this morning's newspapers, we were horrified to see the breach of confidentiality involving the Chancellor of the Exchequer. I shall not make any jibes about that. It is scandalous that the Chancellor's private affairs should be put on the front page of newspapers. I should condemn that breach of confidentiality whether it involved a Conservative or an Opposition Member. But that is not the point. The point is that there must have been a breach of confidentiality.

The Inland Revenue is not the only organisation with confidential information. The Department of Social Security has a great deal of information about individuals, their families and their relationships. The Employment Service has a similar amount of information about individuals, their families, their relationships and their dependants. All that information is at risk. It would be ridiculous to suggest that there would be leaks from all private firms in the country. We do not have leaks from all banks.

The difference is that, in the case of Access and the National Westminster bank, which owns Access, an individual citizen has a choice. If we believe that there is a risk of breach of confidentiality with regard to our Access or bank account, we can go to another bank. We will not be able to choose another Inland Revenue, regardless of whether its work has been market-tested and contracted out. There will only ever be one Inland Revenue, one Department of Social Security, one Benefits Agency and one Employment Service. Individuals have no choice between private and public or between different private firms. Individuals will go to the Inland Revenue, the social security office and the local employment office. What is more, they are required to give private personal information to those agencies and departments.

We can choose how much information we give our bank; we have no choice whatever about the information that we give to the Inland Revenue, the Department of Social Security or the Employment Service when benefits are calculated. We are required by law to give that information. All citizens and all hon. Members should he concerned about the clear risk of confidentiality shown by the experience of the Chancellor in his personal affairs.

Not only civil servants but all of us are affected. Civil servants are especially affected because their jobs are at risk. Their jobs will go as a result of market testing. That is why more than 800 typists and secretaries at the Inland Revenue—they are hardly a militant group of trade unionists—came to London today to protest about their work being market-tested and their jobs being put at risk. They are bewildered and angry, and they cannot understand why the Government are doing that to them. They have given years of service to this Government and previous Governments. Many of them have worked in the civil service for 20 or 30 years.

They have experience and proven loyalty over many years; but loyalty is another two-way street. Civil servants cannot understand why the Government are not loyal to them. The Government are prepared to sack them to get the job done more cheaply for lower wages, despite their service in the past. It is not surprising that civil servants feel that the Government have no confidence in them and place little value on their years of service. The time will come in three or four years when those civil servants will have an opportunity to say that they have no confidence in the Government.

8.38 pm

Lady Olga Maitland (Sutton and Cheam)

I listened with great interest to the hon. Member for Birmingham, Hodge Hill (Mr. Davis). I find it depressing that he scorned and jeered at the importance of trying to instil value for money and standards in the civil service, when we spend taxpayers' money on running it. I find it rather cheap that he should deliberately go in for scaremongering tactics, suggesting that jobs are at risk because contracts are being put out to the private sector. He suggests that people will automatically be paid less. Jobs put out to the private sector mean more jobs in that sector—it is merely a shift from one to the other.

We must ask ourselves; who is paying for our civil service? Undoubtedly, the answer is the hon. Gentleman, me and the taxpayer. I sometimes find it galling that the Opposition totally fail to connect Government spending with the fact that all that money comes out of every working man and woman's pay packet. Let there be no doubt about the Government's commitment to cutting waste. It is a moral responsibility, and it is admirable that they have got around to it. I welcome their initiatives in that direction.

In these belt-tightening times, it is even more appropriate that we should ensure that our civil service gives value for money, in much the same way that the private sector does. It is salutary that we should have the guts and the courage for close self-analysis.

We are talking about improving public services—improving the way in which they serve their customers and ensuring that they provide value for money. Contrary to what the hon. Member for Hodge Hill said, market testing is a good way to achieve that. I find it strange that, just for the sake of principle, he is determined to knock it down.

Market testing has been a significant step forward and the Government have been working on it for some time. It is salutary that the Chancellor of the Duchy of Lancaster yesterday announced that £1.5 billion of Whitehall work is to be exposed to competition. The Government have been developing that policy for the past four years and when they began, the amount was only £25 million. We should congratulate the Government on extending that commitment fiftyfold.

It is essential for all competing services to offer better value for money than the civil service. If work can be done cheaper outside, without any loss of quality—we set great store by quality—[Laughter.] It is true. We must use outside contractors if work can be done cheaper, as that is a far better use of taxpayers' money. The service must be exposed to competition. It has never had that pressure in the past, but the taxpayers' money now comes first.

If we consider areas where private sector companies and service users have been put in the same category, we learn a great deal. An article in the Financial Times today mentions value and the fact that tendering is good news for taxpayers, service users and private sector companies alike. It states: Yesterday's announcement that more than 44,000 jobs in the United Kingdom civil service are to be put out to tender is good news for companies that are well-placed to bid for the contracts…the prospect of almost £1.5 billion of new business in the next 10 months is welcome. But it is also good news for the taxpayer, who can expect significant savings in public expenditure—and better quality services to boot. Let us examine the services that could be dealt with in that way: financial services, such as basic clerical functions; audit services; payroll duties; keeping the books; and some legal services could be included. Why cannot property and estate management be contracted out? The Department of Health is relocating one of its offices to Leeds. Why not use a private firm to look after the maintenance, cleaning, heating and lighting of the property, instead of recruiting the civil service? It would be far better if the task where leased out. The Government will maintain control of what I call the hands-on function, but it will be privately managed. In that way, one can get the best of all worlds.

What about information technology? Should not the maintenance of computer hardware and programming be put out to private contractors? What about financial legal services, such as conveyancing of Government property—for example, when the Department of the Environment buys land for roads and other projects? Many companies could compete and, with the peaks and troughs in the market, the advantage for the Government is in not having to keep on full-time staff unnecessarily. They could rise to the occasion and take advantage of outside contractors. The saving on full-time employees is obvious.

I remind Opposition Members that we would be shifting civil service employees to the private sector. There is no suggestion that they would lose their jobs. Customs and Excise debt collection is another possibility, which is also subject to variations in demand. It must be more economical.

Mr. Terry Davis

The hon. Lady says that there is no question of civil servants losing their jobs and that they are simply shifting to the private sector. Is she prepared to give a firm guarantee to that effect?

Lady Olga Maitland

I am sorry, but I did not catch the hon. Gentleman's question.

Mr. Davis

Is the hon. Lady prepared to say unequivocally that, as a result of market testing, civil servants will not lose their jobs, but will simply change employers?

Lady Olga Maitland

It is simply a matter of market forces and of moving from one area to another by natural selection. That is important. It is more economical to use half the civil servants on a permanent basis and to use half in the private sector according to need; hence the need to use local solicitors.

Home Office dog training is a more quixotic area, which could be contracted out. Until now, guard dogs and dogs that sniff for drugs have been trained by civil service dog trainers. Does one need in-house dog trainers? The Home Secretary could survive very well by using an outside service, from which I am sure he would get cheaper service and, in many cases, better value.

The Ministry of Agriculture, Fisheries and Food uses the Royal Navy to mount surveillance on foreign fishing vessels which operate inside the limit. Why not use outside contractors with their own patrol boats instead? I understand that British companies are already providing such a service for companies overseas—for heaven's sake, let us use them at home.

What about engineering services? The Ministry of Defence has sub-contracted aircraft maintenance, instead of using its employees.

Catering could be contracted out. Five years ago, there were more cooks than economists at the Treasury—a strange state of affairs. Why did not the Treasury manage better and apply its financial rectitude to cookery? The answer is to contract out, put catering in the right hands and get better food, more efficient use of staff and value for money.

Why should the civil service pensions administration be considered a great sacred cow and have to be dealt with internally? The pensions work could be managed by an outside contractor. There are scores of private sector businesses providing the service for other employers. The whole pensions sphere should not be considered sacrosanct.

We can learn many lessons from the past. Where there has been competition in sections of central Government, savings have averaged 25 per cent., with no loss of quality. It is interesting to note that, when contracts have remained in-house, after close examination with outside competition, the same saving has been achieved. We must have more stringent examination of our affairs. The fact that that has not happened must mean that outside comparisons have not been made.

The Government have had great strength of character in examining the way in which we examine our affairs. They accept that we must no longer believe in the old adages about the state providing all, with other people's money being spent. We must have a more reasonable way of looking at life.

Labour Members have thrown several red herrings into the debate. For example, they talk about confidentiality. Safeguards apply in the civil service whether the work is done in-house or outside. For example, the defence industry would not flourish if the Ministry of Defence could not trust outside contractors. The code of conduct that has existed all along works very well indeed.

Why should the honesty and integrity of private sector employees be considered any less than that existing in the public sector? In many cases, a criminal offence would be committed if information were divulged, irrespective of whether employees were in the public or private sector.

I remind the hon. Member who referred to the Chancellor of the Exchequer's affairs that if the details had been exposed to the public through a leak by the Inland Revenue, a criminal offence would have been committed. Had the work been contracted outside the civil service to a contractor, my right hon. Friend's affairs would still have been sacrosanct. Opposition Members seem committed to opposing any privatising of the civil service. They are opposed to change, irrespective of reality and modern methods of working.

I remind them that we are talking not about the core work of the civil service but about its support services, so we should concentrae on the core business of the civil service, which we are good at and can conduct efficiently, and let the experts deal with what might be called the subsidiary work. In other words, let us ensure that the country gets real value for money.

8.53 pm

Mr. Ian Davidson (Glasgow, Govan)

Conservative Membes have indulged in some knock-about debating and general abuse of Labour's position. It is important for us to explain precisely what we favour, because our view has been rather parodied.

As my hon. Friend the Member for Redcar (Ms. Mowlam) said, we are in favour of rigour in the provision of public services. We want efficiency, effectiveness and economy. We are also in favour—more so than Conservative Members—of equity in the provision of those services.

We support the concepts of decentralisation and devolution of implementation and we recognise that the public services must be under constant review. We have always appreciated the need for making improvements where possible, and we are keen to ensure that new ideas and systems are applied to the public service. That demonstrates our commitment to change.

We accept that the civil service should be modernised and we want many sections of it to move away from a safety-first and cannot-do attitude. The agency system has helped in that process, and we welcome it.

While the Government claim to be engaged in an exercise to improve the public service, we are bound to be cynical about their commitment to the public sector. Many people believe that the Conservative recrod shows that the Government want to destroy the public service and cast everyone concerned with it to the vagaries of the market, apart from law and order and defence—items that go to create a strong state—and a few other sectors which they feel obliged to maintain in the public sector.

The Government make the assumption that everything should go out to tender unless, for some reason, it must stay. My hon. Friends and I do not say that everything must stay in-house. We prefer to take an objective look at where services are best provided. That is the way to determine where they should be performed.

We are in conflict with the Government on certain issues. I shall concentrate on the question of devolution as compared with contracting out. In some instances there is a discrepancy between the policy of the Government of devolving management and their determination to contract out the work done by certain agencies.

The decision whether to contract out work should be determined by whether a better service would be achieved by contracting out or by leaving the service where it is. The Government seem to have a prejudiced view and think that everything would be better done in the private sector. That has led them to try to sectionalise the work of individual units or agencies.

That has led the Government to seek to break up the work of a complete organisation, such as the National Savings bank. They then identify a section of activity, such as clerical services, cost it and make it compete. That results in the staff involved, competing for their own jobs, having an inevitable self-interest in trying to minimise the amount of work that they undertake for other sections beyond the contract that has been undertaken. There is pressure on them to have a narrower focus on what they are doing, concentrating on their own self-interest.

Managers in the public sector should be set clear targets and be left to get on with determining how best to achieve those objectives. Agencies should be examined as a whole. The managers and staff should be given an opportunity to take a realistic perspective, which does not mean artificially chopping off certain sections and contracting them out. I am not aware of staff in the private sector having artificially set targets involving a proportion of work being put out to a subsidiary, to the private sector or to the public sector. Nobody in the private sector operates in that way. People make their own decisions.

There is a contradiction between saying that targets should be established for agencies and telling people how to achieve those objectives. If the Government were genuinely committed to the principles of decentralisation and devolution, they would set rigorous targets and output figures and then tell managers, "It's your responsibility. We shall not tell you exactly how to carry out those functions."

To do otherwise is to centralise. In many ways, the Government are being more centralist than previous Governments by directing managers how to go about achieving their goals.

The process of examination and review that has been going on in the public sector over a long period—not rigorously enough, in my view—shows that the existing system can modify itself. An onus should be placed on the Government to give the existing system an opportunity to self-reform before they artificially divide work tasks.

The hon. Member for Sutton and Cheam (Lady Olga Maitland) said that she believed that all was likely to happen was that people presently working in the public sector would be moved into the private sector. That is unrealistic because, for many of the tasks now being contracted out or market-tested, the main expense is that of salaries and the main source of competition must come from people who undercut on salaries. That is a clear attempt to drive down wages and conditions of service. Indeed, it is a Darwinian approach. It is how the natural law of selection works.

Lady Olga Maitland

Will the hon. Gentleman give us evidence to back up his comments?

Mr. Davidson

Certainly. My former local authority lost public sector cleaning contracts to a private sector company solely on the ground that it undercut on wages. The hon. Lady may look puzzled, but it is true. If she wishes, I could take her to schools in Strathclyde where there is difficulty in recruiting, retaining and motivating cleaners because of the low wages that are being paid.

Many Conservative Members recognise the real difficulty. If local companies are competing on the basis of wage rates alone, in areas of high unemployment the bids —the cost of that work—will inevitably be driven down. But we end up with people who have been recruited because that was the only job available and who have no loyalty because as soon as a better job comes up, they are away. There is great difficulty in retaining those workers and the staff have no enthusiasm for their work.

If the Government insist that managers must market test, the managers involved must be left free to pick from the bids as they see fit, according to the criteria that they wish to apply. There is more to bids than cost. Local authorities have been obliged to accept bids solely on the basis of cost and have not been allowed to take quality into account. It is important that they be allowed to take multiple indicators into account when assessing bids.

Another point that I discussed in Committee was where the policy of contracting out clashes with another announced Government policy—dispersal. I am keen as are many of my hon. Friends from deprived areas of the country—areas which a Conservative Member called "the provinces"—to ensure that Government functions are transferred to our areas. We must be clear about what happens in circumstances where there is a clash between how a contract is allocated, if it is done solely on price, and the Government's regional policy.

An example was given earlier of the possibility of the Metropolitan police data processing contract going to the Phillipines, and the Minister treated it as if to say, "Oh well, that may happen." People in my area would be horrified if an enormous amount of data processing work in the National Savings bank, which is one of the largest single-site employers in the entire west of Scotland, was alloweed to go somewhere else in the world. That would have a serious effect on the area's economy. The Government must be prepared to recognise that there is a clash between their policies. I hope that they will be prepared to bear in mind my point about the importance of regional policy.

From all that we have heard in this debate, it appears that Conservative Members are biased towards breaking up the public service. We have heard, in Committee and in the Chamber today, that a process of on-going review is under way. I understand that an organisation will be examined for its suitablity for agency status, an examination will be carried out with a view to contracting out and market testing, and subsequently there will then be an opportunity to sell the whole thing off. In those circumstances, it will inevitably be difficult to promote enthusiasm among the staff. If they achieve the targets, they will be working themselves out of a job.

The Government must say whether or not other principles will override their ideologically driven policy which pays little regard to the objectives of public service —to provide a first-class service to its recipients—and has everything to do with their ideological commitment. Such a commitment should not be the main purpose of Government policy.

9.5 pm

Mr. Roger Knapman (Stroud)

I shall be brief, as I am aware that two Opposition Members wish to speak and, subject to catching your eye, Madam Deputy Speaker, they will.

I have long sought this opportunity to pay tribute to the ideas and ideals of the citizens charter and to congratulate my right hon. Friend the Chancellor of the Duchy of Lancaster and my hon. Friend the Parliamentary Secretary on their excellent work. They are putting firm flesh on the bones of the ideas and ideals contained in the citizens charter and raising standards all round in a thoroughly practical way.

I shall also take the opportunity to thank my right hon. and hon. Friends for funding the Agricultural and Food Research Council—theirs is a wide-ranging Department, which is appropriately represented at Cabinet level. We would have liked more money—we would always like more. It came as something of a culture shock to some of the professors on the council when they realised that they might have to co-operate with the private sector to obtain backing for some of their work. That was their initial reaction, but they are now getting thoroughly used to the idea of lunching, and wining—without an "h"—and dining with industrialists, which is good news.

We must be careful, where we have a successful line of near-market research for which independent backing is obtained, that additional funding is not reduced from traditional methods of funding. I thank my right hon. and hon. Friends for their support and the interest that they take in the council. I can assure them that all those involved are grateful to them.

I heard the excellent speech by my hon. Friend the Member for Harborough (Mr. Garnier). I am glad to hear that we are even attempting some reform to obtain higher standards in the legal profession. I hope that over the next few decades something might be achieved. I also listened to the excellent speeches by my hon. Friends the Members for City of Chester (Mr. Brandreth) and for Sutton and Cheam (Lady Olga Maitland). I am afraid that they will have to listen to just three or four minutes from this old lag as I comment on the four headings originally identified by my hon. Friends.

The first topic is privatisation where appropriate. I know that when other capitalist countries started to privatise things, the Labour party was against it. When it came to selling council houses, the Labour party was against it. When other socialist countries such as France started to privatise things, the Labour party still opposed it. When Russia started to privatise things, the Labour party went a little quiet. Now that Albania is starting to privatise things, the Labour party is becoming very quiet.

I am pleased to see that the hon. Member for Dundee, East (Mr. McAllion) is present. I enjoyed a trip to America, the home of capitalism, with him, and I can see from his expression that he is taking in every idea for privatisation. Perhaps there are ramifications for the Dundee Labour party—who knows?

It is true that we have sold much of the family silver —I am proud of that and of the fact that so many other countries are following our example. To some extent, in cash terms, but not quality terms, we are now talking about the silver plate. Let us privatise British Coal, British Rail, Companies House, the docklands light railway, the driver and vehicle operators information technology department, London Buses, the National Engineering Laboratory, Parcel Force, the vehicle inspectorate and anything else where standards can be increased and we can raise a bob or two. I am not entirely sure, because the period of research available to me tonight was not sufficient, exactly how standards are to be maintained and performance related at the national engineering laboratory, but I am sure that there are no insuperable problems there.

Competitive tendering matters and market testing were so capably dealt with by my hon. Friend the Member for City of Chester (Mr. Brandreth) that I will pass them over. There are very few sectors that are such a natural monopoly that there cannot be some competition, or comparative competition, brought into them. Initially we were criticised because British Telecom, for instance, would have a monopoly, but it is quite clear, after a period of years and the growth of the market, that competitors are increasingly coming to compete with British Telecom. No doubt it will welcome, in due course, the increased competition.

I was very glad to hear that my right hon. Friend has said, with regard to taking decisions close to the customer, which must be our constant aim, in those instances where, for whatever reason, there is no choice but public ownership and no chance of competition being applied…our role must be to devise and apply disciplines that, in their own way, are no less demanding than open competition. Since he said those words a few months ago, he would no doubt agree with me that the more we look into things, the fewer the cases we find in which some competition cannot be instilled. The aim of introducing competition, I believe, is that, unlike the monolithic structures of a few years ago, nowadays the buck has to stop somewhere.

I was very pleased to have the booklet "Citizen's Charter News" with the charter logo and the heading "Raising the standard"—I am not sure whether it should not be "raising the standards". From the original ideas, we now have a good idea of the very wide spread of my right hon. Friend's activities, on health, education, travel, street works, services areas—and, my word, some improved standards are needed there on a bank holiday—driving tests, railways, London Underground, utilities, post offices, employment service, the Benefits Agency, and much more besides. Everything is to do with the improvement of standards; that must be our constant aim.

There has been some criticism this week of the tables produced for certain schools. It is no great secret that in one or two cases, in the compilation of statistics, the suggestion "might do better" could apply. The basic difference between this side of the House and the other is that we believe that parents are entitled to this information and that they have enough intelligence to know that this is one of a number of factors likely to guide and guard them in choosing schools for their children. This is not a privilege for parents; it is a fundamental right. It may be that in some rural areas, such as the one that I represent, because of geography parents may not be able to make full use of those extra privileges which are rightly theirs.

In conclusion, I say to my right hon. and hon. Friends on the Front Bench: well done to date; keep up the good work.

9.12 pm

Mr. John McAllion (Dundee, East)

Conservative Members, in particular the hon. Member for Sutton and Cheam (Lady Olga Maitland), seemed to take great offence at the suggestion made by my hon. Friend the Member for Redcar (Ms. Mowlam) that privatisation leads to wage cuts. The hon. Lady called for evidence, and she was given some by my hon. Friend the Member for Glasgow, Govan (Mr. Davidson). I will give her some direct from the civil service itself.

The Inland Revenue in Nottingham has recently contracted out its typist and secretarial contracts to the private sector company Blue Arrow. Civil Service rates for typists are in the pay band up to £9,405 outside London; the Blue Arrow rate is £7,800, with a 20p productivity bonus. The civil service rate for personal secretaries is in the pay band up to £11,521; the Blue Arrow rate is £8,775—considerably less. If the hon. Lady does not understand now, she had better come to understand in the future that you get what you pay for. If people are looking for real value for money in the public services, they should keep jobs inside the civil service, where people are properly paid and where they reach the proper standards expected of important Government Departments.

When the Chancellor of the Duchy introduced the citizens charter White Paper in the House yesterday, he spoke of a future agenda for further action. A key part of the agenda is the extension of compulsory competitive tendering and market testing. The right hon. Gentleman told the House that these and other measures would be at the heart of the Government's agenda for the 1990s.

Before the right hon. Gentleman thrusts market testing and CCT to the heart of the Government's agenda for the next decade, he should try to understand the full implications of those processes. For instance, does he fully understand the implications of the TUPE regulations? He will know that they are the regulations that protect workers whose employer changes hands as a result of a legal transfer or merger. He will also know that the very core of the regulations is that workers' existing contracts of employment are automatically continued under the new employer. They may move from the civil service to the private sector, but under TUPE they should get the same wages, conditions, holiday entitlements and redundancy agreements.

The Thatcher Government did not introduce the regulations on their own initiative. The natural instinct of her Government was to undercut workers' rights, not to protect them. The regulations were introduced in 1981 as a result of European Community law, because they were meant to implement EC directive 770/187, which first came into force in 1979.

It took the then Tory Government two years to pass the United Kingdom legislation to give effect to this directive. Even then they tried to get off the European hook of being forced to protect workers' rights under existing contracts by excluding from the TUPE regulations transfers in the public sector described as involving non-commercial ventures. The exact words were: Does not include any undertaking or part of an undertaking which is not of a commercial venture". Since then, the phrase not in the nature of a commercial venture has been interpreted as excluding from the TUPE regulations the contracting out of public services such as catering, laundry services and cleaning services. With the ever closer European union of which we are now a part, the Government could not go on getting away with this for ever. The TUPE regulations are clearly in breach of the European directive.

Recently, the TUPE regulations' credibility received two massive blows—first, from the ruling by the European Court of Justice in the Sophie Rodmond Stichting case; and, secondly, from the High Court ruling secured by the National Association of Teachers in Further and Higher Education, in the judicial review against the Secretary of State for Education.

The European Commission has already begun proceedings against the United Kingdom Government for failure to implement the directive correctly since 1979. Moreover, clause 26 of the new Trade Union Reform and Employment Rights Bill effectively accepts that TUPE is in breach of the directive and goes some way towards trying to remedy that. It is clearly an attempt by the Government to head off the European Commission before it drags them through the European Court for being in breach of the directive—an attempt which is unlikely to work because clause 26 goes nowhere near meeting all the EC criticisms of the Government's failure to implement.

All this leaves us in an interesting situation. A number of civil service departments are already beginning to apply TUPE to contracting out. The Central Office of Information has applied TUPE to the contracting out of its photocopying services. The Department for National Savings has applied TUPE to a catering contract that it is putting out to tender, and many other Departments have delayed their market testing programmes while they seek legal advice.

A report in the Financial Times—dear to the heart of the hon. Member for Sutton and Cheam—is headed: FO drops plan for contracting-out". It goes on to say: The Foreign Office announced last night that it had suspended preparations to contract out services because of new regulations protecting workers' pay and conditions when they transfer to the private sector. The Foreign Office lead is likely to be followed by other departments and underlines the extent to which the government's £1bn programme of contracting out has been thrown into confusion by the regulations. The Minister may try to deny it, but the source for the story was an official Foreign Office on-the-record briefing, given at its press office to the journalists concerned.

I also have a copy of a letter from the Welsh Office to general managers of district health authorities and other groups which says: The issue has arisen as a result of a request for guidance for South Glamorgan Health Authority in relation to catering contracts and we have suggested to the Authority that they should take no further steps to let contracts to a private contractor until we have legal advice. We are drawing this to the attention of all Health Authorities and NHS Trusts so that they can take the fact into account in current market testing exercises. I also have a letter from the Home Office to the Home Office trade union which says: The application of TUPE to contracting out is a very complex area and ought to be considered, and legal advice taken if appropriate, before the tender documents are sent out since it will significantly affect the position of any tenderer. The general line the Home Office intends to take is that pending clarification from the centre, Invitations to Tender would make it clear that TUPE does apply unless Legal Adviser's Branch have confirmed otherwise. Some might ask whether all this matters. Yes, it does matter, because if TUPE applies to the transfer of workers from the civil service to the private sector, many contractors will be deterred from bidding for such work. The only way in which the in-house bid can be undercut is by slashing the wages and conditions of the workers involved.

A transcript of the Radio 4 programme "Face The Facts" records John Cutner of Onyx UK, one of the companies involved in trying to win contracts from the public sector, as saying: I think it would slightly emasculate what the Government's intention was behind the Compulsory Competitive Tendering regulations which is to reduce the costs to local authorities by opening it up to private sector tendering which would mean that if the private sector win, the employees would effectively be employed on normal private sector conditions. That means lower wages and worse conditions. Therefore, if the regulations are changed, and we would be obliged to take over the ex-council employees on the existing conditions, this of course would mean that our price would be higher and the price of all our competitors would be higher. Mr. John Hall, chairman of the CBI's competing for quality committee, has already been quoted. He has said: On the face of it, there is no longer any point in companies taking part in tenders for public services. Mr. Hall said that contractors might find it hard to take on existing work forces profitably.

The Minister may argue that it does not matter if the private sector does not try to get the jobs that he is putting through the market testing programme, but it does matter. How else will the 44,000 new jobs be market-tested and put into the private sector if no private sector companies are prepared to pay for existing wages and conditions in the civil service?

The Minister once said that he was interested only in the most competitive supplier and that whether it was public or private did not matter to him; he was interested only in value for money. That is what he tells the House of Commons, but I have here a note from the Treasury which was sent to the principal finance officers, principal establishment officers and others, paragraph 2 of which clearly says: The Government's policy is to restrict the size of the public sector and in general the presumption is that services should wherever possible be provided by the private sector rather than the public sector". The Government's policy is to privatise as much of the public sector as possible. If the TUPE regulations are to be applied they will not be able to achieve the aim of privatising those jobs.

In the past decade, tens of thousands of workers in local government, the national health service and the civil service have lost their jobs or had their wages cut and their conditions made worse as a result of contracting out. Clause 26 in the new employment Bill cannot be applied retrospectively and nor can the TUPE regulations. But the European directive, which came into force in Britain in 1979, can be applied retrospectively.

Trade unions will be making sure that applications are made to the European Court to apply that directive retrospectively to workers affected by it since 1979. Far from contracting out being at the heart of the Government's agenda in the 1990s, the Minister will find that it will be driven off that agenda by the application of the European directive.

9.24 pm

Dr. Tony Wright (Cannock and Burntwood)

As time is short, I will go to the heart of the matter. It has been argued that this debate is about different issues. We heard from the hon. Member for the City of Chester (Mr. Brandreth) that it is about the state of a portakabin on Chester station, and from the hon. Member for Sutton and Cheam (Lady Olga Maitland) that it has to do with matters such as dog training. Earlier, the Chancellor of the Duchy said that it was nothing more than a question of management adjustment, yet important voices outside the House who understand the issues—I do not mean just the civil service unions—say that market testing is a major constitutional change and ought to be treated as such.

A new managerialism is sweeping across public services throughout the western and eastern world, and it encompasses all ideological perspectives. The key issue is the terms on which it is implemented, yet the House has not quite grasped that. I may add that, although it is late on Thursday evening, it is shameful that only a dozen right hon. and hon. Members are present in the Chamber to debate such a major change.

The Government are determined to cut the public sector, costs and size of the civil service using a variety of strategies and from a number of directions. The terms on which they are doing so give everything away. Are the Government really concerned about the citizen rather than consumers? The apostrophe in "The Citizen's Charter" is very important. A consumer is concerned about a school's position in the league table, whereas a citizen is concerned about the quality of all the schools in the league table.

That is the crucial distinction between the approach to public services on this side of the House and that taken by the Government. One attitude is, "I'm all right, Jack," and the other is, "How is Jack down the road doing?" That will always be the fundamental ideological difference between the Labour and Conservative parties.

If cost-cutting were not the thrust behind the Government's actions, we would be considering the quality of public services and, for example, measures to extend the activities of the National Audit Office. The most recent report of the Comptroller and Auditor General states that there is massive scope for fast dealing—for making a fast buck and for fraud—in the contracting-out process.

We would also be arguing, given the new spread of Government activity, that only 50 value-for-money audits annually are inadequate. If cost-cutting is not the Government's prime consideration, they would not have resisted the establishing of a Select Committee to examine the citizens charter process. We are told that the charter goes to the core of Government policy, yet they refuse monitoring and regulation and do everything themselves.

The danger signs are seen every time that a right hon. or hon. Member receives a letter from a Minister—as I have, every week for the past three weeks—stating, "Don't write to me any more about these issues—write to the head of the agency." The danger signs are seen every time that we see the fragmentation of the civil service and hear from constituents about quality being driven down because of a preoccupation with cutting costs.

Last week, a local authority carpenter asked me, "Why am I told to use wood that I know is rotten? Because that is the only way that we could get the contract." The same story is told across the length and breadth of the public services, because no independent, external, regulatory agency is monitoring what is happening.

Conservative Members completely misrepresent our approach to public services. Two approaches are currently on offer. The first can simply be called "business government". We have heard of it through the ages: it basically means, "Turn the business of government over to business men." In the past, it has been presented from time to time as an eccentric opinion; this is the first time that it has been taken seriously and placed at the heart of government.

My hon. Friend the Member for York (Mr. Bayley) talked about Stalin, but that approach is really Lenin's idea of getting rid of policy and turning it into administration. What the Government are offering is one version of the end of politics: politics, representation and participation become irrelevant, and everything is dissolved into administration.

The second approach on offer is our approach. We propose a renewal of the public service tradition, to make it much more powerful and responsive to users. One approach renews the tradition; the other damages it, and may even destroy it.

9.30 pm

Ms. Kate Hoey (Vauxhall)

Despite the small number of hon. Members who are present, I applaud the quality of the debate—even if I cannot applaud the quantity.

Opposition Members feel strongly that we are tremendously well served by our public service—in the civil service, local authorities, the national health service, schools and, indeed, the House. Certainly the civil service is represented in the Officials' Box in terms of quantity, and I presume that there is quality there, too.

My hon. Friend the Member for Glasgow, Govan (Mr. Davidson) summed up Labour's position admirably. We are in favour of efficiency and quality, but we are also in favour of extending access and choice. We want to empower people. However, we are also in favour of change when it is proved to be necessary. The Government seem to view the public services purely in terms of a contractual relationship between consumer and provider. We care about the consumer too, but many of our citizens are in no position to have their needs met, and the Government and the community must help to meet those needs.

Like my hon. Friend the Member for Redcar (Ms. Mowlam), I have no children—indeed, tonight's Opposition Front Bench is very much a childless one. That, however, does not lessen my commitment to extending and developing the provision of good-quality child care for everyone.

Let me mention some aspects that the Minister has not dealt with in detail. First, the citizens charter promised to make the business of government more open and acceptable, and therefore more accountable. Similar claims were made at the launch of the next steps programme. The Treasury and Civil Service Select Committee's last report on next steps made the following recommendation: The provision of information is vital if agencies are to be accepted by Parliament and the public. We consider it a necessary counterweight to the Minister's voluntary relinquishing of control over matters of routine. The Select Committee welcomed the publication of business and corporate plans and recommended that all agencies should publish them, unless there are pressing commercial reasons which make this inappropriate". The Government added that it was necessary to protect other sensitive information". There are, in fact, at least 41 agencies whose corporate plans are tagged "commercial—in confidence", and are therefore unavailable for public scrutiny. At least 30 agencies' business plans are similarly restricted. The situation reaches farcical proportions in some agencies. For example, the Transport Research Laboratory describes its business plans as "commercial—in confidence", but they are available for £995. That is commercial, but it is confidential only to the general public. The only people who will benefit are large motor manufacturers and the road industry lobby; few members of the public will do so. We heard little about open government from the Minister.

I am pleased that the Government are catching up on our commitment to decentralise such services closer to the communities that they serve, but I repeat that many of their policies often serve to erode local democracy and accountability.

The Chancellor of the Duchy of Lancaster added little to the prospects for improving the civil service. The announcement that up to 44,000 of the 560,000 civil service jobs are to be market-tested will have been a sharp pre-Christmas blow to the morale of the service. The Minister has conceded that good morale is vital to the implementation of quality public services, and we agree, so how on earth does he expect the morale of the Inland Revenue's typing and secretarial staff in Glasgow to be anything other than at rock bottom when they read in an advertisement in The Times that their jobs are likely to be given to others in January?

Many hon. Members have expressed concern about the serious issue of confidentiality. The independence, impartiality, objectivity and confidentiality of the civil service are being undermined by market testing and privatisation. Much sympathy has been expressed for the personal difficulties of the Chancellor of the Exchequer, but many of our constituents constantly experience similar problems with debt companies, hire purchase companies and, indeed, banks. That is the reality of private sector involvement in confidential areas.

The role of the civil service is solely to serve the Government of the day. The role of private companies is much more varied and they have a number of different interests. Civil servants in the Inland Revenue have an exemplary record on confidentiality. The civil service is respected as being objective and free from outside influence. If we go ahead with this proposal, we shall be going down a slippery road indeed.

Mr. Knapman

Will the hon. Lady give way?

Ms. Hoey

I cannot, because I know that the Minister wants 20 minutes compared with my 15 minutes.

If the Government are determined to push through such changes on dogmatic grounds, I hope that they will at least have the good sense to agree to our request to implement all necessary measures to ensure objectivity. I call on the Minister to accept our invitation to form an independent body to advise on the maintenance of confidentiality in services being considered for privatisation and to regulate and monitor confidentiality post-privatisation.

I move a little from the civil service to draw some parallels with public servants in local authorities. Compulsory competitive tendering has been central to the Government's approach to local government. How can they seriously propose to introduce market testing and privatisation into branches of the civil service at the whim of Ministers, as was stated tonight, and on a strategic basis without considering an in-house bid? The Minister must reply to the questions that we have asked about in-service bids. If a service is efficiently and effectively provided by civil servants and if local managers and workers believe that they can beat off external bidders, are the Government saying that managers and workers will not be allowed to bid? That would not offer a level playing field and would be similar to ordering the team off before they had been allowed to start the game.

Many examples have been given, particularly by my hon. Friend the Member for York (Mr. Bayley), of good practices by Labour authorities that owe everything to good management and local accountability. My hon. Friend the Member for Redcar cited many examples of privatised services getting it wrong, and I shall contrast that with one or two examples of how Labour councils have got it right, in-house.

York has already been mentioned, but I also cite the London borough of Merton, which, after moving to Labour control, found itself able to rebuild many of the services which had been dismantled by the former Conservative administration. In the aftermath of the utterly conclusive rejection of opting out by schools, including the Prime Minister's school, the council has been able to offer in-house cleaning contracts of a better standard and at a winning price, compared with the existing privatised service That has been achieved through better management, and by paying a sufficiently decent wage to avoid the problems of low morale, high turnover, frequent sickness and low commitment to the job. Better pay and conditions, happier staff and cleaner schools are all possible, because the council is not trying simply to make a fast buck out of the exercise.

Newcastle city council provides another example. It runs an architects department so successful, especially in designing energy conservation schemes, that it is in great demand from the private sector. The market has shown that the service is not only cheaper but better overall. Only the Government's absurd rules prevent the department from selling its expertise to the private sector, insisting that it be sold only to other councils.

I hope that their own experience will enable hon. Members from both sides of the House to see through the Government's boasts about cutting costs. The hon. Member for Suffolk, Central (Mr. Lord) made an interesting speech, showing an intelligent scepticism and open-mindedness. Unfortunately, he is no longer in the Chamber—or perhaps it is just as well that he cannot hear me praising him. The hon. Gentleman pointed to many of the deficiences in the Government's handling of the move towards privatisation, and he asked, as we all should, whether we are going down the right road to improving quality.

The hon. Member for Suffolk, Central urged caution over British Rail privatisation, too. Despite the rail charter, InterCity has already applied to the Department of Transport to downgrade some of the standards and Network SouthEast has applied to downgrade the Kent coastal line services on the grounds of inability to maintain operating equipment due to lack of investment and falling passenger receipts. A charter for train passengers is not much good if they do not have a train to travel on in the first place.

Elsewhere, in other branches of public service, the Government are forcing through change for change's sake. Will they not concede the basic principle that quality and value for money are improved by good and responsive management and by motivated work forces, working to meet the aims of their local communities? Those shared aims are not achieved simply as a result of being in the private sector or the public sector. They are certainly not achieved by cuts in funding, which inevitably lead to cuts in services.

I hope that the Government have taken on board the many constructive comments which have been made this evening and will feel able to build on the areas of agreement and deal with the concerns raised, rather than simply exaggerating and misrepresenting the areas on which we fundamentally disagree. I hope that the Minister will undertake to return to the House with some answers and some concrete and positive proposals to address those important questions.

9.43 pm

The parliamentary Secretary, Office of Public Service and Science (Mr. Robert Jackson)

I begin by welcoming the hon. Member for Vauxhall (Ms. Hoey) on what I believe was her debut at the Dispatch Box—and very elegantly she carried it out.

A combination of events this week has given the House a full opportunity to discuss the future of the public services. There was question time on Monday; we published the citizens charter White Paper yesterday, and there was a statement and a debate on that. We had debates last week on the Second Reading and the Committee stage of the Civil Service (Management Functions) Bill. Tonight we have this debate.

We can all agree that that has been a welcome opportunity to debate an important set of subjects. I agree with the hon. Member for Cannock and Burntwood (Dr. Wright) on that, and I share his regret that others have not seen the importance of the issues at stake in this debate.

The debates have brought out clearly the range, the depth and the strength of the Government's commitment to the public service and to the improvement of the public service. They have also brought out clearly the strength of our commitment to the public service, to its staff, to its traditions, to its values and to its ethos. Nothing in our reforms is inconsistent with that commitment.

I was also happy to note how this debate has brought out the extent of agreement between the parties about what our objectives for the public services should be, and about the need to maintain and to improve the quality of our public services. That was very welcome. However, from the speech by the hon. Member for Redcar (Ms. Mowlam) and from the tone and the temper of many other speeches by Opposition Members, it appears that there continue to be some disagreements between the Government and the Opposition about the means to the shared end of public service improvements.

I can express the difference simply. The Government are committed to public service: the Opposition are committed to public provision. A real difference in perspective is summed up there. The hon. Member for Cannock and Burntwood spoke briefly, but pregnantly, when he pointed out that there was a new managerialism sweeping the world. That has led the Government to seek to identify clearly each particular function within the public service and to put it on to a more businesslike basis. The key to that—I will deal with the point made by the hon. Member for Glasgow, Govan (Mr. Davidson) later —is a clearer specification of the objectives of each function and the embodiment of those clearer specifications in contracts.

The hon. Member for Redcar does not seem to quarrel with that stage of the analysis. She appears to go along with the view of the left-wing think tanks and of some of the progressive Labour authorities in favouring the idea of management by contract. However, she seems to draw back—this is the key point between us—from the next logical stage of the process.

As my hon. Friend the Member for Stroud (Mr. Knapman) percipiently asked, having established a contractual relationship between a Minister and a public sector adviser, why not test the competitiveness of the potential public sector contractors by enabling the private sector to compete for the contract? I put it to the hon. Member for Redcar that it simply is not logical to say, as she seems to, that she is in favour of market testing provided that the private sector is not permitted to compete for the contract. After all, what else is market testing but testing in the marketplace? Why are the Opposition caught up in that illogicality?

I can think of only one explanation, which was sapiently pointed out by the hon. Member for Truro (M r. Taylor), who told me that he could not be here for the winding-up speeches. The explanation is the Labour party's prejudice against the private sector. That was reflected all too eloquently—it made up most of the speech by the hon. Member for Redcar—in the catalogue of petty criticisms of the private sector. It embodied all the old Labour party prejudices against private business.

Mr. McAllion

Will the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply to every civil service job that is put out to competitive tender?

Mr. Jackson

I will come to the hon. Gentleman's point about TUPE, so he does not need to remind me of it.

Another old Labour party prejudice was on display tonight—the prejudice in favour of high spending on producer interests. I pick up a point made by the hon. Member for Birmingham, Hodge Hill (Mr. Davis) by referring to a point that was well made by my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland).

It is surprising to hear a distinguished member of the Public Accounts Committee speak slightingly of the Government's perfectly proper concern to ensure that the cost to the taxpayer of providing public service is kept at the lowest level compatible with satisfactory quality. How can the hon. Gentleman allow himself to slight that approach—especially as he will, I am sure, have heard what my right hon. Friend the Chancellor of the Duchy of Lancaster said about our agreement with the Treasury that all savings from market testing will be retained by the Departments concerned and will be ploughed back into the services they provide to the public?

The hon. Member for Vauxhall asked me about two points of detail, the first of them on in-house bids. We encourage in-house bids in the context of market testing but we are not insisting that they should be mandatory. That would, in effect, give a veto to the employees concerned. We cannot compel employees to put in a bid: if they do not come forward, that should not exclude market testing.

Confidentiality has arisen again and again. We do not accept the Opposition's idea, which seems to be that servants of the public who work in the private sector have a lower standard of integrity than public servants who work in the public sector.

To the hon. Members for Truro and for York (Mr. Bayley), I would say that it is not good enough to complain that some targets for public services are not being met. Of course some of them are not being met. It would be deeply suspicious if all our targets were met.

I see that the hon. Member for York is in his place. He asked a series of specific questions about performance against targets under the patients charter. They were good questions and I shall come back to him later on the detailed points that he raised. Meanwhile, I remind him, and others who have made comments about targets, that targets for the public service are now being set for the first time and that the performance of those services against those targets is now being monitored for the first time. That is what is new and what is important.

I congratulate my hon. Friend the Member for City of Chester (Mr. Brandreth) on a graceful and witty speech and on acting during the debate as my honorary parliamentary private secretary—he will soon be a real PPS, I am sure. He brought out well the important point that the Government's programme for public service reform is welcomed by many people working in the public service who see in that programme opportunities to do better, both in terms of assuming new responsibilities and in terms of providing better-quality services. My hon. Friend was also right to stress that investment in the public service is not only a matter of investment of cash; it is a matter of investing in new thinking, new structures and better management.

I should not like to forget the point made by the hon. Member for Truro, to which I now return. He asked whether the Government were ensuring that the users of public services were being consulted about the setting of targets. The answer to his question is yes, and I invite him to look at the citizens charter White Paper, which details our plans for regular surveys of the customers of public services.

My hon. Friend the Member for Harborough (Mr. Garnier) made an eloquent speech, bringing home from personal and professional knowledge the importance of the new courts charter launched yesterday. I hope that he will maintain his close interest in the courts charter and assist us in the Office of Public Service and Science and the whole House in the work of applying that charter and progressively improving its effectiveness—because we intend that our charters should be upgraded and improved in the light of experience.

My hon. Friend the Member for Sutton and Cheam made a valuable point about the concerns expressed, especially by the hon. Member for Hodge Hill, about jobs in the civil service. She pointed out that market testing does not necessarily entail any net loss of jobs. Jobs will stay in house if the in-house team provide the best value for money. Where contracting out offers better value for money, I give the assurance that contractors will be encouraged to take relevant staff; otherwise, Departments—again, I give an assurance—will make every effort to redeploy staff or absorb them through natural wastage. That has happened in the vast majority of cases in the past four years, and I see no reason why it should not continue to be the pattern of market testing in future.

The hon. Member for Govan continued in the thoughtful and constructive vein of his speeches on Second Reading and in Committee—where he made an active contribution—on the Civil Service (Management Functions) Bill. He articulated his fears about the fragmentation of the civil service and the loss of what he called a holistic sense of responsibility in the new regime by the management of contracts and competitive tendering.

The Government recognise that that could be a danger, but it will happen only if the policy is pressed to exaggerated lengths, which I do not believe will happen. Our watchwords in the policy of market testing will be balance and common sense, and I have no doubt that that will he in conformity with the mood of public servants who, like the hon. Member for Govan, exhibit a sense of balance and common sense. The hon. Member for Dundee, East (Mr. McAllion), asked about the implications of the TUPE regulations for market testing. I am happy to give the hon. Gentleman the assurance he sought: the TUPE regulations do not conflict with the contracting out or market testing of work in the public sector.

Mr. McAllion

Will the TUPE regulations apply in every case in which a civil service job is put out to competitive tender?

Mr. Jackson

The TUPE regulations have always applied to transfers. The amendment to another Bill that the Standing Committee is examining simply makes it clear that the regulations can apply irrespective of the commercial status of the employer. That being the case, organisations tendering under the compulsory competitive tendering programme must take into account the possible effects of the regulations and directives. There is nothing new in that.

I turn to the characteristically thoughtful speech of my hon. Friend the Member for Suffolk, Central (Mr. Lord), who emphasised the importance of leadership. I agree with him. The key point which I hope he will recognise is that the changes which we are making to the structure of public services will create new opportunities for leadership in the provision of public services.

The central theme of our management changes is devolution and decentralisation of responsibility, together with a much clearer specification of the performance standards. Local leadership is responsible for the delivery of those standards. My hon. Friend will have seen that leadership at work in the schools and hospitals in his constituency. The principle will be applied increasingly widely in other fields of public service.

Many of the speakers in this interesting and worthwhile debate about the public service have focused on the citizens charter. That is right and proper, because the citizens charter is the part of the Government's public service reform agenda which is most visible to our constituents. I stress the connection between the citizens charter and our public service reform agenda.

Too many people, especially in the London media, have not yet understood that the citizens charter is not simply a set of pious aspirations. The charter is integrally bound up with the far-reaching changes that we are making in the machinery of government. The essence of the changes lies in the combination of decentralisation and responsibility for service delivery with the specification of performance targets and the embodiment of those targets in con tracts which are increasingly open to competition. That will provide a powerful mechanism for systematically drafting standards of quality and performance in the public sector.

Let me simply say that this is the agenda for the 1990s. Although we are grateful for signs of support from the Opposition for the agenda, I am nevertheless happy that this debate has confirmed that the agenda continues to be dominated by the Conservative party.

Mr. Tim Boswell (Lords Commissioner to the Treasury)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.